ANTEOTECH LTD — Annual Report 2012

Aug 26, 2012

Anteo Diagnostics Limited

ABN: 75 070 028 625

Consolidated Entity

Financial Statements for the year ending 30 June 2012

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

ANNUAL REPORT 30 JUNE 2012

Contents			Page	Contents	Page
Corporate Directory			1	Consolidated Statement of Changes in Equity	26
Chairman’s Report			2	Consolidated Statement of Cash Flows	27
CEO’s Report			3	Notes to the Financial Statements	28
Corporate Governance Statement			6	Directors’ Declaration	51
Directors’ Report			13	Auditor’s Independence Declaration	52
Consolidated Income Statement			24	Independent Audit Report	53
Consolidated Statement Position	of	Financial	25	Additional ASX Information	56

CORPORATE DIRECTORY

Directors Mark Bouris Non-Executive Chairman Geoffrey Cumming CEO, Executive Director Richard Martin 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 contact@anteodx.com 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 Freehills Patent Attorneys 101 Collins Street, Melbourne Victoria 3000 Share Registry Boardroom Pty Limited Level 2, 28 Margaret Street, Sydney NSW 2000 Insurance advisors Marsh Pty Limited 123 Eagle Street, Brisbane QLD 4000 Yellow Brick Road Wealth Management Pty Limited 1 Chifley Square, SYDNEY, 2001 Bankers Australia and New Zealand Banking Group Limited 3 Sherwood Road, Toowong QLD 4066

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ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

CHAIRMAN’S REPORT

Dear Shareholders,

In my first year as Non-Executive Chairman of Anteo Diagnostics Limited, I have been very encouraged by the company’s progress at both an operational and corporate level.

Mix&Go™ is clearly a unique technology that helps in the development of a range of clinical tests and assists in enabling the early detection of disease. This technology also has wide appeal in a large number of healthcare markets, in particular, in vitro diagnostics (IVD), research, point of care diagnostics and immunoprecipitation to name a few.

Anteo has made significant progress this year. In March, the company entered into another commercial agreement with a leading US based healthcare company, eBioscience. The eBioscience licensing agreement follows Anteo’s existing commercial agreements with Bangs Laboratories (‘Bangs’) and Merck Chimie SAS (‘Merck’), which provides real credibility to the company.

Crucially, Anteo has also made some solid progress in the protection of its intellectual property through the granting of a number of important patents in the US, Japan, Europe and Australia.

Anteo continues to be well funded to meet our objectives. The company has over $4.8 million in cash, and based on current expenditure and not including our future revenue, at this time the company is funded through to the end of March 2014. Given the uncertainty in global markets, the company has made a concerted effort to manage its cost base effectively while at the same time pursuing all growth opportunities.

The Board continues to review Anteo’s corporate strategy in order to maximise value for shareholders. The company retains the large IVD companies as its “Core Market” for commercialisation. We have engaged with selected “Expanded Markets” such as smaller IVD companies; Point of Care (POC)/biosensor companies and the R&D market to provide risk mitigation by a portfolio approach to deal making. This approach allows us to leverage the capabilities and skills developed for the Core Market whilst simultaneously giving the organisation the opportunity to add new skill sets and capabilities that will enable it to move into new markets in the future.

I would like to thank Geoff and our very dedicated team for their efforts in the past year. The Board has full confidence in where the leadership team is taking the company, and we look forward to another year of progress.

I would also like to thank our shareholders for their continued support in what has been a year of significant progress in very challenging markets. Anteo is in excellent shape and the Board has sound reasons for continued optimism.

Mr. Mark Bouris Non-Executive Chairman 27[th] August 2012

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ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

CEO’S REPORT

Dear Shareholders,

Financial Year 2012 has been a year of continued progress for Anteo Diagnostics Limited and we firmly believe we have the team in place, both on a corporate and technical level, and the right technology in the right markets, to build on the company’s growth.

The company achieved some significant milestones during the year that position the company well for the future.

STRONG FINANCIAL POSITION

Anteo is well placed financially with a cash balance of $4.8 million. At the time of reporting based on our current burn rate, excluding any future Mix&Go™revenues, execution of Anteo’s business strategy is funded through to March 2014.

PRODUCT DEVELOPMENT

Anteo’s strategy with regards to its Core Markets remains unchanged. Activities in its Expanded Markets are expected to yield synergies in the following areas:

• Expanding company capabilities with Mix&Go™ on beads to other surfaces such as plates, microarrays and biosensors expands use of the technology to meet the needs of the research market, veterinary applications, separations and as a tool in markets such as antibody manufacturing.

• Development of sample test kits allows a larger number of scientists in large companies to test Mix&Go™ personally. Some of Anteo’s strongest champions are scientists who have experienced the benefits of Mix&Go™ directly.

• Broadening our experience to include antigen down assays and competitive immunoassays as well as our existing sandwich immunoassays.

MIX&GO™ COMMERCIAL AGREEMENTS

Whilst we were pleased with the signing of a licensing agreement with eBioscience in March, we expect our level of commercial activity to increase in FY2013.

It takes time for major global IVD companies to change manufacturing processes as they are risk averse, and they dedicate significant amounts of time to assess new technology and undertake due diligence prior to accepting any new product such as Mix&Go™. It can be assumed when potential parties take up the Mix&Go™ technology, they do so with intent to migrate its use across their entire range of assays rather than a single assay. This obviously increases the importance of the decision for these companies, and as a result, their time to make a commercial decision. However, when success comes, as seen with the recent eBioscience agreement, it will be commensurately more rewarding for Anteo.

The eBioscience licensing agreement, signed on 13 March 2012, was significant for Anteo as the deal represented a transition up the value chain from bead manufacturers to test manufacturers, in accordance with the company’s business strategy. eBioscience operates in over 70 countries and is a recognised leader in Life Sciences reagents.

On 26 June, eBioscience was acquired by genetic products maker, Affymetrix Inc (NASDAQ:AFFX). The deal was completed for $315m in cash and is expected to significantly boost Affymetrix’s foothold in the fastgrowing immunology, oncology and translational medicine markets. Affymetrix also stated its aim to invest in research and development to develop new products using eBioscience’s technology.

For Anteo, this means that our Mix&Go™ technology has the exposure to a leading provider of microarraybased products and services who are investing to increase their product range. There is recognition that there are numerous other applications for Mix&Go™ both within their existing product range and with the new products that are under development. Anteo is committed to providing assistance where possible to ensure incorporation of Mix&Go™ into these products at the earliest possible opportunity.

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ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

CEO’S REPORT

INTELLECTUAL PROPERTY

Patenting, for Anteo, is critically important as it protects the company’s intellectual property for Mix&Go™ technology, as well as the methods for generating alternative versions of Mix&Go™. As Anteo continues to advance negotiations for new licensing agreements, protecting the technology’s value in large and strategically important markets is paramount.

Anteo was very active in its patent program over the past financial year with some key achievements’ for the period:

• European Patent for ‘Generation of Surface Coating Diversity’ granted (September 2011)

• Japanese Patent for ‘Use of Metal Complexes ‘ granted (December 2011)

• Australian Patent for ‘Use of Metal Complexes ‘ granted (March 2012)

• US Patent for ‘Use of Metal Complexes ‘ granted (May 2012)

COMPLIANCE WORK

Anteo continues to place significant emphasis on compliance in the areas of workplace health and safety, risk mitigation and corporate governance.

Zero harm to all employees, contractors and visitors remains a key imperative of the company, and Anteo is extremely pleased to report that no incidents occurred during the year.

Anteo has adopted a risk mitigation program that has led to the further development of our risk register that identifies potential risks to our business and the controls that have been put in place to address those risks. The register is reviewed on a quarterly basis and actions taken to mitigate against risk are monitored and measured.

A review of the company’s corporate governance framework has been performed in light of best practice recommendations released by the Australian Securities Exchange Corporate Governance Council in January 2011. The Anteo Board of Directors utilises a set of corporate governance practices and a code of conduct appropriate for the company.

OUTLOOK

I would like to acknowledge the continued support of all shareholders over the past year. Anteo continues to work to create value by expanding our business through commercial development with our Mix&Go™ technology in numerous and large healthcare markets worldwide.

I would also like to thank the Board and all our dedicated staff for their hard work and commitment during the year.

As we look forward to the next year and beyond, I am deeply encouraged by our strong financial platform and our experienced Board and management team. I remain extremely excited by the potential for the Mix&Go™ technology and the growing pipeline of licensing opportunities in strategic markets.

Geoff Cumming Chief Executive Officer 27[th] August 2012

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ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

CORPORATE GOVERNANCE

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ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

CORPORATE GOVERNANCE

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 13 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 structure of the Board to be appropriate for the Company in its present form.

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. A formal evaluation was undertaken during the 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”.

The 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.

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ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

CORPORATE GOVERNANCE

• 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 those delegated to senior executives described in the Board Charter and Company Governance Policies 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.

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ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

CORPORATE GOVERNANCE

Ethnic Diversity	Ethnic Diversity	Ethnic Diversity	Ethnic Diversity	Ethnic Diversity
Total	Australian	European	Asian	Americas
15	4	3	6	2
Gender Diversity Male Female Total Staff 7 8 Senior Executives/Directors 4 - Non-Executives Directors 1 1
Total Staff	7	8
Senior Executives/Directors	4	-
Non-Executives Directors	1	1

Languages Spoken: English, Portuguese, Cantonese, Malay, Japanese, Latvian, Russian, German, Dutch

Languages Spoken: English, Portuguese, Cantonese, Malay, Japanese, Latvian, Russian, German, Dutch	Languages Spoken: English, Portuguese, Cantonese, Malay, Japanese, Latvian, Russian, German, Dutch	Languages Spoken: English, Portuguese, Cantonese, Malay, Japanese, Latvian, Russian, German, Dutch	Languages Spoken: English, Portuguese, Cantonese, Malay, Japanese, Latvian, Russian, German, Dutch	Languages Spoken: English, Portuguese, Cantonese, Malay, Japanese, Latvian, Russian, German, Dutch
Education Diversity
Total	PhD	Masters	Bachelor	Other Qualifications
15	5	-	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 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	2 Audit & Risk Committee meetings were held during the
	an Audit Committee		financial year
4.2	Audit committee should		Mrs Sandra Andersen
	comprise:		- Independent
			- Attended all 2 meetings
	Only Non-Executive	No	Mr Richard Martin
	Directors		- Executive Director
			- Attended all 2 meetings
			Mr Martin as CFO undertakes the preparation of monthly
			management accounts and statutory reporting. Given
			the nature of his role the Board considers Mr Martin is
			an appropriate member.
	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
	chairperson, who is not	Yes
	chairperson of the Board		The Audit & Risk Committee has only two members. It
			is the Board’s view that two members are adequate to
			perform the duties required by the Audit & Risk
	At least three members	No	Committee.

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ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

CORPORATE GOVERNANCE

Rec.No	Description	Conform	Comments
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.

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 put out to tender on a triennial 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.

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.

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ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

CORPORATE GOVERNANCE

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 51 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.

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.

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ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

CORPORATE GOVERNANCE

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 two 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	No	Mr Mark Bouris
	independent Directors		- Independent
			- Attended 3 of 3 meetings
			Mr Richard Martin
			- Executive
			- Attended 3 of 3 meetings
	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 21 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

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ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

CORPORATE GOVERNANCE

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).

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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 2012.

DIRECTORS

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

Mr Mark Bouris Appointed 1 August 2011 Dr Geoffrey Cumming Mr Richard Martin Mrs Sandra Andersen

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 BCom(UNSW), MCom(UNSW),

Hon DBus(UNSW), Hon DLitt(UWS), F.S.A.

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: 5,000,000 (exercise price of 12 cents, expiry date of 24/10/2015, all are vested)

Dr Geoffrey Cumming B.App.Sc, B.Sc.(Hons.),

MBA, PhD, MAICD

Chief Executive Officer - Executive Director

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: 8,500,000 ordinary fully paid shares

13,000,000 options (exercise price of 7 cents, expiry date of 8/11/2014; 6,500,000 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).

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ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

Mr Richard Martin BBus

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: Chief Financial Officer; Member of the Audit & Risk Committee and Nomination & Remuneration Committee.

Director’s Interests: 3,000,000 options (1,400,000 exercise price of 7 cents, expiry date of 8/11/2014; 1,600,000 exercise price of 12 cents, expiry date of 24/10/2015. 2,300,000 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 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 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 and Rural Finance Corporation Limited.

Responsibilities: Chairman of the Audit & Risk Committee.

Director’s Interests: 3,000,000 (exercise price of 12 cents, expiry date of 24/10/2015, all are vested)

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.

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ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

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 Forge Resources; and a Non Executive Director/Company Secretary of ASX listed Exalt Resources Limited. Mr Hartwig has over 20 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 $2,380,199 compared with a loss for the 2011 year of $2,222,462.

As at 30 June 2012, the Company maintained cash reserves of $4,883,174 (2011: $6,863,593) 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.

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 chemicals for research use. Anteo complies with all Workplace, Health and Safety requirements.

15

ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

REMUNERATION REPORT (AUDITED)

This report details the nature and amount of remuneration for each Director and relevant Executives of Anteo Diagnostics Limited.

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 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 Directors and Executives (Executives)

The remuneration policy of Anteo Diagnostics Limited currently consists of a base remuneration 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.

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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 Mr Mark Bouris was issued 5 million options, Mrs Sandra Andersen 3 million options, and Mr Richard Martin 1.6 million options pursuant to shareholder resolution. These options form part of the Long Term Incentive component of their remuneration packages. All these options are vested. These options have an exercise price of $0.12 an expiry date of 24[th] October 2015.

The Company’s employees and consultants were issued a total of 4 million options forming the Long Term Incentive component of their remuneration packages. These options have an exercise price of $0.12 and an expiry date of 24[th] October 2014.

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, Workplace, Health & Safety and technical outcomes.

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ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

Details of Directors’ Remuneration for the Year Ended 30 June 2012

				Post
				Employment	Share
		Base Fee		Super-	Based
Parent Entity	Note	/ Salary	Bonus	annuation	Options	Other	Total
		$	$	$	$	$	$
M Bouris	1	-	-	68,750	86,500	-	155,250
R Martin	2	48,750	-	-	29,270	-	78,020
G Cumming	3	350,000	36,697	34,803	14,768	-	436,268
S Andersen	4	50,459	-	4,541	51,900	-	106,900
Total		449,209	36,697	108,094	182,438	-	776,438

Emoluments of the specified executive officers of the group for the Year Ended 30 June 2012

				Post
				Employment	Share
Economic		Base Fee		Super-	Based
Entity	Note	/ Salary	Bonus	annuation	Options	Other	Total
		$	$	$	$	$	$
J Maeji	5	178,900	20,000	50,000	3,297	-	252,197
N Abernethy	6	175,000	-	15,750	1,055	-	191,805
Total		353,900	20,000	65,750	4,352	-	444,002

A detailed list of Directors including their skills and experience can be found on page 13.

Notes regarding Directors and executive emoluments:

• (1) Mr Bouris was appointed a Director on 1 August 2011.

• (2) 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.

• (3) Dr Cumming was Chief Executive Officer for the full year.

• (4) Mrs Andersen was a director for the full year.

• (5) Dr Maeji was the Chief Scientific Officer for the full year.

• (6) Dr Abernethy was the Chief Product Development and Research Officer for the full year.

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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
Economic		Base Fee		Super-	Based
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

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.

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 9.2% of Dr Cumming’s remuneration for the year. During the year Dr Maeji was paid a bonus of $20,000 in respect of undertakings outside normal hours.

Options held by Directors amounting to $182,438 vested during the year, of which $167,670 were issued in accordance with shareholder resolutions during the reporting period.

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ANTEO DIAGNOSTICS LIMITED – CONSOLIDATED ENTITY ABN 75 070 028 625

DIRECTORS’ REPORT

Options Issued or Vested as Part of Remuneration for the Year Ended 30 June 2012

		Options	Total
	Granted No.	Granted as Part of	Remuneration Represented by Options Exercised Options Lapsed				Total
		Remuneration	Options
		$	%	$		$		$
M Bouris	5,000,000	86,500	56%		0		0	86,500
G Cumming	13,000,000	14,768	3%	50,000			0	64,768
R Martin	3,000,000	29,270	38%		0		0	29,270
S Andersen	3,000,000	51,900	49%		0		0	51,900
J Maeji	6,250,000	3,297	1%		0		0	3,297
N Abernethy	2,000,000	1,055	1%		0		0	1,055
Total	32,250,000	186,790		50,000			0	236,790
Options Outstanding as at 30 June 2012
	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	3,250,000	30/11/2010	Vested	$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	350,000	30/11/2010	Vested	$0.0045		$0.0700	8/11/2014
	700,000		30/11/2010 31/01/2013		$0.0025		$0.0700	8/11/2014
	1,600,000	1,600,000	24/10/2011	Vested	$0.0173		$0.1200	24/10/2015
M Bouris	5,000,000	5,000,000	25/10/2011	Vested	$0.0173		$0.1200	25/10/2015
S Andersen	3,000,000	3,000,000	26/10/2011	Vested	$0.0173		$0.1200	26/10/2015
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	1,562,500	8/11/2010	Vested	$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	500,000	8/11/2010	Vested	$0.0021		$0.0700	8/11/2014
	1,000,000		8/11/2010 31/01/2013		$0.0009		$0.0700	8/11/2014
Total	33,000,000	21,675,000

All Executive options were issued with performance based vesting conditions, except for Shane Hartwig. The options vest annually over a 3 year period. 9,600,000 options were issued to Directors during the year, these options had no vesting conditions.

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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, 7 meetings of Directors, 2 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
M Bouris R Martin G Cumming S Andersen	6 6 7 7 7 7 7 7	2 2 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 $25,544.

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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	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	5,175,000
8 November 2011	8 November 2014	$0.070	12,775,000
30 November 2011	8 November 2014	$0.070	15,450,000
24 October 2011	24 October 2015	$0.120	9,600,000
9 November 2011	24 October 2015	$0.120	4,000,000
			54,205,684

All options are on Issue to Employees, Directors, consultants or investors. 33,000,000 options were on issue to Directors and Executives and 21,205,684 options to employees, consultants and investors. The weighted average share price during the year was $0.0739.

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 2012.

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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 2012 has been received and can be found on page 52 which forms part of this report.

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

==> picture [135 x 58] intentionally omitted <==

Mr Mark Bouris Chairman Dated this 27[th] day of August 2012

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ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 30 JUNE 2012

		2012	2011
	Note	$	$
Sales revenue	2	146,700	11,846
Cost of sales		-	-
Grossprofit		146,700	11,846
Other revenue from ordinary activities	2	1,366,468	1,003,694
Selling and distribution expenses		(763,058)	(646,926)
Occupancy expenses		(35,750)	(33,000)
Administrative expenses – Other		(741,780)	(563,485)
Borrowing costs		(1,899)	(17)
Research and development expenses		(2,345,985)	(1,969,574)
Impairment of financial assets		(4,895)	-
Other expenses from ordinaryactivities		-	(25,000)
Loss from ordinary activities before income tax benefit	3	(2,380,199)	(2,222,462)
Income tax benefit relating to ordinary activities	4	-	-
Loss from ordinary activities after income tax benefit	17	(2,380,199)	(2,222,462)
Other Comprehensive Income		-	-
Total comprehensive income		(2,380,199)	(2,222,462)
Total changes in equity other than those resulting from transactions with owners as owners		(2,380,199)	(2,222,462)
Basic loss per share (cents)	7	(0.3)	(0.3)
Diluted loss per share (cents)	7	(0.3)	(0.3)

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

24

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2012

		Consolidated	Consolidated
		2012	2011
	Note	$	$
CURRENT ASSETS
Cash assets	8	4,883,174	6,863,593
Receivables	9	42,712	137,352
Other	10	2,767	2,448
TOTAL CURRENT ASSETS		4,928,653	7,003,393
NON-CURRENT ASSETS
Property, plant and equipment	11	282,745	281,874
TOTAL NON-CURRENT ASSETS		282,745	281,874
TOTAL ASSETS		5,211,398	7,285,267
CURRENT LIABILITIES
Payables	12	238,612	217,044
Provisions	13	200,221	177,049
TOTAL CURRENT LIABILITIES		438,833	394,093
TOTAL LIABILITIES		438,833	394,093
NET ASSETS		4,772,565	6,891,174
EQUITY
Contributed equity	14	32,120,941	31,859,351
Accumulated losses		(27,348,376)	(24,968,177)
TOTAL EQUITY		4,772,565	6,891,174

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

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ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2012

	Ordinary Shares	Options	Accumulated Losses	Total
	$	$	$	$
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 converting notes into ordinary 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)		-
Other Comprehensive Income	-	-	(2,222,462)	(2,222,462)
Balance at 30 June 2011	31,749,967	109,384	(24,968,177)	6,891,174
Balance at 1 July 2011	31,749,967	109,384	(24,968,177)	6,891,174
Issued during the year	57,500	-	-	57,500
Options expense for the period	-	204,090	-	204,090
Conversion of employee options into shares	582	(582)	-	-
Other Comprehensive Income	-	-	(2,380,199)	(2,380,199)
Balance at 30 June 2012	31,808,049	312,892	(27,348,376)	4,772,565

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

26

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2012

		Consolidated
	Note	2012	2011
		$	$
Cash Flows from Operating Activities:
Receipts from customers and government grants		1,383,796	917,232
Payments to suppliers and employees		(3,711,837)	(3,125,596)
Borrowing costs		(1,899)	(17)
Interest received		401,263	109,260
Net cash used in operating activities	15(i)	(1,928,677)	(2,099,121)
Cash Flows From Investing Activities:
Payment forproperty, plant and equipment		(109,242)	(128,667)
Net cashprovided by investing activities		(109,242)	(128,667)
Cash Flows From Financing Activities:
Proceeds from share issues		57,500	7,665,487
Net cashprovided by (used in) financing activities		57,500	7,665,487
Net increase (decrease) in cash held		(1,980,419)	5,437,699
Cash at start ofyear		6,863,593	1,425,894
Cash at end ofyear	8,15(ii)	4,883,174	6,863,593

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

27

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 2012. 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 2012 the Company had $4,883,174 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.

28

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

(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.

29

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

(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

30

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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.

31

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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.

32

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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 and Hull White valuation models.

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

At the date of authorisation of these financial statements, certain new standards, amendments and interpretations to existing standards have been published but are not yet effective, and have not been adopted early by the Group.

Management anticipates that all of the relevant pronouncements will be adopted in the Group's accounting policies for the first period beginning after the effective date of the pronouncement. Information on new standards, amendments and interpretations that are expected to be relevant to the Group’s financial statements is provided below.

Certain other new standards and interpretations have been issued but are not expected to have a material impact on the Group's financial statements.

AASB 9 Financial Instruments (effective from 1 January 2013)

The AASB aims to replace AASB 139 Financial Instruments: Recognition and Measurement in its entirety. The replacement standard (AASB 9) is being issued in phases. To date, the chapters dealing with recognition, classification, measurement and derecognition of financial assets and liabilities have been issued. These chapters are effective for annual periods beginning 1 January 2013. Further chapters dealing with impairment methodology and hedge accounting are still being developed. Management have yet to assess the impact that this amendment is likely to have on the financial statements of the Group. However, they do not expect to implement the amendments until all chapters of AASB 9 have been published and they can comprehensively assess the impact of all changes.

Consolidation Standards

A package of consolidation standards are effective for annual periods beginning or after 1 January 2013. Information on these new standards is presented below. The Group’s management have yet to assess the impact of these new and revised standards on the Group’s consolidated financial statements.

AASB 10 Consolidated Financial Statements (AASB 10)

AASB 10 supersedes the consolidation requirements in AASB 127 Consolidated and Separate Financial – Statements (AASB 127) and Interpretation 112 Consolidation Special Purpose Entities. It revised the definition of control together with accompanying guidance to identify an interest in a subsidiary. However, the requirements and mechanics of consolidation and the accounting for any non-controlling interests and changes in control remain the same.

AASB 11 Joint Arrangements (AASB 11)

AASB 11 supersedes AASB 131 Interests in Joint Ventures (AASB 131). It aligns more closely the accounting by the investors with their rights and obligations relating to the joint arrangement. It introduces two accounting categories (joint operations and joint ventures) whose applicability is determined based on

33

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

the substance of the joint arrangement. In addition, AASB 131’s option of using proportionate consolidation for joint ventures has been eliminated. AASB 11 now requires the use of the equity accounting method for joint ventures, which is currently used for investments in associates.

AASB 12 Disclosure of Interests in Other Entities (AASB 12)

AASB 12 integrates and makes consistent the disclosure requirements for various types of investments, including unconsolidated structured entities. It introduces new disclosure requirements about the risks to which an entity is exposed from its involvement with structured entities.

Consequential amendments to AASB 127 Separate Financial Statements (AASB 127) and AASB 128 Investments in Associates and Joint Ventures (AASB 128)

AASB 127 Consolidated and Separate Financial Statements was amended to AASB 127 Separate Financial Statements which now deals only with separate financial statements. AASB 128 brings investments in joint ventures into its scope. However, AASB 128’s equity accounting methodology remains unchanged. AASB 13 Fair Value Measurement (AASB 13)

AASB 13 does not affect which items are required to be fair-valued, but clarifies the definition of fair value and provides related guidance and enhanced disclosures about fair value measurements. It is applicable for annual periods beginning on or after 1 January 2013. The Group’s management have yet to assess the impact of this new standard.

AASB 2011-9 Amendments to Australian Accounting Standards Presentation of Items of Other Comprehensive Income s (AASB 101 Amendments) The AASB 101 Amendments require an entity to group items presented in other comprehensive income into those that, in accordance with other IFRSs: (a) will not be reclassified subsequently to profit or loss and (b) will be reclassified subsequently to profit or loss when specific conditions are met. It is applicable for annual periods beginning on or after 1 July 2012. The Group’s management expects this will change the current presentation of items in other comprehensive income; however, it will not affect the measurement or recognition of such items.

Amendments to AASB 119 Employee Benefits (AASB 119 Amendments) The AASB 119 Amendments include a number of targeted improvements throughout the Standard. The main changes relate to defined benefit plans. They:

• eliminate the ‘corridor method’, requiring entities to recognise all gains and losses arising in the reporting period in other comprehensive income

• streamline the presentation of changes in plan assets and liabilities

• enhance the disclosure requirements, including information about the characteristics of defined benefit plans and the risks that entities are exposed to through participation in them.

The amended version of AASB 119 is effective for financial years beginning on or after 1 January 2013. The Group’s management have yet to assess the impact of this revised standard on the Group’s consolidated financial statements.

AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements (AASB 124 Amendments)

AASB 2011-4 makes amendments to AASB 124 Related Party Disclosures to remove individual key management personnel disclosure requirements, to achieve consistency with the international equivalent (which includes requirements to disclose aggregate (rather than individual) amounts of KMP compensation), and remove duplication with the Corporations Act 2011. The amendments are applicable for annual periods beginning on or after 1 July 2013. The Group’s management have yet to assess the impact of these amendments.

Amendments to IAS 32 Financial Instruments: Presentation and IFRS 7 Financial Instruments: Disclosures 5

The amendments to IAS 32 add application guidance to address inconsistencies in applying IAS 32’s criteria for offsetting financial assets and financial liabilities. Qualitative and quantitative disclosures have been added to IFRS 7 relating to gross and net amounts of recognised financial instruments that are (a) set off in the statement of financial position and (b) subject to enforceable master netting arrangements and similar

34

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

agreements, even if not set off in the statement of financial position. The amendments are applicable for annual periods beginning on or after 1 January 2014. The Group’s management have yet to assess the impact of these amendments.

AASB Interpretation 20 Stripping Costs in the Production Phase of a Surface Mine

Clarifies that costs of removing mine waste materials (overburden) to gain access to mineral ore deposits during the production phase of a mine must be capitalised as inventories under AASB 112 Inventories if the benefits from stripping activity is realised in the form of inventory produced. Otherwise, if stripping activity provides improved access to the ore, stripping costs must be capitalised as a non-current, stripping activity asset if certain recognition criteria are met (as an addition to, or enhancement of, an existing asset). The interpretation is applicable for annual periods beginning on or after 1 January 2013. The interpretation will have no impact on the Group as it has no mining activities.

(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.

	Note	2012	2011
		$	$
2. REVENUE
Revenues from operating activities:
Sale ofgoods and services		146,700	11,846
Grants, Rent and Other		258,475	198,217
R&D Tax Concession		789,216	603,751
Sale of non current assets		-	-
Interest - other corporations		318,777	201,726
		1,366,468	1,003,694
Total Revenue		1,513,168	1,015,540

35

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

	Note	2012	2011
		$	$
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		11,477	11,174
Total amortisation of non-current assets		11,477	11,174
Depreciation of non-current assets:
Plant and equipment		80,464	69,536
Furniture,office equipment and software		16,430	5,680
Total depreciation of non-current assets		96,894	75,216
Borrowing costs:
Interest,otherpersons		1,899	17
		1,899	17
Movements in provisions:
Employee benefits		23,172	52,615
		23,172	52,615
Staff Remuneration
Salaries		1,499,466	1,259,650
Superannuation		199,828	111,187
Share Based Payments		204,090	53,783
		1,903,384	1,424,620
Operating lease rentals		298,592	278,974

36

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

	Note	2012	2012	2011	2011
		$		$
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		(714,057)		(666,739)
Add/(deduct) tax effect of :
- interest on converting note			-		-
- other deductible items			(39,896)		(43,247)
- options expensed for accounting purposes			61,227		16,135
- R&D tax concession additional deduction			-	(195,267)
Timing differences not brought to account to the extent of income tax losses			692,726		889,118
Income tax benefit attributable to ordinary activities			-		-
Weighted Average Effective Tax Rates			-		-
(b) Deferred Tax Assetsarising 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		9,232,978		9,083,441

5. DIRECTORS’ 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.

(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 vested during the year is on page 18 of the Directors Report.

37

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

The fair value of options issued to Directors and Executives was determined using the Black Scholes and Hull White methods 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 – 69% ii) Share price $0.07 iii) Exercise Price $0.12 iv) Risk Free Rate 3.9% v) The option life 4 years. vi) Employee exit rate 30%.

(d) Shares issued on exercise of remuneration options

2,875,000 shares were issued on the exercise of remuneration options during the year ended 30 June 2012 (2011: 1,050,000).

(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 2012.

				Options				Total
	Balance	Granted as	Options	Sold or		Balance	Total Vested	Exercisable
	1Jul 11	Remuneration	Lapsed	Exercised	Net Change	30 Jun 12	30 Jun 12	30 June2012
Parent Entity
Directors
M Bouris	-	5,000,000	-	-	5,000,000	5,000,000	5,000,000	5,000,000
G Cumming	15,500,000	-	-	2,500,000	(2,500,000)	13,000,000	6,500,000	6,500,000
R Martin	1,400,000	1,600,000	-	-	1,600,000	3,000,000	2,300,000	2,300,000
S Andersen	-	3,000,000	-	-	3,000,000	3,000,000	3,000,000	3,000,000
	16,900,000	9,600,000	-	2,500,000	7,100,000	**24,000,000 **	16,800,000	16,800,000

Number of options held by or at the nomination of Specified Executives (who held office during the year) as at 30[th] June 2012:

				Options				Total	Total
	Balance	Granted as	Options	Sold or		Balance	Total Vested	Exercisable	Unexercisable
	1 Jul 11	Remuneration	Lapsed	Exercised	Net Change	30 Jun 12	30 Jun 12	30 June 2012	30 June 2012
Specified
Executives
J Maeji	11,410,142	-	57,590	-	(57,590)	11,352,552	8,227,552	8,227,552	3,125,000
N Abernethy	2,372,329	-	-	-	-	2,372,329	1,372,329	1,372,329	1,000,000
S Hartwig	750,000	-		-	-	750,000	750,000	750,000	-
	14,532,471	-	57,590	-	(57,590)	**14,474,881 **	10,349,881	10,349,881	4,125,000

38

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

(f) Shareholdings

Number of shares held by or at the nomination of Directors and specified Executives as at 30[th] June 2012:

	Balance 1 Jul 11	Sold	Options Exercised	Net Change	Balance 30 Jun 12
Parent Entity Directors
M Bouris	-	-	-	-	-
R Martin	-	-	-	-	-
G Cumming	6,000,000	-	2,500,000	2,500,000	8,500,000
S Andersen	-	-	-	-	-
	**6,000,000 **	-	2,500,000	2,500,000	8,500,000

(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.

	Note	2012	2011
		$	$
6. AUDITORS’ REMUNERATION
Remuneration of the auditors of the company for:
- Auditingor reviewingfinancial report		50,767	47,432
		50,767	47,432
7. EARNINGS PER SHARE (EPS)
Weighted average number of ordinary shares outstanding during the year used in the calculation of basic EPS		763,000,430	668,831,388
Weighted number of dilutive options outstanding		52,015,254	134,629,504
Weighted average number of ordinary shares outstanding during the year used in the calculation of diluted EPS		815,015,684	803,460,892

39

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

	Note	2012	2011
		$	$
8. CASH ASSETS
Cash on hand		924	524
Cash at bank		4,727,706	1,668,196
Deposits at call		154,544	5,194,873
		4,883,174	6,863,593
9. RECEIVABLES
CURRENT
Trade debtors		143	19,121
		143	19,121
Other debtors		42,569	118,231
		42,712	137,352

2012 Trade Debtors Other debtors	143 42,569 Net Amount	Past Due but not impaired (days overdue) < 30 31-60 61-90 > 90 - - - - - - - -	143 42,569 Within initial trade	- - Impairment Provision
Total	42,712	- - - -	42,712	-
2011 Trade Debtors Other debtors	19,121 118,231	8,147 - - - - - - -	10,974 118,231	- -
Total	137,352	8,147 - - -	129,205	-

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:

	2012	2011
Current Trade Receivables
Balance 1 July	-	(30,000)
Amounts Written Off (uncollectable)	-	30,000
Amount Provided For	-	-
Closing Balance 30 June	-	-

40

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

	Note	2012	2011
		$	$
10. OTHER ASSETS
CURRENT
Prepayments		2,129	2,448
Deposits		638	-
		2,767	2,448
11. PROPERTY, PLANT AND EQUIPMENT
Plant and equipment, at cost		1,300,651	1,226,424
Accumulated depreciation		(1,111,197)	(1,030,729)
		189,454	195,695
Furniture and fittings, office equipment, at cost		494,237	459,216
Accumulated depreciation		(400,946)	(373,037)
		93,291	86,179
Total Property, Plant and Equipment		282,745	281,874

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:

41

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

2012	Furniture, Office Equipment	Plant and Equipment	Total
	$	$	$
Carrying amount at start of year	86,179	195,695	281,874
Additions	35,019	74,223	109,242
Loss on Assets Written down	-	-	-
Depreciation / amortisation	(27,907)	(80,464)	(108,371)
Carryingamount at end ofyear	93,291	189,454	282,745
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)
Carryingamount at end ofyear	86,179	195,695	281,874

42

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

	Note	2012	2011
		$	$
12. PAYABLES
Trade creditors		90,173	47,644
Sundrycreditors and accrued expenses		148,439	169,400
		238,612	217,044
		Consolidated
	Note	2012	2011
		$	$
13. PROVISIONS
CURRENT
Employee benefits	13(a)	200,221	177,049
		200,221	177,049
(a)Aggregate employee benefits		200,221	177,049
(b)Number of employees atyear end		15	13

43

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

	Note	2012	2011
		$	$
14. CONTRIBUTED EQUITY
Closingbalance contributed equity		32,120,941	31,859,351
Balance at beginning of year:
Opening balance contributed equity		31,859,351	24,153,408
Shares issued during the year:
Issue of shares		58,082	7,667,966
Issue of options		204,090	53,783
Lapsed/Excercised Options		(582)	(15,806)
Balance at the end of year
Closingbalance contributed equity		32,120,941	31,859,351
Ordinary shares at the beginning of reporting period		762,301,591	524,877,643
Shares issued during the period		2,875,000	237,423,948
Fully paid ordinary shares at reporting date		765,176,591	762,301,591

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 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; 105,755,433 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.

On 26th March 2012 the Company issued 200,000 shares at $0.02 to the holder of options exerciseable at that price.

On 28th March 2012 the Company issued 2,500,000 shares at $0.02 to the holder of options exerciseable at that price.

On 21st June 2012 the Company issued 175,000 shares at $0.02 to the holder of options exerciseable at that price.

44

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

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	2012	2011
		$	$
Total Payables	14	238,612	217,044
Less Cash and Cash Equivalents	8	(4,883,174)	(6,863,593)
Net Cash Surplus		(4,644,562)	(6,646,549)
Total Equity		4,772,565	6,891,174
Gearing Ratio		N/A	N/A

45

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

Note	2012	2011
	$	$
15. RECONCILIATION OF CASH FLOWS FROM OPERATING ACTIVITIES
i. Cash Flows from operating activities:
Net loss	(2,380,199)	(2,222,462)
Non-cash items:
Depreciation and Amortisation	108,371	86,390
(Profit) / Loss on disposal of non current assets	-	2,505
Share based remuneration	204,090	53,783
Changes in assets and liabilities:
Decrease / (increase) in receivables	94,640	(84,081)
Decrease / (increase) in other current assets	(319)	(509)
(Decrease) / increase in trade creditors and accruals	21,568	12,638
(Decrease) / increase in other current liabilities	23,172	52,615
Net cash flows from operations	(1,928,677)	(2,099,121)

• 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.

16. 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. The Company has concluded that there is only one segment at this time.

17. RELATED PARTY TRANSACTIONS

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 - $48,750 (2011: $40,996). Note these amounts are included in Directors Remuneration in the Director’s Report.

• b. Fees for Chief Financial Officer services - $89,250 (2011: $48,231).

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.

46

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

18. 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.

	Note	2012		2011
		$		$
(a) Operating Lease Commitments
Payable:
- Not later than one year			97,560	254,813
-Later than one year and not later than five years			-	107,689
			97,560	362,502
(b) Capital Expenditure Commitments
Plant and Equipment Purchases			83,577	-
			83,577	-
Payable:
- Not later than oneyear			83,577	-
			83,577	-
(c) Operating Lease Receivables
Receivable:
- Not later than one year			13,264	121,938
-Later than one year and not later than five years			-	64,607
			13,264	186,546

19. FINANCIAL INSTRUMENTS

(a) Financial Risk Management Policies

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

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.

47

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

The senior management operates under policies approved by the Board of Directors, risk 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 19 (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:

48

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

Note 2012 2011 $ $ Trade and Sundry Payables are expected to be paid as follows: - Less than 6 months 238,612 217,044 238,612 217,044	Note 2012 2011 $ $ Trade and Sundry Payables are expected to be paid as follows: - Less than 6 months 238,612 217,044 238,612 217,044	Note 2012 2011 $ $ Trade and Sundry Payables are expected to be paid as follows: - Less than 6 months 238,612 217,044 238,612 217,044	Note 2012 2011 $ $ Trade and Sundry Payables are expected to be paid as follows: - Less than 6 months 238,612 217,044 238,612 217,044	Note 2012 2011 $ $ Trade and Sundry Payables are expected to be paid as follows: - Less than 6 months 238,612 217,044 238,612 217,044	Note 2012 2011 $ $ Trade and Sundry Payables are expected to be paid as follows: - Less than 6 months 238,612 217,044 238,612 217,044	Note 2012 2011 $ $ Trade and Sundry Payables are expected to be paid as follows: - Less than 6 months 238,612 217,044 238,612 217,044
Consolidated Group	Weighted average effective interest rate	Floating interest rate	Fixed interest rate maturing		Non-interest Bearing	Total
	2012 2011 % %	2012 2011 $ $	2012 2011 $ $ Within 1 year	2012 2011 $ $ 1 to 5 years	2012 2011 $ $	2012 2011 $ $
Financial Assets
Cash	3.50% 4.75%	4,765,174 6,745,593	118,000 -	- 118,000	- -	4,883,174 6,863,593
Receivables	0.00% 0.00%	- -	- -	- -	42,712 137,352	42,712 137,352
Total Financial Assets		4,765,174 6,745,593	118,000 -	- 118,000	42,712 137,352	4,925,886 7,000,945
Financial Liabilit	ies
Payables	0.00% 0.00%	- -	- -	- -	238,612 217,044	238,612 217,044
Total Financial Liabilities		- -	- -	- -	238,612 217,044	238,612 217,044

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 2012, 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 2011 Weighted average interest rate Estimated interest earned Movement in Profit Cash held in 2012 Weighted average interest rate Estimated interest earned Movement in Profit	Actual Increase Rate by 2% Decrease Rate by 2% 6,863,593 6,863,593 6,863,593 4.75% 6.75% 2.75%	Actual Increase Rate by 2% Decrease Rate by 2% 6,863,593 6,863,593 6,863,593 4.75% 6.75% 2.75%
	326,021	463,293 188,749
	137,272 -137,272 4,883,174 4,883,174 4,883,174 3.50% 5.50% 1.50%
		137,272 -137,272
	170,911	268,575 73,248
		97,664 -97,664

49

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2012

20. CONTROLLED ENTITIES AND PARENT ENTITY DISCLOSURES

	20. CONTROLLED ENTITIES AND PARENT ENTITY DISCLOSURES
	2012 2011
	Parent entity:  Anteo Diagnostics Limited Aust Subsidiaries: Bio-Layer Pty Limited Aust 100% 100% Aged Care Diagnostics Pty Limited Aust 100% 100%
	2012 2011 $ $ Result of the Parent Entity Net Loss 461,931 427,072 Financial Position of Parent Entity Current assets 10,035,475 10,213,245 Non current assets 3,700,001 3,700,001 TOTAL ASSETS 13,735,476 13,913,246 CURRENT LIABILITIES Current liabilities 69,102 46,535 TOTAL LIABILITIES 69,102 46,535 NET ASSETS 13,666,374 13,866,711 EQUITY Contributed equity 52,859,162 52,597,570 Accumulated losses (39,192,788) (38,730,859) TOTAL EQUITY 13,666,374 13,866,711

22. AFTER BALANCE DATE EVENTS

There are no after balance date events that the Directors believe should be reported to shareholders

The financial report was authorised for issue on the 27[th] August 2012 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

50

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 24 to 50 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 2012 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

==> picture [134 x 59] intentionally omitted <==

Mr Mark Bouris Chairman Dated this 27th day of August 2012

51

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

AUDITOR’S INDEPENDENCE DECLARATION

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Grant Thornton Audit Pty Ltd ABN 91 130 913 594 ACN 130 913 594 Grant Thornton House 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 info.qld@au.gt.com W www.grantthornton.com.au

Auditor’s Independence Declaration To the Directors of Anteo Diagnostics Limited

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 2012, I declare that, to the best of my knowledge and belief, there have been:

• a no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

• b no contraventions of any applicable code of professional conduct in relation to the audit.

==> picture [124 x 39] intentionally omitted <==

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

==> picture [69 x 47] intentionally omitted <==

M S Bell Partner - Audit & Assurance

Brisbane, 27 August 2012

52

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

AUDITOR’S INDEPENDENCE DECLARATION

==> picture [206 x 40] intentionally omitted <==

Grant Thornton Audit Pty Ltd ABN 91 130 913 594 ACN 130 913 594

Grant Thornton House 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 info.qld@au.gt.com W www.grantthornton.com.au

Independent Auditor’s Report To the Members of Anteo Diagnostics Limited

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 2012, 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.

53

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625 AUDITOR’S INDEPENDENCE DECLARATION

==> picture [138 x 27] intentionally omitted <==

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

In making those risk assessments, the auditor considers internal control relevant to the 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:

• a the financial report of Anteo Diagnostics Limited is in accordance with the Corporations Act 2001, including:

• i giving a true and fair view of the consolidated entity’s financial position as at 30 June 2012 and of its performance for the year ended on that date; and

• ii complying with Australian Accounting Standards and the Corporations Regulations 2001; and

• b 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 16 to 21 of the Directors’ report for the year ended 30 June 2012. 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.

54

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

INDEPENDENT AUDIT REPORT

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Auditor’s opinion on the remuneration report

In our opinion, the remuneration report of Anteo Diagnostics Limited for the year ended 30 June 2012, complies with section 300A of the Corporations Act 2001.

==> picture [125 x 39] intentionally omitted <==

GRANT THORNTON AUDIT PTY LTD Chartered Accountants

==> picture [68 x 49] intentionally omitted <==

M S Bell Partner - Audit & Assurance

Brisbane, 27 August 2012

55

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

ADDITIONAL ASX INFORMATION

SHAREHOLDINGS AS AT 22 AUGUST 2012

Distribution of shareholdings:

Holding From	Holding To	No. of Holders	Total Shares Held	%
1	1,000	1,061	475,905	0.06
1,001	5,000	450	1,120,054	0.15
5,001	10,000	228	1,779,597	0.23
10,001	100,000	974	44,494,842	5.81
Holdings larger than	100,000	770	717,456,193	93.75
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

as follows:
No. of holders	holding less than a marketable parcel	1,656
No. of shares	held	2,577,440

Names and details of substantial shareholders

The following is a listing of Substantial Shareholders as at 22 August 2012.

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

56

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 22 August 2012 together with the number of shares held and the percentage of total shares held.

hares held and the percentage of total shares held.
Shareholder	Shares Held	%
First Cape Management Pty Ltd	77,511,398	10.128
Austcorp No 190 Pty Ltd	32,955,566	4.306
Nimrod Finance Limited	19,867,574	2.596
Mr Ian Andrew Noble & Mrs Annette Joy Noble <Noble Family Retire
Fund A/C>	17,400,000	2.274
Mrs Elizabeth Anne Sietsma	17,000,000	2.221
Masali Pty Ltd	12,500,000	1.633
Sietsma Holdings Pty Ltd	11,100,000	1.450
Mr Thomas David Cumming	10,500,000	1.372
Miss Wei Wei Wai	9,328,863	1.219
Act2 Pty Ltd	9,000,000	1.176
Hsbc Custody Nominees (Australia) Limited	8,781,223	1.147
Mr Konstantinos Bagiartakis	7,494,755	0.979
Bt Portfolio Services Limited	7,000,000	0.915
Mr Charles Edward Logan	6,108,057	0.798
Growsmart Super Fund Pty Ltd	6,000,000	0.784
Jp Morgan Nominees Australia Limited	5,813,400	0.760
Mr Nobuyoshi Joe Maeji	4,815,781	0.629
Koranya Pty Ltd	4,570,000	0.597
Mr Matthew David Burford	4,491,911	0.587
Mr Philip Alan Smith	4,270,000	0.558
Total Top 20 Shareholders	276,508,528	36.129

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: Boardroom Pty Limited Level 2, 28 Margaret 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

57

ANTEO DIAGNOSTICS LIMITED ABN 75 070 028 625

ADDITIONAL ASX INFORMATION

Unquoted Securities:

(a) Employee Option Plan

• The Employee Option Plan last approved by shareholders on 24[th] October 2011, 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 22 August 2012 the total number of Options issued under the Employee Option Plan was 23,100,000 held by nineteen holders.

(b) Other Unlisted Options

The following unlisted options to acquire ordinary shares are on issue as at 27[th] August 2012:

Options issued to the vendors of Bio-Layer	7,133,355
Total other unlisted options to acquire ordinary shares	7,378,141

The 7,378,141 options are held by 17 holders. The following entities hold 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 22 August 2012.

58