TIDMNIM
RNS Number : 2644O
Norwood Immunology Ld
04 March 2009
Norwood Immunology Limited
Financial report for the year ended 30 June 2008
The Directors are pleased to announce the consolidated financial report for the
year ended 30 June 2008. A copy of this report is available at the companies
website www.norwoodimmunolgy.com and the full text of the accounts appears
below. It is expected that the suspension of trading on AIM will be lifted when
copies of these accounts are sent to shareholders. A further announcement is
expected to be made in this regard shortly."
+------------------------------+--------------------------------------------------+
| Directors' report |
+---------------------------------------------------------------------------------+
| The directors of Norwood Immunology Limited submit herewith the financial |
| report for the financial year ended 30 June 2008. In order to comply with the |
| provisions of the Corporations Act 2001, the directors report as follows: |
| |
+---------------------------------------------------------------------------------+
| The names of the directors of the Company during or since the end of the |
| financial year are: |
| |
+---------------------------------------------------------------------------------+
| Directors |
+---------------------------------------------------------------------------------+
| Name |
+---------------------------------------------------------------------------------+
| Mr. P. J. Hansen | Non-Executive Chairman, aged 63, joined the |
| | Board on 1 December 2000 in an executive |
| | capacity as Chief Executive Officer. Resigned as |
| | an executive director on 31 October 2003 and |
| | maintains a non-executive role. |
| | |
+------------------------------+--------------------------------------------------+
| Mr. R.F. Williams | Chief Executive Officer, aged 51, joined the |
| | board on 31 October 2003. |
| | |
+------------------------------+--------------------------------------------------+
| Dr. R.L. Boyd | Aged 57, appointed 21 December 2007 in an |
| | executive capacity as Chief Scientific Officer. |
+------------------------------+--------------------------------------------------+
| Mr. B Guzman | Aged 37, appointed 8 September 2006 in a |
| | Non-Executive Director capacity and resigned 21 |
| | December 2007. |
| | |
+------------------------------+--------------------------------------------------+
| Mr. H Stein | Aged 50, appointed 8 September 2006 in a |
| | Non-Executive Director capacity and resigned 21 |
| | December 2007. |
| | |
+------------------------------+--------------------------------------------------+
| The above named directors held office during and since the financial year |
| except for: |
| |
+---------------------------------------------------------------------------------+
| Mr. B Guzman | Appointed 8 September 2006; resigned 21 December |
| | 2007 |
+------------------------------+--------------------------------------------------+
| Mr. H Stein | Appointed 8 September 2006; resigned 21 December |
| | 2007 |
+------------------------------+--------------------------------------------------+
| Dr. R.L. Boyd | Appointed 21 December 2007. |
+------------------------------+--------------------------------------------------+
| |
+---------------------------------------------------------------------------------+
| Company Secretaries |
+---------------------------------------------------------------------------------+
| Mr. J.H. Bell | Aged 36, Chartered Accountant, serves as Company |
| | Secretary. |
| | |
+------------------------------+--------------------------------------------------+
| Mr. R. Scarrott | Aged 40, Chartered Accountant, joined Norwood |
| | Immunology in November 2003. Mr Scarrott is a |
| | member of the Institute of Chartered Accountants |
| | in England and Wales. Mr Scarrott resigned as |
| | joint Company Secretary on 13 March 2008. |
+------------------------------+--------------------------------------------------+
| | |
+------------------------------+--------------------------------------------------+
| Principal Activities |
+---------------------------------------------------------------------------------+
| The Group's principal activities during the course of the financial year were |
| developing and commercialising of technologies and intellectual property |
| associated with the rejuvenation of the immune system (involving the re-growth |
| of the thymus, generation of T cells and improved bone marrow function) and the |
| development of adjuvanted virosomal vaccines. In addition, a progressively |
| increasing focus has been on the development and possible commercialization of |
| therapies based on the use of adult stem cells in both a veterinary and human |
| setting. |
| |
+---------------------------------------------------------------------------------+
| Review of Operations |
+---------------------------------------------------------------------------------+
| Financial review |
| The consolidated loss after tax for the year ended 30 June 2008 was |
| A$28,488,291 (2007: A$4,863,767), approximately GBP13.7 million (2007: GBP2 |
| million). Consolidated cash at 30 June 2008 was A$1,243,759 (2007: |
| A$5,720,438), approximately GBP0.6 million (2007: GBP2.2 million). All amounts |
| expressed in pounds sterling have been converted, on a pro forma basis, at the |
| 30 June 2008 rate of A$1:GBP0.4821 (2007: A$1:GBP0.4235). |
| The Company has, throughout the year and thereafter, continued to focus on |
| minimisation of expenditure and cash burn given the uncertainties surrounding |
| its ability to raise finance in difficult capital markets. The Board is also |
| exploring the potential sale and/or license of assets owned by the Group in |
| order to provide capital for its future activities. A review and progress |
| report on the Group's principal activities is given below: |
| Immunology |
| The Company has an ongoing Phase II clinical trial in collaboration with The |
| University of Texas M D Anderson Cancer Center, of Houston, to determine |
| whether an enhanced vaccine response can be achieved by using the Company's |
| therapy to increase thymic activity and the output and function of T-cells via |
| sex steroid suppression using the GnRH analogue Lupron Depot . This study is |
| differentiated from the bone marrow transplant ("BMT") work discussed below, in |
| that the aim is to modify the course of cancer using a specific vaccine as |
| opposed to looking at general immune system enhancement. The trial involves |
| Lupron Depot being administered as an adjunctive immunology therapy with an |
| experimental melanoma vaccine, to determine whether an enhanced immune response |
| to that vaccine can be created. The trial is ongoing. |
| The Company has an ongoing Phase II clinical trial in cancer patients |
| undergoing autologous (self-derived) BMT in the USA. The trial comprises an 80 |
| patient double-blind randomized Phase II clinical trial (40 treated; 40 |
| control) at the University of Texas M D Anderson Cancer Center and the |
| Dana-Farber Cancer Institute, Harvard Medical School. The trial is a |
| collaborative effort with a consortium of leading cancer clinicians and |
| institutes, co-funded by the National Cancer Institute and the National |
| Institute of Allergy and Infectious Diseases. Despite actions to increase trial |
| centres and educate clinicians in those centres regarding the merits of the |
| trial, recruitment continues to progress at a slower rate than was originally |
| anticipated. In view of this, the Company together with its partner, Abbott |
| Laboratories (who have taken over Lupron Depot distribution in the USA from |
| TAP Pharmaceuticals) are currently evaluating the future of this trial with the |
| Principal Investigator in order to assess whether a statistically relevant end |
| point can be achieved in a realistic timescale. |
| The Company continues to conduct the majority of its research on the immune |
| system at the laboratories of its Chief Scientific Officer (Immunology), |
| Professor Richard Boyd, at Monash University, Melbourne, Australia. Under the |
| terms of an agreement between Monash and the Company, relevant intellectual |
| property developed in the Boyd laboratory at Monash is assigned to the Company. |
| The Company has been mindful of the funding available to it and has continued |
| to encourage collaborations with other institutions and applying for grants to |
| maximise the benefit received from the Company's sponsorship of the Boyd |
| laboratory. This strategy has enabled the net cost of our research into the |
| immune system to be reduced still further from levels incurred in previous |
| years, whilst maintaining the Group's participation in the intellectual |
| property created at the Boyd laboratory. |
| Virosomal Vaccines |
| Virosome Biologicals' adjuvanted virosome technology has its first out-license |
| in the field of intranasal influenza vaccines with Solvay Pharmaceuticals B.V. |
| ("Solvay"), with milestones and royalties payable to Virosome Biologicals as |
| the clinical development and commercialisation programme progresses. Solvay is |
| responsible for clinical trials and development and commercialising of the |
| vaccine. Having successfully completed a phase I trial in May 2006 Solvay are |
| progressing the program into a Phase II trial, however this trial has yet to |
| commence, a delay which unfortunately is out of the Company's control given the |
| trial conduct and timetable is the responsibility of its licence partner. |
| The key research focus of Virosome Biologicals' during the financial year has |
| been the development of pre-clinical models for its |
| Respiratory Syncytial virus ('RSV') and Herpes Simplex virus (HSV) vaccines. |
| The first of these programmes, RSV, completed its pre-clinical development in |
| Q1 2008 and in July 2008 the Company announced a six month exclusive evaluation |
| agreement for its RSV vaccine candidate with MedImmune LLC. Under the terms of |
| this agreement, the Company received a payment of EUR200,000 and the |
| reimbursement of certain costs associated with doing additional work relating |
| to RSV for MedImmune. |
| The pre-clinical package on HSV is still in the course of preparation, and the |
| Company expects to commence out-licensing discussions relating to this in Q1 |
| 2009. Future vaccine targets under development include Cytomegalovirus (CMV). |
| Funding Strategy |
| The Board recognise the importance of securing appropriate finance for the |
| activities of the Group and have been exploring all options with advisers. |
| It is recognised that the recent financial crisis, and the performance of the |
| Group, make raising finance through traditional capital market routes |
| impractical. Accordingly, the Board have been exploring other options, |
| including securing finance to fund projects allied to the future direction of |
| the Group in the field of human and veterinary stem cells, and also the |
| divestment of assets to raise capital. In this latter regard, the Board have |
| commenced discussions regarding the sale of the Virosomal Vaccine development |
| business and are currently in discussions with a party that may or may not lead |
| to an offer for this business. |
+------------------------------+--------------------------------------------------+
+----------------------------------------------------------------------------------------------------------+
| Changes in State of Affairs |
+----------------------------------------------------------------------------------------------------------+
| During the financial year there was no significant change in the state of affairs of the Company other |
| than that referred to in the financial statements or notes thereto. |
| |
+----------------------------------------------------------------------------------------------------------+
| Subsequent Events |
+----------------------------------------------------------------------------------------------------------+
| As announced on 6 December 2008, the Company has now entered into a non-binding Letter of Intent (LOI) |
| with a NASDAQ listed international biotechnology company focused on developing innovative vaccines |
| interfering with early pathogen transmission events for the sale of 100% of the Company's interest in |
| Bestewil Holding B.V, the immediate holding company of Virosome Biologicals B.V. In connection with the |
| execution of this LOI and the granting of a period of exclusivity to the NASDAQ company to 31 January |
| 2009, the Company has received a non refundable goodwill deposit of EUR100,000. |
| |
| There has not been any other matter or circumstance, other than that referred to in the financial |
| statements or notes thereto, that has arisen since the end of the financial period, that has |
| significantly affected, or may significantly affect, the operation of the Consolidated Entity, the |
| results of those operations, or the state of affairs of the Consolidated Entity in the future financial |
| periods. |
| |
+----------------------------------------------------------------------------------------------------------+
| Strategy |
| Norwood Immunology ('NIM') is developing and commercializing technologies related to stem cells, the |
| immune system and vaccines. |
| |
| The core NIM strategy is to generate revenues and ultimately profitability via the development and |
| commercialization of its technologies and intellectual property which are currently associated with (a) |
| the provision of stem cell services and therapies, (b) licensing and partnerships for intellectual |
| property and therapies based on stem cells and the immune system; and (c) the immune cell targeting of |
| vaccines using adjuvanted virosomes. |
| |
| NIM has out-licensing arrangements with Abbott Laboratories (USA) and Solvay Pharmaceuticals BV for two |
| of its core technology platforms and is in a period of exclusive collaboration in relation with |
| MedImmune LLC for its RSV Virosomal vaccine candidate. |
| |
| The aims of the Board in the near term are to secure the future of the Group through the divestment of |
| its virosomal vaccine development business and thereafter to create shareholder value via the possible |
| development and provision of both veterinary and human stem cell banking and processing services, as |
| well as the possible provision of veterinary and human stem cell (and immunology based) clinical |
| therapies. In this regard, NIM is currently evaluating the commercial opportunities flowing from the |
| potential provision of stem cell processing services as well as the provision of stem cell therapies - |
| initially in the veterinary setting. The aim is to develop revenue producing stem cell technologies in |
| the near term. |
+----------------------------------------------------------------------------------------------------------+
| |
+----------------------------------------------------------------------------------------------------------+
| Dividends |
+----------------------------------------------------------------------------------------------------------+
| No dividends were paid or declared since the start of the financial year and the directors do not |
| recommend payment of a dividend in respect of its current or preceding financial years. |
| |
+----------------------------------------------------------------------------------------------------------+
+----------------------+----------------------+----------+---------+----------+---------------------+
| Directors' Meetings |
+---------------------------------------------------------------------------------------------------+
| |
+---------------------------------------------------------------------------------------------------+
| |
+---------------------------------------------------------------------------------------------------+
| Directors | Board of Directors | Audit Committee |
+ +---------------------------------+--------------------+
| | Held |Attended | Held |Attended |
+----------------------+----------------------+----------+---------+----------+
| Mr. R.L. Boyd* | 9 | 9 | - | - |
+----------------------+----------------------+----------+---------+----------+
| Mr. P. J. Hansen | 11 | 11 | 1 | 1 |
+----------------------+----------------------+----------+---------+----------+
| Mr B. Guzman* | 2 | 2 | 1 | 1 |
+----------------------+----------------------+----------+---------+----------+
| Mr H. Stein* | 2 | 2 | 1 | 1 |
+----------------------+----------------------+----------+---------+----------+
| Mr. R.F. Williams | 11 | 11 | 1 | 1 |
+----------------------+----------------------+----------+---------+----------+
| * Whilst they were a | | | | |
| director. | | | | |
+----------------------+----------------------+----------+---------+----------+---------------------+
+-------------------------------------------------------------------------------+
| Share Options |
| Share Options Granted to Directors and Executives |
| During and since the end of the financial year no options were granted to |
| directors and executives of the Company and no option were exercised. |
| The following options issued to executives, granted on 27 June 2003 expired |
| on 30 November 2007 and were exercisable as follows:* |
| 11,150,000 options exercisable at 0.30 pence per option immediately.* |
| 4,200,000 options exercisable at the placing price per share less 15 per |
| cent. The placing price is 38 pence per share or $1.00 per share based on an |
| exchange rate of GBP 0.382 : $1.00 as at 30 June 2004.* |
| 1,800,000 options exercisable at the placing price per share less 15 per |
| cent, upon the transfer of patents involving the embryonic thymic epithelial |
| cells. |
| Employee Share Option Plan |
| Further details of the employee share option plan are disclosed in note 11 to |
| the financial statements. |
| |
+-------------------------------------------------------------------------------+
+-------------------------------------------------------------------------------+
| Indemnification of Officers and Auditors |
+-------------------------------------------------------------------------------+
| During the financial year, the Company paid a premium in respect of a |
| contract insuring the directors of the Company (as named above), and all |
| executive officers of the Company and of any related body corporate against a |
| liability incurred as such a director or executive officer to the extent |
| permitted by the Corporations Act 2001. The contract of insurance prohibits |
| disclosure of the nature of the liability and the amount of the premium. |
| The Company has not otherwise, during or since the financial year, |
| indemnified or agreed to indemnify an officer or auditor of the Company or of |
| any related body corporate against a liability incurred as such an officer or |
| auditor |
+-------------------------------------------------------------------------------+
| |
+-------------------------------------------------------------------------------+
| Auditor's independence declaration |
+-------------------------------------------------------------------------------+
| The auditor's independence declaration is included on page 6 of the financial |
| report. |
+-------------------------------------------------------------------------------+
| |
+-------------------------------------------------------------------------------+
| |
+-------------------------------------------------------------------------------+
| Signed in accordance with a resolution of directors made pursuant to |
| s. 298(2) of the Corporations Act 2001. |
+-------------------------------------------------------------------------------+
| |
+-------------------------------------------------------------------------------+
| On behalf of the Directors |
+-------------------------------------------------------------------------------+
| |
+-------------------------------------------------------------------------------+
| |
+-------------------------------------------------------------------------------+
| Richard Williams |
+-------------------------------------------------------------------------------+
| Director |
+-------------------------------------------------------------------------------+
| London , 2 March 2009 |
| |
+-------------------------------------------------------------------------------+
Deloitte Touche Tohmatsu
ABN 74 490 121 060
180 Lonsdale Street
Melbourne Vic 3000
GPO Box 78
Melbourne
Tel: + 61 (0) 3 9208 7000
Fax: + 61 (0) 3 9208 7001
www.deloitte.com.au
The Board of Directors
Norwood Immunology Limited
c/-Suite 5, Level 1
405 Nepean Highway
Frankston VIC 3199
2 March 2009
Dear Board Members
Norwood Immunology Limited
In accordance with section 307C of the Corporations Act 2001, I am pleased to
provide the following declaration of independence to the directors of Norwood
Immunology Limited.
As lead audit partner for the audit of the financial statements of Norwood
Immunology Limited for the financial year ended 30 June 2008, I declare that to
the best of my knowledge and belief, there have been no contraventions of:
* the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
* any applicable code of professional conduct in relation to the audit.
Yours sincerely
DELOITTE TOUCHE TOHMATSU
Chris Biermann
Partner
Chartered Accountants
Deloitte Touche Tohmatsu
ABN 74 490 121 060
180 Lonsdale Street
Melbourne Vic 3000
GPO Box 78
Melbourne
Tel: + 61 (0) 3 9208 7000
Fax: + 61 (0) 3 9208 7001
www.deloitte.com.au
Independent Auditor's Report
To the Members of Norwood Immunology Limited
We have audited the accompanying financial report of Norwood Immunology Limited,
which comprises the balance sheet as at 30 June 2008, and the income statement,
cash flow statement and statement of changes in equity for the year ended on
that date, a summary of significant accounting policies and 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 financial year as set out on pages 9 to 45.
Directors' Responsibility for the Financial Report
The directors of the company are responsible for the preparation and fair
presentation of the financial report in accordance with Australian Accounting
Standards (including the Australian Accounting Interpretations) and the
Corporations Act 2001. This responsibility includes establishing and maintaining
internal control relevant to the preparation and fair presentation of the
financial 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 2, 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
financial report, comprising the consolidated financial statements and notes,
complies with International Financial Reporting Standards.
Auditor's Responsibility
Our responsibility is to express an opinion on the financial report based on our
audit. We conducted our audit in accordance with the Australian Auditing
Standards. These Auditing Standards require that we comply with relevant ethical
requirements relating to audit engagements and plan and perform the audit to
obtain reasonable assurance whether the financial report is free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the
amounts and disclosures in the financial report. The procedures selected depend
on the auditor's judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making
those risk assessments, the auditor considers internal control relevant to the
entity's preparation and fair presentation of the financial report in order to
design audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion of the effectiveness of the entity's
internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by
the directors, as well as evaluating the overall presentation of the financial
report.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Auditor's Independence Declaration
In conducting our audit, we have complied with the independence requirements of
the Corporations Act 2001.
Auditor's opinion
In our opinion:
(a) The financial report of Norwood Immunology Limited is in accordance with
the Corporations Act 2001, including:
* giving a true and fair view of the company's and consolidated entity's financial
position as at 30 June 2008 and of their performance for the year ended on that
date; and
* complying with Australian Accounting Standards (including the Australian
accounting Interpretations) and the Corporations Regulations 2001; and
(b) The consolidated financial report also complies with International
Financial Reporting Standards as disclosed in Note 2.
Material Uncertainty Regarding Continuation as a Going Concern
Without qualifying our opinion, we draw attention to Note 3 in the financial
report which indicates that the consolidated entity incurred a net loss of
$28,488,291 (company: $28,744,860) and experienced negative cash flows from
operations of $4,184,689 (company: $4,025,922) during the year ended 30 June
2008. These conditions, along with other matters as set forth in Note 3,
indicate the existence of a material uncertainty which may cast significant
doubt about the company's and the consolidated entity's ability to continue as
going concerns and whether they will realise their assets and extinguish their
liabilities in the normal course of business and at the amounts stated in the
financial report.
DELOITTE TOUCH TOHMATSU
Chris Biermann
Partner
Chartered Accountants
Melbourne, 2 March 2009.
+----------------------------------------+
| Directors' |
| declaration |
+----------------------------------------+
| The |
| directors |
| declare |
| that: |
+----------------------------------------+
| |
+----------------------------------------+
| (a) |
| 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; |
| and |
+----------------------------------------+
| |
+----------------------------------------+
| (b) |
| in |
| the |
| directors' |
| opinion, |
| the |
| attached |
| financial |
| statements |
| and notes |
| thereto |
| are in |
| accordance |
| with the |
| Corporations |
| Act 2001, |
| including |
| compliance |
| with |
| accounting |
| standards |
| and giving a |
| true and |
| fair view of |
| the |
| financial |
| position and |
| performance |
| of the |
| company and |
| the |
| consolidated |
| entity. |
+----------------------------------------+
| |
+----------------------------------------+
| Signed |
| in |
| accordance |
| with a |
| resolution |
| of the |
| directors |
| made |
| pursuant |
| to |
| s.295(5) |
| of the |
| Corporations |
| Act 2001. |
+----------------------------------------+
| |
+----------------------------------------+
| On |
| behalf |
| of the |
| Directors |
+----------------------------------------+
| |
+----------------------------------------+
| |
+----------------------------------------+
| |
+----------------------------------------+
| Richard |
| Williams |
+----------------------------------------+
| Director |
+----------------------------------------+
| London, |
| 2 |
| March 2009 |
+----------------------------------------+
| |
+----------------------------------------+
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Income statement |
| for the financial year ended 30 June 2008 |
+---------------------------------------------------------------------------------------------------+
| | | | | |
+---------------------------+----------+----------------------------+--+----------------------------+
| | | Consolidated | | Company |
+---------------------------+----------+----------------------------+--+----------------------------+
| | Note | 2008 | 2007 | | 2008 | 2007 |
| | | $ | $ | | $ | $ |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Revenue | 6 | 259,985 | 123,683 | | - | - |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Other income | 6 | 287,433 | 225,871 | | 174,331 | 212,833 |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Depreciation and | 7 | (58,277) | (23,444) | | (5,197) | (9,891) |
| amortisation expense | | | | | | |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Employee benefits expense | 7 | (1,628,496) | (1,473,436) | | (1,090,119) | (1,257,458) |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Finance costs | 8 | (55,569) | (202,791) | | (48,889) | (202,319) |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Insurance | | (106,801) | (83,859) | | (100,592) | (83,859) |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Investor relations | | (139,074) | (230,829) | | (139,074) | (230,829) |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Legal costs | | (47,483) | (146,872) | | (45,313) | (145,476) |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Net foreign exchange loss | 7 | (101,179) | (245,827) | | (120,556) | (225,634) |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Former parent entity | 26 | - | (80,000) | | - | (80,000) |
| management fees | (e) | | | | | |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Patent costs | | (309,482) | (53,946) | | (232,846) | (18,256) |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Professional fees | | (573,941) | (275,115) | | (447,934) | (269,858) |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Travel expenses | | (202,127) | (268,342) | | (193,694) | (254,883) |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Research and development | | (753,144) | (1,044,293) | | (594,517) | (846,654) |
| costs immediately | | | | | | |
| expensed | | | | | | |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Impairment of non-current |15,17,18 | (24,880,532) | (637,641) | | (25,785,655) | (637,641) |
| assets | | | | | | |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Other expenses | | (179,604) | (446,926) | | (114,805) | (151,976) |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Loss before tax | | (28,488,291) | (4,863,767) | | (28,744,860) | (4,201,901) |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Income tax expense | 9 | - | - | | - | - |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Loss for the year | | (28,488,291) | (4,863,767) | | (28,744,860) | (4,201,901) |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| |
+---------------------------------------------------------------------------------------------------+
| Earnings per share | | | | | | |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| Basic and Diluted (cents | 24 | (12.5) | (2.6) | | | |
| per share) | | | | | | |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
| |
+---------------------------------------------------------------------------------------------------+
| Notes to the financial statements are included on pages 15 to 45. |
+---------------------------+----------+--------------+-------------+--+--------------+-------------+
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Balance sheet as at 30 June 2008 |
| |
+-----------------------------------------------------------------------------------------------+
| | | | | |
+-------------------------+------+-----------------------------+--+-----------------------------+
| | | Consolidated | | Company |
+-------------------------+------+-----------------------------+--+-----------------------------+
| |Note | 2008 | 2007 | | 2008 | 2007 |
| | | $ | $ | | $ | $ |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Current assets | | | | | | |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Cash and cash | | 1,243,759 | 5,720,438 | | 1,055,322 | 5,334,884 |
| equivalents | | | | | | |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Trade and other | 13 | 414,255 | 82,488 | | 648,352 | 27,766 |
| receivables | | | | | | |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Prepayments | 14 | 99,079 | 156,359 | | 99,079 | 156,359 |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Total current assets | | 1,757,093 | 5,959,285 | | 1,802,753 | 5,519,009 |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Non-current assets | | | | | | |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Other financial assets | 15 | 11,553 | 11,176 | | - | 21,263,154 |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Plant and equipment | 16 | 202,782 | 247,632 | | 7,262 | 16,631 |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Goodwill | 17 | - | 2,100,000 | | - | - |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Other intangible assets | 18 | - | 22,732,609 | | - | 4,474,578 |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Total non-current | | 214,335 | 25,091,417 | | 7,262 | 25,754,363 |
| assets | | | | | | |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Total assets | | 1,971,428 | 31,050,702 | | 1,810,015 | 31,273,372 |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Current liabilities | | | | | | |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Trade and other | 19 | 1,062,220 | 1,248,147 | | 482,653 | 808,951 |
| payables | | | | | | |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Other financial | 20 | 449,425 | 821,439 | | 449,425 | 821,439 |
| liabilities | | | | | | |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Provisions | 21 | 23,926 | 39,828 | | 23,926 | 39,828 |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Total current | | 1,535,571 | 2,109,414 | | 956,004 | 1,670,218 |
| liabilities | | | | | | |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Non-current liabilities | | | | | | |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Provisions | 21 | 42,479 | 46,762 | | 42,479 | 46,762 |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Total non-current | | 42,479 | 46,762 | | 42,479 | 46,762 |
| liabilities | | | | | | |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Total liabilities | | 1,578,050 | 2,156,176 | | 998,483 | 1,716,980 |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Net assets | | 393,378 | 28,894,526 | | 811,532 | 29,556,392 |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Equity | | | | | | |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Issued capital | 22 | 57,842,753 | 57,842,753 | | 57,842,753 | 57,842,753 |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Foreign currency | 23 | (12,857) | - | | | - |
| translation reserve | | | | | | |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Accumulated losses | | (57,436,518) | (28,948,227) | | (57,031,221) | (28,286,361) |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| Total equity | | 393,378 | 28,894,526 | | 811,532 | 29,556,392 |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
| |
+-----------------------------------------------------------------------------------------------+
| Notes to the financial statements are included on pages 15 to 45. |
+-------------------------+------+--------------+--------------+--+--------------+--------------+
+----------------------+------------+--------------+-------------+--------------+---+------------+-----------+--+----------+--+-------------+
| Statement of changes in equity for the financial year ended |
| 30 June 2008 |
| |
+--------------------------------------------------------------------------------------------------------------------------+
| Consolidated | 2008 | | 2007 |
+----------------------+--------------------------------------------------------+---+-------------------------------------------------------+
| | Issued | Accumulated | Foreign | Total | | Issued | Accumulated | Foreign | Total |
| | capital | losses | currency | $ | | capital | losses | currency | $ |
| | $ | $ | translation | | | $ | $ | translation | |
| | | | reserve $ | | | | | reserve $ | |
+----------------------+------------+--------------+-------------+--------------+---+------------+--------------+-------------+-------------+
| | | | | | | | | |
+-----------------------------------+--------------+-------------+--------------+---+------------+--------------+-------------+-------------+
| Opening balance | 57,842,753 | (28,948,227) | - | 28,894,526 | | 27,227,179 | (24,084,460) | - | 3,142,719 |
+----------------------+------------+--------------+-------------+--------------+---+------------+--------------+-------------+-------------+
| | 57,842,753 | (28,948,227) | - | 28,894,526 | | 27,227,179 | (24,084,460) | - | 3,142,719 |
+----------------------+------------+--------------+-------------+--------------+---+------------+--------------+-------------+-------------+
| | | | | | | | | | |
+----------------------+------------+--------------+-------------+--------------+---+------------+--------------+-------------+-------------+
| Exchanges | - | - | (12,857) | (12,857) | | - | - | - | - |
| differences arising | | | | | | | | | |
| on translation of | | | | | | | | | |
| foreign operations | | | | | | | | | |
+----------------------+------------+--------------+-------------+--------------+---+------------+--------------+-------------+-------------+
| Total recognised | | | (12,857) | (12,857) | | | | | |
| directly in equity | | | | | | | | | |
+----------------------+------------+--------------+-------------+--------------+---+------------+--------------+-------------+-------------+
| Loss for the year | - | (28,488,291) | | (28,488,291) | | - | (4,863,767) | - | (4,863,767) |
+----------------------+------------+--------------+-------------+--------------+---+------------+--------------+-------------+-------------+
| Total recognised | - | (28,488,291) | (12,857) | (28,501,148) | | - | (4,863,767) | - | (4,863,767) |
| expense | | | | | | | | | |
+----------------------+------------+--------------+-------------+--------------+---+------------+--------------+-------------+-------------+
| Issue of shares | - | - | - | - | | 31,152,904 | - | - | 31,152,904 |
+----------------------+------------+--------------+-------------+--------------+---+------------+--------------+-------------+-------------+
| Share issue costs | - | - | - | - | | (537,330) | - | - | (537,330) |
+----------------------+------------+--------------+-------------+--------------+---+------------+--------------+-------------+-------------+
| Closing balance | 57,842,753 | (57,436,518) | (12,857) | 393,378 | | 57,842,753 | (28,948,227) | - | 28,894,526 |
+----------------------+------------+--------------+-------------+--------------+---+------------+--------------+-------------+-------------+
| |
+-------------------------------------------------------------------------------------------------------------------------------------------+
| Notes to the financial statements are included on pages 15 to 45. |
+-------------------------------------------------------------------------------------------------------------------------------------------+
| |
+----------------------+------------+--------------+-------------+--------------+---+------------+-----------+--+----------+--+-------------+
+--------------------------------------------------------------------------------------------------+
| Statement of changes in equity for the financial year ended 30 June 2008 |
| |
+--------------------------------------------------------------------------------------------------+
+----------------------+--------------+--------------+-------------+--------------+---+------------+----------+----------+-------------+-------------+
| Company | 2008 | | 2007 |
+----------------------+----------------------------------------------------------+---+--------------------------------------------------------------+
| | Issued | Accumulated | Foreign | Total | | Issued | Accumulated losses | Foreign | Total |
| | capital | losses | currency | $ | | capital | $ | currency | $ |
| | $ | $ | translation | | | $ | | translation | |
| | | | reserve $ | | | | | reserve $ | |
+----------------------+--------------+--------------+-------------+--------------+---+------------+---------------------+-------------+-------------+
| | | | | | | | | |
+-------------------------------------+--------------+-------------+--------------+---+------------+---------------------+-------------+-------------+
| Opening balance | 57,842,753 | (28,286,361) | - | 29,556,392 | | 27,227,179 | (24,084,460) | - | 3,142,719 |
+----------------------+--------------+--------------+-------------+--------------+---+------------+---------------------+-------------+-------------+
| | 57,842,753 | (28,286,361) | - | 29,556,392 | | 27,227,179 | (24,084,460) | - | 3,142,719 |
+----------------------+--------------+--------------+-------------+--------------+---+------------+---------------------+-------------+-------------+
| | | | | | | | | | |
+----------------------+--------------+--------------+-------------+--------------+---+------------+---------------------+-------------+-------------+
| Loss for the year | - | (28,744,860) | - | (28,744,860) | | - | (4,201,901) | - | (4,201,901) |
+----------------------+--------------+--------------+-------------+--------------+---+------------+---------------------+-------------+-------------+
| Total recognised | - | (28,744,860) | - | (28,744,860) | | - | (4,201,901) | - | (4,201,901) |
| expense | | | | | | | | | |
+----------------------+--------------+--------------+-------------+--------------+---+------------+---------------------+-------------+-------------+
| | | | | | | | | | |
+----------------------+--------------+--------------+-------------+--------------+---+------------+---------------------+-------------+-------------+
| Issue of shares | - | - | - | - | | 31,152,904 | - | - | 31,152,904 |
+----------------------+--------------+--------------+-------------+--------------+---+------------+---------------------+-------------+-------------+
| Share issue costs | - | - | - | - | | (537,330) | - | - | (537,330) |
+----------------------+--------------+--------------+-------------+--------------+---+------------+---------------------+-------------+-------------+
| Closing balance | (57,842,753) | (57,031,221) | - | 811,532 | | 57,842,753 | (28,286,361) | - | 29,556,392 |
+----------------------+--------------+--------------+-------------+--------------+---+------------+---------------------+-------------+-------------+
| |
+-------------------------------------------------------------------------------------------------------------+
| Notes to the financial statements are included on pages 15 to 45. |
+----------------------+--------------+--------------+-------------+--------------+---+------------+----------+----------+-------------+-------------+
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Cash flow statement |
| for the financial year ended 30 June 2008 |
| |
+---------------------------------------------------------------------------------------------+
| | | | | |
+--------------------------+-------+---------------------------+--+---------------------------+
| | | Consolidated | | Company |
+--------------------------+-------+---------------------------+--+---------------------------+
| | Note | 2008 | 2007 | | 2008 | 2007 |
| | | $ | $ | | $ | $ |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Cash flows from | | | | | | |
| operating activities | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Receipts from customers | | 199,287 | 123,683 | | - | - |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Payments to suppliers | | (4,328,407) | (3,810,493) | | (3,970,353) | (3,489,561) |
| and employees | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Interest and other costs | | (55,569) | (175,002) | | (55,569) | (175,002) |
| of finance paid | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Net cash used in | 29 | (4,184,689) | (3,861,812) | | (4,025,922) | (3,664,563) |
| operating activities | (c) | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Cash flows from | | | | | | |
| investing activities | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Interest received | | 143,337 | 207,030 | | 170,852 | 206,110 |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Payment for plant and | | (10,458) | (256,556) | | - | (14,101) |
| equipment | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Payment for intangible | | (47,923) | (109,165) | | (47,923) | (109,165) |
| assets | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Purchase of business |29(b) | - | (5,242,599) | | - | - |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Purchase of other | | (377) | (11,176) | | - | (6,078,113) |
| financial assets | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Proceeds from sale of | | 318 | - | | 318 | - |
| plant & equipment | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Net cash provided | | 84,897 | (5,412,466) | | 123,247 | (5,995,269) |
| by/(used in) investing | | | | | | |
| activities | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Cash flows from | | | | | | |
| financing activities | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Payment for share issue | | - | (537,330) | | - | (537,330) |
| costs | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Proceeds from issue of | | - | 16,805,945 | | - | 16,805,945 |
| shares | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Repayment of borrowings | | (351,119) | (1,223,793) | | (351,119) | (1,223,793) |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Net cash (used | | (351,119) | 15,044,822 | | (351,119) | 15,044,822 |
| in)/provided by | | | | | | |
| financing activities | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Net (decrease)/ increase | | (4,450,911) | 5,770,544 | | (4,253,794) | 5,384,990 |
| in cash and cash | | | | | | |
| equivalents | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Cash and cash | | 5,720,438 | 237,805 | | 5,334,884 | 237,805 |
| equivalents at the | | | | | | |
| beginning of the year | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Effects of exchange rate | | (25,768) | (287,911) | | (25,768) | (287,911) |
| changes on the balance | | | | | | |
| of cash held in foreign | | | | | | |
| currencies | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| Cash and cash | 29 | 1,243,759 | 5,720,438 | | 1,055,322 | 5,334,884 |
| equivalents at the end | (a) | | | | | |
| of the year | | | | | | |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
| |
+---------------------------------------------------------------------------------------------+
| Notes to the financial statements are included on pages 15 to 45. |
+--------------------------+-------+-------------+-------------+--+-------------+-------------+
+------+--------------------------------------------------------------------------------------------------------------------------------------------------------------+--------------------------------------+
| Notes to the financial statements |
| for the financial year ended 30 June 2008 |
| |
+------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| 1. | General information |
+------+-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Norwood Immunology Limited (the company) is incorporated in Australia and |
| | listed on London's AIM exchange. |
| | Norwood Immunology Limited's registered office and its principal place of |
| | business are as follows: |
+------+-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Registered office | Principal place of business |
| | Minter Ellison | c/- Suite 5, Level 1 |
| | Rialto Towers' Level 23 | 405 Nepean Highway |
| | 525 Collins Street | Frankston VIC 3199 |
| | Melbourne, VIC 3000 | Australia |
| | Australia | |
+------+--------------------------------------------------------------------------------------------------------------------------------------------------------------+--------------------------------------+
| 2. | Adoption of new and revised Accounting Standards |
+------+-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | In the current year, the Consolidated entity has adopted all of the new |
| | and revised Standards and Interpretations issued by the Australian |
| | Accounting Standards Board (the AASB) that are relevant to its operations |
| | for the current reporting period. The adoption of these new and revised |
| | Standards and Interpretations did not have any material financial impact |
| | on the financial statements of the Company or the consolidated entity. The |
| | Consolidated entity has also adopted the following Standards as listed |
| | below which only impacted on the consolidated entity's financial |
| | statements with respect to disclosure.* |
| | AASB 101 'Presentation of Financial Statements (revised October 2006)'* |
| | AASB 7 'Financial Instruments: Disclosure' |
+------+-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Impact of accounting standards not yet effective |
| | At the date of authorisation of the financial report, the following Standards and Interpretations that are relevant to the company and the consolidated entity were in issue but not yet effective. |
| | Title Effective for annual reporting |
| | periods beginning |
| | AASB 101 'Presentation of 1 January 2009 |
| | Financial Statements' - revised |
| | September 2007 |
| | AASB 8 'Operating Segments' 1 January 2009 |
| | AASB 2007-6 'Amendments to 1 January 2009 |
| | Australian Accounting Standards |
| | arising from AASB 123' |
| | AASB 123 ' Borrowing Costs' - 1 January 2009 |
| | revised standard |
| | AASB 3 ' Business Combinations' 1 July 2009 |
| | AASB 127 'Consolidated and 1 July 2009 |
| | Separate Financial Statements |
| | AASB 2008-1 Amendments to 1 January 2009 |
| | Australian Accounting Standard - |
| | 'Share-based Payments Vesting |
| | Conditions and Cancellations [AASB |
| | 2] |
| | AASB 2008-3 Amendments to 1 July 2009 |
| | Australian Accounting Standards |
| | arising from AASB 3 and ASSB 127 |
| | [AASBs |
| | 1,2,4,5,101,107,112,114,116,121,128,131,132,133,134,136,137,138 |
| | and 139 and Interpretations 9 &107] |
| | AASB 2008-5 Amendments to 1 January 2009 |
| | Australian Accounting Standard |
| | arising from the Annual |
| | Improvements Project [AASBs |
| | 5,7,101,102,107,108,110,116,118,119,120,123,127,128,129,131,132,134,136,138,139,140,141,1023 |
| | & 1038] |
| | AASB 2008-6 Further Amendments to 1 July 2009 |
| | Australian Accounting Standards |
| | arising from the Annual |
| | Improvements Project [AASB 1 & |
| | AASB 5] |
| | |
+------+--------------------------------------------------------------------------------------------------------------------------------------------------------------+--------------------------------------+
+------++--------------------------------------------------------------------------++
| 2 | Adoption of new and revised Accounting Standards (continued) |
+-------+--------------------------------------------------------------------------+
| | AASB 2008-7 Further Amendments to 1 January 2009 |
| | Australian Accounting Standards - |
| | Cost of an Investment in a |
| | Subsidiary, Joint Controlled |
| | Entity or Associate [AASB 1, AASB |
| | 118, AASB 121, AASB 127 & AASB |
| | 136] |
| | Interpretation 16 Hedges of a Net 1 October 2008 |
| | Investment in Foreign Operations |
| | |
+-------+--------------------------------------------------------------------------+
| | The directors are currently evaluating the effect of these changes and |
| | will make the necessary amendments and disclosure as required. |
| | |
+-------+--------------------------------------------------------------------------+
| | Statement of Compliance |
+-------+--------------------------------------------------------------------------+
| | The financial report is a general purpose financial report prepared in |
| | accordance with the Australian Corporations Act 2001, Accounting |
| | Standards and Interpretations, and complies with other requirements of |
| | the law. |
| | The financial report includes the separate financial statements of the |
| | company and the consolidated financial statements of the Consolidated |
| | entity. |
| | Accounting Standards include Australian equivalents to International |
| | Financial Reporting Standards (A-IFRS). Compliance with A-IFRS ensures |
| | that the financial report, comprising the financial statements and notes |
| | of the company and the consolidated entity, complies with International |
| | Financial Reporting Standards (IFRS). |
| | The financial statements were authorized for issue by the directors on 2 |
| | March 2009. |
| | |
+-------+--------------------------------------------------------------------------+
| 3 | Summary of accounting policies |
+------+----------------------------------------------------------------------------+
| | Basis of preparation |
+------+----------------------------------------------------------------------------+
| | The financial report has been prepared on the basis of historical cost, |
| | except for the revaluation of certain non-current assets and financial |
| | instruments. Cost is based on the fair values of the consideration given |
| | in exchange for assets. All amounts are presented in Australian dollars, |
| | unless otherwise noted. |
| | |
+------+----------------------------------------------------------------------------+
| | Critical accounting judgements and key sources of estimation uncertainty |
+------+----------------------------------------------------------------------------+
| | In the application of A-IFRS management is required to make judgments, |
| | estimates and assumptions about carrying values of assets and liabilities |
| | that are not readily apparent from other sources. The estimates and |
| | associated assumptions are based on historical experience and various |
| | other factors that are believed to be reasonable under the circumstance, |
| | the results of which form the basis of making the judgments. Actual |
| | results may differ from these estimates. |
| | |
+------+----------------------------------------------------------------------------+
| | The estimates and underlying assumptions are reviewed on an ongoing basis. |
| | Revisions to accounting estimates are recognised in the period in which |
| | the estimate is revised if the revision affects only that period, or in |
| | the period of the revision and future periods if the revision affects both |
| | current and future periods. |
| | |
+------+----------------------------------------------------------------------------+
| | Judgments made by management in the application of A-IFRS that have |
| | significant effects on the financial statements and estimates with a |
| | significant risk of material adjustments in the next year are disclosed, |
| | where applicable, in the relevant notes to the financial statements. |
| | Refer to note 4 for discussion of critical judgments in applying the |
| | consolidated entity's accounting policies, and key sources of estimation |
| | uncertainty. |
| | |
+------++--------------------------------------------------------------------------++
+-----+---+------------------------------------------------------------------------+
| 3 | Summary of accounting policies (continued) |
+---------+------------------------------------------------------------------------+
| | Going concern basis |
+---------+------------------------------------------------------------------------+
| | The financial report has been prepared on the going concern basis, |
| | which assumes continuity of normal business activities and the |
| | realisation of assets and the settlement of liabilities in the |
| | ordinary course of business. |
| | |
| | The Company is an emerging pharmaceutical business and as such expects |
| | to be cash absorbing until its technologies are commercialised. For |
| | the financial year ended 30 June 2008, the consolidated entity |
| | incurred a net loss of $28,488,291 (Company: $28,744,860) and |
| | experienced negative cash flows from operations of $4,184,689 |
| | (Company: $4,025,922). |
| | |
| | To continue as a going concern the Company requires the continued |
| | support of its loan note holders and shareholders, or to raise new |
| | facilities or equity from other parties or to realise assets to |
| | provide the necessary cash for the business to continue to trade. In |
| | the light of the current environment in world capital markets, the |
| | directors have concluded that realisation of group assets is the most |
| | appropriate route to ensure that capital is available to continue as a |
| | going concern. |
| | |
| | As announced on 6 December 2008, the Company has now entered into a |
| | non-binding Letter of Intent (LOI) with a NASDAQ listed international |
| | biotechnology company focused on developing innovative vaccines |
| | interfering with early pathogen transmission events, for the sale of |
| | 100% of the Company's interest in Bestewil Holding B.V, the immediate |
| | holding company of Virosome Biologicals B.V. In connection with the |
| | execution of this LOI and the granting of a period of exclusivity to |
| | the NASDAQ company to 31 January 2009, the Company has received a non |
| | refundable goodwill deposit of EUR100,000. |
| | |
| | The consideration proposed under the LOI includes cash on completion, |
| | the issue to the Company of a secured loan note by the acquirer, |
| | milestone payments due on successful development of the Virosome |
| | Biologicals' technology, share options in the NASDAQ company and a |
| | share in the ongoing income streams of certain of Virosome |
| | Biologicals' vaccine development programmes. The initial cash |
| | consideration would be sufficient to fund the remaining operations of |
| | the group for at least 12 months from the date of the accounts.There |
| | are a number of uncertainties as to the completion of the sale, |
| | including the signing of a legally binding sale agreement, the |
| | potential acquirer raising the necessary finance and the approval of |
| | the sale by the Company's shareholders. However, the directors have a |
| | reasonable expectation that the proposed transaction will be completed |
| | on the basis that the Company has a signed Letter of Intent with the |
| | NASDAQ company, has been paid an exclusivity fee of EUR 100,000 in |
| | connection with the transaction, has received a draft Sale and |
| | Purchase Agreement, their discussions to date with the NASDAQ |
| | company's management and their discussions with the Company's major |
| | shareholders. |
| | |
| | These financial statements have therefore been prepared on a going |
| | concern basis which contemplates the continuity of normal business |
| | activities and the realisation of assets and settlement of liabilities |
| | in the ordinary course of business. |
| | In the event that the Company is unable to complete the present sale |
| | transaction, there is material uncertainty whether the Company can |
| | continue as a going concern. If the Company is unable to continue as a |
| | going concern, it may be required to realise its assets and extinguish |
| | its liabilities other than in the normal course of business and at |
| | amounts different to those stated in the financial statements. |
| | |
| | No adjustments have been made to the financial report relating to the |
| | recoverability and classification of the asset carrying amounts or the |
| | classification of liabilities that might be necessary should the |
| | Company not continue as a going concern. |
+---------+------------------------------------------------------------------------+
| 3. | Summary of accounting policies (continued) |
+-----+----------------------------------------------------------------------------+
| | Significant accounting policies |
+---------+------------------------------------------------------------------------+
| | The following significant accounting policies have been adopted in the |
| | preparation and presentation of the financial report: |
| | |
+---------+------------------------------------------------------------------------+
| | (a)Basis of consolidation |
+---------+------------------------------------------------------------------------+
| | The consolidated financial statements |
| | incorporate the financial statements of |
| | the Company and entities controlled by |
| | the Company (its subsidiaries) (referred |
| | to as 'the Consolidated entity' in these |
| | financial statements). Control is |
| | achieved where the Company has the power |
| | to govern the financial and operating |
| | policies of an entity so as to obtain |
| | benefits from its activities. |
| | The results of subsidiaries acquired or |
| | disposed of during the year are included |
| | in the consolidated income statement from |
| | the effective date of acquisition or up |
| | to the effective date of disposal, as |
| | appropriate. |
| | Where necessary, adjustments are made to |
| | the financial statements of subsidiaries |
| | to bring their accounting policies into |
| | line with those used by other members of |
| | the Consolidated entity. |
| | All intra-group transactions, balances, |
| | income and expenses are eliminated in |
| | full on consolidation. In the separate |
| | financial statements of the Company, |
| | intra-group transactions are generally |
| | accounted for by reference to the |
| | existing book value of the items. Where |
| | the transaction value of common control |
| | transactions differ from their |
| | consolidated book value, the difference |
| | is recognised as a contribution by or |
| | distribution to equity participants by |
| | the transaction entities. |
| | |
+---------+------------------------------------------------------------------------+
| | (b) Borrowings |
+---------+------------------------------------------------------------------------+
| | Borrowings are recorded initially at fair |
| | value, net of transaction costs. |
+---------+------------------------------------------------------------------------+
| | Subsequent to initial recognition, |
| | borrowings are measured at amortised cost |
| | with any difference between the initial |
| | recognised amount and the redemption value |
| | being recognised in profit and loss over |
| | the period of the borrowing using the |
| | effective interest rate method. |
| | |
+---------+------------------------------------------------------------------------+
| | (c) Cash and cash equivalents |
+---------+------------------------------------------------------------------------+
| | Cash and cash equivalents comprise cash on |
| | hand and demand deposits. Cash equivalents |
| | are short-term, highly liquid investments |
| | that are readily convertible to known |
| | amounts of cash, which are subject to an |
| | insignificant risk of change in value and |
| | have a maturity date of three months or |
| | less at the date of acquisition. |
| | Bank overdrafts are shown within |
| | borrowings in current liabilities in the |
| | balance sheet. |
| | |
+---------+------------------------------------------------------------------------+
| | (d) Employee benefits |
+---------+------------------------------------------------------------------------+
| | A liability is recognised for benefits |
| | accruing to employees in respect of wages |
| | and salaries, annual leave, long service |
| | leave, and sick leave when it is probable |
| | that settlement will be required and they |
| | are capable of being measured reliably. |
| | |
| | Liabilities are recognised in respect of |
| | employee benefits which are expected to be |
| | settled within 12 months are measured at |
| | their nominal values using the |
| | remuneration rate expected to apply at the |
| | time of settlement. |
| | Liabilities recognised in respect of |
| | employee benefits which are not expected |
| | to be settled within 12 months are |
| | measured as the present value of the |
| | estimated future cash outflows to be made |
| | by the company in respect of services |
| | provided by employees up to reporting |
| | date. |
| | |
+---------+------------------------------------------------------------------------+
| | |
+-----+---+------------------------------------------------------------------------+
+-----+---+------------------------------------------------------------------------+
| 3. | Summary of accounting policies (continued) |
+-----+----------------------------------------------------------------------------+
| | (e) Financial assets |
+---------+------------------------------------------------------------------------+
| | Investments are recognised and |
| | derecognised on trade date where purchase |
| | or sale of an investment is under a |
| | contract whose terms require delivery of |
| | the investment within the timeframe |
| | established by the market concerned, and |
| | are initially measured at fair value, net |
| | of transaction costs. |
| | |
| | Subsequent to initial recognition, |
| | investments in subsidiaries are measured |
| | at cost in the company financial |
| | statements. |
| | |
| | Other financial assets are classified into |
| | the following specified categories: |
| | financial assets 'at fair value through |
| | profit or loss', 'held-to-maturity' |
| | investments, 'available-for-sale' |
| | financial assets, and 'loans and |
| | receivables'. The classification depends |
| | on the nature and purpose of the financial |
| | assets and is determined at the time of |
| | initial recognition. |
+---------+------------------------------------------------------------------------+
| | Financial assets at fair value through |
| | profit or loss |
+---------+------------------------------------------------------------------------+
| | The company has classified certain shares |
| | and options as financial assets at fair |
| | value through profit or loss. Financial |
| | assets held for trading purposes are |
| | classified as current assets and are |
| | stated at fair value, with any resultant |
| | gain or loss recognised in profit or loss. |
+---------+------------------------------------------------------------------------+
| | Loans and receivables |
+---------+------------------------------------------------------------------------+
| | Trade receivables, loans, and other |
| | receivables that have fixed or |
| | determinable payments that are not quoted |
| | in an active market are classified as |
| | 'loans and receivables'. Loans and |
| | receivables are measured at amortised |
| | cost using the effective interest rate |
| | method less impairment. |
| | Interest income is recognised by applying |
| | the effective interest rate. |
+---------+------------------------------------------------------------------------+
| | Impairment of financial assets |
+---------+------------------------------------------------------------------------+
| | Financial assets, other than those at fair |
| | value through profit or loss, are assessed |
| | for indicators of impairment at each |
| | balance sheet date. Financial assets are |
| | impaired where there is objective evidence |
| | that as a result of one or more events |
| | that occurred after the initial |
| | recognition of the financial asset the |
| | estimated future cash flows of the |
| | investment have been impacted. For |
| | financial assets carried at amortised |
| | cost, the amount of the impairment is the |
| | difference between the asset's carrying |
| | amount and the present value of estimated |
| | future cash flows, discounted at the |
| | original effective interest rate. |
| | |
| | The carrying amount of the financial asset |
| | is reduced by the impairment loss directly |
| | for all financial assets with the |
| | exception of trade receivables where the |
| | carrying amount is reduced through the use |
| | of an allowance account. When a trade |
| | receivable is uncollectible, it is written |
| | off against the allowance account. |
| | Subsequent recoveries of amounts |
| | previously written off are credited |
| | against the allowance account. Changes in |
| | the carrying amount of the allowance |
| | account are recognised in profit or loss. |
| | |
| | With the exception of available-for-sale |
| | equity instruments, if, in a subsequent |
| | period, the amount of the impairment loss |
| | decreases and the decrease can be related |
| | objectively to an event occurring after |
| | the impairment was recognised, the |
| | previously recognised impairment loss is |
| | reversed through profit or loss to the |
| | extent the carrying amount of the |
| | investment at the date the impairment is |
| | reversed does not exceed what the |
| | amortised cost would have been had the |
| | impairment not been recognised. |
| | |
| | In respect of available-for-sale equity |
| | instruments, any subsequent increase in |
| | fair value after an impairment loss is |
| | recognised directly in equity. |
+---------+------------------------------------------------------------------------+
| | (f)Foreign currency |
+---------+------------------------------------------------------------------------+
| | The individual financial statements of |
| | each group entity are presented in its |
| | functional currency being the currency of |
| | the primary economic environment in which |
| | the entity operates. For the purpose of |
| | the consolidated financial statements, the |
| | results and financial position of each |
| | entity are expressed in Australian |
| | dollars, which is the functional currency |
| | of Norwood Immunology Limited and the |
| | presentation currency for the consolidated |
| | financial statements. |
| | |
| | In preparing the financial statements of |
| | the individual entities, transactions in |
| | currencies other than the entity's |
| | functional currency are recorded at the |
| | rates of exchange prevailing on the dates |
| | of the transactions. At each balance sheet |
| | date, monetary items denominated in |
| | foreign currencies are retranslated at the |
| | rates prevailing at the balance sheet |
| | date. Non-monetary items carried at fair |
| | value that are denominated in foreign |
| | currencies are retranslated at the rates |
| | prevailing on the date when the fair value |
| | was determined. Non-monetary items that |
| | are measured in terms of historical cost |
| | in foreign currency are not retranslated. |
| | |
+-----+---+------------------------------------------------------------------------+
+---+---+---+--------+---+-----+---+----+--+---+-----+---+---+---+---+--------------------------------------+-----+----+---+---+---+---+--------------+---+---+---+---+---+---+---+---+
| 3 | Summary of accounting policies (continued) |
+-------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | (f)Foreign currency (continued) |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Exchange differences are recognised in profit or loss in the |
| | period in which they arise except for exchange differences on |
| | monetary items receivable from or payable to a foreign operation |
| | for which settlement is neither planned or likely to occur, |
| | which form part of the net investment in a foreign operation, |
| | and which are recognised in the foreign currency translation |
| | reserve and recognised in profit or loss on disposal of the net |
| | investment. |
| | On consolidation, the assets and liabilities of the Consolidated |
| | entity's foreign operations are translated into Australian |
| | dollars at exchange rates prevailing on the balance sheet date. |
| | Income and expense items are translated at the average exchange |
| | rates for the period, unless exchange rates fluctuated |
| | significantly during that period, in which case the exchange |
| | rates at the dates of the transactions are used. Exchanges |
| | differences arising, if any, are classified as equity and |
| | transferred to the consolidated entity's foreign currency |
| | translation reserve. Such exchange differences are recognised in |
| | the profit or loss in the period in which the foreign operation |
| | is disposed. |
| | Goodwill and fair value adjustments arising on the acquisition |
| | of a foreign entity on or after the date of transition to A-IFRS |
| | are treated as assets and liabilities of the foreign entity and |
| | translated at exchange rates prevailing at the reporting date. |
| | Goodwill arising on acquisitions before the date of transition |
| | to A-IFRS is treated as an Australian dollar denominated asset. |
| | |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | (g) Goods and services tax |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Revenues, expenses and assets are recognised net of the |
| | amount of goods and services tax (GST), except: |
| | |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | i. where the amount of GST incurred is not recoverable |
| | from the taxation authority, it is recognised as part of |
| | the cost of acquisition of an asset or as part of an |
| | item of expense; or |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | ii. for receivables and payables which are recognised |
| | inclusive of GST. |
| | |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | The net amount of GST recoverable from, or payable to, the |
| | taxation authority is included as part of receivables or |
| | payables. |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Cash flows are included in the cash flow statement on a gross |
| | basis. The GST component of cash flows arising from investing |
| | and financing activities which is recoverable from, or |
| | payable to, the taxation authority is classified as operating |
| | cash flows. |
| | |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | (h)Goodwill |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Goodwill acquired in a business combination is initially |
| | measured at its cost, being the excess of the cost of the |
| | business combination over the acquirer's interest in the net |
| | fair value of the identifiable assets, liabilities and |
| | contingent liabilities recognised. Goodwill is subsequently |
| | measured at its cost less any impairment losses. |
| | For the purpose of impairment testing, goodwill is allocated |
| | to each of the Consolidated entity's cash-generating units |
| | (CGUs), expected to benefit from the synergies of the |
| | business combination. CGUs to which goodwill has been |
| | allocated are tested for impairment annually, or more |
| | frequently if events or changes in circumstances indicate |
| | that goodwill might be impaired. |
| | If the recoverable amount of the CGU is less than the |
| | carrying amount of the CGU, the impairment loss is allocated |
| | first to reduce the carrying amount of any goodwill allocated |
| | to the CGU and then to the other assets of the CGU pro-rata |
| | on the basis of the carrying amount of each asset in the CGU. |
| | An impairment loss recognised for goodwill is recognised |
| | immediately in profit or loss and is not reversed in a |
| | subsequent period. |
| | On disposal of an operation within a CGU, the attributable |
| | amount of goodwill is included in the determination of the |
| | profit or loss on disposal of the operation. |
| | |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| 3. | Summary of accounting policies (continued) |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | (i) Impairment of assets |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | At each reporting date, the entity reviews the carrying |
| | amounts of its tangible and intangible assets to determine |
| | whether there is any indication that those assets have |
| | suffered an impairment loss. If any such indication exists, |
| | the recoverable amount of the asset is estimated in order to |
| | determine the extent of the impairment loss (if any). Where |
| | the asset does not generate cash flows that are independent |
| | from other assets, the entity estimates the recoverable |
| | amount of the cash-generating unit to which the asset |
| | belongs. |
| | |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Recoverable amount is the higher of fair value less costs to |
| | sell and value in use. In assessing value in use, the |
| | estimated future cash flows are discounted to their present |
| | value using a pre-tax discount rate that reflects current |
| | market assessments of the time value of money and the risks |
| | specific to the asset for which the estimates of future cash |
| | flows have not been adjusted |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | If the recoverable amount of an asset (or cash-generating |
| | unit) is estimated to be less than its carrying amount, the |
| | carrying amount of the asset (cash-generating unit) is |
| | reduced to its recoverable amount. An impairment loss is |
| | recognised in profit or loss immediately, unless the relevant |
| | asset is carried at fair value, in which case the impairment |
| | loss is treated as a revaluation decrease. |
| | |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Where an impairment loss subsequently reverses, the carrying |
| | amount of the asset (cash-generating unit) is increased to |
| | the revised estimate of its recoverable amount, but only to |
| | the extent that the increased carrying amount does not exceed |
| | the carrying amount that would have been determined had no |
| | impairment loss been recognised for the asset |
| | (cash-generating unit) in prior years. A reversal of an |
| | impairment loss is recognised in profit or loss immediately, |
| | unless the relevant asset is carried at fair value, in which |
| | case the reversal of the impairment loss is treated as a |
| | revaluation increase. |
| | |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | (j) Income tax |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Current tax |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Current tax is calculated by reference to the amount of income taxes payable or recoverable |
| | in respect of the taxable profit or tax loss for the period. It is calculated using tax |
| | rates and tax laws that have been enacted or substantively enacted by reporting date. |
| | Current tax for current and prior periods is recognised as a liability (or asset) to the |
| | extent that it is unpaid (or refundable). |
| | |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Deferred tax |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Deferred tax is accounted for using the balance sheet liability method in respect of |
| | temporary differences arising from differences between the carrying amount of assets and |
| | liabilities in the financial statements and the corresponding tax base of those items. |
| | In principle, deferred tax liabilities are recognised for all taxable temporary differences. |
| | Deferred tax assets are recognised to the extent that it is probable that sufficient taxable |
| | amounts will be available against which deductible temporary differences or unused tax |
| | losses and tax offsets can be utilised. However, deferred tax assets and liabilities are not |
| | recognised if the temporary differences giving rise to them arise from the initial |
| | recognition of assets and liabilities (other than as a result of a business combination) |
| | which affects neither taxable income nor accounting profit. Furthermore, a deferred tax |
| | liability is not recognised in relation to taxable temporary differences arising from |
| | goodwill. |
| | |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Deferred tax liabilities are recognised for taxable temporary differences arising on investments in |
| | subsidiaries, branches, associates and joint ventures except where the consolidated entity is able |
| | to control the reversal of the temporary differences and it is probable that the temporary |
| | differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible |
| | temporary differences associated with these investments and interests are only recognised to the |
| | extent that it is probable that there will be sufficient taxable profits against which to utilise |
| | the benefits of the temporary differences and they are expected to reverse in the foreseeable |
| | future. |
| | |
+-----------+-----------------------------------------------------------------------------------------------------------------------------------------------------------------+
| 3. | Summary of accounting policies (continued) |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | (j) Income tax (continued) |
+-----------+---------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the |
| | period(s) when the asset and liability giving rise to them are realised or settled, based on tax |
| | rates (and tax laws) that have been enacted or substantively enacted by reporting date. The |
| | measurement of deferred tax liabilities and assets reflects the tax consequences that would follow |
| | from the manner in which the consolidated entity expects, at the reporting date, to recover or |
| | settle the carrying amount of its assets and liabilities. |
| | |
+-----------+-----------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Deferred tax assets and liabilities are offset when they relate to income taxes levied by the |
| | same taxation authority and the company intends to settle its current tax assets and liabilities |
| | on a net basis. |
| | |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Current and deferred tax for the period |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Current and deferred tax is recognised as an expense or income in the income statement, except |
| | when it relates to items credited or debited directly to equity, in which case the deferred tax |
| | is also recognised directly in equity, or where it arises from the initial accounting for a |
| | business combination, in which case it is taken into account in the determination of goodwill or |
| | excess. |
| | |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | (k) Intangible Assets |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Patents, trademarks and licences |
| | Patents, trademarks and licences are recorded at cost less |
| | accumulated amortisation and impairment. Amortisation is charged on |
| | a straight line basis over their estimated useful lives. The |
| | estimated useful life and amortisation method is reviewed at the |
| | end of each annual reporting period, with any changes being |
| | recognised as a change in accounting estimate. |
| | |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Research and development costs |
| | Expenditure on research activities is recognised as an expense in |
| | the period in which it is incurred. Where no internally-generated |
| | intangible asset can be recognised, development expenditure is |
| | recognised as an expense in the period as incurred. |
| | An intangible asset arising from development (or from the |
| | development phase of an internal project) is recognised if, and |
| | only if, all of the following are demonstrated:* |
| | the technical feasibility of completing the intangible asset so |
| | that it will be available for use or sale;* |
| | the intention to complete the intangible asset and use or sell |
| | it;* |
| | the ability to use or sell the intangible asset;* |
| | how the intangible asset will generate probable future economic |
| | benefits;* the availability of adequate technical, financial and |
| | other resources to complete the development and to use or sell the |
| | intangible asset; and* |
| | the ability to measure reliably the expenditure attributable to the |
| | intangible asset during its development. |
| | The amount initially recognised for internally-generated intangible |
| | assets is the sum of the expenditure incurred from the date when |
| | the intangible asset first meets the recognition criteria listed |
| | above. |
| | Subsequent to initial recognition, internally-generated intangible |
| | assets are reported at cost less accumulated amortisation and |
| | accumulated impairment losses, on the same basis as intangible |
| | assets acquired separately. |
| | Amortisation of research and development assets |
| | Amortisation is charged on a straight line basis over the useful |
| | economic life of 10 years, commencing only once the development |
| | project is completed, i.e. achieves regulatory approval and |
| | commences revenue generation from end market sales. Once |
| | amortisation commences, the estimated useful life and amortisation |
| | method is reviewed at the end of each annual reporting period. |
| | Intangible assets acquired in a business combination |
| | All potential intangible assets acquired in a business combination |
| | are identified and recognised separately from goodwill where they |
| | satisfy the definition of an intangible asset and their fair value |
| | can be measured reliably. |
| | Subsequent to initial recognition, intangible assets acquired in a |
| | business combination are reported at cost less accumulated |
| | amortisation and accumulated impairment losses, on the same basis |
| | as intangible assets acquired separately. |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------+
| 3. | Summary of accounting policies (continued) |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | l) Leased assets |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Operating lease payments are recognised as an expense on a |
| | straight-line basis over the lease term, except where another |
| | systematic basis is more representative of the time pattern in which |
| | economic benefits from the leased asset are consumed. |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------+
| m) | Payables |
| | |
+--------------------+----------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Trade payables and other accounts payable are recognised when the company becomes obliged to make future |
| | payments resulting from the purchase of goods and services. |
| | |
+--------------------+----------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | (n) Plant and equipment |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Plant and equipment, are stated at cost less accumulated depreciation and |
| | impairment. Cost includes expenditure that is directly attributable to the |
| | acquisition of the item. In the event that settlement of all or part of the |
| | purchase consideration is deferred, cost is determined by discounting the |
| | amounts payable in the future to their present value as at the date of |
| | acquisition. |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Depreciation is provided on plant and equipment and is calculated on a straight |
| | line basis so as to write off the net cost of each asset over its expected |
| | useful life to its estimated residual value. |
| | The estimated useful lives, residual values and depreciation method are reviewed |
| | at the end of each annual reporting period. |
| | The gain or loss arising on disposal or retirement of an item of plant and |
| | equipment is determined as the difference between the sales proceeds and the |
| | carrying amount of the asset and is recognised in profit or loss. |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | The following estimated useful lives are used in the calculation of |
| | depreciation: |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | * Plant, | 5 - 15 |
| | equipment and | years |
| | office | |
| | furniture | |
+-----------+----------------------------------------------------------------------------------------------------------------------+--------------------------------------------------+
| | * Computer | 3 years |
| | software | |
+-----------+----------------------------------------------------------------------------------------------------------------------+--------------------------------------------------+
| | (o) Provisions |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Provisions are recognised when the company has a present obligation, the future |
| | sacrifice of economic benefits is probable, and the amount of the provision can |
| | be measured reliably. |
| | |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | The amount recognised as a provision is the best estimate of the consideration |
| | required to settle the present obligation at reporting date, taking into account |
| | the risks and uncertainties surrounding the obligation. Where a provision is |
| | measured using the cashflows estimated to settle the present obligation, its |
| | carrying amount is the present value of those cashflows. |
| | |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | When some or all of the economic benefits required to settle a provision are |
| | expected to be recovered from a third party, the receivable is recognised as an |
| | asset if it is virtually certain that recovery will be received and the amount |
| | of the receivable can be measured reliably. |
| | |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | An onerous contract is considered to exist where the company has a contract |
| | under which the unavoidable cost of meeting the contractual obligations exceed |
| | the economic benefits estimated to be received. Present obligations arising |
| | under onerous contracts are recognised as a provision to the extent that the |
| | present obligation exceeds the economic benefits estimated to be received. |
| | |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| 3. | Summary of accounting policies (continued) |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | (p) Revenue recognition |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Revenue is recognized to the extent that it is probable that the economic benefits will flow to the entity |
| | and the revenue can be reliably measured. |
| | |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Licence fees |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Licence fees are recognized in accordance with the substance of the relevant agreement. |
| | |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Dividend and interest revenue |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Dividend revenue is recognised on a receivable basis. Interest revenue is |
| | recognised on a time proportionate basis that takes into account the effective |
| | yield on the financial asset. |
| | |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | (q)Other financial liabilities |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Other financial liabilities, including borrowings, are initially measured at |
| | fair value, net of transaction costs. |
| | Other financial liabilities are subsequently measured at amortised cost using |
| | the effective interest method, with interest expense recognised on an effective |
| | yield basis. |
| | The effective interest method is a method of calculating the amortised cost of a |
| | financial liability and of allocating interest expense over the relevant period. |
| | The effective interest rate is the rate that exactly discounts estimated future |
| | cash payments through the expected life of the financial liability, or, where |
| | appropriate, a shorter period. |
| | |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| 4. | Critical accounting judgements and key sources of estimation uncertainty |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | The following are the critical judgements, that the Board has made in the process of applying the |
| | consolidated entity's accounting policies and that have the most significant effect on the amounts |
| | recognised in the financial statements. |
| | Employee entitlements |
| | Judgement is applied in determining the following key assumptions used in the calculation of long service |
| | leave at balance date: |
| | * |
| | Future increases in wages and salaries* |
| | Future increases in cost rates; and* |
| | Experience of employee departures and period of service |
| | The following are the key assumptions concerning the future, and other key sources of estimation uncertainty |
| | at the balance sheet date, that have a significant risk of causing a material adjustment to the carrying |
| | amounts of assets and liabilities within the next financial year. |
| | Impairment of non-current assets |
| | Determining whether goodwill and other intangible assets are impaired requires an estimation of the value in |
| | use of the cash generating units to which goodwill and the other intangible assets have been allocated. The |
| | value in use calculation requires the entity to estimate the future cash flows expected to arise from the |
| | cash-generating unit and a suitable discount rate in order to calculate present value. |
| | The carrying amount of goodwill and other intangible assets at balance sheet date was nil (2007: $2,100,000 |
| | and $22,732,609 respectively) after impairment losses of $24,880,532 (2007: $637,641) recognised during the |
| | current financial year. Details of the impairment loss are provided in notes 17 and 18. |
| | Fair value of other financial assets |
| | Other financial assets in the Company relate to the investment in Bestewil B.V. Given the financial |
| | uncertainty of the entity and based on existing knowledge, outcomes within the next annual reporting period |
| | that are different from assumptions could require a material adjustment to the carrying amount of nil |
| | (2007:$21,263,154) and after an impairment loss of $21,263,154 (2007:nil). Details of the impairment loss |
| | are provided in note 15. |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| 5. | Business and Geographical segments |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Information on business segments |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | For management purposes, the Consolidated entity is organised into 2 major operating divisions - Immunology |
| | and Virosomal Vaccines. These divisions are the basis on which the Consolidated entity reports its primary |
| | segment information. The principal research of each of these divisions are as follows: |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Immunology- improvement of immunity involving the re-growth of the thymus, generation of T cells and |
| | improved bone marrow function |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Virosomal Vaccines - a new method of making virosomes, as well as the combination of an adjuvant (immune |
| | response stimulator) in the membrane of the virosome that targets them specifically to antigen presenting |
| | cells or B cells ,to improve the efficacy of vaccines. |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Segment revenues |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | External sales | Inter-segment | Other | Total |
+ + +---------------------------+------------------------------------------------------+-----------------------------------------+-------------------------------+
| | | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 |
| | | $ | $ | $ | $ | $ | $ | $ | $ |
+-----------+------------+---------+-----------------+-------+----------------------------------------------+----------+------------------------------+-----------+-------------------+
| | Immunology | - | - | - | - | - | - | - | - |
+-----------+------------+---------+-----------------+-------+----------------------------------------------+----------+------------------------------+-----------+-------------------+
| | Virosomal | 259,985 | 123,683 | - | - | 144,096 | 18,841 | 404,081 | 142,524 |
| | Vaccines | | | | | | | | |
+-----------+------------+---------+-----------------+-------+----------------------------------------------+----------+------------------------------+-----------+-------------------+
| | | | | | | | | | |
+-----------+------------+---------+-----------------+-------+----------------------------------------------+----------+------------------------------+-----------+-------------------+
| | Total of all segments | 404,081 | 142,524 |
+-----------+-----------------------------------------------------------------------------------------------------------------------------------------+-----------+-------------------+
| | Eliminations | - | - |
+-----------+-----------------------------------------------------------------------------------------------------------------------------------------+-----------+-------------------+
| | Unallocated | 143,337 | 207,030 |
+-----------+-----------------------------------------------------------------------------------------------------------------------------------------+-----------+-------------------+
| | Consolidated revenue | 547,418 | 349,554 |
+-----------+-----------------------------------------------------------------------------------------------------------------------------------------+-----------+-------------------+
| | |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Segment results |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | 2008 | 2007 |
| | $ | $ |
+--------------------------------------------------------------------+-----------------------------------------------------------------+----------------------------------------------+
| | Immunology | (7,116,928) | (3,474,878) |
+-----------+--------------------------------------------------------+-----------------------------------------------------------------+----------------------------------------------+
| | Virosomal Vaccines | (20,133,867) | (661,867) |
+-----------+--------------------------------------------------------+-----------------------------------------------------------------+----------------------------------------------+
| | | |
+--------------------------------------------------------------------+-----------------------------------------------------------------+----------------------------------------------+
| | (27,250,795) | (6,230,557) |
+--------------------------------------------------------------------+-----------------------------------------------------------------+----------------------------------------------+
| | Eliminations | - | - |
+-----------+--------------------------------------------------------+-----------------------------------------------------------------+----------------------------------------------+
| | Unallocated | (1,237,496) | (727,022) |
+-----------+--------------------------------------------------------+-----------------------------------------------------------------+----------------------------------------------+
| | Loss before tax | (28,488,291) | (4,863,767) |
+-----------+--------------------------------------------------------+-----------------------------------------------------------------+----------------------------------------------+
| | Income tax expense | - | - |
+-----------+--------------------------------------------------------+-----------------------------------------------------------------+----------------------------------------------+
| | Loss for the year | (28,488,291) | (4,863,767) |
+-----------+--------------------------------------------------------+-----------------------------------------------------------------+----------------------------------------------+
| | |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Segment assets and liabilities |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Assets | | Liabilities |
+---------------------------------------+--+---------------------------------------------------------------------------+---+----------------------------------------------------------+
| | | 2008 | 2007 | | 2008 | 2007 |
| | | $ | $ | | $ | $ |
+---------------------------------------+--+---------------------+-----------------------------------------------------+---+----------------------------------+-----------------------+
| | Immunology | | 655,614 | 4,518,976 | | 472,076 | 818,559 |
+-----------+---------------------------+--+---------------------+-----------------------------------------------------+---+----------------------------------+-----------------------+
| | Virosomal | | 808,128 | 21,064,957 | | 1,226,282 | (463,669) |
| | Vaccines | | | | | | |
+-----------+---------------------------+--+---------------------+-----------------------------------------------------+---+----------------------------------+-----------------------+
| | | | | | | | |
+-----------+---------------------------+--+---------------------+-----------------------------------------------------+---+----------------------------------+-----------------------+
| | Total of all | | 1,463,742 | 25,583,933 | | 1,698,358 | 1,282,228 |
| | segments | | | | | | |
+-----------+---------------------------+--+---------------------+-----------------------------------------------------+---+----------------------------------+-----------------------+
| | Eliminations | | (646,715) | (24,473) | | (646,715) | (24,473) |
+-----------+---------------------------+--+---------------------+-----------------------------------------------------+---+----------------------------------+-----------------------+
| | Unallocated | | 1,154,401 | 5,491,242 | | 526,407 | 898,421 |
+-----------+---------------------------+--+---------------------+-----------------------------------------------------+---+----------------------------------+-----------------------+
| | Consolidated | | 1,971,428 | 31,050,702 | | 1,578,050 | 2,156,176 |
+-----------+---------------------------+--+---------------------+-----------------------------------------------------+---+----------------------------------+-----------------------+
| | |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| 5. | Business and Geographical segments (continued) |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Other segment information |
| | |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Immunology | | Virosomal Vaccines |
+---------------------------------------+--+---------------------------------------------------------------------------+---+----------------------------------------------------------+
| | | 2008 | 2007 | | 2008 | 2007 |
| | | $ | $ | | $ | $ |
+---------------------------------------+--+---------------------+-----------------------------------------------------+---+------------------------------+---------------------------+
| | Acquisition of | - | 123,266 | | 10,458 | 20,600,487 |
| | segment assets | | | | | |
+-----------+------------------------------+---------------------+-----------------------------------------------------+---+------------------------------+---------------------------+
| | Impairment losses: | (4,522,501) | (637,641) | | (20,358,031) | - |
| | Recognised in profit | | | | | |
| | or loss | | | | | |
+-----------+------------------------------+---------------------+-----------------------------------------------------+---+------------------------------+---------------------------+
| | Depreciation and | (5,197) | (9,891) | | (53,080) | (14,551) |
| | amortisation of | | | | | |
| | segment assets | | | | | |
+-----------+------------------------------+---------------------+-----------------------------------------------------+---+------------------------------+---------------------------+
| | | | | | | |
+---------------------------------------+--+---------------------+-----------------------------------------------------+---+------------------------------+---------------------------+
| | Information on geographical segments |
| | |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | The Consolidated entity's 2 divisions operate in two principal geographical areas - Australia & The |
| | Netherlands. The composition of each geographical segment is as follows: |
| | |
+-----------+-------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Revenue from | Segment assets | Acquisition of segment assets |
| | external customers | | |
+------------------------------+-------------------------+---------------------------------------------------------------------+------------------------------------------------------+
| | 2008 | 2007 | 2008 | 2007 | 2008 | 2007 |
| | $ | $ | $ | $ | $ | $ |
+------------------------------+---------------+---------+--------------------------------------------------------+------------+--------------------------+---------------------------+
| | Australia | - | - | 1,163,300 | 9,985,746 | - | 123,266 |
+-----------+------------------+---------------+---------+--------------------------------------------------------+------------+--------------------------+---------------------------+
| | Netherlands | 259,985 | 123,683 | 808,128 | 21,064,956 | 10,458 | 20,600,487 |
+-----------+------------------+---------------+---------+--------------------------------------------------------+------------+--------------------------+---------------------------+
| | 259,985 | 123,683 | 1,971,428 | 31,050,702 | 10,458 | 20,723,753 |
+------------------------------+---------------+---------+--------------------------------------------------------+------------+--------------------------+---------------------------+
| | | | | | | |
+------------------------------+---------------+---------+--------------------------------------------------------+------------+--------------------------+---------------------------+
| | | | | | | |
+------------------------------+---------------+---------+--------------------------------------------------------+------------+--------------------------+---------------------------+
| | Prior year revenues, costs, assets and liabilities have been restated to ensure comparability with the prior |
| | year. |
+---+---+---+--------+---+-----+---+----+--+---+-----+---+---+---+---+--------------------------------------+-----+----+---+---+---+---+--------------+---+---+---+---+---+---+---+---+
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | | Consolidated | | Company |
+-----+---------------------------+-----------------------+--+-----------------------+
| | | 2008 | 2007 | | 2008 | 2007 |
| | | $ | $ | | $ | $ |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| 6. | Revenue | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | An analysis of the | | | | | |
| | revenue for the year | | | | | |
| | from continuing | | | | | |
| | operations is as follows: | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | Licence fees revenue | 259,985 | 123,683 | | - | - |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | Interest income | 143,337 | 207,030 | | 170,852 | 206,110 |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | Other | 144,096 | 18,841 | | 3,479 | 6,723 |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | Total other income | 287,433 | 225,871 | | 174,331 | 212,833 |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| 7. | Loss before tax | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | Depreciation of | | | | | |
| | non-current assets: | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | - Office furniture and | 57,328 | 18,075 | | 4,248 | 4,522 |
| | equipment | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | Amortisation of | | | | | |
| | non-current assets | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | - Intangibles | 949 | 5,369 | | 949 | 5,369 |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | | 58,277 | 23,444 | | 5,197 | 9,891 |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | Employee benefits expense | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | Post employment | | | | | |
| | benefits: | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | - Defined contributions | 53,217 | 52,421 | | 53,217 | 52,421 |
| | plans | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | Other employee benefits | 1,575,279 | 1,421,015 | | 1,036,902 | 1,205,037 |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | | 1,628,496 | 1,473,436 | | 1,090,119 | 1,257,458 |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | Net foreign exchange loss | 101,179 | 245,827 | | 120,556 | 225,634 |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | | Consolidated | | Company |
+-----+---------------------------+-----------------------+--+-----------------------+
| | | 2008 | 2007 | | 2008 | 2007 |
| | | $ | $ | | $ | $ |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| 8. | Finance costs | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | - Interest - other | 55,569 | 202,319 | | 48,889 | 202,318 |
| | entities | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | - Interest - former | - | 472 | | - | - |
| | holding company | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | | 55,569 | 202,791 | | 48,889 | 202,319 |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| 9. | Income taxes | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | (a)The components of tax | | | | | |
| | expense comprise: | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | Current tax | - | - | | - | - |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | Deferred tax | - | - | | - | - |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | | - | - | | - | - |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
| | | | | | | |
+-----+---------------------------+-----------+-----------+--+-----------+-----------+
+------+------------------------+-------------+-------------+---+-------------+-------------+
| | (b)The prima facie tax | | | | | |
| | on loss from ordinary | | | | | |
| | activities before | | | | | |
| | income tax is | | | | | |
| | reconciled to the | | | | | |
| | income tax as follows: | | | | | |
+------+------------------------+-------------+-------------+---+-------------+-------------+
| | | | | | | |
+------+------------------------+-------------+-------------+---+-------------+-------------+
| | The prima facie tax | (8,546,487) | (1,459,130) | | (8,623,458) | (1,260,570) |
| | on loss from | | | | | |
| | ordinary activities | | | | | |
| | before income tax at | | | | | |
| | 30% (2007:30%) | | | | | |
+------+------------------------+-------------+-------------+---+-------------+-------------+
| | | | | | | |
+------+------------------------+-------------+-------------+---+-------------+-------------+
| | Add tax effect of: | | | | | |
+------+------------------------+-------------+-------------+---+-------------+-------------+
| | - Temporary | 8,764,138 | 1,526,733 | | 8,841,109 | 1,328,173 |
| | differences and | | | | | |
| | losses not | | | | | |
| | recognized | | | | | |
+------+------------------------+-------------+-------------+---+-------------+-------------+
| | - Entertainment | 4,697 | 3,456 | | 4,697 | 3,456 |
+------+------------------------+-------------+-------------+---+-------------+-------------+
| | - Other | 596 | 550 | | 596 | 550 |
+------+------------------------+-------------+-------------+---+-------------+-------------+
| | | | | | | |
+------+------------------------+-------------+-------------+---+-------------+-------------+
| | | | | | | |
+------+------------------------+-------------+-------------+---+-------------+-------------+
| | Less tax effect of | | | | | |
+------+------------------------+-------------+-------------+---+-------------+-------------+
| | - Research and | (222,944) | (71,609) | | (222,944) | (71,609) |
| | Development (125% | | | | | |
| | claim) | | | | | |
+------+------------------------+-------------+-------------+---+-------------+-------------+
| | | | | | | |
+------+------------------------+-------------+-------------+---+-------------+-------------+
| | Income tax | - | - | | - | - |
+------+------------------------+-------------+-------------+---+-------------+-------------+
+---+-+---------------------------+------------+------------+---+------------+------------+
| 9. | Income taxes (continued) | | | | | |
+-----+---------------------------+------------+------------+---+------------+------------+
| | | Consolidated | | Company |
+---+-----------------------------+-------------------------+---+-------------------------+
| | | 2008 | 2007 | | 2008 | 2007 |
| | | $ | $ | | $ | $ |
+---+-----------------------------+------------+------------+---+------------+------------+
| | | | | | | |
+---+-----------------------------+------------+------------+---+------------+------------+
| | | | | | | |
+---+-----------------------------+------------+------------+---+------------+------------+
| | (c) Tax assets and | | | | | |
| | liabilities: | | | | | |
+---+-----------------------------+------------+------------+---+------------+------------+
| | Assets | | | | | |
+---+-----------------------------+------------+------------+---+------------+------------+
| | Deferred tax assets | - | - | | - | - |
+---+-----------------------------+------------+------------+---+------------+------------+
| | | | | | | |
+---+-----------------------------+------------+------------+---+------------+------------+
| | Liabilities | | | | | |
+---+-----------------------------+------------+------------+---+------------+------------+
| | Current | - | - | | - | - |
+---+-----------------------------+------------+------------+---+------------+------------+
| | Current tax liability | - | - | | - | - |
+---+-----------------------------+------------+------------+---+------------+------------+
| | | | | | | |
+---+-----------------------------+------------+------------+---+------------+------------+
| | Non current | | | | | |
+---+-----------------------------+------------+------------+---+------------+------------+
| | Deferred tax liability | - | - | | - | - |
+---+-----------------------------+------------+------------+---+------------+------------+
| | | | | | | |
+---+-----------------------------+------------+------------+---+------------+------------+
| | (d) Deferred tax assets | | | | | |
| | not brought to account, the | | | | | |
| | benefit of which will only | | | | | |
| | be realized if the | | | | | |
| | conditions for | | | | | |
| | deductibility occur | | | | | |
+---+-----------------------------+------------+------------+---+------------+------------+
| | - temporary differences | 8,259,750 | (379,720) | | 8,265,346 | (379,720) |
+---+-----------------------------+------------+------------+---+------------+------------+
| | - tax losses: | | | | | |
+---+-----------------------------+------------+------------+---+------------+------------+
| | - operating losses | 10,110,584 | 9,458,591 | | 9,910,422 | 9,458,591 |
+---+-----------------------------+------------+------------+---+------------+------------+
| | - capital losses | - | - | | - | - |
+---+-----------------------------+------------+------------+---+------------+------------+
| | | 18,370,334 | 9,078,871 | | 18,176,768 | 9,078,871 |
+---+-----------------------------+------------+------------+---+------------+------------+
| | | | | | | |
+---+-----------------------------+------------+------------+---+------------+------------+
| | The tax rate used in the above reconciliation is the corporate tax rate of 30% |
| | payable by Australian corporate entities on taxable profits under Australian tax |
| | law. There has been no change in the corporate tax rate when compared with the |
| | previous reporting period. |
+---+-+---------------------------+------------+------------+---+------------+------------+
+-----+---------------------------+-----------+-+------------+---+-+--------+-+-+-----+-----+
| 10. | Key management personnel remuneration | | | | |
+-----+------------------------------------------------------------+--------+---+-----+-----+
| | The key management during the year were: |
+ +-------------------------------------------------------------------------------------+
| | Mr. P.J. Hansen - Non-Executive Chairman |
+-----+-------------------------------------------------------------------------------------+
| | Mr R.F. Williams - Chief Executive Officer and Director |
+-----+-------------------------------------------------------------------------------------+
| | Dr. R. Boyd - Chief Scientific Officer - Norwood Immunology Limited. |
| | Appointed as Director 21 December 2007. |
+-----+-------------------------------------------------------------------------------------+
| | Mr. J.H. Bell - Non-Executive Director resigned 31 August 2006 |
| | remains Company Secretary |
+-----+-------------------------------------------------------------------------------------+
| | Mr. B. Guzman - Non-Executive Director - resigned 21 December 2007. |
+-----+-------------------------------------------------------------------------------------+
| | Mr. H. Stein - Non-Executive Director - resigned 21 December 2007. |
+-----+-------------------------------------------------------------------------------------+
| | Mr. R.Scarrott - Chief Financial Officer - resigned 13 March 2008. |
+-----+-------------------------------------------------------------------------------------+
| | Dr. S. Lipe - Chief Operating Officer - Norwood Immunology Limited - resigned |
| | 1 April 2008. |
+-----+-------------------------------------------------------------------------------------+
| | Mr. A.J.H. Stegmann - Chief Scientific Officer - Virosome Biologicals B.V. |
+-----+-------------------------------------------------------------------------------------+
| | The compensation of the key management personnel of the company, is set out |
| | below |
+-----+-------------------------------------------------------------------------------------+
| | | | |
+-----+---------------------------+--------------------------+------------------------------+
| | | Consolidated | | Company |
+-----+---------------------------+--------------------------+---+--------------------------+
| | | 2008 | 2007 | | 2008$ | 2007 |
| | | $ | $ | | | $ |
+-----+---------------------------+-----------+--------------+---+------------+-------------+
| | | | | | | |
+-----+---------------------------+-----------+--------------+---+------------+-------------+
| | Short-term employee | 1,230,577 | 1,266,273 | | 935,534 | 969,435 |
| | benefits | | | | | |
+-----+---------------------------+-----------+--------------+---+------------+-------------+
| | Post-employment benefits | 44,801 | 45,521 | | 44,801 | 45,521 |
+-----+---------------------------+-----------+--------------+---+------------+-------------+
| | | 1,275,378 | 1,311,794 | | 980,335 | 1,014,956 |
+-----+---------------------------+-----------+--------------+---+------------+-------------+
| | |
+-----+-------------------------------------------------------------------------------------+
| 11. | Employee Option Plan | | | | |
+-----+---------------------------+-------------+------------+----------------+-------------+
| | | 2008 | 2007 | | 2008No. | 2007 |
| | | No. | No. | | | No. |
+-----+---------------------------+-------------+------------+---+------------+-------------+
| | Balance at beginning of | 200,000 | 200,000 | | 200,000 | 200,000 |
| | the financial year | | | | | |
+-----+---------------------------+-------------+------------+---+------------+-------------+
| | Granted during the year | - | - | | - | - |
+-----+---------------------------+-------------+------------+---+------------+-------------+
| | Exercised during the year | - | - | | - | - |
+-----+---------------------------+-------------+------------+---+------------+-------------+
| | Lapsed during the year | - | - | | - | - |
+-----+---------------------------+-------------+------------+---+------------+-------------+
| | Balance at the end of the | 200,000 | 200,000 | | 200,000 | 200,000 |
| | financial year | | | | | |
+-----+---------------------------+-------------+------------+---+------------+-------------+
| |
+-------------------------------------------------------------------------------------------+
| | The company has an ownership-based remuneration scheme for employees. All eligible |
| | employees are entitled to participate in the scheme. Directors are excluded from |
| | participation in the scheme.All eligible employees are eligible to participate in |
| | the scheme while they remain employed by the company. Where an employee becomes |
| | ineligible to participate in the scheme any options that have not vested to the |
| | employee at that date will be cancelled by the company. |
| | 200,000 options were issued in the 2004 financial year to eligible employees with |
| | an exercise price of $1.50 (150% of placing price of 38 pence per option or $1.00 |
| | per option based on an exchange rate of GBP0.382 : $1.00 as at 30 June 2004) and |
| | these options expired on 31 December 2008 and none were exercised. Each employee's |
| | options vest as follows, 25%, 25%, 25% and 25% after 12, 24, 36, and 48 months |
| | respectively, from the date of admission of the company to London Stock Exchanges |
| | Alternative Investment Market. Once exercised, the issued shares will rank equally |
| | with all other issued shares in the company. |
| | The following options issued to executives, granted on 27 June 2003 |
| | expired unexercised on 30 November 2007 and were exercisable as follows, 11,150,000 |
| | options exercisable at 0.30 pence per option immediately, 4,200,000 options |
| | exercisable at the placing price per share less 15 per cent (the placing price is |
| | 38 pence per share or $1.00 per share based on an exchange rate of GBP 0.382 : |
| | $1.00 as at 30 June 2004) and 1,800,000 options exercisable at the placing price |
| | per share less 15 per cent, upon the transfer of patents involving the embryonic |
| | thymic epithelial cells. |
| | The fair value of the options at grant date are recognised in the financial |
| | statements using a binomial option pricing model. The market value of the |
| | company's ordinary shares at 30 June 2008 was 2.25 pence based on the share price |
| | quoted on London Stock Exchanges Alternative Investment Market at that date. |
| | None of the options issued carry any voting rights until the options are exercised |
| | and converted into fully paid ordinary shares. All options convert at a rate of one |
| | option to one fully paid ordinary share. |
+-----+---------------------------+-----------+-+------------+---+-+--------+-+-+-----+-----+
+---------+-------+------+------------+------------+------+------+-------+------+------+------------+
| | | Consolidated | | Company |
+---------+--------------+-------------------------+-------------+----------------------------------+
| 12. | Remuneration | 2008 | 2007 | | 2008 | 2007 |
| | of auditors | $ | $ | | $ | $ |
+---------+--------------+------------+------------+-------------+--------------+-------------------+
| | Auditor of | | | | | |
| | the parent | | | | | |
| | entity | | | | | |
+---------+--------------+------------+------------+-------------+--------------+-------------------+
| | - Audit of | 65,000 | 69,408 | | 65,000 | 69,408 |
| | the | | | | | |
| | financial | | | | | |
| | report | | | | | |
+---------+--------------+------------+------------+-------------+--------------+-------------------+
| | | 65,000 | 69,408 | | 65,000 | 69,408 |
+---------+--------------+------------+------------+-------------+--------------+-------------------+
| | Related | | | | | |
| | practice | | | | | |
| | (UK firm) | | | | | |
| | of the | | | | | |
| | parent | | | | | |
| | entity | | | | | |
| | auditor | | | | | |
+---------+--------------+------------+------------+-------------+--------------+-------------------+
| | - Other | 4,331 | 3,351 | | 4,331 | 3,351 |
| | services | | | | | |
| | (i) | | | | | |
+---------+--------------+------------+------------+-------------+--------------+-------------------+
| | | 4,331 | 3,351 | | 4,331 | 3,351 |
+---------+--------------+------------+------------+-------------+--------------+-------------------+
| | | 69,331 | 72,759 | | 69,331 | 72,759 |
+---------+--------------+------------+------------+-------------+--------------+-------------------+
| | |
+-----------------+---------------------------------------------------------------------------------+
| | The auditor of the company and consolidated entity is Deloitte Touche |
| | Tohmatsu. |
+-----------------+---------------------------------------------------------------------------------+
| | (i) Overseas employee payroll and related tax services. |
+---------+-----------------------------------------------------------------------------------------+
| | | | | | | |
+---------+--------------+------------+-------------------+--------------+-------------+------------+
| 13. | Trade and | | | | | |
| | other | | | | | |
| | receivables | | | | | |
+---------+--------------+------------+-------------------+--------------+-------------+------------+
| | Trade | 374,394 | 3,340 | | - | - |
| | receivables | | | | | |
| | (i) | | | | | |
+---------+--------------+------------+-------------------+--------------+-------------+------------+
| | Goods and | 1,637 | 3,036 | | 1,637 | 3,036 |
| | services | | | | | |
| | tax (GST) | | | | | |
| | recoverable | | | | | |
+---------+--------------+------------+-------------------+--------------+-------------+------------+
| | Intercompany | - | - | | 646,715 | - |
| | receivable | | | | | |
| | (ii) | | | | | |
+---------+--------------+------------+-------------------+--------------+-------------+------------+
| | Other | 38,224 | 76,112 | | - | 24,730 |
+---------+--------------+------------+-------------------+--------------+-------------+------------+
| | | 414,255 | 82,488 | | 648,352 | 27,766 |
+---------+--------------+------------+-------------------+--------------+-------------+------------+
| | * Trade and other receivables does not contain impaired assets and are not past due. |
| | Trade receivables are non-interest bearing.* |
| | The inter-company receivable is interest bearing with interest charged at a rate of |
| | 8% per annum. |
+---------+-----------------------------------------------------------------------------------------+
| | | | | | | |
+---------+--------------+------------+-------------------+--------------+-------------+------------+
| 14. | Prepayments | 99,079 | 156,359 | | 99,079 | 156,359 |
+---------+--------------+------------+-------------------+--------------+-------------+------------+
| | | | | | | |
+---------+--------------+------------+-------------------+--------------+-------------+------------+
| 15. | Other financial assets | | | | |
+---------+---------------------------+------------+-------------+--------------+-------------------+
| | Shares in | - | - | | 21,263,154 | 21,263,154 |
| | subsidiary | | | | | |
| | at cost | | | | | |
+---------+--------------+------------+------------+-------------+--------------+-------------------+
| | Impairment | - | | | (21,263,154) | |
| | (i) | | | | | |
+---------+--------------+------------+------------+-------------+--------------+-------------------+
| | Other | 11,553 | 11,176 | | - | - |
+---------+--------------+------------+------------+-------------+--------------+-------------------+
| | | 11,553 | 11,176 | | - | 21,263,154 |
+---------+--------------+------------+------------+-------------+--------------+-------------------+
| | | | | | | |
+---------+--------------+------------+------------+-------------+--------------+-------------------+
| | (i) The Directors have assessed the carrying values of the Company's shares in the |
| | subsidiary. The current cash position of the Group creates uncertainty as to whether |
| | there will be adequate financial resources in the long term to complete the |
| | development of the technologies in this subsidiary and to create future economic |
| | benefits. Given this funding uncertainty, which adversely impacts the determination |
| | of recoverable amount under the value-in-use approach, and the fact that 'fair value |
| | less costs to sell' is not reliably measurable, the Directors have impaired the |
| | investment in subsidiary.This is not a negative reflection of the potential of the |
| | underlying technologies in the subsidiary and the Directors continue to believe that |
| | there is still potential for successful development of the in-process R&D and patents |
| | and still expect recovery of future economic benefit from its ultimate |
| | commercialization. However, the Directors recognize that given the funding |
| | uncertainties, it would not be appropriate under AASB 136 Impairment of Assets to |
| | continue to carry these assets on the balance sheet. |
| | As referred to in Note 3, in December 2008, the Company announced that it had now |
| | entered into a Letter of Intent regarding the sale of its Virosome business. As of |
| | the date of authorisation for issue of these financial statements, binding contracts |
| | with the intended purchaser have yet to be signed and shareholder approval from the |
| | company's shareholders has yet to be sought or received. Accordingly, no adjustments |
| | have been recognised in the financial report to the carrying value of the investment |
| | in the subsidiary as a result of this potential sale of the Virosome business. |
+---------+-------+------+------------+------------+------+------+-------+------+------+------------+
+------+------------------------------------+------------------+--------------+----+----------+
| 16. | Plant and equipment | Consolidated | |
+------+------------------------------------+--------------------------------------+----------+
| | Gross Carrying Value | Office furniture | Software at | Total |
| | | and equipment | cost | $ |
| | | at cost | $ | |
| | | $ | | |
+------+------------------------------------+------------------+--------------+---------------+
| | Balance at 1 July 2006 | 12,502 | 1,058 | 13,560 |
+------+------------------------------------+------------------+--------------+---------------+
| | Additions | 254,124 | 2,432 | 256,556 |
+------+------------------------------------+------------------+--------------+---------------+
| | Acquisitions through business | 2,099 | - | 2,099 |
| | combination | | | |
+------+------------------------------------+------------------+--------------+---------------+
| | Balance at 30 June 2007 | 268,725 | 3,490 | 272,215 |
+------+------------------------------------+------------------+--------------+---------------+
| | Additions | 10,458 | - | 10,458 |
+------+------------------------------------+------------------+--------------+---------------+
| | Disposals | (12,252) | - | (12,252) |
+------+------------------------------------+------------------+--------------+---------------+
| | Foreign currency exchange | 8,160 | - | 8,160 |
| | difference | | | |
+------+------------------------------------+------------------+--------------+---------------+
| | Balance at 30 June 2008 | 275,091 | 3,490 | 278,581 |
+------+------------------------------------+------------------+--------------+---------------+
| | Accumulated Depreciation | | | |
+------+------------------------------------+------------------+--------------+---------------+
| | Balance at 1 July 2006 | (5,771) | (737) | (6,508) |
+------+------------------------------------+------------------+--------------+---------------+
| | Depreciation expense | (17,563) | (512) | (18,075) |
+------+------------------------------------+------------------+--------------+---------------+
| | Balance at 30 June 2007 | (23,334) | (1,249) | (24,583) |
+------+------------------------------------+------------------+--------------+---------------+
| | Disposals | 8,080 | - | 8,080 |
+------+------------------------------------+------------------+--------------+---------------+
| | Depreciation expense | (57,328) | (949) | (58,277) |
+------+------------------------------------+------------------+--------------+---------------+
| | Foreign currency exchange | (1,019) | - | (1,019) |
| | difference | | | |
+------+------------------------------------+------------------+--------------+---------------+
| | Balance at 30 June 2008 | (73,601) | (2,198) | (75,799) |
+------+------------------------------------+------------------+--------------+---------------+
| | Net Book Value | | | |
+------+------------------------------------+------------------+--------------+---------------+
| | As at 30 June 2007 | 245,391 | 2,241 | 247,632 |
+------+------------------------------------+------------------+--------------+---------------+
| | As at 30 June 2008 | 201,490 | 1,292 | 202,782 |
+------+------------------------------------+------------------+--------------+---------------+
| | | Company | |
+------+------------------------------------+--------------------------------------+----------+
| | Gross Carrying Value | Office furniture | Software at | Total |
| | | and equipment | cost | $ |
| | | at cost | $ | |
| | | $ | | |
+------+------------------------------------+------------------+--------------+---------------+
| | Balance at 1 July 2006 | 12,502 | 1,058 | 13,560 |
+------+------------------------------------+------------------+--------------+---------------+
| | Additions | 11,669 | 2,432 | 14,101 |
+------+------------------------------------+------------------+--------------+---------------+
| | Balance at 30 June 2007 | 24,171 | 3,490 | 27,661 |
+------+------------------------------------+------------------+--------------+---------------+
| | Disposals | (12,252) | - | (12,252) |
+------+------------------------------------+------------------+--------------+---------------+
| | Balance at 30 June 2008 | 11,919 | 3,490 | 15,409 |
+------+------------------------------------+------------------+--------------+---------------+
| | Accumulated Depreciation | | | |
+------+------------------------------------+------------------+--------------+---------------+
| | Balance at 1 July 2006 | (5,771) | (737) | (6,508) |
+------+------------------------------------+------------------+--------------+---------------+
| | Depreciation expense | (4,010) | (512) | (4,522) |
+------+------------------------------------+------------------+--------------+---------------+
| | Balance at 30 June 2007 | (9,781) | (1,249) | (11,030) |
+------+------------------------------------+------------------+--------------+---------------+
| | Disposals | 8,080 | - | 8,080 |
+------+------------------------------------+------------------+--------------+---------------+
| | Depreciation expense | (4,248) | (949) | (5,197) |
+------+------------------------------------+------------------+--------------+---------------+
| | Balance at 30 June 2008 | (5,949) | (2,198) | (8,147)) |
+------+------------------------------------+------------------+--------------+---------------+
| | Net Book Value | | | |
+------+------------------------------------+------------------+--------------+---------------+
| | As at 30 June 2007 | 14,390 | 2,241 | 16,631 |
+------+------------------------------------+------------------+--------------+---------------+
| | As at 30 June 2008 | 5,970 | 1,292 | 7,262 |
+------+------------------------------------+------------------+--------------+----+----------+
+------+----------------------------------+--------------------------+------------------+----------------+----------------+----------------+
| 17. | Goodwill | | | | |
+------+-------------------------------------------------------------+------------------+----------------+----------------+----------------+
| | | Consolidated | Company |
+------+----------------------------------+--------------------------------------------------------------+---------------------------------+
| | | 2008 | 2007 | 2008 | 2007 |
| | | $ | $ | $ | $ |
+------+----------------------------------+---------------------------------------------+----------------+----------------+----------------+
| | Gross carrying amount | | | | |
+------+-------------------------------------------------------------+------------------+----------------+----------------+----------------+
| | Balance at beginning of the financial year | 2,100,000 | - | - | - |
+------+-------------------------------------------------------------+------------------+----------------+----------------+----------------+
| | Additional amounts recognized from business combinations | - | 2,100,000 | - | - |
| | occurring during the period | | | | |
+------+-------------------------------------------------------------+------------------+----------------+----------------+----------------+
| | Balance at end of the financial year | 2,100,000 | 2,100,000 | - | - |
+------+-------------------------------------------------------------+------------------+----------------+----------------+----------------+
| | Accumulated impairment losses | | | | |
+------+-------------------------------------------------------------+------------------+----------------+----------------+----------------+
| | Balance at beginning of the financial year | - | - | - | - |
+------+-------------------------------------------------------------+------------------+----------------+----------------+----------------+
| | Impairment losses for the year | (2,100,000) | - | - | - |
+------+-------------------------------------------------------------+------------------+----------------+----------------+----------------+
| | Balance at end of the financial year | (2,100,000) | - | - | - |
+------+-------------------------------------------------------------+------------------+----------------+----------------+----------------+
| | Net book value | | | | |
+------+-------------------------------------------------------------+------------------+----------------+----------------+----------------+
| | At the beginning of the financial year | 2,100,000 | - | - | - |
+------+-------------------------------------------------------------+------------------+----------------+----------------+----------------+
| | At the end of the financial year | - | 2,100,000 | - | - |
+------+-------------------------------------------------------------+------------------+----------------+----------------+----------------+
| | | | | | |
+------+-------------------------------------------------------------+------------------+----------------+----------------+----------------+
| | The Directors have assessed the carrying values of the goodwill from the acquisition of Virosome Biologicals. The current cash |
| | position of the Group creates uncertainty as to whether there will be adequate financial resources in the long term to complete |
| | the development of the Virosome Biologicals technologies and to create future economic benefits. Given this funding uncertainty, |
| | which adversely impacts the determination of recoverable amount under the value-in-use approach, and the fact that 'fair value |
| | less costs to sell' is not reliably measurable, the Directors have impaired the goodwill. |
| | |
| | As referred to in Note 3, in December 2008, the Company announced that it had now entered into a Letter of Intent regarding the |
| | sale of its Virosome business. As of the date of these accounts, binding contracts with the intended purchaser have yet to be |
| | signed and shareholder approval from the company's shareholders has yet to be sought or received. Accordingly, no adjustments |
| | have been recognised in the financial report to the carrying value of goodwill as a result of this potential sale of the Virosome |
| | business. |
| | |
+------+----------------------------------+--------------------------+------------------+----------------+----------------+----------------+
+-----+---------------------------+--------------+-------------+--------------+-+
| 18. | Other intangible assets | Consolidated |
+-----+---------------------------+---------------------------------------------+
| | Gross Carrying Value | In-process | Patents | Total | |
| | | R&D | $ | $ | |
| | | $ | | | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Balance at 1 July 2006 | - | 5,032,615 | 5,032,615 | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Additions | - | 109,165 | 109,165 | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Disposals | - | - | - | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Acquisitions through | 18,258,031 | - | 18,258,031 | |
| | business combination | | | | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Balance at 30 June 2007 | 18,258,031 | 5,141,780 | 23,399,811 | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Additions | - | 47,923 | 47,923 | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Disposals | - | - | - | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Balance at 30 June 2008 | 18,258,031 | 5,189,703 | 23,447,734 | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Accumulated Amortisation | | | | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Balance at 1 July 2006 | - | (24,192) | (24,192) | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Amortisation expense | - | (5,369) | (5,369) | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Impairment losses charged | - | (637,641) | (637,641) | |
| | to profit | | | | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Balance at 30 June 2007 | - | (667,202) | (667,202) | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Amortisation expense | - | - | - | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Impairment losses charged | (18,258,031) | (4,522,501) | (22,780,532) | |
| | to profit (i) | | | | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Balance at 30 June 2008 | (18,258,031) | (5,189,703) | (23,447,734) | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Net Book Value | | | | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | As at 30 June 2007 | 18,258,031 | 4,474,578 | 22,732,609 | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | As at 30 June 2008 | - | - | - | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | | Company |
+-----+---------------------------+---------------------------------------------+
| | Gross Carrying Value | In-process | Patents | Total | |
| | | R&D | $ | $ | |
| | | & | | | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Balance at 1 July 2006 | - | 5,032,615 | 5,032,615 | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Additions | - | 109,165 | 109,165 | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Disposals | - | - | - | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Balance at 30 June 2007 | - | 5,141,780 | 5,141,780 | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Additions | - | 47,923 | 47,923 | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Disposals | - | - | - | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Balance at 30 June 2008 | - | 5,189,703 | 5,189,703 | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Accumulated Amortisation | | | | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Balance at 1 July 2006 | - | (24,192) | (24,192) | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Amortisation expense | - | (5,369) | (5,369) | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Impairment losses charged | - | (637,641) | (637,641) | |
| | to profit | | | | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Balance at 30 June 2007 | - | (667,202) | (667,202) | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Amortisation expense | - | - | - | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Impairment losses charged | - | (4,522,501) | (4,522,501) | |
| | to profit (i) | | | | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Balance at 30 June 2008 | - | (5,189,703) | (5,189,703) | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | Net Book Value | | | | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | As at 30 June 2007 | - | 4,474,578 | 4,474,578 | |
+-----+---------------------------+--------------+-------------+--------------+-+
| | As at 30 June 2008 | - | - | - | |
+-----+---------------------------+--------------+-------------+--------------+-+
+-----+---+----------------------------+---+---+---+---+-----------+---+----------+---+---+---+
| 18. | Other intangible assets | |
| | (continued) | |
+-----+------------------------------------+------------------------------------------+
| | (i) The Directors have assessed the carrying values of intangible assets |
| | comprising Norwood Immunology Limited patents and Virosome Biologicals |
| | in-process R&D. The current cash position of the Group creates uncertainty as |
| | to whether there will be adequate financial resources in the long term to |
| | complete the development of the Norwood Immunology Limited and Virosome |
| | Biologicals technologies and to create future economic benefits. Given this |
| | funding uncertainty, which adversely impacts the determination of recoverable |
| | amount under the value-in-use approach, and the fact that 'fair value less |
| | costs to sell' is not reliably measurable, the Directors have impaired the |
| | patents and in-process R&D. |
| | This is not a negative reflection of the potential of the underlying |
| | technologies and the Directors continue to believe that there is still |
| | potential for successful development of the in-process R&D and patents and |
| | still expect recovery of future economic benefits from their ultimate |
| | commercialization. However, they recognize that given the funding |
| | uncertainties, it would not be appropriate under AASB 136 Impairment of |
| | Assets to continue to carry these assets on the balance sheet. |
| | As referred to in Note 3, in December 2008, the Company announced that it had |
| | now entered into a Letter of Intent regarding the sale of its Virosome |
| | business. As of the date of these accounts, binding contracts with the |
| | intended purchaser have yet to be signed and shareholder approval from the |
| | company's shareholders has yet to be sought or received. Accordingly, no |
| | adjustments have been recognised in the financial report to the carrying |
| | value of these assets as a result of this potential sale of the Virosome |
| | business. |
| | |
+---------+-------------------------------------------------------------------------------+
| 19. | Trade and other payables |
+---------+-------------------------------------------------------------------------------+
| | | Consolidated | | Company |
+---------+----------------------------+---------------------------+---+------------------+
| | | 2008 | 2007 | | 2008 | 2007 |
| | | $ | $ | | $ | $ |
+---------+----------------------------+-----------+---------------+---+----------+-------+
| | Trade payables | | | | | |
+---------+----------------------------+---------------+-----------+---+----------+-----------+
| | - other entities (i) | 215,123 | 433,453 | | 95,411 | 200,054 |
+---------+----------------------------+---------------+-----------+---+----------+-----------+
| | - related parties - fees | 60,000 | - | | 60,000 | - |
| | to director | | | | | |
+---------+----------------------------+---------------+-----------+---+----------+-----------+
| | - related parties - | 125,000 | - | | 125,000 | - |
| | research fees to | | | | | |
| | Monash University | | | | | |
+---------+----------------------------+---------------+-----------+---+----------+-----------+
| | Other payables | 310,361 | 119,108 | | - | - |
+---------+----------------------------+---------------+-----------+---+----------+-----------+
| | Accrued payables | 351,736 | 695,586 | | 202,242 | 608,897 |
+---------+----------------------------+---------------+-----------+---+----------+-----------+
| | | 1,062,220 | 1,248,147 | | 482,653 | 808,951 |
+---------+----------------------------+---------------+-----------+---+----------+-----------+
| | | | | | | |
+---------+----------------------------+---------------+-----------+---+----------+-----------+
| | * Terms of payment for trade payables range from 15 days to 45 days from the |
| | date of invoice. |
+---------+-----------------------------------------------------------------------------------+
| | | | | | | |
+---------+----------------------------+---------------+-----------+---+----------+-----------+
| 20. | Other financial | | | | | |
| | liabilities | | | | | |
+---------+----------------------------+---------------+-----------+---+----------+-----------+
| | Unsecured - at amortised | | | | | |
| | cost | | | | | |
+---------+----------------------------+---------------+-----------+---+----------+-----------+
| | Deferred consideration (i) | 449,425 | 821,439 | | 449,425 | 821,439 |
+---------+----------------------------+---------------+-----------+---+----------+-----------+
| | | | | | | |
+---------+----------------------------+---------------+-----------+---+----------+-----------+
| | (i) On 27 November 2006 the Consolidated entity completed the acquisition of |
| | all of the issued shares of Bestewil. As part of the consideration for the |
| | acquisition a payment of EUR500,000 (A$838,082) was deferred until 27 May 2008. |
| | The agreement was amended in May 2008, to defer repayment of the amount by |
| | six months. A further amendment was entered into with the recipients of the |
| | deferred consideration in November 2008 to defer repayment of the amounts |
| | until the proceeds of the proposed disposal of the Virosome business |
| | are received, provided that if the transaction referred to in Note 3 |
| | does not proceed, or the disposal has not been completed by 15 February 2009 |
| | (in the case of one of the parties who is owed 45% of the deferred |
| | consideration) then the deferred consideration is immediately repayable. At |
| | the date of issuing this financial report no demand for repayment of this |
| | deferred consideration has been received. Interest on unpaid amounts |
| | continues to accrue at a revised agreed rate of 6% per annum. In June 2008, a |
| | payment of EUR250,000 (A$372,014) was made by Norwood Immunology Limited to the |
| | vendors of Bestewil. |
+---------+-------------------------------------------------------------------------------+
| | | | | |
+---------+----------------------------+---------------------------+---+------------------+
| | | | | | | |
+-----+---+----------------------------+---+---+---+---+-----------+---+----------+---+---+---+
+-----+-------------------------------------------+-------------------+------------------+--------------+-------+------+-------------------+----------+-------------+----------+-----------+-------------------+
| | | Consolidated | | Company |
+-----+---------------------------------------------------------------+------------------------------------------------+------------------------------+------------------------------------+
| | | 2008 | 2007 | | 2008 | 2007 |
| | | $ | $ | | $ | $ |
+-----+---------------------------------------------------------------+------------------+-----------------------------+------------------------------+-------------+----------------------+
| 21. | Provisions | | | | | |
+---------------------------------------------------------------------+------------------+--------------+----------------------------------+------------------------+----------+-------------------------------+
| | Current | | | | | |
+---------------------------------------------------------------------+------------------+--------------+----------------------------------+------------------------+----------+-------------------------------+
| | Employee | 23,926 | 39,828 | | 23,926 | 39,828 |
| | benefits | | | | | |
+---------------------------------------------------------------------+------------------+--------------+----------------------------------+------------------------+----------+-------------------------------+
| | | | | | | |
+---------------------------------------------------------------------+------------------+--------------+----------------------------------+------------------------+----------+-------------------------------+
| | Non-current | | | | | |
+---------------------------------------------------------------------+------------------+--------------+----------------------------------+------------------------+----------+-------------------------------+
| | Employee | 42,479 | 46,762 | | 42,479 | 46,762 |
| | benefits | | | | | |
+---------------------------------------------------------------------+------------------+--------------+----------------------------------+------------------------+----------+-------------------------------+
| | | | | | | |
+---------------------------------------------------------------------+------------------+--------------+----------------------------------+------------------------+----------+-------------------------------+
| 22. | Issued capital | | | | | |
+-----+---------------------------------------------------------------+------------------+-----------------------------+------------------------------+-------------+----------------------+
| | | | | | | |
+-----+---------------------------------------------------------------+------------------+-----------------------------+------------------------------+-------------+----------------------+
| | Fully paid ordinary shares | | | | | |
+-----+---------------------------------------------------------------+------------------+-----------------------------+------------------------------+-------------+----------------------+
| | Balance at beginning of the financial year | 57,842,753 | 27,227,179 | | 57,842,753 | 27,227,179 |
+-----+---------------------------------------------------------------+------------------+-----------------------------+------------------------------+-------------+----------------------+
| | Shares issued | | | | | |
+-----+---------------------------------------------------------------+------------------+-----------------------------+------------------------------+-------------+----------------------+
| | - Cash | - | 16,805,945 | | - | 16,805,945 |
+-----+---------------------------------------------------------------+------------------+-----------------------------+------------------------------+-------------+----------------------+
| | - Acquisition of business | - | 14,346,959 | | - | 14,346,959 |
+-----+---------------------------------------------------------------+------------------+-----------------------------+------------------------------+-------------+----------------------+
| | Share issue costs | - | (537,330) | | - | (537,330) |
+-----+---------------------------------------------------------------+------------------+-----------------------------+------------------------------+-------------+----------------------+
| | Balance at end of the financial year | 57,842,753 | 57,842,753 | | 57,842,753 | 57,842,753 |
+-----+---------------------------------------------------------------+------------------+-----------------------------+------------------------------+-------------+----------------------+
| | | | | | | |
+-----+---------------------------------------------------------------+------------------+-----------------------------+------------------------------+-------------+----------------------+
| | Changes to the then Corporations Law abolished the authorized capital and par value |
| | concept in relation to share capital from 1 July 1998. Therefore, the company does |
| | not have a limited amount of authorized capital and issued shares do not have a par |
| | value. |
+-----+------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | No. | No. | | No. | No. |
+-----+---------------------------------------------------------------+---------------------------------+----------------------------------+----------+-------------+----------------------+
| | Number at beginning of the financial year | 228,241,387 | 123,911,463 | | 228,241,387 | 123,911,463 |
+-----+---------------------------------------------------------------+---------------------------------+----------------------------------+----------+-------------+----------------------+
| | Shares issued | - | 104,329,924 | | - | 104,329,924 |
+-----+---------------------------------------------------------------+---------------------------------+----------------------------------+----------+-------------+----------------------+
| | Number at end of the financial year | 228,241,387 | 228,241,387 | | 228,241,387 | 228,241,387 |
+-----+---------------------------------------------------------------+---------------------------------+----------------------------------+----------+-------------+----------------------+
| | | | | | | |
+-----+---------------------------------------------------------------+---------------------------------+----------------------------------+----------+-------------+----------------------+
| | Fully paid ordinary shares carry one vote per share and carry the right to dividends |
+-----+------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | |
+-----+------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Share Options |
+-----+------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | Details of the employee option plan are contained in note 11 to the financial |
| | statements and details of directors holdings are contained in note 27(b) |
+-----+------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | | Consolidated | | Company |
+-----+---------------------------------------------------------------+------------------------------------------------+------------------------------+------------------------------------+
| 23. | Foreign currency translation reserve | 2008 |2007 | | 2008 | 2007 |
| | | $ | $ | | $ | $ |
+-----+---------------------------------------------------------------+-----------------------------------------+------+------------------------------+------------------------+-----------+
| | Foreign currency translation reserve | | | | | |
+-----+---------------------------------------------------------------+-----------------------------------------+------+------------------------------+------------------------+-----------+
| | Balance at beginning of the financial year | - | - | | - | - |
+-----+---------------------------------------------------------------+-----------------------------------------+------+------------------------------+------------------------+-----------+
| | Translation of foreign operations | (12,857) | - | | - | - |
+-----+---------------------------------------------------------------+-----------------------------------------+------+------------------------------+------------------------+-----------+
| | Balance at end of financial year | (12,857) | - | | - | - |
+-----+-------------------------------------------+-------------------+------------------+--------------+-------+------+-------------------+----------+-------------+----------+-----------+-------------------+
+-----+---------------------------+------------+----+---+----+--+-----+---+----+--------+----+----+----+
| 24. Earnings per share | | | | 2008 | 2007 |
| | | | | Cents per | Cents |
| | | | | share | per |
| | | | | | share |
+---------------------------------------------------+---+----+--+--------------+-------------+
| | | | | | |
+---------------------------------------------------+---+----+--+--------------+-------------+
| Basic and diluted | | | | (12.5) | (2.6) |
| earnings per share | | | | | |
+---------------------------------------------------+---+----+--+--------------+-------------+
| | | | | | |
+---------------------------------------------------+---+----+--+--------------+-------------+
| | | | | 2008 | 2007 |
| | | | | No. | No. |
+---------------------------------------------------+---+----+--+--------------+-------------+
| The weighted average | | | | 228,241,387 | 185,362,472 |
| number of ordinary | | | | | |
| shares on issue during | | | | | |
| the financial year used | | | | | |
| in the calculation of | | | | | |
| basic earnings per share | | | | | |
| and diluted earnings per | | | | | |
| share | | | | | |
+---------------------------------------------------+---+----+--+--------------+-------------+
| All options on issue during the year are considered |
| potential ordinary shares and are therefore excluded from |
| the weighted average number of ordinary shares used in the |
| calculation of basic earnings per share. |
| All options on issue during the year are considered |
| potential ordinary shares for the purposes of calculating |
| diluted earnings per share. Potential ordinary shares that |
| are not dilutive are excluded from the calculation of |
| weighted average number of ordinary shares and potential |
| ordinary shares used in the calculation of diluted earnings |
| per share. |
+--------------------------------------------------------------------------------------------+
| | | | | | |
+---------------------------------------------------+---+----+--+--------------+-------------+
| | | | | 2008 | 2007 |
| | | | | $ | $ |
+---------------------------------------------------+---+----+--+--------------+-------------+
| Earnings used in the | | | | | |
| calculation of basic | | | | | |
| earnings per share and | | | | | |
| diluted earnings per | | | | | |
| share reconciles to the | | | | | |
| net profit in the | | | | | |
| statement of financial | | | | | |
| performance as follows: | | | | | |
+---------------------------------------------------+---+----+--+--------------+-------------+
| Net | | | | (28,488,291) | (4,863,767) |
| loss | | | | | |
+---------------------------------------------------+---+----+--+--------------+-------------+
| Net | | | | (28,488,291) | (4,863,767) |
| loss used | | | | | |
| in the | | | | | |
| calculation | | | | | |
| of basic | | | | | |
| earnings | | | | | |
| per share | | | | | |
| and diluted | | | | | |
| earnings | | | | | |
| per share | | | | | |
+---------------------------------------------------+---+----+--+--------------+-------------+
| | | | | | |
+---------------------------------------------------+---+----+--+--------------+-------------+
| 25. | Leases | | | | | |
+-----+---------------------------+------------+----------------------+---+-------------+--------------+
| | Operating leases | | | | | |
+-----+---------------------------+------------+----------------------+---+-------------+--------------+
| | Operating leases relate to laboratory facilities in the Netherlands for a term of 3 years |
| | with an option to extend for a further 2 years. The lease can be cancelled with 3 months |
| | notice. Also included are administration offices in Melbourne for a term of 18 months |
| | with an option for a further 18 months. The consolidated entity does not have any option |
| | to purchase the asset at the expiry of the lease period. |
+-----+------------------------------------------------------------------------------------------------+
| | | Consolidated | | Company |
+-----+---------------------------+-----------------------------------+---+-----------------------+
| | | 2008 | 2007 | | 2008 | 2007 |
| | | $ | $ | | $ | $ |
+-----+---------------------------+------------+----------------------+---+-------------+---------+
| | | | | | | |
+-----+---------------------------+------------+----------------------+---+-------------+--------------+
| | Operating lease | | | | | |
| | commitments | | | | | |
+-----+---------------------------+------------+----------------------+---+-------------+--------------+
| | Not longer than 1 year | 11,552 | 35,327 | | - | 24,153 |
+-----+---------------------------+------------+----------------------+---+-------------+--------------+
| | Longer than 1 year and | - | - | | - | - |
| | not longer than 5 years | | | | | |
+-----+---------------------------+------------+----------------------+---+-------------+--------------+
| | Longer than 5 years | - | - | | - | - |
+-----+---------------------------+------------+----------------------+---+-------------+--------------+
| | | 11,552 | 35,327 | | - | 24,153 |
+-----+---------------------------+------------+----------------------+---+-------------+--------------+
| | | | | | | |
+-----+---------------------------+------------+----------------------+---+-------------+--------------+
| 26. | Commitments for expenditure and contingent liabilities | | | |
+-----+---------------------------------------------------------------+---+-------------+--------------+
| | Expenditure commitments | | | | | |
| | relating to research | | | | | |
| | funding | | | | | |
+-----+---------------------------+------------+----------------------+---+-------------+--------------+
| | - Not longer than 1 year | 245,848 | 370,000 | | - | 370,000 |
| | (i) | | | | | |
+-----+---------------------------+------------+----------------------+---+-------------+--------------+
| | - Longer than 1 year and | 193,739 | - | | - | - |
| | not longer than 5 years | | | | | |
+-----+---------------------------+------------+----------------------+---+-------------+--------------+
| | - Longer than 5 years | - | - | | - | - |
+-----+---------------------------+------------+----------------------+---+-------------+--------------+
| | | 439,587 | 370,000 | | - | 370,000 |
+-----+---------------------------+------------+----------------------+---+-------------+--------------+
| | | | | | | |
+-----+---------------------------+------------+----------------------+---+-------------+--------------+
| 26. | Commitments for expenditure and contingent liabilities (continued) |
+-----+------------------------------------------------------------------------------------------------+
| | (i):License agreement |
| | On 26 May 2008, the company signed a tripartite research agreement with the Australian |
| | Stem Cell Centre (ASCC) and Monash University. The agreement signed between Norwood |
| | Immunology and ASCC proposes that the research will take place at the Monash Immunology |
| | and Stem Cell Laboratories at the Clayton campus in Melbourne with access to the ASCC's |
| | specialized research facilities in the same building. The research will be funded jointly |
| | by the ASCC and Norwood Immunology and the intellectual property that results from the |
| | work will be jointly owned by the ASCC and Norwood Immunology. |
| | Under the terms of the above agreement the Company has made a commitment for research |
| | funding to Monash via the ASCC of a total of $499,995 payable over the period April 2008 |
| | to February 2010. The agreement allows termination by written notice at any time by |
| | either party including if either party is unable to ensure sufficient funding for the |
| | ongoing financing of the Research Project. |
| | Employment Contracts: |
| | On 27 June 2003 the company entered into an employment agreement with Dr R Boyd which |
| | includes a success fee to the maximum of $400,000, payable once certain milestones are |
| | reached, including the listing of the company on London Stock Exchange's Alternative |
| | Investment Market. At 30 June 2004 Dr R Boyd had received cash $50,000 for the execution |
| | of the TAP Pharmaceutical agreement, and $200,000 was included in current liabilities and |
| | was payable on the listing of the company on London Stock Exchange's Alternative |
| | Investment Market. This has now been paid. The remaining balance of $150,000 remains |
| | contingent on achieving further milestones. |
| | On 7 May 2004 the company entered into an option and incentive deed with Mr R F Williams |
| | which includes a success fee for signing licence agreements covering the Japan territory |
| | and the EU Pharmaceutical Market, equal to the greater of 2.5% of the up-front and first |
| | milestone payment under the agreement and UKGBP75,000 per licence agreement. At the date of |
| | authorization for the issue of these financial statements no payments have been made to |
| | Mr. Williams based on the options and incentive deed. |
| | Royalty agreements: |
| | On 17 June 2003, the company, entered into a licence agreement with Monash University. |
| | Upon the company meeting certain financial conditions the licence converted to an |
| | assignment of the intellectual property. Under the terms of the assignment a royalty is |
| | payable to Monash University on income, from commercial sales or sub-licensee payments |
| | received by the company from the commercial exploitation of the technology assigned by |
| | Monash University. The royalty rate varies between 7.5% and 3.75% depending on the number |
| | of additional licences payable to third parties. |
| | On 27 June 2003, the company entered into an agreement with Dr R Boyd. Under the terms of |
| | the agreement a royalty of 2.5% is payable to Dr R Boyd and his laboratory on income from |
| | commercial sales or sub-licensee payments received by the company from the commercial |
| | exploitation of existing technology developed. In addition, Dr R Boyd and his laboratory |
| | are entitled to 7.5% of license fees, royalties and milestone payments received by the |
| | company from the commercialisation of any new technology. |
| | On 7 May 2004, the company entered into an Option and Incentive Deed with RFW Associates, |
| | a business owned by Mr R F Williams. Under the terms of the agreement the company must |
| | pay a royalty of 1% on all royalties and licence fees actually received by the company |
| | under the TAP Pharmaceutical agreement and subsequent licence agreements in Japan and the |
| | EU. |
| | |
+-----+ +
| | |
+-----+ +
| | |
+-----+---------------------------+------------+----+---+----+--+-----+---+----+--------+----+----+----+
+------+----------------------------------+---+---+---+---+---+------------------------+--+---+---+---+-------------------------------+
| 27. | Related party |
+------+------------------------------------------------------------------------------------------------------------------------------+
| | |
+------+------------------------------------------------------------------------------------------------------------------------------+
| | a) Key management personnel compensation; |
| | Details of key management and personnel remuneration and post-employment benefits |
| | are disclosed in note 10. |
+------+------------------------------------------------------------------------------------------------------------------------------+
| | |
+------+------------------------------------------------------------------------------------------------------------------------------+
| | b) Key Management Personnel ("KMP") equity holdings |
+------+------------------------------------------------------------------------------------------------------------------------------+
| | |
+------+------------------------------------------------------------------------------------------------------------------------------+
| | | | Fully paid ordinary shares |
+------+----------------------------------------------+-------+-----------------------------------------------------------------------+
| | Ordinary shares | | 2008 | | 2007 |
| | | | No. | | No. |
+------+----------------------------------------------+-------+-------------------------------+-------+-------------------------------+
| | | | | | |
+------+----------------------------------------------+-------+-------------------------------+-------+-------------------------------+
| | Issued during the financial year to KMP and | | - | | - |
| | their related entities | | | | |
+------+----------------------------------------------+-------+-------------------------------+-------+-------------------------------+
| | | | | | |
+------+----------------------------------------------+-------+-------------------------------+-------+-------------------------------+
| | Held as at reporting date by KMP and their | | 263,153 | | 263,153 |
| | related entities | | | | |
+------+----------------------------------------------+-------+-------------------------------+-------+-------------------------------+
| | | | | |
+-----------------------------------------------------+-------+-------------------------------+-------+-------------------------------+
| | | Share options |
+-----------------------------------------------------+-------+-----------------------------------------------------------------------+
| | | 2008 | | 2007 |
| | | No. | | No. |
+-----------------------------------------------------+-------+-------------------------------+-------+-------------------------------+
| | Other equity instruments: | | | | |
+------+----------------------------------------------+-------+-------------------------------+-------+-------------------------------+
| | Share options | | | | |
+------+----------------------------------------------+-------+-------------------------------+-------+-------------------------------+
| | Issued during the financial year to KMP and | | - | | - |
| | their related entities | | | | |
+------+----------------------------------------------+-------+-------------------------------+-------+-------------------------------+
| | Redeemed, exercised, lapsed or bought back | | (17,150,000) | | (4,658,684) |
| | during the financial year from KMP or their | | | | |
| | related entities | | | | |
+------+----------------------------------------------+-------+-------------------------------+-------+-------------------------------+
| | |
+---------------------------------------------+---------------------------------------------------------------------------------------+
| | Held as at reporting date by KMP and their | | - | | 17,150,000 |
| | related entities | | | | |
+------+----------------------------------------------+-------+-------------------------------+-------+-------------------------------+
| | | | | | | | |
+------+----------------------------------+---+---+---+---+---+------------------------+--+---+---+---+-------------------------------+
+------+----------------------------------+----+------+------+--+------------+--------------+
| 27. | Related party (continued) |
+------+------------------------------------------------------------------------------------+
| | c) Other transactions with | | | | | | |
| | directors | | | | | | |
+------+----------------------------------+----+------+------+--+------------+--------------+
| | During the financial year, RFW & Associates, a business operated and owned by Mr |
| | R.F.H. Williams, a director since 31 October 2003, provided corporate consulting |
| | services to the company totaling $195,228 (2007:$195,228), on normal terms and |
| | conditions. This is included in the directors' remuneration, disclosed in note 10 |
| | to the financial statements. |
| | During the financial year, Marathon Cove, a business operated and owned by Mr P. |
| | Hansen, a director since 31 October 2003, provided corporate consulting services |
| | to the company totaling $60,000 (2007: $Nil), on normal terms and conditions. |
| | This is included in the directors' remuneration, disclosed in note 10 to the |
| | financial statements. |
| | |
+------+------------------------------------------------------------------------------------+
| | d) Transactions involving other | | | | | | |
| | related parties | | | | | | |
+------+----------------------------------+----+------+------+--+------------+--------------+
| | Other related parties include:* |
| | the parent entity;* |
| | directors of related parties and their director-related entities; and* |
| | other related parties. |
| | Aggregate amounts payable to related parties are disclosed in note 19. |
| | On 2 July 2003 Monash University became a shareholder of Norwood Immunology |
| | Limited, Monash perform research work on behalf of Norwood Immunology Limited. For |
| | the year ended 30 June 2008, Monash provided research services to the company |
| | totaling $208,000 (2007: $870,850). Refer to commitments for expenditure and |
| | contingencies note 25. |
| | |
+------+------------------------------------------------------------------------------------+
| | e) Other transactions involving the | | | | | |
| | former Parent Entity | | | | | |
+------+---------------------------------------+------+------+--+------------+--------------+
| | On 31 March 2004, and amended on 20 May 2004, Norwood Immunology Limited and |
| | Norwood Abbey Limited entered into a service agreement. Services include finance |
| | and accounting, human resources, marketing and promotion, central management and |
| | the provision of office space and facilities. A fee of $600,000 per annum was |
| | agreed effective from 1 July 2004. During the financial year ended 30 June 2007 |
| | the agreement was terminated due to the unbundling of Norwood Immunology from the |
| | Norwood Abbey Group. (Fees to the date of unbundling totalled $80,000 exclusive |
| | of GST). Interest was charged at a rate equal to the 90 day bank bill rate and |
| | during the year ended 30 June 2007 this rate varied between 5.47% and 6.03%. |
| | Interest expense is disclosed in note 8. There is no charge during the current |
| | year. |
+------+------------------------------------------------------------------------------------+
| 28. | Subsidiaries | | | |
+------+----------------------------------+---------------------+------------+--------------+
| | Name of entity | Country of | Ownership interest |
| | | incorporation | |
+------+----------------------------------+---------------------+---------------------------+
| | | | 2008 | 2007 |
+------+----------------------------------+---------------------+------------+--------------+
| | Parent entity | | | |
+------+----------------------------------+---------------------+------------+--------------+
| | Norwood Immunology Limited | Australia | | |
+------+----------------------------------+---------------------+------------+--------------+
| | Subsidiary | | | |
+------+----------------------------------+---------------------+------------+--------------+
| | Bestewil Holdings B.V. | Netherlands | 100% | 100% |
+------+----------------------------------+---------------------+------------+--------------+
| | Subsidiary | | | |
+------+----------------------------------+---------------------+------------+--------------+
| | Virosome Biologicals B.V. | Netherlands | 100% | 100% |
+------+----------------------------------+---------------------+------------+--------------+
| | | | | |
+------+----------------------------------+----+------+------+--+------------+--------------+
+------+---------------------------+--------------+-------------+---+--------------+-+------------+-+
| | | Consolidated | | Company |
+------+---------------------------+----------------------------+---+-----------------------------+
| | | 2008 | 2007 | | 2008 | 2007 |
| | | $ | $ | | $ | $ |
+------+---------------------------+--------------+-------------+---+----------------+------------+
| 29. | Notes to the Cash Flow | | | | | |
| | Statement | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+--------------+
| | | | | | |
+----------------------------------+--------------+-------------+---+--------------+----------------+
| | a) Reconciliation of cash | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | | | | | |
+----------------------------------+--------------+-------------+---+--------------+----------------+
| | For the purposes of the | | | | | |
| | cash flow statement, cash | | | | | |
| | includes cash on hand and | | | | | |
| | in banks. Cash at the end | | | | | |
| | of the financial year as | | | | | |
| | shown in the cash flow | | | | | |
| | statement is reconciled | | | | | |
| | to the related items in | | | | | |
| | the balance sheet as | | | | | |
| | follows: | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | Cash and cash equivalents | 1,243,759 | 5,720,438 | | 1,055,322 | 5,334,884 |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | b) Businesses acquired | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | In the prior year, the Consolidated entity acquired one business. The net cash |
| | outflow on acquisition was $5,242,599. No acquisitions have taken place in the |
| | current year. See note 30. |
+------+--------------------------------------------------------------------------------------------+
| | | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | c) Reconciliation of loss | | | | | |
| | from ordinary activities | | | | | |
| | after related income tax | | | | | |
| | to net cash flows from | | | | | |
| | operating activities | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | Loss for the year | (28,488,291) | (4,863,767) | | (28,744,860) | (4,201,901) |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | Depreciation and | 58,277 | 23,442 | | 5,197 | 9,891 |
| | amortisation | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | Net unrealised foreign | 101,179 | 245,827 | | 120,556 | 225,634 |
| | exchange loss | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | Loss on disposal of plant | 3,854 | - | | 3,854 | - |
| | & equipment | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | Interest received | (143,337) | (207,030) | | (170,852) | (206,110) |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | Non-cash interest | | 27,789 | | | 27,789 |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | Impairment of non-current | 24,880,532 | 637,641 | | 25,785,655 | 637,641 |
| | asset | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | (Increase) in current | (331,767) | (60,746) | | (620,586) | (9,533) |
| | receivables | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | Decrease in current | 57,280 | 177,698 | | 57,279 | (49,274) |
| | prepayments | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | (Decrease)/Increase in | (302,232) | 146,504 | | (441,982) | (108,530) |
| | current payables | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | (Decrease)/increase in | (20,185) | 9,830 | | (20,185) | 9,830 |
| | provisions | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | Net cash used in | (4,184,689) | (3,861,812) | | (4,025,922) | (3,664,563) |
| | operating activities | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | d) Financing facilities | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | Secured bank facilities | | | | | |
| | reviewed annually | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | * amount used | 19,376 | 21,805 | | 19,376 | 21,805 |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | * amount unused | 40,624 | 78,195 | | 40,624 | 78,195 |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | | 60,000 | 100,000 | | 60,000 | 100,000 |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | Secured convertible note | | | | | |
| | facility with repayment | | | | | |
| | by 30 June 2008: | | | | | |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | * amount used | - | - | | - | - |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | * amount unused | - | 2,000,000 | | - | 2,000,000 |
+------+---------------------------+--------------+-------------+---+--------------+----------------+
| | | - | 2,000,000 | | - | 2,000,000 |
+------+---------------------------+--------------+-------------+---+--------------+-+------------+-+
+------+------------------+---------+---+---+-------------+---+------------+---+---+-------------+---+
| 30 | Acquisition of | | | |
| | businesses in 2007 | | | |
+------+--------------------------------+---------------------+------------+-------------------------+
| | Name of business | Principal | Date of | Proportion of | Cost of |
| | acquired | activity | acquisition | shares acquired | acquisition |
| | | | | (%) | $ |
+------+------------------+-----------------+-------------+--------------------+-----------------+
| | Bestewil Holding | Developing | 27/11/2006 | 100 | 21,263,154 |
| | B.V. | and | | | |
| | |commercializing | | | |
| | | a proprietary | | | |
| | | platform | | | |
| | | technology for | | | |
| | | vaccines | | | |
+------+------------------+-----------------+-------------+--------------------+-----------------+
| | Net assets | Book | Fair value | Fair value on | Total |
| | acquired | value | adjustment | acquisition | fair |
| | | | | | value on |
| | | | | |acquisition |
+------+------------------+-----------------+-------------+------------------------+-------------+
| | Current assets | | | | |
+------+------------------+-----------------+-------------+------------------------+-------------+
| | Cash & cash | 835,514 | | | 835,514 |
| | equivalent | | | | |
+------+------------------+-----------------+-------------+------------------------+-------------+
| | Current trade | 3,509 | | | 3,509 |
| | and other | | | | |
| | receivables | | | | |
+------+------------------+-----------------+-------------+------------------------+-------------+
| | Other | 226,972 | | | 226,972 |
+------+------------------+-----------------+-------------+------------------------+-------------+
| | Non-current | | | | |
| | assets | | | | |
+------+------------------+-----------------+-------------+------------------------+-------------+
| | Patents | 13,212 | (13,212) | | - |
+------+------------------+-----------------+-------------+------------------------+-------------+
| | Plant & | 2,099 | | | 2,099 |
| | equipment | | | | |
+------+------------------+-----------------+-------------+------------------------+-------------+
| | In process R&D | | | 18,258,031 | 18,258,031 |
+------+------------------+-----------------+-------------+------------------------+-------------+
| | Current | | | | |
| | liabilities | | | | |
+------+------------------+-----------------+-------------+------------------------+-------------+
| | Trade & other | (162,971) | | | (162,971) |
| | payables | | | | |
+------+------------------+-----------------+-------------+------------------------+-------------+
| | | 918,335 | (13,212) | 18,258,031 | 19,163,155 |
+------+------------------+-----------------+-------------+------------------------+-------------+
| | Goodwill on | | | | 2,100,000 |
| | acquisition | | | | |
+------+------------------+-----------------+-------------+------------------------+-------------+
| | | | | | 21,263,154 |
+------+------------------+-----------------+-------------+------------------------+-------------+
| | Consideration | | | | |
+------+------------------+-----------------+-------------+------------------------+-------------+
| | Cash & cash | | | | 5,431,343 |
| | equivalents | | | | |
+------+------------------+-----------------+-------------+------------------------+-------------+
| | Transaction | | | | 646,770 |
| | costs | | | | |
| | capitalized | | | | |
+------+------------------+-----------------+-------------+------------------------+-------------+
| | Ordinary shares | | | | 14,346,959 |
+------+------------------+-----------------+-------------+------------------------+-------------+
| | Deferred purchase | | | 838,082 |
| | consideration | | | |
+------+------------------------------------+-------------+------------------------+-------------+
| | | | | | 21,263,154 |
+------+----------------------------+-------+-------------+------------------------+-------------+
| | |
+------+-----------------------------------------------------------------------------------------+
| | The assets and liabilities acquired are stated at their fair values, using an |
| | exchange rate at the date of acquisition of A$1:Euro 0.5994. Fair values are |
| | equal to the carrying value in the books of the acquirer immediately prior to |
| | the acquisition with the exception of identifiable intangibles which have |
| | been subject to a separate valuation. |
+------+-----------------------------------------------------------------------------------------+
| | Identifiable intangibiles have been valued using a discounted cash flow |
| | model, based on the following:* |
| | Tax rate of 29.1% (the corporate tax rate in the Netherlands,* |
| | Expected life of the In process R&D is based on 20 years (determined by the |
| | availability of patent protection).* |
| | Expected probability-adjusted future cash flows* |
| | WACC - 25% |
+------+-----------------------------------------------------------------------------------------+
| | Goodwill arose in the business combination due to benefits of expected |
| | synergies and the highly skilled workforce in place, including its technical |
| | expertise. |
+------+-----------------------------------------------------------------------------------------+
| 31. | Subsequent events |
+------+---------------------------------------------------------------------------------------------+
| | As announced on 6 December 2008, the Company has now entered into a non-binding |
| | Letter of Intent (LOI) with a NASDAQ listed international biotechnology company |
| | focused on developing innovative vaccines interfering with early pathogen |
| | transmission events for the sale of 100% of the Company's interest in Bestewil |
| | Holding B.V, the immediate holding company of Virosome Biologicals B.V. In |
| | connection with the execution of this LOI and the granting of a period of |
| | exclusivity to the NASDAQ company to 31 January 2009, the Company has received a |
| | non refundable goodwill deposit of EUR100,000. As at the date of signing the |
| | financial report, the Company is continuing to work towards signing a sale and |
| | purchase agreement with the potential purchaser. Refer Note 3 for further details |
| | of this potential transaction. |
| | There has not been any other matter or circumstance, other than that referred to |
| | in the financial statements or notes thereto, that has arisen since the end of |
| | the financial period, that has significantly affected, or may significantly |
| | affect, the operation of the Consolidated Entity, the results of those |
| | operations, or the state of affairs of the Consolidated Entity in the future |
| | financial periods. |
+------+------------------+---------+---+---+-------------+---+------------+---+---+-------------+---+
+------+----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| 32. | Financial Instruments |
+------+----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
| | |
| | a) Significant Accounting Policies |
| | Details of significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which revenues and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in note 3 to the financial statements. |
| | b) Capital risk management |
| | The Company's objectives when managing capital are to safeguard the Company's ability to continue as a going concern and to maintain an optimal capital structure so as to maximise shareholder value. The capital structure of the Company consists of equity attributed to equity holders of the Company comprising contributed equity, reserves and accumulated losses. By monitoring undiscounted cashflow forecasts and actual cashflows, the Board monitors the need to raise additional equity from equity holders. |
| | |
| | c) Market risk |
| | (i) Foreign currency risk |
| | Since a proportion of the consolidated entity's operating expenditure is incurred in US dollars, Euros and British pounds, the consolidated entity is vulnerable to exchange rate fluctuations between the US dollar, Euros and the British pounds, and the Australian dollar. The consolidated entity currently does not hedge against this exposure. |
| | The Company and consolidated entity's exposure to foreign currency risk at reporting date was as follows: |
| | 2008 2007 |
| | $ $ |
| | Cash and cash equivalents |
| | USD 59,604 360,040 |
| | GBP 268,004 1,788,947 |
| | EUR 778,459 1,959,419 |
| | Other liabilities |
| | EUR 449,425 821,831 |
| | Consolidated Entity Fixed Interest Rate |
| | Maturity |
| | - |
| | - |
| | As at 30 June 2008 Weighted 0 - 6 6 1 to 5 Total |
| | Effective Months Months Years $ |
| | Rate $ To 1 $ |
| | % Year |
| | $ |
| | Financial Liabilities |
| | Interest-bearing liabilities 6 224,712 224,713 - 449,425 |
| | 224,712 224,713 - 449,425 |
| | As at 30 June 2007 |
| | Financial Liabilities |
| | Interest-bearing liabilities 6 - 821,439 - 821,439 |
| | - 821,439 - 821,439 |
| | Company Fixed Interest Rate |
| | Maturity |
| | - |
| | - |
| | As at 30 June 2008 Weighted 0 - 6 6 1 to 5 Total |
| | Effective Months Months Years $ |
| | Rate $ To 1 $ |
| | % Year |
| | $ |
| | Financial Liabilities |
| | Interest-bearing liabilities 6 224,712 224,713 - 449,425 |
| | 224,712 224,713 - 449,425 |
| | As at 30 June 2007 |
| | Financial Liabilities |
| | Interest-bearing liabilities 6 - 821,439 - 821,439 |
| | - 821,439 - 821,439 |
| | CONSOLIDATED Weighted Less 1 to 3 3 months 1 to 5 |
| | 2008 Average than 1 months to 1 year years |
| | Effective month $ $ $ |
| | Interest $ |
| | Rate |
| | % |
| | Non-interest bearing - 393,625 6,498 662,097 - |
| | Deferred 6 - - 469,649 - |
| | consideration |
| | 393,625 6,498 1,131,746 - |
| | 2007 |
| | Non-interest bearing - 324,602 108,851 814,694 - |
| | Deferred 6 - - 841,663 - |
| | consideration |
| | 324,602 108,851 1,656,357 - |
| | COMPANY Weighted Less 1 to 3 3 months 1 to 5 |
| | 2008 Average than 1 months to 1 year years |
| | Effective month $ $ $ |
| | Interest $ |
| | Rate |
| | % |
| | Non-interest bearing - 280,411 - 202,242 - |
| | Deferred 6 - - 469,649 - |
| | consideration |
| | 280,411 - 671,891 - |
| | 2007 |
| | Non-interest bearing - 91,203 108,851 608,897 - |
| | Deferred 6 - - 841,663 - |
| | consideration |
| | 91,203 108,851 1,450,560 - |
| | CONSOLIDATED Weighted Less 1 to 3 3 months 1 to 5 |
| | 2008 Average than 1 months to 1 year years |
| | Effective month $ $ $ |
| | Interest $ |
| | Rate |
| | % |
| | Non-interest bearing - - - 414,255 - |
| | - - 414,255 - |
| | 2007 |
| | Non-interest bearing - - - 82,488 - |
| | - - 82,488 - |
| | COMPANY Weighted Less 1 to 3 3 months 1 to 5 |
| | 2008 Average than 1 months to 1 year years |
| | Effective month $ $ $ |
| | Interest $ |
| | Rate |
| | % |
| | Non-interest bearing - - - 1,637 - |
| | Deferred consideration 8 - - 646,715 - |
| | - - 648,352 - |
| | 2007 |
| | Non-interest bearing - - - 27,766 - |
| | - - 27,766 - |
| | |
+------+----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------+
This information is provided by RNS
The company news service from the London Stock Exchange
END
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