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
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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
-
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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).
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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.
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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.
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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
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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.
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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.
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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.
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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.
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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.
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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.
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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.
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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
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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
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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.
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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,
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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
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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.
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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
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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