Starpharma Holdings Limited
ABN 20 078 532 180
Baker IDI Building
75 Commercial Road, Melbourne
VIC 3004 Australia
Telephone +61 3 8532 2700
Facsimile +61 3 9510 5955
www.starpharma.com
Annual Report 2011
Starpharma is a
world leader in the
development of
dendrimer products
for pharmaceutical,
life science and
other applications.
US
$5
bn
Starpharma has
shown improvements
in the formulation of
agrochemical,
glyphosate (Round
Up®) which has
annual sales of
US$5bn
Starpharma Holdings Limited
ABN 20 078 532 180
US
$1
bn
Starpharma estimates
the addressable
global market for
the treatment and
prevention of
recurrence of BV is
in excess of US$1bn
30%
BV is the most
common vaginal
infection worldwide,
affecting an
estimated 30% of
the adult female
population in the US
US
$3
bn
Starpharma’s drug
delivery candidate,
docetaxel is an
important chemo-
therapy drug used
to treat breast
cancer, lung cancer
and prostate cancer,
and last year
generated sales of
approx. US$3bn
US
$500
m
Japanese condom
market is an
estimated US$500m
in condom sales
annually. Okamoto
has approximately
60% of the market
ANNUAL REPORT 2011
Highlights 2010-2011
VivaGel® demonstrates efficacy in the treatment of bacterial vaginosis
Major Phase 2 clinical trial provides strong evidence for VivaGel®’s efficacy in treating bacterial vaginosis
(BV); 74% of patients were cured of BV compared with just 22% in a placebo group
VivaGel®-coated condom rights reassigned to Ansell
Reckitt Benckiser agreement terminated - Ansell new VivaGel®-coated condom commercial partner
excluding Japan and a number of Asian markets
Japanese VivaGel®-coated condom deal secures access to the world’s
second largest condom market
Agreement with Okamoto, Japan’s largest condom manufacturer with 60% share of the Japanese market -
estimated at US$500 million
Docetaxel selected as a candidate for internal drug delivery program
Reformulation of the important chemotherapy drug docetaxel showed a 2,000 to 8,000-fold improvement in
water solubility, potentially allowing for the development of a novel, improved formulation
Lilly relationship expanded with new co-development program
Additional drug delivery program expands on two previous agreements between the companies
Priostar® dendrimers result in improved performance of glyphosate
(Roundup®)
Characteristics of major agrochemicals including glyphosate (Roundup®) improved when reformulated with
dendrimers - potential to tap into US$40B agrochemical market
Agrochemical program receives Government funding
Starpharma awarded $250,000 funding from the Victorian Government’s Small Technologies Industry
Uptake Program for internal agrochemical program
Starpharma ranked in top ASX-listed biotechnology companies
Market capitalisation increased substantially in the year following strong domestic and international
investment support
Contents
Chairman’s Letter - 2
CEO’s Report - 3
Corporate and Social Responsibility - 9
Directors’ Report - 10
Corporate Governance Statement - 27
Annual Financial Report - 31
Shareholder Information - 70
Intellectual Property Report - 72
Corporate Directory - 73
1
STARPHARMA HOLDINGS LIMITED
Chairman’s Letter
Dear Shareholders,
On behalf of the Board and management of Starpharma l am pleased to present the 2010-2011 annual report for your review.
Over the last 12 months Starpharma has emerged as one of the clear leaders in the biotech sector with a maturing portfolio that
has expanded in number of products and advanced in clinical progress. The company has demonstrated its ability to maximise
the value of the powerful platform technology it possesses through successful application to pharmaceuticals, drug delivery and
diagnostics, agrochemicals and a wide array of other products.
In our VivaGel® portfolio, a Phase 2 clinical trial provided strong evidence for VivaGel®’s efficacy in treating bacterial vaginosis.
We also signed an agreement with Okamoto Industries for the VivaGel®-coated condom securing access to the major Japanese
market, second only to the US market.
Starpharma’s achievements have translated on the share market and resonated with investors both locally and internationally.
Throughout the year, Starpharma’s market capitalisation has increased substantially and the Company now sits in the leading
group of biotech companies by market capitalisation on the Australian Securities Exchange. The Company has welcomed new
institutional investors from Europe, Asia and Australia. The diversity of our shareholders places us in good stead to trade well
through periods of market volatility and our cash reserves put us in a strong position to progress our internal development
programs as planned.
Our business model is one that supports our ability to progress multiple products. Through commercial partners including
Ansell, Okamoto, Lilly, Elanco, Stiefel, Siemens Healthcare, Merck, Aldrich and Qiagen we benefit from co-development and
funding of our products and access to a world class network of people with the skills to complement our team in commercialising
our portfolio. Since the end of the reporting period but of significance we signed a commercial agreement for the VivaGel®-
coated condom with flagship Australian company Ansell, replacing the deal we had with Reckitt Benckiser. Terminating the
agreement with RB due to non-performance of the contract was a difficult decision for the Board and management but one we
are confident was in the best interest of the successful commercialisation of this product.
This year we have also added several internal programs that are being developed in parallel with our partnered programs.
These include a project involving a reformulation of the blockbuster chemotherapeutic docetaxel.
In agrochemicals we have reformulated the well-known herbicide in Roundup® (glysophate) using dendrimers to improve its
performance, thereby reducing the amount of herbicide required. These exciting initial results provide a foundation for several
opportunities in this sector.
In June, founding Director Dr John Raff retired from the Board after 14 years. As an early steward of the business, he
established much of the foundation of what is being achieved today and we thank him for his contribution. John remains a
strong supporter of the Company.
Finally, I thank CEO Jackie Fairley and all Starpharma staff for their ongoing dedication and commitment to the Company.
Starpharma continues to mature as a strong leader in the Australian biotechnology sector. I would also like to thank our
shareholders, both existing and new for their continued support of Starpharma and we look forward to another exciting and
successful year ahead.
Peter T Bartels, AO
Chairman
2
CEO’s Report
Over the past 12 months Starpharma has demonstrated the value
and enormous versatility of its platform technology. The company’s
programs, both internal and with its partners, are in four key areas:
VivaGel®, drug delivery, agrochemical and other, which includes
cosmetics, water treatment, diagnostics, reagents and industrial
applications.
Of major significance, the company delivered very strong clinical
results supporting VivaGel®’s efficacy in treating bacterial
vaginosis. In addition, the Company’s research teams have made
exciting progress exploring the value of its proprietary dendrimers
in the areas of drug delivery and agrochemicals.
Starpharma’s partnerships with leading global companies continue
to help fund and accelerate its development programs as well as
enhance the Company’s commercial positioning as its products
approach the market. In parallel, Starpharma has added a number
of new and exciting internal development programs with the
potential to deliver significant value to shareholders in the future.
VivaGel® product range
VivaGel® for the treatment and prevention of bacterial vaginosis
In May 2011 Starpharma announced the very encouraging results
from its Phase 2 clinical trial assessing the efficacy of VivaGel® in
treating bacterial vaginosis (BV). This was an important milestone
for the Company and its shareholders.
The evidence from this trial was significant and supportive:
following completion of treatment, 74% of patients were cured of
BV compared with just 22% in a placebo group. Two to three
weeks after the treatment concluded, the cure rate was 46%
compared to just 12% in the placebo group. Unpleasant vaginal
odour was cured in 78% of the VivaGel® treated patients.
Finally, in assessments of patients’ perceptions of VivaGel® and its
use, 83% of patients using a VivaGel® formulation of 1% active
ingredient (SPL7013) were extremely satisfied, very satisfied or
satisfied with the product, compared with just 35% of patients
using the placebo.
The high BV cure rates seen in the completed Phase 2 trial,
combined with the high tolerability and patient satisfaction ratings
also give the company further confidence in the additional
indication for VivaGel®: prevention of recurrence through extended
usage. Recurrence is a very common problem with BV and
existing treatments have a number of undesirable characteristics.
Furthermore, as typically these are conventional antibiotics they
are considered unsuitable for long term use. The Company will be
commencing a second BV trial for VivaGel® in Q3 2011 to
determine the efficacy of VivaGel® for the prevention of BV
recurrence, opening up a whole new area of application for the
product.
The recent Phase 2 BV trial results were also used to support new
patent filing which will extend protection of VivaGel® to at least
2032. Starpharma is now in discussions with regulatory agencies
to commence a Phase 3 registration trial for VivaGel® in the next
six months.
ANNUAL REPORT 2011
In 2010/11 Starpharma maintained momentum with its lead
products VivaGel®, and the Company expanded its global reach
through a new commercial partnership with Okamoto Industries for
the VivaGel®-coated condom in Japan. In August 2011 we signed
an agreement with Ansell for the VivaGel®-coated condom which
covers marketing rights to the coated condom in countries
excluding Japan and a number of Asian markets. This replaced the
agreement we had with Reckitt Benckiser which was terminated
due to the failure to achieve satisfactory progress in relation to
certain commercialisation milestones.
The strategic diversification of Starpharma’s technology continues
to yield excellent results, and the market has responded positively
to its ongoing success. The Company’s delivery of major
milestones and strong share price performance places Starpharma
in the top tier of Australian biotech companies. With a number of
achievements to relate, I am pleased to now report in detail on the
Company’s operations for the 2010/2011 financial year.
Market opportunity
The US market remains the initial target for VivaGel® as a
treatment for BV. This is a major market: More than 21 million
women are estimated to be currently infected with BV in the US,
with an infection rate of 51% reported in certain demographics.
One third of US women will have BV during their lives.
Current antibiotic treatments for BV have significant disadvantages
including: low cure rates (and a high rate of recurrence); adverse
effects of treatment occurring such as gastrointestinal side effects
and adverse reactions with alcohol; and incompatibility with
condoms (see Table 1 overleaf).
The lack of significant competition and high prevalence of
infection, not only in the US market but internationally, indicates a
market worth in excess of US$1 billion for a long term prevention
of BV recurrence product. As a leading developer in this space,
Starpharma’s positioning as a company able to rapidly seize this
market opportunity has continued to strengthen in the last year,
given the growing evidence supporting the company’s unique
platform technology and the strong partnerships with major
industry players.
Further link between HIV and BV identified
In July 2011, independent international research found that men
were three times more likely to contract HIV from their female
partners if the women also had BV in the three months before the
men became infected. These findings were reported at the
International HIV/AIDS Conference in Rome by researchers from
the University of California. This study builds on the growing
evidence to prove the reported link between HIV and BV
previously observed in women with BV, but is the first to
demonstrate an association between BV in HIV infected female
partners and the risk of HIV transmission to their male partners.
3
STARPHARMA HOLDINGS LIMITED
Table 1: Advantages of VivaGel® over existing treatments
Advantages
VivaGel®
Metronidazole
Tablets
Metronidazole Gel,
0.75%
Clindamycin Cream,
2%
Active Ingredient Not
Carcinogenic†
Compatible with
Condoms
No Absorption into
blood stream
Sexual Intercourse
permitted during use
Compatible with Alcohol
Consumption
No Other Significant
Warnings / Side Effects‡
Antiviral Activity
?
† Metronidazole has been shown to be carcinogenic in mice and rats. Clindamycin has not been tested for carcinogenicity in long-term studies in animals but is not genotoxic or mutagenic in
other nonclinical studies.
‡ Central and peripheral nervous system effects, such as convulsive seizures and peripheral neuropathy, have been reported in patients treated with metronidazole. Use of clindamycin
phosphate is associated with Clostridium difficile-Associated Diarrhoea.
Sources: Flagyl® Oral Tablet (metronidazole) Label Information, LAB-0162-5.0, revised August 2010; Vandazole® Vaginal Gel (metronidazole) Label Information, Rev. C 12/2010; Clindesse®
Vaginal Cream (clindamycin) Label Information, Revised 12/2010.
VivaGel® for the prevention of transmission of sexually transmitted infections (STIs)
The development of VivaGel® as a stand-alone product continues.
The widespread prevalence of sexually transmitted infections
(STIs) such as genital herpes (HSV), genital warts (HPV), and HIV
indicates a high market value for an efficacious, broad-spectrum,
and consumer-friendly product. Consumer demand has been
identified as strong, with studies showing that 30-40% of female
college students in the US would buy a product of this type.
Market opportunity
More than 50 million Americans are currently infected with genital
herpes. This includes approximately 26% of the female population,
which is estimated to rise to 50% by 2025 at current rates of
infection.
In particular, VivaGel® has demonstrated broad-spectrum action
against a range of viral agents. This includes the various viral
strains which cause cervical cancer and genital warts, as well as
genital herpes, against which VivaGel® remains the only
microbicide in development.
Starpharma’s five human clinical trials have displayed an excellent
safety profile and strong antiviral activity.
VivaGel®-coated condom
In May 2011 Starpharma entered a commercial agreement with
Okamoto Industries Inc (TSE: JP3192800005), granting Okamoto
marketing rights to the VivaGel®-coated condom in Japan in
exchange for royalty and milestone payments made to
Starpharma. In addition, Okamoto will undertake the Japanese
registration and launch process.
While outside the reporting timeframe of this report it is of
significance to the commercialistion of the VivaGel®-coated
condom that we include details of an agreement struck with Ansell
in August 2011 which covers marketing rights to the coated
condom in countries excluding Japan and a number of Asian
markets.
Market opportunity
Okamoto has a 60% share of the estimated US$500 million
condom market in Japan (see Table 2), the second largest in the
world. In addition to its leading position in Japan, Okamoto also
holds strong positions in several other Asian markets including
China, Korea, Malaysia, Taiwan and Singapore.
Under the agreement Ansell will pay Starpharma royalties on sales
of VivaGel®-coated condom and will support registration and other
commercialisation costs. Ansell is also responsible for
manufacturing the VivaGel®-coated condom and marketing of the
product, which will include the VivaGel® brand together with the
respective Ansell brand.
Table 2: Japanese condom market
Condom shipments by major company in Japan (2005)[i]
Company
Okamoto Industries
Sagami Rubber Industries
Fuji Latex Co
Others
Total
Market Share
60%
20%
16%
4%
100%
This commercial arrangement replaced the agreement we had with
Reckitt Benckiser (formerly with SSL International) which was
terminated due to the failure to achieve satisfactory progress in
relation to certain commercialisation milestones for the VivaGel®-
coated condom.
Securing revenue streams as well as forming vital distribution
networks with these established major players represents a key
building block in the value structure of the VivaGel®-coated
condom. The strong partnered brands, secure supply and global
market coverage that Starpharma’s partners provide, all act to
maximise the anticipated revenues from this product.
[i] Market Data Bank (MDB) Report issued February 2009, Condoms: A Global Strategic Business
Report (2005, 2008) and Industry Data
4
Drug delivery
Building concurrent revenue streams through diversifying the
applications for Starpharma’s dendrimer technology is core to
Starpharma’s commercial strategy. In June 2011 Starpharma
announced preliminary results from the drug delivery program,
which aims to improve the delivery of existing drugs through
conjugation with customised dendrimers.
Success in this area has a high potential value for Starpharma.
The performance profile of many drugs could be improved with
Table 3: Major anti-cancer drugs
ANNUAL REPORT 2011
alteration of key characteristics such as solubility, toxicity and half-
life, especially in the case of cancer drugs. Many of the most
profitable cancer drugs (see Table 3) have severe side-effects
which limit their use and represent an opportunity for improvement.
One example is docetaxel, widely used as a chemotherapy
treatment for some types of lung, breast and prostate cancer.
Docetaxel is marketed worldwide under the name Taxotere by
Sanofi-Aventis with sales of US$3.1 billion in 2010.
Trade name
Active ingredient
Market value US$M
Manufacturer
Taxotere®
Eloxatin®
Alimta®
Gemzar®
Camptosar®
Vidaza®
Docetaxel
Oxaliplatin
Pemetrexed
Gemcitabine
Irinotecan
Azacitidine
3,000
1,484
1,306
1,107
329
299
Sanofi Aventis
Sanofi Aventis
Lilly
Lilly
Pfizer
Celgene
Starpharma’s reformulation of docetaxel with dendrimers resulted
in a 2,000 to 8,000-fold improvement in water solubility. This
enhanced water solubility could potentially allow the development
of a docetaxel formulation which would not require pre-medication
with high doses of cortisone and would avoid the need for inclusion
of formulation components thought to cause the severe allergic
reactions and fluid retention experienced by some patients.
Following the results from this work, Starpharma will advance pre-
clinical studies of dendrimer-docetaxel formulations as a lead
candidate in the drug delivery program. Starpharma has also filed
a new patent application with the United States Patent and
Trademark Office, incorporating recent docetaxel data. This
patent builds on Starpharma’s already extensive patent filings and
captures the potential uses of a class of dendrimers in a range of
applications related to drug delivery, laying the groundwork for
securing further intellectual property in this area.
Precedent in the nano-pharmaceutical space may be found in the
example of American nano-pharmaceutical developer Abraxis,
who developed Abraxane®, a highly successful water-soluble
formulation of paclitaxel (a molecule very similar to docetaxel).
Abraxis was acquired in 2010 for US$2.9 billion by Celgene,
displaying the market’s valuation of major improvements on
existing drugs.
Agrochemicals
Another industry Starpharma has selected as a key target for
value-added product development is the US$40 billion agricultural
chemical industry, which has both a large market size and
considerable potential for product enhancement.
Agrochemicals represent a significant cost to farmers. More
effective chemical formulations could reduce the expense of a crop
treatment cycle and the need for reapplication, potentially
improving the environmental profile of such products.
In July 2011 Starpharma announced encouraging early-stage
success with applying its Priostar® dendrimer technology to the
improvement of a number of globally significant agrochemicals
including glyphosate (Roundup®) which has annual sales in excess
of US$5 billion. In addition to glyphosate, the Company’s research
has also included the major insecticide imidacloprid and the
herbicide trifluralin which have annual sales of US$1 billion and
US$300 million respectively.
The addition of Starpharma’s patented dendrimers to the
glyphosate solution resulted in an increase in the brownout, or rate
of vegetation dying off. This suggests that the dendrimer was
significantly increasing the activity of the glyphosate.
5
STARPHARMA HOLDINGS LIMITED
Table 4: Major agrochemicals
Trade name
Active ingredient
Activity
Market value US$M
Manufacturer
Roundup®
Confidor®
Regent®
Fastac®
Glyphosate
Imidacloprid
Fipronil
Herbicide
Insecticide
Insecticide
Alpha-cypermethrin
Insecticide
Gramoxone®
Paraquat
Orthene®
Stomp®
TreflanTM
Acephate
Pendimethalin
Trifluralin
Herbicide
Insecticide
Herbicide
Herbicide
5,000
1,000
420
400
380
360
350
300
Monsanto
Bayer CropScience
BASF
FMC
Syngenta
Sumitomo, Arysta
BASF
Dow
Starpharma’s key patents in this area have already been allowed
or granted by the US and other patent offices for broad protection
of Priostar® dendrimer technology, relevant to both agrochemical
and industrial applications. Additionally Starpharma has filed for
protection for specific agrochemical applications, which if granted
would provide patent coverage to 2029.
In March 2011 Starpharma announced that its agrochemicals
program had received $250,000 additional funding support from
the Victorian Government’s Small Technologies Industry Uptake
Program (STIUP). In addition, Starpharma also has partnered
programs with a growing number of leading agrochemical
companies.
Other applications
The optionality of Starpharma’s platform technology has allowed
the company to develop multiple products across diverse
industries and with a growing number of commercial partners:
Diagnostics and laboratory reagents: in collaboration with
Siemens, Sigma Aldrich, Merck, and Qiagen.
Animal health: in collaboration with Elanco.
Cosmetics: in collaboration with unnamed, in-confidence,
partners.
Starpharma's primary product areas
Product / application
Indication
Partnering status
Commercial strategy
Market opportunity
VivaGel®
for bacterial vaginosis
(BV)
Treatment
Internal
Licence at late stage
US$300-$350M
Prevention of
recurrence
Internal
Licence at late stage
Estimated >US$1B
VivaGel® for STIs
Prevention of
HIV / HSV / HPV
Internal
Licence at late stage
US$3-6B
VivaGel®-coated
condom
Antiviral coating
Partnered: Ansell &
Okomoto Industries
Partnered
US$1.1-1.7B
Docetaxel
(chemotherapeutic)
Internal Program
Licence at late stage
US$3B
Multiple others
Partnered: Lilly, GSK,
Elanco, undisclosed
Co-development
arrangements in place
Undisclosed
Glyphosate
Internal Program
Licence at late stage
US$5B
Multiple others
Partnered: multibillion
US-based partner,
undisclosed
Co-development
payments, royalty on
sales
US$40B
Drug delivery
Agrochemical
6
Overview of financial results
4 Year Financial Summary
Royalty, customer and licence revenue
Grant income
Interest revenue
Total revenue & income
Expenditure
Income tax credit
Net loss after tax
Cash outflow before new capital (Cash Burn)
Cash Burn adjusted for exchange rate movements
New share capital net proceeds
Cash at end of year
For the period ended 30 June 2011, the key metric of net cash
burn for the year was $3.9 million, with cash reserves at 30 June
2011 of $18.9 million (2010: $22.8 million). Starpharma reported a
net loss after tax of $8.9 million (2010: $6.4 million) and
experienced net cash outflows of $6.5 million from operations
(2010: $3.6 million). A further $3.6 million of cash inflows in the
current year was a result from proceeds on the exercise of options.
ANNUAL REPORT 2011
Year Ended 30 June
2009
$M
2008
$M
2.0
7.7
0.1
9.8
1.4
8.2
0.3
9.9
(14.1)
(18.1)
0.2
(4.1)
(2.9)
(4.2)
7.0
11.6
0.7
(7.5)
(6.1)
(5.5)
3.5
7.5
2010
$M
1.4
3.8
0.7
5.9
(12.3)
-
(6.4)
(3.9)
(3.8)
15.1
22.8
2011
$M
1.1
1.2
1.0
3.3
(12.2)
-
(8.9)
(7.5)
(6.7)
3.6
18.9
The results were consistent with the company’s strategic plans and
budget estimates. The increase in the reported net loss included
expenditure for the successful phase 2 VivaGel® clinical trial for
the treatment of bacterial vaginosis and on Starpharma’s internal
development programs for drug delivery and agrochemicals.
Total revenue and other income for the year was $3.3 million, a
reduction of $2.6 million from the previous year, due to lower grant
income from the US National Institutes of Health. Revenue from
partners continues to be an important component in developing
and commercialising the pipeline while minimising cash flows.
Cash at 30 June 2011
$18.9M
Net cash burn for 2011
$3.9M
7
STARPHARMA HOLDINGS LIMITED
Outlook
Financial year 2011/12 has been a highly productive year for
Starpharma. The Company has successfully explored the options
for the Company’s core technology, producing a diverse range of
promising commercial opportunities. In addition, the positive
results received across our programs during the period have been
very encouraging.
New commercial partnerships and strong ongoing relationships
have furthered the potential reach of Starpharma’s product
portfolio, which itself has made major advances both in the clinic
and commercially.
Market awareness of Starpharma continues to grow. Retail and
institutional investment interest alike continues to flourish; strong
liquidity, a diversifying investor register and a continual
appreciation in share price bear this out. This year has seen
increasing interest in the company from investors, not only in
Australia but also in Asia and Europe. Starpharma has clearly
outperformed the broader market and sector during the year,
which has been noted by leading analysts that identified
Starpharma as a strongly performing stock. Cash flows for the year
reflect the investment in the VivaGel® clinical trial for the treatment
of BV, which has delivered great value to the Company. In
2011/12, VivaGel® will now be advanced to Phase 3, the last and
most important stage of trials before approval is given and sales
can begin.
As Starpharma looks ahead to 2012 and beyond, we will continue
to focus on driving our lead products through the final stages of
development and registration while diversifying the underlying
portfolio and building the value of our core technology. The
multiple indications for VivaGel® are Starpharma’s most advanced
and well known work, but we anticipate that as our research
programs progress we will build an increasing amount of value
across a broadening range of applications for our dendrimer
technology.
I would like to sincerely like to thank our staff who remain
enthusiastic and firmly committed to ongoing product innovation
and actively driving the commercialisation of our products.
Finally, to our long term investors we thank you for your enduring
support and to our new investors welcome aboard to what is
certainly an exciting period for Starpharma and those who will
benefit from our products.
Jackie Fairley
CEO
8
ANNUAL REPORT 2011
Corporate and Social Responsibility
Starpharma is a world leader in the development of dendrimer
products for pharmaceutical, life science and other applications,
and aims to create value through the commercialisation of its
proprietary products. In striving for this objective, Starpharma
acknowledges its role within society and believes its success will
deliver long term positive benefits to all stakeholders.
Starpharma’s corporate governance principles and code of
conduct set the framework for how the company, management and
employees are expected to conduct themselves: always ethically
and responsibly.
Our People
The employees of Starpharma are critical for achieving business
success. To ensure Starpharma remains a safe, healthy, and
attractive workplace for our employees, Starpharma has
established work place policies and practices. Policies assist to
ensure employees have engaging and satisfying roles, receive
periodic assessments and feedback on performance, provide
ongoing training and career development, and ensure a balanced
work and home life. Starpharma’s Code of Conduct reflects the
core values of the Company and sets out standards of behaviour
in matters including equal employment opportunity and best
practice in recruitment.
Employees are rewarded for their performance, dedication, and
contribution to the results of Starpharma. Employees are recruited
into and retained in positions based on merit. A balance of skills,
The Community
The very nature of Starpharma products affords the opportunity of
changing lives for the better. Through innovative research and
development, Starpharma is creating products for needs which are
currently unmet, either within the public health, medical, life
sciences or other markets.
Our Partners
Starpharma has established important business and scientific
partnerships with leading global companies, international scientific
and medical research organisations and key governmental and
non-governmental departments and institutions. These
The Environment
expertise and opinion, as well as gender and diversity are viewed
as important cultural elements within the collegiate team
environment. The Board has adopted a Diversity Policy to provide
a framework for Starpharma to achieve a number of diversity
objectives, with an initial focus on gender.
Employee equity participation schemes are used to allow all staff
to share in the business success of the Company and to assist in
aligning the objectives of employees with those of shareholders.
Occupational health and safety is considered every employee’s
responsibility, with an active committee structure to eliminate,
reduce or mitigate risks associated with Starpharma’s activities.
Occupational Health & Safety Committee members represent all
sections of the workplace including management and employees.
All of our pharmaceutical products and our clinical research
activities comply with strict regulatory and ethical approval
processes. These include the FDA in the United States and other
regulatory bodies as applicable.
relationships offer critical analysis of research concepts from world
experts in their field and provide the pathway for products to enter
the market and change daily lives.
The broad application of Starpharma’s dendrimer research
extends into projects that may assist the environment. Research in
the fields of agrochemicals and water may improve existing
products and reduce the negative impact of current practices on
the environment. More effective chemical formulations for
agrochemicals could reduce the frequency of application and
potentially improve the environmental profile of such products.
Early studies in combining the company’s proprietary dendrimer
technology with major agrochemicals indicate that improvements
such as enhanced solubility, better adhesion to plants and
modification of soil penetration properties are possible.
In conducting its research and operations Starpharma has
processes in place to ensure that all wastes products (albeit
relatively minor in volume) are disposed of strictly in accordance
with relevant environment regulations.
9
STARPHARMA HOLDINGS LIMITED
Directors’ Report
Your directors have pleasure in presenting this report on the consolidated entity (referred to hereafter as the group) consisting of Starpharma
Holdings Limited and the entities it controlled at the end of, or during, the year ended 30 June 2011.
Directors
The following persons were directors of Starpharma Holdings Limited (“the Company”) during the whole of the financial year
and up to the date of this report:
P T Bartels (Chairman)
R Dobinson
P J Jenkins (Deputy Chairman)
R A Hazleton
J K Fairley (Chief Executive Officer)
J W Raff was a director and deputy chairman from the beginning of the financial year until his resignation on 17 June 2011.
Principal Activities
The principal activities of the group consist of development and
commercialisation of dendrimer products for pharmaceutical, life-
science and other applications. Activities within the group are
directed towards the development of precisely defined nano-scale
materials, with a particular focus on the development of its topical
vaginal microbicide VivaGel® for the treatment and prevention of
bacterial vaginosis, and prevention of genital herpes and HIV, and
the application of dendrimers to drug delivery and other life
Business Objective
science applications. More broadly, through partners the group is
exploring dendrimer opportunities in materials science with
applications in areas such as cosmetics, agrochemicals, coatings,
adhesives and water. Products based on the group’s dendrimer
technology are on the market in the form of diagnostic elements
and laboratory reagents.
The Company aims to create value for shareholders through the commercial exploitation of proprietary products based on its dendrimer
technology in pharmaceutical, life science and other applications.
Dividends
No dividends were paid or declared during the period and no dividends are recommended in respect to the financial year ended 30 June 2011.
(2010: Nil)
Review of Operations
Achievements and significant events during the 2011 financial year
included:
July 2010 FDA clearance to commence Phase 2 BV Study
The US Food and Drug Administration (FDA) gave clearance for
commencement of a phase 2 study to investigate VivaGel® for the
treatment of bacterial vaginosis (BV).
VivaGel® is under investigation for both the short term treatment
and longer term suppression of recurrence of BV in women, and
this initial phase was to investigate the treatment of BV with a once
daily for seven days treatment of VivaGel®. Findings of this study
would guide further investigation of suppression of recurrence.
August 2010 Phase 2 BV Study Commences
The phase 2 study of VivaGel® for the treatment BV commenced
following receipt of ethics approval.
The primary objective of the clinical program was to identify the
efficacy and optimal dosing with three strengths (0.5%, 1% and
3%) being compared with a placebo gel. Subjects were assessed
at the end of treatment and then two to three weeks after the end
of treatment.
August 2010 VivaGel® Condom Patent Grant Extends Coverage
Starpharma announced the extension of the VivaGel® patent
portfolio with the first grant of a patent specifically for the VivaGel®-
coated condom.
The application was granted on 20 August 2010 by the Russian
patent office. Starpharma has also filed this patent in major
markets including the USA, Canada, Europe, China, India and
Japan.
0
1
Both the VivaGel® coated condom and the VivaGel® standalone
gel are already protected by a portfolio of granted VivaGel®
patents in major markets, and this new patent family provides
additional protection for the condom product, and also extends the
duration of coverage in each market for which it is granted. In the
case of this grant in Russia it provides coverage for the coated
condom until at least 2026.
September 2010 Lilly Partnership Expanded
The signing of a collaborative research agreement with leading US
pharmaceutical corporation Eli Lilly and Company was announced.
The new agreement related to a co-development program for one
of Starpharma’s dendrimer-drug conjugates. Under the agreement
Lilly will receive an option on the conjugate, will pay research fees
to Starpharma and will conduct studies in animal models to
advance the compound.
This latest announcement followed on from two previous
agreements between the companies. In February 2010, an
agreement was announced for the application of Starpharma’s
dendrimer drug delivery technology to the enhancement of
compounds in Lilly’s human pharmaceutical portfolio, and in May
2009 an agreement was signed with Lilly’s animal health division,
Elanco, to develop new animal health products with enhanced
properties.
March 2011 Agricultural Program Expanded through $250,000
Funding
Starpharma was awarded $250,000 funding to enhance
agrochemicals using its Priostar® dendrimers.
The funding was provided under the Victorian Government’s Small
Technologies Industry Uptake Program (STIUP), to allow
Starpharma to expand its Melbourne-based agricultural programs,
further enhancing the commercial prospects of promising
candidates.
Starpharma’s Priostar® dendrimer technology is being applied to
improve delivery of agrochemicals to enable healthier plant growth
and fight plant disease. As well as increasing efficacy, improved
delivery control of chemicals can reduce both the frequency of
application and amount applied. Such innovations have the
potential to reduce farmers’ costs and also reduce environmental
impact.
March 2011 Enrolment Completed for Phase 2 BV Study
Enrolment and all patient follow-up visits in the phase 2 study of
VivaGel® for the treatment of bacterial vaginosis (BV) were
completed, with data being processed and results to be available
in the second quarter of the year.
May 2011 VivaGel® Coated Condom: Licence Agreement for
Japan with Okamoto
A licence agreement was signed with Okamoto Industries Inc in
relation to the VivaGel®-coated condom for the Japanese market.
Japan is the world’s second largest condom market, and Okamoto
is the market leader for condoms sold in Japan.
Under the terms of the agreement Okamoto secured marketing
rights to the VivaGel®-coated condom in Japan. Starpharma will
receive royalty and milestone payments and Okamoto will
undertake registration and launch of the product in Japan. The
coated condoms marketed by Okamoto will carry the VivaGel®
brand.
ANNUAL REPORT 2011
May 2011 VivaGel® Demonstrates Efficacy in BV
Starpharma released results of a major phase 2 clinical study that
demonstrated efficacy of VivaGel® for the treatment of bacterial
vaginosis (BV)
Key Points:
• VivaGel® meets primary endpoint, demonstrating significant
efficacy for treatment of BV
• VivaGel® expected to avoid many shortcomings of existing
therapies
• Trial results support new patent filing which extends VivaGel®
protection to at least 2032
• Planning underway for Phase 3 trials for VivaGel® for BV
treatment
• BV prevention trial of VivaGel® to commence Q3 2011
• Addressable global market for BV treatment and prevention
potentially exceeds US$1 billion.
June 2011 Dendrimer-docetaxel formulation advanced as lead
candidate in drug delivery cancer program.
Starpharma announced the nomination of leading anti-cancer drug
docetaxel as a lead candidate in its cancer drug delivery program
following encouraging early results. The Company has been
applying its dendrimer technology to the reformulation of existing
off-patent cancer drugs, and following promising initial results,
announced that it will advance a dendrimer-docetaxel formulation
to further pre-clinical studies as a lead candidate in its drug
delivery cancer program.
Docetaxel is an important chemotherapy drug to treat breast
cancer, lung cancer and prostate cancer, and last year generated
sales of €2.122 billion (US$3 billion).
Docetaxel reformulated with a suite of Starpharma’s dendrimers
showed a 2,000 to 8,000-fold improvement in water solubility,
potentially allowing for the development of a novel, improved
formulation of this important cancer drug.
Financial Summary
For the year ended 30 June 2011 the consolidated entity incurred an operating loss after income tax of $8,930,000 (June 2010: $6,378,000).
Income statement
Revenue from continuing operations
Other income
Research and development expenses
Administration expenses
Finance costs
Loss attributable to members
Year Ended 30 June
2010
$’000
2,103
3,805
(5,723)
(6,548)
(18)
(6,378)
2011
$’000
2,125
1,178
(5,986)
(6,231)
(16)
(8,930)
Income statement
The reported net loss after tax of $8,930,000 is consistent with the
company’s strategic plans and budget estimates, the increase
includes expenditure for the successful major phase 2 VivaGel®
clinical trial for the treatment of bacterial vaginosis; and
Starpharma’s internal development programs for drug delivery and
agrochemicals.
Total revenue and other income for the year was $3,303,000, a
reduction of $2,605,000 from the previous year, on lower grant
income from the US National Institutes of Health. Revenue from
partners continues to be an important component in developing
and commercialising our pipeline while minimising cash flows. All
research and development expenditure, including patenting costs,
were fully expensed in the current and prior year.
Balance sheet
At 30 June 2011 the group’s cash position was $18,918,000 (2010:
$22,851,000). There was an increase in contributed equity of
$3,633,000 (2010: $16,126,000) on the exercise of options during
the year.
Statement of cash flows
Net operating cash outflow for the year was $6,476,000 (2010:
$3,630,000). Cash flow from financing activities of $3,508,000
(2010: $14,965,000) included the proceeds on the exercise of
options.
1
1
STARPHARMA HOLDINGS LIMITED
Earnings per share
Basic loss per share
Diluted loss per share
Net tangible assets
Net tangible asset backing per ordinary share
2011
($0.04)
($0.04)
2011
$0.07
2010
($0.03)
($0.03)
2010
$0.09
Significant changes in the state of affairs
There was an increase in contributed equity of $3,633,000 (2010: $16,126,000) the majority on the exercise of options during the year.
Matters subsequent to the end of the financial year
On 17 August 2011 Starpharma announced two important
developments in relation to the commercialisation of its VivaGel®-
coated condom.
coated condom. The Agreement covers marketing rights to the
coated condom in countries which exclude Japan and a number of
Asian markets.
Starpharma terminates condom coating agreement with
Reckitt Benckiser
Due to the failure to achieve satisfactory progress in relation to
certain commercialisation milestones for the VivaGel®-coated
condom, Starpharma’s Board has taken the decision to terminate
the Licence granted to Reckitt Benckiser (RB; formerly SSL
International plc) to commercialise the VivaGel®-coated condom
and all of RB’s rights to the product, effective immediately.
Starpharma executes condom coating agreement with Ansell
Starpharma has executed a Licence Agreement with Ansell
Limited (ASX:ANN) giving Ansell marketing rights to the VivaGel®-
Under the agreement Ansell will pay Starpharma royalties on sales
of VivaGel®-coated condoms and will support registration and
other commercialisation costs. Ansell is also responsible for
manufacturing the VivaGel®-coated condom and marketing of the
product, which will include the VivaGel® brand together with the
respective Ansell brand.
No other matters or circumstances have arisen since 30 June
2011 that have significantly affected, or may significantly affect:
(a) the consolidated entity’s operations in future financial years, or
(b) the results of those operations in future financial years, or
(c) the consolidated entity’s state of affairs in future financial years.
Likely developments and expected results of operations
In the opinion of the directors, the group will continue its activities
as described.
Additional comments on expected results of operations of the
group are included in this report under the review of operations.
Further information on likely developments in the operations of the
group and the expected results of operations have not been
included in this annual financial report because the directors
believe it would be likely to result in unreasonable prejudice to the
group.
Regulatory Environment
There were no significant changes in laws or regulations during the
2011 financial year or since the end of the year affecting the
business activities of the group, and the directors are not aware of
any such changes in the near future.
Environmental regulation
The group is subject to environmental regulations and other
licences in respect of its research and development facilities.
There are adequate systems in place to ensure compliance with
relevant Federal, State and Local environmental regulations and
the Directors are not aware of any breach of applicable
environmental regulations by the group.
Legal
At the date of the Directors’ Report there are no significant legal issues.
Health and Safety
The Board, CEO and senior management team of the group are
committed to providing and maintaining a safe and healthy working
environment for the Company’s employees and anyone entering
its premises or with connection to the Company’s business
operations. The Company has adopted an Occupational Health
and Safety (OH&S) Policy and has an established OH&S
Committee structure as part of its overall approach to workplace
safety. Further details of the Company’s policy and practices are
set out in the corporate governance statement on page 30 of this
annual report.
2
1
Information on Directors
Peter T Bartels, AO, FAISM, FRS (age 70)
Independent non-executive director
Chairman
Member of remuneration & nomination committee
Member of audit & risk committee
ANNUAL REPORT 2011
129,804 ordinary shares in Starpharma Holdings Limited
Independent non-executive director and Chairman for eight years. Mr. Bartels has considerable experience in the pharmaceutical industry; while
working for Abbott Laboratories he was responsible for the introduction of a wide range of industrial, agricultural, veterinary and human
pharmaceuticals into the Australian market. He was a director of Drug Houses of Australia and was managing director of DHA Pharmaceuticals.
He has been a major player in corporate Australia, having held the positions of CEO and Managing Director of both Coles Myer Ltd and Fosters
Brewing Company Ltd. He is a past Chairman of the Australian Sports Commission, the Australian Institute of Sport, the Commonwealth Heads
of Government Committee for Sport and the Royal Women's and Royal Children's Hospitals. Peter is presently Chair of the Dean's external
Advisory Council, for the Faculty of Medicine, Dentistry and Health Sciences at The University of Melbourne.
Other current directorships of listed entities: None
Former directorships of listed entities in last 3 years: None
Jacinth (Jackie) K Fairley BSc, BVSc (Hons), MBA (age 48)
Executive director
Chief Executive Officer
1,819,821 ordinary shares in Starpharma Holdings Limited
Dr Fairley was appointed Chief Executive Officer of Starpharma on 1 July 2006 after serving in the role of Chief Operating Officer from July
2005. As CEO and a Director of the Board, Jackie's responsibilities include involvement in setting strategic direction, oversight of operations and
financing activities for the group. She is also plays an active role in driving key commercial negotiations and development programs and
corporate activity. Jackie has more than 20 years’ experience in the pharmaceutical and biotechnology industries working in business
development and senior management roles with companies including CSL and Faulding (now Hospira). Former CEO of Cerylid Biosciences,
Jackie also spent 5 years as a Vice President for Faulding’s injectable division and 5 years with CSL in various executive roles. She holds first
class honours degrees in Science and Veterinary Science, and has an MBA from the Melbourne Business School (MBS) where she was the
recipient of the Clemenger Medal. In 2010, Jackie was appointed to the board of directors of MBS.
Other current directorships of listed entities: None
Former directorships of listed entities in last 3 years: None
Ross Dobinson B Bus (Acc) (age 59)
Independent Non-executive director
Chairman of audit & risk committee
Chairman of remuneration & nomination committee
Nil ordinary shares in Starpharma Holdings Limited
Non-executive director for fourteen years. Merchant banker with a background in investment banking and stockbroking. Has acted as corporate
director for two leading stockbrokers, and was an executive director of the NAB’s corporate advisory subsidiary. Later headed the Corporate
Advisory Division of Dresdner Australia Ltd. Managing Director of TSL Group Ltd, a corporate advisory company specialising in establishing and
advising life sciences companies. Also a director of a number of unlisted companies.
Other current directorships of listed entities:
Non-executive director of Acrux Ltd (director since 2000 and Chairman since 31 January 2006)
Former directorships of listed entities in last 3 years: Executive Chairman of Hexima Limited (delisted 17 June 2011) since 21 July 2010
Richard A Hazleton BSChE, MSChE, HonDrEngr, HonDrCommSci (age 69)
Independent Non-executive director
Member of remuneration & nomination committee
142,616 ordinary shares in Starpharma Holdings Limited
Independent non-executive director since 1 December 2006. Former chairman of US-based global corporation Dow Corning. Joined Dow
Corning in 1965 and held numerous positions in engineering, manufacturing and finance, both in the US and Europe, before becoming Chief
Executive Officer of the company in 1993, and Chairman of the Board of Directors and CEO in 1994. Retired from Dow Corning in 2001.
Chairman of Dendritic Nanotechnologies Inc (DNT) from 2004 until Starpharma’s acquisition of the company in October 2006. Has served on
the Boards of the American Chemistry Council and the Chemical Bank and Trust Company (Midland, MI, USA) as well as several non-profit
social service agencies in Michigan and Belgium.
Other current directorships of listed entities: None
Former directorships of listed entities in last 3 years: None
Peter J Jenkins MB, BS (Melb), FRACP (age 65)
Independent Non-executive director
Member of audit & risk committee
Deputy Chairman from 17 June 2011
1,426,000 ordinary shares in Starpharma Holdings Limited
Independent non-executive director for fourteen years. Consultant physician and gastroenterologist. Holds clinical and research positions with
the Alfred Hospital and has held clinical research positions with the Baker Medical Research Centre. Former judge of the Australian Technology
Awards. Executive Director of AusBio Ltd, an unlisted public biotechnology company.
Other current directorships of listed entities: Nil
Former directorships of listed entities in last 3 years: Non-executive director and chairman of bio-pharmaceutical company Immuron (formerly
Anadis Ltd), resigned February 2009.
1
3
STARPHARMA HOLDINGS LIMITED
John W Raff Dip. Ag Sc, BSc, PhD (age 62)
Non-executive director
Deputy Chairman until his resignation on 17 June 2011
7,280,777 ordinary shares in Starpharma Holdings Limited
Former CEO of Starpharma, holding the position for nine years until his retirement on 1 July 2006. Previously General Manager of the
Biomolecular Research Institute. Co-founder, director and major shareholder of a technology based agricultural seed company. Past Chairman
of the BioMelbourne Network. Also founder and investor in a number of other start-up technology companies. Resigned 17 June 2011.
Other current directorships of listed entities: None
Former directorships of listed entities in last 3 years: None
Company Secretary
The Company Secretary is Mr Ben Rogers (age 63). He was a member of Starpharma’s start-up/IPO management team and has been
Company Secretary since February 1998, with responsibilities that included the role of Chief Financial Officer until 31 December 2008. Mr
Rogers has extensive experience in finance, corporate governance and HR management with CSIRO research laboratories and Co-operative
Research Centres and is an affiliate of Chartered Secretaries Australia.
Meetings of Directors
The number of meetings of the Company’s Board of directors and of each committee held during the year ended 30 June 2011, and the
numbers of meetings attended by each director were:
Name
P T Bartels
J W Raff
J K Fairley
R Dobinson
P J Jenkins
R A Hazleton
Full meetings of directors
Meetings of committees
Audit & risk
Remuneration &
nomination
6 of 6
5 of 5
6 of 6
6 of 6
5 of 6
6 of 6
2 of 2
N/A
N/A
2 of 2
2 of 2
N/A
1 of 1
N/A
N/A
1 of 1
N/A
1 of 1
The table above illustrates the number of meetings attended compared with the number of meetings held during the period that the director held
office or was a member of the committee. N/A denotes that the director is not a member of the relevant committee.
Retirement, election and continuation in office of Directors
Dr J W Raff retired as a director on 17 June 2011.
Mr P Bartels retires by rotation as director at the annual general meeting and, being eligible, offers himself for re-election.
4
1
ANNUAL REPORT 2011
Remuneration Report
The Remuneration report is set out under the following main headings:
A.
B.
C.
D.
Principles used to determine the nature and amount of remuneration
Details of remuneration
Service Agreements
Share-based compensation
The information provided in this remuneration report has been audited as required by section 308(3C) of the Corporations Act 2001.
A. Principles used to determine the nature and amount of remuneration
The objective of the company’s remuneration policy is to ensure
appropriate and competitive reward for the results delivered. The
framework aligns executive reward with achievement of strategic
objectives and the creation of value for shareholders. The
remuneration and nomination committee, consisting of three
independent non-executive directors, advises the Board on
remuneration policies and practices generally, and makes specific
recommendations on remuneration packages and other terms of
employment for executive directors, other senior executives and
non-executive directors.
Directors’ fees
Fees and payments to non-executive directors reflect the demands
which are made on, and the responsibilities of, the directors. The
Chairman’s fees are determined independently from the fees of
non-executive directors based on comparative roles in the external
market. The Chairman is not present at any discussions relating to
determination of his own remuneration. Non-executive directors do
not receive bonuses, share options or other forms of equity
securities, or any performance-related remuneration or retirement
allowances. Non-executive directors’ fees are reviewed annually
by the remuneration and nomination committee, taking into
account comparable data from the biotechnology sector. Non-
executive directors’ fees were last increased with effect from 1
January 2010. Fees and payments are determined within an
aggregate non-executive directors’ fee pool limit, which is
periodically recommended for approval by shareholders. The
aggregate amount currently stands at $450,000 which was
approved by shareholders on 15 November 2006. This amount (or
some part of it) is to be divided among the non-executive directors
as determined by the Board. The aggregate amount paid to non-
executive directors for the year ended 30 June 2011 was $357,833
(2010: $300,000). Superannuation contributions required under the
Australian superannuation guarantee legislation continue to be
made and are deducted from the directors’ overall fee
entitlements.
Relationship between executive reward and company
financial performance
The Company’s remuneration policy aligns executive reward with
the interests of shareholders. The primary focus is on sustained
growth in shareholder value through achievement of R&D and
commercial milestones, and therefore performance goals are not
necessarily linked to financial performance measures typical of
companies operating in other market segments. The Company has
incurred losses in this financial year and in the previous 5 financial
years and has no certainty that this will change in the near term.
Remuneration is set based on key performance indicators (KPIs)
typical of a biotechnology company in Starpharma’s lifecycle,
which may include (but are not limited to) successful negotiations
of commercial contracts, achieving key research and development
milestones, and ensuring the availability of adequate capital to
achieve stated objectives. Improvement in the rating of the
Company against peer biotechnology companies may also be
taken into consideration in determining the performance of the
executive team, and can be assessed on a qualitative basis by
reviewing external sources such as biotechnology publications and
non-commissioned research reports.
Other factors taken into account in determining remuneration
packages include demonstrated record of performance, internal
and external relativities, and the Company’s ability to pay.
Executive pay structure
Remuneration packages are set at levels that are intended to
attract and retain high calibre executives capable of managing the
group’s operations.
The executive pay and reward framework comprises:
– base pay and benefits, including superannuation
– short term performance incentives, and
– long term incentives through participation in the Starpharma
employee equity plans.
The combination of these comprises an executive's total
remuneration.
Short-term performance incentives
With the exception of the CEO, executive service agreements do
not include pre-determined bonus or equity allocations, but cash
incentives (bonuses) may be awarded at the end of the
performance review cycle for specific contributions, or upon
achievement of significant Company milestones at the discretion of
the Board. Following a performance evaluation, the amount of
possible bonus payable to each executive is determined by the
remuneration and nomination committee, taking into account
factors including the accountabilities of the role and impact on the
Company. There are no guaranteed base pay increases in any
executives’ contracts.
Long-term incentives
Long-term incentives for executives and employees to deliver long-
term shareholder returns are provided by a combination of equity
plans that may include:
an Employee Performance Rights Plan;
an Employee Share Plan ($1,000 Plan); and
an Employee Share Option Plan.
Participation in these plans is at the board’s discretion and no
individual has a contractual right to participate in a plan or to
receive any guaranteed benefits.
Starpharma Employee Performance Rights Plan
In 2010 the Board approved the introduction of the Starpharma
Employee Performance Rights Plan (ASX code SPLAK). The
objective of the Plan is to assist in the recruitment, reward,
retention and motivation of employees of the company. The Plan
allows for the issue of performance rights (being rights to receive
fully paid ordinary shares subject to continued employment with
the Company and the satisfaction of certain performance hurdles
over a specified period). The key points of the Plan are:
All executives and staff and certain contractors may be invited to
apply for Rights under the scheme.
One Right once vested is equivalent to one fully paid ordinary
share.
Rights and the resultant shares are granted for no consideration.
Appropriate vesting conditions can be applied to each allocation.
The standard vesting condition in the plan rules is continued
employment for two years.
At the end of the vesting period a further disposal restriction
(Holding Lock) may be applied to restrict disposal of the resulting
shares. The standard Holding Lock in the plan rules is one year
after vesting.
Rights will lapse on cessation of employment before the vesting
date, except for good leaver and change of control provisions at
the Board’s discretion.
1
5
STARPHARMA HOLDINGS LIMITED
In the event of a change of control of the Company the Board
has the discretion to determine whether Rights will vest and
become exercisable. In making its decision, the Board must
consider:
(i) the portion of the Vesting Period elapsed; and
(ii) the extent to which the Performance Conditions (if
any) have been met.
In the event of cessation due to death, illness, permanent
disability, redundancy or any other circumstance approved by
the Board unvested Rights will lapse, unless the Board
determines otherwise having regard to:
(i) the portion of the Vesting Period elapsed; and
(ii) the extent to which the Performance Conditions (if
any) have been met.
The Holding Lock on the resulting shares will be automatically
removed on cessation of employment.
Starpharma Employee Share Plan ($1,000 Plan)
All executives and staff, excluding directors, are eligible to
participate in the Starpharma Employee Share Plan ($1,000 Plan).
The objective of the $1,000 Plan is to assist in the reward,
retention and motivation of employees of the company. An annual
allocation of up to $1,000 of shares may be granted and taxed on
a concessional basis. Shares are granted under the $1,000 Plan
for no consideration and are escrowed for 3 years while
participants are employed by the Company.
B. Details of remuneration
Details of the nature and amount of each element of the
remuneration of each director of Starpharma Holdings Limited and
the key management personnel (as defined in AASB 124 Related
Party Disclosures) and the specified executives of Starpharma
Holdings Limited and the consolidated entity are set out in the
following tables. The key management personnel of Starpharma
Holdings Limited include the directors as per pages 13 to 14. The
key management personnel of the Starpharma Holdings Limited
group include the directors as per pages 13 to 14 above and the
following executive officers, which include the five highest paid
executives of the entity:
Starpharma Employee Share Option Plan
Options are granted under the Starpharma Holdings Limited
Employee Share Option Plan (ASX code SPLAM) which was
approved by shareholders at the 2007 annual general meeting. All
executives and staff are eligible to participate in the Plan. The
objective of the Plan is to assist in the recruitment, reward,
retention and motivation of employees of the company. Options
are granted under the Plan for no consideration. The exercise
price of options granted under the Plan must be not less than the
market price at the time the decision is made to invite a participant
to apply for options. The exercise price is usually calculated on
the basis of 15% above market price. Market price is calculated as
the volume-weighted average price (VWAP) of the shares in the 15
days preceding the approval to grant the options.
Performance review and development
Executives and all other staff participate in a formal two stage
performance review and development process consisting of an
objectives planning and development session at the
commencement of the annual cycle and a performance and salary
review towards the end of the cycle. The objective of the salary
review is to ensure that all employees are appropriately
remunerated for their contribution to the company, that
remuneration is competitive within the relevant industry sector, and
that increases in employees’ skills and responsibilities are
recognised. During the year an evaluation of all executives and
other staff took place in accordance with this process.
N J Baade
C P Barrett
J K Fairley
M L McColl
D J Owen
J R Paull
B P Rogers
Chief Financial Officer
VP, Business Development
Chief Executive Officer
VP, Business Development (from 16 August 2010)
VP, Research
VP, Development and Regulatory Affairs
Company Secretary
Directors and Key management personnel of Starpharma Holdings Limited
2011
Short-term benefits
Post-
employment
Long-term
benefits
Share-based payments
Name
Cash salary
& fees
$
Cash
bonus#
$
Non-monetary
benefits
$
Super-
annuation
$
Long
service
leave
$
Options#
$
Shares#
$
Performance
Rights#
$
Total
$
Non-executive directors
P T Bartels
114,896
J W Raff1
11,773
R Dobinson
60,000
P J Jenkins
30,000
R A Hazleton
60,000
Executive directors
–
–
–
–
–
–
–
–
–
–
5,104
46,060
–
30,000
–
–
–
–
–
–
J K Fairley
310,852
150,000
39,570
24,961
2,765
Totals
587,521
150,000
39,570
106,125
2,765
1 Resigned 17 June 2011.
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
120,000
57,833
60,000
60,000
60,000
–
164,904
693,052
–
164,904 1,050,885
# All performance related remuneration, including cash bonuses, shares, performance rights and options granted, are determined to be an ‘at
risk’ component of total remuneration.
6
1
There were no retirement benefits paid in the current or prior year.
Directors and Key management personnel of Starpharma Holdings Limited
2010
Short-term benefits
Post-
employment
Long-term
benefits
ANNUAL REPORT 2011
Share-based payments
Name
Cash salary
& fees
$
Cash
bonus#
$
Non-monetary
benefits
$
Super-
annuation
$
Long
service
leave
$
Options#
$
Shares#
$
Performance
Rights#
$
Total
$
Non-executive directors
P T Bartels
73,395
J W Raff
–
R Dobinson
50,000
P J Jenkins
–
R A Hazleton
50,000
Executive directors
–
–
–
–
–
–
–
–
–
–
26,605
50,000
–
50,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100,000
50,000
50,000
50,000
50,000
J K Fairley
343,396
200,0001
6,393
24,961
9,842
2,059
985,714
81,556 1,653,921
Totals
516,791
200,000
6,393
151,566
9,842
2,059
985,714
81,556 1,953,921
1 In 2010, the Board offered an additional $50,000 bonus to J K Fairley above the contractual $150,000 payable per year on the achievement of
predetermined objectives. In the prior year, J K Fairley offered and the Board agreed to reduce the maximum bonus payable to $50,000 in view
of the Company’s cash reserves at that time.
# All performance related remuneration, including cash bonuses, shares, performance rights and options granted, are determined to be an ‘at
risk’ component of total remuneration.
1
7
STARPHARMA HOLDINGS LIMITED
Directors and Key management personnel of Starpharma Holdings Limited or subsidiary companies
2011
Short-term benefits
Post-
employment
Long-term
benefits
Share-based payments
Name
Cash salary
& fees
$
Cash
bonus#
$
Non-monetary
benefits
$
Super-
annuation
$
Long service
leave
$
Options#
$
Shares#
$
Performance
Rights#
$
Total
$
Non-executive directors
P T Bartels
114,896
J W Raff1
11,773
R Dobinson
60,000
P J Jenkins
30,000
R A
Hazleton
60,000
Executive directors
–
–
–
–
–
–
–
–
–
–
5,104
46,060
–
30,000
–
–
–
–
–
–
J K Fairley
310,852
150,000
39,570
24,961
2,765
Other Key Management Personnel
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
120,000
57,833
60,000
60,000
60,000
164,904
693,052
B P Rogers
87,729
4,333
2,013
49,999
4,568
12,752
1,000
10,344
172,738
J R Paull
175,212
18,349
13,337
18,238
23,308
16,212
1,000
12,931
278,587
C P Barrett
189,524
18,349
–
18,708
1,733
16,212
1,000
12,931
258,457
N J Baade
159,473
18,349
12,643
22,228
2,200
15,668
1,000
12,931
244,492
D J Owen
161,926
18,349
528
24,945
4,487
15,668
1,000
12,931
239,834
M L McColl2
162,382
6,881
–
15,234
268
–
1,000
12,931
198,696
Totals
1,523,767
234,610
68,091
255,477
39,329
76,512
6,000
239,903 2,443,689
1 Resigned 17 June 2011.
2 Employed from 16 August 2011.
# All performance related remuneration, including cash bonuses, shares, performance rights and options granted are determined to be an ‘at
risk’ component of total remuneration.
There were no retirement benefits paid in the current or prior year.
8
1
ANNUAL REPORT 2011
Directors and Key management personnel of Starpharma Holdings Limited or subsidiary companies
2010
Short-term benefits
Post-
employment
Long-term
benefits
Share-based payments
Name
Cash salary
& fees
$
Cash
bonus#
$
Non-monetary
benefits
$
Super-
annuation
$
Long service
leave
$
Options#
$
Shares#
$
Performance
Rights#
$
Total
$
Non-executive directors
P T Bartels
73,395
J W Raff
–
R Dobinson
50,000
P J Jenkins
–
R A
Hazleton
50,000
Executive directors
–
–
–
–
–
–
–
–
–
–
26,605
50,000
–
50,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
100,000
50,000
50,000
50,000
50,000
J K Fairley
343,396
200,0001
6,393
24,961
9,842
2,059
985,714
81,556 1,653,921
Other Key Management Personnel
B P Rogers
80,431
6,932
8,090
49,977
6,131
18,319
1,000
J R Paull
172,469
11,009
10,198
17,061
5,548
24,555
1,000
C P Barrett
183,132
13,761
–
17,720
5,302
24,555
1,000
N J Baade
153,662
11,009
8,875
15,272
4,244
21,243
1,000
D J Owen
153,165
13,761
528
15,023
407
21,243
1,000
–
–
–
–
–
170,880
241,840
245,470
215,305
205,127
Totals
1,259,650
256,472
34,084
266,619
31,474
111,974
990,714
81,556 3,032,543
1 In 2010, the Board offered an additional $50,000 bonus to J K Fairley above the contractual $150,000 payable per year on the achievement of
predetermined objectives. In the prior year, J K Fairley offered and the Board agreed to reduce the maximum bonus payable to $50,000 in view
of the Company’s cash reserves at that time.
# All performance related remuneration, including cash bonuses, shares, performance rights and options granted are determined to be an ‘at
risk’ component of total remuneration.
C. Service Agreements
Remuneration and other terms of employment for the CEO and the specified executives are formalised in service agreements which include a
formal position description and set out duties, rights and responsibilities, and entitlements on termination. Each of these agreements provides
for the provision of performance-related cash bonuses, and other benefits including participation, when eligible, in the Starpharma Holdings
Employee Equity Plans. Other major provisions of the agreements relating to remuneration are set out below.
J K Fairley Chief Executive Officer
– No fixed term of agreement
– Base salary, inclusive of superannuation, per annum as at 30
June 2011 of $371,315, to be reviewed annually by the
remuneration and nomination committee.
– A cash bonus up to $150,000 per year, commencing on 1 July
2008 allocated proportionately on the achievement of
predetermined objectives.
– Fringe benefits consist of on-site car parking.
– Subject to termination at any time by:
(i) the Executive giving to the Company twelve months’ notice in
writing; or
(ii) the Company giving to the Executive six months’ notice in
writing. If the Company gives notice in accordance with this
clause, the Executive will be entitled to a termination payment
upon the expiration of the notice period, of an amount equal to
6 months’ total remuneration.
– The Executive’s employment may be terminated by the
Company at any time without notice if the Executive:
(i) is guilty of serious misconduct;
(ii) becomes unable to pay the Executive’s debts as they
become due; or
(iii) is found guilty by a court of a criminal offence.
B P Rogers Company Secretary
– No fixed term of agreement.
– Base salary, inclusive of superannuation, per annum as at 30
June 2011 of $135,580 part-time, to be reviewed annually by the
remuneration and nomination committee.
– Fringe benefits consist of on-site car parking.
– Payment of termination benefit on termination by the employer,
other than for serious breach of obligations to the employer,
wilful neglect of duty or serious misconduct, equal to thirteen
weeks gross remuneration.
J R Paull VP – Development and Regulatory Affairs
– No fixed term of agreement.
– Base salary, inclusive of superannuation, per annum as at 30
June 2011 of $203,721, to be reviewed annually by the
remuneration and nomination committee.
1
9
STARPHARMA HOLDINGS LIMITED
– Fringe benefits consist of on-site car parking.
– Subject to termination at any time by:
(i) the Executive giving to the Company not less than three
months written notice; or
(ii) the Company giving to the Executive written notice, or
payment in lieu of that notice, which notice period shall be six
months.
– The Executive’s employment may be terminated by the
Company at any time without notice for serious breach of
obligations to the employer, wilful neglect of duty, serious
misconduct or bankruptcy.
C P Barrett VP – Business Development
– No fixed term of agreement.
– Base salary, inclusive of superannuation, per annum as at 30
June 2011 of $209,634, to be reviewed annually by the
remuneration and nomination committee.
– Subject to termination at any time by:
(i) the Executive giving to the Company not less than two months
written notice; or
(ii) the Company giving to the Executive written notice, or payment
in lieu of that notice, which notice period shall be four months.
– The Executive’s employment may be terminated by the
Company at any time without notice for serious breach of
obligations to the employer, wilful neglect of duty, serious
misconduct or bankruptcy.
N J Baade Chief Financial Officer
– No fixed term of agreement.
– Base salary, inclusive of superannuation, per annum as at 30
June 2011 of $201,291, to be reviewed annually by the
remuneration and nomination committee.
– Fringe benefits consist of on-site car parking.
– Subject to termination at any time by:
(i) the Executive giving to the Company not less than two months
written notice; or
(ii) the Company giving to the Executive written notice, or
payment in lieu of that notice, which notice period shall be four
months.
D. Share-based compensation
Options
Options are granted under the Starpharma Holdings Limited
Employee Share Option Plan (ASX code SPLAM) (“the Plan”)
which was approved by shareholders at the 2007 annual general
meeting. All employees of the group are eligible to participate in
the plan. Options are granted under the plan for no consideration
and when exercised, enable the holder to subscribe for one fully
paid ordinary share of the Company to be allotted not more than
ten business days after exercise, at the exercise price. The vesting
– The Executive’s employment may be terminated by the
Company at any time without notice for serious breach of
obligations to the employer, wilful neglect of duty, serious
misconduct or bankruptcy.
D J Owen VP – Research
– No fixed term of agreement.
– Base salary, inclusive of superannuation, per annum as at 30
June 2011 of $194,040, to be reviewed annually by the
remuneration and nomination committee.
– Subject to termination at any time by:
(i) the Executive giving to the Company not less than three
months written notice; or
(ii) the Company giving to the Executive written notice, or
payment in lieu of that notice, which notice period shall be
three months.
– The Executive’s employment may be terminated by the
Company at any time without notice for serious breach of
obligations to the employer, wilful neglect of duty, serious
misconduct or bankruptcy.
M L McColl VP – Business Development (from 16 August 2010)
– No fixed term of agreement.
– Base salary, inclusive of superannuation, per annum as at 30
June 2011 of $204,000, to be reviewed annually by the
remuneration and nomination committee.
– Subject to termination at any time by:
(i) the Executive giving to the Company not less than three
months written notice; or
(ii) the Company giving to the Executive written notice, or
payment in lieu of that notice, which notice period shall be
three months.
– The Executive’s employment may be terminated by the
Company at any time without notice for serious breach of
obligations to the employer, wilful neglect of duty, serious
misconduct or bankruptcy.
period is 1 to 2 years from the date of grant, and the exercise
period is 2 to 3 years from the end of the vesting period.
There were no options granted in the current or prior year. The
terms and conditions of each grant of options affecting
remuneration of each director of the company and the key
management personnel of the group in this or future reporting
periods are as follows:
Grant date
Date exercisable
Expiry date
Exercise price
Value per option at
grant date
1 January 2009
29 August 2010
28 August 2012
29 June 2009
29 June 2011
28 June 2014
$0.29
$0.37
$0.11
$0.23
% vested
100%
100%
Options granted under the Plan carry no dividend or voting rights. The weighted average remaining contractual life of share options outstanding
at the end of the year was 2.42 years (2010: 1.55 years).
0
2
ANNUAL REPORT 2011
Fair value of options granted
There were no options granted in the current or prior year. For
earlier years, the fair value at grant date was independently
determined using a 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 the expected price
volatility of the underlying share, the expected dividend yield and
the risk free rate for the term of the option. The expected price
volatility is based on the historic volatility (based on the remaining
life of the options), adjusted for any expected changes to future
volatility due to publicly available information.
Shares issued to directors and key management personnel on the exercise of options
Details of ordinary shares issued to the key management personnel of the group on the exercise of options in the current year were:
Name
J K Fairley
B R Rogers
J R Paull
C P Barrett
N J Baade
D J Owen
Number of shares issued on exercise of options
during the year
2011
350,000
100,000
350,000
175,000
300,000
200,000
2010
–
–
–
–
–
–
Intrinsic value1
$
2010
–
–
–
–
–
–
2011
74,775
22,500
82,250
60,125
128,000
60,500
1 The intrinsic value of each option exercised has been determined as opening share price on the date of allotment of shares less the option
exercise price.
The amount paid per ordinary share by the key management personnel of the group on the exercise of options were as follows:
Share allotment date on exercise of options
24 Sep 2010
3 Nov 2010
10 Nov 2010
11 Nov 2010
17 Nov 2010
17 Nov 2010
26 Nov 2010
10 Dec 2010
10 Dec 2010
19 May 2011
Amount paid
per share
$0.50
$0.50
$0.50
$0.50
$0.50
$0.29
$0.50
$0.50
$0.29
$0.29
No amounts are unpaid on any shares issued on the exercise of options.
Share options granted to directors and key management personnel
Details of options over unissued ordinary shares of Starpharma Holdings Limited provided as remuneration to any of the directors or the key
management personnel of the group with greatest authority as part of their remuneration were as follows:
Number of options
vested during the year
Number of options
expired during the year
Name
J K Fairley
B R Rogers
J R Paull
C P Barrett
N J Baade
D J Owen
2011
–
200,000
275,000
275,000
225,000
225,000
2010
200,000
–
–
–
–
–
2011
300,000
100,000
–
200,000
–
–
The options were granted under the Starpharma Holdings Limited Employee Share Option Plan.
No options have been granted to directors or key management personnel in the current or prior year, or since the end of the year. No other
directors or key management personnel hold options under the Plan.
2010
–
–
–
–
–
–
2
1
STARPHARMA HOLDINGS LIMITED
No options lapsed during the year as a result of performance milestones not being met.
Shares and Performance Rights
Details of ordinary shares and performance rights over unissued ordinary shares of Starpharma Holdings Limited provided as remuneration to
any of the directors or the key management personnel of the group with greatest authority as part of their remuneration were as follows:
Name
J K Fairley
B R Rogers
J R Paull
C P Barrett
N J Baade
D J Owen
M L McColl
Number of shares
granted during the year
Number of performance rights
granted during the year
2011
–
1,190
1,190
1,190
1,190
1,190
1,190
2010
1,428,571
1,418
1,418
1,418
1,418
1,418
–
2011
–
65,000
80,000
80,000
80,000
80,000
80,000
2010
750,000
–
–
–
–
–
–
CEO Equity Incentive Plan (Performance Rights)
Details of ordinary shares issued on the vesting of performance rights of Starpharma Holdings Limited provided as remuneration to any of the
directors or the key management personnel of the group with greatest authority as part of their remuneration were as follows:
Number of shares issued
of the vesting of performance
rights during the year
Number of
performance rights
lapsed during the year
Name
J K Fairley
2011
487,500
2010
–
2011
262,500
2010
–
The value at vesting date of performance rights under the CEO Equity Incentive Plan that vested during 2011 was $407,062.
No other performance rights have vested or lapsed; and other no shares were issued on the vesting of performance rights in the current or prior
year provided as remuneration to any of the directors or the key management personnel of the group.
The terms and conditions of the grant of performance rights under the CEO Equity Plan were as follows:
Grant date
Vesting Date
Holding Lock
Expiry date
Number of
Rights
Performance
Measure
Value per right
at grant date
% vested
31 March 2010 31 December 2010
1 March 2013
262,500
Share Price ≥ $0.65
31 March 2010 31 December 2010
1 March 2013
262,500
Share Price ≥ $1.00
31 March 2010 31 December 2010
1 March 2013
225,000
Achievement of KPIs
$0.37
$0.09
$0.55
100%
Nil
100%
Principles used to determine the nature and amount of remuneration and the relationship between remuneration and company performance are
set out in section A of the remuneration report.
Details of remuneration: cash bonuses, shares, performance rights and options
For each cash bonus and grant of equity included in the tables on pages 16 to 23, the percentage of the available bonus or grant that was paid,
or that vested, in the financial year, and the percentage that was forfeited because the person did not meet the service and individual
performance objectives is set out below. The options vest over the specified periods providing vesting criteria are met. No options or rights will
vest if the conditions are not satisfied, hence at the minimum value of the options and rights yet to vest is nil. The maximum value of the options
and rights yet to vest has been determined as the amount of the grant date fair value of the options and rights that is yet to be expensed.
2
2
ANNUAL REPORT 2011
Cash
bonus
Performance
rights
Grant date value
of shares granted
during 20112
Grant date value
of rights granted
during 20112
Accounting values being
amortised in respect of
the 2011 equity grants
in future years3
Remuneration
consisting of
shares, options
& rights4
Paid Forfeited
Vested
Forfeited
2012
2013
Name
J K
Fairley
B P
Rogers
J R Paull
C P
Barrett
N J
Baade
D J
Owen
M L
McColl
%
%
%
%
100%
–1
–1
–1
–1
–1
–1
–
–
–
–
–
–
–
65%
35%
–
–
–
–
–
–
–
–
–
–
–
–
$
–
1,000
1,000
1,000
1,000
1,000
1,000
$
–
$
–
$
–
25,088
12,579
2,165
31,360
15,723
2,706
31,360
15,723
2,706
31,360
15,723
2,706
31,360
15,723
2,706
31,360
15,723
2,706
%
24%
14%
11%
12%
12%
12%
7%
1 The bonuses paid are at the absolute discretion of the Board based on an individual’s performance within the year. There is no unpaid
component of the bonuses awarded.
2 The value at grant date calculated in accordance with AASB 2 Share-based Payments of shares and performance rights granted during the
year as part of remuneration.
3 The maximum value of options and performance rights is determined at grant date and is amortised over the applicable vesting period. The
amount which will be included in a given key management personnel’s remuneration for a given year is consistent with this amortisation amount.
No options or performance rights will vest if the conditions are not satisfied, hence the minimum value yet to vest is nil.
4 The percentage of the value of remuneration consisting of equity, based on the market value of shares at grant date, and the fair value of
options and performance rights expensed during the current year.
Shares under option
Unissued ordinary shares of Starpharma Holdings Limited under option at the date of this report are as follows:
Grant date
Expiry date
Issue price of shares
Number under options
21 August 2007
21 August 2012
1 January 2009
28 August 2012
29 June 2009
28 June 2014
$0.43
$0.29
$0.37
1,684,809
395,000
974,000
No option holder has any right under the options to participate in any other issue of the Company or group.
2
3
STARPHARMA HOLDINGS LIMITED
Shares issued on the exercise of options
The following ordinary shares of Starpharma Holdings Limited were issued during the year to the date of this report on the exercise of options.
No amounts are unpaid on any of the shares.
Date options granted
Issue price of shares
(Option exercise price)
Number of shares issued
6 October 2006
2 January 2007
4 April 2007
21 August 2007
31 October 2007
14 November 2007
1 January 2009
29 June 2009
$0.50
$0.50
$0.50
$0.43
$0.50
$0.50
$0.29
$0.37
280,000
20,000
590,000
5,882,310
330,000
350,000
983,000
100,000
Shares under rights
Unissued ordinary shares of Starpharma Holdings Limited under the Employee Performance Rights Plan granted during the year to the date of
this report are as follows:
Grant date
Vesting date
Holding Lock date
Number of rights
granted
Balance of rights
at date of report
2 September 2010
31 August 2012
31 August 2013
830,800
750,800
Rights and the resultant shares are granted for no consideration.
Shares issued on the vesting of rights
The following ordinary shares of Starpharma Holdings Limited were issued during the year to the date of this report on the exercise of
performance granted under the CEO Equity Incentive Plan and Employee Performance Rights Plan. No amounts are unpaid on any of the
shares.
Date rights granted
31 March 2010
2 September 2010
Issue price of shares
(Exercise price of right)
Number of shares issued
$ -
$ -
487,500
13,000
4
2
Insurance of officers
During the financial year, Starpharma Holdings Limited arranged to
insure the directors and executive officers of the Company and
related bodies corporate. The terms of the policy prohibit
disclosure of the amount of the premium paid. The liabilities
insured are legal costs that may be incurred in defending civil or
criminal proceedings that may be brought against the officers in
their capacity as officers of entities in the group, and any other
payments arising from liabilities incurred by the officers in
Audit & non audit services
The Company may decide to employ the auditor on assignments
additional to their statutory audit duties where the auditor’s
expertise and experience with the Company and/or the group are
important. Details of the amounts paid or payable to the auditor
(PricewaterhouseCoopers) for audit and non-audit services
provided during the year are set out below. The board of directors
has considered the position and, in accordance with the advice
received from the audit and risk committee is satisfied that the
provision of the non-audit services is compatible with the general
standard of independence for auditors imposed by the
Corporations Act 2001. The directors are satisfied that the
provision of non-audit services by the auditor, as set out below, did
ANNUAL REPORT 2011
connection with such proceedings. This does not include such
liabilities that arise from conduct involving a wilful breach of duty
by the officers or the improper use by the officers of their position
or of information to gain advantage for themselves or someone
else or to cause detriment to the company. It is not possible to
apportion the premium between amounts relating to the insurance
against legal costs and those relating to other liabilities.
not compromise the auditor independence requirements of the
Corporations Act 2001 for the following reasons:
– all non-audit services have been reviewed by the audit and risk
committee to ensure they do not impact the impartiality and
objectivity of the auditor
– none of the services undermine the general principles relating to
auditor independence as set out in APES 110 Code of Ethics for
Professional Accountants.
During the year the following fees were paid or payable for
services provided by the auditor (PricewaterhouseCoopers) of the
parent entity, its related practices and non-related audit firms.
Assurance Services
Audit or review of financial reports of the entity or any entity in the group under the
Corporations Act 2001
Other assurance services – Grant reviews & program audits
2011
$
113,000
18,000
2010
$
124,500
27,300
No taxation or advisory services have been provided in either the current or prior year.
Auditors’ Independence Declaration
A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 26.
Rounding of amounts
The company is of a kind referred to in Class order 98/100, issued by the Australian Securities and Investments Commission, relating to the
‘’rounding off’’ of amounts in the directors’ report. Amounts in the directors’ report have been rounded off in accordance with that Class Order to
the nearest thousand dollars, or in certain cases, the nearest dollar.
Auditor
PricewaterhouseCoopers continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of the Directors.
Peter T Bartels, AO
Director
Melbourne, 29 August 2011
2
5
PricewaterhouseCoopers
ABN 52 780 433 757
Freshwater Place
2 Southbank Boulevard
SOUTHBANK VIC 3006
GPO Box 1331
MELBOURNE VIC 3001
DX 77
Telephone 61 3 8603 1000
Facsimile 61 3 8603 1999
www.pwc.com/au
Auditor’s Independence Declaration
As lead auditor for the audit of Starpharma Holdings Limited for the year ended 30 June 2011, I
declare that to the best of my knowledge and belief, there have been:
a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
b) no contraventions of any applicable code of professional conduct in relation to the audit
This declaration is in respect of Starpharma Holdings Limited and the entities it controlled during
the period.
Anton Linschoten
Partner
PricewaterhouseCoopers
Melbourne
29 August 2011
Liability limited by a scheme approved under Professional Standards Legislation
26
Corporate Governance Statement
Starpharma Holdings Limited (“the Company”) and the Board are
committed to achieving and demonstrating the highest standards
of corporate governance. The Board guides and monitors the
Company’s activities on behalf of the shareholders. In developing
policies and setting standards the Board considers the Australian
Securities Exchange (“ASX”) Corporate Governance Principles
and Recommendations (2nd Edition with 2010 Amendments) (“the
CGC Recommendations”). The Corporate Governance Statement
1. The Board of Directors
The relationship between the Board and senior management is
critical to the group’s long term success. The directors are
responsible to the shareholders for the performance of the group in
both the short and the longer term and seek to balance sometimes
competing objectives in the best interests of the group as a whole.
Their focus is to enhance the interests of shareholders and other
key stakeholders and to ensure the group is properly managed.
Day to day management of the group’s affairs and the
implementation of the corporate strategy and policy initiatives are
delegated by the Board to the Chief Executive Officer (“CEO”).
These delegations are reviewed on an annual basis.
1.1 Board charter
The charter of the Board of Starpharma Holdings Limited, matters
reserved for the board and matters delegated to the CEO are set
out below.
1.1.1 Board Composition
– The Board is to be composed of both executive and non-
executive directors with a majority of non-executive directors.
– In recognition of the importance of independent views and the
Board’s role in supervising the activities of management the
Chairman must be an independent non-executive director, the
majority of the Board must be independent of management and
all directors are required to bring independent judgement to bear
in their Board decision making.
– The Chairman is elected by the full Board and meets regularly
with the CEO.
– The Board may decide to appoint one of the non-executive
directors as Deputy Chairman.
– The Company is to maintain a mix of directors on the Board from
different backgrounds with complementary skills and experience.
– The Board is to undertake an annual Board performance review
and consider the composition, structure, and role of the Board
and individual responsibilities of directors.
– The minimum number of directors is three and the maximum is
fifteen unless the Company passes a resolution varying that
number.
– There is no requirement for a director to hold shares in the
Company.
1.1.2 Functions Reserved for the Board
The Company has established matters reserved for the board.
These are:
(a) Strategic Issues
– approving the Company's corporate strategy;
– overseeing and monitoring organisational performance and the
achievement of the group’s strategic goals and objectives;
– approving any major transaction not included in the budget or
outside the ordinary course of the business;
– determining the structure of the Company and the definition of
the business;
(b) Shareholding Items
– issuing shares, options or performance rights;
– granting special rights to shares;
– determining the amount of a dividend;
(c) Financial Items
– approving the Company's credit policy;
– reviewing and approving the annual budget and financial plans
including available resources and major capital expenditure
initiatives;
ANNUAL REPORT 2011
set out below describes the Company’s current corporate
governance principles and practices which the Board considers to
comply with the CGC Recommendations. All of these practices,
unless otherwise stated, were in place for the entire year. This
corporate governance statement is available on the Company’s
website. The company and its controlled entities together are
referred to as the group in this statement.
– seeking credit in excess of $50,000;
– giving any guarantee or letter of credit or any security over the
Company's assets;
(d) Expenditure Items
– approval of the annual and half-year financial reports;
– approving expenditure exceeding $100,000, unless reimbursable
by an external funding body in which case the limit is $250,000;
– approving divestments of assets exceeding $50,000;
(e) Audit
– approving appointment or removal of external auditors;
– considering any external audit reports;
(f) Board and Senior Management
– establishing corporate governance policies;
– appointment, performance assessment and, if necessary,
removal of the CEO
– determining remuneration of the CEO;
– ratifying the appointment and, if necessary, the removal of senior
executives;
1.1.3 Other Board Responsibilities
– enhancing and protecting the reputation of the group;
– overseeing the operation of the group, including its systems for
control, accountability, and risk management;
– monitoring financial performance;
– liaison with the Company’s auditors;
– ensuring there are effective management processes in place and
approving major corporate initiatives;
– reporting to shareholders.
1.2 Board members
Details of the members of the Board, their experience,
qualifications, term of office and independent status are set out in
the directors’ report under the heading “Information on Directors”.
There are four non-executive directors, all of whom are deemed
independent under the principles set out below, and one executive
director at the date of signing the directors’ report. The Board
seeks to ensure that:
– at any point in time, its membership represents an appropriate
balance between directors with experience and knowledge of the
group and directors with an external or fresh perspective; and
– the size of the Board is conducive to effective discussion and
efficient decision-making.
1.3 Directors’ independence
The Company has adopted specific principles for assessing the
independence of directors: To be deemed independent, a director
must be a non-executive and:
– not be a substantial shareholder of the company or an officer of,
or otherwise associated directly with, a substantial shareholder
of the company;
– within the last three years, not have been employed in an
executive capacity by the Company, or been a director after
ceasing to hold any such employment;
– within the last three years, not have been a principal of a
material professional adviser or a material consultant to the
Company, or an employee materially associated with the service
provided;
– not be a material supplier or customer of the Company, or an
officer of or otherwise associated directly or indirectly with a
material supplier or customer;
2
7
STARPHARMA HOLDINGS LIMITED
– must have no material contractual relationship with the Company
other than as a director;
– be free from any interest and any business or other relationship
which could, or could reasonably be perceived to, materially
interfere with the director’s ability to act in the best interests of
the company.
Materiality for the purposes of applying these criteria is determined
on both quantitative and qualitative bases. An amount of 5% of the
individual director’s net worth is considered material, and in
addition a transaction of any amount or a relationship is deemed
material if knowledge of it may impact the shareholders’
understanding of the director’s performance. A substantial
shareholder for the purposes of applying these criteria is a person
with a substantial shareholding as defined in section 9 of the
Corporations Act. The Company has also considered directors’
periods of service on the board, particularly in the context of the
long term nature of the Company’s research, development and
commercialisation activities, and has concluded that length of
service does not, and should not reasonably be perceived to,
adversely impact upon a director’s ability to act in the best
interests of the company.
Under these criteria the Board has determined that all non-
executive directors were independent at the date of this report.
1.4 Term of office
The Company’s Constitution specifies that all non-executive
directors must retire from office no later than the third annual
general meeting following their last election, and that one third of
non-executive directors (or if their number is not a multiple of three
then the number nearest to one third) retire at every annual
general meeting and be eligible for re-election.
1.5 Chairman and Chief Executive Officer (CEO)
The current Chairman Mr Peter Bartels is an independent non-
executive director appointed in 2003. The CEO Dr Jackie Fairley
was appointed as a director and CEO on 1 July 2006. The
Chairman is responsible for leading the Board, ensuring directors
are properly briefed in all matters relevant to their role and
responsibilities, facilitating Board discussions and managing the
Board’s relationship with the Company’s senior executives. The
Board has established the functions delegated to the CEO. The
CEO is responsible for implementing Company strategies and
policies, and for the day to day business operations of the group in
accordance with the strategic objectives of the group as approved
by the Board from time to time.
2. Corporate reporting
The Company prepares audited financial statements for each year
ending 30 June, and reviewed financial statements for each half
year period ending 31 December. In accordance with ASX Listing
Requirements the annual financial statements are lodged with the
ASX by 31 August, and half year statements are lodged with the
ASX by 28 February each year. The CEO and the CFO have made
the following certifications to the Board for the year ended 30 June
2011:
3. Board committees
The Board has established a number of committees to assist in the
execution of its duties and to allow detailed consideration of
complex issues. The committee structure and membership is
reviewed on an annual basis. Board committees are chaired by an
independent director other than the Chairman of the Board. Where
applicable matters determined by committees are submitted to the
full Board as recommendations for Board decisions. Current
committees of the Board are the following:
3.1 Audit and risk committee
The Company has established an audit and risk committee, which
consists of the following independent non-executive directors:
Mr Ross Dobinson (Chairman)
Mr Peter Bartels
Dr Peter Jenkins
8
2
The Board policy is for these separate roles of Chairman and CEO
to be undertaken by separate people.
1.6 Commitment
The Board held six meetings during the year. Meetings are usually
held at the Company’s corporate offices and laboratory facility in
the Baker IDI Building, 75 Commercial Road, Melbourne, Australia.
The number of meetings of the Board and of each Board
committee held during the year ended 30 June 2011, and the
number of meetings attended by each director is disclosed in the
Directors’ Report. The commitments of non-executive directors are
considered by the remuneration and nomination committee prior to
their appointment to the Board and are reviewed each year as part
of the annual performance assessment. Prior to appointment or
being submitted for re-election each non-executive director is
required to specifically acknowledge that they have and will
continue to have the time available to discharge their
responsibilities to the Company.
1.7 Conflict of interests
Directors are expected to avoid any action, position or interest that
may result in a conflict with an interest of the Company. A director
who has a material personal interest in a matter that relates to the
affairs of the Company must give notice of such interest and is
precluded from participating in discussions or decision making on
such dealings.
1.8 Independent professional advice
Directors and Board committees have the right, in connection with
their duties and responsibilities, to seek independent professional
advice at the Company’s expense. Prior approval of the Chairman
is required, but this approval will not be unreasonably withheld.
1.9 Performance assessment
The Board undertakes an annual self-assessment of its
performance. Each director is asked to consider matters such as
composition, structure and role of the Board, and performance of
individual directors. The Chairman then meets individually with
each director to discuss the assessment.
During the year an assessment of the Board and its committees
was conducted in accordance with these procedures.
The CEO’s performance is assessed taking into account
attainment of predetermined targets or goals based on various
financial and other measurable indicators related to the Company.
The CEO meets with the remuneration and nomination committee
annually to discuss attainment of key performance indicators of
both the CEO and the senior management team.
– that the Company’s financial reports are complete and present a
true and fair view, in all material respects, of the financial condition
and operational results of the Company and group and are in
accordance with relevant accounting standards; and
– that the above statement is founded on a sound system of risk
management and internal compliance and control which
implements the policies adopted by the Board and that the
Company’s risk management and internal compliance and control
is operating efficiently and effectively in all material respects.
Details of these directors’ qualifications and attendance at
committee meetings are set out in the directors’ report pages 13 to
14. The audit and risk committee has appropriate financial
expertise and all members are financially literate and have an
appropriate understanding of the industry in which the group
operates. The committee meets at least twice a year, and has
direct access to the Company’s auditors. The charter of this
committee is to:
– review and report to the Board on the annual report, the half-year
financial report and all other financial information published by
the company or released to the market;
– assist the Board in reviewing the effectiveness of the
organisation’s internal control environment covering:
> effectiveness and efficiency of operations,
> reliability of financial reporting, and
> compliance with applicable laws and regulations.
– oversee the effective operation of the risk management
framework by:
> ensuring the effective implementation of the risk
management policy and program,
> defining risk threshold levels for referral to the Board,
> ensuring that an effective system of internal compliance
and control is in place,
> ensuring staff charged with risk management
responsibilities have appropriate authority to carry out their
functions and have appropriate access to the audit and risk
committee, and
> ensuring the allocation of sufficient resources for the
effective management of risk
– recommend to the Board the appointment, removal and
remuneration of the external auditors, and review the terms of
their engagement, the scope and quality of the audit and assess
performance;
– consider the independence and competence of the external
auditor on an ongoing basis;
– review and monitor related party transactions and assess their
propriety;
ANNUAL REPORT 2011
3.2 Remuneration and nomination committee
The Company has established a remuneration and nomination
committee which consists of the following independent non-
executive directors:
Mr Ross Dobinson (Chairman)
Mr Peter Bartels
Mr Richard Hazleton
Details of these directors’ attendance at committee meetings are
set out in the directors’ report on page 14.
The charter of the remuneration and nomination committee is to:
– conduct annual reviews of board membership having regard to
present and future needs of the Company and make
recommendations on board composition and appointments;
– conduct an annual review of and conclude on the independence
of each director;
– propose candidates for board vacancies;
– oversee board succession including the succession of the
Chairman;
– oversee the annual assessment of board performance;
– advise the board on remuneration and incentive policies and
– assist the Board in the development and monitoring of statutory
practices generally;
compliance and ethics programs;
– provide assurance to the Board that it is receiving adequate, up
to date and reliable information;
– report to the Board on matters relevant to the committee’s role
and responsibilities.
In fulfilling its responsibilities, the audit and risk committee:
– receives regular reports from management and the external
auditors;
– reviews the processes the CEO and CFO have in place to
support their certifications to the board;
– reviews any significant disagreements between the auditors and
management, irrespective of whether they have been resolved;
– meets separately with the external auditors at least twice a year
without the presence of management;
– provides the external auditors with a clear line of direct
communication at any time to either the Chairman of the
committee or the Chairman of the board.
The audit and risk committee has authority, within the scope of its
responsibilities, to seek any information it requires from any
employee or external party.
4. External auditors
– make specific recommendations on remuneration packages and
other terms of employment for executive directors, other senior
executives and non-executive directors.
When the need for a new director is identified or an existing
director is required to stand for re-election, the committee reviews
the range of skills, experience and expertise on the board,
identifies its needs and prepares a short-list of candidates with
appropriate skills and experience. Where necessary, advice is
sought from independent search consultants. Each member of the
senior executive team has signed a formal employment contract
covering a range of matters including their duties, rights,
responsibilities and any entitlements on termination. Each contract
refers to a specific formal position description which is reviewed by
the committee as necessary in consultation with the CEO and
relevant executive. The remuneration and nomination committee’s
terms of reference include responsibility for reviewing any
transaction between the organisation and the directors, or any
interests associated with the directors, to ensure the structure and
the terms of the transaction are in compliance with the
Corporations Act 2001 and are appropriately disclosed. The
Remuneration Report is set out on pages 15 to 24.
The Company’s policy is to appoint external auditors who clearly
demonstrate quality and independence. The performance of the
external auditor is reviewed annually. The current auditors are
PricewaterhouseCoopers who have been the external auditors of
the Company since it commenced operations. It is
PricewaterhouseCoopers policy to rotate audit engagement
partners on listed companies at least every five years, and the
current audit engagement partner assumed responsibility for the
conduct of the audit in 2010. An analysis of fees paid to the
external auditors, including a break-down of fees for non-audit
services, is provided in note 18 to the financial statements. It is the
policy of the external auditors to provide an annual declaration of
their independence to the audit and risk committee. The external
auditor is requested to attend the annual general meeting and be
available to answer shareholder questions about the conduct of
the audit and the preparation and content of the audit report.
5. Risk assessment and management
The Board, through the audit and risk committee, is responsible for
ensuring there are adequate policies in relation to risk
management, compliance and internal control systems. The
Company operates in a challenging and dynamic environment, and
risk management is viewed as integral to realising new
opportunities as well as identifying issues that may have an
adverse effect on the Company’s existing operations and its
sustainability. The Company is committed to a proactive approach
towards risk management throughout its entire business
operations. The Board aims to ensure that effective risk
management practices become embedded in the Company culture
and in the way activities are carried out at all levels in the
Company. The Board and Management recognise the importance
that risk management plays in ensuring the business is able to fully
capitalise on the opportunities available to it as well as mitigating
potential loss. Health and Safety (see item 6) are considered to be
of paramount importance and are the focus of significant risk
management activities within the company. Other risk areas that
are addressed include business continuity and disaster recovery,
reputation, intellectual property, product development and clinical
trials. Adherence to the Code of Conduct (see item 7) is required
at all times and the board actively promotes a culture of quality and
integrity. The Board has required management to design and
implement a risk management and internal control system to
manage the group’s material business risks. The risk
management policy, which is available on the Company website,
sets out policies for the oversight of material business risks, and
describes the responsibilities and authorities of the Board, the
audit and risk committee, the CEO, CFO, Company Secretary, and
the senior management team. The CEO, CFO and Company
Secretary are responsible to the Board for the overall
implementation of the risk management program. During the
financial year management has reported to the board as to the
effectiveness of the group’s management of its material risks.
2
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STARPHARMA HOLDINGS LIMITED
6. The environment, occupational health and safety
The Company recognises the importance of environmental issues
and is committed to the highest levels of performance. There are
adequate systems in place to ensure compliance with
environmental regulations, and employees are encouraged to
actively participate in the management of environmental and
Occupational Health and Safety (OH&S) issues. In order to
conduct activities the group has obtained the necessary
accreditations, laboratory certifications and licenses from the
relevant authorities. The directors are not aware of any breach of
applicable environmental regulations.
The Company has adopted an OH&S Policy and has established
an OH&S committee as part of its overall approach to workplace
7. Code of conduct
The directors are committed to the principles underpinning best
practice in corporate governance, with a commitment to the
highest standards of legislative compliance and financial and
ethical behaviour. The Company has established a code of
conduct reflecting the core values of the Company and setting out
the standards of ethical behaviour expected of directors, officers
and employees in all dealings and relationships including with
8. Trading in Company securities
The dealing in Company securities by directors, executives and
employees is only permitted (subject also to complying with
applicable laws) during the following periods (trading windows):
• the period starting 24 hours after the release of Starpharma’s
annual results and ending on 31 December;
• the period starting 24 hours after the release of the Starpharma’s
half-year results and ending on 30 June; and
• such other period as determined by the Chairman or a
Committee of the Board.
Notwithstanding the existence of these trading windows, the
Company may notify Employees not to buy, sell or otherwise deal
in securities of the Company during all or part of any trading
window. The other periods of the year are considered black-out
periods (or closed periods) during which time Employees must not
deal in securities of the Company unless there are exceptional
circumstances and prior written permission from the “approving
officer” (Chairman, CEO or Board, as appropriate) is given.
safety. The committee provides a forum for management and
employees to consult on health and safety matters. The primary
role of the committee is to coordinate the development and
implementation of OH&S policy and procedures, to consider any
work related safety matters or incidents, and to ensure compliance
with relevant legislation and guidelines. The committee includes
representatives of management, and employees from each
operational area generally in proportion to the number of people
working in the area and the perceived safety risks associated with
working in that area. The OH&S committee meets on a monthly
basis.
shareholders, contractors, customers and suppliers, and with the
Company. Areas covered include employment practices, equal
opportunity, harassment and bullying, conflicts of interest, use of
company assets and disclosure of confidential information. The
code of conduct is available in the Corporate Governance section
of the Company’s website.
An Employee who wishes to enter into a margin loan must obtain
written permission from the “approving officer” prior to entering into
the margin loan.
Except with prior written permission from the “approving officer”,
Employees may not enter into any transaction which would have
the effect of hedging or otherwise transferring to any other person
the risk of any fluctuation in the value of:
(a) securities in the Company which are subject to a restriction on
disposal under an employee share or incentive plan; or
(b) options or performance rights (or any unvested securities in the
Company underlying them).
The Company’s share trading policy is discussed with each new
employee as part of their induction training.
The Securities Trading Policy approved by the Board of Directors
and released to the ASX on 16 December 2010, and is effective
from that date. The Securities Trading Policy is available in the
Corporate Governance section of the Company’s website.
9. Continuous disclosure and shareholder communication
The Company has developed a continuous disclosure and
shareholder communication policy to ensure compliance with the
ASX Listing Rules and to facilitate effective communication with
shareholders. A copy of this policy is available on the Company’s
website.
The Board has appointed the Company Secretary as the person
responsible for disclosure of information to the ASX. This role
includes responsibility for ensuring compliance with the continuous
disclosure requirements of the ASX Listing Rules and overseeing
and co-ordinating information disclosure to the ASX, analysts,
brokers, shareholders, the media and the public. Procedures have
been established for reviewing whether there is any price sensitive
information that should be disclosed to the market, or whether any
price sensitive information may have been inadvertently disclosed.
All ASX announcements are posted on the Company’s website as
soon as practicable after release to the ASX. Announcements are
also posted on the OTCQX website (www.otcqx.com) in order to
provide timely disclosure to US investors trading in the Company’s
Level One ADRs (OTCQX:SPHRY).
10. Diversity
The Company is committed to workplace diversity, and the Board
values the level of diversity already present within the organisation,
believing that continuing to promote diversity is in the best
interests of the Company, its employees and its shareholders. In
June 2011 the Board approved a Diversity Policy which operates
alongside the Code of Conduct, providing a framework for
Starpharma to achieve a number of diversity objectives.
The Diversity Policy requires the Board to establish measurable
objectives for achieving gender diversity and to assess annually
both the objectives and progress in achieving them.
The Diversity Policy is available in the Corporate Governance
section of the Company’s website.
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3
ANNUAL REPORT 2011
Annual Financial Report
Contents
Income statement
Statement of comprehensive income
Balance sheet
Statement of changes in equity
Statement of cash flows
Notes to the financial statements
Directors’ declaration
Independent audit report to the members
32
33
34
35
36
37
67
68
This financial report covers the consolidated financial statements for the group consisting of Starpharma Holdings Limited and its subsidiaries.
The financial report is presented in the Australian currency.
Starpharma Holdings Limited is a company limited by shares, incorporated and domiciled in Australia.
Its registered office and principal place of business is:
Starpharma Holdings Limited
Baker IDI Building, 75 Commercial Road
Melbourne, Victoria, 3004, Australia
A description of the nature of the group’s operations and its principal activities is included in the CEO’s Report on pages 3 to 8 and in the review
of operations in the directors’ report on pages 10 to 11, which are not part of this financial report.
The financial report was authorised for issue by the directors on 29 August 2011. The directors have the power to amend and reissue the
financial report.
Through the use of the internet, Starpharma ensures that corporate reporting is timely and complete. All press releases, financial reports and
other information are available on the website: www.starpharma.com.
3
1
STARPHARMA HOLDINGS LIMITED
Income statement
For the year ended 30 June 2011
Revenue from continuing operations
Other income
Administration expense
Research and development expense
Finance costs
Loss before income tax
Income tax credit
Loss from continuing operations attributable to members of
Starpharma Holdings Limited
Loss per share for loss from continuing operations attributable to
the ordinary equity holders of the company
Basic loss per share
Diluted loss per share
2011
$'000
2,125
1,178
(6,231)
(5,986)
(16)
(8,930)
-
Consolidated
2010
$'000
2,103
3,805
(6,548)
(5,723)
(18)
(6,381)
3
(8,930)
(6,378)
($0.04)
($0.04)
($0.03)
($0.03)
Notes
5
5
7
24
24
The above income statement should be read in conjunction with the accompanying notes.
2
3
Statement of comprehensive income
For the year ended 30 June 2011
Loss for the year
Notes
Other comprehensive income (loss), net of income tax
Foreign exchange differences on translation of foreign operations
15
Other comprehensive income (loss), net of income tax
ANNUAL REPORT 2011
2010
$'000
(8,930)
(2,284)
(2,284)
Consolidated
2010
$'000
(6,378)
(667)
(667)
Total comprehensive income (loss) for the year attributable to
members of Starpharma Holdings Limited
(11,214)
(7,045)
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
3
3
STARPHARMA HOLDINGS LIMITED
Balance Sheet
As at 30 June 2011
Current Assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Property, plant and equipment
Intangible assets
Total non-current assets
Total assets
Current Liabilities
Trade and other payables
Borrowings
Provisions (employee entitlements)
Deferred income
Total current liabilities
Non-current liabilities
Borrowings
Provisions (employee entitlements)
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Reserves
Accumulated losses
Total equity
Notes
8
9
10
11
12
13
2011
$'000
18,918
1,023
19,941
280
9,586
9,866
29,807
1,227
49
416
349
2,041
Consolidated
2010
$'000
22,851
1,379
24,230
219
13,118
13,337
37,567
1,581
160
295
629
2,665
13
17
-
56
73
2,114
58
58
2,723
27,693
34,844
105,399
1,022
(78,728)
27,693
101,766
2,876
(69,798)
34,844
14
15
16
The above balance sheet should be read in conjunction with the accompanying notes.
4
3
Statement of changes in equity
Consolidated
For the year ended 30 June 2011
Balance at 1 July 2010
Loss for the year
Other comprehensive income
Foreign exchange differences on translation of
foreign operations
Total comprehensive income (loss) for the
year
Transactions with owners, recorded directly
in equity
Contributions of equity, net of transaction costs
Employee share options plan
Employee share plans
Employee performance rights plan
Total transactions with owners
15
14
15
14
15
Notes
Contributed
capital
$'000
85,640
Balance at 1 July 2009
Loss for the year
Other comprehensive income
Foreign exchange differences on translation of
foreign operations
Total comprehensive income (loss) for the
year
Transactions with owners, recorded directly
in equity
Contributions of equity, net of transaction costs
Employee share options plan
Employee share plans
Employee performance rights plan
Total transactions with owners
15
14
15
14
15
ANNUAL REPORT 2011
Notes
Contributed
capital
$'000
101,766
Reserves
Accumulated
losses
$'000
(69,798)
(8,930)
2011
Total
equity
$'000
34,844
(8,930)
$'000
2,876
-
(2,284)
(2,284)
-
139
-
291
430
-
(2,284)
(8,930)
(11,214)
-
-
-
-
-
3,609
139
24
291
4,063
Reserves
Accumulated
losses
$'000
3,279
-
(667)
(667)
-
182
-
82
264
$'000
(63,420)
(6,378)
-
(6,378)
-
-
-
-
-
2010
Total
equity
$'000
25,499
(6,378)
(667)
(7,045)
15,122
182
1,004
82
16,390
-
-
-
3,609
-
24
-
3,633
-
-
-
15,122
-
1,004
-
16,126
Balance at 30 June 2011
105,399
1.022
(78,728)
27,693
For the year ended 30 June 2010
Balance at 30 June 2010
101,766
2,876
(69,798)
34,844
The above statement of changes in equity should be read in conjunction with the accompanying notes.
3
5
STARPHARMA HOLDINGS LIMITED
Statement of cash flows
For the year ended 30 June 2011
Notes
Cash flow from operating activities
Receipts from trade and other debtors
Grant income (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Interest received
Interest paid
Income tax paid
2011
$'000
1,391
829
(9,793)
1,113
(16)
-
Consolidated
2010
$'000
1,524
3,719
(9,268)
418
(18)
(5)
Net cash outflows from operating activities
23
(6,476)
(3,630)
Cash flow from investing activities
Receipts from disposals of property, plant and equipment
Payments for property, plant and equipment
Net cash outflows from investing activities
Cash flow from financing activities
Proceeds from issue of shares
Share issue transaction costs
Lease repayments
Net cash inflows from financing activities
-
(138)
23
(27)
(138)
(4)
3,609
15,685
-
(101)
(563)
(157)
3,508
14,965
Net increase (decrease) in cash and cash equivalents held
(3,106)
11,331
Cash and cash equivalents at the beginning of the year
22,851
11,595
Effects of exchange rate changes on cash and cash equivalents
(827)
(75)
Cash and cash equivalents at the end of the year
18,918
22,851
The above statement of cash flows should be read in conjunction with the accompanying notes.
6
3
Notes to the financial statements
30 June 2011
Contents
1.
Summary of significant accounting policies
2.
3.
4.
5.
6.
7.
8.
9.
Financial risk management
Critical accounting estimates and judgments
Segment information
Revenue and other income
Expenses
Income tax expense
Current assets – Cash and cash equivalents
Current assets – Trade and other receivables
10.
Non-current assets – Property, plant and equipment
11.
Non-current assets – Intangible assets
12.
Current liabilities – Trade and other payables
13.
Current and non-current liabilities – Borrowings
14.
Contributed equity
15.
Reserves
16.
Accumulated losses
17.
Key management personnel disclosures
18.
Remuneration of auditors
19.
Contingencies
20.
Commitments
21.
Subsidiaries
22.
Events occurring after the balance sheet date
23.
Reconciliation of profit after income tax to net cash inflow from operating activities
24.
Earnings per share
25.
Share-based payments
26.
Related party transactions
27.
Parent entity financial information
ANNUAL REPORT 2011
38
43
44
44
45
46
46
47
49
49
50
51
52
52
54
55
55
58
59
59
60
60
61
61
61
65
66
3
7
STARPHARMA HOLDINGS LIMITED
1. Summary of significant accounting policies
The principal accounting policies adopted in the preparation of
these consolidated financial statements are set out below. These
policies have been consistently applied to all the years presented,
unless otherwise stated. The financial statements are for the
consolidated entity consisting of Starpharma Holdings Limited and
its subsidiaries.
(a) Basis of preparation
These general purpose financial statements have been prepared
in accordance with Australian Accounting Standards, other
authoritative pronouncements of the Australian Accounting
Standards Board, Urgent Issues Group Interpretations and the
Corporations Act 2001.
(i) Compliance with IFRS
The consolidated financial statements of the Starpharma Holdings
Limited group also comply with International Financial Reporting
Standards (IFRS) as issued by the International Accounting
Standards Board (IASB).
(ii) New and amended standards adopted by the group
The following new standards and amendments to standards are
mandatory for the first time for the financial year beginning 1 July
2010:
AASB 2009-5 Further Amendments to Australian Accounting
Standards arising from the Annual Improvements Project –
adopted early by Starpharma Holdings Limited in the 2010
financial report
AASB 2009-8 Amendments to Australian Accounting
Standards – Group Cash-settled Share-based Payment
Transactions
AASB 2009-10 Amendments to Australian Accounting
Standards – Classification of Rights Issues
AASB Interpretation 19 Extinguishing Financial Liabilities with
Equity Instruments and AASB 2009-13 Amendments to
Australian Accounting Standards arising from Interpretation 19,
and
AASB 2010-3 Amendments to Australian Accounting
Standards arising from the Annual Improvements Project.
The adoption of these standards did not have any impact on the
current period or any prior period and is not likely to affect future
periods.
(iii) Early adoption of standards
The group has elected to apply the following pronouncements to
the annual reporting period beginning 1 July 2010:
AASB 2010-4 Further Amendments to Australian Accounting
Standards arising from the Annual Improvements Project
This includes applying the revised pronouncement to the
comparatives in accordance with AASB 108 Accounting Policies,
Changes in Accounting Estimates and Errors. None of the items in
the financial statements had to be restated as the result of
applying this standard.
(iv) Historical cost convention
These financial statements have been prepared under the
historical cost convention.
(v) Critical accounting estimates
The preparation of financial statements requires the use of certain
critical accounting estimates. It also requires management to
exercise its judgement in the process of applying the group’s
accounting policies. The areas involving a higher degree of
judgement or complexity, or areas where assumptions and
estimates are significant to the financial statements are disclosed
in note 3.
For the year ended 30 June 2011, the consolidated entity has
incurred losses of $8,930,000 (2010: $6,378,000) and experienced
net cash outflows of $6,476,000 from operations (2010:
8
3
$3,630,000), as disclosed in the balance sheet and statement of
cash flows, respectively. This is consistent with the consolidated
entity’s strategic plans and budget estimates, and the directors are
satisfied regarding the availability of working capital for the period
up to at least August 2012. Accordingly the directors have
prepared the financial report on a going concern basis in the belief
that the consolidated entity will realise its assets and settle its
liabilities and commitments in the normal course of business and
for at least the amounts stated in the financial report.
(b) Principles of consolidation
(i) Subsidiaries
The consolidated financial statements incorporate the assets and
liabilities of all subsidiaries of Starpharma Holdings Limited
(“company” or “parent entity”) as at 30 June 2011 and the results
of all subsidiaries for the year then ended. Starpharma Holdings
Limited and its subsidiaries together are referred to in this financial
report as the group or the consolidated entity.
Subsidiaries are all those entities (including special purpose
entities) over which the group has power to govern the financial
and operating policies, generally accompanying a shareholding of
more than one-half of the voting rights. The existence and effect of
potential voting rights that are currently exercisable or convertible
are considered when assessing whether the group controls
another entity.
Subsidiaries are fully consolidated from the date on which control
is transferred to the group. They are de-consolidated from the date
that control ceases.
Intercompany transactions, balances and unrealised gains on
transactions between group companies are eliminated. Unrealised
losses are also eliminated unless the transaction provides
evidence of the impairment of the asset transferred. Accounting
policies of subsidiaries have been changed where necessary to
ensure consistency with the policies adopted by the group.
Investments in subsidiaries are accounted for at cost in the
separate financial statements of Starpharma Holdings Limited.
(c) Segment reporting
Operating segments are reported in a manner consistent with the
internal reporting provided to the chief operating decision maker.
The chief operating decision maker, who is responsible for
allocating resources and assessing performance of the operating
segments, has been identified as the Chief Executive Officer.
(d) Foreign currency translation
(i) Functional and presentation currency
Items included in the financial statements of each of the group’s
entities are measured using the currency of the primary economic
environment in which the entity operates (‘the functional currency’).
The consolidated financial statements are presented in Australian
dollars, which is Starpharma Holdings Limited’s functional and
presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional
currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from
the settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in profit or loss.
Foreign exchange gains and losses that relate to borrowings are
presented in the income statement, within finance costs. All other
foreign exchange gains and losses are presented in the income
statement on a net basis within other income or other expenses.
(iii) Group companies
The results and financial position of all the group entities (none of
which has the currency of a hyperinflationary economy) that have
a functional currency different from the presentation currency are
translated into the presentation currency as follows:
assets and liabilities for each balance sheet presented are
translated at the closing rate at the date of that balance
sheet;
income and expenses for each income statement and
statement of comprehensive income are translated at
average exchange rates (unless this is not a reasonable
approximation of the cumulative effect of the rates prevailing
on the transaction dates, in which case income and expenses
are translated at the dates of the transactions); and
all resulting exchange differences are recognised in other
comprehensive income.
On consolidation, exchange differences arising from the translation
of any net investment in foreign entities, and of borrowings and
other financial instruments designated as hedges of such
investments, are recognised in other comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of a
foreign entity are treated as assets and liabilities of the foreign
operation and translated at the closing rate.
(e) Revenue recognition
Revenue is measured at the fair value of the consideration
received or receivable. Amounts disclosed as revenue are net of
returns, trade allowances and amounts collected on behalf of third
parties. Licence revenue is recognised in accordance with the
underlying agreement. Upfront payments are brought to account
as revenues unless there is a correlation to ongoing research and
both components are viewed as one agreement, in which case the
licence income is amortised over the anticipated period of the
associated research program. Unamortised licence revenue is
recognised on the balance sheet as deferred income. Interest
revenue is recognised on a time proportion basis using the
effective interest rate method. All revenue is stated net of the
amount of Goods and Services Tax (GST).
(f) Government Grants
Government grants include contract income awarded by
government bodies for research and development projects. Grants
from the government are recognised at their fair value where there
is a reasonable assurance that the grant will be received and the
group will comply with all attached conditions. Government grants
relating to costs are deferred and recognised in profit or loss over
the period necessary to match them with the costs that they are
intended to compensate. Government grants relating to the
purchase of property, plant and equipment are included in non-
current liabilities as deferred income and are credited to the
income statement on a straight-line basis over the expected lives
of the related assets.
(g) Income Tax
The income tax expense or revenue for the period is the tax
payable on the current period’s taxable income based on the
applicable income tax rate for each jurisdiction adjusted by
changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses. Deferred tax
assets and liabilities are recognised for temporary differences at
the tax rates expected to apply when the assets are recovered or
liabilities are settled, based on those tax rates which are enacted
or substantively enacted for each jurisdiction. The relevant tax
rates are applied to the cumulative amounts of deductible and
taxable temporary differences to measure the deferred tax asset or
liability. An exception is made for certain temporary differences
arising from the initial recognition of an asset or a liability. No
deferred tax asset or liability is recognised in relation to these
temporary differences if they arose in a transaction, other than a
business combination, that at the time of the transaction did not
affect either accounting profit or taxable profit or loss. 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.
Deferred tax liabilities and assets are not recognised for temporary
ANNUAL REPORT 2011
differences between the carrying amount and tax bases of
investments in controlled entities where the parent entity is able to
control the timing of the reversal of the temporary differences and
it is probable that the differences will not reverse in the foreseeable
future. Current and deferred tax balances attributable to amounts
recognised directly in other comprehensive income or equity are
also recognised directly in other comprehensive income or equity,
respectively. Starpharma Holdings Limited and its wholly-owned
Australian controlled entities have not implemented the tax
consolidation legislation.
(h) Leases
Leases of property, plant and equipment where the group has
substantially all the risks and rewards of ownership are classified
as finance leases (note 20). Finance leases are capitalised at the
lease’s inception at the lower of the fair value of the leased
property, or if lower the present value of the minimum lease
payments. The corresponding rental obligations, net of finance
charges, are included in short-term and long term payables. Each
lease payment is allocated between the liability and finance cost.
The finance cost is charged to profit or loss over the lease period
so as to produce a constant periodic rate of interest on the
remaining balance of the liability for each period. The property,
plant and equipment acquired under finance leases is depreciated
over the asset’s useful life or over the shorter of the asset’s useful
life and the lease term if there is no reasonable certainty that the
group will obtain ownership at the end of the lease term. Leases in
which a significant portion of the risks and rewards of ownership
are not transferred to the group as lessee are classified as
operating leases (note 20). Payments made under operating
leases (net of any incentives received from the lessor) are charged
to profit or loss on a straight-line basis over the period of the lease.
Lease income from operating leases where the group is a lessor is
recognised in income on a straight-line basis over the lease term.
(i) Impairment of assets
Goodwill and intangible assets that have an indefinite life are not
subject to amortisation and are tested annually for impairment or
more frequently if events or changes in circumstances indicate that
they might be impaired. Other assets are tested for impairment
whenever events or changes in circumstance indicate that the
carrying amount may not be recoverable. An impairment loss is
recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the
higher of an asset’s fair value less costs to sell and value in use.
For the purposes of assessing impairment, assets are grouped at
the lowest levels for which there are separately identifiable cash
inflows which are largely independent of the cash inflows from
other assets or groups of assets (cash generating units).
(j) Cash and cash equivalents
For the purpose of presentation in the statement of cash flows,
cash and cash equivalents include cash on hand, deposits held at
call with financial institutions and other short-term, highly liquid
investments with original maturities of six months or less that are
readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in value. The amount of
significant cash and cash equivalents not available for use is
disclosed in note 8.
(k) Trade Receivables
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment. Trade receivables
are generally due for settlement within 30 days. They are
presented as current assets unless collection is not expected for
more than 12 months after reporting date. Collectibility of trade
receivables is reviewed on an ongoing basis. Debts which are
known to be uncollectible are written off by reducing the carrying
amount directly. An allowance account (provision for impairment of
trade receivables) is used when there is objective evidence that
the group will not be able to collect all amounts due according to
the original terms of the receivables. Significant financial difficulties
of the debtor, probability that the debtor will enter bankruptcy or
financial reorganisation, and default or delinquency in payments
(more than 30 days overdue) are considered indicators that the
trade receivable is impaired. The amount of the impairment
3
9
STARPHARMA HOLDINGS LIMITED
allowance is the difference between the asset’s carrying amount
and the present value of estimated future cash flows, discounted at
the original effective interest rate. Cash flows relating to short-term
receivables are not discounted if the effect of discounting is
immaterial. The amount of the impairment loss is recognised in
profit or loss within administration expenses. When a trade
receivable for which an impairment allowance had been
recognised becomes uncollectible in a subsequent period, it is
written off against the allowance account. Subsequent recoveries
of amounts previously written off are credited against other
expenses in profit or loss.
(l) Investments and other financial assets
Classification
The group classifies its financial assets in the following categories:
financial assets at fair value through profit or loss, loans and
receivables, held-to-maturity investments and available-for-sale
financial assets. The classification depends on the purpose for
which the investments were acquired. Management determines
the classification of its investments at initial recognition and, in the
case of assets classified as held-to-maturity, re-evaluates this
designation at each reporting period.
(i) Loans and receivables
Loans and receivables are non-derivative financial assets with
fixed or determinable payments that are not quoted in an active
market. They are included in current assets, except for those with
maturities greater than 12 months after the reporting date which
are classified as non-current assets. Loans and receivables are
included in trade and other receivables (note 9) in the balance
sheet.
(m) Property, Plant and Equipment
Property, plant and equipment is stated at historical cost less
depreciation. Historical cost includes expenditure that is directly
attributable to the acquisition of the items. 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. The carrying
amount of any component accounted for as a separate asset is
derecognised when replaced. All other repairs and maintenance
are charged to profit or loss during the financial period in which
they are incurred. Depreciation is calculated using the straight-line
method to allocate their cost or revalued amounts, net of the
residual values, over their estimated useful lives. The expected
useful lives are 3 to 15 years. The assets’ residual values and
useful lives are reviewed, and adjusted if appropriate, at each
balance sheet date. An asset’s carrying amount is written down
immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount (note 1
(i)). Gains and losses on disposals are determined by comparing
proceeds with the carrying amount. These are included in profit or
loss.
(n) Leasehold improvements
The cost of improvements to or on leasehold properties is
amortised over the unexpired period of the lease or the estimated
useful life of the improvement to the group between 2 to 6 years,
whichever is shorter.
(o) Intangible Assets
(i) Goodwill
Goodwill represents the excess of the cost of an acquisition over
the fair value of the group’s share of the net identifiable assets of
the acquired subsidiary/associate at the date of acquisition.
Goodwill on acquisitions of subsidiaries is included in intangible
assets. Goodwill is not amortised. Instead, goodwill is tested for
impairment annually, or more frequently if events or changes in
circumstances indicate that it might be impaired, and is carried at
cost less accumulated impairment losses. Gains and losses on the
disposal of an entity include the carrying amount of goodwill
relating to the entity sold. Goodwill is allocated to cash-generating
units for the purpose of impairment testing. The allocation is made
to those cash-generating units or groups of cash-generating units
0
4
that are expected to benefit from the business combination in
which goodwill arose, identified according to operating segments
(note 4).
(ii) Patents and licences
Costs associated with patents are charged to profit or loss in the
periods in which they are incurred. Licences and acquired patents
with a finite useful life are carried at cost less accumulated
amortisation and impairment losses. Amortisation is calculated
using the straight-line method to allocate the cost of licences and
patents over the period of the expected benefit, which varies from
4 to 15 years.
(iii) Research and development
Expenditure on research activities, undertaken with the prospect of
obtaining new scientific or technical knowledge and understanding,
is recognised in profit or loss as an expense when it is incurred.
Costs incurred on development activities (relating to the
application of research findings or other knowledge to a plan or
design for the production of new or substantially improved
products or services) before the start of commercial production or
use are recognised as intangible assets when it is probable that
the project will, after considering its technically and commercially
feasible and adequate resources are available to complete
development, generate future economic benefits and its costs can
be measured reliably. The expenditure capitalised comprises all
directly attributable costs, including costs of materials, services,
direct labour and an appropriate proportion of overheads. Other
development expenditure is recognised in profit or loss as an
expense as incurred. To date no development costs have been
capitalised.
(p) Trade and other payables
These amounts represent liabilities for goods and services
provided to the group prior to the end of the financial year which
are unpaid. The amounts are unsecured and are usually paid
within 30 to 45 days of recognition. Trade and other payables are
presented as current liabilities unless payment is not due within 12
months from the reporting date.
(q) Borrowings
Borrowings are initially recognised at fair value, net of transaction
costs incurred. Borrowings are subsequently measured at
amortised cost. Any difference between the proceeds (net of
transaction costs) and the redemption amount is recognised in
profit or loss over the period of the borrowings using the effective
interest method. Borrowings are classified as current liabilities
unless the group has an unconditional right to defer settlement of
the liability for at least 12 months after the reporting period.
(r) Provisions
Provisions for legal claims, service claims and make good
obligations are recognised when the group has a present legal or
constructive obligation as a result of past events, it is more
probable than not that an outflow of resources will be required to
settle the obligation and the amount has been reliably estimated.
Provisions are not recognised for future operating losses. Where
there are a number of similar obligations, the likelihood that an
outflow will be required in settlement is determined by considering
the class of obligations as a whole. A provision is recognised even
if the likelihood of an outflow with respect to any one item in the
same class of obligations may be small. Provisions are measured
at the present value of management’s best estimate for the
expenditure required to settle the present obligation at the balance
date. The discount rate used to determine the present value
reflects current market assessment of the time, value of money,
and the risks specific to liability. The increase of the provision due
to the passage of time is recognised as interest expense.
(s) Employee benefits
(i) Wages and salaries and annual leave
Liabilities for wages and salaries, including non-monetary benefits,
and annual leave expected to be settled within 12 months after the
end of the period in which the employees render the related
service are recognised in respect of employees’ services up to the
period and are measured at the amounts expected to be paid
when the liabilities are settled. The liability for annual leave and
accumulating sick leave is recognised in the provision for
employee benefits. All other short-term employee benefit
obligations are presented as payables.
(ii) Other long-term employee benefit obligations
The liability for long service leave and annual leave which is not
expected to be settled within 12 months after the end of the period
in which the employees render the related services is recognised
in the provision for employee benefits and measured as the
present value of expected future payments to be made in respect
of services provided by employees up to the end of the reporting
period using the projected unit credit method. Consideration is
given to expected future wage and salary levels, experience of
employee departures and periods of service. Expected future
payments are discounted using market yields at the end of the
reporting period on national government bonds with terms to
maturity and currency that match, as closely as possible, the
estimated future cash outflows.
(iii) Superannuation and Pension Benefits
Group companies make the statutory superannuation guarantee
contribution in respect of each employee to their nominated
complying superannuation or pension fund. In certain
circumstances pursuant to an employee’s employment contract the
group companies may also be required to make additional
superannuation or pension contributions and/or agree to make
salary sacrifice superannuation or pension contributions in addition
to the statutory guarantee contribution. The group’s legal or
constructive obligation is limited to the above contributions.
Contributions to the employees’ superannuation or pension plans
are recognised as an expense as they become payable. Prepaid
contributions are recognised as an asset to the extent that a cash
refund or reduction in future payments is available.
(iv) Employee benefits on-costs
Employee benefit on-costs, including payroll tax, are recognised
and included in other payables and costs when the employee
benefits to which they relate are recognised as liabilities.
(v) Share-based payments
Share-based compensation benefits are offered to the directors
and employees via the Starpharma Holdings Limited Employee
Share Option Plan (“SPLAM”), a CEO Equity Incentive Plan, an
Employee Share Plan ($1,000 Plan), and an Employee
Performance Rights Plan. Information relating to these plans is set
out in note 25 and section D of the remuneration report under the
directors’ report.
The fair value of options and performance rights granted is
recognised as an employee benefit expense with a corresponding
increase in equity. The fair value is measured at grant date and
recognised over the period during which the employees become
unconditionally entitled to the options or rights The fair value at
grant date is determined using a Black-Scholes model (or variant
of) that takes into account any exercise price, the term, the vesting
and performance criteria, the impact of dilution, the non-tradeable
nature of the option or share right, 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. The fair
value excludes the impact of any non-market vesting conditions
(for example, profitability and sales growth targets). Non-market
vesting conditions are included in assumptions about the number
of options or share rights that are expected to become exercisable.
At each balance sheet date, the entity revises its estimate of the
number of options or share rights that are expected to become
exercisable. The employee benefit expense recognised in each
period takes into account the most recent estimate. The impact of
the revision to original estimates, if any, is recognised in the
income statement with a corresponding adjustment to equity.
Under the Employee Share Plan ($1,000 Plan) shares are issued
to employees for no cash consideration and vest immediately on
grant. On this date, the market value of the shares issued is
recognised as an employee benefits expense with a corresponding
increase in equity.
ANNUAL REPORT 2011
(vi) Bonus payments
The group recognises a liability and an expense for bonuses
based on a formula that takes into consideration performance
criteria that has been set. The group recognises a provision where
contractually obliged or where there is a past practice that has
created a constructive obligation.
(vii) Termination benefits
Termination benefits are payable when employment is terminated
before the normal retirement date, or when an employee accepts
voluntary redundancy in exchange for these benefits. The group
recognises termination benefits when it is demonstrably committed
to either terminating the employment of current employees
according to a detailed formal plan without possibility of withdrawal
or providing termination benefits as a result of an offer made to
encourage voluntary redundancy. Benefits falling due more than
12 months after the end of the reporting period are discounted to
present value.
(t) Contributed equity
Ordinary shares are classified as equity. Incremental costs directly
attributable to the issue of new shares, performance rights or
options are shown in equity as a deduction, net of tax, from the
proceeds. Incremental costs directly attributable to the issue of
new shares or options, for the acquisition of a business, are not
included in the cost of the acquisition as part of the purchase
consideration.
(u) Dividends
Provision is made for the amount of any dividend declared, being
appropriately authorised and no longer at the discretion of the
entity, on or before the end of the reporting period but not
distributed at the end of the reporting period.
(v) Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit
attributable to owners of the company, 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 year and excluding treasury shares.
(ii) Diluted earnings per share
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs
associated with dilutive potential ordinary shares and the weighted
average number of additional ordinary shares that would have
been outstanding assuming the conversion of all dilutive potential
ordinary shares.
(w) Goods and Services Tax (“GST”)
Revenues, expenses and assets are recognised net of the amount
of associated GST, unless the GST incurred is not recoverable
from the taxation authority. In this case it is recognised as part of
the cost of acquisition of the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of
GST receivable from, or payable to, the taxation authority is
included with other receivables or payables in the balance sheet.
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 taxation authority, are
presented as operating cash flows.
(x) Rounding of amounts
The company is of a kind referred to in Class order 98/100, issued
by the Australian Securities and Investments Commission, relating
to the ‘’rounding off’’ of amounts in the financial statements.
Amounts in the financial statements have been rounded off in
accordance with that Class Order to the nearest thousand dollars,
or in certain cases, the nearest dollar.
4
1
STARPHARMA HOLDINGS LIMITED
(y) New accounting standards and interpretations
Certain new accounting standards and interpretations have been
published that are not mandatory for 30 June 2011 reporting
periods. The group's assessment of the impact of these new
standards and interpretations is set out below.
(i) AASB 9 Financial Instruments, AASB 2009-11 Amendments to
Australian Accounting Standards arising from AASB 9 and AASB
2010-7 Amendments to Australian Accounting Standards arising
from AASB 9 (December 2010) (effective from 1 January 2013)
AASB 9 Financial Instruments addresses the classification,
measurement and derecognition of financial assets and financial
liabilities. The standard is not applicable until 1 January 2013 but is
available for early adoption. When adopted, the standard will affect
in particular the group’s accounting for its available-for-sale
financial assets, since AASB 9 only permits the recognition of fair
value gains and losses in other comprehensive income if they
relate to equity investments that are not held for trading. Fair value
gains and losses on available-for-sale debt investments, for
example, will therefore have to be recognised directly in profit or
loss. In the current reporting period, the group recognised $15,000
of such gains in other comprehensive income. There will be no
impact on the group’s accounting for financial liabilities, as the new
requirements only affect the accounting for financial liabilities that
are designated at fair value through profit or loss and the group
does not have any such liabilities. The derecognition rules have
been transferred from AASB 139 Financial Instruments:
Recognition and Measurement and have not been changed. The
group has not yet decided when to adopt AASB 9.
(ii) Revised AASB 124 Related Party Disclosures and AASB 2009-
12 Amendments to Australian Accounting Standards (effective
from 1 January 2011)
In December 2009 the AASB issued a revised AASB 124 Related
Party Disclosures. It is effective for accounting periods beginning
on or after 1 January 2011 and must be applied retrospectively.
The amendment clarifies and simplifies the definition of a related
party and removes the requirement for government-related entities
to disclose details of all transactions with the government and
other government-related entities. The group will apply the
amended standard from 1 July 2011. When the amendments are
applied, the group will need to disclose any transactions between
its subsidiaries and its associates. However, there will be no
impact on any of the amounts recognised in the financial
statements.
(iii) AASB 2009-14 Amendments to Australian Interpretation –
Prepayments of a Minimum Funding Requirement (effective from 1
January 2011)
In December 2009, the AASB made an amendment to
Interpretation 14 The Limit on a Defined Benefit Asset, Minimum
Funding Requirements and their Interaction. The amendment
removes an unintended consequence of the interpretation related
to voluntary prepayments when there is a minimum funding
requirement in regard to the entity's defined benefit scheme. It
permits entities to recognise an asset for a prepayment of
contributions made to cover minimum funding requirements.
The group does not make any such prepayments. The amendment
is therefore not expected to have any impact on the group's
financial statements. The group intends to apply the amendment
from 1 July 2011.
(iv) AASB 1053 Application of Tiers of Australian Accounting
Standards and AASB 2010-2 Amendments to Australian
Accounting Standards arising from Reduced Disclosure
Requirements (effective from 1 July 2013)
On 30 June 2010 the AASB officially introduced a revised
differential reporting framework in Australia. Under this framework,
a two-tier differential reporting regime applies to all entities that
prepare general purpose financial statements. Starpharma
Holdings Limited is listed on the ASX and is not eligible to adopt
the new Australian Accounting Standards – Reduced Disclosure
Requirements. The two standards will therefore have no impact on
the financial statements of the entity.
(v) AASB 2010-6 Amendments to Australian Accounting Standards
– Disclosures on Transfers of Financial Assets (effective for annual
reporting periods beginning on or after 1 July 2011)
Amendments made to AASB 7 Financial Instruments: Disclosures
in November 2010 introduce additional disclosures in respect of
risk exposures arising from transferred financial assets. The
amendments will affect particularly entities that sell, factor,
securitise, lend or otherwise transfer financial assets to other
parties. They are not expected to have any significant impact on
the group's disclosures. The group intends to apply the
amendment from 1 July 2011.
(vi) AASB 2010-8 Amendments to Australian Accounting
Standards – Deferred Tax: Recovery of Underlying Assets
(effective from 1 January 2012)
In December 2010, the AASB amended AASB 112 Income Taxes
to provide a practical approach for measuring deferred tax
liabilities and deferred tax assets when investment property is
measured using the fair value model. AASB 112 requires the
measurement of deferred tax assets or liabilities to reflect the tax
consequences that would follow from the way management
expects to recover or settle the carrying amount of the relevant
assets or liabilities that is through use or through sale. The
amendment introduces a rebuttable presumption that investment
property which is measured at fair value is recovered entirely by
sale. The group will apply the amendment from 1 July 2012. There
will be no impact on any of the amounts recognised in the financial
statements.
(z) Parent entity financial information
The financial information for the parent entity, Starpharma
Holdings Limited, disclosed in note 27 has been prepared on the
same basis as the consolidated financial statements, except as set
out below.
(i) Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities
are accounted for at cost in the financial statements of Starpharma
Holdings Limited. Dividends received from associates are
recognised in the parent entity’s profit or loss, rather than being
deducted from the carrying amount of these investments.
(ii) Share-based payments
The grant by the company of options and rights over its equity
instruments to the employees of subsidiary undertakings in the
group is treated as a capital contribution to that subsidiary
undertaking. The fair value of employee services received,
measured by reference to the grant date fair value, is recognised
over the vesting period as an increase to investment in subsidiary
undertakings, with a corresponding credit to equity.
2
4
ANNUAL REPORT 2011
2. Financial risk management
The group’s activities expose it to a variety of financial risks;
including market risk, credit risk and liquidity risk. The group’s
overall risk management program focuses on the unpredictability
of financial markets and seeks to minimise potential adverse
effects on the financial performance of the group. The chief
executive officer, chief financial officer and company secretary,
under the guidance of the Board, have responsibility for the risk
management program.
(a) Market risk
(i) Foreign Exchange Risk
Foreign exchange risk arises when future commercial transactions
and recognised assets and liabilities are denominated in a
currency that is not the entity’s functional currency. The group
operates internationally and is exposed to foreign exchange risk
arising from currency exposures to major currencies including the
US dollar.
On the basis of the nature of these transactions, the group does
not use derivative financial instruments to hedge such exposures,
but maintains cash and deposits in both Australian and US dollars.
The directors are regularly monitoring the potential impact of
movements in foreign exchange exposure.
The exposure to foreign currency risk at the reporting date was as
follows:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Deferred Income
Group Sensitivity
2011
US
$’000
3,492
517
534
297
Consolidated
2010
US
$’000
3,890
733
898
508
The group is mainly exposed to US dollars. The following table details the group’s sensitivity to a 10% increase and decrease in the Australian
dollar against the US dollar. A positive number indicates a favourable movement; that is an increase in profit or reduction in the loss.
Impact on profit / (loss) on a movement of the US Dollar:
Australian dollar strengthens (increases) against the US Dollar by 10%
Australian dollar weakens (decreases) against the US Dollar by 10%
2011
$’000
(269)
329
(ii) Cash Flow Interest Rate Risk
The group hold interest bearing assets and therefore the income and operating cash flows are exposed to market interest rates.
At the end of the reporting period, the group had the following at call and short term deposits maturing in of 30 to 180 days.
Deposits at call
Group Sensitivity
2011
$’000
16,819
Consolidated
2010
$’000
(343)
420
Consolidated
2010
$’000
20,141
At 30 June 2011, if interest rates had changed by 50 basis points
either higher or lower from the year end rates with all other
variables held constant, group profit for the year would have been
$269,000 higher or lower (2010 - change of 50 bps: $103,000
higher/lower) due to either higher or lower interest income from
cash or cash equivalents.
(b) Credit risk
Credit risk is managed on a group basis. Credit risk arises from
cash and cash equivalents and deposits with banks and financial
institutions, as well as credit exposures from royalty and licensing
agreements and product sales. Credit risk for cash and deposits
with banks and financial institutions is managed by maximising
deposits held under major Australian and US banks. Other than
government funded research and development programs, third
party receivables largely consist of research fees, royalty and
licensing receivables from leading, multinational organisations.
4
3
STARPHARMA HOLDINGS LIMITED
(c) Liquidity risk
Prudent liquidity risk management implies maintaining sufficient
cash and marketable securities. The directors regularly monitor the
cash position of the group, giving consideration to the level of
expenditure and future capital commitments entered into.
(d) Fair value estimation
The fair value of financial assets and financial liabilities must be
estimated for recognition and measurement for disclosure
purposes. The fair value of financial instruments traded in active
markets (such as publicly traded derivatives, and trading and
available-for-sale securities) is based on quoted market prices at
the reporting date. The quoted market price used for financial
assets held by the group is the current bid price. The fair value of
financial instruments that are not traded in an active market (for
example, over-the-counter derivatives and investments in unlisted
3. Critical accounting estimates and judgments
Estimates and judgments are continually evaluated and are based
on historical experience and other factors, including expectations
of future events that may have a financial impact on the entity and
that are believed to be reasonable under the circumstances.
(a) Critical accounting estimates and assumptions
The group makes estimates and assumptions concerning the
future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The estimates and
assumptions that have a significant risk of causing material
adjustment to the carrying amounts of assets and liabilities within
the next financial year are discussed below.
i) Amortisation of finite life intangible assets
The group’s management determines the estimated life of the
patents underlying the core technology of the business and
calculates amortisation accordingly. The estimate is based on the
period of expected benefit which currently stands at 4–15 years.
This could change as a result of technical innovations or
competitor actions in response to severe industry cycles.
Management will increase amortisation charges when the useful
lives are less than their previously estimated lives. The carrying
value of intangible assets at 30 June 2011 is $9,586,000 (2010:
$13,118,000).
ii) Impairment of Goodwill
The group tests annually whether goodwill has suffered any
impairment. In accordance with the accounting policy stated in
notes 1(i) and 1(o). Impairment of goodwill is considered based on
the fair value less cost to sell of the cash generating units over
which the goodwill is allocated. Performing the assessment of fair
value less costs to sell requires the use of assumptions. Refer to
note 11 for details of these assumptions.
iii) Income Taxes
The group is subject to income taxes in Australia and the United
States of America. There are transactions and calculations
undertaken during the ordinary course of business for which the
4. Segment information
Management has determined the operating segments based on
separate reportable segments to the Chief Executive Officer, who
is the chief operating decision maker. There are two reportable
segments within the group, with companies operating across two
jurisdictions - in Australia and United States of America (“USA”).
Dendritic Nanotechnologies Inc. (“DNT”) is domiciled in the USA
subsidiaries) is determined using valuation techniques. The group
uses a variety of methods and makes assumptions that are based
on market conditions existing at each balance date. Quoted market
prices or dealer quotes for similar instruments are used for long-
term debt instruments held. Other techniques, such as estimated
discounted cash flows, are used to determine fair value for the
remaining financial instruments. The fair value of interest rate
swaps is calculated as the present value of the estimated future
cash flows. The fair value of forward exchange contracts is
determined using forward exchange market rates at the reporting
date. The carrying value less impairment provision of trade
receivables and payables are assumed to approximate their fair
values due to their short-term nature. The fair value of financial
liabilities for disclosure purposes is estimated by discounting the
future contractual cash flows at the current market interest rate
that is available to the group for similar financial instruments.
ultimate tax determination may be uncertain. Where the final tax
outcome of these matters is different from the amounts that were
initially recorded, such differences will impact the current and
deferred tax provisions in the period in which such determination is
made. The group has recognised deferred tax assets relating to
carried forward losses to the extent there are sufficient taxable
temporary differences (deferred tax liabilities) relating to the same
taxation authority and the same subsidiary against which the
unused tax losses can be utilised. However, utilisation of the tax
losses also depends on the ability of the entity to satisfy certain
tests at the time the losses are recouped.
(b) Critical accounting judgments in applying accounting
policies
i) Fair value of intellectual property in purchase price allocation of
subsidiary
The group engaged a professional firm in February 2007 to
undertake a valuation of the fair value of the intellectual property
assets recognised on acquisition of the remaining share of the US
based associate Dendritic Nanotechnologies Inc (“DNT”). The
methodology used was a discounted cash flow analysis based on
the future potential revenue derived from the intellectual property
to support the fair value of the asset acquired. To allocate the
purchase price of the business combination, management
attributed a value of $14.9 million being the mid-point of the
experts’ valuation range.
ii) Impairment of Assets
The group follows the guidance of AASB 136 on determining when
an investment is other-than-temporarily impaired. This
determination requires significant judgment. In making these
judgments, the group evaluates, among other factors, the duration
and extent to which the fair value of an investment is less than its
cost and the financial health of the near-term business outlook for
the investee. This includes factors such as industry performance,
changes in technology, operating and financing cash flow and
recent transactions involving equity instruments.
and it has been determined that on the basis of internal reporting
and monitoring of the USA operations. The principal activities of
the group consist of development and commercialisation of
dendrimer products for pharmaceutical, life-science and other
applications.
4
4
Reportable segments
2011
Revenue and other income
Expenses
ANNUAL REPORT 2011
Australia
$’000
3,192
(10,772)
USA
$’000
659
(2,073)
Inter-segment
Eliminations
$’000
(548)
612
Total
$’000
3,303
(12,233)
Loss before income tax
(7,580)
(1,414)
64
(8,930)
Segment net assets
24,096
3,815
(218)
27,693
2010
Revenue and other income
Expenses
Australia
$’000
5,363
(10,244)
USA
$’000
1,160
(2,639)
Loss before income tax
(4,881)
(1,479)
Segment net assets
28,172
6,701
Inter-segment
Eliminations
$’000
(615)
594
(21)
(29)
Total
$’000
5,908
(12,289)
(6,381)
34,844
Sales between segments are carried out at arm's length and are eliminated upon consolidation. The revenue from external parties reported to
the board is measured in a manner consistent with that in the income statement.
5. Revenue and other income
Revenue and other income
Royalty, customer & licence revenue
Interest revenue
Other revenue
Total revenue
Australian Government grants
USA Government grants
Total other income
Total revenue and other income
2011
$’000
1,121
981
23
2,125
92
1,086
1,178
3,303
Consolidated
2010
$’000
1,404
699
–
2,103
167
3,638
3,805
5,908
Australian Government grants consisted of export market
development grants of $86,000 (2010: $161,000) and the Victorian
Government science and technology international partnering
program $6,000 (2010: Nil). USA Government grants consisted of
grants from the National Institutes of Health, USA Department of
Health. With the exception of normal audit requirements, there are
no unfulfilled conditions or other contingencies attached to the
portions of Government grant and contract incomes recognised
above. The group did not benefit directly from any other form of
government assistance.
4
5
STARPHARMA HOLDINGS LIMITED
6. Expenses
Loss from continuing operations before income tax expense includes
the following items:
Depreciation
Amortisation
Rental expense on operating leases
Defined contribution superannuation expense
7. Income tax expense
(a) Income tax expense/(credit)
Current Tax
Deferred Tax
Income tax expense is attributable to:
Profit from continuing operations
Profit from discontinued operations
Aggregate income tax credit
Deferred income tax credit (revenue) / expense included in income
tax credit comprises:
(Decrease) in deferred tax liabilities
(b) Numerical reconciliation to income tax credit prima facie tax
payable
Loss from continuing operations before
income tax
Tax at the Australian tax rate of 30% (2009: 30%)
Tax effect of amounts which are not deductible (taxable) in calculating
taxable income
Share-based payments
Difference in overseas tax rates
Future income tax benefits not brought to account
Income tax credit
6
4
2011
$’000
172
1,360
285
426
2011
$’000
–
–
–
–
–
–
–
–
(8,930)
(2,679)
136
51
2,492
–
Consolidated
2010
$’000
227
1,470
341
383
Consolidated
2010
$’000
5
(8)
(3)
(3)
–
(3)
–
–
(6,380)
(1,914)
380
47
1,484
(3)
(c) Tax losses
Unused tax losses for which no deferred tax asset has been
recognised (as recovery is currently not probable)
Potential tax benefit
(d) Unrecognised temporary differences
Temporary differences for which no deferred tax asset has been
recognised as recoverability is not probable
Unrecognised deferred tax relating to the temporary differences
ANNUAL REPORT 2011
67,575
20,445
1,140
342
55,179
16,554
694
208
Potential future income tax benefits attributable to tax losses
carried forward have not been brought to account at 30 June 2011
because the directors do not believe that it is appropriate to regard
realisation of the future income tax benefit as probable. Similarly,
future benefits attributable to net temporary differences have not
been brought to account as the directors do not regard the
realisation of such benefits as probable.
Realisation of the benefit of tax losses would be subject to the
group satisfying the conditions for deductibility imposed by tax
legislation and no subsequent changes in tax legislation adversely
affecting the group. The group is making an assessment as to the
satisfaction of deductibility conditions at 30 June 2011 which it
believes will be satisfied.
8. Current assets – Cash and cash equivalents
Cash at bank and on hand
Deposits at call
Cash at bank and on hand
The cash is bearing floating interest rates based on current bank rates.
Deposits at call
2011
$’000
2,099
16,819
18,918
Consolidated
2010
$’000
2,710
20,141
22,851
The deposits are bearing floating interest rates ranging from 0.05% to 6.19% (2010: 0.15% to 6.00%). These deposits are of 30-180 day
maturities.
Cash not available
There is $186,000 of cash not available for use due to restrictions associated with a finance lease and credit card facility which is guaranteed by
term deposits (2010: $165,000).
Interest rate risk
With the exception of loans to controlled entities, current receivables are non-interest bearing.
4
7
STARPHARMA HOLDINGS LIMITED
30 June 2011
Floating
Interest
rate
Fixed interest maturing
Notes
$’000
1 year
or
less
$’000
1 to 2
years
$’000
2 to 3
years
$’000
3 to 4
years
$’000
4 to 5
years
$’000
More
than 5
years
$’000
Non-
interest
bearing
$’000
Contractual
cash
flows
Total
$’000
Financial Assets
Cash and
deposits
Receivables
8
9
Weighted average
interest rate
Financial Liabilities
Payables
and provisions
Borrowings
12
13
Deferred income
Weighted average
interest rate
30 June 2010
1,584
15,858
–
–
1,584
15,858
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,476
18,918
N/A
1,023
1,023
1,023
2,499
19,941
1,023
3.6%
5.5%
–%
–%
–%
–%
–%
–%
–
–
–
–
–
66
–
66
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,699
1,699
1,699
–
349
66
349
66
349
2,048
2,114
2,114
–%
10.1%
–%
–%
–%
–%
–%
–%
Floating
Interest
rate
Fixed interest maturing
Notes
$’000
1 year
or
less
$’000
1 to 2
years
$’000
2 to 3
years
$’000
3 to 4
years
$’000
4 to 5
years
$’000
More
than 5
years
$’000
Non-
interest
bearing
$’000
Contractual
cash
flows
Total
$’000
Financial Assets
Cash and
deposits
Receivables
8
9
Weighted average
interest rate
Financial Liabilities
Payables
and provisions
Borrowings
12
13
Deferred income
Weighted average
interest rate
8
4
1,280
19,339
–
–
1,280
19,339
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2,232
22,851
N/A
1,379
1,379
1,379
3,611
24,230
1,379
3.1%
5.4%
–%
–%
–%
–%
–%
–%
–
–
–
–
–
160
–
160
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,934
1,934
1,934
–
629
160
629
160
629
2,563
2,723
2,723
–%
7.8%
–%
–%
–%
–%
–%
–%
9. Current assets – Trade and other receivables
Trade and grant receivables
Interest receivables
Prepayments
Other receivables
ANNUAL REPORT 2011
2011
$’000
604
183
153
83
1,023
Consolidated
2010
$’000
932
315
56
76
1,379
Trade and grant receivables
Trade receivables primarily comprise of customer royalty and
licence revenue and are subject to normal terms of settlement
within 30 to 90 days. Grant receivables comprise of expenditure
reimbursable under grants from the USA government, including
the National Institutes of Health (“NIH”) which are subject to
normal terms of settlement within 30 days from invoice.
Credit risk
The group considers that there is no significant concentration of
credit risk with respect to current receivables. Grant receivables
are with government bodies and trade receivables are from large,
well respected companies. Loans to controlled entities are
assessed for recoverability and provisions are applied as
considered appropriate.
Impaired receivables
As at 30 June 2011, trade and grant receivables of $80,000 (2010:
$140,000) were past due. These relate to grant funding and
customers for whom there is no recent history of default. No
receivables are considered impaired at 30 June 2011 (2010: nil)
other than from subsidiaries within the group.
Other receivables
Other receivables comprise sundry debtors and GST claimable
and are subject to normal terms of settlement within 30 to 90 days.
10.
Non-current assets – Property, plant and equipment
Consolidated
At 30 June 2009
Cost
Accumulated depreciation and amortisation
Net book amount
Year ended 30 June 2010
Opening net book amount
Exchange differences
Additions
Disposals
Depreciation and amortisation
Closing net book amount
Plant and Equipment
$’000
Leasehold
improvements
$’000
Plant and Equipment
under finance lease
$’000
Total Plant and
Equipment
$’000
2,337
(2,112)
225
225
(4)
26
(24)
(85)
138
1,141
(1,133)
8
8
–
–
–
(3)
5
294
(80)
214
214
–
–
–
(138)
76
3,772
(3,325)
447
447
(4)
26
(24)
(226)
219
4
9
STARPHARMA HOLDINGS LIMITED
At 30 June 2010
Cost
Accumulated depreciation and amortisation
Net book amount
Year ended 30 June 2011
Opening net book amount
Exchange differences
Additions
Disposals
Depreciation and amortisation
Closing net book amount
At 30 June 2011
Cost
Accumulated depreciation and amortisation
Net book amount
11. Non-current assets – Intangible assets
Consolidated
At 30 June 2009
Cost
Accumulated depreciation and amortisation
Net book amount
Year ended 30 June 2010
Opening net book amount
Exchange differences
Depreciation and amortisation
Closing net book amount
At 30 June 2010
Cost
Accumulated depreciation and amortisation
Net book amount
0
5
2,246
(2,108)
138
138
(2)
102
(7)
(61)
170
2,042
(1,872)
170
1,141
(1,136)
5
5
–
44
–
(11)
38
1,185
(1,147)
38
614
(538)
76
76
–
96
–
(100)
72
272
(200)
72
4,001
(3,782)
219
219
(2)
242
(7)
(172)
280
3,499
(3,219)
280
Patents & Licences
$’000
Goodwill
$’000
Total Intangibles
$’000
18,244
(4,855)
13,389
13,389
(548)
(1,470)
11,371
17,578
(6,207)
11,371
1,835
–
1,835
1,835
(88)
–
1,747
1,747
–
1,747
20,079
(4,855)
15,224
15,224
(636)
(1,470)
13,118
19,325
(6,207)
13,118
Year ended 30 June 2011
Opening net book amount
Exchange differences
Depreciation and amortisation
Closing net book amount
At 30 June 2011
Cost
Accumulated depreciation and amortisation
Net book amount
ANNUAL REPORT 2011
1,747
(360)
–
1,387
1,387
–
1,387
13,118
(2,172)
(1,360)
9,586
16,241
(6,655)
9,586
11,371
(1,812)
(1,360)
8,199
14,854
(6,655)
8,199
(a) Impairment tests for goodwill
Goodwill is tested annually for impairment based on the fair value
less costs to sell of the cash generating units over which the
goodwill is allocated.
The group has companies in both Australia and the United States
– these are also determined to be the Cash Generating Units
(CGUs) of the Group. The directors have determined that the
goodwill (which arose on the acquisition of the remaining share of
the US business and intellectual property) should be allocated
across these CGUs as the business combination gives rise to
synergies within both Starpharma’s Australian and United States
companies and their intellectual property.
The recoverable amounts of the group’s CGUs have been
determined based on estimation of their fair value less costs to
sell.
(b) Key assumptions used for fair value less costs to sell
estimation
The market capitalisation of the Starpharma group is used to
determine an approximation of the fair value less costs to sell of
the two CGUs which make up the group. Given the excess of the
market capitalisation of Starpharma Holdings Limited over the
carrying value of total assets (including goodwill) at 30 June 2011,
goodwill is not considered to be impaired at the end of the
reporting period.
(c) Impairment tests for finite life intangible assets
Identifiable intangible assets with finite lives are carried at cost less
accumulated amortisation and adjusted for any accumulated
impairment loss. The directors have assessed these assets for
indicators of impairment at 30 June 2011 and determined that
there is no indication that the asset is impaired.
12. Current liabilities – Trade and other payables
Trade payables
Other payables
2011
$’000
940
287
1,227
Consolidated
2010
$’000
1,346
235
1,581
5
1
STARPHARMA HOLDINGS LIMITED
13. Current and Non-current liabilities – Borrowings
Lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the event
of default. The carrying value of leased assets is $66,000 at 30 June 2011 (2010: $160,000).
2011
Floating
Interest rate
Fixed interest rate
Notes
1 year
or
less
$’000
Over 1–2
years
$’000
Over 2–3
years
$’000
Over 3–4
years
$’000
Over 4–5
years
$’000
Over 5
years
$’000
Total
$’000
Lease Liabilities
20
–
49
17
Weighted average interest rate
–%
10.1%
10.1%
–
–%
–
–
–
66
–%
–%
–%
2010
Floating
Interest rate
Fixed interest rate
Notes
1 year
or
less
$’000
Over 1–2
years
$’000
Over 2–3
years
$’000
Over 3–4
years
$’000
Over 4–5
years
$’000
Over 5
years
$’000
Total
$’000
Lease Liabilities
20
–
160
Weighted average interest rate
–%
7.8%
–
–%
–
–%
–
–
–
160
–%
–%
–%
14. Contributed equity
(a) Share Capital
Share Capital
Consolidated
Consolidated
2011
Shares
2010
Shares
2011
$’000
2010
$’000
Ordinary shares – fully paid
247,743,578
238,842,208
105,399
101,766
(b) Movements in ordinary share capital
Date
Details
Number of shares
Issue Price
01 Jul 2009
207,218,113
24 Nov 2009
Share placement
30,000,000
$0.52
less transaction costs
25 Jan 2010 Employee share plan ($1,000) issue
29 Jan 2010
Proceeds on exercise of employee options
11 Feb 2010
Proceeds on exercise of employee options
22 Feb 2010
Proceeds on exercise of employee options
25 Feb 2010
Proceeds on exercise of employee options
31 Mar 2010 CEO equity incentive plan share issue
24 Jun 2010
Proceeds on exercise of employee options
Balance at 30 June 2010
2
5
25,524
10,000
60,000
40,000
20,000
1,428,571
40,000
238,842,208
$0.70
$0.50
$0.50
$0.50
$0.50
$0.69
$0.50
$’000
85,640
15,600
(563)
18
5
30
20
10
986
20
101,766
ANNUAL REPORT 2011
Date
Details
Number of shares
Issue Price
9 Sep 2010
Proceeds on exercise of employee options
24 Sep 2010
Proceeds on exercise of employee options
13 Oct 2010
Proceeds on exercise of employee options
25 Oct 2010
Proceeds on exercise of employee options
3 Nov 2010
Proceeds on exercise of employee options
10 Nov 2010
Proceeds on exercise of employee options
11 Nov 2010
Proceeds on exercise of employee options
17 Nov 2010
Proceeds on exercise of employee options
17 Nov 2010
Proceeds on exercise of options
26 Nov 2010
Proceeds on exercise of employee options
2 Dec 2010
Proceeds on exercise of options
10 Dec 2010
Proceeds on exercise of employee options
20 Dec 2010
Proceeds on exercise of employee options
24 Dec 2010
Proceeds on exercise of options
10 Jan 2011
CEO equity incentive plan share issue
1 Feb 2011
Employee share plan ($1,000) issue
3 Feb 2011
Proceeds on exercise of options
14 Feb 2011
Proceeds on exercise of options
17 Feb 2011
Proceeds on exercise of employee options
7 Mar 2011
Proceeds on exercise of options
22 Mar 2011
Proceeds on exercise of employee options
28 Mar 2011
Proceeds on exercise of options
4 Apr 2011
Proceeds on exercise of options
19 May 2011 Proceeds on exercise of employee options
14 Jun 2011
Proceeds on exercise of options
250,000
280,000
50,000
50,000
172,000
350,000
150,000
290,000
20,000
168,000
600,000
175,000
30,000
750,000
487,500
28,560
600,000
600,000
150,000
639,453
210,000
1,010,000
1,500,000
158,000
182,857
$0.29
$0.50
$0.29
$0.29
$0.35
$0.50
$0.50
$0.39
$0.52
$0.48
$0.43
$0.41
$0.29
$0.43
$ –
$0.84
$0.43
$0.43
$0.43
$0.43
$0.43
$0.43
$0.43
$0.34
$0.43
$’000
72
140
14
14
60
176
75
114
10
81
261
72
9
327
–
24
261
261
65
278
95
439
652
54
79
Balance at 30 June 2011
247,743,578
105,399
(c) Ordinary shares
As at 30 June 2011 there were 247,743,578 issued ordinary
shares. Ordinary shares entitle the holder to participate in
dividends and the proceeds on winding up of the company in
proportion to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a
meeting in person or by proxy, is entitled to one vote, and upon a
poll each share is entitled to one vote. There is no current on-
market share buy-back.
(d) Employee Share Plan ($1,000 Plan)
Information relating to the Employee Share Plan, including details
of shares issued under the plan, is set out in note 25.
(e) CEO Equity Incentive Plan
Information relating to the CEO Equity Incentive Plan, including
details of shares issued under the plan, is set out in note 25.
(f) Employee Performance Rights Plan
Information relating to the Employee Performance Rights Plan,
including details of rights issued under the plan, is set out in note
25.
5
3
STARPHARMA HOLDINGS LIMITED
(g) Options
(h) Capital risk management
Information relating to the Starpharma Holdings Limited Employee
Share Option Plan and Individual option deeds, including details of
options issued, exercised and expired during the financial year and
options outstanding at the end of the financial year are set out in
note 25.
The group’s and the parent entity’s objectives when managing
capital are to safeguard their ability to continue as a going
concern, so that they can continue to provide returns for
shareholders and benefits for other stakeholders.
15.
Reserves
(a) Reserves
Share-based payments reserve
Foreign currency translation reserve
Asset revaluation reserve
(b) Movement in reserves
Share-based payments reserve
Balance at 1 July
Share option expense
Performance right expense
Balance at 30 June
Foreign currency translation reserve
Balance at 1 July
Currency translation differences
arising during the year
Balance at 30 June
2011
$’000
2,842
(4,035)
2,215
1,022
2011
$’000
2,412
139
291
2,842
(1,751)
(2,284)
(4,035)
Consolidated
2010
$’000
2,412
(1,751)
2,215
2,876
Consolidated
2010
$’000
2,148
182
82
2,412
(1,084)
(667)
(1,751)
(c) Nature and purpose of reserves
(i) Share-based payments reserve
The share-based payments reserve is used to recognise the
fair value of options and performance rights granted.
(ii) Foreign currency translation reserve
Exchange differences arising on translation of the foreign
subsidiary are taken to the foreign currency translation
reserve, as described in Note 1(d). The reserve is recognised
in income statement when the net investment is disposed of.
(iii) Asset revaluation reserve
The uplift in fair value of the identifiable net assets of DNT on
the company’s acquisition of the remaining share in October
2006 was recognised in reserves.
4
5
16.
Accumulated Losses
Accumulated losses balance at 1 July
Net loss for the year
Accumulated losses balance at 30 June
17.
Key management personnel disclosures
(a) Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Other long term benefits
Termination benefits
Share-based payments
ANNUAL REPORT 2011
Consolidated
2010
$’000
(63,420)
(6,378)
(69,798)
Consolidated
2010
$’000
1,550
267
31
–
1,185
3,033
2011
$’000
(69,798)
(8,930)
(78,728)
2011
$’000
1,826
255
39
–
324
2,444
Detailed remuneration disclosures are provided in sections A-D of the remuneration report on pages 15 to 24.
(b) Equity instrument disclosures relating to key management personnel
(i) Options provided as remuneration and shares issued on exercise of such options
Details of options provided as remuneration and shares issued on the exercise of such options, together with terms and conditions of the
options, can be found in section D of the remuneration report on pages 20 to 24.
Option holdings
The numbers of options over ordinary shares in the company held during the financial year by each director of Starpharma Holdings Limited and
other key management personnel of the group, including their personally related parties, are set out below. With the exception of J K Fairley, no
director held options in the current or prior year.
2011
Name
Balance at the
start of the year
Granted during
the year as
compensation
Directors of Starpharma Holdings Limited
Exercised during
the year
Other changes
during the year#
Balance at the
end of the year
Vested and
exercisable at the
end of the year
Unvested
J K Fairley
650,000
Other key management personnel of the group
B P Rogers
400,000
J R Paull
C P Barrett
N J Baade
D J Owen
M L McColl
475,000
575,000
425,000
425,000
–
–
–
–
–
–
–
–
350,000
(300,000)
–
–
100,000
(100,000)
200,000
200,000
350,000
–
125,000
125,000
175,000
(200,000)
200,000
200,000
300,000
200,000
–
–
–
–
125,000
125,000
225,000
225,000
–
–
–
–
–
–
–
–
–
5
5
STARPHARMA HOLDINGS LIMITED
2010
Name
Balance at the
start of the year
Granted during
the year as
compensation
Directors of Starpharma Holdings Limited
Exercised during
the year
Other changes
during the year#
Balance at the
end of the year
Vested and
exercisable at the
end of the year
Unvested
J K Fairley
650,000
Other key management personnel of the group
B P Rogers
400,000
J R Paull
C P Barrett
N J Baade
D J Owen
475,000
575,000
425,000
425,000
–
–
–
–
–
–
–
–
–
–
–
–
# Other Changes during the year relate to the expiry of options.
Performance rights holdings
The numbers of rights over ordinary shares in the company held
during the financial year by each director of Starpharma Holdings
Limited and other key management personnel of the group,
including their personally related parties, are set out below. Except
for J K Fairley, no other director held share rights in the current or
–
–
–
–
–
–
650,000
650,000
–
400,000
200,000
200,000
475,000
200,000
275,000
575,000
300,000
275,000
425,000
200,000
225,000
425,000
200,000
225,000
prior year. J K Fairley was granted 750,000 rights to ordinary
shares as part of a CEO equity incentive plan on 31 March 2010.
The granting of these performance rights was approved by
shareholders on 25 March 2010.
2011
Name
Balance at the
start of the year
Granted during
the year as
compensation
Directors of Starpharma Holdings Limited
Vested during
the year
Other changes
during the year#
Balance at the
end of the year
Vested and
exercisable at the
end of the year
Unvested
J K Fairley
750,000
–
487,500
(262,500)
–
–
–
Other key management personnel of the group
B P Rogers
J R Paull
C P Barrett
N J Baade
D J Owen
M L McColl
–
–
–
–
–
–
65,000
80,000
80,000
80,000
80,000
80,000
–
–
–
–
–
–
–
–
–
–
–
–
65,000
80,000
80,000
80,000
80,000
80,000
–
–
–
–
–
–
65,000
80,000
80,000
80,000
80,000
80,000
# Other Changes during the year relate to the forfeit of performance rights
6
5
2010
Name
Balance at the
start of the year
Granted during
the year as
compensation
Directors of Starpharma Holdings Limited
J K Fairley
–
750,000
Other key management personnel of the group
B P Rogers
J R Paull
C P Barrett
N J Baade
D J Owen
–
–
–
–
–
–
–
–
–
–
ANNUAL REPORT 2011
Vested during
the year
Other changes
during the year
Balance at the
end of the year
Vested and
exercisable at the
end of the year
Unvested
–
–
–
–
–
–
–
–
–
–
–
–
750,000
–
750,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Share holdings
The numbers of ordinary shares in the company held during the
financial year by each director of Starpharma Holdings Limited and
other key management personnel of the group, including their
personally related parties, are set out below. There were no shares
received during the prior reporting period on the exercise of
options.
Key management personnel of the group, excluding directors,
were eligible to participate in the Employee Share Plan ($1,000
Plan). Shares to the value of $1,000 where granted to Australian-
based permanent employees under the plan during the current and
prior year.
On 10 January 2011, 487,500 of shares were issued to J K Fairley
as part of the CEO equity incentive plan based on performance
achievements to 31 December 2010. On 31 March 2010, J K
Fairley was granted 1,428,571 fully paid ordinary shares as part of
the CEO equity incentive plan. The granting of shares and rights
was approved by shareholders on 25 March 2010.
No director has entered into a material contract with the group in
either the current or previous financial year and there were no
material contracts involving directors’ interests subsisting at year
end.
2011
Name
Balance at the
start of the year
Granted during
the year as
compensation
On exercise of
share options
during the year
On vesting of
performance rights
during the year
Other changes
during the year
Balance at the
end of the year
Directors of Starpharma Holdings Limited
Ordinary Shares
P T Bartels
J K Fairley
J W Raff1
R Dobinson
129,804
1,482,321
7,280,777
-
P J Jenkins
1,426,000
R A Hazleton
142,616
Other key management personnel of the group
Ordinary Shares
B P Rogers
J R Paull
C P Barrett
N J Baade
D J Owen
M L McColl
1 Resigned 17 June 2011
67,040
1,418
1,418
1,418
1,418
–
–
–
–
–
–
–
1,190
1,190
1,190
1,190
1,190
1,190
–
–
–
129,804
350,000
487,500
(500,000)
1,819,821
–
–
–
–
100,000
350,000
175,000
300,000
200,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
7,280,777
–
1,426,000
142,616
(126,775)
(340,000)
(175,000)
41,455
12,608
2,608
(170,000)
132,608
(150,000)
–
52,608
1,190
5
7
STARPHARMA HOLDINGS LIMITED
2010
Name
Balance at the
start of the year
Granted during
the year as
compensation
Other changes
during the year
Balance at the
end of the year
Directors of Starpharma Holdings Limited
Ordinary Shares
P T Bartels
J K Fairley
J W Raff
R Dobinson
P J Jenkins
R A Hazleton
129,804
53,750
7,280,777
-
1,416,000
142,616
Other key management personnel of the group
Ordinary Shares
B P Rogers
J R Paull
C P Barrett
N J Baade
D J Owen
65,622
–
–
–
–
–
1,428,571
–
–
–
–
1,418
1,418
1,418
1,418
1,418
–
–
–
129,804
1,482,321
7,280,777
-
10,000
1,426,000
-
–
–
–
–
–
142,616
67,040
1,418
1,418
1,418
1,418
18.
Remuneration of auditors
The company may decide to employ the auditor on assignments
additional to their statutory audit duties where the auditor’s
expertise and experience with the company and/or the
consolidated group are important. Details of the amounts paid or
payable to the auditor (PricewaterhouseCoopers) for audit and
non-audit services provided during the year are set out below.
During the year the following fees were paid or payable for
services provided by the auditor (PricewaterhouseCoopers) of the
parent entity, its related practices and non-related audit firms:
(a) Statutory audit services
Audit or review of financial reports of
the entity or any entity in the consolidated entity
PricewaterhouseCoopers
Other auditors of controlled entities
Total remuneration for statutory audit services
(b) Other audit services
Other audit services:
Grant reviews & program audits
PricewaterhouseCoopers
Total remuneration for other audit services
Total remuneration of auditors
8
5
2011
$
113,000
–
113,000
18,000
18,000
131,000
Consolidated
2010
$
124,500
–
124,500
27,300
27,300
151,800
ANNUAL REPORT 2011
19.
Contingencies
The Company has no contingent assets or liabilities at 30 June 2011 (2010: nil).
20.
Commitments
(a) Capital Commitments
There is no capital expenditure contracted for, not recognised as liabilities at the reporting date (2010: nil).
(b) Lease Commitments
Commitments in relation to leases contracted for at the reporting date but
not recognised as liabilities, payable:
Not later than one year
Later than one year and not later than five years
Later than five years
Representing:
Cancellable operating leases
Non-cancellable finance lease
Future finance charges on finance leases
Operating leases
2011
$’000
335
355
–
690
624
71
(5)
690
Consolidated
2010
$’000
452
59
–
511
351
164
(4)
511
The group leases laboratory and offices under a lease until 31 August 2013 and leases various plant and equipment under cancellable
operating leases.
Commitments for minimum lease payments in relation to cancellable
operating leases are payable as follows:
Not later than one year
Later than one year and not later than five years
Later than five years
Representing cancellable operating leases
2011
$’000
286
338
–
624
Consolidated
2010
$’000
293
58
–
351
5
9
STARPHARMA HOLDINGS LIMITED
Finance Leases
The group leases plant and equipment with a carrying amount of $66,000 (2010: $160,000) under a finance leases expiring
within two years.
Commitments in relation to finance leases are payable as follows:
Notes
Not later than one year
Later than one year and not later than five years
Later than five years
Minimum lease payments
Future finance charges
Recognised as a liability
Representing finance lease liabilities:
Current
Non-Current
13
13
2011
$’000
53
18
–
71
(5)
66
49
17
66
Consolidated
2010
$’000
164
–
–
164
(4)
160
160
–
160
The weighted average interest rate implicit in the lease is 10.1% (2010: 7.8%).
(c) Expenditure Commitments
The group has entered into various agreements for research and
development services. These agreements have typical termination
provisions to limit the commitment to the time and materials
expended at termination, or up to an approved work order amount.
(d) Termination Commitments
The service contracts of key management personnel include
benefits payable by the group on termination of the employee’s
contract. Refer to section C of the remuneration report for details
of these commitments.
21.
Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the
accounting policy described in note 1(b).
Name of entity
Starpharma Pty Limited
Angiostar Pty Limited
Viralstar Pty Limited
Dendritic Nanotechnologies Inc.
Country of
Incorporation
Class of Shares
Australia
Australia
Australia
USA
Ordinary
Ordinary
Ordinary
Ordinary
Equity Holding
2010
%
100.00%
100.00%
100.00%
100.00%
2011
%
100.00%
100.00%
100.00%
100.00%
22. Events occurring after the balance sheet date
On 17 August 2011, Starpharma announced two important
developments in relation to the commercialisation of its VivaGel®-
coated condom.
the Licence granted to Reckitt Benckiser (RB; formerly with SSL
International plc) to commercialise the VivaGel®-coated condom
and all of RB’s rights to the product, effective immediately.
1. Starpharma terminates condom coating agreement with
2. Starpharma executes condom coating agreement with Ansell
Reckitt Benckiser
Due to the failure to achieve satisfactory progress in relation to
certain commercialisation milestones for the VivaGel®-coated
condom, Starpharma’s Board has taken the decision to terminate
Starpharma has executed a Licence Agreement with Ansell
Limited (ASX:ANN) giving Ansell marketing rights to the VivaGel®-
coated condom. The Agreement covers marketing rights to the
0
6
coated condom in countries which exclude Japan and a number of
Asian markets.
product, which will include the VivaGel® brand together with the
respective Ansell brand.
Under the agreement Ansell will pay Starpharma royalties on sales
of VivaGel®-coated condoms and will support registration and
other commercialisation costs. Ansell is also responsible for
manufacturing the VivaGel®-coated condom and marketing of the
There are no other significant events occurring since 30 June 2011
that have significantly affected or may significantly affect the
operations of the group, the results of those operations, or the
state of the group.
ANNUAL REPORT 2011
23. Reconciliation of profit after income tax to net cash inflow from operating activities
Operating loss after tax:
Depreciation and amortisation
Foreign exchange (gains) / losses
Non-cash employee benefits: share-based payments
Change in operating assets and liabilities,
net of effects of acquisitions and disposals of entities:
Decrease in receivables and other assets
Increase (decrease) increase in trade creditors
Increase in employee provisions
Decrease in deferred income
Gain (loss) on sale of property, plant and equipment
Net cash outflows from operating activities
24. Earnings per share
Basic loss per share
Diluted loss per share
2011
$’000
(8,930)
1,532
827
456
357
(354)
120
(477)
(7)
Consolidated
2010
$’000
(6,378)
1,697
75
1,268
202
(183)
15
(326)
–
(6,476)
(3,630)
2011
$
(0.04)
(0.04)
Consolidated
2010
$
(0.03)
(0.03)
Net loss attributable to members of Starpharma Holdings Ltd used as the
numerator in calculating diluted and basic earnings per share ($’000)
(8,930)
(6,378)
Weighted average number of ordinary shares outstanding during the year used as
the denominator in calculating diluted and basic earnings per share
242,556,106
225,551,542
25. Share-based payments
Options
(a) Employee Option Plan
The establishment of the Starpharma Holdings Limited Employee
Share Option Plan (ASX code SPLAM) was approved by
shareholders at the Annual General Meeting held on 17 November
2004 and re-approved on 14 November 2007. All full-time or part-
time employees and directors of the company or associated
companies are eligible to participate in the Plan. The objective of
the Plan is to assist in the recruitment, reward, retention and
motivation of employees of the company. Options are granted
under the plan for no consideration. The vesting period is 1 to 2
years from date of grant, with the exercise period 2 to 3 years from
the end of the vesting period. Options granted under the plan carry
no dividend or voting rights. Each option is personal to the
participant and is not transferable, transmissible, assignable or
chargeable, except with the written consent of the remuneration
and nomination committee.
(b) Individual Option Deeds
The company infrequently issues options to key consultants of the
company. The objective of the option issues is to assist in the
reward, retention and motivation of consultants of the company.
Options are granted for no consideration, usually in lieu of some
6
1
STARPHARMA HOLDINGS LIMITED
proportion of cash compensation. Options are normally granted for
a two to five year period, with various exercisable dates. Options
granted carry no dividend or voting rights. Each option is personal
to the participant and is not transferable, transmissible, assignable
or chargeable, except with the written consent of the remuneration
and nomination committee.
(c) Options Attached to a Share Placement
The company issued 7,567,119 unlisted options attached to a
share placement in August 2007. The options have an exercise
price of $0.4346 per option with an expiry date of 21 August 2012.
Options granted carry no dividend or voting rights.
Set out below are summaries of options under the schemes:
2011
Grant Date
Expiry Date
Exercise
Price
Balance
at start of
the year
Exercised
during
the year
Forfeited
during
the year
Expired
during
the year
Balance
at end of
the year
Exercisable
at end of
the year
$
Number
Number
Number
Number
Number
Number
Consolidated and parent entity
4 Jul 2005 a
4 Jul 2010
$0.94
300,000
18 Jul 2005 a
18 Jul 2010
$0.94
100,000
–
–
6 Oct 2006 a
6 Oct 2010
$0.50
898,000
280,000
2 Jan 2007 b
2 Jan 2011
$0.52
20,000
20,000
4 Apr 2007 a
4 Apr 2011
$0.50
590,000
590,000
21 Aug 2007c
22 Aug 2012
$0.43
7,567,119
5,882,310
–
–
–
–
–
–
31 Oct 2007 a
7 Aug 2011
$0.50
370,000
300,000
40,000
14 Nov 2007 a
4 Apr 2011
$0.50
150,000
150,000
14 Nov 2007 a
8 Aug 2011
$0.50
200,000
200,000
1 Jan 2009 a
28 Aug 2012
$0.29
1,358,000
963,000
1 Jan 2009 b
28 Aug 2012
$0.29
20,000
29 Jun 2009 a
28 Jun 2014
$0.37
1,144,000
–
–
–
–
–
–
30,000
300,000
100,000
618,000
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1,684,809
1,684,809
30,000
30,000
–
–
–
–
395,000
395,000
20,000
20,000
1,114,000
1,114,000
Total
12,717,119
8,385,310
70,000
1,018,000
3,243,809
3,243,809
Weighted average exercise price
$0.44
$0.43
$0.45
$0.67
$0.39
$0.39
a Options granted under the Employee Option Plan.
b Options granted under individual option deeds.
c Options granted under a share placement.
No options were granted in the current year.
2
6
ANNUAL REPORT 2011
2010
Grant Date
Expiry Date
Consolidated and parent entity
Exercise
Price
Balance
at start of
the year
Exercised
during
the year
Forfeited
during
the year
Expired
during
the year
Balance
at end of
the year
Exercisable
at end of
the year
$
Number
Number
Number
Number
Number
Number
31 Dec 2004 a
31 Dec 2009
$0.94
86,000
4 Jul 2005 a
4 Jul 2010
$0.94
300,000
18 Jul 2005 a
18 Jul 2010
$0.94
100,000
–
–
–
–
–
–
6 Oct 2006 a
6 Oct 2010
$0.50
1,038,000
130,000
10,000
2 Jan 2007 b
2 Jan 2011
$0.52
20,000
4 Apr 2007 a
4 Apr 2011
$0.50
590,000
21 Aug 2007c
22 Aug 2012
$0.43
7,567,119
12 Oct 2007 b
31 Jul 2009
$0.43
10,000
12 Oct 2007 b
31 Aug 2009
$0.43
10,000
–
–
–
–
–
–
–
–
–
–
31 Oct 2007 a
7 Aug 2011
$0.50
550,000
40,000
140,000
14 Nov 2007 a
4 Apr 2011
$0.50
150,000
14 Nov 2007 a
8 Aug 2011
$0.50
200,000
1 Jan 2009 a
28 Aug 2012
$0.29
1,578,000
1 Jan 2009 b
28 Aug 2012
$0.29
20,000
29 Jun 2009 a
28 Jun 2014
$0.37
1,464,000
–
–
–
–
–
–
–
220,000
–
320,000
86,000
–
–
–
–
–
–
–
–
300,000
300,000
100,000
100,000
898,000
898,000
20,000
20,000
590,000
590,000
7,567,119
7,567,119
10,000
10,000
–
–
–
–
–
–
–
–
–
–
370,000
370,000
150,000
150,000
200,000
200,000
1,358,000
20,000
1,144,000
–
–
–
Total
13,683,119
170,000
690,000
106,000
12,717,119
10,195,119
Weighted average exercise price
$0.44
$0.50
$0.37
$0.76
$0.44
$0.47
a Options granted under the Employee Option Plan.
b Options granted under individual option deeds.
c Options granted under a share placement.
No options were granted in the prior year.
The weighted average share price at the date of exercise of options exercised during the year ended 30 June 2011 was $0.43 (2010: $0.50).
The weighted average remaining contractual life of share options outstanding at the end of the period was 1.77 years (2010: 1.98 years).
Where options are issued to employees of subsidiaries within the group, the subsidiaries compensate Starpharma Holdings Limited for the
amount recognised as expense in relation to these options.
(d) Fair value of options granted
There were no options granted in the current or prior year. The fair
value at grant date of options granted in earlier years were
independently determined using a 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 the
expected price volatility of the underlying share, the expected
dividend yield and the risk free rate for the term of the option. The
expected price volatility is based on the historic volatility (based on
the remaining life of the options), adjusted for any expected
changes to future volatility due to publicly available information.
Options are granted for no consideration, and have varying
exercise and expiry dates.
Shares
(a) Employee Share Plan ($1,000 Plan)
All executives and staff, excluding directors, are eligible to
participate in the Starpharma Employee Share Plan ($1,000 Plan).
The objective of the $1,000 Plan is to assist in the reward,
retention and motivation of employees of the group. An annual
allocation of up to $1,000 of shares may be granted and taxed on
a concessional basis. Shares are granted under the $1,000 Plan
for no consideration and are escrowed for 3 years while
participants are employed by the group.
6
3
STARPHARMA HOLDINGS LIMITED
(b) Fair value of shares granted
The weighted average assessed fair value at grant date of
employee shares granted during the year ended 30 June 2011
was $0.84 (2010: $0.69 per share). The fair value at grant date is
determined by the share price on the date of grant. Employee
shares were granted for no consideration.
Information used in assessing the fair value of shares granted during the year ended 30 June 2011 is as follows:
Share grant date
Number of shares granted
Share price at grant date
Assessed fair value
1 February 2011
28,560
$0.84
$0.84
Information used in assessing the fair value of shares granted during the year ended 30 June 2010 is as follows:
Share grant date
Number of shares granted
Share price at grant date
Assessed fair value
1 Shares issued under the CEO Equity Incentive Plan.
Employee Performance Rights
(a) CEO Equity Incentive Plan
Details are provided in section D of the remuneration report.
(b) Employee Performance Rights Plan
In 2010 the Board approved the introduction of the Starpharma
Employee Performance Rights Plan. All executives and staff are
eligible to participate in the Plan. The Plan allows for the issue of
performance rights (being rights to receive fully paid ordinary
shares subject to continued employment with the Company and
the satisfaction of certain performance hurdles over a specified
period). A further holding lock period may also be applied to
restrict disposal after the vesting date. Performance rights are
granted under the Plan for no consideration. The objective of the
Plan is to assist in the recruitment, reward, retention and
motivation of employees of the company.
24 Jan 2010
31 March 20101
25,524
$0.70
$0.70
1,428,571
$0.69
$0.69
(c) Fair value of performance rights granted
The weighted average assessed fair value at grant date of
performance rights granted during the year ended 30 June 2011
was $0.39 per right (2010: $0.33). There were 830,800
performance rights granted in the current year (2010: 750,000).
The estimated fair value at grant date is determined using a
modified Black-Scholes option pricing model that takes into
account the exercise price, the performance measure, the term of
the right, the impact of dilution, the share price at grant date and
the expected price volatility of the underlying share, the expected
dividend yield and the risk free rate for the term of the option. The
expected price volatility is based on the historic volatility, adjusted
for any expected changes to future volatility due to publicly
available information.
Information used in assessing the fair value of performance rights granted during the year ended 30 June 2011 is as follows:
Right grant date
Number of rights granted
Vesting date
Disposal Restriction until
Performance Measure
Expected price volatility of the company's shares
Risk-free interest rate
Expected dividend yield
Share price at grant date
Assessed fair value
4
6
2 September 2010
830,800
31 August 2012
31 August 2013
KPIs
31%
5.1%
-
$0.49
$0.39
KPIs
41%
5.3%
-
$0.69
$0.55
Consolidated
2010
$’000
182
–
1,004
82
1,268
Information used in assessing the fair value of performance rights granted during the year ended 30 June 2010 is as follows:
ANNUAL REPORT 2011
Right grant date
Number of rights granted
Vesting date
Disposal Restriction until
Performance Measure
Expected price volatility of the company's shares
Risk-free interest rate
Expected dividend yield
Share price at grant date
Assessed fair value
31 March 2010
31 March 2010
31 March 2010
262,500
262,500
225,000
31 December 2010
31 December 2010
31 December 2010
1 March 2013
1 March 2013
1 March 2013
Share Price ≥ $0.65
Share Price ≥ $1.00
41%
5.3%
-
$0.69
$0.37
41%
5.3%
-
$0.69
$0.09
Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period were as follows:
Options issued under employee option plan
Options issued under deed
Employee shares issued
Employee performance rights issued
26. Related party transactions
2011
$’000
138
–
26
291
455
(a) Parent entity and subsidiaries
(c) Transactions with related parties
The parent entity of the group is Starpharma Holdings Limited.
Interests in subsidiaries are set out in note 21.
(b) Key management personnel
Disclosures relating to key management personnel are set out in
note 17.
There are related party transactions within the group between the
parent and subsidiaries. Transactions include funds advanced
to/from entities and the associated interest charge; and
management and services fees. All transactions were made on an
arm’s length basis.
6
5
STARPHARMA HOLDINGS LIMITED
27. Parent entity financial information
(a) Summary financial information
The individual financial statements for the parent entity show the following aggregate amounts:
Balance Sheet
Current assets
Total assets
Current liabilities
Total liabilities
Shareholders’ equity
Contributed equity
Reserves
Accumulated losses
Loss for the year
Total comprehensive income
(b) Contingencies of the parent entity
The parent entity has no contingent assets or liabilities at 30 June 2011 (2010: nil).
2011
$'000
16,876
35,349
988
1,644
105,399
2,333
(74,027)
(11,144)
(11,144)
Parent
2010
$'000
19,553
42,410
1,624
1,624
101,766
1,903
(62,883)
(4,663)
(4,663)
6
6
ANNUAL REPORT 2011
Directors’ Declaration
In the directors’ opinion:
(a) the financial statements and notes set out on pages 31 to 66 are in accordance with the Corporations Act 2001, including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements;
and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2011 and of its performance for the financial year
ended on that date; and
(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.
Note 1(a) confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International
Accounting Standards Board.
The directors have been given the declarations by the chief executive officer and chief financial officer required by section 295A of the
Corporations Act 2001.
This declaration is made in accordance with a resolution of the directors.
Peter T Bartels, AO
Director
Melbourne, 29 August 2011
6
7
Independent auditor’s report to the members of
Starpharma Holdings Limited
Report on the financial report
PricewaterhouseCoopers
ABN 52 780 433 757
Freshwater Place
2 Southbank Boulevard
SOUTHBANK VIC 3006
GPO Box 1331
MELBOURNE VIC 3001
DX 77
Telephone 61 3 8603 1000
Facsimile 61 3 8603 1999
www.pwc.com/au
We have audited the accompanying financial report of Starpharma Holdings Limited (the
company), which comprises the balance sheet as at 30 June 2011, and the income statement, the
statement of comprehensive income, statement of changes in equity and statement of cash flows
for the year ended on that date, a summary of significant accounting policies, other explanatory
notes and the directors’ declaration for the Starpharma Holdings Group (the consolidated entity).
The consolidated entity comprises the company and the entities it controlled at the year's end or
from time to time during the financial year.
Directors’ responsibility 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 is free from material misstatement, whether due to fraud or error. In Note
1 (a), the directors also state, in accordance with Accounting Standard AASB 101 Presentation of
Financial Statements, that the financial statements comply with International Financial Reporting
Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. These Auditing Standards require that
we comply with relevant ethical requirements relating to audit engagements and plan and perform
the audit to obtain reasonable assurance whether the financial report is free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s judgement,
including the assessment of the risks of material misstatement of the financial report, whether due
to fraud or error. In making those risk assessments, the auditor considers internal control relevant
to the entity’s preparation and fair presentation of the financial report in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall presentation of the financial report.
Our procedures include reading the other information in the Annual Report to determine whether it
contains any material inconsistencies with the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinions.
Liability limited by a scheme approved under Professional Standards Legislation
68
Independent auditor’s report to the members of
Starpharma Holdings Limited (continued)
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001.
Auditor’s opinion
In our opinion:
(a)
the financial report of Starpharma Holdings Limited is in accordance with the Corporations
Act 2001, including:
(i)
(ii)
giving a true and fair view of the consolidated entity’s financial position as at
30 June 2011 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards (including the Australian
Accounting Interpretations) and the Corporations Regulations 2001,and
(b)
the financial report and notes also comply with International Financial Reporting Standards
as disclosed in Note 1 (a).
Report on the Remuneration Report
We have audited the remuneration report included in pages 15 to 25 of the directors’ report for the
year ended 30 June 2011. 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.
Auditor’s opinion
In our opinion, the remuneration report of Starpharma Holdings Limited for the year ended 30 June
2011, complies with section 300A of the Corporations Act 2001.
PricewaterhouseCoopers
Anton Linschoten
Partner
Melbourne
29 August 2011
69
STARPHARMA HOLDINGS LIMITED
Shareholder Information
The shareholder information set out below was applicable as at 31 July 2011
Supplementary information as required by ASX listing requirements.
A. Distribution of equity shareholders
Analysis of numbers of equity security holders by size of holding
1 –1,000
1,001–5,000
5,001–10,000
10,001–100,000
100,000 and over
Total
Shares
Options
Performance rights
Class of equity security
465
1,342
775
1,196
186
3,964
–
–
–
14
9
23
–
–
–
22
–
22
There were 104 holders of less than a marketable parcel of ordinary shares.
B. Equity security holders
The names of the twenty largest holders of quoted equity securities are listed below:
Name
Number held
of issued shares
Ordinary shares
Percentage
1. National Nominees Limited
2. J P Morgan Nominees Australia Limited
3. Citicorp Nominees Pty Limited
4. HSBC Custody Nominees (Australia) Limited
5. JP Morgan Nominees Australia Limited
6. T & N Argyrides Investments P/L
7. Mr Peter Malcolm Colman
8. Kenneth Nominees Pty Ltd
9. Auckland Trust Company Ltd
10. JPS Distribution Pty Ltd
11. Applecross Secretarial Services Pty Ltd
12. Citicorp Nominees Pty Ltd
13. Mr Kingsley Bryan Bartholomew
14. JPS Distribution Pty Ltd
15. Commonwealth Scientific And Industrial Research Organisation
16. VCAMM Limited
17. HSBC Custody Nominees (Australia) Limited - A/C 2
18. Dr Stuart Keith Roberts
19. Ms Jacinth Fairley
20. Mr Peter Murray Jackson
0
7
57,203,840
21,165,720
14,775,416
12,638,129
5,925,251
5,566,589
4,157,286
4,000,000
3,625,307
3,567,831
2,882,462
2,539,223
2,000,000
1,969,142
1,448,798
1,397,302
1,386,766
1,350,000
1,278,571
1,225,000
23.09
8.54
5.96
5.10
2.39
2.25
1.68
1.61
1.46
1.44
1.16
1.02
0.81
0.79
0.58
0.56
0.56
0.54
0.52
0.49
150,102,633
60.57
Name
Options issued under the Starpharma Holdings Limited
Employee Share Option Plan (ASX code SPLAM)
Options issued under individual option deeds
Employee Performance Rights
Total
C. Substantial holders
ANNUAL REPORT 2011
Unquoted equity securities over ordinary shares
Number on issue
Number of holders
1,499,000
1,704,809
750,800
2,457,108
19
4
22
45
Substantial shareholders as shown in substantial shareholder notices received by the Company as at 31 July 2011:
Name
Acorn Capital Limited
Orbis Investment Management (Australia) Pty Ltd
The Dow Chemical Company
Platinum-Montaur Life Sciences LLC
Ordinary shares
Number held
29,920,807
23,151,172
14,406,827
9,046,365
D. Voting rights
The voting rights attached to each class of equity securities are set out below:
(a) Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and on a poll each share shall have one
vote.
(b) Options
No voting rights.
(c) Performance Rights
No voting rights.
E. Securities subject to voluntary escrow
The following equity securities are subject to voluntary escrow until the date indicated:
Type of equity securities
Number of equity
securities
Number of holders
Release date
Employee Share Plan
($1,000 Plan)
Employee Share Plan
($1,000 Plan)
Ordinary Shares
Ordinary Shares
CEO Equity Incentive Plan
Ordinary Shares
Employee Performance Rights Plan
Performance Rights
25,524
28,560
487,500
750,800
18
24
1
22
25 January 2013
1 February 2014
1 March 2013
31 August 2013
7
1
STARPHARMA HOLDINGS LIMITED
Intellectual Property Report
The Starpharma patent portfolio currently has around 30 active patent families with over 110 granted patents and more than 70 patent
applications pending. Two new provisional patent applications were filed during the year.
Key patents within the Starpharma portfolio as at 9 August 2011:
Title
Priority Date &
Publication Number
Patents Granted
Applications Pending
VivaGel® Patent Portfolio
Antiviral Dendrimers
15 June 1994
WO95/34595
Australia, Brazil, Canada, China,
Europe, Hong Kong, Mexico,
New Zealand, Singapore, South
Korea, USA, Japan
Anionic Or Cationic Dendrimer
Antimicrobial Or Antiparasitic
Compositions
14 September 1998
WO00/15240
Australia, Canada, Europe,
Mexico, New Zealand,
Singapore, South Korea, USA
Agents For The Prevention &
Treatment Of Sexually Transmitted
Diseases-I
30 March 2001
WO02/079299
Australia, Canada China,
Europe, Hong Kong, Japan,
Mexico, New Zealand,
Singapore, South Korea, USA
Microbicidal Dendrimer Composition
Delivery System
18 October 2005
WO2007/045009
New Zealand, Russian
Federation,
Contraceptive Composition
Method Of Treatment Or Prophylaxis
Of Bacterial Vaginosis
Platform Patent Portfolio
Macromolecules Compounds Having
Controlled Stoichiometry
Modified Macromolecules
22 March 2006
WO2007/106944
16 May 2011
Not yet published
25 October 2005
WO2007/048190
10 August 2006
WO2007/082331
China, Japan
Brazil, USA
Argentina, Australia, Canada, China,
Europe, Hong Kong, India, Japan,
Malaysia, Mexico, South Korea,
Taiwan, USA
Australia, Canada, China, Europe,
Japan, USA
International application
Australia, Canada, Europe, USA
Australia, Canada, China, Europe,
India, Japan, USA
Core-Shell Tectodendrimers
16 February 1999
Canada, Europe, USA,
Mexico
Dendritic Polymers With Enhanced
Amplification And Interior
Functionality
Dendritic Polymers With Enhanced
Amplification And Interior
Functionality
Imaging Project Patent Portfolio
WO00/049066
20 April 2005
WO2006/065266
Canada, India, Japan, New
Zealand Singapore , South
Korea, USA
Argentina, Brazil, China, Europe, Hong
Kong, Israel, Mexico, Taiwan,
21 December 2005
WO2006/115547
Australia, India, Singapore,
South Korea, USA
Argentina, Brazil, Canada, China,
Europe, Hong Kong, Israel, Mexico,
New Zealand, Taiwan,
Polylysine Dendrimer Contrast Agent
11 August 2006
China, Europe, USA
siRNA Project Patent Portfolio
Delivery Of Biologically Active
Materials Using Core-Shell
Tectodendritic Polymers
WO2008/017122
3 March 2006
WO2008/054466
Drug Delivery Project Patent Portfolio
Targeted Polylysine Dendrimer
Therapeutic Agent
11 August 2006
WO2008/017125
Agricultural Chemicals Patent Portfolio
PEHAM Dendrimers for use in
Agriculture
26 October 2009
WO2011/053605
2
7
Europe, USA
China, Europe, India, USA
International , USA
ANNUAL REPORT 2011
Solicitors
Norton Rose
RACV Tower, 485 Bourke Street
Melbourne VIC 3000 Australia
Stock exchange listing
ASX Limited
Level 45, South Tower, Rialto, 525 Collins Street,
Melbourne VIC 3000 Australia
ASX Code: SPL
Starpharma’s American Depositary Receipts (ADRs) trade under
the code SPHRY (CUSIP number 855563102). Each Starpharma
ADR is equivalent to ten ordinary shares of Starpharma as traded
on the ASX. The Bank of New York Mellon is the depositary bank.
Starpharma’s ADRs are listed on OTCQX International
(www.otcmarkets.com), a premium market tier in the U.S. for
international exchange-listed companies, operated by OTC
Markets Group.
Website address
www.starpharma.com
Annual General Meeting
Thursday 10 November 2011 at 4.00pm
Norton Rose
RACV Tower, 485 Bourke Street,
Melbourne VIC 3000
Corporate Directory
Company name
Starpharma Holdings Limited
ABN 20 078 532 180
Directors
P T Bartels AO – Chairman
P J Jenkins – Deputy Chairman
J K Fairley – Chief Executive Officer
R Dobinson
R A Hazleton
Company Secretary
Ben Rogers
Other Management
Chief Financial Officer
Nigel Baade
Paul Barrett
VP, Business Development
Malcolm McColl VP, Business Development
David Owen
Jeremy Paull
VP, Research
VP, Development and Regulatory Affairs
Registered office
Baker IDI Building
75 Commercial Road,
Melbourne, Victoria 3004 Australia
Telephone +61 3 8532 2700
Fax +61 3 9510 5955
Postal address
GPO Box 6535
St Kilda Road Central VIC 8008 Australia
Share register
Computershare Investor Services
452 Johnston Street, Abbotsford VIC 3067
GPO Box 2975
Melbourne, VIC 3001
1300 850 505 (within Australia)
+613 6415 4000 (outside Australia)
www.computershare.com
Auditor
PricewaterhouseCoopers
Freshwater Place
Southbank VIC 3006 Australia
7
3
Starpharma Holdings Limited
ABN 20 078 532 180
Baker IDI Building
75 Commercial Road, Melbourne
VIC 3004 Australia
Telephone +61 3 8532 2700
Facsimile +61 3 9510 5955
www.starpharma.com
Annual Report 2011