ANTEOTECH LTD - Annual Report 2011

Anteo Diagnostics Limited

ABN: 75 070 028 625

Consolidated Entity

Financial Statements for the year ending 30 June 2011

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

ANNUAL REPORT 30 JUNE 2011

*Contents*			*Page*	*Contents*	*Page*
Corporate Directory			1	Consolidated Statement of Changes in Equity	27
Chairman’s Report			2	Consolidated Statement of Cash Flows	28
CEO’s Report			3	Notes to the Financial Statements	29
Corporate Governance Statement			7	Directors’ Declaration	52
Directors’ Report			14	Auditor’s Independence Declaration	53
Consolidated Income Statement			25	Independent Audit Report	54
Consolidated Statement Position	of	Financial	26	Additional ASX Information	56

CORPORATE DIRECTORY

Directors	Mark Bouris	Non-Executive Chairman
	Geoffrey Cumming	CEO, Executive Director
	Richard Martin	Non-Executive Director
	Sam Andersen	Non-Executive Director
Company Secretary	Shane Hartwig
Registered Office	4/26 Brandl Street, Eight	Mile Plains QLD 4113
Mailing Address	4/26 Brandl Street, Eight	Mile Plains QLD 4113
E-mail	[email protected]
Website	www.anteodx.com
Legal Advisors	ClarkeKann Lawyers
	300 Queen Street, Brisbane QLD 4000
Auditors	Grant Thornton
	102 Adelaide Street, Brisbane QLD 4000
Patent Attorneys	Davies Collison Cave
	1 Nicholson Street, Melbourne Victoria 3000
Share Registry	Registries Limited
	Level 2, 28 Margaret Street, Sydney NSW 2000
Insurance advisors	Marsh Pty Limited
	123 Eagle Street, Brisbane QLD 4000
	Austcover Pty Ltd
	99 Melbourne Street, South Brisbane 4101
Bankers	Australia and New Zealand Banking Group Limited
	3 Sherwood Road, Toowong QLD 4066

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

CHAIRMAN’S REPORT

Dear Shareholders,

In August of this year I was delighted to accept the appointment as Non-Executive Chairman of Anteo Diagnostics Limited at such an exciting stage in the company’s growth and development.

I believe that the Mix&Go[tm] technology has considerable potential, exemplified by the fact that the Company has signed two agreements with leading global healthcare companies and the extensive ongoing interest across different market segments.

The Healthcare sector has always been of interest to me and was a reason I joined the Board of Anteo. As shareholders are no doubt aware, the Mix&Go[tm] technology helps in the earlier detection of disease and consequently broadens the range of available treatment options available for many illnesses. Mix&Go[tm] can therefore potentially improve the health and wellbeing of possibly millions of people. This is a unique opportunity for Anteo, and I believe my commercial and business skills will be valuable in helping to realise the value of the Mix&Go[tm] technology for the benefit of Anteo’s shareholders.

I am also very encouraged by the skills and capabilities of the management team that Anteo has in place, and Geoff Cumming and his team have the full confidence of the Board.

My Board colleagues and I look forward to continuing the ongoing work with Geoff and his team to ensure our strategies and processes provide the best opportunity for Mix&Go to deliver its considerable potential for the benefit of the Company and its stakeholders.

I would like to take this opportunity to thank James Henderson who retired as Chairman in May of this year. James was instrumental in recapitalising Anteo and giving the company the financial flexibility to pursue its growth opportunities.

I would like to thank our shareholders for their continued support in what has been a year of real progress for Anteo. I would also like to acknowledge our partners and customers for their confidence in the company, and also thank our loyal and dedicated staff for their hard work and commitment during the year. Anteo is in excellent shape.

Mr. Mark Bouris Non-Executive Chairman 29[th] August 2011

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

CEO’S REPORT

Dear Shareholders,

Financial year 2011 has been a year of significant progress for Anteo Diagnostics Limited, and I am pleased to report that we have established a solid foundation for future growth.

The Company has taken a number of key steps during the year which position the Company well to execute its business objectives.

STABLE FINANCIAL PLATFORM

In February, we raised $5.1m through the exercise of 78,845,313 options. Over 96% of the options issued were exercised, taking cash on hand to $6.85m as at 30 June 2011. On our current burn rate, and excluding any future revenues, Anteo has sufficient funds until the end of CY2013.

MIX&GO[TM] MARKET-READY PROGRAMME

In my first report to shareholders in 2009, focus was given to Company programs to better understand the Mix&Go[TM] technology its market applications and improvement of internal skill sets. This ongoing task delivers continuous improvement of our processes and capabilities to ensure that we are able to control the critical facets of our business. By doing so we provide you, our shareholders, with assurance that Mix&Go[TM] will be given the best opportunity for a successful commercial outcome.

With this objective in mind, resources are allocated with reference to a matrix that ranks the most commercially valuable targets and ensures that they receive prioritisation .

I am pleased to report the Company has made significant improvements over the last year, so that:

We have total confidence that all samples will perform exactly the same in a client’s laboratory as it does in ours.
The ease of use, stability, sensitivity and scalability of Mix&Go[TM] is proven across a broad range of beads formats and reagents.
Optimisation of Mix&Go[TM] for different client applications is such
that sensitivity levels for immunoassays are equivalent to those attained in Molecular diagnostics; and
that troublesome bead batches used by clients are performing uniformly with the use of Mix&Go[TM] .
Our scientific team is broadly recognised by clients for the quality of their work.
Our client management system has evolved to the stage whereby our turnaround times are quick and responsive to client needs, and provides us with ongoing interactions at different levels to ensure Mix&Go[TM] assessment is being conducted properly and in a reasonable timeframe.
Our business development system enables us to monitor and assess the progress with clients, their viability as customers for us and examine the key drivers within their organisations.

COMMERCIAL AGREEMENTS PROVIDING CREDIBILITY

In February, Bangs Laboratories (‘Bangs’) licensed their second product using the Mix&Go[TM] technology. Bangs’ implementation of the technology for their Silica Bind-IT product was significant, as it strengthened our partnership with a leading global company in the healthcare space, and confirmed the market acceptance of the technology.

Whilst the commercial benefits from our relationship with Bangs are yet to fully materialise, we are now working hard with the company to promote the benefits of the Mix&Go[TM] technology to their customers.

Our agreement with Merck Chimie SAS (‘Merck’) is a very good point of reference for Anteo as it positions Mix&Go[TM] as a credible and proven technology. We expect that Merck’s recent acquisition of Millipore, a major company in the separations and purifications market, will help facilitate our entry into that market segment.

In March, the European Patent Office issued confirmation that it intended to grant the ‘Generation of Surface Coating Diversity’ patent to Anteo. We are expecting this patent will be granted in due course and this is a

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

CEO’S REPORT

crucial development in protecting the intellectual property that led to the discovery of the Mix&Go[TM] technology.

We continue to be encouraged by our growth pipeline, Anteo has over 60 different companies assessing the Mix&Go[TM] technology. The feedback from these companies has been extremely positive, instilling further confidence and optimism in Mix&Go[TM] .

As previously mentioned, Anteo is exposed to many different markets for which Mix&Go[TM] can be effectively used, however, after spending considerable time analysing potential size, returns and likely challenges, we continue to focus our primary attention on the In Vitro Diagnostics (IVD) market.

These are the companies that develop, manufacture and sell the instruments in pathology laboratories and the “test kits” that are used on those instruments. They operate in a highly regulated environment and need to meet the exacting standards of regulatory authorities such as the US Food and Drug Administration (FDA) and the European Medicines Association (EMEA).

Importantly, throughout the year we have learnt that the major global IVD players undertake extensive due diligence assessing our technology. We have been consistently informed that if these potential customers implement Mix&Go[TM] , they will be doing so across their range of assays. This broad and significant implementation helps provide an understanding and insight into the cautious and patient nature of the negotiations with the IVD companies. Anteo remains confident that agreements will materialise in due course.

BOARD RENEWAL PROGRAM

A significant amount of time has been spent in 2011 to ensure the appropriate Board and senior management team is in place to drive the company’s growth and development as we move forward. Ms. Sandra (Sam) Andersen was appointed Non-Executive Director in May. Most recently, Sam was the Managing Director of ASX-listed Eyecare Partners Limited, a company with 41 optometry businesses and a staff of 300 people. Sam has also held senior roles in a number of listed technology companies, has held senior executive positions at ANZ, NAB and Commonwealth Banks and is well networked within the finance community. Sam’s experience as a company director and operational manager in the ASX-listed healthcare sector will add a great deal of value to Anteo.

Our Board renewal program has continued into the current financial year where we announced that Mr. Mark Bouris was appointed as Non-Executive Chairman of Anteo. Mark has over 25 years experience in finance and corporate development and as Anteo’s commercial operations develop, Mark’s proven record in these early growth phases and his guidance during this period will be a valuable asset.

Our Board renewal program remains ongoing.

STRENGTHENING OUR TEAM

During the year Anteo appointed two new scientists to work on the continued development of the Mix&Go[TM] technology and continue the high level of responsiveness to requests from our collaborators.

We were also fortunate to secure the services of Dr Tina Baumgartner, a highly regarded and well networked professional in the United States (US) healthcare sectors. Tina has had considerable success in a short period of time identifying smaller IVD companies, Life Science companies active in clinical research, Point of Care companies and companies in the Separations Market that would benefit from access to Mix&Go™. Her activities have significantly increased our opportunity pipeline in these very large markets.

Anteo is in the process of recruiting three additional scientists which will give us the necessary skills base to further develop potential opportunities. Anteo now has a team of 12 scientists and research and development professionals based in the state of the art research facility in Brisbane Technology Park, QLD.

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

CEO’S REPORT

OUTLOOK

Anteo is well placed with a strong cash position, a much more commercially experienced Board, sound business management processes, a strong scientific skills base and a growing pipeline of licensing opportunities.

I would also like to join our Chairman to take this opportunity to thank our staff for their hard work and commitment during the year, our customers and partners and loyal shareholders for their continued support.

Geoff Cumming Chief Executive Officer 29[th] August 2011

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

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ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

CORPORATE GOVERNANCE

The Board of Anteo Diagnostics Limited aims for best practice in the area of corporate governance and supports the governance practices contained in the ASX Corporate Governance Council’s (“ASX CGC”) Corporate Governance Principles and Recommendations (2[nd] edition).

The statement below indicates the degree of conformance to the ASX CGC recommendations as at the date of this report.

Structure of the Board

Directors at the date of this annual report and their skills, experience and expertise relevant to the position they hold are on page 14 in the Directors’ Report.

The Board of Directors should comprise a majority of Independent Directors. When determining whether a Non-Executive Director is independent the Director must not fail any of the following:

Less than 5% of Company shares are held by the Director and any entity or individual directly or indirectly associated with the Director.
Has not held an executive position within the Company within the last three years.
Has not held a position as a principal in any firm providing material professional advice to the Company within the last three years.
Has no material contractual relationship with the Company or Group other than being a Director.

Anteo Diagnostic’s Board consists of two non-independent and two independent directors. The Company believes that although it does not meet the technical requirements of the ASX CGC in relation to the majority of the Board being independent, in practical terms it considers the majority of the Directors are independent.

Richard Martin provides the Company with a supervisory CFO services which under the listing rules renders him non-independent. Richard brings, in all other aspects, an independent role to the board of directors and the decisions that the Board makes. The Anteo Diagnostic’s Board, in general, is independent in thought and judgement and aims in all cases to add value.

The ASX CGC recommendations require the materiality threshold that was used to determine whether a Director is independent to be disclosed. Notwithstanding there are no contracts outside those disclosed in the Annual Report, a level of materiality of 5% of the Independent Directors’ annual income has been set for any non-remuneration based consulting or other financial arrangements.

The ASX Corporate Governance Principles recommend that the Chairperson should be an independent director. The Chairman of Anteo Diagnostics is an independent director.

Directors may access or request such information as they consider necessary to diligently fulfil their responsibilities. Independent professional advice may be sought on Company related matters, at the Company’s expense, subject to prior approval by the Chairman.

Directors are required to comply with their legal, statutory and other duties and obligations when acting in their capacity as Directors of the economic entity, including acting in good faith and with due diligence and care. Directors are required to avoid conflict of interests with the companies within the economic entity. Any actual or potential conflict of interest is required to be disclosed immediately to the Board and those conflicted parties do not take part in the decision making processes regarding the conflict of interest.

The Board annually revisits its objectives and duties and evaluates the effectiveness of its performance taking these into account. Informal evaluations were undertaken during the year, however, a formal evaluation was not undertaken due to changes in the board composition. A formal evaluation will be undertaken this year. Remuneration of Directors, including retirement benefits (superannuation) and entitlements under equity-based remuneration schemes are set out in the Directors’ Report under “Remuneration Report”.

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

The Executive Director and Non-executive Directors annually review the Company’s requirements for skills and experience within the board of Directors, and consider the skills and experience of existing Directors. Should any skill gaps be evident, the Nomination & Remuneration Committee will make recommendations to the Board taking into account:

The size of the Board will be limited to encourage efficient decision making.
The selection process will be formal and transparent.
When a new Director is required, the current Directors (with the assistance of external advisors if necessary) will identify potential candidates who have the following attributes:
are able to contribute to the ongoing effectiveness of the board
are able to exercise sound business judgment
are able to think strategically
have demonstrated leadership ability
have high levels of professional skill
have appropriate personal skills.
Nominees’ competencies and qualifications.
A talented and diverse workforce is a key competitive advantage and Anteo is committed to seeking out and retaining the finest human talent to ensure top business growth and performance.

Performance evaluation of executive Directors and executives was carried out during the reporting period and was in accordance with the process disclosed.

The matters reserved for the Board and delegated to senior executives, and a copy of the Board Charter are publically available on the Company’s website at www.anteodx.com.

Ethical standards and corporate code of conduct

The Board has adopted a corporate code of conduct to ensure that each of its members and all employees are aware of the requirement to adhere to best principles of ethical standards which encompass:

The management of conflicts of interest to ensure that Directors and executives act in the best interests of all stakeholders in the business.
Compliance with all laws and regulatory requirements.
Adoption of acceptable standards of custodianship and use of Company assets.
Ensuring that all Company information remains confidential except where disclosure is either authorised by the Board or legally mandated.
Enforcement of accountabilities and the fostering of an environment in which all officers and employees can identify and bring to the attention of Directors any unlawful or unethical behaviour.

A full copy of the Company’s Code of Conduct is publically available on the Company’s website at www.anteodx.com.

The Board has adopted a Diversity Policy which is publically available on the Company’s website at www.anteodx.com.

Anteo Diagnostics recognises its talented and diverse workforce as a key competitive advantage. Our business success is a reflection of the quality and skill of our people. Our diversity policy encompasses differences in ethnicity, gender, language, age, sexual orientation, religion, socio-economic status, physical and mental ability, thinking styles, experience, and education and our policy encompasses both recruitment and management of human resources on the basis of diversity.

Anteo Diagnostics is committed to seeking out and retaining the finest human talent to ensure top business growth and performance and to employing the best people to do the best job possible at all levels within the Company.

Anteo Diagnostics’ workforce is diverse across many dimensions.

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

EthnicDiversity
Total		Australian	European	Asian	Americas
13		4	2	5	2
Gender Diversity		Male	Female
Total Staff		6	7
Senior Executives		3
Non-ExecutivesDirectors		2	1
Languages Spoken: English, Portuguese, Cantonese, Malay, Japanese, Latvian, Russian, German, Dutch
Education Diversity
Total	PhD		Masters	Bachelor	OtherQualifications
13	4			8	1

Anteo is committed to maintaining diversity within its workforce at all levels, and to this end sets a minimum target of 15% of women in board and senior executive positions to encourage gender diversity. Such targets are important but the overriding factor will be the employment of the best person for the role.

Audit & Risk Committee

The Company has a formally constituted Audit & Risk Committee comprising two Non-Executive Directors. The Audit & Risk Committee must meet at least twice each reporting year. Other Directors and executives may be invited to attend meetings at the discretion of the Chairman of the Committee.

The composition of the Audit & Risk Committee and its conformance to ASX CGC Principle 4 is as below:

Rec.No	Description	Conform	Comments
4.1	The Board should establish	Yes	3 Audit & Risk Committee meetings were held during the
	an Audit Committee		financial year
4.2	Audit committee should		Mrs Sandra Andersen
	comprise:		- Independent
			- Attended 1 of 1 meetings eligible to attend
	Only Non-Executive	Yes
	Directors		Mr Richard Martin
			– Non-Independent
			- Attended all 3 meetings
			Ms Lara Iacusso (resigned 25/2/2011)
			– Independent
			- Attended 2 of 2 meetings eligible to attend
	A majority of Independent	No	Given the background and financial acumen of the
	Directors		committee members, it is the Board’s view that these
			two Directors should form the Audit & Risk Committee.
	An independent	Yes
	chairperson, who is not
	chairperson of the Board

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

Rec.No	Description	Conform	Comments
4.2	At least three members	No	The Audit & Risk Committee has only two members. It
cont’d			is the Board’s view that two members are adequate to
			perform the duties required by the Audit & Risk
			Committee.
4.3	Audit Committee to have	Yes	The Audit & Risk Committee Terms of Reference is
	formal charter		available on the Company website at www.anteodx.com .

The Company requests the external auditor to attend the Annual General Meeting and to be available to answer shareholder questions about the conduct of the audit and preparation and content of the auditor’s report. The Audit & Risk Committee annually revisits its objectives and duties and evaluates the effectiveness of its performance taking these into account. Informal evaluations were undertaken during the year, however, a formal evaluation was not undertaken due to changes in the board composition. A formal evaluation will be undertaken this year.

The Audit & Risk Committee is responsible for the selection and recommendation of the Company’s external auditor. The Audit & Risk Committee has recommended the external audit service be out to tender on a triannual basis.

A full copy of the Audit & Risk Committee Terms of Reference is made publically available on the Company website at www.anteodx.com.

Continuous Disclosure

The Company’s shares are traded on the ASX and the Company is subject to the ASX Listing Rules.

The responsibility for ensuring that the continuous disclosure requirements of ASX Listing Rule 3.1 are complied with is vested in the Board and the Company Secretary.

All meetings of the Board incorporate a standing agenda item advising the Directors of any disclosure that is required prior to the next scheduled meeting. Confirmation is provided of the release of any items since the previous meeting.

In addition the Directors are asked to consider whether they have become aware of information concerning the Company that could reasonably be expected to have an impact on the price or value of the Company’s securities.

This includes new information that has arisen or, if necessary, amendments to information previously disclosed to the market.

The responsibility for deciding what information is disclosed to the market rests with the Chairman of the Board. Where appropriate all disclosure articles are approved by the Board of Directors prior to release to the market.

All Directors and executives have been made aware of their obligations to ensure that the Company complies at all times with the ASX Listing Rules.

A full copy of the Company’s continuous disclosure policy is made publically available on the Company’s website, www.anteodx.com.

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

Business Risk Management

The Board has adopted a formal risk management policy.

The identification and management of risk inherent to the operation of the economic entity is managed by the Directors on a day-to-day basis. Where necessary individual Directors do, through the forum of regular Board meetings, bring matters before the Board collectively who will review, evaluate and deal with any matters arising in a manner that serves the best interests of the Company and its shareholders. This is in addition to the role of the Audit and Risk Committee which ensures the Company maintains effective risk management and internal control systems.

The identification and effective management of risks is critical in achieving the Company’s corporate goals. The Company focuses on effective management of the following material risks:

business risks.
operating risks.
financial risks.
organisational risks.
corporate risks.
occupational health and safety risks.

Anteo Diagnostics Limited believes that risk should be managed on a continuous basis and optimises its ability to achieve business objectives by maintaining a system that assists appropriate management and provides early warning of risks.

The Company identifies, assesses, monitors and manages risk throughout the organisation in accordance with the Company's Risk Management Policy which is made publically available on the Company’s website, www.anteodx.com.

The Board has required management to design and implement a risk management and internal control system to manage the entity’s material business risk and continually receives reports from the executive team as to the effectiveness of the Company’s management of its material business risks. The Board has received assurance from the Chief Executive Officer and Finance Director that the declaration on page 52 of the annual report provided in accordance with section 295A of the Corporations Act is founded on a sound system of risk management and internal control and that the system is operating effectively in all material respects in relation to financial reporting risks.

Shareholder Communication

The Company communicates with shareholders through the following media:

All announcements that may affect the price of the Company’s securities are released to the market through the ASX.
Following this all announcements are placed onto the Company’s website: www.anteodx.com.
Any press releases are also placed on the Company’s website www.anteodx.com.
It is Company policy that updates are made available to all shareholders at regular intervals.
It is Company policy to encourage shareholder attendance at the annual general meeting.

A full copy of the Company’s policy on shareholder communication is made publically available on the Company’s website, www.anteodx.com.

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

Trading in Company Shares

The Company’s policy regarding Directors, officers and employees trading in its securities, is set by the Board of Directors. The policy restricts Directors, officers and employees from acting on material information until it has been released to the market.

The period in which Directors, officers and employees can deal in the Company’s securities provided the market is fully informed, is not later than 30 days, after the release of each quarterly cash flow report, the yearly or half yearly profit announcement to the ASX, any disclosure document offering securities in the Company, and after the Annual General Meeting of the Company.

Outside this period, in the current environment by which companies are required to maintain a continuously informed market, Directors, officers or employees may buy or sell subject to specific approval by the Chairman or by the Board.

A full copy of the of the Company’s policy for trading in the Company’s shares is publically available on the Company website, www.anteodx.com.

Nomination & Remuneration Committee

The Company’s Constitution contains specific provisions for the remuneration of Non-Executive Directors. There has been no change to these specific provisions since the incorporation of the Company.

The Board has a formally constituted a Nomination & Remuneration Committee comprising only NonExecutive Directors. The Nomination & Remuneration Committee meets as required during the year. Other Directors and executives may be invited to attend meetings at the discretion of the Chairman of the Committee. The composition of the Nomination & Remuneration Committee and its conformance to ASX CGC Principles 2.4 and 8.1 is as below:

Rec.No	Description	Conform	Comments
2.4 &	Remuneration
8.1	Committee should
	comprise:
	A minimum of three	No	The Nomination & Remuneration committee only has two
	members		members. It is the Board’s view that two members are
			adequate to perform the duties required by the
			Nomination & Remuneration Committee.
	A majority of	Yes	Mr Mark Bouris (Appointed 1/8/2011)
	independent Directors		- Independent
			- Attended 0 of 0 meeting eligible to attend
			Mr Richard Martin
			- Non-Independent
			- Attended 3 of 3 meetings
			Ms Lara Iacusso (Resigned 25/2/2011)
			- Independent
			- Attended 0 of 0 meeting eligible to attend
			Mr James Henderson (Resigned 16/5/2011)
			- Non-Independent
			- Attended 3 of 3 meetings eligible to attend

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

Description	Conform	Comments
A chairperson who is	Yes	Mr Mark Bouris
an independent
Director

The Nomination & Remuneration Committee has approved a long-term incentive component for the executive and senior management remuneration packages (equity based). The policy includes the prohibition on recipients entering into transactions in associated products which limit the economic risk of participating in unvested entitlements under an equity based remuneration scheme.

The Director’s attendance at meetings of the committee is contained on page 22 of the Annual Report.

The Committee annually revisits its objectives and duties and evaluates the effectiveness of its performance taking these into account. Informal evaluations were undertaken during the year, however, a formal evaluation was not undertaken due to changes in the board composition. A formal evaluation will be undertaken this year. A description of the policy for the nomination and appointment of directors and a copy of the Nomination & Remuneration Committee Charter is publically available on the Company’s website, www.anteodx.com.

Remuneration Policies

The Company’s policy for remuneration and performance evaluation of Directors and executives has been stated in the Directors’ Report under “Remuneration Report”.

There are no schemes for retirement benefits, other than superannuation, for any Director.

Other Information

The Company’s corporate governance practices and policies are publicly available at the Company’s registered office. These policies have also been posted on the Company’s website (www.anteodx.com).

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

Your Directors present their report on the Company and its controlled entity for the financial year ended 30 June 2011.

DIRECTORS

Persons holding the position of Directors at any time during or since the end of the year are:

Mr Mark Bouris Appointed on 1 August 2011 Dr Geoffrey Cumming Mr Richard Martin Mrs Sandra Andersen Appointed on 16 May 2011 Mr James Henderson Resigned on 16 May 2011. Ms Lara Iacusso Resigned on 25 February 2011. Dr. Robert Gilmour Resigned on 3 November 2010.

Directors have been in office since the start of the financial year to the date of this report unless otherwise stated.

The Directors of the Company at the date of this report are set out below, together with details of their qualifications, experience and interests in the Company.

Mr Mark Bouris MCom

Chairman

Mark Bouris is one of Australia’s most well respected businessmen, with a career that spans three decades in the financial services industry. He is the Co-founder and Chairman of Yellow Brick Road Limited and Chairman of TZ Limited. Mark is the author of 'Wealth Wizard' and 'The Yellow Brick Road to Your Financial Security', and he writes a number of financial columns for some of Australia’s most recognised publications. He’s a board member of the Sydney Roosters, an adjunct professor at the University of NSW. Previous directorships include Executive Chairman Wizard Home Loans, trustee of the Powerhouse Museum NSW and Chair of the Federal Government's expert group on consumer protection in electronic commerce.

Mr Bouris was appointed to the Board in August 2011.

Responsibilities: Chairperson of Nomination & Remuneration Committee.

Director’s Interests: NIL

Dr Geoffrey Cumming B.App.Sc, B.Sc.(Hons.), Chief Executive Officer - Executive Director MBA, PhD, MAICD

Dr Cumming has over 20 years experience in the healthcare and biotechnology market. Geoff’s roles have progressed from pure research to sales and marketing roles through to Managing Director level and Board seats. Previously Managing Director of Roche Diagnostic Systems – Oceania Regional Centre, where he transformed a loss making business to one achieving over 30% compound annual growth over a four year period and the highest profitability levels in Roche’s global organisation. Geoff was also Managing Director and CEO of an Australian based biotechnology company commercialising a range of products in cancer diagnosis and treatment. During his tenure he was responsible for taking research from Sydney University through to product registration. This involved capital raising, managing Intellectual Property, investor relations and forging links with relevant international partners.

Dr Cumming has been a Director of Anteo since April 2009 and is a Non-Executive Director of ASX listed Medical Australia Limited.

Responsibilities: Chief Executive Officer of the Company

Director’s Interests: 6,000,000 ordinary fully paid shares

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

2,500,000 options (exercise price of 2 cents, expiry date of 30/9/2012) 13,000,000 options (exercise price of 7 cents, expiry date of 8/11/2014; 3,250,000 of these options are vested and the remainder vest on an annual basis upon the condition that the movement of share price of the Company is positive and in the top 50% of the healthcare sector).

Mr Richard Martin BBus

Non-Executive Director

Mr Martin holds a Bachelor of Business. He practised as a Chartered Accountant for 16 years, 11 as a partner in a medium sized Sydney practice. He has considerable experience both inside and advising corporate entities, his work has included complex business structuring and financing, the establishment of international hotels from conception, the public listing of resource companies, the management of foreign currency loan portfolios, establishing and operating start up technology companies and the negotiation and implementation on the purchase and sale of enterprises.

He has been a Director of Anteo since September 2005.

Responsibilities: Member of the Audit & Risk Committee and Nomination & Remuneration Committee.

Director’s Interests: 1,400,000 options (exercise price of 7 cents, expiry date of 8/11/2014; 350,000 of these options are vested and the remainder vest on an annual basis upon the condition that the movement of share price of the Company is positive and in the top 50% of the healthcare sector).

Mrs Sandra (Sam) Andersen LLB, CPA, FFinsia, FAICD Non-Executive Director

Sandra (Sam) Andersen was appointed to the board in May 2011, is a Certified Practicing Accountant, and holds a Bachelor of Laws. She is a Fellow of Finsia and the Australian Institute of Company Directors.

Sam is a Director and Chair of the Audit and Risk Committee for Rural Finance Corporation Limited, a Director and Chair of the Audit and Risk Management Committee for Victorian Rail track, and Director and Chair of the Audit Committee for Grain Growers Limited.

She began her career with a law degree and subsequently held senior executive positions with ANZ Bank, Commonwealth Bank of Australia and National Australia Bank. Following a career change from banking and finance into the information technology and health industry sectors, Ms Andersen was the Chief Financial Officer at Lumacom Ltd and Chief Operating and Financial Officer of MultiEmedia.com Ltd. She led the initial public offering for, and became the Managing Director of, Eyecare Partners Limited, a company which trebled in size in its first 2 years of operation. Her previous directorships include Eyecare Partners Ltd.

Responsibilities: Chairman of the Audit & Risk Committee.

Director’s Interests: Nil

Dr Robert Gilmour	Resigned 3 November 2010
Ms Lara Iacusso	Resigned 25 February 2011
James Henderson	Resigned 16 May 2011

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

COMPANY SECRETARY

The position of Company Secretary has been held by Mr Shane Hartwig since 24 May 2010. Mr Hartwig’s experience is set out below.

Mr Hartwig is a Certified Practising Accountant and Chartered Company Secretary and holds a Bachelor of Business degree, majoring in Accounting and Taxation from Curtin University of Technology in Western Australia.

Mr Hartwig is involved in the areas of IPOs, capital raisings, prospectus and information memorandum preparation and project management, company assessments and due diligence reviews, mergers and acquisitions and providing general corporate advice and is currently Company Secretary of ASX listed GLG Corp Limited and Forge Resources; and a Non Executive Director of ASX listed Uran Limited. Mr Hartwig has over fifteen years experience in the finance industry both nationally and internationally with exposure in both the debt and equity capital markets.

PRINCIPAL ACTIVITIES

The principal activities of the Company in the course of the year were the development and commercialisation of specialised surfaces used in life sciences, and the research & development of surfaces for specific binding of proteins (“abiotics”). The Company is applying capability in surfaces and binding of proteins to the development of invitro diagnostic tests.

There were no significant changes in the nature of the Company’s principal activities during or after the end of the financial year.

CONSOLIDATED OPERATING RESULT

The net consolidated operating loss of the economic entity for the financial year, after providing for income tax, amounted to $2,222,462 compared with a loss for the 2010 year of $2,255,405

As at 30 June 2011, the Company maintained cash reserves of $6,863,593 (2010: $1,425,894) which will be used in the further development and commercialisation of Anteo Diagnostics Limited’s proprietary technology.

DIVIDENDS PAID OR RECOMMENDED

No dividend has been paid during the year and the Directors do not recommend payment of a dividend.

REVIEW OF OPERATIONS

The review of operations is set out in the Chairman’s Letter and CEO Report above.

AFTER BALANCE DATE EVENTS

There are no after balance date events that the Directors believe should be reported to shareholders, except that the Directors have resolved to issue 9,600,000 options exercisable at $0.12 each subject to shareholder approval expiring in October 2015.

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

FUTURE DEVELOPMENTS

Going forward the Company will focus on progressing its business strategy in the diagnostic market place.

ENVIRONMENTAL ISSUES

Anteo is licensed under the Queensland Health (Drugs and Poisons) Regulations 1996 for the use and storage of sodium cyanide.

REMUNERATION REPORT (AUDITED)

This report details the nature and amount of remuneration for each Director of Anteo Diagnostics Limited, and for the executives receiving the highest remuneration.

Remuneration Policy

The Board’s policy for determining the nature and amount of remuneration for Non-executive Directors and Executive Directors and Senior Executives (collectively Executives) of the economic entity is as follows:

Directors and Executives receive a superannuation guarantee contribution required by the Government, which is currently 9%, and do not receive any other retirement benefits.

All remuneration paid to Directors and Executives is valued at the cost to the Company and expensed. Shares (if any) attained by Directors and Executives are valued as the difference between the market price of those shares and the amount paid by the Director or Executive. Options are valued using standard methodologies set out in Notes 1(r) and 5 of the Financial Statements. The Company’s policies prohibit Directors and Executives entering into transactions in associated products which limit the economic risk in relation to securities and this policy is enforced.

Executive Director and Executives (Executives)

The remuneration policy of Anteo Diagnostics Limited currently consists of a base salary and in some cases the consideration of a short term cash incentive, and a long term incentive through the issue of options at the Board’s discretion. The Board believes the policy is appropriate as it repositions itself in the market, aligning Executive objectives with shareholder and business objectives.

The remuneration policy, setting the terms and conditions for the Executives was developed by the Nomination & Remuneration Committee, and approved by resolution of the Board. All eligible Executives receive a base salary and superannuation with options issued at the discretion of the Board. The Board of Directors, excluding Executive Directors, review Executive packages annually by reference to the economic entity’s performance, Executive performance and comparable information from industry sectors and other listed companies in similar industries. Executive performance is evaluated based on achievement of Business Plan and objectives set by the Board. Performance evaluation of Executives was carried out during the reporting period, in accordance with the remuneration policy.

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

Non-Executive Directors

The Board policy is to remunerate Non-Executive Directors at market rates for comparable companies for time, commitment and responsibilities. The Nomination & Remuneration Committee determines payments to the Non-Executive Directors and reviews their remuneration annually, based on market practice, duties and accountability. Independent external advice is sought when required. Any changes to the maximum aggregate amount of fees that can be paid to Non-Executive Directors is subject to approval by shareholders at the Annual General Meeting. Fees for Non-Executive Directors are not linked to performance of the economic entity. However to align Directors’ interests with shareholder interests, the Directors are encouraged to hold shares in the Company and are able to participate in the employee share option plan. Non-Executive Directors receive a superannuation guarantee contribution required by the Government, which is currently 9%, and do not receive any other retirement benefits.

Performance Based Remuneration

As part of each Executive’s remuneration package there is a performance based component, consisting of key performance indicators (“KPIs”) which can affect the vesting of options that have been granted. The intention of this programme is to facilitate goal congruence between Executives with that of the business and shareholders. The KPIs are set with a certain level of consultation with Non-executive Directors and Executives to ensure “buy-in”. The measures are particularly tailored to the areas each Executive is involved in and has a level of control over. The KPI’s target areas the Board believes hold greater potential for group expansion and profit.

Company Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration

During the financial year Dr Geoff Cumming was issued 13 million options pursuant to shareholder resolution. These options form part of the Long Term Incentive component of his salary package and are subject to defined conditions designed to match Company performance with vesting. The criteria for vesting are measured on an annual basis and require a positive movement in the share price of the Company and for that movement to be in the top 50% of companies in the ASX Health Care index on a percentage basis. These options have an exercise price of $0.07 on expiry date of 8[th] November 2014. Mr Richard Martin and Ms Lara Iacusso were each issued 1,400,000 options by shareholder resolution on the same terms as Dr Cumming.

The Company’s employees were issued a total of 12.775 million options forming the Long Term Incentive component of their salary package. 3.775million vested immediately and have an exercise price of $0.07 and an expiry date of 8[th] September 2014. The remaining 9 million options vest over 3 years and are dependent on performance goals measured annually. The performance criteria for the vesting of these options is the same as for Dr Cumming. These options have an expiry date of 8[th] November 2014. Details of options that were issued or exercised during the financial year are set out on page 21.

As stated above, the Board reviews staff incentives annually, incorporating bonus and share option elements. In the previous five years there have been two methods applied to achieve goal congruence between shareholders and executives, the first being a performance based bonus based on KPIs, the second being the issue of options to encourage the alignment of personal and shareholder interests. Current KPIs are based upon success in key business outcomes, improvement in share price and holistic companywide performance criteria, including human resources, OH&S and technical outcomes.

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

Details of Directors’ Remuneration for the Year Ended 30 June 2011

				Post
				Employment	Share
		Base Fee		Super-	Based
Parent Entity	Note	/ Salary	Bonus	annuation	Options	Other	Total
R Martin	1	40,996	-	-	2,337	-	43,333
G Cumming	2	370,833	36,697	32,178	21,701	-	461,409
S Andersen	3	6,728	-	606	-	-	7,334
J Henderson	4	61,250	-	-	-	-	61,250
L Iacusso	5	6,876	-	-	2,337	-	9,213
R Gilmour	6	-	-	-	-	25,000	25,000
Total		486,683	36,697	32,784	26,375	25,000	607,539

Emoluments of the specified executive officers of the group for the Year Ended 30 June 2011

				Post
				Employment	Share
Economic		Base Fee		Super-	Based
Entity	Note	/ Salary	Bonus	annuation	Options	Other	Total
J Maeji	7	153,230	-	50,000	5,607	-	208,837
N Abernethy	8	156,250	-	14,063	1,794	-	172,107
Total		309,480	-	64,063	7,401	-	380,944

A detailed list of Directors including their skills and experience can be found on page 14.

Notes regarding Directors and executive emoluments:

(1) Mr Martin was a Director for the full year. Mr Martin is a Director of Shubrick Investments Pty Ltd. Transactions with Shubrick Investments are disclosed as part of related party transactions in the Financial Statements.
(2) Dr Cumming was Chief Executive Officer for the full year. (3) Mrs Andersen was appointed as a director on 16[th] May 2011.
(4) Mr Henderson was a Director until 16[th] May 2011 and is a Director of Transocean Group Pty. Limited. Transactions with Transocean are disclosed as part of related party transactions in the Financial Statements.
(5) Ms Iacusso was a Director until 25[th] February 2011 and is a Director of Transocean Group Pty. Limited. Transactions with Transocean are disclosed as part of related party transactions in the Financial Statements.
(6) Dr Gilmour was a Director until 3[rd] November 2010 and is a Director of Bodyworks Holdings Limited. Transactions with Bodyworks are disclosed as part of related party transactions in the Financial Statements
(7) Dr Maeji was the Chief Scientific Officer for the full year.
(8) Dr Abernethy was the Chief Product Development and Research Officer for the full year.

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

Details of Directors’ Remuneration for the Year Ended 30 June 2010

				Post
				Employment	Share
		Base Fee		Super-	Based
Parent Entity	Note	/ Salary	Bonus	annuation	Options	Other	Total
R Martin	1	38,150	-	-	-	-	38,150
G Cumming	2	258,792	114,679	33,612	506	-	407,590
J Henderson	3	60,000	-	-	-	-	60,000
L Iacusso	4	-	-	-	-	-	-
R Gilmour	5	-	-	-	-	60,000	60,000
B Rathie	6	6,666	-	600	-	-	7,266
Total		363,608	114,679	34,212	506	60,000	573,006

Emoluments of the specified executive officers of the group for the Year Ended 30 June 2010

				Post
				Employment	Share
Economic		Base Fee		Super-	Based
Entity	Note	/ Salary	Bonus	annuation	Options	Other	Total
J Maeji	7	149,056	-	45,618	304	-	194,978
N Abernethy	8	145,833	-	13,125	203	-	159,161
Total		294,889	-	58,743	507	-	354,138

Notes regarding Directors and executive emoluments:

(1) Mr Martin was a Director for the full year. Mr Martin is a director of Shubrick Investments Pty Ltd. Transactions with Shubrick Investments are disclosed as part of related party transactions in the Financial Statements.
(2) Dr Cumming was Chief Executive Officer for the full year.
(3) Mr Henderson was appointed as a Director on 18 December 2009 and is a Director of Transocean Group Pty. Limited. Transactions with Transocean are disclosed as part of related party transactions in the Financial Statements.
(4) Ms Iacusso was a Director for the full year and is a Director of Transocean Group Pty. Limited. Transactions with Transocean are disclosed as part of related party transactions in the Financial Statements.
(5) Dr Gilmour was a Director for the full year and is a Director of Bodyworks Holdings Limited. Transactions with Bodyworks are disclosed as part of related party transactions in the Financial Statements
(6) Mr Rathie resigned on 26 August 2009.
(7) Dr Maeji was the Chief Scientific Officer for the full year.
(8) Dr Abernethy was the Chief Product Development and Research Officer for the full year.

Performance Remuneration as a Proportion of Total Remuneration

During the year Dr Geoff Cumming was paid a bonus of $36,697 plus superannuation of $3,303. This payment was made in accordance with his employment contract following satisfaction of the KPIs adopted by the Board. The bonus represented 7.5% of Dr Cumming’s remuneration for the year.

The options issued to executives and employees amounted to $49,109. Options issued to non-executive Directors amounted to $4,674.

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

Options Issued as Part of Remuneration for the Year Ended 30 June 2011

		Options	Total
	Granted No.	Granted as Part of	Remuneration Represented by Options Exercised Options Lapsed			Total
		Remuneration	Options
		$	% $	$			$
G Cumming	13,000,000	21,701	5	0		0	21,701
R Martin	1,400,000	2,337	5	0		0	2,337
L Iacusso	1,400,000	2,337	25 1,168 1,169				2,337
S Hartwig	750,000	2,692	4	0		0	2,692
J Maeji	6,250,000	5,607	3	0		0	5,607
N Abernethy	2,000,000	1,794	1	0		0	1,794
Total	24,800,000	36,468					36,468
The options allotted to Ms Iacusso		represent 25% of fees paid because a		director’s	fee was charged			for
3 months in relation to her services.		The terms and	conditions of these options are as follows:
	Options Granted	Options Vested Grant Date Due Vesting Value per Option			Exercise Price		Expiry Date
	No.	No.	Date	$		$
G Cumming	3,250,000	3,250,000	30/11/2010 Vested	$0.0067		$0.0700	8/11/2014
	3,250,000		30/11/2010 31/01/2012	$0.0045		$0.0700	8/11/2014
	6,500,000		30/11/2010 31/01/2013	$0.0025		$0.0700	8/11/2014
R Martin	350,000	350,000	30/11/2010 Vested	$0.0067		$0.0700	8/11/2014
	350,000		30/11/2010 31/01/2012	$0.0045		$0.0700	8/11/2014
	700,000		30/11/2010 31/01/2013	$0.0025		$0.0700	8/11/2014
L Iacusso	350,000	350,000	30/11/2010 Vested	$0.0067		$0.0700	8/11/2014
	350,000		30/11/2010 Lapsed	$0.0000		$0.0700	8/11/2014
	700,000		30/11/2010 Lapsed	$0.0000		$0.0700	8/11/2014
S Hartwig	750,000	750,000	8/11/2010 Vested	$0.0036		$0.0700	8/11/2014
J Maeji	1,562,500	1,562,500	8/11/2010 Vested	$0.0036		$0.0700	8/11/2014
	1,562,500		8/11/2010 31/01/2012	$0.0021		$0.0700	8/11/2014
	3,125,000		8/11/2010 31/01/2013	$0.0009		$0.0700	8/11/2014
N Abernethy	500,000	500,000	8/11/2010 Vested	$0.0036		$0.0700	8/11/2014
	500,000		8/11/2010 31/01/2012	$0.0021		$0.0700	8/11/2014
	1,000,000		8/11/2010 31/01/2013	$0.0009		$0.0700	8/11/2014
Total	24,800,000	6,762,500

The options allotted to Ms Iacusso represent 25% of fees paid because a director’s fee was charged for 3 months in relation to her services. The terms and conditions of these options are as follows:

All Executive and Director options were issued with performance based vesting conditions, except for Shane Hartwig. The options vest annually over a 3 year period.

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

Employment contracts of Directors and senior executives

The executives of the Company are employed on open-ended employment contracts that provide for termination by either party with notice. For Geoff Cumming and Joe Maeji, the notice period is 3 months and for Nevin Abernethy the notice period is one month. There are no special termination provisions.

There are no terms in any of the above agreements that provide for changes to remuneration for future periods. The Nomination & Remuneration Committee may review these arrangements annually or as required.

This is the end of the Remuneration Report

MEETINGS OF DIRECTORS

During the financial year, 5 meetings of Directors, 3 meetings of the Audit & Risk Committee and 3 meetings of the Nomination & Remuneration Committee were held. Attendances were as follows:

	Directors’ Meetings	Audit & Risk Committee	Remuneration & Nomination Committee
Director	Number eligible to attend Number Attended	Number eligible to attend Number Attended	Number eligible to attend Number Attended
R Martin G Cumming S Andersen J Henderson L Iacusso R Gilmour	5 5 5 5 1 1 3 3 2 2 2 2	3 3 1 1 2 2	3 3 3 3

INDEMNIFYING OFFICERS OR AUDITOR

The Company’s Constitution provides that the Company will indemnify officers of the Company against liabilities for costs and expenses incurred by them in defending any legal proceedings arising out of their conduct while acting in the capacity of Director or officer of the Company other than conduct involving a wilful breach of duty in relation to the Company.

The Company has paid premiums to insure the Directors and officers against such liabilities that may arise. The amount of the premium for the period was $23,270.

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

SHARE OPTIONS

At the date of this report, the un-issued ordinary shares of Anteo Diagnostics Limited under option are as follows:

follows:
		Exercise Price	Number under Option
Grant Date	Date of Expiry
		(Post consolidation value)	(Post consolidation number)
30 September 2005	13 September 2011	$0.651	9,598
30 September 2005	19 October 2011	$0.521	16,479
30 September 2005	1 January 2012	$0.651	60,790
30 September 2005	1 March 2012	$0.651	9,598
30 September 2005	1 April 2012	$0.651	72,152
30 September 2005	25 April 2012	$0.651	3,840
30 September 2005	31 October 2012	$0.651	4,800
30 September 2005	1 September 2013	$0.156	76,786
30 September 2005	18 December 2013	$0.156	3,656,206
30 September 2005	24 May 2014	$0.156	71,643
30 September 2005	1 October 2014	$0.156	71,987
30 September 2005	20 December 2014	$0.156	3,087,902
30 September 2005	20 January 2015	$0.156	105,865
30 September 2005	20 February 2015	$0.156	58,166
31 July 2008	31 July 2013	$0.081	72,329
17 September 2009	30 September 2012	$0.020	8,050,000
8 November 2011	8 November 2014	$0.070	12,775,000
30 November 2011	8 November 2014	$0.070	15,800,000
			44,003,141

All options are on Issue to Employees, Directors or consultants. The weighted average share price during the year was $0.0775.

PROCEEDINGS ON BEHALF OF THE COMPANY

No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings. The Company was not a party to any such proceedings during the year.

NON-AUDIT SERVICES

There were no fees for non-audit services paid or payable to an associated firm of the external auditors during the year ended 30 June 2011.

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

AUDITOR’S INDEPENDENCE DECLARATION

The auditor’s independence declaration for the year ended 30 June 2011 has been received and can be found on page 53 which forms part of this report.

Signed in accordance with a resolution of the Board of Directors.

==> picture [171 x 50] intentionally omitted <==

Mr Mark Bouris Chairman Dated this 29[th] day of August 2011

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2011

		2011	2010
	Note	$	$
Sales revenue	2	11,846	84,271
Cost of sales		-	-
Gross profit		11,846	84,271
Other revenue from ordinary activities	2	1,003,694	531,867
Selling and distribution expenses		(646,926)	(486,775)
Occupancy expenses		(33,000)	(33,000)
Administrative expenses – Other		(563,485)	(507,597)
Borrowing costs	3	(17)	(123)
Research and development expenses		(1,969,574)	(1,753,971)
Impairment of financial assets		-	(30,000)
Other expenses from ordinary activities		(25,000)	(60,077)
Loss from ordinary activities before income tax benefit		(2,222,462)	(2,255,405)
Income tax benefit relating to ordinary activities	4	-	-
Loss from ordinary activities after income tax benefit	16	(2,222,462)	(2,255,405)
Other Comprehensive Income		-	-
Total comprehensive income		(2,222,462)	(2,255,405)
Total changes in equity other than those resulting from transactions with owners as owners		(2,222,462)	(2,255,405)
Basic loss per share (cents)	7	(0.3)	(0.6)
Diluted loss per share (cents)	7	(0.3)	(0.6)

The financial statements should be read in conjunction with the accompanying notes.

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2011

		2011	2010
	Note	$	$
CURRENT ASSETS
Cash assets	8	6,863,593	1,425,894
Receivables	9	137,352	53,271
Other	10	2,448	1,939
TOTAL CURRENT ASSETS		7,003,393	1,481,104
NON-CURRENT ASSETS
Property, plant and equipment	11	281,874	242,102
Other financial assets	12	-	-
TOTAL NON-CURRENT ASSETS		281,874	242,102
TOTAL ASSETS		7,285,267	1,723,206
CURRENT LIABILITIES
Payables	13	217,044	204,406
Provisions	14	177,049	124,434
TOTAL CURRENT LIABILITIES		394,093	328,840

TOTAL LIABILITIES		394,093	328,840
NET ASSETS		6,891,174	1,394,366
EQUITY
Contributed equity	15	31,859,351	24,153,408
Accumulated losses		(24,968,177)	(22,759,042)
TOTAL EQUITY		6,891,174	1,394,366

The financial statements should be read in conjunction with the accompanying notes.

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2011

	Ordinary Shares	Options	Accumulated Losses	Total
	$	$	$	$
Balance at 1 July 2009	21,466,602	69,635	(20,503,637)	1,032,600
Issued during the year	1,457,542	-	-	1,457,542
Capital Raising Costs	(117,229)	-	-	(117,229)
Conversion of converting notes into ordinary shares	1,275,086	-	-	1,275,086
Options expense for the period	-	1,772	-	1,772
Total Comprehensive Income	-	-	(2,255,405)	(2,255,405)
Balance at 30 June 2010	24,082,001	71,407	(22,759,042)	1,394,366
Balance at 1 July 2010	24,082,001	71,407	(22,759,042)	1,394,366
Issued during the year	5,951,004	-	-	5,951,004
Conversion of options into shares	1,714,483	-	-	1,714,483
Options expense for the period	-	53,783	-	53,783
Reversal of lapsed share options	-	(13,327)	13,327	-
Conversion of employee options into shares	2,479	(2,479)	-	-
Total Comprehensive Income	-	-	(2,222,462)	(2,222,462)
Balance at 30 June 2011	31,749,967	109,384	(24,968,177)	6,891,174

The financial statements should be read in conjunction with the accompanying notes.

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2011

	Note	2011	2010
		$	$
Cash Flows from Operating Activities:
Receipts from customers and government grants		917,232	549,510
Payments to suppliers and employees		(3,125,596)	(2,743,019)
Borrowing costs		(17)	(717)
Interest received		109,260	43,995
Net cash used in operating activities	16 (i)	(2,099,121)	(2,150,231)
Cash Flows From Investing Activities:
Proceeds from disposal of non-current assets		-	20,000
Payment for property, plant and equipment		(128,667)	(12,628)
Net cash provided by investing activities		(128,667)	7,372
Cash Flows From Financing Activities:
Proceeds from share issues		7,665,487	2,732,628
Capital raising costs		-	(117,229)
Net cash provided by (used in) financing activities		7,665,487	2,615,399
Net increase (decrease) in cash held		5,437,699	472,540
Cash at start of year		1,425,894	953,354
Cash at end of year	8, 16 (ii)	6,863,593	1,425,894

The financial statements should be read in conjunction with the accompanying notes.

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Preparation

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with the International Financial Reporting Standards.

Anteo Diagnostics Limited is a listed public company, incorporated and domiciled in Australia.

The accounting policies set out below have been applied in preparing the financial statements for the year ended 30 June 2011. The financial report has been prepared on an accruals basis, except for cash flow information.

Going Concern

The financial statements have been prepared on the going concern basis.

The Board is continually assessing the capital needs of the Company’s business and addressing the alternatives available to fund the operational requirements of the Company. As at the 30[th] June 2011 the Company had $6,863,593 in cash reserves. The Board believes that based upon current spending forecasts there is adequate funding to provide for the Company’s requirements to complete its strategic plan and in any case beyond 12 months of operation.

Significant accounting policies

The following significant accounting policies have been adopted in the preparation and presentation of the financial report:

(a) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, cash in banks and investments with original maturities of three months or less.

(b) Comparatives

When required by accounting standards or accounting policy, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

(c) Employee benefits

Provision is made for benefits accruing to employees in respect of wages and salaries, annual leave, long service leave, and sick leave when it is probable that settlement will be required and they are capable of being measured reliably.

Provisions made in respect of employee benefits expected to be settled within 12 months are measured at their nominal values using the remuneration rate expected to apply at the time of settlement.

Provisions made in respect of employee benefits which are not expected to be settled within 12 months, are measured as the present value of the estimated future cash outflows to be made by the consolidated entity in respect of the services provided by employees up to reporting date.

Contributions to defined contribution superannuation plans are expensed when incurred.

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

(d) Financial assets

Financial investments are initially measured at cost on trade date, which includes transaction costs, when the related contractual rights or obligations exist. Subsequent to initial recognition, these investments are assessed at each reporting date to determine whether there is any evidence that an investment is impaired. Any such impairment is reported in the Statement of Comprehensive Income.

(e) Foreign currency transactions

All foreign currency transactions during the financial year are brought to account using the exchange rate in effect at the date of the transaction. Foreign currency monetary items at reporting date are translated at the exchange rate existing at reporting date. Exchange differences are recognised in profit or loss in the period in which they arise.

(f) Goods and services tax

Revenues, expenses, assets and liabilities are recognised net of the amount of goods and services tax (GST), except:

i. where the amount of GST incurred is not recoverable from the taxation authority, it is recognised as part of the cost of acquisition of an asset or as part of an item of expense; or
ii. for receivables and payables which are recognised inclusive of GST.

The amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables and payables.

Cash flows are included in the Statement of Cash Flows on a gross basis. The GST component of cash flows arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is classified as operating cash flows.

(g) Goodwill

Pursuant to the adoption of AASB3 Business Combinations (reverse acquisitions), goodwill, representing the excess of the cost of combination to Bio-Layer Pty Limited over the fair value of the identifiable assets, liabilities and contingent liabilities acquired of Anteo Diagnostics Limited (formerly BioLayer Corporation Limited and prior to that SSH Medical Limited), was recognised as an asset and not amortised, and was tested for impairment. This impairment was recognised in profit or loss and will not be subsequently reversed.

(h) Government grants

Government grants are assistance by the government in the form of transfers or resources to the consolidated entity in return for past or future compliance with certain conditions relating to the operating activities of the entity. Government grants include government assistance where there are no conditions specifically relating to the operating activities of the consolidated entity other than the requirement to operate in certain regions or industry sectors.

Government grants relating to income are recognised as income over the periods necessary to match them with the related costs.

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

(i) Impairment of assets

At each reporting date, the consolidated entity reviews the carrying amounts of its tangible and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent from other assets, the consolidated entity estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Goodwill is tested for impairment at each reporting date and whenever there is an indication that the asset may be impaired. An impairment of goodwill is not subsequently reversed.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is treated as a revaluation decrease.

Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is increased to the revised estimate of its recoverable amount, but only to the extent that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (cash-generating unit) in prior years. A reversal of impairment loss is recognised in profit or loss immediately, unless the relevant asset is carried at fair value, in which case the reversal of the impairment is treated as a revaluation increase.

(j) Income tax

Current tax

Current tax is calculated by reference to the amount of income taxes payable or recoverable in respect of the taxable profit or tax loss for the period. It is calculated using tax rates and tax laws that have been enacted or substantively enacted by reporting date. Current tax for current and prior periods is recognised as a liability (or asset) to the extent that it is unpaid (or refundable).

Deferred tax

Deferred tax is accounted for using the comprehensive statement of financial position liability method in respect of temporary differences between the carrying amount of assets and liabilities in the financial statements and the corresponding tax base of those items.

In principle, deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised to the extent that it is probable that sufficient taxable amounts will be available against which deductible temporary differences or unused tax losses and tax offsets can be utilized. However, deferred tax assets and liabilities are not recognised if the temporary differences giving rise to them arise from the initial recognition of assets and liabilities (other than as a result of a business combination) which affects neither taxable income nor accounting profit. Furthermore, a deferred tax liability is not recognised in relation to taxable temporary differences arising from goodwill.

Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, branches, associates and joint ventures except where the consolidated entity is able to control the reversal of the temporary differences and it is probably that the temporary differences will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary differences associated with these investments and interests are only recognised to the extent that it is probable that there will be sufficient taxable profits against which to utilize the benefits of the temporary differences and they are expected to reverse in the foreseeable future.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period(s) when the asset and liability giving rise to them are realized or settled, based on tax rates (and tax laws) that

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

have been enacted or substantively enacted by reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the manner in which the consolidated entity expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when they relate to income taxes levied by the same taxation authority and the Company/consolidated entity intends to settle its current tax assets and liabilities on a net basis.

Current and deferred tax for the period

Current and deferred tax is recognised as an expense or income in the Statement of Comprehensive Income, except when it relates to items credited or debited directly to equity, in which case the deferred tax is also recognised directly in equity, or where it arises from the initial accounting for a business combination, in which case it is taken into account in the determination of goodwill.

(k) Intangible assets

Patents, trademarks and licenses

Patents, trademarks and license costs are recognised as an expense in the period in which they are incurred.

Research and development costs

Expenditure on research activities is recognised as an expense in the period in which it is incurred.

(l) Overheads

The Company allocates overheads for the operating entity to their business cost centres. This procedure has been adopted in this period to more accurately represent operating costs of the economic entity.

(m) Payables

Trade payables and other accounts payable are recognised when the economic entity becomes obliged to make future payments resulting from the purchase of goods and services.

(n) Principles of consolidation

The consolidated financial statements are prepared by combining the financial statements of all the entities that comprise the economic entity, being the Company (the parent entity) and its subsidiaries as defined in Accounting Standard AASB 127 Consolidated and Separate Financial Statements. Consistent accounting policies are employed in the preparation and presentation of the consolidated financial statements.

On acquisition, the assets, liabilities and contingent liabilities of a subsidiary are measured at their fair values at the date of acquisition. Any excess of the cost of acquisition over the fair values of the identifiable net assets acquired is recognised as goodwill. If, after assessment, the fair values of the identifiable net assets acquired exceed the cost of acquisition, the deficiency is credited to profit and loss in the period of acquisition.

The consolidated financial statements include the information and results of each subsidiary from the date on which the Company obtains control and until such time as the Company ceases to control such entity.

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

In preparing the consolidated financial statements, all intercompany balances and transactions, and unrealised profits arising within the economic entity are eliminated in full.

(o) Property, plant and equipment

Plant and equipment, leasehold improvements and equipment under finance lease are stated at cost less accumulated depreciation and impairment. Cost includes expenditure that is directly attributable to the acquisition of the item. In the event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the amounts payable in the future to their present value as at the date of acquisition.

Depreciation is provided on property, plant and equipment. Depreciation is calculated on a straight line basis so as to write off the net cost or other revalued amount of each asset over its expected useful life to its estimated residual value. Leasehold improvements are depreciated over the period of the lease or estimated useful life, whichever is the shorter, using the straight line method. The estimated useful lives, residual values and depreciation method are reviewed at the end of each annual reporting period. The following estimated useful lives are used in the calculation of depreciation:

Leasehold improvements	10% - 50%
Plant and equipment	20% - 40%
Furniture and office equipment	20% - 40%
Leased plant and equipment	20%

(p) Provisions

Provisions are recognised when the consolidated entity has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably.

The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at reporting date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured using the cashflows estimated to settle the present obligation, its carrying amount is the present value of those cashflows.

When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured reliably.

(q) Revenue recognition

Sale of goods

Revenue from the sale of goods is recognised when the economic entity has transferred to the buyer the significant risks and rewards of ownership of the goods.

Rendering of services

Revenue for a contract to provide services is recognised by reference to the stage of completion of the contract. Revenue is not recognised until each milestone has been successfully completed under the terms of the contract.

Royalties and licence fees

Royalty and licence fee revenue is recognised on an accrual basis in accordance with the substance of the relevant agreement.

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

Interest revenue

Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the financial assets.

(r) Share-based payments

Share-based payments are measured at fair value at the date of grant. Fair value for options is measured by use of the Black Scholes valuation model.

The fair value determined as at the grant date of the share-based payments is expensed on a straight line basis over the vesting period, based on the economic entity’s estimate of shares that will eventually vest.

Terms and conditions of Share-based payments are set out in the Remuneration Report.

(s) New accounting standards and interpretations

In the current year, the Group has adopted all of the new and revised Standards and Interpretations issued by the Australian Accounting Standards Board that are relevant to its operations and effective for the current annual reporting period. The 2010 comparatives contained in these financial statements may therefore differ from those published in the financial statements for the year ended 30 June 2010 as described below.

Significant effects on current, prior or future periods arising from the first-time application of the standards discussed above in respect of presentation, recognition and measurement of accounts are described in the following notes.

Adoption of AASB 101 Presentation of Financial Statements (revisions), AASB 2007-8 and 2007-10 Amendments arising from the revisions to AASB 101

Anteo Diagnostics Limited have adopted the revisions to AASB 101 Presentation of Financial Statements in these financial statements which has resulted in the introduction of the statement of comprehensive income, changes to the statement of changes in equity, and other terminology changes.

New Accounting Standards for Application in Future Periods

The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods and which the Group has decided not to early adopt. A discussion of those future requirements and their impact on the Group is as follows:

AASB 9: Financial Instruments (December 2010) (applicable for annual reporting periods commencing on or after 1 January 2013).

This Standard is applicable retrospectively and includes revised requirements for the classification and measurement of financial instruments, as well as recognition and derecognition requirements for financial instruments. The Group has not yet determined any potential impact on the financial statements.

The key changes made to accounting requirements include:

simplifying the classifications of financial assets into those carried at amortised cost and those carried at fair value;
simplifying the requirements for embedded derivatives;
removing the tainting rules associated with held-to-maturity assets;
removing the requirements to separate and fair value embedded derivatives for financial assets carried at amortised cost;
allowing an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument;

requiring financial assets to be reclassified where there is a change in an entity’s business model as they are initially classified based on: (a) the objective of the entity’s business model for managing the financial assets; and (b) the characteristics of the contractual cash flows; and
requiring an entity that chooses to measure a financial liability at fair value to present the portion of the change in its fair value due to changes in the entity’s own credit risk in other comprehensive income, except when that would create an accounting mismatch. If such a mismatch would be created or enlarged, the entity is required to present all changes in fair value (including the effects of changes in the credit risk of the liability) in profit or loss.
AASB 124: Related Party Disclosures (applicable for annual reporting periods commencing on or after 1 January 2011).

This Standard removes the requirement for government-related entities to disclose details of all transactions with the government and other government-related entities and clarifies the definition of a “related party” to remove inconsistencies and simplify the structure of the Standard. No changes are expected to materially affect the Group.

AASB 2010–4: Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project [AASB 1, AASB 7, AASB 101 & AASB 134 and Interpretation 13] (applicable for annual reporting periods commencing on or after 1 January 2011). This Standard details numerous non-urgent but necessary changes to Accounting Standards arising from the IASB’s annual improvements project. Key changes include:
adding an explicit statement to AASB 7 that qualitative disclosures should be made in the context of the quantitative disclosures to better enable users to evaluate an entity’s exposure to risks arising from financial instruments;
amending AASB 101 to the effect that disaggregation of changes in each component of equity arising from transactions recognised in other comprehensive income is required to be presented, but is permitted to be presented in the statement of changes in equity or in the notes;
adding a number of examples to the list of events or transactions that require disclosure under AASB 134; and
making sundry editorial amendments to various Standards and Interpretations.

This Standard is not expected to impact the Group.

AASB 2010–5: Amendments to Australian Accounting Standards [AASB 1, 3, 4, 5, 101, 107, 112, 118, 119, 121, 132, 133, 134, 137, 139, 140, 1023 & 1038 and Interpretations 112, 115, 127, 132 & 1042] (applicable for annual reporting periods beginning on or after 1 January 2011).

This Standard makes numerous editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments to reflect changes made to the text of IFRSs by the IASB. However, these editorial amendments have no major impact on the requirements of the respective amended pronouncements.

AASB 2010–6: Amendments to Australian Accounting Standards – Disclosures on Transfers of Financial Assets [AASB 1 & AASB 7] (applicable for annual reporting periods beginning on or after 1 July 2011).

This Standard adds and amends disclosure requirements about transfers of financial assets, especially those in respect of the nature of the financial assets involved and the risks associated with them. Accordingly, this Standard makes amendments to AASB 1: First-time Adoption of Australian Accounting Standards, and AASB 7: Financial Instruments: Disclosures, establishing additional disclosure requirements in relation to transfers of financial assets.

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

This Standard is not expected to impact the Group.

AASB 2010–7: Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 120, 121, 127, 128, 131, 132, 136, 137, 139, 1023 & 1038 and Interpretations 2, 5, 10, 12, 19 & 127] (applies to periods beginning on or after 1 January 2013).

This Standard makes amendments to a range of Australian Accounting Standards and Interpretations as a consequence of the issuance of AASB 9: Financial Instruments in December 2010. Accordingly, these amendments will only apply when the entity adopts AASB 9.

As noted above, the Group has not yet determined any potential impact on the financial statements from adopting AASB 9.

(t) Critical Accounting Estimates and Judgements

Key Estimates - Impairments

The Company assesses impairment at each reporting date by evaluating conditions specific to the group that may lead to impairment of assets. Where an impairment trigger exists, the recoverable amount of the asset is determined. Per AASB 136 value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates.

The Board have critically considered the carrying value of the parent entity’s investment (and corresponding associated inter-company receivable balance) at year end.

	2011	2010
	$	$
2. REVENUE
Revenues from operating activities:
Sale ofgoods and services	11,846	84,271
Grants, Rent and Other	198,217	181,481
R&D Tax Concession	603,751	286,391
Sale of non current assets	-	20,000
Interest - other corporations	201,726	43,995
	1,003,694	531,867

Total Revenue	1,015,540	616,138

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

	2011	2010
	$	$
3. LOSS FROM ORDINARY ACTIVITIES
The loss from ordinary activities before income tax
expense has been determined after:
Amortisation of non-current assets:
Leasehold improvements	11,174	10,632
Total amortisation of non-current assets	11,174	10,632
Depreciation of non-current assets:
Plant and equipment	69,536	54,009
Furniture, office equipment and software	5,680	7,476
Total depreciation of non-current assets	75,216	61,485
Borrowing costs:
Interest, other persons	17	5
	17	5
Movements in provisions:
Doubtful debts	-	30,000
Employee benefits	52,615	66,608
	52,615	96,608

Operating lease rentals	278,974	319,481

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

	2011	2010
	$	$
4. INCOME TAX EXPENSE
(a) The prima facie income tax on the loss from
ordinary income tax is reconciled as follows:
Prima facie tax calculated at 30% on losses from ordinary activities	(666,739)	(676,622)
Add/(deduct) tax effect of :
- other deductible items	(43,247)	(72,555)
- impairment of financial assets	-	17,997
- options expensed for accounting purposes	16,135	532
- R&D tax concession additional deduction	(195,267)
Timing differences not brought to account to the extent of income tax losses	889,118	730,648
Income tax benefit attributable to ordinaryactivities	-	-
Weighted Average Effective Tax Rates	-	-
(b) Deferred Tax Assets arising from income tax losses
not brought to account, the benefits of which will only be
realised if the conditions for deductibility set out in Note 1(j) occur	9,083,441	8,825,247

5. DIRECTOR’S AND EXECUTIVES’ REMUNERATION

(a) Directors and Executives

Names and positions held of parent entity Directors and specified executives in office at any time during the financial year have been included in the Directors Report.

(b) Parent Entity Directors’ Remuneration and specified Executive Remuneration

Directors and specified Executives’ remuneration has been included in the Remuneration Report section of the Directors Report.

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

(c) Options

Directors and specified Executives’ remuneration has been included in the Remuneration Report section of the Directors Report. Further information regarding value of options issued during the year is on page 19 of the Directors Report.

The fair value of options issued to Directors and Executives was determined using the Black Scholes method of valuation as the basis for determining value. Regard was given to the vesting terms of the options and that they are not transferable by halving the nominal calculated amount. The follow parameters were used in the calculation:

i) Expected Volatility – 19% ii) Share price $0.047 and $0.053 iii) Exercise Price $0.07 iv) Risk Free Rate 5.5% v) Variation of the option life dependent on vesting conditions from 1 to 4 years. vi) It was assumed all options would be exercised at time of expiry.

(d) Shares issued on exercise of remuneration options

1,050,000 shares were issued on the exercise of remuneration options during the year ended 30 June 2011 (2010 Nil).

(e) Options holdings

Number of options held by or at the nomination of Parent Entity Directors (who held office during the year) as at 30[th] June 2011.

				Options				Total
	Balance	Granted as	Options	Sold or		Balance	Total Vested	Exercisable
	1 Jul 10	Remuneration	Lapsed	Exercised	Net Change	30 Jun 11	30 Jun 11	30 June 2011
Parent Entity
Directors
G Cumming	4,500,000	13,000,000	-	2,000,000	11,000,000	15,500,000	5,750,000	5,750,000
R Martin	-	1,400,000	-	-	1,400,000	1,400,000	350,000	350,000
J Henderson	73,332,445	-	8,166,942	65,165,503	(73,332,445)	-	-	-
L Iacusso	-	1,400,000	1,050,000	350,000	-	-	-	-
R Gilmour	4,356,477	-	2,689,810	1,666,667	(4,356,477)	-	-	-
	82,188,922	15,800,000	11,906,752	69,182,170	(65,288,922)	16,900,000	6,100,000	6,100,000

Number of options held by or at the nomination of Specified Executives (who held office during the year) as at 30[th] June 2011:

								Total	Total
	Balance	Granted as	Options	Options		Balance	Total Vested	Exercisable	Unexercisable
	1 Jul 10	Remuneration	Lapsed	Exercised	Net Change	30 Jun 11	30 Jun 11	30 June 2011	30 June 2011
Specified
Executives
J Maeji	9,160,142	6,250,000	2,000,000	2,000,000	2,250,000	11,410,142	6,722,642	6,722,642	4,687,500
N Abernethy	2,072,329	2,000,000	1,000,000	700,000	300,000	2,372,329	872,329	872,329	1,500,000
S Hartwig	-	750,000		-	750,000	750,000	750,000	750,000	-
	11,232,471	9,000,000	3,000,000	2,700,000	3,300,000	14,532,471	8,344,971	8,344,971	6,187,500

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

(f) Shareholdings

Number of shares held by or at the nomination of Directors and specified Executives as at 30[th] June 2011:

	Balance 1 Jul 10	Sold	Options Exercised	Net Change	Balance 30 Jun 11
Parent Entity Directors
Mr Richard Martin	-	-	-	-	-
Mr Geoffrey Cumming	4,000,000	-	2,000,000	2,000,000	6,000,000
Mrs Sandra Andersen	-	-	-	-	-
*Mr James Henderson	37,742,227	88,314,881	65,165,503	(23,149,378)	14,592,849
*Ms Lara Iacusso	333,333	100,000	350,000	250,000	583,333
*Mr Robert Gilmour	1,046,287	2,712,954	1,666,667	(4,379,621)	-
	43,121,847	91,127,835	69,182,170	(25,278,999)	21,176,182

Retired Directors amounts as per share register.

(g) Remuneration practices

The Company’s policy for determining the nature and amount of emoluments of Board members and senior Executives of the Company has been included in the Remuneration Report section of the Directors Report.

	2011	2010
	$	$
6. AUDITORS’ REMUNERATION
Remuneration of the auditors of the company for:
- Auditing or reviewing financial report	47,432	48,165
	47,432	48,165
7. EARNINGS PER SHARE (EPS)
Weighted average number of ordinary shares outstanding during the year used in the calculation of basic EPS	668,831,388	362,271,246
Weighted number of dilutive options outstanding	134,629,504	240,549,269
Weighted average number of ordinary shares outstanding during the year used in the calculation of diluted EPS	803,460,892	602,820,514

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

	2011	2010
	$	$
8. CASH ASSETS
Cash on hand	524	1,031
Cash at bank	1,668,196	1,278,201
Deposits at call	5,194,873	146,662
	6,863,593	1,425,894

9. RECEIVABLES

CURRENT
Trade debtors	19,121	57,865
Provision for impairment of receivables	-	(30,000)
	19,121	27,865
Other debtors	118,231	25,406
	137,352	53,271

2011 Trade Debtors Other debtors	19,121 118,231 Net Amount	Past Due but not impaired (days overdue) < 30 31-60 61-90 > 90 8,148 - - - - - - -	10,974 118,231 Within initial trade	- - Impairment Provision
Total	137,352	8,148 - - -	129,205	-
2010 Trade Debtors Other debtors	27,865 25,406	7,006 3,246 - - - - - -	17,614 25,406	30,000 -
Total	53,271	7,006 3,246 - -	43,020	30,000

Provision for Impairment of Receivables

Current trade receivables are non-interest bearing and generally on 14 day terms. Provision for impairment is recognised when there is objective evidence that an individual trade receivable is impaired. These amounts have been included in the other expenses item.

Movement in the provision for impairment of receivables is as follows:

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

	2011	2010
Current Trade Receivables
Balance 1 July	(30,000)	-
Amounts Written Off (uncollectable)	30,000
Amount Provided For	-	(30,000)
Balance 30 June	-	(30,000)

Balance 30 June -	(30,000)
	Note	2011	2010
		$	$
10. OTHER ASSETS
CURRENT
Prepayments		2,448	1,939
		2,448	1,939
11. PROPERTY, PLANT AND EQUIPMENT
Plant and equipment, at cost		1,226,424	1,178,398
Accumulated depreciation		(1,030,729)	(1,024,087)
		195,695	154,311
Furniture and fittings, office equipment, at cost		459,216	476,344
Accumulated depreciation		(373,037)	(388,553)
		86,179	87,791

Total Property, Plant and Equipment		281,874	242,102

Movements in carrying amounts

Movement in carrying amounts for each class of property, plant and equipment between the beginning and end of the financial year is as follows:

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

2011	Furniture, Office Equipment	Plant and Equipment	Total
	$	$	$
Carrying amount at start of year	87,791	154,311	242,102
Additions	16,012	112,655	128,667
Loss on Assets Written down	(770)	(1,735)	(2,505)
Depreciation / amortisation	(16,854)	(69,536)	(86,390)
Carrying amount at end of year	86,179	195,695	281,874

2010	Furniture, Office Equipment	Plant and Equipment	Total
	$	$	$
Carrying amount at start of year	104,500	197,091	301,591
Additions	1,399	11,229	12,628
Depreciation / amortisation	(18,108)	(54,009)	(72,117)
Carrying amount at end of year	87,791	154,311	242,102

	Note	2011	2010
		$	$
12. OTHER FINANCIAL ASSETS
Investment in financial assets
Cosmedics Australia Ltd		-	2,184,876
Less provision for impairment		-	(2,184,876)
		-	-
13. PAYABLES
Trade creditors		47,644	71,978
Sundry creditors and accrued expenses		169,400	132,428
		217,044	204,406
14. PROVISIONS
CURRENT
Employee benefits	14(a)	177,049	124,434
		177,049	124,434
(a) Aggregate employee benefits		177,049	124,434

(b) Number of employees at year end		13	11

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

	2011	2010
	$	$
15. CONTRIBUTED EQUITY
Closing balance contributed equity	31,859,351	24,153,408
Balance at beginning of year:
Opening balance contributed equity	24,153,408	21,536,237
Shares issued during the year:
Issue of shares	7,667,966	2,732,628
Issue of options	53,783	1,772
Lapsed/Excercised Options	(15,806)	-
Costs associated with share issues	-	(117,229)
Balance at the end of year
Closing balance contributed equity	31,859,351	24,153,408
Ordinary shares at the beginning of reporting period	524,877,643	180,109,739
Shares issued duringtheperiod	237,423,948	344,767,904
Fully paid ordinary shares at reporting date	762,301,591	524,877,643

Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the number of shares held.

At shareholders meetings each ordinary share is entitled to one vote when a poll is called, otherwise each shareholder has one vote on a show of hands.

On 10th November 2009 the Company completed a 1 for 1 rights and a placement and issued 219,609,739 shares at $0.006 each with an option exerciseable at $0.012 by 30th September 2010.

On 22nd January 2010 the Company issued 18,833,333 shares at $0.006 with one attaching option exerciseable at $0.012 by 30th September 2010.

On 24th June 2010 the Company issued 537,678 shares at $0.05 for the amount of $26,884 being a sharebased payment for reimbursement of expenses incurred by First Cape Management Pty. Ltd.

On 22nd December 2010 the Company issued 700,000 shares at $0.02 to the holder of options exerciseable at that price.

On 30th September 2010 the Company completed the allotment of 248,959,075 shares at $0.012 to holders of options expiring on that date, (143,203,622 in 2011; 105755,433 in 2010).

On 2nd February 2011 the Company completed the allotment of 78,845,313 shares at $0.065 to holders of options expiring on that date, (78,813,613 in 2011, 31,700 in 2010).

On 1st April 2011 the Company completed the allotment of 14,356,713 shares at $0.055 to holders of options expiring on that date, all of which were issued in 2011.

On 30th May 2011 the Company issued 350,000 shares at $0.07 to the holder of options exerciseable at that price.

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

Capital Management

Management controls the capital of the group to ensure that the group can fund its operations and continue as a going concern.

The group’s debt and capital includes ordinary share capital, options and financial liabilities, supported by financial assets.

There are no externally imposed capital requirements.

Management effectively manages the group’s capital by assessing the group’s financial risks and adjusting its capital structure in response to changes in these risks and in the market. These responses include the management of debt levels and share issues.

There have been no changes in the strategy adopted by management to control the capital of the group since the prior year.

since the prior year.
	Note	2011	2010
		$	$
Total Payables	13	217,044	204,406
Less Cash and Cash Equivalents	8	(6,863,593)	(1,425,894)
Net Cash Surplus		6,646,549	1,221,488
Total Equity		6,891,174	1,394,366
Gearing Ratio		N/A	N/A

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

Note	2011	2010
	$	$
16. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
i. Cash Flows from operating activities:
Net loss	(2,222,462)	(2,255,405)
Non-cash items:
Depreciation	86,390	72,117
(Profit) / Loss on disposal of non current assets	2,505	(20,000)
Options issued	53,783	1,772
Changes in assets and liabilities:
Decrease / (increase) in receivables	(84,081)	22,372
Decrease / (increase) in other current assets	(509)	(398)
(Decrease) / increase in trade creditors and accruals	12,638	(37,297)
(Decrease) / increase in other current liabilities	52,615	66,608
Net cash flows from operations	(2,099,121)	(2,150,231)

ii. For the purpose of this statement of cash flows, cash includes cash on hand and at call deposits with banks or financial institutions, net of bank overdrafts, as shown in Note 8.

iii. Credit Facilities The economic entity has no unused credit facilities with Banks or other financial institutions.

17. SEGMENT REPORTING

The economic entity operates in the life sciences sector. Furthermore, although activities are conducted in a number of countries, the core business functions supporting the activities of the economic entity are located in Australia.

18. RELATED PARTY TRANSACTIONS

Other than approved share transactions performed by Directors the Company conducted the following related party transactions:

1. Transocean Group Pty Ltd

a. James Henderson is a Director and the beneficial owner of Transocean Group Pty Ltd.

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

b. Lara Iacusso is a Director of Transocean Group Pty Ltd but does not hold any ownership interest in this company.
c. Transocean Group was a substantial shareholder of the Company. Transocean Securities Pty Ltd and Cardrona Capital Pty Ltd were wholly-owned subsidiaries of Transocean Group Pty Ltd.
d. During the year Transocean Securities Pty Ltd had the following related party transactions with the Company whilst it was a related party:
i. In December 2007, Transocean Securities entered into an exclusive mandate to provide capital raising and corporate advisory services to the Company. Transocean Securities received the following fees during the year:
- Monthly retainers paid under the mandate - $75,000 (2010: $180,000).
- Chairman’s fees for James Henderson - $61,250 (2010: $60,000)
- Additional fees for adviser services pursuant to the mandate $8,307 (2010: $67,918)
- Office rent to the Company - $30,250 (2010: $33,000)
e. During the year Cardrona Capital Pty Ltd was contracted to provide company secretarial services to the Company. Total fees paid were $60,000 (2010: $60,000) of which $55,000 was paid while Transocean was a related party.

2. Bodyworks Holdings Pty Ltd

In December 2007, the Company entered into a mandate with Bodyworks Holdings Pty Ltd to provide strategic technological advisory services to the Company. Dr Robert Gilmour is a Director and owner of this Company. As part of this mandate, Bodyworks Holdings Pty Ltd received the following fees during the year:

a. Consulting fees - $25,000 (2010: $60,000). Note these amounts are included in Directors Remuneration in the Director’s Report.

3. Shubrick Investments Pty Ltd

Richard Martin is a Director of Shubrick Investments Pty Ltd. During the year, Shubrick Investments Pty Ltd invoiced the Company for the following services.

a. Director’s fees - $40,996 (2010: $38,150). Note these amounts are included in Directors Remuneration in the Director’s Report.
b. Fees for Chief Financial Officer services - $48,231 (2010: $33,520).

Share Transactions of Directors - Directors and Director-related entities hold directly, indirectly or beneficially as at the reporting date the equity interests set out in Note 5.

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

19. CAPITAL AND LEASING COMMITMENTS

(a) Operating lease commitments

Non-cancellable operating leases contracted for but not capitalised in the financial report. This lease relates to the current business premises and expires in November 2012.

	2011	2010
	$	$
(a) Operating Lease Commitments
Payable:
- Not later than one year	254,813	244,318
- Later than one year and not later than five years	107,689	359,738
	362,502	604,056
(b) Capital Expenditure Commitments
Plant and Equipment Purchases	-	65,000
	-	65,000
Payable:
- Not later than one year	-	65,000
	-	65,000
(c) Operating Lease Receivables
Receivable:
- Not later than one year	121,938	118,318
- Later than one year and not later than five years	64,607	49,867
	186,546	168,185

20. FINANCIAL INSTRUMENTS

(a) Financial Risk Management Policies

The group’s financial instruments consist mainly of deposits with banks, accounts receivable and payables, loans to and from subsidiaries and convertible notes.

The main purpose of non-derivative financial instruments is to finance for Group operations. There are no derivatives used by the Group.

i. Treasury Risk Management

The senior management of the Group regularly analyse the financial risk exposure to evaluate treasury management strategies in the context of the most recent economic conditions and forecasts.

The management strategy seeks to assist the economic entity in meeting its financial targets, whilst minimising potential adverse effects on the financial performance.

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

The senior management operates under policies approved by the Board of Directors, rsk management policies are approved and reviewed by the Board on a regular basis. These include credit risk policies and future cash flow requirements.

ii. Financial Risk Exposures and Management

The main risks the Group is exposed to through its financial instruments are interest rate risk, foreign currency risk, liquidity risk and credit risk.

Interest Rate Risk

There is no significant interest expense rate risk as the Group does not have any external debt. Interest income rate risk is managed by placing cash excess to short term needs on deposit with one of top four banks in Australia. For further details on interest rate risk refer to Note 20 (b) (iii).

Foreign Currency Risk

The economic entity is not exposed to significant financial risks from movements in foreign exchange rates as there are no material financial assets and liabilities denominated in foreign currencies. This is inclusive of both on and off statement of financial position financial instruments. The Group does not participate in any type of hedging transaction or derivatives.

Liquidity Risk

The Group manages liquidity risk by monitoring forecast cash flows.

Credit Risk

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to recognised financial assets is the carrying amount as disclosed in the statement of financial position and notes to the financial statements.

Trade debtors that are neither past due or impaired are considered to be of high credit quality. Aggregates of such amounts are as detailed in Note 9.

(b) Financial Instruments

i. Net Fair Values

For all financial assets and liabilities the net fair value approximates their carrying value. No financial assets and financial liabilities are readily traded on organised markets. The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the statement of financial position and in the notes to the financial statements.

ii. Financial Instruments composition and maturity analysis

The tables below reflect the settlement terms for financial instruments of a fixed period of maturity, as well as management’s expectations of the settlement period for all other financial instruments.

Trade and sundry payables are expected to be paid as follows:

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

Note	2011	2010
	$	$
Trade and Sundry Payables are expected to be paid as follows:
- Less than 6 months	217,044	204,406
	217,044	204,406

Consolidated	Weighted average effective interest rate	Floating interest rate	Fixed interest rate maturing	Fixed interest rate maturing	Non-interest Bearing	Total
	2011 2010	2011 2010	2011 2010 Within 1 year	2011 2010 1 to 5 years	2011 2010	2011 2010
Group	% %	$ $	$ $	$ $	$ $	$ $
Financial Assets
Cash	4.75% 4.50%	1,745,594 1,307,894	4,999,999 -	118,000 118000	- -	6,863,593 1,425,894
Receivables	0.00% 0.00%	- -	- -	- -	137,352 53,271	137,352 53,271
Total Financial Assets		1,745,594 1,307,894	4,999,999 -	118,000 118,000	137,352 53,271	7,000,945 1,479,165

Financial Liabilit	ies
Payables	0.00% 0.00%	- -	- -	- -	217,044 204,406	217,044 204,406
Total Financial Liabilities		- -	- -	- -	217,044 204,406	217,044 204,406

iii. Sensitivity Analysis

Interest Rate Risk

The group has performed a sensitivity analysis relating to its exposure to interest rate risk at balance date. The sensitivity analysis demonstrates the effect on the current year results and equity which could result from a change in these risks.

At 30 June 2011, the effect on profit and equity as a result of changes in the interest rate, with all other variables remaining constant would be as follows:

Cash held in 2010 Weighted average interest rate Estimated interest earnt Movement in Profit Cash held in 2011 Weighted average interest rate Estimated interest earnt Movement in Profit	Actual Increase Rate by 2% Decrease Rate by 2% 1,425,894 1,425,894 1,425,894 4.50% 6.50% 2.50%	Actual Increase Rate by 2% Decrease Rate by 2% 1,425,894 1,425,894 1,425,894 4.50% 6.50% 2.50%
	64,165	92,683 35,647
	28,518 -28,518 6,863,593 6,863,593 6,863,593 4.75% 6.75% 2.75%
		28,518 -28,518
	326,021	463,293 188,749

		137,272 -137,272

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2011

21. CONTROLLED ENTITIES AND PARENT ENTITY DISCLOSURES

	21. CONTROLLED ENTITIES AND PARENT ENTITY DISCLOSURES
	2011 2010
	Parent entity:  Anteo Diagnostics Limited Aust Subsidiaries: Bio-Layer Pty Limited Aust 100% 100% Aged Care Diagnostics Pty Limited Aust 100% 100%

	2011 2010 $ $ Result of the Parent Entity Net Loss 427,072 561,955 Financial Position of Parent Entity Current assets 10,213,245 2,942,967 Non current assets 3,700,001 3,700,001 TOTAL ASSETS 13,913,246 6,642,968 Current liabilities 46,535 68,455 TOTAL LIABILITIES 46,535 68,455 NET ASSETS 13,866,711 6,574,513 EQUITY Contributed equity 52,597,570 44,891,627 Accumulated losses (38,730,859) (38,317,114) TOTAL EQUITY 13,866,711 6,574,513

22. AFTER BALANCE DATE EVENTS

The financial report was authorised for issue on the 29[th] August 2011 by the Board of Directors.

23. COMPANY DETAILS

The registered office and principal place of business of the Company is:

4/26 Brandl Street Eight Mile Plains QLD 4113

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

DIRECTORS’ DECLARATION

The Directors of Anteo Diagnostics Limited declare that:

(1) The financial statements and notes, as set out on pages 25 to 51 are in accordance with the Corporations Act 2001 and:
(a) comply with Accounting Standards, the Corporations Regulations 2001;and
(b) give a true and fair view of the financial position as at 30 June 2011 and of the financial performance for the year ended on that date of the Company and the economic entity,
(2) The Chief Executive Officer and the Chief Financial Officer have declared that :
(a) The financial records for the Company for the financial year have been properly maintained in accordance with section 286 of the Corporations Act 2001;
(b) The financial statements and notes for the financial year comply with the Accounting Standards; and
(c) The financial statements and notes for the financial year give a true and fair view.
(3) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable having regard to the disclosures made in Note 1 to the financial statements.

Signed in accordance with a resolution of the Board of Directors

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Mr Mark Bouris Chairman Dated this 29th day of August 2011

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AUDITOR’S INDEPENDENCE DECLARATION TO THE DIRECTORS OF ANTEO DIAGNOSTICS LIMITED

Grant Thornton Queensland Partnership ABN 13 131 589 059

Ground Floor 102 Adelaide Street Brisbane Queensland 4000 GPO Box 1008 Brisbane Queensland 4001 T + 61 7 3222 0200 F + 61 7 3222 0444 E [email protected] W www.grantthornton.com.au

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Anteo Diagnostics Limited for the year ended 30 June 2011, I declare that, to the best of my knowledge and belief, there have been:

1 No contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
2 No contraventions of any applicable code of professional conduct in relation to the audit.

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GRANT THORNTON QUEENSLAND PARTNERSHIP Chartered Accountants

M S Bell Partner

Brisbane, Dated 29 August 2011

Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia.

Liability limited by a scheme approved under Professional Standards Legislation

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INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF ANTEO DIAGNOSTICS LIMITED

Grant Thornton Queensland Partnership ABN 13 131 589 059

Ground Floor 102 Adelaide Street Brisbane Queensland 4000 GPO Box 1008 Brisbane Queensland 4001

T + 61 7 3222 0200 F + 61 7 3222 0444 E [email protected] W www.grantthornton.com.au

Report on the financial report

We have audited the accompanying financial report of Anteo Diagnostics Limited (the “Company”), which comprises the consolidated statement of financial position as at 30 June 2011, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information and the directors’ declaration of the consolidated entity comprising the Company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors responsibility for the financial report

The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view of the financial report in accordance with Australian Accounting Standards and the Corporations Act 2001. This responsibility includes such internal controls as the Directors determine are necessary to enable the preparation of the financial report to be free from material misstatement, whether due to fraud or error. The Directors also state, in the notes to the financial report, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s responsibility

Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards which require us to comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error.

Our Ref: 809414_2.DOC Liability limited by a scheme approved under Professional Standards Legislation

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In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

Auditor’s opinion

In our opinion:

1 The financial report of Anteo Diagnostics Limited is in accordance with the Corporations Act 2001, including:
a Giving a true and fair view of the consolidated entity’s financial position as at 30 June 2011 and of its performance for the year ended on that date; and
b Complying with Australian Accounting Standards and the Corporations Regulations 2001; and
a The financial report also complies with International Financial Reporting Standards as disclosed in the notes to the financial statements.

Report on the remuneration report

We have audited the remuneration report included in pages 17 to 22 of the directors’ report for the year ended 30 June 2011. The Directors of the Company are responsible for the preparation and presentation of the remuneration report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the remuneration report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s opinion on the remuneration report

In our opinion, the remuneration report of Anteo Diagnostics Limited for the year ended 30 June 2011, complies with section 300A of the Corporations Act 2001.

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GRANT THORNTON QUEENSLAND PARTNERSHIP Chartered Accountants

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M S Bell Partner

Brisbane, Dated 29 August 2011

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

ADDITIONAL ASX INFORMATION

SHAREHOLDINGS AS AT 24 AUGUST 2011

Distribution of shareholdings:

Holding From	Holding To	No. of Holders	Total Shares Held	%
1	1,000	1,064	482,529	0.06
1,001	5,000	460	1,159,420	0.15
5,001	10,000	229	1,808,098	0.24
10,001	100,000	996	45,848,999	6.02
Holdings larger than	100,000	729	713,011,564	93.53
TOTAL		3,478	762,301,591	100.00

Voting rights:

In accordance with the Company’s constitution, the following rights to vote apply to members holding ordinary shares:

(a) On a show of hands every member present in person or by proxy or attorney or representative will have one vote; and
(b) on a poll every member present in person or by proxy, attorney or representative will have one vote for each fully paid share held.

Holdings less than a Marketable Parcel:

As defined by the ASX Listing Rules a marketable parcel is a parcel of securities of not less than $500 in value based on the closing price on SEATS the date before the issue of the notice. At the date of this report, in relation to ordinary shares in the Company, a marketable parcel equates to 7,463 ordinary shares. The number of shareholders holding less than a marketable parcel and the number of shares held by them were as follows:

No. of holders holding less than a marketable parcel

asfollows:
No. of holders holding less than a marketable parcel	1.611
No. of shares held	2,176,358

Names and details of substantial shareholders

The following is a listing of Substantial Shareholders as at 23 August 2011.

Name of Substantial Shareholder	Shares held	% of Total
		Shares
First Cape Management Pty Ltd <FCM Unit	110,401,278	14.5
A/c>

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

ADDITIONAL ASX INFORMATION

Top 20 shareholders

The following is a listing of the 20 largest shareholders at 23 August 2011 together with the number of shares held and the percentage of total shares held.

Shareholder	Shares held	% of Total
FirstCape Management Pty Ltd	77,511,398	10.168
Austcorp NO 190 Pty Ltd	32,889,866	4.315
Nimrod Finance Limited	19,867,574	2.606
Mr Ian Andrew Noble & Mrs Annette Joy Noble <Noble Family	17,000,000	2.230
Retire Fund A/C>
Mrs Elizabeth Anne Sietsma	15,000,000	1.968
Mr Stephen Charles O'halloran	14,990,000	1.966
Transocean Securities Pty Ltd	12,437,876	1.632
Tisia Nominees Pty Ltd	12,224,785	1.604
Sietsma Holdings Pty Ltd	12,000,000	1.574
Miss Wei Wei Wai	11,800,000	1.548
Act2 Pty Ltd	11,000,000	1.443
Masali Pty Ltd	11,000,000	1.443
Mr Thomas David Cumming	10,500,000	1.377
Mr Konstantinos Bagiartakis	9,139,755	1.199
Hsbc Custody Nominees (Australia) Limited	8,610,611	1.130
Hsbc Custody Nominees (Australia) Limited - A/C 3	8,500,000	1.115
Abn Amro Clearing Sydney Nominees Pty Ltd <Custodian	6,601,824	0.866
A/C>
Mr Janakan Krishnarajah	5,537,003	0.726
Jp Morgan Nominees Australia Limited	5,271,900	0.692
Mr Nobuyoshi Joe Maeji	4,815,781	0.632
Total Top 20 Shareholders	306,698,373	40.233

On-market buy-back

There is currently no proposal to undertake an on-market buy-back of the Company’s securities.

Company Secretary:

Mr Shane Hartwig

Company Registered Office: 4/26 Brandl Street,

Eight Mile Plains QLD 4113 (07) 3219 0085 Share Registry: Registries Limited Level 7, 207 Kent Street Sydney.NSW 2000 1300 737 760

Stock Exchange Listing:

The Company’s securities are quoted on the official list of the ASX. The ASX listing code for the Company’s securities is: Ordinary shares - ADO

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

ADDITIONAL ASX INFORMATION

Unquoted Securities:

(a) Employee Option Plan

The Employee Option Plan dated 30 August 1999, provides that employees may be issued options to acquire shares in the Company. These options are not quoted on the Australian Stock Exchange. As at 26 August 2011 the total number of Options issued under the Employee Option Plan was 37,397,329 held by eleven holders.

(b) Other Unlisted Options

The following unlisted options to acquire ordinary shares are on issue as at 24 August 2011:

Options issued to the vendors of Bio-Layer	7,378,141
Total other unlisted options to acquire ordinary shares	7,378,141

The 7,378,141 options are held by 17 holders. The following entity holds more than 20% of these unlisted options:

Joe Maeji	3,660,142
First Cape Management Pty. Limited	1,543,951
Jason Armstrong	1,543,951

(c) Unquoted shares

There were nil unquoted fully paid ordinary shares as at 26 August 2011.

AI assistant

ANTEOTECH LTD — Annual Report 2011

64304_rns_2011-08-29_55ca7379-178b-4561-bcee-71b449f054fc.pdf

Anteo Diagnostics Limited

Consolidated Entity

ANNUAL REPORT 30 JUNE 2011

CORPORATE DIRECTORY

CHAIRMAN’S REPORT

Mr. Mark Bouris Non-Executive Chairman 29[th] August 2011

CEO’S REPORT

STABLE FINANCIAL PLATFORM

MIX&GO[TM] MARKET-READY PROGRAMME

COMMERCIAL AGREEMENTS PROVIDING CREDIBILITY

CEO’S REPORT

BOARD RENEWAL PROGRAM

STRENGTHENING OUR TEAM

CEO’S REPORT

OUTLOOK

DIRECTORS’ REPORT

CORPORATE GOVERNANCE

Structure of the Board

DIRECTORS’ REPORT

Ethical standards and corporate code of conduct

DIRECTORS’ REPORT

Audit & Risk Committee

DIRECTORS’ REPORT

Continuous Disclosure

DIRECTORS’ REPORT

Business Risk Management

Shareholder Communication

DIRECTORS’ REPORT

Trading in Company Shares

Nomination & Remuneration Committee

DIRECTORS’ REPORT

Remuneration Policies

Other Information

DIRECTORS

Mr Mark Bouris MCom

Chairman

Dr Geoffrey Cumming B.App.Sc, B.Sc.(Hons.), Chief Executive Officer - Executive Director MBA, PhD, MAICD

DIRECTORS’ REPORT

Mr Richard Martin BBus

Non-Executive Director

Mrs Sandra (Sam) Andersen LLB, CPA, FFinsia, FAICD Non-Executive Director

COMPANY SECRETARY

PRINCIPAL ACTIVITIES

CONSOLIDATED OPERATING RESULT

DIVIDENDS PAID OR RECOMMENDED

REVIEW OF OPERATIONS

AFTER BALANCE DATE EVENTS

FUTURE DEVELOPMENTS

ENVIRONMENTAL ISSUES

REMUNERATION REPORT (AUDITED)

Remuneration Policy

Executive Director and Executives (Executives)

Non-Executive Directors

Performance Based Remuneration

Company Performance, Shareholder Wealth and Directors’ and Executives’ Remuneration

DIRECTORS’ REPORT

Details of Directors’ Remuneration for the Year Ended 30 June 2011

Emoluments of the specified executive officers of the group for the Year Ended 30 June 2011

DIRECTORS’ REPORT

Details of Directors’ Remuneration for the Year Ended 30 June 2010

Emoluments of the specified executive officers of the group for the Year Ended 30 June 2010

Notes regarding Directors and executive emoluments:

Performance Remuneration as a Proportion of Total Remuneration

DIRECTORS’ REPORT

Options Issued as Part of Remuneration for the Year Ended 30 June 2011

Employment contracts of Directors and senior executives

MEETINGS OF DIRECTORS

INDEMNIFYING OFFICERS OR AUDITOR

DIRECTORS’ REPORT

SHARE OPTIONS

PROCEEDINGS ON BEHALF OF THE COMPANY

NON-AUDIT SERVICES

DIRECTORS’ REPORT

AUDITOR’S INDEPENDENCE DECLARATION

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2011

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2011

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2011

ANTEOTECH LTD Annual Report 2011