ABN 35 094 006 023
Annual Report
2020
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
CONTENTS
Corporate Directory
Directors' Report
Auditor’s Independence
Declaration
Independent Auditor’s Report
Directors’ Declaration
Statement of Profit or Loss and
Other Comprehensive Income
Statement of Financial Position
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Shareholder Information
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2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
CORPORATE DIRECTORY
PRINCIPAL PLACE OF BUSINESS
PharmAust Limited
Suite 116,
1 Kyle Way
Claremont, Western Australia 6010
Tel +61 (8) 9202 6814 Fax +61 (8) 9467 6111
www.pharmaust.com
ASX CODE: PAA
Epichem Pty Ltd
Suite 5, 3 Brodie-Hall Drive
Bentley WA 6102
REGISTERED OFFICE
Suite 116, 1 Kyle Way
Claremont, Western Australia 6010
Tel +61 (8) 9202 6814 Fax +61 (8) 9467 6111
DIRECTORS
Dr Roger Aston
Mr Robert Bishop
Mr Sam Wright
Mr Neville Bassett
COMPANY SECRETARY
Mr Sam Wright
SHARE REGISTRY
Computershare Investor Services Pty Limited
Level 11, 172 St George’s Terrace
Perth, Western Australia 6000
AUDITORS
RSM Australia Partners
2 The Esplanade
Perth, Western Australia 6000
SOLICITORS
Fairweather Corporate Lawyers
595 Stirling Highway
Cottesloe, Western Australia 6011
STOCK EXCHANGE
Australian Securities Exchange
Central Park
152-158 St Georges Terrace
Perth, Western Australia 6000
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DIRECTORS’ REPORT
Your Directors present their report on the Company and the entities it controlled for the financial year ended 30 June 2020.
Directors
The following persons held office as directors of PharmAust Limited during the whole of the financial year and up to the date of this
report, unless otherwise stated:
Dr Roger Aston
Mr Robert Bishop
Mr Sam Wright
Mr Neville Bassett
Executive Chairman
Executive Director
Non-Executive Director & Company Secretary
Non-Executive Director
Principal Activities
The principal continuing activities constituted by PharmAust Limited and the entities it controlled during the year were to develop its
own drug discovery intellectual property for the treatment of different types of cancers in humans and animals, as well as providing
highly specialised medicinal and synthetic chemistry services on a contract basis to clients.
Operating Results
The results of the consolidated entity for the year ended 30 June 2020 was a loss, after income tax expense of $1,361,990 (2019: loss of
$1,551,222).
Financial Position
The net assets of the consolidated entity were $8,526,269 as at 30 June 2020 (2019: $7,455,880).
Dividends
Since the end of the financial year, no dividend has been paid, declared or recommended.
Review of Operations
PITNEY PHARMACEUTICALS PTY LIMITED – 100% OWNED SUBSIDIARY
PharmAust Limited is primarily focused on developing cancer therapeutics for humans and canines. PharmAust’s lead molecule
for this purpose is monepantel (MPL). MPL is a veterinary drug registered for use by a major pharmaceutical company as a
wormicide in many global jurisdictions. PharmAust discovered independently that MPL interacts in a previously unrecognized ”off-
target” fashion with the mTOR (mechanistic Target Of Rapamycin) pathway, an important regulatory pathway in mammalian cells.
It is apparent that molecules such as MPL that target the mTOR pathway have relevant therapeutic value in a wide range of
diseases.
PharmAust’s wholly-owned subsidiary Pitney Pharmaceuticals Pty Ltd owns a number of granted patents offering protection for the
use of MPL in cancer therapy and providing cover for the use of MPL in neurodegenerative diseases such as Parkinson’s Disease
and Alzheimer’s Disease. Pitney has further recently submitted novel patents to cover the use of MPL in the treatment of COVID-
19 and other related viral infections. The fact that MPL is already approved for use in animals in a number of major jurisdictions
(EU/UK, Australia) means that the development process for PharmAust is simpler and cheaper than it would be if MPL were a new
API (Active Pharmaceutical Ingredient).
In line with its strategic objectives, PharmAust signed an agreement with UNSW-NSI, the commercial arm of the University of NSW
to acquire all the rights to MPL. PharmAust is therefore in a strong position to license and co-develop MPL with third parties and co-
development partners. PharmAust further signed an agreement with Nihon Nohyaku, the original MPL developer, to acquire the
rights to a suite of closely related MPL analogues. PharmAust’s additional wholly-owned subsidiary Epichem Pty Ltd, a fine chemicals
manufacturer, also independently created through its medicinal chemistry arm an alternative and complementary MPL analogue
suite. The patent rights to MPL combined with the patent rights to the Nihon Nohyaku and Epichem MPL analogue suites place
PharmAust in an unparalleled position to commercialise outcomes of mTOR pathway inhibition by this drug class in cancer, COVID-
19 and neurodegeneration.
In order to further the development of its products and add value for shareholders, PharmAust changed the original liquid
monepantel formula to a novel monepantel tablet formula to facilitate administration to both dogs and humans.
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2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
DIRECTORS' REPORT (Cont.)
Achievements during the 2019 - 2020 financial year include:
1. Receipt of an MPL tablet Phase I canine pharmacokinetic and toxicology report from a major Contract Research
Organisation in the USA. The report covered studies examining single and repeat high and low dose monepantel tablet
administration to healthy Beagle dogs. In consideration with the toxicology data supplied by the Vet Major, these studies
enabled dosing selection for the Phase II trial in pet owners’ dogs with cancer.
2. Commencement and completion of the PharmAust Phase II clinical trial in pet owners’ dogs with cancer. PharmAust
demonstrated anti-cancer activity of MPL tablets, yet at a target dose higher than necessary. This enables the targeting
of lower dosing in subsequent larger scale trials.
3.
The execution of collaborative agreements with the University Veterinary Teaching Hospital Sydney (UVTHS), Western
Australian Veterinary Emergency and Specialty (WAVES; Perth), the Animal Referral Hospital (ARH) Brisbane. These
agreements enabled a national network of veterinary practices to participate in the trial and achieve a more rapid
recruitment of pet dogs for the Phase II B cell lymphoma trial.
4. Acceptance of ethics applications through UVTHS, WAVES and ARH Brisbane for the Phase II trial in pet owners’ dogs with
cancer for trial commencement.
5. Awarding to PharmAust of Research Licenses and Accreditation to undertake research by the Department of Primary
Industries and Regional Development (Western Australia) and the Department of Agriculture and Fisheries (Queensland)
to conduct the Phase II clinical trials in pet owners’ dogs with cancer in those States. These licenses add to PharmAust’s
similar accreditation in New South Wales with the Department of Primary Industries.
6. Completion of the agreement with the University of Melbourne to appoint U-Vet as Phase II trial site lead and agreement
on the Phase II trial protocol with U-Vet.
7. Commencement and completion of a second GMP MPL tablet manufacturing round with Catalent San Diego,
facilitating supply to all five veterinary centres participating in the Phase II trial in pet owners’ dogs with cancer.
8. Receipt of nine- and six-month stability shelf-life studies from Catalent San Diego of the first and second GMP MPL
manufacturing rounds. These studies demonstrated a robust and repeatable high quality manufacturing program
generating tablets of high quality, reproducibility and a long half-life.
9.
Full characterization of MPL tablets produced to GMP standards by PharmAust’s subsidiary Epichem. This work
demonstrated all tablet constituents, even following prolonged storage, remain within the Centre for Veterinary
Medicine’s (the USA’s Federal Drug Administration’s veterinary arm) range specifications. This implies that the tablet
would qualify for registration when subsequent Phase III trials will be undertaken.
10. The successful undertaking of further GMP tablet manufacturing optimization work that will further facilitate administration
to human patients.
11. The submission of a manuscript to a peer-reviewed journal detailing PharmAust’s Phase I trial in humans with cancer
treated with MPL and conducted at the Royal Adelaide Hospital.
12. The identification of clinicians willing to conduct human clinical trials examining the effects of MPL against
neurodegenerative diseases.
13. Continued discussions with clinicians willing to conduct human clinical trials examining the effects of MPL against cancer.
14. The preparation of 700 g of highly pure (>99% purity) reference grade MPL by PharmAust’s subsidiary Epichem. This MPL
will be used for future preclinical work as required by PharmAust.
15. Commencement of RNAseq work with the Associate Professor Doug Fairlie at the Olivia Newton John Cancer Research
Institute. Preliminary data confirm MPL’s safety in respect to non-cancer cells and supports findings that anti-cancer
activity is related to autophagy and apoptosis pathways.
16. PharmAust entered into an Agreement with the research group of Professor Marc Pellegrini at the Walter and Eliza Hall
Institute to study the effects of MPL upon preclinical models of SARS-CoV-2 (COVID-19) infections. Preliminary data has
demonstrated that MPL inhibits SARS-CoV2 infectivity in non-human primate cells in vitro.
17. PharmAust received an Advance Finding Certificate from the Australian Tax Organisation covering selected Research
and Development (R&D) activities conducted overseas. This means that specific R&D expenditures in the future and
nominated under the ruling, including reformulation work, tablet manufacture and testing and drug manufacture, are
preapproved for the full 43.5% tax incentive rebate offered by the ATO.
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2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
DIRECTORS' REPORT (Cont.)
Research and Development Targets 2020-2021:
1.
2.
3.
4.
5.
6.
To undertake a large “First Line Therapy” Phase II/III clinical trial in canines with naturally occurring cancer to build
on the positive outcomes of the Phase II trial recently conducted with U-Vet.
To complete optimization research on the MPL tablet to create a more tailored human product. The current tablet
is sufficient for human work, but further optimization will permit greater flexibility for targeting a wider range of human
conditions in addition to cancer, such as viral infections (COVID-19) and neurodegenerative disorders.
To commence evaluation of the new MPL tablet in humans in Phase I/II anti-cancer trials, as a follow on from the
Phase I clinical trial undertaken at the Royal Adelaide Hospital in 2015. Furthermore, to determine and characterize
the pharmacokinetic parameters, the dietary requirements and the safety of the newly formulated tablet in humans
in Phase I/II trials.
To commence evaluation of the effects or MPL upon preclinical models of neurodegenerative disease and COVID-
19 to understand mechanisms of neuroprotection and anti-viral activity.
To identify Clinical Centres prepared to evaluate the new MPL tablet in humans with COVID-19 and
neurodegenerative diseases. PharmAust has already commenced discussions with several Centres regarding the
same and has made good progress to date.
To complete analysis of the effects of MPL upon the cancer cell transcriptome to assist identification of the
mechanisms by which the anti-cancer activity is elicited.
7.
To continue analysis aimed at determining the precise nature of MPL’s molecular binding mechanism within cells.
EPICHEM PTY LTD - 100% OWNED SUBSIDIARY
Epichem, a fully owned subsidiary of PharmAust, is a profitable and award winning medicinal and synthetic chemistry company
with expertise and capability in the field of drug development, discovery and design. Epichem provides specialised products and
technical expertise to a worldwide customer base in the pharmaceutical, mining, agriculture and animal health sectors.
Epichem also manufactures Pharmaceutical Reference Materials and Fine Chemicals and supports the PharmAust Drug
Development Pipeline with Lead Drug Development and Validation, Drug Candidate Pipeline Manufacture and Analysis, Drug
reformulation, GMP synthesis and stability support as well as Drug Inventory dispensing to clinical trial centres.
Epichem appointed a new CEO in Colin La Galia effective 14 October 2019. Colin was previously the Regional Business Director
and Commercial Head of Asia Pacific, China and Japan for Abbott Rapid Diagnostics and he has previously held senior roles over
20 years at Alere Inc, Origin Healthcare, Hollywood Fertility Centre, GlaxoSmithKline and Merck Sharpe & Dohme. Colin is a highly
experienced executive in pharmaceuticals, devices and diagnostics, both locally and internationally, and has demonstrated great
success in international business development.
Epichem finished the Financial Year strongly, exceeding projected revenue forecast of AUD3.32M to achieve AUD3.54M. This is in
light of the Unity Ltd contract coming to an end sooner than expected and the COVID-19 Pandemic.
The DNDi Medicinal Chemistry contract is on track and all deliverables have been achieved thus far. Epichem was acknowledged
as the only consortium Medicinal Chemistry provider that was able to remain open and continue to provide services during the
COVID-19 Pandemic as many other partners were more seriously impacted and affected.
The Pharmaceutical Reference Materials Business Unit also had strong performance for the year, exceeding its budget target.
Epichem’s Chemistry Grade Hand Sanitiser has continued to be donated to healthcare and aged care providers in need. Some
of the beneficiaries include Parkerville Children and Youth Care and a number of RSM Charity and Not for Profit Partners including
the Cancer Council.
Epichem has increased its Business Development capability with Distribution Partners, BD Consultants, Lead Generation partners
and the engagement of a Social Media and PR partner for the US, Europe, Asia and Australian Markets and has added additional
internal resource for Marketing and Communications.
Epichem continues to support the PharmAust Drug Development Pipeline with Lead drug development and validation, drug
candidate pipeline manufacture and analysis, drug reformulation, GMP synthesis and stability support as well as Drug inventory
dispensing to clinical trial centres.
Epichem is involved in a series of COVID-19 Government related projects including the WA Innovation Hub initiative in relation to
Smart Surface Chemistry chaired by former Australian of the Year, Dr Fiona Wood.
CEO, Colin La Galia has been invited to take part in the WA Government appointed Health and Medical Life Science Industry
Reference Group sponsored by WA Health Minister, Roger Cook and Chaired by WA’S Chief Scientist, Professor Peter Klinken to
develop an growth plan for the state’s health and medical life science sector. Colin is a strong advocate for the Lifescience Biotech
and R&D industry in Australia having completed a large number of interview and pod cast commitments.
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2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
DIRECTORS' REPORT (Cont.)
Epichem has also expanded its suite of products and services beyond its current portfolio to include Material Science and IP
technology to service the Energy, Resources and Agriculture sectors.
Epichem continues to pursue opportunities to create our own IP portfolio. This will also allow Epichem to maximise the R&D Tax
incentive, partner with key stakeholders to accelerate commercialisation as well as act as an R&D project incubator for PAA.
Epichem was awarded the 2019 WA Exporter Award for International Health and was also awarded two Biotechnology 2020
Awards for Most Innovative Chemistry Service Provider - Australia & Best in Organic Chemistry Solutions 2020. This is testament to
Epichem’s expertise, experience and acknowledgement of its export capability and outcomes achievement.
PHARMAUST LTD – PARENT ENTITY
Annual General Meeting
The Annual General Meeting of the Shareholders of PharmAust Limited was held on 25 October 2019 at RSM on Level 32, 2 The
Esplanade, Perth, Western Australia. All resolutions that were put were passed by a poll.
PharmAust Raises $2.4m in Placement
On 3 October 2019, PharmAust announced that it had raised $2.4 million through a placement primarily to Australian and
Singaporean fund management institutions. Funds were raised via a placement of approximately 20 million fully paid ordinary
shares under ASX Listing Rule 7.1 at $0.12 cents per share.
PharmAust receives $712,647 R&D Tax Incentive Refund
Following approval from the ATO of the Company’s application for a Research and Development rebate, an amount of $712,647
was deemed refundable on PharmAust’s 2019 Tax Return and was paid to PharmAust on 14 January 2020.
COVID-19 pandemic impact
There was minimal impact to the Company from the COVID-19 pandemic.
Epichem was acknowledged as the only consortium Medicinal Chemistry provider that was able to remain open and continue to
provide services during the COVID-19 Pandemic as many other partners were more seriously impacted and affected.
Recruitment for the Phase II Canine Trial at some clinics was put on hold due to the COVID-19 pandemic and related shutdown
measures at State and federal government levels. Following consultation with the trial manager, PharmAust considered it was in
the best interests of dogs and their owners to reduce the consultation visits and intensity required for the trial in some circumstances.
This meant a pause on recruitment at some centres due to COVID-19. Despite this however, in May 2020, PharmAust was pleased
to advise that its canine trial achieved a successful outcome.
Significant Changes in State of Affairs
A review of events during the reporting period can be found in the review of operations.
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2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
DIRECTORS' REPORT (Cont.)
Subsequent Events
On 7 July 2020, the Company issued 4,400,000 fully paid ordinary shares based on the exercise of 650,000 unlisted options at 8c per
option raising $52,000 for the Company, exercise of 3,500,000 unlisted options at 12c per option raising $420,000 for the Company
and the exercise of 250,000 unlisted options at 15c per option raising $37,500 for the Company.
On 10 July 2020, the Company issued 1,000,000 fully paid ordinary shares based on the exercise of 500,000 unlisted options at 8c
per option raising $40,000 for the Company and exercise of 500,000 unlisted options at 12c per option raising $60,000 for the
Company.
On 15 July 2020, the Company issued 1,050,000 fully paid ordinary shares based on the exercise of 100,000 unlisted options at 8c
per option raising $8,000 for the Company and exercise of 950,000 unlisted options at 12c per option raising $114,000 for the
Company.
On 17 July 2020, the Company issued 2,625,000 fully paid ordinary shares based on the exercise of 125,000 unlisted options at 8c
per option raising $10,000 for the Company and exercise of 2,500,000 unlisted options at 12c per option raising $300,000 for the
Company.
On 24 July 2020, the Company issued 3,400,000 fully paid ordinary shares based on the exercise of 900,000 unlisted options at 8c
per option raising $72,000 for the Company and exercise of 2,500,000 unlisted options at 12c per option raising $300,000 for the
Company.
On 31 July 2020, the Company issued 900,000 fully paid ordinary shares based on the exercise of 900,000 unlisted options at 8c per
option raising $72,000 for the Company.
On 7 August 2020, the Company issued 200,000 fully paid ordinary shares based on the exercise of 200,000 unlisted options at 8c
per option raising $16,000 for the Company.
On 31 August 2020, the Company issued 250,000 fully paid ordinary shares based on the exercise of 250,000 unlisted options at 8c
per option raising $20,000 for the Company.
On 9 September 2020, the Company announced that Elanco Animal Health had advised the company that it would not proceed
to exercise its option to develop Monepantel for veterinary cancers.
No other matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly
affect the operations of the Company, the results of those operations, or the state of affairs of the Company in future financial
years, other than:
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has had no significant impact on the consolidated
entity 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 measures 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
Future Developments
In the opinion of the Directors disclosure of information regarding likely developments in the Company’s operations and the
expected results of those operations in subsequent financial years could prejudice the Company’s interests. Accordingly, this
information has not been included in this report.
Environmental Regulation
The Company is subject to a range of environmental regulation. During the year, the Company met all reporting requirements
under any relevant legislation. There were no incidents which required reporting.
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2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
DIRECTORS' REPORT (Cont.)
Information on Directors
Dr Roger Aston – Executive Chairman
Qualifications
BSc (Hons), Ph.D
Experience
Dr Aston currently serves as Executive Chairman and Chief Executive Officer of PharmAust Ltd.
Dr Aston served as Chief Executive Officer of Mayne Pharma Group until 15 February 2012. During
his career, 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 is both a scientist and
seasoned biotechnology entrepreneur, with a successful track record in both fields. Dr Aston
holds a B.Sc. (Hons) and Ph.D. degrees from the University of Manchester from 1975 to 1981.
Interests in Shares & Options
Dr Aston holds 15,044,815 Fully Paid Ordinary Shares.
Other Current Directorships
(ASX Listed Companies)
Previous Directorships (last 3
years) ASX Listed Companies
Immuron Limited (ASX:IMC), Oncosil Limited (ASX: OSL) and ResApp Health Limited (ASX:RAP)
IDT Limited (ASX:IDT); and Polynovo Limited (ASX:PNV) (previously Calzada Limited (ASX:CZD))
and Regeneus Limited (ASX:RGS)
Mr Robert C Bishop – Executive Director
Qualifications
Ll.B (Hons), Solicitor (New South Wales and England & Wales), MAICD
Experience
Mr Bishop has 35 years’ experience in corporate finance and equity capital markets. Having
worked extensively in London and Sydney, first as a lawyer at Linklaters & Paines and Allen, Allen
& Hemsley; and then as a stockbroker and investment banker at Ord Minnett, Robert Fleming
and, since 1998, at his Sydney based corporate finance business, First Capital Markets. He has
extensive experience in the areas of stock market flotation's, licensing and compliance work.
Interests in Shares & Options
Mr Bishop, via his Company, holds 9,211,060 Fully Paid Ordinary Shares.
Other Current Directorships
(ASX Listed Companies)
Previous Directorships (last 3
years) ASX Listed Companies
Nil
Nil
Mr Neville Bassett AM – Non-Executive Director
Qualifications
Experience
AM, FCA, B.Bus
Mr Bassett has spent more than 35 years working in accounting, finance and stockbroking. During
that time, he has had considerable involvement in Australian financial markets including
numerous public Company listings and capital raisings, as well as mergers and acquisitions.
In 1991, he became a Director/Councillor of the Royal Flying Doctor Service (RFDS) in WA and he
was Chairman of RFDS Western Operations for eight years until his retirement in 2017. He also
served six years as Western Operations representative on the Board of the Australian Council of
the Royal Flying Doctor Service of Australia. In 2015, Mr Bassett’s decades of unwavering
dedication to community service were recognised when he was awarded a Member of the
Order of Australia (AM) in the Australia Day Honours.
Interests in Shares & Options
Mr Bassett holds 7,000 ordinary shares in PharmAust Limited.
Other Current Directorships
(ASX Listed Companies)
Previous Directorships (last 3
years) ASX Listed Companies
Auris Minerals Limited, Pointerra Limited, Yowie Group Limited and Blina Minerals NL
Longford Resources Ltd, Meteoric Resources NL, Vector Resources Ltd and Metalsearch Ltd
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2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
Mr Sam Wright – Non-Executive Director & Company Secretary
DIRECTORS' REPORT (Cont.)
Qualifications
Experience
AFin DipAcc ACIS MAICD
Sam Wright has over fifteen years’ experience in the administration of ASX listed companies,
corporate governance and corporate finance. He is a member of the Australian Institute of
Company Directors, the Financial Services Institute of Australasia, and the Chartered Secretaries
of Australia.
Mr Wright joined PharmAust as the Financial Controller in September 2006, was appointed as the
Company Secretary in August 2007, and has been a Director of the Company since October
2008.
Mr Wright is also Company Secretary for ASX listed companies, Buxton Resources Limited,
Structural Monitoring Systems plc and Wide Open Agriculture Limited. Mr Wright has also filled the
role of Director and Company Secretary with a number of unlisted companies.
Mr Wright is the Managing Director of Perth-based corporate advisory firm Straight Lines
Consultancy, specialising in the provision of corporate services to public companies.
Mr Wright has extensive experience in relation to public Company responsibilities, including ASX
and ASIC compliance, control and implementation of corporate governance, statutory financial
reporting, and shareholder relations with both retail and institutional investors.
Interests in Shares & Options
Mr Wright, via his Company, holds 3,000,000 ordinary shares in PharmAust Limited.
Other Current Directorships
(ASX Listed Companies)
Previous Directorships (last 3
years) ASX Listed Companies
Nil
Nil
Meetings of Directors
The number of meetings of the Company’s directors held during the year ended 30 June 2020, and the number of meetings attended
by each director was:
Directors
Dr Roger Aston
Mr Neville Bassett
Mr Robert Bishop
Mr Sam Wright
Meetings of Directors
Eligible to
Participate
3
3
3
3
Number
Attended
3
3
3
3
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2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
DIRECTORS' REPORT (Cont.)
Remuneration Report (Audited)
The remuneration report, which has been audited, outlines the key management personnel (KMP) remuneration arrangements for
the consolidated entity, in accordance with the requirements of the Corporations Act 2001 and its Regulations.
This report details the nature and amount of remuneration for each director and executive of PharmAust Limited.
Remuneration policy
The remuneration of directors and executives of PharmAust Limited has been designed to align director and executive objectives with
shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives based
on key performance areas affecting the Company’s financial results. The Board of PharmAust Limited believes the remuneration policy
to be appropriate and effective in its ability to attract and retain the best executives and directors to run and manage the Company,
as well as create goal congruence between directors, executives and shareholders.
All executives receive a base salary (which is based on factors such as length of service and experience) and superannuation whilst
some executives receive fringe benefits. The Board reviews executive packages periodically by reference to the Company’s
performance, executive performance and comparable information from industry sectors and other listed companies in similar
industries.
The performance of executives is measured against criteria agreed regularly with each executive and is based on factors including
the forecast growth of profits and shareholders’ value.
The remuneration is designed to attract the highest calibre of executives and reward them for performance that results in long-term
growth in shareholder wealth. The goal of the remuneration structures it to align the remuneration packages of the executives with
the Company’s performance and specifically the Company’s earnings and the consequences of the Company’s performance on
shareholder wealth including dividends, returns of capital and capital appreciation.
The executive directors and executives receive a superannuation guarantee contribution required by the government and do not
receive any other retirement benefits. Individuals, however, have the option to sacrifice part of their salary to increase payments
towards superannuation.
All remuneration paid to directors and executives is valued at the cost to the Company and expensed. Any shares given to directors
and executives will be valued as the difference between the market price of those shares and the amount paid by the director or
executive. Any options granted will be valued by an independent expert using the Black-Scholes, Binomial or any other methodologies
that the independent expert deems appropriate.
The Board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and
responsibilities. The Board (excluding the relevant director) determines payments to the directors and reviews their remuneration
regularly, based on market practice, duties and accountability. Independent external advice is sought when required. The maximum
aggregate amount of fees that can be paid to non-executive directors is subject to approval by shareholders at the Annual General
Meeting. Fees for non-executive directors are not linked to the performance of the Company.
Voting and comments made at the Company's 2019 Annual General Meeting ('AGM').
At the 2019 AGM, 99.95% 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
Details of the nature and amount of each element of remuneration of each key management personnel of the consolidated entity
are set out in the following tables.
The key management personnel of the consolidated entity consisted of the following directors and other key
management personnel:
Executive Chairman
Executive Director
Non-Executive Director & Company Secretary
Non-Executive Director
Non-Executive Chairman – Epichem Pty Ltd
Chairman – Epichem Pty Ltd
Non-Executive Director – Epichem Pty Ltd
Chief Scientific Officer – PharmAust Ltd
Chief Executive Officer – Pitney Pharmaceuticals Pty Ltd
Chief Scientific Officer & Executive Director – Epichem Pty Ltd
Chief Executive Officer – Epichem Pty Ltd
Directors
Roger Aston
Robert Bishop
Sam Wright
Neville Bassett
Other Key Management Personnel
Wayne Best*
John Horton
Rebecca McCrackan
Richard Mollard
Martine Keenan
Colin La Galia**
* Resigned on 1/07/2020.
** Appointed on 7/10/2019.
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2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
DIRECTORS' REPORT (Cont.)
Remuneration Report (Audited)
2020
Short-term Benefits
Post-employment
Benefits
Share-based
Payments
Salary & Fees
$
Superannuation
$
Options &
Performance Rights
$
Total
$
260,000
132,200
122,000
30,000
9,000
240,000
175,000
6,000
5,400
173,089
1,152,689
24,700
-
11,590
-
-
22,800
16,482
-
513
14,482
90,567
-
-
-
-
-
18,829
-
-
-
-
18,829
284,700
132,200
133,590
30,000
9,000
281,629
191,482
6,000
5,913
187,571
1,262,085
Directors
Roger Aston
Sam Wright
Robert Bishop
Neville Bassett
Other Key
Management
Personnel
Wayne Best*
Richard Mollard
Martine Keenan
John Horton
Rebecca McCrackan
Colin La Galia*
* Resigned on 1/07/2020.
** Appointed on 7/10/2019.
2019
Short-term Benefits
Post-employment
Benefits
Share-based
Payments
Salary & Fees
$
Superannuation
$
Options &
Performance Rights
$
Total
$
260,000
114,000
104,000
20,000
16,500
196,987
140,000
12,000
5,400
868,887
24,700
-
9,880
-
713
18,714
13,300
-
513
67,820
-
-
-
-
-
-
-
-
284,700
114,000
113,880
20,000
17,213
215,701
153,300
12,000
5,913
936,707
Directors
Roger Aston
Sam Wright
Robert Bishop
Neville Bassett
Wayne Best
Other Key
Management
Personnel
Richard Mollard
Martine Keenan
John Horton
Rebecca McCrackan
- 12 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
DIRECTORS' REPORT (Cont.)
Remuneration Report (Audited)
Service agreements
Remuneration and other terms of employment for key management personnel are formalised in service agreements. Details of these
agreements are as follows:
Remuneration of Roger Aston (Executive Chairman - PharmAust Limited)
Term of the agreement – permanent and no specific term.
Base salary of $260,000 per year plus superannuation of 9.5% of base salary.
Payment of termination benefit on termination by the employer, other than for gross misconduct, is equal to six (6) months base salary
and superannuation.
Remuneration of Robert Bishop (Executive Director - PharmAust Limited)
Term of the agreement – permanent and no specific term.
Base salary of $104,000 per year plus superannuation of 9.5% of base salary. Effective from 1 October 2019, base salary increased to
$128,000 per year plus superannuation of 9.5% of base salary.
Payment of termination benefit on termination by the employer, other than for gross misconduct, is equal to three (3) months base
salary and superannuation.
Remuneration of Sam Wright (Non-Executive Director and Company Secretary – PharmAust Limited)
Term of the agreement – permanent and no specific term.
Consultancy fees of $9,500 plus GST per month, payable in arrears. Effective from 1 October 2019, consultancy fees increased to
$11,500 plus GST per month, payable in arrears.
Payment of termination benefit on termination by the employer, other than for gross misconduct, is equal to six (6) months consultancy
fee.
Remuneration of John Horton (Chairman – Epichem Pty Ltd)
Term of the agreement – permanent and no specific term.
Consultancy fees of $12,000 per annum. John Horton resigned with effect from 31 December 2019.
Remuneration of Rebecca McCrackan (Non-Executive Director – Epichem Pty Ltd)
Term of the agreement – permanent and no specific term.
Director fees of $5,400 per annum plus superannuation of 9.5% of base salary.
Remuneration of Neville Bassett (Non-Executive Director – PharmAust Limited)
Term of the agreement – permanent and no specific term.
Directors fees of $30,000 per year.
Remuneration of Richard Mollard (Chief Scientific Officer – PharmAust Ltd & Chief Executive Officer – Pitney Pharmaceuticals Pty Ltd)
Term of the agreement – permanent and no specific term.
Base salary of $240,000 per year plus superannuation of 9.5% of base salary
Payment of termination benefit on termination by the employer, other than for gross misconduct, is equal to six (6) months base salary
and superannuation.
Remuneration of Martine Keenan (Chief Executive Officer – Epichem Pty Ltd)
Term of the agreement – permanent and no specific term. Martine Keenan stepped down from this role with effect from 31 December
2019 and commenced a role as non-executive director of Epichem Pty Ltd with a base salary of $1,500 per month plus superannuation,
effective 1 September 2019.
Base salary of $140,000 per annum plus superannuation of 9.5% of base salary for period while CEO of Epichem.
Payment of termination benefit on termination by the employer, other than for gross misconduct, is equal to three (3) months base
salary and superannuation.
- 13 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
DIRECTORS' REPORT (Cont.)
Remuneration Report (Audited)
Remuneration of Colin La Galia (Chief Executive Officer – Epichem Pty Ltd)
Commencement date is 7 October 2019. Term of the agreement – permanent and no specific term.
Base salary of $212,500 per annum plus superannuation of 9.5% of base salary.
Bonus set out below depending on the relevant band in the event of the satisfaction of Bonus milestones for any one financial year
that Epichem Pty Ltd makes an after tax profit of:
(a) $100,000 – $200,000 - bonus of $10,000 plus $10,000 worth of PAA shares; or
(b) $200,001 - $320,000 - bonus of $17,500 plus $17,500 worth of PAA shares; or
(c) $320,001 - $400,000 - bonus of $25,000 plus $25,000 worth of PAA shares; or
(d) $400,001 - $525,000 - bonus of $30,000 plus $30,000 worth of PAA shares; or
(e) $525,001 - $650,000 - bonus of $35,000 plus $35,000 worth of PAA shares; or
(f)
$650,001 - $750,000 - bonus of $40,000 plus $40,000 worth of PAA shares; or
(g) $750,001 - $1,000,000 - bonus of $45,000 plus $45,000 worth of PAA shares; or
(h) $1,000,001 plus - bonus of $50,000 plus $50,000 worth of PAA shares; or
(i)
for any after tax profit above $1,250,000 – additional bonus of $5,000 plus $5,000 worth of PAA shares in addition to the
amount in (h) above for each additional $250,000 profit figure above above $1,250,000.
Payment of termination benefit on termination by the employer, other than for gross misconduct, is equal to three (3) months base
salary and superannuation. Payment of the bonus and grant of shares will be made in the following year after the completion of the
annual audit.
Share-based compensation
Shares
There were no shares issued to directors and other KMP as part of compensation during the year ended 30 June 2020.
Options
There were no options issued to directors and other KMP as part of compensation during the year ended 30 June 2020.
Performance rights
On 26 April 2020, 4,000,000 performance rights were granted to Richard Mollard as part of compensation during the year
ended 30 June 2020. The performance rights have a number of vesting conditions attached. 2,000,000 performance rights
expire on 30 April 2022, with the remaining 2,000,000 expiring 31 October 2022.
Options and performance rights granted as part of remuneration
All options and performance rights have been granted and issued. The amount allocated to remuneration is allocated over the
vesting period.
Other transactions with key management personnel and their related parties
There were no other transactions with key management personnel and their related parties during the year.
- 14 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
DIRECTORS' REPORT (Cont.)
Remuneration Report (Audited)
Additional information
The earnings of the consolidated entity for the five years to 30 June 2020 are summarised below:
Revenue
EBITDA
EBIT
Loss after income tax
2020
$
2019
$
2018
$
2017
$
2016
$
4,123,411
(968,857)
(1,243,494)
(1,361,990)
4,364,554
(1,330,970)
(1,503,400)
(1,551,222)
3,295,904
(2,374,722)
(2,493,327)
(2,521,679)
3,333,505
2,754,737
(1,161,152)
(4,076,414)
(1,343,614)
(3,927,256)
(1,343,614)
(3,927,256)
The factors that are considered to affect total shareholders return ('TSR') are summarised below:
Share price at financial year end ($)
Total dividends declared (cents per share)
Basic earnings per share (cents per share)
0.16
-
(0.46)
0.04
-
(0.71)
0.04
-
(1.72)
0.06
-
(1.08)
0.08
-
(0.60)
2020
2019
2018
2017
2016
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key management
personnel of the consolidated entity, including their personally related parties, is set out below:
2020
Directors
Roger Aston
Robert Bishop
Sam Wright
Neville Bassett
Other Key
Management
Personnel
Wayne Best
Colin La Galia**
John Horton
Rebecca McCrackan
Richard Mollard
Martine Keenan
Balance
1 July 2019
No.
Share
Consolidation
No.
Received as
Compensation
No.
At date of
Appointment
and/or
Resignation
No.
15,044,815
9,211,060
2,800,000
7,000
1,072,538
-
1,250
-
625,000
-
28,761,663
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Net Change
Other*
No.
Balance
30 June 2020
No.
-
-
200,000
-
15,044,815
9,211,060
3,000,000
7,000
-
-
-
-
-
-
200,000
1,072,538
-
1,250
-
625,000
-
28,961,663
*The net change other column above includes shares that were purchased during the year.
**Appointed on 7 October 2019.
- 15 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
DIRECTORS' REPORT (Cont.)
Remuneration Report (Audited)
Option holding
The number options over ordinary shares in the Company held during the financial year by each director and other members of
key management personnel of the consolidated entity, including their personally related parties, is set out below:
2020
Directors
Roger Aston
Robert Bishop
Sam Wright
Neville Bassett
Other Key
Management
Personnel
Wayne Best
Colin La Galia**
John Horton
Richard Mollard
Rebecca
McCrackan
Martine Keenan
Balance
1 July 2019
Granted as
Compensation
Options
Exercised
No.
No.
No.
At date of
Appointment
and/or
Resignation
1,791,050
913,222
166,668
-
1,311,017
-
250,000
10,125,000
250,000
750,000
15,556,957
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Net
Change
Other*
No.
Balance
30 June
2020
No.
Total
Vested
No.
(1,791,050)
(913,222)
(166,668)
-
-
-
-
-
-
-
-
-
(61,017)
-
-
1,250,000
-
250,000
1,250,000
-
250,000
(10,125,000)
-
-
(13,056,957)
-
-
250,000
750,000
2,500,000
250,000
750,000
2,500,000
*The net change other column above includes those options that have expired during the year.
**Appointed on 7 October 2019.
[END OF REMUNERATION REPORT]
- 16 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
DIRECTORS' REPORT (Cont.)
Share Options & Performance Rights
The details of unissued ordinary shares under option at the date of this report are as follows:
Number
Exercise Price
Expiry Date
Unlisted
Unlisted
Unlisted
500,000
5,000,000
10,000,000
15 cents
8 cents
12 cents
30 June 2022
31 December 2020
31 January 2022
During the year, 1,799,862 options were exercised. Please refer to Note 27 ‘Events After the Reporting Period’
for details of all options exercised since the end of the financial year to the date of this report.
The Company has no unissued ordinary shares through Performance Rights.
During the year, the Company issued 4,000,000 performance rights. The performance rights have no exercise price and vest based
on a number of vesting conditions. 2,000,000 of the rights expire on 30 April 2022 and 2,000,000 expire on 31 October 2022. To date
none of the performance rights have vested.
Shares Issued on Exercise of Compensation Options
No options were exercised last financial year, this financial year or up to the date of this report.
Indemnification and Insurance of Directors and Officers
During the year, the Company held Directors and Officers Indemnity insurance.
The Company’s Constitution provides that except as may be prohibited by Sections 199A and 199B of the Corporations Act every
Officer, auditor or agent of the Company shall be indemnified out of the property of the Company against any liability incurred by
him in his capacity as Officer, auditor or agent of the Company or any related corporation in respect of any act or omission whatsoever
and howsoever occurring or in defending any proceedings whether civil or criminal.
Indemnification 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 for leave of Court to bring proceedings on behalf of the Company or 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 any part of these proceedings.
Annual Report Disclosure on Corporate Governance
PharmAust Limited is a drug discovery and development Company. The Company has established and continues to refine and
improve procedures to ensure a culture of good corporate governance exists and is respected across the consolidated entity.
The Company has a written policy designed to ensure compliance with ASX Listing Rules and all other regulatory requirements for
disclosures. Additionally, the Company has adopted a policy designed to ensure procedures to implement the policy are suitable
and effective.
The Board wishes to acknowledge that nothing has come to its attention that would lead it to conclude that its current practices
and procedures are not appropriate for an organisation of the size and maturity of the Company. The Corporate Governance
Policy and the Company’s corporate governance practices is set out on the Company’s web site at www.pharmaust.com.
- 17 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
Non-Audit Services
DIRECTORS' REPORT (Cont.)
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor are
outlined in Note 28 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another person or
firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the Corporations
Act 2001.
The directors are of the opinion that the services as disclosed in Note 28 to the financial statements do not compromise the external
auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity of
the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics
for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including reviewing or
auditing the auditor's own work, acting in a management or decision-making capacity for the Company, acting as
advocate for the Company or jointly sharing economic risks and rewards.
●
Officers of the Company who are former partners of RSM Australia Partners
There are no officers of the Company who are former partners of RSM Australia Partners.
Auditor’s Independence Declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is included within
these financial statements.
Auditor
RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.
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 ROGER ASTON
Executive Chairman
18 September 2020
Perth, Western Australia
- 18 -
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of PharmAust Limited for the year ended 30 June 2020, I
declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 18 September 2020
TUTU PHONG
Partner
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF PHARMAUST LIMITED
Opinion
We have audited the financial report of PharmAust Limited (Company) and its subsidiaries (Group), which
comprises the consolidated statement of financial position as at 30 June 2020, the consolidated statement of profit
or loss and other comprehensive income, the consolidated statement of changes in equity and the consolidated
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:
(i)
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
(ii)
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 (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 confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
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.
How our audit addressed this matter
Our audit procedures included:
Assessing whether there are any indicators of
impairment of the MPL asset, including enquiring
with management on the current and planned
commercialisation activities;
Assessing the reasonableness of management’s
assumptions used in the value-in-use model and
whether there are any indicators that would require
the re-estimation of the asset’s recoverable amount;
and
Assessing the adequacy of the disclosures in the
financial statements.
Key audit matter
Intangible Assets
Refer to Note 8 in the financial statements
Intangible assets of the Group are $3,107,476 as at
30 June 2020. This relates to the intellectual
property rights for the monepantel oncology platform
(MPL).
The MPL asset is not yet available for use and is
required to be tested annually for impairment by
comparing its carrying amount with its recoverable
amount. Management’s assessment determined
that the recoverable amount of this asset exceeded
its carrying value at the reporting date.
Management’s assessment involved:
Reviewing the key assumptions for the MPL
value-in-use model to determine whether there
were any significant changes during the current
financial year; and
Evaluating whether any events have occurred to
indicate the MPL asset’s recoverable amount
may be less than its carrying amount.
Management’s assessment is subject to estimation
uncertainty and requires significant management
judgement. We determined this to be a key audit
matter due the risk that the outcome of the
impairment assessment could vary significantly if
different assumptions are applied.
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 the
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.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and
Assurance Standards Board website at: https://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This
description forms part of our auditor's report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors' report for the year ended 30 June 2020.
In our opinion, the Remuneration Report of PharmAust Limited, for the year ended 30 June 2020, complies with
section 300A of the Corporations Act 2001.
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.
RSM AUSTRALIA PARTNERS
Perth, WA
Dated: 18 September 2020
TUTU PHONG
Partner
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
DIRECTORS’ DECLARATION
In accordance with a resolution of the Directors of PharmAust Limited, I state that:
1.
In the opinion of the directors:
(a)
the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the financial position of the consolidated entity as at 30 June 2020 and of its
performance, for the year ended on that date; and
complying with Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001;
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable;
(c)
the financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 1;
2. This declaration has been made after receiving the declarations required to be made in accordance with sections of 295A of
the Corporations Act 2001 for the financial year ending 30 June 2020.
On behalf of the Board
Dr ROGER ASTON
Executive Chairman
18 September 2020
Perth, Western Australia
- 24 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2020
Revenue
Other income
Raw materials and consumables used
Employee benefits expense
Depreciation expense
Finance costs
Research and development expenses
Administration expenses
Loss before income tax expense
Income tax expense
Loss after income tax expense
Other comprehensive income
Total comprehensive loss for the year
NOTE
2
2
CONSOLIDATED
2020
$
2019
$
3,195,892
927,519
4,123,411
(246,157)
(3,099,119)
(274,637)
(118,495)
(605,351)
(1,141,642)
(5,485,401)
3,670,457
694,097
4,364,554
(333,632)
(2,913,555)
(172,430)
(47,822)
(1,039,136)
(1,409,201)
(5,915,776)
1,361,990
1,551,222
3a
-
-
1,361,990
1,551,222
-
-
1,361,990
1,551,222
Basic and diluted loss per share (cents per share)
16
(0.46)
(0.71)
The accompanying notes form part of these financial statements.
- 25 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
STATEMENT OF FINANCIAL POSITION
As at 30 June 2020
CONSOLIDATED
NOTE
2020
$
2019
$
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other current assets
Inventory
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Intangible assets
Plant and equipment
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Borrowings
Employee benefits
Lease liabilities
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Borrowings
Employee Benefits
Lease liabilities
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
4
5a
6
7
8
9
10
11
12
17
11
12
17
2,880,496
297,683
34,359
857,570
4,070,108
3,107,476
3,568,717
6,676,193
2,090,625
258,842
58,509
611,816
3,019,792
3,107,476
2,468,449
5,575,925
10,746,301
8,595,717
557,002
179,230
146,672
175,407
1,058,311
38,206
44,507
1,079,008
1,161,721
673,020
143,384
105,602
-
922,006
181,230
36,601
-
217,831
2,220,032
1,139,837
8,526,269
7,455,880
13
14
26
53,772,433
1,955,644
(47,201,808)
51,388,306
1,907,392
(45,839,818)
8,526,269
7,455,880
The accompanying notes form part of these financial statements.
- 26 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2020
Issued
Capital
Accumulated
Losses
$
$
Share-Based
Payments
Reserve
$
Total Equity
$
As at 1 July 2018
49,371,354
(44,288,596)
2,055,460
7,138,218
Loss for the year
Total comprehensive loss for the year
-
-
(1,551,222)
(1,551,222)
Shares issued (net of costs)
Conversion and lapse of performance
rights
1,917,577
99,375
-
-
-
-
-
(1,551,222)
(1,551,222)
1,917,577
(148,068)
(48,693)
As at 30 June 2019
51,388,306
(45,839,818)
1,907,392
7,455,880
As at 1 July 2019
51,388,306
(45,839,818)
1,907,392
7,455,880
Loss for the year
Total comprehensive loss for the year
-
-
(1,361,990)
(1,361,990)
-
-
(1,361,990)
(1,361,990)
Shares issued (net of costs)
Exercise of options
Share-based payment
2,223,144
160,983
-
-
-
-
-
-
48,252
2,223,144
160,983
48,252
As at 30 June 2020
53,772,433
(47,201,808)
1,955,644
8,526,269
The accompanying notes form part of these financial statements.
- 27 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
STATEMENT OF CASH FLOWS
For the year ended 30 June 2020
Cash Flows from Operating Activities
Receipts from customers
Payments to suppliers and employees
Other income
Interest received
Interest and other costs of finance
Net cash used in operating activities
Cash Flows from Investing Activities
Payments for plant and equipment
Net cash used in investing activities
Cash Flows from Financing Activities
Proceeds from share issues (net)
Repayment of borrowing and leases
Net cash generated from financing activities
Net increase in cash held
Cash at the beginning of the financial year
CONSOLIDATED
NOTE
2020
$
2019
$
3,133,673
(5,332,663)
927,519
23,378
(21,909)
(1,270,002)
3,659,968
(5,860,249)
676,299
17,798
(47,822)
(1,554,006)
19b
(30,229)
(30,229)
(146,725)
(146,725)
2,384,127
(294,025)
2,090,102
2,016,952
(101,027)
1,915,925
789,871
215,194
2,090,625
1,875,431
Cash at the end of the financial year
19a
2,880,496
2,090,625
The accompanying notes form an integral part of these financial statements.
- 28 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
These consolidated financial statements and notes represent those of PharmAust Limited and its Controlled Entities (the
“consolidated entity” or “Group”).
The separate financial statements of the parent entity, PharmAust Limited, have not been presented within this financial report
as permitted by the Corporations Act 2001. Supplementary information about the parent entity is disclosed within this financial
statements in Note 25.
1
SIGNIFICANT ACCOUNTING POLICIES
The financial statements are general purpose financial statements that have been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian
Accounting Standards Board and the Corporations Act 2001. The Group is a for-profit entity for financial reporting purposes
under Australian Accounting Standards.
Australian Accounting Standards set out accounting policies that the Australian Accounting Standards Board has
concluded would result in financial statements containing relevant and reliable information about transactions, events and
conditions. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply
with International Financial Reporting Standards as issued by the IASB. Material accounting policies adopted in the
preparation of these financial statements are presented below and have been consistently applied unless stated otherwise.
Except for cash flow information, the financial statements have been prepared on an accruals basis and are based on
historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets
and financial liabilities.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in Note 25.
The financial report was authorised for issue on 18 September 2020 by the Directors of the Company.
(a) Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of PharmAust Limited as at 30
June 2020 and the results of all subsidiaries for the year then ended. PharmAust Limited and its subsidiaries together are
referred to in these financial statements as the 'consolidated entity'.
Subsidiaries are all those entities over which the parent has control. The consolidated entity controls an entity when the
parent entity is exposed to, or has rights to, variable returns from its involvement with the subsidiary and has the ability to
affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date
on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity 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 consolidated entity.
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.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and
other comprehensive income, statement of financial position and statement of changes in equity of the consolidated entity.
Losses incurred by the consolidated entity are attributed to the non-controlling interest in full, even if that results in a deficit
balance.
Where the consolidated entity 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
consolidated entity 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.
- 29 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
1
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(b) 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.
The parent and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the tax
consolidation regime. The head entity and each subsidiary in the tax consolidated group continue to account for their own
current and deferred tax amounts. The tax consolidated group has applied the 'separate taxpayer within group' approach
in determining the appropriate amount of taxes to allocate to members of the tax consolidated group.
In addition to its own current and deferred tax amounts, the head entity also recognises the current tax liabilities (or assets)
and the deferred tax assets arising from unused tax losses and unused tax credits assumed from each subsidiary in the tax
consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
receivable from or payable to other entities in the tax consolidated group. The tax funding arrangement ensures that the
intercompany charge equals the current tax liability or benefit of each tax consolidated group member, resulting in neither
a contribution by the head entity to the subsidiaries nor a distribution by the subsidiaries to the head entity.
(c) Plant and equipment
Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation and any
accumulated impairment. In the event the carrying amount of plant and equipment is greater than the estimated
recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount and
impairment losses are recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a
revalued asset.
The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable
amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be
received from the asset’s employment and subsequent disposal. The expected net cash flows have been discounted to
their present values in determining recoverable amounts.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. All other repairs and maintenance are recognised as expenses in profit or loss during the financial period
in which they are incurred.
- 30 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
1
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(c) Plant and Equipment (Cont.)
Depreciation
The depreciable amount of all plant is depreciated on a straight-line basis over their useful lives to the consolidated entity
commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Class of fixed asset
Plant and equipment
Depreciation rate
3-20 years
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at each reporting date.
Leasehold improvements and plant and equipment under lease are depreciated over the unexpired period of the lease or
the estimated useful life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future economic benefit to the
consolidated entity. Gains and losses between the carrying amount and the disposal proceeds are taken to profit or loss.
Any revaluation surplus reserve relating to the item disposed of is transferred directly to retained profits.
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 consolidated entity 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 consolidated entity 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.
(d) Leases
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 consolidated entity'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. The variable lease payments that
do not depend on an index or a rate are expensed in the period in which they are incurred.
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.
Investments and other financial assets
(e)
Investments and other financial assets are initially measured at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently measured at either
amortised cost or fair value depending on their classification. Classification is determined based on both the business model within
which such assets are held and the contractual cash flow characteristics of the financial asset unless an accounting mismatch is
being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been transferred and the
consolidated entity has transferred substantially all the risks and rewards of ownership. When there is no reasonable expectation
of recovering part or all of a financial asset, it's carrying value is written off.
- 31 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are classified as financial
assets at fair value through profit or loss. Typically, such financial assets will be either: (i) held for trading, where they are acquired
for the purpose of selling in the short-term with an intention of making a profit, or a derivative; or (ii) designated as such upon
initial recognition where permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the consolidated entity
intends to hold for the foreseeable future and has irrevocably elected to classify them as such upon initial recognition.
Impairment of financial assets
The consolidated entity recognises a loss allowance for expected credit losses on financial assets which are either measured at
amortised cost or fair value through other comprehensive income. The measurement of the loss allowance depends upon the
consolidated entity's assessment at the end of each reporting period as to whether the financial instrument's credit risk has
increased significantly since initial recognition, based on reasonable and supportable information that is available, without
undue cost or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-month expected credit
loss allowance is estimated. This represents a portion of the asset's lifetime expected credit losses that is attributable to a default
event that is possible within the next 12 months. Where a financial asset has become credit impaired or where it is determined
that credit risk has increased significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount
of expected credit loss recognised is measured on the basis of the probability weighted present value of anticipated cash
shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets mandatorily measured at fair value through other comprehensive income, the loss allowance is recognised
in other comprehensive income with a corresponding expense through profit or loss. In all other cases, the loss allowance
reduces the asset's carrying value with a corresponding expense through profit or loss.
(f)
Foreign currency transactions and balances
The financial statements are presented in Australian dollars, which is the Group’s functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars 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.
- 32 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
1
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(g) Impairment of assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. The
assessment will include the consideration of external and internal sources of information including dividends received from
subsidiaries, associates or jointly controlled entities deemed to be out of pre-acquisition profits. If such an indication exists,
an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the
asset’s fair value less costs to sell and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying amount
over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a revalued amount in
accordance with another Standard. Any impairment loss of a revalued asset is treated as a revaluation decrease in
accordance with that other Standard.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable
amount of the cash-generating unit to which the asset belongs.
Impairment testing is performed annually for goodwill, intangible assets with indefinite lives and intangible assets not yet
available for use.
(h) Employee benefits
Short-term employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave 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.
Other long-term employee benefits
The liability for annual leave and long service leave 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 using the projected unit credit method. Consideration is given to expected future wage and salary
levels, experience of employee departures and periods of service. Expected future payments are discounted using market
yields at the reporting date on corporate bonds with terms to maturity and currency that match, as closely as possible, the
estimated future cash outflows.
Share-based payments
Equity-settled and cash-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. Cash-settled transactions are awards of cash for the exchange of services, where the amount of
cash is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently determined
using either the Binomial or Black-Scholes option pricing model that takes into account the exercise price, the term of the
option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the
expected dividend yield and the risk free interest rate for the term of the option, together with non-vesting conditions that
do not determine whether the consolidated entity receives the services that entitle the employees to receive payment. No
account is taken of any other vesting conditions.
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.
(i) Provisions
Provisions are recognised when the consolidated entity has a present (legal or constructive) obligation as a result of a past
event, it is probable the consolidated entity will be required to settle the obligation, and a reliable estimate can be made
of the amount of the obligation. The amount recognised as a provision is the best estimate of the consideration required to
settle the present obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
If the time value of money is material, provisions are discounted using a current pre-tax rate specific to the liability. The
increase in the provision resulting from the passage of time is recognised as a finance cost.
(j) 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 of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value. For the statement of cash flows presentation purposes, cash
and cash equivalents also includes bank overdrafts, which are shown within borrowings in current liabilities on the statement
of financial position.
- 33 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
1
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(k) Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using the effective
interest method, less any provision for impairment. Trade receivables are generally due for settlement within 30 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which uses a lifetime
expected loss allowance. To measure the expected credit losses, trade receivables have been grouped based on days
overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
(l) Revenue recognition
The consolidated entity recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the consolidated entity is expected to be
entitled in exchange for transferring goods or services to a customer. For each contract with a customer, the consolidated
entity: identifies the contract with a customer; identifies the performance obligations in the contract; determines the
transaction price which takes into account estimates of variable consideration and the time value of money; allocates
the transaction price to the separate performance obligations on the basis of the relative stand-alone selling price of each
distinct good or service to be delivered; and recognises revenue when or as each performance obligation is satisfied in a
manner that depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer such as discounts,
rebates and refunds, any potential bonuses receivable from the customer and any other contingent events. Such
estimates are determined using either the 'expected value' or 'most likely amount' method. The measurement of variable
consideration is subject to a constraining principle whereby revenue will only be recognised to the extent that it is highly
probable that a significant reversal in the amount of cumulative revenue recognised will not occur. The measurement
constraint continues until the uncertainty associated with the variable consideration is subsequently resolved. Amounts
received that are subject to the constraining principle are recognised as a refund liability.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the goods, which
is generally at the time of delivery.
Rendering of services
Revenue from a contract to provide services is recognised over time as the services are rendered based on either a fixed
price or an hourly rate.
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.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
All revenue is stated net of the amount of goods and services tax.
(m) 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.
- 34 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
1
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(n) Inventories
Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value on a 'first in first
out' basis. Cost comprises of direct materials and delivery costs, direct labour, import duties and other taxes, an appropriate
proportion of variable and fixed overhead expenditure based on normal operating capacity, and, where applicable,
transfers from cash flow hedging reserves in equity. Costs of purchased inventory are determined after deducting rebates
and discounts received or receivable.
Stock in transit is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery costs, net of
rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
(o) 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.
(p) Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of PharmAust Limited, 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.
(q) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily take a substantial
period of time to prepare for their intended use or sale are added to the cost of those assets, until such time as the assets
are substantially ready for their intended use or sale.
All other borrowing costs are recognised in profit or loss in the period in which they are incurred.
(r)
Intangibles assets
Intellectual property rights- three oncology technology platforms
Intellectual property rights are recognised at cost of acquisition less accumulated amortisation and any impairment losses.
For intellectual property rights not yet available for use, they are reviewed for impairment annually or more frequently if
events or changes in circumstances indicate that they might be impaired, and are carried at cost less accumulated
impairment losses.
Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are
capitalised only when technical feasibility studies identify that the project is expected to deliver future economic benefits
and these benefits can be measured reliably.
Intangible assets have a finite useful life and are amortised on a systematic basis based on the future economic benefits
over the useful life of the project following commercialisation of the assets.
(s) Fair value measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair
value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date; and assumes that the transaction will take place either: in the
principal market; or in the absence of a principal market, in the most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming
they act in their economic best interests. For non-financial assets, the fair value measurement is based on its highest and
best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to
measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable
inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the
significance of the inputs used in making the measurements. Classifications are reviewed at each reporting date and
transfers between levels are determined based on a reassessment of the lowest level of input that is significant to the fair
value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not
available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and
reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is
undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where
applicable, with external sources of data.
- 35 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
1
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(t) Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial year.
(u) Operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same
basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the
allocation of resources to operating segments and assessing their performance.
(v) 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 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 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.
(w) Trade and other payables
These amounts represent liabilities for goods and services provided to the consolidated entity 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 and are usually paid within 30 days of recognition.
(x) 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 component of the convertible notes that exhibits characteristics of a liability is recognised as a liability in the statement
of financial position, net of transaction costs.
On the issue of the convertible notes the fair value of the liability component is determined using a market rate for an
equivalent non-convertible bond and this amount is carried as a non-current liability on the amortised cost basis until
extinguished on conversion or redemption. The increase in the liability due to the passage of time is recognised as a finance
cost. The remainder of the proceeds are allocated to the conversion option that is recognised and included in shareholders
equity as a convertible note reserve, net of transaction costs. The carrying amount of the conversion option is not
remeasured in the subsequent years. The corresponding interest on convertible notes is expensed to profit or loss.
- 36 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
1
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(y) New or amended accounting standards and interpretations adopted
The consolidated entity 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 and Interpretations that are not yet mandatory have not been early adopted.
The consolidated entity does not expect any of the new standards applicable in future years will have a material impact
on the financial results or the disclosures of the consolidated entity.
In the current year, the consolidated entity has adopted all of the new and revised Standards and Interpretations issued by
the Australian Accounting Standards Board that are relevant to its operations and effective for the current annual reporting
period. The adoption of AASB 16 was the most meaningful to the consolidated entity.
AASB 16 Leases
The consolidated entity has adopted AASB 16 'Leases' (AASB 16) from 1 July 2019. The standard replaces AASB 117 'Leases'
(AASB 117) 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.
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 consolidated entity 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 re-measurement of lease liabilities.
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 consolidated entity'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. The variable lease payments that
do not depend on an index or a rate are expensed in the period in which they are incurred.
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.
Transition
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.
In accordance with the transition provisions of AASB 16, the consolidated entity has adopted the modified retrospective
transition approach to implementing the new standard. Under this approach, comparatives are not restated. Instead, the
reclassifications and adjustments arising from the new leasing rules are recognised in the statement of financial position on
1 July 2019.
The impact on the statement of financial position as at 1 July 2019 on the adoption of AASB16 are noted below:
1 July 2019
$'000
Right of use assets
- 37 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
Buildings
Total right of use assets
Lease liabilities - current (AASB 16)
Lease liabilities - non-current (AASB 16)
Total lease liabilities
Reduction in opening retained profits as at 1 July 2019
1,344,748
1,344,748
87,239
1,257,509
1,344,748
-
(z) Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether equity instruments
or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity instruments issued
or liabilities incurred by the acquirer to former owners of the acquiree and the amount of any non-controlling interest in the
acquiree. For each business combination, the non-controlling interest in the acquiree is measured at either fair value or at
the proportionate share of the acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or
loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities assumed for
appropriate classification and designation in accordance with the contractual terms, economic conditions, the
consolidated entity's operating or accounting policies and other pertinent conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the consolidated entity remeasures its previously held equity interest
in the acquiree at the acquisition-date fair value and the difference between the fair value and the previous carrying
amount is recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value. Subsequent
changes in the fair value of the contingent consideration classified as an asset or liability is recognised in profit or loss.
Contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity.
- 38 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
1
SIGNIFICANT ACCOUNTING POLICIES (Cont.)
(z) Business combinations (Cont.)
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-controlling
interest in the acquiree and the fair value of the consideration transferred and the fair value of any pre-existing investment
in the acquiree is recognised as goodwill. If the consideration transferred and the pre-existing fair value is less than the fair
value of the identifiable net assets acquired, being a bargain purchase to the acquirer, the difference is recognised as a
gain directly in profit or loss by the acquirer on the acquisition-date, but only after a reassessment of the identification and
measurement of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred
and the acquirer's previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts the provisional
amounts recognised and also recognises additional assets or liabilities during the measurement period, based on new
information obtained about the facts and circumstances that existed at the acquisition-date. The measurement period
ends on either the earlier of (i) 12 months from the date of the acquisition or (ii) when the acquirer receives all the information
possible to determine fair value.
(aa) Critical accounting estimates and judgements
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.
Other finite life intangible assets not yet in use
The consolidated entity tests annually, or more frequently if events or changes in circumstances indicate impairment,
whether other finite life intangible assets have suffered any impairment, in accordance with the accounting policy stated
in Note 1(r). The recoverable amounts of cash-generating units have been determined based on value-in-use calculations.
These calculations require the use of assumptions, including estimated discount rates based on the current cost of capital,
royalty rates and growth rates of the estimated future cash flows.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has had, or may
have, on the consolidated entity based on known information. This consideration extends to the nature of the supply chain,
staffing and geographic regions in which the consolidated entity operates. Other than as addressed in specific notes, there
does not currently appear to be either any significant impact upon the financial statements or any significant uncertainties
with respect to events or conditions which may impact the consolidated entity unfavourably as at the reporting date or
subsequently as a result of the Coronavirus (COVID-19) pandemic.
- 39 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
2
REVENUE
Sales
OTHER INCOME
Interest received
Other revenue
Refer to Note 23 Segment Reporting for further information with respect to disaggregated revenue.
3
INCOME TAX EXPENSE
3a
No income tax is payable as a tax loss has been incurred for income tax purposes.
Loss before income tax
Prima facie tax benefit at 27.5% (2019: 27.5%)
Tax effect of:
- Other non-allowable items
- Deferred tax asset not brought to account
3b
Deferred tax asset
CONSOLIDATED
2020
$
2019
$
3,195,892
3,670,457
3,290
924,229
927,519
17,798
676,299
694,097
(1,361,990)
(1,551,222)
(374,547)
(426,586)
219,455
155,092
-
277,538
149,048
-
The potential deferred tax assets have not been recognised in the statement of financial position because their recovery is
not considered probable.
-
Tax losses at 27.5% tax rate (not recognised) (2019: 27.5%)
6,790,774
6,595,011
PharmAust Limited and its wholly-owned Australian subsidiary have formed an income tax consolidated group under the Tax
Consolidation Regime. PharmAust Limited is responsible for recognising the current and deferred tax assets and liabilities for
the tax consolidated group. The tax consolidated group has entered a tax sharing agreement whereby each Company in
the consolidated entity contributes to the income tax payable in proportion to their contribution to the net profit before tax
of the tax consolidated group.
4
CASH AND CASH EQUIVALENTS
Cash at bank
2,880,496
2,090,625
- 40 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
5 TRADE AND OTHER RECEIVABLES
5a
CURRENT
Trade receivables
Less: provision for doubtful debts
CONSOLIDATED
2020
$
2019
$
297,683
-
297,683
258,842
-
258,842
Trade receivables: Payment terms are 30 days from the date of recognition and carried at fair value.
5b Provision for impairment of receivables
Current trade and term receivables are non-interest bearing and generally on 30-day terms. Non-current trade and term
receivables are assessed for recoverability based on the underlying terms of the contract. A provision for impairment is
recognised when there is objective evidence that an individual trade or term receivable is impaired.
5c Past due but not impaired
As of 30 June 2020, trade receivables of $7,177 (2019: $9,585) were past due but not impaired. These relate to a number of
independent customers for whom there is no recent history of default. The ageing analysis of these trade receivables is as
follows:
31 to 60 days
61 days and above
561
7,177
7,738
249,257
9,585
258,842
Based on the credit history of these other classes, it is expected that these amounts will be received when due. The Group
does not hold any collateral in relation to these receivables.
5d Fair value and credit risk
The Group has no significant concentration of credit risk with respect to any single counterparty or group of counterparties
other than those receivables specifically provided for and mentioned within Note 5. The class of assets described as “trade
and other receivables” is considered to be the main source of credit risk related to the Group.
6
OTHER CURRENT ASSETS
GST receivable
Bond
Prepayments
7 Inventories
Finished Goods
- 41 -
12,966
4,291
17,102
34,359
29,771
4,291
24,447
58,509
857,570
857,570
611,816
611,816
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
8. Intangible Assets
Intellectual property rights – at cost
Amortisation
Accumulated impairment losses
Movements in Carrying Amounts:
Balance at the beginning of the year
Addition
Impairment
Balance at the end of the year
CONSOLIDATED
2020
$
2019
$
5,179,128
-
(2,071,652)
3,107,476
5,179,128
-
(2,071,652)
3,107,476
3,107,476
-
-
3,107,476
3,107,476
-
-
3,107,476
No amortisation has been recognised as these intellectual property rights are not yet at the commercialisation stage.
The Group has assessed the recoverability of the carrying amount of the Intangible Asset based on a 16-year value in use
calculation using a discounted cash flow model for the intellectual property rights to the monepantel (MPL) oncology
platform. The calculation is based on budgets approved by management, assuming commercialisation through a royalty
revenue stream for both human and animal patents. The key assumptions used in the discounted cash flow model include:
-
-
Royalty rate of 10% (2019: 10%).
Post-tax discount rate of 30% (2019: 30%).
The discount rate of 30% post-tax reflects management’s estimate of the time value of money and the Group’s weighted
average cost of capital.
Based on the results of the value in use calculation using a discounted cash flow model, there is no impairment required to
be recognised.
9. PLANT AND EQUIPMENT
Plant and Equipment - Cost
Less: Accumulated depreciation
Right of Use Asset – Cost
Less: Accumulated depreciation
Movements in Carrying Amounts:
Balance at 1 July 2018
Additions
Depreciation expense
Balance at 30 June 2019
Additions
Depreciation expense
Balance at 30 June 2020
CONSOLIDATED
2020
$
2019
$
3,526,015
(1,179,731)
2,346,284
1,344,676
(122,243)
1,222,433
3,568,717
Plant and
Equipment
$
2,495,154
145,725
(172,430)
2,468,449
30,229
(152,394)
2,346,284
Right of Use
Asset
$
-
-
-
-
1,344,676
(122,243)
1,222,433
3,444,975
(976,526)
2,468,449
-
-
-
2,468,449
Total
$
2,495,154
145,725
(172,430)
2,468,449
1,374,905
(274,637)
3,568,717`
The consolidated entity leases buildings for its offices under agreements of between five to fifteen years with, in some cases, options
to extend. The leases have various escalation clauses. On renewal, the terms of the leases are renegotiated.
10 TRADE AND OTHER PAYABLES
Trade creditors and accruals
557,002
673,020
Payment terms are 30 days from receipt of goods and/or services rendered.
- 42 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
11
BORROWINGS
CURRENT
EFIC Loan Facility
NON CURRENT
EFIC Loan Facility
Terms and conditions:
179,230
179,230
143,384
143,384
38,206
38,206
181,230
181,230
The EFIC Loan Facility has a variable interest rate charged at the AFMA Bank Bill Average Bid Rate fix + 6.05% margin. At
30 June 2020 this rate was 6.195%.
Financing arrangements
Loan Facility 1:
The consolidated entity entered into a loan agreement to gain access to an original loan facility of $466,000.
Security: First charge over the new laboratory equipment.
Loan facility 1 (formerly known as Loan Facility 2):
Total facility limit
Amount utilised
Total unused facility at 30 June
12
EMPLOYEE BENEFITS
CURRENT
Employee entitlements
NON-CURRENT
Employee entitlements
466,000
(217,436)
466,000
(324,614)
248,564
141,386
146,672
105,602
44,507
36,601
Amounts not expected to be settled within the next 12 months
The current provision for employee benefits includes all unconditional entitlements where employees have completed the
required period of service and also those where employees are entitled to pro-rata payments in certain circumstances. The entire
amount is presented as current, since the consolidated entity does not have an unconditional right to defer settlement. However,
based on past experience, the consolidated entity does not expect all employees to take the full amount of accrued leave or
require payment within the next 12 months.
13
ISSUED CAPITAL
Issued and paid up ordinary shares
53,772,433
51,388,306
13a Movement in fully paid ordinary shares
Ordinary Shares
1 July
Shares issued (net of costs)
Conversion and lapse of performance rights
Share issued upon the exercise of options
30 June
2020
2019
Number of shares
2020
$
2019
$
280,221,192
199,050,664
51,388,306
49,371,354
19,999,999
79,920,528
2,223,144
1,917,577
-
1,250,000
-
99,375
1,799,862
-
160,983
-
302,021,053
280,221,192
53,772,433
51,388,306
- 43 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
13
ISSUED CAPITAL (Cont.)
13b
Terms and Conditions
Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per
share at shareholders’ meetings.
In the event of winding up the Company, ordinary shares rank after all other shareholders and creditors and are fully entitled
to any proceeds from liquidation.
Ordinary shares issued as a result of the exercise of options, will rank equally and on the same terms and conditions as all
other shareholders.
13c Capital Management
Management controls the capital of the Group in order to maintain a good debt to equity ratio, provide the shareholders
with adequate returns and ensure that the Group can fund its operations and continue as a going concern.
The Group’s debt and capital includes ordinary share capital and financial liabilities, supported by financial assets.
There are no externally imposed capital requirements.
Management effectively manages the Group’s capital by assessing its financial risks and adjusting its capital structure in
response to changes in these risks and in the market. These responses include the management of debt levels, distributions
to shareholders and share issues.
There have been no changes in the strategy adopted by management to control the capital of the Group since the prior
year. The gearing ratios for the year ended 30 June 2020 and 30 June 2019 are as follows:
Total borrowings
Less: cash and cash equivalents
Net debt
Total equity
Total capital
14
RESERVES
NOTE
CONSOLIDATED
2020
$
2019
$
2,028,853
(2,880,496)
(851,643)
8,526,270
7,674,627
997,634
(2,090,625)
(1,092,991)
7,387,483
6,294,492
Share-based payments reserve
1,955,644
1,907,392
The movement in the share-based payments reserve was as follows:
2019
At 1 July
Performance rights converted
Performance rights lapsed
Options expired
At 30 June
2020
At 1 July
Performance rights granted
At 30 June
No. of
Performance
Rights
No. of Options
Weighted
Average
Exercise Price
$
6,750,000
(1,250,000)
(5,500,000)
-
-
57,570,412
-
-
(675,000)
56,895,412
0.13
-
-
0.16
0.13
No. of
Performance
Rights
No. of Options
-
4,000,000
4,000,000
56,895,412
-
56,895,412
Weighted
Average
Exercise Price
$
0.13
-
0.13
Balance
$
2,055,460
(99,375)
(48,693)
-
1,907,392
Balance
$
1,907,392
48,252
1,955,644
35,750,000 options are exercisable as at 30 June 2020 (2019: 56,895,412).
1,799,862 options were exercised during the year (2019: Nil).
The weighted average remaining contractual life of options outstanding at year-end was 0.04 years (2019: 1.04 years).
The weighted average exercise price of outstanding options at the end of the reporting period was $0.13 (2019: $0.13).
- 44 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
15 RELATED PARTY TRANSACTIONS
Transactions between related parties are on normal commercial terms and conditions which are no more favourable than
those available to other parties. The following transactions occurred with related parties:
Transactions with related parties:
The following transactions occurred with related parties:
Payments for goods from Nanollose Limited [1]
Payment for services to – Straight Lines Consultancy [2]
[1] Former Epichem Chairman, Wayne Best is Executive Chairman of Nanollose Limited.
[2] Non-Executive Director Sam Wright is Managing Director of Straight Lines Consultancy.
CONSOLIDATED
2020
$
2019
$
170,190
18,000
203,944
18,000
16
EARNINGS PER SHARE
Net (loss) attributable to members of the Company
1,361,990
1,551,222
Weighted average number of ordinary shares outstanding during
the year used in calculating basic earnings per share.
Basic Earnings per Share
16a
No.
No.
296,032,074
219,329,568
Basic earnings per share is determined by dividing the loss after income tax attributable to members of the Company by the
weighted average number of ordinary shares outstanding during the financial period, adjusted for any bonus elements in
ordinary shares issued during the year.
16b
Diluted Earnings per Share
Diluted earnings per share is the same as basic earnings per share as there were no options on issue which would be
potential ordinary shares.
17
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s financial instruments consist mainly of deposits with banks, local money market instruments, short-term
investments, accounts receivable and payable, loans to and from subsidiaries, borrowings and leases.
The totals for each category of financial instruments, measured in accordance with AASB 9 as detailed in the accounting
policies to these financial statements, are as follows:
Financial assets
Cash and cash equivalents
Loans and receivables (excluding GST)
Total financial assets
Financial liabilities
Trade and other payables
Borrowings
Total financial liabilities
Note
Consolidated
2020
$
2019
$
4
5a
10
11
2,880,496
2,090,625
297,683
258,842
3,178,179
2,349,467
557,002
217,436
774,438
673,202
324,614
997,816
Specific Financial Risk Exposures and Management
The main risks arising from the Group’s financial instruments are cash flow interest rate risk, liquidity risk and foreign exchange
risk. Other minor risks are either summarised below or disclosed at Note 5 in the case of credit risk and Note 13 in the case of
capital risk management. The Board reviews and agrees policies for managing each of these risks.
- 45 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
17
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Cont.)
Cash Flow Interest Rate Risk
The Group’s exposure to the risks of changes in market interest rates relates primarily to the Group’s short-term deposits with a
floating interest rate. These financial assets with variable rates expose the Group to cash flow interest rate risk. All other
financial assets and liabilities in the form of receivables and payables are non-interest bearing. The Group does not engage
in any hedging or derivative transactions to manage interest rate risk.
The following tables set out the carrying amount by maturity of the Group’s exposure to interest rate risk and the effective
weighted average interest rate for each class of these financial instruments.
The Group has not entered into any hedging activities to cover interest rate risk. In regard to its interest rate risk, the Group
does not have a formal policy in place to mitigate such risks.
2020
Financial Assets
Cash and cash equivalents
Trade and other
receivables
Total Financial Assets
Financial liabilities
Trade and other payables
Borrowings
Lease labilities
Total Financial Liabilities
Net Financial
Assets/(Liabilities)
2019
Weighted
Average
Interest
Rate
Floating
Interest
Rate
$
Fixed Interest
Rate
Within 1 Year
$
Fixed
Interest
Rate
Within 1-5
Years
$
Non-Interest
Bearing
$
Total
$
0.58%
604,964
-
2,275,532
-
604,964
2,275,532
-
-
-
-
297,683
2,880,496
297,683
297,683
3,178,179
6.2%
7.5%
-
(217,436)
-
(217,436)
-
-
(175,407)
(175,407)
-
-
(1,079,008)
(1,079,008)
(557,002)
-
-
(557,002)
(557,002)
(217,436)
(1,254,415)
(2,028,853)
387,528
2,100,125
(1,079,008)
(259,319)
1,149,326
Weighted
Average
Interest
Rate
Floating
Interest
Rate
$
Fixed Interest
Rate
Within 1 Year
$
Fixed
Interest
Rate
Within 1-5
Years
$
Non-Interest
Bearing
$
Total
$
Financial Assets
Cash and cash equivalents
Trade and other
receivables
Total Financial Assets
Financial liabilities
Trade and other payables
Borrowings
Total Financial Liabilities
Net Financial
Assets/(Liabilities)
1.33%
2,025,071
-
65,554
-
2,025,071
65,554
7.5%
-
(324,614)
(324,614)
-
-
-
1,700,457
65,554
-
-
-
-
-
-
-
-
258,842
2,090,625
258,842
258,842
2,349,467
(673,020)
-
(673,020)
(673,020)
(324,614)
(997,634)
(414,178)
1,351,833
- 46 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
17
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Cont.)
Interest rate sensitivity analysis
At 30 June 2020 if interest rates had changed by 100 basis points during the entire year with all other variables held constant,
profit for the year and equity would have been $3,875 (2019: $ $17,004) lower/higher, mainly as a result of lower/higher
interest income from cash and cash equivalents.
Based on the sensitivity analysis only interest revenue from variable rate deposits and cash balances are impacted resulting
in a decrease or increase in overall income.
Liquidity risk
The Group manages liquidity risk by maintaining sufficient cash reserves and marketable securities and through the continuous
monitoring of budgeted and actual cash flows.
Contracted maturities
Payables
- within 1 year
Borrowings
- within 1 year
Price risk
The Group is not exposed to price risk.
Foreign exchange risk
CONSOLIDATED
2020
$
2019
$
557,002
673,020
179,230
143,384
The Group is exposed to foreign exchange rate arising from various currency exposures. Foreign exchange risk arises from
future commercial transactions and recognised assets and liabilities denominated in a currency that is not the Group’s
functional currency.
The Group’s exposure to foreign currency risk at the reporting date was as follows:
Trade receivables
Trade payables
USD
$
140,157
26,478
2020
EUR
$
2019
SEK
$
USD
$
EUR
$
NZD
$
556
-
-
925
132,492
21,998
-
-
-
-
- 47 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
17
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES (Cont.)
Foreign currency risk sensitivity analysis
At 30 June, the effect on profit and equity as a result of changes in the value of the Australian Dollar to the foreign
currencies, with all other variables remaining constant is as follows:
2020
Change in profit and equity with a +/-
10% in AUD to
EUR
$
USD
$
SEK
$
2019
Change in profit and equity with a +/-
10% in AUD to
USD
$
EUR
$
NZD
$
-
-
Trade receivables
Trade payables
13,379
2,527
53
-
-
88
12,646
2,099
-
-
Net fair values
For assets and other liabilities the net fair value approximates their carrying value. The Group has no financial assets where
the carrying amount exceeds net fair values at reporting date.
The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the statement
of profit or loss and other comprehensive income and in the notes to the financial statements.
18
INVESTMENT IN CONTROLLED ENTITIES
Parent Entity:
PharmAust Limited
Name of Controlled Entity:
Epichem Pty Ltd
Pitney Pharmaceuticals Pty Ltd
COUNTRY OF
CORPORATION
CLASS OF SHARES
EQUITY HOLDING
2020
%
EQUITY HOLDING
2019
%
Australia
-
Australia
Australia
Ordinary
Ordinary
-
100
100
-
100
100
- 48 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
19
NOTES TO THE STATEMENT OF CASH FLOWS
19a
Reconciliation of Cash
Cash at bank
19b
Reconciliation of net cash used in operating activities to loss after
income tax
Loss after income tax
Loss on disposal of fixed assets
Depreciation
Share Based Payment
Interest on lease
Movement in assets and liabilities:
Inventory
Receivables
Other assets
Payables
Provisions
CONSOLIDATED
2020
$
2019
$
2,880,496
2,090,625
(1,361,990)
(1,551,222)
-
274,637
48,252
96,586
(245,753)
(38,841)
24,150
(116,019)
48,976
6,326
172,430
(148,068)
-
(37,801)
(10,489)
(6,266)
56,194
(35,110)
Net cash used in operating activities
(1,270,002)
(1,554,006)
19c Non-cash Financing and Investing Activities
There were no non-cash financing and investing activities during the year (2019: $nil).
- 49 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
20
SHARE-BASED PAYMENTS
The Company has recognised the following amounts as expenses relating to share-based payments for the year.
Share-based payments to non-KMP – options
Share-based payments to KMP – performance rights
Total
2020
2019
$
$
29,423
18,829
48,252
-
-
-
Share-based payments to KMP – performance rights
During 2020, 4,000,000 performance rights were issued to KMP. The performance rights have no exercise price and a number of
vesting conditions. 2,000,000 of the performance rights expire 30 April 2022 and 2 000,000 expire 31 October 2022. $18,829 has been
recognised in employee benefits expense with respect to these performance rights.
Share-based payments to non-KMP – options
During the current year the following options were issued to non-KMP
Name
Grant Date
Expiry Date
Exercise Price
Number
Expense
Alto Capital
JP Equity
26-Jul-19
1-Jul-22
28-Aug-19
30-Jun-22
$0.065
$0.15
1,000,000
500,000
11,954
17,469
29,423
The fair values of the options granted in 2020 were calculated using the Black-Scholes option pricing model applying the following
inputs:
Name
Alto Capital
JP Equity
Options
Share Price
at Grant Date
Exercise
Price
Expected
Volatility
Dividend
Yield
Risk-free
Interest
Rate
Expiry
Date
Fair Value
at Grant
Date
1,000,000
500,000
$0.04
$0.10
$0.07
$0.15
71%
71%
0%
0%
0.975%
0.955%
1-Jul-22
30-Jun-22
$0.01
$0.04
The 1,500,000 Options granted to consultants in 2020 were valued at the fair value of services provided which was determined to
be $29,423.
The valuation of these options was recognised as share-based payment expense immediately as options vest immediately.
- 50 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
21
KEY MANAGEMENT PERSONNEL
21a Remuneration of Key Management Personnel
Refer to the remuneration report contained in the directors’ report for details of the remuneration paid or payable to each
member of the consolidated entity’s key management personnel for the year ended 30 June 2020 and 30 June 2019.
The totals of remuneration paid to key management personnel of the consolidated entity during the year are as follows:
Short term employee benefits
Post-employment benefits
Share based payment
CONSOLIDATED
2020
$
2019
$
1,152,689
90,567
18,829
1,262,085
868,888
54,319
-
923,207
CONSOLIDATED
2020
$
2019
$
22 COMMITMENTS
Office lease commitments
Non-cancellable operating leases contracted for but not recognised in the financial statements:
Payable – minimum lease payments
- Not later than 12 months
- Between 12 months and 5 years
- Later than 5 years
Minimum lease payments
-
-
-
-
162,685
650,741
163,589
977,015
Following the application of AASB 16 Leases, non-cancellable operating leases have now been recognised in the financial
statements.
- 51 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
23 SEGMENT REPORTING
Segment Information
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Directors (chief
operating decision makers) in assessing performance and determining the allocation of resources.
Descriptions of segments
i.
ii.
Corporate
The corporate segment covers all the corporate overhead expenses.
Pharmaceutical
The pharmaceutical segment provides products and services in synthetic and medicinal chemistry to the drug
discovery and pharmaceutical industries.
Basis of accounting for purposes of reporting by operating segments
a.
Accounting policies adopted
All amounts reported to the Directors, being the chief decision makers with respect to operating segments, are
determined in accordance with accounting policies that are consistent to those adopted in these financial
statements.
b.
Intersegment transactions
There are intersegment sales and purchase within the consolidated entity.
Intersegment loans payable and receivable are initially recognised at the consideration received/to be received net
of transaction costs.
c.
Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives majority
economic value from the asset. In the majority of instances, segment assets are clearly identifiable on the basis of
their nature and physical location.
d.
Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the
operations of the segment.
- 52 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
23
SEGMENT REPORTING(Cont'd)
The consolidated entity operates in two business segments as disclosed below:
i)
Segment Performance
Consolidated
2020
Revenue
External sales
Other external revenue
Total segment revenue
Inter-segment elimination
Total revenue per statement of
comprehensive income
Results
Segment result from continuing
operations before tax
Consolidated
2019
Revenue
External sales
Other external revenue
Total segment revenue
Inter-segment elimination
Total revenue per statement of
comprehensive income
Results
Segment result from continuing
operations before tax
Corporate
Pharmaceutical
$
$
Total
$
-
807,683
807,683
3,221,414
228,194
3,449,608
3,221,414
1,035,877
4,257,291
(133,880)
4,123,411
(1,575,668)
213,678
(1,361,990)
Corporate
Pharmaceutical
$
$
Total
$
-
652,079
652,079
3,670,457
42,018
3,712,475
3,670,457
694,097
4,364,554
-
4,364,554
(1,936,221)
384,999
(1,551,222)
- 53 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
23 SEGMENT REPORTING (Cont.)
ii) Segment assets and liabilities
Consolidated
2020
Segment assets
Segment assets
Total assets of the consolidated entity:
Segment liabilities
Segment operating liabilities
Total liabilities of the consolidated entity:
Consolidated
2019
Segment assets
Segment assets
Total assets of the consolidated entity:
Segment liabilities
Segment operating liabilities
Total liabilities of the consolidated entity:
ii) Revenue by geographical region
Corporate
$
Pharmaceutical
$
Total
$
2,757,269
2,757,269
7,989,033
7,989,033
10,746,302
10,746,302
(257,327)
(257,327)
(1,962,706)
(2,220,033)
(1,962,706)
(2,220,033)
Corporate
$
Pharmaceutical
$
Total
$
1,974,139
1,974,139
6,621,578
6,621,578
8,595,717
8,595,717
(327,419)
(327,419)
(812,418)
(1,139,837)
(812,418)
(1,139,837)
Revenue by geographical region
Revenue attributable to external customers is disclosed
below, based on the location of the external customer:
Switzerland
Australia
USA
Others
Total revenue
Assets by geographical region
The location of segment assets by geographical location
of the assets is disclosed below:
Australia
Total assets
Major customers
CONSOLIDATED
2020
$
2019
$
1,240,000
1,791,390
870,978
221,042
4,123,410
1,274,180
1,431,837
1,452,066
206,471
4,364,554
10,746,301
10,746,301
8,595,717
8,595,717
The consolidated entity has a number or customers to which it provides both products and services. The consolidated
entity supplies a single external customer within the pharmaceutical segment who accounts for 39% of external revenue
(2019: 35%). The next most significant customer accounts for 22% (2019: 34%).
- 54 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2020
24
CONTINGENT LIABILITIES
The consolidated entity has no contingent liabilities as at 30 June 2020.
25 PARENT INFORMATION
Statement of Financial Position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non -current liabilities
Total liabilities
Equity
Issued capital
Reserves
Accumulated losses
Total equity
Statement of profit or loss and other comprehensive income
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
2020
$
2019
$
4,182,377
3,438,990
7,621,367
3,395,759
3,439,990
6,835,749
491,390
-
491,390
561,482
-
561,482
53,772,433
1,955,644
(48,598,100)
7,129,977
51,388,306
1,907,392
(47,023,431)
6,272,267
(1,575,669)
-
(1,575,669)
(1,935,951)
-
(1,935,951)
Guarantees
PharmAust Limited is a guarantor of a debt facility for its fully owned subsidiary Epichem during the year as disclosed in
Note 11.
Other Commitments and Contingencies
PharmAust Limited has no commitments to acquire property, plant and equipment and has no contingent liabilities other
than those disclosed in Note 24.
CONSOLIDATED
2020
$
2019
$
26
ACCUMULATED LOSSES
Accumulated losses at beginning of the financial year
(Loss)after income tax for the year
Accumulated losses at the end of the financial year
(45,839,818)
(1,361,990)
(47,201,808)
(44,288,596)
(1,551,222)
(45,839,818)
27
EVENTS AFTER THE REPORTING PERIOD
Subsequent to year end the following transactions took place:
On 7 July 2020, the Company issued 4,400,000 fully paid ordinary shares based on the exercise of 650,000 unlisted options at 8c
per option raising $52,000 for the Company, exercise of 3,500,000 unlisted options at 12c per option raising $420,000 for the
Company and the exercise of 250,000 unlisted options at 15c per option raising $37,500 for the Company.
On 10 July 2020, the Company issued 1,000,000 fully paid ordinary shares based on the exercise of 500,000 unlisted options at 8c
per option raising $40,000 for the Company and exercise of 500,000 unlisted options at 12c per option raising $60,000 for the
Company.
On 15 July 2020, the Company issued 1,050,000 fully paid ordinary shares based on the exercise of 100,000 unlisted options at 8c
per option raising $8,000 for the Company and exercise of 950,000 unlisted options at 12c per option raising $114,000 for the
Company.
On 17 July 2020, the Company issued 2,625,000 fully paid ordinary shares based on the exercise of 125,000 unlisted options at 8c
per option raising $10,000 for the Company and exercise of 2,500,000 unlisted options at 12c per option raising $300,000 for the
Company.
- 55 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
On 24 July 2020, the Company issued 3,400,000 fully paid ordinary shares based on the exercise of 900,000 unlisted options at 8c
per option raising $72,000 for the Company and exercise of 2,500,000 unlisted options at 12c per option raising $300,000 for the
Company.
On 31 July 2020, the Company issued 900,000 fully paid ordinary shares based on the exercise of 900,000 unlisted options at 8c
per option raising $72,000 for the Company.
On 7 August 2020, the Company issued 200,000 fully paid ordinary shares based on the exercise of 200,000 unlisted options at 8c
per option raising $16,000 for the Company.
On 31 August 2020, the Company issued 250,000 fully paid ordinary shares based on the exercise of 250,000 unlisted options at 8c
per option raising $20,000 for the Company.
On 9 September 2020, the Company announced that Elanco Animal Health would not proceed with exercise of the option to
develop Monepantel for veterinary cancers.
No other matters or circumstances have arisen since the end of the financial year which significantly affected or may significantly
affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated entity in
future financial years, other than:
The impact of the Coronavirus (COVID-19) pandemic is ongoing and while it has had no significant impact on the consolidated
entity 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 measures 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.
CONSOLIDATED
2020 2019
$ $
28 AUDITOR’S REMUNERATION
Remuneration of RSM Australia Partners as auditor for:
- auditing or reviewing the financial report
- taxation services
73,000
14,250
87,250
67,000
15,500
82,500
- 56 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
SHAREHOLDER INFORMATION
Additional information required by ASX Limited Listing Rules, and not disclosed elsewhere in this report.
SHAREHOLDINGS
Mr Graham Darcy is a substantial shareholder holding a relevant interest in 22,000,000 shares representing 6.97% of voting power
and has notified the Company in accordance with section 671B of the Corporations Act 2001.
CLASS OF SHARES AND VOTING RIGHTS
The voting rights attached to the Fully Paid Ordinary shares of the Company are:
(a) at a meeting of members or classes of members each member entitled to vote may vote
in person or by proxy or by attorney; and
(b) on a show of hands every person present who is a member has one vote, and on a poll
every person present in person or by proxy or attorney has one vote for each ordinary share held.
There are no voting rights attached to any Options on issue.
ORDINARY FULLY PAID SHARES as at 14 September 2020
There is no current on-market buy back taking place.
During the reporting period the Company used its cash and assets in a manner consistent with its business objectives.
- 57 -
2020 ANNUAL REPORT AND STATUTORY FINANCIAL STATEMENTS
PharmAust Limited and its Controlled Entities
TWENTY LARGEST SHAREHOLDERS (as at 14 September 2020)
SHAREHOLDER INFORMATION (CONT.)
- 58 -