NOTES TO THE FINANCIAL STATEMENTS
The financial statements of Novogen Limited for the year ended 30 June, 2012 were authorised for issue in accordance with a resolution of the Board of Directors on 26 October, 2012.
Note 1.
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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
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The significant accounting policies which have been adopted in the preparation of the financial statements are:
Basis of preparation
The financial
statements are general-purpose financial statements, which have been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting
Standards Board (AASB). Novogen Limited is a for-profit entity for the purpose of preparing the financial statements. The financial statements have been prepared on a historical cost basis with all amounts presented in Australian
dollars, rounded to the nearest thousand dollars ($000), unless otherwise stated.
Going Concern
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. This basis of accounting
contemplates the recovery of the Companys assets and the satisfaction of liabilities in the normal course of business and does not include any adjustments to reflect the possible future effects on the recoverability and classification of
assets or the amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
While the basis of presentation remains that of a going concern, the Groups ability to continue as a going concern is dependent on the
in specie
distribution of the MEI shares proceeding as described in Note 23, which is subject to shareholder approval.
Following the planned
in
specie
distribution of shares of MEI held by Novogen Limited the Company will have no active operations and limited financial resources. The Directors will continue to explore a number of acquisition or merger options for the company so as to
achieve the best outcome for shareholders. Although the Directors believe the company will have sufficient cash resources to fund operations for the next twelve months, its future will be dependent on the result of the current options that are being
explored for the future of the Company. If such a transaction is completed, the going concern of the Company will be dependent on the operations of the new business and no assurance can be provided that additional funding will not be required for
the Company to continue as a going concern.
If the in specie distribution does not occur Novogen Limiteds future performance will
continue to be dependent upon the performance of its subsidiary MEI and MEIs ability to continue to raise capital to continue its operations. Should the Company not participate in any of MEIs capital raises, the Companys investment
in MEI could be further diluted. Any participation by the Company in MEIs capital raising efforts would be dependent on the Companys ability to raise funds on market.
If the Company does not undertake the in specie distribution and its subsidiary MEI is unable to obtain funds on favourable terms or at all and/or the Directors are unable to identify future options for
the Company, the Company may be required to cease or reduce its operations. These factors raise substantial doubt about the Companys ability to continue as a going concern.
81
Statement of compliance
The financial statements comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.
Basis of consolidation
The consolidated financial statements comprise the financial
statements of Novogen Limited and its subsidiaries (the Group) as at 30 June each year.
The financial statements of the
subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies.
In preparing the
consolidated financial statements, all inter-company balances and transactions, income and expenses and profit and losses resulting from intra-group transactions have been eliminated in full.
Subsidiaries are fully consolidated from the date on which control is transferred to the Group and cease to be consolidated from the date on which control is transferred out of the Group.
Non-controlling interests represent the portion of profit or loss and net assets in MEI and Glycotex not held by the Group and are presented separately
in the Statement of Comprehensive Income and within equity in the consolidated Statement of Financial Position.
Significant accounting
judgements, estimates and assumptions
(i) Significant accounting judgements
In the process of applying the Groups accounting policies, management has made the following judgement, apart from those involving estimations.
Research and development expenses
The Directors do not consider the development programs to be sufficiently advanced to reliably determine the economic benefits and technical feasibility to justify capitalisation of development costs.
These costs have been recognised as an expense when incurred.
Research and development expenses relate primarily to the cost of conducting
human clinical and pre-clinical trials. Clinical development costs are a significant component of research and development expenses. Estimates have been used in determining the expense liability under certain clinical trial contracts where services
have been performed but not yet invoiced. The actual costs of those services could differ in amount and timing from the estimates used in completing the financial statements.
Generally the costs, and therefore estimates, associated with clinical trial contracts are based on the number of patients, drug administration cycles, the type of treatment and the outcome being
measured. The length of time before actual amounts can be determined will vary depending on length of the patient cycles and the timing of the invoices by the clinical trial partners.
Clinical trial expenses of A$152,000 have been accrued at June 30, 2012. These estimates are based on the number of patients in each trial and the drug administration cycle.
82
(ii) Significant accounting estimates and assumptions
The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and
assumptions that have a significant risk of causing a material adjustment to the carrying amounts of certain assets and liabilities within the next annual reporting period are:
Share-based payment transactions
The Group measures the cost of equity-settled
transactions with employees by reference to the fair value of equity instruments at the date at which they are granted. The fair value is determined using a binomial model, using the assumptions detailed in Note 13.
Impairments
The Group assesses
impairment at the end of each reporting period by evaluating conditions specific to the Group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Value-in-use calculations
performed in assessing recoverable amounts incorporate a number of key estimates.
Clinical Trial Expenses
Estimates have been used in determining the expense liability under certain clinical trial contracts where services have been performed but not yet
invoiced. The actual costs of those services could differ in amount and timing from the estimates used in completing the financial results.
Revenue recognition
Revenue is
recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured. In determining the economic benefits, provisions are made for certain trade discounts and returned goods. The
following specific recognition criteria must also be met:
Sale of goods
Revenue from sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer and can be measured reliably. Risks and rewards are considered passed to
the buyer when the goods have been dispatched to a customer pursuant to a sales order and invoice. Net sales represent product shipped less actual and estimated future returns, and slotting fees, rebates and other trade discounts accounted for as
reductions of revenue.
Estimates and allowances are based upon known claims and an estimate of additional returns. In order to calculate
estimates, management regularly monitor historical patterns of returns from, and discounts to, individual customers.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. The effective interest method uses the effective
interest rate which is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial asset.
Dividends
Dividend revenue is
recognised when the right to receive the payment is established.
Government grants
Grant income is recognised when there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. Grant
income is recognised in the profit or loss over the periods necessary to match the grant on a systematic basis to the costs that it is intended to compensate.
Royalties
Royalty revenue is recognised on an accruals basis in accordance with the
substance of the relevant agreements.
83
Litigation Settlement
Revenue is recognised when the risks and rewards have been transferred, which is considered to occur on settlement.
Borrowing costs
Borrowing costs are recognised as an expense when incurred. Novogen
Limited does not currently hold any qualifying assets but if it did, the borrowing costs directly associated with this asset would be capitalised (including any other costs directly attributable to the borrowing and temporary investment income
earned on the borrowing).
Leases
The determination of whether an arrangement is or contains a lease is based on the substance of the arrangement and requires assessment of whether the fulfilment of the arrangement is dependent on the use
of a specific asset or assets and the arrangement conveys a right to use the asset.
Finance leases, which transfer to the Group substantially
all the risks and benefits incidental to ownership of the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments. Lease payments are
apportioned between the finance charges and reduction of the lease liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised as an expense in profit or loss.
Capitalised leased assets are depreciated over the shorter of the estimated useful life of the asset and the lease term if there is no reasonable
certainty that the Group will obtain ownership by the end of the lease term.
Operating lease payments are recognised as an expense in the
profit or loss on a straight-line basis over the lease term. Lease incentives are recognised in the profit or loss as an integral part of the total lease expense.
The cost of improvements to or on leasehold property is capitalised, disclosed as leasehold improvements, and amortised over the unexpired period of the lease or the estimated useful lives of the
improvements, whichever is the shorter.
Cash and cash equivalents
Cash and short term deposits in the Statement of Financial Position comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less that are readily convertible
to known amounts of cash and which are subject to an insignificant risk of changes in value.
For the purposes of the Statement of Cash Flows,
cash and cash equivalents consist of cash and cash equivalents as defined above, net of outstanding bank overdrafts and secured cash.
Trade and other receivables
Trade
receivables, which generally have 30-60 day terms, are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method less an allowance for any uncollectible amounts.
An allowance for doubtful debts is made when there is objective evidence that the Group will not be able to collect the debts. Objective evidence of
impairment includes: financial difficulties of debtors; default payments; or debts more than 120 days overdue. Bad debts are written off when identified.
84
Cash flows relating to short term receivables are not discounted if the effect of discounting is immaterial.
Inventories
Inventories are
measured at the lower of cost and net realisable value.
Costs incurred for finished goods and work-in-progress in bringing each product to
its present location and condition are accounted for as cost of direct material, direct labour and a proportion of manufacturing overheads based on normal operating capacity but excluding borrowing costs and assigned on a standard costing basis.
Costs are assigned using a standard costing system on the basis of weighted average costs.
Net realisable value is the estimated selling
price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.
Foreign
currency translation
Functional currency
Both the functional and presentation currency of Novogen Limited and its subsidiaries is Australian dollars (A$) except for MEI, Marshall Edwards Pty Limited and Glycotex, where the functional currency is
US dollars.
Translation of foreign currency transactions
Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign
currencies are translated at the rate of the exchange ruling as at the end of the reporting period.
Non-monetary items that are measured in
terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.
Translation of financial statements of overseas operations
As at the end of the reporting period the assets and liabilities of overseas subsidiaries are translated into the presentation currency of the Group at the rate of exchange ruling as at the end of the
reporting period and the income and expenses are translated at the weighted average exchange rates for the period.
The exchange differences
arising on the retranslation of overseas operations which have a functional currency of A$ are taken directly to the profit or loss. The exchange differences arising on the retranslation of overseas operations which have a functional currency that
is not A$ are taken directly to a separate component of equity (foreign currency translation reserve).
Taxes
Income tax
Current tax assets and
liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantially enacted by
the end of the reporting period.
Deferred income tax is provided on all temporary differences as at the end of the reporting period between
the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
85
The carrying amount of deferred income tax assets is reviewed at the end of each reporting period and
reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on the tax rates (and tax
laws) that have been enacted or substantively enacted as at the end of the reporting period.
Unrecognised deferred income tax assets are
reassessed at the end of each reporting period and recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the Statement of Comprehensive Income.
Other taxes
Revenues, expenses and assets are recognised net of the amount of GST receipt
except:
|
|
when the GST incurred on a purchase of goods or services is not recoverable from the taxation authority, in which case the GST is recognised as part of
the cost of acquisition of the asset or as part of the expense item as applicable; and
|
|
|
receivables and payables, which are stated with the amounts of GST included.
|
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the Statement of
Financial Position.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation
authority.
Property, plant and equipment
Cost and valuation
Each class of property, plant and equipment is carried at cost or fair
value less, where applicable, any accumulated depreciation and impairment losses.
Depreciation
Depreciation is calculated on a straight-line basis to write off the depreciable amount of each item of property, plant and equipment over its expected
useful life to the Group.
Major depreciation periods are:
|
|
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Plant and equipment
|
|
2.5 - 10 years
|
Leasehold improvements
|
|
the lease term
|
Impairment of assets
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of
recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount.
Recoverable amount is the greater of fair value less costs to sell and value in use. It is determined for an individual asset, unless the assets value in use cannot be estimated to be close to its
fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash-generating unit to which the asset
belongs.
86
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.
Derecognition and disposal
An item of
property, plant and equipment is derecognised upon disposal or when no further future economic benefits are expected from its use or disposal.
Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the
asset) is included in profit or loss in the year the asset is derecognised.
Non-current assets held for sale and discontinued operations
Non-current assets and disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less
costs to sell. Non-current assets and disposal groups are classified as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than through continuing use. This condition is regarded as met only when
the sale is highly probable and the asset or disposal group is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to qualify for recognition as a completed sale within one year
from the date of classification.
In the statement of comprehensive income, income and expenses from discontinued operations are reported
separately from income and expenses from continuing operations. The resulting profit or loss (after taxes) is reported separately in the statement of comprehensive income.
Property, plant and equipment, once classified as held for sale, are not depreciated or amortised.
Research and development
Expenditure
during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies identify that the project will deliver future economic benefits and these benefits can be
measured reliably.
Capitalised development costs have a finite life and are amortised on a systematic basis matched to the future economic
benefits over the useful life of the project.
Trade and other payables
Trade and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the
Group becomes obliged to make future payments in respect of the purchases of these goods and services.
Interest bearing loans and
borrowings
All loans and borrowings are initially recognised at the fair value of the consideration received less directly attributable
transaction costs.
Gains and losses are recognised in profit or loss when the liabilities are derecognised.
Provisions
Provisions are recognised
when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation.
87
Employee benefits
Wages, salaries, annual leave
Liabilities for wages and salaries, including non-monetary
benefits, are recognised in other payables in respect of employees services up to the end of the reporting period. Liabilities for annual leave are recognised in current provisions in respect of employees services up to the end of the
reporting period. They are measured at the amounts expected to be paid when the liabilities are settled.
Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected
future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee
departures, and periods of service. Expected future payments are discounted using market yields at the end of the reporting period on national government bonds with terms to maturity and currencies that match, as closely as possible, the estimated
future cash outflows.
Defined contribution plan
Defined superannuation contributions are recognised as an expense in the period they are incurred.
Onerous lease provision
When a lease
contract is considered to be onerous, the present obligation under the lease is recognised as a provision. A contract is considered to be onerous when the unavoidable costs of meeting the obligations under the contract exceed the economic benefits
expected to be received under it. The unavoidable costs under a contract reflect the least net costs of exiting from the contract, which is the lower of the cost of fulfilling it and any compensation or penalties arising from failure to fulfil it.
Share-based payment transactions
The Group provides benefits to employees of the Group in the form of share-based payments, whereby employees render services in exchange for shares or rights over shares (equity-settled transactions)
under the terms of the Employee Share Option Plan (ESOP).
The cost of these equity-settled transactions with employees is measured by
reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined using a binomial model. Further details are given in Note 13.
In valuing equity-settled transactions, no account is taken of any performance conditions.
The
cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the vesting period of the instrument. The cumulative expense recognised for equity-settled transactions at each end of the reporting period
until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the Groups best estimate of the number of equity instruments that will ultimately vest. The Statement of Comprehensive Income charge or
credit for a period represents the movement in cumulative expense recognised as at the beginning and end of that period.
Termination
benefits
Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts
voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when they are demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without the possibility
of withdrawing or providing termination benefits as a result of an offer made to encourage voluntary redundancy.
88
Contributed equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown as a deduction, net of tax, from the proceeds.
Subsidiary equity issues
Where a
subsidiary makes a new issue of capital subscribed by non-controlling interests, the parent company may make a gain or loss due to dilution of non-controlling interests. These gains or losses are recognised in equity attributable to the parent
company.
Earnings per share (EPS)
Basic earnings per share amounts are calculated by dividing net loss for the year attributable to owners of the parent by the weighted average number of ordinary shares outstanding during the year.
Diluted earnings per share amounts are calculated by dividing the net loss attributable to owners of the parent by the weighted average
number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on the conversion of all the dilutive potential ordinary shares into ordinary shares.
Deferred offering costs
Where costs
associated with a capital raising have been incurred at the end of the reporting period and it is probable that the capital raising will be successfully completed after the end of the reporting period, such costs are deferred and offset against the
proceeds subsequently received from the capital raising.
Financial instruments
Recognition
Financial instruments are
initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition these instruments are measured as set out below.
Loans and receivables
Loans and
receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are stated at amortised cost using the effective interest rate method.
Financial liabilities
Non-derivative
financial liabilities are recognised at amortised cost, comprising original debt less principal payments and amortisation.
Derivative
liabilities are initially recognised at fair value. Changes in the fair value of the derivative liabilities are recognised in profit or loss.
89
New accounting standards and interpretations
Certain new accounting standards and interpretations have been published that are not mandatory for 30 June, 2012 reporting periods. The Groups assessment of the impact of these new standards
and interpretations is set out below.
(i) AASB 9
Financial Instruments
(effective from 1 January, 2015)
In September 2009 the AASB issued AASB 9,
Financial Instruments,
which amends the requirements for classification and measurement of financial
assets. This standard was subsequently amended in December, 2010. AASB 9 requires that gains or losses on financial liabilities measured at fair value are recognised in profit or loss, except that the effects of changes in the liabilitys
credit risk are recognised in other comprehensive income. At 30 June 2012, the Company currently has no financial liabilities measured at fair value through profit or loss (2011: A$1,047,000). The amendments require that any changes in fair
value attributable to the liabilitys credit risk be recognised in other comprehensive income instead of profit or loss. The amendments apply retrospectively from date of initial application, which will be 1 July 2015. Therefore, at this
stage, it is not yet possible for the Company to quantify the impact on the financial statements of first time application of these amendments.
(ii) AASB 10
Consolidated Financial Statements
(effective from 1 January, 2013)
AASB 10 establishes a revised control model which broadens the situations when an entity is considered to be controlled by another entity. The effect of this change may lead to more entities being
consolidated into the Group.
The Company does not expect that this change with have any impact on the financial statements due to there
currently not being any entities or investment with in the group that are not currently consolidated. However, should the investment that the Company currently has in MEI Pharma, Inc become diluted to less than 50% ownership interest, due to further
share issuances by the subsidiary, the Company will need to review the new standard.
(iii) AASB 12
Disclosure of Interests in Other
Entities (
effective from 1 January, 2013)
AASB 12 combines the disclosure requirements for subsidiaries, joint arrangements,
associates and structured entities within a comprehensive disclosure standard. Its aim is to provide more transparency on borderline consolidations decisions and includes enhanced disclosures centred on significant judgements and
assumptions made around determining control, joint control and significant influence.
The Company does not expect that this change with have
any impact on the financial statements other than to add additional disclosure.
(iv) AASB 13
Fair Value Measurement
(effective from
1 January, 2013)
Currently, fair value measurement requirements are included in several Accounting Standards. AASB 13 establishes a
single framework for measuring fair value of financial and non-financial items recognized at fair value in the statement of financial position or disclosed in the notes in the financial statements.
The Company has not yet conducted a detailed analysis of the differences between the current fair calculation methodologies used and those required by
AASB 13. However, when this standard is adopted for the first time for the year ended 30 June 2014, there will be no impact on the financial statements because the revised fair value measurement requirements apply prospectively from 1 July
2013.
90
(v) AASB 2011-9 Amendments to Australian Accounting Standards
Presentation of Other
Comprehensive
Income
(effective 1 July, 2013).
These amendments align the presentation of items of other comprehensive income
(OCI) with US GAAP. When this standard is first adopted for the year ended 30 June 2014, there will be no impact on amounts recognised for transactions and balances for 30 June 2014 (and comparatives). However, the statement of
comprehensive income will include name changes and include subtotals for items of OCI that can subsequently be reclassified to profit or loss in future (e.g. foreign currency translation reserves) and those that cannot subsequently be reclassified
(e.g. fixed asset revaluation surpluses).
(vi) AASB 119
Employee Benefits
(effective 1 January, 2013).
The Company currently calculates its liability for annual leave employee benefits on the basis that it is due to be settled within 12 months of the end of
the reporting period because employees are entitled to use this leave at any time. The amendments to IAS 19 require that such liabilities be calculated on the basis of when the leave is expected to be taken, i.e. expected settlement.
When this standard is first adopted for the 30 June, 2014 year end, annual leave liabilities will be recalculated on 1 July 2012. Leave liabilities for
any employees with significant balances of leave outstanding who are not expected to take their leave within 12 months will be discounted, which may result in a reduction of the annual leave liabilities recognised on 1 July 2012, and a
corresponding increase in retained earnings at that date.
91
Note 2 (LOSS)/PROFIT BEFORE INCOME TAX
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
2010
A$000
|
|
|
|
|
|
Revenue and other income from continuing operations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Revenue
|
|
|
|
|
|
|
|
|
|
|
|
|
Bank interest
|
|
|
285
|
|
|
|
144
|
|
|
|
290
|
|
Royalties
|
|
|
1,162
|
|
|
|
1,714
|
|
|
|
1,492
|
|
Dividends
|
|
|
66
|
|
|
|
165
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
2
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
1,513
|
|
|
|
2,025
|
|
|
|
1,784
|
|
|
|
|
|
(b) Other income
|
|
|
|
|
|
|
|
|
|
|
|
|
Government grants - research and development
|
|
|
|
|
|
|
247
|
|
|
|
|
|
Gain on fair value of derivative liability
|
|
|
728
|
|
|
|
|
|
|
|
|
|
Net gains on disposal of investment
|
|
|
199
|
|
|
|
|
|
|
|
|
|
Net gains on disposal of plant and equipment
|
|
|
|
|
|
|
265
|
|
|
|
7
|
|
Other
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
937
|
|
|
|
512
|
|
|
|
7
|
|
|
|
|
|
(c) Other expenses*
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventory impairment
|
|
|
12
|
|
|
|
12
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
12
|
|
|
|
12
|
|
|
|
|
|
|
|
|
|
(d) Depreciation included in the statement of comprehensive income*
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation:
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in administrative expenses
|
|
|
25
|
|
|
|
83
|
|
|
|
198
|
|
|
|
|
|
(e) Lease payments and other expenses included in the statement of comprehensive income*
|
|
|
|
|
|
|
|
|
|
|
|
|
Included in administrative expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Minimum lease payments - operating leases
|
|
|
246
|
|
|
|
402
|
|
|
|
476
|
|
Net foreign exchange differences
|
|
|
(214
|
)
|
|
|
771
|
|
|
|
512
|
|
Net loss on disposal of plant and equipment
|
|
|
9
|
|
|
|
|
|
|
|
|
|
Share issue expenses
|
|
|
|
|
|
|
433
|
|
|
|
|
|
Onerous lease provision movement - operating leases
|
|
|
(37
|
)
|
|
|
|
|
|
|
|
|
Included in research and development expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Onerous lease expense - operating leases
|
|
|
|
|
|
|
550
|
|
|
|
|
|
|
|
|
|
(f) Employee benefit expense*
|
|
|
|
|
|
|
|
|
|
|
|
|
Wages and salaries
|
|
|
3,225
|
|
|
|
4,609
|
|
|
|
5,453
|
|
Workers compensation costs
|
|
|
1
|
|
|
|
27
|
|
|
|
47
|
|
Defined contribution plan expense
|
|
|
90
|
|
|
|
336
|
|
|
|
573
|
|
Termination costs
|
|
|
1,155
|
|
|
|
655
|
|
|
|
3,017
|
|
Share-based payments expense
|
|
|
574
|
|
|
|
651
|
|
|
|
728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,045
|
|
|
|
6,278
|
|
|
|
9,818
|
|
*
|
includes amounts from discontinuing operations
|
92
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
2010
A$000
|
|
A reconciliation between tax expense and the product of accounting (loss)/profit before income tax multiplied by the Groups
applicable tax rate is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounting (loss)/profit before tax from continuing and discontinuing operations
|
|
|
(1,343
|
)
|
|
|
(9,474
|
)
|
|
|
(15,236
|
)
|
|
|
|
|
At the Groups statutory income tax rate of 30% (2011 and 2010: 30%)
|
|
|
(403
|
)
|
|
|
(2,842
|
)
|
|
|
(4,571
|
)
|
|
|
|
|
Foreign tax rate differentials
|
|
|
(860
|
)
|
|
|
(139
|
)
|
|
|
(184
|
)
|
Non deductible expenses
|
|
|
159
|
|
|
|
26
|
|
|
|
85
|
|
Deductible balancing adjustments
|
|
|
5
|
|
|
|
|
|
|
|
|
|
Research and development allowance
|
|
|
|
|
|
|
(110
|
)
|
|
|
(604
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sub-total
|
|
|
(1,099
|
)
|
|
|
(3,065
|
)
|
|
|
(5,274
|
)
|
Tax losses and timing differences not recognised
|
|
|
1,106
|
|
|
|
3,070
|
|
|
|
5,284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax expense
|
|
|
7
|
|
|
|
5
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax expense from continuing operations
|
|
|
|
|
|
|
1
|
|
|
|
1
|
|
Tax expense from discontinuing operations
|
|
|
7
|
|
|
|
4
|
|
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7
|
|
|
|
5
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Components of income tax expense/(benefit)
|
|
|
|
|
|
|
|
|
|
|
|
|
Current tax
|
|
|
(1,099
|
)
|
|
|
(3,065
|
)
|
|
|
(5,274
|
)
|
Deferred tax
|
|
|
1,106
|
|
|
|
3,070
|
|
|
|
5,284
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
|
|
|
7
|
|
|
|
5
|
|
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred income tax at 30 June relates to the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax assets/(liabilities)
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
106
|
|
|
|
124
|
|
|
|
301
|
|
Amortisation of intangibles
|
|
|
(214
|
)
|
|
|
|
|
|
|
|
|
Start up costs capitalised
|
|
|
1,491
|
|
|
|
|
|
|
|
|
|
Provisions and accruals
|
|
|
(54
|
)
|
|
|
702
|
|
|
|
166
|
|
Exchange losses/(gain)
|
|
|
(201
|
)
|
|
|
(75
|
)
|
|
|
113
|
|
Share based payments by USA subsidiaries
|
|
|
171
|
|
|
|
195
|
|
|
|
171
|
|
Other
|
|
|
|
|
|
|
40
|
|
|
|
51
|
|
Losses carried forward
|
|
|
|
|
|
|
|
|
|
|
|
|
- Australia
|
|
|
13,509
|
|
|
|
41,923
|
|
|
|
40,474
|
|
- US
|
|
|
16,392
|
|
|
|
14,950
|
|
|
|
16,921
|
|
- Other countries
|
|
|
|
|
|
|
1,259
|
|
|
|
1,899
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deferred tax assets not recognised
|
|
|
31,200
|
|
|
|
59,118
|
|
|
|
60,096
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deferred tax liability
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total deferred tax liability not recognised
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net deferred tax asset not recognised
|
|
|
31,200
|
|
|
|
59,118
|
|
|
|
60,096
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At the Groups statutory income tax rate of 30% (2011 and 2010: 30%)
|
|
|
9,360
|
|
|
|
17,735
|
|
|
|
18,029
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital Losses carried forward
|
|
|
3,230
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At the Groups statutory income tax rate of 30% (2011 and 2010: 30%)
|
|
|
969
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Tax losses of A$28,999,000 (2011 and 2010: nil) expired during the year as a result of dissolution of subsidiaries.
93
Tax consolidation
Novogen Limited and its 100% owned Australian subsidiaries elected to form a tax consolidation group for income tax purposes with effect from 1 July, 2003. The Australian Tax Office has been formally
notified of this decision. Novogen Limited as the head entity discloses all of the deferred tax assets of the tax consolidated group in relation to tax losses carried forward (after elimination of inter-group transactions).
As the tax consolidation group continues to generate tax losses there has been no reason for the Company to enter a tax funding agreement with members of
the tax consolidation group.
Note 4
|
EARNINGS PER SHARE
|
The notional issue of
potential ordinary shares resulting from the exercise of options detailed in Note 13 does not result in diluted earnings per share therefore the information has not been disclosed.
Potential ordinary shares (non-dilutive) and not included in determining earnings per share: 1,606,240 options (2011: 2,640,756) (refer Note 13).
There have been no conversions to, calls of, or subscriptions for ordinary shares or issues of potential ordinary shares since the end of the reporting period and before the completion of these financial
statements.
The following reflects the income and share data used in the basic and diluted earnings per share computations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
2010
A$000
|
|
|
|
|
|
Net loss attributable to owners of the parent from continuing operations
|
|
|
(6,083
|
)
|
|
|
(7,965
|
)
|
|
|
(12,913
|
)
|
Net profit attributable to owners of the parent from discontinuing operations
|
|
|
7,392
|
|
|
|
1,467
|
|
|
|
568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net profit/(loss) attributable to owners of the parent
|
|
|
1,309
|
|
|
|
(6,498
|
)
|
|
|
(12,345
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
2010
|
|
|
|
Thousands
|
|
|
Thousands
|
|
|
Thousands
|
|
|
|
|
|
Weighted average number of ordinary shares used in calculating basic and diluted earnings per share
|
|
|
102,431
|
|
|
|
102,126
|
|
|
|
102,126
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
94
Note 5
|
CASH AND CASH EQUIVALENTS
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
|
|
Cash at bank and in hand
|
|
|
6,348
|
|
|
|
5,266
|
|
Short-term deposits
|
|
|
1,750
|
|
|
|
500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,098
|
|
|
|
5,766
|
|
|
|
|
Secured cash (Refer Note 15)
|
|
|
250
|
|
|
|
250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,348
|
|
|
|
6,016
|
|
Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short-term deposits and secured cash are made for varying periods of between one day and three months, depending on the immediate cash requirements of
the Group, and earn interest at the respective short-term deposit rates.
Note 6
|
TRADE AND OTHER RECEIVABLES
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
Trade receivables
|
|
|
322
|
|
|
|
2,424
|
|
Allowance for doubtful debts
|
|
|
(315
|
)
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
7
|
|
|
|
2,415
|
|
|
|
|
Deposits held
|
|
|
326
|
|
|
|
349
|
|
Royalty receivable
|
|
|
|
|
|
|
2,565
|
|
Other debtors
|
|
|
71
|
|
|
|
140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
404
|
|
|
|
5,469
|
|
At 30 June, 2011 the Company had entered into an agreement to receive a lump sum upfront payment in settlement of
royalties due under the licence agreement with ADM. This payment was received in July, 2011.
Allowance for doubtful debts
Trade receivables are non-interest bearing and are generally on 30-60 day terms. An allowance for doubtful debts is made when there is
objective evidence that the Group will not be able to collect the debts.
At 30 June, 2012 trade receivables of A$315,000 (2011: A$9,000)
were considered doubtful.
95
Movements in the allowance for doubtful debts were as follows:
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
|
|
Balance at 1 July
|
|
|
(9
|
)
|
|
|
(36
|
)
|
|
|
|
Change in allowance for the year
|
|
|
(306
|
)
|
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at 30 June
|
|
|
(315
|
)
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
Past due but not considered doubtful
At 30 June, 2012 trade receivables of A$6,000 (2011: A$427,000) were past due but were not considered to be doubtful. These relate to a number of independent customers for whom there is no recent
history of default. The ageing analysis of these trade receivables is as follows:
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
|
|
1 - 30 days overdue
|
|
|
6
|
|
|
|
352
|
|
31 - 60 days overdue
|
|
|
|
|
|
|
13
|
|
61 - 90 days overdue
|
|
|
|
|
|
|
62
|
|
91 + days overdue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6
|
|
|
|
427
|
|
Receivable balances which are neither overdue nor impaired are expected to be received when due.
Other receivables
Other debtors,
generally arising from transactions outside usual operating activities of the Group, are non-interest bearing and have repayment terms between 7 and 30 days.
At 30 June, 2012 there were no other receivables that were past due but were not considered to be doubtful (2011: $NIL).
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
|
|
1 - 30 days overdue
|
|
|
|
|
|
|
|
|
31 - 60 days overdue
|
|
|
|
|
|
|
|
|
61 - 90 days overdue
|
|
|
|
|
|
|
|
|
91 + days overdue
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other receivable balances which are neither overdue nor impaired are expected to be received when due.
96
Fair value and credit risk
Due to the short term nature of these receivables, their carrying value is assumed to approximate their fair value.
The maximum exposure to credit risk is the fair value of receivables. Collateral is not held against these receivables.
Foreign exchange and interest rate risk
Details regarding foreign exchange and
interest rate risk exposure is disclosed in Note 15.
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
Work in progress (at cost)
|
|
|
|
|
|
|
66
|
|
Finished goods (at cost)
|
|
|
|
|
|
|
588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
654
|
|
|
|
|
|
|
|
|
|
|
Note 8
|
OTHER CURRENT ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
|
|
Prepayments
|
|
|
206
|
|
|
|
521
|
|
|
|
|
|
|
|
|
|
|
97
Note 9
|
PROPERTY, PLANT AND EQUIPMENT
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
|
|
Plant and equipment - at cost
|
|
|
84
|
|
|
|
615
|
|
Accumulated depreciation
|
|
|
(62
|
)
|
|
|
(561
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
22
|
|
|
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leasehold improvements - at cost
|
|
|
20
|
|
|
|
118
|
|
Accumulated depreciation
|
|
|
(15
|
)
|
|
|
(105
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
5
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total property, plant and equipment - at cost
|
|
|
104
|
|
|
|
733
|
|
Accumulated amortisation and depreciation
|
|
|
(77
|
)
|
|
|
(666
|
)
|
|
|
|
|
|
|
|
|
|
Total property, plant and equipment
|
|
|
27
|
|
|
|
67
|
|
Reconciliations
Reconciliations of the carrying amount of plant, property and equipment at the beginning and at the end of the current financial year:
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
Plant and equipment
|
|
|
|
|
|
|
|
|
Carrying amount at beginning of financial year
|
|
|
54
|
|
|
|
158
|
|
Additions
|
|
|
1
|
|
|
|
35
|
|
Disposals
|
|
|
(16
|
)
|
|
|
(75
|
)
|
Depreciation expense
|
|
|
(17
|
)
|
|
|
(64
|
)
|
|
|
|
|
|
|
|
|
|
Carrying amount at end of financial year
|
|
|
22
|
|
|
|
54
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Leasehold improvements
|
|
|
|
|
|
|
|
|
Carrying amount at beginning of financial year
|
|
|
13
|
|
|
|
14
|
|
Additions
|
|
|
|
|
|
|
20
|
|
Disposals
|
|
|
|
|
|
|
(2
|
)
|
Depreciation expense
|
|
|
(8
|
)
|
|
|
(19
|
)
|
|
|
|
|
|
|
|
|
|
Carrying amount at end of financial year
|
|
|
5
|
|
|
|
13
|
|
98
Note 10
|
TRADE AND OTHER PAYABLES
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
Trade payables
|
|
|
831
|
|
|
|
1,936
|
|
Accrued payables
|
|
|
1,763
|
|
|
|
2,311
|
|
Deferred royalty income
|
|
|
1,081
|
|
|
|
2,139
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,675
|
|
|
|
6,386
|
|
Terms and conditions relating to the above payables:
|
|
trade payables are non-interest bearing and normally settled on 30 day terms; and
|
|
|
accrued trade payables are non-interest bearing and normally settled on 30 day terms.
|
Risk exposure
Information about
the Groups exposure to foreign exchange risk and liquidity risk is provided in Note 15.
Fair value
Due to the short term nature of these payables, their carrying value is assumed to approximate their fair value.
99
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
Current
|
|
|
190
|
|
|
|
770
|
|
Non-current
|
|
|
7
|
|
|
|
104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
197
|
|
|
|
874
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
Employee benefit provision
|
|
|
|
|
|
|
|
|
Current
|
|
|
190
|
|
|
|
264
|
|
Non-current
|
|
|
7
|
|
|
|
55
|
|
|
|
|
|
|
|
|
|
|
|
|
|
197
|
|
|
|
319
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
Onerous lease provision
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
506
|
|
Non-current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
506
|
|
|
|
|
|
|
|
|
|
|
Following the transition of the research and development function to the US and the expected sale of the consumer
business, the Company raised a provision at 30 June, 2011 for the excess space available at its North Ryde premises. In 2012, the Company assigned its lease obligations for this property and relocated to a smaller premises appropriate to its
revised space requirements. As a result the onerous lease provision has been reversed.
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
Make good provision
|
|
|
|
|
|
|
|
|
Opening balance at beginning of the year
|
|
|
49
|
|
|
|
49
|
|
Write back of provision in the period
|
|
|
(49
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Closing balance at the end of the year
|
|
|
|
|
|
|
49
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
Non-current
|
|
|
|
|
|
|
49
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
49
|
|
|
|
|
|
|
|
|
|
|
In accordance with its Sydney premises lease, the Group must restore the leased premises to agreed condition at the end
of the lease term. Following the assignment of the Companys lease obligations, described above, the make good provision has been reversed.
100
Note 12
|
CONTRIBUTED EQUITY AND RESERVES
|
(a)
Issued and paid up capital
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
Fully Paid Ordinary Shares
|
|
|
|
|
|
|
|
|
Novogen Limited
|
|
|
|
|
|
|
|
|
103,805,676 (2011: 102,125,894) ordinary shares
|
|
|
133,264
|
|
|
|
133,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
133,264
|
|
|
|
133,100
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
Gain arising on issue of shares by subsidiaries to outside shareholders:
|
|
|
|
|
|
|
|
|
Marshall Edwards, Inc.
|
|
|
56,483
|
|
|
|
53,731
|
|
Glycotex, Inc.
|
|
|
9,279
|
|
|
|
7,464
|
|
|
|
|
|
|
|
|
|
|
|
|
|
65,762
|
|
|
|
61,195
|
|
|
|
|
|
|
|
|
|
|
Contributed Equity
|
|
|
199,026
|
|
|
|
194,295
|
|
|
|
|
|
|
|
|
|
|
Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to
participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held.
Ordinary
shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
Movements in issued and paid up ordinary
share capital of Novogen Limited are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of
shares
|
|
|
Issue
price
A$
|
|
|
A$000
|
|
On issue 1 July, 2010
|
|
|
102,125,894
|
|
|
|
|
|
|
|
133,100
|
|
|
|
|
|
On issue 30 June, 2011
|
|
|
102,125,894
|
|
|
|
|
|
|
|
133,100
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
On issue 1 July, 2011
|
|
|
102,125,894
|
|
|
|
|
|
|
|
133,100
|
|
|
|
|
|
New Share Issue
|
|
|
250,000
|
|
|
|
0.09
|
|
|
|
23
|
|
New Share Issue
|
|
|
1,407,282
|
|
|
|
0.10
|
|
|
|
139
|
|
New Share Issue
|
|
|
22,500
|
|
|
|
0.10
|
|
|
|
2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total shares issued during the period
|
|
|
1,679,782
|
|
|
|
|
|
|
|
164
|
|
|
|
|
|
On issue 30 June, 2012
|
|
|
103,805,676
|
|
|
|
|
|
|
|
133,264
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share options
The Company has an employee share option plan under which options to subscribe for the Companys shares have been granted to certain executive and other employees (refer Note 13).
May 2011 Private Placement
On 16 May,
2011, MEI entered into an Amended and Restated Securities Purchase Agreement (the Amended Securities Purchase Agreement) with certain accredited investors pursuant to which MEI agreed to issue and sell to the investors certain shares of
MEIs common stock, and warrants to purchase additional shares of common stock. Pursuant to the Amended Securities Purchase Agreement, in May 2011 MEI issued to the investors: (i) 835,217 shares (the Initial Shares) of common
stock, at a purchase price of US$1.333 per share; (ii) series A warrants (the Series A warrants) which initially represented the right to
101
purchase up to 626,413 shares of common stock, up to a maximum of 2,250,564 shares; and (iii) series B warrants (the Series B warrants) which initially represented the right to
purchase up to 2,165,534 shares of common stock in MEI. In addition, MEI agreed to issue certain additional shares of common stock (the Adjustment Shares) to the extent the price of the common stock was below US$1.333 per share, but
greater than or equal to US$0.75 per share, on certain dates (Adjustment Dates) during the period ending 26 June, 2012, including as a result of a subsequent offering by MEI of its securities at a price below the purchase price of
the Initial Shares. The number of Adjustment Shares issuable was initially limited to 649,242, subject to proportionate increases to the extent the Series B warrants have been exercised prior to the applicable Adjustment Date, up to a maximum of
2,332,583 shares. If the trading price of MEIs common stock was below US$0.75 per share on any Adjustment Date, MEI would, in addition to issuing the applicable number of Adjustment Shares, refund to the investors an amount per share of its
common stock received by the investors in the transaction equal to the difference between US$0.75 and the price of the common stock on such Adjustment Date. The transactions contemplated by the Amended Securities Purchase Agreement are referred to
as the May 2011 private placement. Upon the closing of the May 2011 private placement, MEI also issued warrants to the placement agent for the purchase of up to 210,053 shares of MEI common stock, which warrants were exercisable on the same terms as
the Series A warrants.
On 29 December, 2011, MEI issued an aggregate of 667,272 Adjustment Shares to the investors in accordance with the
calculation of the applicable price, based on the trading price of MEIs common stock, with respect to the first Adjustment Date. Additionally, on 29 December, 2011, MEI issued an aggregate of 245,700 Adjustment Shares to the investors in
connection with the private placement of common stock to Novogen that closed on 29 December, 2011.
Terms of Series A and Series B
Warrants
The Series A warrants became exercisable on the six month anniversary of the 18 May, 2011 closing of the May 2011 private
placement. The Series A warrants will expire on the fifth anniversary of the date on which the Series A warrants first became exercisable. Prior to the amendment of the warrant terms in September 2011 in conjunction with the Supplemental Agreement,
as defined and described below, the Series A warrants were initially exercisable at an exercise price of US$1.57 per share, subject to adjustment as provided in the Series A warrant agreements. Under the terms of the warrant agreements, the number
of shares of common stock issuable upon exercise of the Series A warrants would be increased by an amount equal to 75% of the number of shares of common stock issued upon each exercise of the Series B warrants.
Prior to the amendment of the warrant terms in September 2011 in conjunction with the Supplemental Agreement, as described below, the initial exercise
price per share of the Series B warrants was equal to the lower of (i) US$1.333, and (ii) 85% of the arithmetic average of the lowest eight weighted average prices of MEIs common stock during the 20 consecutive trading day period in
the case of a voluntary exercise by the holders, ending on the trading day immediately preceding the date of delivery of a notice of exercise.
In July and August 2011, the investors exercised an aggregate of 1,294,000 Series B warrants for 1,294,000 shares of MEIs common stock. MEI
received net proceeds of US$1,094,000 in conjunction with the exercise of the Series B warrants. Pursuant to the terms of the Amended Securities Purchase Agreement, an additional 970,500 Series A warrants became exercisable as a result of these
Series B warrant exercises.
102
Supplemental Agreement
On 28 September, 2011, MEI entered into a Supplemental Agreement (the Supplemental Agreement) with each of the investors party to the Amended Securities Purchase Agreement.
Pursuant to the Supplemental Agreement, each of the Series A warrants and the Series B warrants issued pursuant to the Amended Securities Purchase
Agreement were amended and restated (the Amended Series A Warrants and Amended Series B Warrants, respectively). The exercise price of each of the Series A warrants and Series B warrants was reduced to US$1.00 per share. As
amended, the exercise price of the Amended Series A Warrants is no longer subject to further adjustment upon the occurrence of certain events, including the subsequent sale or deemed sale by MEI of shares of its common stock at a price per share
below the exercise price of the Amended Series A Warrants; however, the Amended Series A Warrants continue to provide for certain customary anti-dilution adjustments.
The Series B warrants were amended to permit the exercise of such warrants on a cashless basis. Pursuant to the terms of the Supplemental Agreement, on 28 September, 2011, the investors exercised, on
a cashless basis, the Amended Series B Warrants for all of the remaining shares of common stock for which such Amended Series B Warrants were exercisable, resulting in the issuance by MEI of an aggregate of 305,603 shares of its common stock. As of
28 September, 2011, there were no remaining outstanding Series B warrants.
The Supplemental Agreement also effected certain amendments
to the Amended Securities Purchase Agreement, including the extension, through 28 September, 2013, of the period during which the investors have the right to participate in subsequent equity offerings of MEI. In connection with the amendments
described above, MEI made cash payments to the investors in an aggregate amount of US$365,000.
Rights Offering
On 26 March, 2012, MEIs registration statement on Form S-1, filed with the Securities and Exchange Commission, became effective. The Form S-1
was filed in connection with MEIs rights offering (Rights Offering) to its existing stockholders and to holders of MEIs Series A warrants issued in connection with the May 2011 private placement. Pursuant to the Rights
Offering, MEI distributed one subscription right for each share of its common stock and each Series A warrant exercisable for a share of its common stock to holders of record as of 30 March, 2012. Each subscription right entitled the holder to
purchase one Unit, which consisted of 0.5 shares of MEIs common stock and a warrant to purchase 0.25 shares of MEIs common stock.
For every two Units purchased in the Rights Offering, stockholders received one share of common stock in MEI for a purchase price of US$0.89 per share,
which represented a 10 percent discount to the volume-weighted average price of MEIs common stock for the 30 consecutive trading days ending on, and inclusive of, 13 March, 2012, and warrants to purchase one-half of one share of
MEIs common stock with an exercise price of US$1.19 per share, which represented a 20 percent premium to the volume-weighted average price of MEIs common stock during the same period. The warrants are exercisable for a five-year period
beginning on May 11, 2012.
The Rights Offering also included an over-subscription privilege, which entitled stockholders to purchase
additional Units that remained unsubscribed at the expiration of the Rights Offering.
The subscription period expired on 11 May, 2012.
Eligible participants exercised subscription rights to purchase 11,660,606 Units under the offering, including 8,988,675 Units purchased by Novogen Limited (described above). Based on the irrevocable exercise of the subscription rights, MEI issued
5,830,202
103
shares of its common stock and warrants to purchase 2,915,152 shares upon exercise of the warrants (subject to adjustment for fractional shares). Gross proceeds of US$5.2 million were received in
connection with the Rights Offering.
On 10 May, 2011 the asset purchase agreement entered into between the MEI, Novogen Limited, and
Novogen Research Pty Limited on 21 December, 2010 was completed. The closing of the transaction followed approval at a meeting of Novogen shareholders on 6 May, 2011. The agreement was previously approved at MEIs Annual Meeting of
Stockholders on 13 April, 2011. Under the agreement, MEI acquired Novogens isoflavone-based intellectual property portfolio in exchange for issuing Novogen 1,000 shares of Class A Preferred Stock. Each Preferred Stock is convertible
into 4,827 shares of MEI common stock for an aggregate of 4,827,000 shares, valued in total at US$4 million based on the volume weighted average price over the 20 trading days prior to the date of the date of the execution of the asset purchase
agreement. Should any of the acquired assets achieve a statistically significant result in a Phase II clinical trial or the first patient is enrolled in a Phase III clinical trial, each share of Class A Preferred Stock not already converted
will become convertible into 9,654 shares of MEI common stock. MEI can buy back the preference shares at any time at a total price of US$12 million. On completion all prior licensing agreements between the Company and MEI were cancelled.
(b) Reserves
The foreign currency
translation reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.
Movements in the currency translation reserve were as follows:
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
|
|
Balance at the beginning of the year
|
|
|
(3,422
|
)
|
|
|
(3,778
|
)
|
Share of opening reserve transferred to minority interest due to issuance of shares by subsidiary
|
|
|
(198
|
)
|
|
|
639
|
|
Exchange differences on translation of foreign operations
|
|
|
(230
|
)
|
|
|
(283
|
)
|
|
|
|
|
|
|
|
|
|
Balance at the end of the year
|
|
|
(3,850
|
)
|
|
|
(3,422
|
)
|
(c) Accumulated losses
Movements in accumulated losses were as follows:
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
|
|
Balance at the beginning of the year
|
|
|
(186,644
|
)
|
|
|
(191,452
|
)
|
|
|
|
Adjustment to opening retained earnings attributed to minority interest holders
|
|
|
(7,096
|
)
|
|
|
11,190
|
|
Equity attributable to share based payments
|
|
|
730
|
|
|
|
116
|
|
Current year (loss)/profit
|
|
|
1,309
|
|
|
|
(6,498
|
)
|
|
|
|
|
|
|
|
|
|
Balance at the end of the year
|
|
|
(191,701
|
)
|
|
|
(186,644
|
)
|
104
(d) Non-controlling interests
The non-controlling interests are detailed as follows:
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
|
|
Ordinary shares
|
|
|
41,009
|
|
|
|
43,971
|
|
Foreign currency translation reserve
|
|
|
(2,399
|
)
|
|
|
(2,550
|
)
|
Accumulated losses
|
|
|
(36,972
|
)
|
|
|
(41,230
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
1,638
|
|
|
|
191
|
|
Note 13
|
SHARE BASED PAYMENT PLANS
|
Novogen
Limited
Employee Share Option Plan
The Company established an Employee Share Option Plan which was approved by shareholders in October, 2007. The employee Share Option Plan provides for the issue of options to eligible employees being an
employee or Director of the Company or related company. The number and timing of options issued under the terms of the Employee Share Option Plan is entirely at the discretion of the Board.
Each option issued under the Employee Share Option Plan entitles its holder to acquire one fully paid ordinary share and is exercisable at a price generally equal to the weighted average price of such
shares at the close of trading on the Australian Stock Exchange Limited for the five days prior to the date of issue. Options generally vest equally over a four year period from the date of grant and expire five years after grant date. No
performance conditions apply to the options granted, however, the unvested option lapses if the employee ceases to be an employee during the vesting period. Options are not transferable and can not be settled by the Company in cash. The Employee
Share Option Plan provides that in the event of a change of control of the Company or in the event that the Company is taken over, outstanding options become exercisable regardless of vesting status.
The expense recognised in the Statement of Comprehensive Income in relation to employee share-based payments is disclosed in Note 2(f).
The following table illustrates the number (No.) and weighted average exercise price (WAEP) of, and movements in, share options issued to employees
during the year;
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
No.
|
|
|
WAEP
|
|
|
No.
|
|
|
WAEP
|
|
Outstanding at the beginning of the year
|
|
|
2,528,560
|
|
|
$
|
0.47
|
|
|
|
2,370,340
|
|
|
$
|
1.11
|
|
Granted
|
|
|
|
|
|
|
N/A
|
|
|
|
1,750,000
|
|
|
$
|
0.30
|
|
Forfeited
|
|
|
(980,800
|
)
|
|
$
|
0.62
|
|
|
|
(1,533,956
|
)
|
|
$
|
1.14
|
|
Exercised
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
N/A
|
|
Expired
|
|
|
(22,624
|
)
|
|
$
|
2.41
|
|
|
|
(57,824
|
)
|
|
$
|
3.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at the end of the year
|
|
|
1,525,136
|
|
|
$
|
0.34
|
|
|
|
2,528,560
|
|
|
$
|
0.47
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at the end of the year
|
|
|
811,183
|
|
|
$
|
0.36
|
|
|
|
474,924
|
|
|
$
|
1.00
|
|
105
The following table details the exercise price, expiry date and number of options issued to employees that
were outstanding as at the end of the year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise
Price
|
|
|
Expiry
Date
|
|
|
No. outstanding
30 June, 2012
|
|
|
No. outstanding
30 June, 2011
|
|
$
|
2.41
|
|
|
|
30/03/12
|
|
|
|
|
|
|
|
79,920
|
|
$
|
1.06
|
|
|
|
1/03/13
|
|
|
|
44,324
|
|
|
|
182,736
|
|
$
|
0.53
|
|
|
|
6/03/14
|
|
|
|
105,812
|
|
|
|
515,904
|
|
$
|
0.30
|
|
|
|
26/01/15
|
|
|
|
1,375,000
|
|
|
|
1,750,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,525,136
|
|
|
|
2,528,560
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consultant options
The Company has also granted options by way of compensation to consultants who perform services for Novogen and its controlled entities. Options issued to consultants generally vest in four equal annual
instalments over the vesting period.
The expense recognised in the Statement of Comprehensive Income in relation to consultant options is
$Nil (2011: $Nil).
The following table illustrates the number (No.) and weighted average exercise price (WAEP) of, and movements in, share
options issued to consultants during the year;
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
No.
|
|
|
WAEP
|
|
|
No.
|
|
|
WAEP
|
|
Outstanding at the beginning of the year
|
|
|
112,196
|
|
|
$
|
1.22
|
|
|
|
132,820
|
|
|
$
|
1.59
|
|
Granted
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
N/A
|
|
Forfeited
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
N/A
|
|
Expired
|
|
|
(31,092
|
)
|
|
$
|
2.41
|
|
|
|
(20,624
|
)
|
|
$
|
3.64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at the end of the year
|
|
|
81,104
|
|
|
$
|
0.76
|
|
|
|
112,196
|
|
|
$
|
1.22
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at the end of the year
|
|
|
69,693
|
|
|
$
|
0.80
|
|
|
|
80,509
|
|
|
$
|
1.43
|
|
The following table details the exercise price, expiry date and number of options issued to consultants that were
outstanding as at the end of the year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise
Price
|
|
|
Expiry
Date
|
|
|
No. outstanding
30 June, 2012
|
|
|
No. outstanding
30 June, 2011
|
|
$
|
2.41
|
|
|
|
30/03/12
|
|
|
|
|
|
|
|
31,092
|
|
$
|
1.06
|
|
|
|
1/03/13
|
|
|
|
35,460
|
|
|
|
35,460
|
|
$
|
0.53
|
|
|
|
6/03/14
|
|
|
|
45,644
|
|
|
|
45,644
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81,104
|
|
|
|
112,196
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The contractual life of all options granted is between three and five years. There are no cash settlement alternatives.
The weighted average remaining contractual life for all share options outstanding as at 30 June, 2012 was 2.7 years.
The fair value of the
equity-settled share options is estimated as at the date of grant using a binomial model taking into account the terms and conditions upon which the options were granted.
106
The following table lists the inputs to the model used to calculate the fair value of the options.
|
|
|
|
|
|
|
6 May,
2011
|
|
Exercise price
|
|
A$
|
0.297
|
|
Share price at grant date
|
|
A$
|
0.24
|
|
Dividend yield
|
|
|
0
|
%
|
Expected volatility
|
|
|
125
|
%
|
Historical volatility
|
|
|
125
|
%
|
Risk-free interest rate
|
|
|
5.20
|
%
|
Expected life of option
|
|
|
3.7 years
|
|
Option fair value
|
|
A$
|
0.19
|
|
The dividend yield reflects the assumption that the current dividend payout, which is zero, will continue with no
anticipated increases. The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative
of future trends, which may also not necessarily be the actual outcome.
MEI Pharma, Inc.
Share based payment plans
On 9 December,
2008, MEI Pharma, Inc. (MEI) adopted the MEI 2008 Stock Omnibus Equity Compensation Plan (the Plan). The Plan provides for the issuance of a maximum of 7,000,000 shares of common stock in connection with the grant of options
and/or other stock-based or stock-denominated awards to non-employee directors, officers, employees and advisors. Options issued under The Plan generally have a term of five years from the date of grant. The options/warrants generally vest in the
following pattern, 25% twelve months from grant date with the balance vesting in equal monthly instalments over the following thirty-six (36) months.
At 30 June, 2012 no options/warrants issued as share based payments had expired, been forfeited or exercised.
Other share based payments
MEI has also issued options/warrants outside The Plan to a
consultant and to MEIs President and Chief Executive Officer, however no options have been issued during the year ended 30 June, 2012.
At 30 June, 2012 no shares had been issued as a result of exercising the options/warrants.
107
The following table illustrates the number (No.) and weighted average exercise price (WAEP) of, and
movements in, MEI share options/warrants issued during the year;
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
|
|
|
2011
|
|
|
|
No.
|
|
|
WAEP
|
|
|
No.
|
|
|
WAEP
|
|
Outstanding at the beginning of the year
|
|
|
600,813
|
|
|
US$
|
2.23
|
|
|
|
303,461
|
|
|
US$
|
3.31
|
|
Granted
|
|
|
141,510
|
|
|
US$
|
1.89
|
|
|
|
297,352
|
|
|
US$
|
1.12
|
|
Forfeited
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
N/A
|
|
Expired
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Outstanding at the end of the year
|
|
|
742,323
|
|
|
US$
|
2.16
|
|
|
|
600,813
|
|
|
US$
|
2.23
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercisable at the end of the year
|
|
|
308,402
|
|
|
US$
|
2.47
|
|
|
|
92,256
|
|
|
US$
|
4.14
|
|
The following table details the exercise price, expiry date and number of MEI options/warrants issued that were
outstanding as at the end of the year:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise
Price
|
|
|
Expiry
Date
|
|
|
No. outstanding
30 June, 2012
|
|
|
No. outstanding
30 June, 2011
|
|
US$
|
21.70
|
|
|
|
30/07/13
|
|
|
|
4,608
|
|
|
|
4,608
|
|
US$
|
6.30
|
|
|
|
28/01/14
|
|
|
|
5,000
|
|
|
|
5,000
|
|
US$
|
5.05
|
|
|
|
23/04/15
|
|
|
|
110,195
|
|
|
|
110,195
|
|
US$
|
1.86
|
|
|
|
7/06/15
|
|
|
|
110,195
|
|
|
|
110,195
|
|
US$
|
1.52
|
|
|
|
18/06/15
|
|
|
|
73,463
|
|
|
|
73,463
|
|
US$
|
0.77
|
|
|
|
1/09/15
|
|
|
|
82,232
|
|
|
|
82,232
|
|
US$
|
1.15
|
|
|
|
1/11/15
|
|
|
|
37,500
|
|
|
|
37,500
|
|
US$
|
1.28
|
|
|
|
1/06/16
|
|
|
|
177,620
|
|
|
|
177,620
|
|
US$
|
1.90
|
|
|
|
1/08/16
|
|
|
|
138,510
|
|
|
|
|
|
US$
|
1.53
|
|
|
|
1/09/16
|
|
|
|
2,000
|
|
|
|
|
|
US$
|
0.61
|
|
|
|
1/06/17
|
|
|
|
1,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
742,323
|
|
|
|
600,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following table details the exercise price, expiry date and number of MEI options/warrants issued that were
outstanding as at the end of the year:
The following table lists the inputs to the model used to calculate fair value:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 June,
2012
|
|
|
20 October,
2011
|
|
|
1 September,
2011
|
|
|
1 August,
2011
|
|
|
1 June,
2011
|
|
|
1 November,
2010
|
|
|
1 September,
2010
|
|
Exercise price
|
|
US$
|
0.61
|
|
|
US$
|
1.34
|
|
|
US$
|
1.53
|
|
|
US$
|
1.90
|
|
|
US$
|
1.28
|
|
|
US$
|
1.15
|
|
|
US$
|
0.77
|
|
Share price at grant date
|
|
US$
|
0.61
|
|
|
US$
|
1.34
|
|
|
US$
|
1.53
|
|
|
US$
|
1.90
|
|
|
US$
|
1.28
|
|
|
US$
|
1.15
|
|
|
US$
|
0.77
|
|
Dividend yield
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
|
|
0
|
%
|
Expected volatility
|
|
|
152
|
%
|
|
|
148
|
%
|
|
|
147
|
%
|
|
|
145
|
%
|
|
|
144
|
%
|
|
|
137
|
%
|
|
|
136
|
%
|
Historical volatility
|
|
|
152
|
%
|
|
|
148
|
%
|
|
|
147
|
%
|
|
|
145
|
%
|
|
|
144
|
%
|
|
|
137
|
%
|
|
|
136
|
%
|
Risk-free interest rate
|
|
|
0.62
|
%
|
|
|
1.05
|
%
|
|
|
0.90
|
%
|
|
|
1.32
|
%
|
|
|
1.60
|
%
|
|
|
1.17
|
%
|
|
|
1.41
|
%
|
Expected life of warrant/option
|
|
|
5 years
|
|
|
|
5 years
|
|
|
|
5 years
|
|
|
|
5 years
|
|
|
|
5 years
|
|
|
|
5 years
|
|
|
|
5 years
|
|
|
|
|
|
|
|
|
|
Warrant/option fair value
|
|
US$
|
0.54
|
|
|
US$
|
1.18
|
|
|
US$
|
1.34
|
|
|
US$
|
1.66
|
|
|
US$
|
0.67
|
|
|
US$
|
1.01
|
|
|
US$
|
1.11
|
|
108
Glycotex, Inc.
Share based payment plans
The Glycotex, Inc, 2007 stock option plan provides for the
issuance of a maximum of 357,000 shares of common stock in connection with the grant of options and/or other stock-based or stock-denominated awards to non-employee directors, officers, employees and advisors.
Under the Glycotex stock option plan, an employee has three months from the date of the termination of employment to exercise any vested options. At
30 June, 2012, 132,586 options had vested and were exercisable and outstanding, however these options will be forfeited if not exercised by 31 August, 2012 following termination of employment of Glycotexs CEO on 31 May, 2012. No
options have expired, been forfeited or exercised during the year.
The fair value of the equity settled transactions are estimated as at the
date of grant using a binomial model taking into account the terms and conditions upon which the options and warrant were granted.
Note 14
|
SEGMENT INFORMATION
|
Identification of
reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the
executive management team (the chief operating decision makers) in assessing performance and in determining the allocation of resources.
The
operating segments indentified by management are based on the specific area of targeted therapeutic treatment or the individual market in which products are sold.
The Group has identified four unique segments as follows:
1
Drug Development
includes the discovery of new compounds and the early stage screening for bioactivity of such compounds through both in vivo and in vitro testing. This group also includes licence fee income (not specific to the other segments) and costs
associated with the Companys public listings on the ASX and Nasdaq.
2
Oncology Drug Program
involves the
development of selected oncology drug candidates which have indicated potential bioactivity against cancer cells through clinical trial programs to assess safety and efficacy.
3
Consumer Business
a dietary supplement business based on red clover isoflavones which are marketed and sold world wide (this business segment was sold in August 2011 and has been
classified as a discontinuing operation refer Note 21).
4
Wound Healing
a separate and unique technology based on
Beta-1 Glucan to aid in the management of wounds. This technology is currently being progressed through a clinical trial program to assess safety and efficacy in order to ultimately obtain marketing approval.
The accounting policies used by the Group in reporting segments internally are consistent with those applied to the consolidated accounts and contained
in Note 1.
Corporate costs have been allocated between segments and are therefore included in the net profit/(loss) for each segment.
109
The Group had a number of customers to which it provided products prior to the sale of the consumer products
business in August 2011. The major customers of the Group were pharmaceutical distributors, the largest of these accounted for A$574,000 (23%) of external revenue (2011: A$2,905,000) with the next highest accounting for 7% of external revenue
(2011: 11%). The Group also receives royalty income which is dominated by one single customer representing A$1,162,000 (46%) of external revenue (2011: A$1,715,000).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DRUG DEVELOPMENT
|
|
|
ONCOLOGY DRUG PROGRAM
|
|
|
CONSUMER BUSINESS
|
|
|
WOUND HEALING
|
|
|
TOTAL
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
2010
A$000
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
2010
A$000
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
2010
A$000
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
2010
A$000
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
Net sales from external customers
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
988
|
|
|
|
10,843
|
|
|
|
7,983
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
988
|
|
|
|
10,843
|
|
Other revenue
|
|
|
1,504
|
|
|
|
1,893
|
|
|
|
1,690
|
|
|
|
9
|
|
|
|
132
|
|
|
|
95
|
|
|
|
43
|
|
|
|
510
|
|
|
|
140
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,556
|
|
|
|
2,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue
|
|
|
1,504
|
|
|
|
1,893
|
|
|
|
1,690
|
|
|
|
9
|
|
|
|
132
|
|
|
|
95
|
|
|
|
1,031
|
|
|
|
11,353
|
|
|
|
8,123
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,544
|
|
|
|
13,378
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss)/profit
|
|
|
(620
|
)
|
|
|
(5,068
|
)
|
|
|
(7,427
|
)
|
|
|
(7,272
|
)
|
|
|
(7,167
|
)
|
|
|
(7,245
|
)
|
|
|
7,325
|
|
|
|
3,461
|
|
|
|
958
|
|
|
|
(783
|
)
|
|
|
(705
|
)
|
|
|
(1,532
|
)
|
|
|
(1,350
|
)
|
|
|
(9,479
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest revenue
|
|
|
276
|
|
|
|
109
|
|
|
|
195
|
|
|
|
9
|
|
|
|
35
|
|
|
|
95
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
285
|
|
|
|
144
|
|
Interest expense
|
|
|
|
|
|
|
(18
|
)
|
|
|
(16
|
)
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2
|
|
|
|
|
|
|
|
(18
|
)
|
Depreciation and amortisation
|
|
|
(9
|
)
|
|
|
(62
|
)
|
|
|
(188
|
)
|
|
|
(15
|
)
|
|
|
(13
|
)
|
|
|
|
|
|
|
(1
|
)
|
|
|
(7
|
)
|
|
|
(8
|
)
|
|
|
|
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
|
(25
|
)
|
|
|
(83
|
)
|
Share based payments
|
|
|
(78
|
)
|
|
|
(40
|
)
|
|
|
(225
|
)
|
|
|
(496
|
)
|
|
|
(487
|
)
|
|
|
(73
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(124
|
)
|
|
|
(430
|
)
|
|
|
(574
|
)
|
|
|
(651
|
)
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(1
|
)
|
|
|
(7
|
)
|
|
|
(5
|
)
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(8
|
)
|
|
|
(6
|
)
|
Total assets and total liabilities, as reviewed and used by the executive management team, are not allocated between
segments where the segments are contained within the same legal entity.
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
Segment assets
|
|
|
|
|
|
|
|
|
|
Drug development and consumer business (combined)
|
|
|
25,056
|
|
|
|
22,158
|
|
Oncology drug program
|
|
|
6,255
|
|
|
|
4,801
|
|
Wound healing
|
|
|
2
|
|
|
|
150
|
|
|
|
|
|
|
|
|
|
|
Total segment assets
|
|
|
31,313
|
|
|
|
27,109
|
|
Inter-segment eliminations
|
|
|
(22,328
|
)
|
|
|
(14,382
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets per the statement of financial position
|
|
|
8,985
|
|
|
|
12,727
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment liabilities
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
Drug development and consumer business (combined)
|
|
|
1,463
|
|
|
|
5,533
|
|
Oncology drug program
|
|
|
1,740
|
|
|
|
3,127
|
|
Wound healing
|
|
|
3,548
|
|
|
|
2,720
|
|
Total segment liabilities
|
|
|
6,751
|
|
|
|
11,380
|
|
Inter-segment eliminations
|
|
|
(2,879
|
)
|
|
|
(3,073
|
)
|
|
|
|
Total liabilities per the statement of financial position
|
|
|
3,872
|
|
|
|
8,307
|
|
110
Revenue from external customers by geographical locations is detailed below. Revenue is attributed to
geographical locations based on the location of the customers.
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment revenue
|
|
Consolidated
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
2010
A$000
|
|
Australia
|
|
|
711
|
|
|
|
3,188
|
|
|
|
3,529
|
|
North America
|
|
|
171
|
|
|
|
1,778
|
|
|
|
1,788
|
|
South America
|
|
|
|
|
|
|
2,905
|
|
|
|
|
|
Europe
|
|
|
87
|
|
|
|
2,367
|
|
|
|
2,240
|
|
Asia
|
|
|
12
|
|
|
|
419
|
|
|
|
245
|
|
other
|
|
|
7
|
|
|
|
186
|
|
|
|
181
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
988
|
|
|
|
10,843
|
|
|
|
7,983
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
An analysis of the location of non-current assets, other than financial instruments, is as follows.
|
|
|
|
|
|
|
|
|
Non-current assets
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
Australia
|
|
|
1
|
|
|
|
20
|
|
North America
|
|
|
26
|
|
|
|
47
|
|
Europe
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
27
|
|
|
|
67
|
|
|
|
|
|
|
|
|
|
|
Note 15
|
FINANCIAL INSTRUMENTS
|
Capital risk
management
The Group manages its capital to ensure that the entities in the Group will be able to continue as a going concern while
maximising shareholder value.
The capital structure of the Group consists of cash and cash equivalents and equity attributable to equity
holders. The Group operates globally through subsidiary companies established to facilitate the development of specialty pharmaceutical products including oncology drug development through MEI and wound healing through Glycotex.
Following the sale of the Consumer Health business in August 2011, the Groups overall strategy is to invest the proceeds from this sale in the drug
development programs, run through the subsidiary companies, and to further depend on funds raised in equity markets to continue the drug development programs.
Financial risk management
The Groups principal financial instruments comprise cash
and short term deposits, receivables and payables. The Group is not exposed to significant debt or borrowings.
The Groups activities
expose it to a variety of financial risks. The main risks arising from the Groups financial instruments are market risk (including currency risk and interest rate risk), credit risk and liquidity risk. The Group uses different methods to
measure and manage the different types of risks to which it is exposed. These methods include monitoring the levels of exposure to interest rates and foreign exchange, ageing analysis and monitoring of specific credit allowances to manage credit
risk, and, rolling cash flow forecasts to manage liquidity risk.
111
Market risk
Interest rate risk
The Groups exposure to market interest rates relate primarily to
the investments of cash balances.
The Group has cash reserves held primarily in US$ and A$ and places funds on deposit with financial
institutions for periods generally not exceeding three months.
At the end of the reporting period the Group had the following exposure to
variable interest rate risk:
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
Cash at bank and in hand
|
|
|
6,348
|
|
|
|
5,266
|
|
Short term deposits
|
|
|
1,750
|
|
|
|
500
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,098
|
|
|
|
5,766
|
|
|
|
|
Secured cash
|
|
|
250
|
|
|
|
250
|
|
|
|
|
|
|
|
|
|
|
Net exposure
|
|
|
8,348
|
|
|
|
6,016
|
|
|
|
|
|
|
|
|
|
|
At 30 June, 2012, if interest rates had moved as illustrated in the table below, with all other variables held
constant, post tax profit would have been affected as follows:
|
|
|
|
|
|
|
|
|
|
|
Post tax profit
Higher/(Lower)
|
|
Judgements of reasonably possible movements:
|
|
2012
A$000
|
|
|
2011
A$000
|
|
Consolidated
|
|
|
|
|
|
|
|
|
+1% (100 basis points)
|
|
|
83
|
|
|
|
60
|
|
-1% (100 basis points)
|
|
|
(83
|
)
|
|
|
(60
|
)
|
112
The Groups exposure to interest rate risk and the effective weighted average interest rate for each
class of financial assets and liabilities is set out below.
Consolidated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Floating Interest
Rate
|
|
|
Fixed
1 year or less
|
|
|
Fixed
Over 1 to 5 years
|
|
|
Non-interest
bearing
|
|
|
Total
|
|
|
Weighted
average rate of
interest
|
|
|
|
Note
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
2012
|
|
|
2011
|
|
Financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
5
|
|
|
5,083
|
|
|
|
4,232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1,265
|
|
|
|
1,034
|
|
|
|
6,348
|
|
|
|
5,266
|
|
|
|
0.25
|
%
|
|
|
0.78
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
5
|
|
|
|
|
|
|
|
|
|
|
2,000
|
|
|
|
750
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000
|
|
|
|
750
|
|
|
|
4.25
|
%
|
|
|
5.15
|
%
|
Trade and other receivables
|
|
6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
404
|
|
|
|
5,469
|
|
|
|
404
|
|
|
|
5,469
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loans and receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
2,000
|
|
|
|
750
|
|
|
|
|
|
|
|
|
|
|
|
404
|
|
|
|
5,469
|
|
|
|
2,404
|
|
|
|
6,219
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,083
|
|
|
|
4,232
|
|
|
|
2,000
|
|
|
|
750
|
|
|
|
|
|
|
|
|
|
|
|
1,669
|
|
|
|
6,503
|
|
|
|
8,752
|
|
|
|
11,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,675
|
|
|
|
6,386
|
|
|
|
3,675
|
|
|
|
6,386
|
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities at amortised cost
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,675
|
|
|
|
6,386
|
|
|
|
3,675
|
|
|
|
6,386
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net financial assets/(liabilities)
|
|
|
|
|
5,083
|
|
|
|
4,232
|
|
|
|
2,000
|
|
|
|
750
|
|
|
|
|
|
|
|
|
|
|
|
(2,006
|
)
|
|
|
117
|
|
|
|
5,077
|
|
|
|
5,099
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency risk
The Group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar (USD). Foreign exchange risk arises from future
transactions and recognised assets and liabilities denominated in a currency that is not the entitys functional currency and net investments in foreign operations.
As of 30 June, 2012, the Group did not hold derivative financial instruments in managing its foreign currency, however, the Group may from time to time enter into hedging arrangements where circumstances
are deemed appropriate. Foreign subsidiaries with a functional currency of AUD have exposure to the local currency of these subsidiaries and any other currency these subsidiaries trade in. The functional currency of MEI and Glycotex is USD and these
subsidiaries have exposure to AUD and any other currency these subsidiaries trade in.
113
The Groups exposure to foreign currency risk at 30 June, 2012 was as follows:
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
USDdenominated
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
122
|
|
|
|
550
|
|
Trade and other receivables
|
|
|
|
|
|
|
2,571
|
|
|
|
|
122
|
|
|
|
3,121
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
|
2
|
|
|
|
48
|
|
Net exposure
|
|
|
120
|
|
|
|
3,073
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GBP denominated
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
21
|
|
Trade and other receivables
|
|
|
|
|
|
|
324
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
345
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
|
10
|
|
|
|
107
|
|
|
|
|
|
|
|
|
|
|
Net exposure
|
|
|
(10
|
)
|
|
|
238
|
|
|
|
|
CADdenominated
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
47
|
|
Trade and other receivables
|
|
|
|
|
|
|
225
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
272
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
|
|
|
|
|
129
|
|
|
|
|
|
|
|
|
|
|
Net exposure
|
|
|
|
|
|
|
143
|
|
|
|
|
EUROdenominated
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
Trade and other receivables
|
|
|
309
|
|
|
|
361
|
|
|
|
|
|
|
|
|
|
|
|
|
|
309
|
|
|
|
361
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
|
|
|
|
|
93
|
|
|
|
|
|
|
|
|
|
|
Net exposure
|
|
|
309
|
|
|
|
268
|
|
|
|
|
|
|
|
|
|
|
|
|
|
AUDdenominated
|
|
|
|
|
|
|
|
|
|
|
|
Financial assets
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
271
|
|
Trade and other receivables
|
|
|
|
|
|
|
4
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
275
|
|
|
|
|
|
|
|
|
|
|
Financial liabilities
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
|
1
|
|
|
|
52
|
|
|
|
|
|
|
|
|
|
|
Net exposure
|
|
|
(1
|
)
|
|
|
223
|
|
|
|
|
|
|
|
|
|
|
114
The following sensitivity is based on the foreign currency risk exposures in existence at the date of the
Statement of Financial Position:
|
|
|
|
|
|
|
|
|
Judgements of reasonably possible movements:
|
|
Post tax profit
Higher/(Lower)
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
USDdenominated
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
AUD/USD +10%
|
|
|
(11
|
)
|
|
|
(279
|
)
|
AUD/USD -10%
|
|
|
13
|
|
|
|
341
|
|
|
|
|
GBPdenominated
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
AUD/GBP +10%
|
|
|
1
|
|
|
|
(22
|
)
|
AUD/GBP -10%
|
|
|
(1
|
)
|
|
|
26
|
|
|
|
|
CADdenominated
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
AUD/CAD +10%
|
|
|
|
|
|
|
(13
|
)
|
AUD/CAD -10%
|
|
|
|
|
|
|
16
|
|
|
|
|
EUROdenominated
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
AUD/EURO +10%
|
|
|
(28
|
)
|
|
|
(24
|
)
|
AUD/EURO -10%
|
|
|
34
|
|
|
|
30
|
|
|
|
|
AUDdenominated
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
|
|
|
|
|
AUD/USD +10%
|
|
|
|
|
|
|
(20
|
)
|
AUD/USD -10%
|
|
|
|
|
|
|
25
|
|
Credit risk
The Group trades only with recognised, creditworthy third parties.
It is the Groups policy
that all customers who wish to trade on credit terms are subject to credit application procedures. In addition, receivable balances are monitored on an ongoing basis with the result that the Groups exposure to bad debts is not significant.
As of 30 June, 2012, the Group did not hold derivative financial instruments with the exception of warrants issued by MEI as part of a
capital raising which have a pricing reset mechanism and include the potential to issue additional shares, resulting in them being classified as derivative liabilities. The Group places its cash deposits with high credit quality financial
institutions and by policy, limits the amount of credit exposure to any single counter-party. The Group is averse to principal loss and ensures the safety and preservation of its invested funds by limiting default risk, market risk, and reinvestment
risk.
The Group mitigates default risk by depositing funds with high credit quality financial institutions and by constantly positioning its
portfolio to respond appropriately to a significant reduction in a credit rating of any financial institution.
115
The Groups maximum exposures to credit risk at the end of the reporting period in relation to each
class of recognised financial assets is the carrying amount of those assets as indicated in the Statement of Financial Position. Trade and other receivables by region are as follows:
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
Australia
|
|
|
393
|
|
|
|
4,925
|
|
North America
|
|
|
11
|
|
|
|
341
|
|
Europe
|
|
|
|
|
|
|
203
|
|
|
|
|
|
|
|
|
|
|
|
|
|
404
|
|
|
|
5,469
|
|
|
|
|
|
|
|
|
|
|
Concentration of credit risk
There are no significant concentrations of credit risk within the Group. Following the sale of the Consumer Health business in August 2011, the Group no longer sells any product and is therefore no longer
exposed to credit risk in relation to trade receivables. The credit risk on liquid funds is limited as the counterparties are banks with high credit ratings.
Credit risk is managed by limiting the amount of credit exposure to any single counter-party for cash deposits.
Liquidity risk
The Group manages liquidity risks by maintaining adequate cash reserves and
by continuously monitoring cash forecasts and actual cash flows.
Maturity analysis of financial liabilities based on managements
expectation=
Trade payables and other financial liabilities mainly arise from the financing of assets used in our ongoing operations such
as plant and equipment and investments in working capital. These assets are considered in the Groups overall liquidity risk.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Year ended 30 June, 2012
|
|
< 6 months
A$000
|
|
|
6-12 months
A$000
|
|
|
1-5 Years
A$000
|
|
|
> 5 years
A$000
|
|
|
Total
A$000
|
|
|
|
|
|
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
|
2,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,594
|
|
|
|
|
|
|
|
Year ended 30 June, 2011
|
|
< 6 months
A$000
|
|
|
6-12 months
A$000
|
|
|
1-5 Years
A$000
|
|
|
> 5 years
A$000
|
|
|
Total
A$000
|
|
|
|
|
|
|
|
Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
|
4,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
4,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
4,247
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
116
Financing facilities available
At the end of the reporting period, the following financing facilities had been negotiated and were available:
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
|
|
Multi option facility
|
|
|
250
|
|
|
|
250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250
|
|
|
|
250
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Used at balance date
|
|
|
250
|
|
|
|
250
|
|
Unused at balance date
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
250
|
|
|
|
250
|
|
|
|
|
|
|
|
|
|
|
Novogen Limited has entered into a Deed of Set-off where it has agreed to hold a deposited sum with the bank of at least
A$250,000 (2011: A$250,000) at all times as security for the multi-option facility.
Derivative liability
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
|
|
Derivative liability
|
|
|
|
|
|
|
1,047
|
|
|
|
|
|
|
|
|
|
|
The Amended and Restated Securities Purchase Agreement executed by MEI on 18 May, 2011, as disclosed in Note 12(a) to the
financial statements, resulted in derivative liabilities relating to the adjustment shares that may be issued and the series A warrants that had a pricing reset mechanism. These derivative liabilities were measured at fair value as described below.
Series B warrants also had a pricing reset mechanism, however these were determined as having nil value at 18 May, 2011 and
30 June, 2011 on the basis that it is considered unlikely that such warrants would be exercised.
The fair values at 18 May, 2011
and 30 June, 2011 were determined using a Monte Carlo simulation model that simulates various possible outcomes given certain assumptions, inputs and expected distribution of outcomes. The key inputs and assumptions were as follows:
|
|
|
|
|
|
|
|
|
|
|
18 May, 2011
|
|
|
30 June, 2011
|
|
Series A warrants
|
|
|
|
|
|
|
|
|
days to maturity
|
|
|
2,011
|
|
|
|
1,968
|
|
share price
|
|
US$
|
1.35
|
|
|
US$
|
1.02
|
|
exercise price
|
|
US$
|
1.57
|
|
|
US$
|
1.57
|
|
expected volatility *
|
|
|
121.50
|
%
|
|
|
121.20
|
%
|
risk free interest rate
|
|
|
1.87
|
%
|
|
|
1.76
|
%
|
|
|
|
Adjustment shares
|
|
|
|
|
|
|
|
|
days to maturity
|
|
|
366
|
|
|
|
323
|
|
share price
|
|
US$
|
1.35
|
|
|
US$
|
1.02
|
|
exercise price
|
|
|
n/a
|
|
|
|
n/a
|
|
expected volatility *
|
|
|
122.10
|
%
|
|
|
112.90
|
%
|
risk free interest rate
|
|
|
0.19
|
%
|
|
|
0.19
|
%
|
*
|
expected volatility has been calculated as the midpoint between the historic volatility and the average industry volatility data
|
117
The derivatives were considered a Level 3 financial instrument, whereby the valuation technique applied uses
inputs that are not based on observable market data.
The fair value on initial recognition at 18 May 2011 was A$1,053,000 and A$6,000
fair value adjustment has been credited to profit or loss for the year ended 30 June 2011.
On 28 September, 2011, MEI entered into
a Supplemental Agreement with each of the investors party to the Amended Securities Purchase Agreement. Pursuant to the Supplemental Agreement, each of the Series A warrants and the Series B warrants were amended and restated. As a result of
amending the Series A and Series B warrant terms, and following the exercise of the Amended Series B Warrants in September 2011, the Series A and Series B warrants were no longer considered to be derivatives. As a result of MEIs completion of
its contractual obligations under the Amended Securities Purchase Agreement related to the issuance of Adjustment Shares, the Company had no remaining derivative liabilities as of 30 June, 2012. The balance of A$1,047,000 held at 30 June, 2011
was recognized in the year ended 30 June, 2012 as a gain under general and administrative expenses in the statement of comprehensive income after offsetting the costs associated with amending the terms of the Series A and Series B warrants. The
total net gain recognized during the year was A$728,000. For more information on the Supplemental Agreement refer to Note 12 above.
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
|
|
(a) Lease commitments *
|
|
|
|
|
|
|
|
|
|
|
|
Commitments in relation to operating leases contracted for at the reporting date but not recognised as liabilities
payable:
|
|
|
|
|
|
|
|
|
Not later than 1 year
|
|
|
102
|
|
|
|
234
|
|
Later than 1 year but not later than 2 years
|
|
|
3
|
|
|
|
211
|
|
Later than 2 years but not later than 3 years
|
|
|
|
|
|
|
125
|
|
Later than 3 years but not later than 4 years
|
|
|
|
|
|
|
128
|
|
Later than 4 years but not later than 5 years
|
|
|
|
|
|
|
22
|
|
Greater than 5 years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
105
|
|
|
|
720
|
|
|
|
|
|
|
|
|
|
|
*
|
Operating leases represent payments for property and equipment rental. Leases for property include an annual review for CPI increases.
|
118
Note 17
|
RELATED PARTY DISCLOSURES
|
Transactions with related parties
During
the year the Company incurred A$374,000 (2011: A$30,000) in fees from Spark Capital, to which Mr Peter Scutt, a former director of Novogen, consulted as a corporate advisor. The fees were in association with the process of selling which resulted in
the successful sale of the consumer business Mr Scutt did not act as a consultant to Spark Capital in this matter. The transaction was entered into on an arms length basis on both normal market prices and normal commercial terms.
Interests in controlled entities
The
consolidated financial statements include the financial statements of Novogen Limited and the subsidiaries listed in the following table.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Country
of
Incorporation
|
|
% Equity interest *
|
|
|
Investment (A$000)
|
|
Name of Entity
|
|
|
2012
|
|
|
2011
|
|
|
2012
|
|
|
2011
|
|
Novogen Laboratories Pty Ltd ^
|
|
Australia
|
|
|
100
|
|
|
|
100
|
|
|
|
2,254
|
|
|
|
2,264
|
|
Novogen Research Pty Ltd ^
|
|
Australia
|
|
|
100
|
|
|
|
100
|
|
|
|
7,000
|
|
|
|
7,000
|
|
Novogen Inc
|
|
US
|
|
|
100
|
|
|
|
100
|
|
|
|
|
|
|
|
|
|
Glycotex, Inc.
|
|
US
|
|
|
99.7
|
|
|
|
80.7
|
|
|
|
999
|
|
|
|
857
|
|
MEI Pharma, Inc. *
|
|
US
|
|
|
63.5
|
|
|
|
59.0
|
|
|
|
18,449
|
|
|
|
10,451
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
28,702
|
|
|
|
20,572
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
less: impairment of investments (eliminated on consolidation)
|
|
|
|
|
|
|
|
|
|
|
|
|
(21,332
|
)
|
|
|
(11,855
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,370
|
|
|
|
8,717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Novogen Limited, a company incorporated in Australia, is the ultimate parent entity.
^
Entities subject to class order relief
Pursuant to Class Order 98/1418 (as amended) issued by the Australian Securities and Investment Commission, relief has been granted to these companies from the Corporations Act 2001 requirements for
preparation, audit and lodgement of their financial reports.
As a condition of the Class Order, Novogen Limited and the subsidiaries subject
to the Class Order (the Closed Group), entered into a Deed of Cross Guarantee on 28 May, 1999. The effect of the deed is that Novogen Limited has guaranteed to pay any deficiency in the event of winding up of the controlled
entities. The subsidiaries have also given a similar guarantee in the event that Novogen Limited is wound up.
*
|
The proportion of ownership interest is equal to the proportion of voting power held and excludes convertible preference shares which do not hold any voting rights
until converted.
|
119
The consolidated Statement of Comprehensive Income and Statement of Financial Position of the entities that
are members of the Closed Group are as follows:
|
|
|
|
|
|
|
|
|
Consolidated Statement of Comprehensive Income
|
|
CLOSED GROUP
|
|
|
|
2012
|
|
|
2011
|
|
|
|
A$000
|
|
|
A$000
|
|
|
|
|
Loss from continuing operations before income tax
|
|
|
(10,960
|
)
|
|
|
(922
|
)
|
Income tax expense
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss after tax from continuing operations
|
|
|
(10,960
|
)
|
|
|
(922
|
)
|
Profit after tax from discontinuing operations
|
|
|
7,742
|
|
|
|
1,084
|
|
Accumulated losses at the beginning of the period
|
|
|
(121,466
|
)
|
|
|
(121,668
|
)
|
Net income recognised directly in equity
|
|
|
55
|
|
|
|
40
|
|
|
|
|
|
|
|
|
|
|
Accumulated losses at the end of the financial year
|
|
|
(124,629
|
)
|
|
|
(121,466
|
)
|
|
|
|
|
|
|
|
|
|
Consolidated Statement of Financial Position
|
|
CLOSED GROUP
|
|
|
|
2012
|
|
|
2011
|
|
|
|
A$000
|
|
|
A$000
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
2,261
|
|
|
|
2,314
|
|
Trade and other receivables
|
|
|
394
|
|
|
|
5,356
|
|
Inventories
|
|
|
|
|
|
|
295
|
|
Other current assets
|
|
|
73
|
|
|
|
271
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
2,728
|
|
|
|
8,236
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT ASSETS
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
|
1
|
|
|
|
20
|
|
Other financial assets
|
|
|
7,370
|
|
|
|
8,717
|
|
|
|
|
|
|
|
|
|
|
Total non-current assets
|
|
|
7,371
|
|
|
|
8,737
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
10,099
|
|
|
|
16,973
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
|
1,355
|
|
|
|
4,525
|
|
Provisions
|
|
|
102
|
|
|
|
710
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
1,457
|
|
|
|
5,235
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
Provisions
|
|
|
7
|
|
|
|
104
|
|
|
|
|
|
|
|
|
|
|
Total non-current liabilities
|
|
|
7
|
|
|
|
104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
1,464
|
|
|
|
5,339
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET ASSETS
|
|
|
8,635
|
|
|
|
11,634
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
Contributed equity
|
|
|
133,264
|
|
|
|
133,100
|
|
Accumulated losses
|
|
|
(124,629
|
)
|
|
|
(121,466
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY
|
|
|
8,635
|
|
|
|
11,634
|
|
|
|
|
|
|
|
|
|
|
120
Note 18
|
PARENT ENTITY INFORMATION
|
The following
details information related to the parent entity, Novogen Limited, at 30 June, 2012. The information presented here has been prepared using consistent accounting policies as presented in Note 1.
|
|
|
|
|
|
|
|
|
|
|
Novogen Limited
|
|
|
|
2012
|
|
|
2011
|
|
|
|
A$000
|
|
|
A$000
|
|
CURRENT ASSETS
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
2,237
|
|
|
|
1,933
|
|
Trade and other receivables
|
|
|
3
|
|
|
|
1
|
|
Other current assets
|
|
|
73
|
|
|
|
261
|
|
|
|
|
|
|
|
|
|
|
Total current assets
|
|
|
2,313
|
|
|
|
2,195
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT ASSETS
|
|
|
|
|
|
|
|
|
Other financial assets
|
|
|
7,370
|
|
|
|
8,717
|
|
|
|
|
|
|
|
|
|
|
Total non-current assets
|
|
|
7,370
|
|
|
|
8,717
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL ASSETS
|
|
|
9,683
|
|
|
|
10,912
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES
|
|
|
|
|
|
|
|
|
Trade and other payables
|
|
|
88
|
|
|
|
158
|
|
Intercompany loan
|
|
|
3,739
|
|
|
|
3,739
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
3,827
|
|
|
|
3,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
|
|
|
3,827
|
|
|
|
3,897
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET ASSETS
|
|
|
5,856
|
|
|
|
7,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
Contributed equity
|
|
|
133,264
|
|
|
|
133,100
|
|
Accumulated losses
|
|
|
(127,408
|
)
|
|
|
(126,085
|
)
|
|
|
|
|
|
|
|
|
|
TOTAL EQUITY
|
|
|
5,856
|
|
|
|
7,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Novogen Limited
|
|
|
|
2012
|
|
|
2011
|
|
|
|
A$000
|
|
|
A$000
|
|
|
|
|
Loss for the period
|
|
|
(1,378
|
)
|
|
|
(3,782
|
)
|
|
|
|
Total comprehensive income
|
|
|
(1,378
|
)
|
|
|
(3,782
|
)
|
|
|
|
|
|
|
|
|
|
Parent entity guarantees
(a)
|
As a condition of the Class Order, Novogen Limited and the subsidiaries subject to the Class Order, entered into a Deed of Cross Guarantee on 28 May, 1999. The
effect of the deed is that Novogen Limited has guaranteed to pay any deficiency in the event of winding up of the controlled entities. The subsidiaries have also given a similar guarantee in the event that Novogen Limited is wound up.
|
(b)
|
As a condition of establishing bank facilities Novogen Limited and its subsidiaries, Novogen Laboratories Pty Ltd and Novogen Research Pty Ltd have entered into a
Guarantee and Indemnity with St George Bank in January 1997. The effect of the guarantee is to guarantee amounts owed to the bank by any of the above Novogen companies.
|
121
Note 19
|
REMUNERATION OF AUDITORS
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
|
|
|
2011
|
|
|
|
A$
|
|
|
A$
|
|
|
|
|
Grant Thornton
|
|
|
|
|
|
|
|
|
(a) Audit and other assuarance services
|
|
|
|
|
|
|
|
|
(i) an audit or review of the financial statements of theentity and any other entity in the consolidated group;
|
|
|
106,062
|
|
|
|
269,693
|
|
|
|
|
(ii) other assurance services:
|
|
|
|
|
|
|
|
|
- MEI S1/S3/S8/10K audit and review services
|
|
|
12,877
|
|
|
|
83,689
|
|
|
|
|
|
|
|
|
|
|
Total remuneration for audit and other assurance services
|
|
|
118,939
|
|
|
|
353,382
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) other services in relation to the entity and any otherentity in the consolidated entity.
|
|
|
|
|
|
|
|
|
- Tax compliance services
|
|
|
29,375
|
|
|
|
30,945
|
|
|
|
|
|
|
|
|
|
|
Total other service remuneration
|
|
|
29,375
|
|
|
|
30,945
|
|
|
|
|
Total remuneration for Grant Thornton
|
|
|
148,314
|
|
|
|
384,327
|
|
|
|
|
Non-Grant Thornton audit firms
|
|
|
|
|
|
|
|
|
(a) Audit and other assuarance services
|
|
|
|
|
|
|
|
|
(i) an audit or review of the financial statements of theentity and any other entity in the consolidated group;
|
|
|
113,733
|
|
|
|
102,745
|
|
|
|
|
(ii) other assurance services:
|
|
|
|
|
|
|
|
|
- MEI S1/S8 audit and review services
|
|
|
8,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total remuneration for audit and other assurance services
|
|
|
121,884
|
|
|
|
102,745
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(b) other services in relation to the entity and any otherentity in the consolidated entity.
|
|
|
|
|
|
|
|
|
- Taxation and book keeping services
|
|
|
33,960
|
|
|
|
55,732
|
|
|
|
|
|
|
|
|
|
|
|
|
|
33,960
|
|
|
|
55,732
|
|
|
|
|
Total remuneration for non-Grant Thornton audit firms
|
|
|
155,844
|
|
|
|
158,477
|
|
|
|
|
Total auditors remuneration
|
|
|
304,158
|
|
|
|
542,804
|
|
|
|
|
|
|
|
|
|
|
Grant Thornton Audit Pty Limited merged with BDO Audit (NSW-VIC) Pty Limited during the year and fees charged by both
firms are included under Grant Thornton.
122
Note 20
|
DIRECTOR AND EXECUTIVE DISCLOSURES
|
a)
Compensation of key management personnel
|
|
|
|
|
|
|
|
|
|
|
Consolidated
|
|
|
|
2012
|
|
|
2011
|
|
|
|
A$
|
|
|
A$
|
|
|
|
|
Short term employee benefits
|
|
|
1,575,246
|
|
|
|
1,699,353
|
|
Post employment benefits
|
|
|
30,751
|
|
|
|
165,417
|
|
Long term employee benefits
|
|
|
(3,334
|
)
|
|
|
36,220
|
|
Termination payments
|
|
|
436,158
|
|
|
|
738,715
|
|
Share-based payment
|
|
|
366,657
|
|
|
|
537,148
|
|
|
|
|
|
|
|
|
|
|
Total Compensation
|
|
|
2,405,478
|
|
|
|
3,176,853
|
|
123
b) Option holding of key management personnel
Novogen Limited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
beginning of
period
1 July, 2011
Number
|
|
|
Granted
as
remuneration
Number
|
|
|
Options
exercised
Number
|
|
|
Net
change
other
Number
|
|
|
Balance
at
end of period
30 June, 2012
Number
|
|
|
Vested and
exercisable
30 June,
2012
Number
|
|
|
Not
exercisable
30 June,
2012
Number
|
|
Non-executive Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WD Rueckert
|
|
|
375,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
375,000
|
|
|
|
187,500
|
|
|
|
187,500
|
|
P Scutt
|
|
|
375,000
|
|
|
|
|
|
|
|
|
|
|
|
(375,000
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
PR White
|
|
|
375,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
375,000
|
|
|
|
187,500
|
|
|
|
187,500
|
|
R Youngman
|
|
|
375,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
375,000
|
|
|
|
187,500
|
|
|
|
187,500
|
|
JP OConnor @
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
81,104
|
|
|
|
81,104
|
|
|
|
69,693
|
|
|
|
11,411
|
|
|
|
|
|
|
|
|
|
Executives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CD Kearney
|
|
|
215,332
|
|
|
|
|
|
|
|
|
|
|
|
(215,332
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
MG Hinze
|
|
|
381,224
|
|
|
|
|
|
|
|
|
|
|
|
(15,548
|
)
|
|
|
365,676
|
|
|
|
193,919
|
|
|
|
171,757
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
2,096,556
|
|
|
|
|
|
|
|
|
|
|
|
(524,776
|
)
|
|
|
1,571,780
|
|
|
|
826,112
|
|
|
|
745,668
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
@
|
Mr OConnor was elected as a Director in May, 2012. Options held prior to his appointment as a Director are shown in net changes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
beginning of
period
1 July, 2010
Number
|
|
|
Granted as
remuneration
Number
|
|
|
Options
exercised
Number
|
|
|
Net change
other
Number
|
|
|
Balance at
end of period
30 June, 2011
Number
|
|
|
Vested and
exercisable
30 June,
2011
Number
|
|
|
Not
exercisable
30 June,
2011
Number
|
|
Non-executive Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WD Rueckert
|
|
|
|
|
|
|
375,000
|
|
|
|
|
|
|
|
|
|
|
|
375,000
|
|
|
|
|
|
|
|
375,000
|
|
P Scutt
|
|
|
|
|
|
|
375,000
|
|
|
|
|
|
|
|
|
|
|
|
375,000
|
|
|
|
|
|
|
|
375,000
|
|
PR White
|
|
|
|
|
|
|
375,000
|
|
|
|
|
|
|
|
|
|
|
|
375,000
|
|
|
|
|
|
|
|
375,000
|
|
R Youngman
|
|
|
|
|
|
|
375,000
|
|
|
|
|
|
|
|
|
|
|
|
375,000
|
|
|
|
|
|
|
|
375,000
|
|
|
|
|
|
|
|
|
|
Executives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CD Kearney
|
|
|
233,084
|
|
|
|
|
|
|
|
|
|
|
|
(17,752
|
)
|
|
|
215,332
|
|
|
|
139,440
|
|
|
|
75,892
|
|
RL Erratt
|
|
|
213,636
|
|
|
|
|
|
|
|
|
|
|
|
(213,636
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
MG Hinze
|
|
|
140,376
|
|
|
|
250,000
|
|
|
|
|
|
|
|
(9,152
|
)
|
|
|
381,224
|
|
|
|
84,467
|
|
|
|
296,757
|
|
AJ Husband
|
|
|
207,836
|
|
|
|
|
|
|
|
|
|
|
|
(207,836
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
BM Palmer
|
|
|
226,392
|
|
|
|
|
|
|
|
|
|
|
|
(226,392
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
1,021,324
|
|
|
|
1,750,000
|
|
|
|
|
|
|
|
(674,768
|
)
|
|
|
2,096,556
|
|
|
|
223,907
|
|
|
|
1,872,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
124
MEI Pharma, Inc.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
beginning of
period
1 July, 2011
Number
|
|
|
Granted as
remuneration
Number
|
|
|
Options
exercised
Number
|
|
|
Net change
other
Number
|
|
|
Balance at
end of period
30 June, 2012
Number
|
|
|
Vested and
exercisable
30 June,
2012
Number
|
|
|
Not
exercisable
30 June,
2012
Number
|
|
Non-executive Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WD Rueckert
|
|
|
|
|
|
|
25,169
|
|
|
|
|
|
|
|
|
|
|
|
25,169
|
|
|
|
|
|
|
|
25,169
|
|
|
|
|
|
|
|
|
|
Executives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DP Gold
|
|
|
220,390
|
|
|
|
100,000
|
|
|
|
|
|
|
|
|
|
|
|
320,390
|
|
|
|
119,386
|
|
|
|
201,004
|
|
TM Zech
|
|
|
73,463
|
|
|
|
26,537
|
|
|
|
|
|
|
|
|
|
|
|
100,000
|
|
|
|
36,726
|
|
|
|
63,274
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
293,853
|
|
|
|
151,706
|
|
|
|
|
|
|
|
|
|
|
|
445,559
|
|
|
|
156,112
|
|
|
|
289,447
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at
beginning of
period
1 July, 2010
Number
|
|
|
Granted as
remuneration
Number
|
|
|
Options
exercised
Number
|
|
|
Net change
other
Number
|
|
|
Balance at
end of period
30 June, 2011
Number
|
|
|
Vested and
exercisable
30 June,
2011
Number
|
|
|
Not
exercisable
30 June,
2011
Number
|
|
Executives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
DP Gold
|
|
|
220,390
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
220,390
|
|
|
|
64,282
|
|
|
|
156,108
|
|
TM Zech
|
|
|
73,463
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
73,463
|
|
|
|
18,366
|
|
|
|
55,097
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
293,853
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
293,853
|
|
|
|
82,648
|
|
|
|
211,205
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
125
c) Shareholdings of key management personnel and their related parties
Novogen Limited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
1 July, 2011
Number Ord
|
|
|
Granted as
remuneration
Number Ord
|
|
|
On exercise
of options
Number Ord
|
|
|
Net change
other
Number Ord
|
|
|
Balance
30 June, 2012
Number Ord
|
|
Executive Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WD Rueckert *
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
JT Austin *
|
|
|
20,288,053
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,288,053
|
|
JP OConnor @
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
253,551
|
|
|
|
253,551
|
|
|
|
|
|
|
|
Executives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CD Kearney #
|
|
|
8,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,850
|
|
MG Hinze
|
|
|
14,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
20,316,631
|
|
|
|
|
|
|
|
|
|
|
|
253,551
|
|
|
|
20,570,182
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
#
|
Closing balance represents the shareholding at the time the key management personnels employment ceased with the company.
|
*
|
Shares held include sponsored ADRs.
|
@
|
Mr OConnor was elected as a Director in May, 2012. Shares held prior to his appointment as a Director are shown in net changes.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance
1 July, 2010
Number Ord
|
|
|
Granted as
remuneration
Number Ord
|
|
|
On exercise
of options
Number Ord
|
|
|
Net change
other
Number Ord
|
|
|
Balance
30 June, 2011
Number Ord
|
|
Executive Directors
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
WD Rueckert *
|
|
|
5,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
5,000
|
|
JT Austin * @
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
20,288,053
|
|
|
|
20,288,053
|
|
PA Johnston #
|
|
|
73,594
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
73,594
|
|
GM Leppinus #
|
|
|
11,883
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11,883
|
|
PJ Nestel AO #
|
|
|
32,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
32,000
|
|
|
|
|
|
|
|
Executives
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CD Kearney
|
|
|
8,850
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,850
|
|
MG Hinze
|
|
|
14,728
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
14,728
|
|
RL Erratt #
|
|
|
271,368
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
271,368
|
|
AJ Husband #
|
|
|
102,920
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
102,920
|
|
BM Palmer #
|
|
|
205,636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
205,636
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
725,979
|
|
|
|
|
|
|
|
|
|
|
|
20,288,053
|
|
|
|
21,014,032
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
#
|
Closing balance represents the shareholding at the time the key management personnels employment ceased with the company.
|
*
|
Shares held include sponsored ADRs.
|
@
|
Mr Austin was elected as a Director in September, 2010. Shares held prior to his appointment as a Director are shown in net changes.
|
All equity transactions with Executive Directors and executives, other than those arising from the exercise of remuneration options, have been entered
into under terms and conditions no more favourable than those the entity would have adopted if dealing at arms length.
126
Note 21
|
DISCONTINUING OPERATIONS
|
At the
Companys AGM in October, 2010 it was announced that the Company was looking at strategic alternatives for its Consumer Business. The Company commenced a planned process to dispose of this business and in April 2011 appointed a financial
advisor to actively search for a buyer and complete the plan. On 1 August, 2011, the consumer products business was sold to Pharm-a-Care Laboratories Pty Limited.
Financial information for this discontinuing operation is set out below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
2010
A$000
|
|
Total revenue
|
|
|
1,031
|
|
|
|
11,353
|
|
|
|
8,123
|
|
Expenses
|
|
|
(1,624
|
)
|
|
|
(9,882
|
)
|
|
|
(7,546
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(593
|
)
|
|
|
1,471
|
|
|
|
577
|
|
|
|
|
|
Proceeds from sale of consumer business
|
|
|
9,500
|
|
|
|
|
|
|
|
|
|
Termination costs
|
|
|
(1,018
|
)
|
|
|
|
|
|
|
|
|
Other transaction costs
|
|
|
(490
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before tax from discontinuing operations
|
|
|
7,399
|
|
|
|
1,471
|
|
|
|
577
|
|
|
|
|
|
Tax expense
|
|
|
(7
|
)
|
|
|
(4
|
)
|
|
|
(9
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit after tax from discontinuing operations
|
|
|
7,392
|
|
|
|
1,467
|
|
|
|
568
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
2010
A$000
|
|
|
|
|
|
Net cash inflow from operating activities
|
|
|
2,469
|
|
|
|
1,202
|
|
|
|
593
|
|
|
|
|
|
Net cash inflow from investing activities
|
|
|
7,992
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash increase generated by discontinuing operations
|
|
|
10,461
|
|
|
|
1,202
|
|
|
|
593
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Information relating to the financial position of the consumer business is set out below. No amount is included for
receivables or payables which were not included in the assets transferred in the sale of the business.
|
|
|
|
|
|
|
|
|
|
|
2012
A$000
|
|
|
2011
A$000
|
|
|
|
|
Inventories
|
|
|
|
|
|
|
654
|
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
|
|
|
|
|
654
|
|
|
|
|
|
|
|
|
|
|
Net assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
127
Note 22
|
CONTINGENT ASSETS AND CONTINGENT LIABILITIES
|
(a)
|
The Company is continuing to prosecute its IP rights and in June 2007 announced that the Vienna Commercial Court had upheld a provisional injunction against an Austrian
company, APOtrend. The Company has provided a guarantee to the value of 250,000 with the court to confirm its commitment to the ongoing enforcement process.
|
(b)
|
As a condition of establishing bank facilities Novogen Limited and its subsidiaries, Novogen Laboratories Pty Ltd and Novogen Research Pty Ltd have entered into a
Guarantee and Indemnity with St George Bank in January 1997. The effect of the guarantee is to guarantee amounts owed to the bank by any of the above Novogen companies.
|
(c)
|
Although the Company assigned its liability for the property lease in June 2012, it remains as the original lessee and should the assignee default on the lease, a
potential liability may exist. Offsetting this contingent liability the Company holds a letter of personal guarantee from the director of the assignee company, which guarantees the obligations of the assignee company contained or implied in the
original lease.
|
Parent entity guarantees are further disclosed in Note 18.
Note 23
|
EVENTS AFTER THE BALANCE SHEET DATE
|
On
27 July, 2012, Novogen announced that it had entered into a merger agreement with Kai Medical, a United States based company, incorporated in Delaware, whose business is focused on sleep apnea therapy devices and wireless respiration monitoring
technology. The agreement was subject to a number of conditions including completion of due diligence and shareholder approval. On 24 September, 2012 Novogen announced the termination of the merger agreement with Kai Medical following confirmation
that the merged entity would not be able to maintain continued listing on the ASX (and Nasdaq markets). Under the terms of the merger agreement entered into by the companies, the merger agreement shall forthwith become void and have no effect
without any liability or obligation on the part of Novogen or Kai.
Novogen plans to undertake a capital reduction and
in specie
distribution to the Novogen shareholders of the shares of MEI Pharma, Inc. (MEI) that it owns. This transaction is subject to shareholder approval. On 11 October 2012, Novogen announced that this transaction would be included in
the items for shareholders to vote on at the the Annual General Meeting to be held on 12 November, 2012. This distribution will allow Novogen shareholders to directly own their proportionate share of the MEIs shares now held by Novogen.
The glucan technology assets, previously being developed by Glycotex, Inc., were not going to be acquired by Kai Medical in the proposed
merger and Novogen completed a sale of those assets to TR Therapeutics, Inc., a privately held US corporation, on 16 August, 2012.
On
9 August, 2012, MEI announced that it had entered into a definitive asset purchase agreement with S*BIO Pte Ltd, pursuant to which MEI will acquire S*BIOs exclusive worldwide rights to Pracinostat, an investigational, potential
best-in-class, based on improved physicochemical, pharmaceutical and pharmacokinetic properties when compared to other compounds in its class of oral histone deacetylase (HDAC) inhibitor. Pracinostat is an orally available, selective HDAC inhibitor
that has demonstrated clinical
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study evidence of single-agent activity, including studies in patients with advanced hematologic disorders such as acute myeloid leukemia and myelofibrosis. In addition, Pracinostat has
demonstrated pharmacokinetic properties in the clinic, including increased bioavailability and increased half-life, that compare favorably to other compounds of this class. Pursuant to the terms of the agreement, MEI will issue US$500,000 of common
stock to S*BIO. The agreement also includes potential success-based clinical, regulatory and sales milestone payments of up to US$75.2 million, as well as low single-digit contingent earn-out payments based on net sales. On August 22, 2012, MEI
completed the asset purchase and issued 1,174,536 shares of common stock to S*Bio Pte Ltd.
There have been no other significant events
occurring after the end of the reporting period which have had a material impact on the business.
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