Immuron Limited
ABN 80 063 114 045
Annual report
for the year ended 30 June 2018
Immuron Limited ABN 80 063 114 045
Annual Report- 30 June 2018
Contents
Corporate directory
Intellectual property report
Directors' report
Auditor’s independence declaration
Financial statements
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors' declaration
Independent auditor's report to the members
Shareholder information
Page
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6
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73
Directors
Immuron Limited
Corporate directory
Dr. Roger Aston
Independent non-executive chairman
Mr. Daniel Pollock
Independent non-executive director
Mr. Stephen Anastasiou
Independent non-executive director
Mr. Peter Anastasiou
Executive vice chairman
Mr. Richard J Berman (appointed 1 July 2018)
Independent non-executive director
Secretary
Mr. Phillip Hains
Mr. Peter Vaughan (resigned 1 July, 2018)
Interim Chief Executive Officer
Dr. Jerry Kanellos
Registered Office
Principal Place of Business
Share Registry - Australia
Share registry - United States
Auditors
Solicitors - Australia
Solicitors - United States
Level 3, 62 Lygon Street
Carlton VIC 3053
Australia
Telephone: +61(0)3 9824 5254
Facsimile: +61(0)3 9822 7735
Unit 10, 25 - 37 Chapman Street
Blackburn North VIC 3130
Australia
Telephone: +61 (0)3 9824 5254
Facsimile: +61 (0)3 9822 7735
Security Transfer Registrars Pty Ltd
770 Canning Highway
Applecross WA 6153
Australia
Telephone: +61 (0)8 9315 2333
Facsimile: +61 (0)8 9315 2233
Bank of New York
225 Liberty Street
New York, NY 102286
United States of America
Telephone: +1 212 495 1784
Grant Thornton Audit Pty Ltd
Collins Square, Tower 1
727 Collins Street
Melbourne VIC 3008
Australia
Telephone: +61 3 8320 2222
Francis Abourizk Lightowlers (FAL)
Level 16
356 Collins Street
Melbourne VIC 3000
Australia
Telephone: +61 (0)3 9642 2252
Carter Ledyard and Milburn LLP
2 Wall Street
New York NY 10005
United States of America
Telephone: +1 212 238 8605
1
Bankers
Securities exchange listings
Websites
Immuron Limited
Corporate directory
(continued)
National Australia Bank (NAB)
330 Collins Street
Melbourne VIC 3000
Australia
Australian Securities Exchange (Code: IMC)
NASDAQ Exchange (Code: IMRN)
www.Immuron.com
www.travelan.com.au
2
Dear Shareholders,
Highlights
Immuron Limited
30 June 2018
Travelan expands commercial returns, extends therapeutic potential
First patients enrolled in Clostridium difficile clinical study
• NASH clinical trial produces positive results
•
•
• Colitis pre-clinical program successful
•
• New auditors appointed
International marketing and fundraising efforts step up
NASH clinical trial produces promising results
Our IMM-124E phase II Non-Alcoholic Steatohepatitis (NASH) clinical study has clearly demonstrated significant
reductions in serum Lipopolysaccharide (LPS), as well as reductions in other biomarkers associated with liver
damage.
Our drug candidate IMM-124E, a first-in-class, oral antibody therapeutic targets the endotoxin LPS and other
gram negative bacterial components in the gut and prevents translocation into the blood circulation where they
drive inflammation and cause damage to the liver. The 24-week treatment study in Australia, Israel, and the US
targeted 133 biopsy-proven NASH patients. The results revealed nearly 64.3 per cent of IMM-24E-dosed patients
showed a 15 per cent or greater decrease in serum LPS levels, compared with just 34.5 per cent of patients
showing a decrease in the placebo group.
the same time,
At
Cytokeratin-18 (CK-18), metabolic markers associated with NASH and liver damage.
the study showed decreases in both Aspartate Transaminase (AST and ALT) and
The reported results provide conformation of a unique mechanism of action and proof of concept that metabolic
endotoxemia can be decreased by using this drug candidate to prevent LPS translocating into the blood stream.
Another expected but nonetheless pleasing outcome was the confirmation that IMM-124E was retained within the
gut lumen and was not absorbed systemically. This finding strengthened IMM-124E’s safety profile and potential
for use in combination with other therapeutics.
NASH is a severe form of non-alcoholic fatty liver disease (NAFLD). It represents an impending health crisis with
between three and five per cent of the US population affected, particularly through its obesity epidemic. Between
two and four per cent of the global population is also thought to be at risk. Projected annual costs of NASH
treatment could reach USD25 billion by 2026.
Travelan expands commercial returns, extends therapeutic potential with US Defence study
On the back of elevated sales for Travelan in the first half of 2017/18, the sales trajectory continued upward in the
third quarter in both the United States and Australia.
Travelan is Immuron’s oral over-the-counter gastrointestinal and traveller's diarrhoea treatment.
The Company's global gross sales reached AUD$2 million which resulted in 29% increase against the gross
sales in 2017. In USA alone, gross sales saw an increase of 114% over 2017. While in Australia, the gross sales
managed an increase of 19% over 2017.
As this trend continues, Travelan will continue to see an increase against the 2018 sales performance. With a
sharp focus on a consistent trade and pharmacy marketing program in both countries, and the expected addition
of new territories to promote Travelan, sales growth is projected to continue growing.
3
Immuron Limited
30 June 2018
(continued)
US Department of Defence backs Travelan research
In other Travelan news, a US Department of Defence-commissioned study has shown Travelan has effective
immunological reactivity to dangerous and potentially fatal infectious bacteria.
The Department of Enteric Diseases (DED), Armed Forces Research Institute of Medical Sciences (AFRIMS)
performed the study. It took place at a laboratory of the Walter Reed Army Institute of Research (WRAIR) in
Bangkok. WRAIR is one of the leading health research organisations in the world.
three involving Travelan,
isolates of each of Campylobacter,
The study, one of
Enterotoxigenic Escherichia coli (ETEC), and Shigella from infected US Defence personnel in southeast Asia
between 1993 and 2016. The study found that Travelan antibodies were reactive to all 180 clinical
isolates
tested.
looked at 60 clinical
We believe that our continuing collaborations with the DoD are a powerful validation of the potential of our
platform to develop novel anti-infectives.
First patients enrolled in Clostridium difficile clinical study
With 29,000 annual deaths, and 450,000 people affected by Clostridium difficile infection (CDI) in the United
States alone, the positive progress of our IMM-529 CDI clinical trial is welcome news.
CDI mostly strikes older people following the use of antibiotics, or extended periods of hospitalisation.
It
manifests in a range of symptoms, from diarrhoea to potentially life-threating gut inflammation. Our clinical study
will treat 60 patients diagnosed with CDI, beginning with recruits at the Hadassah Medical Centre in Israel.
Once infected, patients face high rates of recurrence. The cost to the US healthcare system alone is estimated at
$4.5 billion a year.
Colitis pre-clinical program successfully completed
In May 2018, we announced the completion of our IMM-124 colitis preclinical mice program at the University of
Zurich.
The results follow in parallel with our NASH clinical study, which showed significant reductions in serum
Lipopolysaccharide (LPS) levels. LPS endotoxins are chief suspects in the inflammation associated with colitis
and inflammatory bowel and other autoimmune diseases.
IMM-124E was shown to successfully treat mice with colonoscopy confirmed
Oral administration of
immunologically induced colitis. The results revealed that
treatment with IMM-124E significantly reduced
intestinal inflammation associated with colitis and produced substantial reductions in weight loss, disease activity
scores, shortening of the colon, and macroscopically detectable colitis.
Immuron believes IMM-124E may represent a novel therapeutic to induce and maintain remission in IBD patients.
The findings of the University of Zurich studies have been submitted for presentation at the annual United
European Gastroenterology Week conference to be held in Austria in October.
Fatty Liver Porfolio – Two Ongoing Phase 2 Programs in clinical development (ASH and Pediatric NAFLD)
Dr Arun Sanyal is the lead Principle Investigator for the Immuron alcoholic steatohepatitis (ASH) clinical study
which is funded by the NIH. The study has enrolled 56 patients with severe alcoholic hepatitis and recruitment
into the study has now been closed. The primary endpoint is changes in ALT (liver enzymes) and topline results
are expected in Q1 2019.
4
Immuron Limited
30 June 2018
(continued)
Fatty Liver Porfolio – Two Ongoing Phase 2 Programs in clinical development (ASH and Pediatric NAFLD)
(continued)
With 17.3 percent of Americans aged 15 - 19 suffering NAFLD, Health authorities estimate paediatric NAFLD
affects five to 10 percent of the US paediatric population, with no current approved treatments. The lead Principle
Investigator for our Paediatric NAFLD study is Dr Miriam Vos, Emory University. Dr Vos specializes in the
treatment of gastrointestinal disease in children as well as fatty liver disease and obesity. Our NIH funded Phase
II double blind, placebo control, randomized study on IMM-124E has enrolled 19 patients approximately 50% of
the targeted 40 patients into the study. The primary endpoint is changes in ALT (liver enzymes) following 3
months of treatment with top-line results expected in Q2 2019.
International marketing and fundraising efforts step up
High profile marketing via road-show appearances, analysts and investment conferences, and business
television broadcasts continued throughout the period.
In January, Chief Executive Officer, Dr Jerry Kanellos was interviewed on the US Redchip Money Report, The
Action Channel, and on American Business TV’s The Family Channel. The latter has access to 100 million
homes in the US.
Also in January, he presented at the 10th annual Biotech Showcase in San Francisco where he was able to meet
with influential representatives from investment and pharmaceutical circles.
In March, we released a company presentation outlining all the latest developments across all of Immuron’s
platforms, as well and pipeline.
And in April, Dr Kanellos presented at
the monthly US Redchip Global Online Growth conference. The
conference attracts large numbers of analysts and investors - more than 12,000 participants attended the
Redchip Global Online CEO conferences last year.
Australian tax refund
Under the Australian Government’s Research and Development Income Tax Concession incentive scheme,
Immuron received a AUD2.16 million cash refund. The payment rewarded our investment of more than AUD4.6
million in continuing R&D. The funds will go towards accelerating timelines for pipeline programs.
Equity raise
In mid March, we responded to market demand by completing a AUD5.1million private placement with a large US
institutional
investment fund. The placement saw the issue of 13,162,744 new ASX shares. The funds will
underpin current and future clinical programs, support continued Travelan marketing, and secure working capital.
New auditors appointed
Immuron has appointed international firm Grant Thornton Audit Pty Ltd as auditors for both our Australian and US
operations. Grant Thornton Audit Pty Ltd replaced Marcum LLP in the US and William Buck Audit Pty Ltd in
Australia.
Dr. Jerry Kanellos
Interim Chief Executive Officer (CEO)
Immuron Limited
Melbourne
27 September 2018
5
Immuron Limited
Intellectual property report
30 June 2018
Intellectual property report
Immuron has a policy to identify, capture and protect all relevant intellectual property associated within its core
business strategies. The company owns a number of patent families that have been filed to protect both the
vaccine that is used to generate Immuron’s colostrum enriched with antibodies of choice, as well as methods of
treating certain conditions with the resulting hyper-immune colostrum. The company further maintains a
significant register of trademarks, particularly in association with the product Travelan.
Immuron’s patent rights are supplemented by a comprehensive body of confidential and proprietary expertise that
has been developed over many years and relates to the methods of production of the hyper-immune colostrum.
These trade secrets include information relating to a low cost production system and an effective immunisation
process that is approved by an independent animal ethics committee.
During the year ended 30 June 2018, Immuron continued to progress its patent portfolio and has successfully
prosecuted patents to Grant, over various global jurisdictions.
A summary of the principal patent families owned by Immuron is set out in the table below:
Number
Country
Status
Expiry
Granted
Pending
Granted
Pending
Pending
Granted
Granted
Granted
Granted
Australia
Brazil
Canada
China
Europe
India
New Zealand
USA
USA
4 March 2024
4 March 2024
4 March 2024
4 March 2024
4 March 2024
4 March 2024
4 March 2024
4 March 2024
25 February 2028
Travelan: Composition and Method for the Treatment and Prevention of Enteric Bacterial Infections
2004216920
0408085-8
2,517,911
201210055406.0
EP 1605975
230664 B
542088
9,402,902
8,637,025
Anti LPS Enriched Immunoglobulin Preparation for use in Treatment and/or Prophylaxis of a Pathologic
Disorder
2010243205
2760096
13/265,252
2424890
12103554.8
315924
5740390
10-2011-7027634
335793
201171304
2011290478
2808361
2605791
13/817,414
1185016
Methods and Compositions for the Treatment and/or Prophylaxis of Clostridium Difficile Associated
Disease
2014253685
2,909,636
2986316
14/785,527
201480034857.3
713233
27 April 2030
27 April 2030
27 April 2030
27 April 2030
27 April 2030
27 April 2030
27 April 2030
27 April 2030
27 April 2030
27 April 2030
27 April 2030
27 April 2030
27 April 2030
27 April 2030
27 April 2030
Australia
Canada
USA
Europe
Hong Kong
Israel
Japan
Korea
Mexico
Eurasia
Australia
Canada
Europe
USA
Hong Kong
Granted
Allowed
Pending
Allowed
Published
Granted
Granted
Granted
Pending
Granted
Granted
Pending
Granted
Allowed
Published
17 April 2034
17 April 2034
17 April 2034
17 April 2034
17 April 2034
17 April 2034
Australia
Canada
Europe
USA
China
New Zealand
Pending
Pending
Pending
Pending
Pending
Pending
6
Immuron Limited
Directors' report
30 June 2018
Your Directors present their report on the consolidated entity consisting of Immuron Limited and the entities it
controlled at the end of, or during, the year ended 30 June 2018. Throughout the report, the consolidated entity is
referred to as the Company.
Directors
The following persons held office as Directors of Immuron Limited during the financial year:
Dr. Roger Aston, Independent non-executive chairman
Mr. Daniel Pollock, Independent non-executive director
Mr. Stephen Anastasiou, Independent non-executive director
Mr. Peter Anastasiou, Executive vice chairman
Prof. Ravi Savarirayan, Independent non-executive director
Mr. Richard J Berman, Independent non-executive director (appointed 1 July 2018)
The following persons held office as Key Management Personnel of Immuron Limited during the financial year
with the following changes subsequent to 30 June 2018:
Dr. Jerry Kanellos, Interim Chief Executive Officer (CEO) (appointed 3 August 2017) and Chief Operating &
Scientific Officer (COSO)
Mr. Thomas Liquard, Chief Executive Officer (CEO) (Resigned 3 August 2017)
Principal activities
The Company's principal activity is a product development driven biopharmaceutical Company focused on the
research and development of bovine-colostrum enriched with antibodies of choice for the treatment and
prevention of a range of infectious and immune modulated diseases.
Dividends
No dividends have been paid during the financial year. The Directors do not recommend that a dividend be paid
in respect of the financial year (2017: $nil).
Operating and financial review
Consolidated statement of profit or loss and other comprehensive income
The reported after tax loss of $3,010,929 is after fully expensing all of the Company’s research and development
expenditure and patenting costs of $2,257,224 incurred during the year.
The Company has engaged a specialised R&D Tax consultant
to review the research and development
expenses of the Company for financial year 2018, to ensure the maximum rebate is received under the Australian
Government’s R&D Tax Incentive program. It is anticipated that the Company will receive substantial cash
inflows following this review process.
The total operating revenue for the year was $1,842,909, which is an increase of 32% from financial year 2017.
Gross Profit increased 35% to $1,424,216 compared to 2017.
Consolidated statement of financial position
At 30 June 2018 the Company’s cash position was $4,727,430 (30 June 2017: $3,994,924). The Company had
trade and other receivables of $1,683,305 (30 June 2017: $1,768,237). This receivables amount includes future
receivables from the Australian Government under the R&D Tax Incentive program mentioned above.
the current
During
loan arrangement with
Great Accommodation Pty Ltd to fund on going R&D expenditure, for an amount of AUD $500,000 at an interest
rate of 15% per annum and a AUD $15,000 establishment fee. The loan was repaid on 12 February 2018.
the Company entered
into a short-term
financial year,
7
Immuron Limited
Directors' report
30 June 2018
(continued)
Operating and financial review (continued)
Consolidated statement of financial position (continued)
As announced to the market on 14 March 2018, the Company secured AUD $5.1 million in funding through a
private placement with a large U.S. institutional investment fund. This capital raise was required to secure the
future funding needs of Immuron's other ongoing clinical programs, support marketing initiatives surrounding the
Company's flagship product Travelan, which already experienced significant sales growth through the first half of
the financial year 2018, and provide ongoing working capital for the Company.
Consolidated statement of cash flows
The net operating and investing cash outflows for the year were $3,527,444 (2017: $7,031,088) which included
costs associated with the Company’s further development of its research and development programs, together
with significant clinical trial cost expenditure associated with the NASH and ASH clinical trials. During the
financial year $2,156,206 was received from the Australian Government’s R&D tax concession refund incentives
associated with eligible research and development expenditure and activities. The Company will continue to take
advantage of the available Australian Government Research and Development incentives available.
Material business risks
Immuron develops therapeutics and has projects in both the commercial sales and development phases. Any
investment in the development of therapeutics is considered high‐risk. The Company is also subject to risks
associated with the usual conduct of business and these risks, including interest rate movements,
labour
conditions, government policies, securities market conditions, exchange rate fluctuations, and a range of other
factors which are outside the control of the Board and Management.
More specific material risks of the sector and the Company include, but are not limited to:
•
Scientific, technical and clinical - the outcome of the development of therapeutics is inherently unknown.
Activities are experimental in nature so the risk of failure or delay is material. Key development activities,
including clinical trials and product manufacture, are undertaken by specialist contract organisations; and
there are risks in managing the quality and timelines of these activities.
• Regulatory - products and their testing, may not be approved by, or be delayed by regulatory bodies (as was
the case in Canada) whose approvals are necessary before products can be sold in market.
•
•
Financial - the Company currently, and since inception, does not receive sufficient income to cover operating
expenses. The Company may require additional capital funding in the future, and no assurance can be given
that such funding will be available, if required.
Intellectual Property (IP)
- commercial success requires the ability to develop, obtain and maintain
commercially valuable patents and, trade secrets. Gaining and maintaining the IP across multiple countries;
and preventing the infringement of the Company’s exclusive rights involves management of complex legal,
scientific and factual issues. The Company must also operate without infringing upon the IP of others.
• Commercialisation - the Company relies, and intends to rely, upon corporate partners to market, and in some
cases finalise development of its products, on its behalf. There are risks in establishing and maintaining these
relationships, and with the manner in which partners execute on these collaborative agreements.
•
•
•
Product acceptance and competitiveness - a developed product may not be considered by key opinion
leaders (eg. doctors), reimbursement authorities (eg. PBA-listing) or the end customer to be an effective
alternative to products already on market, or new superior future products may be preferred.
liability - a claim or product recall would significantly impact
Product
Insurance, at an
acceptable cost, may not be available or be adequate to cover liability claims if a marketed product is found
to be unsafe.
the Company.
Key personnel - the Company’s success and achievements against timelines depend on key members of its
highly qualified, specialised and experienced management and scientific teams. The ability to retain and
attract such personnel is important.
8
Immuron Limited
Directors' report
30 June 2018
(continued)
Material business risks (continued)
• Grant and R&D incentives - the Company may undertake R&D activities under competitive grants and be
part-funded by other incentive programs (eg R&D tax credits). There is no certainty that grants or incentive
programs will continue to be available to the Company, and changes in government policy may reduce their
applicability.
In accordance with good business practice in the pharmaceutical industry the company’s management actively
and routinely employs a variety of risk management strategies. These are broadly described in the Corporate
Governance Statement.
Biotechnology companies - inherent risks
Some of the risks inherent in the development of a pharmaceutical product to a marketable stage include the
uncertainty of patent protection and proprietary rights, whether patent applications and issued patents will offer
adequate protection to enable product development or may infringe intellectual property rights of other parties,
the obtaining of
the necessary drug regulatory authority approvals and difficulties caused by the rapid
advancements in technology. Also a particular compound may fail the clinical development process through lack
of efficacy or safety. Companies such as Immuron Limited are dependent on the success of their R&D projects
and on the ability to attract funding to support these activities. Investment in research and development projects
cannot be assessed on the same fundamentals as trading and manufacturing enterprises. Thus investment in
these areas must be regarded as speculative, taking into account these considerations.
This Report may contain forward-looking statements regarding the potential of the Company’s projects and
interests and the development of the Company’s projects and interests and the development and therapeutic
potential of the Company’s research and development projects. Any statement describing a goal, expectation,
intention or belief of the Company is a forward-looking statement and should be considered an at-risk statement.
Such statements are subject to certain risks and uncertainties, particularly those inherent in the process of
discovering, developing and commercialising drugs that are safe and effective for use as human therapeutics and
the financing of such activities. There is no guarantee that the Company’s research and development projects will
be successful or receive regulatory approvals or prove to be commercially successful in the future. Actual results
of further R&D could differ from those projected or detailed in this report.
As a result, you are cautioned not to rely on forward-looking statements. Consideration should be given to these
and other risks concerning the Company’s research and development program referred to in this Directors' report
and in the Company’s ‘Operations Report’ as contained in this Annual report for the year ended 30 June 2018.
9
Immuron Limited
Directors' report
30 June 2018
(continued)
Significant changes in state of affairs
Event since the end of the financial year
On 29 June 2018, the Company announced to the market two major changes to the board. Effective July 01,
2018, the Company appointed a non-executive director, Mr. Richard J Berman and the resignation of the joint
company secretary Mr. Peter Vaughan.
On 01 July 2018, the Company issued 1,000,000 unlisted employee stock options to a key management
personnel, Mr. Jerry Kanellos.
On 01 July 2018, the Company granted 2,000,000 unlisted options to Mr. Richard J Berman, subject to the
shareholder approval.
On 11 July 2018, the Company announced that the European Patent Office (EPO) has decided to grant a patent
for the use of composition for the treatment of Non-alcoholic steatohepatitis (NASH). This patent (EPO Grant No.
2424890) is entitled “Anti-LPS enriched immunoglobulin preparations for the treatment and/or prophylaxis of
a pathologic disorder”). This patent is due to Expire in April 2030, with potential for supplementary protection
and extension of this monopoly.
On 16 July 2018, the Company announced an update towards the research collaboration with the US
Department of Defense Research going ahead. Studies were commissioned by the US Department of Defense to
evaluate Travelan®’s ability to neutralise pathogenic bacteria of interest, including Campylobacter, ETEC and
Shigella. A further update on 5 September 2018 on the successful completion of Travelan pre-clinical shigellosis
challenge studies in non-human primates (NHP) was announced.
Other than the events listed above, there have not been any other matters or circumstances in the financial
statements or notes thereto, that have arisen since the end of the financial year which significantly affected, or
may significantly affect, the operations of Immuron Limited the results of those operations or the state of affairs of
Immuron Limited in future financial years.
Business strategy, future developments and prospects
Immuron aims to create value for shareholders through a two-pronged approach. In the short and medium term
Immuron sells and licenses Travelan, an over-the-counter product. Beyond the short term, Immuron is
researching and developing prescription products, principally for the treatment of NASH and Clostridium difficile.
The Company continues to develop its NASH, ASH and C-Diff products. These development programs are not
expected to generate revenues in the short term however, in the longer term, and pending a successful
development outcome in particular the NASH and ASH clinical trials, each of these development programs could
increase shareholder value by many multiples.
Environmental regulation
The Company is involved in pharmaceutical research and development. Much of which is contracted out to third
parties, and it is the Directors understanding that these activities do not create any significant/material
environmental impact. To the best of the Company's knowledge, the scientific research activities undertaken by,
or on behalf of, the Company are in full compliance with all prescribed environmental regulations.
10
Immuron Limited
Directors' report
30 June 2018
(continued)
Information on directors
Dr Roger Aston Independent Non-Executive Chairman
Appointed to the Board
20 March 2012
Last elected by
shareholders
Experience and
expertise
13 November 2014
Dr. Aston has more than 20 years of experience in the pharmaceutical and biotech
industries. Dr. Aston was previously the Chief Executive Officer and a Director of
Mayne Pharma Group Limited.
Prior to his position at Mayne Pharma, some of his previous positions have included
CEO of Peptech Limited (Australia), Director of Cambridge Antibody Technology
Limited (UK), and Chairman of Bio Focus Plc (formally: Cambridge Drug Discovery
Limited).
Dr. Aston was also founder and CEO of Biokine Technology Ltd (UK) prior to its
acquisition by the Peptech Group. Dr. Aston was also a director of pSivida Ltd. During
the past 20 years of his career, Dr. Aston has been closely involved in the
development of many successful pharmaceutical and biotechnology companies.
Dr. Aston has extensive experience including negotiating global licence agreements,
overseeing product
the establishment and
implementation of guidelines and operating procedures for manufacturing and clinical
trials, overseeing manufacturing of human and veterinary products, private and public
fund raising activities and the introduction of corporate governance procedures.
registration activities with the FDA,
Qualifications
BSc (Hons), PhD
Directorships held in
other public entities
Other listed directorships
held during the past 3
years
Committees
Dr. Aston is currently a director of:
- Pharmaust Limited (ASX:PAA) - Current Executive Chairman (12 Aug 2013)
- Oncosil Limited (ASX:OSL) - Non-Executive Chairman (stepped down 8 May 2017)
- Oncosil Limited (ASX:OSL) - Current Non-Executive Chairman (28 Mar 2013)
- Regeneus Limited (ASX:RGS) - Current Non-Executive Chairman (21 Sep 2012)
- Resapp Health Limited (ASX:RAP) - Current Chairman (2 Jul 2015)
Dr. Aston has been a Director of the following entities in the past 3 years:
Nil
Chairman and Member of the Company’s Remuneration Committee; and Member of
the Company’s Audit and Risk Committee.
Interests in shares and
options
Shares
Options
751,116 fully paid ordinary shares
3,282,950 options
11
Immuron Limited
Directors' report
30 June 2018
(continued)
Information on directors (continued)
Mr Daniel Pollock Independent Non-Executive Director
Appointed to the Board
11 October 2012
Last elected by
shareholders
Experience and
expertise
25 November 2015
Mr. Pollock is a lawyer admitted in both Scotland and Australia and holding Practicing
Certificates in both Jurisdictions. He is a sole practitioner in his own legal firm based
in Melbourne, Australia which operates internationally and specializes in commercial
law.
He is Executive Director and co-owner of Great Accommodation P/L a property
management business operating in Victoria.
Mr. Pollock has had historical involvement as a seed investor and Board member of a
number of small unlisted companies. The most recent of these was an e-Pharmacy
company where he was heavily involved in its commercial growth and ultimate sale to
a large listed health services company.
Qualifications
LL.B; Dip L.P
Directorships held in
other public entities
Other listed directorships
held during the past 3
years
Nil
Nil
Committees
Chairman and Member of the Company’s Audit and Risk Committee; and Member of
the Company’s Remuneration Committee.
Interests in shares and
options
Shares
Options
374,800 fully paid ordinary shares
1,134,800 options
12
Immuron Limited
Directors' report
30 June 2018
(continued)
Information on directors (continued)
Mr Stephen Anastasiou Non-Executive Director
Appointed to the Board
28 May 2013
Last elected by
shareholders
Experience and
expertise
29 November 2016
Mr. Anastasiou has over 20 years’ experience in general management, marketing and
strategic planning within the healthcare industry.
His breadth of experience incorporates medical diagnostics, pharmaceuticals,
hospital, dental and OTC products, with companies including the international
pharmaceutical company Bristol Myer Squibb.
While working with KPMG Peat Marwick as a management consultant, Mr.
Anastasiou has previously led project
teams in a diverse range of market
development and strategic planning projects in both the public and private sector. He
is also a director and shareholder of a number of unlisted private companies, covering
a variety of industry sectors that include healthcare and funds management.
Mr. Anastasiou’s companies have participated in several corporate transactions
involving business units and brands of multinational and Australian companies.
Qualifications
BSc (Hons), Grad. Dip MKTG, MBA
Directorships held in
other public entities
Other listed directorships
held during the past 3
years
Committees
Nil
Nil
Nil
Interests in shares and
options
Shares
Options
6,251,137 fully paid ordinary shares
3,247,017 options
13
Immuron Limited
Directors' report
30 June 2018
(continued)
Information on directors (continued)
Mr Peter Anastasiou Executive Vice Chairman
Appointed to the Board
21 May 2015
Last elected by
shareholders
Experience and
expertise
25 November 2015
Mr. Anastasiou is a serial entrepreneur and investor with extensive experience in
business both in Australia and overseas. Over the past 25 years, he has been
credited with rebuilding a number of companies through the implementation of various
corporate restructurings, acquisitions and solid financial management practices, with
his most recent success being managing the restructuring of SABCO to ensure the
future of this 100 year old iconic Australian company.
Mr. Anastasiou’s involvement with Immuron commenced in May 2013 following his
substantial underwriting support of the Company’s Renounceable Rights Issue, which
was surpassed by his further funding support of the $9.66M (before costs) capital
raising in February 2014 resulting in an ownership of approx. 15% of the Company via
his associated investment funds.
Mr. Anastasiou was the founding Chairman of the ACSI Group of Companies, which
has owned and managed successful consumer companies such as SABCO, Britex
Carpet care, Rug Doctor and Crystal Clear.
Mr. Anastasiou also has a number of philanthropic interests including being a patron
of the Identity Theatre for men, a prior board member and supporter of the Indigenous
Eye Health Unit at Melbourne University, a supporter of the John Fawcett Foundation
in Bali, and a founding investor and Director of Melbourne Victory Football Club.
Qualifications
B.Psych
Directorships held in
other public entities
Other listed directorships
held during the past 3
years
Committees
Nil
Nil
Nil
Interests in shares and
options
Shares
Options
16,398,664 fully paid ordinary shares
5,158,409 options
14
Immuron Limited
Directors' report
30 June 2018
(continued)
Information on directors (continued)
Prof Ravi Savarirayan Non-Executive Director
Appointed to the Board
7 April 2017
Last elected by
shareholders
Experience and
expertise
N/A
He is a consultant clinical geneticist at the Victorian Clinical Genetics Services since
August 1999, as well as Professor and Research Group Leader (Skeletal Biology and
Disease) at the Murdoch Children’s Research Institute since September 2000. Mr.
Savarirayan is a founding member of the Skeletal Dysplasia Management Consortium
since January 2011 and has been the Chair of the Specialist Advisory Committee in
Clinical Genetics, Royal Australasian College of Physicians since February 2009 . He
was president of the International Skeletal Dysplasia Society from July 2009 to June
2011 and has been an invited member of several International Working Committees
on Constitutional Diseases of Bone. Mr. Savarirayan’s primary research focus is on
inherited disorders of the skeleton causing short stature, arthritis and osteoporosis.
He has published over 150 peer-reviewed articles, collaborating with peers from over
30 countries, and has been on the editorial board of Human Mutation since January
2009, European Journal of Human Genetics since July 2007, American Journal of
Medical Genetics since December 2011 and Journal of Medical Genetics since June
2005. Mr. Savarirayan received his MBBS from the University of Adelaide in 1990 and
became a fellow of the Royal Australasian College of Physicians in December 1997.
He was certified as a specialist in clinical genetics from the Human Genetics Society
of Australasia in 1998 and received his Doctor of Medicine from the University of
Melbourne in 2004,
for his thesis “Clinical and Molecular Studies in the
Osteochondrodysplasias.”
Qualifications
MD (Melb.), BS, FRACP, ARCPA (Hon.)
Directorships held in
other public entities
Other listed directorships
held during the past 3
years
Committees
Nil
Nil
Nil
Interests in shares and
options
Shares
Options
Company secretary
Nil fully paid ordinary shares
1,000,000 options
Mr Phillip Hains Joint Company Secretary & Chief Financial Officer
Mr. Hains was appointed as Company Secretary on 19 April 2013.
Mr. Hains is a Chartered Accountant and specialist in the public company environment. He has served the
needs of a number of public company boards of directors and related committees. He has over 20 years’
experience in providing accounting, administration, compliance and general management services. He holds a
Masters of Business Administration from RMIT and a Public Practice Certificate from the Institute of Chartered
Accountants of Australia.
15
Immuron Limited
Directors' report
30 June 2018
(continued)
Company secretary (continued)
Mr Peter Vaughan Joint Company Secretary & Chief Financial Officer - (resigned effective July 01, 2018)
Mr. Vaughan was appointed as Company Secretary on 19 April 2013.
Mr. Vaughan is a Chartered Accountant who has worked in the listed company environment for more than 10
years across a number of industries. He has served on and provided accounting, administration, compliance
and general management services to a number of private, not-for-profit and public company boards of directors
and related committees.
Chief Executive Officer
Dr Jerry Kenellos Chief Executive Officer (CEO) and Chief Operating & Scientific Officer (COSO)
Appointed as CEO
1 August 2017
Experience and
expertise
property
intellectual
development,
project management,
Dr. Jerry Kanellos has over twenty five years’ experience in the pharmaceutical and
biotechnology industry, and has held leadership roles in executive management,
business
portfolio
management research and development. From 2008 until 2012, Dr. Kanellos was the
Chief Operating Officer of TransBio Limited where he was responsible for the
strategic identification, development and maintenance of commercial partnerships
globally, along with development, management and maintenance responsibility for the
intellectual property portfolio, research and development and technology transfer.
Prior to this, Dr. Kanellos work for five years as a consultant to the biotechnology
industry and has provided development and commercialization strategies for various
bodies including academic institutes, private and publicly listed companies and
government departments both national and international. He has also been involved
in the establishment and management of several startup biotechnology companies.
During his ten years tenure in research and development at CSL Limited, a global
specialty biotherapeutics company that develops and delivers innovative biotherapies,
Dr. Kanellos gained considerable experience in the international drug development
process, formulation development through to pharmaceutical scale up and cGMP
manufacture successfully leading the Chemistry Manufacturing and Controls (CMC)
programs for the approval, manufacture and launch of several products. Dr. Kanellos
holds a PhD in Medicine from the University of Melbourne.
Qualifications
Directorships held in
other public entities
Other listed directorships
held during the past 3
years
Interests in shares and
options
PhD
Nil
Nil
Shares
Options
Nil fully paid ordinary shares
200,000 options
16
Immuron Limited
Directors' report
30 June 2018
(continued)
Meetings of directors
The numbers of meetings of the Company's board of Directors and of each board committee held during the year
ended 30 June 2018, and the numbers of meetings attended by each Director were:
Meetings
of directors
Meetings of Committees
Audit
Remuneration
A
12
12
12
12
12
B
12
12
12
12
12
A
3
3
-
-
-
B
3
3
-
-
-
A
1
1
-
-
-
B
1
1
-
-
-
Dr. Roger Aston
Mr. Daniel Pollock
Mr. Stephen Anastasiou
Mr. Peter Anastasiou
Prof. Ravi Savarirayan
Mr. Richard J Berman
A = Number of meetings attended
B = Number of meetings held during the time the Director held office or was a member of the committee during
the year
As at the date of this report the Company had an Audit and Risk Committee and Remuneration Committee with
membership of the committees as follows:
Chairman
Members
Audit and Risk Committee
Mr. Daniel Pollock
Dr. Roger Aston
Remuneration Committee
Dr. Roger Aston
Mr. Daniel Pollock
Indemnification and Insurance of Directors and other Officers
Under the Company's constitution:
(a) To the extent permitted by law and subject to the restrictions in section 199A and 199B of the Corporations
Act 2001, the Company indemnifies every person who is or has been an officer of the Company against any
liability (other than for legal costs) incurred by that person as an officer of the Company where the Company
requested the officer to accept appointment as Director.
(b) To the extent permitted by law and subject to the restrictions in sections 199A and 199B of the Corporations
Act 2001, the Company indemnifies every person who is or has been an officer of the Company against
reasonable legal costs incurred in defending an action for a liability incurred by that person as an officer of the
Company.
The Company has insured its Directors, the Company Secretaries and executive officers for the financial year
ended 30 June 2018. Under the Company's Directors' and Officers' Liability Insurance Policy, the Company
cannot release to any third party or otherwise publish details of the nature of the liabilities insured by the policy or
the amount of the premium. Accordingly, the Company relies on section 300(9) of the Corporations Act 2001 to
exempt it from the requirement to disclose the nature of the liability insured against and the premium amount of
the relevant policy.
The Company also has in place a Deed of Indemnity, Access and Insurance with each of the Directors. This
Deed:
(i) indemnifies the Director to the extent permitted by law and the Constitution against certain liabilities and legal
costs incurred by the Director as an officer of the Company and subsidiary;
(ii) requires the Company to maintain, and pay the premium for, a Directors and Officers Insurance Policy in
respect of the Directors; and
(iii) provides the Director with access to particular papers and documents requested by the Director for a
Permitted Purpose;
17
Immuron Limited
Directors' report
30 June 2018
(continued)
Indemnification and Insurance of Directors and other Officers (continued)
both during the time that the Director holds office and for a seven-year period after the Director ceases to be an
officer of the Company and any subsidiary, on the terms and conditions contained in the Deed.
Indemnification and Insurance of auditor
The Company has not, during or since the financial year, indemnified or agreed to indemnify the auditor of the
Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of
the Company or any related entity.
Proceedings on Behalf of the Company
the Corporations Act 2001 for leave to bring
No person has applied to the Court under section 237 of
proceedings on behalf of the Company, or to intervene in any proceedings to which the Company is a party, for
the purpose of taking responsibility on behalf of the Company for all or part of those proceedings.
No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under
section 237 of the Corporations Act 2001.
Other Audit Services
The Company’s Auditors, Grant Thornton Audit Pty Ltd, did not provide any non-audit services during the 2018
financial year.
Auditor's Independence Declaration
The Auditors Independence Declaration as required under section 307C of the Corporations Act 2001 for the
year ended 30 June 2018 has been received and can be found in the ‘Auditor’s Independence Declaration’
section of this Annual Report.
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors of
Immuron support and adhere to good corporate governance practices. The Company's Corporate Governance
Statement is available on the Company’s website together with the Board Skills Matrix at www.immuron.com.
Remuneration report (Audited)
This Remuneration Report outlines the Director and Executive remuneration arrangements of the Company as
required by the Corporations Act 2001 and its Regulations.
This report details the nature and amount of remuneration of each Director of Immuron Limited and all other Key
Management Personnel.
For the purposes of this report, Key Management Personnel (KMP) are defined as those persons having
authority and responsibility for planning, directing and controlling the major activities of the Company, directly or
indirectly, including any Director (whether Executive or otherwise) of the Company.
For the purposes of this report, the term 'executive' encompasses the chief executive, senior executives, and
secretaries of the Company. This report details the nature and amount of remuneration for each Director of
Immuron Limited, and for the other Key Management Personnel.
18
Immuron Limited
Directors' report
30 June 2018
(continued)
Remuneration report (Audited) (continued)
The Directors of Immuron Limited during the year were:
• Dr. Roger Aston-Independent non-executive chairman
• Mr. Peter Anastasiou-Executive vice chairman
• Mr. Daniel Pollock-Independent non-executive director
• Mr. Stephen Anastasiou-Independent non-executive director
• Prof. Ravi Savarirayan-Independent non-executive director
The following persons held office as Key Management Personnel of Immuron Limited during the financial year
with the following changes subsequent to 30 June 2018:
• Dr. Jerry Kanellos Interim Chief Executive Officer (CEO), (appointed 3 August 2017) and Chief Operating &
Scientific Officer (COSO)
• Mr. Thomas Liquard Chief Executive Officer (CEO), (Resigned 3 August 2017)
(a) Section A: Principles used to determine the nature and amount of Remuneration
Remuneration Policy
The Remuneration Policy ensures that Directors and Senior Management are appropriately remunerated having
regard to their
industry
norms/standards and the general pay environment as appropriate. The Remuneration Policy has been
established to enable the Company to attract, motivate and retain suitably qualified Directors and Senior
Management who will create value for shareholders.
relevant experience,
the performance of
their performance,
the Company,
Remuneration Policy versus Company Performance
The Company's Remuneration Policy is not directly based on the Company's earnings. The Company's earnings
have remained negative since inception due to the nature of the Company. Shareholder wealth reflects this
speculative and volatile market sector. No dividends have ever been declared by the Company. The Company
continues to focus on the research and development of its intellectual property portfolio with the objective of
achieving key development and commercial milestones in order to add further Shareholder value.
The Company’s performance over the previous five financial years is as follows:
Financial year
Net loss ($)
Share price at
year end
2018
2017
2016
2015
2014
3,010,929
6,804,154
5,599,004
3,447,951
2,544,550
$0.34
$0.27
$0.25
$0.23*
$0.20*
* Share prices have been adjusted to reflect a 40:1 capital consolidation which was completed on 20 Nov 2014
Remuneration Committee
The Remuneration Committee of the Board of Directors of Immuron Limited is responsible for overseeing the
Remuneration Policy of the Company and for recommending or making such changes to the policy as it deems
appropriate.
Non-Executive Director Remuneration
Objective
The Remuneration Policy ensures that Non-Executive Directors are appropriately remunerated having regard to
their relevant experience, individual performance, the performance of the Company, industry norms/standards
and the general pay environment as appropriate.
19
Immuron Limited
Directors' report
30 June 2018
(continued)
Remuneration report (Audited) (continued)
(a) Section A: Principles used to determine the nature and amount of Remuneration (continued)
Non-Executive Director Remuneration (continued)
Structure
The Company's Constitution and the ASX Listing Rules specify that the aggregate remuneration of
Non-Executive Directors shall be determined from time to time by a Meeting of Shareholders. An amount (not
exceeding the amount approved at the Shareholders Meeting) is determined by the Board and then divided
between the Non-Executive Directors as agreed. The latest determination was at the Shareholders Meeting held
on 8 November 2005 when shareholders approved the aggregate maximum sum to be paid or provided as
remuneration to Non-Executive Directors as a whole (other than the Managing Director, CEO and Executive
Directors) for their services as $350,000 per annum (relates to salaries and superannuation only, and excludes
share based payments).
In the year ended 30 June 2018, the Non-Executive Directors and Executive Directors were remunerated an
aggregate $302,325 and $50,000, respectively per annum, including superannuation and any equity issued
during the period. Equity issued to directors were approved by shareholders as consideration for additional
services provided to the Company.
The manner in which the aggregate remuneration is apportioned amongst Non-Executive Directors is reviewed
periodically.
The Board is responsible for reviewing its own performance. Board, and Board committee performance, is
monitored on an informal basis throughout the year with a formal review conducted during the financial year.
No retirement benefits are payable other than statutory superannuation, if applicable.
Executive Director and Executive Officer Remuneration
Objective
The Remuneration Policy ensures that Executive Directors are appropriately remunerated having regard to their
relevant experience, individual performance, the performance of the Company, industry norms/standards and the
general pay environment as appropriate.
Structure
The Non-Executive Directors are responsible for evaluating the performance of the Chief Executive Officer (CEO)
who in turn evaluates the performance of the other Senior Executives. The evaluation process is intended to
assess the Company's business performance, whether long-term strategic objectives are being achieved and the
achievement of individual performance objectives.
The performance of the CEO and Senior Executives are monitored on an informal basis throughout the year and
a formal evaluation is performed annually.
Fixed Remuneration
Executives' fixed remuneration comprises salary and superannuation and is reviewed annually by the CEO, and
in turn, the Remuneration Committee. This review takes into account the Executives' experience, performance in
achieving agreed objectives and market factors as appropriate.
Variable Remuneration – Short Term Incentive Scheme
All Executives are entitled to participate in the Employee Short Term Incentive Scheme which provides for
executive employees to receive a combination of short term incentive (STI) as part of their total remuneration if
they achieve certain performance indicators as set by the Board. The STI can be paid either by cash, or a
combination of cash and the issue of equity in the Company, at the determination of the Board and Remuneration
Committee.
20
Immuron Limited
Directors' report
30 June 2018
(continued)
Remuneration report (Audited) (continued)
(a) Section A: Principles used to determine the nature and amount of Remuneration (continued)
Executive Director and Executive Officer Remuneration (continued)
Variable Remuneration – Long Term Incentive Scheme
Executives may also be provided with longer-term incentives through the Company's Executive Share Option
Plan (ESOP), that was approved by shareholders at the Annual General Meeting held on 13 November 2014.
The aim of the ESOP is to allow the Executives to participate in, and benefit from, the growth of the Company as
a result of their efforts and to assist in motivating and retaining those key employees over the long term.
Continued service is the condition attached to the vesting of the options. The Board at its discretion determines
the total number of options granted to each Executive.
(b) Section B: Details of remuneration
Details of remuneration for the year ended 30 June 2018
The remuneration for each Director and each of the other Key Management Personnel of the Company during
the year ended 30 June 2018 was as follows:
2018
Short-term
employee benefits
Post-
employment
benefits
Share based
payments
Cash
salary and
fees
$
Cash
bonus
$
Non-
monetary
benefits
$
Super-
annuation
$
Options
$
Total
$
Directors
Dr. Roger Aston*
Mr. Daniel Pollock
Mr. Stephen Anastasiou
Mr. Peter Anastasiou
Prof. Ravi Savarirayan**
Total
Other key management personnel
Dr. Jerry Kanellos
Mr. Thomas Liquard
Total
Total
70,000
60,000
50,000
50,000
50,000
280,000
207,756
82,500
290,256
570,256
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,650
5,700
-
-
-
12,350
19,737
-
19,737
13,275
-
-
-
46,700
59,975
-
-
-
89,925
65,700
50,000
50,000
96,700
352,325
227,493
82,500
309,993
32,087
59,975
662,318
* Dr. Roger Aston's share based expenses related to the 1,000,000 options (issued on November 27, 2015)
which vested on 6 August 2017. For further details please refer to Note 17 (d) (i).
** Prof. Ravi Savariryan, was granted 1,000,000 options exercisable at $0.50 on or before 27 November 2019.
For further details please refer to page 24, Note 3.
21
Immuron Limited
Directors' report
30 June 2018
(continued)
Remuneration report (Audited) (continued)
(b) Section B: Details of remuneration (continued)
Details of remuneration for the year ended 30 June 2017
The remuneration for each Director and each of the other Key Management Personnel of the Company during
the year ended 30 June 2017 was as follows:
2017
Short-term
employee benefits
Post-
employment
benefits
Share based
payments
Cash
salary and
fees
$
Cash
bonus
$
Non-
monetary
benefits
$
Super-
annuation
$
Options
$
Total
$
Directors
Dr. Roger Aston
Mr. Daniel Pollock
Mr. Stephen Anastasiou
Mr. Peter Anastasiou
Prof. Ravi Savarirayan
Total
Other key management personnel
Dr. Jerry Kanellos
Mr. Thomas Liquard
Total
Total
Fully paid ordinary shares held
64,375
48,750
42,500
42,500
12,501
210,626
160,000
311,040
471,040
681,666
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6,116
4,631
-
-
-
10,747
15,200
-
15,200
212,400
26,550
26,550
26,550
-
292,050
28,620
33,000
61,620
282,891
79,931
69,050
69,050
12,501
513,423
203,820
344,040
547,860
25,947
353,670
1,061,283
The number of shares in the Company held during the financial year by each Director and other Key
Management Personnel of the Company, including their personally related parties, are set out below.
2018
Directors
Dr. Roger Aston
Mr. Daniel Pollock
Mr. Stephen Anastasiou
Mr. Peter Anastasiou
Prof. Ravi Savarirayan
Total
Other key management personnel
Mr. Jerry Kenellos
Mr. Thomas Liquard(Note 1)
Total
Total
Opening
balance
No.
Granted as
compensation
No.
Net change -
other
No.
Closing
balance
No.
751,116
300,000
5,376,137
14,971,644
-
21,398,897
-
134,964
134,964
21,533,861
-
-
-
-
-
-
-
-
-
-
-
74,800
875,000
1,427,020
-
2,376,820
751,116
374,800
6,251,137
16,398,664
-
23,775,717
-
(134,964)
(134,964)
-
-
-
2,241,856
23,775,717
Note1: The movement relates to Mr. Thomas Liquard ceasing to be a Key Management Personnel on August 3, 2017.
22
Immuron Limited
Directors' report
30 June 2018
(continued)
Remuneration report (Audited) (continued)
(b) Section B: Details of remuneration (continued)
Fully paid ordinary shares held (continued)
Net Change - Other No: Securities acquired or disposed of on market during the period, including securities
acquired via the Rights Issue from the NASDAQ Listing as announced to the market on 9 June 2017. No shares
were granted to Directors or Key Management in relation to remuneration during the 2018 financial year.
2017
Directors
Dr. Roger Aston
Mr. Daniel Pollock
Mr. Stephen Anastasiou
Mr. Peter Anastasiou
Total
Other key management personnel
Mr. Jerry Kenellos
Mr. Thomas Liquard
Dr. Leearne Hinch
Total
Opening
balance
$
Granted as
compensation
$
Net change -
other
$
Closing
balance
$
607,116
319,640
4,067,857
13,663,364
18,657,977
-
-
-
-
-
144,000
(19,640)
1,308,280
1,308,280
2,740,920
751,116
300,000
5,376,137
14,971,644
21,398,897
-
-
-
-
-
134,694
-
134,694
-
-
-
-
-
134,694
-
134,694
Total
18,657,977
134,694
2,740,920
21,533,591
Net Change - Other No: Securities acquired or disposed of on market during the period, including securities
acquired via the Rights Issue as announced to the market on 5 July 2016. No shares were granted to Directors or
Key Management in relation to remuneration during the 2017 financial year.
Shares and options may be granted to key management personnel under the various share based compensation
plans as set out in section A of this report.
Details of shares and options provided as part of the total remuneration paid to key management personnel are
set out below. When exercisable, each option is convertible into one ordinary fully paid share of Immuron Limited.
23
Immuron Limited
Directors' report
30 June 2018
(continued)
Remuneration report (Audited) (continued)
(b) Section B: Details of remuneration (continued)
Options and rights held
The number of options over ordinary shares in the Company held during the financial year by each Director of
Immuron Limited and other Key Management Personnel of the Company, including their personally related
parties, are set out below:
2018
Opening
balance
No.
Options
expired or
lapsed No.
Net
change
- other
No.
Closing
balance
No.
Vested and
exercisable
No.
Unvested
No.
Directors
Dr. Roger Aston
Mr. Daniel Pollock(Note 1)
Mr. Stephen Anastasiou
Mr. Peter Anastasiou(Note 2)
Prof. Ravi Savarirayan(Note 3)
Total
3,282,950
1,060,000
3,247,017
4,726,409
1,000,000
13,316,376
key management
Other
personnel
Mr. Thomas Liquard
Mr. Jerry Kanellos
Total
-
200,000
200,000
Total
13,516,376
-
-
-
-
-
-
-
-
-
-
-
74,800
-
432,000
-
506,800
3,282,950
1,134,800
3,247,017
5,158,409
1,000,000
13,823,176
3,282,950
1,134,800
3,247,017
5,158,409
1,000,000
13,823,176
-
-
-
-
200,000
200,000
-
200,000
200,000
506,800
14,023,176
14,023,176
-
-
-
-
-
-
-
-
-
-
During the financial period ending 30 June 2018, the following directors had movement in their shareholding:
• Note 1: Mr. Daniel Pollock acquired 74,800 options on 6 September 2017 through an off market acquisition
with a consideration of AUD$ 25,000.
• Note 2: Mr Peter Anastasiou acquired 432,000 options on 18 August 2017 through an on market acquisition
with a consideration of USD$10,800.
• Note 3: Prof. Ravi Savarirayan, a Non-Executive Director of Immuron Limited was granted 1,000,000 unlisted
options exercisable at $0.50 on or before 27 November 2019 . The unlisted options were granted on June 22,
2017 and were held in escrow until shareholders approval was received. Subsequent
to shareholder
approval, the Company recognised the share based payment expense during the 2018 financial period.
Please refer to Note 17 (d) (v) for further details.
24
Immuron Limited
Directors' report
30 June 2018
(continued)
Remuneration report (Audited) (continued)
(b) Section B: Details of remuneration (continued)
Options and rights held (continued)
2017
Opening
balance
No.
Options
expired or
lapsed
No.
Net
change
- other
No.
Closing
balance
No.
Vested and
exercisable
No.
Unvested
No.
Directors
Dr. Roger Aston(Note 1)
Mr. Daniel Pollock(Note 2)
Mr. Stephen Anastasiou(Note
3)
Mr. Peter Anastasiou
Prof. Ravi Savarirayan
Total
3,500,000
1,250,000
1,250,000
1,000,000
-
7,000,000
(500,000)
(250,000)
282,950
60,000
3,282,950
1,060,000
3,282,950
1,060,000
(250,000)
-
-
(1,000,000)
2,247,017
3,726,409
1,000,000
7,316,376
3,247,017
4,726,409
1,000,000
13,316,376
3,247,017
4,726,409
1,000,000
13,316,376
key management
Other
personnel
Mr. Thomas Liquard
Mr. Jerry Kenellos
Total
-
-
-
-
-
-
-
200,000
200,000
-
200,000
200,000
-
-
-
Total
7,000,000
(1,000,000)
7,516,376
13,516,376
13,316,376
-
-
-
-
-
-
-
-
-
-
Note 1: The 500,000 (IMCAI) lapsed options were granted on 4 December 2013 at an exercisable price of $0.456
to Dr. Roger Aston.
Note 2: The 250,000 (IMCAI) lapsed options were granted on 4 December 2013 at an exercisable price of $0.456
on or before 4 December 2016 to Mr. Daniel Pollock.
Note 3: The 250,000 (IMCAI) lapsed options were granted on 4 December 2013 at an exercisable price of $0.456
on or before 4 December 2016 to Mr. Stephen Anastasiou.
*Issue of Unlisted Options in lieu of cash payment for additional services as per Resolution 5A - 5D of the AGM
held on 25 Nov 2015.
**Issue of Unlisted Options in lieu of cash payment for additional services as per Resolution 5A - 5D of the AGM
held on 25 Nov 2015. Mr Peter Anastasiou also exercised 556,000 IMCAI Unlisted Options into Ordinary Shares
at exercise price of $0.376.
Additional information in respect of options
The terms and conditions of each grant of options over ordinary fully paid shares affecting remuneration of
directors and key management personnel in this financial year or future reporting years on detailed on Note 17.
The number of options over ordinary shares granted to and vested by directors and key management personnel
as part of compensation is set out below:
25
Immuron Limited
Directors' report
30 June 2018
(continued)
Remuneration report (Audited) (continued)
(b) Section B: Details of remuneration (continued)
Additional information in respect of options (continued)
Directors:
Dr. Roger Aston
Mr. Daniel Pollock
Mr. Stephen Anastasiou
Mr. Peter Anastasiou
Prof. Ravi Savarirayan
Total
a
Other key management personnel:
Mr. Jerry Kenellos
Mr. Thomas Liquard
Total
a
Total
Total value of
options granted
during the year
$
2018
2017
Value of options
exercised during
the year
$
2018
2017
Value of options
lapsed during the
year
$
2018
2017
13,275 212,400
26,550
-
26,550
-
26,550
-
46,700
-
59,975 292,050
-
-
-
28,620
-
28,620
59,975 320,670
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
50,800
25,400
25,400
-
-
101,600
-
-
-
101,600
The relative proportions of remuneration that are linked to performance and those that are fixed are as follows:
Directors:
Dr. Roger Aston
Mr. Daniel Pollock
Mr. Stephen Anastasiou
Mr. Peter Anastasiou
Prof. Ravi Savarirayan
a
Other key management personnel:
Mr. Jerry Kenellos
Mr. Thomas Liquard
Fixed remuneration
2018
2017
At risk - STI
2018
2017
At risk - LTI
2018
2017
85%
100%
100%
100%
52%
25%
67%
62%
62%
100%
100%
-
86%
90%
15%
-
-
-
48%
-
-
75%
33%
38%
38%
-
14%
10%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Loans to/from Directors and Other Key Management Personnel
During the current
the Company entered into a short-term loan arrangement with Great
Accommodation Pty Ltd to fund on going R&D expenditure, for an amount of AUD $500,000 at an interest rate of
15% per annum and a AUD $15,000 establishment fee. The loan was repaid on 12 February 2018.
financial year,
Other transactions with Directors or Other Key Management Personnel
Services rendered by Grandlodge Pty Ltd to Immuron Ltd:
Grandlodge, and its associated entities, are marketing, warehousing and distribution logistics companies. Mr
David Plush is also an owner of Grandlodge, and its associated entities.
Commencing on 1st June 2013, Grandlodge was verbally contracted to provide warehousing, distribution and
invoicing services for Immuron’s products for AUD$70,000 per annum. These fees will be payable in new fully
paid ordinary shares in Immuron Limited at a set price of AUD$0.16 per share representing Immuron Limited’s
share price at the commencement of the verbal agreement.
26
Immuron Limited
Directors' report
30 June 2018
(continued)
Remuneration report (Audited) (continued)
(b) Section B: Details of remuneration (continued)
Other transactions with Directors or Other Key Management Personnel (continued)
Services rendered by Grandlodge Pty Ltd to Immuron Ltd: (continued)
The shares to be issued to Grandlodge, or its associated entities, as compensation in lieu of cash payment for
the services rendered under this verbal agreement have been subject to the approval of Immuron shareholders at
Company shareholder meetings held over the past 18 months.
Grandlodge will also be reimbursed in cash for all reasonable costs and expenses incurred in accordance with
their scope of works under the verbal agreement, unless both parties agree to an alternative method of payment.
Premises Rental services received from Wattle Laboratories Pty Ltd to Immuron Ltd:
Wattle Laboratories Pty Ltd (Wattle) is an entity part-owned and operated by Immuron Directors Peter and
Stephen Anastasiou.
Commencing on 1 January 2016, Immuron executed a 3 year Lease Agreement with Wattle whereby Immuron
will lease part of their Blackburn office facilities for Immuron's operations at an arms-length commercial rental rate
of $38,940 per annum, payable in monthly installments. The rental agreement
is subject to annual rental
increases, and effective 1 January 2017, the annual rent was increased to $39,525.
Section C: Employment Contracts of Key Management Personnel
As at 30 June 2018, the following contracts are in place for Directors or Key Management Personnel:
Title
Dr. Jerry Kanellos
Nature of change Notice Requirements
Until
by either party.
termination
For any reason Dr
Kanellos may terminate
the agreement by
providing 30 days' notice.
Termination Requirements
Pay Dr Kanellos on termination
any unpaid salary, reimburse all
business expenses submitted
with appropriate documentation.
Section D: Additional Information
No additional loans were made to any Director, any member of the Key Management Personnel, or any of their
related entities, or any executive during the 2018 financial year (2017: $Nil) that have not already been disclosed
in the audited remuneration report.
This completes the audited Remuneration Report of Immuron Limited for 30 June 2018
Immuron Limited Corporate Governance Statement for financial year ended 30 June 2018 can be found on
Immuron Limited website: www.immuron.com
This report is made in accordance with a resolution of Directors.
Dr. Roger Aston
Director
Melbourne
27 September 2018
27
Collins Square, Tower 1
727 Collins Street
Melbourne Victoria 3008
Correspondence to:
GPO Box 4736
Melbourne Victoria 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Immuron Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Immuron
Limited for the year ended 30 June 2018, I declare that, to the best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Grant Thornton Audit Pty Ltd
Chartered Accountants
M A Cunningham
Partner – Audit & Assurance
Melbourne, 27 September 2018
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
28
Immuron Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 30 June 2018
Revenue
Sales of good
Total operating revenue
Cost of goods sold
Gross profit
Direct Selling Costs
Sales and marketing costs
Freight costs
Total gross profit less direct selling costs
Other income
Expenses
Consulting, employee and director
Other corporate administration
Depreciation
Finance fee costs
Impairment of inventory
Marketing and promotion
Research and development
Travel and entertainment expenses
Loss before income tax
Income tax expense
Loss for the period
Other comprehensive income
Items that may be reclassified to profit or loss:
Exchange differences on translation of foreign operations
Total comprehensive loss for the period
Consolidated entity
2018
$
2017
$
Notes
2
2
3
3
4
1,842,909
1,842,909
1,396,197
1,396,197
(418,693)
1,424,216
(337,546)
1,058,651
(282,241)
(169,458)
972,517
(407,751)
(135,377)
515,523
1,850,401
1,614,373
(1,384,298)
(1,336,516)
(5,047)
(18,857)
(163,600)
(370,699)
(2,257,224)
(297,606)
(3,010,929)
(1,689,521)
(1,381,809)
(4,922)
(24,483)
(136,494)
(789,608)
(4,630,674)
(276,539)
(6,804,154)
-
(3,010,929)
-
(6,804,154)
(79,599)
(79,599)
40,017
40,017
Total comprehensive income for the period is attributable to:
Owners of Immuron Limited
(3,090,528)
(6,764,137)
Earnings per share for profit attributable to the ordinary equity
holders of the Company:
Basic loss per share
Diluted loss per share
Cents
Cents
19
19
(2.3)
(2.3)
(6.4)
(6.4)
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes.
29
Immuron Limited
Consolidated statement of financial position
As at 30 June 2018
Consolidated entity
2018
$
2017
$
Notes
5(a)
5(b)
6
7(a)
6
5(c)
5(d)
5(d)
4,727,430
1,683,305
497,902
141,800
7,050,437
20,384
2,171,867
2,192,251
3,994,924
1,768,237
2,336,127
168,366
8,267,654
18,837
-
18,837
9,242,688
8,286,491
689,326
-
114,012
-
-
803,338
1,290,389
139,864
36,173
226,000
19,139
1,711,565
803,338
1,711,565
8,439,350
6,574,926
8(a)
8(b)
58,372,043
2,606,722
(52,539,415)
53,632,995
2,470,417
(49,528,486)
8,439,350
6,574,926
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Plant and equipment
Inventories
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Borrowings
Employee benefit obligations
Other financial liabilities
Deferred revenue
Total current liabilities
Total liabilities
Net assets
EQUITY
Issued capital
Reserves
Accumulated losses
Total equity
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes.
30
Immuron Limited
Consolidated statement of changes in equity
For the year ended 30 June 2018
Attributable to owners of
Immuron Limited
Consolidated entity
Notes
Issued capital
$
Reserves
$
Accumulated
losses
$
Total
$
Balance at 1 July 2016
45,633,354
2,128,566
(42,821,357)
4,940,563
Loss for the period
Other comprehensive income
Total comprehensive (loss) income
for the period
Transactions with owners in their
capacity as owners:
Contributions of equity, net of
transaction costs
Options and warrants
issued/expensed
Lapse or exercise of share options
8(a)
8(b)
8(b)
-
-
-
-
40,017
40,017
(6,804,154)
-
(6,804,154)
40,017
(6,804,154)
(6,764,137)
7,927,766
-
71,875
7,999,641
-
-
7,927,766
470,734
(168,900)
301,834
-
97,025
97,025
470,734
-
8,398,500
Balance at 30 June 2017
53,632,995
2,470,417
(49,528,486)
6,574,926
Balance at 1 July 2017
53,632,995
2,470,417
(49,528,486)
6,574,926
Loss for the period
Other comprehensive income
Total comprehensive (loss) income
for the period
Transactions with owners in their
capacity as owners:
Contributions of equity, net of
transaction costs
Options issued/expensed
-
-
-
-
(79,599)
(3,010,929)
-
(3,010,929)
(79,599)
(79,599)
(3,010,929)
(3,090,528)
8(a)
8(b)
4,739,048
-
4,739,048
-
215,904
215,904
-
-
-
4,739,048
215,904
4,954,952
Balance at 30 June 2018
58,372,043
2,606,722
(52,539,415)
8,439,350
The above consolidated statement of changes in equity should be read in conjunction with the accompanying
notes.
31
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Other - R&D tax concession refund and other government grants
Interest and other costs of finance paid
Net cash used in operating activities
Cash flows from investing activities
Payments for property, plant and equipment
Net cash used from investing activities
Cash flows from financing activities
Proceeds from issues of shares and other equity securities
Proceeds from borrowings
Repayment of borrowings
Capital raising cost
Net cash provided from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effects of exchange rate changes on cash and cash equivalents
Cash and cash equivalents at end of period
Immuron Limited
Consolidated statement of cash flows
For the year ended 30 June 2018
Consolidated entity
2018
$
2017
$
Notes
1,601,619
(7,262,348)
1,278
2,156,206
(24,199)
(3,527,444)
1,413,676
(9,971,142)
8,386
1,615,043
(97,051)
(7,031,088)
(6,594)
(6,594)
(5,696)
(5,696)
5,472,200
500,000
(865,864)
(733,152)
4,373,184
839,146
3,994,924
(106,640)
4,727,430
12,525,067
500,000
(2,191,593)
(2,132,422)
8,701,052
1,664,268
2,290,639
40,017
3,994,924
9(a)
8(a)
8(a)
5(a)
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
32
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
1 Segment information
(a) Description of segments and principal activities
The entity has identified its operating segments based on the internal reports that are reviewed and used by the
executive management team in assessing performance and determining the allocation of resources.
The executive management team considers the business from both a product and a geographic perspective and
has identified two reportable segments.
Research and Development (R&D): Income and expenses directly attributable to the Company’s research and
development projects performed in Australia, Israel and United States.
HyperImmune Products: Income and expenses directly attributable to Travelan activities which occur in
Australia, New Zealand, US and Canada. In 2018, the Company earned 62%, 1% and 37% of its revenues from
customers located in Australia, Canada and US, respectively. In 2017, the Company earned 64%, 10% and 26%
of its revenues from customers located in Australia, Canada and US, respectively.
(b) Segment results
Consolidated entity
2018
Research &
Development
HyperImmune
Products
Unallocated
Corporate
$
$
$
Total
$
Segment revenue & other income
Revenue from external customers
R&D tax concession refund
Other income
Total Segment revenue & other
income
-
1,849,123
-
1,842,909
-
40
1,849,123
1,842,949
-
1,238
-
1,238
1,842,909
1,850,361
40
3,693,310
Segment expenses
Depreciation
Finance fee costs
Share-based payments
Other operating expenses
Total segment expenses
Income tax expense
(Loss)/profit for the year
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
-
-
-
(2,257,224)
(2,257,224)
-
-
-
(832,661)
(832,661)
(5,047)
(18,857)
(59,975)
(3,530,475)
(3,614,354)
(5,047)
(18,857)
(59,975)
(6,620,360)
(6,704,239)
-
(408,101)
-
1,010,288
-
(3,613,116)
-
(3,010,929)
1,191,029
1,191,029
3,162,045
3,162,045
4,889,614
4,889,614
9,242,688
9,242,688
(174,434)
(174,434)
(26,009)
(26,009)
(602,895)
(602,895)
(803,338)
(803,338)
(3,040,152)
(5,004,994)
(4,890,852)
(12,935,998)
33
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
1 Segment information (continued)
(b) Segment results (continued)
Consolidated entity
2017
Segment revenue & other income
Revenue from external customers
R&D tax concession refund
Interest income
Other income
Total Segment revenue & other
income
Segment expenses
Depreciation
Finance fee costs
Share-based payments
Other operating expenses
Total segment expenses
Income tax expense
(Loss)/profit for the year
Assets
Segment assets
Total assets
Liabilities
Segment liabilities
Total liabilities
Research &
Development
HyperImmune
Products
Unallocated
Corporate
$
$
$
Total
$
-
1,575,315
-
25,000
1,396,197
-
-
5,672
1,600,315
1,401,869
-
-
8,386
-
8,386
1,396,197
1,575,315
8,386
30,672
3,010,570
-
-
(188,481)
(4,805,874)
(4,994,355)
-
(3,394,040)
-
-
-
(1,017,169)
(1,017,169)
(4,922)
(24,483)
(334,184)
(3,439,611)
(3,803,200)
(4,922)
(24,483)
(522,665)
(9,262,654)
(9,814,724)
-
384,700
-
(3,794,814)
-
(6,804,154)
1,498,112
1,498,112
2,585,755
2,585,755
4,202,624
4,202,624
8,286,491
8,286,491
(514,326)
(514,326)
(330,218)
(330,218)
(867,021)
(867,021)
(1,711,565)
(1,711,565)
(3,098,427)
(3,987,624)
(4,211,010)
(11,297,061)
(c)
Information on major customers
During the years ended 30 June 2018 and 2017, the Group had the following major customers (and their
respective contribution to the Group’s total revenue):
Customer A
Customer B
Customer C
Customer D
Customer E
2018
31%
25%
12%
10%
*
2017
13%
34%
15%
15%
10%
* Less than 10% of revenue for the respective year.
No other single customers contributed 10% or more to the Group’s revenue for all periods.
34
2 Revenue and other income
The Company derives the following types of revenue:
Revenue from operating activities
Sales of good
Less: discounts and rebates
Total revenue from operating activities
Other income
Interest income
R&D tax concession refund
Other income
Total other income
3 Expenses
Consulting, employee and director
Wages and salaries expenses
Superannuation and other employee related expenses
Director expenses
Share-based payments
Total consulting, employee and director expenses
Other corporate administration
Audit and accounting fees
Legal fees
Insurances
Foreign exchange (gain) / losses
Corporate administration costs
Total corporate administration expenses
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
Consolidated entity
2018
$
2017
$
2,000,832
(157,923)
1,842,909
1,565,319
(169,122)
1,396,197
1,238
1,849,123
40
1,850,401
8,386
1,575,315
30,672
1,614,373
Consolidated entity
2018
$
2017
$
885,197
153,795
285,331
59,975
1,384,298
222,973
11,513
277,888
(258,767)
1,082,909
1,336,516
905,819
39,664
221,373
522,665
1,689,521
146,007
-
150,502
238,985
846,315
1,381,809
35
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
4 Income tax expense
(a) Numerical reconciliation of income tax expense to prima facie tax payable
Profit from continuing operations before income tax expense
Tax at the Australian tax rate of 27.5% (2017 - 27.5%)
Tax effect of amounts which are not deductible (taxable)
in calculating taxable income:
Non-deductible amounts associated with R&D rebates
Non-allowable expenses
Deferred tax assets relating to tax losses not recognised
Income tax expense
Consolidated entity
2018
$
2017
$
(3,010,929)
(828,005)
(6,804,154)
(1,871,142)
(508,509)
796,398
540,116
-
(433,212)
1,681,990
622,364
-
3,010,929
6,804,154
The Company has estimated total tax losses of $ 35,299,886 (2017: $34,759,770), representing a Deferred Tax
Asset of $9,707,469 at 27.5% (2017: $9,558,937 at 27.5%) that has not been recognised in the Financial
Statements.
5 Financial assets and financial liabilities
(a) Cash and cash equivalents
Current assets
Cash at bank and in hand
(b) Trade and other receivables
Trade receivables
Accrued income
Consolidated entity
2018
$
2017
$
4,727,430
3,994,924
Consolidated entity
2018
2017
Notes
$
$
492,276
270,125
5(b)(i) 1,191,029 1,498,112
1,683,305 1,768,237
All trade and other receivables are non-interest bearings. For further detail please refer to Note 11.
(i) Accrued income
Primarily comprises of receivables from the Australian Tax Office in relation to R&D tax concession for the year.
36
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
5 Financial assets and financial liabilities (continued)
(c) Trade and other payables
Current liabilities
Trade payables
Accrued expenses
Other payables
(d) Other financial liabilities
Secured
Borrowings1
Total Borrowings
Convertible notes2
Total Convertible Note
Total borrowings
Consolidated entity
2018
$
2017
$
216,938
435,280
37,108
689,326
699,530
568,988
21,871
1,290,389
Consolidated entity
2018
2017
$
-
-
-
-
-
$
139,864
139,864
226,000
226,000
365,864
(1) Borrowings
The Company has financed A$162,457 for its insurance policies during the year ended June 30, 2017. Principal
and interest (A$8,561) is to be repaid monthly by Immuron over a 11 month term. During the financial year 2018,
the outstanding borrowings were repaid by the Company.
(2) Convertible note
On 17 February 2016, the Company secured AUD$1,700,000 in funding with a New York-based Investment
Fund. The facility was being used to fund the immediate start of the clinical phase for IMM-529 in Clostridium
difficile.
The investment was structured in 3 tranches with a mix of equity financing and convertible securities:
•
•
•
Tranche #1 - AUD$100,000 private placement of securities plus a AUD$600,000 repayable Convertible Note
with AUD$78,000 finance charge;
Tranche #2 - 45 days after issuance of the tranche 1, the Company has the right to call a second Tranche as
per Tranche 1 terms.
Tranche #3 - by mutual consent, AUD$339,000 Face Value repayable Convertible Note issued on same
terms as Tranche 1 and 2. Tranche #3 has not been issued as of the issuance date of the consolidated
financial statements.
The Convertible Notes are repayable monthly over an 18 month period with each repayment to be settled at
Immuron’s discretion by:
•
the issuance of new shares at a 10% discount to a 5 Day Volume Weighted Average Price (VWAP) over the
20 trading days immediately prior to a repayment due date; or
37
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
5 Financial assets and financial liabilities (continued)
(d) Other financial liabilities (continued)
•
cash repayment plus a 2.5% premium to the repayment amount.
Immuron repaid AUD$902,117 in cash during the 2017 financial year.
Due to the Capital Raising that was closed on 7 July 2016,
to
shareholders and will repay all future obligations pertaining to the Convertible Note in cash, rather than via the
issuance of new securities.
Immuron has executed its commitment
During the financial year 2018, the balance of the outstanding convertible note as at 30 June 2017 was repaid
during July 2017 and August 2017 with the liability being fully extinguished by 10 September 2017.
6 Inventories
Raw materials - Colostrum
Work in progress
Finished goods - Travelan and Protectyn
Prepaid inventory
Total of inventories classified under current asset
Raw materials - Colostrum
Total of inventories classified under non-current asset
Consolidated entity
2018
$
2017
$
198,585
33,625
265,692
-
497,902
1,793,882
48,425
357,478
136,342
2,336,127
Consolidated entity
2018
$
2,171,867
2,171,867
2017
$
-
-
As certain raw materials held by the Company at 30 June 2018 may approach their expiration date for clinical use
in the future, management has alternative options to utilise these inventories for R&D, or sale as non-clinical
products.
There was a $163,600 impairment of inventories recognised during financial year 2018 (2017: $136,494) for
stock obsolescence in the Statement of Profit or Loss and Other Comprehensive Income.
At 30 June 2017, management classified the inventory as a current asset as it was expected and assessed that it
would be sellable in the next 12 months based on the combination of sales to an alternative market for the
Colostrum powder, as well as forecasted manufacturing quantities. At 30 June 2018, management has
reassessed the classification of inventory on the basis that the product has been clinically tested to have a longer
shelf life and it is unlikely that the Colostrum powder will be sold to an alternative market. During the current
financial period, management have performed an assessment on its raw materials and its utilisation within 12
months from reporting date and have determined $198,585 of raw materials relating to Colostrum will be
consumed within 12 months and remaining balance of $2,171,867 will be consumed after 12 months from
reporting date.
38
7 Non-financial assets and liabilities
(a) Other non-financial assets
Current assets
Prepayments
8 Equity
(a) Contributed equity
Ordinary shares
Ordinary shares - fully paid
Total share capital
(i) Movements in ordinary share:
Opening balance 1 July 2016
Share issued during the year2
Transactions costs
Exercise of options - transfer from reserve
Balance 30 June 2017
Share issued during the year1
Transactions costs
Cancellation of Shares
Balance 30 June 2018
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
Consolidated entity
2018
$
2017
$
141,800
141,800
168,366
168,366
2018
Shares
2017
Shares
2018
$
2017
$
142,778,206
142,778,206
130,041,417
130,041,417
58,372,043
58,372,043
53,632,995
53,632,995
Notes Number of shares
$
80,099,646
49,941,771
-
-
130,041,417
14,736,789
-
(2,000,000)
142,778,206
45,633,354
9,965,323
(2,037,557)
71,875
53,632,995
5,472,200
(733,152)
-
58,372,043
1During the year ended 30 June 2018, the Company issued the following ordinary shares:
Date
Details
28 July 2017
13 November 2017
15 March 2018
15 March 2018
Issue of Equity for the repayment of
Sea Otter 16th payment of Convertible
Note
Issue of Shares to Grandlodge - Issue
of Shares to Grandlodge
Private Placement to US Investment
Fund
Exercise
(IMRNW)
of NASDAQ Warrants
No.
Issue price
$
Total value
$
399,045
875,000
$0.19
$0.16
75,333
140,000
13,162,744
$0.39
5,161,585
300,000
14,736,789
$0.32
95,282
5,472,200
39
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
8 Equity (continued)
(a) Contributed equity (continued)
2During the year ended 30 June 2017 the Company issued the following ordinary shares:
Date
Details
7 July 2016
7 July 2016
29 September 2016
2 December 2016
9 June 2017
issue to oversubscribes and
Right issue*
Right issue
Right
private placement
Shares under ESOP – for 6 months
service (vesting monthly)
Shares
on
issued
(equivalent to 610,000 ADSs)**
NASDAQ
No.
18,045,512
3,275,466
3,968,916
251,877
24,400,000
49,941,771
Issue price
$
-
0.250
Total value
$
-
818,867
0.250
0.245
0.332
992,229
61,710
8,092,517
9,965,323
*As at 30 June 2016, the Company was committed to issue 18,045,512 of ordinary shares in relation to the
$4,511,378 received in capital raising. These shares were subsequently issued to respective holders on 7 July
2016. 2,418,129 of these new fully paid ordinary shares were issued to Grandlodge on the same terms and
conditions as all other subscribers.
**Grandlodge participated in the NASDAQ IPO and acquired 32,707 ADRs and 32,707 warrants over ADRs (1
ADR = 40 ordinary shares).
(b) Other reserves
The following table shows a breakdown of the Statement of Financial Position line item ‘other reserves’ and the
movements in these reserves during the year. A description of the nature and purpose of each reserve is
provided below the table.
Options over fully paid
ordinary shares
Consolidated entity
No. of
options
Amount
$
Balance at 1 July 2016
Options/warrants issued during the year
Expense of vested options
Lapse of unexercised options
Other comprehensive income for the period
At 30 June 2017
9,937,629
56,002,894
-
(2,250,000)
-
63,690,523
2,132,301
136,784
333,950
(168,900)
-
2,434,135
Balance at 1 July 2017
Options issued during the year
Options exercised during the year
Options expensed
Lapse of unexercised options
Other comprehensive income for the period
At 30 June 2018
63,690,523
8,424,157
(300,000)
-
(465,500)
-
71,349,180
2,434,135
156,392
-
59,975
(463)
-
2,650,039
Foreign
currency
translation
reserve
$
(3,735)
-
-
-
40,017
36,282
36,282
-
-
-
-
(79,599)
(43,317)
Total
$
2,128,566
136,784
333,950
(168,900)
40,017
2,470,417
2,470,417
156,392
-
59,975
(463)
(79,599)
2,606,722
40
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
8 Equity (continued)
(b) Other reserves (continued)
During the year ended 30 June 2018, the Company issued the following options:
Date
Details
15 March 2018
15 March 2018
Issue of options- Free-attaching 3
options for every 5 new shares as a
part of the capital raise
Issue of options - Broker shares as
part of placement fee
No.
Issue price*
$
Total value
$
7,897,647
526,510
8,424,157
-
$0.30
-
156,392
156,392
As a part of the capital raise in March 2018, free attaching 3 options for every 5 shares were issued. Additionally,
options were issued to the broker as part of the placement cost.
*Issue price has been rounded for presentation of this report.
During the year ended 30 June 2017, the Company issued the following options:
Date
Details
7 July 2016
7 July 2016
29 September 2016
9 December 2016
9 June 2017
9 June 2017
13 June 2017
22 June 2017
issue to oversubscribes and
Right issue**
Right issue
Right
private placement
Unlisted options in lieu of services
Options issued to cover equivalent of
610,000 warrants on issue with
NASDAQ
Options
to be issued to cover
equivalent of 35,075 warrants with
NASDAQ
Options issued to cover equivalent of
91,500 warrants
issue with
NASDAQ
Unlisted options in lieu of services
on
No.
18,045,512
3,275,466
3,968,916
200,000
Issue price*
$
-
-
Total value
$
-
-
-
0.143
-
28,620
24,400,000
0.00033
8,101
1,403,000
0.00033
463
3,660,000
1,050,000
56,002,894
0.00033
0.094
1,215
98,385
136,784
*Issue price has been rounded for presentation of this report.
**As at 30 June 2016, the Company was committed to issue 18,045,512 options in relation to the $4,511,378
received in capital raising. These options were subsequently issued to respective holders on 7 July 2016.
2,418,129 of these options were issued to Grandlodge on the same terms and conditions as all other subscribers.
On 22 June 2017, the Company issued Professor Ravi Savarirayan, a Non-Executive Director of Immuron
Limited, 1,000,000 unlisted options exercisable at $0.50 on or before 27 Nov 2019. During the Annual General
Meeting in 2018, the shareholders approved the issuance of the options to Ravi Savarirayan.
41
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
9 Cash flow information
(a) Reconciliation of profit after income tax to net cash inflow from operating activities
Profit for the period
Adjustment for
Add depreciation expense
Add back share based payments expense
Add change in fair value and interest accrued on borrowings
Change in operating assets and liabilities:
Decrease in trade debtors and other receivables
(Increase) in inventories
(Increase) decrease in other operating assets
(Decrease) in trade creditors
Increase (decrease) in other provisions
Net cash inflow (outflow) from operating activities
10 Critical estimates and judgements
Consolidated entity
2018
$
2017
$
(3,010,929)
(6,804,154)
5,047
242,950
-
84,932
(333,642)
26,561
(620,202)
77,839
(3,527,444)
4,922
522,665
8,561
7,396
(280,060)
69,034
(559,452)
-
(7,031,088)
Management evaluates estimates and judgments incorporated into the financial statements based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future events
are based on current trends and economic data, obtained both externally and within the group.
(a) Significant estimates and judgements
•
•
•
Share-based payments:
The value attributed to share options and remunerations shares issued is an estimate calculated using an
appropriate mathematical formula based on an option pricing model. The choice of models and the resultant
option value require assumptions to be made in relation to the likelihood and timing of the conversion of the
options to shares and the value of volatility of the price of the underlying shares. Refer to note 17 for more
details.
Impairment of inventories:
The provision for impairment of inventories assessment requires a degree of estimation and judgement. The
level of
the ageing of
inventories and in particular the shelf life of inventories that affects obsolescence. Expected shelf-life is
reassessed on a regular basis with reference to stability tests which are conducted by an expert engaged by
the Company.
the provision is assessed by taking into account
the recent sales experience,
Provision for employee benefits:
Provision for employee benefits represents amounts accrued for annual leave and long service leave.
The current portion for this provision includes the total amount accrued for annual leave entitlements and the
amounts accrued for long service leave entitlements that have vested due to employees having completed
the required period of service. Refer to note 21(c) for policies on provisions.
• R&D tax incentive:
The Group's research and development activities are eligible under an Australian Government tax incentive
for eligible expenditure from 1 July 2011. Management has assessed these activities and expenditure to
determine which are likely to be eligible under the incentive scheme. For the year ended 30 June 2018 the
Group has recorded in other income of $1,849,123 (2017: $1,575,315) to recognise this amount which
relates to this financial year.
42
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
10 Critical estimates and judgements (continued)
(a) Significant estimates and judgements (continued)
•
Inventory split:
During the current financial period, management have performed an assessment on its raw materials and its
utilisation within 12 months from reporting date and have determined $198,585 of raw materials relating to
Colostrum expected to be consumed with 12 months and remaining balance of $2,171,867 expected to be
consumed after 12 months from reporting date.
11 Financial risk management
(a) Financial instruments
The Company's financial instruments consist of cash and cash equivalents, trade and other receivables and trade
and other payables, borrowing and Convertible note:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Borrowings
Convertible notes
Consolidated entity
2018
$
2017
$
4,727,430
492,276
689,326
-
-
5,909,032
3,994,924
270,125
1,290,389
139,864
(226,000)
5,469,302
The fair values of cash and cash equivalents, trade and other receivables and trade and other payables
approximate their carrying amounts largely due to being liquid assets and payables will be settled within 12
months.
(b) Risk management policy
The Board is responsible for overseeing the establishment and implementation of the risk management system,
and reviews and assesses the effectiveness of the Company's implementation of that system on a regular basis.
The Board and Senior Management identify the general areas of risk and their impact on the activities of the
Company, with Management performing a regular review of:
•
•
•
•
the major risks that occur within the business;
the degree of risk involved;
the current approach to managing the risk; and
if appropriate, determine:
•
•
any inadequacies of the current approach; and
possible new approaches that more efficiently and effectively address the risk.
The Company seeks to ensure that its exposure to undue risk which is likely to impact its financial performance,
continued growth and survival is minimised in a cost effective manner.
(c) Significant accounting policies
Details of significant accounting policies and methods adopted, including the criteria for recognition, the basis for
measurement and the basis on which income and expenses are recognised, in respect of each class of financial
asset, financial liability and equity instrument are disclosed in Note 21 to the financial statements.
The carrying amounts of cash and cash equivalents, trade and other receivables, trade and other payables and
financial liabilities represents their fair values determined in accordance with the accounting policies disclosed in
Note 21.
43
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
11 Financial risk management (continued)
(d) Capital risk management
The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going
concern and to maintain an optimal capital structure so as to maximise shareholder value.
In order to maintain or achieve an optimal capital structure, the Company may issue new shares or reduce its
capital, subject to the provisions of the Company's constitution. The capital structure of the Company consists of
equity attributed to equity holders of the Company, comprising contributed equity, reserves and accumulated
losses disclosed in Notes 8(a) and 8(b).
By monitoring undiscounted cash flow forecasts and actual cash flows provided to the Board by the Company's
Management the Board monitors the need to raise additional equity from the equity markets.
(i) Financial risk management
The main risks the Company is exposed to through its operations are interest rate risk, foreign exchange risk,
credit risk and liquidity risk.
Interest rate risk
(ii)
The Company is exposed to interest rate risks via the cash and cash equivalents and borrowings that it holds.
Interest rate risk is the risk that a financial
instruments value will fluctuate as a result of changes in market
interest rates. The objective of managing interest rate risk is to minimise the Company's exposure to fluctuations
in interest rate that might impact its interest revenue and cash flow.
Interest rate risk is considered when placing funds on term deposits. The Company considers the reduced
interest rate received by retaining cash and cash equivalents in the Company's operating account compared to
placing funds into a term deposit. This consideration also takes into account the costs associated with breaking a
term deposit should early access to cash and cash equivalents be required.
There has been no change to the Company's exposure to interest rate risk or the manner in which it manages
and measures its risk in the year ended 30 June 2018.
(iii) Foreign currency risk
The Company is exposed to foreign currency risk via the trade and other receivables and trade and other
payables that it holds. Foreign currency risk is the risk that the value of a financial instrument will fluctuate due to
changes in foreign exchange rates. The Company aims to take a conservative position in relation to foreign
currency risk hedging when budgeting for overseas expenditure however, the Company does not have a policy to
hedge overseas payments or receivables as they are highly variable in amount and timing, due to the reliance on
activities carried out by overseas entities and their billing cycle.
44
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
11 Financial risk management (continued)
(d) Capital risk management (continued)
The following financial assets and liabilities are subject to foreign currency risk:
Cash and cash equivalent (AUD/USD)
Trade and other receivable (AUD/USD)
Trade and other payables (AUD/USD)
Trade and other payables (AUD/ISL)
Consolidated entity
2018
$
2017
$
4,222,310
161,138
57,667
4,320
2,770,682
126,207
502,651
20,489
Foreign currency risk is measured by regular review of cash forecasts, monitoring the dollar amount and
currencies that payment are anticipated to be paid in. The Company also considers the market fluctuations in
relevant currencies to determine the level of exposure. If the level of exposure is considered by Management to
be too high, then Management has authority to take steps to reduce the risk.
Steps to reduce risk may include the acquisition of foreign currency ahead of the anticipated due date of an
invoice, or may include negotiations with suppliers to make payment in our functional currency, or may include
holding receipted foreign currency funds in a foreign currency denominated bank account to make future
payments denominated in that same currency. Should Management determine that the Company consider taking
out a hedge to reduce the foreign currency risk, they would need to seek Board approval.
The Company conducts some activities outside of Australia which exposes it
movements, where the Company is required to pay in a currency other than its functional currency.
to transactional currency
There has been no change in the manner the Company manages and measures its risk in the year ended 30
June 2018.
The Company is exposed to fluctuations in the United States dollars and Israeli Shekel. Analysis is conducted on
a currency by currency basis using sensitivity variables.
The Company has conducted a sensitivity analysis of the Company's exposure to foreign currency risk. The
analysis shows that if the Company's exposure to foreign currency risk was to fluctuate as disclosed below and
all other variables had remained constant, then the foreign currency sensitivity impact on the Company's loss
after tax and equity would be as follows:
AUD/USD: 2018 + 11.00% (2017: + 8.00%)
AUD/USD: 2018 - 11.00% (2017: - 8.00%)
AUD/ISL: 2017 + 7.00% (2017: + 11.00%)
AUD/ISL: 2017 - 7.00% (2017: - 11.00%)
Consolidated entity
2018
(Higher) /
Lower
$
6,343
(6,343)
302
(302)
2017
(Higher) /
Lower
$
35,186
(35,186)
2,254
(2,254)
(iv) Credit risk
The Company is exposed to credit risk via its cash and cash equivalents and trade and other receivables. Credit
risk is the risk that a counter-party will default on its contractual obligations resulting in a financial loss to the
Company. To reduce risk exposure for the Company's cash and cash equivalents, it places them with high credit
quality financial institutions.
45
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
11 Financial risk management (continued)
(d) Capital risk management (continued)
The use of 11% was determined based on the analysis of AUD and USD change on an absolute value basis,
between July 2017 and June 2018. The average change of these currencies within this period was approximately
11%.
The use of 7% was determined based on the analysis of AUD and ISL change on an absolute value basis,
between July 2017 and June 2018. The average change of these currencies within this period was approximately
7%.
The Company has a policy that limits the credit exposure to customers and regularly monitors its credit exposure.
The Board believes that the Company does not have significant credit risk at this time in respect of its trade and
other receivables. Regarding customers with over 30-day debt balance, management has maintained on-going
communication with relevant counter parties in regard of repayment schedule, and concluded that there have
been no changes to the initial assessment of credit risk.
The Company has analysed its trade and other receivables below:
Consolidated entity
2018
Trade and other receivables
2017
Trade and other receivables
0 - 30 days
AUD$
31 - 60 days
AUD$
61 - 90 days
AUD$
90 + days
AUD$
Total
AUD$
250,806
122,890
106,494
11,986
492,276
173,248
33,731
419
62,727
270,125
(v) Liquidity risk
The Company is exposed to liquidity risk via its financial liabilities and its recurring and projected losses.
Liquidity risk is the risk that the Company will encounter difficulty in raising funds to meet the commitments
associated with its financial instruments. Responsibility for liquidity risk rests with the Board who manage liquidity
risk by monitoring undiscounted cash flow forecasts and actual cash flows provided to them by the Company's
Management at Board meetings to ensure that the Company continues to be able to meet its debts as and when
they fall due.
Contracts are not entered into unless the Board believes that there is sufficient cash flow to fund the additional
activity. The Board considers when reviewing its undiscounted cash flow forecasts whether the Company needs
to raise additional funding from the equity markets.
The Company has analysed its financial liabilities below:
Consolidated entity
2018
Trade and other payables
2017
Trade and other payables
Borrowings
Convertible note
Total
0 - 30 days
AUD$
31 - 60 days
AUD$
61 - 90 days
AUD$
90 + days
AUD$
Total
AUD$
216,938
-
-
-
216,938
446,693
-
-
446,693
102,546
-
-
102,546
72,052
-
-
72,052
77,395
-
-
77,395
1,326,562
139,864
226,000
1,692,426
46
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
11 Financial risk management (continued)
(d) Capital risk management (continued)
As at 30 June 2018,
the Company maintained a cash and cash equivalents balance of AUD$4,727,430.
Additionally, the Company also recognised a total of AUD$1,683,305 in receivables, which will be received in the
near future. On this basis, even though the Company has been in loss making position historically, management
is satisfied that the Company is a going concern and are of the opinion that no asset is likely to be realized for an
amount lower than the amount at which it is recorded in the Consolidated Statement of Financial Position at 30
June 2018.
12 Interests in other entities
(a) Subsidiaries
The Company's subsidiaries at 30 June 2018 are set out below. Unless otherwise stated, they have share capital
consisting solely of ordinary shares that are held directly by the Company, and the proportion of ownership
interests held equals the voting rights held by the Company. The country of incorporation or registration is also
their principal place of business.
Name of entity
Immuron Inc.
Anadis EPS Pty Ltd
IMC Canada Limited*
*Incorporated on April 12, 2018.
Place of
business/
country of
incorporation
USA
Australia
Canada
Ownership interest held
by the Company
2018
%
100.0
100.0
100.0
2017
%
100.0
100.0
-
These companies are wholly owned subsidiary of Immuron Limited and was formed for the sole purpose to act as
trustee for the Immuron Limited Executive Officer Share Plan Trust. All costs associated with the operations of
this company are borne by Immuron Limited. Consolidated accounts have not been prepared as the net assets
and trading activity of Anadis ESP Pty Ltd are not material.
13 Contingent liabilities and contingent assets
As at June 30, 2018, there were no contingent liabilities and assets of the Company.
14 Commitments
(a) Non-cancellable operating leases
Commitments for minimum lease payments in relation to non-cancellable operating leases are
payable as follows:
Within one year
Later than one year but not later than five years
Consolidated
entity
2018
$
19,470
-
19,470
47
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
14 Commitments (continued)
(a) Non-cancellable operating leases (continued)
The property lease is a non-cancellable lease with a 3 year term, with rent payable monthly in advance. The
minimum lease payments shall be increased by CPI per annum. An option exists to renew the lease at the end of
the 3 year term for an additional term of 3 years. The current lease period expires in December 2018.
The Group has recognised $38,917 and $46,082, of rental expenses in its consolidated statement of profit or loss
and other comprehensive income for the year 2018 and 2017, respectively, as other corporate administration
expense.
15 Events occurring after the reporting period
On 29 June 2018, the Company announced to the market two major changes to the board. Effective 01 July,
2018, the Company appointed a non-executive director, Mr. Richard J Berman and the resignation of the joint
company secretary Mr. Peter Vaughan.
On 1 July 2018, the Company issued 1,000,000 unlisted employee stock options to a key management
personnel, Dr. Jerry Kanellos.
On 1 July 2018, the Company granted 2,000,000 unlisted options to Mr. Richard J Berman, subject to the
shareholder approval.
On 11 July 2018, the Company announced that the European Patent Office (EPO) has decided to grant a patent
for the use of composition for the treatment of Non-alcoholic steatohepatitis (NASH). This patent (EPO Grant No.
2424890) is entitled “Anti-LPS enriched immunoglobulin preparations for the treatment and/or prophylaxis of a
pathologic disorder”). This patent is due to Expire in April 2030, with potential for supplementary protection and
extension of this monopoly.
On 16 July 2018,
the Company announced an update towards the research collaboration with the US
Department of Defense Research going ahead. Studies were commissioned by the US Department of Defense to
evaluate Travelan®’s ability to neutralise pathogenic bacteria of interest, including Campylobacter, ETEC and
Shigella.
No other matter or circumstances has arisen since 30 June 2018 that has significantly affected, or may
significantly affect the Group's operations, the results of those operations, or the Group's state of affairs in future
financial years.
16 Related party transactions
(a) Key management personnel compensation
This note details the nature and amount of remuneration for each Director of Immuron Limited, and for the Key
Management Personnel.
48
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
16 Related party transactions (continued)
(a) Key management personnel compensation (continued)
The Directors of Immuron Limited during the year ended 30 June 2018 were:
The following persons held office as Directors of Immuron Limited during the financial year:
- Dr. Roger Aston, Independent non-executive chairman
- Mr. Daniel Pollock, Independent non-executive director
- Mr. Stephen Anastasiou, Independent non-executive director
- Mr. Peter Anastasiou, Executive vice chairman
- Prof. Ravi Savarirayan, Independent non-executive director
- Mr. Richard J Berman, Independent non-executive director (appointed 1 July 2018)
The following persons held office as Key Management Personnel of Immuron Limited during the financial
year with the following changes during the financial year end 30 June 2018:
- Dr. Jerry Kanellos, Interim Chief Executive Officer (CEO), (appointed 3 August 2017) and Chief Operating
& Scientific Officer (COSO)
- Mr. Thomas Liquard, Chief Executive Officer (CEO), (resigned 3 August 2017)
The aggregate compensation made to Directors and Other Key Management Personnel of the Company is set
out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated entity
2018
$
2017
$
570,256
32,087
59,975
662,318
681,666
25,947
353,670
1,061,283
Detailed remuneration disclosures are provided in the audited remuneration report on pages 18 to 27.
(b) Transactions with other related parties
The following transactions occurred with related parties:
49
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
16 Related party transactions (continued)
(b) Transactions with other related parties (continued)
Short-term loan from Grandlodge Capital Pty Ltd:
Grandlodge Capital Pty Ltd (Grandlodge) is an entity part-owned and
operated by Immuron Directors Peter and Stephen Anastasiou. Mr David
Plush is also an owner of Grandlodge, and its associated entities.
On 1 December 2015, 6 June 2016 and 9 May 2017, Immuron executed a
short-term funding agreement with Grandlodge for a principle amount of
$1,000,000 (interest
rate 15%) and
$500,000 (interest rate 15%) respectively.
rate 13%), $750,000 (interest
receive from the Australian Taxation Office under
The short-term funding is a cash advance against the anticipated refund
Immuron will
the
Research and Development Income Tax Concession Incentive for the
Company's eligible R&D expenditure incurred for financial year of 2016
and 2017.
Loan from December 2016, June 2016 and May 2017, plus applicable
fees and interest, was repaid to Grandlodge on 10 February 2016, 2
December 2016 and 23 June 2017, respectively. Interest expense was
approximately $57,000 and $31,000 for the years ended 30 June 2017
and 2016, respectively. In addition, the Company incurred approximately
$35,000 of loan fees for the year ended 30 June 2016.
Total paid by the Company to Grandlodge Pty Ltd during the year:
At year end the Company owed Grandlodge Pty Ltd:
Premises rental services received from Wattle Laboratories Pty Ltd
to Immuron Limited:
Wattle Laboratories Pty Ltd (Wattle) is an entity part-owned and operated
by Immuron Directors Peter and Stephen Anastasiou.
Commencing on 1 January 2016, Immuron executed a Lease Agreement
with Wattle whereby Immuron will
lease part of their Blackburn office
facilities for Immuron's operations at an arms-length commercial rental
rate of $38,940 per annum, payable in monthly instalments. The rental
agreement is subject to annual rental increases, and effective 1 January
2017, the annual rent was increased to $39,525.
The lease is for a 3 year term with an additional 3 year option period.
The lease is cancellable by either party upon 6 months written notice of
termination of the agreement.
Rental fees paid to Wattle Laboratories Pty Ltd during the year through
the issue of equity:
Total paid by the Company to Wattle Laboratories Pty Ltd during the
year:
At year end the Company owed Wattle Laboratories Pty Ltd:
30 June 2018
30 June 2017
$Nil
Nil
$1,329,007
$Nil
30 June 2018
30 June 2017
$Nil
$Nil
$33,020
$35,792
$Nil
$Nil
50
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
16 Related party transactions (continued)
(b) Transactions with other related parties (continued)
Service rendered by Grandlodge Pty Ltd to Immuron Ltd:
Grandlodge, and its associated entities, are marketing, warehousing and
distribution logistics companies.
30 June 2018
30 June 2017
Commencing on 1 June 2013, Grandlodge was contracted on commercial
market arms-length terms to provide warehousing, distribution and
invoicing services for Immuron’s products for $70,000 per annum. These
fees will be payable in new fully paid ordinary shares in Immuron Limited
at a set price of $0.16 per share representing Immuron Limited’s share
price at the commencement of the agreement.
The shares to be issued to Grandlodge, or its associated entities, as
compensation in lieu of cash payment for the services rendered under this
agreement have been subject to the approval of Immuron shareholders at
Company shareholder meetings held over the past 18 months.
Grandlodge will also be reimbursed in cash for all reasonable costs and
expenses incurred in accordance with their scope of works under the
agreement, unless both parties agree to an alternative method of
payment.
The agreement is cancellable by either party upon providing the other
party with 30 days written notice of the termination of the agreement.
Service fees paid to Grandlodge Pty Ltd during the year through the issue
of equity:
Total paid by the Company to Grandlodge Pty Ltd during the year:
At year end the Company owed Grandlodge Pty Ltd:
$140,000
$Nil
$Nil
$35,000
$Nil
$105,000
51
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
16 Related party transactions (continued)
(b) Transactions with other related parties (continued)
Service rendered by Great Accommodation Pty Ltd to Immuron Ltd:
During the current financial year, the Company entered into a short-term
loan arrangement with Great Accommodation Pty Ltd to fund on going
R&D expenditure, for an amount of AUD $500,000 at an interest rate of
15% per annum and a AUD $15,000 establishment fee. The loan was
repaid on 12 February 2018.
Service fees paid to Great Accommodation Pty Ltd during the year
through the issue of equity:
Total paid by the Company to Great Accommodation Pty Ltd during
the year:
At year end the Company owed Great Accommodation Pty Ltd:
30 June 2018
30 June 2017
$Nil
$520,342
$Nil
$Nil
$Nil
$Nil
52
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
17 Share-based payments
Executives and consultants may be provided with longer-term incentives through the Company’s Employee
Share and Option Plan (ESOP), to allow the executives and consultants to participate in, and benefit from, the
growth of the Company as a result of their efforts and to assist in motivating and retaining these key employees
over the long term.
(a) Options issued under ESOP
The following table illustrates the number and weighted average exercise price of and movement in share options
issued under the scheme during the year:
Consolidated entity
2018
2017
As at 1 July
Granted during the year
Lapse of unexercised options
As at 30 June
Vested and exercisable at 30 June
Weighted
Average
exercise price
per share
option
0.55
-
-
0.55
0.55
Weighted
Average
exercise price
per share
option
1.56
0.50
0.50
0.55
0.55
Number of
options
1,312,500
-
-
1,312,500
1,312,500
Number of
options
1,062,500
1,250,000
(1,000,000)
1,312,500
1,312,500
The options outstanding at 30 June 2018 have a weighted average remaining contractual life of 1.39 years (2017:
1.39 years) and exercise prices ranging from $0.50 to $1.56 (2017: from $0.50 to $1.56).
(b) Options issued to directors
The following table illustrates the number and weighted average exercise price of and movement in share options
issued to directors during the year:
Consolidated entity
2018
2017
Weighted
Average
exercise price
per share
option
Weighted
Average
exercise price
per share
option
Number of
options
Number of
options
As at 1 July
Lapse of unexercised options
As at 30 June
Vested and exercisable at 30 June
0.50
-
0.50
0.50
6,000,000
-
6,000,000
6,000,000
0.46
0.46
0.50
0.50
7,000,000
(1,000,000)
6,000,000
5,000,000
The options outstanding at 30 June 2018 have a weighted average remaining contractual life of 2.41 years (2017:
2.41 years) and exercise price of $0.50 (2017: $0.50).
53
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
17 Share-based payments (continued)
(c) Other options/warrants issued
The following table illustrates the number and weighted average exercise price of and movement in share options
issued to other parties during the year:
Consolidated entity
As at 1 July
Granted during the year
Exercised during the year
Lapse of unexercised options
As at 30 June
Vested and exercisable at 30 June
2018
Average
exercise price
per share
option
0.43
0.47
1.55
-
0.47
0.47
2017
Average
exercise price
per share
option
0.56
0.43
-
0.46
0.44
0.44
Number of
options
1,875,129
54,752,894
-
(250,000)
56,378,023
56,378,023
Number of
options
56,378,023
8,424,157
(300,000)
(465,000)
64,036,680
64,036,680
The options outstanding at 30 June 2018 have a weighted average remaining contractual life of 4.589 years
(2017: 3.57 years) and exercise prices ranging from $0.30 to $1.94 (2017:from $0.30 to $1.944).
(d) Vesting terms of options
The following summarises information about options held by employees, directors and third parties as at 30 June
2018:
Grant date
a
29-Jun-12
29-Jun-12
3-Mar-14
29-May-14
27-Nov-15
18-Feb-16
31-May-16
7-Jul-16
9-Dec-16
9-Jun-17
13-Jun-17
22-Jun-17
22-Jun-17
15-Mar-18
15-Mar-18
Number of
options
Vesting
conditions
14,493
29,668
15,380
140,056
6,000,000
1,000,000
425,532
25,289,894
200,000
24,400,000
3,660,000
1,050,000
1,000,000
7,897,647
526,510
Nil
Nil
Nil
Nil
See below
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Expiry date
Exercise price
$
30-Nov-21
17-Jan-22
28-Feb-19
28-May-19
27-Nov-19
24-Feb-19
27-Nov-19
30-Nov-19
27-Nov-19
13-Jun-22
13-Jun-22
1-Oct-18
27-Nov-19
15-Mar-23
15-Mar-23
1.944
1.876
1.892
0.300
0.500
0.570
0.500
0.550
0.500
0.326
0.326
0.500
0.500
0.468
0.585
(i) November 2015 options
The options with an issue date of 27 November 2015, entitle the holder to purchase one ordinary share in
Immuron Limited at an exercise price of $0.500. Options vest based on month of continuous services completed
as per the following:
•
5,000,000 Options which vested on 6 August 2016 - subject to completion of 12 months’ continuous services
as a Director of the Company
54
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
17 Share-based payments (continued)
(d) Vesting terms of options (continued)
•
1,000,000 Options which vested on 6 August 2017 - subject to completion of 24 months’ continuous services
as a Director of the Company
(ii) February 2016 options
The options with an issue date of 18 February 2016, entitle the holder to purchase one ordinary share in Immuron
Limited at an exercise price of $0.570. There are no performance conditions attached to the options. The options
were deemed to have been fully vested on their date on issue.
(iii) May 2016 options
The options with an issue date of 31 May 2016, entitle the holder to purchase one ordinary share in Immuron
Limited at an exercise price of $0.500. There are no performance conditions attached to the options. The options
were deemed to have been fully vested on their date on issue.
(iv) December 2016 options
Pursuant to an agreement entered between the Company and a consultant on 1 April 2015, the Company
granted 200,000 options, which became vested and issued on 9 December 2016, and entitled the holder to
purchase one ordinary share in Immuron Limited at an exercise price of AUD$0.500. These options were vested
and issued following the successful completion of related milestone pertaining to a minimum recruitment of 100
patients into the Company's NASH Phase IIb clinical trial.
(v) June 2017 options
The options with various issue dates in June 2017, entitle the holder to purchase one ordinary share in Immuron
Limited at an exercise price ranging from $0.326 to $0.500. There are no performance conditions attached to the
options. The options were deemed to have been fully vested on their date on issue.
*The above values has been adjusted for 40:1 share consolidation which was completed on 20 November 2014.
(e) Deemed valuation of options
The fair value of the options granted by the Company under the Company’s Executive Share and Option Plan
(ESOP) is estimated as at the grant date using Black-Scholes model taking into account the terms and conditions
upon which the options were granted.
(i) December 2013 options
The following table lists the inputs to the model used to determine the weighted average value of the options
expensed during the year:
Vesting date
Dividend yield
Expected volatility
Risk-free interest rate
Expected life of option (years)
Option exercise price
Weighted average share price at grant date
Value per option
N/A
-
62%
3.03%
3.00
$0.01
$0.01
$0.1016*
*The above values have been adjusted for 40:1 share consolidation which was completed on 20 November 2014.
(ii) November 2015 options (Restated)
The following table lists the inputs to the model used to determine the weighted average value of the options
expensed during the year:
55
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
17 Share-based payments (continued)
(e) Deemed valuation of options (continued)
Vesting date
Dividend yield
Expected volatility
Risk-free interest rate
Expected life of option (years)
Option exercise price
Weighted average share price at grant date
Value per option
As per above
-
100%
2.11%
4.00
$0.500
$0.465
$0.3186
(iii) February 2016 options
The following table lists the inputs to the model used to determine the weighted average value of the options
expensed during the year:
Vesting date
Dividend yield
Expected volatility
Risk-free interest rate
Expected life of option (years)
Option exercise price
Weighted average share price at grant date
Value per option
N/A
-
97%
1.73%
3.00
$0.570
$0.360
$0.1856
(iv) May 2016 options
The following table lists the inputs to the model used to determine the weighted average value of the options
expensed during the year:
Vesting date
Dividend yield
Expected volatility
Risk-free interest rate
Expected life of option (years)
Option exercise price
Weighted average share price at grant date
Value per option
N/A
-
84%
2.11%
4.00
$0.500
$0.410
$0.235
(v) December 2016 options
The following table lists the inputs to the model used to determine the weighted average value of the options
expensed during the year:
Vesting date
Dividend yield
Expected volatility
Risk-free interest rate
Expected life of option (years)
Option exercise price
Weighted average share price at grant date
Value per option
N/A
-
100%
1.61%
3.17
$0.500
$0.285
$0.1431
(vi) June 2017 options
The following table lists the inputs to the model used to determine the weighted average value of the options
expensed during the year:
56
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
17 Share-based payments (continued)
(e) Deemed valuation of options (continued)
Vesting date
Dividend yield
Expected volatility
Risk-free interest rate
Expected life of option (years)
Option exercise price
Weighted average share price at grant date
Value per option
N/A
-
100%
1.69%
1.33
$0.500
$0.315
$0.0937
The expected life of the option is based on historical data and is not necessarily indicative of exercise patterns
that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future
trends, which may also not necessarily be the actual outcome.
18 Remuneration of auditors
During the year the following fees were paid or payable for services provided by the auditor of the Parent entity,
its related practices and non-related audit firms:
(a) Auditor firm
(i) Audit and other assurance services
Audit and other assurance services
Audit and review of financial statements - Grant Thornton
Audit and review of financial statements - William Buck
Audit and review of financial statements - Marcum
Other assurance services
NASDAQ Listing services - Marcum
Total remuneration for audit and other assurance services
19 Loss per share
(a) Basic/diluted loss per share
Consolidated entity
2018
$
2017
$
145,706
-
-
-
145,706
-
41,600
91,175
470,503
603,278
Consolidated entity
2018
Cents
2017
Cents
From continuing operations attributable to the ordinary equity holders of the
company
(2.3)
(6.4)
(b) Diluted loss per share
From continuing operations attributable to the ordinary equity holders of the
company
Total diluted earnings per share attributable to the ordinary equity holders of the
Company
57
Consolidated entity
2018
Cents
(2.3)
(2.3)
2017
Cents
(6.4)
(6.4)
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
19 Loss per share (continued)
(c) Reconciliation of earnings used in calculating loss per share
Loss attributable to the ordinary equity holders of the Company used in
calculating basic/diluted loss per share:
(d) Weighted average number of shares used as the denominator
Consolidated entity
2018
$
2017
$
(3,010,929)
(6,804,154)
Consolidated entity
2018
Number
2017
Number
Weighted average number of ordinary shares used as the denominator in
calculating basic/diluted loss per share
133,660,556
105,866,110
The Company is currently in a loss making position any thus the impact of any potential shares is concluded as
anti-dilutive which includes the company’s options and Convertible Note payable and warrants. Treasury shares
are excluded from the calculation of weighted average number of ordinary shares.
20 Parent entity financial information
(a) Summary financial information
The individual financial statements for the Parent entity show the following aggregate amounts:
Balance sheet
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total Liabilities
Shareholders' equity
Issued capital
Reserves
Retained earnings
2018
$
2017
$
4,582,342
4,481,439
9,063,781
758,373
7,634
766,007
8,211,562
1,659,635
9,871,197
1,707,924
-
-
58,372,043
2,650,038
(52,724,307)
53,632,996
2,434,135
(47,903,858)
8,297,774
5,729,138
Profit or loss for the period
(4,820,448)
(6,039,941)
(b) Contingent liabilities of the parent entity
The Parent entity did not have any contingent liabilities as at 30 June 2018 or 30 June 2017. For information
about guarantees given by the Parent entity, please see above.
(c) Determining the parent entity financial information
The financial information for the Parent entity has been prepared on the same basis as the consolidated financial
statements, except as set out below.
58
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
20 Parent entity financial information (continued)
(c) Determining the parent entity financial information (continued)
Investments in subsidiaries, associates and joint venture entities
(i)
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial
statements of Immuron Limited.
(ii) Tax consolidation legislation
Immuron Limited and its wholly-owned Australian controlled entities have implemented the tax consolidation
legislation.
The head entity, Immuron Limited, and the controlled entities in the tax consolidated Company account for their
own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated
Company continues to be a stand-alone taxpayer in its own right.
In addition to its own current and deferred tax amounts, Immuron Limited also recognises the current tax liabilities
(or assets) and the deferred tax assets arising from unused tax losses and unused tax credits assumed from
controlled entities in the tax consolidated Company.
21 Summary of significant accounting policies
(a) Corporate Information
The consolidated financial statements Immuron Limited (‘the Company’) and the entities it controlled for the year
ended 30 June 2018 was authorised for issue in accordance with a resolution of the Directors on September 27,
2018.
Immuron Limited is a listed public company limited by shares incorporated and domiciled in Australia whose
shares are publicly traded on the Australian Securities Exchange (ASX) and NASDAQ.
The principal activity of the Company is a product development driven biopharmaceutical Company focused on
the research and development of polyclonal antibodies for the treatment and prevention of major diseases.
(b) Basis of preparation
The financial report is a general-purpose financial report, which has been prepared in accordance with the
requirements of Australian Accounting Standards ("AAS's"), required for a for-profit entity.
The financial report has been prepared on an accruals basis and is based primarily on historical costs. The
financial report is presented in Australian dollars, which is the Company’s functional and presentation currency.
All values are rounded to the nearest dollar unless otherwise stated.
Management is required to make judgements, estimates and assumptions about carrying values of assets and
liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based
on historical experience and various other factors that are believed to be reasonable under the circumstance, the
results of which form the basis of making the judgements. 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 in which the estimate is revised if the revision affects only that period, or in the period of
the revision and future periods if the revision affects both current and future periods.
Judgements made by management in the application of IFRS that have significant effects on the financial
statements and estimates with a significant risk of material adjustments in the next year are disclosed, where
applicable, in the relevant notes to the financial statements.
Accounting policies are selected and applied in a manner which ensures that the resulting financial information
satisfies the concepts of relevance and reliability,
the underlying
transactions or other events is reported.
thereby ensuring that
the substance of
59
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
21 Summary of significant accounting policies (continued)
(b) Basis of preparation (continued)
(i) Compliance with Australian Accounting Standards
The consolidated financial statements of the Immuron Limited Company comply with Australian Accounting
Standards as issued by the Australian Accounting Standards Board (AASB).
(ii) Compliance with IFRS
The consolidated financial statements of Immuron Limited also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
(iii) New and amended standards adopted by the Company
The consolidated entity has adopted all of the new, revised or amending Accounting Standards and Interpretation
issued by the Australian Accounting Standards Board (‘AASB’) that are mandatory for the current reporting
period. The adoption of these Accounting Standards and Interpretations did not have any significant impact on
the financial performance or position of the consolidated entity.
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
effective and have not been adopted by the Company for the annual reporting period ending 30 June 2018 are
outlined in the table below.
Standard
AASB 9 Financial Instruments and related standards
AASB 15 Revenue from Contracts with Customers and
AASB 2014-5 Amendments to Australian. Accounting
Standards arising from AASB 15
AASB 2016-3 Amendments to Australian Accounting
Standards - Clarifications to AASB 15
AASB 2016-5 Amendments to Australian Accounting
Standards
- Classification and Measurement of
Share-based Payment Transactions
Interpretation
Treatments
AASB 16 - Leases
23 Uncertainty
Income Tax
over
Mandatory date for
annual reporting
periods (beginning
on or after)
1 January 2018
1 January 2018
Reporting period
standard adopted by
the company
1 July 2018
1 July 2018
1 January 2018
1 July 2018
1 January 2018
1 July 2018
1 January 2019
1 July 2019
1 January 2019
1 July 2019
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June
2018 reporting periods and have not been early adopted by the Company. The Company’s assessment of the
impact of these new standards and interpretations is set out below.
There are no other standards that are not yet effective and that would be expected to have a material impact on
the Group in the current or future reporting periods and on foreseeable future transactions.
60
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
21 Summary of significant accounting policies (continued)
(b) Basis of preparation (continued)
Title of standard
AASB 9 Financial
Instruments
AASB 15 Revenue
from Contracts with
Customers
AASB 16 Leases
Mandatory
application date
Accounting periods
on
beginning
or
after
January
1
2018
Accounting periods
on
beginning
or
after
January
1
2018
Impact
Although
management
anticipate that the adoption of
AASB 9 will
the
Group's financial statements,
management have determined
that
the
impact
accounts will be immaterial.
impact
the
to
on
yet
has
to
Management
perform a detailed analysis,
however
their
based
preliminary assessment of the
impact of AASB 15 on the
recognition of
they
do not anticipate a material
difference to how revenue has
been recognised under
the
accounting
prevailing
standard.
revenue,
Accounting periods
on
beginning
or
after
January
1
2019
Management has considered
the
and
recognition
measurement requirements of
AASB16 in conjunction with
the existing operating lease
agreement between the Group
and its suppliers. Based on
this assessment management
have concluded that there will
be no material
impact to the
accounts.
9
for
the
and
hedge
deciding
introduces
improve
approach
Nature of change
AASB
new
requirements for the classification
and measurement of
financial
assets and liabilities and includes
a forward-looking ‘expected loss’
and
impairment
a
model
substantially-changed
approach
accounting. These
to
and
requirements
simplify
for
classification and measurement of
financial assets compared with
the requirements of AASB 139.
AASB 15 − replaces AASB 118
Revenue, AASB 111 Construction
Contracts
some
Interpretations−
revenue-related
establishes
new revenue
a
recognition model − changes the
basis
whether
revenue is to be recognised over
time or at a point
in time −
provides new and more detailed
guidance on specific topics (e.g.
multiple element arrangements,
variable pricing, rights of return,
−
warranties
improves
expands
disclosures about revenue.
AASB 16 − replaces AASB 117
Leases and some lease-related
all
Interpretations−
for
be
leases
‘on-balance sheet’ by lessees,
other
than short-term and low
value asset leases− provides new
guidance on the application of the
lease and on sale
definition of
and
accounting−
back
lease
largely retains the existing lessor
accounting requirements in AASB
117− requires new and different
leases
disclosures
Interpretations.
requires
accounted
licensing)
about
and
and
to
61
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
21 Summary of significant accounting policies (continued)
(c) Accounting policies
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities controlled
by the Company (its subsidiaries) referred to as ‘the Group’ in the financial statements. Control is achieved where
the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has
the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully
consolidated from the date on which control is transferred to the consolidated entity. They are de-consolidated
from the date that control ceases.
A list of controlled entities is contained in Note 12 to the financial statements. All controlled entities have a 30
June financial year-end.
All intra-group transactions, balances, income and expenses are eliminated in full on consolidation.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with those
policies applied by the parent entity. Subsidiaries are accounted for at cost in the parent entity.
The results of subsidiaries acquired or disposed of during the year are included in profit or loss from the effective
date of acquisition or up to the effective date of disposal, as appropriate.
Segment reporting
The Company determines and presents operating segments using the ‘management approach’ where the
information presented is on the same basis as the internal reports provided to the Chief Operating Decision
Makers ('CODM'). The CODM are responsible for the allocation of resources to operating segments and
assessing their performance and provide the strategic direction and management oversight of the day to day
activities of
for research and development
expenditure decisions and challenging and approving strategic planning for the business.
the entity in terms of monitoring results, providing approval
Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements are measured using the currency of the primary economic environment
in which the entity operates (“the functional currency”). The financial statements are presented in Australian
dollars, which is the Company’s functional and presentation currency.
(ii) Transactions and balances
Transactions in foreign currencies are translated into the functional currency using the rates of exchange ruling at
the date of each transaction. At reporting date, amounts outstanding in foreign currencies are translated into the
functional currency using the rate of exchange ruling at the end of the financial year. Refer to Note 3 for the
foreign currency gains and losses recognized during the periods.
Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss and
other comprehensive income, within finance costs. All other foreign exchange gains and losses are presented in
the statement of profit or loss and other comprehensive income on a net basis within Corporate Administration
Costs.
Immuron Inc., a subsidiary of the Group, has USD as its functional currency. Accordingly, this entity’s statement
of comprehensive income and statement of financial position balances have been translated to the Group’s
presentation currency (which is AUD$) at the reporting date. A gain arising from this translation of AUD$79,599
(2017: AUD$40,017) is recognized as Other Comprehensive Income for the year.
Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue
are net of returns, trade allowances, rebates and amounts collected on behalf of third parties.
62
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
21 Summary of significant accounting policies (continued)
(c) Accounting policies (continued)
Revenue recognition (continued)
The Company recognises revenue when the amount of revenue can be reliably measured, it is probable that
future economic benefits will flow to the entity and specific criteria have been met for each of the Company's
activities as described in Note 2. The amount of the revenue is not considered to be reliably measured until all
contingencies relating to the sale have been resolved.
The following specific revenue criteria must be met before revenue is recognized:
(i) Sale of Goods
Significant risks and rewards of ownership of goods has passed to the buyer and an invoice for the goods or
services is issued;
(ii) Other Income
• Interest income
Interest income is recognized using the effective interest rate method;
• R & D Tax Refund
Income is recognized in the year the research and development expenses were incurred.
The Company has worked with experienced advisors to improve its internal process on advanced findings of the
R&D activities, which includes determining and evaluating the eligibility of R&D related expenditure to support its
submission of the R&D Tax Refund claim.
• Other income
Other income is recognised when it is received or when the right to receive payment is established.
Government grants
Grants from the government are recognized at their fair value where there is a reasonable assurance that the
grant will be received and the Company will comply with all attached conditions.
Government grants relating to costs to be incurred are deferred or accrued such that they are recognized in the
statement of profit or loss and other comprehensive income over the period necessary to match them with the
costs that they are intended to compensate.
Income tax
The income tax expense or revenue for the period is the tax payable or tax rebate receivable on the current
period’s taxable income adjusted by changes in deferred tax assets and liabilities attributable to temporary
differences between the tax base of assets and liabilities and their carrying amounts in the financial statements,
and to unused tax losses.
Deferred income tax is provided in full, using the liability method on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the financial statements. However, the deferred
income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than
a business combination that at the time of the transaction affects neither the accounting nor taxable profit or loss.
Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by
the end of reporting period and are expected to apply when the related deferred income tax is realized or the
deferred income tax liability is settled.
Deferred tax assets are recognized for deductible temporary differences and unused tax losses only if it is
probable that future taxable amounts will be available to utilize those temporary differences and losses.
63
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
21 Summary of significant accounting policies (continued)
(c) Accounting policies (continued)
Income tax (continued)
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
and liabilities and when the deferred balances relate to the same taxation authority. Current tax assets and tax
liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net
basis, or to realize the asset and settle the liability simultaneously.
Current and deferred tax balances attributable to amounts recognized directly in equity are also recognized
directly in equity.
Impairment of non-financial assets
Assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying
amount may not be recoverable. An impairment loss is recognized for the amount by which the asset’s carrying
amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs
to sell and value in use.
Cash and cash equivalents
For presentation purposes, cash and cash equivalents includes cash on hand.
Trade receivables
Trade receivables are recognized initially at fair value and subsequently measured at amortized cost using the
effective interest rate method, less provision for impairment. Trade receivables are due for settlement no more
than 30 days from the date of recognition.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are
written off. A provision for impairment of trade receivables is established when there is objective evidence that
the Company will not be able to collect all amounts due according to the original terms of receivables.
financial difficulties of
the debtor, probability that
Significant
the debtor will enter bankruptcy or financial
reorganisation and default or delinquency in payment (more than 30 days overdue) are considered indicators that
the trade receivable is impaired. The amount of the provision is the difference between the asset’s carrying
amount and the present value of estimated future cash flows, discounted at the original effective interest rate.
Cash flows relating to short term receivables are not discounted if the effect of discounting is immaterial. The
amount of the provision is recognized in the statement of profit or loss and other comprehensive income.
Inventories
(i) Raw materials, work in progress and finished goods
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value.
Where appropriate, cost comprises direct materials, direct labor and an appropriate proportion of variable and
fixed overheads expenditure, the latter being allocated on the basis of normal operating capacity. The Company
classifies inventory as a current asset as all amounts are held for the purpose of trading.
Costs are assigned to individual items of inventory on basis of weighted average costs. Net realisable value is the
estimated selling price in the ordinary course of business less the estimated costs of completion and the
estimated costs necessary to make the sale.
Plant and equipment
Plant and equipment are stated at historical cost
expenditure that is directly attributable to the acquisition of the items.
less accumulated depreciation. Historical cost
includes
Repairs and maintenance are charged to the statement of profit or loss and other comprehensive income during
the financial period in which they are incurred.
64
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
21 Summary of significant accounting policies (continued)
(c) Accounting policies (continued)
Plant and equipment (continued)
Depreciation on assets is calculated using the straight line method to allocate their cost, net of their residual
values, over their estimated useful lives, as follows:
Plant & Equipment (3-15 years)
Computer Equipment (2-4 years)
Furniture & Fittings (3-15 years)
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, annually.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount.
Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included
in the statement of profit or loss and other comprehensive income.
Intangible assets
(i) Research and development
Expenditure on research activities, undertaken with the prospect of obtaining new scientific or technical
knowledge and understanding, is recognized in the statement of profit or loss and other comprehensive income
as an expense when it is incurred.
Expenditure on development activities, being the application of research findings or other knowledge to a plan or
design for the production of new or substantially improved products or services before the start of commercial
production or use, is capitalized if it is probable that the product or service is technically and commercially
feasible, will generate probable economic benefits and adequate resources are available to complete
development and cost can be measured reliably. Other development expenditure is recognized in the statement
of profit or loss and other comprehensive income as an expense as incurred.
Trade and other payables
These amounts represent liabilities for goods and services provided to the entity prior to the end of the financial
year and which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade
payables are recognized initially at fair value and subsequently measured at amortized cost using the effective
interest rate method.
Employee benefits
(i) Short-term obligations
Liabilities for wages and salaries, annual leave and long service leave that are expected to be settled wholly
within 12 months after the end of the period in which the employees render the related service are recognized in
respect of employees’ services up to the end of the reporting period and are measured at the amounts expected
to be paid when the liabilities are settled.
(ii) Other long-term employee benefit obligations
The liabilities for long service leave and annual leave that are not expected to be settled wholly within 12 months
after the end of the period in which the employees render the related service are recognized in the provision for
employee benefits and measured as the present value of expected future payments to be made in respect of
services provided by employees up to the end of the reporting period using the projected unit credit method.
Consideration is given to expected future wage and salary levels, experience of employee departures and
periods of service. Expected future payments are discounted using market yields at the end of the reporting
period of high quality corporate bonds with terms and currencies that match, as closely as possible, the estimated
future cash outflows. The obligations are presented as current liabilities in the Statement of financial position if
the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting
period, regardless of when the actual settlement is expected to occur.
65
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
21 Summary of significant accounting policies (continued)
(c) Accounting policies (continued)
Employee benefits (continued)
(iii) Retirement benefit obligations
Contributions to the defined contribution superannuation funds are recognized as an expense as they become
payable. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction in the
future payments is available.
(iv) Share-based payments
Share-based compensation benefits may be provided through the issue of fully paid ordinary shares under the
Immuron Employee Share and Option Plan. Options are also granted to employees and consultants in
accordance with the terms of their respective employment and consultancy agreements. Any options granted are
made in accordance with the terms of the Company’s Employee Share and Option Plan (ESOP).
The fair value of options granted under employment and consultancy agreements are recognized as an
employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and
recognized over the period during which the employees become unconditionally entitled to the options.
The fair value at grant date is determined using a Black-Scholes option pricing model that takes into account the
exercise price,
the
non-tradeable nature of the option, the share price at grant date and expected price volatility of the underlying
share, the expected dividend yield and the risk-free interest rate for the term of the option.
the vesting and performance criteria,
the impact of dilution,
the term of
the option,
The fair value of the options granted excludes the impact of any non-market vesting conditions (for example,
profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the
number of options that are expected to become exercisable. At each reporting date, the entity revises its estimate
of the number of options that are expected to become exercisable. The employee benefit expense recognized
each period takes into account the most recent estimate. The impact of the revision to original estimates, if any,
is recognized in the statement of profit or loss and other comprehensive in come with a corresponding adjustment
to equity.
Upon the exercise of options, the balance of the share-based payments reserve relating to those options is
transferred to contributed equity.
(v) Termination benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or when an
employee accepts voluntary redundancy in exchange for these benefits.
The Company recognises termination benefits when it is demonstrably committed to either terminating the
employment of current employees according to a detailed formal plan without possibility of withdrawal or
providing termination benefits as a result of an offer made to encourage voluntary redundancy.
Benefits falling due more than 12 months after reporting date are discounted to present value.
Leases
Leases in which a significant portion of the risk and reward of ownership are not transferred to the Company as
lessee are classified as operating leases. Payments made under operating leases (net of any incentives received
from the lessor) are charged to the statement of profit or loss and other comprehensive income on a straight-line
basis over the period of the lease.
Borrowings
Generally, loans and borrowings are initially recognized at cost, being the fair value of the consideration received
net of issue costs associated with the borrowing. After initial recognition, interest bearing loans and borrowings
are subsequently measured at amortized cost using the effective interest method. Amortized cost is calculated by
taking into account any issue costs and any discount or premium on settlement.
66
Immuron Limited
Notes to the consolidated financial statements
30 June 2018
(continued)
21 Summary of significant accounting policies (continued)
(c) Accounting policies (continued)
Borrowings (continued)
The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in the
statement of financial position, net of transaction costs.
Convertible notes are initially classified as a financial liability on the amortised cost basis until extinguished on
conversion or redemption. Any increase in the liability die to the passage of time is recognised as a finance cost.
The corresponding interest on convertible notes is expensed to the statement of profit or loss and other
comprehensive income.
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction from the proceeds.
Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Company,
excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary
shares outstanding during the full year, adjusted for bonus elements in ordinary shares issued during the full
year.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into
account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary
shares and the weighted average number of shares assumed to have been issued for no consideration in relation
to dilutive potential ordinary shares.
Goods and Services Tax (GST)
Revenues, expenses and assets are recognized net of the amount of associated GST, unless the GST incurred
is not recoverable from the taxation authority. In this case it is recognized as part of the cost of acquisition of the
asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST recoverable or payable. The net amount of
GST recoverable from, or payable to, the taxation authorities is included with other receivable or payables in the
statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flow arising from investing or financing
activities which are recoverable for, or payable to, the taxation authorities are presented as operating cash flow.
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.
67
Immuron Limited
Directors' declaration
30 June 2018
In the consolidated opinion of the Directors of Immuron Limited:
(a)
the financial statements and notes set out on pages 29 to 67 are in accordance with the Corporations Act
2001, including:
(i)
(ii)
complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory
professional reporting requirements, and
giving a true and fair view of the consolidated entity's financial position as at 30 June 2018 and of
its performance for the year ended on that date, and
(b)
(c)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable, and
at the date of this declaration, there are reasonable grounds to believe that Immuron Limited will be able
to meet any obligations or liabilities to which they are, or may become, subject by virtue of the deed of
cross guarantee.
Note 21(b) confirms that the financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board.
The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer
required by section 295A of the Corporations Act 2001.
This declaration is made in accordance with a resolution of Directors.
Dr. Roger Aston
Director
Melbourne
27 September 2018
68
Collins Square, Tower 1
727 Collins Street
Melbourne VIC 3008
Correspondence to:
GPO Box 4736
Melbourne VIC 3001
T +61 3 8320 2222
F +61 3 8320 2200
E info.vic@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Immuron Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Immuron Limited (the Company) and its subsidiaries (the Group), which comprises
the consolidated statement of financial position as at 30 June 2018, the consolidated statement of profit or loss and other
comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the
year then ended, and notes to the consolidated financial statements, including a summary of significant accounting
policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its performance for the year
ended on that date; and
b complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are
further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled
our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
69
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current period. These matters were addressed in the context of our audit of the financial report as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter
How our audit addressed the key audit matter
Research and development tax rebate accrual – refer to
Note 2, 5b & 10
Under the Research and Development (R&D) Tax Incentive
scheme, the Group receives a 43.5% refundable tax offset of
eligible expenditure if its turnover is less than $20 million per
annum, provided it is not controlled by income tax exempt
entities. An R&D plan is filed with AusIndustry in the following
financial year, and based on this filing, the Group receives the
incentive in cash. Management performed a detailed review of
the Company’s total research and development expenditure to
determine the potential claim under the R&D tax incentive
legislation.
This area is a key audit matter due to the degree of judgement
and interpretation of the R&D tax legislation required by
management to assess the eligibility of the R&D expenditure
under the scheme.
Valuation of Inventory – refer to Note 6 & 10
At 30 June 2018, the Group held inventories of $2,669,769 on
the consolidated statement of financial position, as disclosed
in Note 6, which relates to finished product, work in progress
and raw materials.
The audit of the valuation of inventories is a key audit matter
because of the significance of the inventories balance at 30
June 2018 as well the judgement required in determining
whether it is recorded at the lower of cost and net realisable
value. The valuation of the inventories is assessed
considering forecast inventory usage and sales and expiry
dates of product.
Our procedures included, amongst others:
Obtaining and reviewing management’s FY18 R&D
calculations and assessing the reasonableness of
assumptions utilised in the calculation;
Comparing the estimates made in previous years to the
amount of cash actually received after lodgement of the
R&D tax claim;
Comparing the nature of the R&D expenditure included in
the current year estimate to the prior year estimate;
Considering the nature of the expenses against the
eligibility criteria of the R&D tax incentive scheme to form a
view about whether the expenses included in the estimate
were likely to meet the eligibility criteria;
Comparing the eligible expenditure used to calculate the
estimate against the expenditure recorded in the general
ledger;
Inspecting copies of relevant correspondence with
AusIndustry and the ATO related to the claims;
Testing the accuracy and validity of expenses included in
the R&D tax incentive accrual by vouching to supporting
documentation; and
Engaging with our R&D specialist to review the
reasonableness of the calculation; and
Assessing the adequacy of financial statement disclosures.
Our procedures included, amongst others:
Obtaining management’s weighted average cost calculation
and checking the accuracy of calculations;
Testing a sample of inventory items to assess the build-up
of costs;
Reviewing management’s methodology and assumptions in
quantifying stock obsolescence while considering expiry
dates, as well as future sales levels;
Obtaining the report prepared by management’s expert to
support the useful life of stock;
Assessing the qualification and independence of
management’s expert and validating assumptions utilised
within the report for reasonableness;
Testing a sample of product sales to assess whether the
margin achieved was sufficient to support the recoverable
amount of the inventory on hand; and
Assessing the adequacy of financial statement disclosures
and accuracy of financial statement classification.
70
Information other than the financial report and auditor’s report thereon
The Directors are responsible for the other information. The other information comprises the information included in the
Group’s annual report for the year ended 30 June 2018, but does not include the financial report and our auditor’s report
thereon.
Our opinion on the financial report does not cover the other information and we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors’ for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in
accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors
determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material
misstatement, whether due to fraud or error.
In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the
Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions
of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 18 to 27 of the Directors’ report for the year ended 30 June
2018.
In our opinion, the Remuneration Report of Immuron Limited, for the year ended 30 June 2018 complies with section
300A of the Corporations Act 2001.
71
Responsibilities
The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
Grant Thornton Audit Pty Ltd
Chartered Accountants
M A Cunningham
Partner – Audit & Assurance
Melbourne, 27 September 2018
72
The Shareholder information set out below was applicable as at 19 September 2018.
A. Distribution of equity securities
Analysis of numbers of equity security holders by size of holding:
Immuron Limited
Shareholder information
30 June 2018
Class of equity security
Ordinary shares
No. of
Holders
Total Units
248
520
273
601
188
1,830
66,619
1,555,790
2,179,614
20,537,475
118,438,708
142,778,206
305
432
Ordinary shares
Number held
%
13,544,344
12,606,927
9,556,682
8,624,999
2,907,236
2,731,632
2,506,000
2,500,000
2,296,874
2,035,371
2,000,000
1,800,000
1,624,999
1,575,000
1,334,075
1,331,744
1,000,000
1,000,000
887,462
882,412
72,745,757
9.49
8.83
6.69
6.04
2.04
1.91
1.76
1.75
1.61
1.43
1.40
1.26
1.14
1.10
0.93
0.93
0.70
0.70
0.62
0.62
50.95
70,032,449
142,778,206
49.05
100.00
Holding
1 - 1000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 and over
Unmarketable parcel
B. Equity security holders
Twenty largest quoted equity security holders
Name
HSBC CUSTODY NOM AUST LTD*
CITICORP NOMINEES PTY LIMITED
GRANDLODGE PTY LTD
AUTHENTICS AUSTRALIA PTY LTD
ANASTASIOU PETER + K P*
INVERAREY PL
MR WILLIAM DAVID FRANK BIRD
INSYNC INV PL
ADVANCE CLINICAL SYSTEMS
MR STEPHEN ANASTASIOU &
ADVANCE PUBLICITY PTY LTD
MR DALE ANTHONY REED
MR KENNETH BIDDICK &
HAMBLETON STREET PTY LTD
MR DAVID ANTHONY PLUSH &
G & N LORD SUPER PL*
TJS INVESTMENTS (AUST) PTY LTD
MR THOMAS EDGAR EDMUNDS &
HADASIT MEDICAL RESEARCH
MR IAN DAVID PATTISON &
Total
Total balance of remaining holders
Total on issue
* Denotes merged holders.
73
B. Equity security holders (continued)
Quoted equity securities
Immuron Limited
Shareholder information
30 June 2018
(continued)
No. of
Holders
Total Units
IMCOB listed options exercisable at $0.55 on or before 30 November 2019
339
362
Unquoted equity securities
IMCAC unlisted options exercisable at $0.500 on or before 1 October 2018
IMCAI unlisted options exercisable at $0.570 on or before 24 February 2019
IMCAI unlisted options exercisable at $1.892 on or before 28 February 2019
IMCAI unlisted options exercisable at $0.300 on or before 28 May 2019
IMCAI unlisted options exercisable at $0.500 on or before 27 November 2019
IMCRM1 unlisted options exercisable at $1.944 on or before 30 November 2021
IMCRM2 unlisted options exercisable at $1.876 on or before 17 January 2022
IMCAI unlisted options exercisable at USD$10 for every 40 options on or before
13 June 2022*
*Unlisted options held by HSBC Custody Nomination Australia Limited.
C. Substantial holders
No. of
Holders
Total Units
2
1
1
1
6
1
1
1
1,050,000
1,000,000
15,380
140,056
7,625,532
14,493
29,668
28,060,000
The name of substantial shareholders the Company is aware of from the register, or who have notified the
Company in accordance with Section 671B of the Corporations Act are:
HSBC CUSTODY NOM AUST LTD
CITICORP NOMINEES PTY LIMITED
GRANDLODGE PTY LTD
D. Shareholder enquiries
Number
held
13,544,344
12,606,927
9,556,682
35,707,953
Percentage
9.49%
8.83%
6.69%
25.01%
Shareholders with enquiries about their shareholdings should contact the Share Register:
Security Transfer Registrars
PO Box 535, Applecross, WA 6953, Australia
Telephone: +61 (0)8 9315 2333
Facsimilie: +61 (0)893152233
E. Change of address, change of name, consolidation of shareholdings
Shareholders should contact the Share Registry to obtain details of the procedure required for any of these
changes.
F. Removal from the Annual Report mailing list
Shareholders who wish to receive the Annual Report should advise the Share Registry in writing. These
shareholders will continue to receive all other shareholder information.
G. Tax File numbers
It is important that Australian resident shareholders, including children, have their tax file number or exemption
details noted by the Share Registry.
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Immuron Limited
Shareholder information
30 June 2018
(continued)
H. CHESS (Clearing House Electronic Sub-Register System)
Shareholders wishing to move to uncertified holdings under the Australian Stock Exchange (CHESS) system
should contact their stockbroker.
I. Uncertified share register
Shareholding statement are issued at the end of each month that there is a transaction that alters the balance of
your holding.
75