Biotron Limited Annual Report 2013

FY2013 Annual Report · Biotron Limited
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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.

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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.”

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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.”

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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.”

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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.” 

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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

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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. 

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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.

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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
$

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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

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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.

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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.

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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.

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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. 

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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.

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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.

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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.

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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. 

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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.

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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.

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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
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O
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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
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O
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U
N
N
A

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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
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U
N
N
A

N
O
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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

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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.

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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.

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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.

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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).

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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
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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
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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
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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
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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
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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

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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.

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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

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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.

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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

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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.

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