Dimerix Limited
Annual Report 2016

Plain-text annual report

Dimerix Limited Dimerix Limited ACN 001 285 230 Annual Report for the year ended 30 June 2016 Dimerix Limited Corporate directory Board of Directors Dr James Howard Williams Dr Sonia Maria Poli Mr David Franklyn Dr Liz Jazwinska Company Secretary Mr Ian Hobson Executive Chairman Non-Executive Director Non-Executive Director Non-Executive Director Registered Office Suite 5, 95 Hay Street Subiaco, Western Australia 6008 Tel: Fax: +61 8 9388 8290 +61 8 9388 8256 Postal Address PO Box 226 Subiaco, Western Australia 6904 Website Website: www.dimerix.com Auditors Stantons International Level 2, 1 Walker Avenue West Perth, Western Australia 6005 Share Registry Automic Registry Services Suite 1a, Level 1 7 Ventnor Avenue West Perth, Western Australia 6005 +61 8 9324 2099 Tel: +61 8 9321 2337 Fax: Stock Exchange Australian Securities Exchange Level 40, Central Park 152-158 St Georges Terrace Perth, Western Australia 6000 ASX Code DXB Annual report for the year ended 30 June 2016 Contents DIRECTORS’ REPORT AUDITOR’S INDEPENDENCE DECLARATION INDEPENDENT AUDITOR’S REPORT DIRECTORS’ DECLARATION Dimerix Limited 1 16 17 19 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2016 20 CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2016 21 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2016 22 CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2016 NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2016 23 24 ASX ADDITIONAL INFORMATION 55 Dimerix Limited Directors’ report The directors of Dimerix Limited (“Dimerix” or “the Company”) submit herewith the financial report of the Company and its subsidiary (“Group or Consolidated Entity”) for the financial year ended 30 June 2016. In order to comply with the provisions of the Corporations Act 2001, the directors report as follows: Information about the directors The names and particulars of the directors of the Group during or since the end of the financial year are: Name Dr James Williams BSc (Hons), MBA, PhD, GAICD Dr Sonia Poli PhD Mr David Franklyn BEcon Particulars Executive Chairman, joined the Board in July 2015. Dr Williams is the co- founder of Dimerix Bioscience Pty Ltd as well as co-founder and investment director of Yuuwa Capital LP, a venture capital firm based in Western Australia. Prior to establishing Yuuwa Capital, he was managing director of two medical device companies, ASX-listed Resonance Health Limited and Argus Biomedical Pty Ltd, both of which secured regulatory approvals under his leadership. Dr Williams conceived, co-founded and is a former CTO and Director of iCeutica Inc., a clinical stage nano drug reformulation company. iCeutica was acquired by Philadelphia-based Iroko Pharmaceuticals in 2011. Dr Williams is a director of Yuuwa investee companies Adalta Limited, PolyActiva Pty Ltd, and Nexgen Plants Pty Ltd. He is also a director of Linear Clinical Research Ltd, a specialist early phase trial unit and a member of the “Panel of Experts” for the University of Western Australia’s Pathfinder Fund. Non-Executive Director, joined the Board in July 2015. Dr Poli is an accomplished R&D professional with 20 years international experience in large and small pharmaceutical companies. She has broad knowledge of small molecule drug design, optimisation and early clinical development, with expertise which encompasses multiple therapeutic areas. She is the co- inventor of a new anti-emetic medicine, recently included in the National Comprehensive Cancer Network Antiemesis Guidelines as a recommended option. Dr Poli has worked within the Swiss Stock Exchange listed companies Hoffman la Roche and Addex Therapeutics Ltd, where she has held leadership and executive positions across various disciplines in drug discovery, pre-clinical development and translational science. She has served as the Chief Scientific Officer at Addex Therapeutics Limited. Non-Executive Director, joined the Board in November 2015. David has extensive experience in research, financial analysis, funds management and business strategy. His career includes 15 years in the Australian stockbroking industry and 10 years in the funds management sector as well as experience in company management and business strategy. He is an experienced company director, having been Chairman, executive director and non- executive director of various ASX listed companies. David has strong incorporating company restructuring, business management expertise strategy development, people management, corporate culture and organisational structure. David was Chairman of Onterran Ltd until April 2015 and is currently managing director of Village National Holdings Ltd. Dr Liz Jazwinska BSc (Hon), PhD, MBA, GAICD Non-Executive Director, joined the Board in December 2015. Dr Jazwinska has more than 25 years’ experience in R&D Management and drug portfolio business development. She has held senior positions in Industry, Academia 1 | Dimerix Limited and Government bodies in Australia, New Zealand, Singapore and the UK, and is currently the Strategic Alliances Director at the Institute of Medical Biology, A*STAR, Singapore. Previously, Dr Jazwinska established and led Asia Pacific Partnering Group, at Johnson & Johnson Research Pty Ltd (JJR) in Sydney, responsible for identification and negotiation of Licences and partnerships across Asia. Liz was closely involved in the divestment of the JJR R&D portfolio in 2009 and she led and successfully completed the Series A fund-raising for a new molecular diagnostics company, SpeedX. Dr Jazwinska holds a BSc (Hons) from Aberdeen University, a PhD from Edinburgh University, an MBA from the Australian Graduate School of Management, and is also a Graduate of the Australian Institute of Company Directors. Dr Anton Uvarov MBA, PhD Mr Howard Digby B.Eng (Hons) Mr Evan Cross B.Bus, CA, FAICD Mr Peter Webse B.Bus, FGIA, FCIS, FCPA, MAICD Mr Uvarov resigned on 23 November 2015. Mr Digby resigned on 23 November 2015. Mr Cross resigned on 3 July 2015. Mr Webse resigned on 3 July 2015. The above named directors held office during the whole of the financial year and since the end of the financial year except for: Mr James Williams (appointed 3 July 2015) Dr Sonia Maria Poli (appointed 3 July 2015) Mr David Franklyn (appointed 23 November 2015) Dr Liz Jazwinska (appointed 17 December 2015) Mr Howard Digby (resigned 23 November 2015) Dr Anton Uvarov (resigned 23 November 2015) Mr Evan Cross (resigned 3 July 2015) Mr Peter Webse (resigned 3 July 2015) Directors’ shareholdings The following table sets out each director’s relevant interest in shares, debentures and rights or options in shares or debentures of the Company or a related body corporate as at the date of this report: Directors James Williams1 Sonia Poli1 David Franklyn2 Liz Jazwinska3 1 Appointed 3 July 2015 2 Appointed 23 November 2015 3 Appointed 17 December 2015 Fully paid ordinary shares Number Share options Number Performance shares Number 29,043,382 - 3,311,443 - 10,762,183 2,152,437 2,152,437 - 2,420,283 - 275,954 - 2 | Dimerix Limited Share options granted to directors and senior management During and since the end of the financial year, an aggregate 15,067,057 share options were granted to the following directors pursuant to the acquisition agreement to acquire 100% of Dimerix Bioscience Pty Ltd (2015: nil): Number of options granted 10,762,183 2,152,437 2,152,437 Issuing entity Dimerix Limited Dimerix Limited Dimerix Limited Number of ordinary shares under option 10,762,183 2,152,437 2,152,437 Directors James Williams1 Sonia Poli1 David Franklyn2 1 Appointed 3 July 2015 2 Appointed 23 November 2015 Company Secretary Ian Hobson B.Bus, FCA, ACIS, MAICD Mr Hobson is a chartered accountant and chartered company secretary with 30 years’ experience. Ian acts as non-executive director and company secretary for ASX listed companies and is experienced in the areas of biotech, technology, finance, mining exploration, marine and mining services. Ian is a governance professional and facilitates governance courses for AICD. Peter Webse B.Bus, FGIA, FCIS, FCPA, MAICD Mr Webse resigned as company secretary on 24 November 2015. He joined as company secretary on 1 February 2013. Dividends No dividends have been paid or declared since the start of the financial year and the directors have not recommended the payment of a dividend in respect of the financial year. Shares under option /Performance Shares or issued on exercise of options / Performance Shares Details of unissued shares or interests under option as at the date of this report are: Performance Shares Number of shares under option 20,857,143 30,851,594i 60,000,000ii Exercise price of option Expiry date of options Issuing entity Dimerix Limited Dimerix Limited Dimerix Limited Dimerix Limited $0.0076 31 Dec. 2017 $0.0200 30 June 2017 $0.0100 30 June 2017 n/a 30 June 2019 i Issued to past and present employees and consultants of Dimerix Bioscience Pty Ltd in connection with the acquisition of Dimerix Bioscience Pty 75,000,040iii Class of shares Ordinary Ordinary Ordinary Ordinary Ltd (refer to ASX announcement dated 3 July 2015). ii Issued to nominees of Forrest Capital (refer to ASX announcement dated 3 July 2015). iii Represent Class C performance shares respectively which convert to fully paid ordinary shares following achievement of numero us milestones (refer to ASX announcement dated 3 July 2015). The holders of these options and performance shares do not have the right to participate in any share issue or interest issue of the Company or of any other body corporate or registered scheme. 150,000,080 ordinary shares were issued as a result of achieving milestones in relation to the 75,000,040 Class A and 75,000,040 Class B performance shares (2015: Nil). No shares were issued during the year or since the end of the financial year as a result of exercise of an option (2015: nil). 3 | Dimerix Limited Indemnification of officers and auditors During the financial year, the Group paid a premium in respect of a contract insuring the directors of the Group (as named above), the company secretary and all executive officers of the Group and of any related body corporate against a liability incurred as such a director, secretary or executive officer to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium. The Group has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the Group or of any related body corporate against a liability incurred as such an officer or auditor. Directors’ meetings The following table sets out the number of directors’ meetings (including meetings of committees of directors) held during the financial year and the number of meetings attended by each director (while they were a director or committee member). During the financial year, 12 board meetings were held. Directors Dr James Williams Dr Sonia Poli Mr David Franklyn Dr Liz Jazwinska Mr Howard Digby Mr Anton Uvarov Mr Evan Cross Mr Peter Webse Held 12 12 7 5 4 4 - - Board of Directors Attended 12 12 7 5 4 4 - - Proceedings on behalf of the Group No person has applied for leave of Court to bring proceedings on behalf of the Group or intervene in any proceedings to which the Group is a party for the purpose of taking responsibility on behalf of the Group for all or any part of those proceedings. Non-audit services Details of amounts paid or payable to the auditor for non-audit services provided during the year by the auditor are outlined in note 25 to the financial statements. In the event non-audit services are provided by Stantons, the Board has established procedures to ensure that the provision of non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. These include:  all non-audit services are reviewed and approved to ensure that they do not impact the integrity and objectivity of the auditor; and  non-audit services do not undermine the general principles relating to auditor independence as set out in APES 110 ‘Code of Ethics for Professional Accountants’ issued by the Accounting Professional & Ethical Standards Board, including reviewing or auditing the auditor’s own work, acting in a management or decision-making capacity for the Company, acting as advocate for the Company or jointly sharing economic risks and rewards. Auditor’s independence declaration The auditor’s independence declaration is included on page 16 of the financial report. 4 | Dimerix Limited Operating and financial review Principal activities The Group’s principal activity during the course of the financial year was to complete the acquisition of Dimerix Biosciences Limited and to progress the development of Dimerix’s DMX-200 clinical asset for the treatment of Chronic Kidney Disease, and the broader commercialisation of Dimerix’s underlying drug discovery technology. Operating results On 3 July 2015, the Company completed the acquisition of Dimerix Bioscience Pty Ltd. For accounting purposes, Dimerix Bioscience Pty Ltd has been identified as the accounting acquirer of the consolidated group. The accompanying consolidated financial statements represent a continuation of Dimerix Bioscience Pty Ltd’s financial statements. The consolidated results reflect a full period of Dimerix Bioscience Pty Ltd plus Dimerix Limited from the date of acquisition, 3 July 2015 to 30 June 2016. The comparative period results reflect Dimerix Bioscience Pty Ltd. The loss of the Group for the year ended 30 June 2016, after accounting for income tax benefit, amounted to $5,254,475. The loss after tax for Dimerix Bioscience Pty Ltd was $525,073 for the year ended 30 June 2015. The year ended 30 June 2016 operating results are attributed to the following:  Corporate restructure cost of $3,971,811 following the business combination (30 June 2015: $ nil);  Share based payment in respect of transaction options issued to employees and contractors of Dimerix Bioscience Pty Ltd of $112,205;  Grants received $2,000 (30 June 2015: $Nil); and  Corporate and administration expenses of $1,188,579 (30 June 2015: $474,491). Review of operations Summary On 13 May 2015 the Company entered into an implementation agreement with Dimerix Bioscience Pty Ltd to acquire 100% of Dimerix Bioscience Pty Ltd (“Acquisition”). At the General Meeting held on 30 June 2015 the shareholders passed a resolution approving the Acquisition of Dimerix Bioscience Pty Ltd and change of control of the Company. On the 3 July 2015 the Company successfully completed the acquisition and in accordance with the Implementation Agreement, the Company issued:  750,000,041 shares in Dimerix Limited;  75,000,040 Class A Performance shares (which converted into 75,000,040 ordinary shares following receipt by the Company of a notice of allowance from the United States Patent and Trademark Office in relation to the US patent application within 24 months of completion of the Acquisition);  75,000,040 Class B Performance shares (which converted into 75,000,040 ordinary shares upon the Board making an investment decision to proceed to file an application to the US Food and Drug administration for a pre-Investigational New Drug meeting to progress development of DMX200 following receipt of data generated under the clinical trial for chronic kidney disease supporting further progression of the technology within 48 months of completion of the Acquisition);  75,000,040 Class C Performance shares (convertible into 75,000,040 shares upon receipt of ethics approval allowing commencement of a second clinical trial derived from the Dimerix platform and in relation to an indication that is not covered under the existing Austin Human Research Ethics Committee approval within 48 months of completion of the Acquisition); and  30,851,594 Management Options to past and present employees and Consultants of Dimerix Bioscience Pty Ltd exercisable at $0.02 on or before 30 June 2017. 5 | Dimerix Limited Following the completion of the Acquisition, on 3 July 2015, Mr Evan Cross and Mr Peter Webse resigned as directors and Dr Sonia Poli was appointed as Non-Executive Director. Mr Howard Digby stepped down as Chairman and remained a Non-Executive Director and Dr James William was appointed Executive Chairman. On 23 November 2015, Mr Howard Digby and Dr Anton Uvarov resigned as directors of Dimerix and Mr David Franklyn was appointed Non-Executive Director. The Company Secretary, Mr Peter Webse also resigned and was replaced by Mr Ian Hobson. At the General Meeting held on 26 November 2015, the shareholders approved the Company name change from Sun Biomedical Limited to Dimerix Limited, with the associated change of ASX code from SBN to DXB. On 17 December 2015, Dr Liz Jazwinska was appointed as Non- Executive Director. On 19 February 2016, the Company announced that it had received a Notice of Allowance from the United States Patent and Trade Mark Office (USPTO) for its patent covering the use of DMX-200 in the treatment of kidney disease. The allowance of the US patent triggers Milestone A of the Class A performance shares which were issued to the Dimerix Bioscience vendors on 3 July 2015. As such, 75,000,040 Class A Performance Shares converted to 75,000,040 ordinary shares. On 28 April 2016, the Company announced that it filed a request to the US Food and Drug Administration (FDA) for a pre Investigational New Drug (IND) application meeting in relation to the Development Plan for DMX-200 in Focal Segmental Glomerularsclerosis (FSGS). This event triggered Milestone B of the Class B performance shares which were issued to the Dimerix Bioscience vendors on 3 July 2015. As such, 75,000,040 Class B Performance Shares converted to 75,000,040 ordinary shares. Overview of Group strategy The acquisition of Dimerix Biosciences Limited into the group has resulted in the significant shift of corporate focus to the development of Dimerix’s DMX-200 clinical asset for the treatment of Chronic Kidney Disease, and the broader commercialisation of Dimerix’s underlying drug discovery technology. The Group intends to establish proof of concept for DMX-200 in treating forms of chronic kidney disease in a human trial to support partnering of the asset with a pharmaceutical company within a 2-3 year time frame. In parallel, Dimerix will leverage its drug discovery technology to build a pipeline of additional pre-clinical and clinical assets with the intention of becoming a company with multiple, high potential value, commercial opportunities. The DMX-200 Program DMX-200 combines two existing drugs, irbesartan and propagermanium. Irbesartan is an off-patent angiotensin II type I receptor blocker indicated for the treatment of hypertension and nephropathy in Type II diabetic patients. Propagermanium (PPG) is a chemokine receptor (CCR2) blocker used for its anti-inflammatory properties. DMX-200 has been shown to improve the outcome of chronic kidney disease by reducing leakage of protein into the urine (proteinuria) by more than 50 per cent in animal models. During the year, the Group initiated the DMX-200 trial at three public hospitals and one private nephology practice in Melbourne, Australia. The DMX-200 trial is a single arm, open label trial in adult patients with chronic kidney disease (with proteinuria). The primary end points are the incidence and severity of adverse events and the clinically significant changes in the safety profile of participants. The secondary end points are obtained from statistical analysis of biomarker data at each time point including change from baseline, and the proportion of responders defined as those participants achieving normalisation of proteinuria 6 | Dimerix Limited (proteinuria within normal limits) or those participants achieving a 50% reduction in proteinuria. The trial has two parts Part A is a dose escalation trial recruiting up to 30 patients. All patients recruited to the trial will be on stable irbesartan therapy, and will be treated with propagermanium dosed orally three times per day. Part B is an expansion study, in which up to 30 patients are recruited on the best dose identified from Part A. The Group expects to carry out an interim analysis during Part A of the study to review the safety of the therapy and observe any biomarker changes. It is expected interim data will be available during 2016. The Group expects to review the design of Part B in consultation with the US Food and Drug Administration (FDA) and in light of all data available to the Group, prior to commencement of Part B. These discussions will be in line with the Group’s strategy of pursuing registration for an orphan indication in which the sufferers exhibit chronic kidney disease. The first patient in the DMX-200 trial was dosed in September 2015, with two patients on trial at the end of the half year. The trial sites are continuing to screen patients for potential enrolment in the study. The Group is actively monitoring recruitment, and may expand the study into other jurisdictions to meet recruitment targets and regulatory goals. In December 2015, Dimerix announced that it had received Orphan Designation from the US Food and Drug Administration (FDA) for propagermanium and irbesartan, the constituent parts of DMX-200, for the treatment of focal segmental glomerulosclerosis (FSGS). On the 29th June 2016, Dimerix attended a pre Investigational New Drug meeting with the US FDA to discuss the development of DMX-200 for the treatment of FSGS. Financial position Cash and cash equivalents Net assets / total equity Contributed equity Accumulated losses Consolidated Year ended 30 June 2016 $ 2,018,717 2,242,575 10,920,070 (8,977,201) Company Year ended 30 June 2015 $ 486,864 655,784 4,378,510 (3,722,726) The 2015 comparable figures are those of Dimerix Bioscience Pty Ltd (see note 3.2). The increase in cash and cash equivalents, net assets, contributed equity and accumulated losses was largely the result of the reverse acquisition (refer to note 23 for more information). The directors believe the Group is in a strong and stable financial position to expand and grow its current operations. Significant changes in state of affairs During the year, the Company completed the acquisition of 100% of Dimerix Bioscience Pty Ltd a public unlisted clinical stage drug discovery and development company, based in Melbourne. There were significant Board changes during the year under review. Events after the reporting period There has not been any matter or circumstance that has arisen subsequent to the end of the financial year that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. 7 | Dimerix Limited Future developments, prospects and business strategies Part A of the current Phase II open label trial aims to recruit up to 30 patients at four sites across Melbourne with the aim of demonstrating safety and reduction of proteinuria in patients with CKD. Proteinuria is common in CKD patients and is a strong independent risk factor for disease progression. Reducing proteinuria reduces the risk of CKD progression and its consequences of progressive loss of renal function leading to renal failure, and the development and progression of cardiovascular disease. Patients in the study are already being prescribed irbesartan and, as part of the trial protocol, commence on a dose of 30mg of propagermanium per day. The Investigators review the patients at four week intervals, and escalate the patients’ dose to 60, 90, 150 and 240mg per day over each four week period. The supply of propagermanium to patients following their participation in the trial can be approved under the Australian TGA’s Special Access Scheme. The first two patients to complete Part A of the DMX-200 Phase II trial are continuing to access propagermanium under this Special Access Scheme. Dimerix aims to provide an interim data analysis based on 10-15 patients in the trial before the end of the third quarter of 2016. Environmental issues The Group’s operations are not subject to significant environmental regulation under the Australian Commonwealth or State Law. Remuneration report (audited) This remuneration, which forms part of the directors’ report, sets out information about the remuneration of Dimerix Limited’s key management personnel for the financial year ended 30 June 2016. The term ‘key management personnel’ refers to those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly, including any director (whether executive or otherwise) of the Group. The prescribed details for each person covered by this report are detailed below under the following headings:  key management personnel     key terms of employment contracts. remuneration policy relationship between the remuneration policy and Group performance remuneration of key management personnel Key management personnel The directors and other key management personnel of the Group during the financial year were: Non-executive directors Mr David Franklyn (appointed 23 November 2015) Dr Liz Jazwinska (appointed 17 December 2015) Dr Sonia Maria Poli (appointed 3 July 2015) Mr Howard Digby* (resigned 23 November 2015) Mr Evan Cross (resigned 3 July 2015) Mr Peter Webse (resigned 3 July 2015) Position Non-executive director Non-executive director Non-executive director Non-executive director Non-executive director Non-executive director Executive directors Mr James Williams (appointed 3 July 2015) Dr Anton Uvarov (resigned 23 November 2015) Position Executive Chairman Executive director Executive Employees Kathy Harrison Position General Manager * Mr Howard Digby reverted to a non-executive director role, effective 3 July 2015 (refer to ASX announcement dated 13 May 2015). Except as noted, the named persons held their current position for the whole of the financial year and since the end of the financial year. 8 | Dimerix Limited Remuneration policy The board of directors of the Group is currently responsible for determining and reviewing compensation arrangements for key management personnel. The Group does not currently operate a Remuneration Committee. The remuneration policy, which is set out below, is designed to promote superior performance and long-term commitment to the Group. Non-executive director remuneration Non-executive directors are remunerated by way of fees, in the form of cash, non-cash benefits, superannuation contributions or salary sacrifice into equity and do not normally participate in schemes designed for the remuneration of executives. Shareholders approval must be obtained in relation to the overall limit set for the non-executive directors’ fees. The maximum aggregate remuneration approved by shareholders for non-executive directors is $250,000 per annum. The directors set the individual non-executive director fees within the limit approved by shareholders. Non-executive directors are not provided with retirement benefits. Executive director remuneration Executive directors receive a base remuneration which is at market rates, and may be entitled to performance based remuneration, which is determined on an annual basis. Overall remuneration policies are subject to the discretion of the board and can be changed to reflect competitive and business conditions where it is in the interests of the Group and shareholders to do so. Executive remuneration and other terms of employment are reviewed annually by the board having regard to the performance, relevant comparative information and expert advice. The board’s remuneration policy reflects its obligation to align executive remuneration with shareholders’ interests and to retain appropriately qualified executive talent for the benefit of the Group. The main principles are: (a) remuneration reflects the competitive market in which the Group operates; (b) individual remuneration should be linked to performance criteria if appropriate; and (c) executives should be rewarded for both financial and non-financial performance. The total remuneration of executives consists of the following: (a) salary – executives receive a fixed sum payable monthly in cash plus superannuation at 9.5% of salary; (b) cash at risk component – executives may participate in share and option schemes generally made in accordance with thresholds set in plans approved by shareholders if deemed appropriate. However, the board considers it appropriate to issue shares and options to executives outside of approved schemes in exceptional circumstances; (c) other benefits – executives may, if deemed appropriate by the board, be provided with a fully expensed mobile phone and other forms of remuneration; and (d) performance bonus. The board has not formally engaged the services of a remuneration consultant to provide recommendations when setting the remuneration received by directors or other key management personnel during the financial year. Relationship between the remuneration policy and Group performance The board considers that at this time, evaluation of the Group’s financial performance using generally accepted measures such as profitability, total shareholder return or per Group comparison are not relevant as the Group is at an early stages of the DMX-200 Phase II trial which is continuing as outlined in the directors’ report. 9 | Dimerix Limited Remuneration of key management personnel Short-term employee benefits Salary & fees $ Other7 $ Post- employment benefits Superannuation $ Share-based payment Options $ Total $ 60,000 24,187 39,315 18,750 - - 100,000 21,918 - 207,916 472,086 - - - 8,196 - - - 10,070 - 8,942 27,208 - 2,298 - - - - 9,500 3,039 - 16,427 31,264 7,828 7,828 - - - - 39,141 - - 7,828 62,625 67,828 34,313 39,315 26,946 - - 148,641 35,027 - 241,113 593,183 2016 Non-executive directors Sonia Poli1 David Franklyn2 Liz Jazwinska3 Howard Digby4,5 Evan Cross6 Peter Webse6 Executive directors James Williams3 Anton Uvarov5 General Manager Kathy Harrison Total 1 Appointed 3 July 2015 2 Appointed 23 November 2015 3 Appointed 17 December 2015 4 Reverted to non-executive director on 3 July 2015 5 Resigned 23 November 2015 6 Resigned 3 July 2015 7 Other comprises annual leave expense for the year This schedule represents remuneration of the legal parent for the year ended 30 June 2016 and the legal subsidiary’s key management personnel since acquisition on 3 July 2015. Short-term employee benefits 2015 – legal parent Salary & fees $ Other $ Post- employment benefits Superannuation $ Share-based payment Options $ Total $ Non-executive directors Evan Cross1 Peter Webse1,2 Executive directors Howard Digby3 Anton Uvarov Total 36,000 36,000 - 63,750 54,795 54,795 181,590 - - 63,750 - - 5,205 5,205 10,410 - - - - - 36,000 99,750 60,000 60,000 255,750 1 Resigned 3 July 2015 2 The amount of $63,750 in ‘Other’ represents company secretarial fees of $4,000 per month and an amount of $7,000 for additional company secretary work outside the scope of the consultancy agreement with Platinum Corporate Secretariat Pty Ltd (Platinum). Also included in ‘Other’ is an amount of $8,750 accrued as at 30 June 2015 for additional company secretary work. The amount of $8,750 was paid subsequent to year end. Mr Webse is the sole director of Platinum. 3 Reverted to non-executive director on 3 July 2015 10 | Dimerix Limited No key management personnel appointed during the year received a payment as part of his or her consideration for agreeing to hold the position. Bonuses and share-based payments granted as compensation for the current financial year Bonuses Kathy Harrison achieved the milestones for a bonus of $35,000 during the financial year (2015: nil) which forms part of salary and fees. Incentive share-based payments arrangements During the financial year, the following share-based payment arrangements were in existence: Option series 1 2 Grant date 22 January 2013 3 July 2015 Expiry date 31 December 2017 30 June 2017 Grant date fair value $0.0076 $0.0036 Vesting date Vested at date of grant Vested at date of grant There has been no alteration of the terms and conditions of the above share-based payment arrangements since the grant date. Share options issued to key management personnel as remuneration during the year are set out in the following table (2015: nil). No share options were exercised by key management personnel during the year (2015: nil). 2016 Balance at 1 July No. Granted as compensation No. Exercised Net other change No. Balance at 30 June No. James Williams Sonia Poli David Franklyn Kathy Harrison Total 10,762,183 2,152,437 2,152,437 2,152,437 17,219,494 No Performance shares were issued to key management personnel as remuneration during the year (2015: nil). 150,000,080 performance shares issued as part of the consideration for the acquisition of Dimerix Bioscience Pty Ltd were converted to ordinary shares during the year (2015: nil). 10,762,183 2,152,437 2,152,437 2,152,437 17,219,494 - - - - - - - - - - - - - - Key terms of employment contracts On 3 July 2015, Dr James Williams was appointed Executive Chairman and his remuneration and other terms of appointment were formalised in a letter of appointment, the key terms and conditions of which are:  Term of agreement – 12 months commencing 3 July 2015 (casual basis) and monthly thereafter until terminated by the Company.  After the initial term of the agreement employment may be terminated by either party giving one month’s notice.  Remuneration will be $109,500 per annum inclusive of statutory superannuation. On 3 July 2015, Dr Sonia Poli was appointed as Non-Executive Director and her remuneration and other terms of appointment were formalised in a letter of appointment, the key terms and conditions of which are:  Term of agreement – monthly until termination by the Company or until the next AGM.  No entitlement to any compensation or damage or payment of any further director’s fees for 11 | Dimerix Limited any period after termination  No entitlement to any compensation or damage or payment of any further director’s fees for any period after termination.  Remuneration will be $45,000 per annum (plus GST if applicable). Dimerix Bioscience Pty Ltd entered into a consulting agreement with Dr Poli on 1 April 2016 to provide additional consulting services at the rate of $5,000 per month for four months. On 23 November 2015 Mr David Franklyn was appointed as Non-Executive Director and the terms of the appointments were formalised in a letter of appointment with the following key terms and conditions:  Term of agreement – monthly until termination by the Company or until the next AGM in 2016.  No entitlement to any compensation or damage or payment of any further director’s fees for any period after termination.  Remuneration will be $45,000 per annum. On 17 December 2015 Dr Liz Jazwinska was appointed as Non-Executive Director and the terms of the appointment were formalised in a letter of appointment with the following key terms and conditions:  Term of agreement – monthly until termination by the Company or until the next AGM in 2016.  No entitlement to any compensation or damage or payment of any further director’s fees for any period after termination.  Remuneration will be $45,000 per annum. Dimerix Bioscience Pty Ltd entered into a consulting agreement with Dr Jazwinksa on 1 April 2016 to provide additional consulting services at the rate of $5,000 per month for four months. Ms Kathy Harrison was appointed as General Manager of Dimerix Bioscience Pty Ltd on 25 March 2014 with the following key terms and conditions  Term of agreement – employment may be terminated by either party giving one month’s notice.  Remuneration will be $175,000 per annum plus superannuation.  Performance bonus of up to 20% of base salary ($35,000) with capacity for additional 5% for over performance. On 23 November 2015 Mr Howard Digby resigned as Non-Executive Director. On 3 July 2015, Mr Digby reverted to Non-Executive Director (formerly Executive Chairman) and his remuneration and other terms of appointment were formalised in a letter of appointment, the key terms and conditions of which are:  Term of agreement – monthly until termination by the Company.  No entitlement to any compensation or damage or payment of any further director’s fees for any period after termination.  Remuneration will be $45,000 per annum (plus GST if applicable). On 23 November 2015 Dr Anton Uvarov’s resigned as Non-Executive Director and his remuneration and other terms of appointment were formalised in an executive service agreement (dated 20 November 2013), the key terms and conditions of which are:  Term of agreement – monthly until termination by the Company.  Payment of termination benefits on early termination by the employer, other than gross misconduct and other specified events, equal to two week’s base salary or two weeks’ notice.  Remuneration will be $60,000 per annum inclusive of statutory superannuation. On appointment to the board, all non-executive directors are required to sign a letter of appointment with the Company. The letter of appointment summarises the board policies and terms, including compensation relevant to the office or director. 12 | Dimerix Limited On 24 November 2015, Mr Ian Hobson was appointed as company secretary. His services are provided through Churchill Services Pty Ltd (“Churchill Services”). Churchill Services is paid a fee of $200/Hr for the provision of company secretarial services. On 24 November 2015, Mr Peter Webse’s services resigned as company secretary. His services had been provided through Platinum Corporate Secretariat Pty Ltd (“Platinum Corporate”). The agreement with Platinum Corporate commenced 1 February 2013. Platinum Corporate was paid a fee of $5,000 per month (excluding GST) for the provision of company secretarial services. Services, if any, outside the scope of the engagement were charged at a rate of $250 per hour as agreed from time to time. The agreement was subject to two (2) months’ notice of termination. Key management personnel equity holdings Fully paid ordinary shares of Dimerix Limited 2016 Balance at 1 July Granted as compensation James Williams1 Sonia Poli1 David Franklyn2 Liz Jazwinska3 Howard Digby4 Anton Uvarov4 Evan Cross5 Peter Webse5 No. - - - - 3,000,000 1,500,000 27,550,462 1,450,000 No. - - - - - - - - Received on exercise of options/ performance shares No. 4,840,566 - 551,908 - - - - - Net other change Balance on Resignation Balance at 30 June No. 24,202,816 - 2,759,535 - 2,549,810 - - - - (3,000,0000) (4,049,810) (27,550,462) (1,450,000) No. 29,043,382 - 3,311,443 - - - - - 2015 – Parent Legal Balance at 1 July Granted as compensation No. 3,000,000 - 27,550,462 1,450,000 No. - - - - Howard Digby4 Anton Uvarov4 Evan Cross5 Peter Webse5 1 Appointed 3 July 2015 2 Appointed 23 November 2015 3 Appointed 17 December 2015 4Resigned 24 November 2015 5Resigned 3 July 2015. Received on exercise of options/ performance shares No. - - - - Net other change Balance at 30 June No. - 1,500,000 - - No. 3,000,000 1,500,000 27,550,462 1,450,000 13 | Dimerix Limited Share options of Dimerix Limited 2016 Balance at 1 July Granted as compens- ation Exercised Balance on resignati on Balance at 30 June Balance vested at 30 June Vested and exercisable Options vested during year No. No. No. No. No. No. No. James Williams1 Sonia Poli1 David Franklyn2 Liz Jazwinska3 Howard Digby4 Anton Uvarov4 Evan Cross5 Peter Webse5 Kathy Harrison - - - - - - - - - 10,762,183 2,152,437 2,152,437 - - - - - 2,152,437 2015 Howard Digby Anton Uvarov1 Evan Cross Peter Webse Balance at 1 July No. Granted as compens- ation No. - - - - - - - - 1 Appointed 3 July 2015 2 Appointed 23 November 2015 3 Appointed 17 December 2015 4Resigned 23 November 2015 5Resigned 3 July 2015. No. - - - - - - - - - - - - - - - - - - 10,762,183 10,762,183 10,762,183 10,762,183 2,152,437 2,152,437 2,152,437 2,152,437 2,152,437 2,152,437 2,152,437 2,152,437 - - - - - - - - - - - - - - - - - - - - 2,152,437 2,152,437 2,152,437 2,152,437 Exercised Balance on resignation Balance at 30 June Balance vested at 30 June Vested and exercisable No. No. No. No. Options vested during year No. No. - - - - - - - - - - - - - - - - - - - - - - - - - 14 | Key management personnel equity holdings Performance shares of Dimerix Limited 2016 Balance at 1 July Granted as compensation Net other change No. No. No. James Williams1 Sonia Poli1 David Franklyn2 Liz Jazwinska3 Howard Digby4 Anton Uvarov4 Evan Cross5 Peter Webse5 - - - - - - - - - - - - - - - - 7,260,849 - 827,862 - - - - - Dimerix Limited Balance on Resignation Balance at 30 June No. 2,420,283 - 275,954 - - - - - - - - - - - - - Conversion to fully paid ordinary shares No. (4,840,566) - (551,908) - 2015 Balance at 1 July Granted as compensation Conversion to ordinary shares Net other change Balance at 30 June No. No. No. No. No. - - - - - - - - - - - - - - - - - - - - Howard Digby4 Anton Uvarov4 Evan Cross5 Peter Webse5 1 Appointed 3 July 2015 2 Appointed 23 November 2015 3 Appointed 17 December 2015 4Resigned 23 November 2015 5Resigned 3 July 2015. This directors’ report, incorporating the remuneration report, is signed in accordance with a resolution made pursuant to s.298(2) of the Corporations Act 2001. On behalf of the directors Dr James Williams Chairman Perth, 24 August 2016 15 | Dimerix Limited Directors’ declaration The directors declare that: (a) in the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; (b) in the directors’ opinion, the attached financial statements are in compliance with International Financial Reporting Standards, as stated in note 3 to the financial statements; (c) in the directors’ opinion, the attached financial statements and notes thereto are in accordance with the Corporations Act 2001, including compliance with accounting standards and giving a true and fair view of the financial position and performance of the Consolidated entity; and (d) the directors have been given the declarations required by s.295A of the Corporations Act 2001. Signed in accordance with a resolution of the directors made pursuant to s.295(5) of the Corporations Act 2001. On behalf of the directors Dr James Williams Chairman 24 August 2016 19 | Dimerix Limited Consolidated statement of profit or loss and other comprehensive income for the year ended 30 June 2016 Consolidated Company Year ended Continuing operations Revenue Other income Research and development expenses Business development expenses Corporate restructure expense Loss on sale of fixed assets Share based payments Corporate administration expenses Loss before income tax Income tax expense Loss for the year from continuing operations Other comprehensive income, net of income tax Items that will not be reclassified subsequently to profit or loss Items that may be reclassified subsequently to profit or loss Other comprehensive income for the year, net of income tax Total comprehensive loss for the year Loss attributable to: Owners of Dimerix Limited Total comprehensive loss attributable to: Owners of Dimerix Limited Loss per share: Basic and diluted (cents per share) Notes to the financial statements are included on pages 24 to 53. 30 June 2015 $ 15,068 222,985 (252,859) (35,776) - - - (474,491) (525,073) 30 June 2016 $ Note 45,311 564,961 (589,075) - (3,971,811) (3,077) (112,205) (1,188,579) (5,254,475) 6 7 23 19 8 9 - (5,254,475) - (525,073) - - - (5,254,475) - - - (525,073) (5,254,475) (525,073) (5,254,475) (525,073) 10 (0.387) (0.07) 20 | Dimerix Limited Consolidated statement of financial position as at 30 June 2016 Current assets Cash and cash equivalents Trade and other receivables Total current assets Non-current assets Property, plant and equipment Total non-current assets Total assets Current liabilities Trade and other payables Provisions Total current liabilities Total liabilities Net assets Equity Issued capital Reserves Accumulated losses Total equity Consolidated 30 June 2016 $ Company 30 June 2015 $ Note 22 11 12 13 14 16 17 2,018,716 504,375 2,523,091 486,864 207,816 694,680 2,209 2,209 2,525,300 1,847 1,847 696,527 264,552 18,173 282,725 282,725 31,513 9,230 40,743 40,743 2,242,575 655,784 10,920,070 299,706 (8,977,201) 2,242,575 4,378,510 - (3,722,726) 655,784 Notes to the financial statements are included on pages 24 to 53. 21 | Dimerix Limited Consolidated statement of changes in equity for the year ended 30 June 2016 Company Balance at 1 July 2014 Loss for the year Other comprehensive income Total comprehensive loss for the year Refund of share issue costs Balance at 30 June 2015 Consolidated Balance at 1 July 2015 Loss for the year Other comprehensive income Total comprehensive loss for the year Issue of ordinary shares on acquisition Share issue costs Issue of Performance Shares Conversion of Performance Shares Recognition of share based payments Balance at 30 June 2016 Issued Capital $ 4,297,215 - - - 81,295 4,378,510 4,378,510 - - - 5,736,400 (19,840) - 825,000 - 10,920,070 Reserves $ Accumulated losses $ (3,197,653) (525,073) - (525,073) - (3,722,726) - - - - - - Total $ 1,099,562 (525,073) - (525,073) 81,295 655,784 - - - - - - 1,012,501 (825,000) 112,205 299,706 (3,722,726) (5,254,475) - (5,254,475) - - - - - (8,977,201) 655,784 (5,254,475) - (5,254,475) 5,736,400 (19,840) 1,012,501 - 112,205 2,242,575 Notes to the financial statements are included on pages 24 to 53. 22 | Dimerix Limited Consolidated statement of cash flows for the year ended 30 June 2016 Cash flows from operating activities Research and development rebate received Receipts from grants Payments to suppliers and employees Interest paid Interest received Net cash used in operating activities Cash flows from investing activities Cash and cash equivalents acquired Proceeds from sale of property, plant and equipment Payments for property, plant and equipment Net cash from investing activities Cash flows from financing activities Refund/(Payment) for share issue costs Net cash (used in)/provided by financing activities Consolidated Company Year ended 30 June 2016 $ 30 June 2015 $ Note 22.1 12 328,374 6,876 (1,759,366) - 44,987 (1,379,129) 140,414 106,546 (817,075) (3,503) 15,068 (558,550) 2,931,305 1,500 (1,984) 2,930,821 - - - - (19,840) 81,295 (19,840) 81,295 Net increase / (decrease) in cash and cash equivalents 1,531,852 (477,255) Cash and cash equivalents at the beginning of the year 486,864 964,119 Cash and cash equivalents at the end of the year 22 2,018,716 486,864 Notes to the financial statements are included on pages 24 to 53. 23 | Dimerix Limited Notes to the financial statements for the year ended 30 June 2016 1. General information 2. 2.1 2.2 Dimerix Limited (“Dimerix or the Company”) and its subsidiary (the “Group or Consolidated Entity”) is a listed public company incorporated in Australia. The address of its registered office and principal place of business is disclosed in the corporate directory to the annual report. The principal activities of the Group are described in the directors’ report. Application of new and revised Accounting Standards The Group has considered the implications of new and amended Accounting Standards applicable for annual reporting periods beginning after 1 July 2015 but determined that their application to the financial statements is either not relevant or not material. New standards and interpretations not yet adopted A number of new standards, amendments to standards and interpretations issued by the AASB which are not yet mandatorily applicable to the Group have not been applied in preparing these consolidated financial statements. Those which may be relevant to the Group are set out below. The Group does not plan to adopt these standards early.  AASB 9 Financial Instruments and associated Amending Standards (applicable for annual reporting period commencing 1 January 2018) The Standard will be applicable retrospectively (subject to the comment on hedge accounting below) and includes revised requirements for the classification and measurement of financial instruments, revised recognition and derecognition requirements for financial instruments and simplified requirements for hedge accounting. Key changes made to this standard that may affect the Group on initial application include certain simplifications financial assets, simplifications to the accounting of embedded derivatives, and the irrevocable election to recognise gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. the classification of to The directors anticipate that the adoption of AASB 9 will not have a material impact on the Group’s financial instruments.  AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods commencing on or after 1 January 2018). When effective, this Standard will replace the current accounting requirements applicable to revenue with a single, principles-based model. Except for a limited number of exceptions, including leases, the new revenue model in AASB 15 will apply to all contracts with customers as well as non-monetary exchanges between entities in the same line of business to facilitate sales to customers and potential customers. The core principle of the Standard is that an entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects 24 | Dimerix Limited the consideration to which the entity expects to be entitled in exchange for the goods or services. To achieve this objective, AASB 15 provides the following five- step process: - identify the contract(s) with a customer; - identify the performance obligations in the contract(s); - determine the transaction price; - allocate the transaction price to the performance obligations in the contract(s); and - recognise revenue when (or as) the performance obligations are satisfied. This Standard will require retrospective restatement, as well as enhanced disclosures regarding revenue. The directors anticipate that the adoption of AASB 15 will not have a material impact on the Group’s revenue recognition and disclosures.  AASB 16: Leases (applicable to annual reporting periods commencing on or after 1 January 2019). AASB 16 removes the classification of leases as either operating leases or finance leases for the lessee effectively treating all leases as finance leases. Short term leases (less than 12 months) and leases of a low value are exempt from the lease accounting requirements. Lessor accounting remains similar to current practice. Although the directors anticipate that the adoption of AASB 16 may have an impact on the Group's financial statements, it is impracticable at this stage to provide a reasonable estimate of such impact.  AASB 2014-3: Amendments to Australian Accounting Standards – Accounting for Acquisitions of Interests in Joint Operations [AASB 1 & AASB 11] AASB 2014-3 amends AASB 11 Joint Arrangements to provide guidance on the accounting for acquisitions of interests in joint operations in which the activity constitutes a business. The amendments require: (a) the acquirer of an interest in a joint operation in which the activity constitutes a business, as defined in AASB 3 Business Combinations, to apply all of the principles on business combinations accounting in AASB 3 and other Australian Accounting Standards except for those principles that conflict with the guidance in AASB 11 (b) the acquirer to disclose the information required by AASB 3 and other Australian Accounting Standards for business combinations This Standard also makes an editorial correction to AASB 11.  AASB 2014-9: Amendments to Australian Accounting Standards – Equity Method in Separate Financial Statements (AASB 2014-9 applies to annual reporting periods beginning on or after 1 January 2016. Early adoption permitted). AASB 2014-9 amends AASB 127 Separate Financial Statements, and consequentially amends AASB 1 First-time Adoption of Australian Accounting Standards and AASB 128 Investments in Associates and Joint Ventures, to allow entities to use the equity method of accounting for investments in subsidiaries, joint ventures and associates in their separate financial statements. AASB 2014-9 also makes editorial corrections to AASB 127. 25 | Dimerix Limited  Other standards not yet applicable There are no other standards that are not yet effective and that would be expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions. 3. 3.1 Significant accounting policies Statement of compliance These financial statements are general purpose financial statements which have been in accordance with the Corporations Act 2001, Accounting Standards and prepared Interpretations and comply with other requirements of the law. The financial statements comprise the financial statements of the Group. For the purposes of preparing the financial statements, the Group is a for-profit entity. Accounting Standards include Australian Accounting Standards. Compliance with Australian Accounting Standards ensures that the financial statements and notes of the Group comply with International Financial Reporting Standards (“IFRS”). The financial statements were authorised for issue by the directors on 24 August 2016. 3.2 Basis of preparation The financial statements have been prepared on the basis of historical cost, except for certain financial instruments that are measured at revalued amounts or fair values at the end of each reporting period, as explained in the accounting policies below. Historical cost is generally based on the fair values of the consideration given in exchange for goods and services. The financial statements have been prepared on a going concern basis. All amounts are presented in Australian dollars, unless otherwise noted. Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, regardless of whether that price is directly observable or estimated using another valuation technique. In estimating the fair value of an asset or liability, the Group takes into account the characteristics of the asset or liability at the measurement date. Fair value for measurement and/or disclosure purposes in these financial statements is determined on such a basis, except for share-based payment transactions that are within the scope of AASB 2, leasing transactions that are within the scope of AASB 117 and measurements that have some similarities to fair value but are not fair value, such as net realisable value in AASB 2 or value in use in AASB 136. In addition, for financial reporting purposes, fair value measurements are categorised into Level 1, 2 or 3 based on the degree to which inputs to the fair value measurements are observable and the significance of the inputs to the fair value measurement in its entirety, which are described as follows:    Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date; Level 2 inputs are inputs, other than quoted prices included in Level 1, that are observable for the asset or liability, either directly or indirectly; and Level 3 inputs are unobservable inputs for the asset or liability. 26 | Dimerix Limited Reverse acquisition Dimerix Limited acquired Dimerix Bioscience Pty Ltd on 3 July 2015. From a legal and taxation perspective Dimerix Limited is considered the acquiring entity. However, the acquisition has the features of a reverse acquisition as described in the Australian Accounting Standard AASB3 “Business Combinations” (AASB 3) notwithstanding Dimerix Limited being the legal parent of the Group. The transaction has been accounted for as a reverse acquisition from a consolidated perspective, where Dimerix Bioscience Pty Ltd is the accounting acquirer and Dimerix Limited is the legal acquirer. The financial report includes the consolidated financial statements of the Group for the period 1 July 2015 to 30 June 2016 and represents a continuation of Dimerix Bioscience Pty Ltd financial statements with exception of the capital structure. The amount recognised as equity instruments in these consolidated statements represents the issued equity of Dimerix Limited adjusted to reflect the equity issued by Dimerix Limited on acquisition. Refer to note 16 on issued capital and note 23 on the accounting for the acquisition. The comparable figures are those of Dimerix Bioscience Pty Ltd. Under the reverse acquisition principles, the consideration provided by Dimerix Bioscience Pty Ltd was determined to be $6,748,901, which is the deemed fair value of the 573,640,008 shares owned by the former Sun Biomedical Limited shareholders at the completion of the acquisition and the performance shares issued to Dimerix Bioscience Pty Ltd shareholders as consideration. The net assets of Dimerix Ltd were recorded at fair value at the completion of the acquisition and no adjustments were required to the historical book values. The excess of the deemed fair value of the shares owned by the Dimerix Limited (formerly Sun Biomedical Limited) shareholders and the fair value of the identifiable net assets of Dimerix Limited immediately prior to the completion of the merger is accounted for under “AASB 2 “Share–based Payment” and resulted in the recognition of $3,971,811 being recorded as “Corporate Restructure Expense”. The net assets of Dimerix Limited were recorded at fair value at completion of the merger. No adjustments were required to the historical values. 3.3 Business combinations Acquisitions of business are accounted for using the acquisition method. The consideration transferred in a business combination is measured at fair value which is calculated as the sum of the acquisition-date fair values of assets transferred by the Company, liabilities incurred by the Company to the former owners of the acquiree and the equity instruments issued by the Company in exchange for control of the acquiree. Acquisition-related costs are recognised in profit or loss as incurred. At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value, except that:  deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements are recognised and measured in accordance with AASB 112 ‘Income Taxes’ and AASB 119 ‘Employee Benefits’ respectively.  liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment arrangements of the Company entered into to replace share-based payment arrangements of the acquiree are measured in accordance with AASB 2 ‘Share-based Payment’ at the acquisition date; and  assets (or disposal groups) that are classified as held for sale in accordance with AASB 5 ‘Non-current Assets Held for Sale and Discontinued Operations’ are measured in accordance with that Standard. 27 | Dimerix Limited Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer's previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer's previously held interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain. Where the consideration transferred by the Company in a business combination includes assets or liabilities resulting from a contingent consideration arrangement, the contingent consideration is measured at its acquisition-date fair value. Changes in the fair value of the contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date. The subsequent accounting for changes in the fair value of contingent consideration that do not qualify as measurement period adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or liability is remeasured at subsequent reporting dates in accordance with AASB 139, or AASB 137 ‘Provisions, Contingent Liabilities and Contingent Assets’, as appropriate, with the corresponding gain or loss being recognised in profit or loss. If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Company reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to reflect new information obtained about facts and circumstances that existed as of the acquisition date that, if known, would have affected the amounts recognised as of that date. 3.4 Going concern basis The financial statements have been prepared on the going concern basis which contemplates the continuity of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business. For the year ended 30 June 2016 the Group incurred a loss after tax of $5,254,475 (2015: $525,073) and a net cash outflow from operations of $1,379,129 (2015: $558,550). At 30 June 2016, the Group had current assets of $2,523,091 (2015: $694,680), current liabilities of $282,725 (2015: $40,743) and current cash holding was $2,018,716. The Group does not have any forthcoming material expenditure commitments in the relevant period. The directors have reviewed the business outlook and cash flow forecasts and are of the opinion that the use of the going concern basis of accounting is appropriate as they believe the Group will continue to raise further funds and meet its expenditure commitments as required. Should the Group be unable to continue as a going concern, it may be required to realise its assets and extinguish its liabilities other than in the normal course of business and at amounts different to those stated in the financial statements. The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that may be necessary should the Group be unable to continue as a going concern. 28 | Dimerix Limited 3.5 Goodwill Goodwill arising on an acquisition of a business is carried at cost as established at the date of the acquisition of the business (see 3.3 above) less accumulated impairment losses, if any. For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash- generating units (or groups of cash-generating units) that is expected to benefit from the synergies of the combination. A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods. On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal. 3.6 Revenue recognition Revenue is measured at the fair value of the consideration received or receivable. Revenue is reduced for estimated customer returns, rebates and other similar allowances. Interest income Interest income from a financial asset is recognised when it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably. Research and Development Incentive These are accounted on an accrual basis once it is probable that it will be received. 3.7 Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period to get ready for their intended use or sale, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale. Investment income earned on the temporary investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All other borrowing costs are recognised in profit or loss in the period in which they are incurred. 3.8 Government grants Government grants are not recognised until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received. Government grants are recognised in profit or loss on a systematic basis over the periods in which the Group recognises as expenses the related costs for which the grants are intended to compensate. Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognised as deferred revenue in the statement of financial position and transferred to profit or loss on a systematic and rational basis over the useful lives of the related assets. 29 | Dimerix Limited Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose of giving immediate financial support to the Group with no future related costs are recognised in profit or loss in the period in which they become receivable. 3.9 Employee benefits Short-term and long-term employee benefits A liability is recognised for benefits accrued to employees in respect of wages and salaries and annual leave when it is probable that settlement will be required and they are capable of being measured reliably. Liabilities recognised in respect of short-term employee benefits are measured at their nominal values using the remuneration rate expected to apply at the time of settlement. Liabilities recognised in respect of long term employee benefits are measured as the present value of the estimated future cash outflows to be made by the Group in respect of services provided by employees up to reporting date. 3.10 Share-based payments arrangements Equity-settled share-based payments to employees and others providing similar services are measured at the fair value of the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based transactions are set out in note 19. The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding increase in equity. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest. The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve. Equity-settled share-based payment transactions with parties other than employees are measured at the fair value of the goods or services received, except where that fair value cannot be estimated reliably, in which case they are measured at the fair value of the equity instruments granted, measured at the date the entity obtains the goods or the counterparty renders the service. For cash-settled share-based payments, a liability is recognised for the goods or services acquired, measured initially at the fair value of the liability. At the end of each reporting period until the liability is settled, and at the date of settlement, the fair value of the liability is remeasured, with any changes in fair value recognised in profit or loss for the year. 30 | Dimerix Limited 3.11 Taxation Income tax expense represents the sum of the tax currently payable and deferred tax. 3.11.1 Current tax The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in the statement of profit or loss and other comprehensive income because of items of income or expense that are taxable or deductible in other years and items that are never taxable or deductible. The Group’s current tax is calculated using the tax rates that have been enacted or substantively enacted by the end of the reporting period. 3.11.2 Deferred tax Deferred tax is recognised on temporary differences between the carrying amounts of assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the computation of taxable profit. Deferred tax liabilities are generally recognised for all taxable temporary differences. Deferred tax assets are generally recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which those deductible temporary differences can be utilised. Such deferred tax assets and liabilities are not recognised if the temporary difference arises from the initial recognition (other than in a business combination) of assets and liabilities in a transaction that affects neither the taxable profit nor the accounting profit. In addition, deferred tax liabilities are not recognised if the temporary difference arises from the initial recognition of goodwill. Deferred tax liabilities are recognised for taxable temporary differences associated with investments in subsidiaries and associates, and interests in joint ventures, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to reverse in the foreseeable future. The carrying amount of deferred tax assets is reviewed at the end of each reporting period and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the period in which the liability is settled or the asset realised, based on tax rates (and tax laws) that have been enacted or substantively enacted by the end of the reporting period. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax liabilities and assets are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when they relate to income taxes levied by the same authority and the Group intends to settle its current tax assets and liabilities on a net basis. 3.11.3 Current and deferred tax for the year Current and deferred tax are recognised in profit or loss, except when they relate to items that are recognised in other comprehensive income or directly in equity, in which case the current and deferred tax are also recognised in other comprehensive income or directly in equity, respectively. Where current tax or deferred tax arises from the initial accounting for a 31 | Dimerix Limited business combination, the tax effect is included in the accounting for the business combination. 3.12 Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Depreciation is recognised so as to write off the cost or valuation of assets (other than freehold land and properties under construction) less their residual values over their useful lives, using the straight-line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting period, with the effect of any changes in estimate accounted for on a prospective basis. An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits are expected to arise from the continued use of the asset. Any gain or loss arising on the disposal or retirement of an item of property, plant and equipment is determined as the difference between the sales proceeds and the carrying amount of the asset and is recognised in profit and loss. 3.13 Intangible assets 3.13.1 Intangible assets acquired in a business combination Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair value at the acquisition date (which is regarded as their cost). Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately. 3.13.2 Derecognition of intangible assets An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the carrying amount of the asset are recognised in profit or loss when the asset is derecognised. 3.14 Impairment of tangible and intangible assets other than goodwill At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified. Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least annually, and whenever there is an indication that the asset may be impaired. Recoverable amount is the higher of fair value less cost 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 32 | Dimerix Limited money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted. If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease When an impairment loss subsequently reverses, the carrying amount of the asset (or cash- generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase. 3.15 Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that the Group will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. When a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows (where the effect of the time value of money is material). When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the receivable can be measured reliably. 3.16 Financial instruments Financial assets and financial liabilities are recognised when a group entity becomes a party to the contractual provisions of the instrument. Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in profit or loss. 3.16.1 Financial assets Financial assets are classified into the following specified categories: financial assets ‘at fair value through profit or loss’ (FVTPL), ‘held-to maturity’ investments, ‘available-for-sale’ (AFS) financial assets and ‘loans and receivables’. The classification depends on the nature and purpose of the financial assets and is determined at the time of initial recognition. All regular way purchases or sales of financial assets are recognised and derecognised on a trade date basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace. 33 | Dimerix Limited 3.16.1.1 Financial assets at FVTPL Financial assets are classified as at FVTPL when the financial asset is either held for trading or it is designated as at FVTPL. A financial asset is classified as held for trading if: it has been acquired principally for the purpose of selling it in the near term; or   on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or it is a derivative that is not designated and effective as a hedging instrument.  A financial asset other than a financial asset held for trading may be designated as at FVTPL upon initial recognition if:    such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or the financial asset forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy and information about the grouping is provided internally on that basis; or it forms part of a contract containing one or more embedded derivatives, and AASB 139 ‘Financial Instruments: Recognition and Measurement’ permits the entire combined contract to be designated as at FVTPL. Financial assets at FVTPL are stated at fair value, with any gains or losses arising on re- measurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any dividend or interest earned on the financial asset and is included in the ‘other gains and losses’ line item. 3.16.1.2 Loans and receivables Trade receivables, loans and other receivables that have fixed or determinable payments that are not quoted in an active market are classified as ‘loans and receivables’. Loans and receivables are measured at amortised cost using the effective interest method, less any impairment. Interest income is recognised by applying the effective interest rate, except for short-term receivables when the effect of discounting is immaterial. 3.16.1.3 Impairment of financial assets Financial assets, other than those at FVTPL, are assessed for indicators of impairment at the end of each reporting period. Financial assets are considered to be impaired when there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows of the investment have been affected. For financial assets that are carried at amortised cost, the amount of the impairment loss recognised is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the financial asset’s original effective interest rate. For financial asset that are carried at cost, the amount of the impairment loss is measured as the difference between the asset’s carrying amount and the present value of the estimated future cash flows discounted at the current market rate of return for a similar financial asset. Such impairment loss will not be reversed in subsequent periods. The carrying amount of the financial asset is reduced by the impairment loss directly for all financial assets with the exception of trade receivables, where the carrying amount is reduced through the use of an allowance account. When a trade receivable is considered uncollectible, 34 | Dimerix Limited it is written off against the allowance account. Subsequent recoveries of amounts previously written off are credited against the allowance account. Changes in the carrying amount of the allowance account are recognised in profit or loss. When an AFS financial asset is considered to be impaired, cumulative gains or losses previously recognised in other comprehensive income are reclassified to profit or loss in the period. For financial assets measured at amortised cost, if, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed through profit or loss to the extent that the carrying amount of the investment at the date the impairment is reversed does not exceed what the amortised cost would have been had the impairment not been recognised In respect of AFS securities, impairment losses previously recognised in profit or loss are not reversed through profit or loss. Any increase in fair value subsequent to an impairment loss is income and accumulated under the heading of recognised investments revaluation reserve. in other comprehensive 3.16.1.4 Derecognition of financial assets The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another party. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and also recognises a collateralised borrowing for the proceeds received. On derecognition of a financial asset in its entirety, the difference between the asset’s carrying amount and the sum of the consideration received and receivable and the cumulative gain or loss that had been recognised in other comprehensive income and accumulated in equity is recognised in profit or loss. On derecognition of a financial asset other than in its entirety (e.g. when the Group retains an option to repurchase part of a transferred asset), the Group allocates the previous carrying amount of the financial asset between the part it continues to recognise under continuing involvement, and the part it no longer recognises on the basis of the relative fair values of those parts on the date of the transfer. The difference between the carrying amount allocated to the part that is no longer recognised and the sum of the consideration received for the part no longer recognised and any cumulative gain or loss allocated to it that had been recognised in other comprehensive income is recognised in profit or loss. A cumulative gain or loss that had been recognised in other comprehensive income is allocated between the part that continues to be recognised and the part that is no longer recognised on the basis of the relative fair values of those parts. 3.16.2 Financial liabilities and equity instruments 3.16.2.1 Classification as debt or equity Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance of the contractual arrangement. 3.16.2.2 Equity instruments An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting all of its liabilities. Equity instruments issued by a group of entity are 35 | Dimerix Limited recognised at the proceeds received, net of direct issue costs. 3.16.2.3 Financial liabilities Financial liabilities are classified as either financial liabilities ‘at FVTPL’ or ‘other financial liabilities’. 3.16.2.4 Financial liabilities at FVTPL Financial liabilities are classified as at FVTPL when the financial liability is either held for trading or it is designated as at FVTPL. A financial liability is classified as held for trading if:  it has been incurred principally for the purpose of repurchasing it in the near term; or  on initial recognition it is part of a portfolio of identified financial instruments that the Group manages together and has a recent actual pattern of short-term profit-taking; or it is a derivative that is not designated and effective as a hedging instrument  A financial liability other than a financial liability held for trading may be designated as at FVTPL upon initial recognition if:    such designation eliminates or significantly reduces a measurement or recognition inconsistency that would otherwise arise; or the financial liability forms part of a group of financial assets or financial liabilities or both, which is managed and its performance is evaluated on a fair value basis, in accordance with the Group’s documented risk management or investment strategy, and information about the grouping is provided internally on that basis; or it forms part of a contract containing one or more embedded derivatives, and AASB 139 ‘Financial Instruments: Recognition and Measurement’ permits the entire combined contract to be designated as at FVTPL. Financial liabilities at FVTPL are stated at fair value, with any gains or losses arising on re- measurement recognised in profit or loss. The net gain or loss recognised in profit or loss incorporates any interest paid on the financial liability and is included in the ‘other gains and losses’ line item. 3.16.2.5 Other financial liabilities Other financial liabilities, including borrowings and trade and other payables, are initially measured at fair value, net of transaction costs. Other financial liabilities are subsequently measured at amortised cost using the effective interest method, with interest expense recognised on an effective yield basis. The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or (where appropriate) a shorter period, to the net carrying amount on initial recognition. 3.16.2.6 Derecognition of financial liabilities The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of the financial liability derecognised and the consideration paid and payable is recognised in profit or loss. 36 | Dimerix Limited 3.17 Goods and services tax Revenues, expenses and assets are recognised net of the amount of goods and services tax (GST), except: i. where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or ii. for receivables and payables which are recognised inclusive of GST. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables. Cash flows are included in the cash flow statement on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified within operating cash flows. 3.18 Comparative amounts When current period balances have been classified differently within current period disclosures when compared to prior periods, comparative disclosures have been restated to ensure consistency of presentation between periods. 4 Critical accounting judgements and key sources of estimation uncertainty In the application of the Group’s accounting policies, which are described in note 3, the directors of the Group are required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period on which the estimate is revised if the revision affects only that period, or in the period in the revision and future periods if the revision affects both current and future periods. In preparing these financial statements, the significant judgements were made by management in applying the Group’s accounting policies and the key sources of estimation uncertainty have been applied to the Business combination refer to note 23. 4.1 Other Key sources of estimation uncertainty  Valuation of Performance Shares issued on acquisition of subsidiary which impact on the corporate restructure expense  Valuation of share options issued to management, staff and consultants  Determination of expenses eligible for research and development rebate 5 Segment information AASB 8 requires operating segments to be identified on the basis of internal reports about components of the Consolidated Entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance. AASB 8 “Operating Segments’” states that similar operating segments can be aggregated to form one reportable segment. Following the acquisition of Dimerix Bioscience Pty Ltd the Group identified two business segments and one geographical segment. The business 37 | Dimerix Limited segments are:  the development of occupational drug testing devices and new therapeutic agents in Australia (Segment 1); and clinical stage drug discovery and development in Australia (Segment 2).  Segment information The following table presents revenue and profit information and asset and liability information regarding the business segments for the year ended 30 June 2016: June 2016 Segment 1 Segment 2 $ $ 40,603 123,872 164 ,475 4,708 441,089 445,797 Corporate Restructure Expense $ - - - Consolidated $ 45,311 564,961 610,272 (732,841) (1,160,095) (3,971,811) (5,864,747) (568,366) (714,298) (3,971,811) (5,254,475) 1,782,753 46,107 - 1,828,860 235,963 458,2678 2,209 696,440 68,777 - 68,777 195,775 18,173 213,948 - - - - - - 2,018,716 504,375 2,209 2,525,300 264,552 18,173 282,725 Revenue Revenue Other income Total segment revenue Operating expenses Segment net operating loss before taxation Segment assets Cash and cash equivalents Trade and other receivables Plant and equipment Total segment assets Segment liabilities Trade and other payables Provisions Total segment liabilities For the period 1 July 2014 to 30 June 2015 the Group’s operating segments did not meet the prescribed quantitative thresholds and as such did not have to report segments separately. The Group aggregated all its reporting segments into one reportable operating segment. The revenue and results of this segment are those of the Dimerix Bioscience Pty Ltd as a whole and are set out in the statement of profit or loss and other comprehensive income. The segment assets and liabilities are those of Dimerix Bioscience Pty Ltd at 30 June 2015. 38 | June 2015 Revenue Revenue Other income Total segment revenue Operating expenses Segment net operating loss before taxation Segment assets Cash and cash equivalents Trade and other receivables Plant and equipment Total segment assets Segment liabilities Trade and other payables Provisions Total segment liabilities 6. Revenue Interest received 7. Other income Research and development rebate Contract research Grant income Dimerix Limited Company $ 222,985 15,068 238,053 (763,126) (525,073) 486,864 207,816 1,847 696,527 31,513 9,230 40,743 Consolidated 2016 $ 45,311 Company 2015 $ 15,068 Consolidated Company 2016 $ 562,961 - 2,000 564,961 2015 $ 196,650 24,489 1,846 222,985 39 8. Loss for the year Loss for the year has been arrived at after charging the following items of expenses: Corporate administration expenses Company secretary fees Directors remuneration Legal and professional fees Share registry fees Insurance expenses Other administration expenses 9. Income taxes relating to continuing operations 9.1 Income tax recognised in profit or loss Current tax expense/(income) Deferred tax expense/(income) Tax losses not recognised Total Tax expense/(income) Dimerix Limited Consolidated Company 2016 $ 69,670 249,034 8,995 11,695 35,448 813,737 1,188,579 2015 $ 17,900 80,002 30,639 - 14,606 331,344 474,491 Consolidated Company 2016 $ (297,843) 71,556 226,287 - 2015 $ (100,155) 24,228 75,927 - The income tax expense for the year can be reconciled to the accounting loss as follows: Loss before tax from continuing operations Income tax expense/(revenue) calculated at 30% (2015: 30%) Effect of items that are not assessable/deductible in determining taxable loss: Non-deductible expenses Non-assessable income Effect of unused tax losses not recognised as deferred tax assets Consolidated 2016 $ (5,254,475) Company 2015 $ (525,073) 1,576,343 157,522 (1,518,944) 168,888 (226,287) - (140,590) 58,995 (75,927) - The tax rate used for the 2016 and 2015 reconciliations above is the corporate tax rate of 30% payable by Australian corporate entities on taxable profits under Australian tax law. The Company has no franking credits available for recovery in future years. 40 9.2 Income tax recognised directly in equity Current tax Share issue costs Deferred tax Share issue costs deductible over 5 years 9.3 Unrecognised deferred tax assets Dimerix Limited Consolidated 2016 $ Company 2015 $ 63,503 36,750 4,762 - 110,251 - Consolidated 2016 $ Company 2015 $ Unused tax losses (revenue) for which no deferred tax assets have been recognised Temporary differences 2,426,521 185,885 345,210 152,385 All unused tax losses were incurred by Australian entities. This benefit for tax losses will only be obtained if the specific entity carrying forward the tax losses derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be realised, and the Group complies with the conditions for deductibility imposed by tax legislation. 10. Loss per share Basic and diluted loss per share (cents per share) 10.1 Basic and diluted loss per share Consolidated 2016 (0.387) Company 2015 (0.07) The loss and weighted average number of ordinary shares used in the calculation of basic earnings per share are as follows: Loss for the year attributable to owners of the Company Weighted average number of ordinary shares for the purposes of basic and diluted loss per share 11. Trade and other receivables Other receivables Prepayments At the reporting date, none of the receivables are past due. Consolidated 2016 $ (5,254,475) Company 2015 $ (525,073) 2016 No. 1,359,964,139 2015 No. 750,000,041 Consolidated 2016 $ 459,467 44,908 504,375 Company 2015 $ 196,866 10,950 207,816 41 12. Property, plant and equipment Carrying amounts of Computer Equipment Cost or valuation Balance at 1 July 2015 Additions Disposals Balance at 30 June 2016 Accumulated depreciation Balance at 1 July 2015 Accumulated depreciation acquired through the Acquisition Depreciation expense Disposals Balance at 30 June 2016 Dimerix Limited Consolidated 2016 $ Company 2015 $ 2,209 1,847 Consolidated 2016 $ Company 2015 $ 3,152 7,866 (6,335) 4,683 3,152 - - 3,152 Consolidated 2016 $ Company 2015 $ 1,305 1,018 1,909 (1,758) 2,474 265 - 1,040 - 1,305 Net book value 2,209 1,847 13. Trade and other payables Trade creditors Accruals and other payables Trade creditor payment terms are 30 days from end of month. 14. Provisions Provision for employee entitlements 15. Subsidiaries Consolidated 2016 $ 133,273 131,279 264,552 Company 2015 $ 16,342 15,171 31,513 Consolidated 2016 $ 18,173 Company 2015 $ 9,230 Dimerix Bioscience Pty Ltd* Australia 2016 100% 2015 - On 3 July 2015 the Company concluded the acquisition of Dimerix Bioscience Pty Ltd refer to note 23. 42 16. Issued capital 1,473,640,129 fully paid ordinary shares (2015: 67,946,250 shares) Dimerix Limited 2016 $ 10,920,070 2015 $ 4,378,510 Balance at beginning of the balance period Merger of Dimerix Ltd and Dimerix Bioscience Ltd Elimination of existing Dimerix Bioscience Ltd shares Existing Dimerix Limited shares on acquisition Issue of Dimerix Ltd shares on acquisition Issue on conversion of performance shares Capital raising costs/(refund) Balance at end of the end of the year Consolidated 30 June 2016 Company 30 June 2015 No. $ No. $ 67,946,250 4,378,510 67,946,250 4,297,215 (67,946,250) 573,640,008 - - 750,000,041 5,736,400 150,000,080 - 825,000 (19,840) - - - - - - - 81,295 1,473,640,129 10,920,070 67,946,250 4,378,510 Fully paid ordinary shares carry one vote per share and carry a right to dividends. 17. Reserves Performance shares reserve Share based payment reserve Total reserves at end of year Consolidated 2016 $ 187,501 112,205 299,706 Company 2015 $ - - - Performance share reserve On acquisition of Dimerix Bioscience Pty Ltd, performance shares were issued to the Vendors or their nominees refer note 23. Each performance share is convertible into 1 ordinary share. The Directors determined the value of the performance shares based on the ASX market price on the date of issue and adjusted the value for the probability of achieving the performance milestones as follows: Class Class A Performance shares Class B Performance shares Class C Performance shares No. Probability 75,000,040 75,000,040 75,000,040 85% 25% 25% 43 Dimerix Limited On 19 February 2016, the Group announced that it had received a Notice of Allowance from the United States Patent and Trade Mark Office (USPTO) for its patent covering the use of DMX-200 in the treatment of kidney disease. The allowance of the US patent triggers Milestone A of the Class A performance shares which were issued to the Dimerix Bioscience vendors on 3 July 2015. As such, 75,000,040 Class A Performance Shares converted to 75,000,040 ordinary shares. On 28 April 2016, the Group announced that it filed a request to the US Food and Drug Administration (FDA) for a pre Investigational New Drug (IND) application meeting in relation to the Development Plan for DMX-200 in Focal Segmental Glomerularsclerosis (FSGS). This event triggered Milestone B of the Class B performance shares which were issued to the Dimerix Bioscience vendors on 3 July 2015. As such, 75,000,040 Class B Performance Shares converted to 75,000,040 ordinary shares. Performance share reserve movement Consolidated 2016 $ Company 2015 $ Balance at beginning of the balance period Issue of performance shares on acquisition of Dimerix Bioscience Pty Ltd Conversion to ordinary shares Balance at end of the end of the balance period - 1,012,501 (825,000) 187,501 Share-based payments Reserve Balance at beginning of year Arising on share-based payments Balance at end of year Consolidated 2016 $ Company 2015 $ - 112,205 112,205 - - - - - - - Further information about share-based payments is set out in note 19. 18. Financial instruments 18.1 Capital management The Group manages its capital to ensure entities in the Group will be able to continue as going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group’s overall strategy remains unchanged from 2015. The Group is not subject to any externally imposed capital requirements. Given the nature of the business, the Group monitors capital on the basis of current business operations and cash flow requirements. 44 18.2. Categories of financial instruments Financial assets Cash and cash equivalents Trade and other receivables Financial liabilities Trade and other payables Dimerix Limited Consolidated 2016 $ 2,018,716 459,467 2,478,183 Company 2015 $ 486,864 196,867 683,731 264,552 264,552 31,513 31,513 The fair value of the above financial instruments approximates their carrying values. 18.3 Financial risk management objectives In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note describes the Group’s objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative information in respect of those risks is presented throughout these financial statements. There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note. The board has overall responsibility for the determination of the Group’s risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective implementation of the objectives and policies to the Group’s finance function. The Group’s risk management policies and objectives are therefore designed to minimise the potential impacts of these risks on the Group where such impacts may be material. The board receives monthly financial reports through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives and policies it sets. The overall objective of the board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s competitiveness and flexibility. 18.4 Market risk Market risk for the Group arises from the use of interest bearing financial instruments. It is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in interest rate (see 18.5 below). 18.5 Interest rate risk management The sensitivity analyses below have been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at the end on the reporting period. Interest rate sensitivity analysis The sensitivity analyses below have been determined based on the exposure to interest rates for both derivatives and non-derivative instruments at the end on the reporting period. If interest rates had been 100 basis points higher/lower and all other variables were held constant, the Group’s loss for the year ended 30 June 2016 would increase/decrease by $20,187 (2015: $4,869). 45 Dimerix Limited 18.6 Credit risk management Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The Group has adopted a policy of dealing with creditworthy counterparties and obtaining sufficient collateral, where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group only transacts with entities that are rated the equivalent of investment grade and above. This information is supplied by independent rating agencies where available and, if not available, the Group uses other publicly available financial information and its own trading records to rate its major customers. The Group’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate value of transactions concluded is spread amongst approved counterparties. The credit risk on liquid funds is limited because the counterparties are banks with high credit- ratings assigned by international credit-rating agencies. 18.7 Liquidity risk management Ultimate responsibility for liquidity risk management rests with the board of directors, which has established an appropriate liquidity risk management framework for the management of the Group’s short-, medium- and long-term funding and liquidity management requirements. The Group manages liquidity by maintaining adequate banking facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. Contractual cash flows Carrying Amount Less than 1 month 1-3 months 3-12 months 1 year to 5 years $ $ $ $ $ Total contractual cash flows $ 2016 Trade and other payables 2015 Trade and other payables 264,552 264,552 31,513 31,513 - - - - - - 264,552 31,513 19. Share-based payments 19.1 Employee share option plan Options may be issued to external consultants or non-related parties without shareholders’ approval, where the annual 15% capacity pursuant to ASX Listing Rule 7.1 has not been exceeded. Options cannot be offered to a director or an associate except where approval is given by shareholders at a general meeting. 30,851,594 were issued to employees during the financial year (2015: nil.) Each option issued converts into one ordinary share of Dimerix Limited on exercise. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry. Each option issued converts into one ordinary share of Dimerix Limited on exercise. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry. 46 Dimerix Limited 30,851,594 options were granted to Dimerix Bioscience Pty Ltd employees and consultants pursuant to the acquisition of Dimerix Bioscience Pty Ltd. The fair value of the options at grant date are determined using a Black Scholes pricing method that takes into account the exercise price, the term of the option, the share price at grant date and expected volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option. The following table lists the inputs to the model used for valuation of the unlisted options. Item Volatility (%) Risk free interest rate (%) Expected life of option (years) Exercise price per terms and conditions Underlying security price at grant date Expiry date Value per option 19.2 Options on Issue Inputs 90% 1.92% 2 $0.02 $0.011 30 June 2017 $0.0036 The following share-based payment arrangements were in existence during and prior reporting periods: Option series Number Grant date Grant date fair value Exercise price Expiry date Vesting date $ $ 1 20,857,143 22/01/2013 0.0076 0.007 31/12/2017 2 30,851,594 03/07/2015 0.0036 0.02 30/06/2017 3 60,000,000 03/07/2015 0.0001 0.01 30/06/2017 At grant date At grant date At grant date There has been no alteration of the terms and conditions of the above share-based payment arrangements since the grant date. 19.2 Fair value of share options granted in the year The deemed fair value of options granted to employees during the year is $112,205 (2015: nil). 47 Dimerix Limited 19.3 Movements in share options during the year The following reconciles the share options outstanding at the beginning and end of the year: 2016 2015 Weighted average exercise price Number of options Weighted average exercise price Number of options No. $ No. $ Balance at beginning of the year 20,857,143 0.0076 20,857,143 0.0076 Granted during the year 90,851,594 0.0134 Forfeited during the year Exercised during the year Expired during the year - - - - - - - - - - Balance at end of year 111,708,737 0.0123 20,857,143 Exercisable at end of year 111,708,737 0.0123 20,857,143 - - - - 0.0076 0.0076 19.4 Share options exercised during the year No share options were exercised during the year (2015: nil). 19.5 Share options outstanding at the end of the year The share options outstanding at the end of the year had a weighted average exercise price of $0.0123 and a weighted average remaining contractual life of 386 days (2015: 915 days). 20. Key management personnel The aggregate compensation made to directors and other members of key management personnel of the Company is set out below: Short-term employee benefits Post-employment benefits Share-based payments Short term employee benefits Consolidated 2016 $ 499,294 31,264 62,625 593,183 Company 2015 $ 245,340 10,410 - 255,750 These amounts include director and consulting fees paid to non-executive directors as well as salary and paid leave benefits awarded to executive directors. 48 Dimerix Limited Post-employment benefits These amounts are superannuation contributions made during the year. Further information in relation to key management personnel remuneration can be found in the remuneration report contained in the directors’ report. 21. Related party transactions 21.1 Entities under the control of the Group On 3 July 2015 the Company completed the 100% acquisition of Dimerix Bioscience Pty Ltd. Refer to note 15 and note 23 for further information. 21.2 Key management personnel Any person(s) having authority and responsibility for planning, directing and controlling the activities of the entity, directly or indirectly, including any director (whether executive or otherwise) of that entity, are considered key management personnel. For details of disclosures relating to key management personnel, refer to the remuneration report contained in the directors’ report and note 20. 21.3 Other related party transactions Mr Webse’s services were provided by Platinum Corporate Secretariat Pty Ltd (Platinum). Mr Webse is the sole director of Platinum. Company secretarial fees paid to Platinum are disclosed in the remuneration report. Mr Webse resigned as a non-executive director on 3 July 2015 and as Company Secretary on 23 November 2015. All transactions between the Group and related parties are on an arms-length basis. 22. Cash and cash equivalents For the purposes of the statement of cash flows, cash and cash equivalents include cash on hand and in banks, net of outstanding bank overdrafts. Cash and cash equivalents at the end of the reporting period as shown in the statement of cash flows can be reconciled to the related items in the statement of financial position as follows: Cash and bank balances Consolidated 2016 $ 2,018,716 Company 2015 $ 486,864 49 Dimerix Limited 22. Cash and cash equivalents (cont’d) 22.1 Reconciliation of loss for the year to net cash flows from operating activities Cash flow from operating activities Loss for the year Adjustments for: Loss from disposal of property, plant and equipment Depreciation Share based payments Corporate restructure expense Movements in working capital (Increase)/decrease in other receivables (Increase)/decrease in prepayments Increase/(decrease) in trade and other payables Increase in provisions Net cash outflows from operating activities Consolidated 2016 $ Company 2015 $ (5,254,475) (525,073) 3,077 1,909 112,205 3,971,811 (230,036) (33,959) 41,396 8,942 (1,379,130) - 1,040 - - 23,976 (2,844) (62,283) 6,634 (558,550) Non Cash Financing and Investing Activities During the year the company issued ordinary shares and performance shares as consideration for the acquisition of Dimerix Bioscience Pty Ltd (see note 23). 23. Business Combination – Reverse acquisition Subsidiary acquired On 3 July 2015 Dimerix Limited (formerly Sun Biomedical Limited) completed the 100% acquisition of Dimerix Bioscience Pty Ltd a clinical stage drug discovery and development company. The consideration for this acquisition was $6,748,901 made up as follows: i) 750,000,041 shares in Dimerix Limited; ii) 75,000,040 Class A Performance shares (convertible into 75,000,040 shares upon receipt by the Company of a notice of allowance from the United States Patent and Trademark Office in relation to the US patent application within 24 months of completion of the Acquisition); iii) 75,000,040 Class B Performance shares (convertible into 75,000,040 shares upon the Board making an investments decision to proceed to file an application to the US Food and Drug administration for a pre-investigational New Drug meeting to progress development of DMX200 following receipt of data generated under the clinical trial for chronic kidney disease supporting further progression of the technology within 48 months of completion of the Acquisition); and iv) 75,000,040 Class C Performance shares (convertible into 75,000,040 shares upon receipt of ethics approval allowing commencement of a second clinical trial derived from the Dimerix platform and in relation to an indication that is not covered under the existing Austin Human Research Ethics Committee approval within 48 months of completion of the Acquisition). From a legal and taxation perspective Dimerix Limited is considered the acquiring entity. However, the acquisition has the features of a reverse acquisition as described in the Australian 50 Dimerix Limited Accounting Standard AASB 3 “Business Combinations” notwithstanding Dimerix Limited being the legal parent of the Group. The transaction has been accounted for as a reverse acquisition from a consolidated perspective, where Dimerix Bioscience Pty Ltd is the accounting acquirer and Dimerix Limited is the legal acquirer. The excess of the fair value of the shares owned by the Dimerix Limited (formerly Sun Biomedical Limited) shareholders and the fair value of the identifiable net assets of Dimerix Limited immediately prior to the completion of the merger is accounted for under “AASB 2 “Share –based Payment” and resulted in the recognition of $3,971,811 being recorded as “Corporate Restructure Expense”. The net assets of Dimerix Limited were recorded at fair value at completion of the merger. No adjustments were required to the historical values. Assets acquired and liabilities of Dimerix Limited assumed at the date of acquisition: Current assets Cash and cash equivalents Trade receivables Non-current assets Property, plant and equipment Total assets Current liabilities Trade and other payables Provisions Total liabilities Net assets acquired Dimerix Limited $ 2,931,305 32,564 4,864 2,968,733 175,376 16,267 191,643 2,777,090 The fair values of the assets acquired and the liabilities assumed approximate their carrying value. The initial accounting for the acquisition of Dimerix Limited (the legal acquirer) has been determined at the end of the reporting period. Corporate restructure expense on acquisition Consideration transferred Less fair value of identifiable net assets acquired- Dimerix Limited Corporate restructure expense $ 6,748,901 (2,777,090) 3,971,811 24. Commitments and contingencies There are no significant commitments and contingencies at balance date in the current or prior reporting periods. 51 25. Remuneration of auditors Auditor of the parent entity Audit or review of the financial statements Other non-audit services Dimerix Limited Consolidated 2016 $ 45,621 - 45,621 Company 2015 $ 5,000 - 5,000 The auditors of Dimerix Limited are Stantons International Audit and Consulting Pty Ltd. 26. Events after the reporting period No matters or circumstances have arisen since the end of the year which significantly affected or could significantly affect the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial years. 27. Parent entity information The accounting policies of the parent entity, which have been applied in determining the 2016 financial information shown below, are the same as those applied in the financial statements. Refer to note 3 for a summary of significant accounting policies relating to the Group. Financial position of Dimerix Limited (Legal Parent) Assets Current assets Non-current assets Total assets Liabilities Current liabilities Provisions Non-current liabilities Total liabilities Net assets Equity Issued capital Shares and options yet to be issued Reserves Accumulated losses Total equity Financial performance Loss for the year 2016 $ 2015 $ 1,828,861 9,053,507 10,882,368 68,777 - - 68,777 10,813,591 2,963,869 4,864 2,968,733 175,376 16,267 - 191,643 2,777,090 40,862,982 - 463,685 (30,513,076) 10,813,591 31,557,822 1,006,000 157,979 (29,944,711) 2,777,090 (568,365) (679,539) 52 Dimerix Limited Commitments and contingencies There were no material commitments and contingencies at the reporting date for the Group. 29. Approval of financial statements The financial statements were approved by the board of directors and authorised for issue on 24 August 2016. 53 Dimerix Limited ASX Additional Information as at 6 September 2016 Corporate Governance Statement The Company’s corporate governance statement www.dimerix.com/company/corporate-governance. is located at the Company’s website: Ordinary share capital Holding Ranges 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 - 9,999,999,999 Totals Holders 282 323 155 532 607 1,899 Total Units 100,786 825,744 1,125,201 24,116,377 1,450,448,211 1,476,616,319 % Issued Share Capital 0.01% 0.06% 0.08% 1.63% 98.23% 100.00% Each ordinary share is entitled to vote when a poll is called, otherwise each member present at a meeting or by proxy has one vote on a show of hands. Options     17,880,953 unlisted $0.007 options expiring 31 December 2017 are held by 6 individual option holders. Unlisted option holders holding more than 20% of the above options – Celtic Capital Pty Ltd who holds 8,928,573 options representing 49.9% of the options on issue. 10,000,000 unlisted $0.02 expiring 30 June 2019 are held by one individual option holder: DS & KM Harrison 60,000,000 unlisted $0.01 expiring 30 June 2017 are held by three individual option holders. Unlisted option holders holding more than 20% of the above options are: JK Nominees Pty Ltd Tisia Nominees Pty Ltd Oaktone Nominees Pty Ltd 30,851,594 unlisted $0.02 expiring 30 June 2017 are held by eight individual option holders. Unlisted option holders holding more than 20% of the above options are: Dr James Williams Toroha Pty Ltd 20,000,000 20,000,000 20,000,000 33.33% 33.33% 33.33% 10,762,182 8,609,748 34.88% 27.91% Options do not carry a right to vote. Performance Shares  75,000,040 Class C Performance Shares are held by 77 individual holders. Class C Performance Shares holders holding more than 20% of the above Class C Performance Shares – Mr Peter Meurs who holds 26,423,688 Class C Performance Shares representing 35.23% of the Class CA Performance Shares on issue. The Performance Shares do not carry a right to vote. Unmarketable parcels There are 1,004 shareholdings held with less than a marketable parcel. 54 Substantial shareholders Mr Peter Meurs Yodambao Pty Ltd Restricted securities Nil On-Market buy-back There is no current on-market buy-back. Twenty (20) largest shareholders of quoted equity securities Position Holder Name 1 2 3 4 MR PETER FLETCHER MEURS YODAMBAO PTY LTD MRS WISHNY SRITHARAN KRISHNARAJAH MR JASON PETERSON & MRS LISA PETERSON MR PAUL ANDREW WHITE & MS ELIZABETH ANN MCCALL SRV CUSTODIANS PTY LTD MRS GWEN MURRAY PFLEGER JAMPASO PTY LTD NULLAKI SERVICES PTY LTD JGC SUPER PTY LTD BOND STREET CUSTODIANS LIMITED SAYERS INVESTMENTS (ACT) PTY LIMITED TISIA NOMINEES PTY LTD SLADE TECHNOLOGIES PTY LTD JANAKA PTY LTD HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED DR MARTIN MARSHALL BLAKE NOMINEES PTY LTD MANHATTAN INVESTMENTS PTY LTD AUSPIPE PTY LTD Totals Total Issued Capital 5 6 7 8 9 10 11 12 12 13 14 15 16 17 18 19 20 Dimerix Limited Number of shares % holding 317,084,255 77,886,197 21.47 6.33 Holding 317,084,255 70,485,214 50,000,000 48,757,209 % IC 21.47% 4.77% 3.39% 3.30% 40,389,928 2.74% 37,889,734 2.57% 31,187,444 2.11% 27,718,806 1.88% 24,434,707 1.65% 21,440,000 16,557,207 1.56% 1.45% 1.12% 16,557,207 1.12% 15,000,000 1.02% 14,000,000 0.95% 13,954,060 12,978,154 12,142,857 11,837,711 11,802,560 11,000,409 828,195,685 1,476,616,319 0.95% 0.88% 0.82% 0.80% 0.80% 0.75% 56.09% 100.00% 55 YODAMBAO PTY LTD 22,978,223 

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