Biotron Limited Annual Report 2013

Plain-text annual report

BIOTRON LIMITED ABN 60 086 399 144 ANNUAL REPORT 2013 CONTENTS Operating and Financial Review Statement of Corporate Governance Directors’ Report Lead Auditor’s Independence Declaration Statement of Proﬁ t or Loss and Other Comprehensive Income Statement of Financial Position Statement of Changes in Equity Statement of Cash Flows Notes to the Financial Statements Directors’ Declaration Independent Auditor’s Report Additional Stock Exchange Information Corporate Directory 1 7 12 21 22 23 24 25 26 44 45 47 IBC OPERATING AND FINANCIAL REVIEW REVIEW OF OPERATIONS The major focus of Biotron during the last year has been on the clinical development of its lead drug, BIT225, an oral, novel antiviral compound for treatment of Hepatitis C virus (‘HCV’) and HIV infections. The period under review has seen the continued stepwise clinical development of BIT225, resulting in positive data from clinical trials, which demonstrated efﬁ cacy of BIT225 in both HCV and HIV patient populations, each of which represents potentially signiﬁ cant market opportunities. Biotron’s clinical program was further strengthened by the commencement of a trial of BIT225 in HIV/HCV co-infected patients. Several supporting activities, including manufacture of 10 kilograms of clinical grade BIT225 and formulation studies to produce capsules of the drug, as well as three month preclinical toxicology studies to enable longer-term human dosing, were also completed. A summary of signiﬁ cant events achieved in this ﬁ nancial year includes: (cid:122) Completion of a Phase 1b/2a clinical trial of BIT225 in HIV-infected patients. (cid:122) Commencement of a Phase 2 trial of BIT225 in patients co-infected with HCV and HIV, which completed its clinical phase subsequent to the end of the reporting period. (cid:122) Development of a capsule formulation of BIT225, resulting in 1.6 fold improvement in drug levels. (cid:122) Manufacture of 10 kilograms of GMP BIT225. (cid:122) Successful completion of three month preclinical toxicology studies, which support longer-term dosing in future clinical trials. (cid:122) Presentation of 48 week data from the Company’s completed Phase 2a trial of BIT225 in HCV infected patients at international conferences. One hundred percent of patients who received BIT225 (400mg) in combination with Interferon and Ribavirin (IFN/RBV) had undetectable virus at this key time point, compared to 75% who received placebo with IFN/RBV. (cid:122) Presentation of data from the Phase 1b/2a HIV trial at an international scientiﬁ c conference. (cid:122) Showcasing the Company to the international investment community at various events in the USA as well as locally. (cid:122) Receipt of an R&D Tax Incentive refund of $891,951 for the 2011/12 ﬁ nancial year. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 1 OPERATING AND FINANCIAL REVIEW HCV Clinical Program In 2011, Biotron performed a 28 day dosing, Phase 2a clinical trial of BIT225 in patients infected with HCV. This trial was a crucial study for Biotron, with the results, reported during 2012 and early 2013, validating the Company’s approach to the treatment of this disease. The data from the trial demonstrated that BIT225 improved the measures of infection in patients with the hard-to-treat genotype 1 HCV infection. One hundred percent of patients who were treated with 400mg BIT225 in combination with IFN/RBV, the currently approved treatment for HCV, had no detectable virus at 48 weeks, compared to 75% of patients who received only IFN/RBV. The current treatment of IFN/RBV is associated with debilitating side effects in a large proportion of patients, and is ineffective in around 50% of cases. Genotype 1 patients make up the majority of HCV infections in the Western world, and are the hardest to treat. It is estimated that in the USA alone, some 4 million people have been infected with Hepatitis C with 2.7 million suffering from chronic infection. Worldwide, 185 million people are infected (3% of the world’s population). HCV causes inﬂ ammation of the liver, which, apart from the acute disease, may lead to cirrhosis, liver cancer and, ultimately, liver failure. The HCV drug market is expected to grow to more than three times its current size by 2018, and to be more than US$20 billion by the end of decade. In a clinical setting, BIT225 would most likely be used in combination with other anti-HCV drugs, subject to continuing positive results and approvals. The pharmaceutical industry is currently focused on developing several new classes of drugs, known as direct acting antiviral (‘DAA’) drugs, for HCV which are likely to be used in combination with each other and which may replace the problematic IFN/RBV treatment. BIT225 represents a ﬁ rst-in-class drug for treatment of HCV, targeting the p7 protein of HCV. In addition to having the potential to be used in combination with IFN/RBV to improve patient outcomes, BIT225 also has the potential to be used in combination with these other new classes of DAA drugs being developed. The new DAA drugs are being trialled in 12 week dosing studies and, to be competitive, Biotron needs to demonstrate safety and efﬁ cacy of BIT225 with this extended period of dosing. To date, Biotron has focused on demonstrating activity against HCV genotype 1, which has the greatest unmet medical need. However, there are opportunities and potential treatment gaps in other genotypes and it is important to assess efﬁ cacy of BIT225 against these, in particular genotype 3. To this end, Biotron is preparing to commence a larger Phase 2 trial of BIT225 in patients infected with HCV genotypes 1 and 3. Patients will receive BIT225 for 12 weeks, “BIT225 represents a ﬁ rst-in-class drug for treatment of HCV, targeting the p7 protein of HCV.” 3 1 0 2 T R O P E R L A U N N A N O R T O I B 2 OPERATING AND FINANCIAL REVIEW in combination with IFN/RBV. Documents for regulatory and human ethics committee submission are being ﬁ nalised and, subject to receipt of relevant approvals, Biotron expects to commence the trial in October 2013. The trial is expected to run through the ﬁ rst half of 2014, with preliminary data available in the second half of that year, subject to optimal recruitment rates. Based on advice received from international advisors, this trial will best position BIT225 for licensing to a major pharmaceutical company. As is the case in a signiﬁ cant unmet market, developing a drug to treat HCV is a very competitive environment and numerous trials are being conducted by other companies to treat HCV with and without IFN and/or RBV. The position of BIT225 in this competitive environment is not entirely certain and will not be fully ascertained until at least the conclusion of the 12 week trial described above. HIV Clinical Program BIT225 is also active against HIV, the virus that causes AIDS. In late 2012, Biotron completed the clinical phase of its Phase 1b/2a clinical trial of BIT225 in HIV infected patients who have not previously received anti-retroviral drugs. This trial was designed to investigate the potential of BIT225 to treat HIV infection ‘hidden’ in reservoir cells. Existing HIV treatments do not completely clear the virus from patients, leaving pools of virus that are long lived and can adversely impact on patient health outcomes. Developing drugs that can target and eradicate these virus pools remains a signiﬁ cant challenge. The Phase 1b/2a trial successfully demonstrated that BIT225 targets HIV replication in monocyte cells in treated patients. These cells become infected with HIV and are the seeds of hidden HIV pools in patients, setting up long lived macrophage reservoir cell populations in various sites in the body. The trial showed that BIT225 can signiﬁ cantly reduce virus levels in these cells. The results suggest that BIT225 has the potential to be included in future HIV eradication or cure strategies, and may provide a means of halting the ongoing cycle of infection from these long lived cells. In addition, the trial also showed for the ﬁ rst time that BIT225 is able to cross the blood-brain barrier. This is important as it means BIT225 may be a potential therapeutic option for the treatment of AIDS related dementia, which affects up to 24% of people in Western world HIV populations. The outcomes of this trial are extremely encouraging and are of interest to the international scientiﬁ c and pharmaceutical industry, as evidenced by Biotron’s invitation to present at the International AIDS Society conference and the preceding Towards a Cure symposium in late May this year. These results provide hope to the millions of HIV sufferers around the globe. HIV/HCV Co-Infection Clinical Program In late 2012, the Company commenced a Phase 2 trial of BIT225 in patients co-infected with HCV and HIV. BIT225 is uniquely placed due to its dual anti-HCV and anti-HIV activity. This trial was designed to generate efﬁ cacy data in this unique, speciﬁ c population with a signiﬁ cant unmet medical need, as well as to extend the data to other HCV genotypes, including genotype 3. Additionally, the trial was designed to provide detailed pharmacokinetic and safety data on BIT225 in the presence of other anti-HIV drugs. Since the end of the ﬁ nancial year, recruitment of the trial has been completed. Twelve patients have received 28 days of treatment with BIT225 in combination with IFN/RBV. They will be followed out to 48 weeks when they will complete on-going treatment with IFN/RBV without BIT225. The key time point for efﬁ cacy data is at the three month time point of the trial and it is anticipated that preliminary, interim data will be available during the second half of calendar 2013. “BIT225 targets HIV replication in monocyte cells…..the seeds of hidden HIV pools in patients.” 3 1 0 2 T R O P E R L A U N N A N O R T O I B 3 OPERATING AND FINANCIAL REVIEW The proportion of patients infected with both HIV and HCV is signiﬁ cant and this co-infected group offers particular challenges to treatment with current therapies. HCV is a more serious disease in HIV positive patients and is a leading cause of death in these patients. It has been estimated that between 25% and 40% of HIV positive patients in the USA are co-infected with HCV. These people have a signiﬁ cantly worse prognosis than mono-infected patients. There are no existing therapies capable of targeting both HCV and HIV. BIT225 has demonstrated robust data in both indications in Phase 2a trials. The data to date is encouraging, which suggests that BIT225 could be the ﬁ rst drug in a new class with dual virus targeting capabilities. Biotron’s trials in HCV and HIV patients are important steps in the Company’s development programs. Demonstration that BIT225 can attack these viruses in patients is a major value addition for the Company. The latest results further validate the potential of BIT225 for treatment of both patient populations. Biotron continues to actively promote its technologies and engage with potential international partners and remains focused on achieving a commercial outcome of its programs. “Successfully developed a new, improved formulation of BIT225 in capsule form suitable for use in extended trials in larger patient populations.” 3 1 0 2 T R O P E R L A U N N A N O R T O I B 4 New Formulations, Drug Manufacture and Extended Toxicity Studies The Company has completed additional activities to support these programs during the last 12 months. These supporting activities are equally central to achieving a successful commercial outcome for BIT225. In the second half of 2012, the Company, in conjunction with a specialist US formulation partner, successfully developed a new, improved formulation of BIT225 in capsule form suitable for use in extended trials in larger patient populations. To date, BIT225 has been given to trial participants in powder form, suspended just before dosing in a taste masking liquid. During 2013, a Phase 1 trial of the new capsules was completed. This study, performed in healthy volunteers, directly compared the new capsules of BIT225 with the old powder formulation. The results showed that the bioavailability of BIT225 (i.e. the amount of drug that enters the circulation system and is able to have an active effect) increased by about 1.6 fold when delivered by the new capsules. This is likely to result in a more convenient dosing regimen and less variability in response. During the year, the Company also successfully completed extended non-human, preclinical toxicology studies of BIT225. These studies assessed the safety proﬁ le of BIT225 when given daily for three months. Previously, BIT225 was only tested for 28 days in preclinical toxicology studies before the commencement of the ﬁ rst human trials with the drug. The extended toxicology studies enhance BIT225’s data package and enable future clinical trials in which patients can be dosed with BIT225 for longer periods. This is important as clinical trials of other new classes of drugs for treating HCV have moved to three month dosing regimens. It is anticipated that, if successful, BIT225 would most likely be used in a cocktail with these other new classes of drugs. During 2012, the Company completed the manufacture of 10 kilograms of clinical grade BIT225 drug. This material will be used for future clinical trials of BIT225. Data from ongoing stability studies from previously manufactured clinical grade BIT225 have shown that the drug remains stable at room temperature for over 6 years. The successful completion of a second, larger batch of clinical grade drug demonstrates the robustness of the manufacturing process developed by Biotron for BIT225. OPERATING AND FINANCIAL REVIEW In parallel with the development of BIT225 and completing the above additional activities, the Company has been developing a new, next generation anti-HCV compound through early preclinical development. BIT314 has shown promise in the tests performed to date and is ready to progress into manufacturing and formal GLP preclinical toxicology studies. At present, the Company’s resources are committed to the BIT225 program but, as additional resources become available, this new compound will be progressed. Other Viral Programs The Company has a portfolio of clinical and preclinical antiviral programs developing drugs targeting HCV, HIV, Dengue virus and Inﬂ uenza virus. At present, focus is on development of the HCV and HIV programs into trials in infected patient populations and additional resources will be committed to these additional programs once the more advanced programs have been successfully commercialised or as resources become available. Currently, the clearer commercial path for Biotron is ﬁ rstly focusing on its Hepatitis C program (including the potential beneﬁ t in the HIV/HCV co-infected population) and secondly, exploiting BIT225 to reduce the viral reservoirs in HIV infected patients. Outlook for the Next 12 Months As set out above, the past 12 months has seen impressive progress across Biotron’s antiviral drug development program. It is anticipated that Biotron will continue to signiﬁ cantly advance its activities and, by 30 June 2014, we expect to have: (cid:122) completed and analysed efﬁ cacy, pharmacokinetic and resistance data, complete with one year follow up, on participants in the Phase 2 HIV/HCV co-infection BIT225 and IFN/RBV combination trial; (cid:122) commenced and completed recruitment in a 12 week Phase 2 trial of BIT225 against a wider range of HCV genotypes; and (cid:122) prepared and submitted an Investigational New Drug (‘IND’) application for BIT225 to the US Food & Drug Administration (FDA). “Focus is on development of HCV and HIV programs into trials in infected patient populations.” 3 1 0 2 T R O P E R L A U N N A N O R T O I B 5 OPERATING AND FINANCIAL REVIEW Patents Biotron is focused on progressing patents related to its antiviral programs through the international patenting process. The Company recognises that the key to establishment of partnerships is the expansion and continued strengthening of Biotron’s intellectual property portfolio. Strong, defensible, international patents are essential to attract partners and to ensure a competitive advantage for the Company’s products in the marketplace. A summary of Biotron’s patent portfolio is: Title Status WO0021538 Method of modulating ion channel functional activity Priority - 12 October 1998 WO9813514 Method of determining ion channel activity of a substance Priority - 27 September 1996 Granted in Australia, Canada, China, Europe, Japan, New Zealand, and USA Granted in Australia, Canada, Japan, Europe, and USA WO04112687 Antiviral compounds and methods Priority - 26 June 2003 WO06135978 Antiviral compounds and methods Priority - 24 June 2005 WO2009/018609 Hepatitis C antiviral compounds and methods Priority - 3 August 2007 Corporate Granted in Australia, Canada, China, India, Japan, Korea, New Zealand, Singapore and South Africa Under examination elsewhere (Brazil, Europe, Hong Kong, USA) Granted in Australia, China, New Zealand and South Africa Waiting for or under examination elsewhere Granted in Australia, New Zealand, Singapore and South Africa Waiting for or under examination elsewhere In May 2013, the Company was pleased to receive an R&D Tax Incentive refund of $891,951 for the 2011/12 ﬁ nancial year. The R&D Tax Incentive is an Australian Government program under which companies receive cash refunds for 45% of eligible expenditure on research and development. The incentive refund results from expenditure on Biotron’s HCV and HIV drug development programs. The cash rebate strengthens the Company’s cash position and is an important source of funds for the Company’s ongoing research and development activities. On behalf of the Board we would like to thank the dedicated Biotron staff for their commitment and efforts during the year. Biotron is poised to achieve the outcome that we have all been working towards - demonstration that its systematic approach to antiviral drug development can result in signiﬁ cant clinical beneﬁ t to patients and generate value for our shareholders We look forward to the next year with conﬁ dence. Michael J. Hoy Chairman Michelle Miller Managing Director 3 1 0 2 T R O P E R L A U N N A N O R T O I B 6 STATEMENT OF CORPORATE GOVERNANCE This statement outlines the main Corporate Governance practices that were in place throughout the ﬁ nancial year, which comply with the Australian Stock Exchange (‘ASX’) Corporate Governance Council recommendations, unless otherwise stated. CORPORATE GOVERNANCE STATEMENT The Board is committed to maintaining the highest standards of Corporate Governance. Corporate Governance is about having a set of core values and behaviours that underpin the Company’s activities and ensure transparency, fair dealing and protection of the interests of stakeholders. The Board of Directors supports the Principles of Good Corporate Governance and Best Practice Recommendations developed by the ASX Corporate Governance Council (Council). Whilst the Company’s practices are largely consistent with the Council’s guidelines, the Board considers that the implementation of some recommendations are not appropriate having regard to the nature and scale of the Company’s activities and size of the Board. The Board uses its best endeavours to ensure exceptions to the Council’s guidelines do not have a negative impact on the Company and the best interests of shareholders as a whole. When the Company is not able to implement one of the Council’s recommendations the Company applies the ‘if not, why not’ explanation approach by applying practices in accordance with the spirit of the relevant principle. The following discussion outlines the ASX Corporate Governance Council’s eight principles and associated recommendations and the extent to which the Company complies with those recommendations. Details of all of the Council’s recommendations can be found on the ASX website at www.asx.com.au. Principle 1 - Lay Solid Foundations for Management and Oversight (cid:122) the resourcing, review and monitoring of executive management; Board of Directors The Board is responsible for, and has the authority to determine, all matters relating to the policies, practices, management and operations of the Company. The Board is also responsible for the overall corporate governance and management oversight of the Company and recognises the need for the highest standards of behaviour and accountability in acting in the best interests of the Company as a whole. The Board also ensures that the Company complies with all of its contractual, statutory and any other legal or regulatory obligations. The Board has the ﬁ nal responsibility for the successful operations of the Company. Where the Board considers that particular expertise or information is required, which is not available from within their members, appropriate external advice may be taken and reviewed prior to a ﬁ nal decision being made by the Board. Without intending to limit the general role of the Board, the principal functions and responsibilities of the Board include the following: (cid:122) formulation and approval of the strategic direction, objectives and goals of the Company; (cid:122) ensuring that adequate internal control systems and procedures exist and that compliance with these systems and procedures is maintained; (cid:122) the identiﬁ cation of signiﬁ cant business risks and ensuring that such risks are adequately managed; (cid:122) the timeliness, accuracy and effectiveness of communications and reporting to shareholders and the market; and (cid:122) the establishment and maintenance of appropriate ethical standards. The Company has followed Recommendation 1.1 by establishing the functions reserved to the Board and those delegated to senior executives as disclosed above. The Company has followed Recommendation 1.2 by evaluating the performance of senior executives. The Board reviews the performance of the Company’s senior executives on a face to face basis with the performance evaluation of the Managing Director being conducted by the Chairman of the Board. The Company has taken the appropriate measures to provide each director and senior executive with a copy of the Company’s policies which spells out the rights, duties and responsibilities that they should follow. (cid:122) the prudential control of the Company’s ﬁ nances and operations and monitoring the ﬁ nancial performance of the Company; The Company has followed Recommendation 1.3 by conducting the evaluations of senior executives in accordance with the process described above. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 7 STATEMENT OF CORPORATE GOVERNANCE Principle 2 - Structure the Board to Add Value Board of Directors - Composition, Structure and Process The Board has been formed so that it has effective composition, size and commitment to adequately discharge its responsibilities and duties given the Company’s current size, scale and nature of its activities. The composition of the Board is reviewed periodically with regards to the optimum number and skills of directors required for the Board to properly perform its responsibilities and functions. Having regard to the current membership of the Board and the size, organisational complexity and scope of operations of the Company, a Nomination Committee has not been established and therefore Recommendation 2.4 has not been followed. The Company has followed Recommendations 2.1, 2.2 and 2.3 as disclosed below. Performance review and evaluation Independent directors The Board is made up of six directors, ﬁ ve of which, including the Chairman, are independent directors. The Managing Director is the only executive director. The names of the directors of the Company in ofﬁ ce at the date of this report, specifying which are independent, are set out in the Directors’ Report on page 12 of this report. Regular assessment of independence An independent director, in the view of the Company, is a non-executive director who: (cid:122) is not a substantial shareholder of the Company or an ofﬁ cer of, or otherwise associated directly with, a substantial shareholder of the Company; (cid:122) within the last three years has not been employed in an executive capacity by the Company, or been a director after ceasing to hold any such employment; (cid:122) within the last three years has not been a principal of a material professional advisor or a material consultant to the Company, or an employee materially associated with a service provider; (cid:122) is not a material supplier or customer of the Company, or an ofﬁ cer of or otherwise associated directly or indirectly with a material supplier or customer; (cid:122) has no material contractual relationship with the Company other than as a director of the Company; (cid:122) (cid:122) has not served on the Board for a period which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the Company; and is free from any interest and any business or other relationship which could, or could reasonably be perceived to, materially interfere with the director’s ability to act in the best interests of the Company. The Company has followed Recommendations 2.5 and 2.6 by disclosing the process for evaluating the performance of the Board, and disclosure requirements under Principle 2 below. It is the policy of the Board to ensure that the directors and executives of the Company are equipped with the knowledge and information they need to discharge their responsibilities effectively, and that individual and collective performance is regularly and fairly reviewed. Although the Company is not of a size to warrant the development of formal processes for evaluating the performance of its Board, individual directors and executives, there is on-going monitoring by the Chairman and the Board. The Chairman also speaks to directors individually regarding their role as a director. Induction and education The Company has the policy to provide each new director or ofﬁ cer with a copy of the following documents: (cid:122) Code of Conduct; (cid:122) Continuous Disclosure Policy; (cid:122) Share Trading Policy; and (cid:122) Shareholders Communication Policy. Access to information Each director has access to Board papers and all relevant documentation. Skills, knowledge and experience Directors are appointed based on the speciﬁ c corporate and governance skills and experience required by the Company. The Board consists of a relevant blend of personal experience in accounting and ﬁ nance, law, ﬁ nancial and investment markets, ﬁ nancial management and public company administration, and, director-level business or corporate experience required by the Company. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 8 STATEMENT OF CORPORATE GOVERNANCE Professional advice Access to Company information and conﬁ dentiality Board members, with the approval of the Chairman, may seek from time to time external professional advice. Term of appointment as a director The Constitution of the Company provides that a director, other than the Managing Director, may not retain ofﬁ ce for more than three calendar years or beyond the third Annual General Meeting following his or her election, whichever is longer, without submitting himself or herself for re-election. One third of the directors (excluding the Managing Director) must retire each year and are eligible for re-election. The directors who retire by rotation at each Annual General Meeting are those with the longest length of time in ofﬁ ce since their appointment or last election. Remuneration The remuneration of the directors is determined by the Board as a whole, with the director to whom a particular decision relates being absent from the meeting during the time that the remuneration level is discussed and decided upon. For details on the amount of remuneration and any amount of equity based executive remuneration payment for each director, refer to the Key Management Personnel note to the ﬁ nancial statements and the Remuneration Report in the Directors’ Report. Internal controls The Board acknowledges that it is responsible for the overall internal control framework, but recognises that no cost effective internal control system will preclude all errors and irregularities. The system of internal control adopted by the Company seeks to provide an appropriate division of responsibility and careful selection and training of personnel relative to the level of activities and size of the Company. Principle 3 - Promote Ethical and Responsible Decision Making Code of Conduct and Ethical Standards All directors, executives and employees act with the utmost integrity and objectivity in carrying out their duties and responsibilities, endeavouring at all times to enhance the reputation and performance of the Company. Every employee has direct access to a director to whom they may refer any ethical issues that may arise from their employment. The Company has followed Recommendation 3.1 and has adopted a formal Code of Conduct. All directors have the right of access to all relevant Company books and to the Company’s executive management. In accordance with legal requirements and agreed ethical standards, directors and executives of the Company have agreed to keep conﬁ dential information received in the course of exercising their duties and will not disclose non-public information except where disclosure is authorised or legally mandated. Share dealings and disclosures The Company has adopted a policy relating to the trading of Company securities. The Board restricts directors, executives and employees from acting on material information until it has been released to the market. Executives, employees and directors are required to consult the Chairman prior to dealing in securities in the Company or other companies in which the Company has a relationship. Share trading by directors, executives or employees is not permitted at any time whilst in the possession of price sensitive information not already available to the market. In addition, the Corporations Act prohibits the purchase or sale of securities whilst a person is in possession of inside information. The trading windows for restricted persons are 60 days after the release of the half year results, the full year results or the holding of the Annual General Meeting. Restricted persons are prohibited from trading in the Company’s securities outside these trading windows unless in special circumstances and with the approval of the Chairman. Conﬂ icts of interest To ensure that directors are at all times acting in the best interests of the Company, directors must: (cid:122) disclose to the Board actual or potential conﬂ icts of interest that may or might reasonably be thought to exist between the interests of the director and the interests of any other parties in carrying out the activities of the Company; and (cid:122) if requested by the Board, within seven days or such further period as may be permitted, take such necessary and reasonable steps to remove any conﬂ ict of interest. If a director cannot, or is unwilling to remove a conﬂ ict of interest then the director must, as required by the Corporations Act, absent himself from the room when Board discussion and/or voting occurs on matters about which the conﬂ ict relates. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 9 STATEMENT OF CORPORATE GOVERNANCE Related party transactions Related party transactions include any ﬁ nancial transaction between a director and the Company as deﬁ ned in the Corporations Act or the ASX Listing Rules. Unless there is an exemption under the Corporations Act from the requirement to obtain shareholder approval for the related party transaction, the Board cannot approve the transaction. The Company also discloses related party transactions in its ﬁ nancial statements as required under relevant Accounting Standards. Board diversity Given the small size of the Company, the Company has not set a policy concerning diversity and therefore Recommendations 3.2, 3.3, 3.4 and 3.5 have not been followed. However, the Company’s Board does take into account the gender, age, ethnicity and cultural background of potential Board members. Principle 4 - Safeguard Integrity in Financial Reporting Audit and Risk Committee Having regard to the current membership of the Board and the size, organisational complexity and scope of operations of the Company, an Audit Committee has not been established and therefore Recommendations 4.1, 4.2, 4.3 and 4.4 have not been followed. The objective of a committee is to make recommendations to the Board regarding various matters including the adequacy of the external audit, risk management and compliance procedures, to evaluate from time to time the effectiveness of the ﬁ nancial statements prepared for the Board and to ensure that independent judgement is always exercised. These functions of an Audit Committee are performed by the full Board. Principle 5 - Make timely and Balanced Disclosure The Company has followed Recommendations 5.1 and 5.2 and has adopted a formal Continuous Disclosure Policy. Continuous Disclosure to the ASX The Board has designated the Chairman, Managing Director and Company Secretary as being responsible for overseeing and co-ordinating disclosure of information to the ASX as well as communicating with the ASX. Accordingly the Company will notify the ASX promptly of information: (cid:122) concerning the Company, that a reasonable person would expect to have a material effect on the price or value of the Company’s securities; and (cid:122) that would, or would be likely to, inﬂ uence persons who commonly invest in securities in deciding whether to acquire or dispose of the Company’s securities. Announcements are made in a timely manner, are factual and do not omit material information in order to avoid the emergence of a false market in the Company’s securities. Principle 6 - Respect the Rights of Shareholders The Company has followed Recommendations 6.1 and 6.2 and has designed a communications policy for promoting effective communication with shareholders and encouraging their participation at general meetings as disclosed below. Communication to the Market and Shareholders The Board recognises its duty to ensure that its shareholders are informed of all major developments affecting the Company’s state of affairs. The Board considers that information will be communicated to shareholders and the market through: (cid:122) the Annual Report which is distributed to shareholders (usually with the Notice of Annual General Meeting); (cid:122) the Annual General Meeting and other general meetings called to obtain shareholder approvals as appropriate; (cid:122) the half-yearly ﬁ nancial statements; (cid:122) quarterly cash ﬂ ow reports; and (cid:122) other announcements released to the ASX as required under the continuous disclosure requirements of the ASX Listing Rules and other information that may be mailed to shareholders or made available through the Company’s website. The Company actively promotes communication with shareholders through a variety of measures, including the use of the Company’s website and email. The Company’s reports and ASX announcements are made available on the Company’s website, www.biotron.com.au, and on the ASX website, www.asx.com.au, under ASX code ‘BIT’. The Company also maintains an email list for the distribution of the Company’s announcements via email. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 10 STATEMENT OF CORPORATE GOVERNANCE Principle 7 - Recognise and Manage Risk The Company has followed Recommendation 7.1 and has designed policies for the oversight and management of material business risks as disclosed below. been established and therefore Recommendations 8.1, 8.2, 8.3 and 8.4 have not been followed. However, the functions and responsibilities listed below were carried out by the Board. The Board is responsible for the identiﬁ cation, monitoring and management of signiﬁ cant business risks and the implementation of appropriate levels of internal control, recognising however that no cost effective internal control system will preclude all errors and irregularities. The Board regularly reviews and monitors areas of signiﬁ cant business risk. Having regard to the current membership of the Board and the size, organisational complexity and scope of operations of the Company, Recommendation 7.2 is not relevant because the Board has the oversight function of risk management and internal control systems. Therefore, the risk management functions and oversight of material business risks are performed directly by the Board and not by management. Internal control and risk management The Board reviews systems of external and internal controls and areas of signiﬁ cant operational, ﬁ nancial and property risk and ensures arrangements are in place to contain such risks to acceptable levels. Appropriate insurance policies are kept current to cover all potential risks and maintaining Directors’ and Ofﬁ cers’ professional indemnity insurance. Internal audit function The internal audit function is carried out by the Board. The Company does not have an internal audit department nor has an internal auditor. The size of the Company does not warrant the need or the cost of appointing an internal auditor. CEO and CFO declarations The Company has adopted and complied with Recommendation 7.3. The Board has determined that the Managing Director and the Company Secretary are the appropriate persons to make the CEO and CFO declarations as required under section 295A of the Corporations Act. The Board is also satisﬁ ed that the internal control system is operating effectively in all material respects. The Company has followed Recommendation 7.4 by disclosing the information above. Remuneration responsibilities The role and responsibility of the Board is to review and make recommendations in respect of: (cid:122) executive remuneration policy; (cid:122) executive director and senior management remuneration; (cid:122) executive incentive plan; (cid:122) non-executive directors’ remuneration; (cid:122) performance measurement policies and procedures; (cid:122) termination policies and procedures; (cid:122) equity based plans; and (cid:122) required remuneration and remuneration beneﬁ ts public disclosure. Remuneration policy The directors’ remuneration is adopted by shareholders at the Annual General Meeting. The salary and emoluments paid to ofﬁ cers are approved by the Board. Consultants are engaged as required pursuant to service agreements. The Company ensures that fees, salaries and emoluments are in line with general standards for publicly listed companies of the size and type of the Company. All salaries of directors and ofﬁ cers are disclosed in the Annual Report of the Company. In line with Recommendation 8.2, the Company has a policy to remunerate its directors and ofﬁ cers based on ﬁ xed and incentive component salary packages to reﬂ ect the short and long term objectives of the Company. The salary component of the Managing Director’s remuneration is made up of: (cid:122) ﬁ xed remuneration; and (cid:122) equity based remuneration when invited to participate by the Board in the executive share option plan of the Company. The salary component of non-executive and executive directors is made up of: Principle 8 - Remunerate Fairly and Responsibly (cid:122) ﬁ xed remuneration; and Having regard to the current membership of the Board and the size, organisational complexity and scope of operations of the Company, a Remuneration Committee has not (cid:122) equity based remuneration when invited to participate by the Board in the executive share option plan of the Company. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 11 DIRECTORS’ REPORT The period under review has seen the continued stepwise clinical development of BIT225, resulting in positive data from clinical trials. The directors present their report together with the ﬁ nancial statements of Biotron Limited (‘the Company’) for the year ended 30 June 2013 and the auditor’s report thereon. Directors The names and particulars of the directors of the Company at any time during or since the end of the ﬁ nancial year are: Mr Michael J. Hoy Independent and Non-Executive Chairman Mr Hoy has more than 30 years’ corporate experience in Australia, the United Kingdom, USA and Asia. He is Chairman of Telesso Technologies Limited and Lipotek Pty Limited and a former director of John Fairfax Holdings Limited and FXF Trust. He has been a director since 7 February 2000 and Chairman since 16 March 2000. Dr Michelle Miller BSc, MSc, PhD, GCertAppFin (Finsia) Managing Director Dr Miller has worked for over 20 years in the bioscience industry, with extensive experience in managing commercial bioscience research. She completed her PhD in the Faculty of Medicine at Sydney University, investigating molecular models of cancer development. Her experience includes a number of years at Johnson & Johnson developing anti-HIV gene therapeutics through preclinical research to clinical trials. She has experience in early stage start-ups from time spent as an Investment Manager with a specialist bioscience venture capital fund. She was appointed as Managing Director on 21 June 2002. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 12 DIRECTORS’ REPORT Mr Bruce Hundertmark BE (Chemical) Independent and Non-Executive Director Dr Susan M. Pond AM, MD DSc, FTSE Independent and Non-Executive Director Mr Robert B. Thomas BEc, MSAA, SF Fin, FICD Independent and Non-Executive Director Mr Thomas has over 35 years’ experience in the securities industry, with Potter Partners (now UBS), County NatWest and Citigroup. He is the chairman of TAL Limited (formerly Tower Australia Limited) and a director of Virgin Australia Limited, Heartware Limited and REVA Medical Limited. He chairs the Stockbrokers Association of Australia and Grahger Capital Securities, is the president of the Library Council of NSW and a director of O’Connell Street Associates Pty Limited and Aus Bio Limited. He is a member of the Advisory Boards of Nomura Australia and Inteq Limited. Mr Thomas has a Bachelor of Economics degree from Monash University (1963 - 1966). He has been a member of the Securities Institute of Australia since 1976 and was appointed as a Fellow to the Institute in 1997. He is a Master Stockbroker and is a Fellow of the Institute of Company Directors. Mr Thomas was appointed as a director on 7 March 2012. Mr Hundertmark is an independent businessman and company director with a wide range of experience in diverse business operations. He has specialised in recent years in high technology based company start-up operations and in promoting the formation of venture capital companies including News Datacom Research Limited in Israel, News Datacom Limited in Hong Kong and both PT Indo Bio Products and PT Indo Bio Fuels in Indonesia. He has been a director of numerous private and publicly listed companies including US Consultants Inc., News International plc, Sky Television plc, Prudential Cornhill Insurance Limited, Harris Scarfe Limited, Bernkastel Wines Limited, Codan Limited, Samic Limited and Investment & Merchant Finance Corporation Limited. He holds a Bachelors Degree in Engineering (Chemical) from the University of Adelaide and has completed studies to bachelors degree level in economics at the University of Queensland and chemistry at the University of Adelaide. He has worked in the UK, the USA, Japan, Bahrain, Qatar and Indonesia for extensive periods of time in various positions. Mr Hundertmark was appointed as a director on 16 March 2000. Dr Pond has a strong scientiﬁ c and commercial background having held executive positions in the biotechnology and pharmaceutical industry for 12 years, most recently as chairman and managing director of Johnson & Johnson Research Pty Limited (2003 - 2009). She has held many previous board positions including as executive director of Johnson & Johnson Pty Limited and non-executive director and chairman of AusBiotech Limited. Dr Pond is currently on the boards of the Australian Nuclear Science and Technology Organisation, Commercialisation Australia, the Centenary Institute and the Australian Academy of Technological Sciences and Engineering, of which she is vice-president. She is a Fellow of the Australian Institute of Company Directors. Dr Pond holds a ﬁ rst class honours degree in Bachelor of Medicine and Surgery from the University of Sydney and a Doctor of Medicine degree from the University of New South Wales. She has obtained specialist clinical credentials in internal medicine, clinical pharmacology and clinical toxicology and has held academic appointments at the University of California, San Francisco and the University of Queensland before joining industry. Dr Pond was appointed as a director on 7 March 2012. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 13 DIRECTORS’ REPORT Dr Denis N. Wade Mr Peter J. Nightingale Independent and Non-Executive Director Company Secretary Mr Nightingale graduated with a Bachelor of Economics degree from the University of Sydney and is a member of the Institute of Chartered Accountants in Australia. He has worked as a chartered accountant in both Australia and the USA. As a director or company secretary Mr Nightingale has, for more than 25 years, been responsible for the ﬁ nancial control, administration, secretarial and in-house legal functions of a number of private and public listed companies in Australia, the USA and Europe including Bolnisi Gold N.L., Callabonna Uranium Limited, Mogul Mining N.L., Pangea Resources Limited, Perseverance Corporation Limited, Sumatra Copper & Gold plc, Timberline Minerals, Inc. and Valdora Minerals N.L. Mr Nightingale is currently a director of ASX listed Augur Resources Ltd, Cockatoo Coal Limited and Planet Gas Limited and unlisted public companies Equus Resources Limited and Nickel Mines Limited. Mr Nightingale has been Company Secretary since 23 February 1999. Dr Wade has been involved for over 40 years with the development of research based pharmaceuticals and medical devices in both industry and academia. He has been a director of several private and public companies in the healthcare sector, including Heartware Limited and subsequently Heartware International Inc., since December 2004. He was a director and chairman of Gene Shears Pty Limited and, from 1987 until his retirement in 2002, was managing director and chairman of Johnson & Johnson Research Pty Ltd, a research and development company of Johnson & Johnson Inc. He was also a member of the J&J Corporate Ofﬁ ce of Science and Technology. Prior to that, Dr Wade was the Foundation Professor of Clinical Pharmacology at the University of New South Wales and served as a member of a number of state and federal bodies related to the drug industry, including the P3 Committee. He is a former chairman of the Australian Academy National Committee for Pharmacology, the Australasian Society for Clinical and Experimental Pharmacology and Toxicology and a former chairman of the Clinical Pharmacology Section of the International Union of Pharmacology. Dr Wade holds a ﬁ rst class honours degree in Medicine and Science from the University of Sydney and a Doctorate of Philosophy from the University of Oxford. He was awarded an Honorary Doctorate of Science by the University of New South Wales and is a Fellow of the Royal Australasian College of Physicians and of the Australian Academy of Technological Sciences and Engineering. In 1999 he was made a Member of the Order of Australia. Dr Wade was appointed as a director on 30 April 2010. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 14 DIRECTORS’ REPORT Directors’ Meetings The number of directors’ meetings held and number of meetings attended by each of the directors of the Company, while they were a director, during the year are: Director Michael J. Hoy Michelle Miller Bruce Hundertmark Susan M. Pond Robert B. Thomas Denis N. Wade Directors’ Interests Directors’ Meetings No. of Eligible Meetings to Attend No. of Meetings Attended 6 6 6 6 6 6 6 6 6 6 6 6 At the date of this report, the beneﬁ cial interests of each director of the Company in the issued share capital of the Company and options, each exercisable to acquire one fully paid ordinary share of the Company are: Fully Paid Ordinary Shares Options Option Terms (Exercise Price and Term) Directors Michael J. Hoy Michelle Miller Bruce Hundertmark Susan M. Pond Robert B. Thomas Denis N. Wade 3,154,322 - - - - 50,000 250,000 5,566,716 1,232,894 2,000,000 $0.22 at any time up to 30 October 2015 3,000,000 $0.25 from 30 October 2012 to 30 October 2015 - - - - - - - - There were no options over unissued ordinary shares granted to directors or executives of the Company during or since the end of the ﬁ nancial year. Unissued Shares Under Option At the date of this report, unissued ordinary shares of the Company under option are: Number of Shares 2,000,000 3,000,000 Exercise Price $0.22 $0.25 Expiry Date 30 October 2015 30 October 2015 All options expire on the earlier of their expiry date or termination of the employee’s employment. The persons entitled to exercise the options do not have, by virtue of the options, the right to participate in a share issue of the Company or any other body corporate. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 15 DIRECTORS’ REPORT Shares Issued on Exercise of Options Likely Developments The Company has not issued any ordinary shares of the Company as a result of the exercise of options during or since the end of the ﬁ nancial year. Principal Activities The principal activities of the Company during the ﬁ nancial year were the funding and management of intermediate and applied biotechnology research and development projects. Financial Result and Review of Operations The operating loss of the Company for the ﬁ nancial year after income tax was $3,850,745 (2012 - $2,378,052 loss). A review of the Company’s operations for the year is set out in the Operating and Financial Review. Impact of Legislation and Other External Requirements There were no changes in environmental or other legislative requirements during the year that have signiﬁ cantly impacted the results or operations of the Company. Dividends The directors recommend that no dividend be paid by the Company. No dividend has been paid or declared since the end of the previous ﬁ nancial year. State of Affairs In the opinion of the directors, there were no signiﬁ cant changes in the state of affairs of the Company that occurred during the year ended 30 June 2013. Environmental Regulations The Company’s operations are not subject to signiﬁ cant environmental regulations under Commonwealth or State legislation in relation to its research projects. Events Subsequent to Balance Date There has not arisen in the interval between the end of the ﬁ nancial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the Company, to affect signiﬁ cantly the operations of the Company, the results of those operations, or the state of affairs of the Company, in future ﬁ nancial years. During the year ended 30 June 2013, the Company continued to fund and manage its research and development projects. The success of these research projects, which cannot be assessed on the same fundamentals as trading and manufacturing enterprises, will determine future likely developments. Indemniﬁ cation of Ofﬁ cers and Auditors During or since the end of the ﬁ nancial year, the Company has not indemniﬁ ed or made a relevant agreement to indemnify an ofﬁ cer or auditor of the Company against a liability incurred by such an ofﬁ cer or auditor. In addition, the Company has not paid or agreed to pay, a premium in respect of a contract insuring against a liability incurred by an ofﬁ cer or auditor. Remuneration Report - Audited Principles of compensation - Audited Key management personnel have authority and responsibility for planning, directing and controlling the activities of the Company. Key management personnel comprise the directors of the Company and the Company Secretary. No other employees have been deemed to be key management personnel. The policy of remuneration of directors and senior executives is to ensure the remuneration package properly reﬂ ects the person’s duties and responsibilities, and that remuneration is competitive in attracting, retaining and motivating people of the highest quality. The Board is responsible for reviewing its own performance. The non-executive directors are responsible for evaluating the performance of the executive directors who, in turn, evaluate the performance of all other senior executives. The evaluation process is intended to assess the Company’s business performance, whether long term strategic objectives are being achieved and the achievement of individual performance objectives. Remuneration generally comprises salary and superannuation. Longer term incentives are able to be provided through the Company’s Incentive Option Plan which acts to align the directors and senior executives’ actions with the interests of the shareholders. The remuneration disclosed below represents the cost to the Company for the services provided under these arrangements. No directors or senior executives receive performance related remuneration. Options issued in prior periods as remuneration were subject to minimum service periods being met. All outstanding options have fully vested at 30 June 2013. There were no remuneration consultants used by the Company during the year ended 30 June 2013, or in the prior year. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 16 DIRECTORS’ REPORT Consequences of performance on shareholder wealth - Audited In considering the Company’s performance and beneﬁ ts for shareholders wealth, the Board have regard to the following indices in respect of the current ﬁ nancial year and the previous four ﬁ nancial years. 2013 2012 2011 2010 2009 Net loss attributable to equity holders of the Company $3,850,745 $2,378,052 $1,907,527 $1,872,244 $1,766,099 Dividends paid - - - - - Change in share price (2.0) cents (1.0) cents 4.8 cents (0.02) cents (0.0) cents The overall level of key management personnel’s compensation is assessed on the basis of market conditions, status of the Company’s projects, and ﬁ nancial performance of the Company. Details of remuneration for the year ended 30 June 2013 - Audited Details of director and senior executive remuneration and the nature and amount of each major element of the remuneration of each director of the Company, and other key management personnel of the Company are set out below: Year 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 2013 2012 Primary Fees $ 68,807 59,633 36,697 30,581 36,697 11,715 36,697 11,715 36,697 21,407 - 11,468 299,999 291,346 75,000 75,000 Superannuation $ 6,193 5,367 3,303 2,752 3,303 1,054 3,303 1,054 3,303 11,927 - 1,032 27,000 26,221 - - Share Based Payments - Options $ Total $ Value of Options as a % of Remuneration - - - - - - - - - - - - 56,308 210,246 - - 75,000 65,000 40,000 33,333 40,000 12,769 40,000 12,769 40,000 33,334 - 12,500 383,307 527,813 75,000 75,000 - - - - - - - - - - - - 15% 40% - - Directors Non-executive Michael J. Hoy (Chairman) Bruce Hundertmark Susan M. Pond Robert B. Thomas Denis N. Wade Michael S. Hirshorn Executive Michelle Miller (Managing Director) Executives Peter J. Nightingale (Company Secretary) No bonuses were paid during the ﬁ nancial year and no performance based components of remuneration exist. The Company employed no other key management personnel. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 17 DIRECTORS’ REPORT Options granted as compensation - Audited There were no options granted to key management personnel during the 2013 and 2012 ﬁ nancial years. Modiﬁ cation of terms of equity-settled share-based payment transactions - Audited No terms of equity-settled share-based payment transactions (including options granted as compensation to a key management person) have been altered or modiﬁ ed by the issuing entity during the 2013 and 2012 ﬁ nancial years. Exercise of options granted as compensation - Audited There were no shares issued on the exercise of options previously granted as compensation during the 2013 and 2012 ﬁ nancial years. Analysis of options and rights over equity instruments granted as compensation - Audited All options refer to options over ordinary shares of Biotron Limited, which are exercisable on a one-for-one basis. Director Number Date % vested in year Options granted % forfeited in year Financial year in which grant vests Michelle Miller 1,000,000 24 December 2010 1,000,000 24 December 2010 3,000,000 24 December 2010 -% -% 100% -% -% -% 1 July 2010 1 July 2011 1 July 2012 The number of options that had vested as at 30 June 2013 is 5,000,000 (2012 - 2,000,000). No options were granted subsequent to year end. Analysis of movements in options - Audited Director Michelle Miller Service contracts - Audited Granted in the year Valuation of options exercised in the year Lapsed in the year - - - There are no service contracts for the key management personnel. Non-executive directors - Audited Total compensation for all non-executive directors is determined by the Board based on market conditions. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 18 DIRECTORS’ REPORT Non-audit Services During the year KPMG, the Company’s auditor, performed no other services in addition to their statutory duties. A copy of the auditors’ independence declaration as required under Section 307C of the Corporations Act 2001 is included in the Directors’ Report. Details of the amounts paid and accrued to the auditor of the Company, KPMG, and its related practices for audit and non-audit services provided during the year are set out below. Statutory audit - Audit and review of ﬁ nancial reports - KPMG 34,000 32,250 2013 $ 2012 $ 3 1 0 2 T R O P E R L A U N N A N O R T O I B 19 DIRECTORS’ REPORT Lead Auditor’s Independence Declaration The Lead Auditor’s Independence Declaration is set out on page 21 and forms part of the Directors’ Report for the year ended 30 June 2013. This report has been signed in accordance with a resolution of the directors and is dated 28 August 2013: Michael J. Hoy Chairman Michelle Miller Managing Director 3 1 0 2 T R O P E R L A U N N A N O R T O I B 20 DIRECTORS’ REPORT Lead Auditor’s Independence Declaration under Section 307C of the Corporations Act 2001 To: the Directors of Biotron Limited I declare that, to the best of my knowledge and belief, in relation to the audit for the ﬁ nancial year ended 30 June 2013, there have been: (i) no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and (ii) no contraventions of any applicable code of professional conduct in relation to the audit. KPMG Brisbane 28 August 2013 Adam Twemlow Partner KPMG, an Australian partnership and a member ﬁ rm of the KPMG network of independent member ﬁ rms afﬁ liated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Liability limited by a scheme approved under Professional Standards Legislation. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 21 STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2013 Continuing operations Other income Administration and consultants' expenses Depreciation Employee and director expenses Direct research and development expenses Rent and outgoings expenses Travel expenses Other expenses from ordinary activities Operating loss before ﬁ nancing income Interest income Net ﬁ nancing income Loss before tax Income tax expense Loss for the year Other comprehensive income Total comprehensive loss for the year Notes 2013 $ 2012 $ 5 12 6 891,951 503,700 (219,000) (225,600) (8,213) (10,871) (802,404) (781,697) (3,545,476) (1,729,015) (63,491) (25,025) (61,819) (40,944) (290,804) (243,496) (4,062,462) (2,589,742) 211,717 211,717 211,690 211,690 (3,850,745) (2,378,052) 9 - - (3,850,745) (2,378,052) - - (3,850,745) (2,378,052) Basic and diluted loss per share (cents) 7 (1.69) cents (1.26) cents The above Statement of Proﬁ t or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 22 STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2013 Current assets Cash and cash equivalents Trade and other receivables Other assets Total current assets Non-current assets Plant and equipment Total non-current assets Total assets Current liabilities Trade and other payables Employee entitlements Total current liabilities Total liabilities Net assets Equity Issued capital Reserves Accumulated losses Total equity Notes 2013 $ 2012 $ 8 10 11 12 13 14 4,792,437 7,891,781 1,723 48,518 503,700 43,254 4,842,678 8,438,735 23,511 23,511 22,991 22,991 4,866,189 8,461,726 218,824 172,255 391,079 391,079 52,865 139,314 192,179 192,179 4,475,110 8,269,547 15 32,548,656 32,548,656 522,000 465,692 (28,595,546) (24,744,801) 4,475,110 8,269,547 The above Statement of Financial Position should be read in conjunction with the accompanying notes. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 23 STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2013 Attributable to equity holders of the Company Notes Issued Capital $ Option Premium Reserve $ Accumulated Losses $ Total $ Balance at 1 July 2011 23,087,673 2,171,485 (22,858,858) 2,400,300 Total comprehensive income for the year Loss for the year Other comprehensive income Total comprehensive loss for the year Transactions with owners, recorded directly in equity Contribution by and distribution to owners Ordinary shares/options issued Cost of options issued Share based payment transactions Transfer expired options Exercise of options - - - 8,038,554 (1,501) - - - - - - - 210,246 (492,109) 1,423,930 (1,423,930) (2,378,052) (2,378,052) - - (2,378,052) (2,378,052) - - - 492,109 - 8,038,554 (1,501) 210,246 - - Balance at 30 June 2012 15 32,548,656 465,692 (24,744,801) 8,269,547 Balance at 1 July 2012 32,548,656 465,692 (24,744,801) 8,269,547 Total comprehensive income for the year Loss for the year Other comprehensive income Total comprehensive loss for the year Transactions with owners, recorded directly in equity Contribution by and distribution to owners Share based payment transactions - - - - - - - (3,850,745) (3,850,745) - - (3,850,745) (3,850,745) 56,308 - 56,308 Balance at 30 June 2013 15 32,548,656 522,000 (28,595,546) 4,475,110 The above Statement of Changes in Equity should be read in conjunction with the accompanying notes. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 24 STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2013 Cash ﬂ ows from operating activities Cash receipts in the course of operations Payments for research and development Cash payments in the course of operations Interest received Notes 2013 $ 2012 $ 1,395,651 447,490 (3,389,942) (1,720,933) (1,308,037) (1,225,419) 211,717 211,010 Net cash used in operating activities 16 (3,090,611) (2,287,852) Cash ﬂ ows from investing activities Payments for plant and equipment Net cash used in investing activities Cash ﬂ ows from ﬁ nancing activities Proceeds from issue of shares and options Cost of issue of shares and options Net cash from ﬁ nancing activities Net (decrease)/increase in cash held Cash and cash equivalents at 1 July Cash and cash equivalents at 30 June (8,733) (8,733) (2,252) (2,252) - - - 8,038,554 (1,500) 8,037,054 (3,099,344) 5,746,950 7,891,781 2,144,831 8 4,792,437 7,891,781 The above Statement of Cash Flows should be read in conjunction with the accompanying notes. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 25 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 1. Reporting Entity Biotron Limited (the ‘Company’) is a company domiciled in Australia. The address of the Company’s registered ofﬁ ce is at Level 2, 66 Hunter Street, Sydney, NSW 2000. The Company is a for-proﬁ t entity and is primarily engaged in the funding and management of intermediate and applied biotechnology research and development projects. 2. Basis of Preparation (a) Statement of compliance These ﬁ nancial statements are general purpose ﬁ nancial statements which have been prepared in accordance with Australian Accounting Standards (‘AASBs’) (including Australian Interpretations) adopted by the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001. The ﬁ nancial statements of the Company also comply with International Financial Reporting Standards (‘IFRSs’) adopted by the International Accounting Standards Board (‘IASB’). The ﬁ nancial report was authorised for issue by the directors on 28 August 2013. (b) Basis of measurement The ﬁ nancial statements have been prepared on the historical cost basis. (c) Functional and presentation currency These ﬁ nancial statements are presented in Australian dollars, which is the Company’s functional currency. (d) Use of estimates and judgements The preparation of ﬁ nancial statements requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. 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 and in any future periods affected. In particular, information about signiﬁ cant areas of estimation uncertainty and critical judgements in applying accounting policies that have the most signiﬁ cant effect on the amounts recognised in the ﬁ nancial statements are described in the following notes: (cid:122) Note 9 - Unrecognised deferred tax asset (e) Going concern The ﬁ nancial statements have been prepared on a going concern basis which contemplates the realisation of assets and settlement of liabilities in the ordinary course of business. 3. Signiﬁ cant Accounting Policies The accounting policies set out below have been applied consistently to all periods presented in these ﬁ nancial statements, and have been applied consistently by the Company. (a) Cash and cash equivalents Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less. (b) Trade and other receivables Trade and other receivables are stated at their amortised cost less impairment losses. (c) Property, plant and equipment Property plant and equipment are stated at their historical cost less accumulated depreciation and accumulated impairment losses. Depreciation is recognised in proﬁ t or loss using the reducing balance method from the date of acquisition at rates between 13% and 40% per annum. (d) Research and development Grants Where a grant is received relating to research and development costs that have been expensed, the grant is recognised as other income when the grant becomes receivable and the Company complies with all attached conditions. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 26 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 3. Signiﬁ cant Accounting Policies (Cont.) Share-based payment transactions Costs Expenditure on research activities, undertaken with the prospect of gaining new scientiﬁ c or technical knowledge and understanding, is recognised in proﬁ t and loss when incurred. Development activities involve a plan or design for the production of new or substantially improved products and processes. Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic beneﬁ ts are probable, and the Company intends to and has sufﬁ cient resources to complete development and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour and overhead costs that are directly attributable to preparing the asset for its intended use. Other development expenditure is recognised in proﬁ t or loss when incurred. Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment losses. (e) Trade and other payables Trade and other payables are stated at their amortised cost, are non-interest bearing and are normally settled within 60 days. (f) Employee entitlements Wages, salaries, annual leave and sick leave Liabilities for employee entitlements for wages, salaries, annual leave and sick leave represent present obligations resulting from employees’ services provided to reporting date, calculated at undiscounted amounts based on remuneration wages and salary rates that the Company expect to pay as at reporting date including related on-costs, such as workers compensation insurance and superannuation. Long service leave Liabilities for employee entitlements for long service leave is the amount of future beneﬁ t that employees have earned in return for their service in the current and prior periods plus related on-costs, that beneﬁ t is discounted to determine its present value. The grant-date fair value of share-based payment awards granted to employees is recognised as an employee expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The amount recognised as an expense is adjusted to reﬂ ect the number of awards for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant date fair value of the share-based payment is measured to reﬂ ect such conditions and there is no true-up for differences between expected and actual outcomes. (g) Financial Instruments Non-derivative ﬁ nancial assets The Company initially recognises loans and receivables on the date that they are originated. The Company derecognises a ﬁ nancial asset when the contractual rights to the cash ﬂ ows from the asset expire, or it transfers the rights to receive the contractual cash ﬂ ows on the ﬁ nancial asset in a transaction in which substantially all the risks and rewards of ownership of the ﬁ nancial asset are transferred. Any interest in such transferred ﬁ nancial assets that is created or retained by the Company is recognised as a separate asset or liability. Financial assets and liabilities are offset and the net amount presented in the Statement of Financial Position when, and only when, the Company has a legal right to offset the amounts and intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously. The Company holds loans and receivables. Loans and receivables are non-derivative ﬁ nancial assets with ﬁ xed or determinable payments that are not quoted in an active market. Such assets are recognised at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost using the effective interest method, less any impairment losses. They are included in current assets, except for those with maturities greater than 12 months after the reporting period, which are classiﬁ ed as non-current assets. Loans and receivables comprise cash and cash equivalents and trade and other receivables. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 27 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 3. Signiﬁ cant Accounting Policies (Cont.) Non-derivative ﬁ nancial liabilities The Company initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other ﬁ nancial liabilities are recognised initially on the trade date, which is the date that the Company becomes a party to the contractual provisions of the instrument. The Company derecognises a ﬁ nancial liability when its contractual obligations are discharged, cancelled or expire. Other ﬁ nancial liabilities comprise trade and other payables. Share Capital Ordinary Shares Ordinary shares are classiﬁ ed as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects. (h) Tax Current tax and deferred tax is recognised in proﬁ t or loss except to the extent that it relates to a business combination, or items recognised directly in equity or in other comprehensive income. Current tax Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax Deferred tax is recognised in respect of temporary differences between the carrying amount of assets and liabilities for ﬁ nancial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable proﬁ t or loss. The measurement of deferred tax reﬂ ects the tax consequences that would follow the manner in which the Company expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously. A deferred tax asset is recognised for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable proﬁ ts will be available against which they can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax beneﬁ t will be realised. Goods and services tax Revenue, expenses and assets are recognised net of the amount of goods and services tax (‘GST’), except where the amount of GST incurred is not recoverable from the taxation authority. In these circumstances, the GST is recognised as part of the cost of acquisition of the asset or as part of the expense. Receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the ATO is included as a current asset or liability in the balance sheet. Cash ﬂ ows are included in the statement of cash ﬂ ows on a gross basis. The GST components of cash ﬂ ows arising from investing and ﬁ nancing activities which are recoverable from, or payable to, the ATO are classiﬁ ed as operating cash ﬂ ows. (i) Finance income Finance income comprises interest income on funds invested. Interest income is recognised as it accrues in proﬁ t or loss, using the effective interest method. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 28 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 3. Signiﬁ cant Accounting Policies (Cont.) (j) Earnings per share The Company presents basic and diluted earnings per share (‘EPS’) data for its ordinary shares. Basic EPS is calculated by dividing the proﬁ t or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the proﬁ t or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares, which comprise share options granted to employees. (k) Impairment Non-derivative ﬁ nancial assets A ﬁ nancial asset not classiﬁ ed as at fair value through proﬁ t or loss is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A ﬁ nancial asset is considered to be impaired if objective evidence indicates that one or more events have had a negative effect on the estimated future cash ﬂ ows of that asset. Financial assets measured at amortised cost Individually signiﬁ cant ﬁ nancial assets are tested for impairment on an individual basis. The remaining ﬁ nancial assets are assessed collectively in groups that share similar credit risk characteristics. An impairment loss in respect of a ﬁ nancial asset measured at amortised cost is calculated as the difference between its carrying amount, and the present value of the estimated future cash ﬂ ows discounted at the original effective interest rate. Losses are recognised within proﬁ t or loss. When an event occurring after the impairment was recognised causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through proﬁ t or loss. Non-ﬁ nancial assets The carrying amounts of the Company’s non-ﬁ nancial assets are reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists then the asset’s recoverable amount is estimated. An impairment loss is recognised whenever the carrying amount of an asset or its cash-generating unit (‘CGU’) exceeds its recoverable amount. The recoverable amount of an asset or CGU is the greater of their fair value less costs to sell and value in use. In assessing value in use, the estimated future cash ﬂ ows are discounted to their present value using a pre-tax discount rate that reﬂ ects current market assessments of the time value of money and the risks speciﬁ c to the asset or CGU. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inﬂ ows from continuing use that are largely independent of the cash inﬂ ows of other assets or CGUs. Impairment losses are recognised in proﬁ t or loss. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. (l) Provisions A provision is recognised if, as a result of a past event, the Company has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outﬂ ow of economic beneﬁ ts will be required to settle the obligation. Provisions are determined by discounting the expected future cash ﬂ ows at a pre-tax rate that reﬂ ects the current market assessments of the time value of money and the risks speciﬁ c to the liability. The unwinding of the discount is recognised as a ﬁ nance cost. (m) Segment reporting Determination and presentation of operating segments The Company determines and presents operating segments based on the information that is provided internally to the Managing Director, who is the Company’s chief operating decision maker. An operating segment is a component of the Company that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Company’s other components. All operating segments’ operating results are regularly reviewed by the Company’s Managing Director to make decisions about resources to be allocated to the segment and assess its performance. Segment results that are reported to the Managing Director include items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate assets (primarily the Company’s headquarters), head ofﬁ ce expenses, and income tax assets and liabilities. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 29 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 3. Signiﬁ cant Accounting Policies (Cont.) 4. Determination of Fair Values (n) New standards and interpretations not yet adopted A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after 1 July 2012, and have not been applied in preparing these ﬁ nancial statements. Those which may be relevant to the Company are set out below. The Company does not plan to adopt these standards early. AASB 9 Financial Instruments (2010), AASB 9 Financial Instruments (2009) AASB 9 (2009) introduces new requirements for the classiﬁ cation and measurement of ﬁ nancial assets. Under AASB 9 (2009), ﬁ nancial assets are classiﬁ ed and measured based on the business model in which they are held and the characteristics of their contractual cash ﬂ ows. AASB 9 (2010) introduces additions relating to ﬁ nancial liabilities. The IASB currently has an active project that may result in limited amendments to the classiﬁ cation and measurement requirements of AASB 9 and add new requirements to address the impairment of ﬁ nancial assets and hedge accounting. The Company does not plan to adopt this standard early and the standard is not expected to have a signiﬁ cant effect on the ﬁ nancial statements. AASB 13 Fair Value Measurement (2011) AASB 13 provides a single source of guidance on how fair value is measured, and replaces the fair value measurement guidance that is currently dispersed throughout Australian Accounting Standards. Subject to limited exceptions, AASB 13 is applied when fair value measurements or disclosures are required or permitted by other AASBs. AASB 13 is effective for annual periods beginning on or after 1 January 2013 with early adoption permitted. The standard is not expected to have a signiﬁ cant effect on the ﬁ nancial statements. A number of the Company’s accounting policies and disclosures require the determination of fair value, for both ﬁ nancial and non-ﬁ nancial assets and liabilities. Fair values have been determined for measurement and/or disclosure purposes based on the following methods. Where applicable, further information about the assumptions made in determining fair values is disclosed in the notes speciﬁ c to that asset or liability. Trade and other receivables The fair value of trade and other receivables is estimated as the present value of future cash ﬂ ows, discounted at the market rate of interest at the measurement date. Fair value is determined at initial recognition and, for disclosure purposes, at each annual reporting date. Share-based payment transactions The fair value of employee share options is measured using the Black-Scholes formula. Measurement inputs include share price on measurement date, exercise price of the instrument, expected volatility (based on weighted average historic volatility adjusted for changes expected due to publicly available information), weighted average expected life of the instruments (based on historical experience and general option holder behaviour), expected dividends, and the risk-free interest rate (based on government bonds). Service and non-market performance conditions attached to the transactions are not taken into account in determining fair value. Share-based payment arrangements in which the Company receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions. Non-derivative ﬁ nancial liabilities Non-derivative ﬁ nancial liabilities are measured at fair value, at initial recognition, and for disclosure purposes, at each annual reporting date. Fair value is calculated based on the present value of future principal and interest cash ﬂ ows, discounted at the market rate of interest at the measurement date. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 30 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 5. Other Income Research and development rebate 6. Loss from Operating Activities Loss from ordinary activities has been arrived at after charging the following items: Auditors' remuneration paid to KPMG - Audit and review of ﬁ nancial reports Depreciation - Ofﬁ ce equipment - Plant and equipment Direct research and development expenditure expensed as incurred Provision for employee entitlements Superannuation expense 2013 $ 2012 $ 891,951 503,700 34,000 32,250 5,962 2,251 6,779 4,092 3,545,476 1,729,015 32,941 88,253 35,537 60,931 3 1 0 2 T R O P E R L A U N N A N O R T O I B 31 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 7. Loss Per Share The calculation of basic and diluted loss per share at 30 June 2013 was based on the loss attributable to ordinary shareholders of $3,850,745 (2012 - $2,378,052 loss) and a weighted average number of ordinary shares outstanding during the ﬁ nancial year ended 30 June 2013 of 228,296,944 (2012 - 188,157,762), calculated as follows: Net loss for the year Weighted average number of ordinary shares (basic and diluted) Issued ordinary shares at 1 July Effect of shares issued on 24 October 2011 Effect of shares issued on 25 November 2011 Effect of shares issued on 9 January 2012 Effect of shares issued on 3 April 2012 2013 $ 2012 $ 3,850,745 2,378,052 2013 Number 2012 Number 228,296,944 147,965,108 - - - - 4,713 241,828 39,932,613 13,500 Weighted average number of ordinary shares at 30 June 228,296,944 188,157,762 As the Company is loss making, none of the potentially dilutive securities are currently dilutive. 8. Cash and Cash Equivalents Cash at bank Cash and cash equivalents in the statement of cash ﬂ ows 2013 $ 2012 $ 4,792,437 4,792,437 7,891,781 7,891,781 3 1 0 2 T R O P E R L A U N N A N O R T O I B 32 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 9. Income Tax Expense Current tax expense Current year Tax losses not recognised Deferred tax expense Current year De-recognition of temporary differences 2013 $ 2012 $ (1,418,791) 1,418,791 - 13,713 (13,713) - (836,541) 836,541 - (27,541) 27,541 - Numerical reconciliation between tax expense and pre-tax net proﬁ t Loss before tax - continuing operations (3,850,745) (2,378,052) Prima facie income tax beneﬁ t at the Australian tax rate of 30% (2012 - 30%) (1,155,223) (713,416) Increase in income tax expense due to: - Adjustments not resulting in temporary differences - Effect of tax losses not recognised - Unrecognised temporary differences Income tax expense current and deferred Deferred tax assets have not been recognised in respect of the following items Deductible temporary differences (net) Tax losses Net (249,855) 1,418,791 (13,713) - (150,666) 836,541 27,541 - 103,594 9,001,283 9,104,877 174,876 8,180,001 8,354,877 The deductible temporary differences and tax losses do not expire under the current tax legislation. Deferred tax assets have not been recognised in respect of these items because it is not probable that future taxable proﬁ t will be available against which the Company can utilise the beneﬁ ts of the deferred tax asset. 10. Trade and Other Receivables Current Other debtors 11. Other Assets Current prepayments Security deposits 1,723 503,700 33,387 15,131 48,518 28,123 15,131 43,254 3 1 0 2 T R O P E R L A U N N A N O R T O I B 33 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 12. Plant and Equipment Ofﬁ ce equipment - at cost Accumulated depreciation Plant and equipment - at cost Accumulated depreciation Total plant and equipment - net book value Reconciliations Reconciliations of the carrying amounts for each class of plant and equipment are set out below: Ofﬁ ce equipment Balance at 1 July Additions Depreciation Carrying amount at the end of the ﬁ nancial year Plant and equipment Balance at 1 July Depreciation Carrying amount at the end of the ﬁ nancial year Total carrying amount at the end of the ﬁ nancial year 13. Trade and Other Payables Current Creditors Accruals 14. Employee Entitlements Current Employee annual leave provision Long service leave provision Number of employees at the end of the ﬁ nancial year 3 1 0 2 T R O P E R L A U N N A N O R T O I B 34 2013 $ 2012 $ 148,680 (133,915) 14,765 506,463 (497,717) 8,746 23,511 139,947 (127,953) 11,994 506,463 (495,466) 10,997 22,991 11,994 8,733 (5,962) 14,765 10,997 (2,251) 8,746 23,511 174,194 44,630 218,824 82,276 89,979 172,255 7 16,521 2,252 (6,779) 11,994 15,089 (4,092) 10,997 22,991 27,915 24,950 52,865 65,273 74,041 139,314 4 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 2013 $ 2012 $ 15. Capital and Reserves Issued and paid up capital 228,296,944 (2012 - 228,296,944) fully paid ordinary shares 32,548,656 32,548,656 Fully paid ordinary shares Balance at the beginning of the ﬁ nancial year Issue of shares Exercise of options Costs of issue 32,548,656 23,087,673 - - - 8,038,554 1,423,930 (1,501) Balance at the end of ﬁ nancial year 32,548,656 32,548,656 The Company does not have authorised capital or par value in respect of its issued shares. All issued shares are fully paid. Terms and conditions - Shares Holders of ordinary shares are entitled to receive dividends as declared and, are entitled to one vote per share at shareholders’ meetings. In the event of winding up of the Company, ordinary shareholders rank after creditors and are fully entitled to any proceeds of liquidation. During the year ended 30 June 2012, the Company issued ordinary shares following the exercise of 80,278,131 $0.10 options for cash totalling $8,027,813 and 53,705 $0.20 options for cash totalling $10,741. There were no amounts unpaid on the shares issued and there were no material share issue costs. Nature and purpose of reserves Option premium reserve The option premium reserve is used to recognise the grant date fair value of options issued but not exercised. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 35 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 16. Statement of Cash Flows Reconciliation of cash ﬂ ows from operating activities Loss for the period Adjustments for: Depreciation of plant and equipment Provisions Share based payment Changes in assets and liabilities Decrease/(increase) in receivables (Increase) in prepayments Increase/(decrease) in payables Net cash used in operating activities 17. Related Parties 2013 $ 2012 $ (3,850,745) (2,378,052) 8,213 32,941 56,308 501,977 (5,265) 165,960 10,871 35,537 210,246 (51,176) (27,599) (87,679) (3,090,611) (2,287,852) Key management personnel and director transactions The following key management personnel holds a position in another entity that results in them having control or joint control over the ﬁ nancial or operating policies of that entity, and this entity transacted with the Company during the year as follows: (cid:122) During the year ended 30 June 2013, Peter J. Nightingale had a controlling interest in an entity, MIS Corporate Pty Limited, which provided full administrative services, including rental accommodation, administrative staff, services and supplies, to the entity. Fees paid to MIS Corporate Pty Limited during the year, which were in the ordinary course of business and on normal terms and conditions, amounted to $144,000 (2012 - $144,000). There were no outstanding amounts at 30 June 2013 (2012 - $nil). Key management personnel compensation During the year ended 30 June 2013 compensation of key management personnel totalled $693,307 (2012 - $772,518), which comprised primary salary and fees of $590,594 (2012 - $512,865), superannuation of $46,405 (2012 - $49,407), and share based payments of $56,308 (2012 - $210,246). During the 2013 and 2012 ﬁ nancial years, no long term beneﬁ ts or termination payments were paid. Individual directors and executives compensation disclosures Information regarding individual directors and executives’ compensation and some equity instruments disclosures as required by Corporations Regulations 2M.3.03 is provided in the remuneration report section of the Directors’ Report. Apart from the details disclosed in this note, no director has entered into a material contract with the Company since the end of the previous ﬁ nancial year and there were no material contracts involving directors’ interests existing at year end. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 36 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 17. Related Parties (Cont.) Equity holdings and transactions The movement during the reporting period in the number of ordinary shares in the Company held directly, indirectly or beneﬁ cially, by each speciﬁ ed director and executive, including their personally-related entities, is as follows: Fully paid ordinary shareholdings and transactions - 2013 Held at 1 July 2012 Purchased Received on exercise of options Sales Held at 30 June 2013 Directors Michael J. Hoy Michelle Miller Bruce Hundertmark Susan M. Pond Robert B. Thomas Denis N. Wade Executives Peter J. Nightingale 2,974,322 180,000 - 50,000 250,000 5,250,000 1,232,894 4,348,076 - - - 316,716 - - Fully paid ordinary shareholdings and transactions - 2012 Held at 1 July 2011 Purchased Directors Michael J. Hoy Michelle Miller Bruce Hundertmark Susan M. Pond Robert B. Thomas Denis N. Wade Michael S. Hirshorn Executives Peter J. Nightingale - - 50,000 250,000 - 1,566,108 - - -^ 5,250,000^ 475,000 130,000 157,894 600,000 - - 1,702,397 157,894 2,487,785 - - - - - - - Received on exercise of options 1,408,214 - - - - - - - - - - - 3,154,322 - 50,000 250,000 5,566,716 1,232,894 4,348,076 Sales Held at 30 June 2012 - - - - - - - - 2,974,322 - 50,000 250,000 5,250,000 1,232,894 130,000* 4,348,076 ^ Number of shares held at date of appointment as a director. * Number of shares held when ceasing to be a director. No shares were granted to key management personnel during the reporting period as compensation during the 2013 and 2012 ﬁ nancial years. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 37 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 17. Related Parties (Cont.) Option holdings The movement during the reporting period in the number of options over ordinary shares in the Company held directly, indirectly or beneﬁ cially, by each speciﬁ ed director and executive, including their personally related entities, is as follows: Option holdings - 2013 Directors Michael J. Hoy Michelle Miller Bruce Hundertmark Susan M. Pond Robert B. Thomas Denis N. Wade Executives Peter J. Nightingale Option holdings - 2012 Directors Michael J. Hoy Michelle Miller Bruce Hundertmark Susan M. Pond Robert B. Thomas Denis N. Wade Michael S. Hirshorn Executives Peter J. Nightingale Held at 1 July 2012 - 5,000,000 - - - - - Held at 1 July 2011 1,408,214 5,000,000 - - - Exercised Expired Held at 30 June 2013 Vested and exercisable at 30 June 2013 - - - - - - - - - - - - - - - - 5,000,000 5,000,000 - - - - - - - - - - Exercised Expired Held at 30 June 2012 Vested and exercisable at 30 June 2012 1,408,214 - - - - - - - - - 762,500 600,000 162,500 - - 2,487,785 2,487,785 - - - - 5,000,000 2,000,000 - - - - - - - - - - - - No options held by key management personnel are vested but not exercisable at 30 June 2013 or 2012. There were no loans made to key management personnel or their related parties during the 2013 and 2012 ﬁ nancial years year and no amounts were outstanding at 30 June 2013 (2012 - $nil). 3 1 0 2 T R O P E R L A U N N A N O R T O I B 38 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 18. Share Based Payments The Company has an Incentive Option Plan to provide eligible persons, being employees or directors, or individuals whom the Plan Committee determine to be employees for the purposes of the Plan, with the opportunity to acquire options over unissued ordinary shares in the Company. The number of options granted or offered under the Plan will not exceed 10% of the Company’s issued share capital and the exercise price of options will be the greater of the market value of the Company’s shares as at the date of grant of the option or such amount as the Plan Committee determines. Options have no voting or dividend rights. The vesting conditions of options issued under the plan are based on minimum service periods being achieved. There are no other vesting conditions attached to options issued under the plan. In the event that the employment or ofﬁ ce of the option holder is terminated, any options which have not reached their exercise period will lapse and any options which have reached their exercise period may be exercised within three months of the date of termination of employment. Any options not exercised within this three month period will lapse. During the 2013 and 2012 ﬁ nancial years, no options were issued under the Incentive Option Plan. Options outstanding at 30 June 2013 Grant date 24 December 2010 24 December 2010 24 December 2010 Number of options 1,000,000 1,000,000 3,000,000 Exercise price Fair value at grant date Vesting date* Expiry date $0.22 $0.22 $0.25 $0.105 $0.105 $0.104 24 December 2010 30 October 2015 30 October 2011 30 October 2015 30 October 2012 30 October 2015 * Vesting conditions are based on minimum service periods being achieved Options outstanding at 30 June 2012 Grant date 24 December 2010 24 December 2010 24 December 2010 Number of options 1,000,000 1,000,000 3,000,000 Exercise price Fair value at grant date Vesting date* Expiry date $0.22 $0.22 $0.25 $0.105 $0.105 $0.104 24 December 2010 30 October 2015 30 October 2011 30 October 2015 30 October 2012 30 October 2015 * Vesting conditions are based on minimum service periods being achieved Movement of options during the year Number of options 2013 Weighted average exercise price 2013 Number of options 2012 Weighted average exercise price 2012 Outstanding at 1 July 5,000,000 $0.24 5,000,000 Exercised during the year Expired during the year Outstanding at 30 June Exercisable at 30 June - - 5,000,000 5,000,000 - - $0.24 $0.24 - - 5,000,000 5,000,000 $0.24 - - $0.24 $0.24 The Option Premium Reserve is used to record the options issued to directors and executives of the Company. Options are valued using the Black-Scholes option pricing model: The weighted average remaining contractual life of share outstanding at the end of the year was 2.33 years (2012 - 3.33 years). 3 1 0 2 T R O P E R L A U N N A N O R T O I B 39 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 18. Share Based Payments (Cont.) No ordinary shares have been issued as a result of the exercise of any option granted pursuant to the Incentive Option Plan during the current and prior ﬁ nancial year. Fair value of options The fair value of options granted is measured at grant date and recognised as an expense over the period during which the employee becomes unconditionally entitled to the options. The fair value of the options granted is measured using an option valuation methodology, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reﬂ ect the actual number of options that vest. Expenses arising from share-based payment transactions Total expense arising from share based payment transactions recognised during the year ended 30 June 2013 was $56,308 (2012 - $210,246). 19. Financial Instruments Financial risk management objectives and policies The Company’s ﬁ nancial instruments comprise deposits with banks, receivables, trade and other payables and from time to time short term loans from related parties. The Company does not trade in derivatives or in foreign currency. The Company manages its risk exposure of its ﬁ nancial instruments in accordance with the guidance of the Board of Directors. The main risks arising from the Company’s ﬁ nancial instruments are market risk, credit risk and liquidity risks. This note presents information about the Company’s exposure to each of these risks, its objectives, policies and processes for measuring and managing risk, and the Company’s management of capital. Risk management framework The Board has overall responsibility for the establishment and oversight of the risk management framework. Informal risk management policies are established to identify and analyse the risks faced by the Company. The primary responsibility to monitor the ﬁ nancial risks lies with the Managing Director and the Company Secretary under the authority of the Board. Credit risk Credit risk arises mainly from the risk of counterparties defaulting on the terms of their agreements. The carrying amounts of the following assets represent the Company’s maximum exposure to credit risk in relation to ﬁ nancial assets: 3 1 0 2 T R O P E R L A U N N A N O R T O I B 40 Cash and cash equivalents Trade and other receivables Security deposits Note 8 10 11 Carrying amount 2013 $ Carrying amount 2012 $ 4,792,437 7,891,781 1,723 15,131 503,700 15,131 4,809,291 8,410,612 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 19. Financial Instruments (Cont.) Cash and cash equivalents The Company mitigates credit risk on cash and cash equivalents by dealing with regulated banks in Australia. Trade and other receivables Credit risk of trade and other receivables is very low as it consists predominantly of amounts recoverable from taxation and other government authorities in Australia. All ﬁ nancial assets are current and are not past due or impaired and the Company does not have any material credit risk exposure to any single debtor or group of debtors under ﬁ nancial instruments entered into by the Company. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its ﬁ nancial obligations as they fall due. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufﬁ cient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company’s reputation. Ultimate responsibility for liquidity management rests with the Board. The Company monitors rolling forecasts of liquidity on the basis of expected fund raisings, trade payables and other obligations for the ongoing operation of the Company. At balance date, the Company has available funds of $4,792,437 for its immediate use. The following are the contractual maturities of ﬁ nancial liabilities, including estimated interest payments: Company 30 June 2013 Carrying amount $ Contractual cash ﬂ ows $ Less than one year $ Between one and ﬁ ve years $ Interest $ Trade and other payables 218,824 (218,824) (218,824) 30 June 2012 Trade and other payables 52,865 (52,865) (52,865) - - - - It is not expected that the cash ﬂ ows included in the maturity analysis could occur signiﬁ cantly earlier, or at signiﬁ cantly different amounts. Market Risks Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of ﬁ nancial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. Interest rate risk The Company’s income statement is affected by changes in interest rates due to the impact of such changes on interest income from cash and cash equivalents and interest bearing security deposits. The average interest rate on funds held during the year was 3.34% (2012 - 4.13%). 3 1 0 2 T R O P E R L A U N N A N O R T O I B 41 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 19. Financial Instruments (Cont.) At balance date, the Company had the following mix of ﬁ nancial assets exposed to variable interest rate risk that are not designated as cash ﬂ ow hedges: Financial assets Cash and cash equivalents Security deposits Net exposure Note 8 11 2013 $ 2012 $ 4,792,437 7,891,781 15,131 15,131 4,807,568 7,906,912 The Company did not have any interest bearing ﬁ nancial liabilities in the current or prior year. The Company does not have interest rate swap contracts. The Company always analyses its interest rate exposure when considering renewals of existing positions including alternative ﬁ nancing. Sensitivity analysis The following sensitivity analysis is based on the interest rate risk exposures at balance date. An increase of 100 basis points in interest rates throughout the reporting period would have decreased the loss for the period by the amounts shown below, whilst a decrease would have increased the loss by the same amount. The Company’s equity consists of fully paid ordinary shares. There is no effect on fully paid ordinary shares by an increase or decrease in interest rates during the period. 63,436 64,048 The Company is not exposed to currency or price risks. Capital management The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market conﬁ dence and to sustain future development of the business. The Board ensures costs are not incurred in excess of available funds and will seek to raise additional funding through issues of shares for the continuation of the Company’s operations. There were no changes in the Company’s approach to capital management during the year. The Company is not subject to externally imposed capital requirements. Estimation of fair values The carrying amounts of ﬁ nancial assets and liabilities approximate their net fair values, given the short time frames to maturity and or variable interest rates. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 42 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2013 20. Financial Reporting by Segments The Company operates in one reportable operating and geographical segment, being the biotechnology industry in Australia. 21. Operating Leases The Company leases an ofﬁ ce in North Ryde, Sydney. The lease is for a period of 3 years starting from November 2010 with an option to renew lease after that 3 years. During the year ended 30 June 2013, $63,491 was recognised as an expense in proﬁ t or loss in respect of the operating lease (2012 - $61,819). The future minimum leases payments under non-cancellable operating leases are payable as follows: Less than one year Between one and ﬁ ve years 22. Commitments and Contingencies 2013 $ 17,210 - 2012 $ 51,629 17,210 There are no capital commitments, contingent assets or contingent liabilities at the date of these ﬁ nancial statements. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 43 DIRECTORS’ DECLARATION 1. In the opinion of the directors of Biotron Limited: a) the ﬁ nancial statements and notes set out on pages 22 to 43, and the Remuneration Report in the Directors’ Report, set out on pages 16 to 18, are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Company’s ﬁ nancial position as at 30 June 2013 and of its performance for the ﬁ nancial year ended on that date; and (ii) complying with Australian Accounting Standards (including Australian Accounting Interpretations) and the Corporations Regulations 2001; b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable. 2. The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the chief executive ofﬁ cer and chief ﬁ nancial ofﬁ cer for the ﬁ nancial year ended 30 June 2013. 3. The directors draw attention to note 2(a) of the ﬁ nancial statements, which includes a statement of compliance with International Financial Reporting Standards. This report has been signed in accordance with a resolution of the directors and is dated 28 August 2013: Michael J. Hoy Chairman Michelle Miller Managing Director 3 1 0 2 T R O P E R L A U N N A N O R T O I B 44 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BIOTRON LIMITED Report on the Financial Report We have audited the accompanying ﬁ nancial report of Biotron Limited (the Company), which comprises the Statement of Financial Position as at 30 June 2013, and the Statement of Proﬁ t or Loss and Other Comprehensive Income, Statement of Changes in Equity and Statement of Cash Flows for the year ended on that date, notes 1 to 22 comprising a summary of signiﬁ cant accounting policies and other explanatory information and the directors’ declaration. Directors’ responsibility for the ﬁ nancial report The directors of the Company are responsible for the preparation of the ﬁ nancial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the ﬁ nancial report that is free from material misstatement, whether due to fraud or error. In note 2(a), the directors also state, in accordance with Australian Accounting Standard AASB 101 Presentation of Financial Statements, that the ﬁ nancial statements comply with International Financial Reporting Standards. Auditor’s responsibility Our responsibility is to express an opinion on the ﬁ nancial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the ﬁ nancial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the ﬁ nancial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the ﬁ nancial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation of the ﬁ nancial report that gives a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the ﬁ nancial report. We performed the procedures to assess whether in all material respects the ﬁ nancial report presents fairly, in accordance with the Corporations Act 2001 and Australian Accounting Standards, a true and fair view which is consistent with our understanding of the Company’s ﬁ nancial position and of its performance. We believe that the audit evidence we have obtained is sufﬁ cient and appropriate to provide a basis for our audit opinion. Independence In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001. KPMG, an Australian partnership and a member ﬁ rm of the KPMG network of independent member ﬁ rms afﬁ liated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Liability limited by a scheme approved under Professional Standards Legislation. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 45 INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF BIOTRON LIMITED Auditor’s opinion In our opinion: a) the ﬁ nancial report of Biotron Limited is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Company’s ﬁ nancial position as at 30 June 2013 and of its performance for the year ended on that date; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001. b) the ﬁ nancial report also complies with International Financial Reporting Standards as disclosed in note 2(a). Report on the Remuneration Report We have audited the Remuneration Report included in pages 16 to 18 of the directors’ report for the year ended 30 June 2013. The directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with Section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with auditing standards. Auditor’s opinion In our opinion, the Remuneration Report of Biotron Limited for the year ended 30 June 2013 complies with Section 300A of the Corporations Act 2001. KPMG Brisbane 28 August 2013 Adam Twemlow Partner 3 1 0 2 T R O P E R L A U N N A N O R T O I B 46 KPMG, an Australian partnership and a member ﬁ rm of the KPMG network of independent member ﬁ rms afﬁ liated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Liability limited by a scheme approved under Professional Standards Legislation. ADDITIONAL STOCK EXCHANGE INFORMATION Home Exchange The Company is listed on the ASX Limited. The home exchange is Sydney. Use of Cash and Assets Since the Company’s listing on the ASX, the Company has used its cash and assets in a way consistent with its stated business objectives. Class of Shares and Voting Rights There is only one class of shares in the Company, fully paid ordinary shares. The rights attaching to shares in the Company are set out in the Company’s Constitution. The following is a summary of the principal rights of the holders of shares in the Company. Every holder of shares present in person or by proxy, attorney or representative at a meeting of shareholders has one vote on a vote taken by a show of hands, and, on a poll every holder of shares who is present in person or by proxy, attorney or representative has one vote for every fully paid share registered in the shareholder’s name on the Company’s share register. A poll may be demanded by the chairperson of the meeting, by at least 5 shareholders entitled to vote on the resolution or shareholders with at least 5% of the votes that may be cast on the resolution on a poll. Distribution of Equity Securityholders As at 31 July 2013, the distribution of each class of equity was as follows: Range 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over Fully Paid Ordinary Shares 30 October 2015 $0.22 Options 30 October 2015 $0.25 Options 72 367 306 732 291 1,768 - - - - 1 1 - - - - 1 1 At 31 July 2013, 509 shareholders held less than a marketable parcel of shares. 3 1 0 2 T R O P E R L A U N N A N O R T O I B 47 ADDITIONAL STOCK EXCHANGE INFORMATION Twenty Largest Quoted Shareholders At 31 July 2013 the twenty largest fully paid ordinary shareholders held 37.13% of fully paid ordinary as follows: Name Dr Angela Fay Dulhunty Scott’s A V Pty Ltd CBDF Pty Limited Rigi Investments Pty Limited Rigi Super Fund Pty Ltd Rob Thomas Super Fund Prof Alan Jonathan Berrick Mr. Russell Dean Thomson Pathold No 222 Pty Ltd Twynam Agricultural Group Pty Ltd Bell Potter Nominees LTD Umbiram Pty Ltd Fordholm Investments Pty Ltd 1 2 3 4 5 6 7 8 9 10 11 12 13 14 Mr. Peter James Nightingale 15 Linkenholt Pty Limited 16 Mr. Christopher David Hammer 17 Lenvat Pty Ltd 18 Warman Investments Pty Ltd 19 Ramsab Pty Ltd 20 Mrs. Narelle Fay There are no current on-market buy-backs. Fully Paid Ordinary Shares 9,968,362 9,014,000 5,750,508 5,750,000 5,399,426 5,316,666 5,090,000 4,385,000 4,100,000 3,700,000 3,650,000 3,154,322 3,000,000 2,834,750 2,692,100 2,331,730 2,200,000 2,175,000 2,150,000 2,105,000 % 4.37 3.95 2.52 2.52 2.37 2.33 2.23 1.92 1.80 1.62 1.60 1.38 1.31 1.24 1.18 1.02 0.96 0.95 0.94 0.92 3 1 0 2 T R O P E R L A U N N A N O R T O I B 48 CORPORATE DIRECTORY CORPORATE DIRECTORY Directors Mr Michael J. Hoy (Chairman) Dr Michelle Miller (Managing Director) Mr Bruce Hundertmark Dr Susan M. Pond Mr Robert B. Thomas Dr Denis N. Wade Company Secretary Mr Peter J. Nightingale Registered Ofﬁ ce Level 2, 66 Hunter Street SYDNEY NSW 2000 Phone: Fax: E-mail: Homepage: www.biotron.com.au + 61 2 9300 3344 + 61 2 9221 6333 enquiries@biotron.com.au Principal Administration Ofﬁ ce Suite 1.9, 56 Delhi Road NORTH RYDE NSW 2113 Phone: Fax: + 61 2 9805 0488 + 61 2 9805 0688 Share Registrar Computershare Investor Services Pty Limited 117 Victoria Street West End QLD 4101 Phone: Fax: + 61 7 3237 2100 + 61 7 3229 9860 Auditors KPMG Level 16, Riparian Plaza 71 Eagle Street BRISBANE QLD 4000 Home Exchange ASX Limited 20 Bridge Street SYDNEY NSW 2000 Solicitors Minter Ellison 88 Phillip Street SYDNEY NSW 2000 Biotron Limited, incorporated and domiciled in Australia, is a publicly listed company limited by shares. 4595 Designed and Produced by RDA Creative www.rda.com.au WWW . . COM . AU

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