BIOTRON LIMITED
ABN 60 086 399 144
WWW .
WWW .
. COM . AU
2015
ANNUAL REPORT
41
BIOTRON ANNUAL REPORT 2015 CONTENTS
Operating and Financial Review ........................................ 1
Corporate Governance Statement .................................. 5
Directors’ Report ................................................................ 6
Lead Auditor’s Independence Declaration .................... 15
Statement of Profi t or Loss and
Other Comprehensive Income ........................................ 16
Statement of Financial Position ...................................... 17
Statement of Changes in Equity .................................... 18
Statement of Cash Flows ................................................. 19
Notes to the Financial Statements ................................ 20
Directors’ Declaration ..................................................... 35
Independent Auditor’s Report ....................................... 36
Additional Stock Exchange Information ....................... 38
Corporate Directory ....................................................... IBC
CORPORATE DIRECTORY
Directors
Mr Michael J. Hoy (Chairman)
Dr Michelle Miller (Managing Director)
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:
+ 61 2 9300 3344
+ 61 2 9221 6333
enquiries@biotron.com.au
Homepage: www.biotron.com.au
Principal Administration Offi ce
Computershare Investor Services Pty Limited
Suite 1.9, 56 Delhi Road
NORTH RYDE NSW 2113
Phone:
+ 61 2 9805 0488
Fax:
+ 61 2 9805 0688
Share Registrar
Level 4, 60 Carrington Street
SYDNEY NSW 2000
Phone:
1300 787 272
Fax:
+61 3 9473 2500
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.
4796 Designed and Produced by RDA Creative www.rda.com.au
OPERATING AND FINANCIAL REVIEW
REVIEW OF OPERATIONS
Executive Summary
Biotron’s strategy is to systematically grow the value of the Company and work towards a commercial outcome for shareholders.
This is best achieved by the demonstration of positive data, from clinical trials and other supporting studies. To date, focus has
been on the planned, step‑wise clinical development of the Company’s lead antiviral drug, BIT225. Significant progress has been
made with all the Company’s clinical programs, which include clinical trials in HIV, Hepatitis C virus (‘HCV’) and in HIV/HCV
co‑infected patients.
Positive data has been reported in all clinical studies completed to date, which have demonstrated that BIT225 has activity
(the antiviral effectiveness) against both HIV and HCV.
A summary of significant events achieved in the period under
review includes:
zz
zz Report of positive data from the Phase 2 trial
(BIT225‑006) of BIT225 in patients co‑infected with HIV
and HCV. This study showed that all genotype 3 patients
who completed dosing were HCV‑virus free 12 weeks
after completing all drug treatment (known as SVR12),
indicating that they were cured of HCV infection.
zz Completion of enrolment of a longer term, 12 week
dosing, Phase 2 trial (BIT225‑008) of BIT225 in HCV
genotype 1 and 3 patients.
zz An independent Data and Safety Monitoring Committee
(DSMC) review of preliminary interim data from the
BIT225‑008 trial recommended the Company focus
further development of BIT225 in combination with new
classes of HCV drugs.
zz Report that BIT225 is able to reverse HIV‑induced immune
activation in HIV‑infected patients.
zz
Showcasing the Company to the international investment
community at various events in the USA and Australia.
Successful completion of a fully underwritten rights issue,
raising $4.06 million in November 2014, and a placement,
raising $2 million in June 2015. Subsequent to the end of
the 2015 financial year, an additional $2 million was raised
via a share purchase plan to eligible shareholders.
HCV and HIV Clinical Programs
As summarised below, significant progress has been made by
the Company to date with clinical programs, which include
clinical trials in HIV, HCV and HIV/HCV co‑infected
populations. BIT225 is in mid‑stage clinical development with
7 clinical trials completed and one trial currently in progress.
Encouraging efficacy results against both HCV and HIV in
clinical studies completed to date include:
zz
zz
100% of HCV genotype 1 patients receiving 400mg of
BIT225 plus interferon and ribavirin (IFN/RBV) were HCV
virus free at 48 weeks (BIT225‑005), compared to 75% of
controls who received IFN/RBV alone.
100% of HCV genotype 3 and HIV co‑infected patients
completing dosing with 300mg of BIT225 plus 48 weeks
of IFN/RBV were HCV virus free 12 weeks after completing
treatment (SVR12) (BIT225‑006).
1
BIOTRON ANNUAL REPORT 2015 OPERATING AND FINANCIAL REVIEW
zz
BIT225 accelerated viral load reductions in HCV genotype
3 patients (BIT225‑006).
zz
BIT225 shown to have HCV pan‑genotype activity
(i.e. activity against the 6 major strains of HCV) in in vitro
laboratory studies.
zz
BIT225 shown to target HIV in monocyte reservoir cells,
reducing virus production from these long‑lived viral
pools that are not cleared with current anti‑HIV drugs
(BIT225‑004).
zz
BIT225 shown to reduce HIV‑induced impairment of the
immune system (BIT225‑004).
BIT225 has a unique mode of action compared to other
antiviral drugs in development. It works by targeting the
assembly of virus particles and has dual activity against both
HIV and HCV. Chronic viral diseases such as HCV and HIV
need to be treated with two or more different classes of drugs
in combination to stop the virus mutating and becoming
resistant to treatment.
Both markets are large and growing. The worldwide
anti‑HCV drug market is forecast to grow from the current
US$4.7 billion to US$19 billion by end of the decade.
HIV drug sales in the major markets, which include the USA,
Europe and Japan, were US$11.9 billion in 2013. Due to growth
in the HIV drug market, stimulated by new drug launches and
increasing prevalence of HIV, this market is projected to reach
US$16.8 billion by 2020.
The Company aims to position BIT225 to maximise its
chances of being licensed for use in combination with other
anti‑HCV drugs. To this end, a series of clinical trials have
been undertaken in different HCV patient populations,
designed to determine BIT225’s anti‑HCV activity profile.
As demonstrated by the above summary of results of
clinical trials, BIT225 has shown encouraging activity
against HCV.
BIT225 is being positioned to fill treatment gaps that are
being left by other new HCV drug classes, in particular in
HCV genotype 3 and HIV/HCV co‑infected patients. In trials
to date, BIT225 has been used in combination with existing
drugs IFN/RBV, which are being replaced with new, safer HCV
drugs used in combination. To be considered for inclusion in
future HCV drug combinations treatment regimes, BIT225 will
need to be tested in patients in combination with other new
HCV drugs.
During the 2015 financial year, the Company has progressed
BIT225 along the path to commercialisation. Clinical data
from the BIT225‑006 HIV/HCV trial supports ongoing
development of BIT225, in particular for the treatment of
HCV genotype 3. Other new classes of HCV drugs are not
as effective against this type of HCV. There is a real needs
for alternative classes of HCV drugs that can improve viral
clearance and/or reduce the treatment time for genotype 3.
The completion of enrolment in the Phase 2 HCV 3‑month
dosing trial is a key milestone for the Company. This trial
is important as it will provide key data for future dosing
regimens with BIT225, as well as important longer‑term
dosing safety data. It will also provide additional efficacy data
against HCV genotypes 1 and 3. The review of the preliminary
interim data by the independent DSMC, which recommended
that Biotron should focus on groups with unmet needs such as
the HCV genotype 3 population in future studies with BIT225.
This is in line with the Company’s previously stated strategy.
The extent to which any virus remains in the blood 12 weeks
after stopping all drug treatment (SVR12 = Sustained
Virological Response at Week 12) is the measure of successful
treatment with HCV drugs. The BIT225‑008 trial protocol
required administration of IFN/RBV to G1 and G3 patients for
different periods after the 12 weeks of treatment with BIT225.
This means that SVR12 will be reached at Week 36 of the
trial for HCV genotype 3, and at Week 60 of the trial for
HCV genotype 1. It is anticipated that SVR12 for G3 will be
reported in 3Q15, and SVR12 for G1 will be reported in 1Q16.
Significant treatment gaps remain for HCV, such as
genotype 3, despite new drugs coming on the market.
There remains a need for additional drugs that will shorten
treatment time and improve outcomes for particular patients
who currently have limited treatment options. In addition,
it is becoming apparent that more patients than anticipated
are failing treatment with the new HCV drugs. The DSMC
noted this and said that this population, which has very
limited choices, may be an area of advantage for BIT225 given
its novel and different anti‑viral mechanism of action.
BIT225 also has antiviral activity against HIV.
Despite advances in HIV treatments, significant hurdles
remain. The incidence of infections is on the rise, with rates
in Australia at a 20‑year high. The number new cases being
diagnosed increased by over 10% in the last 12 months.
Estimates are that there could be up to 10,000 Australians
who do not know that they are HIV positive. In the USA,
over 1.1 million people are living with HIV infection, with
almost 1 in 6 unaware of their infection.
Reservoirs of HIV exist in patients despite treatment with
current anti‑HIV drugs. Biotron’s BIT225 has shown that it can
target HIV in one of the main reservoirs, with the potential
to reduce viral burdens in patients, and reverse HIV‑induced
impairment of the immune system. BIT225 is able to cross
the blood‑brain barrier, and may have an impact on HIV
associated dementia.
2
BIOTRON ANNUAL REPORT 2015 OPERATING AND FINANCIAL REVIEW
“During the 2015 financial year, the Company
has progressed BIT225 along the path to
commercialisation. Clinical data from the
BIT225‑006 HIV/HCV trial supports ongoing
development of BIT225, in particular for the
treatment of HCV genotype 3.”
Other Viral Programs
Biotron has a portfolio of clinical and preclinical antiviral
programs developing drugs targeting HCV, HIV, Dengue virus
and Influenza virus. At present, focus is on the development
of its lead compounds for the treatment of HCV and HIV.
Resources will be committed to additional projects once
the more advanced programs have been successfully
commercialised or as more resources become available.
Outlook for the Next 12 Months
The Company’s objective is to progress its HIV and HCV
programs, with specific focus on ensuring the programs
comply with US Food and Drug Administration (‘FDA’)
regulatory guidelines, to position BIT225 within the HCV
and HIV drug landscapes.
As detailed in the Prospectus released with the recent
successful Rights Issue, Biotron proposes to continue to
progress these programs through to a commercial outcome.
A key milestone on this commercialisation pathway is the
filing of Investigational New Drug (‘IND’) applications with
the USA FDA. IND filings are necessary to undertake clinical
trials in the USA and are key steps on the process towards final
drug approvals.
The Company is currently well funded to complete its stated
objectives, achievement of which will be important in the
selection of a partner for the further development of BIT225
within the HCV treatment landscape. These include:
zz
The Phase 2 trial (BIT225‑008) evaluating BIT225 as
a potential new therapy for treatment of HCV in HCV
genotype 1 (G1) and genotype 3 (G3) subjects and to
extend efficacy data against HCV G1 and G3, and to
provide further information regarding BIT225’s safety and
tolerability profile in longer term dosing using the capsule
formulation of the drug.
zz Modelling of pharmacokinetic data from previous trials
to determine optimal BIT225 dose and frequency in
future trials.
zz Additional in vitro laboratory studies of BIT225’s antiviral
activity, including studies in combination with other
HCV drugs.
zz Determination of potential drug‑drug interactions
between BIT225 and other HCV drug(s), to assist with
design of the proposed IND study.
zz
Progressing towards filing an IND with the US FDA.
The data from the BIT225‑008 trial is key for completing
pre‑IND activities. With the data received, the Company
expects to progress to an IND filing for the BIT225
HCV program.
There is renewed industry interest in eradicating HIV
reservoirs from patients. This is likely to require several
different drug strategies working in combination and BIT225,
with its unique anti‑HIV activity, has the potential to be a key
part of future HIV eradication strategies.
The Company has been in discussions with international
HIV experts, designing a pivotal clinical study that will
facilitate positioning BIT225 within the HIV treatment arena.
The safety and pharmacokinetic data on BIT225 from the
recent HCV trials have served a dual purpose ‑ supporting
both the HCV and HIV programs. One of the primary purposes
of the recent successful capital raising is to fund preparation
and submission of regulatory and ethics documentation,
and if approved, initiate a Phase 2 HIV trial.
The results of these studies will assist with positioning BIT225
in the commercial HCV and HIV landscapes.
In parallel with undertaking activities associated with the
IND filings, the Company plans to progress discussions with
potential partners.
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.
3
BIOTRON ANNUAL REPORT 2015 OPERATING AND FINANCIAL REVIEW
A summary of Biotron’s patent portfolio is as follows:
Title
WO0021538
Method of modulating ion channel
functional activity
Priority ‑ 12 October 1998
Status
Granted in Australia, Canada, China, Germany, France, United Kingdom,
The Netherlands, Japan, New Zealand and USA.
WO9813514
Granted in Australia, Canada, Japan, Europe, United Kingdom and USA.
Method of determining ion channel activity of
a substance
Priority ‑ 27 September 1996
WO04112687
Antiviral compounds and methods
Priority ‑ 26 June 2003
WO06135978
Antiviral compounds and methods
Priority ‑ 24 June 2005
WO2009/018609
Granted in Australia, Canada, China, India, Japan, Korea, New Zealand,
Singapore, and South Africa.
Under or awaiting examination in Brazil, Europe, Hong Kong, and USA.
Granted in Australia, Canada, China, Japan, Europe and United Kingdom,
New Zealand, Singapore, South Africa, and USA.
Under or awaiting examination in Brazil and India.
Granted in Australia, Europe, Japan, New Zealand, Singapore, and South Africa.
Hepatitis C antiviral compounds and methods
Priority ‑ 3 August 2007
Under or awaiting examination in Brazil, Canada, China, Hong Kong, India,
Korea, and USA.
Corporate
In April 2015, the Company received an R&D Tax Incentive rebate of $1.7 million for the 2014 financial 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 cash refund results from expenditure on Biotron’s HCV and HIV drug development programs. It is an important source of funds
for the Company’s ongoing research and development activities.
During the financial year and subsequent to the end of the financial year, the Company raised ~$8 million in equity capital.
The funds will be used to support the Company’s ongoing activities described above, and will, by strengthening the Company’s
balance sheet, improve the Company’s position to engage in the negotiation of a commercialisation transaction.
On behalf of the Board we would like to thank the Biotron staff for their commitment and dedication 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 significant clinical benefit to patients and generate value for our shareholders.
We look forward to the next year with confidence.
Michael J. Hoy
Chairman
Michelle Miller
Managing Director
4
BIOTRON ANNUAL REPORT 2015 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 Company has reviewed its corporate governance practices against the Corporate Governance
Principles and Recommendations (3rd edition) published by the ASX Corporate Governance Council.
The 2015 corporate governance statement is dated as at 6 August 2015 and reflects the corporate governance practices throughout
the 2015 financial year. The 2015 corporate governance was approved by the board on 6 August 2015. A description of the
Company’s current corporate governance practices is set out in the Company’s corporate governance statement which can be
viewed at http://www.biotron.com.au/corporate‑governance/
“Positive data has been reported in all
clinical studies completed to date, which
have demonstrated that BIT225 has activity
(the antiviral effectiveness) against both HIV
and HCV.”
5
BIOTRON ANNUAL REPORT 2015 DIRECTORS’ REPORT
The directors present their report together with the financial statements of Biotron Limited (‘the Company’) for the year ended
30 June 2015 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 financial 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.
Mr Hoy 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 commercial
development of early to mid stage technologies.
She completed her PhD in the Faculty of Medicine at
Sydney University investigating molecular models of
cancer development. Her experience includes several years at
Johnson and Johnson developing anti‑HIV gene therapeutics
through preclinical research to clinical trials. She has finance
industry experience from time spent as an Investment
Manager with a specialist bioscience venture capital fund.
Dr Miller was appointed as Managing Director on
21 June 2002.
Dr Susan M. Pond
AM, MD DSc, FTSE
Independent and Non‑Executive Director
Dr Pond has a strong scientific 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, non‑executive director and
chairman of AusBiotech Limited, director of the Australian
Nuclear Science and Technology Organisation and board
member of Innovation Australia.
Dr Pond is currently on the boards of 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 and the Australian Academy of Health and
Medical Sciences.
Dr Pond holds a first 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 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 the industry.
Dr Pond was appointed as a director on 7 March 2012.
6
BIOTRON ANNUAL REPORT 2015 DIRECTORS’ REPORT
Mr Robert B. Thomas
BEc, MSDIA, 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 Starpharma Holdings Limited and a
director of Aus Bio Limited, Heartware Inc, REVA Medical
Limited and Virgin Australia Limited. He chairs Grahger Capital
Securities and is a director of O’Connell Street Associates
Pty 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.
Dr Denis N. Wade
Independent and Non‑Executive Director
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 Office 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 first 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.
Mr Peter J. Nightingale
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
financial 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, Cockatoo Coal 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,
Planet Gas Limited and unlisted public companies Nickel
Mines Limited and Prospech Limited.
Mr Nightingale has been Company Secretary since
23 February 1999.
7
BIOTRON ANNUAL REPORT 2015 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
Susan M. Pond
Robert B. Thomas
Denis N. Wade
Directors’ Interests
Directors’ Meetings
No. of Eligible Meetings to Attend
No. of Meetings Attended
8
8
8
8
8
8
8
8
8
8
At the date of this report, the beneficial 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
Susan M. Pond
Robert B. Thomas
Denis N. Wade
3,855,283
‑
‑
305,556
5,265,000
1,506,871
700,961
2,000,000
3,000,000
55,556
1,237,038
273,977
$0.12 at any time up to 30 September 2016
$0.21 at any time up to 30 October 2015
$0.24 at any time up to 30 October 2015
$0.12 at any time up to 30 September 2016
$0.12 at any time up to 30 September 2016
$0.12 at any time up to 30 September 2016
In November 2014 the options issued to Michelle Miller were repriced. The 2,000,000 options issued were repriced from $0.22 to
$0.21 and the 3,000,000 options issued were repriced from $0.25 to $0.24.
There were no options over unissued ordinary shares granted as compensation to directors or executives of the Company during or
since the end of the financial year.
Unissued Shares Under Option
At the date of this report, unissued ordinary shares of the Company under option are:
Number of Shares
Exercise Price
2,000,000
3,000,000
50,720,453
$0.21
$0.24
$0.12
Expiry Date
30 October 2015
30 October 2015
30 September 2016
All options expire on the earlier of their expiry date or termination of the employee’s employment provided the exercise period
has been reached. In the event that the employment 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. 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.
8
BIOTRON ANNUAL REPORT 2015
DIRECTORS’ REPORT
Shares Issued on Exercise of Options
During or since the end of the financial year, the Company issued ordinary shares as a result of the exercise of options as follows
(there are no amounts unpaid on the shares issued):
Number of Shares
12,201
Principal Activities
Amount paid on each share
$0.12
The principal activities of the Company during the financial 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 financial year after income tax was $2,723,221 (2014 ‑ $3,085,814 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 significantly 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 financial year.
State of Affairs
In the opinion of the directors, there were no significant changes in the state of affairs of the Company that occurred during the
year ended 30 June 2015.
Environmental Regulations
The Company’s operations are not subject to significant environmental regulations under Commonwealth or State legislation in
relation to its research projects.
Events Subsequent to Balance Date
On 18 June 2015, the company offered all eligible shareholders the opportunity to participate in a Share Purchase Plan (“SPP”).
The offer closed on 10 July 2015. The Shareholders subscribed for 17,361,111 ordinary shares under the SPP at $0.1152 per share,
raising $2,000,000 before issue costs. All shares were issued 15 July 2015.
Other than the matter discussed above, there has not arisen in the interval between the end of the financial 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 significantly the operations of the Company, the results of those operations, or the state of affairs of the Company in
future financial years.
9
BIOTRON ANNUAL REPORT 2015 DIRECTORS’ REPORT
Likely Developments
During the year ended 30 June 2015, 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.
Indemnification of Officers and Auditors
During or since the end of the financial year, the Company has not indemnified or made a relevant agreement to indemnify an
officer or auditor of the Company against a liability incurred by such an officer 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 officer 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 reflects 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 2015.
There were no remuneration consultants used by the Company during the year ended 30 June 2015, or in the prior year.
Consequences of performance on shareholder wealth ‑ Audited
In considering the Company’s performance and benefits for shareholders wealth, the Board have regard to the following indices in
respect of the current financial year and the previous four financial years.
2015
2014
2013
2012
2011
Net loss attributable to equity
holders of the Company
Dividends paid
Change in share price
$2,723,221
$3,085,814
$3,850,745
$2,378,052
$1,907,527
‑
‑
‑
‑
‑
3.0 cents
2.0 cents
(2.0) cents
(1.0) cents
4.8 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 financial performance of the Company.
10
BIOTRON ANNUAL REPORT 2015 DIRECTORS’ REPORT
Details of remuneration for the year ended 30 June 2015 ‑ 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:
Directors
Non‑executive
Michael J. Hoy
(Chairman)
Susan M. Pond
Robert B. Thomas
Denis N. Wade
Bruce Hundertmark
Executive
Michelle Miller
(Managing Director)
Executives
Peter J. Nightingale
(Company Secretary)
Year
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
2015
2014
Primary
Fees
$
68,807
68,807
36,697
36,697
36,697
36,697
36,697
36,697
‑
13,106
328,846
343,254
75,000
75,000
Superannuation
$
6,537
6,365
3,486
3,394
3,486
3,394
3,486
3,394
‑
1,212
31,240
29,885
‑
‑
Share Based
Payments
‑ Options
$
Total
$
Value of
Options
as a % of
Remuneration
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
75,344
75,172
40,183
40,091
40,183
40,091
40,183
40,091
‑
14,318
360,086
373,139
75,000
75,000
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
No bonuses were paid during the financial year and no performance based components of remuneration exist. The Company
employed no other key management personnel.
Options granted as compensation ‑ Audited
There were no options granted as compensation to key management personnel during the 2015 and 2014 financial years.
Modification of terms of equity‑settled share‑based payment transactions ‑ Audited
In November 2014 the 5,000,000 options on issue to Michelle Miller were repriced. The modification resulted in an immaterial
change to the fair value of the options and no expense has been recognised as a result.
No other terms of equity‑settled share‑based payment transactions (including options granted as compensation to a key
management person) have been altered or modified by the issuing entity during 2015 and 2014 financial year.
Exercise of options granted as compensation ‑ Audited
There were no shares issued on the exercise of options previously granted as compensation during the 2015 and 2014 financial years.
11
BIOTRON ANNUAL REPORT 2015 DIRECTORS’ REPORT
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.
Options granted
Director
Number
Date
% vested in year
Michelle Miller
1,000,000
24 December 2010
1,000,000
24 December 2010
3,000,000
24 December 2010
‑%
‑%
‑%
% forfeited
in year
Financial year in
which grant vests
‑%
‑%
‑%
1 July 2010
1 July 2011
1 July 2012
The number of options that had vested as at 30 June 2015 is 5,000,000 (2014 ‑ 5,000,000). No options were granted subsequent
to year end.
Analysis of movements in options ‑ Audited
Director
Michelle Miller
Granted in the year
Valuation of options
exercised in the year
Lapsed in the year
‑
‑
‑
Options and rights over equity instruments ‑ Audited
The movement during the reporting period in the number of options over ordinary shares in the Company held directly, indirectly or
beneficially, by each key management person, including their personally related entities, is as follows:
Option holdings 2015 ‑ Audited
Held at
1 July 2014
Purchased
Exercised
Expired
Held at
30 June 2015
Vested and
exercisable at
30 June 2015
Directors
Michael J. Hoy
Michelle Miller
Susan M. Pond
Robert B. Thomas
Denis N. Wade
Executives
Peter J. Nightingale
‑
700,961
5,000,000
‑
‑
‑
‑
‑
55,556
1,237,038
273,977
1,151,924
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
700,961
700,961
5,000,000
5,000,000
55,556
55,556
1,237,038
1,237,038
273,977
273,977
1,151,924
1,151,924
Loans to key management personal and their related parties ‑ Audited
There were no loans made to key management personnel or their related parties during the 2015 and 2014 financial years and no
amounts were outstanding at 30 June 2015 (2014 ‑ $nil).
12
BIOTRON ANNUAL REPORT 2015 DIRECTORS’ REPORT
Other transactions with key management personnel ‑ Audited
The following key management personnel holds a position in another entity that results in them having control or joint control over
the financial or operating policies of that entity, and this entity transacted with the Company during the year as follows:
zz During the year ended 30 June 2015, 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 amounted to $144,000 (2014 ‑ $144,000). There were no
outstanding amounts at 30 June 2015 (2014 ‑ $nil).
zz During the year ended 30 June 2015, Peter J. Nightingale had a controlling interest in an entity, Rosignol Consultants Pty Limited,
which provided consulting services specifically in relation to the capital raise conducted by the Company in October 2014.
The additional fees paid to Rosignol Consultants Pty Limited during the period amounted to $5,000. There were no outstanding
amounts at 30 June 2015.
Movements in shares ‑ Audited
The movement during the reporting period in the number of ordinary shares in the Company held directly, indirectly or beneficially,
by each key management person, including their personally‑related entities, is as follows:
Directors
Michael J. Hoy
Michelle Miller
Susan M. Pond
Robert B. Thomas
Denis N. Wade
Executives
Peter J. Nightingale
Held at
1 July 2014
Purchased
Received on
exercise of
options
Sales
Held at
30 June 2015
3,154,322
700,961
‑
250,000
5,566,666
1,232,894
‑
55,556
1,237,038
273,977
4,348,076
1,151,924
‑
‑
‑
‑
‑
‑
‑
‑
‑
1,538,704
‑
‑
3,855,283
‑
305,556
5,265,000
1,506,871
5,500,000
Service contracts ‑ Audited
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.
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 financial reports ‑ KPMG
2015
$
2014
$
38,500
31,300
13
BIOTRON ANNUAL REPORT 2015 DIRECTORS’ REPORT
Lead Auditor’s Independence Declaration
The Lead Auditor’s Independence Declaration is set out on page 15 and forms part of the Directors’ Report for the year ended
30 June 2015.
This report has been signed in accordance with a resolution of the directors and is dated 28 August 2015:
Michael J. Hoy
Chairman
Michelle Miller
Managing Director
14
BIOTRON ANNUAL REPORT 2015
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 financial year ended 30 June 2015,
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 2015
Adam Twemlow
Partner
KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under Professional Standards Legislation.
15
BIOTRON ANNUAL REPORT 2015
STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2015
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 financing income
Interest income
Net financing income
Loss before tax
Income tax expense
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Notes
2015
$
2014
$
5
1,672,265
1,722,481
12
6
(300,112)
(302,636)
(16,957)
(11,193)
(801,660)
(831,497)
(2,882,954)
(3,237,229)
(85,289)
(44,776)
(65,825)
(90,842)
(311,429)
(339,045)
(2,770,912)
(3,155,786)
47,691
47,691
69,972
69,972
(2,723,221)
(3,085,814)
9
‑
‑
(2,723,221)
(3,085,814)
‑
‑
(2,723,221)
(3,085,814)
Basic and diluted loss per share (cents)
7
(1.04) cents
(1.35) cents
The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the accompanying notes.
16
BIOTRON ANNUAL REPORT 2015 STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
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
2015
$
2014
$
8
10
11
12
13
14
15
15
4,523,224
1,764,181
10,184
35,025
‑
35,033
4,568,433
1,799,214
47,769
47,769
64,726
64,726
4,616,202
1,863,940
283,319
189,857
473,176
473,176
295,327
179,317
474,644
474,644
4,143,026
1,389,296
37,207,759
32,548,656
1,339,848
522,000
(34,404,581)
(31,681,360)
4,143,026
1,389,296
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
17
BIOTRON ANNUAL REPORT 2015 STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2015
Attributable to equity holders of
the Company
Notes
Issued
Capital
$
Option
Reserves
$
Accumulated
Losses
$
Total
$
Balance at 1 July 2013
32,548,656
522,000
(28,595,546)
4,475,110
Total comprehensive income for the year
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
‑
‑
‑
‑
‑
‑
(3,085,814)
(3,085,814)
‑
‑
(3,085,814)
(3,085,814)
Balance at 30 June 2014
15
32,548,656
522,000
(31,681,360)
1,389,296
Balance at 1 July 2014
32,548,656
522,000
(31,681,360)
1,389,296
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 shares issued
Exercise of options
‑
‑
‑
‑
‑
‑
(2,723,221)
(2,723,221)
‑
‑
(2,723,221)
(2,723,221)
5,242,032
(583,126)
197
818,045
‑
(197)
‑
‑
‑
6,060,077
(583,126)
‑
Balance at 30 June 2015
15
37,207,759
1,339,848
(34,404,581)
4,143,026
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
18
BIOTRON ANNUAL REPORT 2015 STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2015
Cash flows 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
2015
$
2014
$
1,672,265
1,722,481
(2,932,696)
(3,162,882)
(1,507,222)
(1,605,482)
47,953
70,035
Net cash used in operating activities
16
(2,719,700)
(2,975,848)
Cash flows from investing activities
Payments for plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares and options
Cost of issue of shares and options
Net cash from financing activities
Net increase/(decrease) in cash held
Cash and cash equivalents at 1 July
Effect of exchange rate adjustments on cash held
‑
‑
(52,408)
(52,408)
6,060,077
(583,126)
5,476,951
‑
‑
‑
2,757,251
(3,028,256)
1,764,181
4,792,437
1,792
‑
Cash and cash equivalents at 30 June
8
4,523,224
1,764,181
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
19
BIOTRON ANNUAL REPORT 2015
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
1. REPORTING ENTITY
3. SIGNIFICANT ACCOUNTING POLICIES
Biotron Limited (the ‘Company’) is a company domiciled in
Australia. The address of the Company’s registered office is at
Level 2, 66 Hunter Street, Sydney, NSW 2000. The Company
is a for‑profit entity and is primarily engaged in the funding
and management of intermediate and applied biotechnology
research and development projects.
2. BASIS OF PREPARATION
The accounting policies set out below have been applied
consistently to all periods presented in these financial
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.
(a) Statement of compliance
(b) Trade and other receivables
These financial statements are general purpose financial
statements which have been prepared in accordance with
Australian Accounting Standards (‘AASBs’) adopted by
the Australian Accounting Standards Board (‘AASB’) and
the Corporations Act 2001. The financial statements of the
Company also comply with International Financial Reporting
Standards (‘IFRSs’) adopted by the International Accounting
Standards Board (‘IASB’).
The financial report was authorised for issue by the directors
on 28 August 2015.
(b) Basis of measurement
The financial statements have been prepared on the historical
cost basis.
(c) Functional and presentation currency
These financial statements are presented in Australian dollars,
which is the Company’s functional currency.
(d) Use of estimates and judgements
The preparation of financial 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 significant areas of estimation
uncertainty and critical judgements in applying accounting
policies that have the most significant effect on the amounts
recognised in the financial statements are described in the
following notes:
zz Note 9 ‑ Unrecognised deferred tax asset
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 profit 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.
Costs
Expenditure on research activities, undertaken with the
prospect of gaining new scientific or technical knowledge and
understanding, is recognised in profit 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 benefits are probable, and the
Company intends to and has sufficient 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 profit or loss when incurred.
Capitalised development expenditure is measured at cost less
accumulated amortisation and accumulated impairment losses.
20
BIOTRON ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(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
Short‑term employee benefits
Short‑term employee benefits are expensed as the related
service is provided. A liability is recognised for the amount
expected to be paid under short term cash bonus or
profit sharing plans if the Company has a present legal or
constructive obligation to pay this amount as a result of past
service provided by the employee, and the obligation can be
estimated reliably.
Long term employee benefits
The Company’s net obligation in respect of long term
employee benefits is the amount of future benefit that
employees have earned in return for their service in the
current and prior periods. That benefit is discounted to
determine its present value. Remeasurements are recognised
in profit or loss in the period in which they arise.
Share‑based payment transactions
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
reflect 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 reflect such conditions and there is no true‑up for
differences between expected and actual outcomes.
(g) Financial Instruments
Non‑derivative financial assets
The Company holds loans and receivables. Loans and
receivables are non‑derivative financial assets with fixed
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 classified as non‑current assets.
Loans and receivables comprise cash and cash equivalents and
trade and other receivables.
The Company initially recognises loans and receivables on the
date that they are originated.
The Company derecognises a financial asset when the
contractual rights to the cash flows from the asset expire, or
it transfers the rights to receive the contractual cash flows on
the financial asset in a transaction in which substantially all
the risks and rewards of ownership of the financial asset are
transferred. Any interest in such transferred financial 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.
Non‑derivative financial liabilities
The Company initially recognises debt securities issued and
subordinated liabilities on the date that they are originated.
All other financial 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 financial liability when its
contractual obligations are discharged, cancelled or expire.
Other financial liabilities comprise trade and other payables.
(h) Share Capital
Ordinary Shares
Ordinary shares are classified as equity. Incremental costs
directly attributable to the issue of ordinary shares are
recognised as a deduction from equity, net of any tax effects.
(i) Tax
Income tax comprises of current tax and deferred tax and is
recognised in profit or loss except to the extent that it relates
to a business combination, or items recognised directly in
equity or in other comprehensive income.
21
BIOTRON ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
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.
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 flows are included in the statement of cash flows on a
gross basis. The GST components of cash flows arising from
investing and financing activities which are recoverable from,
or payable to, the ATO are classified as operating cash flows.
Current tax assets and liabilities are offset only if certain
criteria are met.
(j) Finance income
Deferred tax
Deferred tax is recognised in respect of temporary differences
between the carrying amount of assets and liabilities
for financial 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 profit or loss.
The measurement of deferred tax reflects 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 profits 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 benefit 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.
Finance income comprises interest income on funds invested.
Interest income is recognised as it accrues in profit or loss,
using the effective interest method.
(k) 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 profit 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 profit 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.
(l) Impairment
Non‑derivative financial assets
A financial asset not classified as at fair value through profit or
loss is assessed at each reporting date to determine whether
there is any objective evidence that it is impaired. A financial
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 flows of that asset.
Financial assets measured at amortised cost
Individually significant financial assets are tested for
impairment on an individual basis. The remaining financial
assets are assessed collectively in groups that share similar
credit risk characteristics.
An impairment loss in respect of a financial asset measured
at amortised cost is calculated as the difference between its
carrying amount, and the present value of the estimated future
cash flows discounted at the original effective interest rate.
Losses are recognised within profit 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 profit or loss.
22
BIOTRON ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Non‑financial assets
The carrying amounts of the Company’s non‑financial 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 of disposal
and value in use. In assessing value in use, the estimated
future cash flows are discounted to their present value using a
pre‑tax discount rate that reflects current market assessments
of the time value of money and the risks specific to the asset
or CGU. For impairment testing, assets are grouped together
into the smallest group of assets that generates cash inflows
from continuing use that are largely independent of the
cash inflows of other assets or CGUs. Impairment losses are
recognised in profit 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.
(m) 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
outflow of economic benefits will be required to settle
the obligation. Provisions are determined by discounting the
expected future cash flows at a pre‑tax rate that reflects the
current market assessments of the time value of money and
the risks specific to the liability. The unwinding of the discount
is recognised as a finance cost.
(n) 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 office expenses,
and income tax assets and liabilities.
(o) 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 2014, and have not been applied in preparing these
financial 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
AASB 9 replaces the existing guidance in AASB 139 Financial
Instruments: Recognition and Measurement. AASB 9 includes
revised guidance on the classification and measurement of
financial instruments, including a new expected credit loss
model for calculating impairment on financial assets and the
new general hedge accounting requirements. It also carries
forward the guidance on recognition and derecognition of
financials instruments from AASB 139.
AASB 9 is effective for the Company’s annual reporting
period beginning 1 July 2018 and can be early adopted.
The Company does not plan to adopt this standard early and
the standard is not expected to have a significant effect on
the financial statements.
23
BIOTRON ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
4. DETERMINATION OF FAIR VALUES
A number of the Company’s accounting policies and disclosures require the determination of fair value, for both financial and
non‑financial 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 specific 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 flows, 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 financial liabilities
Non‑derivative financial 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 flows, discounted at the
market rate of interest at the measurement date.
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 financial reports
Depreciation
‑ Office equipment
‑ Plant and equipment
Direct research and development expenditure expensed as incurred
Provision for employee entitlements
Superannuation expense
2015
$
2014
$
1,672,265
1,722,481
38,500
31,300
15,817
1,140
9,351
1,842
2,882,954
3,237,229
10,540
109,051
7,062
99,464
24
BIOTRON ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
7. LOSS PER SHARE
The calculation of basic and diluted loss per share at 30 June 2015 was based on the loss attributable to ordinary shareholders
of $2,723,221 (2014 ‑ $3,085,814 loss) and a weighted average number of ordinary shares outstanding during the financial year
ended 30 June 2015 of 260,882,383 (2014 ‑ 228,296,944), calculated as follows:
Net loss for the year
Weighted average number of ordinary shares (basic and diluted)
Issued ordinary shares at 1 July
Weighted average number of ordinary shares at 30 June
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 flows
2015
$
2014
$
2,723,221
3,085,814
2015
Number
2014
Number
228,296,944
228,296,944
260,882,383
228,296,944
2015
$
2014
$
4,523,224
4,523,224
1,764,181
1,764,181
25
BIOTRON ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
9. INCOME TAX EXPENSE
Current tax expense
Current year
Tax losses not recognised
Deferred tax expense
Current year
De‑recognition of temporary differences
2015
$
2014
$
(1,351,580)
(1,459,680)
1,351,580
1,459,680
‑
‑
33,987
(33,987)
‑
18,570
(18,570)
‑
Numerical reconciliation between tax expense and pre‑tax net profit
Loss before tax ‑ continuing operations
(2,723,221)
(3,085,814)
Prima facie income tax benefit at the Australian tax rate of 30% (2014 ‑ 30%)
(816,966)
(925,744)
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
(500,626)
1,351,580
(33,988)
‑
(515,366)
1,459,680
(18,570)
‑
226,406
9,549,564
9,775,970
85,455
9,312,955
9,398,410
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 profit will be available against which the
Company can utilise the benefits of the deferred tax asset.
10. TRADE AND OTHER RECEIVABLES
Current
Other debtors
11. OTHER ASSETS
Current prepayments
Security deposits
26
10,184
‑
19,894
15,131
35,025
19,902
15,131
35,033
BIOTRON ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
12. PLANT AND EQUIPMENT
Office 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:
Office equipment
Balance at 1 July
Additions
Depreciation
Carrying amount at the end of the financial year
Plant and equipment
Balance at 1 July
Depreciation
Carrying amount at the end of the financial year
Total carrying amount at the end of the financial 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 financial year
2015
$
2014
$
201,088
(159,084)
42,004
506,463
(500,698)
5,765
47,769
201,088
(143,267)
57,821
506,463
(499,558)
6,905
64,726
57,821
‑
(15,817)
42,004
6,905
(1,140)
5,765
47,769
14,765
52,408
(9,352)
57,821
8,746
(1,841)
6,905
64,726
249,213
34,106
283,319
267,077
28,250
295,327
78,694
111,163
189,857
4
79,051
100,266
179,317
4
27
BIOTRON ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
15. CAPITAL AND RESERVES
Issued and paid up capital
296,402,910 (2014 ‑ 228,296,944) fully paid ordinary shares
37,207,759
32,548,656
2015
$
2014
$
Fully paid ordinary shares
Balance at the beginning of the financial year
Issue of shares
Exercise of options
Costs of issue
32,548,656
32,548,656
5,242,032
197
(583,126)
‑
‑
‑
37,207,759
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.
During the year ended 30 June 2015 the following shares and options were issued:
zz
In October 2014 the Company offered eligible shareholders to purchase one new share and one new listed option through a
pro‑rata renounceable rights issue. Under this offer, the Company issued 50,732,654 ordinary shares and 50,732,654 listed
options for cash totalling $4,058,613. Total issue cost of $403,709 was recognised as a reduction in proceeds of issue of
these shares. The listed options are each exercisable at 12 cents to acquire one fully paid ordinary share exercisable at any time
up to 30 September 2016.
zz
In June 2015 the Company issued 17,361,111 ordinary shares through a share placement offer for cash totalling $2,000,000.
Total issue costs of $179,417 were recognised as a reduction in the proceeds of the issue of these shares.
In addition to the above share issues 12,201 ordinary shares were issued through the exercise of the listed options for cash totalling
$1,464. The fair value of the options issued was $197.
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.
Option Reserves
Equity based compensation reserve (a)
Option premium reserve (b)
Movements during the period
(a) Equity based compensation reserve
Balance at the beginning of period
Balance at end of period
(b) Option premium reserve
Balance at the beginning of period
Issue of options
Exercise of options
Balance at end of period
28
522,000
817,848
522,000
‑
1,339,848
522,000
522,000
522,000
522,000
522,000
‑
818,045
(197)
817,848
‑
‑
‑
‑
BIOTRON ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
15. CAPITAL AND RESERVES (Cont.)
Nature and purpose of reserves
Equity based compensation reserve:
The equity based compensation reserve is used to recognise the grant date fair value of options issued but not exercised.
Option premium reserve:
The option premium reserve is used to accumulate proceeds received from the issuing of options.
16. STATEMENT OF CASH FLOWS
Reconciliation of cash flows from operating activities
Loss for the period
Adjustments for:
Depreciation of plant and equipment
Provisions
Effect of exchange rate adjustments
Changes in assets and liabilities
Decrease/(Increase) in receivables
Decrease in prepayments
Decrease/(Increase) in payables
Net cash used in operating activities
17. RELATED PARTIES
2015
$
2014
$
(2,723,221)
(3,085,814)
16,957
10,540
(1,792)
(10,184)
8
(12,008)
11,193
7,062
‑
1,723
13,485
76,503
(2,719,700)
(2,975,848)
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 financial or operating policies of that entity, and this entity transacted with the Company during the year as follows:
zz During the year ended 30 June 2015, 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, amounted to $144,000 (2014 ‑ $144,000). There were no
outstanding amounts at 30 June 2015 (2014 ‑ $nil).
zz During the year ended 30 June 2015, Peter J. Nightingale had a controlling interest in an entity, Rosignol Consultants Pty Limited,
which provided consulting services specifically in relation to the capital raise conducted by the Company in October 2014.
The additional fees paid to Rosignol Consultants Pty Limited during the period amounted to $5,000. There were no outstanding
amounts at 30 June 2015.
Key management personnel compensation
During the year ended 30 June 2015 compensation of key management personnel totalled $630,979 (2014 ‑ $657,902), which
comprised primary salary and fees of $582,744 (2014 ‑ $610,257), superannuation of $48,235 (2014 ‑ $47,645), and share based
payments of Nil (2014 ‑ Nil). During the 2015 and 2014 financial years, no long term benefits or termination payments were paid.
29
BIOTRON ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
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 office 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 2015 and 2014 financial years, no options were issued under the Incentive Option Plan.
Options outstanding at 30 June 2015
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
$0.21
$0.21
$0.24
$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.
The options on issue at 30 June 2015 were modified in November 2014. The strike price of the options was reduced by 1c for
each option. The modification had an immaterial impact on the fair value of each option on issue, and accordingly no expense has
been recognised in relation to the modification.
Options outstanding at 30 June 2014
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 in the equity based compensation reserve during the year
Number of options
2015
Weighted average
exercise price
2015
Number of options
2014
Weighted average
exercise price
2014
Outstanding at 1 July
5,000,000
$0.23
5,000,000
$0.24
The equity based compensation reserve is used to record the options issued to directors and executives of the Company as compensation.
Options are valued using the Black‑Scholes option pricing model.
The weighted average remaining contractual life of share options outstanding at the end of the year in the equity based compensation
reserve was 0.33 years (2014 ‑ 1.33 years).
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 financial year.
30
BIOTRON ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
18. SHARE BASED PAYMENTS (Cont.)
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 reflect the actual number of options that vest.
When options on issue are modified and the modification is beneficial to the other party the incremental fair value at the date of
the modification is recognised over the remaining modified vesting period and the original grant‑date fair value is recognised over
the remaining original vesting period. When the modification is to options on issue that have fully vested the incremental fair value
is recognised as an expense in the period the modification occurs. The incremental fair value is the difference between the fair value
of the share based payment at the date of modification between the old and new terms.
Expenses arising from share‑based payment transactions
No expenses arising from share based payment transactions were recognised during the year ended 30 June 2015 (2014 ‑ $Nil).
19. FINANCIAL INSTRUMENTS
Financial risk management objectives and policies
The Company’s financial 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 financial instruments in accordance with the guidance of the Board of Directors.
The main risks arising from the Company’s financial 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 financial 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
financial assets:
Cash and cash equivalents
Trade and other receivables
Security deposits
Note
8
10
11
Carrying amount
2015
$
2014
$
4,523,224
1,764,181
10,184
15,131
‑
15,131
4,548,539
1,779,312
31
BIOTRON ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
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 usually consists predominantly of amounts recoverable from taxation and
other government authorities in Australia.
All financial 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 financial instruments entered into by the Company.
Liquidity risk
Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they fall due. The Company’s
approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient 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 $4,523,224 for its immediate use.
The following are the contractual maturities of financial liabilities, including estimated interest payments:
Company
30 June 2015
Carrying
amount
$
Contractual
cash flows
$
Less than
one year
$
Between one
and five years
$
Interest
$
Trade and other payables
283,319
(283,319)
(283,319)
30 June 2014
Trade and other payables
295,327
(295,327)
(295,327)
‑
‑
‑
‑
It is not expected that the cash flows included in the maturity analysis could occur significantly earlier, or at significantly
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 financial instruments. The objective of market risk management is to manage and
control market risk exposures within acceptable parameters, while optimising the return.
32
BIOTRON ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
19. FINANCIAL INSTRUMENTS (Cont.)
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
1.64% (2014 ‑ 2.41%).
At balance date, the Company had the following mix of financial assets exposed to variable interest rate risk that are not
designated as cash flow hedges:
Financial assets
Cash and cash equivalents
Security deposits
Net exposure
Note
8
11
2015
$
2014
$
4,523,224
15,131
4,538,355
1,764,181
15,131
1,779,312
The Company did not have any interest bearing financial 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 financing.
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.
29,270
29,018
Currency risk
The Company is exposed to currency risk on cash and cash equivalents that are denominated in United States currency.
The company’s gross financial exposure to foreign currency risk at balance date was US$433,934 (2014 ‑ nil).
Sensitivity analysis
The following sensitivity analysis is based on the currency risk exposures at balance date.
A 5% strengthening of the United States dollar to Australian dollar at 30 June 2015 would have decreased post tax profit and net
assets for the period by the amounts shown below, while weakening would have increased the post‑tax profit and net assets for
the period.
28,334
‑
The Company is not exposed to price risks.
33
BIOTRON ANNUAL REPORT 2015 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
19. FINANCIAL INSTRUMENTS (Cont.)
Capital management
The Board’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence 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 financial assets and liabilities approximate their net fair values, given the short time frames to maturity
and or variable interest rates.
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 office in North Ryde, Sydney. The lease is for a period of 3 years starting from November 2013 with an
option to renew lease after that 3 years.
During the year ended 30 June 2015, $85,289 was recognised as an expense in profit or loss in respect of the operating lease
(2014 ‑ $65,825).
The future minimum leases payments under non‑cancellable operating leases are payable as follows:
Less than one year
Between one and five years
22. COMMITMENTS AND CONTINGENCIES
2015
$
66,640
24,250
2014
$
66,640
90,890
The Company may be party to commercial disputes and litigation in the normal course of business. No material liabilities are
expected to arise in respect of the commercial disputes and litigation existing at balance date.
There are no capital commitments at the date of these financial statements.
23. SUBSEQUENT EVENTS
On 18 June 2015, the company offered all eligible shareholders the opportunity to participate in a Share Purchase Plan (“SPP”).
The offer closed on 10 July 2015. The Shareholders subscribed for 17,361,111 ordinary shares under the SPP raising $2,000,000
before issue costs. All shares were issued 15 July 2015.
Other than the matter discussed above, there has not arisen in the interval between the end of the financial 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 significantly the operations of the Company, the results of those operations, or the state of affairs of the Company in
future financial years.
34
BIOTRON ANNUAL REPORT 2015 DIRECTORS’ DECLARATION
1. In the opinion of the directors of Biotron Limited:
a) the financial statements and notes set out on pages 16 to 34, and the Remuneration Report in the Directors’ Report, set out
on pages 10 to 13, are in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Company’s financial position as at 30 June 2015 and of its performance for the financial
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
officer and chief financial officer for the financial year ended 30 June 2015.
3. The directors draw attention to note 2(a) of the financial 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 2015:
Michael J. Hoy
Chairman
Michelle Miller
Managing Director
35
BIOTRON ANNUAL REPORT 2015
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF BIOTRON LIMITED
Report on the Financial Report
We have audited the accompanying financial report of Biotron Limited (the Company), which comprises the Statement of Financial
Position as at 30 June 2015, and the Statement of Profit 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 23 comprising a summary of significant accounting
policies and other explanatory information and the directors’ declaration.
Directors’ responsibility for the financial report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors
determine is necessary to enable the preparation of the financial 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 financial statements comply with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance
with Australian Auditing Standards. 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 financial report is free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement
of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control
relevant to the entity’s preparation of the financial 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 financial report.
We performed the procedures to assess whether in all material respects the financial 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 financial position and of its performance.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under Professional Standards Legislation.
36
BIOTRON ANNUAL REPORT 2015 INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF BIOTRON LIMITED
Auditor’s opinion
In our opinion:
a) the financial report of Biotron Limited is in accordance with the Corporations Act 2001, including:
(i) giving a true and fair view of the Company’s financial position as at 30 June 2015 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 financial 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 10 to 13 of the directors’ report for the year ended 30 June 2015.
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 2015 complies with Section 300A of the
Corporations Act 2001.
KPMG
Brisbane
28 August 2015
Adam Twemlow
Partner
KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under Professional Standards Legislation.
37
BIOTRON ANNUAL REPORT 2015
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 2015, 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
Unlisted Options
30 October 2015
$0.25
Unlisted Options
30 September 2016
$0.12
Listed Options
95
445
433
1,278
464
2,715
‑
‑
‑
‑
1
1
‑
‑
‑
‑
1
1
63
209
81
291
96
740
At 31 July 2015, 442 shareholders held less than a marketable parcel of shares and 340 listed option holders held less than a
marketable parcel of options.
38
BIOTRON ANNUAL REPORT 2015 ADDITIONAL STOCK EXCHANGE INFORMATION
Twenty Largest Quoted Shareholders
At 31 July 2015 the twenty largest fully paid ordinary shareholders held 29.87% of fully paid ordinary as follows:
Name
Bond Street Custodians Limited
Armco Barriers Pty Ltd
Scott’s A V Pty Ltd
Mr Mark Hamish Lochtenberg + Mr Michael Lochtenberg
CBDF Pty Limited
Warman Investments Pty Ltd
Mr Robert Thomas +Mrs Kyrenia Thomas
Pathold No 222 Pty Ltd
Rigi Investments Pty Limited
Umbiram Pty Ltd
Twynam Agricultural Group Pty Ltd
1
2
3
4
5
6
7
8
9
10
11
12 Mr. Peter James Nightingale
13 Mrs Narelle Fay
14
15
16
17
18
19
Fordholm Investments Pty Ltd
Mrs Wishny Sritharan Krishnarajah
Jey Investments Pty Ltd
Linkenholt Pty Limited
Ramsab Pty Ltd
Rosignol Pty Ltd
20
Dr Peter Mun Sun Chan
There are no current on‑market buy‑backs.
Fully Paid
Ordinary Shares
10,000,000
9,150,000
9,014,000
7,827,755
6,060,000
5,280,556
5,086,805
4,800,000
4,308,746
3,985,491
3,830,208
3,594,903
3,279,402
3,200,000
2,620,000
2,560,445
2,500,000
2,444,445
2,165,513
2,000,000
%
3.19
2.92
2.87
2.49
1.93
1.68
1.62
1.53
1.37
1.27
1.22
1.15
1.05
1.02
0.84
0.82
0.80
0.78
0.69
0.64
39
BIOTRON ANNUAL REPORT 2015 ADDITIONAL STOCK EXCHANGE INFORMATION
BIOTRON LIMITED
ABN 60 086 399 144
Twenty Largest Quoted Option Holders
At 31 July 2015 the twenty largest option holders held 43.50% of listed options as follows:
Name
Armco Barriers Pty Ltd
Rigi Investments Pty Limited
Mr Russell Dean Thomson
BMMDH Pty Ltd
Mr Robert Thomas +Mrs Kyrenia Thomas
CBDF Pty Limited
Bond Street Custodians Limited
Mr Daryl John Halder
Viking Management Services Pty Ltd
1
2
3
4
5
6
7
8
9
10 Mr Russel Wayne Halder
11
12
13
Pudd & Co Pty Ltd
Umbiram Pty Ltd
Fordholm Investments Pty Ltd
14 Mr Mark Hamish Lochtenberg + Mr Michael Lochtenberg
15
Mrs Narelle Fay
16 Mr. Peter James Nightingale
17
18
Altinova Nominees Pty Ltd
Lenvat Pty Ltd Lenvat Super Fund A/C
19 Mr Donal Francis O’Sullivan
20
Rosignol Pty Ltd
Fully Paid
Ordinary Shares
4,650,000
2,003,112
1,760,000
1,444,000
1,181,482
1,077,891
1,000,000
955,000
822,223
800,000
727,278
700,961
666,666
666,666
632,619
629,945
625,000
600,000
600,000
521,979
%
9.17
3.95
3.47
2.85
2.33
2.13
1.97
1.88
1.62
1.58
1.43
1.38
1.31
1.31
1.25
1.24
1.23
1.18
1.18
1.03
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2015
ANNUAL REPORT
BIOTRON ANNUAL REPORT 2015 CONTENTS
CONTENTS
Operating and Financial Review ........................................ 1
Operating and Financial Review ........................................ 1
Corporate Governance Statement .................................. 5
Corporate Governance Statement .................................. 5
Directors’ Report ................................................................ 6
Directors’ Report ................................................................ 6
Lead Auditor’s Independence Declaration .................... 15
Lead Auditor’s Independence Declaration .................... 15
Statement of Profi t or Loss and
Statement of Profi t or Loss and
Other Comprehensive Income ........................................ 16
Other Comprehensive Income ........................................ 16
Statement of Financial Position ...................................... 17
Statement of Financial Position ...................................... 17
Statement of Changes in Equity .................................... 18
Statement of Changes in Equity .................................... 18
Statement of Cash Flows ................................................. 19
Statement of Cash Flows ................................................. 19
Notes to the Financial Statements ................................ 20
Notes to the Financial Statements ................................ 20
Directors’ Declaration ..................................................... 35
Directors’ Declaration ..................................................... 35
Independent Auditor’s Report ....................................... 36
Independent Auditor’s Report ....................................... 36
Additional Stock Exchange Information ....................... 38
Additional Stock Exchange Information ....................... 38
Corporate Directory ....................................................... IBC
Corporate Directory ....................................................... IBC
CORPORATE DIRECTORY
CORPORATE DIRECTORY
Directors
Directors
Mr Michael J. Hoy (Chairman)
Mr Michael J. Hoy (Chairman)
Dr Michelle Miller (Managing Director)
Dr Michelle Miller (Managing Director)
Dr Susan M. Pond
Dr Susan M. Pond
Mr Robert B. Thomas
Mr Robert B. Thomas
Dr Denis N. Wade
Dr Denis N. Wade
Company Secretary
Company Secretary
Mr Peter J. Nightingale
Mr Peter J. Nightingale
Registered Offi ce
Registered Offi ce
Level 2, 66 Hunter Street
Level 2, 66 Hunter Street
SYDNEY NSW 2000
SYDNEY NSW 2000
Phone:
Phone:
Fax:
Fax:
E‑mail:
E‑mail:
Homepage: www.biotron.com.au
Homepage: www.biotron.com.au
+ 61 2 9300 3344
+ 61 2 9221 6333
enquiries@biotron.com.au
+ 61 2 9300 3344
+ 61 2 9221 6333
enquiries@biotron.com.au
Principal Administration Offi ce
Principal Administration Offi ce
Suite 1.9, 56 Delhi Road
Suite 1.9, 56 Delhi Road
NORTH RYDE NSW 2113
NORTH RYDE NSW 2113
Phone:
Phone:
Fax:
Fax:
+ 61 2 9805 0488
+ 61 2 9805 0688
+ 61 2 9805 0488
+ 61 2 9805 0688
Share Registrar
Share Registrar
Computershare Investor Services Pty Limited
Computershare Investor Services Pty Limited
Level 4, 60 Carrington Street
Level 4, 60 Carrington Street
SYDNEY NSW 2000
SYDNEY NSW 2000
Phone:
Phone:
Fax:
Fax:
1300 787 272
1300 787 272
+61 3 9473 2500
+61 3 9473 2500
Auditors
Auditors
KPMG Level 16, Riparian Plaza
KPMG Level 16, Riparian Plaza
71 Eagle Street
71 Eagle Street
BRISBANE QLD 4000
BRISBANE QLD 4000
Home Exchange
Home Exchange
ASX Limited
ASX Limited
20 Bridge Street
20 Bridge Street
SYDNEY NSW 2000
SYDNEY NSW 2000
Solicitors
Solicitors
Minter Ellison
Minter Ellison
88 Phillip Street
88 Phillip Street
SYDNEY NSW 2000
SYDNEY NSW 2000
Biotron Limited, incorporated and domiciled in Australia,
is a publicly listed company limited by shares.
Biotron Limited, incorporated and domiciled in Australia,
is a publicly listed company limited by shares.
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BIOTRON LIMITED
ABN 60 086 399 144
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2015
ANNUAL REPORT