COLLIER CREATIVE 03 9088 2470
ONC0006 Oncosil AR20_PFO August 19, 2020 7:08 PM
Annual Report 2020
COLLIER CREATIVE 03 9088 2470
ONC0006 Oncosil AR20_PFO August 19, 2020 7:08 PM
Contents
1 Chairman’s Letter
2 2020 Highlights
3 Message from the CEO
4 An Incredibly Important Focus
5 OncoSil™ Device and
Technology Platform
6 PanCO Trial Update
8 Pathway Forward
10 Hammersmith Hospital Case Study
12 Campaign Launch
14 Directors’ Report
27 Auditor’s Independence Declaration
28 Statement of Profi t or Loss
and Other Comprehensive Income
29 Statement of Financial Position
30 Statement of Changes in Equity
31 Statement of Cash Flows
32 Notes to the Financial Statements
54 Directors’ Declaration
55 Independent Auditor’s Report
60 Shareholder Information
2020
April
British Standards Institute (BSI)
grants European CE marking for the
OncoSil™ System and designates
OncoSil™ a breakthrough device for
the treatment of locally advanced
pancreatic cancer in combination
with chemotherapy
2018
June
The number of OncoSil™
device implantations for the
PanCO study was achieved
which resulted in end of
study recruitment
2017
April
First study participant patient
implanted with the OncoSil™
device as part of the global
PanCO study
2013
Enigma Therapeutics Ltd is
acquired by Neurodiscovery Ltd.
Neurodiscovery Ltd changes its
name to OncoSil Medical Ltd
and focuses on the
development of OncoSil™
2004 to 2009
Early clinical development
phases for the OncoSil™
technology
2020
May
OncoSil™ System receives
regulatory approval from
Singapore’s Health
Sciences Agency
2020
March
FDA grants Breakthrough
Device Designation for
the OncoSil™ device for
treatment of unresectable
pancreatic cancer
2018
March
First US study participant
implanted with the OncoSil™
device as part of the
OncoPaC-1 study
2016
October
OncoSil Medical receives
IDE approval from the FDA
to conduct a clinical study
2012
pSividia Corp grants an
exclusive worldwide royalty-
bearing license agreement with
Enigma Therapeutics Ltd for the
development of BrachySil™
2004
The OncoSil™ technology is
developed as BrachSil™ by
pSivida Corp
Chairman’s Letter
“
On behalf of the OncoSil Medical
Board, it gives me great pleasure to
present our 2019-2020 Annual Report
for OncoSil Medical.
Dear Fellow Shareholder,
Refl ecting on the last 12 months, this has been a milestone
year for OncoSil with several signifi cant achievements.
In March 2020, OncoSil announced that it had received CE
Mark approval and Breakthrough Device Designation for the
treatment of locally advanced pancreatic cancer (LAPC) in
combination with chemotherapy, from the British Standards
Institute (BSI). This marked a milestone achievement for
OncoSil and eff ectively allows for the OncoSil™ device to be
marketed and sold within the European Union and the United
Kingdom. In addition, the CE Mark paves the way for further
regulatory approvals in other key markets whereby the CE
Mark authority is recognised. It is pleasing that to date, we
have received approvals in New Zealand and Singapore;
and are awaiting outcomes of registrations fi led in Australia,
Hong Kong and Malaysia.
The achievement of CE Marking was a result of a lengthy and
complex clinical & regulatory development program which
involved a substantial amount of work from a broad group
of professionals such as trial monitors, biostatisticians, and
clinical investigators both within and external to the Company.
I would like to take this opportunity to send my sincerest
thanks to everyone involved as this would not have been
possible without their contribution.
In addition to CE Marking, the business continues focusing
on driving commercial activities across UK/Europe and
ASEAN regions supported by the successful A$19m capital
raising which was completed in May of this year. In addition
to Europe and Asia, we have also pushed forward in the US
with an HDE fi ling submitted for the OncoSil™ device for
the treatment of bile duct cancer; and with the breakthrough
designation by the FDA in relation to the treatment of LAPC.
In light of the COVID-19 pandemic and the varying disruptions
it caused, we remain nimble and continue making progress
building the necessary infrastructure for commercial sales.
This infrastructure includes capabilities such as scaled up
manufacturing and global supply chain logistics for our
radioactive products. Also important are clinical support
activities such as training material as well as a comprehensive
post market patient registry enabling the tracking of clinical
results on implanted patients. Building out the infrastructure
supporting successful commercialisation underpins the
building of shareholder value.
Finally, on behalf of the Board, I would like to take this
opportunity to thank our Chief Executive Offi cer, Daniel Kenny,
and the entire OncoSil Medical management team for their
outstanding contribution throughout the year. I would also
like to thank the Board for their tireless eff orts in 2020.
We look forward to the coming year ahead and building on
our recent momentum as we continue to make a diff erence
through our important mission of transforming the prognosis
of pancreatic cancer.
Sincerely,
Dr Chris Roberts, AO
Chairman, OncoSil Medical Limited
1
2020 Highlights
2
CE
Marking
achieved
in April 2020
Marketing
of device
rolling out
across the UK and EU
Granted
Designated
Breakthrough
device
by FDA in March 2020
OncoSil Annual Report 2020 Message from the CEO
“
In 2020, OncoSil Medical
made signifi cant progress
in commercialising our lead
device, OncoSilTM.
In 2020, OncoSil Medical made signifi cant progress in
commercialising our lead device, OncoSilTM. The progress was
marked by several key milestones including the granting of
CE Mark, the fi rst regulatory approval of its type for the device.
In addition to this, there have been numerous other milestones
achieved over the past year that has enabled the Company
to drive towards commercialisation of the OncoSil™ device.
Europe and Asia
Our key priority in 2020 was to continue progressing the
CE Mark application towards a positive regulatory outcome.
In March 2020, we successfully achieved CE Marking for the
treatment of locally advanced pancreatic cancer (LAPC) in
combination with chemotherapy from the British Standards
Institute (BSI). The approval is a signifi cant step for the
Company and means OncoSil is now able to sell and market
the OncoSilTM device across the United Kingdom and European
Union. While COVID-19 has delayed a full commercial launch
due to limited hospital access causing disruptions in training
and site initiation, the Company has continued to progress
many of the necessary launch preparation activities. As part
of our European rollout strategy, the Company appointed
former Sirtex Group Chief Commercial Offi cer, Nigel Lange,
as its EMEA President. This appointment will help the Company
establish its commercial presence in the European market,
aided by Nigel’s network of connections and extensive
experience in the region.
Outside of Europe, we were quick to leverage our CE Marking
approvals as we focused our attention on gaining regulatory
approvals in jurisdictions that recognise the CE Marking
certifi cation. Since April 2020, we have fi led for regulatory
approvals in New Zealand, Singapore, Malaysia, Hong Kong
and in Australia. As of August 2020, I am happy to report that
we have received clearance in New Zealand and Singapore;
and are awaiting outcomes on all other applications.
United States
In October 2019, we announced our intention to explore
additional US regulatory pathways for our device outside of
LAPC treatment. As a result of these eff orts, the Company has
added the treatment of distal cholangiocarcinoma (otherwise
known as bile duct cancer) to its near-term priorities. Over
the past year, the Company has made signifi cant progress
with respect to both pathways. In terms of bile duct cancer,
the Company submitted the Humanitarian Device Exemption
(HDE) in July 2020. The HDE submission is required as part
of the process under the Humanitarian Use Designation (HUD)
program, which was granted to the Company in July 2019. In
terms of LAPC, the Company is working with the FDA to design
clinical trials following its breakthrough device designation in
March 2020. The breakthrough designation is signifi cant as it
helps to expedite the development and approval of the device
and provides further validation of the OncoSilTM device.
Financial Position
As at 30 June 2020, OncoSil had a cash balance of
A$21 million supported by its A$19 million raising comprised of
an oversubscribed institutional placement and an underwritten
entitlement off er. The funds from the capital raising enables
OncoSil to pursue its commercialisation plans across Europe,
UK, ASEAN and APAC for LAPC and in US for bile duct cancer.
Finally, we understand that the path to commercialisation has
not been a straightforward journey for OncoSil shareholders,
however I believe we have turned a signifi cant corner in
2020. The Company is entering into a new and exciting
phase of growth and we look forward to building on our
accomplishments in 2021 as we work towards further
commercialising our device, establishing our market presence
and ultimately achieving our goal of improving patient
outcomes in the area of pancreatic cancer.
Sincerely,
Daniel Kenny
Chief Executive Offi cer, OncoSil Medical Limited
3
An Incredibly Important Focus
ABOUT PANCREATIC CANCER
Pancreatic cancer occurs when abnormal cells in the
pancreas grows out of control, with symptoms varying
according to the tumour type and location. Unfortunately,
symptoms are often diffi cult to detect in the early stages
of the disease, meaning tumours can grow over time
without detection.
There are an average of 79,000 new cases of pancreatic
cancer in the EU each year, 42,000 in the US, and 3,350
in Australia. Treatment options remain limited for patients
with the disease, making OncoSil’s goal of delivering
targeted and eff ective therapy incredibly important.
What’s the need?
There is signifi cant unmet patient need in the treatment
of pancreatic cancer. Consider the following pancreatic
cancer facts:
· The fourth highest cause of cancer death1
· Projected to be the second leading cause of cancer
related deaths by 2030 in Western countries2
· 277,000 new cases diagnosed annually worldwide3
· 5-year overall survival rate for pancreatic cancer has
only increased by 1% (from 5% to 6%) in the past
three decades4
· Highest mortality rate of all major cancers5
· 1 in 64 – The average lifetime risk of a person
diagnosed with pancreatic cancer6
1 Spadi, R. et al. (2016) Current therapeutic strategies for advanced pancreatic cancer: A review
for clinicians. World Journal of Clinical Oncology Vol 7 Issue 1 pp 27-43.
2 Ibid.
3 Chiorean, E. G and Coveler, A.L. (2015) Pancreatic cancer: optimizing treatment options, new,
and emerging targeted therapies. Drug Design, Development and Therapy Vol 9 pp 3529-3545.
4 Ibid.
5 Hirshberg Foundation for Pancreatic Cancer Research, Pancreatic Cancer Facts http://pancreatic.
org/pancreatic-cancer/pancreatic-cancer-facts/
6 American Cancer Society, Lifetime risk of pancreatic cancer, https://www.cancer.org/cancer/
pancreatic-cancer/about/key-statistics.html
SURVIVAL
RATE %
Age-Standardised Ten-Year Net Survival,
Selected Cancers, Adults (Aged 15-99)
England and Wales, 2010-2011
100%
98
89
84
80
78
77
63
63
62
57
50
50
46
35
33
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13
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B
ALL CANCERS
4
OncoSil Annual Report 2020
OncoSil™ Device and Technology Platform
OncoSil™ is used in combination with modern chemotherapy
and aims to provide local tumour control and may have an
impact on reducing cancer symptoms.
It may also be able to convert certain patients by shrinking
tumours into an operative state to provide a potentially
curative option.
Dr Paul Ross the PanCO trial Principal Investigator (PI) gave
the inaugural virtual presentation at the World GI conference.
The presentation was an online video to registered delegates
presenting the updated PanCO trial results. The World
GI conference is the premier European conference on
Gastrointestinal cancer supported by ESMO the European
Society for Medical Oncology.
OncoSil™ is a single-use brachytherapy device that
implants a pre-determined dose of beta radiation directly
into cancerous tissue. The beta particles emitted by OncoSil™
travel a short distance in the tissue causing damage to
cancer cell DNA, which renders them incapable of further
cell division and proliferation.
The device is used for the treatment of pancreatic cancer
and intended for patients who are unable to undergo surgery
to remove their tumours due to either tumour size, or the
location in the pancreas. Approximately 20% of patients
at diagnosis are able to have an operation to remove their
pancreatic tumour, which is currently the most eff ective way
to treat pancreatic cancer.
OncoSil™ is made with Microparticles that are a combination
of silicon and radioactive phosphorus, which are injected as
a suspension directly into a pancreatic tumour.
Implantation of the device is straightforward and involves the
use of an endoscope. Using real time imaging, a needle is
guided through the endoscope to the tumour and OncoSil™
is injected directly into the cancer while the patient is sedated.
The procedure typically takes less than 30 minutes and most
patients are able to leave the hospital the same day.
20% of
patients
diagnosis are able to have an operation
to remove their pancreatic tumour
5
PanCO Trial Update
SUMMARY OF
CLINICAL DATA
Median OS
16.1
months
Median PFS
9.3
months
Overall Response Rate
31%
Disease Control Rate
100%
Median tumour
volumetric change
38.0%
Median CA
19-9 reduction
77.8%
LDCR 16 Weeks
90.5%
Median LPFS
9.6
months
Surgical resection
with curative intent
23.8%
RO margin rate
80.0%
Median FDG-PET
TLG change
65.2%
Median reduction
EORTC-QLC PAN26 Pain
scale score at week 12
20
The PanCO Study is currently in long-term
follow-up phase with participating sites
in Australia, UK and Belgium. A total of
50 subjects were enrolled in the study
with 42 subjects successfully implanted
with the OncoSil™ device.
6
OncoSil Annual Report 2020
COMPELLING CLINICAL DATA FROM
THE PANCO STUDY UNDERPINNED
CE MARKING APPROVAL
The CE Marking approval was achieved based on the
compelling clinical outcomes from the PanCO study.
Supporting the approval was a detailed comparative analysis
(naïve in-direct treatment comparison) of the PanCO results
with “state-of-the-art” treatment for unresectable locally
advanced pancreatic cancer.
The “state-of-the-art” treatments included a broad range
of clinical studies of systemic chemotherapy (CT-only) and
induction chemotherapy plus consolidated chemo-radiotherapy
(ICT+CCRT) regimens supported in clinical guidelines for the
treatment for unresectable LAPC.
This comparative analysis confi rms that the OncoSil™ device,
when combined with contemporary systemic chemotherapy
regimens, demonstrates the following:
Excellent Local Disease Control (LDCR)
• Local Disease Control Rates at 16 weeks (LDCR16 weeks)
of 90.5% in the Per Protocol (PP) population (p=0.0001)
that received OncoSil™ plus CT, demonstrate that the
PanCO study met its a priori primary performance endpoint
and convincingly demonstrates that OncoSil™ plus CT
is better than CT alone.
Prolonged Overall Survival (OS)
• Prolonged median overall survival of 16.1 months in the
PP population. (as of May 2019).
• Almost double the accepted median OS for patients with
unresectable pancreatic cancer.
• In the naïve indirect treatment comparison, the PanCO
median OS results were signifi cantly longer (p<0.001) than
CT-only and ICT + CCRT regimens, representing a clinically
relevant 20% reduction in the risk of death compared
to CT-only and ICT + CCRT studies.
Prolonged Progression Free Survival (PFS)
• Progression-free survival (PFS) was also prolonged
(9.3 months in the ITT and PP populations), and was
signifi cantly greater than ‘state-of-the-art’ CT – only
and ICT + CCRT studies (p<0.001).
Higher Disease Control Rate
• Disease control and overall response rates in the
PanCO study – 100% and 31.0% respectively in the PP
population – underline the response following OncoSil™
administration and were again signifi cantly greater than
the CT – only and ICT + CCRT studies in the naïve indirect
treatment comparison.
Marked Tumour Volume Reduction
• OncoSil™ treatment results in marked tumour volume
reduction. Overall, treatment with OncoSil™ resulted
in a median maximal volumetric reduction of 52%
from baseline.
• Median tumour volumetric reduction at 16 weeks
was 38% (p<0.0001).
• In the PanCO study a number of patients demonstrated
substantial tumour volume reductions up to 74% volumetric
reduction at Week 8 and up to 90% volumetric reduction
at Week 16.
Signifi cant CA19-9 tumour marker reduction
• There was a signifi cant reduction in CA19-9 tumour marker
with a median CA19-9 reduction of -77.8%; (p<0.0001).
Superior outcomes to comparators
• The naive indirect treatment comparison confi rms that
the PanCO study results were consistently and statistically
signifi cantly better than the results from CT-only and
ICT+CCRT studies, and clearly demonstrates that
OncoSil™ plus CT provides clinically relevant benefi ts
for patients with unresectable LAPC that are superior
to those reported with CT alone.
Encouraging rate of Surgical Resection with Curative intent
Safety
• An encouraging rate of surgical resection with curative
• Excellent safety profi le overall, with no evidence of
intent in nearly one-in-four PanCO patients (23.8%) were
downstaged. This rate is signifi cantly greater than those
reported in the CT-only and ICT + CCRT studies (p<0.001)
and, notably, the rate of R0 margin status was 80%.
• In the systemic literature review analyses the CT-only
resection rate was 7.7%, and the CT-only and ICT +
CCRT resection rate was 9.9% compared with the PanCO
resection rate of 23.8%.
• Surgical resection of pancreatic cancer, particularly
in patients previously determined to be unresectable,
profoundly improves patients’ prognosis from a fi ve-year
survival rate of 5% to greater than 20%.
signifi cant safety concerns or unexpected/serious toxicities
associated with the OncoSil™ device and/or implantation
procedure over a prolonged study timeframe.
• The OncoSil™ device provides a valuable treatment option
in an area of high unmet medical need with an acceptable
safety and tolerability profi le.
• The clinically relevant benefi ts of OncoSil™ combined
with systemic chemotherapy in appropriate patients with
unresectable LAPC more than outweigh the identifi ed risks
and represent a favourable risk-benefi t profi le.
1 Loehrer PJ et al. J Clin Oncol 2011Nov 1;29 (31) 4105-12
7
Pathway Forward
STRATEGIC GROWTH PILLARS
EU/UK
Commercialisation
Strategy
· CE Marking Granted
(April 2020)
· Scalable manufacturing
capabilities
· Sales force ramp up
· Training and initiation
across sites
· First revenues
ASEAN/APAC
Strategy
US
Market Entry
Strategic
Partnerships
· Many jurisdictions
recognise CE Marking
and do not necessarily
require separate clinical
trials to gain approval
· Registrations have been
obtained in Singapore
and New Zealand.
Filings for Hong Kong,
Malaysia and Australia
have been submitted
for each country
· Dual entry pathway
· FDA Breakthrough
Designation
· HDE filing submitted
for Bile Duct Cancer
indication
· US commercial
launch
· OncoSil continues to
explore all attractive
opportunities, including
potential licensing
agreements and
strategic partnerships
with external parties
Sales strategy for EU and UK
TARGET
ATTRACTIVE
HOSPITALS
C
SELL TO
HOSPITALS
B
D
HOSPITAL
TRAINING
A
R
E
C
E
I
V
E
C
E
F
E
NETWORKING
EFFECT TO
INCREASE
DEMAND
BUILD HOSPITAL
CLINICAL EVIDENCE
M
A
R
K
1 Launch preparation is currently delayed due to the COVID-19 pandemic, with limited hospital access causing
disruptions in new site initiation, training, shipping and logistics.
8
A
B
C
D
E
F
Receive CE Mark
Sell to Hospitals
CE Marking allows OncoSil™ to be marketed
to hospitals in the EU and the UK.
Target attractive hospitals
Strategically target high patient volume
pancreatic cancer hospitals with experienced
practitioners including nuclear medicine,
endoscopy, medical oncology and surgery.
Hospital training
Training practitioners on appropriate
OncoSil™ patient selection and safe product
use. New training kit materials have been
developed to support the training effort1.
Build hospital clinical evidence
Build the clinical evidence from increasing
the number of patient treatments with
OncoSil™. Clinical evidence is published
and disseminated through scientific journals
to the broader cancer scientific community
generating further awareness of OncoSil.
Networking effect to increase demand
The pancreatic cancer medical community
is highly specialised and positive experiences
with OncoSil treatments generates
encouragement to peers at other hospitals
considering starting with OncoSil.
OncoSil Annual Report 2020
COLLIER CREATIVE 03 9088 2470
ONC0006 Oncosil AR20_PFO August 19, 2020 7:08 PM
FOCUSED ON COMMERCIALISATION
It has been a year of significant milestones for OncoSil
with several noteworthy achievements as the business
continues to make significant progress in commercialising
its OncoSilTM device.
The progress was marked by several key milestones including
the granting of CE Mark and Breakthrough Device Designation
for the treatment of locally advanced pancreatic cancer
(LAPC) in combination with chemotherapy, from the British
Standards Institute (BSI) effectively allowing the OncoSil™
device to be marketed and sold within the European Union
and the United Kingdom.
The CE Marking milestone paves the way for further regulatory
approvals in other key markets whereby the CE Mark authority
is recognised. We are excited to report that to date we have
received approvals in New Zealand and Singapore off the
back of CE Mark; and are awaiting outcomes of registrations
filed in Australia, Hong Kong and Malaysia.
Outside of Europe and Asia, we continue to make inroads
in the US as we explore additional regulatory pathways for
our device. As a result of these efforts, the Company has
added the treatment of distal cholangiocarcinoma (otherwise
known as bile duct cancer) to its near-term priorities and has
submitted to the FDA for Humanitarian Device Exemption
(HDE) approval. In addition to this, the Company continues
to progress its work around LAPC as it leverages its
breakthrough designation to expedite work with the
FDA to design clinical trials.
US – Primary focus on Pancreatic but scope to expand into new indications
PANCREATIC
CANCER
BILE DUCT
CANCER
MARKET
OPPORTUNITY
US$508MN P.A1,2 US$80MN P.A3
ROUTE TO US
ENTRY THUS FAR
August 2016
December 2018
Investigational Device Exemption (IDE)
granted by FDA.
Humanitarian Use Designation
(HUD) granted by FDA.
April 2020
July 2019
Breakthrough Device designation
granted by FDA, successfully meeting
its strict criteria.
Successfully agreed with FDA
that PanCO data could be used
as predicate for dCCA.
FORWARD PLAN
Now
Now
Working closely with FDA to
optimise the Pre-market approval (PMA)
evidence development and clinical trials.
The HDE has been submitted to the
FDA. If successful the HDE will allow
commercial usage of OncoSil in the
US for 2021.
Notes:
1 GLOBOCAN 2018: Estimated Cancer Incidence Worldwide in 2018 (IARC/WHO)
2 Based on OncoSil list dose pricing of US$25,000 and pancreatic cancer target market of 40% of incidences
3 Based on OncoSil’s target indicative list dose pricing of US$50,000 and the incidence of distal cholangiocarcinoma in the US
9
Hammersmith Hospital Case Study
Dr Zarni Win
Imperial College
NHS Healthcare Trust,
London, UK
One of our investigators in the
international PanCO trial explains
how OncoSil™ is off ering new hope
for patients with unresectable locally
advanced pancreatic cancer (LAPC).
ONCOSIL™:
TARGETING AN UNMET NEED
IN PANCREATIC CANCER
ONCOSIL™ BRACHYTHERAPY:
A NEW HIGHLY-TARGETED
TREATMENT FOR LAPC
Patients presenting with LAPC are typically unsuitable for
curative surgery due either to the size of the tumour or its
location within the pancreas. Current options for these
patients are limited to chemotherapy or chemoradiotherapy,
but prognosis is poor, and survival is around 12 months.
New solutions for patients with this devastating disease
are urgently needed.
The procedure can
take as little as
OncoSil™, which is prescribed in combination with
chemotherapy, consists of Microparticles of radioactive
phosphorous-32 (P-32). The therapeutic benefi t is derived
from short-range, high-energy beta radiation.
Unlike conventional radiotherapy, OncoSil™ is injected
directly into the tumour guided by endoscopic ultrasound.
This means the beta particles are localised within the
pancreas, minimising side eff ects in surrounding organs and
tissue. OncoSil™ is delivered by a multidisciplinary team
including oncology, gastroenterology and nuclear medicine.
The procedure can take as little as 30 minutes, with patients
going home the same day.
Imperial College’s Hammersmith Hospital campus was the largest
single European site recruiting patients for the PanCO trial.
30mins
with
patients
going home the same day
10
OncoSil Annual Report 2020
CASE STUDY:
PROLONGING SURVIVAL WITH
TUMOUR DOWNSTAGING
An 83-year-old patient with newly-diagnosed unresectable
LAPC was enrolled in the PanCO trial. The patient commenced
on standard-of-care chemotherapy and was implanted with
OncoSil™ as per the trial protocol. A confi rmatory scan (A)
demonstrated that the Microparticles were correctly located
within the tumour.
Scan taken on day of implant
Day 7 follow up scan
(A) SPECT-CT scan demonstrating localisation of OncoSil™ in the tumour.
The patient was monitored with 8-weekly CT scans: response
to treatment was excellent and the patient is alive 26 months
after diagnosis. A CT scan at 18 months revealed the tumour
had shrunk by an astounding 86%, meaning the patient was
eligible for curative resection.
Endoscopic Ultrasound of pancreatic tumour. In the first image the yellow region of interest is the pancreatic tumour. The second image with the yellow arrow
points to the endoscopic needle which has been punctured into the tumour. the third image with the yellow arrow pointing to a white blush is the OncoSil
injected into the tumour.
The most up-to-date PanCO data were presented at the World
Congress on Gastrointestinal Cancer in July 2020. Following
treatment, 33% of patients were eligible for potentially curative
surgery. In chemotherapy/chemoradiotherapy studies in
unresectable LAPC, around 10% of patients are resected.
Median overall survival in the PanCO trial was signifi cantly
increased to 16 months.
Based on the results of all
patients that were enrolled into
the PanCO trial, OncoSil received
its CE Marking in April 2020.
OncoSil is most grateful to all
of the multidisciplinary team
members and of course the
patients who took part in the
PanCO trial in all centres in
the UK, Australia and Belgium.
11
Campaign Launch
In the world of medicine
the prognosis for patients
can be too often too bad.
Limited options,
too little too late.
But now with new science
comes new thinking and
new reason for optimism.
By moving forward, striving
to change the status quo,
being part of progress, we
can revolutionise outcomes.
Survival becomes imaginable
and months can turn into years.
At Oncosil Medical we’re
working to defy the odds,
delivering new hope for patient
and family alike.
12
OncoSil Annual Report 2020
ONCOSIL GLOBAL
CAMPAIGN LAUNCH
OncoSil Medical has been working with healthcare
communication specialists, McCann Health, to develop a global
campaign for our breakthrough brachytherapy device, OncoSilTM.
Development began with a strategic workshop, gathering
insights into the market, our customers and the role of OncoSilTM.
This uncovered the brand truth that forms the basis of our
campaign. For decades the prognosis in pancreatic cancer
has remained almost unchanged. The grim statistics gave
patients and doctors little reason to hope.
But OncosilTM gives patients and cancer specialists the courage
to defy the statistics and transform the prognosis. This idea is
crystalised in our launch campaign with the powerful invitation
to ‘treat me like I’m going to live.’ It challenges medical
specialists to no longer accept the status quo for patients.
(Above) our new logo with brand promise tagline.
(Below) our new brand manifesto video.
New Brand Identity
The OncoSil Medical Brand Book establishes a new brand
voice and visual language. One that is bold, visually arresting
and unmistakably OncoSilTM.
Campaign roll out
The new visual identity for OncoSilTM was developed for use
across the launch campaign. The contemporary look and
feel provides cut-through when applied to launch marketing
materials. Emphasis has been given to digital touchpoints,
focusing on the communication needs of a post-COVID
environment. The breakthrough status of OncoSilTM is central
to messaging to medical specialists.
Launch campaign
Striking, black and white portraits refl ect the determination
of people with pancreatic cancer to defy the prognosis and
challenge the status quo.
New presence
We are strengthening brand presence with a new website and
brand manifesto video, designed to educate and encourage
medical cancer specialists to transform the prognosis.
Launch materials
For the global launch we are developing sales fi eld force and
medical cancer specialist materials, outlining the compelling
evidence for our breakthrough brachytherapy device.
13
Directors’ Report
OncoSil Medical Ltd
Directors' report
30 June 2020
The directors present their report, together with the financial statements, on the consolidated entity (referred to hereafter as
the 'Group') consisting of OncoSil Medical Ltd (referred to hereafter as the 'Company' or 'parent entity') and the entities it
controlled at the end of, or during, the year ended 30 June 2020.
Directors
The following persons were directors of OncoSil Medical Ltd during the whole of the financial year and up to the date of this
report, unless otherwise stated:
Dr Chris Roberts AO - Non-Executive Chairman
Mr Daniel Kenny - Chief Executive Officer and Managing Director
Dr Roger Aston - Non-Executive Director
Dr Martin Cross - Non-Executive Director
Mr Michael Bassett - Non-Executive Director
Information on directors
Name:
Title:
Qualifications:
Experience and expertise:
Dr Chris Roberts AO
Non-Executive Chairman
BE(Hons), MBA, PhD, Hon DSc(Macq), Hon DSc(UNSW), FTSE, FAICD, Hon
FIEAust
Dr Roberts AO is a highly experienced director and senior executive with over 44
years’ experience in the medical innovation space. He was CEO/President of
Cochlear Limited (ASX: COH) from February 2004 to August 2015. He was also
Chairman of Sirtex Medical Ltd (ASX: SRX), from March 2000 to December 2002,
and was Executive Vice-President of global sleep disorder treatment company
ResMed Inc (NYSE: RMD, ASX: RMD) from 1992 to 2004. Dr Roberts AO also sits
on the boards of a number of other entities and groups including; Clarity
Pharmaceuticals Limited, Innovation Science Australia, Atmo Biosciences Pty Ltd and
O’Connell Street Associates.
None
Member of the Nomination and Remuneration Committee and member of Audit and
Risk Committee
12,681,819 ordinary shares (10,000,000 performance dependent loan shares under
Employee Share Plan 'ESP')
Other current directorships:
Former directorships (last 3 years): ResMed Inc. (NYSE:RMD, ASX:RMD)
Special responsibilities:
Interests in shares:
Name:
Title:
Qualifications:
Experience and expertise:
Mr Daniel Kenny
Chief Executive Officer and Managing Director
BSc (UNSW), MAIP, MAICD.
Mr Kenny has over 35 years’ experience in the Global Pharmaceutical and Medical
Devices Industry. Mr Kenny’s industry career experience extends to US Food and
Drug Administration ('FDA') and European Union ('EU') product and device
registration, clinical development, marketing and sales, in-licensing and business
development. Prior to joining OncoSil Medical Mr Kenny was Chief Commercial
Officer with ABIVAX, a leading French biotechnology company specialising in
vaccines and antiviral products based in Paris, France. From 2010 to 2013, Mr Kenny
was Global Franchise Head Vaccines, Austria. For the period 2008 to 2010 Mr Kenny
was Vice President BioScience EMEA for Baxter International based in Zurich
Switzerland. Before joining industry Mr Kenny commenced his career in clinical
research in the fields of Ophthalmology and HIV/AIDS in the University sector in
Sydney. Mr Kenny is Chairman of the External Advisory Committee, School of
Chemical Engineering, UNSW.
Other current directorships:
None
Former directorships (last 3 years): None
Special responsibilities:
Member of the Nomination and Remuneration Committee and member of Audit and
Risk Committee
20,352,778 ordinary shares (17,300,000 performance dependent loan shares under
ESP)
Interests in shares:
14
2
OncoSil Annual Report 2020
OncoSil Medical Ltd
Directors' report
30 June 2020
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Dr Roger Aston
Non-Executive Director
B.Sc (Hons) and Ph.D. (Manchester)
Dr Aston is a scientist and seasoned biotechnology entrepreneur. He has been
closely involved in start-up companies and major pharmaceutical companies. Aspects
of his experience include FDA and EU product registration, clinical trials, global
licensing agreements, fundraising through private placements, and a network of
contacts within the pharmaceutical, banking and stock broking sectors. Dr Aston has
also held Directorships/Chairmanships with Clinuvel Ltd, HalcyGen Ltd, Regeneus
Ltd and Ascent Pharma Ltd, and was a member of the AusIndustry Biological
Committee advising the Industry Research and Development Brand. More recently,
Dr Aston was Executive Chairman of Mayne Pharma Group from 2009 to 2011 and
later, CEO of Mayne Pharma Group.
Chairman of: Immuron Limited (ASX: IMC), ResApp Health Limited (ASX: RAP),
PharmAust Ltd (ASX: PAA) and its subsidiary Pitney Pharmaceuticals Pty Ltd
Former directorships (last 3 years): Regeneus Limited (ASX: RGS)
Special responsibilities:
Interests in shares:
Name:
Title:
Qualifications:
Experience and expertise:
Member of the Nomination and Remuneration Committee and Chairman of the Audit
and Risk Committee
13,154,416 ordinary shares
Dr Martin Cross
Non-Executive Director
B.SC (Hons) and Ph.D. (Aberdeen) FAICD
Dr Cross is a highly regarded pharmaceutical executive with over 35 years’
experience including corporate and industry leadership roles directly influencing
healthcare policy and government legislation in Australia and global business
management, marketing and sales roles. From 2013 to 2015, Dr Cross was Chairman
of Medicines Australia, the country’s peak body representing the research based
pharmaceutical industry in Australia. Prior to leading Medicines Australia, from 2010
to 2013 Dr Cross was Chairman of both the Generics Medicine Industry Association
and Pharmaceutical Industry Council. During this time, Dr Cross was also Managing
Director of Alphapharm in Australia and New Zealand, with responsibility for 750
employees and sales of over US $500m per annum. From 2003 to 2008, Dr Cross
was Country Head and Managing Director of Novartis Australia and New Zealand,
and Head of Global Marketing and Sales Capabilities from 2001 to 2003, based in
Switzerland.
Non-Executive Director Cellmid Limited (ASX:CDY)
Chairman of the Nomination and Remuneration Committee and member of the Audit
and Risk Committee
2,727,273 ordinary shares
Other current directorships:
Former directorships (last 3 years): None
Special responsibilities:
Interests in shares:
Name:
Title:
Qualifications:
Experience and expertise:
Mr Michael Bassett
Non-Executive Director
B.Econ, member of the Australian Institute of Company Directors.
Mr Bassett has over 25 years' experience in capital markets and has held senior
management roles at Australia's leading fund management and investment banking
firms. His career focus involved analysing, advising and investing in small-cap ASX-
listed companies with strong prospects for shareholder value creation. Mr Bassett
currently works as SVP Corporate and Strategic Development for ASX listed medical
device company ImpediMed Limited. Prior to this he worked for Market Connect, a
consultancy business focusing on small-cap ASX lisited companies, Portfolio
Manager for the successful Regal Australian Small Companies Fund with a significant
focus on Life Science companies and has held senior management positions within
Credit Suisse's Institutional Equities business, Deutsche Asset Management and
Merrill Lynch.
Other current directorships:
None
Former directorships (last 3 years): None
None
Special responsibilities:
1,116,000 ordinary shares
Interests in shares:
3
15
Directors’ Report cont.
OncoSil Medical Ltd
Directors' report
30 June 2020
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and
excludes directorships of all other types of entities, unless otherwise stated.
Company secretary
Mr Karl Pechmann was appointed as company secretary on 31 March 2020. Mr Tom Milicevic resigned on 27 September
2019 and Mr Nicholas Falzon, a director at PKF Chartered Accountants, was company secretary from 27 September 2019
to 31 March 2020.
Mr Pechmann was CFO and Company Secretary of a regulatory technology company, Kyckr Limited (ASX: KYK). His
previous roles include Finance Director with ASX listed biotech company, Immutep Limited (ASX: IMM) and has held
senior finance roles at both ASX-listed and multinational organisations.
Principal activities
The principal activities of the Group during the financial year focused on the development and commercialisation of its lead
product candidate, the OncoSil™ localised radiation therapy for the treatment of pancreatic and bile duct cancer.
Dividends
There were no dividends paid, recommended or declared during the current or previous financial year.
Review of operations
The loss for the Group after providing for income tax amounted to $4,261,895 (30 June 2019: $8,566,731).
OncoSil Medical Ltd is an Australian-based and ASX listed medical device company focused on localised treatments for
patients with pancreatic and bile duct cancer. The Group’s lead product, OncoSilTM, is a first in class medical device
comprising microparticles containing Phosphorus-32 (P-32), a pure beta-emitter radioisotope, implanted directly into a
patient’s pancreatic tumours via an endoscopic ultrasound. This treatment, known as brachytherapy, is intended to deliver
more concentrated and localised radiation.
Over the past twelve months, the Group’s focus has been to commercialise the OncoSilTM device and advance its global
pancreatic clinical study, PanCO. OncoSil Medical made significant progress in commercialising the OncoSilTM device. The
progress was marked by several key milestones including the granting of the CE Mark, the first regulatory approval of its
type for the device. The Company is also working with the FDA to design clinical trials to follow its breakthrough device
designation received in March 2020. In addition to this, there have been numerous other milestones achieved over the past
year that has enabled the Company to drive commercialisation efforts globally.
Europe
During 2020, the Group’s key priority was to continue progressing the CE Mark application towards a positive regulatory
outcome. In April 2020, the Group successfully achieved CE Marking for the treatment of locally advanced pancreatic
cancer (LAPC) in combination with chemotherapy from the British Standards Institute (BSI). The approval was a significant
step for the Group and means OncoSil is now able to sell and market the OncoSilTM device across the United Kingdom and
European Union.
While COVID-19 has delayed a full commercial launch due to limited hospital access causing disruptions in training and
site initiation, the Company has continued to progress many of the necessary launch preparation activities. As part of our
European rollout strategy, the Company has made key appointments which include former Sirtex Group Chief Commercial
Officer, Nigel Lange, as its EMEA president. These appointments will help the Company establish its presence in the
European market, aided by Nigel’s network of connections and extensive experience in the region.
Asia
Outside of Europe, the Group was quick to leverage the CE Marking approvals, focusing attention on gaining regulatory
approvals in jurisdictions that recognise the CE Marking certification. Since April 2020, we have filed for regulatory
approvals in New Zealand, Singapore, Malaysia, Hong Kong and Australia, and to date have received regulatory approvals
in New Zealand and Singapore.
16
4
OncoSil Annual Report 2020
OncoSil Medical Ltd
Directors' report
30 June 2020
United States
In October 2019, we announced our intention to explore additional US regulatory pathways for our device outside of LAPC
treatment. As a result of these efforts, the Company has added the treatment of distal cholangiocarcinoma (otherwise
known as bile duct cancer) to its near-term priorities. Over the past year, the Company has made significant progress with
respect to both pathways. In terms of bile duct cancer, the Company submitted the Humanitarian Device Exemption (HDE)
in July 2020. The HDE submission is required as part of the process under the Humanitarian Use Designation (HUD)
program, which was granted to the Company in July 2019. In terms of LAPC, the Company is working with the FDA to
design clinical trials following its breakthrough device designation in March 2020. The breakthrough designation is
significant as it helps to expedite the development and approval of the device and provides further validation of the
OncoSilTM device.
Financial Position
As at 30 June 2020, OncoSil had a cash balance of A$21 million supported by its A$19 million capital raising comprised of
an oversubscribed institutional placement and an underwritten entitlement offer. The funds from the capital raising enables
OncoSil to pursue its commercialisation plans across Europe, UK, ASEAN and APAC for LAPC and in US for bile duct
cancer.
AASB 16 'Leases' had no significant impact on the current period. The current loss before income tax expense was
increased by $1,588. This included an increased depreciation expense of $122,684 and increased finance costs of
$10,224, offset by a reduction in occupancy expenses (reclassification of lease expenses) of $131,320. As at 30 June
2020, net current assets were reduced by $83,377 (attributable to current lease liabilities) and net assets were reduced by
$1,588 (attributable to right-of-use assets and lease liabilities).
The impact of the COVID-19 pandemic up to the year ended 30 June 2020 has not been material to the Group. The
pandemic has resulted in a delay of full commercial launch which is expected to occur during the financial year ending 30
June 2021. It is not practicable to estimate the potential impact, positive or negative, after the reporting date.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the Group during the financial year.
Matters subsequent to the end of the financial year
The impact of the COVID-19 pandemic is ongoing and while it has not materially impacted the Group up to 30 June 2020, it
is not practicable to estimate the potential impact, positive or negative, after the reporting date. The situation is rapidly
developing and is dependent on measure imposed by the Australian Government and other countries, such as maintaining
social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
No other matter or circumstance has arisen since 30 June 2020 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.
Likely developments and expected results of operations
In April 2020, the Company received the CE Marking approval for the sale of the OncoSil device in the United Kingdom
and the European Union. The Company is currently progressing its manufacturing capabilities, supply chain and sales and
marketing infrastructure in order to achieve first commercial sales in the United Kingdom and the European Union, as well
as seeking to obtain marketing approval in markets which recognise the CE Mark. The CE Marking approval requires the
Company to conduct a post marketing surveillance program, or which the nature and costs associated are yet to be
determined. The Global Pivotal OncPac-1 Clinical Study will be undertaken, aimed at supporting a Pre Marketing
application in the United States in future years. There can be no guarantees that in the future we will achieve these
regulatory approvals, or on the basis sought by the Company, and there are no guarantees of the rate of enrolment of the
OncPac-1 Clinical Study or the outcome of clinical results.
Environmental regulation
The Group is not subject to any significant environmental regulation under Australian Commonwealth or State law.
5
17
Directors’ Report cont.
OncoSil Medical Ltd
Directors' report
30 June 2020
Meetings of directors
The number of meetings of the Company's Board of Directors ('the Board') and of each Board committee held during the
year ended 30 June 2020, and the number of meetings attended by each director were:
Full Board
Nomination and
Remuneration Committee
Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
Dr Chris Roberts AO
Mr Daniel Kenny
Dr Roger Aston
Dr Martin Cross
Mr Michael Bassett
10
10
10
10
10
10
10
10
10
10
1
1
1
1
-
1
1
1
1
-
2
2
2
2
-
2
2
2
2
-
Held: represents the number of meetings held during the time the director held office or was a member of the relevant
committee.
Remuneration report (audited)
The remuneration report, which has been audited, details the key management personnel ('KMP') remuneration
arrangements for the Group, in accordance with the requirements of the Corporations Act 2001 and its Regulations.
KMP are those persons having authority and responsibility for planning, directing and controlling the activities of the entity,
directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
●
●
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service agreements
Share-based compensation
Additional information
Additional disclosures relating to KMP
Principles used to determine the nature and amount of remuneration
The objective of the Group's executive reward framework is to ensure the remuneration package properly reflects each
person's duties and responsibilities and that remuneration is competitive in attracting, retaining and motivating people of
the highest quality. The framework aligns executive reward with the achievement of strategic objectives and the creation of
value for shareholders, and it is considered to conform to the market best practice for the delivery of reward. The Board of
Directors ('the Board') ensures that executive reward satisfies the following key criteria for good reward governance
practices:
●
●
●
●
competitiveness and reasonableness;
acceptability to shareholders;
performance linkage / alignment of executive compensation; and
transparency.
The Nomination and Remuneration Committee ('NRC') is responsible for determining and reviewing remuneration
arrangements for its directors and executives. The performance of the Group depends on the quality of its directors and
executives. The remuneration philosophy is to attract, motivate and retain high performance and high quality personnel.
The NRC has structured an executive remuneration framework that is market competitive and complementary to the
reward strategy of the Group.
The Board has considered that the reward framework is designed to align to shareholders' interests by:
●
●
having economic profit as a core component of plan design;
focusing on sustained growth in shareholder wealth, consisting of dividends and growth in share price, and delivering
constant or increasing return on assets as well as focusing the executive on key non-financial drivers of value; and
attracting and retaining high calibre executives.
●
18
6
OncoSil Annual Report 2020
OncoSil Medical Ltd
Directors' report
30 June 2020
Additionally, the reward framework should seek to enhance executives' interests by:
●
rewarding executives for Group and individual performance against targets set by reference to appropriate
benchmarks;
aligning the interests of executives with those of shareholders;
linking reward with the strategic goals and performance of the Group; and
ensuring total remuneration is competitive by market standards.
●
●
●
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Non-executive directors' remuneration
Fees and payments to non-executive directors reflect the demands and responsibilities of their role. Non-executive
directors' fees and payments are reviewed annually by the NRC. The NRC may, from time to time, receive advice from
independent remuneration consultants to ensure non-executive directors' fees and payments are appropriate and in line
with the market. The chairman's fees are determined independently to the fees of other non-executive directors based on
comparative roles in the external market. The chairman is not present at any discussions relating to the determination of
his own remuneration.
Non-executive directors are also entitled to government statutory superannuation guarantee contribution. They may also
be granted shares, aligning their interests with those of the shareholders.
ASX listing rules require the aggregate non-executive directors' remuneration be determined periodically by a general
meeting. The most recent determination was at the Annual General Meeting held on 26 November 2015, where the
shareholders approved a maximum annual aggregate director's fees payable to non-executive directors of $500,000.
Executive remuneration
The Group aims to reward executives based on their position and responsibility, with a level and mix of remuneration which
has both fixed and variable components.
The executive remuneration and reward framework has four components:
●
●
●
●
base pay and non-monetary benefits;
short-term performance incentives;
share-based payments; and
other remuneration such as superannuation and long service leave.
The combination of these comprises the executive's total remuneration.
Structure
Executive directors are contracted to the Group either on a consultancy basis with remuneration and terms stipulated in
individual consultancy arrangements or pursuant to an employment contract with remuneration and terms stipulated in
individual employment agreements.
Fixed remuneration, consisting of base salary, superannuation and non-monetary benefits, are reviewed annually by the
NRC based on individual and business unit performance, the overall performance of the Group and comparable market
remuneration.
Executives are given the opportunity to receive their base emolument in a variety of forms including cash and fringe
benefits such as motor vehicles and expense payment plans. It is intended that the manner of payment chosen will be
optimal for the recipient without creating undue cost for the Group.
The short-term incentives ('STI') program is designed to align the targets of the business units with the performance hurdle
of executives. STI payments are granted to executives based on specific annual targets and key performance indicators
('KPI's') being achieved. In particular, all executive directors and other KMP may be entitled to annual bonuses payable
upon the achievement of annual corporate or profitability measures. The Group seeks to emphasise payment for results
through providing various cash bonus reward schemes, specifically the incorporation of incentive payments based on
achievement of approved targets.
7
19
Directors’ Report cont.
OncoSil Medical Ltd
Directors' report
30 June 2020
The long-term incentives (‘LTI’) include long service leave and share-based payments. Limited recourse loans are awarded
to executives in order for the executive to subscribe for ordinary shares in the Company under the OncoSil Employee
Share Plan. These performance dependent loan shares will vest upon achieving of long-term KPI's as agreed with the
executive, measured over terms varying from three to five years. These KPI's include, but are not limited to, an increase in
shareholders’ value, revenue targets or meeting regulatory and clinical measures. The NRC reviewed the long-term equity-
linked performance incentives specifically for executives during the year ended 30 June 2020.
Group performance and link to remuneration
Remuneration for certain individuals is directly linked to the performance of the Group. A portion of cash bonus and
incentive payments are dependent on defined earnings per share targets being met. The remaining portion of the cash
bonus and incentive payments are at the discretion of the NRC. Refer to the section 'Additional information' below for
details of the earnings and total shareholders return for the last five years.
Use of remuneration consultants
The Group did not engage the use of a remuneration consultant during the financial year ended 30 June 2020.
Voting and comments made at the Company's 2019 Annual General Meeting ('AGM')
At the 2019 AGM, 92% of the votes received supported the adoption of the remuneration report for the year ended 30 June
2019. The Company did not receive any specific feedback at the AGM regarding its remuneration practices.
Details of remuneration
Amounts of remuneration
The KMP of the Group consisted of the directors of OncoSil Medical Ltd and the following persons:
●
●
Mr Karl Pechmann - Chief Financial Officer and Company Secretary (appointed on 31 March 2020)
Mr Tom Milicevic - Chief Financial Officer and Company Secretary (resigned on 27 September 2019)
20
8
OncoSil Annual Report 2020
OncoSil Medical Ltd
Directors' report
30 June 2020
Details of the remuneration of KMP of the Group are set out in the following tables.
Short-term benefits
Post-
employment
benefits
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long-term
benefits
Long
service
leave
$
Share-based payments
Equity-
settled
options
$
Equity-
settled
shares
$
Total
$
2020
Non-Executive
Directors:
Dr Chris Roberts
AO (chairman) *
Dr Roger Aston
Dr Martin Cross
Mr Michael
Bassett *
80,000
73,059
73,059
80,000
-
-
-
-
-
-
-
-
-
6,941
6,941
-
Executive
Directors:
Mr Daniel Kenny
492,404
156,800
-
31,920
Other KMP:
Mr Karl
Pechmann
Mr Tom Milicevic
71,970
169,857
1,040,349
12,500
-
169,300
-
-
-
8,025
9,278
63,105
-
-
-
-
-
-
-
-
-
-
-
-
(653,063)
(21,075)
-
(573,063)
58,925
80,000
-
80,000
-
(954,705)
(273,581)
-
-
(233,400)
-
- (1,862,243)
92,495
(54,265)
(589,489)
*
The remuneration payments to Dr Chris Roberts and Mr Michael Bassett were made to their director-related entities,
Robertsplan Pty Ltd and Market Connect Australia Pty Ltd, respectively.
During the year 2,139,524 performance dependent loan shares were granted to non-KMP under the Group’s Employee
Share Plan. A review of all existing outstanding shares granted to KMP and employees was undertaken to determine the
probability of achieving certain non-market based performance conditions. A reduction in the probability of achieving these
performance conditions has resulted in a reversal of cumulate share-based payment expenses in the amount of
$1,948,279 during the current year for KMP. Share-based payments expenses relating to market-linked performance
conditions for KMP was $86,035 during the current year.
9
21
Directors’ Report cont.
OncoSil Medical Ltd
Directors' report
30 June 2020
2019
Non-Executive
Directors:
Dr Chris Roberts
AO (chairman) *
Dr Roger Aston
Dr Martin Cross
Mr Michael
Bassett **
80,000
73,059
73,059
44,822
Executive
Directors:
Mr Daniel Kenny
473,939
Other KMP:
Mr Tom
Milicevic
279,771
1,024,650
Short-term benefits
Post-
employment
benefits
Cash salary
and fees
$
Cash
bonus
$
Non-
Super-
monetary annuation
$
$
Long-term
benefits
Long
service
leave
$
Share-based payments
Equity-
settled
options
$
Equity-
settled
shares
$
Total
$
-
-
-
-
-
-
-
-
-
-
-
-
6,941
6,941
-
-
25,365
-
-
24,983
64,230
-
-
-
-
-
-
-
-
-
-
-
208,000
6,977
-
288,000
86,977
80,000
-
44,822
-
383,487
882,791
-
-
112,455
417,209
710,919 1,799,799
*
**
The remuneration payments to Dr Chris Roberts were made to his director-related entity, Robertsplan Pty Ltd.
Represents remuneration for the period from date of appointment 10 December 2018 to 30 June 2019. The
remuneration payments to Michael Bassett were made to his director-related entity, Market Connect Australia Pty Ltd.
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
Non-Executive Directors:
Dr Chris Roberts AO *
Dr Roger Aston *
Dr Martin Cross
Mr Michael Bassett
Executive Directors:
Mr Daniel Kenny *
Other KMP:
Mr Karl Pechmann
Mr Tom Milicevic
Fixed remuneration
2019
2020
At risk - STI
At risk - LTI
2020
2019
2020
2019
100%
100%
100%
100%
28%
92%
100%
100%
-
-
-
-
77%
56%
23%
86%
-
-
72%
14%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
72%
8%
-
-
44%
-
28%
*
During the year, the probability of achieving certain non-market conditions was revised and as a result the relevant
share-based payment of the KMP was reversed. Consequently, the proportion of the at risk LTI portion of
remuneration in the year ended 30 June 2020 has been reduced to Nil in the above table.
22
10
OncoSil Annual Report 2020
OncoSil Medical Ltd
Directors' report
30 June 2020
The proportion of the cash bonus paid/payable or forfeited is as follows:
Name
Executive Directors:
Mr Daniel Kenny
Other KMP:
Mr Karl Pechmann
Mr Tom Milicevic
Cash bonus paid/payable
2020
2019
Cash bonus forfeited
2019
2020
70%
100%
-
-
-
-
30%
100%
-
-
-
100%
Service agreements
Remuneration and other terms of employment for KMP are formalised in service agreements. Details of these agreements
are as follows:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Name:
Title:
Agreement commenced:
Term of agreement:
Details:
Daniel Kenny
Chief Executive Officer and Managing Director
5 January 2015
No fixed term
Base salary for the year ending 30 June 2020 of $448,000 plus superannuation, to be
reviewed annually by the NRC, six months termination notice by either party, cash
bonus up to 50% of salary subject to achievement of KPI's as set by the Board. There
is a restraint period of six months ending on the date of termination of employment.
He is eligible to participate in the long term incentive plan as approved by
shareholders.
Karl Pechmann
Chief Financial Officer and Company Secretary
31 March 2020
No fixed term
Base salary for the year ended 30 June 2020 of $250,000 plus superannuation, to be
reviewed annually by the NRC, three months termination notice by either party, cash
bonus up to 25% of salary subject to achievement of KPIs as set by the Board. There
is a restraint period of six months ending on the date of termination of employment.
He is eligible to participate in the long term incentive plan as approved by
shareholders.
KMP have no entitlement to termination payments in the event of removal for misconduct.
Share-based compensation
Issue of shares
There were no shares issued to directors and other KMP as part of compensation during the year ended 30 June 2020
other than those issued under the Employee Share Plan below.
Employee Share Plan ('ESP')
Certain employees have been issued limited recourse loans to acquire shares in the Company. In accordance with the
Accounting Standards, these performance dependent loan shares are accounted for in a similar manner as options.
Terms and conditions of share based payment arrangements affecting the remuneration of KMP in the current financial
year:
Name
Number of
shares
granted
Grant date
Expiry date
Exercise
price
Fair value
per share
at grant date
Dr Chris Roberts AO
10,000,000 10/05/2016
10/05/2021
$0.22
$0.104
Mr Daniel Kenny
14,000,000
10/05/2016
3,300,000 31/10/2018
10/05/2021
31/10/2021
$0.22
$0.18
$0.104
$0.078
11
23
Directors’ Report cont.
OncoSil Medical Ltd
Directors' report
30 June 2020
The shares cannot be traded by the holder until their related loan has been settled and the shares released.
Other than the above, there were no options over ordinary shares granted to or vested in directors and other KMP as part
of compensation during the year ended 30 June 2020.
Additional information
The earnings of the Group for the five years to 30 June 2020 are summarised below:
2020
$
2019
$
2018
$
2017
$
2016
$
Revenue/income
Loss after income tax
2,958,779
(4,261,895)
3,845,045
(8,566,731)
4,549,584
(8,539,542)
3,755,765
(7,016,079)
4,141,691
(4,768,598)
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
Share price at financial year end ($)
Basic earnings per share (cents per share)
0.12
(0.65)
0.05
(1.36)
0.23
(1.66)
0.10
(1.49)
0.14
(1.23)
2020
2019
2018
2017
2016
Additional disclosures relating to KMP
Shareholding
The number of shares in the Company held during the financial year by each director and other members of KMP of the
Group including their personally related parties (including those held under an Employee Share Plan), is set out below:
Balance at Received
the start of
the year
as part of
remuneration Additions
Disposals/
other *
Balance at
the end of
the year
Ordinary shares
Dr Chris Roberts AO
Mr Daniel Kenny
Dr Roger Aston
Dr Martin Cross
Mr Michael Bassett
Mr Karl Pechmann
Mr Tom Milicevic **
11,125,000
23,341,667
12,516,547
1,880,000
1,023,000
-
5,746,667
55,632,881
-
-
-
-
-
-
-
-
1,556,819
11,111
1,137,869
847,273
93,000
165,455
-
3,811,527
- 12,681,819
(3,000,000) 20,352,778
(500,000) 13,154,416
-
2,727,273
-
1,116,000
-
165,455
-
(5,746,667)
(9,246,667) 50,197,741
*
**
other represents performance dependent loan shares forfeited under the Employee Share Plan
other represents shares held on date of resignation.
Loan shares holding
The number of performance dependent loan shares over ordinary shares in the Company held during the financial year by
each director and other members of KMP of the Group, is set out below:
Loan shares over ordinary shares **
Dr Chris Roberts AO
Mr Daniel Kenny
Dr Roger Aston
Mr Tom Milicevic *
Balance at
the start of
the year
Granted
Exercised
Forfeited
Balance at
the end of
the year
10,000,000
20,300,000
500,000
3,650,000
34,450,000
-
-
-
-
-
-
-
-
-
-
- 10,000,000
(3,000,000) 17,300,000
-
(500,000)
(3,650,000)
-
(7,150,000) 27,300,000
*
**
Performance dependent employee loan shares forfeited on resignation.
None of the performance dependent loan shares over ordinary shares have vested at the end of the year since the
related loans haven’t been repaid.
24
12
OncoSil Annual Report 2020
OncoSil Medical Ltd
Directors' report
30 June 2020
Other transactions with KMP and their related parties
Payment of Director's fees to Dr Chris Roberts AO, were made to his director-related entity, Robertsplan Pty Ltd during the
financial year of $80,000 (2019: $80,000).
Payment of Director's fees to Mr Michael Bassett, were made to his director-related entity, Market Connect Australia Pty
Ltd during the financial year of $80,000 (2019: $44,822).
This concludes the remuneration report, which has been audited.
Shares under option
There were no unissued ordinary shares of OncoSil Medical Ltd under option outstanding at the date of this report.
Shares issued on the exercise of options
There were no ordinary shares of OncoSil Medical Ltd issued on the exercise of options during the year ended 30 June
2020 and up to the date of this report.
Indemnity and insurance of officers
The Company has indemnified the directors and executives for costs incurred, in their capacity as a director or executive,
for which they may be held personally liable, except where there is a lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and executives of
the Company against a liability to the extent permitted by the Corporations Act 2001. The contract of insurance prohibits
disclosure of the nature of the liability and the amount of the premium.
Indemnity and insurance of auditor
The Company has not, during or since the end of 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
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring 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.
Non-audit services
There were no non-audit services provided during the financial year by the auditor.
Officers of the Company who are former partners of Crowe Sydney
There are no officers of the Company who are former partners of Crowe Sydney.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors' report.
Auditor
Crowe Sydney continues in office in accordance with section 327 of the Corporations Act 2001.
13
25
Directors’ Report cont.
OncoSil Medical Ltd
Directors' report
30 June 2020
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act
2001.
On behalf of the directors
___________________________
Dr Chris Roberts AO
Non-Executive Chairman
19 August 2020
Sydney
26
14
OncoSil Annual Report 2020
Auditor’s Independence Declaration
Crowe Sydney
ABN 97 895 683 573
Level 15 1 O’Connell Street
Sydney NSW 2000
Australia
Tel +61 2 9262 2155
Fax +61 2 9262 2190
www.crowe.com.au
19 August 2020
The Board of Directors
OncoSil Medical Ltd
Suite 402, Level 4
50 Berry Street
North Sydney NSW 2060
Dear Board Members
OncoSil Medical Ltd
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the Directors of OncoSil Medical Ltd.
As lead audit partner for the audit of the financial report of OncoSil Medical Ltd for the financial year
ended 30 June 2020, I declare that to the best of my knowledge and belief, that there have been no
contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii) any applicable code of professional conduct in relation to the audit.
Yours sincerely
Crowe Sydney
John Haydon
Senior Partner
The title ‘Partner’ conveys that the person is a senior member within their respective division, and is among the group of persons who hold an
equity interest (shareholder) in its parent entity, Findex Group Limited. The only professional service offering which is conducted by a partnership
is the Crowe Australasia external audit division. All other professional services offered by Findex Group Limited are conducted by a privately
owned organisation and/or its subsidiaries.
Findex (Aust) Pty Ltd, trading as Crowe Australasia is a member of Crowe Global, a Swiss verein. Each member firm of Crowe Global is a
separate and independent legal entity. Findex (Aust) Pty Ltd and its affiliates are not responsible or liable for any acts or omissions of Crowe
Global or any other member of Crowe Global. Crowe Global does not render any professional services and does not have an ownership or
partnership interest in Findex (Aust) Pty Ltd. Services are provided by Crowe Sydney, an affiliate of Findex (Aust) Pty Ltd. Liability limited by a
scheme approved under Professional Standards Legislation.
© 2020 Findex (Aust) Pty Ltd.
27
Statement of Profit or Loss
and Other Comprehensive Income
For the year ended 30 June 2020
OncoSil Medical Ltd
Statement of profit or loss and other comprehensive income
For the year ended 30 June 2020
Revenue
Other income
Interest revenue calculated using the effective interest method
Expenses
Employee benefits expense
Research and development expenses
Occupancy expenses
Consulting, finance and legal expenses
Share-based payments
Other administrative expenses
Finance costs
Loss before income tax expense
Income tax expense
Loss after income tax expense for the year attributable to the owners of
OncoSil Medical Ltd
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year attributable to the owners of OncoSil
Medical Ltd
Note
Consolidated
2020
$
2019
$
5
6
6
7
2,853,898
104,881
3,640,933
204,112
(3,539,643)
(3,726,272)
(77,992)
(1,782,490)
2,390,884
(474,076)
(11,085)
(4,002,787)
(5,576,351)
(174,292)
(1,212,226)
(1,133,097)
(313,023)
-
(4,261,895)
(8,566,731)
-
-
(4,261,895)
(8,566,731)
(1,132)
(45,934)
(1,132)
(45,934)
(4,263,027)
(8,612,665)
Cents
Cents
Basic earnings per share
Diluted earnings per share
26
26
(0.65)
(0.65)
(1.36)
(1.36)
The above statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
16
28
OncoSil Annual Report 2020
Statement of Financial Position
As at 30 June 2020
OncoSil Medical Ltd
Statement of financial position
As at 30 June 2020
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Other assets
Total current assets
Non-current assets
Plant and equipment
Right-of-use assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Employee benefits
Total current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Note
Consolidated
2020
$
2019
$
8
9
10
20,997,985
2,805,747
117,762
7,689,234
3,819,044
97,603
23,921,494 11,605,881
11
56,583
81,789
138,372
62,466
-
62,466
24,059,866 11,668,347
12
13
1,780,592
26,564
83,377
268,025
2,158,558
767,608
-
-
225,603
993,211
2,158,558
993,211
21,901,308 10,675,136
14
15
70,137,314 52,257,231
6,020,395
(47,602,490)
3,628,379
(51,864,385)
21,901,308 10,675,136
The above statement of financial position should be read in conjunction with the accompanying notes
17
29
Statement of Changes in Equity
For the year ended 30 June 2020
OncoSil Medical Ltd
Statement of changes in equity
For the year ended 30 June 2020
Consolidated
Balance at 1 July 2018
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
52,257,231
4,933,232
(39,035,759) 18,154,704
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Share-based payments (note 15)
-
-
-
-
(45,934)
(8,566,731)
-
(8,566,731)
(45,934)
(45,934)
(8,566,731)
(8,612,665)
-
1,133,097
-
1,133,097
Balance at 30 June 2019
52,257,231
6,020,395
(47,602,490) 10,675,136
Consolidated
Balance at 1 July 2019
Issued
capital
$
Reserves
$
Accumulated
losses
$
Total equity
$
52,257,231
6,020,395
(47,602,490) 10,675,136
Loss after income tax expense for the year
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
-
-
-
-
(1,132)
(4,261,895)
-
(4,261,895)
(1,132)
(1,132)
(4,261,895)
(4,263,027)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs (note 14)
Share-based payments (note 15)
17,880,083
-
-
(2,390,884)
- 17,880,083
(2,390,884)
-
Balance at 30 June 2020
70,137,314
3,628,379
(51,864,385) 21,901,308
The above statement of changes in equity should be read in conjunction with the accompanying notes
18
30
OncoSil Annual Report 2020
Statement of Cash Flows
For the year ended 30 June 2020
OncoSil Medical Ltd
Statement of cash flows
For the year ended 30 June 2020
Cash flows from operating activities
Payments to suppliers and employees
Interest received
Interest and other finance costs paid
Research and development tax incentive
Government grants
Note
Consolidated
2020
$
2019
$
(8,357,796)
104,881
(11,085)
3,718,921
89,000
(11,991,410)
204,112
-
4,286,144
-
Net cash used in operating activities
24
(4,456,079)
(7,501,154)
Cash flows from investing activities
Payments for property, plant and equipment
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from borrowings
Share issue transaction costs
Repayment of lease liabilities
Net cash from financing activities
(20,721)
(14,828)
(20,721)
(14,828)
14
14
19,099,733
26,564
(1,219,650)
(121,096)
17,785,551
-
-
-
-
-
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
13,308,751
(7,515,982)
7,689,234 15,205,216
Cash and cash equivalents at the end of the financial year
8
20,997,985
7,689,234
The above statement of cash flows should be read in conjunction with the accompanying notes
19
31
Notes to the Financial Statements
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 1. General information
The financial statements cover OncoSil Medical Ltd as a Group consisting of OncoSil Medical Ltd (the 'Company' or 'parent
entity') and the entities it controlled at the end of, or during, the year (the 'Group'). The financial statements are presented
in Australian dollars, which is OncoSil Medical Ltd's functional and presentation currency.
OncoSil Medical Ltd is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered
office and principal place of business is:
Suite 402, Level 4
50 Berry Street
North Sydney NSW 2060
A description of the nature of the Group's operations and its principal activities are included in the directors' report, which is
not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 19 August 2020. The
directors have the power to amend and reissue the financial statements.
Note 2. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective
notes or below. These policies have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
The following Accounting Standards and Interpretations are most relevant to the Group:
AASB 16 Leases
The Group has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and for lessees eliminates
the classifications of operating leases and finance leases. Except for short-term leases and leases of low-value assets,
right-of-use assets and corresponding lease liabilities are recognised in the statement of financial position. Straight-line
operating lease expense recognition is replaced with a depreciation charge for the right-of-use assets (included in
operating costs) and an interest expense on the recognised lease liabilities (included in finance costs). In the earlier
periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease
expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results
improve as the operating expense is now replaced by interest expense and depreciation in profit or loss. For classification
within the statement of cash flows, the interest portion is disclosed in operating activities and the principal portion of the
lease payments are separately disclosed in financing activities. For lessor accounting, the standard does not substantially
change how a lessor accounts for leases.
Impact of adoption
AASB 16 was adopted using the modified retrospective approach and as such the comparatives have not been restated.
The impact of adoption on opening accumulated losses as at 1 July 2019 was nil as follows:
32
20
OncoSil Annual Report 2020
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Operating lease commitments as at 1 July 2019 (AASB 117)
Operating lease commitments discount based on the weighted average incremental borrowing rate of 5%
(AASB 16)
Right-of-use assets (AASB 16)
Lease liabilities - current (AASB 16)
Lease liabilities - non-current (AASB 16)
Reduction in opening accumulated losses as at 1 July 2019
1 July 2019
$
218,865
(14,392)
204,473
(125,066)
(79,407)
(204,473)
-
Practical expedients applied
In adopting AASB 16, the Group has used the following practical expedients permitted by the standard:
●
accounted for operating leases with a remaining lease term of less than 12 months as at 1 July 2019 as short-term
leases;
excluded initial direct costs for the measurement of the right-of-use asset at the date of initial application; and
used hindsight in determining the lease term where the contract contains options to extend or terminate the lease.
●
●
Interpretation 23 Uncertainty over Income Tax
The Group has adopted Interpretation 23 from 1 July 2019. The interpretation clarifies how to apply the recognition and
measurement requirements of AASB 112 ‘Income Taxes’ in circumstances where uncertain tax treatments exists. The
interpretation requires: the Group to determine whether each uncertain tax treatment should be treated separately or
together, based on which approach better predicts the resolution of the uncertainty; the Group to consider whether it is
probable that a taxation authority will accept an uncertain tax treatment; and if the Group concludes that it is not probable
that the taxation authority will accept an uncertain tax treatment, it shall reflect the effect of uncertainty in determining the
related taxable profit (tax loss), tax bases, unused tax losses, unused tax credits or tax rates, measuring the tax uncertainty
based on either the most likely amount or the expected value. In making the assessment it is assumed that a taxation
authority will examine amounts it has a right to examine and have full knowledge of all related information when making
those examinations. Interpretation 23 was adopted using the modified retrospective approach and as such comparatives
have not been restated. There was no impact of adoption on opening retained profits as at 1 July 2019.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as
appropriate for for-profit oriented entities. These financial statements also comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also requires
management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a
higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial
statements, are disclosed in note 3.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the Group only.
Supplementary information about the parent entity is disclosed in note 22.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of OncoSil Medical Ltd as at
30 June 2020 and the results of all subsidiaries for the year then ended. OncoSil Medical Ltd and its subsidiaries together
are referred to in these financial statements as the 'Group'.
21
33
Notes to the Financial Statements cont.
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the Group 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 Group. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group are eliminated.
Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the Group.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity
attributable to the parent.
Where the Group loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and non-
controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The Group
recognises the fair value of the consideration received and the fair value of any investment retained together with any gain
or loss in profit or loss.
Foreign currency translation
The financial statements are presented in Australian dollars, which is OncoSil Medical Ltd's functional and presentation
currency.
Foreign currency transactions
Foreign currency transactions are translated into the entity’s functional currency using the exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation at financial year-end exchange rates of monetary assets and liabilities denominated in foreign currencies
are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange rates at the
reporting date. The revenues and expenses of foreign operations are translated into Australian dollars using the average
exchange rates, which approximate the rates at the dates of the transactions, for the period. All resulting foreign exchange
differences are recognised in other comprehensive income through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is disposed of.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
Group's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12 months
after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used to settle
a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the Group's normal operating cycle; it is held
primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
34
22
OncoSil Annual Report 2020
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Plant and equipment
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant and equipment
over their expected useful lives as follows:
Office equipment 3-15 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting
date.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
Group. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Research and development costs
Research costs are expensed in the period in which they are incurred. Development costs are capitalised when it is
probable that the project will be a success considering its commercial and technical feasibility; the Group is able to use or
sell the asset; the Group has sufficient resources and intent to complete the development and its costs can be measured
reliably.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction costs. They
are subsequently measured at amortised cost using the effective interest method.
The borrowings the Group has as at 30 June 2020 corresponds to loans for insurance premium funding arrangements.
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs are expensed in
the period in which they are incurred.
Employee benefits
Short-term employee benefits
Liabilities for wages and salaries and other employee benefits expected to be settled wholly within 12 months of the
reporting date are measured at the amounts expected to be paid when the liabilities are settled.
Long-term employee benefits
Employee benefits not expected to be settled within 12 months of the reporting date are measured as the present value of
expected future payments to be made in respect of services provided by employees up to the reporting date. 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 reporting date on high quality corporate bonds with terms to
maturity and currency that match, as closely as possible, the estimated future cash outflows.
Defined contribution superannuation expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are incurred.
Goods and Services Tax ('GST') and other similar taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not
recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of the asset or as part
of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST
recoverable from, or payable to, the tax authority is included in other receivables or other payables in the statement of
financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the tax authority, are presented as operating cash flows.
23
35
Notes to the Financial Statements cont.
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 2. Significant accounting policies (continued)
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or amended but are not yet
mandatory, have not been early adopted by the Group for the annual reporting period ended 30 June 2020. The Group's
assessment of the impact of these new or amended Accounting Standards and Interpretations, most relevant to the Group,
are set out below.
Conceptual Framework for Financial Reporting (Conceptual Framework)
The revised Conceptual Framework is applicable to annual reporting periods beginning on or after 1 January 2020 and
early adoption is permitted. The Conceptual Framework contains new definition and recognition criteria as well as new
guidance on measurement that affects several Accounting Standards. Where the Group has relied on the existing
framework in determining its accounting policies for transactions, events or conditions that are not otherwise dealt with
under the Australian Accounting Standards, the Group may need to review such policies under the revised framework. At
this time, the application of the Conceptual Framework is not expected to have a material impact on the Group's financial
statements.
Note 3. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and assumptions that
affect the reported amounts in the financial statements. Management continually evaluates its judgements and estimates in
relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements, estimates
and assumptions on historical experience and on other various factors, including expectations of future events,
management believes to be reasonable under the circumstances. The resulting accounting judgements and estimates will
seldom equal the related actual results. The judgements, estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within the next
financial year are discussed below.
COVID-19
Judgement has been exercised in considering the impacts that COVID-19 has had, or may have, on the Group based on
known information. This consideration extends to the nature of the products and services offered, customers, supply chain,
staffing and geographic regions in which the Group operates. Whilst the impact of COVID-19 has not materially impacted
the Group up to 30 June 2020, it is not practicable to estimate the potential impact, positive or negative, after the reporting
date.
Share-based payment transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by using the Black-Scholes model taking
into account the terms and conditions upon which the instruments were granted. The accounting estimates and
assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and
liabilities within the next annual reporting period but may impact profit or loss and equity.
Research and development tax incentive
The Group measures the research and development tax incentive ('RDTI') based on the preparation of the income tax
return for the year therefore assumptions and judgement are involved to determine whether some costs are appropriated to
RDTI.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences only if the Group considers it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
36
24
OncoSil Annual Report 2020
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 3. Critical accounting judgements, estimates and assumptions (continued)
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease liability. Judgement
is exercised in determining whether there is reasonable certainty that an option to extend the lease or purchase the
underlying asset will be exercised, or an option to terminate the lease will not be exercised, when ascertaining the periods
to be included in the lease term. In determining the lease term, all facts and circumstances that create an economical
incentive to exercise an extension option, or not to exercise a termination option, are considered at the lease
commencement date. Factors considered may include the importance of the asset to the Group's operations; comparison
of terms and conditions to prevailing market rates; incurrence of significant penalties; existence of significant leasehold
improvements; and the costs and disruption to replace the asset. The Group reassesses whether it is reasonably certain to
exercise an extension option, or not exercise a termination option, if there is a significant event or significant change in
circumstances.
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is estimated to
discount future lease payments to measure the present value of the lease liability at the lease commencement date. Such
a rate is based on what the Group estimates it would have to pay a third party to borrow the funds necessary to obtain an
asset of a similar value to the right-of-use asset, with similar terms, security and economic environment.
Note 4. Operating segments
Identification of reportable operating segments
The Group operates in one segment being the device development for new medical treatments. This is based on the
internal reports that are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision
Makers ('CODM')) in assessing performance and in determining the allocation of resources. There is no aggregation of
operating segments.
The information reported to the CODM is on at least a monthly basis. The financial information presented in these financial
statements are the same as that presented to the CODM.
Note 5. Other income
Government grants *
Research and development tax incentive
Net gain/(loss) on foreign exchange
Other income
Other income
Consolidated
2020
$
2019
$
89,000
2,763,475
1,092
331
-
3,626,082
14,851
-
2,853,898
3,640,933
* During the year the Company received payments from the Australian Government amounting to $50,000 and $39,000 as
part of its ‘Boosting Cash Flow for Employers’ and 'JobKeeper' schemes, respectively, in response to COVID-19. These
non-tax amounts have been recognised as government grants and recognised as income once there is reasonable
assurance that the Company will comply with any conditions attached.
Accounting policy for revenue recognition
Revenue is recognised when it is probable that the economic benefit will flow to the Group and the revenue can be reliably
measured. Revenue is measured at the fair value of the consideration received or receivable.
25
37
Notes to the Financial Statements cont.
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 5. Other income (continued)
Research and development tax incentive
The research and development tax incentive ('RDTI') represents a refundable tax offset that is available on eligible
research and development expenditure incurred by the Group. The RDTI is considered to be a form of government
assistance and the accounting policy adopted is analogous to accounting for government grants.
RDTI are recognised at their fair value where there is a reasonable assurance that the incentive will be received and the
Group will comply with all attached conditions.
RDTI relating to expenses are recognised as incurred at the point of time in profit or loss.
Dividends
Dividend revenue is recognised when it is received or when the right to receive payment is established.
Other income
Other income is recognised when it is received or when the right to receive payment is established.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of calculating the
amortised cost of a financial asset and allocating the interest income over the relevant period using the effective interest
rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset
to the net carrying amount of the financial asset.
Note 6. Expenses
Consolidated
2020
$
2019
$
26,604
122,684
38,617
-
149,288
38,617
3,361,082
178,561
3,804,313
198,474
3,539,643
4,002,787
861
10,224
11,085
-
-
-
-
131,319
163,052
-
131,319
163,052
Loss before income tax includes the following specific expenses:
Depreciation
Office equipment
Buildings right-of-use assets
Total depreciation
Employee benefits (excluding share-based payments)
Employee benefits
Defined contribution superannuation expense
Total employee benefits expense
Finance costs
Interest and finance charges paid/payable on borrowings
Interest and finance charges paid/payable on lease liabilities
Finance costs expensed
Leases
Minimum lease payments
Short-term lease payments
38
26
OncoSil Annual Report 2020
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 7. Income tax
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 27.5%
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Research and development - write back
Share-based payments
Others
Future income tax benefit not brought to account
Income tax expense
Consolidated
2020
$
2019
$
(4,261,895)
(8,566,731)
(1,172,021)
(2,355,851)
981,525
(657,493)
(33,292)
881,281
1,391,559
311,602
(97,242)
749,932
-
-
Consolidated
2020
$
2019
$
Tax losses not recognised
Unused tax losses for which no deferred tax asset has been recognised
Potential tax benefit @ 27.5%
12,422,257
9,651,356
3,416,121
2,654,123
The above potential tax benefit for tax losses has not been recognised in the statement of financial position. These tax
losses can only be utilised in the future if the continuity of ownership test is passed, or failing that, the same business test
is passed.
Accounting policy for income tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on the
applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and liabilities attributable to
temporary differences, unused tax losses and the adjustment recognised for prior periods, where applicable.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be applied when
the assets are recovered or liabilities are settled, based on those tax rates that are enacted or substantively enacted,
except for:
●
When the deferred income tax asset or liability arises from the initial recognition of goodwill or an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting
nor taxable profits; or
When the taxable temporary difference is associated with interests in subsidiaries, associates or joint ventures, and
the timing of the reversal can be controlled and it is probable that the temporary difference will not reverse in the
foreseeable future.
●
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that
future taxable amounts will be available to utilise those temporary differences and losses.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date. Deferred
tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits will be available for
the carrying amount to be recovered. Previously unrecognised deferred tax assets are recognised to the extent that it is
probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax assets
against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to the same taxable
authority on either the same taxable entity or different taxable entities which intend to settle simultaneously.
27
39
Notes to the Financial Statements cont.
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 8. Current assets - cash and cash equivalents
Cash at bank *
Cash on deposit
Consolidated
2020
$
2019
$
20,881,585
116,400
7,574,359
114,875
20,997,985
7,689,234
* The significant increase corresponds to the capital raising on 8 May 2020, where the net cash proceeds was
approximately $17,800,000. Refer to note 14 for further details.
Accounting policy for cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities between three and six months that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of changes in value.
Note 9. Current assets - trade and other receivables
Other receivables
Research and development tax incentive receivable
Consolidated
2020
$
2019
$
42,272
2,763,475
38,188
3,780,856
2,805,747
3,819,044
Accounting policy for trade and other receivables
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
Note 10. Current assets - other assets
Prepayments
Other deposits
Note 11. Non-current assets - right-of-use assets
Buildings - right-of-use
Less: Accumulated depreciation
Consolidated
2020
$
2019
$
48,548
69,214
28,389
69,214
117,762
97,603
Consolidated
2020
$
2019
$
204,473
(122,684)
81,789
-
-
-
The Group leases buildings for its offices under agreements of between 3 to 5 years with, in some cases, options to
extend. The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated.
40
28
OncoSil Annual Report 2020
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 11. Non-current assets - right-of-use assets (continued)
Accounting policy for right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured at cost, which
comprises the initial amount of the lease liability, adjusted for, as applicable, any lease payments made at or before the
commencement date net of any lease incentives received, any initial direct costs incurred, and, except where included in
the cost of inventories, an estimate of costs expected to be incurred for dismantling and removing the underlying asset,
and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the estimated useful
life of the asset, whichever is the shorter. Where the Group expects to obtain ownership of the leased asset at the end of
the lease term, the depreciation is over its estimated useful life. Right-of use assets are subject to impairment or adjusted
for any remeasurement of lease liabilities.
The Group has elected not to recognise a right-of-use asset and corresponding lease liability for short-term leases with
terms of 12 months or less and leases of low-value assets. Lease payments on these assets are expensed to profit or loss
as incurred.
Note 12. Current liabilities - trade and other payables
Trade payables
Payroll liabilities
Other payables
Consolidated
2020
$
2019
$
1,355,610
216,583
208,399
363,987
98,784
304,837
1,780,592
767,608
Refer to note 17 for further information on financial instruments.
Accounting policy for trade and other payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year and
which are unpaid. Due to their short-term nature they are measured at amortised cost and are not discounted. The
amounts are unsecured, non-interest bearing and are usually paid within 60 days of recognition.
Note 13. Current liabilities - lease liabilities
Lease liability
Refer to note 17 for information on the maturity analysis of lease liabilities.
Consolidated
2020
$
2019
$
83,377
-
Accounting policy for lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised at the present
value of the lease payments to be made over the term of the lease, discounted using the interest rate implicit in the lease
or, if that rate cannot be readily determined, the Group's incremental borrowing rate. Lease payments comprise of fixed
payments less any lease incentives receivable, variable lease payments that depend on an index or a rate, amounts
expected to be paid under residual value guarantees, exercise price of a purchase option when the exercise of the option
is reasonably certain to occur, and any anticipated termination penalties.
29
41
Notes to the Financial Statements cont.
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 13. Current liabilities - lease liabilities (continued)
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts are remeasured
if there is a change in the following: future lease payments arising from a change in an index or a rate used; residual
guarantee; lease term; certainty of a purchase option and termination penalties. When a lease liability is remeasured, an
adjustment is made to the corresponding right-of use asset, or to profit or loss if the carrying amount of the right-of-use
asset is fully written down.
Note 14. Equity - issued capital
Consolidated
2020
Shares
2019
Shares
2020
$
2019
$
Ordinary shares - fully paid
828,600,898 630,708,788 70,137,314 52,257,231
Movements in ordinary share capital
Details
Date
Shares
Issue price
$
Balance
Employee loan shares issued
1 July 2018
31 October 2018
624,158,788
6,550,000
52,257,231
-
$0.18
Balance
Loan funded employee options repaid
Employee loan shares issued
Forfeited employee loan shares
Placement issue of shares
Rights issue
Forfeited employee loan shares
Transaction costs
30 June 2019
3 December 2019
25 March 2020
27 March 2020
8 May 2020
28 May 2020
30 June 2020
630,708,788
-
2,139,524
(12,300,000)
155,137,076
56,415,510
(3,500,000)
-
52,257,231
60,000
$0.00
-
$0.10
$0.00
-
$0.09 13,962,337
5,077,396
$0.09
$0.00
-
$0.00
(1,219,650)
Balance
30 June 2020
828,600,898
70,137,314
Ordinary shares
Ordinary shares entitle the holder to participate in any dividends declared and any proceeds attributable to shareholders
should the company be wound up, in proportions that consider both the number of shares held and the extent to which
those shares are paid up. The fully paid ordinary shares have no par value and the Company does not have a limited
amount of authorised capital.
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
Share buy-back
There is no current on-market share buy-back.
Capital risk management
The Group's policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to
sustain future development of the business. Given the state of the Group's development there are no formal targets set for
return of capital.
Capital is regarded as total equity, as recognised in the statement of financial position, plus net debt. Net debt is calculated
as total borrowings less cash and cash equivalents.
The Group is not subject to any financing arrangements covenants or externally imposed capital requirements.
The capital risk management policy has not changed during the year.
42
30
OncoSil Annual Report 2020
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 14. Equity - issued capital (continued)
Accounting policy for issued capital
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, net of tax,
from the proceeds.
Note 15. Equity - reserves
Foreign currency reserve
Share-based payments reserve
Consolidated
2020
$
2019
$
(162,394)
3,790,773
(161,262)
6,181,657
3,628,379
6,020,395
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial statements of foreign
operations to Australian dollars. It is also used to recognise gains and losses on hedges of the net investments in foreign
operations.
Share-based payments reserve
The reserve is used to recognise the value of equity benefits provided to: employees and directors as part of their
remuneration under an Employee Share Plan; directors on terms determined by the Board and approved by shareholders;
and other parties as part of their compensation for services.
Movements in reserves
Movements in each class of reserve during the current and previous financial year are set out below:
Consolidated
Balance at 1 July 2018
Foreign currency translation
Share-based payments
Balance at 30 June 2019
Foreign currency translation
Share-based payments
Balance at 30 June 2020
Note 16. Equity - dividends
Foreign
currency
$
Share-based
payments
$
Total
$
(115,328)
(45,934)
-
5,048,560
-
1,133,097
4,933,232
(45,934)
1,133,097
(161,262)
(1,132)
-
6,181,657
-
(2,390,884)
6,020,395
(1,132)
(2,390,884)
(162,394)
3,790,773
3,628,379
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 17. Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and
interest rate risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the
unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the
Group. The Group uses different methods to measure different types of risk to which it is exposed. These methods include
sensitivity analysis in the case of interest rate and ageing analysis for credit risk.
31
43
Notes to the Financial Statements cont.
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 17. Financial instruments (continued)
Risk management is carried out by senior finance executives ('finance') under policies approved by the Board of Directors
('the Board'). These policies include identification and analysis of the risk exposure of the Group and appropriate
procedures, controls and risk limits. Finance identifies and evaluates financial risks within the Group's operating units.
Finance reports to the Board on a monthly basis.
Market risk
Foreign currency risk
The Group is not exposed to significant foreign currency risk.
Price risk
The Group is not exposed to any significant price risk.
Interest rate risk
The Group's main interest rate risk arises from cash at bank and short term deposits. The policy is to maintain a mix of
fixed and floating rate deposits.
The carrying value of the Group's cash and cash equivalents at the reporting date, subject to interest rate risk are detailed
in note 8. The effect a 100 (2019: 100) basis point interest rate change is detailed below. The method used to arrive at the
possible change in basis points was based on the analysis of the average change of the Reserve Bank of Australia ('RBA')
monthly issued cash rate over the past five years.
Consolidated - 2020
Basis points
change
profit before
tax
Effect on
equity
Basis points
change
profit before
tax
Effect on
equity
Basis points increase
Effect on
Basis points decrease
Effect on
Cash and cash equivalents
100
209,980
152,235
(100)
(209,980)
(152,235)
Consolidated - 2019
Basis points
change
profit before
tax
Effect on
equity
Basis points
change
profit before
tax
Effect on
equity
Basis points increase
Effect on
Basis points decrease
Effect on
Cash and cash equivalents
100
76,892
55,747
(100)
(76,892)
(55,747)
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. The Group has a strict code of credit, including obtaining agency credit information, confirming references and
setting appropriate credit limits. The Group obtains guarantees where appropriate to mitigate credit risk. The maximum
exposure to credit risk at the reporting date to recognised financial assets is the carrying amount, net of any provisions for
impairment of those assets, as disclosed in the statement of financial position and notes to the financial statements. The
Group does not hold any collateral.
The credit risk on liquid funds is limited because the counter party is a bank with high credit rating.
Liquidity risk
Vigilant liquidity risk management requires the Group to maintain sufficient liquid assets (mainly cash and cash
equivalents) to be able to pay debts as and when they become due and payable.
The Group manages liquidity risk by maintaining adequate cash reserves by continuously monitoring actual and forecast
cash flows and matching the maturity profiles of financial assets and liabilities.
The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of finance
leases and equity funding.
44
32
OncoSil Annual Report 2020
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 17. Financial instruments (continued)
Remaining contractual maturities
The following tables detail the Group's remaining contractual maturity for its financial instrument liabilities. The tables have
been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which the
financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Consolidated - 2020
Non-derivatives
Non-interest bearing
Trade payables
Payroll liabilities
Other payables
Interest-bearing - variable
Lease liability
Interest-bearing - fixed rate
Other loans
Total non-derivatives
Consolidated - 2019
Non-derivatives
Non-interest bearing
Trade payables
Payroll liabilities
Other payables
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
-
-
1,355,610
216,583
208,399
5.00%
83,377
11.62%
26,564
1,890,533
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,355,610
216,583
208,399
83,377
26,564
1,890,533
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
-
-
363,987
98,784
304,837
767,608
-
-
-
-
-
-
-
-
-
-
-
-
363,987
98,784
304,837
767,608
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value.
Note 18. Key management personnel disclosures
Compensation
The aggregate compensation made to directors and other members of KMP of the Group is set out below:
Short-term employee benefits
Post-employment benefits
Share-based payments
Consolidated
2020
$
2019
$
1,209,649
63,105
(1,862,243)
1,024,650
64,230
710,919
(589,489)
1,799,799
33
45
Notes to the Financial Statements cont.
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 19. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Crowe Sydney, the auditor of the
Company:
Audit services - Crowe Sydney
Audit or review of the financial statements
Note 20. Contingent liabilities
Consolidated
2020
$
2019
$
55,800
53,700
There has been no change in the status of contingent liabilities since 30 June 2019.
On 16 April 2013, OncoSil Medical Ltd settled the acquisition of OncoSil Medical (UK) Limited (formerly Enigma
Therapeutics Limited "OncoSil UK"). OncoSil UK holds a licence to commercialise OncoSil™ (formerly BrachySil™), a
targeted brachytherapy product for the treatment of cancer ('the Product') under a licence agreement from pSiMedica.
pSiMedica has granted to OncoSil UK an exclusive world-wide royalty-bearing license for the term of the pSiMedica
Transaction (with limited rights to sub-license) under the Licensed Patents solely to make, use, sell, offer to sell and import
the Product in the field of therapy in human neoplastic disease (cancer). Key terms of the license agreement have been
summarised below:
●
●
OncoSil UK is required to make a payment of up to US$100,000 to pSiMedica annually to support existing patents;
and
OncoSil UK is required to make the following payments for patents and subject to the Product completing positive
clinical trials and becoming registered for sale.
i) During the term of the licence, 8% of future net sales (future sales which cannot be guaranteed) of the Product or any
other product protected by the rights arising from the Assigned Patents (if sold by OncoSil UK or its affiliates) and
services performed using the Product or such other products, on a product-by-product and country-by-country basis.
Only half of this payment must be made whenever approved generic competitor products derived from the Product
maintain at least a 20% world-wide market share of sales, on a country-by-country and product-by-product basis.
ii) 20% of any form of consideration, payments, royalties, third party net sales income and other payments received from
third party licensing deals and various other agreements with third parties in relation to the Product or any other product
protected by the rights arising from the Assigned Patents, for the term of the pSiMedica licence, on a product-by-
product and country-by-country basis.
iii) Potential milestone payments based only upon the Product being a commercial success, which cannot be guaranteed
now or in the future (ranging from US$1,000,000 to US$5,000,000) upon:
- OncoSil UK, its affiliates and any of OncoSil UK's third party transferees together potentially achieving
US$5,000,000 aggregate net sales of the Product and any other product protected by the rights arising from the
Assigned Patents, for (i) an indication and (ii) a second indication;
- aggregate net sales of the Product and any other product protected by the rights arising from the Assigned Patents,
paid to OncoSil UK, its affiliates and third party transferees in a calendar year of US$20,000,000 or more; and
- aggregate net sales of the Product and any other product protected by the rights arising from the Assigned Patents,
paid to OncoSil UK, its affiliates and third party transferees in a calendar year of US$100,000,000 or more.
Termination of licence agreement
Unless terminated early for reasons such as a material breach, or by pSiMedica due to a patent challenge being brought
against pSiMedica in certain circumstances (including by OncoSil UK), the term of the licence for the Licensed Patents and
OncoSil UK's rights to exploit the product and any other products arising from the Assigned Patents, remain in effect on a
country-by-country and product-by-product basis, until the later to occur of:
46
34
OncoSil Annual Report 2020
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 20. Contingent liabilities (continued)
●
●
the date on which the product or any other product protected by the rights arising from the Assigned Patents in such
country is no longer covered or protected by a potential claim of the Licensed Patents or the Assigned Patents in such
country; and
ten years from the date of first commercial sale of a product or any other product protected by the rights arising from
the Assigned Patents in such country.
In addition, if OncoSil UK reasonably forms the view that it is not capable of commercialising OncoSil™, OncoSil UK shall
have the right to terminate the license agreement by giving 60 days prior written notice to pSiMedica.
The directors are not aware of any other commitments or contingencies as at 30 June 2020.
Note 21. Related party transactions
Parent entity
OncoSil Medical Ltd is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 23.
Key management personnel
Disclosures relating to key management personnel are set out in note 18 and the remuneration report included in the
directors' report.
Transactions with related parties
Payment of Director's fees to Dr Chris Roberts AO, were made to his director-related entity, Robertsplan Pty Ltd during the
financial year of $80,000 (2019: $80,000).
Payment of Director's fees to Mr Michael Bassett, were made to his director-related entity, Market Connect Australia Pty
Ltd during the financial year of $80,000 (2019: $44,822).
Receivable from and payable to related parties
There were no trade receivables from or trade payables to related parties at the current and previous reporting date.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 22. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Parent
2020
$
2019
$
(3,829,725)
(7,909,445)
(3,829,725)
(7,909,445)
35
47
Notes to the Financial Statements cont.
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 22. Parent entity information (continued)
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payments reserve
Accumulated losses
Total equity
Parent
2020
$
2019
$
26,316,323 13,552,451
26,454,695 13,614,917
2,152,608
972,307
2,152,608
972,307
70,137,314 52,257,231
6,181,656
(45,796,277)
3,790,773
(49,626,000)
24,302,087 12,642,610
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
The parent entity had no guarantees in relation to the debts of its subsidiaries as at 30 June 2020 and 30 June 2019.
Contingent liabilities
The parent entity had no contingent liabilities as at 30 June 2020 and 30 June 2019.
Capital commitments - Property, plant and equipment
The parent entity had no capital commitments for property, plant and equipment as at 30 June 2020 and 30 June 2019.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the Group, as disclosed in note 2, except for the
following:
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
Note 23. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in
accordance with the accounting policy described in note 2:
Name
OncoSil Medical UK Limited
OncoSil Medical Germany GmbH
OncoSil Medical US Inc.
OncoSil Medical NZ Limited
Principal place of business /
Country of incorporation
United Kingdom
Germany
United States
New Zealand
Ownership interest
2019
2020
%
%
100%
100%
100%
100%
100%
100%
100%
100%
48
36
OncoSil Annual Report 2020
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 24. Reconciliation of loss after income tax to net cash used in operating activities
Loss after income tax expense for the year
Adjustments for:
Depreciation and amortisation
Share-based payments
Foreign exchange differences
Change in operating assets and liabilities:
Decrease in other operating assets
Increase/(decrease) in trade and other payables
Increase in employee benefits
Net cash used in operating activities
Note 25. Changes in liabilities arising from financing activities
Consolidated
Balance at 1 July 2018
Balance at 30 June 2019
Net cash from/(used in) financing activities
Acquisition of buildings - right-of-use by means of leases
Balance at 30 June 2020
Note 26. Earnings per share
Consolidated
2020
$
2019
$
(4,261,895)
(8,566,731)
149,288
(2,390,884)
(1,132)
38,617
1,133,097
(45,934)
993,138
1,012,984
42,422
659,359
(816,440)
96,878
(4,456,079)
(7,501,154)
Loan for
insurance
premium
$
Lease
liability
$
Total
$
-
-
-
-
26,564
-
-
(121,096)
204,473
-
(94,532)
204,473
26,564
83,377
109,941
Consolidated
2020
$
2019
$
Loss after income tax attributable to the owners of OncoSil Medical Ltd
(4,261,895)
(8,566,731)
Weighted average number of ordinary shares used in calculating basic earnings per share
656,175,735 628,519,473
Weighted average number of ordinary shares used in calculating diluted earnings per share 656,175,735 628,519,473
Number
Number
Basic earnings per share
Diluted earnings per share
Cents
Cents
(0.65)
(0.65)
(1.36)
(1.36)
55,427,986 ESP have not been included in the diluted earnings per share calculation as they are anti-dilutive.
37
49
Notes to the Financial Statements cont.
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 26. Earnings per share (continued)
Accounting policy for earnings per share
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of OncoSil Medical Ltd, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
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.
Note 27. Share-based payments
The Group's Employee Share Plan (‘ESP’) is designed as an incentive for senior managers and above. Under the plan,
participants are granted performance dependent loan shares which only vest if certain performance standards are met.
The issue price is fully financed by a limited recourse loan provided by the Group. Dividends are for the benefit of the
employee. Employees are not permitted to deal in the shares until the limited recourse loan has been repaid. Performance
dependent loan shares issued under the ESP are accounted for in a similar manner as options. There are no cash
settlement alternatives.
The following performance dependent loan shares were on issue under the ESP at reporting date and held as security
against limited recourse loan arrangements:
2020
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Expired/
forfeited/
other *
Balance at
the end of
the year
Vested
30/10/2013
28/11/2014
28/11/2014
13/01/2016
10/05/2016
12/08/2016
11/12/2017
02/03/2018
02/03/2018
31/10/2018
31/10/2018
25/03/2020
25/03/2020
31/12/2019
31/12/2019
31/12/2019
13/01/2020
10/05/2021
30/06/2021
11/12/2020
02/03/2021
02/03/2021
31/10/2021
31/10/2021
25/03/2025
25/03/2025
5,000,000
$0.15
500,000
$0.18
3,000,000
$0.13
$0.13
8,500,000
$0.22 24,000,000
4,000,000
$0.22
769,231
$0.22
4,230,769
$0.22
1,000,000
$0.22
3,275,000
$0.18
3,275,000
$0.18
-
$0.10
-
$0.10
57,550,000
-
-
-
-
-
-
-
-
-
-
-
1,069,763
1,069,761
2,139,524
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(5,000,000)
(500,000)
(3,000,000)
(6,000,000)
-
-
-
2,500,000
- 24,000,000
4,000,000
-
769,231
-
4,230,769
-
1,000,000
-
2,625,000
(650,000)
2,625,000
(650,000)
1,069,763
-
1,069,761
-
(15,800,000) 43,889,524
Weighted average exercise price
$0.19
$0.10
$0.00
$0.14
$0.20
*
During the year 15,800,000 performance dependent loan shares were forfeited due to vesting conditions being met.
The vesting conditions for the performance dependent loan shares issued during the year on 25 March 2020 are as
follows;
●
●
The first tranche of 1,069,763 shares will vest automatically if and when OncoSil Total Shareholder Return (TSR)
achieves a compound annual growth rate (CAGR) of 10%, provided that the Participant has been continuously
employed with the Company at the time the CAGR achieves 10% - 5 year loan.
The second tranche of 1,069,761 shares will vest automatically if and when OncoSil Total Shareholder Return (TSR)
achieves a compound annual growth rate (CAGR) of 20%, provided that the Participant has been continuously
employed with the Company at the time the CAGR achieves 20% - 5 year loan.
50
38
OncoSil Annual Report 2020
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 27. Share-based payments (continued)
The following unvested performance dependent loan shares were on issue under the ESP as at 30 June 2019 and were
being held as security against limited recourse loan arrangements:
2019
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
30/10/2013
28/11/2014
28/11/2014
08/10/2015
13/01/2016
13/01/2016
13/01/2016
10/05/2016
12/08/2016
11/12/2017
02/03/2018
02/03/2018
31/10/2018
31/10/2018
31/12/2019
31/12/2019
31/12/2019
08/10/2018
13/01/2019
13/01/2019
13/01/2020
10/05/2021
30/06/2021
11/12/2020
02/03/2021
02/03/2021
31/10/2021
31/10/2021
5,000,000
$0.15
500,000
$0.18
3,000,000
$0.13
1,538,462
$0.13
769,231
$0.13
5,730,769
$0.13
$0.13
8,500,000
$0.22 24,000,000
4,000,000
$0.22
769,231
$0.22
4,230,769
$0.22
1,000,000
$0.22
-
$0.18
-
$0.18
59,038,462
-
-
-
-
-
-
-
-
-
-
-
-
3,275,000
3,275,000
6,550,000
Expired/
forfeited/
other
Balance at
the end of
the year
5,000,000
-
500,000
-
3,000,000
-
-
-
-
-
-
-
-
8,500,000
- 24,000,000
4,000,000
-
769,231
-
4,230,769
-
1,000,000
-
3,275,000
-
-
3,275,000
- 57,550,000
Vested*
-
-
-
(1,538,462)
(769,231)
(5,730,769)
-
-
-
-
-
-
-
-
(8,038,462)
Weighted average exercise price
$0.18
$0.18
$0.13
$0.00
$0.19
In relation to 6,550,000 performance dependent loan shares granted on 31 October 2018 the vesting conditions are as
follows;
●
The first tranche of 3,275,000 shares will vest automatically if and when OncoSil Total Shareholder Return (TSR) has
a compound annual growth rate (CAGR) of 15%, provided that the Participant has been continuously employed with
the Company at the time the CAGR achieves 15% - 3 year loan. 1,650,000 of these shares were issued to Daniel
Kenny (CEO and Managing Director) and 325,000 shares were issued to Tom Milicevic (CFO). The second tranche of
3,275,000 shares will vest automatically if and when TSR has a CAGR of 25%, provided that the Participant has been
continuously employed with the Company at the time the CAGR achieves 25% - 3 year loan. 1,650,000 of these
shares were issued to Daniel Kenny (CEO and Managing Director) and 325,000 shares were issued to Tom Milicevic
(CFO).
*
*
During the year, of the 15,000,000 shares with expiry date 13 January 2019, 6,500,000 shares vested. The expiry date
of the remaining 8,500,000 shares was extended until 13 January 2020.
During the year 1,538,462 shares with expiry date 8 October 2018 vested.
Set out below are the vested and unreleased performance dependent loan shares subject to loan repayment at the end of
the financial year:
Grant date
Expiry date
19/05/2014
28/11/2014
28/11/2014
07/10/2015
07/10/2015
13/01/2016
13/01/2016
13/01/2016
19/05/2017
31/12/2018
31/12/2018
07/10/2018
07/10/2018
13/01/2019
13/01/2019
13/01/2019
2020
2019
Number
Number
-
-
-
769,231
769,231
2,000,000
2,000,000
2,500,000
461,539
500,000
3,000,000
769,231
769,231
2,000,000
2,000,000
2,500,000
8,038,462 12,000,001
39
51
Notes to the Financial Statements cont.
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 27. Share-based payments (continued)
Share based payments were priced using Black-Scholes option pricing model inputs to determine the fair value at the grant
date as follows:
Grant date
Expiry date
Share price Exercise
at grant date
price
Expected
volatility
Risk-free
Fair value
interest rate at grant date
25/03/2020
25/03/2020
25/03/2025
25/03/2025
$0.10
$0.10
$0.09
$0.09
175.70%
175.70%
0.77%
0.77%
$0.084
$0.084
Terms of limited recourse loan arrangement
The loans issued are limited recourse such that on the repayment date the repayment obligation under the loan will be
limited to the lesser of:
(a) the outstanding balance of the loan; and
(b) the market value of the loan shares on that date.
In addition, where the participant has elected for the performance dependent loan shares to be provided to the Company in
full satisfaction of the loan, the Company must accept the loan shares as full settlement of the repayment obligation under
the loan.
The total value of loans outstanding under the Employee Share Plan at reporting date was $8,956,464 (2019:
$10,994,000).
The weighted average remaining contractual life of loan shares outstanding at the end of the financial year was 12 months
(2019: 18 months).
Accounting policy for share-based payments
Equity-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares, that are provided to employees in exchange for
the rendering of services.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined
using the Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the share
price at grant date and expected price volatility of the underlying share and the risk free interest rate for the term of the
option.
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity over the
vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value of the award, the
best estimate of the number of awards that are likely to vest and the expired portion of the vesting period. The amount
recognised in profit or loss for the period is the cumulative amount calculated at each reporting date less amounts already
recognised in previous periods.
Market conditions are taken into consideration in determining fair value. Therefore any awards subject to market conditions
are considered to vest irrespective of whether or not that market condition has been met, provided all other conditions are
satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not been made.
An additional expense is recognised, over the remaining vesting period, for any modification that increases the total fair
value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Group or employee, the failure to satisfy the condition is treated as a
cancellation. If the condition is not within the control of the Group or employee and is not satisfied during the vesting
period, any remaining expense for the award is recognised over the remaining vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, they are treated as if they had vested on the date of cancellation, and any remaining
expense is recognised immediately. If a new replacement award is substituted for the cancelled award, the cancelled and
new award is treated as if they were a modification.
52
40
OncoSil Annual Report 2020
OncoSil Medical Ltd
Notes to the financial statements
30 June 2020
Note 28. Events after the reporting period
The impact of the COVID-19 pandemic is ongoing and while it has not materially impacted the Group up to 30 June 2020, it
is not practicable to estimate the potential impact, positive or negative, after the reporting date. The situation is rapidly
developing and is dependent on measure imposed by the Australian Government and other countries, such as maintaining
social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be provided.
No other matter or circumstance has arisen since 30 June 2020 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.
41
53
Directors’ Declaration
OncoSil Medical Ltd
Directors' declaration
30 June 2020
In the directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 2 to the financial statements;
the attached financial statements and notes give a true and fair view of the Group's financial position as at 30 June
2020 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Dr Chris Roberts AO
Non-Executive Chairman
19 August 2020
Sydney
54
42
OncoSil Annual Report 2020
Independent Auditor’s Report
Crowe Sydney
ABN 97 895 683 573
Level 15 1 O’Connell Street
Sydney NSW 2000
Australia
Tel +61 2 9262 2155
Fax +61 2 9262 2190
www.crowe.com.au
Independent Auditor’s Report to the Members of
OncoSil Medical Ltd
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of OncoSil Medical Ltd (the Company) and its subsidiaries
(the Group), which comprises the statement of financial position as at 30 June 2020, the statement of
profit or loss and other comprehensive income, the statement of changes in equity and the statement
of cash flows for the year then ended, and notes to the 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 2020 and of its financial
performance for the year then ended; 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 (including Independence Standards) (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.
The title ‘Partner’ conveys that the person is a senior member within their respective division, and is among the group of persons who hold an
equity interest (shareholder) in its parent entity, Findex Group Limited. The only professional service offering which is conducted by a partnership
is the Crowe Australasia external audit division. All other professional services offered by Findex Group Limited are conducted by a privately
owned organisation and/or its subsidiaries.
Findex (Aust) Pty Ltd, trading as Crowe Australasia is a member of Crowe Global, a Swiss verein. Each member firm of Crowe Global is a
separate and independent legal entity. Findex (Aust) Pty Ltd and its affiliates are not responsible or liable for any acts or omissions of Crowe
Global or any other member of Crowe Global. Crowe Global does not render any professional services and does not have an ownership or
partnership interest in Findex (Aust) Pty Ltd. Services are provided by Crowe Sydney, an affiliate of Findex (Aust) Pty Ltd. Liability limited by a
scheme approved under Professional Standards Legislation.
© 2020 Findex (Aust) Pty Ltd.
55
Independent Auditor’s Report cont.
Independent Auditor’s Report
OncoSil Medical Ltd
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 we addressed the Key Audit Matter
Research and Development Tax Incentive
Refer to Note 2, Note 3 and Note 5
Under the research and development (R&D) tax
incentive scheme, the Group is entitled to receive
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 the
income tax exempt entities.
The R&D plan is filed with AusIndustry in the
following financial year, and based on this filing,
the Group receives the incentive in cash. The
Group prepared an estimate of its total R&D
expenditure to determine the potential claim
under the R&D tax incentive legislation.
As at 30 June 2020, the Group had an estimated
claim of $2.8 million relating to the year ended
30 June 2020.
The R&D tax incentive is a key audit matter due
to the size of the balance and because
interpretation of the R&D tax legislation is
required by the Group to assess the eligibility of
the R&D expenditure under the scheme.
Share Based Payments
Refer to Note 3, Note 15 and Note 27
The Group’s Employee Share Plan (‘ESP’) is
granted to senior managers and above as an
incentive. Under the plan participants are granted
shares which only vest if certain performance
standards are met.
In the current financial year, the Group granted
further shares under the ESP. It had also
reviewed its non-market vesting conditions of
shares granted in prior years and updated the
share-based payment expense to reflect the
estimated cumulative share-based payments at
year end. As a result, the Group reversed $2.75
million of share-based payment expense
recognised in prior years. For the year ended
30 June 2020, a share-based payment credit of
$2.4 million was included in its profit and loss.
The share-based payment is a key audit matter
due to the significance of the amount.
We performed the following key procedures:
• Agreed the estimate made in previous year
to the amount of cash received after
lodgement of the R&D tax claim.
• Compared the nature of R&D expenditure
included in the current year estimate to the
prior year estimate.
• Tested a sample of R&D expenses for
eligibility under the R&D tax incentive
scheme.
• Compared the amount of eligible
expenditures used to calculate the estimate
to the expenditure recorded in the general
ledger.
Inspected copies of relevant documents
lodged with AusIndustry and the ATO
related to historic claims.
•
• Reviewed the related financial statement
disclosures.
We performed the following key procedures:
• Assessed the valuation of the shares
granted during the year and the current year
impact.
• Assessed the reasonableness on the
likelihood that the non-market vesting
conditions will not or have not been met.
• Performed re-computation of share-based
payment expense that was reversed in the
current year.
• Reviewed the reconciliation of the share-
based payments reserve.
• Reviewed the related financial statement
disclosures.
© 2020 Findex (Aust) Pty Ltd
www.crowe.com.au
56
OncoSil Annual Report 2020
Independent Auditor’s Report
OncoSil Medical Ltd
Other Information
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 2020, 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 accordingly 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 ability of the Group 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.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
•
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Group’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
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Independent Auditor’s Report cont.
Independent Auditor’s Report
OncoSil Medical Ltd
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
to the date of our auditor’s report. However, future events or conditions may cause the Group to
cease to continue as a going concern.
•
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the group financial report. The
auditor is responsible for the direction, supervision and performance of the group audit. The
auditor remains solely responsible for the audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during the audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in the auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in the auditor’s report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the remuneration report included in pages 18 to 25 of the directors’ report for the
year ended 30 June 2020.
In our opinion, the remuneration report of OncoSil Medical Ltd, for the year ended 30 June 2020,
complies with section 300A of the Corporations Act 2001.
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58
OncoSil Annual Report 2020
Independent Auditor’s Report
OncoSil Medical Ltd
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.
Crowe Sydney
John Haydon
Senior Partner
19 August 2020
Sydney
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59
Shareholder Information
OncoSil Medical Ltd
Shareholder information
30 June 2020
The shareholder information set out below was applicable as at 18 August 2020.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
WEBINVEST PTY LTD (OLSB UNIT A/C)
CS FOURTH NOMINEES PTY LIMITED (HSBC CUST NOM AU LTD 11 A/C)
MR DANIEL KENNY
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
ROJO NERO CAPITAL PTY LTD
CS THIRD NOMINEES PTY LIMITED (HSBC CUST NOM AU LTD 13 A/C)
MR GREGORY JOSEPH HARRIS
MR ROGER ASTON
MR CHRISTOPHER GRAHAM ROBERTS
TISIA NOMINEES PTY LTD (HENDERSON FAMILY A/C)
MORGAN STANLEY AUSTRALIA SECURITIES (NOMINEE) PTY LIMITED (NO 1
ACCOUNT)
NEWECONOMY COM AU NOMINEES PTY LIMITED (900 ACCOUNT)
MR MICHAEL WARRENER
MR DAVID CHARLES JAMES
MS NICOLE WILSON
MR PETER YING FEI HUI & MRS MANDY LI PIK SEUNG HUI (NAT EQUITIES
SUPERFUND A/C)
NEWFOUND INVESTMENTS PTY LTD (NEWFOUND SUPER FUND A/C)
BOND STREET CUSTODIANS LIMITED (DEAONE - D42595 A/C)
Unquoted equity securities
There are no unquoted equity securities.
60
48
Number
of holders
of ordinary
shares
127
456
662
2,366
1,050
4,661
376
Ordinary shares
% of total
shares
issued
Number held
60,723,403
38,323,578
24,272,728
24,230,269
20,352,778
18,512,463
18,339,290
17,292,895
13,536,442
13,154,416
11,045,455
9,384,768
9,039,126
8,123,224
6,393,588
6,392,463
6,325,695
6,252,000
6,000,000
5,160,000
7.33
4.63
2.93
2.92
2.46
2.23
2.21
2.09
1.63
1.59
1.33
1.13
1.09
0.98
0.77
0.77
0.76
0.75
0.72
0.62
322,854,581
38.94
OncoSil Annual Report 2020
OncoSil Medical Ltd
Shareholder information
30 June 2020
Substantial holders
There are no substantial holders in the Company.
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
There are no other classes of equity securities.
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OncoSil Annual Report 2020 www.colliercreative.com.au #ONC0006
COLLIER CREATIVE 03 9088 2470
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