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ANNUAL REPORT 2016
ANNUAL REPORT 2016
CONTENTS
operating and Financial Review ........................................ 1
Corporate Governance Statement .................................. 6
Directors’ Report ................................................................. 7
Lead Auditor’s Independence Declaration .................... 17
Statement of Profi t or Loss and
other Comprehensive Income ....................................... 18
Statement of Financial Position ...................................... 19
Statement of Changes in equity .................................... 20
Statement of Cash Flows ................................................. 21
notes to the Financial Statements ................................ 22
Directors’ Declaration ..................................................... 39
Independent Auditor’s Report ....................................... 40
Additional Stock exchange Information ....................... 42
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: + 61 2 9300 3344
Fax:
+ 61 2 9221 6333
e‑mail: enquiries@biotron.com.au
Homepage: www.biotron.com.au
Suite 1.9, 56 Delhi Road
noRTH RYDe nSW 2113
Phone: + 61 2 9805 0488
Fax:
+ 61 2 9805 0688
Share Registrar
Computershare Investor
Services Pty Limited
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
Minter ellison
88 Phillip Street
SYDneY nSW 2000
Biotron Limited, incorporated and
domiciled in Australia, is a publicly listed
company limited by shares.
Principal Administration Offi ce
Solicitors
4850 Designed and Produced by RDA Creative www.rda.com.au
REVIEW OF OPERATIONS
Biotron Limited (‘Biotron’ or the ‘Company’) is currently focused on the
ongoing clinical development of its unique antiviral platform, which has
significant commercial value. 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‑ 1, Hepatitis C virus (‘HCV’) and in
HIV‑1/HCV co‑infected patients.
Data from completed studies have demonstrated that BIT225 has clinical antiviral activity against
both HIV‑1 and HCV.
During the financial year under review, further progress has been achieved. Preliminary data have
been reported from the Phase 2 HCV 3‑month dosing trial (BIT225‑008). A paper with data from
the Company’s HIV‑1 trial was published in an international, peer‑reviewed scientific journal,
demonstrating that BIT225 has potential to eradicate important viral reservoirs in patients.
A summary of significant events achieved in the period in review includes:
zz Confirmation of positive outcomes from the Phase 2, three‑month dosing study of BIT225 in
subjects infected with HCV (BIT225‑008). The trial has generated important safety, tolerability
and pharmacokinetic data that will support further development of BIT225 for both HIV‑1 and
HCV indications.
zz Demonstration that BIT225 may have a broader role in treatment of HIV‑1 infection, based on
data from the key trial of BIT225 in HIV‑1‑infected subjects (BIT225‑004) and reported in a
prestigious international scientific journal.
zz Results indicating that selected Biotron compounds have activity against the Zika virus.
zz Receipt of $1.5 million under the Federal R&D Tax Incentive Program.
zz
Successful completion of a share purchase plan to eligible shareholders, raising $2 million.
zz
Showcasing the Company to the international investment and pharmaceutical
communities at various events in the USA, Asia and Australia.
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BIOTRON AnnuAl RepoRt 2016
REVIEW OF OPERATIONS
Clinical Programs ‑ Hepatitis C Virus (HCV)
Significant progress has been made by the Company to
date with clinical programs, which include clinical trials in
HIV‑1, HCV and HIV‑1/HCV co‑infected populations. BIT225
is in mid‑stage clinical development with 8 clinical trials
completed. encouraging efficacy results against both HCV
and HIV‑1 have been achieved.
In April 2016, the Company reported positive outcomes from
its Phase 2, 3‑month dosing trial of BIT225 in HCV patients.
The trial confirmed that BIT225 was safe and well tolerated
when dosed for the extended period of 12 weeks. An antiviral
effect from BIT225 was evident over and above the standard
of care drugs that the patients were taking, with 82% of
HCV genotype 1 (‘GT1’) patients clearing the virus, compared
to 60% who only received the standard HCV treatment.
HCV GT1 patients treated with BIT225 cleared the virus faster
than those treated with standard treatment alone.
The results of this trial were in line with the results of previous
trials of BIT225. Unlike those previous trials, this study
provided key data on the performance of the new capsule
formulation of BIT225.
This was the first trial to use a new capsule form of BIT225.
The trial provided key information on how well this new
formulation delivered BIT225. Patients treated with the
capsules had higher blood levels of the drug than were
achieved with the previously used powder form of BIT225.
This shows that the capsules were more efficient at delivering
BIT225 to the blood than the powder form of the drug.
This information is key for further development of BIT225.
The data from BIT225‑008 means that lower dosages can be
used in future studies, which will further improve the safety
profile of the drug.
The results in the HCV genotype 3 (‘GT3’) cohort, which were
reported previously, were less clear because of the higher than
expected clearance of virus in the standard treatment arm.
All GT3 patients treated with standard treatment cleared
the virus, meaning that it was impossible to show an
improvement with BIT225 for the GT3 subtype.
However, non‑clinical studies have shown that BIT225 is
pan‑genotypic, which means it is active against all the main
HCV genotypes, including GT3.
Clinical programs ‑ HIV‑1
BIT225 has a different mechanism of action than other
HIV‑1 drugs. Unlike other treatments for HIV‑1 infection,
BIT225 specifically targets viral reservoirs. These long‑lived
pools of virus persist despite drug treatment, and are never
completely eliminated. The reservoirs act as ‘burning embers’,
producing low levels of virus that cause chronic disease in
people infected with HIV‑1 through constant activation of
the body’s immune system. These factors mandate life‑long
treatment using currently available drugs.
Therefore, eradication of HIV‑1 is a current focus of scientists,
clinicians, and the pharmaceutical industry and an area where
BIT225 has potential.
Biotron has built up a detailed data package on its
HIV‑1 program, including results from a clinical trial in
HIV‑1‑infected patients. During the last year, Biotron reported
these results in two papers published by international,
peer‑reviewed scientific journals.
This clinical trial showed that BIT225 targets and reduces
levels of HIV‑1 residing in long‑lived monocyte/macrophage
reservoirs. These reservoirs exist even in patients undergoing
treatment with current antiretroviral drugs, and are
responsible for ongoing cycles of reseeding HIV‑1 infection.
The study also indicated that BIT225 may impact on immune
activation. Immune activation is responsible for a number of
ongoing health issues in these patients and treatment strategies
are needed to prevent development of associated disorders that
include accelerated aging and neurological dysfunction.
Biotron is currently progressing plans for a pivotal Phase 2
trial, designed in consultation with international medical and
scientific HIV‑1 experts. The purpose of this study will be to
demonstrate that adding BIT225 to current anti‑HIV‑1 drugs
results in an additional, measurable clinical benefit to patients.
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REVIEW OF OPERATIONS
It should be noted that the results for safety and the capsule
formulation from the BIT225‑008 HCV trial are also relevant
for the Company program on HIV‑1. Completed studies
done to predict drug‑drug interactions, and modelling of
pharmacokinetic data from previous trials to determine
optimal dosage of BIT225, benefit both the HCV and
HIV‑1 programs.
Preparation of the trial protocol and other regulatory
documentation is complete, and is ready for submission to the
relevant institutional ethics review board.
This study is key to a commercial outcome for Biotron’s
HIV‑1 program.
Other viral programs
There have been a number of high profile international
outbreaks of viral diseases, including ebola, Middle east
Respiratory virus (MeRS‑ CoV) and more recently, Zika virus.
Covered extensively in the media, they are a reminder
that there is an ongoing need for new drugs to treat
life‑threatening diseases.
During the year in review, Biotron has been expanding
testing of Biotron compounds for activity against other key
commercially relevant virus targets.
Biotron’s core expertise lies in designing and developing
drugs that target a class of virus protein known as viroporins.
Viroporins are found in a very broad range of viruses, and have
key roles in the virus life cycle.
Whilst BIT225 is an important asset in its own right
and demonstrates the robustness of Biotron’s approach
to antiviral drug development, it is only one of the
Company’s compounds.
Biotron’s proprietary compound library is a rich source of
potential hits against other viruses. Screening against other
viruses, including Zika virus, is in progress. Hits from this
screening will act as starting points for further chemistry to
generate compounds with increased potency against Zika and
other viruses.
As announced in May 2016, in the initial round of testing of a
small number of representative compounds, two were shown
to have antiviral activity against Zika virus.
These early results are encouraging. They demonstrate
the additional depth beyond BIT225 of Biotron’s library of
compounds and approach to developing drugs that target
serious viral diseases. The identification of these active
compounds is a starting point for designing compounds with
increased potency against Zika.
Outlook for the next 12 months
In line with previously stated strategies, Biotron
aims to progress its antiviral programs through to a
commercial outcome. In parallel with progressing clinical
development of BIT225, and identification of lead candidates
for additional viral diseases, the Company will progress
discussions with potential partners in established and
emerging markets such as China. It has been estimated that
there are up to 30 million HCV‑infected people in China.
This compares to 3 ‑ 5 million HCV‑infections in the USA.
Achieving a commercial outcome for the Company’s
programs will be the main focus of activities over the next
12 months. In parallel, the Company anticipates achieving the
following outcomes:
zz
Subject to receipt of relevant regulatory and ethics
approvals, the commencement, and completion,
of a pivotal Phase 2 trial of BIT225 in combination with
current HIV‑1 drugs, with the aim of demonstrating a
clinical benefit.
zz Determination of the potential of BIT225 to impact on
rebound of HIV‑1 from viral reservoirs.
zz
Progression of early stage programs for viruses other than
HIV‑1 and HCV with the aim of generating lead drugs
suitable for clinical programs.
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BIOTRON AnnuAl RepoRt 2016 REVIEW OF OPERATIONS
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.
TITLE
WO0021538
Method of modulating ion channel
functional activity
Priority ‑ 12 october 1998
WO9813514
Method of determining ion channel
activity of a substance
Priority ‑ 27 September 1996
WO04112687
Antiviral compounds and methods
Priority ‑ 26 June 2003
WO06135978
Antiviral compounds and methods
Priority ‑ 24 June 2005
WO2009/018609
Hepatitis C antiviral compounds
and methods
Priority ‑ 3 August 2007
STATUS
Granted in Australia, Canada, China, Germany, France, United Kingdom,
The netherlands, Japan, new Zealand, and USA
Granted in Austria, Australia, Belgium, Canada, Switzerland, Germany,
Denmark, Spain, Finland, France United Kingdom, Greece, Ireland, Italy, Japan,
Luxembourg, Monaco, The netherlands, Portugal, Sweden and USA
Granted in Australia, Canada, China, India, Japan, Korea, new Zealand,
Singapore and South Africa
Under examination elsewhere (Brazil, europe, Hong Kong, and USA)
Granted in Austria, Australia, Belgium, Canada, Switzerland, China, Germany,
Denmark, Spain, Finland, France, United Kingdom, Hong Kong, Ireland, Italy,
Japan, Korea, Luxembourg, Monaco, The netherland, new Zealand, Poland,
Portugal, Sweden, Singapore, Turkey, South Africa and USA
Under examination elsewhere (Brazil, India)
Granted in Austria, Australia, Belgium, Switzerland, Germany, Denmark, Spain,
Finland, France, United Kingdom, Ireland, Italy, Japan, Korea, Luxembourg,
Monaco, The netherlands, new Zealand, Poland, Portugal, Sweden, Singapore,
Turkey and South Africa
Accepted in China
Under examination in elsewhere (Brazil, Canada, Hong Kong, India, and USA)
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BIOTRON AnnuAl RepoRt 2016 REVIEW OF OPERATIONS
Corporate
In April 2016, the Company received an R&D Tax Incentive rebate of $1.5 million for the 2015/16 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.
At the start of the financial year in review, the Company completed a $2 million capital raising by way of a share purchase plan
to eligible shareholders. The funds will be used to support the Company’s ongoing activities described above, in particular the
HIV‑1 Phase 2 trial that is expected to run through the second half of 2016. Thank you to everyone who participated; your ongoing
support is appreciated.
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
5
BIOTRON AnnuAl RepoRt 2016 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 2016 corporate governance statement is dated as at 5 August 2016 and reflects the corporate governance practices
throughout the 2016 financial year. The 2016 corporate governance was approved by the board on 4 August 2016. 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/
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BIOTRON AnnuAl RepoRt 2016
DIRECTORS’ REPORT
The directors present their report together with the financial statements of Biotron Limited (‘the Company’) for the year ended
30 June 2016 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 Australian
Academy of Technological Sciences and engineering (ATSe)
and board member of Commercialisation Australia and
Innovation Australia.
Dr Pond is currently on the boards of the Wound Management
Innovation Cooperative Research Centre and Vectus
Biosystems Ltd. She is Adjunct Professor in the Faculty of
engineering and Information Technologies at the University
of Sydney, and Fellow of the Australian Institute of Company
Directors, ATSe 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.
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BIOTRON AnnuAl RepoRt 2016 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
Retail Securities Pty Ltd 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 Argent Minerals Limited,
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.
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BIOTRON AnnuAl RepoRt 2016 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
6
6
6
6
6
6
6
6
6
6
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:
Directors
Michael J. Hoy
Michelle Miller
Susan M. Pond
Robert B. Thomas
Denis n. Wade
Fully Paid
Ordinary Shares
4,985,491
‑
‑
348,958
5,395,207
1,637,079
Options
700,961
2,000,000
3,000,000
Option Terms
(Exercise Price and Term)
$0.12 at any time up to 30 September 2016
$0.15 at any time up to 30 november 2018
$0.18 at any time up to 30 november 2018
55,556
$0.12 at any time up to 30 September 2016
1,237,038
$0.12 at any time up to 30 September 2016
273,977
$0.12 at any time up to 30 September 2016
In november 2015, 2,000,000 unlisted options with an exercise price of $0.15 and 3,000,000 unlisted options with an exercise
price of $0.18 were granted to Michelle Miller.
There were no other 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
50,719,140
$0.15
$0.18
$0.12
Expiry Date
30 november 2018
30 november 2018
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.
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BIOTRON AnnuAl RepoRt 2016 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
1,313
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 $3,004,303 (2015 ‑ $2,723,221 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 2016.
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
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.
Likely Developments
During the year ended 30 June 2016, 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.
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BIOTRON AnnuAl RepoRt 2016 DIRECTORS’ REPORT
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.
The number of options that had vested as at 30 June 2016 is 1,000,000. no options were granted subsequent to year end.
5,000,000 unlisted options granted to Michelle Miller expired during the year.
There were no remuneration consultants used by the Company during the year ended 30 June 2016, 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.
net loss attributable to equity holders
of the Company
Dividends paid
Change in share price
2016
2015
2014
2013
2012
$3,004,303
$2,723,221
$3,085,814
$3,850,745
$2,378,052
‑
‑
‑
‑
‑
(7.0) cents
3.0 cents
2.0 cents
(2.0) cents
(1.0) cents
The overall level of key management personnel’s compensation is assessed on the basis of market conditions, status of the
Company’s projects, and financial performance of the Company.
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BIOTRON AnnuAl RepoRt 2016 DIRECTORS’ REPORT
Details of remuneration for the year ended 30 June 2016 ‑ 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
Executive
Michelle Miller
(Managing Director)
Executives
Peter J. nightingale
(Company Secretary)
Year
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
2016
2015
Primary
Fees
$
Super-
annuation
$
Share Based
Payments
- Options
$
Other
Long Term
$
Value of
Options
as a % of
Remuneration
Total
$
68,807
68,807
36,697
36,697
36,697
36,697
36,697
36,697
6,537
6,537
3,486
3,486
3,486
3,486
3,486
3,486
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
75,344
75,344
40,183
40,183
40,183
40,183
40,183
40,183
‑
‑
‑
‑
‑
‑
‑
‑
325,383
328,846
29,048
31,240
75,000
75,000
‑
‑
42,902
5,096
402,429
11%
‑
‑
‑
‑
‑
‑
360,086
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
Details of options granted as compensation to each key management person:
Director
Grant Date
Number of
Options Granted
Fair Value
at Grant Date
Option Terms
(Exercise Price and Term)
Michelle Miller
25 november 2015
1,000,000
$17,900
$0.15 at any time to 30 november 2018.
$0.15 at any time from
Michelle Miller
25 november 2015
1,000,000
$17,900
30 november 2016 up to 30 november 2018.
$0.18 at any time from
Michelle Miller
25 november 2015
3,000,000
$48,900
30 november 2017 up to 30 november 2018.
The fair value of the options at grant date was determined based on Black‑ Scholes formula. The model inputs of the options
issued, were the Company’s share price of $0.046 at the grant date, a volatility factor of 100% based on historic share price
performance, a risk free rate of 2.11% based on the 10 year government bond rate and no dividends paid.
The number of options that vested as at 30 June 2016 is 1,000,000 (2015 ‑ 5,000,000). no options were granted subsequent to
year end and 5,000,000 options lapsed during the year.
12
BIOTRON AnnuAl RepoRt 2016 DIRECTORS’ REPORT
Modification of terms of equity‑settled share‑based payment transactions ‑ Audited
no terms of equity‑settled share‑based payment transactions (including options granted as compensation to a key
management person) have been altered or modified by the issuing entity during 2016 financial year.
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.
Exercise of options granted as compensation ‑ Audited
There were no shares issued on the exercise of options previously granted as compensation during the 2016 and 2015
financial years.
Analysis of options and rights over equity instruments granted as compensation ‑ Audited
All options refer to options over ordinary shares of Biotron Limited, which are exercisable on a one‑for‑one basis.
Director
Michelle Miller
Options granted
Number
1,000,000
1,000,000
3,000,000
1,000,000
1,000,000
3,000,000
Date
% vested
in year
% forfeited
in year
Financial year in
which grant vests
24 December 2010
24 December 2010
24 December 2010
‑
‑
‑
25 november 2015
100%
25 november 2015
25 november 2015
‑
‑
100%
100%
100%
‑
‑
‑
1 July 2010
1 July 2011
1 July 2012
1 July 2015
1 July 2016
1 July 2017
The number of options that had vested as at 30 June 2016 is 1,000,000 (2015 ‑ 5,000,000). no options were granted subsequent
to year end.
Analysis of movements in options ‑ Audited
Director
Michelle Miller
Granted in the year
5,000,000
Valuation of options
exercised in the year
Lapsed in the year
‑
5,000,000
13
BIOTRON AnnuAl RepoRt 2016 DIRECTORS’ REPORT
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 2016 ‑ Audited
Held at
1 July 2015
Granted/
Purchased
Exercised
Expired
Held at
30 June 2016
Vested and
exercisable at
30 June 2016
Directors
Michael J. Hoy
Michelle Miller
Susan M. Pond
Robert B. Thomas
Denis n. Wade
Executives
Peter J. nightingale
1,151,924
700,961
‑
5,000,000
5,000,000
55,556
1,237,038
273,977
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
700,961
700,961
(5,000,000)
5,000,000
1,000,000
‑
‑
‑
‑
55,556
1,237,038
273,977
55,556
1,237,038
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 2016 and 2015 financial years and no
amounts were outstanding at 30 June 2016 (2015 ‑ $nil).
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 2016, 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 (2015 ‑ $144,000). There were no
outstanding amounts at 30 June 2016 (2015 ‑ $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 fees paid to Rosignol Consultants Pty Limited during the prior period amounted to $5,000. There were no
outstanding amounts at 30 June 2015.
14
BIOTRON AnnuAl RepoRt 2016 DIRECTORS’ REPORT
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:
Fully paid ordinary shareholdings and transactions 2016 ‑ Audited
Directors
Michael J. Hoy
Michelle Miller
Susan M. Pond
Robert B. Thomas
Denis n. Wade
Executives
Peter J. nightingale
Held at
1 July 2015
Purchased
Received on
exercise of
options
Sales
Held at
30 June 2016
3,855,283
1,130,208
‑
305,556
5,265,000
1,506,871
‑
43,402
130,207
130,208
5,500,000
260,416
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
‑
4,985,491
‑
348,958
5,395,207
1,637,079
5,760,416
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
2016
$
2015
$
43,400
38,500
15
BIOTRON AnnuAl RepoRt 2016 DIRECTORS’ REPORT
Lead Auditor’s Independence Declaration
The Lead Auditor’s Independence Declaration is set out on page 17 and forms part of the Directors’ Report for the year ended
30 June 2016.
This report has been signed in accordance with a resolution of the directors and is dated 5 August 2016:
Michael J. Hoy
Chairman
Michelle Miller
Managing Director
16
BIOTRON AnnuAl RepoRt 2016
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 2016,
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
5 August 2016
Brisbane
Stephen J. Board
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.
17
BIOTRON AnnuAl RepoRt 2016
STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2016
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
Notes
2016
$
2015
$
5
1,548,185
1,672,265
12
6
(225,250)
(300,112)
(15,457)
(16,957)
(850,813)
(801,660)
(3,132,197)
(2,882,954)
(62,686)
(36,404)
(85,289)
(44,776)
(306,046)
(311,429)
(3,080,668)
(2,770,912)
76,365
76,365
47,691
47,691
(3,004,303)
(2,723,221)
9
‑
‑
(3,004,303)
(2,723,221)
‑
‑
Total comprehensive loss for the year
(3,004,303)
(2,723,221)
Basic and diluted loss per share (cents)
7
(0.96) cents
(1.04) cents
The above Statement of Profit or Loss and other Comprehensive Income should be read in conjunction with the accompanying notes.
18
BIOTRON AnnuAl RepoRt 2016
STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
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
2016
$
2015
$
8
10
11
12
13
14
15
15
3,418,453
4,523,224
‑
27,755
10,184
35,025
3,446,208
4,568,433
37,075
37,075
47,769
47,769
3,483,283
4,616,202
115,959
230,357
346,316
346,316
283,319
189,857
473,176
473,176
3,136,967
4,143,026
39,163,122
37,207,759
860,729
1,339,848
(36,886,884)
(34,404,581)
3,136,967
4,143,026
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
19
BIOTRON AnnuAl RepoRt 2016 STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2016
Attributable to equity holders
of the Company
Notes
Issued
Capital
$
Option
Reserves
$
Accumulated
Losses
$
Total
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
Balance at 1 July 2015
37,207,759
1,339,848
(34,404,581)
4,143,026
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
Share based payment
Transfer of expired options
exercise of options
‑
‑
‑
2,000,158
(44,816)
‑
‑
21
‑
‑
‑
‑
‑
42,902
(3,004,303)
(3,004,303)
‑
‑
(3,004,303)
(3,004,303)
‑
‑
‑
2,000,158
(44,816)
42,902
‑
‑
(522,000)
522,000
(21)
‑
Balance at 30 June 2016
15
39,163,122
860,729
(36,886,884)
3,136,967
The above Statement of Changes in equity should be read in conjunction with the accompanying notes.
20
BIOTRON AnnuAl RepoRt 2016 STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2016
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
2016
$
2015
$
1,548,185
1,672,265
(3,260,756)
(2,932,696)
(1,444,702)
(1,507,222)
76,366
47,953
Net cash used in operating activities
16
(3,080,907)
(2,719,700)
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
(4,763)
(4,763)
‑
‑
2,000,158
6,060,077
(44,816)
(583,126)
1,955,342
5,476,951
(1,130,328)
2,757,251
4,523,224
1,764,181
25,557
1,792
Cash and cash equivalents at 30 June
8
3,418,453
4,523,224
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
21
BIOTRON AnnuAl RepoRt 2016
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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
(a) Statement of compliance
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 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.
(b) Trade and other receivables
Trade and other receivables are stated at their amortised cost
less impairment losses.
(c) Property, plant and equipment
Property plant and equipment are stated at their historical
cost less accumulated depreciation and accumulated
impairment losses. Depreciation is recognised in profit or
loss using the reducing balance method from the date of
acquisition at rates between 13% and 40% per annum.
The financial report was authorised for issue by the directors
on 5 August 2016.
(d) Research and development
(b) Basis of measurement
Grants
The financial statements have been prepared on the historical
cost basis, unless otherwise stated.
(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
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.
22
BIOTRON AnnuAl RepoRt 2016 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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.
23
BIOTRON AnnuAl RepoRt 2016 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
Goods and services tax
(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.
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.
Current tax assets and liabilities are offset only if certain
criteria are met.
Revenue, expenses and assets are recognised net of the
amount of goods and services tax (‘GST’), except where the
amount of GST incurred is not recoverable from the taxation
authority. In these circumstances, the GST is recognised
as part of the cost of acquisition of the asset or as part of
the expense.
Receivables and payables are stated with the amount of GST
included. The net amount of GST recoverable from, or payable
to, the ATo is included as a current asset or liability in the
balance sheet.
Cash 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.
Deferred tax
(j) Finance income
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.
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.
24
BIOTRON AnnuAl RepoRt 2016 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
3. SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(n) Segment reporting
Financial assets measured at amortised cost
Determination and presentation of operating segments
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.
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.
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.
25
BIOTRON AnnuAl RepoRt 2016 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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
2016
$
2015
$
1,548,185
1,672,265
43,400
38,500
14,550
907
15,817
1,140
3,132,197
2,882,954
40,500
66,177
10,540
109,051
26
BIOTRON AnnuAl RepoRt 2016 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
7. LOSS PER SHARE
The calculation of basic and diluted loss per share at 30 June 2016 was based on the loss attributable to ordinary shareholders
of $3,004,303 (2015 ‑ $2,723,221 loss) and a weighted average number of ordinary shares outstanding during the financial year
ended 30 June 2016 of 313,099,418 (2015 ‑ 260,882,383), 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
2016
$
2015
$
3,004,303
2,723,221
2016
Number
2015
Number
296,402,910
228,296,944
313,099,418
260,882,383
2016
$
2015
$
3,418,453
3,418,453
4,523,224
4,523,224
27
BIOTRON AnnuAl RepoRt 2016 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
9. INCOME TAX EXPENSE
Current tax expense
Current year
Tax losses not recognised
Deferred tax expense
Current year
De‑recognition of temporary differences
2016
$
2015
$
(1,367,846)
(1,351,580)
1,367,846
1,351,580
‑
‑
15,679
(15,679)
‑
33,987
(33,987)
‑
Numerical reconciliation between tax expense and pre-tax net profit
Loss before tax ‑ continuing operations
(3,004,303)
(2,723,221)
Prima facie income tax benefit at the Australian tax rate of 30% (2015 ‑ 30%)
(901,291)
(816,966)
Increase in income tax expense due to:
‑ Adjustments not resulting in temporary differences
‑ effect of tax losses not recognised
‑ Unrecognised temporary differences
590,106
326,864
(15,679)
(500,626)
1,351,580
(33,988)
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
227,691
226,406
9,876,428
9,549,564
10,104,119
9,775,970
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.
28
BIOTRON AnnuAl RepoRt 2016 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
10. TRADE AND OTHER RECEIVABLES
Current
other debtors
11. OTHER ASSETS
Current prepayments
Security deposits
12. PLANT AND EQUIPMENT
office equipment ‑ at cost
Accumulated depreciation
Plant and equipment ‑ at cost
Accumulated depreciation
2016
$
2015
$
‑
10,184
12,755
15,000
27,755
19,894
15,131
35,025
205,851
(173,634)
32,217
506,463
(501,605)
4,858
201,088
(159,084)
42,004
506,463
(500,698)
5,765
Total plant and equipment ‑ net book value
37,075
47,769
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
42,004
4,763
(14,550)
32,217
5,765
(907)
4,858
57,821
‑
(15,817)
42,004
6,905
(1,140)
5,765
Total carrying amount at the end of the financial year
37,075
47,769
29
BIOTRON AnnuAl RepoRt 2016 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
13. TRADE AND OTHER PAYABLES
Current
Creditors
Accruals
14. EMPLOYEE ENTITLEMENTS
Current
employee annual leave provision
Long service leave provision
2016
$
2015
$
92,459
23,500
249,213
34,106
115,959
283,319
106,233
124,124
230,357
78,694
111,163
189,857
number of employees at the end of the financial year
4
4
15. CAPITAL AND RESERVES
Issued and paid up capital
313,765,329 (2015 ‑ 296,402,910) fully paid ordinary shares
39,163,122
37,207,759
Fully paid ordinary shares
Balance at the beginning of the financial year
Issue of shares
exercise of options
Costs of issue
37,207,759
32,548,656
2,000,158
5,242,032
21
197
(44,816)
(583,126)
Balance at the end of financial year
39,163,122
37,207,759
The Company does not have authorised capital or par value in respect of its issued shares. All issued shares are fully paid.
zz During the year ended 30 June 2016, 1,313 ordinary shares (2015‑12,201) were issued through the exercise of the listed options
for cash totalling $158 (2015:$1,464). The fair value of the options issued was $21 (2015 ‑ $197).
zz
In July 2015, the Company issued 17,361,111 new fully paid ordinary shares through a share purchase plan for a cash totalling
$2,000,000. Total issue cost of $44,816 was recognised as a reduction in the proceeds of these shares.
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.
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. Fair value for the listed options amounting to $818,045 was recognised in the
option premium reserve. 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.
30
BIOTRON AnnuAl RepoRt 2016 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
15. CAPITAL AND RESERVES (Cont.)
The following options were issued during the year ended 30 June 2016 and were on issue at 30 June 2016:
zz
1,000,000 options with a fair value at grant date of 1.8 cents, each exercisable at 15 cents to acquire one fully paid ordinary
share at any time up to 30 november 2018.
zz
1,000,000 options with a fair value at grant date of 1.8 cents, each exercisable at 15 cents to acquire one fully paid ordinary
share at any time after 30 november 2016 up to 30 november 2018.
zz
3,000,000 options with a fair value at grant date of 1.6 cents, each exercisable at 18 cents to acquire one fully paid ordinary
share at any time after 30 november 2017 up to 30 november 2018.
The fair value of the options at each grant date was determined based on the Black‑Scholes formula. The model inputs for those
options issued during the year ended 30 June 2016 were the Company’s share price of $.046 at the grant date, a volatility factor of
100% based on historic share price performance, risk free interest rate of 2.11% based on the 10 year government bond rate and no
dividends paid.
During the year ended 30 June 2016, the following options lapsed (2015‑ nil).
zz
2,000,000 options, each exercisable at 21 cents to acquire one fully paid ordinary share at any time up to 30 october 2015.
zz
3,000,000 options, each exercisable at 24 cents to acquire one fully paid ordinary share at any time up to 30 october 2015.
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
Share Based Payment
expiry of options
Balance at end of period
2016
$
2015
$
42,902
817,827
522,000
817,848
860,729
1,339,848
522,000
42,902
(522,000)
42,902
522,000
‑
‑
522,000
31
BIOTRON AnnuAl RepoRt 2016 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
15. CAPITAL AND RESERVES (Cont.)
(b) Option premium reserve
Balance at the beginning of period
Issue of options
exercise of options
2016
$
2015
$
817,848
‑
(21)
‑
818,045
(197)
Balance at end of period
817,827
817,848
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
Share based payments
effect of exchange rate adjustments
Changes in assets and liabilities
Decrease/(Increase) in receivables
Decrease in prepayments
Decrease/(Increase) in payables
2016
$
2015
$
(3,004,303)
(2,723,221)
15,457
40,500
42,902
(25,557)
16,957
10,540
‑
(1,792)
10,184
7,139
(10,184)
8
(167,229)
(12,008)
Net cash used in operating activities
(3,080,907)
(2,719,700)
32
BIOTRON AnnuAl RepoRt 2016 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
17. RELATED PARTIES
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 2016, 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 (2015 ‑ $144,000). There were no
outstanding amounts at 30 June 2016 (2015 ‑ $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. There was no additional fees paid to Rosignol Consultants Pty Limited during the period (2015‑$5,000).
There were no outstanding amounts at 30 June 2016 and 30 June 2015.
Key management personnel compensation
During the year ended 30 June 2016 compensation of key management personnel totalled $673,322 (2015 ‑ $630,979), which
comprised primary salary and fees of $579,281 (2015 ‑ $582,744), superannuation of $46,043 (2015 ‑ $48,235), share based
payments of $42,902 (2015 ‑ nil) and long service leave of $5,096. During the 2016 and 2015 financial years, no long term benefits
or termination payments were paid.
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 year ended 30 June 2016, 5,000,000 options were issued to the managing director as detailed in note 15 (2015‑ nil).
Options outstanding at 30 June 2016
Grant date
25 november 2015
25 november 2015
25 november 2015
Number of
options
1,000,000
1,000,000
3,000,000
Exercise price
Fair value
at grant date
Vesting date*
Expiry date
$0.15
$0.15
$0.18
$0.018
$0.018
$0.016
25 november 2015
30 november 2018
30 november 2016
30 november 2018
30 november 2017
30 november 2018
* Vesting conditions are based on minimum service periods being achieved.
33
BIOTRON AnnuAl RepoRt 2016 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
18. SHARE BASED PAYMENTS (Cont.)
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.
Movement of options in the equity based compensation reserve during the year
Number of options
2016
Weighted average
exercise price
2016
Number of options
2015
Weighted average
exercise price
2015
outstanding at 1 July
5,000,000
$0.17
5,000,000
$0.23
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 2.42 years (2015 ‑ 0.33 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.
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
Total expenses arising from share based payment transactions recognised during the year ended 30 June 2016 was $42,902
(2015 ‑ $nil).
34
BIOTRON AnnuAl RepoRt 2016 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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
Cash and cash equivalents
Note
8
10
11
Carrying amount
2016
$
2015
$
3,418,453
4,523,224
‑
15,000
10,184
15,131
3,433,453
4,548,539
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.
35
BIOTRON AnnuAl RepoRt 2016 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
19. FINANCIAL INSTRUMENTS (Cont.)
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 $3,418,453 for its immediate use.
The following are the contractual maturities of financial liabilities, including estimated interest payments:
Carrying
amount
$
Contractual
cash flows
$
Less than
one year
$
Between one
and five years
$
30 June 2016
Trade and other payables
115,959
(115,959)
(115,959)
30 June 2015
Trade and other payables
283,319
(283,319)
(283,319)
‑
‑
Interest
$
‑
‑
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.
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
1.99% (2015 ‑ 1.64%).
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
2016
$
2015
$
3,418,453
4,523,224
15,000
15,131
3,433,453
4,538,355
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.
36
BIOTRON AnnuAl RepoRt 2016 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
19. FINANCIAL INSTRUMENTS (Cont.)
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.
2016
$
2015
$
38,378
29,270
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$5,269 (2015‑ US$433,934).
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 2016 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.
2016
$
355
2015
$
28,334
The Company is not exposed to price risks.
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.
37
BIOTRON AnnuAl RepoRt 2016 NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2016
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
monthly renewal after the 3 years.
During the year ended 30 June 2016, $62,686 was recognised as an expense in profit or loss in respect of the operating lease
(2015 ‑ $85,289).
The future minimum leases payments under non‑cancellable operating leases are payable as follows:
Less than one year
Between one and five years
2016
$
24,250
‑
2015
$
66,640
24,250
22. COMMITMENTS AND CONTINGENCIES
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
There has been no matters 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.
38
BIOTRON AnnuAl RepoRt 2016
DIRECTORS’ DECLARATION
1.
In the opinion of the directors of Biotron Limited:
a) the financial statements and notes set out on pages 18 to 38, and the Remuneration Report in the Directors’ Report, set out
on pages 11 to 15, 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 2016 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 2016.
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 5 August 2016:
Michael J. Hoy
Chairman
Michelle Miller
Managing Director
39
BIOTRON AnnuAl RepoRt 2016
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 2016, 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.
40
BIOTRON AnnuAl RepoRt 2016 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 2016 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 11 to 15 of the directors’ report for the year ended 30 June 2016.
The directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with
Section 300A of the Corporations Act 2001. our responsibility is to express an opinion on the Remuneration Report, based on our
audit conducted in accordance with auditing standards.
Auditor’s opinion
In our opinion, the Remuneration Report of Biotron Limited for the year ended 30 June 2016 complies with Section 300A of the
Corporations Act 2001.
KPMG
5 August 2016
Brisbane
Stephen J. Board
Partner
41
BIOTRON AnnuAl RepoRt 2016
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 2016, 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
Total Number
of Shares
30 September
2016 $0.12
Listed Options
Total Number
of Listed
Options
30 November
2018 $0.15
Unlisted
Options
30 November
2018 $0.18
Unlisted
Options
105
403
430
1,271
468
30,952
1,459,600
3,494,475
50,019,137
258,763,937
2,677
313,768,101
65
200
74
255
89
683
40,185
538,577
561,798
9,200,393
40,375,420
50,716,373
‑
‑
‑
‑
1
1
‑
‑
‑
‑
1
1
At 31 July 2016, 683 shareholders held less than a marketable parcel of shares and 546 listed option holders held less than a
marketable parcel of options.
42
BIOTRON AnnuAl RepoRt 2016 ADDITIONAL STOCK EXCHANGE INFORMATION
Twenty Largest Quoted Shareholders
At 31 July 2016 the twenty largest fully paid ordinary shareholders held 30.35% of fully paid ordinary as follows:
Name
Armco Barriers Pty Ltd
Bond Street Custodians Limited
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