“Tomorrow’s Standard Practice
for the Treatment of Liver Cancer”
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Chairman’s report
CEO report
Corporate Governance
Statement
15
Financial report
15
22
Directors’ Report
Auditor’s Independence
Declaration
23
24
26
27
28
Directors’ Declaration
Independent Auditor’s Report
Income Statement
Balance Sheet
Statement of Change
in Equity
30
31
Cash Flow Statement
Notes to the Financial
Statements
55
Additional Information
56
Company Information
Sirtex Medical Ltd ABN 35 078 166 122
Sitex Medical Ltd was listed on the Australian
Stock exchange (ASX) in August 2000
As at 30 June 2009, there were 1,837 shareholders.
® SIR-Spheres is a Registered Trademark
of Sirtex Medical Ltd.
® Thermospheres is a Registered Trademark
of Sirtex Medical Ltd.
Sirtex Annual Report 2009 01
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The fi nancial year ended 30 June 2009 was a year of signifi cant progress for
Sirtex Medical Limited (“Sirtex”). Sirtex is one of a small number of Australian
biotech companies to have brought successfully a product to market not only
in Australia, but in the substantial overseas markets of North America,
Europe and Asia Pacifi c.
In a year of global economic turmoil, it was pleasing that our shareholders
were rewarded with attractive returns refl ecting the strength of our fi nancial
performance and balance sheet.
“Sirtex is one
of a small
number of
Australian
biotech
companies
to have
brought
successfully
a product to
market.”
We reported net profi t after tax of $18,229,000 for the year, compared
with $1,210,000 in the previous year, and fi nished the year with net cash
of $26,521,000, up from $6,921,000 as at 30 June 2008.
We remain focused on strategies to grow awareness, acceptance and use
of our targeted liver cancer treatment SIR-Spheres microspheres in both
existing and new markets. The results achieved by Sirtex in the fi nancial year
are testament to the effectiveness of SIR-Spheres microspheres and to
our strategy.
Total product sales revenue for the year was A$65,559,000, a 72 per cent
increase from the previous year’s $38,125,000. This primarily refl ected a
42 per cent increase in the number of SIR-Spheres microspheres doses sold.
This was the fourth consecutive year of double digit growth in unit sales.
Richard Hill
Chairman
02 Sirtex Annual Report 2009
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The sales revenue
growth was also partly
attributable to the
depreciation of the
Australian dollar against
the US dollar and the
Euro, in which 90 per
cent of our revenue
is denominated.
Unit sales increased in
all major markets during
the fi nancial year, with
a particularly pleasing
increase in Europe of
117 per cent. In the US,
our largest market, we
achieved commendable
growth of 28 per cent.
In Asia Pacifi c unit sales rose 17 per cent, with signifi cant ground-work having been
completed to establish new markets across the region.
During the year we continued to increase our investment in sales and marketing, research
and development, and clinical trials. This expenditure is necessary to underpin our
continued growth and drive further penetration of the SIR-Spheres microspheres product
in its existing niche for metastatic colorectal liver cancer, as well as drive mainstream
acceptance of the product in other indications.
The increase in expenditure was comfortably offset by our higher unit sales and stronger
gross margin, with Sirtex reporting profi t before tax of $23,152,000 for 2009, up from
$2,499,000 in 2008. The 2009 result included realised and unrealised foreign exchange
gains totalling $6,994,000.
Profi t after tax improved to $18,229,000, as mentioned above. The effective tax rate for
the year was 21 per cent, refl ecting a $2,409,000 one-off reduction in reported tax expense.
This resulted from the improved performance of Sirtex’s European business which allowed
us to recognise carried forward losses held by that business but not previously brought
to account.
Sirtex’s year-end cash of $26,591,000 was attributable to a signifi cantly improved cash
fl ow performance. The business reported a $20,140,000 infl ow from operating activities for
the year compared with an outfl ow in the previous year of $3,486,000. This was due to the
increase in operating profi t, our focus on reducing debtors and a tax refund of $4,001,000.
As shareholders will be aware, legal costs relating to the UWA proceedings have been a
material cash fl ow burden for the company in recent periods, with costs in excess of
$5,500,000 incurred to date. We still expect to recover a signifi cant proportion of these
costs but the timing of any recovery remains uncertain. Shareholders should refer to
note 23 in the fi nancial section of this report for further detail regarding this matter.
The sustained growth of the business over the last fi ve years, the company’s continued
signifi cant investment in key growth areas and Sirtex’s sound fi nancial position provides
the Board and management confi dence in Sirtex’s future.
Richard Hill
Chairman
Sirtex Annual Report 2009 03
Overview
Sirtex continues to take signifi cant strides forward, with each of our regional
businesses successfully building the awareness and reputation of SIR-Spheres
microspheres in its respective markets. It is pleasing to see the business-building
initiatives and investments we have made over the past fi ve years starting to
show results and this is clearly refl ected in the 42 per cent increase in dose sales
during the 2009 fi nancial year.
I would like to thank all our staff for their excellent efforts and valuable contributions
throughout the 2009 year, and thank our shareholders for their support.
All regions recorded double digit unit sales growth. The US business achieved
growth of 28 per cent, selling approximately 2,300 doses. The European business
had an outstanding year with unit sales growing 117 per cent to approximately
1,000 doses as a number of its marketing initiatives began to yield results. In
Asia Pacifi c we achieved growth of approximately 17 percent, with promising
opportunities as the business continues to develop new markets within the region.
Our new purpose-
built manufacturing
facility in
Wilmington, US,
completed its
fi rst full year of
production and
easily supported
the growth of
the business by
supplying the
majority of US
treatment centres
with locally
produced doses.
Worldwide, well over 200 treatment centres offer patients selective internal
radiation therapy (SIRT). Since the listing of Sirtex more than 11,000 doses of
SIR-Spheres microspheres have now been provided to treat liver cancer patients
in routine practice and in clinical trials conducted in major teaching hospitals
and cancer centres.
Government reimbursement is an important factor in the continued success of
SIR-Spheres microspheres in our various markets. In the US, Centers for Medicare
and Medicaid Services (CMS) are working on a new funding agreement, with
a decision expected by November. In the UK, the National Institute of Clinical
Excellence (NICE) is expected to provide guidelines on funding provisions for
SIR-Spheres microspheres via the National Health Service (NHS) during the fi rst
quarter of 2010. In Australia the Medical Services Advisory Committee (MSAC) is
scheduled to review the reimbursement provisions for the product by the end of
the second quarter of 2010.
“I would like to thank all our staff for their excellent
efforts and valuable contributions throughout the 2009
year, and thank our shareholders for their support.”
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Gilman Wong
Chief Executive Offi cer
04 Sirtex Annual Report 2009
“More than
11,000 doses
of SIR-Spheres
microspheres
have now been
provided to treat
liver cancer.”
Our clinical program is focused on
providing further evidence of the
effectiveness and safety of SIR-
Spheres microspheres in each
of the three key indications: liver
metastases from colorectal cancer,
heptatocellular carcinoma, and liver
metastases from neuroendocrine
tumours. To this end we are
sponsoring or supporting 15 clinical
trials in primary and secondary
liver cancer to provide additional
clinical data with the aim of building
acceptance of our treatment and
expanding it’s treatment indications.
Recruitment is progressing well for
our largest initiative, the SIRFLOX
study, an international randomised
controlled trial of SIRT with FOLFOX,
the “gold-standard” chemotherapy,
as the fi rst-line treatment for
colorectal cancer patients with
secondary liver tumours.
Beyond our SIR-Spheres
microspheres product, we have
made pleasing progress with
our expanded research and
development initiatives with major
universities, which we anticipate
will yield a pipeline of promising
new non-surgical cancer therapies
over time.
Sales and Marketing
United States
In the US we sold approximately
2,300 SIR-Spheres microspheres
doses in the 2009 fi nancial year,
compared with 1,805 doses sold
in 2008. During the year the US
business developed and
implemented an internal
reimbursement capability to assist
our customers obtain appropriate
reimbursement for our product.
The business focused on ensuring
the effective and effi cient delivery
of our marketing efforts in the
US. As a result we achieved the
28 per cent sales volume growth
without increasing our US sales
and marketing expenditure.
Europe
In Europe we achieved outstanding
117 per cent growth in unit sales
during the fi nancial year. We saw
growth in both our existing and
new geographic markets in the
region. The European business
continues its strategic focus
on driving the awareness and
acceptance of SIR-Spheres
microspheres among a broader
range of target audiences and
building collaborative networks
of SIRT users within the EU. The
business is also actively supporting
advocate groups and working to
enhance SIRT credibility through
scientifi c presentations.
Asia Pacifi c
Unit sales in the Asia Pacifi c region
increased by 17 per cent over the
previous year.
The primary strategic focus of
the business during the year
was increasing sales of SIR-
Spheres microspheres in our
existing markets of Australia, New
Zealand, Hong Kong, Thailand,
Singapore and Malaysia, and
the establishment of markets in
Taiwan, Korea and India.
Submissions were presented to
the regulators in the larger Asian
markets, including the Taiwanese
Department of Health, the Korean
FDA and the Ministry of Health in
India. We anticipate receiving
approvals in the Taiwan, Korean
and Indian markets in the 2010
fi nancial year, which will have a
positive impact on sales in
the region.
Clinical Activities
The 2009 fi nancial year was
an exciting one for Sirtex on
the clinical front and we are
encouraged by our signifi cant
progress in our clinical strategy for
SIR-Spheres microspheres across
two broad areas:
(cid:129)
New clinical data supporting
the use of SIR-Spheres
microspheres as a standard
therapy for patients with liver
cancer
(cid:129)
Further expansion of clinical
trials program
Sirtex Annual Report 2009 05
New Clinical Data
mCRC trial results
At the Annual Meeting of the American Society of Clinical Oncology (ASCO)
in June, Dr Marc Van den Eynde from the Université Libre de Bruxelles
in Belgium presented the fi nal results of the randomised controlled trial
that tested SIR-Spheres microspheres in the treatment of patients with
liver metastases from primary colon or rectal cancer (mCRC). This multi-
centre trial evaluated the use of SIR-Spheres microspheres in patients who
had failed all standard chemotherapy treatment options. Patients were
randomised to receive either SIR-Spheres microspheres plus 5- fl uorouracil
chemotherapy or 5-fl uorouracil chemotherapy alone.
Signifi cantly improved disease control
The primary endpoint of the trial was to compare time to disease
progression (TTP) in the liver. Median TTP in the liver was signifi cantly
increased to 5.5 months in the SIR-Spheres microspheres plus
chemotherapy arm, compared with 2.1 months in the chemotherapy-
only arm (p = 0.003).
The median TTP elsewhere in the body was also signifi cantly longer for
patients receiving SIR-Spheres microspheres plus chemotherapy compared
with those receiving chemotherapy alone at 4.6 months versus 2.1 months,
respectively (p = 0.03).
Despite no previous objective response to both modern “FOLFOX” and
“FOLFIRI” chemotherapy, one patient (5 per cent) receiving SIR-Spheres
microspheres plus chemotherapy had a suffi ciently large reduction in
tumour size to permit potentially curative surgical resection of the
remaining disease.
Improved overall survival
After progression of their disease, 10 patients (43.5 per cent) who started
the trial in the chemotherapy-only arm elected to “cross over” to the other
arm of the trial and receive SIR-Spheres microspheres alone as salvage
therapy. Overall survival was extended in both treatment arms by the
targeted treatment of liver tumours using SIRSpheres microspheres.
Overall, there was 2.5 months’ difference in the median survival of 9.9
months versus 7.4 months of the combination and chemotherapy-only
arms, respectively (p = 0.80).
“After progression of their disease, 10 patients
(43.5 per cent) who started the trial in the
chemotherapy-only arm elected to “cross over” to
the other arm of the trial and receive SIR-Spheres
microspheres alone as salvage therapy.”
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06 Sirtex Annual Report 2009
“Research has progressed well and several small- scale
test have increased our confi dance in the capabilities
of the technology”
Further expansion of clinical trials program
Sirtex believes there remains a major unmet clinical need for effective options for the treatment of both
metastatic colorectal cancer and primary liver cancer, the leading cause of cancer death in Asia. To this end,
we have signifi cantly expanded the number and magnitude of clinical trials of SIR-Spheres microspheres in
these two disease indications. As SIRT therapy is gaining “standard of care” status in Europe and the US,
we have focussed our clinical trials program on the northern hemisphere and Asia. Recruitment to Sirtex’s
“SIRFLOX” multi-centre randomised controlled trial in metastatic colorectal cancer has opened at institutions in
the US, Germany, Spain, Belgium and Italy. This trial is expected to report early clinical data in 2011 and will be
combined with the clinical data from Oxford University’s UK “FOXFIRE” clinical trial of a similar design.
Final planning for randomised controlled trials in primary liver cancer were also completed during the year and
it is anticipated that these studies will open in Europe and the US over coming months.
Research and Development
During 2009 we increased our investment in our R&D program to ensure the continued evolution of the
SIR-Spheres microspheres product and the development of new therapies to encompass the three key
non-surgical treatment options for liver cancer: radiation, hyperthermia, and drug delivery.
Our R&D program is largely outsourced to major Australian universities and research groups. Typically, any new
patent derived from this research is held by the institution where it was developed and Sirtex is granted
licence rights.
Our New Opportunities Committee (NOC) actively assesses potential opportunities for new product
development that emerge from our collaborations or are presented from external sources. During the year,
no new developments were added to the Sirtex R&D program.
Evolution of SIR-Spheres Microspheres
In collaboration with scientists at the Australian National University (ANU) and several academic institutions in
the US, this program consists of several sub-projects aimed at enabling improved precision in calculating and
delivering individualised patient-specifi c doses of SIR-Spheres microspheres.
Having also gathered feedback from opinion leaders and many of our key customers, we have developed a
comprehensive R&D program to provide the market with desired improvements.
Research has progressed well, increasing our confi dence in the capabilities of the technology and our ability to
make ongoing improvements to SIR-Spheres microspheres.
Sirtex Annual Report 2009 07
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Targeted Hyperthermia
Progress continues with Sirtex’s targeted hyperthermia project, with preparartion for
pre-clinical studies commenced during the 2009 fi nancial year. The project is based on
the premise that targeted heating of tumours may signifi cantly enhance the effectiveness
of SIR-Spheres microspheres.
Hollow Microspheres
Sirtex has exclusive worldwide rights to the hollow, biodegradable microsphere
technology developed by the University of New South Wales (UNSW). We are
investigating the potential use of hollow microspheres as a programmable and targeted
delivery mechanism for a range of therapeutic agents, including chemotherapy drugs.
Radioprotector Technology
In October 2007, Sirtex executed two contracts with the Peter MacCallum Cancer
Centre in Melbourne, obtaining exclusive worldwide licence rights to an innovative
technology based on radioprotector compounds. These compounds offer a means of
protecting healthy tissue from the harmful effects of exposure to ionising radiation,
potentially providing enormous benefi t to a range of cancer patients.
The use of radioprotector compounds could also expand the number of patients able to
be treated with SIR-Spheres microspheres; in particular, patients with very small reserves
of healthy liver could potentially be eligible for treatment. It could also be potentially used
prior to radiation treatment or exposure, such as external beam radiation for cancers of
the breast, head and neck, and prostate.
Work is proceeding according to plan and good progress has been made on the
development of lead compounds with an improved radioprotection and toxicity profi le
as determined in cell culture tests (i.e. in vitro).
Manufacturing
Sirtex’s new purpose-built manufacturing facility in Wilmington in the US received
regulatory approval from the FDA in January 2008, enabling us to commence US
production of SIR-Spheres microspheres. From February 2008, we began a controlled
ramp-up program to supply doses for the 140+ US treatment centres that offer SIRT
and which previously relied on doses air-freighted from Australia. As anticipated,
from August 2008 the majority of the US market has been supplied from the
Wilmington facility.
The Wilmington facility incorporates state-of-the-art robotic and computer-controlled
manufacturing equipment to ensure product quality and signifi cantly enhance the safety
of production personnel. It has the capacity to produce an average of 200 doses of
SIR-Spheres microspheres each week on a single shift and will therefore be able to fully
support our forecast sales growth in the US market.
“The use of a radioprotector could also expand the
number of patients who are able to be treated with
SIR-Spheres microsphere.”
08 Sirtex Annual Report 2009
“Sirtex continues
to meet its
quality objectives
through ongoing
development,
improvement and
compliance of the
Quality system”
SIR-Spheres microspheres have
a three-day shelf life, so a local
product supply means US doctors
have more fl exibility in scheduling
SIRT procedures, which may help
increase the number of patients
treated each week. The facility’s
proximity to major US population
centres and transport hubs ensures
seamless, timely and cost effective
transfer from manufacture to
patient treatment.
Market demand for SIR-Spheres
microspheres from the European
and Asia Pacifi c regions continues
to be supported by the
manufacturing facility at Lucas
Heights in Sydney, Australia. This
facility is well equipped to support
our future growth from
these regions.
With new regions opening up
through Asia in 2010, in particular
Taiwan, South Korea and India, it
has been a signifi cant challenge to
ensure SIR-Spheres microspheres
doses arrive at the treating
hospitals on time and available for
patient treatment. We are working
with global freight forwarders to
ensure this occurs with every dose
supplied. Strategies are in place
to ensure the airlines and courier
companies we use are fully aware
of our product and the need to
ensure on-time delivery.
Regulatory Affairs and
Quality Assurance
Sirtex continues to meet its quality
objectives through its ongoing
development and improvement
of and compliance with the
Sirtex Quality System in line with
regulatory requirements to support
the ongoing supply of our products
into global markets.
Over the past year, external
assessments of the Sirtex Quality
System were effected by each
of our main regulators: British
Standards Institution (BSI) for
our CE Mark, the Australian
Therapeutic Goods Administration
(TGA) and the US Food & Drug
Administration (FDA).
Regulatory data was supplied
to Korea, Taiwan and India for
local regulatory approval
applications, which have
recently been approved.
Looking Forward
We will maintain our strategic focus
on sales and marketing, extensive
clinical trial activities and innovative
research and development,
coupled with sound manufacturing,
regulatory and quality control
processes, ensuring Sirtex’s
continued growth and robustness.
“We are confi dent
that Sirtex has an
extremely bright
future.”
We are confi dent Sirtex has
an extremely bright future.
We look forward to continuing
our profi table growth,
improving both returns to
shareholders and the lives of
cancer patients around the
world.
Gilman Wong
Chief Executive Offi cer
Sirtex Annual Report 2009 09
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10 Sirtex Annual Report 2009
The Board of Directors of Sirtex
Medical Limited is responsible for
the corporate governance of
the Group and guides and
monitors the business and affairs
of Sirtex Medical Limited on
behalf of its shareholders.
Sirtex Medical Limited is
committed to ensuring that its
policies and practices refl ect
good corporate governance.
In developing these policies and
practices, the Board has taken
into account the ASX Corporate
Governance Council’s “Corporate
Governance Principles and
Recommendations”. The Council,
however, states that these
recommendations are not
prescriptive; they are guidelines.
If a company decides not to
adopt a specifi c recommendation
it has the fl exibility not to do
so providing it explains the
reason for not adopting the
recommendation.
The Company has structured
its Corporate Governance
Statement with reference to the
Corporate Governance Council’s
principles and recommendations,
which are as follows:
Principle Note
1
2
3
4
5
6
7
8
Lay solid foundation
for management and
oversight
Structure the board
to add value
Promote ethical and
responsible decision
making
Safeguard integrity
in fi nancial reporting
Make timely and
balanced disclosure
Respect the rights of
shareholders
Recognise and
manage risk
Renumerate fairly
and responsibly
Sirtex Medical Limited corporate
governance practices were in
place throughout the year ended
30 June 2009 and with the
exception of the recommendation
regarding the establishment of
a Nomination Committee,
were compliant in all material
respects with the Council’s
recommendations. The reason
for not establishing this
committee is explained below at
the end of the section headed
Board Functions.
For further information on corporate
governance policies adopted by Sirtex
Medical Limited, refer to the company
website: www.sirtex.com
Board Functions
The Board’s prime responsibility
is to oversee Sirtex’s business
activities for the benefi t of all its
shareholders. The Board’s
responsibilities are detailed on
the Company’s website in the
“Corporate Governance”
web pages.
The Board also recognises
that the Company has other
corporate and community
responsibilities.
The Board has delegated
certain responsibilities for the
management of operations and
administration of the Company
to the CEO and the executive
management. The Chief
Executive Offi cer is accountable
to the Board for all delegated
authority to executive
management. The responsibilities
of management are detailed on
the Company’s website in the
“Corporate Governance” web
pages. The Board recognises
that at all times it retains full
responsibility for guiding and
“Sirtex Medical
Limited to ensuring
that its policies and
practices refl ect
good corporate
governance.”
monitoring the Company.
In discharging this stewardship
the Board makes use of
sub-committees. Specialist
committees are able to focus
on a particular responsibility and
provide informed feedback to
the Board.
To this end the board has
established the following
committees:
(cid:129)
(cid:129)
Remuneration
Audit
The roles and responsibilities of
these committees are discussed
later in this statement.
Further detail can be found on
the Company’s website in the
“Corporate Governance”
web pages.
As previously mentioned, the
Board does not have a
Nomination Committee
(recommendation 2.4). The charter
of the Nomination Committee has
been incorporated into the Board
Charter. The Sirtex Board believes
that as it is not large (4 directors),
a formal Nomination Committee
would not provide any marked
effi ciencies or enhancements.
The charter of the nomination
committee has been included into
the board charter and as such
the Board considers all matters
that would be relevant regarding
Board appointments. For further
information refer to the Company’s
website in the “Corporate
Governance” web pages.
advice at the Company’s
expense. For further information
refer to the Company’s website
in the “Corporate Governance”
web pages.
The term in offi ce of each
Director at the date of this report
is as follows
Name
Term
Richard Hill
5 years
John Eady
4 years
Grant Boyce 7 years
Gilman
Wong
4 years
CEO and CFO
Certifi cation
The Chief Executive Offi cer and
Chief Financial Offi cer have
provided a written certifi cation to
the Board that:
(cid:129)
(cid:129)
The Company’s fi nancial
reports are complete and
present a true and fair view,
in all material respects, of
the fi nancial condition and
operational results of the
Company and Group and
are in accordance with
the relevant accounting
standards and;
The above statement is
founded on a sound system
of risk management and
internal controls are operating
effi ciently and effectively in
all material respects.
Structure of the Board
The skill, experience and
expertise relevant to the position
of Director, held by each Director
in offi ce at the date of this report,
are included in the Directors’
Report under the section
headed Directors.
All three Non-Executive Directors
of Sirtex Medical Ltd are
considered to be independent
with reference to the Company’s
independence criteria as
contained on the Company’s
website in the “Corporate
Governance” web pages. These
independent Directors are:
Name
Position
Richard Hill Non-Executive
Chairman
John Eady Non-Executive
Deputy
Chairman
Grant
Boyce
Non-Executive
Director
The Board has procedures to
permit Directors, in the
furtherance of their duties, to
seek independent professional
Sirtex Annual Report 2009 11
“The performance evaluation process has been
completed for all Directors and Senior Executives within
the last twelve months, in line with Company policy.”
Performance
Audit Committee
The Audit committee operates under a
charter approved by the Board. It is the
Board’s responsibility to ensure that an
effective internal control framework exists
within the group. This includes ensuring
that there are internal controls to deal with
both effectiveness and effi ciency of
signifi cant business processes, safeguarding
of assets, the maintenance of proper
accounting records and the reliability of
the fi nancial information as well as non
fi nancial considerations.
The Board has delegated the responsibility
for the establishment and maintenance
of a framework of internal control and the
ethical standards for the management of the
consolidated entity to the Audit Committee.
The Audit Committee also provides the
Board with additional assurances regarding
the reliability of the fi nancial information for
inclusion in the fi nancial report. All members
of the Audit Committee are independent
Non-Executive Directors’. The members of
the audit committee during the year were
Grant Boyce (Chairman), Richard Hill and
John Eady. The qualifi cations of the members
of the Audit Committee are contained in the
Directors Report. In addition the Directors’
report sets out the number of meetings
attended by each member.
The Audit Committees is also responsible
for nomination of the external auditors and
reviewing the adequacy of the scope and
quality of the annual statutory audit and half
year statutory review. The Audit Committees
charter can be found on the Company’s
website in the “Corporate Governance”
web pages.
Policies and procedures in place with respect
to monitoring the performance of the Directors
and Senior Executives are set out in the
Directors’ Report under the section headed
“Remuneration Report”. The performance
evaluation process has been completed for all
Directors and Senior Executives within the last
twelve months, in line with Company policy.
Remuneration Committee
The Remuneration Committee operates
under a charter approved by the Board.
The charter can be viewed on the company
website. It augments the work of the Board
through the development and monitoring of
the Company’s remuneration policies and
processes and the through the provision of
feedback to the Board and recommendations
for action.
The Committee reviews the remuneration
of the Non Executive Directors, Executive
Directors and key Executives by reference
to independent data, external professional
advice and the requirements to retain
high quality management. Refer to the
Directors’ Report for details of performance
evaluation, remuneration policy and the value
of remuneration (both monetary and non-
monetary) paid to each Director and Key
Executive during the year.
There is no scheme to provide retirement
benefi ts, other than superannuation, for Non
Executive Directors.
The members of the Remuneration
Committee are all independent Non-Executive
Directors. During the year the members were
John Eady (Chairman), Richard Hill and
Grant Boyce.
Details of the number of meetings held
during the year and the number of meetings
attended by each member during the year
are contained in the Directors’ Report.
12 Sirtex Annual Report 2009
(cid:129)
•
Occupational health
and safety and equal
opportunity laws
Information technology
To this end, comprehensive
practices are in place that are
directed towards achieving the
following objectives
(cid:129)
•
(cid:129)
Effective and effi cient use of
the Company’s resources
Compliance with applicable
laws and regulations
Preparation of reliable
published fi nancial
information
The Board oversees an annual
assessment of the effectiveness
of risk management and internal
compliance and control. The
responsibility for undertaking
and assessing risk management
and internal control effectiveness
is delegated to management.
Annually, management is
required and has provided to
the Board a report assessing
the effi ciency and effectiveness
of risk management and
associated internal compliance
and control procedures.
Risk Management
The Board determines the
Company’s risk profi le and is
responsible for overseeing and
approving risk management
strategy and policies, internal
compliance and internal control.
The Board has delegated
monitoring Risk Management
performance to the Audit
Committee and its operation has
been delegated to Sirtex’s
Executive Management.
Employees are required to be
conversant with the company’s
risk management policies,
standard operational procedures
associated with risk management
and their employment, and to
actively participate in risk
management matters.
The Board and Executive
Management continue to identify
and monitor the general areas of
risk including:
(cid:129)
•
(cid:129)
•
(cid:129)
•
(cid:129)
•
Economic outlook
Political policy regarding
healthcare and
reimbursement
Competitor products /
research and development
programs
Market demand and prices,
including supplies
Legal proceedings
commenced against the
company (if any)
Environmental regulations
Ethical issues including those
relating to pharmaceutical
research and development
Other government
regulation including those
specifi cally relating to the
biotechnology and heath
industries
)
d
e
u
n
i
t
n
o
c
(
t
n
e
m
e
t
a
t
S
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
Sirtex Annual Report 2009 13
t
r
o
p
e
R
l
a
i
c
n
a
n
i
F
15 Directors’ Report
22 Auditor’s Independence
Declaration
23 Directors’ Declaration
24 Independent Auditor’s
Report
26 Income Statement
27 Balance Sheet
28 Statements of change
in equity
30 Cash fl ow statement
31 Notes to the fi nancial
statements
55 Additional Information
SIRTEX MEDICAL LTD AND ITS
CONTROLLED ENTITIES
A.B.N.: 35 078 166 122
FINANCIAL REPORT FOR THE YEAR
ENDED 30 JUNE 2009
14 Sirtex Annual Report 2009
Directors’ Report (continued)
Directors’ Report
For the year ended 30 June 2009
For the year ended 30 June 2009
For the year ended 30 June 2009
The Directors of Sirtex Medical Ltd present their report, together with the fi nancial statements of the Group,
being the Company and its controlled entities (consolidated entity), for the year ended 30 June 2009.
Directors
The Directors of Sirtex Medical Ltd during the fi nancial year and until the date of this report are Mr R. Hill,
Dr J. Eady, Mr G. Boyce, and Mr G. Wong. Details of the Directors, including their skills, experience, and
expertise, are set out below.
Richard Hill - Chairman, B.A, LL.B (Sydney), LL.M (London)
Experience and Expertise
Mr Hill was appointed a director in September 2004 and Chairman in August 2006. He previously held senior
executive positions with HSBC Investment Bank in Hong Kong and New York and has extensive experience in
international M&A and Capital raising. He is a founding partner of Hill Young & Associates, a corporate advisory
fi rm. He is also an attorney of the New York State Bar.
Other Current Directorships
Calliden Limited - Chairman
Biota Holdings Limited
Pelorus Property Group Limited
Special Responsibilities
Member of the Audit Committee and the Remuneration Committee
Interest in Shares and Options
Nil
Dr. John Eady – Non-executive Director, Deputy Chairman, B.Sc. (Hons), Ph.D, FTSE
Experience and Expertise
Dr Eady was appointed director in March, 2005. He spent most of his career with CRA limited in a range
of senior executive positions. He has broad Board experience including that with the Australian Federal
Government’s Industry, Research and Development Board. Dr Eady is a Fellow of the Academy of
Technological Sciences and Engineering and is also an Adjunct Professor within RMIT University’s Graduate
School of Business. He consults extensively on business improvement in Asia & North America.
Special Responsibilities
Chairman of the Remuneration Committee and Member of the Audit Committee.
Former Directorships in the last 3 years
Frigrite Limited
Interest in Shares and Options
Nil
Grant Boyce – Non-executive Director, CA, B.Com
Experience and Expertise
Mr Boyce was appointed director in December 2002. He is a Chartered Accountant and the founder of
Montrose Partners, a West Australian fi rm of chartered accountants. He was a partner with Ernst & Young and
worked in their Perth and New York offi ces. He has also served previously as Company Secretary for Sirtex.
Special Responsibilities
Chairman of the Audit Committee and Member of the Remuneration Committee.
Interest in Shares and Options
5,000 ordinary shares in Sirtex Limited
Sirtex Annual Report 2009 15
Directors’ Report (continued)
For the year ended 30 June 2009
Gilman Wong - Executive Director and Chief Executive Offi cer
Experience and Expertise
Mr Wong was appointed Chief Executive Offi cer in May 2005 and director in June 2005. Mr Wong previously
held CEO and senior executive positions in the commercial and industry sector including 10 years with Email
Limited. He has a strong planning and sales and marketing background.
Interest in Shares and Options
Nil
Company Secretary
Darren Smith – Company Secretary and Chief Financial Offi cer, MBA, BBus, CPA
Experience and Expertise
Mr Smith was appointed company secretary in July 2008 and Chief Financial Offi cer in February 2009
(previously interim CFO). Mr Smith previously held CFO and senior executive fi nance and general management
positions in a number of international, Australian listed and private companies. He has signifi cant experience in a
range of commercial environments including FMCG, services and manufacturing industries.
Interest in Shares and Options
15,000 ordinary shares in Sirtex Limited
Directors’ meetings
The number of Directors’ meetings (including meetings of committees of Directors) and number of meetings
attended by each of the Directors of the company during the fi nancial year are:
Directors
Board of Directors
Remuneration Committee
Audit Committee
Held
Attended
Held
Attended
Held
Attended
R. Hill (Chairman)
Dr J. Eady
G. Boyce
G. Wong
11
11
11
11
10
11
11
11
4
4
4
-
4
4
4
-
6
6
6
-
6
6
6
-
Principal activities
Sirtex Medical Ltd and its controlled entities form a biotechnology and medical device company whose primary
objective is to manufacture and to distribute effective liver cancer treatments utilizing small particle technology to
approved markets in Asia-Pacifi c, Europe and the United States of America.
Review of operations
Revenue from the sale of goods for the year ended 30 June 2009 was $65,559,000 representing revenue
growth of 72% above last year’s $38,125,000. There were two key factors infl uencing revenue growth. Firstly
a 42% growth in the number of SIR-Spheres microspheres doses sold and secondly the favourable impact of
the depreciation of the Australian dollar against the US dollar and the Euro (as a majority of revenue is currently
earned in these currencies).
16 Sirtex Annual Report 2009
Directors’ Report (continued)
Directors’ Report (continued)
For the year ended 30 June 2009
For the year ended 30 June 2009
All regional markets performed with double digit growth. In doses sold, the US achieved approximately
28% growth selling approximately 2,300 doses. Europe had an outstanding year with 117% growth selling
approximately 1,000 doses as a number of the business’s marketing initiatives begin to yield results.
Asia Pacifi c achieved approximately 17% growth with promising opportunities as the business continues
to develop new markets within Asia Pacifi c.
Gross margin improved to 80.7% for the year ended 30 June 2009 compared to 73.6% for last fi nancial year.
This is partly due to the benefi t from the full year operation of our manufacturing facility in Wilmington,
USA that was commissioned in February 2008.
Profi t after tax for the year ended 30 June 2009 was $18,229,000 compared to last year $1,210,000.
The weighted average effective tax rate for the year was 21%.
Dividends
No dividends have been paid or declared since the start of the fi nancial year.
Signifi cant changes in state of affairs
During the fi nancial year there were no signifi cant changes in the state of affairs of the Consolidated Entity other
than that referred to in the fi nancial statements or notes thereto.
Future developments, prospects and business strategies
Disclosure of information regarding likely developments in the operations of the Consolidated Entity in future
fi nancial years and the expected results of those operations is likely to result in unreasonable prejudice to the
Consolidated Entity. Accordingly, this information has not been disclosed in this report.
Environmental regulations
The operations are not subject to signifi cant environmental regulation under the law of the Commonwealth
or state.
Share options
Share options granted to key management personnel
There were no share options granted to the directors or other key management personnel of the Group during
or since the end of the fi nancial year.
Share options on issue at year end or exercised during the year
During the year ended 30 June 2009, there were no ordinary shares of Sirtex Medical Ltd issued on the exercise
of options. A total of 200,000 share options lapsed during the year, and no further share options have been
issued since 30 June 2009.
Directors’ interests
The relevant interest of each director in the share capital of the Company, as notifi ed by the directors to the ASX
in accordance with section 205G(1) of the Corporations Act 2001, at the date of this Report is as follows:
Directors
2009
2009
2008
2008
Ordinary Shares
Share Options
Ordinary Shares
Share Options
R. Hill
Dr J. Eady
G. Boyce
G. Wong
-
-
5,000
-
-
-
-
-
-
-
5,000
-
-
-
-
-
Sirtex Annual Report 2009 17
Directors’ Report (continued)
For the year ended 30 June 2009
Indemnifi cation of offi cers and auditors
During or since the fi nancial year, the Company has paid premiums to insure each of the directors of the Group
against liabilities incurred by them arising out of their conduct while acting in the capacity of director, subject to
certain terms and conditions. The insurance policy prohibits disclosure of the value of the premium. During
or since the fi nancial year, the Company has also agreed to continue to indemnify the directors of the Group
against certain liabilities incurred by them arising out of their conduct while acting in the capacity of director,
subject to certain terms and conditions, and to the applicable requirements of the Corporations Act.
Events after balance date
There has not been any matter or circumstance, other than that referred to in the fi nancial statements or notes
thereto, that has arisen since the end of the fi nancial year, that has signifi cantly affected, or may signifi cantly
affect, the operations of the Consolidated Entity, the results of those operations, or the state of affairs of the
Consolidated Entity in future fi nancial years.
Proceedings on behalf of the Company
No person has applied for leave of Court to bring proceedings on behalf of the company or intervene in any
proceedings to which the company is a party for the purpose of taking responsibility on behalf of the company
for all or any part of those proceedings. The company was not a party to any such proceedings during the year
except for those mentioned in Note 23.
Non-audit services
The Board of Directors, in accordance with advice from the audit committee, is satisfi ed that the provision
of non-audit services during the year is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001. The directors are satisfi ed that their services disclosed below did not
compromise the external auditor’s independence for the following reasons:
(cid:129)
(cid:129)
all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure
they do not adversely affect the integrity and objectivity of the auditor; and
the nature of the services provided do not compromise the general principles relating to auditor
independence in accordance with APES 110: Code of ethics for Professional Accountants set out by the
Accounting Profession Ethical Standards Board.
There were no non-audit services performed during the year.
Details of amounts paid or payable to the auditor for services provided during the year are outlined in Note 28.
Auditor’s independence declaration
The auditor’s independence declaration for the year ended 30 June 2009 has been received and can be found
on page 22.
Rounding off of amounts
The company is an entity to which ASIC Class Order 98/100 applies and, accordingly, amounts in the fi nancial
statements and directors’ report have been rounded to the nearest thousand dollars, unless otherwise indicated.
Remuneration report
This report details the nature and amount of remuneration for each of the key management personnel (KMP).
Remuneration policy
The remuneration policy of Sirtex Medical Ltd has been designed to align director and other KMP objectives with
shareholder and business objectives. The Board of Sirtex Medical Ltd believes the remuneration policy to be
appropriate and effective in its ability to attract and retain appropriate KMP to run and manage the Consolidated
Entity, as well as create goal congruence between directors, other KMP and shareholders.
18 Sirtex Annual Report 2009
Directors’ Report (continued)
For the year ended 30 June 2009
The Remuneration Committee reviews and develops the remuneration policies and reviews parameters
applicable to all Sirtex employees, and recommends their approval to the Board. It also reviews and
recommends approval by the Board of remuneration packages, terms of employment and termination
packages applicable to all directors and those other KMP reporting directly to the CEO.
The Board’s policy for determining the nature and amount of remuneration for board members and other KMP
of the Consolidated Entity is as follows:
(cid:129)
(cid:129)
(cid:129)
The remuneration policy, setting the terms and conditions for the executive directors and other KMP, was
developed by the Remuneration Committee and approved by the Board after reviewing extensive market
data and seeking professional advice from independent external consultants.
All other KMP receive a base salary (based on factors such as role and experience), superannuation and are
eligible for fringe benefi ts, and performance incentives.
The remuneration committee reviews executive packages annually by reference to the Consolidated Entity’s
performance, executive performance and comparable information from industry sectors and other listed
companies in similar industries.
The performance of other KMP is measured against criteria agreed at least annually, directly with the CEO or
through him for his direct reports. These criteria refl ect current strategic initiatives and goals. The performance
of the CEO and non-executive directors is measured against criteria that are determined annually by the Board.
These criteria detail expectations and refl ect short and long-term goals and stakeholder interests. All bonuses
and incentives must be linked to predetermined performance criteria. The Board may, however, exercise its
discretion in relation to approving incentives, bonuses and options, and can recommend changes to the
committee’s recommendations. The policy is designed to attract the highest caliber of key management
personnel and reward them for performance that results in long-term growth in stakeholder value.
The executive director (CEO) and other key management personnel receive a superannuation guarantee
contribution required by the government, and do not receive any other retirement benefi ts. Some individuals,
however, have chosen to sacrifi ce part of their salary to increase payments towards superannuation.
All remuneration paid to key management personnel is valued at the cost to the company and expensed.
The board policy is to remunerate non-executive directors at market rates for comparable companies for time,
commitment and responsibilities. The remuneration committee recommends payments to the non-executive
directors and reviews their remuneration annually, based on market practice, duties and accountability.
Independent external advice is sought. The maximum aggregate amount of fees that can be paid to non-
executive directors is subject to approval by shareholders at the Annual General Meeting. In accordance with
recommended good practice, non-executive directors do not receive incentive payments.
Performance based remuneration
As part of each executive director and other key management personnel’s remuneration package, there is a
performance-based component, refl ecting agreed key performance indicators (KPIs). The intention is to facilitate
goal congruence between executive director and other key management personnel with that of the business
and stakeholders. The KPIs are specifi cally tailored to the accountabilities of the executive director and other key
management personnel. They target areas the board believes hold greater potential for group expansion and
profi t, covering both short- and long-term goals. The level set for each KPI is based on budgeted fi gures for the
group and respective industry standards.
Performance in relation to the KPIs is assessed annually, with bonuses being awarded depending on that
performance and its relative effect on Group operations.
Sirtex Annual Report 2009 19
Directors’ Report (continued)
For the year ended 30 June 2009
Key management personnel remuneration details
The following table provides the remuneration details of key management personnel of the Group
Short-term
Post-employment
Salary
& fees
Bonus
Non-
monetary
Super-
annuation
Benefi ts
Equity Other
Long
Term
Options
Total
Perfor-
mance
related
$
$
$
$
$
Non-executive Directors
R. Hill
Dr J. Eady
G. Boyce
Subtotal
2009
2008
2009
2008
2009
2008
2009
2008
119,600
115,000
15,624
30,046
62,400
60,000
197,624
205,046
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
52,496
35,454
-
-
52,496
35,454
-
-
-
-
-
-
-
-
Other key management personnel
G. Wong (1)
Dr D. Cade
N. Geissel (2)
J. Reddington (3)
N. Lange
A. Axisa (4)
D. Smith (5)
Dr M. Vandenberg
D. Turner (6)
Subtotal
Total
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
2008
2009
402,255
381,002
214,109
205,827
-
122,757
362,124
93,497
364,308
523,038
233,596
203,345
276,485
1,200
212,975
187,464
276,450
160,902
30,950
72,797
-
-
-
81,342
-
161,759
-
-
-
83,727
-
50,683
-
90,440
-
-
-
-
-
-
26,061
-
176,822
88,975
-
14,885
-
-
-
-
25,264
13,745
17,807
13,745
19,086
-
-
-
-
-
-
3,120
18,711
4,582
-
13,745
32,262
50,520
2009
2008
2,342,302
1,718,130
701,650
30,950
228,147
103,860
99,520
87,866
2009
2008
2,539,926
1,923,176
701,650
30,950
228,147
103,860
151,954
123,320
-
-
-
-
-
20,777
-
-
-
-
-
-
-
-
-
-
-
-
20,777
-
20,777
$
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$
$
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
28
7
24
-
-
-
17
-
23
-
-
-
23
-
18
-
20
20
7
119,600
115,000
68,120
65,500
62,400
60,000
250,120
240,500
576,902
429,759
300,651
224,913
-
143,534
469,527
93,497
702,889
612,013
236,716
236,941
364,794
1,200
277,403
219,726
442,674
3,371,557
1,961,583
3,621,677
2,202,083
(1) The bonus value for G Wong represents an accounting provision. As at the time of release of this report, the board
has yet to approve a value.
(2) N Geissel departed from the Group on 3/12/07
(3) J Reddington commenced employment on 3/3/08
(4) A Axisa commenced maternity leave on 30/7/08 and departed from the Group on 25/2/09. The salary paid to her
during the year ended 30 June 2009 includes a termination payment of $183,000.
(5) D Smith commenced on 30/6/08 as interim CFO and was appointed CFO on 26/2/09
(6) D Turner was appointed Head of Global Marketing on 1/3/08
20 Sirtex Annual Report 2009
Directors’ Report (continued)
Directors’ Report (continued)
For the year ended 30 June 2009
For the year ended 30 June 2009
Performance conditions linked to Remuneration
G. Wong’s remuneration has the following performance based elements:
(cid:129)
Annual bonus available up to 25% of base salary made up of 10% on achieving total company budget
profi t, 5% on achieving North American budgeted profi t, 5% on achieving European budgeted profi t,
and 5% on achieving Rest of World budgeted profi t.
(cid:129)
Up to futher 15% of base salary at the discretion of the Board
No other Director’s remuneration includes performance based elements.
G. Wong is employed by Sirtex Medical Ltd under an employment agreement with no fi xed term. The notice
period is 3 month (if the employment is terminated by G. Wong). and 6 months (if the employment is terminated
by the company).
Other key management personnel remuneration includes a performance-based element based on KPI’s of the
Group and of the regions.
The Report of the Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of
the Board of Directors
Gilman Wong
Director
28 August 2009
Sirtex Annual Report 2009 21
Auditor’s Independence Declaration
For the year ended 30 June 2009
Grant Thornton NSW
ABN 25 034 787 757
Level 17, 383 Kent Street
Sydney NSW 2000
PO Locked Bag Q800
QVB Post Offi ce
Sydney NSW 1230
T +61 2 8297 2400
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E info.nsw@grantthornton.com.au
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Sirtex Medical Limited
In accordance with the requirements of section 307C of the Corporations Act
2001, as lead auditor for the audit of Sirtex Medical Limited for the year ended
30 June 2009, 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.
GRANT THORNTON NSW
Chartered Accountants
N J Bradley
Partner
Sydney, 28 August 2009
Grant Thornton Australia Limited is a member fi rm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member fi rms are not a
worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.
Liability limited by a scheme approved under Professional Standards legislation.
22 Sirtex Annual Report 2009
Directors’ Declaration
For the year ended 30 June 2009
The directors of the company declare that:
1. The fi nancial atatements and notes, as set out on pages 13 to 41, are in accordance
with the Corporation Act 2001 and:
a. comply with Accounting Standards and Corporations Regulations 2001; and
b. give a true and fair view of the company’s and consolidated entity’s fi nancial
position as at 30 June 2009 and of their performance for the year ended on
that date.
2. The Chief Executive Offi cer and Chief Finance Offi cer have each declared that
a. the fi nancila records of the company for the fi nancial year have been properly
maintained in accordance with section 286 of the Corporation Act 2001;
b. the fi nancial statements and notes for the fi nancial year comply with Accounting
Standards and
c. the fi nancial statements and notes for the fi nancial year give a true and fair view
3. In the directors’ opinion, there are reasonable grounds to believe that the company
will be able to pay its debts as and when they become due and payable.
This declaration is made in accordane with a resolution of the Boards Directors.
On behalf of the directors
Gilman Wong
Director
28 August 2009
Sirtex Annual Report 2009 23
Independent Auditor’s Report
For the year ended 30 June 2009
Grant Thornton NSW
ABN 25 034 787 757
Level 17, 383 Kent Street
Sydney NSW 2000
PO Locked Bag Q800
QVB Post Offi ce
Sydney NSW 1230
T +61 2 8297 2400
F +61 2 9299 4445
E info.nsw@grantthornton.com.au
W www.grantthornton.com.au
Independent Auditor’s Report
To the members of Sirtex Medial Limited
Report on the Financial Report
We have audited the accompanying fi nancial report of Sirtex Medical Limited, (the company) which
comprises the balance sheet as at 30 June 2009, and the income statement, statement of changes
in equity and cash fl ow statement for the year ended on that date, a summary of signifi cant
accounting policies, other explanatory notes and the directors’ declaration of the consolidated entity
comprising the company and the entities it controlled at the year’s end or from time to time during
the fi nancial year.
Directors’ responsibility for the fi nancial report
The directors of the company are responsible for the preparation and fair presentation of the fi nancial
report in accordance with Australian Accounting Standards (including the Australian Accounting
Interpretations) and the Corporations Act 2001. This responsibility includes establishing and
maintaining internal controls relevant to the preparation and fair presentation of the fi nancial report that
is free from material misstatement, whether due to fraud or error; selecting and applying appropriate
accounting policies; and making accounting estimates that are reasonable in the circumstances. In
Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation
of Financial Statements, that compliance with the Australian equivalents to International Financial
Reporting Standards ensures that the fi nancial report, comprising the fi nancial statements and notes,
complies with International Financial Reporting Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the fi nancial 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 fi nancial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures
in the fi nancial report. The procedures selected depend on the auditor’s judgement, including
the assessment of the risks of material misstatement of the fi nancial 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 fi nancial 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 fi nancial report.
We believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis
for our audit opinions.
24 Sirtex Annual Report 2009
Independent Auditor’s Report (continued)
For the year ended 30 June 2009
Independence
In conducting our audit, we complied with applicable independence requirements of the
Corporations Act 2001.
Auditor’s opinion
In our opinion:
a. the fi nancial report of Sirtex Medical Limited is in accordance with the Corporations Act 2001,
including:
i giving a true and fair view of the company’s and consolidated entity’s fi nancial position as
at 30 June 2009 and of their performance for the year ended on that date; and
ii complying with Australian Accounting Standards (including the Australian Accounting
Interpretations)
and the Corporations Regulations 2001; and
b. the fi nancial report also complies with International Financial Reporting Standards as disclosed
in Note 1.
Report on the Remuneration Report
Our responsibility is to express an opinion on the fi nancial report based on our audit. We
conducted our audit in We have audited the Remuneration Report included on pages 6 to 8
of the directors’ report for the year ended 30 June 2009. 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 Sirtex Medical Limited for the year ended 30
June 2009, complies with section 300A of the Corporations Act 2001.
GRANT THORNTON NSW
Chartered Accountants
N J Bradley
Partner
Grant Thornton Australia Limited is a member fi rm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member fi rms are not a worldwide
partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.
Liability limited by a scheme approved under Professional Standards legislation.
Sirtex Annual Report 2009 25
Income Statement
For the year ended 30 June 2009
2009
$’000 Note
2009
$’000
2008
$’000
2009
$’000
2008
$’000
Consolidated
Company
Revenue from the sales of goods
2(a)
65,559
38,125
Cost of sales
Gross profi t
Other revenue
Other income
Marketing expenses
Research expenditure
Regulatory expenses
Quality assurance expenses
Clinical trials expenses
Administration expenses
Other expenses from ordinary activities
Profi t before income tax expense
Income tax expense
Net profi t attributable to members of
the parent entity
Earnings per share
Basic earnings per share
Diluted earnings per share
Dividends per share
2(b)
2(c)
4
19
19
(12,606)
(10,043)
52,953
28,082
1,334
6,994
927
324
(19,342)
(15,978)
(2,889)
(1,551)
(189)
(438)
(6,005)
(8,211)
(1,055)
23,152
(4,923)
(269)
(149)
(2,262)
(6,453)
(172)
2,499
(1,289)
-
-
-
-
-
-
13,564
-
(623)
9,671
49
(1,368)
-
-
-
-
(6,601)
(131)
6,209
(2,056)
-
-
-
-
(4,496)
(457)
3,399
(1,395)
18,229
1,210
4,153
2,004
Cents
Cents
32.7
32.7
-
2.2
2.2
-
The fi nancial statements should be read in conjunction with the accompanying notes.
26 Sirtex Annual Report 2009
Balance Sheet
As at 30 June 2009
Consolidated
Company
Note
2009
$’000
2008
$’000
2009
$’000
2008
$’000
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Financial assets
Other current assets
Current tax assets
Total – CURRENT ASSETS
NON-CURRENT ASSETS
Financial assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Total - NON-CURRENT ASSETS
TOTAL ASSETS
5(a)
6
7
8
9
10(a)
8
11
12
10(b)
26,521
12,438
1,399
230
582
460
41,630
-
3,512
1,617
3,164
8,293
6,921
9,623
594
163
497
2,950
20,748
-
3,254
1,762
2,608
7,624
49,923
28,372
24,712
3,973
-
80
157
-
28,922
62
327
1,502
369
2,260
31,182
4,934
26,477
-
141
128
2,943
34,623
62
383
1,747
381
2,573
37,196
CURRENT LIABILITIES
Trade and other payables
Current tax liabilities
Short-term provisions
Interest-bearing loans
Other current liabilities
Total - CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Long-term provisions
Deferred tax liabilities
Total - NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Issued capital
Reserves
Retained earnings / (accumulated losses)
Total – EQUITY
13
14(a)
15(a)
16
15(b)
14(b)
17
18
5,791
2,110
1,605
64
-
4,701
21,713
32,198
231
46
-
11
36
145
64
-
-
-
-
-
9,570
4,989
21,958
32,198
185
989
1,174
10,744
96
-
96
37
53
90
17
-
17
5,085
22,048
32,215
39,179
23,287
9,134
4,981
23,521
(882)
16,540
39,179
23,521
2,012
(2,246)
23,287
23,521
-
(14,387)
9,134
23,521
557
(19,097)
4,981
The fi nancial statements should be read in conjunction with the accompanying notes.
Sirtex Annual Report 2009 27
Statement of changes in equity
As at 30 June 2009
Ordinary
Shares
$’000
Option
Reserve
$’000
FC Translation
Reserve
$’000
Retained
Profi ts
$’000
Total
$’000
Consolidated Entity
Balance at 1 July 2007
Foreign currency translation reserve
Net income recognised directly in equity
Profi t attributable to members of parent entity
Total recognised income and expense for the period
Transfer from option reserve to retained profi ts
Dividends paid or provided for
Balance at 30 June 2008
Foreign currency translation reserve
Net income recognised directly in equity
Profi t attributable to members of parent entity
Total recognised income and expense for the period
Transfer from option reserve to retained profi ts
Dividends paid or provided for
Balance at 30 June 2009
23,521
638
1,142
(3,537)
21,764
-
-
-
-
-
-
-
-
-
-
(81)
-
313
313
-
-
-
-
-
-
313
313
1,210
1,210
1,210
1,210
81
-
-
-
23,521
557
1,455
(2,246)
23,287
-
-
-
-
-
-
23,521
-
-
-
-
(557)
-
-
(2,337)
(2,337)
-
-
(2,337)
(2,337)
-
-
-
-
18,229
18,299
18,299
18,299
557
-
-
-
(882)
16,540
39,179
The fi nancial statements should be read in conjunction with the accompanying notes.
28 Sirtex Annual Report 2009
Statement of changes in equity (continued)
As at 30 June 2009
Ordinary
Shares
$’000
Option
Reserve
$’000
FC Translation
Reserve
$’000
Retained
Profi ts
$’000
Total
$’000
Parent Entity
Balance at 1 July 2007
Foreign currency translation reserve
Net income recognised directly in equity
Profi t attributable to members of parent entity
Total recognised income and expense for the period
Transfer from option reserve to retained profi ts
Dividends paid or provided for
Balance at 30 June 2008
Foreign currency translation reserve
Net income recognised directly in equity
Profi t attributable to members of parent entity
Total recognised income and expense for the period
Transfer from option reserve to retained profi ts
Dividends paid or provided for
Balance at 30 June 2009
23,521
638
-
-
-
-
-
-
23,521
-
-
-
-
-
-
23,521
-
-
-
-
(81)
-
557
-
-
-
-
(557)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(21,182)
2,977
-
-
-
-
2,004
2,004
2,004
2,004
81
-
-
-
(19,097)
4,981
-
-
-
-
4,153
4,153
4,153
4,153
557
-
-
-
(14,387)
9,134
The fi nancial statements should be read in conjunction with the accompanying notes.
Sirtex Annual Report 2009 29
Cash Flow Statement
For the year ended 30 June 2009
2009
$’000
CASH FLOWS FROM OPERATING
ACTIVITIES
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
Receipts from customers
62,557
34,331
1
(6,481)
Payments to suppliers and employees
(42,664)
(32,374)
(1,797)
Receipts from government grants
Receipts from license fees
Interest received
Interest paid
248
113
450
(9)
812
-
439
-
Net income tax (paid) / received
(555)
(6,694)
208
-
413
(9)
924
72
227
-
351
-
(6,696)
Net cash provided by / (used in) operating
activities
5(b)
20,140
(3,486)
(260)
(12,527)
CASH FLOWS FROM INVESTING
ACTIVITIES
Proceeds received from sale of plant and equipment
Purchase of plant and equipment
Purchase of short term funds
-
(604)
-
-
(169)
(85)
-
(151)
-
(7)
(87)
(86)
Net cash used in investing activities
(604)
(254)
(151)
(180)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from short term borrowings
Repayment of short term borrowings
Net cash provided by fi nancing activities
Net increase / (decrease) in cash held
Cash at the beginning of fi nancial year
Cash at the end of fi nancial year
5(a)
96
(32)
64
19,600
6,921
26,521
-
-
-
(3,740)
10,661
6,921
20,221
13,560
(32)
-
20,189
19,778
4,934
24,712
13,560
853
4,081
4,934
The fi nancial statements should be read in conjunction with the accompanying notes.
30 Sirtex Annual Report 2009
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES
The fi nancial report is a general-purpose fi nancial report which has been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the
Australian Accounting Standards Board and the Corporations Act 2001. The report includes the consolidated
fi nancial statements and notes of Sirtex Medical Ltd and controlled entities, and the separate fi nancial
statements and notes of Sirtex Medical Ltd as an individual parent entity (“Parent entity”).
Australian Accounting Standards include Australian equivalents to International Financial Reporting Standards
(AIFRS). Compliance with AIFRS ensures that the fi nancial report of Sirtex Medical Ltd complies with International
Financial Reporting Standards (IFRS) in their entirety. Material accounting policies adopted in the preparation of
this fi nancial report are presented below and have been consistently applied unless otherwise stated.
This fi nancial report has been prepared on an accruals basis and is based on historical costs, modifi ed, where
applicable, by the measurement at fair value of selected non-current assets, fi nancial assets and fi nancial liabilities.
(a) Principles of consolidation
A controlled entity is any entity Sirtex Medical Ltd has the power to control the fi nancial and operating policies
of so as to obtain benefi ts from its activities.
A list of controlled entities is contained in Note 25 to the fi nancial statements. All controlled entities have a June
fi nancial year-end.
As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the
consolidated fi nancial statements as well as their results for the year then ended. Where controlled entities have
entered or left the consolidated group during the year, their operating results have been included/excluded from
the date control was obtained or until the date control ceased.
All inter-company balances and transactions between entities in the consolidated group, including any
unrealised profi ts or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have
been changed where necessary to ensure consistencies with those policies applied by the parent entity.
Minority equity interests in the equity and results of the entities that are controlled are shown as a separate item
in the consolidated fi nancial report.
(b) Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Taxation Offi ce. In these circumstances, the GST is recognised
as part of the cost of acquisition of the asset or as part of an item of the expense.
Receivables and payables are shown inclusive of GST. The net amount of GST recoverable from, or payable to,
the ATO is included as a current asset or liability in the balance sheet.
Cash fl ows are presented in the cash fl ow statement on a gross basis, except for the GST component of
investing and fi nancing activities, which are disclosed as operating cash fl ows.
(c) Government Grants
Government grants are recognised at fair value where there is reasonable assurance that the grant will be
received and all grant conditions will be met. Grants relating to expense items are recognised as income over
the periods necessary to match the grant to the costs they are compensating.
Grants relating to assets are credited to deferred income at amortised fair value and are credited to income over
the expected useful life of the asset on a straight-line basis.
(d) Provisions
Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for
which it is probable that an outfl ow of economic benefi ts will result and that outfl ow can be reliably measured.
(e) Intangibles
Goodwill
Goodwill and goodwill on consolidation are initially recorded at the amount by which the purchase price for a
business combination exceeds the fair value attributed to the interest in the net fair value of identifi able assets,
liabilities and contingent liabilities at date of acquisition.
Sirtex Annual Report 2009 31
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
Intellectual property
The fair value of intellectual property contributed by an outside equity interest holder to Sirtex Medical Ltd, has
been capitalised and recorded at fair value at the time of the contribution. The asset will be amortised on a
straightline basis over a period of 20 years.
Research and development
Expenditure during the research phase of a project is recognised as an expense when incurred. Development
costs are capitalised only when technical feasibility studies identify that the project will deliver future economic
benefi ts and these benefi ts can be measured reliably.
(f) Acquisition of assets
All assets acquired, including plant and equipment and intangibles other than goodwill, are initially recorded at
their cost of acquisition, being fair value of the consideration provided plus incidental costs directly attributable
to the acquisition and depreciation or amortisation as outlined below.
The cost of plant and equipment constructed by the Consolidated Entity includes the cost of material and direct
labour, an appropriate proportion of fi xed and variable overheads and capitalised interest.
Carrying value
All items of plant and equipment are carried at the lower of cost less accumulated depreciation, amortisation
and impairment losses and their recoverable amount. The carrying amount is reviewed annually by directors
to ensure it is not in excess of the recoverable amount. The recoverable amount is assessed on the basis of
the expected discounted present value net cash fl ows that will be received from the asset’s employment and
subsequent disposal.
(g) Depreciation and amortisation
Items of plant and equipment, including leasehold assets, are depreciated or amortised on a reducing balance
basis so as to write off the net cost of each asset over its expected useful life. Assets are depreciated or
amortised from the date of acquisition or, in respect of internally constructed assets, from the time an asset is
completed and held ready for use.
Depreciation and amortisation rates are reviewed annually for appropriateness. When changes are made,
adjustments are refl ected prospectively in current and future fi nancial periods only.
The annual depreciation and amortisation rates used for each class of asset are as follows:
Plant & Equipment 10%-50%
Intellectual Property 5%
(h) Impairment of assets
At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine
whether there is any indication that those assets have been impaired. If such an indication exists, the
recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use,
is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount
is expensed to the income statement.
Impairment testing is performed annually for intangible assets with indefi nite lives.
Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
(i) Leases
Lease payments for operating leases, where substantially all the risks and benefi ts remain with the lessor,
are charged as expenses in the periods in which they are incurred. Lease incentives under operating leases
are recognised as a liability and amortised on a straight-line basis over the life of the lease term.
32 Sirtex Annual Report 2009
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
(j) Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products
includes direct materials, direct labour and an appropriate portion of variable and fi xed overheads. Costs are
assigned on the basis of weighted average costs.
(k) Employee benefi ts
Wages, salaries and annual leave
Liabilities for employee benefi ts for wages, salaries and annual leave expected to settle within 12 months of the
year end represent present obligations resulting from employees’ services provided up to reporting date,
calculated at undiscounted amounts based on remuneration wage and salary rates that the Consolidated Entity
expects to pay as at reporting date including related on costs, such as workers’ compensation insurance and
payroll tax. Employee benefi ts expected to be settled beyond 12 months are carried at the present value of the
estimated future cash fl ows.
Long service leave
The provision for employee benefi ts to long service leave represents the present value of estimated future cash
outfl ows to be made by the employer resulting from employees’ services provided up to reporting date. The
provision is calculated using expected future increases in remuneration rates, including related costs, and
expected settlement dates based on turnover history, and is discounted using the rates attaching to national
government securities at reporting date, which most closely match the terms of maturity of the related liabilities.
Superannuation plans
The Consolidated Entity contributes to various employee superannuation plans. Contributions are charged
against expense as they are made.
Share-based payments
The group has in the past operated a share-based compensation plan in form of an employee option plan.
The amount to be expensed over the vesting period has been determined by reference to the fair value of the
shares of the options granted.
(l) Receivables
Trade debtor terms vary from market to market depending on the economic factors relevant to the individual
market. The Consolidated Entity has actual trading terms ranging up to 120 debtor days. The collectability of
debts is assessed at reporting date and allowance made for any doubtful accounts.
The allowance for doubtful debts is specifi c with reference to the profi le of debtors in the Consolidated Entity’s
sales and marketing regions.
(m) Income tax
The charge for current income tax expense is based on the profi t for the year adjusted for any non-assessable
or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by
the balance sheet date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the fi nancial statements.
No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a
business combination, where there is no effect on accounting or taxable profi t or loss.
Sirtex Annual Report 2009 33
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or
liability is settled. Deferred tax is credited in the income statement except where it relates to items that may be
credited directly to equity, in which case the deferred tax is adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profi ts will be available
against which deductible temporary differences can be utilised.
The amount of benefi ts brought to account or which may be realised in the future is based on the assumption
that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will
derive suffi cient future assessable income to enable the benefi t to be realised and comply with the conditions of
deductibility imposed by the law.
Sirtex Medical Ltd and its wholly-owned Australian subsidiaries have formed an income tax consolidated group
under the tax consolidation regime. Each entity in the group recognises its own current and deferred tax
liabilities, except for any deferred tax liabilities resulting from unused tax losses and tax credits, which are
immediately assumed by the parent entity. The current tax liability of each group entity is then subsequently
assumed by the parent entity. The group notifi ed the Australian Tax Offi ce that it had formed an income tax
consolidated group to apply from 1 July 2004. The tax consolidated group has entered a tax sharing agreement
whereby each company in the group contributes to the income tax payable in proportion to their contribution to
the net profi t before tax of the consolidated group.
(n) Accounts payable
Liabilities are recognised for amounts to be paid in the future for goods and services received, whether or not
billed to the Company or Consolidated Entity.
(o) Borrowings
Bank loans are carried in the balance sheet at their principal amount. Interest expense is recognised on an
accruals basis.
(p) Comparative fi gures
Where required by Accounting Standards, comparative fi gures have been adjusted to conform to changes in
presentation for the current fi nancial year.
(q) Earnings per share
Basic earnings per share (EPS) is calculated by dividing the net profi t attributable to members of the parent
entity for the fi nancial period, after excluding any costs of servicing equity (other than ordinary shares) by the
weighted average number of ordinary shares of the Company, adjusted for any bonus issue.
Diluted EPS is calculated by dividing the basic EPS earnings, adjusted by the after tax effect of fi nancing costs
associated with dilutive potential ordinary shares and the effect on revenues and expenses of conversion to
ordinary shares associated with dilutive potential ordinary shares, by the weighted average number of ordinary
shares and dilutive potential ordinary shares of the Company adjusted for any bonus issue.
(r) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily
take a substantial period of time to prepare for their intended use or sale, are added to the cost of those assets,
until such time as the assets are substantially ready for their intended use or sale. All other borrowing costs are
recognised in the income statement in the period incurred.
34 Sirtex Annual Report 2009
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
(s) Financial instruments
Financial instruments are initially measured at cost on trade date, which includes transaction costs, when the
related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured
as set out below.
Loans and receivables are non-derivative fi nancial assets with fi xed or determinable payments that are not
quoted in an active market and are stated at amortised cost using the effective interest rate method. Non-
derivative fi nancial liabilities are recognised at amortised cost, comprising original debt less principal payments
and amortisation.
Foreign currency options entered into to hedge highly probable forecast transactions are accounted for as a
derivative. Changes in the fair value of derivatives are recorded in the Income Statement, together with any
changes in the fair value of hedged assets or liabilities that are attributable to the hedged risk.
(t) Cash and cash equivalents
Cash and cash equivalents include cash on hand and deposits held at call with banks and other short-term
highly liquid instruments with original maturity of three months or less. Restricted cash assets are shown within
other current fi nancial assets.
(u) Key estimates – impairment
The group assesses impairment at each reporting date by evaluating conditions specifi c to the group that may
lead to impairment of assets. Where impairment exists, the recoverable amount of the asset is determined.
Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.
Impairment of trade receivables is based on best estimates of amounts that will not be collected from debtors
for doses sold. For the year ended 30 June 2009, a total of $395,000 (2008: $165,000) of trade receivables has
been estimated as being impaired, the majority of which are in Europe.
(v) New Accounting Standards for Application in Future Periods
The AASB has issued new, revised and amended standards and interpretations that have mandatory application
dates for future reporting periods. The Group has decided against early adoption of these standards and does
not expect these requirements to have any material effect on the Group’s fi nancial statements.
AASB 8 – Operating Segments: effective for reporting periods commencing on or after 1 January 2009,
application by Group on 1 July 2009. Application of AASB8 may result in different segments, segment results
and different information being reported in one segment.
AASB 101 – Presentation of Financial Statements: effective for reporting periods commencing on or after 1
January 2009, application by Group on 1 July 2009. Application of AASB 101 will require the presentation of a
statement of comprehensive income and will make changes to the statement of changes in equity.
AASB 123 – Borrowing Costs: effective for reporting periods commencing on or after 1 January 2009,
application by Group on 1 July 2009. Application of AASB 123 will require the capitalisation of all borrowing
costs directly attributable to the acquisition, construction or production of a qualifying asset.
AASB 2008-1 (Amendments to AASB 2 – Share based Payments): effective for reporting periods commencing
on or after 1 January 2009, application by Group on 1 July 2009. Application of AASB 2008-1 will restrict
vesting conditions to service and performance conditions only.
Sirtex Annual Report 2009 35
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
2. REVENUE AND OTHER INCOME
(a) Revenue from the sale of goods
65,559
38,125
-
-
(b) Other revenue from ordinary activities
Grant income
Licensing income
License and management fees
Interest income
Other
(c) Other income
Realised foreign exchange gains
Unrealised foreign exchange gains
358
113
-
602
261
1,334
4,758
2,236
6,994
252
175
-
439
61
927
-
324
324
208
-
12,788
565
3
13,564
-
-
-
175
-
9,142
351
3
9,671
49
-
49
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
3. PROFIT FOR THE YEAR
Profi t from ordinary activities before income
tax includes the following expense items:
Cost of sales
License and management fees
Legal fees
Bad and doubtful debts
Employee benefi ts expense
Depreciation and amortisation of
Plant and equipment
Intangible assets
Operating lease expenses
Minimum lease payments
Foreign exchange losses
36 Sirtex Annual Report 2009
12,606
10,043
-
1,121
230
15,686
436
434
296
-
-
1,096
-
-
102
970
-
10,815
3,226
385
180
238
1,302
47
339
177
431
-
453
1,096
-
1,849
156
180
192
115
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
4. INCOME TAX EXPENSE
(a) The components of tax expense comprise:
Current tax
Deferred tax
Recoupment of prior year losses
Under provision in respect of prior years
(b) The prima facie tax on profi t from ordinary
activities before income tax is reconciled to the
income tax as follows:
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
6,282
813
(2,355)
183
4,923
1,265
453
(429)
-
1,289
2,033
23
-
-
1320
75
-
-
2,056
1,395
Net profi t before tax
23,152
2,499
6,209
3,399
Prima facie tax payable on profi t from ordinary
activities before income tax at 30%
6,946
759
1,863
1,029
Add/(less): Tax effect of
- Non deductible amortisation
- Non-deductible expenses
- Over provision in respect of prior years
Effect of higher tax rates on overseas income
Effect of Foreign Currency translation of tax balances
Timing differences and tax losses not brought to
account as deferred tax assets
Current and deferred taxes relating to
transactions, events and balances of wholly-owned
subsidiaries in the tax consolidated group
Eliminations for the tax consolidated group
Other
54
241
183
139
(277)
(2,409)
-
46
-
54
438
12
88
(368)
306
-
-
-
Income tax attributable to entity
4,923
1,289
54
116
54
312
-
-
-
-
-
-
23
2,056
-
-
-
-
-
-
-
1,395
The applicable weighted average effect tax rates
are as follows
21%
51%
31%
41%
(c) Franking Account
Franking Account Balance
9,209
11,182
9,209
11,182
Legislation to allow groups, comprising a parent entity and its Australian resident wholly-owned entities, to elect to consolidate
and be treated as a single entity for income tax purposes was substantially enacted on 21 October 2002. This legislation,
which includes both mandatory and elective elements, is applicable to the company. The directors elected for those entities
within the consolidated entity that are wholly-owned Australian resident entities to be taxed as single entity from 1 July 2004.
The implementation of the tax consolidation system was notifi ed to the Australian Tax Offi ce. The head entity within the tax-
consolidated group for the purposes of the tax consolidation system is Sirtex Medical Limited.
Sirtex Annual Report 2009 37
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
5. CASH AND CASH EQUIVALENTS
(a) Reconciliation of cash
Cash at the end of the fi nancial year as shown in the
cash fl ow statement is reconciled to items in the
balance sheet as follows:
Cash at bank and in hand
Short-term bank deposits
3,342
23,179
26,521
2,772
4,149
6,921
1,533
23,179
24,712
785
4,149
4.934
The effective interest rate on short-term bank deposits was 3.87% (2008: 5.24%). The deposits have an average maturity of
43 days.
(b) Reconciliation of cash fl ow from operations with profi t after income tax
Profi t after income tax
Non-cash fl ows in profi t:
Deprecation and amortisation
Share options expensed
Decrease/ (increase) in current tax assets
Decrease/ (increase) in deferred assets
Net foreign exchange differences
Changes in net assets and liabilities, net of the
effect effects of purchase or disposal of subsidiaries
(Increase)/ decrease in assets
Trade receivables
Other receivables
Inventories
Other current assets
(Increase)/ decrease in liabilities
Payables
Current tax liabilities
Short-term provisions
Other current liabilities
Long-term provisions
Deferred tax liabilities
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
18,229
1,210
4,153
2,004
870
-
2,489
(556)
(2,715)
565
227
386
-
336
1
(2,950)
2,943
(2,943)
453
313
12
(27)
75
-
(3,264)
(1,071)
(1)
(12,659)
424
(804)
(128)
(604)
1,879
1,548
1,694
89
989
-
(368)
-
866
(2,782)
11
(4)
44
-
22,702
-
(74)
(18)
36
145
(30,591)
21
53
-
-
-
3,652
(2,991)
-
(12)
10
-
Net cash fl ow from operating activities
20,140
(3,486)
(260)
(12,527)
38 Sirtex Annual Report 2009
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
6. TRADE AND OTHER RECEIVABLES
(a) Trade receivables
Trade receivables
Provision for impairment
(b) Other receivables
Receivables from employees
GST receivables
Receivables from subsidiaries
Other receivables
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
11,944
(395)
11,549
35
445
-
409
889
8,450
(165)
8,285
-
528
-
810
1,338
1
-
1
-
54
3,671
247
3,972
-
-
-
-
95
26,319
63
26,477
12,438
9,623
3,973
26,477
Receivables are assessed for recoverability based on the underlying terms of the contract. A provision for impairment is
recognised when there is objective evidence that an individual trade or term receivable is impaired. These amounts have
been included in the other expenses item (refer Note 3).
Movement in the provision for impairment of receivables is as follows:
Opening
balance
$’000
Change
for the yr
$’000
Amounts
written off
$’000
Closing
balance
$’000
Consolidated Group
Trade receivables
Company
Trade receivables
(165)
(230)
-
-
-
-
Impaired trade receivables
An amount of $395,000 was considered impaired as at 30 June 2009 (2008: $165,000).
Trade receivables past due but not impaired
Less than 30 days overdue
30-60 days overdue
More than 60 days overdue
No other receivables are past due.
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
1,616
557
671
810
520
1,862
-
-
-
(395)
-
-
-
-
Credit risk
The Group has no signifi cant concentration of credit risk with respect to any single counter party or group of counter parties
other than those receivables specifi cally provided for and shown above.
The class of assets described as Trade and other Receivables is considered to be the main source of credit risk related to
the Group.
No collaterals have been received from any of the trade debtors in form of a fi nancial guarantee.
Sirtex Annual Report 2009 39
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
1,399
594
-
-
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
230
230
-
-
163
163
-
-
80
80
62
62
141
141
62
62
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
582
582
497
497
157
157
128
128
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
460
2,950
-
2,943
369
299
2,496
3,164
2,608
556
3,164
381
145
2,082
2,608
3,061
(453)
2,608
369
-
-
369
381
(12)
369
381
-
-
381
456
(75)
381
7. INVENTORIES
Raw materials – at cost
8. OTHER FINANCIAL ASSETS
(a) Other current fi nancial assets
Security deposits paid
(b) Non-current fi nancial assets
Investments in wholly-owned subsidiaries
Controlled entities: refer Note 25
9. OTHER CURRENT ASSETS
Prepayments
10. TAX ASSETS
(a) Current tax assets
Current tax assets
(b) Deferred tax assets
Timing differences attributable to:
Parent entity
Entities in the tax consolidated group
Overseas entities
The overall movement in the deferred tax
account is as follows:
Opening balance
(Charge)/ credit to the income statement
40 Sirtex Annual Report 2009
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
11. PROPERTY, PLANT AND EQUIPMENT
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
Land and buildings
At cost
Accumulated depreciation
Net carrying amount
Plant and equipment
At cost
Accumulated depreciation
Net carrying amount
Assets work in progress
At cost
Accumulated depreciation
Net carrying amount
Total Property, Plant and Equipment
At cost
Accumulated depreciation
Net carrying amount
Movements in carrying amounts
Land and buildings
Carrying amount at beginning
Additions
Disposals
Depreciation expense
Carrying amount at end
Plant and equipment
Carrying amount at beginning
Additions
Disposals
Depreciation expense
Carrying amount at end
Assets work in progress
Carrying amount at beginning
Additions
Disposals
Depreciation expense
Carrying amount at end
Total Property, Plant and Equipment
Carrying amount at beginning
Additions
Disposals
Depreciation expense
Carrying amount at end
1,234
(87)
1,147
3,819
(1,458)
2,361
4
-
4
5,057
(1,546)
3,512
1,023
194
-
(70)
1,040
(17)
1,023
3,168
(966)
2,202
29
-
29
4,237
(983)
3,254
-
1,040
-
(17)
1,147
1,023
2,202
753
(68)
(526)
2,361
29
-
(25)
-
4
3,254
918
(68)
(592)
3,512
625
1,875
(6)
(292)
2,202
201
-
(172)
-
29
826
2,915
(178)
(309)
3,254
-
-
-
1,169
(846)
323
4
-
4
1,173
(846)
327
-
-
-
-
-
354
164
(8)
(187)
323
29
-
(25)
-
4
383
164
(33)
(187)
327
-
-
-
1,035
(681)
354
29
-
29
1,064
(681)
383
-
-
-
-
-
391
71
(4)
(104)
354
201
-
(172)
-
29
592
71
(176)
(104)
383
Sirtex Annual Report 2009 41
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
12. INTANGIBLE ASSETS
Software
At cost
Accumulated depreciation
Net carrying amount
Intellectual property
At cost
Accumulated depreciation
Net carrying amount
Total intangible assets
At cost
Accumulated depreciation
Net carrying amount
Movements in carrying amounts
Software
Carrying amount at beginning
Additions
Disposals
Depreciation expense
Carrying amount at end
Intellectual property
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
458
(254)
204
3,607
(2,194)
1,413
4,065
(2,448)
1,617
169
162
-
(127)
204
296
(126)
169
3,607
(2,014)
1,593
3,902
(2,140)
1,762
12
249
-
(91)
169
320
(231)
89
3,607
(2,194)
1,413
3,927
(2,425)
1,502
154
47
-
(112)
89
273
(119)
154
3,607
(2,014)
1,593
3,880
(2,133)
1,747
9
232
-
(87)
154
Carrying amount at beginning
1,593
1,773
1,593
1,773
Additions
Disposals
Depreciation expense
Carrying amount at end
Total intangible assets
Carrying amount at beginning
Additions
Disposals
Depreciation expense
Carrying amount at end
-
-
(180)
1,413
1,762
162
-
(307)
1,617
-
-
(180)
1,593
-
-
(180)
1,413
-
-
(180)
1,593
1,785
1,747
1,782
249
-
(272)
1,762
47
-
(292)
1,502
232
-
(267)
1,747
42 Sirtex Annual Report 2009
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
13. TRADE AND OTHER PAYABLES
Trade payables
Payables to wholly owned subsidiaries
Other accruals and payables
14. CURRENT TAX LIABILITIES
(a) Current tax liabilities
Current tax liability
(b) Deferred tax liabilities
Timing differences attributable to:
Parent entity
Entities in the tax consolidated group
Overseas entities
The overall movement in the deferred tax
account is as follows:
Opening balance
(Charge)/ credit to the income statement
15. PROVISIONS AND ACCRUALS
(a) Short-term Provisions
Employee benefi ts *
(b) Long-term Provisions
Employee benefi ts *
* Employee benefi ts include provisions for annual leave,
bonus and for long service leave
The overall movement in the deferred tax
account is as follows:
Opening balance
Additional provisions for the year
Amounts used during the year
Closing balance
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
3,233
-
2,558
5,791
2,607
-
2,094
4,701
234
20,231
1,248
27,713
240
31,640
318
32,198
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
2,110
2,110
231
231
53
735
201
989
-
989
-
-
-
-
-
-
36
36
53
-
-
53
-
53
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
1,605
1,605
185
185
46
1,961
(402)
1,605
46
46
96
96
-
91
(45)
46
145
145
38
38
-
257
(112)
145
-
-
-
-
-
-
-
-
-
-
17
17
-
13
(13)
-
Sirtex Annual Report 2009 43
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
15. PROVISIONS & ACCRUALS
CONTINUED
The overall movement in the deferred tax
account is as follows:
Opening balance
Additional provisions for the year
Amounts used during the year
Closing balance
16. INTEREST
-BEARING LOANS
Effective Interest
Maturity
Rate (%)
Current
Insurance premium funding
- unsecured
6.56
Aug 09
17. ISSUED CAPITAL
Issued capital
Share issue cost
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
96
112
(23)
185
52
44
-
96
17
6
(15)
38
7
10
-
17
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
64
64
-
-
64
64
-
-
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
24,779
(1,258)
23,521
24,779
(1,258)
23,521
24,779
(1,258)
23,521
24,779
(1,258)
23,521
Number of shares issued
55,768,136
55,768,136
55,768,136
55,768,136
Fully paid ordinary shares
Balance at beginning of the year
Balance at end of the year
Consolidated
2009
Company
2008
No (000)
$’000
No (000)
$’000
55,768
55,768
23,521
23,521
55,768
55,768
23,521
23,521
Fully paid ordinary shares carry one vote per share and carry the right to dividends. On winding up, ordinary shares
participate in dividends and the proceeds, in proportion to the number of shares held. The Company does not have a limited
number of authorized capital and issued shares do not have a par value.
Share options
At reporting date, there were no share options outstanding.
44 Sirtex Annual Report 2009
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
Capital management
Management controls the capital of the group in order to maintain a good debt to equity ratio, provide the shareholders
with adequate returns and ensure that the group can fund its operations and continue as a going concern. Management
effectively manages the group’s capital by assessing the group’s fi nancial risk and adjusting its capital structure in response
to changes in these risks and in the market. The responses include the management of debt levels, distributions to
shareholders, and share issues.
The company currently has no debt with the exception of a $64,000 debt funding for insurance premium which will be fully
repaid in August 2009.
18. RESERVES
Foreign Currency Translation Reserve (1)
Option Reserve (2)
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
(882)
-
(882)
1,455
557
2,012
-
-
-
-
557
557
(1) The translation of foreign controlled subsidiaries into the functional currency of the group gives rise to a foreign currency
translation reserve.
(2) Options issued under an Executive and Employee Share Option Plan in 2003 lapsed during the fi nancial year. There is
currently no option plan in place.
19. EARNINGS PER SHARE
(a) Basic earnings per share
Profi t from continuing operations attributable to equity
holders
Weighted average number of shares used in the calculation
of basic earnings per share
(a) Diluted earnings per share
Consolidated
2009
$
2008
$
18,299,000
1,210,000
55,768,136
55,768,136
Profi t from continuing operations attributable to equity
18,299,000
1,210,000
holders
Weighted average number of shares used in the calculation
of diluted earnings per share
55,818,136
55,970,328
Sirtex Annual Report 2009 45
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
20. SEGMENT INFORMATION
Segment revenues
External sales
Inter-segment(i)
Other
Total
2009
$’000
2008
$’000
2009
$’000
2008
$’000
2009
$’000
2008
$’000
2009
$’000
2008
$’000
2,738
43,957
18,863
2,356
69,006
37,764
321
28,254
7,516
4,362
102
-
-
-
-
562
189
-
72,065
48,319
18,965
40,682
28,443
7,516
139,350
76,641
(73,469)
(37,764)
8,007
499
73,887
39,376
2009
$’000
2008
$’000
11,621
1,295
10,398
23,314
(162)
23,152
(4,923)
1,338
876
285
2,499
-
2,499
(1,289)
18,229
1,210
Assets
Liabilities
2009
$’000
2008
$’000
2009
$’000
2008
$’000
83,499
118,955
17,652
22,605
7,036
6,741
41,973
20,722
6,058
85,418
25,688
13,953
108,187
148,301
68,753
125,059
(58,264)
(119,929)
(58,009)
(119,974)
49,923
28,372
10,744
5,085
Asia Pacifi c
North America
Europe
Total of all segments
Eliminations
Unallocated
Consolidated
Segment results
Asia Pacifi c
North America
Europe
Total of all segments
Eliminations
Profi t before income tax expense
Income tax expense
Profi t after income tax expense
Segment assets and liabilities
Asia Pacifi c
North America
Europe
Total of all segments
Eliminations
Consolidated
46 Sirtex Annual Report 2009
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
Other segment information: Segment assets and liabilities
Acquisition of segment assets
- Land and buildings
- Plant and equipment
Depreciation and amortisation of segment
assets
- Plant and equipment
- Intangibles
Asia Pacifi c
North America
Europe
2009
$’000
2008
$’000
2009
$’000
2008
$’000
2009
$’000
2008
$’000
-
-
70
428
52
287
214
180
-
725
410
-
51
56
126
-
-
132
57
-
-
41
45
-
For management purposes and reporting on primary segment information, the group is organized in three geographical
areas – Asia Pacifi c, North America and Europe. The group operates in only one business segment being the manufacturing
and sale of SIR-Spheres for treatment of liver cancer.
21. KEY MANAGEMENT PERSONNEL
Refer to the Remuneration Report contained in the Report of the Directors for details of the remuneration paid or payable to
each member of the Group’s key management personnel for the year ended 30 June 2009.
The totals of remuneration paid to key management personnel of the consolidated entity during the year are as follows:
Short-term employee benefi ts
Post-employment benefi ts
Other long-term benefi ts
Termination benefi ts
Share-based payment
2009
$
2008
$
3,333,594
2,057,986
105,083
-
183,000
-
123,320
20,777
-
-
3,621,677
2,202,083
Key management personnel shareholdings
The number of fully paid ordinary shares in Sirtex Medical Ltd held by each key management personnel of the Group during
the fi nancial year is as follows:
Balance at
beginning
Granted as
remuneration
Issued on
exercise of
options
Other
changes
Balance at end
30 June 2009
G.Boyce
D.Smith
30 June 2008
G.Boyce
5,000
-
5,000
-
-
-
-
-
-
-
15,000
5,000
15,000
-
5,000
Sirtex Annual Report 2009 47
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
22. SHARE OPTIONS
(a) Executive and employee share option plan
At reporting date, there was no Executive and Employee Share Option Plan in place. All options outstanding from the 2003
plan lapsed during the year.
Balance at beginning of the fi nancial year (I)
Granted during the fi nancial year (II)
Exercised during the fi nancial year (III)
Lapsed during the fi nancial year (IV)
Balance at end of the fi nancial year (V)
(I) Balance at beginning of the fi nancial year
Options – Series
No.
Grant date
2009
No.
2008
No.
200,000
250,000
-
-
-
-
(200,000)
-
(50,000)
200,000
Expiry/
exercise
date
Exercise
price
$
Issued 1 October 2003
200,000
01/10/03
30/09/08
4.85
(II) Granted during the fi nancial year
Options – Series
No.
Grant date
No options were granted during the fi nancial year
III) Exercised during the fi nancial year
Options – Series
No.
Grant date
No options were exercised during the fi nancial year.
IV) Lapsed during the fi nancial year
Options – Series
No.
Grant date
Expiry/
exercise
date
Exercise
price
$
Expiry/
exercise
date
Exercise
price
$
Expiry/
exercise
date
Exercise
price
$
Issued 1 October 2003
200,000
01/10/03
30/09/08
4.85
(V) Balance at end of fi nancial year
Options – Series
No.
Grant date
Expiry/
exercise
date
Exercise
price
$
The balance at the end of fi nancial year was nil
48 Sirtex Annual Report 2009
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
(b) Share options outside executive and employee share option plan
Balance at beginning of the fi nancial year
Granted during the fi nancial year
Exercised during the fi nancial year
Lapsed during the fi nancial year
Balance at end of the fi nancial year
2009
No.
2008
No.
-
-
-
-
-
-
-
-
-
-
23. Contingent assets and contingent liabilities
(1) Contingent assets
As previously reported, Sirtex Medical Limited (Sirtex) is a party to proceedings in the Federal Court of Australia issued by the
University of Western Australia (UWA Proceedings). Dr Bruce Gray (former director and a substantial shareholder of Sirtex) is
also a party to the UWA Proceedings. The UWA Proceedings are summarised as follows:
On 17 April 2008 Justice French delivered a judgment in the UWA Proceedings which included the Court:
1. dismissing the claims by UWA against Sirtex and Dr Gray;
2. fi nding in favour of Sirtex on its cross claim against Dr Gray;
3. ordering UWA to pay Sirtex’s costs of UWA’s claim against Sirtex; and
4. ordering Dr Gray to pay Sirtex’s costs of Sirtex’s cross claim against Dr Gray.
Sirtex has the benefi t of the general costs orders in its favour against UWA and Dr Gray and its claim for damages against Dr
Gray in respect of which Sirtex will be claiming any costs not recovered from UWA.
Sirtex is pursuing both claims as it has incurred in excess of $5.5 million in legal costs and expenses in relation to the UWA
Proceedings and related matters. The Court has scheduled a hearing of these claims for 9-13 November 2009 and Sirtex
expects the claims to be determined some time after the conclusion of the hearing when the Court delivers its Judgment.
Whilst UWA and Dr Gray dispute various aspects of Sirtex’s costs and claim for damages, Sirtex expects to recover a
signifi cant proportion of the above amount as part of its costs award against UWA and a signifi cant proportion of the balance
from Dr Gray as damages. However, it is not possible to provide a useful or precise estimate of the likely amount to be
recovered at this time. Sirtex expects the Court will deliver its Judgment on these issues in the fi rst half of 2010.
(2) Contingent liabilities
Dr Gray Proceedings
As previously reported, Sirtex was the defendant in proceedings in the Supreme Court of Western Australia brought by Dr
Gray seeking declaration that certain terms of his employment contracts and the Subscription and Shareholders Agreement
were unenforceable as unreasonable restraints of trade (Dr Gray Proceedings). The Dr Gray Proceedings are summarised in
an announcement of Sirtex dated 12 December 2008.
On 14 May 2009, Justice Le Miere delivered a Judgment in the Dr Gray Proceedings in favour of Dr Gray and ordered Sirtex
to pay Dr Gray’s costs of the proceedings.
Dr Gray is yet to inform Sirtex of the amount of costs he seeks to recover or to initiate the process by which those costs are
assessed or determined. In those circumstances, it is not possible to provide a useful or precise estimate of the likely amount
of Sirtex’s liability for Dr Gray’s costs at this time, and therefore no provision has been recognized on this matter.
Sirtex Annual Report 2009 49
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
24. COMMITMENTS
Operating Leases
The consolidated entity leases offi ces in Sydney, in Germany and in the United States, with no option to purchase the leased
assets at the expiry of the leased assets
The Sydney offi ce has a lease term of 36 months, with a remaining period of 17 months. The German offi ce has a lease
term of 60 months, with a remaining period of 55 months, and the US offi ce has a lease term of 1 year with a remaining
period of 6 months.
The consolidated entity also leases various items of plant and equipment in Germany with lease terms from 36 to 48
months, and remaining periods of 15 to 33 months.
Non-cancellable operating leases
Not longer than 1 year
Longer than 1 year and not longer than 5 years
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
337
480
817
375
513
888
156
66
222
330
467
797
Research Commitments
The consolidated entity has entered into various research and development agreements with Universities and other external
research institutions for ongoing research and clinical trials. Under these agreements, the consolidated entity is committed
to providing funds over future periods, payable within one year, of $432,000 (2008: $Nil).
25. CONTROLLED ENTITIES
Name of entity
Country of incorporation
Ownership interest
2009
%
2008
%
Parent entity
Sirtex Medical Limited
Controlled entities
Sirtex Medical Products Pty Ltd
Sirtex Global Pty Ltd
Sirtex Technology Pty Ltd
Sirtex SIR-Spheres Pty Ltd
Sirtex Thermospheres Pty Ltd
Sirtex Medical Holdings Inc
Sirtex Medical Inc
Sirtex Wilmington LLC
Sirtex Medical Europe GmbH
Australia
Australia
Australia
Australia
Australia
Australia
USA
USA
USA
Germany
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
Sirtex Medical Holdings Inc was incorporated on 25 July 2006. The company holds 100% interest in Sirtex Medical and in
Sirtex Wilmington LLC. Sirtex Medical Ltd and all its Australian controlled entities are included in the tax consolidated group
and is head entity for tax consolidation.
50 Sirtex Annual Report 2009
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
26. RELATED PARTY TRANSACTIONS
(a) Equity interests in related parties
Details of the percentage of ordinary shares held in controlled entities are disclosed in Note 25.
(b) Transactions with key management personnel related entities.
At 30 June 2009, $Nil (2008: $Nil) was payable to directors, key management personnel and director related entities.
At 30 June 2009, $22,474 (2008: $Nil) was receivable from key management personnel. There is no interest payable on the
receivable, and repayment is due no later than 31 December 2009.
c) Transactions with the wholly-owned group
The wholly-owned group includes:
the ultimate parent entity in the wholly-owned group, and wholly-owned entities.
wholly-owned controlled entities
The ultimate parent entity in the wholly-owned group is Sirtex Medical Limited.
Amounts receivable from and payable to entities in the wholly owned group are disclosed in the notes to the fi nancial
statement.
During the fi nancial year, Sirtex Medical Ltd provided management services, on normal commercial terms and conditions, to
entities in the wholly-owned group and received licence fees from entities in the wholly-owned group.
(d) Controlling entities
The parent entity in the consolidated entity is Sirtex Medical Ltd. The ultimate parent entity in the wholly-owned group is
Sirtex Medical Ltd.
27. EVENTS AFTER BALANCE SHEET DATE
No matters or circumstances have arisen since the end of the fi nancial year which signifi cantly affected or may signifi cantly
affect the operations of the consolidated entity, the results of those operations, or the state of affairs of the consolidated
entity in future fi nancial years.
28. REMUNERATION OF AUDITORS
During the year, the following were paid or were payable for services provided by the auditor of the parent entity, its related
party practices and non-related audit fi rms:
Consolidated
Company
Remuneration of the auditor of the parent entity for audit
and review of fi nancial reports
Other non-audit services
Remuneration of other auditors of subsidiaries for audit
and review of fi nancial reports
2009
$’000
2008
$’000
2009
$’000
2008
$’000
96
-
25
60
-
20
96
-
-
55
-
-
The auditor of Sirtex Medical Ltd and its Australian and German subsidiaries is Grant Thornton NSW.
The auditor of the US entities is Grant Thornton LLP.
Sirtex Annual Report 2009 51
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
29. FINANCIAL RISK MANAGEMENT
The Audit Committee has been delegated responsibility by the Board of Directors for, amongst other issues, monitoring
and managing fi nancial risk exposures of the Group. The Audit Committee monitors the Group’s fi nancial risk management
policies and exposures and approves fi nancial transactions within the scope of its authority. It also reviews the effectiveness
of internal controls relating to counter party credit risk, currency risk, and interest rate risk.
The Groups’ activities expose it to a variety of fi nancial risks, including but not limited to, market risk (currency risk and
interest rate risk), credit risk and liquidity risk. The overall risk management strategy seeks to measure and to mitigate these
risks, in using different methods measure the different types of risk, and in using derivate instruments to minimize certain
risk exposures.
The Group’s fi nancial instruments consist mainly of deposits with banks, short-term investments, account receivable and
payable, and loans to and from subsidiaries.
The totals for each category of fi nancial instruments, measured in accordance with AASB 139 as detailed in the accounting
policies to these fi nancial instruments, are as follows
Financial Assets
Cash and cash equivalents
Trade and other receivables
Other fi nancial assets *
Financial Liabilities
Trade and other payables
Borrowings
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
26,521
12,438
230
39,185
5,791
64
5,855
6,921
10,120
163
17,204
24,712
3,973
80
28,765
4,934
26,605
203
31,742
4,701
21,713
32,198
-
64
-
4,701
21,777
32,198
* Other fi nancial assets comprise security deposits and investments in wholly owned subsidiaries.
The carrying amounts of fi nancial assets and fi nancial liabilities recorded in the fi nancial statements represent their respective
net fair values, determined in accordance with the accounting policies disclosed in note 1 to the fi nancial statements.
Financial Risk Exposures and Management
The main risks the Group is exposed to through its fi nancial instruments are interest rate risk, foreign exchange risk, liquidity
risk and credit risk as follows:
(a) Interest rate risk
The Group’s exposure to interest rate risk relates to its cash and short-term deposits. The interest rate as at 30 June 2009
on cash was 2.5% (2008: 5.9%) and on short-term deposits 3.87% (2008:7.95%). The interest-bearing loan is a fi xed rate
loan with an effective interest rate of 6.56%The totals for each category of fi nancial instruments, measured in accordance
with AASB 139 as detailed in the accounting policies to these fi nancial instruments, are as follows
52 Sirtex Annual Report 2009
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
Sensitivity analysis
A change in interest rate on cash and short-term deposits would result in a change in profi t as follows:
Change in profi t:
Increase in interest rate by 2%
Decrease in interest rate by 2%
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
371
(371)
98
(98)
346
(346)
85
(85)
(b) Credit risk
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in fi nancial loss to the Group.
The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining suffi cient collateral or other
securities where appropriate, as a means of mitigating the risk of fi nancial loss from defaults. The Group measures credit risk
on a fair value basis.
The Group does not have any signifi cant credit risk exposure to any single counterparty or any group of counterparties
having similar characteristics. The carrying amounts of fi nancial assets recorded in the fi nancial statements, net of any
provision for impairment, represent the Group’s maximum exposure to credit risk without taking into account any collateral or
other security obtained.
(c) Foreign exchange risk
The Group is exposed to foreign exchange risk resulting in fl uctuations in the fair value and in future cash fl ows of its fi nancial
instruments due to a movement in foreign exchange rates of currencies other than the Group’s measurement currency.
It is the Group’s policy that hedging, as a percentage of net foreign exchange rate exposure, be maintained within the limits
of the foreign exchange risk management policy.
The Group has open currency options at balance date relating to highly probable forecast transactions. These options give
the Group the right to purchase foreign currencies at a specifi ed exchange rate if the actual exchange rate at expiry date of
the options is higher than the specifi ed rate.
Sensitivity analysis
A change in foreign exchange rates would result in a change in profi t as follows:
Change in profi t:
Increase of AUD to USD by 15%
Decrease of AUD to USD by 15%
Increase of AUD to EUR by 15%
Decrease of AUD to EUR by 15%
Consolidated
Company
2009
$’000
2008
$’000
2009
$’000
2008
$’000
(6,576)
6,576
(2,829)
2,829
(2,188)
2,960
(23)
30
-
-
-
-
-
-
-
-
Sirtex Annual Report 2009 53
Notes to the Financial Statements (continued)
For the year ended 30 June 2009
The following table shows the foreign currency risk on the fi nancial assets and liabilities of the Group’s operations,
denominated in currencies other than the functional currency of the operations. The foreign currency risk in the books of
the parent entity is considered immaterial and is therefore not shown.
2009 - Consolidated
Net fi nancial assets/ (liabilities) in ‘000
Group entity (Functional currency)
North American entities (USD)
European entity (EUR)
Balance sheet exposure
USD
4,869
-
4,869
EUR
AUD
-
2,460
2,460
6,001
4,227
10,228
2008 - Consolidated
Net fi nancial assets/ (liabilities) in ‘000
Group entity (Functional currency)
North American entities (USD)
European entity (EUR)
Balance sheet exposure
Foreign Currency Call/ Put Options
USD
5,346
-
5,346
EUR
-
1,573
1,573
AUD
5,554
2,581
8,135
The Group has European style call/ put options open at balance date relating to highly probable forecast transactions and
recognised fi nancial assets and fi nancial liabilities. These options consist of two components:
1. The right to buy specifi ed amounts of AUD against foreign currencies in the future at specifi ed exchange rates.
2. The obligation to buy specifi ed amounts of AUD against foreign currencies in the future at specifi ed exchange
rates if the AUD falls below a specifi ed rate.
The following table summarises the notional amounts and terms of these options.
Consolidated Group
Call Options (Sell USD/ Buy AUD)
Settlement
- less than 6 months
Put Options (Sell USD/ Buy AUD)
Settlement
- less than 6 months (1)
Notional Amounts
Average Exchange Rate
2009
USD ’000
2008
USD ’000
2009
2008
3,000
3,000
-
-
0.82
0.82
-
-
(1) The obligation to purchase AUD at the specifi ed rate of $0.82 occurs, should on expiry date of the option the spot
exchange rate is $0.725 or less.
54 Sirtex Annual Report 2009
Additional Information
For the year ended 30 June 2009
Additional stock exchange information as at 20 August 2009
Number of holders of equity securities (ordinary share capital)
55,768,136 fully paid ordinary shares are held by 1,936 individual shareholders.
All issued ordinary shares carry one vote per share, however, partly paid shares do not carry the rights to dividends.
Distribution of holders of equity securities
Ordinary
Shares
Holders
1 - 1,000
460,873
1,001 - 5,000
2,212,977
5,001 - 10,000
1,382,094
10,001 - 100,000
4,056,556
100,001 and over
47,655,636
752
841
175
146
22
55,768,136
1,936
Substantial shareholders
Ordinary shareholders
Fully paid
Number
Percentage
COGENT NOMINEES PTY LIMITED 16,457,284
ACN 132442114 PTY LIMITED
16,462,283
CANCER RESEARCH FUND
CITICORP NOMINEES
4,568,526
3,092,531
40,580,624
29.510
29.519
8.192
5.545
72,766
Twenty largest holders of quoted equity
securities
Ordinary shareholders
COGENT NOMINEES PTY LIMITED
ACN 132442114 PTY LIMITED
CANCER RESEARCH FUND
CITICORP NOMINEES
EQUITY TRUSTEES LIMITED
JP MORGAN NOMINEES AUSTRALIA
PINERIDGE HOLDINGS PTY LTD
HSBC CUSTODY NOMINEES AUSTRALIA
ANZ NOMINEES
ADRIAANSE ERIK
SANDHURST TRUSTEES
APOLLO SOLUTIONS LIMITED
CITY AND WESTMINSTER LIMITED
PACIFIC SECURITIES INC
BANNABY INVESTMENTS PTY LTD
TILL NO 54 PTY LTD
EQUITY TRUSTEES
ATTUNGA NOMINEES
PANACCIO CHRISTIANA
WARK TIM
BRADFIELD ROBERT
Fully paid
Number
Percentage
16,457,284
16,462,283
4,568,526
3,092,531
1,786,859
861,600
720,000
562,357
515,417
500,000
421,403
284,491
250,000
250,000
210,000
190,000
172,000
135,385
115,000
100,500
100,000
29.510
29.519
8.192
5.545
3.204
1.545
1.291
1.008
0.924
0.897
0.756
0.510
0.448
0.448
0.377
0.341
0.308
0.243
0.206
0.180
0.179
47,755,636
85.632
Sirtex Annual Report 2009 55
Company Information
Company Secretary
Mr Darren Smith
Stock exchange listing
Australian Stock Exchange Limited
ASX code SRX
Share registrar
Registries Ltd
Level 7
207 Kent Street
Sydney, NSW, 2000, Australia
Tel: 61-2-29290-9600
Registered offi ce
Unit F6, Parkview, 16 Mars Road,
Lane Cove, NSW, 2066
Tel: +61-2-9936-1400
Auditors
Grant Thornton NSW
Level 17, 383 Kent Street,
Sydney, NSW, 2000, Australia
Principal Places of Business are:
Australian Offi ce
Unit F6, Parkview, 16 Mars Road,
Lane Cove, NSW, 2066
Tel: +61-2-9936-1400
United States Offi ce
2-4, 16 Upton Drive,
Wilmington, MA, 01887
Tel: +1-978- 694-9099
European Offi ce
Walter-Flex-Strasse 2,
53113 Bonn, Germany
Tel: +49-228-1840-730
n
o
i
t
a
m
r
o
f
n
I
y
n
a
p
m
o
C
Annual General Meeting
The Annual General Meeting will be held
at 10.00am Tuesday 27 October 2009 at
the Stamford Grand Hotel
North Ryde, NSW Australia.
56 Sirtex Annual Report 2009