Medlab Clinical Limited (MDC) 2020年年度報告「ASX」.pdf

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1、Who we areAn Australian Biotechnology company focusing on chronic illnessesPOINT OF DIFFERENCERESEARCHEVIDENCEPATENTSAPPROVALGLOBAL3 CORE REVENUE STREAMS1Early market access for newdrugsPartnering23NutraceuticalRange3 IN-MARKET SEGMENTSDRUG DEVELOPMENT:a non-opioid analgesic for CIBP(cancer induced

2、bone pain)PLATFORM DEVELOPMENT:a unique submicron delivery platform for improving drug solubilityNUTRACEUTICALS(AU):Via AU Pharmacies,with several under clinical investigationPARTNERING(GLOBAL):Partnering agreementsfor 3rd party use ininternational territoriesCONTENTSChairmans Letter4CEO Report5Dire

3、ctors Report9Auditors Independence Decl aration20Financial Statements21Directors Decl aration50Independent Auditors Report51Sharehol der Information54Corporate Directory56CHAIRMANS LETTERDear Sharehol ders,It is my pl easure to present Medl ab Cl inical s 2020 Annual Report.This has been a pivotal y

4、ear for Medl ab Cl inical.Our focus has shifted towards drug devel opment l eadingwith our cannabinoid portfol io.We have successful l y compl eted a Phase I/II cl inical trial of our l ead candidateNanaBis which is targeting the treatment of bone pain in breast and prostate cancer patients.This is

5、anarea of great unmet need and where there is currentl y a high rel iance on opioids.Our strategy is to expand our market opportunity by gaining US regul atory approval for our cl inical l y val idated,medical cannabis-based product(NanaBis).Furthermore,the superior performance we can achieve via ou

6、r drug del ivery pl atform,NanoCel l ewil l be a key differentiator and we are on the j ourney to buil d a body of cl inical and real worl d evidence to support this.The mil estones achieved over the past 12 months and the capital raised puts us on track to commence the process offil ing an investig

7、ational new drug appl ication with the US Food and Drug Administration and commencing a mul ti-centre,international Phase III study.During the year we compl eted the NanaBis Phase I/II study at Royal North Shore Hospital (RNSH)in Sydney.This study metits primary and secondary endpoints,demonstrating

8、 safety,efficacy and tol erabil ity and a 40%improvement in pain scoresfrom the basel ine.Our 12 month observational study,which is enabl ing the col l ection of real worl d data from prescribing physicians and patients,is wel l underway and generating resul ts consistent with the RNSH.We are now pr

9、eparing to commence an international Phase III study and fil e an Investigational New Drug Appl ication with theUS Food and Drug Administration(FDA).There wil l be several catal ysts for val ue creation as we embark on this mission.Whil e achieving regul atory cl earance is the ul timate goal,we are

10、 strongl y encouraged by the increasing uptake of NanaBisunder the special access scheme for patients in Austral ia.This is generating earl y revenue,but more importantl y providing anindication of earl y market adoption,enabl ing us to engage with practitioners and ul timatel y hel p patients who a

11、re in need.We now have four products in the cannabis portfol io,which are avail abl e to patients in the special access scheme and/orbeing sol d into overseas markets incl uding the UK and Hong Kong.Nutraceuticals Portfolio Our nutraceutical s portfol io has been going through a period of rational i

12、sation since l aunching in banner pharmacy in theJune quarter 2019.We have increased our presence in digital sal es and marketing channel s and this coincided with a softeningof sal es via traditional pharmacy retail channel s,in l ine with the impact of COVID-19.We recognise that buil ding a busine

13、ss of scal e to achieve the l evel of sal es that woul d support positive earnings wil l take time,capital and resources.We are now assessing the right strategy to drive further growth of the nutraceutical s business and makemost effective use of our cash resources.The options being considered are a

14、 trade sal e,l icencing or further commercialpartnerships to real ise sooner the val ue within the nutraceutical s portfol io,and ensure we are focusing our efforts on theactivities that wil l drive greater sharehol der returns.Corporate ActivitySubsequent to the year-end,we were very pl eased to an

15、nounce the appointment of Laurence McAl l ister to the Board ofDirectors.This is our first new board appointment since our IPO.Laurence is currentl y the CEO of ASX l isted companyMcPhersons(ASX.MCP),a gl obal l eader in heal th,wel l ness and beauty.He was al so the General Manager of Sanofis opera

16、tionsin Austral ia and New Zeal and,during which time he served two years on the Board of Medicines Austral ia and he spent morethan two decades at Coca-Col a.He is an excel l ent addition to our Board with experience across M&A and corporate strategy,consumer marketing and gl obal pharmaceutical s

17、that wil l benefit us immensel y.During the year,we raised$11.97M before costs via two pl acements and an SPP(compl eted Jul y 2020).The funds raisedprovide us with capital to support us as we prepare to l aunch the Phase III study of NanaBis.We thank new and existinginvestors for their support.We h

18、ave a cl ear strategy to create significant sharehol der val ue over the l onger term with val ue infl ection points al ong theway.There are many precedents of gl obal companies successful in gaining regul atory approval to support this thesis.The datagenerated to date,the encouraging dial ogue with

19、 the regul ators,and the expert team we have supporting us gives usconfidence that we are on the right pathway.I woul d l ike to acknowl edge and thank the work of our entire team at Medl ab Cl inical and thank you our sharehol ders for yourongoing support.Yours sincerel y,Michael HallChairman45CEO

20、REPORTAt Medl ab we have a cl ear purpose:To provide better treatment options for peopl e managing chronic disease increasingl y with a focus on oncol ogy backed by strong scientific rigour and cl inical val idation.Our point of difference l ies in the NanoCel l edrug del ivery pl atform which uses

21、nanotechnol ogy to enabl efaster absorption of known active ingredients,enabl ing us to enhance the qual ity,del ivery and effectivenessof both over-the-counter and prescribed products.This pl atform has been appl ied to enhance our existingportfol io of novel drug candidates and over-the-counter nu

22、traceutical products,but al so provides us withthe potential to create a pipel ine of additional products.Cannabinoid portfolio We have made important strides forward with our cannabinoid portfol io over the past year buil ding a compel l ing body ofcl inical and real-worl d evidence,as wel l as gen

23、erating earl y revenues from sal es under the special access scheme and exports.We successful l y del ivered on several important cl inical and operational mil estones,for our l ead program,NanaBis a blendof THC/CBD,used as a non-opioid alternative for cancer-induced bone pain.Successful completion

24、of Phase I/II study:The trial of 30 advanced cancer patients conducted at Royal North Shore Hospital met its primary and secondary endpoints,demonstrating safety,tol erabil ity and efficacy.The study combined a singl e ascending dose(SAD)and mul tipl e ascending dose(MAD)regimes.The resul t showed i

25、mprovement in qual ity of l ife measures(insomnia and emotional functioning)and a 40%improvement in basel ine pain scores,within a subset of patients with cancer and bone metastases.NanaBis 12 month observation study:Enrol ment in this study,designed to gather real-worl d evidence,is tracking to pl

26、an.As of August 2020,432 of 2000 patients had been enrol l ed in the trial.The third monitoring report has demonstrated positive data with a 59.5%reported reduction in pain(unadj usted),based on average dose of four sprays per day,consistent with the findings of the RNSH trial.Demand for NanaBis und

27、er Special Access Scheme continues to grow:Shipment of units under the Special Access Scheme have continued to steadil y increase over the past year.Sal es in June hit a record monthl y high of 910 units.Supply and manufacturing agreement with TASALK:Manufacturing of NanaBis was transferred to Tasma

28、nian Al kal oids(TASALK)ensuring sufficient suppl y of product to growing demand under the special access scheme and to support a Phase III cl inical trial at qual ity standards required to meet regul atory requirements.The body of evidence on the safety,tol erabil ity and efficacy of NanaBis is gro

29、wing,and that bodes wel l as we pl an to formal l ysubmit our mul ti-centred Phase III trial s protocol to the US,UK and Austral ian regul atory authorities l ater in 2020.The confirmation of the performance of our product through these real worl d trial s encourages us to continue to push aheadaggr

30、essivel y with our ul timate obj ective of a drug registration for NanaBis.We al so l aunched two additional products,which are al ready generating sal es under the Austral ian Special Access Scheme aswel l as export sal es:NanoCBD a CBD onl y formul ation,intended for the treatment of chemotherapy

31、induced nausea and vomiting(CINV)and subj ect to future investigation for drug approval.First sal es have commenced under the special access scheme in Austral ia,with forty-five units shipped in the first month since l aunch.A further 1,500 units have been shipped to Hong Kong.Mg Optima and CBD a hy

32、brid cannabinoid,which combines CBD with Medl abs existing nutraceutical formul ation of magnesium(12Mg Optima Rel ax).An initial order of 5,000 units has been shipped to Cul tech Limited in the UK,Medl abs excl usive distribution partner for this product.Despite suppl y chain l imitations experienc

33、ed as a resul t of COVID-19,Medl ab recorded an increase of cannabis sal es of 199%(approx.176%for NanaBis).Mar 20Dec 19Sept 19Jun 19Mar 19Cumulative NanaBis Sales(Units)Jun 20Sept 18Dec 1810,0008,0006,0004,0002,00006663460628831737102882381915666CEO REPORT(cont.)Research and Development Simil ar to

34、 our pharmaceutical products division,we bel ieve it is important to differentiate and val idate our nutraceutical sproducts with cl inical data.In April,we compl eted a study of 120 patients for the use of NRGBiotic in combination withcommonl y prescribed treatments for depression,to investigate ho

35、w these products used in combination coul d provide betteroutcomes.We were pl eased to be abl e to final ise this trial in the midst of the COVID-19 pandemic,and l ook forward to therel ease of these trial resul ts currentl y del ayed due to COVID-19 l imitations around social distancing and access

36、to 3rdpartyl abs.We have an ongoing program of research and devel opment,assessing known active ingredients and generic drugs on ourNanoCel l epl atform as potential product candidates and in support of our strategy to position NanoCel l eas a pl atform forpartners.Nutraceuticals Portfolio During th

37、e year we increased our presence in digital sal es channel s,incl uding establ ishing a tel eheal th service,to supportdirect to consumer sal es al ongside our distribution into pharmacies via Symbion,API and Sigma Austral ia-wide.The domestic nutraceutical business has been going through a period o

38、f rational isation since l aunching in banner pharmacyl ast FY.Up until the third quarter,we had experienced impressive sal es growth in the nutraceutical s portfol io,rising 27%yearon year in Q3 in invoiced sal es.In the final quarter,we saw sal es soften,a refl ection of the chal l enges facing br

39、icks and mortarretail due to COVID-19 restrictions.Our investment in digital marketing coincided with this,and has hel ped to mitigate someof the short-term chal l enges.This was in a stark contrast to the June quarter FY 19 when we l aunched into banner pharmacyand reported the pipe fil l.Medl ab c

40、ontinues to pursue export opportunities.As mentioned in the Chairmans report we are assessing a number of options for the strategic direction of the nutraceutical sbusiness.Financial Performance Total revenue was down 28%to$5.8m.This is predominantl y due to an increase of promotional costs to$1.8m.

41、We do expectto see sal es of the cannabinoid products continue to increase,fol l owing the trend seen this year.The company del ivered a net l oss after tax of$13.4M.This is l argel y attributed to the accel eration of research programmes,noting that the company writes these costs off to the P&L imm

42、ediatel y and does not capital ise R&D as a bal ance sheet asset.The company received an R&D tax incentive payment of$2.1m.Medl ab has continued to manage cash and as a resul t,normal ised cash burn(excl uding government subsidies)has continuedto improve over the past 12 months.Cash burn($M)4,500,00

43、04,000,0003,500,0003,000,0002,500,0002,000,0001,500,0001,000,000500,0000Q1 FY20Q2 FY20Q4 FY20Q3 FY20CEO REPORT(cont.)As of June 30,our cash position was$9M.In concl usion,Medl ab Cl inical has a portfol io of cl inical l y advanced and commercial stage products,we are generating earl yrevenue,promis

44、ing data and seeing rising demand.We bel ieve the l ong-term val ue driver is in achieving regul atory approval and opening up l arger gl obal markets.For NanaBisal one we estimate the market opportunity coul d be in excess of$200M in the first year al one,and rising to over several bil l ionsdol l

45、ars,five years thereafter;probabl y a good exampl e of performance is Epidol ex by GW Pharmaceutical s(NASDAQ:GWPH).The progress made this year l ays the foundation for val ue infl ection in the coming 12 month as we move into cl inical trial s,fil eour IND and continue to buil d out a pipel ine of

46、future products.We l ook forward to bringing better treatment options and improving qual ity of l ife for patients,and creating val ue for oursharehol ders al ong the way.Thank you to our dedicated team,and thank you to our investors for your support.Yours sincerel y,Dr Sean Hal lCEO7FINANCIAL REPOR

47、TCONTENTSDirectors Report9Auditors Independence Decl aration20Statement of Profit and Lossand Other Comprehensive Income21Statement of Financial Position22Statement of Changes in Equity23Statement of Cash Fl ows24Notes to the Financial Statements25Directors Decl aration50Independent Auditors Report5

48、1Sharehol der Information54Corporate Directory56DIRECTORS REPORTYour directors present their report on the consol idated entity consisting of Medl ab Cl inical Limited(Company)and its control l edentities(Group)at the end of,or during,the year ended 30 June 2020.DirectorsThe fol l owing persons were

49、 directors of the company during the year and up to the date of this report,unl ess otherwise stated:Sean Hal l Michael Hal l Drew Townsend Laurence McAl l ister(appointed 5 August 2020)Directors have been in office since the start of the financial year to the date of this report unl ess otherwise s

50、tated.Principal ActivitiesThe principal activities of the consol idated group are:The continued research and devel opment of NanaBis via cl inical trial s for drug approvalThe continued use of the Austral ian Special Access Scheme NanaBis and other Cannabis rel ated productsThe continued devel opmen

51、t of Medl abs proprietary del ivery pl atform,NanoCel l eThe commercial isation of nutraceutical s predominantl y in Austral ian pharmaciesThe devel opment and commercial isation of Export markets for various,“ready to sel l”productsNo significant changes in the nature of these activities occurred d

52、uring the period.DividendsNo dividends were paid or decl ared during the year and up to the date of signing this report.Review of OperationsMedl ab Cl inical has two main areas of operational focus:Pharmaceutical research and commercial isation(Pharmaceuticalportfol io)and Devel opment and sal es of

53、 nutraceutical s product(Nutraceutical portfol io).Over the past 12 months the devel opment of the pharmaceutical portfol io has taken on greater focus,l eading with ourcannabinoid portfol io.We successful l y del ivered on several important cl inical and operational mil estones,for our l ead progra

54、m,NanaBis a blendof THC/CBD,used as a non-opioid alternative for cancer-induced bone pain.A Phase I/II study of NanaBis enrol l ing 30 Advanced Cancer patients conducted at Royal North Shore Hospital met its primary and secondary endpoints,demonstrating safety,tol erabil ity and efficacy.The study c

55、ombined a singl e ascending dose(SAD)and mul tipl e ascending dose(MAD)regimes.The resul t showed improvement in qual ity of l ife measures(insomnia and emotional functioning)and a 40%improvement in basel ine pain scores,within a subset of patients with breast or prostate cancer and bone metastases.

56、A 12-month l ongevity observation study of NanaBis commenced in February 2020.As of August 2020,432 of 2000 patients had been enrol l ed in the study.The third monitoring report has demonstrated positive data with a 59.5%reported reduction in pain(unadj usted),based on average dose of four sprays pe

57、r day,consistent with the findings of the RNSH trial.The purpose of this trial is to gather real-worl d evidence that shoul d ul timatel y reduce the number of patients required to participate in a Phase III study for regul atory approval.Manufacturing of NanaBis was transferred to Tasmanian Al kal

58、oids(TASALK)ensuring sufficient suppl y of product to growing demand under the special access scheme and to support a Phase III cl inical trial at qual ity standards required to meet regul atory requirements.The company was subj ect to suppl y issues in April and May.The transfer of suppl y and manu

59、facturing to TASALK has enabl ed the company to overcome these suppl y issues,with al l backorders now fil l ed.Shipment of units of NanaBis under the Special Access Scheme have continued to steadil y increase over the past year.Overal la total of 8238 units were sol d to FY2020.Medl ab Cl inical cu

60、rrentl y has four cannabinoid products in its portfol io which are avail abl e either under special access schemein Austral ia and/or export markets.9DIRECTORS REPORT(cont.)In addition to NanaBis these products are:NanaBidial a product simil ar to NanaBis but with a ratio of 18 parts CBD to 1 part T

61、HC.NanoCBD a CBD onl y formul ation,intended for the treatment of chemotherapy induced nausea and vomiting(CINV)and subj ect to future investigation for drug approval.First sal es have commenced under the special access scheme in Austral ia,with forty-five units shipped in the first month since l au

62、nch.A further 1,500 units have been shipped to Hong Kong.MgOptima and CBD a hybrid cannabinoid,which combines CBD with Medl abs existing nutraceutical formul ation of magnesium(12Mg Optima Rel ax).An initial order of 5,000 units has been shipped to Cul tech Limited in the UK,Medl abs excl usive UK d

63、istribution partner for this product.Medl ab has an ongoing program of research and devel opment,assessing known active ingredients and generic drugs on ourNanoCel l epl atform as potential product candidates and in support of our strategy to position NanoCel l eas a pl atform forpartners.Other prod

64、uctsIn April,Medl ab compl eted a study of 120 patients for the use of NRGBiotic in combination with commonl y prescribedtreatments for depression,to investigate how these products used in combination coul d provide better outcomes.The nutraceutical s portfol io has been going through a period of ra

65、tional isation since l aunching in banner pharmacy in theJune quarter 2019.We have increased our presence in digital sal es and marketing channel s,and this coincided with a softeningof sal es via traditional pharmacy retail channel s,in l ine with the impact of COVID-19.Up until the third quarter,w

66、e had experienced impressive sal es growth in the nutraceutical s portfol io,rising 27%year on yearin Q3 in invoiced sal es.In the final quarter,we saw sal es soften,a refl ection of the chal l enges facing bricks and mortar retaildue to COVID-19 restrictions.Our investment in digital marketing coin

67、cided with this and has hel ped to mitigate some of theshort-term chal l enges.Medl ab continues to pursue export opportunities and is currentl y assessing strategic options for thenutraceutical s portfol io which coul d incl ude trade sal es,l icensing or commercial partnerships.Impact of COVID-19D

68、espite the uncertainty around Coronavirus(COVID-19)pandemic,the Company continued with operations as normal aspossibl e,incl uding that no empl oyees were stood down.The pandemic had a positive impact on Medl abs immunity products,to such an extent,2 l ines were out of stock over April and May.In th

69、e nutraceutical business,l ower foot traffic in pharmacypartners impacted sal es with a decl ine in invoiced sal es in the June quarter compared to the previous quarter.The pandemical so caused production del ays in the pharmaceutical business resul ting in a rationing of NanaBis in March and April

70、and being out of stock in May.This del ay caused a decrease in quarterl y NanaBis sal es compared to the previous quarter.The l oss of the consol idated group after providing for income tax and non-control l ing interest amounted to$13,399,374(2019:$8,090,937).At period end,the consol idated group h

71、ad total assets of$17,788,523(2019:$20,204,377)and total l iabil ities of$6,533,232(2019:$5,211,725).A more detail ed operations review can be found in the CEO report.Significant Changes in the State of AffairsThere were no significant changes in the state of affairs of the consol idated entity duri

72、ng the financial year.After Balance Date EventsNo matters or circumstances have arisen since 30 June 2020 which significantl y affected or may significantl y affect theoperations of the consol idated group,the resul ts of those operations,or the state of affairs of the consol idated group in futuref

73、inancial years other than the compl etion of the Share Purchase Pl an on 8 Jul y 2020.10,469,841 shares were issued at$0.15,raising$1.570m before costs.The recent outbreak of COVID-19 has caused uncertainty in both our gl obal and domestic markets.Al though the ongoingeffect is unknown,there is no i

74、dentifiabl e impact on the Companys operations,especial l y given that the suppl y chain l imitationshave been rectified in the June quarter.The Company is in continual contact with its maj or suppl iers and customers to minimiseany further impact.10Information Relating to Directors and Company Secr

75、etaryName:Michael Hal lTitl e:Non-Executive ChairmanQual ifications:B.Com,CPAExperience:Mr Hal l has a l ong history in the management and buil ding of successful nutrition companies.Mr Hal l s earl y career was in accounting,retail ing and private banking.Other current directorships:NoneFormer dire

76、ctorships(l ast 3 years)NoneSpecial responsibil itiesMember of:Risk Management and Audit CommitteeNomination and Remuneration CommitteeInterest in shares:15,907,383 ordinary sharesInterest in options:NoneContractual right to shares:NoneName:Sean Hal lTitl e:Managing Director and Chief Executive Offi

77、cerQual ifications:MD,MBA(Cl in Pharm Mtg)Experience:Dr Hal l has over 20 years experience in the Austral ian Heal thcare and food industries and earl y phase drug discovery in Austral ia and Asia.Sean is best known for buil ding Austral ias l eading practitioner brand,BioCeutical s.Dr Hal l is an a

78、ctive member of Medicines Austral ia,American Federation for Medical Research,American Academy of Anti-Ageing Medicine,Ausbiotech,a member of the Scientific Advisory Board for BITs Life Science China and a Board Member of the International Probiotics Association.Dr Hal l has compl eted Executive Edu

79、cation at Harvard Graduate School of Business and more recentl y continuing Medical Education through Harvard Medical School.Other current directorships:NoneFormer directorships(l ast 3 years)NoneSpecial responsibil itiesMember of:Nomination and Remuneration CommitteeInterest in shares:58,425,555 or

80、dinary sharesInterest in options:NoneContractual right to shares:NoneName:Drew TownsendTitl e:Non-Executive DirectorQual ifications:B.Com,CA,MAICDExperience:Mr Townsend is a senior partner in the chartered accounting firm of Hal l Chadwick and has been a partner in this firm for over 25 years.He is

81、an experienced chartered accountant and corporate advisor to numerous SMEs.Other current directorships:Non-Executive Chairman of Qantum Heal th Group LimitedFormer directorships(l ast 3 years)NoneSpecial responsibil itiesChairman of:Risk Management and Audit CommitteeNomination and Remuneration Comm

82、itteeInterest in shares:16,135,553 ordinary sharesInterest in options:NoneContractual right to shares:None1112Information Relating to Directors and Company Secretary(continued)Name:Laurence McAl l isterTitl e:Non-Executive DirectorQual ifications:Experience:Mr McAl l ister is an experienced internat

83、ional senior executive with strong consumer marketing and dynamic commercial experience.Mr McAl l ister is currentl y the Managing Director of McPhersons Limited,a l eading suppl ier of heal th,wel l ness,beauty,househol d and personal care in Austral asia.Prior to his current rol e,worked for over

84、23 years with the Coca-Col a Company,managing New Product Devel opment,M&A,Innovation and the Research and Devel opment function across Europe,Eurasia and the Middl e East.Mr.McAl l ister was al so the President of Nordics and the Chief Commercial&Marketing Officer for Japan for the Coca-Col a Compa

85、ny.Throughout this tenure,Mr McAl l ister represented the Coca-Col a Company on Boards in Germany,Sweden,Norway,Denmark and Finl and.Other current directorships:McPhersons LimitedFormer directorships(l ast 3 years)NoneSpecial responsibil itiesMember of:Risk Management and Audit CommitteeNomination a

86、nd Remuneration CommitteeInterest in shares:NoneInterest in options:NoneContractual right to shares:NoneName:Al an DworkinTitl e:Company SecretaryQual ifications:B.Bus,CA,ACSA,GAICDExperience:Mr Dworkin is a Chartered Accountant with over 20 years experience in tax,resources and nutraceutical sector

87、s,incl uding as the CFO and Company Secretary of FIT-BioCeutical s Limited for the six years prior to commencing at Medl ab Cl inical Limited.Meetings of DirectorsThe number of meetings of the companys Board of Directors(the Board)and of each Board committee hel d during the yearended 30 June 2020,a

88、nd the number of meetings attended by each director were:Hel d:represents the number of meetings hel d during the time the director hel d office or was a member of the rel evantcommittee.Future DevelopmentsLikel y devel opments in the operations of the consol idated group and the expected resul ts o

89、f those operations in future financialyears have not been incl uded in this report as the incl usion of such information is l ikel y to resul t in unreasonabl e prej udice tothe consol idated group.Environmental IssuesThe consol idated groups operations are not regul ated by any significant environm

90、ental regul ations under a l aw of theCommonweal th or of a State or Territory.Shares under OptionAt the date of this report,the unissued ordinary shares of Medl ab Cl inical Limited under option are as fol l ows:Option hol ders do not have rights to participate in any issue of shares or other inter

91、ests in the company or any other entity.13Michael HallDrew TownsendSean Hall888NameAttendedNomination andRemuneration CommitteeRisk Management andAudit CommitteeHeldAttendedHeldAttendedHeld88811111122-22-Full BoardNumber under optionNilGrant dateDate of expiryExercise priceRemuneration ReportThe rem

92、uneration report detail s the key management personnel remuneration arrangements for the consol idated entity,inaccordance with the requirements of the Corporations Act 2001 and its Regul ations.Key management personnel are those persons having authority and responsibil ity for pl anning,directing a

93、nd control l ing theactivities of the entity,directl y or indirectl y,incl uding al l directors.The remuneration report is set out under the fol l owing main headings:Principl es used to determine the nature and amount of remunerationDetail s of remunerationService agreementsShare-based compensation

94、Principles used to determine the nature and amount of remunerationThe obj ective of the consol idated entitys executive reward framework is to ensure reward for performance is competitive andappropriate for the resul ts del ivered.The framework al igns executive reward with the achievement of strate

95、gic obj ectives andthe creation of val ue for sharehol ders,and conforms to the market best practice for the del ivery of reward.The Board ofDirectors(the Board)ensures that executive reward satisfies the fol l owing key criteria for good reward governance practices:Competitiveness and reasonabl ene

96、ssAcceptabil ity to sharehol dersPerformance l inkage/al ignment of executive compensationTransparencyThe Nomination and Remuneration Committee is responsibl e for determining and reviewing remuneration arrangements forits directors and executives.The performance of the consol idated entity depends

97、on the qual ity of its directors and executives.The remuneration phil osophy is to attract,motivate and retain high performance and high qual ity personnel.The Nomination and Remuneration Committee has structured an executive remuneration framework that is market competitiveand compl ementary to the

98、 reward strategy of the consol idated entity.Al ignment to sharehol ders interests:Has economic profit as a core component of pl an designFocuses on sustained growth in sharehol der weal th,consisting of dividends and growth in share price,and del ivering constant or increasing return on assets as w

99、el l as focusing the executive on key non-financial drivers of val ueAttracts and retains high cal ibre executivesAl ignment to program participants interests:Rewards capabil ity and experienceRefl ects competitive reward for contribution to growth in sharehol der weal thProvides a cl ear structure

100、for earning rewardsIn accordance with best practice corporate governance,the structure of non-executive directors and executive remunerationsis separate.Non-executive directors remunerationFees and payments to non-executive directors refl ect the demands and responsibil ities of their rol e.Non-exec

101、utive directorsfees and payments are reviewed annual l y by the Nomination and Remuneration Committee.The Nomination andRemuneration Committee may,from time to time,receive advice from independent remuneration consul tants to ensure non-executive directors fees and payments are appropriate and in l

102、ine with the market.The chairmans fees are determinedindependentl y to the fees of other non-executive directors based on comparative rol es in the external market.The chairmanis not present at any discussions rel ating to the determination of his own remuneration.ASX l isting rul es require the agg

103、regate non-executive directors remuneration be determined periodical l y by a general meeting.The most recent determination was at the Annual General Meeting hel d on 26 October 2015,where the sharehol ders approveda maximum annual aggregate remuneration of$300,000.14Executive remunerationThe consol

104、 idated entity aims to reward executives with a l evel and mix of remuneration based on their position andresponsibil ity,which has both fixed and variabl e components.The executive remuneration and reward framework has four components:Base pay and non-monetary benefitsShort-term performance incenti

105、vesShare-based paymentsOther remuneration such as superannuation and l ong service l eaveThe combination of these comprises the executives total remuneration.Fixed remuneration,consisting of base sal ary,superannuation and non-monetary benefits,are reviewed annual l y by theNomination and Remunerati

106、on Committee,based on individual and business unit performance,the overal l performance ofthe consol idated entity and comparabl e market remunerations.Executives may receive their fixed remuneration in the form of cash or other fringe benefits(for exampl e motor vehicl e benefits)where it does not

107、create any additional costs to the consol idated entity and provides additional val ue to the executive.The short-term incentives(STI)program is designed to al ign the targets of the business units with the performance hurdl esof executives.STI payments are granted to executives based on specific an

108、nual targets and key performance indicators(KPIs)being achieved.KPIs incl ude profit contribution,customer satisfaction,l eadership contribution and product management.The l ong-term incentives(LTI)incl ude l ong service l eave and share-based payments.Shares are awarded to executives underthe share

109、hol der approved Empl oyee Share Option Pl an(ESOP)based on l ong-term incentive measures.These incl ude increasein sharehol ders val ue rel ative to the entire market and the increase compared to the consol idated entitys direct competitors.The Nomination and Remuneration Committee reviewed the l o

110、ng-term equity-l inked performance incentives specifical l y forexecutives during the year ended 30 June 2020.As at 30 June 2020,no options were issued under the ESOP.Voting and comments made at the companys 2019 Annual General Meeting(AGM)At the 2019 AGM,99%of the votes received supported the adopt

111、ion of the remuneration report for the year ended 30 June2019.The Company did not receive any specific feedback at the AGM regarding its remuneration package.Details of remunerationAmounts of remunerationDetail s of the remuneration of key management personnel of the consol idated entity are set out

112、 in the fol l owing tabl es.The key management personnel of the consol idated entity consisted of the fol l owing directors of Medl ab Cl inical Limited:Michael Hal l Non-Executive ChairmanDrew Townsend Non-Executive DirectorSean Hal l Managing Director and Chief Executive OfficerAnd the fol l owing

113、 persons:Al an Dworkin Chief Financial Officer,Company Secretary and Chief Operations Officer Dr Luis Vitetta Director of Medical ResearchDr David Rutol o Director of ScienceMr Paul Vil ner Director of Commercial Operations(resigned 10 January 2020)Mr Ian Curtinsmith Chief Information Officer(appoin

114、ted as an executive on 18 February 2020)15Appointed as executive on 18 February 2020*Resigned 10 January 2020*Commenced 4 June 2018The proportion of remuneration l inked to performance and the fixed proportion are as fol l ows:162020Short-termbenefitsCash salaryand fees$Cashbonus$Non-monetary$Super-

115、annuation$Equitysettled$Total$Directors:Michael HallDrew TownsendSean HallOther Key Management Personnel:Alan DworkinLuis VitettaDavid RutoloIan CurtinsmithPaul Vilner*125,00060,225300,000250,727250,250178,76162,308203,4051,430,676129,75060,225379,107296,342304,071192,43671,202218,2821,651,415-4,750

116、-27,40422,83622,85913,6755,91914,877112,320-Post-employmentbenefitsLongserviceleave-51,70322,77930,962-2,975-108,4192019Short-termbenefitsCash salaryand fees$Cashbonus$Non-monetary$Super-annuation$Equitysettled$Total$Directors:Michael HallDrew TownsendSean HallOther Key Management Personnel:Alan Dwo

117、rkinLuis VitettaDavid RutoloPaul Vilner*124,88460,225299,305244,529250,250167,717331,4411,478,351129,62360,225364,018286,182300,750180,547359,0031,680,348-4,739-28,43423,11123,77412,83027,562120,450-Post-employmentbenefitsLongserviceleave-36,27918,54226,726-81,547Directors:Michael HallDrew TownsendS

118、ean HallOther Key Management Personnel:Alan DworkinLuis VitettaDavid RutoloIan Curtinsmith(appointed 10 Jan 2020)Paul Vilner100%100%100%100%100%100%100%100%Fixed remuneration2020-%-%-%-%-%-%N/A-%-%-%-%-%-%-%-%-%-%-%-%-%-%-%N/A-%-%-%-%-%-%-%-%-%100%100%100%100%100%100%N/A100%20192020201920202019At ri

119、sk-LTIAt risk-STINameService agreementsRemuneration and other terms of empl oyment for key management personnel are formal ised in service agreements orempl oyment contracts.Detail s of these agreements are as fol l ows:Name:Sean Hal lTitl e:Managing Director and Chief Executive OfficerAgreement com

120、menced:1 Jul y 2012Term of agreement:No Fixed TermDetail s:Base sal ary for the year ending 30 June 2020 of$300,000 pl us superannuation,to be reviewed annual l y by the Nomination and Remuneration Committee.12 month termination notice by either party,non-sol icitation and non-compete cl auses.Name:

121、Al an DworkinTitl e:Chief Financial Officer,Company Secretary and Chief Operations Officer Agreement commenced:9 February 2015Term of agreement:No Fixed TermDetail s:Base sal ary for the year ending 30 June 2020 of$250,000 pl us superannuation,to be reviewed annual l y by the Nomination and Remunera

122、tion Committee.4 weeks termination notice by either party,el igibl e to be part of the consol idated entitys ESOP.Name:Luis VitettaTitl e:Director of Medical ResearchAgreement commenced:4 March 2013Term of agreement:No Fixed TermDetail s:Base sal ary for the year ending 30 June 2020 of$250,250 pl us

123、 superannuation,to be reviewed annual l y by the Nomination and Remuneration Committee.2 weeks termination notice by either party,el igibl e to be part of the consol idated entitys ESOP.Name:David Rutol oTitl e:Director of ScienceAgreement commenced:22 January 2015Term of agreement:No Fixed TermDeta

124、il s:Base sal ary for the year ending 30 June 2020 of US$120,000 pl us empl oyment benefits,to be reviewed annual l y by the Nomination and Remuneration Committee.30 days termination notice by either party.Name:Ian CurtinsmithTitl e:Chief Information OfficerAgreement commenced:9 Jul y 2018Term of ag

125、reement:No Fixed TermDetail s:Base sal ary for the year ending 30 June 2020 of$180,000 pl us superannuation,to be reviewed annual l y by the Nomination and Remuneration Committee.4 weeks termination notice by either party,el igibl e to be part of the consol idated entitys ESOP.Key management personn

126、el have no entitl ement to termination payments in the event of removal for misconduct.17Share-based compensationOptionsThe terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and other keymanagement personnel in this financial year or future report

127、ing years are as fol l ows:Options granted carry no dividend or voting rights.The number of options over ordinary shares granted to and vested by directors and other key management personnel as partof compensation during the year ended 30 June 2020 are set out bel ow:Val ues of options over ordinary

128、 shares granted,exercised and l apsed for directors and other key management personnel aspart of compensation during the year ended 30 June 2020 are set out bel ow:Additional disclosures relating to key management personnelShareholdingThe number of shares in the company hel d during the financial ye

129、ar by each director and other members of key managementpersonnel of the consol idated entity,incl uding their personal l y rel ated parties,is set out bel ow:This concl udes the remuneration report,which has been audited.18NoneVesting date andexercisable date$Exercise priceExpiry dateGrant dateMicha

130、el HallDrew TownsendSean HallAlan DworkinLuis VitettaDavid RutoloIan Curtinsmith850,000-5,000,0001,000,0001,500,000-850,000-2,170,0001,000,000100,000-Balance at thestart of year$Balance at theend of the year$ExercisedGrantedName-2,830,000-1,400,000-ForfeitedMichael HallDrew TownsendSean HallAlan Dwo

131、rkinLuis VitettaDavid RutoloIan Curtinsmith255,000-1,500,000300,000450,000-255,000-651,000300,00030,000-Balance at thestart of year$Balance at theend of the year$ExercisedGrantedName-849,000-420,000-ForfeitedMichael HallDrew TownsendSean HallAlan DworkinLuis VitettaDavid RutoloIan Curtinsmith-15,907

132、,38316,135,55358,425,5552,222,222111,1013,000,000464,35696,266,17068,707-68,707850,000-2,170,0001,000,0001,00,000-4,120,000Received as partof remunerationBalance at theend of the yearDisposals/otherAdditionsOrdinary shares15,126,09016,135,55356,255,5551,222,22211,1013,000,000464,35692,214,877Balance

133、 at thestart of yearIndemnification of Officers and AuditorsDuring the financial year,the Company paid a premium in respect of a contract to insure the directors and executives of theCompany against a l iabil ity to the extent permitted by the Corporations Act 2001.The contract of insurance prohibit

134、s discl osureof the nature of the l iabil ity and the amount of the premium.The Company has not otherwise,during or since the end of the financial year,indemnified or agreed to indemnify the auditorof the Company or any rel ated entity against a l iabil ity incurred by the auditor.During the financi

135、al year,the Company has not paid a premium in respect of a contract to insure the auditor of the Companyor any rel ated entity.Proceedings on behalf of the CompanyNo person has appl ied for l eave of Court to bring proceedings on behal f of the Company or intervene in any proceedings towhich the Com

136、pany is a party for the purpose of taking responsibil ity on behal f of the company for al l or any part of thoseproceedings.The company was not a party to any such proceedings during the year.Non-Audit ServicesDetail s of the amounts paid or payabl e to the auditor for non-audit services provided d

137、uring the financial year by the auditorare outl ined in note 23 to the financial statements.The directors are satisfied that the provision of non-audit services during the financial year,by the auditor(or by another personor firm on the auditors behal f),is compatibl e with the general standard of i

138、ndependence for auditors imposed by theCorporations Act 2001.The directors are of the opinion that the services as discl osed in note 20 to the financial statements do not compromise theexternal auditors independence requirements of the Corporations Act 2001 for the fol l owing reasons:Al l non-audi

139、t services have been reviewed and approved to ensure that they do not impact the integrity and obj ectivity of the auditor;andNone of the services undermine the general principl es rel ating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants issued by the Acco

140、unting Professional and Ethical Standards Board,incl uding reviewing or auditing the auditors own work,acting in a management or decision-making capacity for the company,acting as advocate for the company or j ointl y sharing economic risks and rewards.Auditors Independence DeclarationThe auditors i

141、ndependence decl aration for the year ended 30 June 2020 has been received and can be found on page 20 ofthe financial report.AuditorESV Business advice and accounting continues in office in accordance with section 327 of the Corporations Act 2001.Signed in accordance with a resol ution of the Board

142、 of Directors.S HallD TownsendDirectorDirectorDated this 27thday of August 202019STATEMENT OF PROFIT AND LOSSAND OTHER COMPREHENSIVE INCOMEFOR THE YEAR ENDED 30 JUNE 2020The accompanying notes form part of these financial statements21ConsolidatedSales revenue:-Sale of goods(net discounts)-Sales retu

143、rns-Provision for sale returns-Promotional costs and other rebatesRendering of R&D services&consultationOther incomeTotal Revenue Raw materials and consumables usedEmployee benefits expenseDepreciation and amortisation expenseProfessional and consulting feesOperating lease costsFinance costsSelling&

144、marketing expensesR&D/trial expensesOther expensesLoss before income taxIncome tax expense Net loss for the periodOther comprehensive incomeItems that will not be reclassified subsequently to profit or lossForeign currency translationOther comprehensive loss for the year,net of taxTotal comprehensiv

145、e loss for the yearNet loss attributable to:Members of the parent entityNon-controlling interestTotal comprehensive loss attributable to:Members of the parent entityNon-controlling interestEarnings per share Basic earnings per shareDiluted earnings per share2020$Notes6,074,834-(711,153)5,363,68168,2

146、952,654,7848,086,760(3,063,663)(6,465,254)(147,490)(1,003,891)(500,897)(79,772)(1,533,818)(1,026,085)(2,439,986)(8,174,096)-(8,174,096)5,2855,285(8,168,811)(8,090,937)(83,159)(8,174,096)(8,087,766)(81,045)(8,168,811)Cents(4.23)(3.82)5,451,436(473,549)(300,000)(1,829,492)2,848,395-2,965,4185,813,813(

147、2,804,877)(6,665,917)(961,003)(1,257,038)(198,544)(197,287)(1,750,327)(1,947,189)(3,519,948)(13,488,317)-(13,488,317)10,36710,367(13,477,950)(13,399,374)(88,943)(13,488,317)(13,393,154)(84,796)(13,477,950)Cents(5.94)(5.94)34530302019$STATEMENT OF FINANCIAL POSITIONAS AT 30 JUNE 2020The accompanying

148、notes form part of these financial statements.22ConsolidatedASSETSCurrent AssetsCash and cash equivalentsTrade and other receivablesInventoriesOther assetsTotal Current AssetsNon-Current AssetsOther assetsProperty,plant and equipmentRight of use assetsTotal Non-Current AssetsTOTAL ASSETSLIABILITIESC

149、urrent LiabilitiesTrade and other payablesEmployee benefitsBorrowingsLease liabilitiesTotal Current LiabilitiesNon-Current LiabilitiesEmployee benefitsProvisionsLease liabilitiesOther liabilitiesTotal Non-Current LiabilitiesTOTAL LIABILITIESNET ASSETSEQUITYIssued capitalReservesAccumulated lossesEqu

150、ity attributable to the owners of Medlab Clinical LimitedOutside equity interest TOTAL EQUITY2020$Notes11,441,9753,813,7582,217,9531,616,14319,089,829482,845631,703-1,114,54820,204,3773,622,192389,319971,976-4,983,487103,67069,167-55,401228,2385,211,72514,992,65241,621,32071,975(26,643,581)15,049,71

151、4(57,062)14,992,6529,063,0443,379,0231,473,136509,47014,424,673482,940592,4182,288,4923,363,85017,788,5233,217,816503,93194,221609,8094,425,777172,243305,4221,629,790-2,107,4556,533,23211,255,29151,361,90978,195(40,042,955)11,397,149(141,858)11,255,291678991011121314161315161718192019$STATEMENT OF C

152、HANGES IN EQUITYFOR THE YEAR ENDED 30 JUNE 2020The accompanying notes form part of these financial statements.23Consolidated GroupBalance at 1 July 2018Loss after income tax for the periodOther comprehensive income for the period,net of taxTotal comprehensive income for the periodTransactions with o

153、wners in their capacity as owners:Contributions of equity,net of transaction costs(note 18)Acquisition of non-controlling interestBalance at 30 June 201939,163,420-1,302,9001,155,00041,621,320(16,353,301)(8,090,937)(8,090,937)(2,199,343)(26,643,581)68,8043,1713,17171,97522,878,923(8,090,937)3,171(8,

154、087,766)1,302,900(1,044,343)15,049,714(1,020,360)(83,159)2,114(81,045)1,044,343(57,062)21,858,563(8,174,096)5,285(8,168,811)1,302,900-14,992,652AccumulatedLossesAttributableto membersof the parentcompany$Total$Non-ControllingInterests$Attributableto ownersof the parent$Reserves$IssuedCapital$Consoli

155、dated GroupBalance at 1 July 2019Loss after income tax for the periodOther comprehensive income for the period,net of taxTotal comprehensive income for the periodTransactions with owners in their capacity as owners:Contributions of equity,net of transaction costs(note 18)Balance at 30 June 202041,62

156、1,320-9,740,58951,361,909(26,643,581)(13,399,374)(13,399,374)(40,042,955)71,9756,2206,22078,19515,049,714(13,399,374)6,220(13,393,154)9,740,58911,397,149(57,062)(88,943)4,147(84,796)(141,858)14,992,652(13,488,317)10,367(13,477,950)9,740,58911,255,291AccumulatedLossesAttributableto membersof the pare

157、ntcompany$Total$Non-ControllingInterests$Attributableto ownersof the parent$Reserves$IssuedCapital$STATEMENT OF CASH FLOWSFOR THE YEAR ENDED 30 JUNE 2020The accompanying notes form part of these financial statements.24ConsolidatedCash Flows from Operating ActivitiesReceipts from customersReceipts fr

158、om R&D Tax incentive and government grantsPayments to suppliers and employeesFinance costsInterest expense-AASB 16Interest receivedNet cash used in operating activitiesCash flows from Investing ActivitiesPurchase of plant and equipmentNet cash used in investing activitiesCash flows from Financing Ac

159、tivitiesRepayment of borrowingsProceeds from borrowingsRepayment of lease liabilitiesProceeds from issue of sharesShare issue transaction costsNet cash from financing activitiesNet decrease in cash heldCash and cash equivalents at beginning of financial yearExchange rate adjustmentsCash and cash equ

160、ivalents at end of the financial year5,832,7451,415,784(17,834,851)(79,772)-349,517(10,316,577)(340,323)(340,323)(5,649,036)6,121,309-1,302,900-1,775,173(8,881,727)20,332,694(8,992)11,441,9756,484,4382,478,779(19,270,442)(90,210)(107,077)82,092(10,422,420)(243,075)(243,075)(4,895,833)3,941,418(558,5

161、92)10,397,603(563,301)8,321,295(2,344,200)11,441,975(34,731)9,063,0446141462020$2019$NotesNOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020The consol idated financial statements and notes represent those of Medl ab Cl inical Limited and control l ed entities(Company,Group or consol id

162、ated entity).The pl ace of business of the Parent Company is:Research Office&LaboratoryHead Office66 McCaul ey StreetUnit 5,11 Lord StreetAl exandria NSW 2015Botany NSW 2019In accordance with the Corporations Act 2001,these financial statements present the resul ts of the consol idated entity onl y.

163、Suppl ementary information about the parent entity is discl osed in Note 2.The Financial Statements were authorised for issue by the Directors on 27 August 2020.NOTE 1 SIGNIFICANT ACCOUNTING POLICIESThe principal accounting pol icies adopted in the preparation of the financial statements are set out

164、 bel ow.These have beenconsistentl y appl ied otherwise stated.NEW,REVISED OR AMENDING ACCOUNTING STANDARDS AND INTERPRETATIONS ADOPTEDThe consol idated entity has not el ected to adopt any accounting standards or amendments to standards or interpretationsissued prior to the date of this report wher

165、e appl ication is not mandatory for the year ended 30 June 2020.APPLICATION OF NEW AND REVISED STANDARDSThe consol idated entity has adopted al l of the new or amended Accounting Standards and Interpretations issued by theAustral ian Accounting Standards Board(AASB)that are mandatory for the current

166、 reporting period.Any new or amendedAccounting Standards or Interpretations that are not yet mandatory have not been earl y adopted.Conceptual Framework for Financial Reporting(Conceptual Framework)The revised Conceptual Framework is appl icabl e to annual reporting periods beginning on or after 1 J

167、anuary 2020 and earl yadoption is permitted.The Conceptual Framework contains new definition and recognition criteria as wel l as new guidanceon measurement that affects several Accounting Standards.Where the consol idated entity has rel ied on the existing frameworkin determining its accounting pol

168、 icies for transactions,events or conditions that are not otherwise deal t with under theAustral ian Accounting Standards,the consol idated entity may need to review such pol icies under the revised framework.Atthis time,the appl ication of the Conceptual Framework is not expected to have a material

169、 impact on the consol idated entitysfinancial statements.AASB 16 LeasesThe consol idated entity has adopted AASB 16 from 1 Jul y 2019.The standard repl aces AASB 117 Leases and for l esseesel iminates the cl assifications of operating l eases and finance l eases.Except for short-term l eases and l e

170、ases of l ow-val ueassets,right-of-use assets and corresponding l ease l iabil ities are recognised in the statement of financial position.Straight-l ine operating l ease expense recognition is repl aced with a depreciation charge for the right-of-use assets(incl uded in operatingcosts)and an intere

171、st expense on the recognised l ease l iabil ities(incl uded in finance costs).In the earl ier periods of the l ease,the expenses associated with the l ease under AASB 16 wil l be higher when compared to l ease expenses under AASB 117.However,EBITDA(Earnings Before Interest,Tax,Depreciation and Amort

172、isation)resul ts improve as the operating expense isnow repl aced by interest expense and depreciation in profit or l oss.For cl assification within the statement of cash fl ows,theinterest portion is discl osed in operating activities and the principal portion of the l ease payments are separatel y

173、 discl osed infinancing activities.25NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)Impact of adoptionAASB 16 was adopted using the modified retrospective approach and as such the comparatives have not been restated.Theimpact of adoption on

174、opening retained profits as at 1 Jul y 2019 was as fol l owsWhen adopting AASB 16 from 1 Jul y 2019,the consol idated entity has appl ied the fol l owing practical expedients:Appl ying a singl e discount rate to the portfol io of l eases with reasonabl y simil ar characteristics;Accounting for l eas

175、es with a remaining l ease term of 12 months as at 1 Jul y 2019 as short-term l eases;Excl uding any initial direct costs from the measurement of right-of-use assets;Using hindsight in determining the l ease term when the contract contains options to extend or terminate the l ease;andNot appl y AASB

176、 16 to contracts that were not previousl y identified as containing a l ease.1.1BASIS OF PREPARATIONThese general purpose financial statements have been prepared in accordance with Austral ian Accounting Standards andInterpretations issued by the Austral ian Accounting Standards Board(AASB)and the C

177、orporations Act 2001,as appropriatefor for-profit oriented entities.These financial statements al so compl y with International Financial Reporting Standards asissued by the International Accounting Standards Board(IASB).The financial statements have been prepared under the historical cost conventio

178、n.The preparation of the financial statements requires the use of certain critical accounting estimates.It al so requiresmanagement to exercise its j udgement in the process of appl ying the companys accounting pol icies.The areas invol ving ahigher degree of j udgement or compl exity,or areas where

179、 assumptions and estimates are significant to the financial statements,are discl osed further down in Note 1.23.26Operating lease commitments as at 1 July 2019(AASB 117)2,961,225Operating lease additions under AASB 16 314,048Operating lease commitments discount based on the weighted average incremen

180、talborrowing rate of 4.30%(AASB 16)(282,043)Short-term leases not recognised as a right-of-use asset(AASB 16)(18,768)Lease straight lining balance as at 30 June 2019(AASB 117)55,395Estimated costs expected to restore the assets (230,833)Right-of-use assets(AASB 16)as at 1 July 2019 2,799,024Lease li

181、abilities-current(AASB 16)as at 1 July 2019 558,895Lease liabilities-non-current(AASB 16)as at 1 July 2019 2,240,129Total lease liabilities as at 1 July 2019 2,799,024Reduction in opening retained profits as at 1 July 2019-NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020SIGNIFICANT A

182、CCOUNTING POLICIES(CONTINUED)1.2BASIS OF CONSOLIDATIONThe consol idated financial statements incorporate the assets and l iabil ities of al l subsidiaries of Medl ab Cl inical Limited(company or parent entity)as at 30 June 2020 and the resul ts of al l subsidiaries for the period then ended.Medl ab

183、Cl inicalLimited and its subsidiaries together are referred to in these financial statements as the consol idated entity.Subsidiaries are al l those entities over which the consol idated entity has control.The consol idated entity control s an entitywhen the consol idated entity is exposed to,or has

184、 rights to,variabl e returns from its invol vement with the entity and has theabil ity to affect those returns through its power to direct the activities of the entity.Subsidiaries are ful l y consol idated from thedate on which control is transferred to the consol idated entity.They are de-consol i

185、dated from the date that control ceases.Intercompany transactions,bal ances and unreal ised gains on transactions between entities in the consol idated entity areel iminated.Unreal ised l osses are al so el iminated unl ess the transaction provides evidence of the impairment of the assettransferred.

186、Accounting pol icies of subsidiaries have been changed where necessary to ensure consistency with the pol iciesadopted by the consol idated entity.The acquisition of subsidiaries is accounted for using the acquisition method of accounting.A change in ownership interest,without the l oss of control,i

187、s accounted for as an equity transaction,where the difference between the considerationtransferred and the book val ue of the share of the non-control l ing interest acquired is recognised directl y in equity attributabl eto the parent.Non-control l ing interest in the resul ts and equity of subsidi

188、aries are shown separatel y in the statement of profit or l oss andother comprehensive income,statement of financial position and statement of changes in equity of the consol idated entity.Losses incurred by the consol idated entity are attributed to the non-control l ing interest in ful l,even if t

189、hat resul ts in a deficitbal ance.A change in ownership interest,without the l oss of control,is accounted for as an equity transaction,where the differencebetween the consideration transferred and the book val ue of the share of the non-control l ing interest acquired is recogniseddirectl y in equi

190、ty attributabl e to the parent.1.3OPERATING SEGMENTSOperating segments are presented using the management approach,where the information presented is on the same basisas the internal reports provided to the Chief Operating Decision Makers(CODM).The CODM is responsibl e for the al l ocationof resourc

191、es to operating segments and assessing their performance.1.4FOREIGN CURRENCIES1.4.1Individual Controlled EntitiesThe individual Financial Statements of each Group entity are presented in the currency of the primary economic environmentin which the entity operates(its functional currency).For the pur

192、pose of the consol idated Financial Statements,the financialresul ts and financial position of each Group entity are expressed in Austral ian Dol l ars($),which is the functional currency ofMedl ab Cl inical Limited,and the presentation currency for the consol idated Financial Statements.1.4.2Foreig

193、n Currency TransactionsIn preparing the Financial Statements of the individual entities,transactions in currencies other than the entitys functionalcurrency(foreign currencies)are recognised at the rates of exchange prevail ing on the dates of the transactions.At the end ofeach reporting period,mone

194、tary items denominated in foreign currencies are retransl ated at the rates prevail ing at that date.Non-monetary items carried at fair val ue that are denominated in foreign currencies are retransl ated at the rates prevail ing onthe date when the fair val ue was determined.Non-monetary items that

195、are measured in terms of historical cost in a foreigncurrency are not retransl ated.1.4.3Foreign OperationsThe financial resul ts and position of foreign operations,whose functional currency is different from the Groups presentationcurrency,are transl ated as fol l ows:Assets and l iabil ities are t

196、ransl ated at year-end exchange rates prevail ing at that reporting date;Income and expenses are transl ated at average exchange rates for the period where the average rate approximates the rate at the date of the transaction;andRetained earnings are transl ated at the exchange rates prevail ing at

197、the date of the transaction.Exchange differences arising on transl ation of foreign operations are transferred directl y to the Groups foreign currencytransl ation reserve in the statement of financial position.These differences are recognised in the statement of profit or l ossand other comprehensi

198、ve income in the period.The foreign currency reserve is recognised in profit or l oss when the foreign operation or net investment is disposed of.27NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)1.5REVENUE RECOGNITIONRevenue is recognised on

199、 the fol l owing basis:Sale of nutraceuticalsSal e of goods revenue is recognised at the point of sal e,which is at the time when the customers orders are despatched.Amounts discl osed as revenue are net of sal es returns and trade discounts.Discounts,promotional and other rebatesThe sal e of goods

200、revenue is net of any discounts,rebates and any contributions to customers towards promotional activities.R&D refundable tax offset Tax refundabl e tax offset is recognised when there is reasonabl e assurance that the incentive wil l be received and al l attachedconditions wil l be compl ied with.In

201、terestInterest revenue is recognised as interest accrues using the effective interest method.This is a method of cal cul ating theamortised cost of a financial asset and al l ocating the interest income over the rel evant period using the effective interest rate,which is the rate that exactl y disco

202、unts estimated future cash receipts through the expected l ife of the financial asset to thenet carrying amount of the financial asset.R&D contract revenueR&D contract revenue is recognised by reference to the stage of the contracts.Stage of compl etion is measured by referenceto mil estones achieve

203、d as per the contract.Where the mil estones are not cl arified as per the contract,revenue is recognisedbased on other indications as per the contract.1.6TAXATIONThe income tax expense or benefit for the period is the tax payabl e on that periods taxabl e income based on the appl icabl eincome tax r

204、ate for each j urisdiction,adj usted by changes in deferred tax assets and l iabil ities attributabl e to temporarydifferences,unused tax l osses and the adj ustment recognised for prior periods,where appl icabl e.Deferred tax assets and l iabil ities are recognised for temporary differences at the

205、tax rates expected to appl y when the assetsare recovered or l iabil ities are settl ed,based on those tax rates that are enacted or substantivel y enacted,except for:When the deferred income tax asset or l iabil ity arises from the initial recognition of goodwil l or an asset or l iabil ity in a tr

206、ansaction that is not a business combination and that,at the time of the transaction,affects neither the accounting nor taxabl e profits;orWhen the taxabl e temporary difference is associated with interests in subsidiaries,associates or j oint ventures,and the timing of the reversal can be control l

207、 ed and it is probabl e that the temporary difference wil l not reverse in the foreseeabl e future.The Company and its whol l y owned Austral ian resident entities are part of a tax consol idated group.As a consequence,al lmembers of the tax-consol idated group are taxed as a singl e entity.The head

208、 entity within the tax consol idated group is Medl abCl inical Limited.1.7CURRENT AND NON-CURRENT CLASSIFICATIONAssets and l iabil ities are presented in the statement of financial position based on current and non-current cl assification.Anasset is cl assified as current when:it is either expected

209、to be real ised or intended to be sol d or consumed in the consol idatedentitys normal operating cycl e;it is hel d primaril y for the purpose of trading;it is expected to be real ised within 12 monthsafter the reporting period;or the asset is cash or cash equival ent unl ess restricted from being e

210、xchanged or used to settl e al iabil ity for at l east 12 months after the reporting period.Al l other assets are cl assified as non-current.A l iabil ity is cl assified ascurrent when:it is either expected to be settl ed in the consol idated entitys normal operating cycl e;it is hel d primaril y fo

211、r thepurpose of trading;it is due to be settl ed within 12 months after the reporting period;or there is no unconditional right todefer the settl ement of the l iabil ity for at l east 12 months after the reporting period.Al l other l iabil ities are cl assified as non-current.1.8CASH AND CASH EQUIV

212、ALENTS Cash and cash equival ents incl udes cash on hand,deposits hel d at cal l with financial institutions,other short-term,highl y l iquidinvestments with original maturities of three months or l ess that are readil y convertibl e to known amounts of cash and whichare subj ect to an insignificant

213、 risk of changes in val ue.28NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)1.9TRADE AND OTHER RECEIVABLESTrade receivabl es are initial l y recognised at original invoice amount,l ess any al l owance for expected credit l osses.Tradereceiva

214、bl es are general l y due for settl ement within 60 days.The consol idated entity has appl ied the simpl ified approach to measuring expected credit l osses,which uses a l ifetime expectl oss al l owance.To measure the expected credit l osses,consideration is given to days overdue,financial difficul

215、 ties of thedebtor and defaul t payments.1.10INVENTORIESRaw material s(capsul es,bottl es and l abel s),work in progress and finished goods are stated at the l ower of cost and netreal isabl e val ue on a weighted average basis.Cost comprises direct material s and del ivery costs,import duties and o

216、ther taxes.Costs of purchased inventory are determined after deducting rebates and discounts received or receivabl e.Stock in transit is stated at the l ower of cost and net real isabl e val ue.Cost comprises purchase and del ivery costs,net of rebatesand discounts received or receivabl e.Net real i

217、sabl e val ue is the estimated sel l ing price in the ordinary course of business l ess the estimated costs of compl etion andthe estimated costs necessary to make the sal e.Culture librariesCosts associated with the acquisition of cul ture l ibraries are expensed in the period in which they are inc

218、urred.1.11PROPERTY,PLANT AND EQUIPMENTPl ant and equipment is stated at historical cost l ess accumul ated depreciation and impairment.Historical cost incl udesexpenditure that is directl y attributabl e to the acquisition of the items.Depreciation is cal cul ated on a straight-l ine or diminishing

219、val ue basis to write off the net cost of each item of property,pl antand equipment(excl uding l and)over their expected useful l ives as fol l ows:Leasehol d improvements3-15 yearsPl ant and equipment3-13 yearsOffice furniture and equipment3-10 yearsThe residual val ues,useful l ives and depreciati

220、on methods are reviewed,and adj usted if appropriate,at each reporting date.Leasehol d improvements and pl ant and equipment under l ease are depreciated over the unexpired period of the l ease or theestimated useful l ife of the assets,whichever is shorter.An item of property,pl ant and equipment i

221、s derecognised upon disposal or when there is no future economic benefit to thecompany.Gains and l osses between the carrying amount and the disposal proceeds are taken to profit or l oss.Any reval uationsurpl us reserve rel ating to the item disposed of is transferred directl y to retained profits.

222、1.12RIGHT-OF-USE ASSETSA right-of-use asset is recognised at the commencement date of a l ease.The right-of-use asset is measured at cost,whichcomprises the initial amount of the l ease l iabil ity,adj usted for,as appl icabl e,any l ease payments made at or before thecommencement date net of any l

223、ease incentives received,any initial direct costs incurred,and,except where incl uded in thecost of inventories,an estimate of costs expected to be incurred for dismantl ing and removing the underl ying asset,andrestoring the site or asset.Right-of-use assets are depreciated on a straight-l ine basi

224、s over the unexpired period of the l ease or the estimated useful l ifeof the asset,whichever is the shorter.Where the consol idated entity expects to obtain ownership of the l eased asset at theend of the l ease term,the depreciation is over its estimated useful l ife.Right-of use assets are subj e

225、ct to impairment or adj ustedfor any remeasurement of l ease l iabil ities.The consol idated entity has el ected not to recognise a right-of-use asset and corresponding l ease l iabil ity for short-term l easeswith terms of 12 months or l ess and l eases of l ow-val ue assets.Lease payments on these

226、 assets are expensed to profit or l ossas incurred.29NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)1.13IMPAIRMENT OF NON-FINANCIAL ASSETSNon-financial assets are reviewed for impairment whenever events or changes in circumstances indicate t

227、hat the carryingamount may not be recoverabl e.An impairment l oss is recognised for the amount by which the assets carrying amountexceeds its recoverabl e amount.Recoverabl e amount is the higher of an assets fair val ue l ess costs of disposal and val ue-in-use.The val ue-in-use is the presentval

228、ue of the estimated future cash fl ows rel ating to the asset using a pre-tax discount rate specific to the asset or cash-generating unit to which the asset bel ongs.Assets that do not have independent cash fl ows are grouped together to form acash-generating unit.1.14TRADE AND OTHER PAYABLESLiabil

229、ities for trade creditors are carried at cost which is the fair val ue of the consideration to be paid in the future for goods orservices received,whether or not bil l ed to the Group at bal ance date.The amounts are unsecured and are usual l y paid within30 days of recognition.1.15BORROWINGSLoans a

230、nd borrowings are initial l y recognised at the fair val ue of the consideration received,net of transaction costs.1.16LEASE LIABILITIESA l ease l iabil ity is recognised at the commencement date of a l ease.The l ease l iabil ity is initial l y recognised at the present val ueof the l ease payments

231、 to be made over the term of the l ease,discounted using the interest rate impl icit in the l ease or,if thatrate cannot be readil y determined,the consol idated entitys incremental borrowing rate.Lease payments comprise of fixedpayments l ess any l ease incentives receivabl e,variabl e l ease payme

232、nts that depend on an index or a rate,amounts expectedto be paid under residual val ue guarantees,exercise price of a purchase option when the exercise of the option is reasonabl ycertain to occur,and any anticipated termination penal ties.The variabl e l ease payments that do not depend on an index

233、 or arate are expensed in the period in which they are incurred.Lease l iabil ities are measured at amortised cost using the effective interest method.The carrying amounts are remeasured ifthere is a change in the fol l owing:future l ease payments arising from a change in an index or a rate used;re

234、sidual guarantee;l ease term;certainty of a purchase option and termination penal ties.When a l ease l iabil ity is remeasured,an adj ustment ismade to the corresponding right-of use asset,or to profit or l oss if the carrying amount of the right-of-use asset is ful l y writtendown.1.17PROVISIONSPro

235、visions are recognised when the Group has a present obl igation(l egal or constructive)as a resul t of a past event,it isprobabl e that the Group wil l be required to settl e the obl igation,and a rel iabl e estimate can be made of the amount of theobl igation.The amount recognised as a provision is

236、 the best estimate of the consideration required to settl e the present obl igation at theend of the reporting period,taking into account the risks and uncertainties surrounding the obl igation.Where a provision ismeasured using the cash fl ows estimated to settl e the present obl igation,its carryi

237、ng amount is the present val ue of thosecash fl ows(where the effect of the time val ue of money is material).When some or al l of the economic benefits required to settl e a provision are expected to be recovered from a third party,thereceivabl e is recognised as an asset if it is virtual l y certa

238、in that reimbursement wil l be received and the amount of the receivabl ecan be measured rel iabl y.30NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)1.18EMPLOYEE BENEFITSShort-term employee benefitsLiabil ities for wages and sal aries,incl u

239、ding non-monetary benefits,annual l eave and l ong service l eave expected to be settl edwhol l y within 12 months of the reporting date are measured at the amounts expected to be paid when the l iabil ities are settl ed.Other long-term employee benefitsThe l iabil ity for l ong service l eave not e

240、xpected to be settl ed within 12 months of the reporting date are measured at the presentval ue of expected future payments to be made in respect of services provided by empl oyees up to the reporting date usingthe proj ected unit credit method.Consideration is given to expected future wage and sal

241、ary l evel s,experience of empl oyeedepartures and periods of service.Expected future payments are discounted using market yiel ds at the reporting date oncorporate bonds with terms to maturity and currency that match,as cl osel y as possibl e,the estimated future cash outfl ows.Share-based payments

242、Equity-settl ed and cash-settl ed share-based compensation benefits are provided to empl oyees.Equity-settl ed transactions are awards of shares,or options over shares,that are provided to empl oyees in exchange for therendering of services.Cash-settl ed transactions are awards of cash for the excha

243、nge of services,where the amount of cash isdetermined by reference to the share price.The cost of equity-settl ed transactions are measured at fair val ue on grant date.Fair val ue is independentl y determined usingeither the Binomial or Bl ack-Schol es option pricing model that takes into account t

244、he exercise price,the term of the option,the impact of dil ution,the share price at grant date and expected price vol atil ity of the underl ying share,the expected dividendyiel d and the risk free interest rate for the term of the option,together with non-vesting conditions that do not determinewhe

245、ther the consol idated entity receives the services that entitl e the empl oyees to receive payment.No account is taken ofany other vesting conditions.The cost of equity-settl ed transactions are recognised as an expense with a corresponding increase in equity over the vestingperiod.The cumul ative

246、charge to profit or l oss is cal cul ated based on the grant date fair val ue of the award,the best estimateof the number of awards that are l ikel y to vest and the expired portion of the vesting period.The amount recognised in profitor l oss for the period is the cumul ative amount cal cul ated at

247、 each reporting date l ess amounts al ready recognised in previousperiods.The cost of cash-settl ed transactions is initial l y,and at each reporting date until vested,determined by appl ying either theBinomial or Bl ack-Schol es option pricing model,taking into consideration the terms and condition

248、s on which the award wasgranted.The cumul ative charge to profit or l oss until settl ement of the l iabil ity is cal cul ated as fol l ows:during the vesting period,the l iabil ity at each reporting date is the fair val ue of the award at that date mul tipl ied by the expired portion of the vesting

249、 period.from the end of the vesting period until settl ement of the award,the l iabil ity is the ful l fair val ue of the l iabil ity at the reporting date.Al l changes in the l iabil ity are recognised in profit or l oss.The ul timate cost of cash-settl ed transactions is the cash paid tosettl e th

250、e l iabil ity.Market conditions are taken into consideration in determining fair val ue.Therefore,any awards subj ect to market conditionsare considered to vest irrespective of whether or not that market condition has been met,provided al l other conditions aresatisfied.If equity-settl ed awards are

251、 modified,as a minimum an expense is recognised as if the modification has not been made.Anadditional expense is recognised,over the remaining vesting period,for any modification that increases the total fair val ue ofthe share-based compensation benefit as at the date of modification.If the non-ves

252、ting condition is within the control of the consol idated entity or empl oyee,the fail ure to satisfy the condition istreated as a cancel l ation.If the condition is not within the control of the consol idated entity or empl oyee and is not satisfiedduring the vesting period,any remaining expense fo

253、r the award is recognised over the remaining vesting period,unl ess theaward is forfeited.If equity-settl ed awards are cancel l ed,it is treated as if it has vested on the date of cancel l ation,and any remaining expense isrecognised immediatel y.If a new repl acement award is substituted for the c

254、ancel l ed award,the cancel l ed and new award istreated as if they were a modification.Liabil ities recognised in respect of l ong-term empl oyee benefits are measured as the present val ue of the estimated futurecash outfl ows to be made by the Group in respect of services provided by empl oyees u

255、p to reporting date.31NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)1.19ISSUED CAPITALOrdinary shares are cl assified as equity.Incremental costs directl y attributabl e to the issue of new shares or options are shown in equity as a deducti

256、on,net of tax,from the proceeds.1.20EARNINGS PER SHAREBasic earnings per shareBasic earnings per share is cal cul ated by dividing the profit or l oss attributabl e to the owners of Medl ab Cl inical Limited,excl uding any costs of servicing equity other than ordinary shares,by the weighted average

257、number of ordinary sharesoutstanding during the financial year,adj usted for bonus el ements in ordinary shares issued during the financial year.Diluted earnings per shareDil uted earnings per share adj usts the figures used in the determination of basic earnings per share to take into account theaf

258、ter income tax effect of interest and other financing costs associated with dil utive potential ordinary shares and the weightedaverage number of shares assumed to have been issued for no consideration in rel ation to dil utive potential ordinary shares.1.21GOODS AND SERVICE TAXRevenues,expenses and

259、 assets are recognised net of the amount of goods and services tax(GST),except:where the amount of GST incurred is not recoverabl e from the taxation authority,it is recognised as part of the cost of acquisition of an asset or as part of an item of expense;orfor receivabl es and payabl es which are

260、recognised incl usive of GST.The net amount of GST recoverabl e from,or payabl e to,the taxation authority is incl uded as part of receivabl es or payabl es.Cash fl ows are incl uded in the consol idated Statement of Cash Fl ows on a gross basis.The GST component of cash fl owsarising from investing

261、 and financing activities which is recoverabl e from,or payabl e to,the taxation authority is cl assified withinoperating cash fl ows.1.22EXPENSESResearch and developmentResearch and devel opment costs are expensed in the period in which they are incurred.Patents and trademarksCosts associated with

262、patents and trademarks are expensed in the period in which they are incurred.Website development costsCosts associated with website devel opment are expensed in the period in which they are incurred.1.23CRITICAL ACCOUNTING JUDGEMENTS AND KEY SOURCES OF ESTIMATION UNCERTAINTYThe preparation of the fi

263、nancial statements requires management to make j udgements,estimates and assumptions that affectthe reported amounts in the financial statements.Management continual l y eval uates its j udgements and estimates in rel ationto assets,l iabil ities,contingent l iabil ities,revenue and expenses.Managem

264、ent bases its j udgements,estimates and assumptionson historical experience and on other various factors,incl uding expectations of future events,management bel ieves to bereasonabl e under the circumstances.The resul ting accounting j udgements and estimates wil l sel dom equal the rel ated actualr

265、esul ts.The j udgements,estimates and assumptions that have a significant risk of causing a material adj ustment to the carryingamounts of assets and l iabil ities(refer to the respective notes)within the next financial year are discussed bel ow.Allowance for expected credit lossesThe al l owance fo

266、r expected credit l osses assessment requires a degree of estimation and j udgement.It is based on the l ifetimeexpected credit l oss,grouped based on days overdue,and makes assumptions to al l ocate an overal l expected credit l oss ratefor each group.These assumptions incl ude recent sal es experi

267、ence,historical col l ection rates,the impact of the Coronavirus(COVID-19)pandemic and forward-l ooking information that is avail abl e.32NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020SIGNIFICANT ACCOUNTING POLICIES(CONTINUED)Estimation of useful lives of assetsThe consol idated en

268、tity determines the estimated useful l ives and rel ated depreciation and amortisation charges for its property,pl ant and equipment and finite l ife intangibl e assets.The useful l ives coul d change significantl y as a resul t of technicalinnovations or some other event.The depreciation and amorti

269、sation charge wil l increase where the useful l ives are l ess thanpreviousl y estimated l ives,or technical l y obsol ete or non-strategic assets that have been abandoned or sol d wil l be written offor written down.Provision for impairment of inventoriesThe provision for impairment of inventories

270、assessment requires a degree of estimation and j udgement.The l evel of theprovision is assessed by taking into account the recent sal es experience,the ageing of inventories and other factors that affectinventory obsol escence.Employee benefits provisionAs discussed in Note 1.18,the l iabil ity for

271、 empl oyee benefits expected to be settl ed more than 12 months from the reportingdate are recognised and measured at the present val ue of the estimated future cash fl ows to be made in respect of al lempl oyees at the reporting date.In determining the present val ue of the l iabil ity,estimates of

272、 attrition rates and pay increasesthrough promotion and infl ation have been taken into account.Lease make good provisionA provision has been made for the present val ue of anticipated costs for future restoration of l eased premises.The provisionincl udes future cost estimates associated with cl os

273、ure of the premises.The cal cul ation of this provision requires assumptionssuch as appl ication of cl osure dates and cost estimates.The provision recognised for each site is periodical l y reviewed andupdated based on the facts and circumstances avail abl e at the time.Changes to the estimated fut

274、ure costs for sites arerecognised in the statement of financial position by adj usting the asset and the provision.Reductions in the provision thatexceed the carrying amount of the asset wil l be recognised in profit or l oss.R&D tax incentiveThe R&D tax incentive is recognised when there is reasona

275、bl e assurance that the incentive wil l be received and al l attachedconditions wil l be compl ied with.There is currentl y proposed l egisl ation where the offset rate for the R&D tax incentive payment coul d be reduced to 41%.Theoutcome of the proposal is difficul t to predict and at this stage,th

276、e incentive has been cal cul ated in accordance with thecurrent l egisl ation.Any impact woul d not be considered material.Promotional and other rebatesRecognition of rebate accrual s at bal ance date requires management to exercise significant j udgement with respect to theamount of required accrua

277、l s which are based on customers sal es vol umes for the period as wel l as other contributions towardsthe promotional activities of customers.Provision for sales returnsThe provision for sal es returns requires a degree of estimation and j udgement.The l evel of the provision is assessed by takingi

278、nto account the recent sal es experience,the ageing and quantity of inventories at maj or cl ients.Lease termThe l ease term is a significant component in the measurement of both the right-of-use asset and l ease l iabil ity.Judgement isexercised in determining whether there is reasonabl e certainty

279、 that an option to extend the l ease or purchase the underl yingasset wil l be exercised,or an option to terminate the l ease wil l not be exercised,when ascertaining the periods to be incl udedin the l ease term.In determining the l ease term,al l facts and circumstances that create an economical i

280、ncentive to exercisean extension option,or not to exercise a termination option,are considered at the l ease commencement date.Factorsconsidered may incl ude the importance of the asset to the consol idated entitys operations;comparison of terms andconditions to prevail ing market rates;incurrence o

281、f significant penal ties;existence of significant l easehol d improvements;andthe costs and disruption to repl ace the asset.The consol idated entity reassesses whether it is reasonabl y certain to exercisean extension option,or not exercise a termination option,if there is a significant event or si

282、gnificant change in circumstances.Coronavirus(COVID-19)pandemicJudgement has been exercised in considering the impacts that the Coronavirus(COVID-19)pandemic has had,or may have,on the consol idated entity based on known information.This consideration extends to the nature of the products and servic

283、esoffered,customers,suppl y chain,staffing and geographic regions in which the consol idated entity operates.Other than asaddressed in specific notes,there does not currentl y appear to be either any significant impact upon the financial statementsor any significant uncertainties with respect to eve

284、nts or conditions which may impact the consol idated entity unfavourabl yas at the reporting date or subsequentl y as a resul t of the Coronavirus(COVID-19)pandemic.Incremental borrowing rateWhere the interest rate impl icit in a l ease cannot be readil y determined,an incremental borrowing rate is

285、estimated to discountfuture l ease payments to measure the present val ue of the l ease l iabil ity at the l ease commencement date.Such a rate is basedon what the consol idated entity estimates it woul d have to pay a third party to borrow the funds necessary to obtain an assetof a simil ar val ue

286、to the right-of-use asset,with simil ar terms,security and economic environment.33NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020NOTE 2 PARENT INFORMATIONThe fol l owing information has been extracted from the books and records of the parent and has been prepared in accordancewith A

287、ustral ian Accounting Standards.Contingent liabilitiesThe parent entity had no contingent l iabil ities as at 30 June 2020.Significant accounting policiesThe accounting pol icies of the parent entity are consistent with those of the consol idated entity,as discl osed in Note 1.NOTE 3 REVENUESTATEMEN

288、T OF FINANCIAL POSITIONASSETSCurrent assetsNon-current assets-Investments in subsidiaries-Loans to subsidiaries-Property,plant and equipmentTOTAL ASSETSLIABILITIESCurrent liabilitiesTOTAL LIABILITIESEQUITYIssued capitalRetained earningsTOTAL EQUITY2019$2020$11,545,8392,252,37435,381,52968,68049,248,

289、4221,473,1371,620,05651,361,909(3,733,543)47,628,36612,991,8152,252,37427,041,6855,72242,291,596639,106639,10641,621,32131,16941,652,490STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOMELoss after tax(3,764,712)(868,548)Total comprehensive loss(3,764,712)(868,548)2019$2020$Sales revenue:-Sa

290、le of goods(net discounts)-Sales returns-Provision for sale returns-Promotional costs and other rebates-Rendering of R&D services&consultationOther income:-Interest received-R&D tax incentive-Government grants-Government incentives-OtherTotal revenue2019$2020$5,451,436(473,549)(300,000)(1,829,492)2,

291、848,395-2,848,39576,1422,444,68586,478356,5001,6132,965,4185,813,8136,074,834-(711,153)5,363,68168,2955,431,976336,4672,027,07692,952198,289-2,654,7848,086,760NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020NOTE 4 OTHER EXPENSESNOTE 5 INCOME TAX EXPENSESThe economic entity has separa

292、te tax entities within Austral ia,the UK and the United States.Al l tax j urisdictions have tax l osses,which are not recognised in their books at 30 June 2019.The unused tax l osses hel d in the Austral ian group companies as at30 June 2020 are$19,815,439,$2,575,890(USD)was hel d in the US companie

293、s and a further$11,206(GBP)was hel d in the UKcompany.The tax l osses are avail abl e for offset against future taxabl e profits of the companies in which l osses arose withineach tax j urisdiction subj ect to certain conditions being met.The Directors have not brought to account a deferred tax asse

294、t to recognise the potential tax benefit of these tax l osses as anybenefit wil l onl y be obtained if:The economic entity meets the conditions for deductibil ity imposed by tax l egisl ation in rel ation to the same business test and continuity of ownership l aws;The economic entity derives future

295、assessabl e income of a nature and of an amount sufficient to enabl e the benefit from deductions for the l osses to be real ised;andNo changes in tax l egisl ation occur in future years that woul d adversel y affect the economic entity in real ising the benefit from the deductions for the l osses(i

296、n the event they qual ify to be util ised by the economic entity).352019$2020$(3,709,287)1,545,94526,4753,68119,717(672,486)2,785,955-(2,247,876)1,327,44726,338-34,273(557,446)1,417,264-The prima facie tax on the(loss)from ordinary activities before income tax is reconciled to the income tax as foll

297、ows:Prima facie tax payable on(loss)from ordinary activities before incometax at 27.5%Add tax effect of:-non-deductible R&D expense-entertainment-donations Less:tax effect of:-Tax effect of different company tax rate in USA 21%(FY19:21%)-R&D incentive receivableFuture income tax benefit not recognis

298、edOther expenses includes the following specific expenses:Insurance 281,516 195,776Educational and compliance 164,642 159,607Lab Consumables 33,471 82,992Software licences 172,423 114,526Provision for inventory obsolescence 895,000 35,000Telephone and internet 105,479 123,320Travel 415,195 384,57720

299、19$2020$NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020NOTE 6 CASH AND CASH EQUIVALENTSNOTE 7 TRADE AND OTHER RECEIVABLESPast due but not impairedCustomers with bal ances past due but without provision for impairment of receivabl es amount to$307,966.The consol idated entity did not

300、 consider a credit risk on the aggregate bal ances after reviewing the credit terms of customersbased on recent col l ection practices.The ageing of the past due but not impaired receivabl es are as fol l ows:2019$2020$808,500(25,000)783,5002,595,5233,379,0231,824,272(25,000)1,799,2722,014,4863,813,

301、758CurrentTrade receivablesLess:Allowance for expected credit lossOther receivablesTotal current receivables2019$2020$9,063,044-9,063,044(13,488,317)34,730961,003434,7351,253,032236,255744,817183,185(781,860)(10,422,420)3,441,9758,000,00011,441,975(8,174,096)8,992147,490(1,757,886)(1,353,998)11,667(

302、1,053,918)170,3011,684,871(10,316,577)Cash at bank and on handCash on depositTotal cash and cash equivalentsReconciliation of cash flow from operations with loss from ordinaryactivities after income taxLoss after income taxNon-cash flows in profitForeign exchange gains and lossesDepreciation and amo

303、rtisationChanges in assets and liabilities-(Increase)/decrease in receivables-(Increase)/decrease in prepayments-Increase/(decrease)in provisions-(Increase)/decrease in inventories-Increase/(decrease)in employee benefits-Increase/(decrease)payablesCash flows from operations2019$2020$1 to 2 months ov

304、erdue3 to 6 months overdueOver 6 months overdue75,762122,204110,000307,96631,80829,422-61,23036NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020NOTE 7 TRADE AND OTHER RECEIVABLES(CONTINUED)Impairment of receivablesThe consol idated entity has recognised a l oss of$9,631(2019:51,319)in

305、 profit or l oss in respect of impairment of receivabl esfor the year ended 30 June 2020.The ageing of the impaired receivabl es provided for above are as fol l ows:Movements in the provision for impairment of receivabl es as fol l ows:NOTE 8 INVENTORIESNOTE 9 OTHER ASSETS2019$2020$1 to 2 months ove

306、rdue3 to 6 months overdueOver 6 months overdue-9,97515,02525,000-25,000-25,0002019$2020$25,0009,631(9,631)25,00025,00063,860(63,860)25,000Opening balanceAdditional provisions recognisedReceivables written off during the year as uncollectableCurrentDeposits for stockPrepaymentsTotal current other ass

307、etsNon CurrentSecurity bonds and guaranteesTotal non current other assets2019$2020$146,359363,111509,470482,940482,940-1,616,1431,616,143482,845482,8452019$2020$264,6802,173,4562,438,136(965,000)1,473,136385,1831,902,7702,287,953(70,000)2,217,953CurrentRaw materialsFinished goodsLess:Provision for o

308、bsolescenceTotal inventories37NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020NOTE 10 PROPERTY,PLANT AND EQUIPMENT(a)Movements in carrying amountsMovement in the carrying amounts for each cl ass of property,pl ant and equipment between the beginning and the end of thecurrent financia

309、l year:NOTE 11 RIGHT OF USE ASSETSThe consol idated entity l eases l and and buil dings for its offices and warehouses under agreements of between two to five years with,in some cases,options to extend.The l eases have various escal ation cl auses.On renewal,the terms of the l eases are renegotiated

310、.AASB 16 was adopted using the modified retrospective approach.As such the comparatives have not been restated and arenot directl y comparabl e.Plant and equipment costLess accumulated depreciationLeasehold improvements-costLess accumulated amortisationOffice furniture&equipment costLess accumulated

311、 depreciationTotal property,plant and equipment2019$2020$595,356(361,232)234,124424,101(192,497)231,604565,796(439,106)126,690592,418547,349(303,062)244,287312,391(101,214)211,177489,644(313,405)176,239631,703Consolidated Group:Balance at 1 July 2018AdditionsDisposalsDepreciation expenseAmortisation

312、 expenseForeign currency translationCarrying amount at 30 June 2019Plant&Equipment$Total$LeaseholdImprovements$Office Furniture&Equipment$293,8414,380-(53,983)-49244,287437,774340,323-(126,471)(21,019)1,096631,70378,756153,440-(21,019)-211,17765,177182,503-(72,488)-1,047176,239Consolidated Group:Bal

313、ance at 1 July 2019AdditionsDisposalsDepreciation expenseAmortisation expenseForeign currency translationCarrying amount at 30 June 2020Plant&Equipment$Total$LeaseholdImprovements$Office Furniture&Equipment$244,28747,978-(58,153)-12234,124631,703243,075-(183,102)(91,283)(7,975)592,418211,177111,710-

314、(91,283)-231,604176,23983,387-(124,949)-(7,987)126,690ConsolidatedLeasehold propertiesLess:Accumulated depreciation-2,631,723(343,231)2,288,4922020$2019$NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020NOTE 12 TRADE AND OTHER PAYABLESNOTE 13 EMPLOYEE BENEFITSThe provision for empl oye

315、e benefits incl udes al l unconditional entitl ements where empl oyees have compl eted the requiredperiod of service and al so those where empl oyees are entitl ed to pro-rata payments in certain circumstances.NOTE 14 BORROWINGS(a)A debtor finance facil ity was establ ished with Scottish Pacific Bus

316、iness Finance.The facil ity is over a 24-month term with a discount charge of 8.04%and is for$2m and matures June 2021.(b)An insurance premium funding facil ity was establ ished with Hunter Premium.The facil ity is over a 12-month term with an interest rate of 7.56%39CurrentDebtor finance facility(a

317、)Insurance funding facility(b)Total current borrowings2019$2020$27,04867,17394,221929,53542,441971,9762019Debtor finance facility Insurance funding facility 2020Debtor finance facility Insurance funding facility OpeningBalance$464,59735,106499,703929,53542,441971,976ClosingBalance$929,53542,441971,9

318、7627,04867,17394,221CashOutflow$(5,487,062)(161,974)(5,649,036)(4,648,432)(247,401)(4,895,833)CashInflow$5,952,000169,3096,121,3093,669,000272,4183,941,418Reconciliation of borrowings balance arising from financing activitiesNon-Cash$-76,945(285)76,660CurrentProvision for annual leave Non CurrentPro

319、vision for long service leave2019$2020$503,931503,931172,243172,243389,319389,319103,670103,670CurrentUnsecured liabilities:Trade payablesAccrued expensesProvision for sales returnsSundry payables2019$2020$1,823,449840,466300,000253,9013,217,8162,549,418991,349-81,4253,622,19240NOTES TO THE FINANCIA

320、L STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020NOTE 15 PROVISIONSLease make goodThe provision represents the estimated costs to make good the premises l eased by the consol idated entity at the end of therespective l ease terms.Movements in provisionsMovements in provision during the current financial y

321、ear are set out bel ow:NOTE 16 LEASE LIABILITIESNOTE 17 OTHER LIABILITIESNon-CurrentProvision for lease make-goodTotal non-current provisions2019$2020$305,422305,42269,16769,167Lease Make Good$Carrying amount at the start of the yearAdditional provisions recognisedCarrying amount at the end of the y

322、ear69,167236,255305,422CurrentLease liabilityNon CurrentLease liability2019$2020$609,809609,8091,629,7901,629,790-2020Lease liabilitiesOpeningBalance$-ClosingBalance$2,239,5992,239,599CashOutflow$(558,592)(558,592)Additions$2,799,0242,799,024Reconciliation of balance arising from lease liabilitiesNo

323、n-Cash/Adjustment$(833)(833)Non CurrentDeferred lease liability2019$2020$-55,40155,40141NOTES TO THE FINANCIAL STATEMENTSFOR THE YEAR ENDED 30 JUNE 2020NOTE 18 ISSUED CAPITALMovements in ordinary share capitalProceeds were received for the conversion of 4,343,000 unl isted at 30c per option in June

324、2019 but the shares were issued on 1 Jul y 2019.Ordinary shares entitl e the hol der to participate in dividends and the proceeds on winding up of the parent entity in proportionto the number of shares hel d.At sharehol ders meetings each ordinary share is entitl ed to one vote when a pol l is cal l

325、 ed,otherwise each sharehol der hasone vote on a show of hands.Capital risk managementThe consol idated entitys obj ectives when managing capital is to safeguard its abil ity to continue as a going concern,so thatit can provide returns for sharehol ders and benefits for other stakehol ders and to ma

326、intain an optimum capital structure toreduce the cost of capital.In order to maintain or adj ust the capital structure,the consol idated entity may adj ust the amount of dividends paid tosharehol ders,return capital to sharehol ders,issue new shares or sel l assets to reduce debt.The consol idated e

327、ntity woul d l ook to raise capital when an opportunity to invest in a business or company was seen as val ueadding rel ative to the current companys share price at the time of the investment.The consol idated entity is not activel ypursuing additional investments in the short term as it continues t

328、o integrate and grow its existing businesses in order tomaximise synergies.The consol idated entity woul d al so l ook to raise capital if there is a need for additional funds for strategic(whether nutraceutical or R&D)or working capital requirements.Ordinary shares fully paid2019$2019Number41,621,3

329、2041,621,320211,021,667211,021,6672020Number269,205,830269,205,8302020$51,361,90951,361,909Total$IssuePrice$No.ofSharesDateDetailsBalanceIssue of shares NCIExercise of options proceeds*BalanceExercise of options*Share Issue Placement Share Issue Placement Share issue costs,net of taxBalance30 June 2

330、0188 March 201930 June 201930 June 20191 July 201923 December 201919 June 202030 June 202039,163,4201,155,0001,302,90041,621,320-5,000,0005,397,603(657,014)51,361,9090.385-$0.28$0.15208,021,6673,000,000-211,021,6674,343,00017,857,14335,984,020-269,205,83042NOTES TO THE FINANCIAL STATEMENTSFOR THE YE

331、AR ENDED 30 JUNE 2020NOTE 19 RESERVESForeign Currency Transl ation Reserve:The foreign currency transl ation reserve records exchange differences arising ontransl ation of overseas control l ed subsidiaries in the United States and United Kingdom.Movements in reservesMovements in each cl ass of rese

332、rve during the current and previous financial year are set out bel ow:NOTE 20 SHARE-BASED PAYMENTSNo share options were granted during the financial year.Set out bel ow is the summary of the options:An empl oyee share option pl an has been establ ished by the consol idated entity and approved by sha

333、rehol ders at a generalmeeting,whereby the consol idated entity may,at the discretion of the board of Directors,grant options over ordinary sharesin the company to certain staff of the consol idated entity.The options are issued for nil consideration and are granted inaccordance with performance guidel ines establ ished by the Nomination and Remuneration Committee.No options havebeen issued under