BPH ENERGY LTD - Annual Report 2010

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HEALTH + TECHNOLOGY + RESOURCES

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A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

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Directors

Auditor

Share Registry

Scientific Advisors

Australian Securities Exchange Listing

Registered Office

Principal Business Address

Australian Business Number

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Chairman’s Letter

Dear Shareholder,

The past year has seen BPH Corporate enhance its assets with a diversified outlook and exercise its option to invest in an exciting resources exploration company.

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Following shareholder, ASX and regulatory approval, BPH Corporate has acquired 19.06% of unlisted energy explorer Advent Energy Limited. Advent Energy is pursuing its right to earn an 85% interest in Petroleum Exploration Permit 11 (PEP 11), its cornerstone project situated in the offshore Sydney sedimentary Basin. Advent Energy also holds a portfolio of petroleum assets throughout Australia.

Advent Energy announced recently that it has secured the Ocean Patriot semi submersible rig to drill the initial well in PEP 11 later this year. Advent Energy has also announced an increase in its estimated prospective recoverable resources within PEP 11 to 13.2 Tcf (trillion cubic feet) (at the P50 or ‘best estimate’ level). The chosen location for the maiden exploration well in PEP11 is the New Seaclem-1 well, 55 km east of Newcastle, and targeting the Great White and Marlin prospects.

Encouragingly for Advent Energy and its shareholders, the independent site survey contractor’s analysis of pre-drilling site survey data over the primary drilling prospect states that the geological sequence immediately above the interpreted Permo-Triassic unconformity is “likely” to contain zone(s) of gas.

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The Ocean Patriot is due to drill two wells in the Bass Strait, offshore Victoria for another major operator prior to commencing work for Advent. The exact timing for completion of that two well program is to be determined and it is currently anticipated that the rig will be on that program until the fourth quarter of 2010, before being towed to the New Seaclem-1 location.

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Dr Robin Scaife, Principal Scientist

BPH Corporate’s biomedical research and technology groups are progressing well and work is underway to prepare both Cortical and MDS for IPOs. The Cortical IPO is near completion with the IPO being planned for the near future. Principal researcher Dr Robin Scaife was recently jointly awarded a Scott Kirkbride Melanoma Research Centre grant to pursue screening of compounds for inhibitors of melanoma cell survival and proliferation using Molecular Discovery Systems’ high content imaging and analysis platform.

During the period, Dr Scaife discovered a new class of anti-mitotic drugs that has now undergone extensive development toward pre-clinical testing of anti-cancer activity. Detailed analyses of chemical analogues of the new drug candidate have yielded a new drug candidate that exhibits nearly 1000 times the biological activity of the initial compound derived by MDS’ screening process. The new drug candidate has also undergone animal testing designed to rule out adverse toxic side effects and is primed for pre-clinical testing of anti-tumour activity.

Cortical Dynamics’ work has recently been published in the journal of Anesthesiology, entitled Propofol and Remifentanil Differentially Modulate Frontal Electroencephalographic Activity . The Cortical Dynamics team is developing this unique and patented depth of anaesthesia monitoring system for use during major surgery.

We will keep you informed of developments in what will be a very eventful period.

We look forward to another challenging and exciting year in 2011.

Yours Sincerely,

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Mr David Breeze Chairman

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Company Focus and Developments

BPH Corporate Limited [ASX: BPH] is an Australian Securities Exchange listed company with interests spanning the biotechnology and resources industries. BPH is developing biomedical research and technologies within Australian Universities and hospital institutes, and holds an interest in Australia’s most exciting resources company exploring for large natural gas resources off the NSW coast.

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BPH provides early stage funding, project management and commercialisation strategies for a direct collaboration, a spin out company or to secure a license. The company also provides commercial strategies for proof or concept, research and product development. BPH has invested into a wide portfolio of projects Australia-wide.

The company also partners with several academic institutions including Western Australian Institute for Medical Research (WAIMR), Swinburne University of Technology (SUT) and The Royal Melbourne Institute for Technology (RMIT) University.

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BPH holds a passive investment of nearly 20% of unlisted Australian natural gas exploration company Advent Energy Limited (“Advent”). Advent is preparing to drill the first ever offshore exploration well into the offshore Sydney Basin, targeting a multi trillion cubic foot (Tcf) resource.

Advent Energy Limited

Advent is an unlisted oil and gas exploration company based in Perth, Western Australia. Advent holds a strong portfolio of exploration assets throughout Australia, with its cornerstone project lying off the coast of NSW in Petroleum Exploration Permit 11 (PEP 11).

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Offshore Sydney Basin – PEP 11

Advent’s interest in PEP 11 is held through its wholly owned subsidiary, Asset Energy Pty Ltd. Advent Energy is pursuing its option to increase its current 25% interest to an 85% interest in PEP 11 by drilling the first well in this highly prospective permit. Joint venture partner Bounty Oil & Gas NL will thereby reduce their interest from 75% to 15%.

The offshore Sydney Basin is an untested but proven petroleum basin situated along the heavily populated and industrialised central coast of New South Wales. No drilling has taken place in the offshore Sydney Basin, despite a number of wells drilled in the adjacent onshore Sydney Basin which have flowed gas or encountered oil shows.

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Covered by PEP 11, a 200km long, 8,250km[2] permit, the offshore Sydney Basin is a significant exploration area with large scale structuring adjacent to the coastline from Wollongong to Newcastle (offshore NSW). Following reviews by Tanvinh Resources Pty Limited of recently reprocessed seismic data, estimates of the prospective recoverable resources comprised in PEP 11 prospects and leads have recently increased to 13.2 Tcf (P50 or ‘best estimate’ level) of natural gas. Furthermore, analysis of predrilling site survey data over the Great White and Marlin prospects concluded that the geological sequence associated with these prospects is “likely” to contain zone(s) of gas.

The prospectivity of this proven petroleum basin has been further enhanced by the confirmation of the presence of apparent ongoing hydrocarbon seeps. Data collected by Geoscience Australia along the continental slope / permit margin has demonstrated active erosional features in conjunction with geophysical indications of gas escape.

Furthermore, in reviews of its exploration data for the PEP 11 project, Advent has interpreted significant new seismically indicated gas features. Evaluation of the reprocessed seismic data for Direct Hydrocarbon Indicators (DHI) has revealed evidence of Flat Spots, Hydrocarbon Related Diagenetic Zones, and anomalous Amplitude Versus Offset features. These potential DHI have been observed coincident with key targets and increase the confidence for the first exploration well.

Successful exploration and field development of the anticipated volumes of natural gas reported could have a positive impact on New South Wales’ and Australia’s energy industry. PEP11 lies adjacent to the Sydney-Wollongong-Newcastle greater metropolitan area, with a population of approximately 5,000,000 people. Traditionally, all natural gas used in New South Wales has been piped in from South Australia and the Bass Strait. However, studies by the Australian Bureau of Agricultural and Resource Economics and the Australian Petroleum Production and Exploration Association state that those sources may not be able to meet the demand for gas in the medium to longer term.

Although there have been over a thousand wells drilled in offshore Australia, no exploration drilling has ever taken place in the Offshore Sydney Basin.

Advent has contracted the Ocean Patriot semisubmersible drilling rig to drill the first well in PEP 11. The Ocean Patriot is due to drill two wells in the Bass Strait, offshore Victoria for another major operator prior to commencing work for Advent. The exact timing of that two well program is to be determined and it is currently anticipated that the rig will be available in the fourth quarter of 2010.

Advent has commenced the lodgement of appropriate approval documents with relevant NSW and Commonwealth government departments and agencies. The New Seaclem-1 well will target the Great White and Marlin prospects, with a combined prospective gas resource estimate of 4.1 Tcf (gas in place, P50 level).

Exmouth sub-Basin region of the Carnarvon Basin

Advent Energy has an 8.3% interest (Permit Operator: Strike Energy Ltd) in a shallow, near shore permit in the Exmouth sub-Basin region of the Carnarvon Basin, which contains the undeveloped Rivoli Gas Field discovery. The Rivoli Joint Venture is considering a proposal to develop the Rivoli Gas Field to supply gas to nearby infrastructure at Exmouth.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Company Focus and Developments

Onshore Bonaparte Basin

Advent Energy holds EP 386 and RL 1 in the onshore Bonaparte Basin in northern Australia. The Bonaparte Basin is a hydrocarbon-bearing sedimentary basin straddling the border between the Northern Territory (NT) and Western Australia (WA). Most of the basin is located offshore, covering 250,000 square kilometres, compared to just over 20,000 square kilometres onshore.

Advent Energy holds 100% of Exploration Permit EP 386 (4,760 square kilometres in area) which covers the entire Western Australian section of the onshore Bonaparte Basin. The permits contain five sub-commercial gas fields which may be able to be advanced to commercial status with additional work. Previously three modest gas discoveries have been made along the western edge of the onshore Bonaparte Basin.

In the NT, Advent Energy holds 100% of Retention Lease RL-1 (166 square kilometres in area), which covers the Weaber Gas Field and two related prospects, Weaber North and Weaber Southwest. Geoscience Australia has estimated that the Weaber field contains 4.3 million barrels of oil equivalent.

Reports received by Advent Energy confirm that upon investigation of well completion reports and drill stem testing data from EP 386 and RL1 wells there is a strong evidence from pressure data that there is considerable upside potential in the area if damage can be avoided. Advent has initiated a multi-phased study to address methods of minimising formation damage and significantly improve gas flow rates.

Central Petroleum

Advent Energy holds a large shareholding in an ASX-listed Australian onshore hydrocarbon explorer, Central Petroleum Ltd (Central Petroleum) (ASX: CTP).

Central Petroleum holds exploration tenements that cover over 250,000km[2] of central Australia, and has recently announced a significant discovery at the Johnstone West-1 well.

Biotechnology Portfolio

Molecular Discovery Systems

Novel Anti-Mitotic Cancer Theraperutics

A team of expert cancer cell biology researchers at Molecular Discovery Systems (MDSystems) Limited have used state-of-the-art technology to screen synthetic molecules and natural extracts for new anti-cancer drugs. Using high-content imaging and computational analyses, these drug screening efforts have now yielded several new compounds that potently inhibit cancer cell proliferation.

One of these new anti-proliferative compounds, discovered by MDSystems cancer cell biology researcher Dr Robin Scaife, has undergone extensive development toward pre-clinical testing of anticancer activity. Detailed analyses of chemical analogues of the new drug have yielded a new compound that exhibits nearly 1000 times the biological activity of the initial entity derived by the primary screening process.

The new drug has also recently undergone testing in animals to rule out adverse toxic side effects. Animals exposed to very high levels of the new drug exhibited no signs of acute toxicity. MDSystems new anti-cancer drug is, therefore, primed for preclinical testing of anti-tumour activity.

The inhibition of cell proliferation and induction of cancer cell death is due to the anti-mitotic activity of these new drugs. Anti-mitotic drugs, such as the blockbuster microtubule cancer drug Taxol®, have long been considered to be among the most

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----- Start of picture text -----

Increase in vascular
permeability: protein
leakage Platelet activation,
serotonin release
Tumour Active
tissue vasoconstriction
Reduced
blood flow
Red-cell
Blood
stacking
High blood
viscosity
High interstitial
Endothelial cells Endothelial-cell fluid pressure
rounding up and blebbing; apoptosis
increased vascular resistance
----- End of picture text -----

Proposed mechanisms for rapid tumour vascular shutdown after treatment with CA-4-P or DMXAA.

clinically important cancer drugs discovered to date[[1]] , generating revenue well in excess of one billion USD/yr[[2]] ,[[3]] . More recently, it has been recognised that some of these microtubule drugs also selectively target the tumour vasculature. Since targeting of the tumour vasculature causes rapid tumour shrinkage, a number of new microtubule drugs have been developed in recent years by a range of pharmaceutical companies. In light of encouraging initial clinical results, these new microtubule drugs are currently undergoing extensive testing for anti-cancer activity in humans[[4]] . The microtubule perturbing compounds recently discovered by researchers at MDSystems clearly have the potential to join this class of highlypromising new anti-cancer drugs.

An exceptional opportunity exists for a drug development company to participate in this lead compound development program.

Dr Robin Scaife has also recently been awarded funding from the Scott Kirkbride Melanoma Research Centre (SKMRC) to spearhead a melanoma drug discovery programme. Although melanomas have a reputation for being particularly refractory to therapeutic intervention, some types of melanoma have recently been shown to respond well to a new class of customised cancer drugs. Dr Scaife and his collaborators at the Western Australian Institute of Medical Research (WAIMR) and the University of Western Australia will use

the high-content imaging and analysis platform at MDSystems to screen an arsenal of recently synthesized drug-like molecules for inhibitors of melanoma cell survival and proliferation.

[1] “Taxol has become one of the most valuable cytotoxic chemotherapeutic agents we have in clinical oncology. It has proven effective in ovarian, breast, lung, and head and neck cancer and it has contributed immensely to the quality of life of cancer patients,” (www.medicalnewstoday.com/articles/26471. php)
[2] “In 2000. BMS reported its annual sales of Taxol® was $1.592 billion - equal to excess $4.3 million per day” (www.21cecpharm. com/px)
[3] “A taxane is a type of chemotherapy that stops cell division in order to fight tumors. Sales of taxanes were approximately $2 billion in 2007,” (www.wikinvest.com/stock/Abraxis_BioScience_ (ABII)
[4] Read more at Suite101: New Cancer Treatment in FDA Trials, Vascular Disrupting Agents http://www.suite101.com/content/ new-cancer-treatment-in-fda-trials-vascular-disrupting-agentsa279581#ixzz103Z5L4J1

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InCell Analyser 1000

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Company Focus and Developments

Drug Discovery and High-Content Screening Technology

MDSystems has core expertise in high-content and high-throughput imaging and analysis, providing services for researchers worldwide. The MDSystems owned IN Cell Analyser 1000 (GE Healthcare) is a semi-automated cellular imaging and analysis platform that combines high-resolution imaging and high-content analysis to provide a technology that rapidly detects and quantifies cellular properties much faster than conventional methods. MDSystems has developed and applied a range of high-content analysis protocols to analyse diverse cellular processes such as cell proliferation, cell cycle progression, apoptosis, cytoskeletal changes and dynamics of intracellular organelles.

A recently synthesized collection of novel druglike molecules is available at MDSystems for High-Content Screening (HCS). High-throughput screening (HTS) of chemical libraries is widely regarded as the most efficient and cost effective approach to finding hits in early drug discovery. In light of the success of HTS in drug discovery, this technology has recently been developed to include high-content imaging and analysis. By providing access to pathways and phenotypic screening, HCS permits identification of modulators of a multitude of intractable molecular and cellular targets.

The screening compounds at MDSystems are based on novel and relatively complex chemical scaffolds that have been designed to have desirable pharmaceutical properties. By permitting analysis of complex cellular properties, the IN Cell Analyser 1000 at MDSystems is ideally suited for screening of these chemical resources for new pharmaceutical leads.

MDSystems is currently utilising the IN Cell Analyser 1000 for in-house screening of new lead molecules for drug development. The oncology drug discovery program at MDSystems has been greatly boosted by generous seed funding from the. Scott Kirkbride Melanoma Research Centre. In addition to the in-house drug discovery efforts, MDSystems is actively seeking high-content screening contracts.

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HLS5 Technology

MDSystems is working with the Western Australian Institute for Medical Research (WAIMR) to develop and validate HLS5 as a novel tumour suppressor gene. A concerted research effort by leading Australian scientists has revealed that HLS5 works through multiple pathways that may target cancer as well as a range of other diseases such as Huntington’s, Parkinson’s and HIV infection.

Professor Peter Klinken and his team at WAIMR have been awarded a grant for Melanoma Research from the Scott Kirkbridge Melenoma Research Centre (SKMRC). As a direct consequence of the grant, the team at WAIMR have been investigating the tumor suppressor gene HLS5 and its potential influence in melanoma. The team at WAIMR have uncovered a role for HLS5 in leukemia and breast cancer, and during that process they also noticed that the gene interacts with a number of key proteins involved in one of the known growth pathways associated with melanoma. They have been able to demonstrate that HLS5 associates with proteins that are able to regulate the growth and migration of melanoma cells.

A large grant from the National Health and Medical Research Council (NHMRC) has also been awarded to the HLS5 team.This grant : “Characterization of haemopoietic lineage determining genes” will be provided over the next three years. The research conducted under this grant will contine to look at the role of HLS5 in blood cell development, leukemia and cancer.

In September a poster on HLS5 was presented at The Society for Hematology and Stem Cells in Melbourne. The poster. : HLS5, a novel ubiquitin E3 ligase, modulates levels of sumoylated GATA-1 and regulates erythroid progenitor cell differentiation ,

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provided a great opportunity to present the research at an international meeting to an audience of researchers and clinicians working in the field of hematology and stem cells.

The investigation into the role of HLS5 has progressed well this year. To further understand the role of HLS5 the team are developing both cell lines and whole animals that have down regulated HLS5. A new lab environment has been set-up to enable the generation of these cell lines and will be complete later this year with the research taking place over a few months. The aim of the research will be to precisely define the biochemical function of HLS5. The tumour suppressor gene HLS5 has had a large volume of data gathered with the continued support of WAIMR.

MDSystems has exclusive rights to the tumour suppressor gene HLS5 and has developed an extensive patent portfolio , both as a potential therapeutic target and also underpinning its involvement in a variety of disease pathways. The patent portfolio surrounding HLS5 is currently going through National Phase filings in Australia and Europe, and the patent “Tumour Suppressor Factor” No. 7560253 has been issued as a patent in the United States of America.

Cortical Dynamics

BAR Technology

Cortical Dynamics is working with BPH and Swinburne University of Technology (SUT) to develop and commercialise a unique depth of anaesthesia monitoring system for use during major surgery. The core technology is based on real time analysis of the patients electroencephalograph (EEG) using a proprietary algorithm based on a mathematically and physiologically detailed understanding of the brain’s rhythmic electrical activity.

The theory was developed by Professor David Liley who heads the scientific team at Cortical Dynamics, and, for the first time, provides a meaningful way of relating brain electrical activity to the underlying physiological processes that generate it. Cortical Dynamics is confident that the resulting Brain Anaesthesia Response (BAR) analysis methodology and index will be a more sensitive measure of the state of the brain during anaesthesia than the

current alternatives. Alternative technologies are based on detecting empirical correlations between subjective assessments of the level of consciousness and a range of parameters derived from the quantitative analysis of EEG. This brain activity monitor also has potential in neuro-diagnostic applications, including the detection of the early onset of neurodegenerative diseases such as Alzheimer’s and Parkinson’s and in drug monitoring associated with these conditions.

Cortical Dynamics core technology can be used to monitor a number of clinical processes. The Brain Anaesthesia Response (BAR) monitor has been developed by Cortical Dynamics to detect the effect of anaesthetic agents on brain activity and assist anaesthetists in keeping patients optimally anaesthetised.The research funded through the National Health and Medical Research Council (NHMRC) Development Grant has enabled substantial improvements in the performance of the Brain Anaesthesia Response (BAR) monitor. In particular it has resulted in the development of a modified sensor layout having improved performance and sensitivity, as well as an upgrade of the data acquisition module to enable a greater resilience to the effects of noise and artefact in a range of clinical monitoring situations.

The Cortical Dynamics team have completed two clinical trials at The Royal Melbourne Hospital. The first trial was designed to test the sensitivity of a new method in quantifying the effect various levels of nitrous oxide have on measures of anaesthetic depth. The results were published in the peer reviewed international journal Computers in Biology and Medicine . The second trial was designed to evaluate the sensitivity of the BAR methodology to opioids and other intravenous anaesthetic drugs. These trials have provided evidence that the BAR algorithm is more sensitive than competitive monitors in detecting the effects of anaesthetics on brain activity.

Cortical Dynamics has analysed a comprehensive data set obtained from European collaborators. The analysis of this European data set using the BAR methodology unambiguously indicated that the effects of remifentanil (a powerful synthetic opioid) and propofol (a widely used intravenous general anaesthetic agent) on brain electrical

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Company Focus and Developments

BAR Technology (continued)

activity can be differentiated. These results suggest that analgesia and anaesthesia may be monitored independently using the EEG. The results of this analysis have been presented at the Australian and New Zealand College of Anaesthetists (ANZCA), and also published in the prestigious journal Anesthesiology in 2010.

The technology also has many other emerging applications, including neurodiagnostics pain response monitoring and neuropharmaceutical drug evaluation, which will be developed subsequent to the depth of anaesthesia monitoring system reaching the market.

The strategic focus for Cortical Dynamics is to validate the BAR systems measurement and monitoring of depth of anaesthesia and to complete development of market ready stand alone products and modules that integrate with market leading holistic patient monitoring systems. The company will continue to explore collaborative arrangements such as those with the European researchers to facilitate development and commercialisation of the Company’s technology.

Cortical Dynamics has developed an extensive patent portfolio which is currently going through National Phase filings in Australia, New Zealand, Japan, China, USA and Europe, and has this year been granted Patent No. 2004206763 for the patent “Method of monitoring brain function” in Australia.

potential to accelerate therapeutic treatment, lead to a reduction in hospitalisations and help reduce the overuse of antibiotics.

Amongst all infectious diseases, respiratory are the most common illnesses in the world. They are highly contagious and are easily spread. The disease causing bacteria can remain in the air where they can easily reach other individuals by inhalation. The number of patients suffering from respiratory infections is increasing, as is the number of deaths caused by these diseases. DAS has completed their research with in-house validation and have been in discussions with third parties to license the technology.

BPH has assisted with funding the development of BacTrak™ which includes a number of key features that underpin its commercial potential. These include:

Rapid simultaneous detection of 16 respiratory pathogens including Tuberculosis (TB), Legionella, and Methycillin Resistant Staphylococcus Aureus (MRSA).
Results within hours rather than days using the current culture gold standard.
Sensitivity and positive confirmation for the 16 pathogens from easily obtained clinical sputum samples.

Direct benefits from the project development include:

Earlier, pathogen specific treatment;

Diagnostic Array Systems

Diagnostic Array Systems (DAS) has created the BacTrak™ System which is a diagnostic test for the detection of respiratory infections (e.g. diagnosis of pneumonia, Tuberculosis (TB) and Legionella disease). Our system identifies the cause of disease by testing for multiple bacteria in a single sputum sample quickly, efficiently and more accurately than current techniques. The test has important implications for the clinical management of infectious diseases by identifying the specific bacteria responsible for a disease and suggesting the most effective therapy. Utilisation of the novel test is intended to provide more information, more quickly, than alternative methods. It has the

Shorter length of hospital stay;
Earlier potential isolation of hospital patients; and
Reduction in the over-prescription of broadspectrum antibiotics.

The core technology underlying this multiplexed screening is protected by international patents currently going through National Phase in Australia, China, Europe and the US. BPH is confident that the BacTrak Technology and/or Intellectual Property will yield a substantial return on negotiation and completion of a suitable out-licensing deal.

10 BPH Corporate Limited | A N N U A L R E P O R T 2010

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Directors’ Report

The directors of BPH Corporate Ltd (formerly BioPharmica Limited) (“BPH Corporate”) present their report on the company and its controlled entities for the financial year ended 30 June 2010.

Directors

The names of directors in office at any time during or since the end of the year are:

D L Breeze

G Gilbert H Goh

S K Yap (resigned 26 August 2009) D Ambrosini (appointed 31 August 2009)

Company Secretary

Ms Deborah Ambrosini continues in her role of Company Secretary. She also holds the position of Financial Controller of the Company and has over 10 years experience in Corporate accounting roles.

Principal Activities

Biotechnology

BPH Corporate’s existing Biotechnology investments include its 3.89% interest in Cortical Dynamics Ltd; 51.82% interest in Diagnostic Array Systems Pty Ltd; 20% interest in Molecular Discovery Systems and its interest in the SERS project.

Molecular Discovery Systems (MDS)

This new class of anti-mitotic drugs, discovered by MDS’ cancer cell biology researcher Dr Robin Scaife, has undergone extensive development toward pre-clinical testing of anti-cancer activity. Detailed analyses of chemical analogues of the new drug have yielded a new drug that exhibits nearly 1000 times the biological activity of the initial compound derived by the aforementioned screening process.

The new drug has also recently undergone testing in animals to rule out adverse toxic side effects and is, therefore, primed for pre-clinical testing of antitumour activity.

HLS5 Project

During the period BPH Corporate disposed of its interests in the HLS5 technology and its associated project to MDS.

MDS is working with the Western Australian Institute for Medical Research (WAIMR) to develop and validate HLS5 as a novel tumour suppressor gene. A concerted research effort by leading Australian scientists has revealed that HLS5 works through multiple pathways that may target cancer as well as a range of other diseases such as Huntington’s, Parkinson’s and HIV infection.

MDS has developed an extensive patent portfolio and has exclusive rights to the tumour suppressor gene HLS5, both as a potential therapeutic target and also underpinning its involvement in a variety of disease pathways.

Cortical Dynamics

Cortical Dynamics is working with BPH Corporate and Swinburne University of Technology (SUT) to develop and commercialise a unique depth of anaesthesia monitoring system for use during major surgery. The core technology is based on real time analysis of the patients electroencephalograph (EEG) using a proprietary algorithm based on a mathematically and physiologically detailed understanding of the brain’s rhythmic electrical activity.

The Cortical Dynamics team lead by Professor David Liley have recently finished analysing a comprehensive data set from Europe using the Brain Anaesthesia Response (“BAR”) methodology and have completed the results for publication. The team has also successfully completed an NHMRC Grant which has significantly improved the ability of the BAR monitor to detect a wide range of anaesthetic drug effects. This concludes the most important component of the system development and integration of the BAR monitor. Current calibration trials are underway.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Directors’ Report

Diagnostic Array Systems (DAS)

Diagnostic Array Systems (DAS) is working with BPH Corporate and RMIT University to develop and commercialise BacTrak™, a diagnostic tool that will enable pathology laboratories and the emergency departments of hospitals to provide patients with fast and accurate identification of disease causing bacteria from a single sputum sample. The test has important implications for the clinical management of infectious diseases by identifying the specific bacteria responsible for a disease and suggesting the most effective therapy. Utilisation of the novel test is intended to provide more information, more quickly, than alternative methods. It has the potential to accelerate therapeutic treatment, lead to a reduction in hospitalisations and help reduce the overuse of antibiotics.

Advent Energy Limited

BPH Corporate currently holds a passive interest of 19.06% in unlisted Australian exploration company Advent Energy Limited.

Advent Energy holds a strong portfolio of exploration assets throughout Australia, with its cornerstone project lying off the coast of NSW in Petroleum Exploration Permit 11 (PEP 11).

Advent Energy, through its wholly owned subsidiary Asset Energy Pty Ltd, is pursuing its option to increase its current 25% interest to an 85% interest in PEP 11 by drilling the first well in this highly prospective permit. The offshore Sydney Basin contains all the elements seen in other producing world class structures. The PEP11 permit covers 8,250km[2] on the doorstep of Australia’s largest energy market and extensive gas infrastructure.

Advent assumed operatorship of PEP11 in 2008 and has since generated an extensive accumulation of data demonstrating an active hydrocarbon system in what is considered a proven petroleum basin. The permit has recently been estimated to contain 13.2 trillion cubic feet (TCF) prospective recoverable gas resources (at the P50 or ‘best estimate’ level).

Advent has secured the semi-submersible drilling rig Ocean Patriot to drill the first well offshore NSW to evaluate a target of multi-TCF size. Drilling is planned to commence in mid October 2010.

Operating Results

The consolidated loss of the economic entity after providing for income tax was $234,457 (2009 $2,240,611).

Dividends

The Directors recommend that no dividend be paid in respect of the current period and no dividends have been paid or declared since the commencement of the period.

Review of Operations

The major activities throughout the period were (a) BPH Corporate invested $12.8M into unlisted oil and gas explorer Advent Energy Ltd. The investment gave BPH 19.06% of Advent Energy’s share capital who is pursuing its option to increase its current 25% interest to an 85% interest in PEP 11 by drilling the first well in this highly prospective permit. (b) the commencement of animal testing to rule out the toxicity affects of the new class of aniti mitotic drugs discovered by MDS (c) Cortical Dynamics Limited has completed an analysis with the BAR analysis method of a comprehensive dataset from a European clinical research centre. The results have been finalised for publication. (d) the HLS5 team were awarded an National Health and Medical Research grant to assist with research to look at the role of HLS5 in blood development, leukemia and cancer.

Financial Position

The net assets of the economic entity increased by $14,980,714 to $15,697,202 at 30 June 2010. This increase has largely resulted from the following factors:

Cash balances increasing by $1,483,552 after three successful capital raisings
Acquisition of investment in Advent Energy Limited $12,800,000
The consolidated entity posting a significantly reduced net loss of $208,785 (2009: $2,215,717) following the spin off of its subsidiary Molecular Discovery Systems.

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Significant Changes in State of Affairs

During the year BPH Corporate conducted three separate capital raisings generating a total of $17.3M in additional capital for the Company.

On 12 August 2009 and 21 September 2009, the Company announced to the ASX its intention, subject to the receipt of all necessary Shareholder, regulatory and ASX approvals, to exercise an exclusive option to acquire between 9.7% and 19.5% of Advent Energy (Advent Interest), an unlisted oil and gas exploration company based in Perth, Western Australia. Advent Energy holds a portfolio of petroleum assets throughout Australia, including the cornerstone project situated in the offshore Sydney sedimentary Basin within Petroleum Exploration Permit 11.

The Company received approval from Shareholders at the General Meeting held on 24 December 2009 to proceed with the above transaction.

On 6 January 2010 BPH Corporate spun off its 100% owned subsidiary Molecular Discovery Systems Ltd. Under the spin off BPH transferred 100% of its interest in the HLS5 technology and it associated technologies to investee company Molecular Discovery Systems Ltd. BPH Corporate still holds a 20% interest in Molecular Discovery Systems Ltd.

On 6 January 2010, BPH Corporate initiated its investment option with Advent Energy Ltd and invested $7M. On 7 April 2010 BPH Corporate advised the ASX that it had acquired a further $5.8 million equity in Advent Energy, representing a total of $12.8 million invested by BPH to date. BPH could invest up to $14 million under the exclusive option agreement granted to them on 29 September 2009, which expired on 30 June 2010.

On 15 June 2010 BPH Corporate entered into a secured loan agreement with Advent Energy. The principal amount of the loan is $1M with further advances up to an additional $3M payable at the discretion of the Company.

After Balance Date Events

On 21 July 2010 BPH Corporate signed a share sale agreement with MEC Resources Ltd (“MEC”). The Company has agreed to purchase 3M fully paid ordinary shares in the capital of Advent Energy Ltd from MEC in consideration for 18.75M ordinary shares in the Company reflecting an agreement reached in December 2009. The agreement is subject to the Company obtaining all necessary shareholder approvals required by the Corporations Act and the ASX Listing Rules in relation to the transaction.

On 30 July 2010 BPH Corporate announced a non renounceable entitlements issue for its shareholders. The offer provides shareholders with the right to purchase one share for every two shares held at an issue price $0.08 cents per share to raise approximately $8,278,170 (before costs). As at the date of this report $1,003,274 has been raised.

On 30 July 2010 BPH Corporate entered into a sub-underwriting agreement with GBA Securities. GBA Securities agreed to underwrite the non renounceable entitlements offer of 103,477,123 shares announced 30 July 2010 on best endeavours basis.

Environmental Issues

The consolidated group’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a state or territory.

Future Developments

The entity will continue to assist its investee companies to commercialise breakthrough biomedical research developed in universities, medical institutes and hospitals.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Directors’ Report

Information on Directors

G Gilbert

Non-Executive Director – Age 62

D L Breeze

Managing Director and Executive Chairman – Age 56

Shares held – 13,019,621 Unlisted Options held – 2,000,000

David is a Corporate Finance Specialist with extensive experience in the stock broking industry and capital markets. He has been a corporate consultant to Daiwa Securities; was formerly Manager of Corporate Services for Eyres Reed McIntosh and the State Manager and Associate Director for the stock broking firm BNZ North’s.

David has a Bachelor of Economics and a Masters of Business Administration, and is a Member of the Australian Institute of Management, a Fellow of the Financial Services Institute of Australasia, and a Fellow of the Institute of Company Directors of Australia. He has published in the Journal of Securities Institute of Australia and has also acted as Independent Expert under the Corporations Act. He has worked on the structuring, capital raising and public listing of over 70 companies involving in excess of $250M. These capital raisings covered a diverse range of areas including oil and gas, gold, food, manufacturing and technology.

David is Chairman of Grandbridge Limited, a publicly listed investment and advisory company and an Executive Director of MEC Resources Ltd, Advent Energy Ltd and Cortical Dynamics Ltd.

Shares held – 961,538 Unlisted Options held – 2,000,000

Greg is a specialist in strategy and planning and works in the health and aged care sector. He has a Master of Science from Cranfield University in the UK and, in addition, has a Master of Health Administration from La Trobe University, an MBA from Deakin University, a BA from the University of Queensland, and a Dip.App Sc from the Royal Military College Duntroon.

Greg has an extensive background in merchant banking and banking, having held the position Global Head of Strategy and Finance and Project Director Global Credit Review with the National Australia Bank, as well as having worked in executive roles with Capel Court Investment Bank, CIBC Australia Limited and Bentley and Chau.

Greg has also worked with the National Australia Bank as an Internal Consultant on strategic operational reviews with Mckinsey and Company and Booz Allen and Hamilton consultants.

A former Lieutenant Colonel in the Australian Defence Force, he has extensive senior management experience in strategic planning, financial management, change management and project management as well as merchant banking and corporate advisory experience in mergers and acquisitions and valuations.

14 BPH Corporate Limited | A N N U A L R E P O R T 2010

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H Goh

Non-Executive Director – Age 55

Shares held – 961,538 Unlisted Options held – 2,000,000

Hock was formerly President of Network and Infrastructure Solutions, a division of Schlumberger Limited, based in London with revenue in excess of US$1.5 billion. He had global responsibility of Schlumberger’s outsourcing services, security, business continuity and networked related business units.

Prior to that, Hock was President of Schlumberger Asia based in Beijing, China where he managed their Asian operations consisting of a broad range of services including oil field services, outsourcing, financial software and smartcards. Hock was responsible for US$800 million in revenue and more than 2,000 employees spread across 17 countries.

In his 25 year career with Schlumberger, Hock held several other field and management responsibilities in the oil and gas industry spanning more than ten countries in Asia, the Middle East and Europe. Hock started as an oil field service engineer in Indonesia in 1980 before moving to Australia where he worked on the rigs in Roma, Queensland, Bass Strait in Victoria and the Northwest Shelf, offshore Western Australia.

Hock is also an operating partner with Baird Capital Partners, the U.S. based buyout fund of Baird Private Equity, providing change-of-control and growth capital to middle-market companies. Baird Private Equity has raised and managed $1.7 billion in capital.

Hock is the Chairman of Netgain Systems, a network monitoring software provider. He also serves on the Board of Xaloy Holdings, a US based steel components manufacturer for the plastic industry, as well as an independent director of THISS Technologies Pte Limited, a Singapore based satellite communication provider. He received his B Eng (Hons) in Mechanical Engineering from Monash University, Australia. He also completed an Advanced Management Program at INSEAD/ France in 2004.

Hock is Chairman of ASX listed company MEC Resources Ltd.

D Ambrosini

Executive Director – Age 36

Shares held – nil Unlisted Options held – 2,000,000

Deborah is a chartered accountant with over 11 years’ experience in accounting and business development spanning the biotechnology, mining, IT communications and financial services sectors. She has extensive experience both nationally and internationally in financial and business planning, compliance and taxation.

Deborah is a member of the Institute of Chartered Accountants and was a state finalist in the 2009 Telstra Business Woman Awards. Deborah is also a Director of ASX listed MEC Resources Ltd, and unlisted entities Advent Energy Ltd, Cortical Dynamics Ltd and Molecular Discovery Systems Ltd.

Remuneration Report

This report details the nature and amount of remuneration for each director of BPH Corporate Limited, and for the executives receiving the highest remuneration.

D L Breeze – Executive Chairman

H Goh – Non-Executive Director G Gilbert – Non Executive Director S K Yap – Non-Executive Director (resigned 26 August 2009) D Ambrosini – Executive Director and Company Secretary (appointed 31 August 2009)

Remuneration Policy

The remuneration policy of BPH Corporate Limited has been designed to align director and executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific long-term incentives based on key performance areas affecting the economic entity’s financial results. The board believes the remuneration policy to be appropriate and effective in its ability to attract and retain the best executives and directors to run and manage the economic entity, as well as create goal congruence between directors, executives and shareholders.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Directors’ Report

Remuneration Policy (continued)

The board’s policy for determining the nature and amount of remuneration for board members and senior executives of the economic entity is as follows:

The remuneration policy, setting the terms and conditions for the executive directors and other senior executives, was developed and approved by the board after seeking professional advice from independent external consultants.
All executives receive a base salary (which is based on factors such as length of service and experience), superannuation, fringe benefits, options and performance incentives.
The board reviews 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.

The performance of executives is measured against criteria agreed biannually with each executive and is based predominantly on the amount of their workloads and responsibilities for the company. The board may, however, exercise its discretion in relation to approving incentives, bonuses and options, and can recommend changes to recommendations. Any changes must be justified by reference to measurable performance criteria. The policy is designed to attract the highest calibre of executives and reward them for performance that results in long-term growth in shareholder wealth.

Executives are also entitled to participate in the employee share and option arrangements.

The executive directors and executives which receive salaries receive a superannuation guarantee contribution required by the government, which is currently 9%, and do not receive any other retirement benefits.

The board policy is to remunerate non-executive directors at market rates for comparable companies for time, commitment and responsibilities. The 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. 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 the 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 option plan.

The board does not have a policy in relation to the limiting of risk to directors and executives in relation to the shares and options provided.

Employment contracts of directors and senior executives

The employment conditions of the managing director, all of the executive directors and specified executives are formalised in contracts of employment. The directors are permanent employees of BPH Corporate Limited. The employment contracts stipulate a six month resignation period. The company may terminate an employment contract without cause by providing six months written notice or making payment in lieu of notice, based on the individual’s annual salary component together with a redundancy payment of six months of the individual’s fixed salary component. Termination payments are generally not payable on resignation or dismissal for serious misconduct. In the instance of serious misconduct the company can terminate employment at any time. Any options not exercised before or on the date of termination will not lapse.

Shares given to 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 the BlackScholes methodology.

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Details of Remuneration for the year ended 30 June 2010

The remuneration for each director and each of the executive officers of the consolidated entity receiving the highest remuneration during the year was as follows:

2010

Key Management Person D L Breeze	Cash, Salary and fees 133,000	Short-term Bonus -	Benefits Non-cash benefit -	Other -	Post-employment Benefits Superannuation -
S K Yap	-	-	-	-	-
G Gilbert	25,000	-	-	-	-
H Goh	25,000	-	-	-	-
D Ambrosini	20,830	-	-	-	-

2010 (continued)

Key Management Person D L Breeze	Long-term Benefits Other -	Share-based payment Equity Options 15,000 53,200	Total $ 201,200	Performance Related % 26.44	Compensation Relating to Options % 26.44
S K Yap	-	- -	-	-	-
G Gilbert	-	- -	25,000	-	-
H Goh	-	- -	25,000	-	-
D Ambrosini	-	- 26,600	47,430	56.01	56.01

On 24 December 2009 Mr David Breeze was issued options in the company. A total of 2,000,000 options were issued having a fair value of $53,200 (2009:nil). The options are exercisable at 45c on or before 31 December 2014. These options vested at grant date.

On 24 December 2009 Ms Deborah Ambrosini was issued options in the company. A total of 1,000,000 options were issued having a fair value of $26,600 (2009:nil). The options are exercisable at 45c on or before 31 December 2014. These options vested at grant date.

Each option converts into one ordinary share of the company on exercise. No amounts are paid or payable by the recipient on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any time from the date of vesting to the date of their expiry.

Shares have been issued to directors in lieu of cash payments, as approved by shareholders.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Directors’ Report

Details of Remuneration for the year ended 30 June 2010 (continued)

2009

Key Management Person	Cash, Salary and fees	Short-term Bonus	Benefits Non-cash benefit	Other	Post-employment Benefits Superannuation
D L Breeze	49,000	-	-	-	-
S K Yap	12,500	-	-	-	-
G Gilbert	-	-	-	-	-
H Goh	-	-	-	-	-
D Ambrosini	-	-	-	-	-

2009 (continued)

Key Management Person	Long-term Benefits Other	Share-based payment Equity Options	Share-based payment Equity Options	Total $	Performance Related %	Compensation Relating to Options %
D L Breeze	-	74,000	-	123,000	-	-
S K Yap	-	-	-	12,500	-	-
G Gilbert	-	25,000	-	25,000	-	-
H Goh	-	25,000	-	25,000	-	-
D Ambrosini	-	-	-	-	-	-

On 18 March 2009 Mr David Breeze, Mr Hock Goh and Mr Greg Gilbert were issued shares in the company as consideration for their 2009 director fees, as approved by shareholders. A total of 4,769,228 shares were issued having a total value of $124,000.

Company performance, shareholder wealth and director and executive remuneration

The following table shows the gross revenue and the operating result for the last 3 years for the listed entity, as well as the share price at the end of the respective financial years. Analysis of the actual figures shows an increase in the revenue from the previous year with a decrease in the loss in the current year. The board is of the opinion that the increase in the share price is attributable to the recent diversification of the company’s assets through the purchase of a $12.8M investment in unlisted oil and gas explorer Advent Energy Ltd.

	2008	2009	2010
Revenue and other income	1,103,422	162,940	339,253
Operatingloss attributable to owners of the company	(1,614,219)	(2,215,717)	(208,785)
Shareprice at Year end	$0.046	$0.02	$0.068

There is no link between the performance of the entity and remuneration policy of the company.

End of remuneration report.

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Additioal Information

Meetings of Directors

During the financial year, two meetings of directors were held. Attendances by each director during the year were:

	Number eligible	Directors’ Meetings to attend Number attended
D L Breeze	2	2
D Ambrosini	2	2
G Gilbert	2	2
H Goh	2	2
S K Yap	1	1

Indemnifying Officers or Auditors

During or since the end of the financial year the company has given an indemnity or entered an agreement to indemnify, or paid or agreed to pay insurance premiums as follows:

The company has paid premiums to insure each of the following directors 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 of the company, other than conduct involving a wilful breach of duty in relation to the company. The amount of the premium was $13,540.

D Breeze
D Ambrosini
G Gilbert
H Goh

The company has not indemnified the current or former auditor of the Company.

Non-audit Services

The board of directors is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 . The directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons:

all non-audit services are reviewed and approved by the board prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and
the nature of the services provided do not compromise the general principles relating to auditor independence in accordance with APES 110: Code of Ethics for Professional Accountants set by the Accounting Professional and Ethical Standards Board.

No fees for non-audit services were paid/payable to the external auditors during the year ended 30 June 2010 (2009: Nil).

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Directors’ Report

Options

At the date of this report, the unissued ordinary shares of BPH Corporate Ltd under option are as follows:

Unlisted Options

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----- Start of picture text -----

Grant Date Date of Expiry Exercise Price Number Under Option
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17 October 2006	17 October 2011	*	500,000
29 April 2008	29 April 2013	*	500,000
20 December 2007	31 December 2010	$0.15	6,000,000
1 June 2008	30 June 2013	$0.15	2,550,000
16 December 2008	16 December 2013	$0.15	1,000,000
25 September 2009	30 September 2014	$0.30	150,000
24 December 2009	31 December 2014	$0.45	3,000,000

The exercise price will be the average amount determined by the market price for the 5 days prior to exercise

On 24 December 2009 3,000,000 options were issued to the Directors of BPH Corporate Ltd. The options are exercisable at 45 cents with an expiry date of 31 December 2014. The options had a fair value of $79,800. The fair value of the options was determined using the Black Scholes option pricing model.

During the year ended 30 June 2010, no ordinary shares of BPH Corporate Limited were issued on the exercise of options granted under the BPH Corporate Limited Employee Option Plan. No amounts are unpaid on any of the shares.

No person entitled to exercise the option had or has any right by virtue of the option to participate in any share issue of any other body corporate.

Proceedings on Behalf of 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.

Auditor’s Independence Declaration

The lead auditor’s independence declaration for the year ended 30 June 2010 has been received and can be found on page 21.

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

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David Breeze Dated this 24th August 2010

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Auditor’s Independence Declaration

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The Board of Directors BPH Corporate Limited 14 View Street NORTH PERTH WA 6006

Deloitte Touche Tohmatsu ABN 74 490 121 060 Woodside Plaza Level 14 240 St Georges Terrace Perth WA 6000 GPO Box A46 Perth WA 6837 Australia DX: 206 Tel: +61 (0) 8 9365 7000 Fax: +61 (8) 9365 7001 www.deloitte.com.au

24 August 2010

Dear Board Members

BPH Corporate Limited

In accordance with section 307C of the Corporations Act 2001 , I am pleased to provide the following declaration of independence to the directors of BPH Corporate Limited.

As lead audit partner for the audit of the financial statements of BPH Corporate Limited for the financial year ended 30 June 2010, I declare that to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

(ii) any applicable code of professional conduct in relation to the audit.

Yours sincerely

DELOITTE TOUCHE TOHMATSU

Chris Nicoloff Partner Chartered Accountants

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu

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Corporate Governance Statement

The Board of Directors of BPH Corporate Limited (“BPH” or “the Company”) (“Group”) is responsible for the corporate governance of the economic entity. The Board guides and monitors the business and affairs of the Company on behalf of the shareholders by whom they are elected and to whom they are accountable.

To ensure that the Board is well equipped to discharge its responsibilities, it has established guidelines and accountability as the basis for the administration of corporate governance.

Corporate Governance Disclosures

BPH Corporate Limited and the board are committed to achieving and demonstrating the highest standards of corporate governance. The board continues to review the framework and practices to ensure they meet the interests of shareholders. The company and its controlled entities together are referred to as the Group in this statement.

Composition of the Board

The composition of the Board is determined in accordance with the following principles and guidelines:

the Board should comprise a majority or at least 50% of the Board will be independent non-executive directors;
the Board should have at least one director with an appropriate range of qualifications and expertise; and
the Board shall meet at regular intervals and follow meeting guidelines set down to ensure all directors are made aware of, and have available all necessary information, to participate in an informed discussion of all agenda items.

When a vacancy exists, through whatever cause, or where it is considered that the Board would benefit from the service of a new director with particular skills, the Board selects a candidate or panel of candidates with the appropriate expertise.

The Board then appoints the most suitable candidate, who must stand for election at the next general meeting of shareholders. The Company does not have a formal Nomination Committee.

Remuneration and Nomination Committees

The Company does not have a formal Remuneration or Nomination Committee. The full Board attends to the matters normally attended to by a Remuneration Committee and a Nomination committee. Remuneration levels are set by the Company in accordance with industry standards to attract suitable qualified and experienced Directors and senior executives.

Audit Committee

The Company does not have a formal Audit Committee. The full Board carried out the functions of an Audit Committee. Due to the status of the Company and the relatively straight forward accounts of the Company anticipated in the financial year, the Directors believe that at the moment there would be no additional benefits obtained by establishing such a committee. The Board follows the Audit Committee Charter, a copy of which is available on request.

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Board Responsibilities

As the Board acts on behalf of and is accountable to the shareholders, it seeks to identify the expectations of the shareholders, as well as other regulatory and ethical expectations and obligations. In addition, the Board is responsible for identifying areas of significant business risk and ensuring arrangements are in place to adequately manage those risks. The Board seeks to discharge these responsibilities in a number of ways.

The responsibility for the operation and administration of the economic entity is delegated by the Board to the Chief Executive Officer. The Board ensures that the Chief Executive Officer is appropriately qualified and experienced to discharge his responsibilities, and has in place procedures to assess the performance for the Company’s officers, employees, contractors and consultants.

The Board is responsible for ensuring that management’s objectives and activities are aligned with the expectations and risks identified by the Board. It has a number of mechanisms in place to ensure this is achieved, including the following:

Board approval of a strategic plan, designed to meet shareholder needs and manage business risk;
Implementation of operating plans and budgets by management and Board monitoring progress against budget;
Procedures to allow directors, in the furtherance of their duties, to seek independent professional advice at the Company’s expense.

Monitoring of the Board’s Performance

In order to ensure that the Board continues to discharge its responsibilities in an appropriate manner, the performance of all directors is to be reviewed annually by the chairperson. Directors whose performance is unsatisfactory are asked to retire.

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Corporate Governance Statement

Best Practice Recommendation

Outlined below are the 8 Essential Corporate Governance Principles as outlined by the ASX and the Corporate Governance Council. The Company has complied with the Corporate Governance Best Practice Recommendations except as identified below.

Action taken and reasons if not adopted

Principle 1: Lay solid foundations for management and oversight

The relationship between the board and senior management is critical to the Group’s long-term success. The directors are responsible to the shareholders for the performance of the Group in both the short and the longer term and seek to balance sometimes competing objectives in the best interests of the Group as a whole. Their focus is to enhance the interests of shareholders and other key stakeholders and to ensure the Group is properly managed.

The responsibilities of the board include:

providing strategic guidance to the Group including contributing to the development of and approving the corporate strategy;
reviewing and approving business plans, and financial plans including major capital expenditure initiatives;
overseeing and monitoring:
organisational performance and the achievement of the Group’s strategic goals and objectives and
progress of major capital expenditures and other significant corporate projects including any acquisitions or divestments
monitoring financial performance including approval of the annual and half-year financial reports;
appointment, performance assessment and, if necessary, removal of the Managing Director;
ratifying the appointment and/or removal and contributing to the performance assessment for the members of the senior management team including the CFO and the Company Secretary;
ensuring there are effective management processes in place and approving major corporate initiatives;
enhancing and protecting the reputation of the organization;
overseeing the operation of the Group’s system for compliance and risk management reporting to shareholders;

Day to day management of the Group’s affairs and the implementation of the corporate strategy and policy initiatives are formally delegated by the board to the Managing Director and senior executives.

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Action taken and reasons if not adopted

Principle 2: Structure the board to add value

The board operates in accordance with the broad principles set out in its charter. The charter details the board’s composition and responsibilities.

The board seeks to ensure that :

at any point in time, its membership represents an appropriate balance between directors with experience and knowledge of the Group and directors with an external or fresh perspective; and
the size of the board is conducive to effective discussion and efficient decision-making.

Directors’ independence

The board has adopted specific principles in relation to directors’ independence. These state that when determining independence, a director must be a non-executive and the board should consider whether the director:

is a substantial shareholder of the company or an officer of, or otherwise associated directly with, a substantial shareholder of the company;
is or has been employed in an executive capacity by the company or any other Group member within three years before commencing to serve on the board;
within the last three years has been a principal of a material professional adviser or a material consultant to the company or any other Group member, or an employee materially associated with the service provided;
has a material contractual relationship with the company or a controlled entity other than as a director of the Group;
is free from any business or other relationship which could, or could reasonably be perceived to, materially interfere with the director’s independent exercise of their judgement.

Materiality for these purposes is determined on both quantitative and qualitative bases. A transaction of any amount or a relationship is deemed material if knowledge of it may impact the shareholders’ understanding of the director’s performance.

The board assesses independence each year. To enable this process, the directors must provide all information that may be relevant to the assessment.

Board members

Details of the members of the board, their experience, expertise, qualifications, term of office, relationships affecting their independence and their independent status are set out in the directors’ report under the heading ‘’Information on directors’’. At the date of signing the directors’ report, there are two non-executive directors and two executive directors, three of whom have no relationships adversely affecting independence and so are deemed independent under the principles set out above.

Mr Breeze has business dealings with the Group as disclosed in Note 26 to the financial report. However, these are not of a value or significance that adversely affect the directors’ independence.

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Corporate Governance Statement

Action taken and reasons if not adopted

Principle 2: Structure the board to add value (continued)

Term of office

The company’s Constitution specifies that all non-executive directors must retire from office no later than the third annual general meeting (AGM) following their last election. Where eligible, a director may stand for re-election, subject to the following limitations:

on attaining the age of 72 years a director will retire, by agreement, at the next AGM and will not seek re-election.

Chair and Chief Executive Officer (CEO)

The Chair is responsible for leading the board, ensuring directors are properly briefed in all matters relevant to their role and responsibilities, facilitating board discussions and managing the board’s relationship with the company’s senior executives. In accepting the position, the Chair has acknowledged that it will require a significant time commitment and has confirmed that other positions will not hinder his effective performance in the role of Chair.

The CEO is responsible for implementing Group strategies and policies.

The Chairman does not satisfy the Independence test as the role of the Chairman and the CEO is exercised by the same person. The board is of the opinion that the Chairman’s role as Chairman of the Board is appropriate given his experience and knowledge of the business.

Committees

The number of meetings of the company’s board of directors and of each board committee held during the year ended 30 June 2010, and the number of meetings attended by each director is disclosed on page 19.

It is the company’s practice to allow its executive directors to accept appointments outside the company. No appointments of this nature were accepted during the year ended 30 June 2010.

The Company is not of a size at the moment that justifies having a separate Nomination Committee. However, matters typically dealt with by such a committee are dealt with by the Board of Directors.

Notices of meetings for the election of directors comply with the ASX Corporate Governance Council’s best practice recommendations.

Principle 3: Promote ethical and responsible decision making

The company has developed a statement of values a which has been fully endorsed by the board and applies to all directors and employees. The Statement is regularly reviewed and updated as necessary to ensure it reflects the highest standards of behaviour and professionalism and the practices necessary to maintain confidence in the Group’s integrity and to take into account legal obligations and reasonable expectations of the company’s stakeholders.

The Statement requires that at all times all company personnel act with the utmost integrity, objectivity and in compliance with the letter and the spirit of the law and company policies.

The purchase and sale of company securities by directors and employees is monitored by the Board.

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Action taken and reasons if not adopted

Principle 4: Safeguard integrity in financial reporting

Adopted except as follows:-

The Company does not have a separate Audit Committee. The full Board carries out the functions of an Audit Committee. The Board has the authority, within the scope of its responsibilities, to seek any information it requires from any employee or external party.

Due to the status of the Company and the relatively straight forward accounts of the Company, the Directors at the moment can see no additional benefits to be obtained by establishing such a committee.

The Board follows the Audit Committee Charter, a copy of which is available on request.

External auditors

The Board’s policy is to appoint external auditors who clearly demonstrate quality and independence. The performance of the external auditor is reviewed annually and applications for tender of external audit services are requested as deemed appropriate, taking into consideration assessment of performance, existing value and tender costs. Deloitte was appointed as the external auditor in 2010. It is Deloitte’s policy to rotate audit engagement partners on listed companies at least every five years. A partner should not be re-assigned to a listed entity audit engagement if this equates to the partner serving in this role for more than 5 out of 7 successive years.

An analysis of fees paid to the external auditors, including a break-down of fees for non-audit services, is provided in the directors’ report and in Note 5 to the financial statements. It is the policy of the external auditors to provide an annual declaration of their independence to the Board.

The external auditor will attend the annual general meeting and be available to answer shareholder questions about the conduct of the audit and the preparation and content of the audit report. The Company is not of a size at the moment that justifies having a internal audit division.

Principle 5&6: Make timely and balanced disclosures and respect the rights of shareholders Continuous disclosure and shareholder communication

The company has policies and procedures on information disclosure that focus on continuous disclosure of any information concerning the Group that a reasonable person would expect to have a material effect on the price of the company’s securities. These policies and procedures also include the arrangements the company has in place to promote communication with shareholders and encourage effective participation at general meetings.

The Company Secretary has been nominated as the person responsible for communications with the ASX. This role includes responsibility for ensuring compliance with the continuous disclosure requirements in the ASX Listing Rules and overseeing and co-ordinating information disclosure to the ASX, analysts, brokers, shareholders, the media and the public.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Corporate Governance Statement

Action taken and reasons if not adopted

Principle 5&6: Make timely and balanced disclosures and respect the rights of shareholders Continuous disclosure and shareholder communication (continued)

All information disclosed to the ASX is posted on the company’s website as soon as it is disclosed to the ASX. When analysts are briefed on aspects of the Group’s operations, the material used in the presentation is released to the ASX and posted on the company’s web site. Procedures have also been established for reviewing whether any price sensitive information has been inadvertently disclosed and, if so, this information is also immediately released to the market.

All shareholders receive a copy of the company’s annual (full or concise) and half-yearly reports. In addition, the company seeks to provide opportunities for shareholders to participate through electronic means. Recent initiatives to facilitate this include making all company announcements, media briefings, details of company meetings, and financial reports available on the company’s website.

Principle 7: Recognise and manage risk

The board and senior executives are responsible for ensuring there are adequate policies in relation to risk management, compliance and internal control systems. In summary, the company policies are designed to ensure strategic, operational, legal, reputational and financial risks are identified, assessed, effectively and efficiently managed and monitored to enable achievement of the Group’s business objectives.

Considerable importance is placed on maintaining a strong control environment. There is an organisation structure with clearly drawn lines of accountability and delegation of authority. The board actively promotes a culture of quality and integrity.

The responsibility for the operation and administration of the economic entity is delegated by the board to the Chief Executive Officer. The board ensures that the Chief Executive Officer is appropriately qualified and experienced to discharge his responsibilities, and has in place procedures to assess the performance for the Company’s officers, employees, contractors and consultants. The board receives monthly updates as to the effectiveness of the company’s management of material risks that may impede meeting business objectives.

The board is responsible for ensuring that management’s objectives and activities are aligned with the expectations and risks identified by the Board. It has a number of mechanisms in place to ensure this is achieved, including the following:

Board approval of a strategic plan, designed to meet shareholder needs and manage business risk;
Implementation of operating plans and budgets by management and board monitoring progress against budget;
Procedures to allow directors, in the furtherance of their duties, to seek independent professional advice at the Company’s expense.

Control procedures cover management accounting, financial reporting, project appraisal, IT security, compliance and other risk management issues. The Chief Executive Officer is required to ensure that appropriate controls are in place to effectively manage the identified risks. This is monitored by the board on a monthly basis.

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Action taken and reasons if not adopted

Principle 7: Recognise and manage risk (continued)

The environment

Information on compliance with significant environmental regulations is set out in the directors’ report.

Corporate reporting

The Managing Director and CFO have made the following certifications to the board:

that the company’s financial reports are complete and present a true and fair view, in all material respects, of the financial condition and operational results of the company and Group and are in accordance with relevant accounting standards;
that the above statement is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the board and that the company’s risk management and internal compliance and control is operating efficiently and effectively in all material respects in relation to financial reporting risks.

Principle 8: Remunerate fairly and responsibly

The Company is not of a size at the moment that justifies having a separate Remuneration Committee. However, matters typically dealt with by such a committee are dealt with by the board.

The board makes specific recommendations on remuneration packages and other terms of employment for executive directors, other senior executives and non-executive directors.

Each member of the senior executive team signs a formal employment contract at the time of their appointment covering a range of matters including their duties, rights, responsibilities and any entitlements on termination. The standard contract refers to a specific formal job description.

Further information on directors’ and executives’ remuneration, including principles used to determine remuneration, is set out in the directors’ report under the heading ‘’Remuneration report’’. In accordance with Group policy, participants in equity-based remuneration plans are not permitted to enter into any transactions that would limit the economic risk of options or other unvested entitlements.

The board with the Chief Executive Office also assumes responsibility for overseeing management succession planning, including the implementation of appropriate executive development programmes and ensuring adequate arrangements are in place, so that appropriate candidates are recruited for later promotion to senior positions.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Statement of Comprehensive Income

for the year ended 30 June 2010

Note Revenue from continuing operations 2 Other income 2 Share of associates profit/(loss) Administration expenses Advertising and Promotion expenses Consulting and Legal expenses Research and Development expenses Depreciation and amortisation expense 3 Employee expense Insurance expenses Impairment expense 11 Service Fees Travelling expenses Other expenses Operating Loss Before Income Tax Income tax expense Operating Loss from continuing operations Operating Profit/(Loss) from discontinuing operations 31 Operating Loss for the Period Other Comprehensive Income Total Comprehensive Income for the period Operating loss attributable to non-controlling interests Operating Loss attributable to owners of the company Total Comprehensive Income attributable to non-controlling interests Total Comprehensive Income attributable to owners of the Company From continuing and discontinued operations Earnings Per Share – Basic and diluted earnings per share (cents per share) 6 From continuing operations Earnings Per Share – Basic and diluted earnings per share (cents per share) 6	Consolidated 2010 $ 2009 $
	174,608 42,142 164,645 120,798 (20,939) - (312,371) (167,617) (44,441) (2,505) (468,450) (193,282) (209,746) (630,727) (27,232) (42,497) (296,893) (239,736) (17,904) (19,007) - (641,815) (131,040) (131,040) (86) (5,467) (6,146) (33,234)
	(1,195,995) (1,943,987) - -
	(1,195,995) (1,943,987) 961,538 (296,624)
	(234,457) (2,240,611) - -
	(234,457) (2,240,611)
	(25,672) (24,894)
	(208,785) (2,215,717)
	(25,672) (24,894)
	(208,785) (2,215,717)
	(0.14) (3.04) (0.80) (2.63)

The accompanying notes form part of these financial statements.

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Statement of Financial Position

as at 30 June 2010

		Consolidated	Consolidated
		2010	2009
	Note	$	$
Current Assets
Cash and cash equivalents	7	1,855,820	372,268
Trade and other receivables	8	89,636	171,914
Financial Assets	10	183,432	88,149
Other current assets	9	15,945	18,843
Total Current Assets		2,144,833	651,174
Non-Current Assets
Financial assets	10	12,848,949	48,949
Investments in associates	13	1,568,790	-
Intangible assets	11	72,454	809,954
Property, plant & equipment	12	2,190	5,549
Total Non-Current Assets		14,492,383	864,452
Total Assets		16,637,216	1,515,626
Current Liabilities
Trade and other payables	15	572,227	405,683
Financial liabilities	16	354,106	384,415
Provisions	17	12,438	9,040
Total Current Liabilities		938,771	799,138
Non-Current Liabilities
Provisions	17	1,243	-
Total Non-Current Liabilities		1,243	-
Total Liabilities		940,014	799,138
Net Assets		15,697,202	716,488
Equity
Issued capital	18	22,427,420	7,308,660
Reserve	19	391,056	294,645
Accumulated losses		(7,114,327)	(6,905,542)
Non-controlling interest		(6,947)	18,725
Total Equity		15,697,202	716,488

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Statement of Changes in Equity for the year ended 30 June 2010

Note Balance at 1 July 2008 Loss attributable to members of consolidated entity Other Comprehensive income Total Comprehensive income for the year Transactions with owners in their capacity as owners Shares issued during the financial year 18 Issue of employee options 19 Balance at 30 June 2009 Balance at 1 July 2009 Loss attributable to members of consolidated entity Other Comprehensive income Total Comprehensive income for the year Transactions with owners in their capacity as owners Shares issued during the financial year 18 Capital Raising Costs Issue of employee options 19 Balance at 30 June 2010	Consolidated
	Ordinary Share Capital $ Accumu- lated losses $ Option Reserve $ Total attributable to owners of the parent entity $ Non- controlling Interest $ Total $
	7,184,660 (4,689,825) 230,181 2,725,016 43,619 2,768,635 - (2,215,717) - (2,215,717) (24,894) (2,240,611) - - - - - -
	- (2,215,717) - (2,215,717) (24,894) (2,240,611) 124,000 - - 124,000 - 124,000 - - 64,464 64,464 - 64,464
	7,308,660 (6,905,542) 294,645 697,763 18,725 716,488
	7,308,660 (6,905,542) 294,645 697,763 18,725 716,488 - (208,785) - (208,785) (25,672) (234,457) - - - - - -
	- (208,785) - (208,785) (25,672) (234,457) 15,910,031 - - 15,910,031 - 15,910,031 (791,271) - - (791,271) - (791,271) - - 96,411 96,411 - 96,411
	22,427,420 (7,114,327) 391,056 15,704,149 (6,947) 15,697,202

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Statement of Cash Flows

for the year ended 30 June 2010

Note Cash Flows From Operating Activities Receipts from customers Grant income Payments to suppliers and employees Interest received Net cash used in operating activities 21 Cash Flows From Investing Activities Amounts (to)/from other entities Payment for investments Net outflow from disposal of subsidiary 31 Payment for property, plant and equipment Net cash used in investing activities Cash Flows From Financing Activities Proceeds from capital raising (net of capital raising costs) Repayment of Borrowings Net cash provided by financing activities Net increase (decrease) in Cash Held Cash At the Beginning Of The Financial Year Cash At The End Of The Financial Year 7	Consolidated 2010 $ 2009 $
	13,274 33,474 236,585 750,380 (1,135,243) (900,742) 174,674 42,142
	(710,710) (74,746)
	(42,378) (249,212) (12,800,000) - (16,204) - (665) (144)
	(12,859,247) (249,356)
	15,103,760 - (50,251) (149,296)
	15,053,509 (149,296)
	1,483,552 (473,398) 372,268 845,666
	1,855,820 372,268

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements

for the year ended 30 June 2010

1. Statement of Significant Accounting Policies

Corporate Information

The financial report includes the consolidated financial statements and the notes of BPH Corporate Limited (formerly BioPharmica Limited) and controlled entities (‘Consolidated Group’ or ‘Group’).

BPH Corporate Limited is a company incorporated and domiciled in Australia and listed on the Australian Securities Exchange.

The financial report was authorised for issue on 24th August 2010 by the board of directors.

Basis of Preparation

The financial report is a general purpose financial report that has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board (“AASB”)and the Corporations Act 2001 .

Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial report containing relevant and reliable information about transactions, events and conditions to which they apply. Compliance with Australian Accounting Standards ensures that the financial statements and notes also comply with International Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are presented below. They have been consistently applied unless otherwise stated.

The financial report has been prepared on an accruals basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.

Compliance with IFRS

The consolidated financial statements of the BPH Corporate Limited group comply with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

Going Concern

The consolidated entity has incurred losses for the year ended 30 June 2010 of $208,785 (2009:losses of $2,215,717). On 15 June 2010 BPH Corporate entered into a secured loan agreement with Advent Energy. The principal amount of the loan is $1M with further advances up to an additional $3M payable at the discretion of the Company.

The directors have reviewed their expenditure and their commitments for the consolidated entity. The directors as a part of their cash monitoring, may voluntarily suspended cash payments for their director’s fees to conserve cash.

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Based on the recent capital raising activity the directors have prepared cash flow forecasts that indicate that the consolidated entity and the parent entity will have sufficient cashflows for a period of at least 12 months from the date of this report.

Based on the cash flow forecasts and the monitoring of operational costs, the directors are satisfied that, the going concern basis of preparation is appropriate. The financial report has therefore been prepared on a going concern basis, which assumes continuity of normal business activities and the realisation of assets and the settlement of liabilities in the ordinary course of business.

Accounting Policies

(a) Principles of Consolidation

A controlled entity is any entity BPH Corporate Limited has the power to control the financial and operating policies of so as to obtain benefits from its activities.

A list of controlled entities is contained in Note 20 to the financial statements. All controlled entities have a June financial year-end.

As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the consolidated financial statements as well as their results for the year then ended.

The results of subsidiaries acquired or disposed of during the year are included in the consolidated statement of comprehensive income from the effective date of acquisition and up to the effective date of disposal, as appropriate.

All inter-company balances and transactions between entities in the economic entity, including any unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries have been changed where necessary to ensure consistencies with those policies applied by the parent entity.

Non-controlling interests in the results and equity of subsidiaries are shown separately in the statement of comprehensive income, statement of changes in equity and statement of financial position respectively.

Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any non-controlling interests. Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be required if the relevant assets or liabilities were disposed of. The fair value of any investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on initial recognition for subsequent accounting under AASB 139 Financial Instruments: Recognition and Measurement or, when applicable, the cost on initial recognition of an investment in an associate or jointly controlled entity.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements

for the year ended 30 June 2010

1. Statement of Significant Accounting Policies (continued)

Accounting Policies (continued)

(b) Income Tax

The charge for current income tax expense is based on the profit for the year adjusted for any nonassessable or disallowed items. It is calculated using the tax rates that have been enacted or are substantially enacted by the statement of financial position date.

Deferred tax is accounted for using the statement of financial position liability method in respect of temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. No deferred income tax will be recognised from the initial recognition of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss.

Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is recognised in the statement of comprehensive income except where it relates to items that may be recognised directly to equity, in which case the deferred tax is adjusted directly against equity.

Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be available against which deductible temporary differences or unusual tax losses and tax credits can be utilised.

The amount of benefits brought to account or which may be realised in the future is based on the assumption that no adverse change will occur in income taxation legislation and the anticipation that the economic entity will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law.

BPH Corporate Limited and its wholly-owned Australian subsidiaries have formed an income tax consolidated group under the tax consolidation regime. The group notified the Australian Taxation Office on 30 June 2006 that it had formed an income tax consolidated group to apply from 30 June 2006. The tax consolidated group has entered a tax funding agreement whereby each company in the group contributes to the income tax payable in proportion to their contribution to the net profit before tax of the tax consolidated group.

(c) Property, Plant & Equipment

Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment losses.

Plant and equipment

Plant and equipment are measured on the cost basis.

The carrying amount of plant and equipment is reviewed annually by directors to ensure it is not in excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the expected net cash flows that will be received from the assets employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts.

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The cost of fixed assets constructed within the economic entity includes the cost of materials, direct labour, borrowing costs and an appropriate proportion of fixed and variable overheads.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the income statement during the financial period in which they are incurred.

Depreciation

The depreciable amount of all fixed assets including building and capitalised lease assets, but excluding freehold land, is depreciated on a straight-line basis over their useful lives to the economic entity commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

The depreciation rates used for each class of depreciable assets are:

Class of Fixed Asset	Depreciation Rate
Computers	33 %
Office furniture	15 %

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount.

Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the income statement. When revalued assets are sold, amounts included in the revaluation reserve relating to that asset are transferred to retained earnings.

(d) Leases

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that are transferred to entities in the economic entity are classified as finance leases.

Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the fair value of the leased property or the present value of the minimum lease payments, including any guaranteed residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period.

Leased assets are depreciated on a straight-line basis over the shorter of their estimated useful lives or the period of the lease.

Lease payments for operating leases, where substantially all the risks and benefits remain with the lessor, are charged as an expense on a straight line basis over the lease term.

Lease incentives under operating leases are recognised as a liability and amortised on a straight-line basis over the life of the lease term.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements

for the year ended 30 June 2010

1. Statement of Significant Accounting Policies (continued)

Accounting Policies (continued)

(e) Financial Instruments

Recognition and Initial Measurement

Financial instruments, incorporating financial assets and financial liabilities, are recognised when the entity becomes a party to the contractual provisions of the instrument. Trade date accounting is adopted for financial assets that are delivered within timeframes established by marketplace convention.

Financial instruments are initially measured at fair value plus transactions costs where the instrument is not classified as at fair value through profit or loss. Transaction costs related to instruments classified as at fair value through profit or loss are expensed to profit or loss immediately. Financial instruments are classified and measured as set out below.

Derecognition

Financial assets are derecognised where the contractual rights to receipt of cash flows expires or the asset is transferred to another party whereby the entity is no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are either discharged, cancelled or expire. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss.

Classification and Subsequent Measurement

(i) Financial assets at fair value through profit or loss
Financial assets are classified at fair value through profit or loss when they are held for trading for the purpose of short term profit taking, where they are derivatives not held for hedging purposes, or designated as such to avoid an accounting mismatch or to enable performance evaluation where a group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Realised and unrealised gains and losses arising from changes in fair value are included in profit or loss in the period in which they arise.
(ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost using the effective interest rate method.

(iii) Held-to-maturity investments

Held-to-maturity investments are non-derivative financial assets that have fixed maturities and fixed or determinable payments, and it is the group’s intention to hold these investments to maturity. They are subsequently measured at amortised cost using the effective interest rate method.

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(iv) Available-for-sale financial assets

Available-for-sale financial assets are non-derivative financial assets that are either designated as such or that are not classified in any of the other categories.

Listed shares held by the Group that are traded in an active market are classified as AFS and are stated at fair value. The Group also has investments in unlisted shares that are not traded in an active market but that are also classified as AFS financial assets and stated at fair value (because the directors consider that fair value can be reliably measured). Gains and losses arising from changes in fair value are recognised in other comprehensive income and accumulated in the investments revaluation reserve, with the exception of impairment losses, interest calculated using the effective interest method, and foreign exchange gains and losses on monetary assets, which are recognised in profit or loss.

(v) Financial Liabilities

Non-derivative financial liabilities are subsequently measured at amortised cost using the effective interest rate method.

Fair value

Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm’s length transactions, reference to similar instruments and option pricing models.

Impairment

At each reporting date, the group assesses whether there is objective evidence that a financial instrument has been impaired. In the case of available-for-sale equity financial instruments, a significant or prolonged decline in the value of the instrument below cost is considered to determine whether an impairment has arisen. Impairment losses are recognised in the profit or loss.

(f) Impairment of Assets

At each reporting date, the group reviews the carrying values of its tangible and intangible assets to determine whether there is any indication that those assets have been impaired. If such an indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable amount is expensed to the profit or loss.

Impairment testing is performed annually for goodwill and intangible assets with indefinite lives.

Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements

for the year ended 30 June 2010

1. Statement of Significant Accounting Policies (continued)

Accounting Policies (continued)

(g) Investments in Associates

Associates are all entities over which the group has significant influence but not control or joint control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for in the parent entity financial statements using the cost method and in the consolidated financial statements using the equity method of accounting, after initially being recognised at cost. The equity method of accounting recognises the group’s share of post-acquisition reserves of its associates.

The group’s share of its associates’ post-acquisition profits or losses is recognised in the profit or loss, and its share of post-acquisition movements in reserves is recognised in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment.

Dividends receivable from associates are recognised in the parent entity’s profit or loss, while in the consolidated financial statements they reduce the carrying amount of the investment.

When the group’s share of losses in an associate equals or exceeds its interest in the associate,

including any other unsecured long-term receivables, the group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

Unrealised gains on transactions between the group and its associates are eliminated to the extent of the group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the group.

(h) Intangibles

Goodwill

Goodwill arising in a business combination is recognised as an asset at the date that control is acquired (the acquisition date). Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed.

If, after reassessment, the Group’s interest in the fair value of the acquiree’s identifiable net assets exceeds the sum of the consideration transferred, the amount of any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held equity interest in the acquiree (if any), the excess is recognised immediately in profit or loss as a bargain purchase gain.

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Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment testing, goodwill is allocated to each of the Group’s cash-generating units expected to benefit from the synergies of the combination. Cash-generating units to which goodwill has been allocated are tested for impairment annually, or more frequently when there is an indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of each asset in the unit. An impairment loss recognised for goodwill is not reversed in a subsequent period.

On disposal of a subsidiary, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.

Research

Expenditure during the research phase of a project is recognised as an expense when incurred.

Patents and Trademarks

Patents and trademarks are recognised at cost of acquisition. Patents and trademarks have a finite life and are carried at cost less any accumulated amortisation and any impairment losses. Patents and trademarks are amortised over their useful life of 20 years.

(i)

Employee Benefits

Provision is made for the company’s liability for employee benefits arising from services rendered by employees to balance date. Short term employee benefits have been measured at the amounts expected to be paid when the liability is settled, plus related on-costs. Long term employee benefits have been measured at the present value of the estimated future cash outflows to be made for those benefits.

(j) Provisions

Provisions are recognised when the group has a legal or constructive obligation, as a result of past events, for which it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.

(k) Cash and Cash Equivalents

Cash and cash equivalents include cash on hand, deposits held at call with banks, other shortterm highly liquid investments, and bank overdrafts. Bank overdrafts are shown within short-term borrowings in current liabilities on the statement of financial position.

(l) Revenue and Other Income

Interest revenue is recognised when it is probable that the economic benefits will flow to the Group and the amount of revenue can be measured reliably. Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable

Dividend revenue is recognised when the right to receive a dividend has been established.

Revenue from the rendering of a service is recognised by reference to the stage of completion of the contract.

All revenue is stated net of the amount of goods and services tax (GST).

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements

for the year ended 30 June 2010

1. Statement of Significant Accounting Policies (continued)

Accounting Policies (continued)

(m) Goods and Services Tax (GST)

Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as part of the cost of acquisition of the asset or as part of an item of the expense.

Receivables and payables in the statement of financial position are shown inclusive of GST.

Cash flows are presented in the cash flow statement on a gross basis, except for the GST component of investing and financing activities, which are disclosed as operating cash flows.

(n) Government Grants

Government grants are recognised at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expense items are recognised as income over the periods necessary to match the grant to the costs they are compensating. Grants relating to assets are credited to deferred income at fair value and are credited to income over the expected useful life of the asset on a straight-line basis.

(o) Trade and other payables

Liabilities are recognized for amounts to be paid in the future for goods or services received, whether or not billed to the consolidated entity. The amounts are unsecured and are usually paid within 30 days.

(p) Share based payments

The fair value of options granted under the Company’s Employee Option Plan is recognized as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognized over the period during which the employees become unconditionally entitled to the options.

The fair value at grant date is independently determined using a Black and Scholes option pricing model that takes into account the exercise price, the term of the option, the vesting and performance criteria, the impact of dilution, the non-tradeable nature of the option, the share price at grant date and expected volatility of the underlying share, the expected dividend yield and risk free interest rate for the term of the option.

The fair value of the options granted excludes the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. At each statement of financial position date, the entity revises its estimate of the number of options that are expected to vest. The employee benefit expense recognised each period takes into account the most recent estimate. Upon the exercise of options, the balance of the share-based payments reserve relating to those options is transferred to share capital.

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(q) Earnings per share

Basic earnings per share (EPS) is calculated as net profit/loss attributable to members, adjusted to exclude costs of servicing equity (other than dividends) and preference share dividends, divided by the weighted average number of ordinary shares, adjusted for any bonus element.

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares, and the weighted average number of additional ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

(r) Critical accounting estimates and judgments

The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information.

Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the group.

Key estimates — Impairment

The group 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. The goodwill has been impairment tested for the financial year. The directors believe that the goodwill associated with the SERS technology is fully impaired as there are currently no contracts in place to support this amount. The full amount of the goodwill has been recognised in the profit or loss.

Key judgements — Provision for Impairment of Loans Receivables

Included in the accounts of Consolidated entity are amounts from loan receivables of $183,432 (2009: $56,017). The directors believe that the full amount of the debt will be recoverable from each entity and that no provision for impairment of receivables has been made at 30 June 2010.

Key Judgments —Impairment of Intangible Assets

No impairment has been recognised in respect of intangible assets for the year ended 30 June 2010 (2009: $641,815). The directors believe that the carrying value of all intangibles is appropriate after reviewing the status of each entity’s developments. The directors are confident that the products will provide the necessary returns to the Company.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements

for the year ended 30 June 2010

2. Revenue Revenue Interest revenue: other entities Total revenue Other income Research & development rebate 3. Loss for the year (a) Expenses Finance costs: - related entities Depreciation and amortisation - Depreciation - Amortisation - Salary - Superannuation - Director fees - Share based payments - Other payroll costs Total employee costs	Consolidated 2010 $ 2009 $
	174,608 42,142
	174,608 42,142
	164,645 120,798
	164,645 120,798
	- 16,827 3,174 7,497 24,058 35,000 65,000 65,000 5,850 5,850 124,991 106,247 96,411 60,464 4,641 2,172
	296,893 239,736

4. Key Management Personnel Compensation

(a) Names and positions held of economic and parent entity key management personnel in office at any time during the financial year are:

Key Management Personnel

D L Breeze – Executive Chairman

H Goh – Non-Executive Director

G Gilbert – Non Executive Director

S K Yap – Non-Executive Director (resigned 26 August 2009)

D Ambrosini – Executive Director and Company Secretary (appointed 31 August 2009)

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Short term employee benefits Share based payments	Consolidated 2010 $ 2009 $
	203,830 61,500 94,800 124,000
	298,630 185,500

Key management personnel remuneration, shareholdings and option holdings has been included in the Remuneration report section of the Directors Report.

Options and Rights Holdings

2010 Number of Options Held by Key Management Personnel

							Total	Total
		Granted as		Net			Exercisable	Unexercis-
	Balance	Compen-	Options	Change	Balance	Total Vested	and Vested	able
	1.7.2009	sation	Exercised	Other *	30.6.2010	30.6.2010	30.6.2010	30.6.2010
D L Breeze	-	2,000,000	-	-	2,000,000	2,000,000	2,000,000	-
S K Yap	2,000,000	-	-	(2,000,000)	-	-	-	-
G Gilbert	2,000,000	-	-	-	2,000,000	2,000,000	2,000,000	-
H Goh	2,000,000	-	-	-	2,000,000	2,000,000	2,000,000	-
D Ambrosini	1,000,000	1,000,000	-	-	2,000,000	1,666,667	1,666,667	333,333

2009 Number of Options Held by Key Management Personnel

							Total	Total
		Granted as		Net			Exercisable	Unexercis-
	Balance	Compen-	Options	Change	Balance	Total Vested	and Vested	able
	1.7.2008	sation	Exercised	Other	30.6.2009	30.6.2009	30.6.2009	30.6.2009
D L Breeze	2,000,000	-	-	(2,000,000)	-	-	-	-
S K Yap	4,000,000	-	-	(2,000,000)	2,000,000	2,000,000	2,000,000	-
G Gilbert	2,000,000	-	-	-	2,000,000	2,000,000	2,000,000	-
H Goh	2,000,000	-	-	-	2,000,000	2,000,000	2,000,000	-
D Ambrosini	1,000,000	-	-	-	1,000,000	333,333	333,333	666,667

*The Net Change Other reflected above includes those options that have been forfeited by holders, directors that have resigned, options that have expired as well as options issued during the year under review.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements

for the year ended 30 June 2010

4. Key Management Personnel Compensation (continued)

Shareholdings

2010 Number of Shares Held by Key Management Personnel

	Balance	Received as	Options	Net Change	Balance
	1.7.2009	Compensation	Exercised	Other	30.6.2010
D L Breeze	12,965,254	-	-	54,367	13,019,621
S K Yap	1,700,000	-	-	(1,700,000)*	-
G Gilbert	961,538	-	-	-	961,538
H Goh	961,538	-	-	-	961,538
D Ambrosini	-	-	-	-	-

*Relates to resignation of Director

2009 Number of Shares Held by Key Management Personnel

	Balance	Received as	Options	Net Change	Balance
	1.7.2008	Compensation	Exercised	Other	30.6.2009
D L Breeze	10,119,102	2,846,152	-	-	12,965,254
S K Yap	1,700,000	-	-	-	1,700,000
G Gilbert	-	961,538	-	-	961,538
H Goh	-	961,538	-	-	961,538
D Ambrosini	-	-	-	-	-

Net Change Other refers to shares purchased or sold during the financial year.

ange Other refers to shares purchased or sold during the financial year.
Auditors’ Remuneration Remuneration of the auditor of the parent entity for: - auditing or reviewing the financial report PKF Deloitte Touche Tohmatsu Remuneration of other auditors of subsidiaries for: - auditing or reviewing the financial report of subsidiaries	Consolidated 2010 $ 2009 $
	24,202 30,903 15,500 - - -
	39,202 30,903

5. Auditors’ Remuneration

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		Consolidated	Consolidated
		2010	2009
		$	$
6.	Earnings per share
	For basic and diluted Earnings Per Share
	Total earnings per share attributable to ordinary equity holders
	of the company	(208,785)	(2,215,717)
	Net (profit)/loss from discontinuing operations	(961,538)	296,624
	Earnings used in the calculation of basic earnings per share from
	continuing operations	(1,170,323)	(1,919,093)
	For basic and diluted Earnings Per Share
	From continuing operations	(0.80)	(2.63)
	From discontinuing operations	0.66	(0.41)
	Total Basic Earnings per Share	(0.14)	(3.04)

	Weighted average number of ordinary shares outstanding during	No.	No.
	the year used in calculating basic EPS and diluted EPS	146,389,578	72,954,727
	The Company’s potential ordinary shares, being its options granted, are
	not considered dilutive as the conversion of these options will result in a
	decreased net loss per share.
		Consolidated
		2010	2009
		$	$
7.	Cash and cash equivalents
	Cash at Bank and in hand	1,849,203	168,804
	Short-term bank deposits	6,617	203,464
		1,855,820	372,268
	Reconciliation of cash
	Cash at the end of the financial year as shown in the statement of cashflows
	is reconciled to items in the statement of financial position as follows:
	Cash and cash equivalents	1,855,820	372,268
8.	Trade and other receivables

Trade and other receivables
CURRENT Trade receivables Research and development rebate receivable Other receivables	- 740 70,850 145,000 18,786 26,174
	89,636 171,914

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements

for the year ended 30 June 2010

9. Other Assets CURRENT Prepaid insurance Prepaid – other 10. Financial Assets – Current Held-to-maturity financial assets (b) Unsecured Loans to other entities: (c) Grandbridge Limited Molecular Discovery Systems Pty Ltd MEC Resources Limited and Advent Energy LImited Financial assets – Non Current Available for sale financial assets (a) (a) Available for sale Financial Assets Comprise: Unlisted investments, at fair value - shares in other corporations Total available-for-sale financial assets	Consolidated 2010 $ 2009 $
	15,945 6,334 - 12,509
	15,945 18,843
	- 32,132 55,645 55,645 117,000 - 10,787 372
	183,432 88,149
	12,848,949 48,949
	12,849,949 48,949
	12,848,949 48,949
	12,848,949 48,949

On 9 September 2009 Advent Energy Ltd (“Advent”) granted BPH Corporate an exclusive option to purchase up to $14M in the capital of Advent. BPH initiated this option in January 2010 by making an initial investment of $7M. A further investment of $5.8M was made in April 2010 increasing their holding to $12.8m. The option expired on 30 June 2010.

As the company purchased the investment in April 2010, management believe that there is no material change in the fair value at balance sheet date.

(b) Held-to-maturity Investments Comprise:

Security Deposit
32,132

The security deposit is held as a special condition for the Leased Rental Equipment, GE In Cell Analyser, Rental Agreement with NAB dated 28 June 2006. The deposit was released on 29 July 2009.

(c) Unsecured loans

These loans are unsecured, non-interest bearing and repayable on demand.

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		Consolidated	Consolidated
		2010	2009
		$	$
11.	Intangible assets
	Patent costs capitalised
	Cost	72,454	72,454
	Accumulated amortisation and
	impairment	-	-
	Net carrying value	72,454	72,454
	Goodwill
	Cost	-	707,053
	Accumulated impaired losses	-	(707,053)
	Net carrying value	-	-
	Acquired intellectual property (i), (ii)
	At cost (a)	1,151,697	1,151,697
	Accumulated impaired losses	(151,697)	(151,697)
	Disposal of intellectual property to MDS	(713,442)	-
	Accumulated amortisation	(286,558)	(262,500)
	Net carrying value	-	737,500
	Total intangibles	72,454	809,954
	(i) Tumour Suppressor Gene - HLS5	-	737,500
	(ii) BAR Index	-	-

Patent costs include all costs associated with the filing and maintenance of the patents for the company’s technologies.

On 6th January 2010 BPH Corporate spun off its 100% owned subsidiary Molecular Discovery Systems Ltd. Under the spin off BPH transferred 100% of its interest in the HLS5 technology and it associated technologies to investee company Molecular Discovery Systems Ltd.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements

for the year ended 30 June 2010

12. Property, Plant and Equipment Plant and Equipment: At cost Accumulated depreciation Total Property, Plant and Equipment	Consolidated 2010 $ 2009 $
	40,252 515,732 (38,062) (510,183)
	2,190 5,549

(a) Movements in Carrying Amounts

Movements in the carrying amounts for each class of property, plant and equipment between the beginning and the end of the current financial year.

Balance at the beginning of the year Additions Disposals Depreciation expense Carrying amount at the end of the year	2010 Total $ $ 5,549 5,549 1,275 1,275 (850) (850) (3,784) (3,784) 2,190 2,190	2009 Total $ $
		173,515 173,515 144 144 - - (168,110) (168,110)
		5,549 5,549

Consolidated	Consolidated
2010	2009
$	$

13. Investments accounted for using the equity method

Shares in Associates 1,568,790 -

(a) Shares in associates

Investments in associates are accounted for in the consolidated financial statements using the equity method of accounting.

	Country of	Ownership Interest	Ownership Interest
Name of Entity	Incorporation		%
		2010	2009
Molecular Discovery Systems	Australia	20%	-

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(b) Summarised financial information of associates

The results of its associates aggregated assets (including goodwill) and liabilities, including the group’s share of net assets and net loss for the period are as follows:

Groups Share of:

							Net Loss for	Net Loss for
								the Period
	Ownership			Profits/		Net	since becoming
	interest %	Assets	Liabilities	Losses	Revenues	Assets	an associate
2010
Molecular Discovery
Systems Ltd 20		797,286	307,819	(138,724)	13,344	97,893		(20,939)
		797,286	307,819	(138,724)	13,344	97,893		(20,939)
							Consolidated
						2010		2009
						$		$
14.	Income Tax Expense
(a)	The components of tax expense comprise:
	Current tax						-	-
	Deferred tax						-	-
							-	-
(b)	The prima facie tax on profit	from operations before
	income tax is reconciled to the income		tax as follows:
	Prima facie tax payable on profit from operations before
	income tax at 30% (2009: 30%)					(70,337)		(672,183)
	Add tax effect of:
	Non deductible expenses					46,011		112,077
	Effect of concessions (research	and development)				(49,394)		-
	Prior year tax loss used in Research and
	development clawback						-	200,357
	Tax benefit of revenue losses not recognised					(167,660)		(319,721)
	Temporary differences					241,380		679,470
	Weighted average rate of tax						-	-
(c)	Deferred Tax Assets
	Deferred tax assets not brought to account, the benefits of which will only
	be realised if the conditions for deductibility set out			in Note 1b	occur.
	Temporary difference					4,650		5,112
	Tax losses:
	- operating losses					1,256,425		1,577,917
	- capital losses					26,342		26,342

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements

for the year ended 30 June 2010

15. Trade and other payables Trade payables Sundry payables and accrued expenses 16. Financial Liabilities Current Secured Liabilities Lease Liability Current borrowings – unsecured Current borrowings are unsecured, non interest bearing and repayable on 17. Provisions Short term employee entitlements: Opening balance at 1 July 2009 Reduction/addition to provision Balance at 30 June 2010 Long term employee entitlements	Consolidated 2010 $ 2009 $
	125,673 194,410 446,554 211,273
	572,227 405,683
	- 79,405 354,106 305,010
	354,106 384,415
	demand. 9,040 7,507 3,398 1,533
	12,438 9,040
	1,243 -
	1,243 -

Provision for Employee Entitlements

Provisions have been recognised for employee entitlements relating to annual leave and long service leave. The measurement and recognition criteria relating to employee benefits has been included in Note 1 to this report.

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18. Issued Capital

206,954,246 (2009: 74,980,016) fully paid ordinary shares In September 2009 BPH Corporate conducted a Shareholder Share Placement plan. A total of $2.7M was raised with a 93% take up.

Consolidated 2010 2009 $ $ 22,427,420 7,308,660

The Company conducted two placements during the months of December 2009 and January 2010. A total of $13.1M was raised.

The Company has no authorised capital and the issued shares do not have a par value.

(a) Ordinary Shares At the beginning of reporting period Shareholder Share Placement Plan First Offer and Second Offer Placements Conversion of quoted options Payment for consultancy /director services Capital Raising costs At reporting date	Consolidated 2010 $ 2009 $ 7,308,660 7,184,660 2,730,561 - 13,159,670 - 4,800 - 15,000 124,000 (791,271) - 22,427,420 7,308,660

Capital Raising

There were 24,000 options exercised during the year (2009: nil).

Fully Paid Ordinary Share Capital

Fully paid ordinary shares carry one vote per share and carry the right to dividends.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements

for the year ended 30 June 2010

18. Issued Capital (continued)

(b) Options

There were 13,700,000 employee options on issue at the end of the year:

Total number	Exercise price	Expiry date
500,000	*	17 October 2011
500,000	*	29 April 2013
6,000,000	$0.15	31 October 2010
2,550,000	$0.15	30 June 2013
1,000,000	$0.15	16 December 2013
150,000	$0.30	30 September 2014
3,000,000	$0.45	31 December 2014
13,700,000

The exercise price will be the average amount determined by the market price for the 5 days prior to exercise.

The market price of the company’s ordinary shares at 30 June 2010 was 6.8 cents.

The holders of options do not have the right, by virtue of the option, to participate in any share issue or interest issue of any other body corporate or registered scheme.

(c) Capital risk management

The Group’s and the parent entity’s objectives when managing capital are to safeguard their ability to continue as a going concern, so that they may continue to provide returns for shareholders and benefits for other stakeholders.

The focus of the Group’s capital risk management is the current working capital position against the requirements of the Group to meet corporate overheads. The Group’s strategy is to ensure appropriate liquidity is maintained to meet anticipated operating requirements, with a view to initiating appropriate capital raisings as required. The working capital position of the Group at 30 June 2010 and 30 June 2009 are as follows:

Cash and cash equivalents Trade and other receivables Trade and other payables Working capital position	Consolidated 2010 $ 2009 $
	1,855,820 372,268 89,636 171,914 (572,227) (405,683)
	1,373,229 138,499

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Reserves Options Reserve	Consolidated 2010 $ 2009 $ 391,056 294,645

19. Reserves

(a) Option Reserve

The option reserve records items recognized as expenses on the valuation of Director and Employee share options.

Reconciliation of movement Opening balance Option charges during the year Expired options Closing balance	294,645 230,181 96,411 64,464 - - 391,056 294,645

20. Controlled Entities

20. Controlled Entities
Name of	Principal	Country of	Ownership Interest
Entity	Activity	Incorporation	%
			2010 2009
Parent Entity
BPH Corporate Limited	Investment	Australia
Subsidiaries of BPH Corporate
Limited
Diagnostic Array Systems Pty	BioMedical Research	Australia	51.82 51.82
Limited
Molecular Discovery Systems Ltd	BioMedical Research	Australia	20.00 * 100.00

Molecular Discovery Systems Ltd is now accounted for as an investment in an associate. Refer to Note 13.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements

for the year ended 30 June 2010

21. Cash Flow Information (a) Reconciliation of Cash Flow from Operations with Profit after income tax Operating loss after income tax Non-cash flows in profit: Loss on acquisition of joint venture Depreciation and amortisation Impairment Share based payment expense Management Fee Share of Associates Loss Gain on disposal of subsidiary Changes in net assets and liabilities, net of effects of purchase and disposal of subsidiaries (Increase)/decrease in trade and other receivables (Increase)/decrease in other assets Increase/(decrease) in provisions Increase/(decrease) in trade payables and accruals Cash flow from operations (b) Non-cash Financing and Investing Activities i) In Specie Distribution 206,935,864 ordinary shares were redistributed to shareholders during the prior year as part of the In Specie distribution undertaken by the Company to Molecular Discovery Systems. The share value was based on the fair value at the time of the distribution. ii) issue of Shares 114,767 shares were issued for consultancy services 4,769,228 shares were issued in lieu of directors fees (c) Financing Facilities Credit card facility (limit) Used credit card facility	Consolidated 2010 $ 2009 $
	(234,457) (2,240,611) - 49,651 27,842 208,943 - 641,815 96,411 188,464 85,549 170,685 20,939 - (995,566) - 83,364 643,792 35,008 152,902 4,642 1,533 165,558 108,080
	(710,710) (74,746) 570,753 - 15,000 - - 124,000 20,000 20,000 - -

21.
Cash Flow Information
(a)
Reconciliation of Cash Flow from
Operations with Profit after income tax
Operating loss after income tax
Non-cash flows in profit:
Loss on acquisition of joint venture
Depreciation and amortisation
Impairment
Share based payment expense
Management Fee
Share of Associates Loss
Gain on disposal of subsidiary
Changes in net assets and liabilities,
net of effects of purchase and
disposal of subsidiaries
(Increase)/decrease in trade and
other receivables
(Increase)/decrease in other assets
Increase/(decrease) in provisions
Increase/(decrease) in trade payables
and accruals
Cash flow from operations
(b)
Non-cash Financing and Investing Activities
i) In Specie Distribution
206,935,864 ordinary shares were redistributed
to shareholders during the prior year as part of
the In Specie distribution undertaken by the
Company to Molecular Discovery Systems.
The share value was based on the fair value at
the time of the distribution.
ii) issue of Shares
114,767 shares were issued for
consultancy services
4,769,228 shares were issued in lieu
of directors fees
(c)
Financing Facilities
Credit card facility (limit)
Used credit card facility

Consolidated
2010
$ 2009
$

(234,457)
(2,240,611)
-
49,651
27,842
208,943
-
641,815
96,411
188,464
85,549
170,685
20,939
-
(995,566)
-
83,364
643,792
35,008
152,902
4,642
1,533
165,558
108,080

(710,710)
(74,746)
570,753
-
15,000
-
-
124,000
20,000
20,000
-
-

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22. Financial Risk Management

(a) Financial Risk Management

The group’s financial instruments consist mainly of deposits with banks, short-term investments, accounts receivable and payable, and loans to and from subsidiaries. The main purpose of nonderivative financial instruments is to raise finance for group operations policies.

i. Financial Risk Exposures and Management

The main risks the group is exposed to through its financial instruments are interest rate risk, liquidity risk, credit risk and equity price risk.

Interest rate risk

Interest rate risk is managed with a mixture of fixed and floating rate debt.

Liquidity risk

The Group manages liquidity risk by maintaining adequate reserves, by continuously monitoring forecast and actual 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, net of any provisions for impairment of those assets, as disclosed in the statement of financial position and notes to the financial statements.

Credit risk for derivative financial instruments arises from the potential failure by counter-parties to the contract to meet their obligations.

The economic entity does not have any material credit risk exposure to any single receivable or group of receivables under financial instruments entered into by the economic entity.

Equity price risk

The Group is exposed to equity price risks arising from equity investments. Equity investments are held for strategic rather than trading purposes. The Group does not actively trade these investments.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements

for the year ended 30 June 2010

22. Financial Risk Management (continued)

(b) Financial Instruments
i. Interest rate risk

The economic entity’s exposure to interest rate risk, which is the risk that a financial instrument’s value will fluctuate as a result of changes in market interest rates and the effective weighted average interest rates on classes of financial assets and financial liabilities, is as follows:

Consolidated Group

Consolidated Group
2010 Weight Effective Interest Rate %	Floating Interest Rate $ Fixed Interest Rate 1 Year of less Fixed Interest Rate 1 to 5 Years Non-Interest Bearing $ Total $
Financial Assets Cash and cash equivalents 4.25 Trade and other receivables Other financial assets Total Financial Assets Financial Liabilities Trade and sundry payables Financial liabilities Total Financial Liabilities	1,855,820 - - - 1,855,820 - - - 89,636 89,636 - - - 183,432 183,432
	1,855,820 - - 273,068 2,128,888
	- - - 572,227 572,227 - - - 354,106 354,106
	- - - 926,333 926,333

2009 Weight Effective Interest Rate %	Floating Interest Rate $ Fixed Interest Rate 1 Year of less Fixed Interest Rate 1 to 5 Years Non-Interest Bearing $ Total $
Financial Assets Cash and cash equivalents 2.75 Trade and other receivables Other financial assets 4.20 Total Financial Assets Financial Liabilities Trade and sundry payables Lease liabilities 11.38 Financial liabilities Total Financial Liabilities	372,268 - - - 372,268 - - - 171,914 171,914 32,132 - - 56,017 88,149
	404,400 - - 227,931 632,331
	- - - 405,683 405,683 - 79,405 - - 79,405 - - - 305,010 305,010
	- 79,405 - 710,693 790,098

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ii. Fair Values

The fair values of:

Term receivables are determined by discounting the cash flows, at the market interest rates of similar securities, to their present value.
Other loans and amounts due are determined by discounting the cash flows, at market interest rates of similar borrowings to their present value.
For unlisted investments where there is no organised financial market, the fair value has been based on a reasonable estimation of the underlying net assets or discounted cash flows of the investment.
Other assets and liabilities approximate their carrying value.

No financial assets and financial liabilities are readily traded on organised markets in standardised form other than listed investments.

	2010	2010	2009	2009
	Carrying		Carrying
	Amount	Fair Value	Amount	Fair Value
Financial Assets
Available-for-sale financial assets	12,848,949	12,848,949	48,949	48,949
Loans and receivables	273,068	273,068	260,063	260,063
	13,122,017	13,122,017	309,012	309,012
Financial Liabilities
Other loans and amounts due	354,106	354,106	384,415	384,415
Trade payables	572,227	572,227	405,583	405,583
	926,333	926,333	789,998	789,998

Reconciliation of fair value measurements of financial assets in Level 3 Hierarchy:

Opening balance Add: Purchases Closing balance	Available for sale
	48,949 12,800,000
	12,800,000

The purchase during the year relates to the investment in Advent Energy Limited on April 2010. Management have made an assessment and believe that there is no material change in the fair value of the investment at balance sheet date. The investment in Advent Energy Limited was an arm’s length transaction.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements

for the year ended 30 June 2010

22. Financial Risk Management (continued)

(b) Financial Instruments (continued)

iii. Sensitivity Analysis

Interest Rate Risk

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

Interest Rate Sensitivity Analysis

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:

remaining constant would be as follows:
Change in profit — Increase in interest rate 1% — Decrease in interest rate by 0.5%	Consolidated Group 2010 2009
	54,303 6,897 (27,151) (3,449)

Liquidity Risk Management

The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities.

23.

Capital and Leasing Commitments Finance Lease Commitments Payable – minimum lease payments - not later than 12 months - Greater than 12 months Minimum lease payments Less future finance charges Present value of minimum lease payments (Note 22)	Consolidated 2010 2009
	- - - 79,404
	- 79,404 - -
	- 79,404

24. Operating Segment

The Economic entity operates predominantly in one industry, namely the biomedical research sector through its investee companies. These activities are predominantly in Australia.

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25. Events after the Statement of financial position Date

26. Related Party Transactions

((a) Equity interests in controlled entities

Details of the percentage of ordinary shares held in controlled entities are disclosed in Note 20 to the financial statements.

(b) Directors’ Remuneration

Details of the directors’ remuneration and retirement benefits is located in the Directors Report and in Note 4

(c) Directors’ Equity Holdings

Parent 2010 2009 No. No. Ordinary Shares Held as at the date of this report by directors and their director-related entities in: BPH Corporate Limited 14,942,697 16,588,330

Other Equity Instruments

Options

Held as at the date of this report by directors and their director-related entities in: BPH Corporate Limited 8,000,000 6,000,000

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements

for the year ended 30 June 2010

26. Related Party Transactions (continued)

(d) Directors

The Company has an agreement with Trandcorp Pty Limited on normal commercial terms procuring the services of David Breeze to provide product development services. $98,000 (2009: $123,000) was paid during the year.

(e) Interest in Associates

A loan receivable exists between BPH Corporate and Molecular Discovery Systems Ltd (“MDS”) $117,000 (2009:$1,423,019). This amount is unsecured, non interest bearing and repayable on demand.

In January 2010, BPH Corporate converted $1,500,000 of its loan receivable from MDS into ordinary shares of MDS.

On 24th December 2009 shareholder approval was received to spin off 100% owned subsidiary MDS, which occurred of 6 January 2010. Under the spin BPH Corporate disposed of its interest in the HLS5 technology and its associated projects. This was distributed back to the shareholders of BPH Corporate on a one for one basis. Refer to Note 31 for further details.

During the year BPH Corporate entered into a convertible loan agreement with MDS. The loan is for a maximum amount of $500,000 and is to be used for short term working capital requirements. Subject MDS being admitted to the Official list BPH Corporate has a right of conversion to satisfy the debt on or before the termination date.

27. Share-Based Payments

The following share-based payment arrangements existed at 30 June 2010:

		Exercise	Fair value at
Total number	Grant Date	price	grant date	Expiry date
500,000	17 October 2006	*	$0.0869	17 October 2011
500,000	29 April 2008	*	$0.0225	29 April 2013
6,000,000	20 December 2007	$0.15	$0.0443	31 December 2010
2,550,000	1 June 2013	$0.15	$0.0232	30 June 2013
1,000,000	16 December 2008	$0.15	$0.0119	16 December 2013
150,000	25 September 2009	$0.30	$0.0423	30 September 2014
3,000,000	24 December 2009	$0.45	$0.0266	31 December 2014
13,700,000

On 24 December 2009 Mr David Breeze was issued options in the company. A total of 2,000,000 options were issued having a total value of $53,200 (2009:nil).

On 24 December 2009 Ms Deborah Ambrosini was issued options in the company. A total of 1,000,000 options were issued having a total value of $26,600 (2009:nil).

At balance date, no share options had been exercised.

All options granted to key management personnel are to purchase ordinary shares in BPH Corporate Limited, which confer a right of one ordinary share for every option held.

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Consolidated Group

	Consolidated Group
Outstanding at the beginning of the year Granted Granted Forfeited Exercised Expired Outstanding at year-end Exercisable at year-end	2010 2009 Number of Options Weighted Average Exercise Price $ Number of Options Weighted Average Exercise Price $
	12,150,000 0.15 11,150,000 - 3,000,000 0.45 1,000,000 0.15 150,000 0.30 - - - - - - - - - - (1,600,000) 0.15 - -
	13,700,000 0.22 12,150,000 0.15
	12,750,000 0.22 8,383,333 0.15

No options were exercised during the year ended 30th June 2010.

The weighted average fair value of the options granted during the year was $79,800.

This price was calculated by using a Black-Scholes option pricing model applying the following inputs:

Exercise price	$0.45
Life of the option	60 months
Underlying share price	$0.135
Expected share price volatility	50%
Dividends	0%
Risk free interest rate	6.35%

Historical volatility has been the basis for determining expected share price volatility as it is assumed that this is indicative of future tender, which may not eventuate.

The life of the options is based on the historical exercise patterns, which may not eventuate in the future.

Included under employee benefits expense in the profit and loss is $96,410 (2009: $60,464), and relates, in full, to equity.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements for the year ended 30 June 2010

28. Commitments and Contingencies

On the 9th October 2009 the parent entity successfully resolved a claim for outstanding consulting fees that has been brought against the parent. This has now been settled in full with no further action required.

At reporting date there are no contingent liabilities.

During the year BPH Corporate entered into an agreement for the provision on consultancy services for the commercialisation of its biotech projects. The agreement is a six month rolling agreement with fees payable monthly of approximately of $6k.

There is secured registered charge over all assets and rights over BPH Corporate including but not limited to, all real and personal property, choses in action, goodwill and called but unpaid nominal and premium capital. This charge has been discharged subsequent to year end.

Parent Entity Disclosures Financial Position Assets Current assets Non-current assets Total asset Liabilities Current liabilities Non-current liabilities Total liabilities Equity Issued Capital Retained earnings Reserves Option Reserve Total equity Financial Performance Profit/Loss for the year Other comprehensive income Total comprehensive income	Consolidated 2010 2009
	2,852,089 2,663,429 15,272,208 1,642,264
	18,124,297 4,305,693
	681,485 380,949 1,243 -
	682,728 380,949
	22,429,869 7,311,109 (5,379,356) (3,681,010) 391,056 294,,645
	17,441,569 3,924,744
	(1,698,346) (936,513) - -
	(1,698,346) (936,513)

30. Parent Entity Disclosures

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31. Discontinued Operations

(a) Details of operations disposed

On 15th September 2009 the Company announced its intention to spin off Molecular Discover Systems Pty Ltd (MDS) a 100% owned subsidiary of BPH Corporate. MDS has core expertise in high content and high throughput imaging and analysis.

The focus of the spin off was a possible new anti-cancer therapeutic and a new anti-cancer strategy. The most recent development in the novel anti-mitotic cancer therapeutic area addresses a market which is one of the primary objectives of current oncology drug discovery today.

On 24th December 2009 shareholder approval was received to spin off 100% owned subsidiary MDS. The record date for the spin off was 6th January 2010 with all shareholders at this date receiving shares in MDS on a one for one basis to their holding in BPH Corporate.

Under the spin BPH Corporate disposed of 80% of its interest in the HLS5 technology and its associated projects. This was distributed back to the shareholders of BPH Corporate on a one for one basis.

(b) Financial Performance of operations disposed

The results of the discontinued operation included in the statement of comprehensive income is set out below.:

out below.:
Revenue Expenses Gain on disposal of subsidiary Loss before income tax of discontinued operation	June 2010 $ June 2009 $
	13,340 13,537 (47,369) (310,161)
	(34,029) (297,024) 995,566 -
	961,537 -

(c) Assets and liabilities – operations disposed

Assets and liabilities – operations disposed
Current Assets Cash and cash equivalents Trade and Other receivables Intangibles Total assets of disposal group held for sale Current Liabilities Trade and other payables Financial Liabilities Total assets of disposal group held for sale Net assets attributable to discontinued operations	6 January 2010 $
	16,204 3,616 713,442
	733,262
	5,678 133,422
	139,100
	594,162

The assets and liabilities of MDS are reflected at the carrying value which is equivalent to their fair value. The Directors have been unable to separately indentify the costs associated with the distribution of MDS through the in-specie distribution, as the transaction was part of the whole prospectus arrangement.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements

for the year ended 30 June 2010

31. Discontinued Operations (continued)

(d) Cashflow information – operation disposed

31. Discontinued Operations (continued) (d) Cashflow information – operation disposed
The net cashflows of MDS are as follows: Operating activities Investing activities Financing activities Net cash outflow (e) Gain on disposal of subsidiary Consideration received Gain on disposal of subsidiary Disposal of 80% of investment by BPH Net gain on disposal of subsidiary The gain on disposal is included in the loss for the year from discontinued operations in the statement of comprehensive income. (f) Net Cashflow of Disposal Consideration received Less cash balances disposed of Net cash on disposal of subsidiary	30 June 2010 $ 30 June 2009 $
	(60,180) (51,956) 140,695 21,602 (79,405) (149,297)
	1,110 (179,651)
	- - 1,566,319 - (570,753) -
	995,566 -
	- - (16,204) -
	(16,204) -

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32. Changes in Accounting Policies

New accounting standards and interpretations

The Group has adopted all new and revised Australian Accounting Standards and AASB Interpretations that are relevant to its operations and effective for reporting periods beginning on 1 July 2009. The following standards have had an impact on the group:

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----- Start of picture text -----

Effective for
annual reporting
periods
beginning/ending More Impact on
New or revised requirement on or after information Group
----- End of picture text -----

New or revised requirement	Effective for annual reporting periods beginning/ending on or after	More information	Impact on Group

AASB 101: Presentation of Financial Statements (Revised September 2007), AASB 2007- 8 Amendments to Australian Accounting Standards & Interpretations and AASB 2007-10 Further Amendments to AASBs arising from AASB 101. The revised standard affects the presentation of changes in equity and comprehensive income. It does not change the recognition, measurement or disclosure of specific transactions and other events required by other AASB standards.	Beginning 1 January 2009	This has been adopted for the year ended 30 June 2010	The Group has adopted the revised terminologies for presentation of its financial statements in accordance with AASB 101.
AASB 8: Operating Segments, AASB 2007- 3 Amendments to Australian Accounting Standards 5, 6, 102, 107, 119, 127, 134, 136, 1023 & 1038 arising from AASB 8. This standard supersedes AASB 114, Segment Reporting introducing a US GAAP approach of management reporting as part of the convergence project with FASB.	Beginning 1 January 2009	This has been adopted for the year ended 30 June 2010	The Group has revised its disclosure requirements in accordance with AASB 8, for the Group’s operating segments, as described in Note 24.
AASB 2008-1: Amendments to AASB 2 "Share Based Payments” The amendment clarifies that vesting conditions comprise service conditions and performance conditions only. Other features of a share-based payment are not vesting conditions. It also specifies that all cancellations, whether by the entity or by other parties, should receive the same accounting treatment.	Beginning 1 January 2009	This has been adopted for the year ended 30 June 2010	The adoption of this standard had no impact on the Group.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements

for the year ended 30 June 2010

32. Changes in Accounting Policies (continued)

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New or revised requirement	Effective for annual reporting periods beginning/ending on or after	More information	Impact on Group

AASB 2008-7: Amendments to Australian Accounting Standards – Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate This amends and clarifies the following standards AASB 101, AASB 118, AASB 127 & AASB 136 for the treatment of determining the cost of an investment in a subsidiary, jointly controlled entity or associate	Beginning 1 January 2009	This has been adopted for the year ended 30 June 2010	The adoption of this standard had no impact on the Group.
AASB 3 Business Combinations (Revised), AASB 127 Consolidated and Separate Financial Statements (Amended), AASB2008-3 Amendments to AASBs arising from AASB 3 and AASB 127 This revision changes the application of acquisition accounting for business combinations and accounting for non - controlling interests. The revised and amended standards changes affect the valuation of non controlling interest, the accounting of transaction costs and the initial recognition and subsequent recognition of contingent considerations.	Beginning 1 July 2009	This has been adopted for the year ended 30 June 2010	These standards are applied prospectively and had no material impact on prior business combinations.
Interpretation 17: Distributions of Non-cash Assets to Owners The Interpretation provides guidance on the appropriate accounting treatment when an entity distributes assets other than cash as dividends to its shareholders.	Beginning 1 July 2009	This has been adopted for the year ended 30 June 2010	The adoption of this standard had no impact on the Group.

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New or revised requirement	Effective for annual reporting periods beginning/ending on or after	More information	Impact on Group

AASB 2009-2: Amendments to Australian Accounting Standards – Improving Disclosures about Financial Instruments. The amendments to AASB 7 expand the disclosures required in respect of fair value measurements and liquidity risk. The Group has elected not to provide comparative information for these expanded disclosures in the current year in accordance with the transitional reliefs offered in these amendments.	Beginning 1 January 2009 & ending on or after 30 April 2009	This has been adopted for the year ended 30 June 2010	The Group has updated disclosures in the financial report in relation to financial instruments.
AASB 2009-4 Amendments to Australian Accounting Standards arising from the Annual Improvements Project and AASB 2009- 7: Amendments to Australian Accounting Standards. These makes amendments to various Australian Accounting Standards which have led to a number of terminology changes, but have had no material effect.	Beginning 1 July 2009	This has been adopted for the year ended 30 June 2010	The adoption of this standard had no material impact on the Group.

The following Australian Accounting Standards and Interpretations have recently been issued or amended but are not yet effective and have not been adopted by the group for the year ended 30 June 2010.

New or revised requirement	Effective for annual reporting periods beginning/ending on or after	More information	Impact on Group
AASB 2009-5: Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project. This makes amendments to various Australian Accounting Standards which have led to a number of terminology changes, but have had no material effect.	Beginning 1 January 2010	This will be adopted for the year ending 30 June 2011.	Management does not anticipate any impact on adoption.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements

for the year ended 30 June 2010

32. Changes in Accounting Policies (continued)

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New or revised requirement	Effective for annual reporting periods beginning/ending on or after	More information	Impact on Group

AASB 2009-8: Amendments to Australian Accounting Standards – Group Cash-settled Share-based Payment Transactions AASB 2. The amendments clarify the scope of AASB 2 by requiring an entity that receives goods or services in a share-based payment arrangement to account for those goods or services no matter which entity in the group settles the transaction, and no matter whether the transaction is settled in shares or cash. The amendments incorporate the requirements previously included in Interpretation 8 and Interpretation 11 and as a consequence these two Interpretations are superseded by the amendments.	Beginning 1 January 2010	This will be adopted for the year ending 30 June 2011.	Management does not anticipate any impact on adoption.
AASB 9: Financial Instruments and AASB 2009- 11: Amendments to Australian Accounting Standards arising from AASB 9 [AASB 1, 3, 4, 5, 7, 101, 102, 108, 112, 118, 121, 127, 128, 131, 132, 136, 139, 1023 & 1038 and Interpretations 10 & 12]. AASB 9 simplifies the classifications of financial assets into two categories: Those carried at amortised cost; and Those carried at fair value. Simplifies requirements related to embedded derivatives that exist in financial assets that are carried at amortised cost, such that there is no longer a requirement to account for the embedded derivative separately. Removes the tainting rules associated with held-to-maturity assets. Investments in unquoted equity instruments (and contracts on those investments that must be settled by delivery of the unquoted equity instrument) must be measured at fair value. However, in limited circumstances, cost may be an appropriate estimate of fair value.	Beginning 1 January 2013.	This will be adopted for the year ending 30 June 2014.	Management is yet to make an assessment on impact on adoption.

BPH Corporate Limited | A N N U A L R E P O R T 2010

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New or revised requirement	Effective for annual reporting periods beginning/ending on or after	More information	Impact on Group

AASB 2009-10: Amendments to Australian Accounting Standards - Classification of Rights Issues. Clarifies that rights options or warrants to acquire a fixed number of an entity’s own equity instruments for a fixed amount in any currency are equity instruments if the entity offers the rights, options or warrants pro rata to all existing owners of the same class of its own non-derivative equity instruments.	Beginning 1 February 2010	This will be adopted for the year ending 30 June 2011.	Management does not anticipate any impact on adoption.
AASB 2009-12: Amendments to Australian Accounting Standards [AASBs 5, 8, 108, 110, 112, 119, 133, 137, 139, 1023 & 1031 and Interpretations 2, 4, 16, 1039 & 1052]. AASB 2009-12 makes amendments to a number of Standards and Interpretations. In particular, it amends AASB 8 Operating Segments to require an entity to exercise judgement in assessing whether a government and entities known to be under the control of that government are considered a single customer for the purposes of certain operating segment disclosures. It also makes numerous editorial amendments to a range of Australian Accounting Standards and Interpretations, including amendments to reflect changes made to the text of IFRSs by the IASB.	Beginning 1 January 2011	This will be adopted for the year ending 30 June 2012.	Management does not anticipate any impact on adoption.
Revised AASB 124: Related Party Disclosures (December 2009): Related Party Disclosures (December 2009). Simplifies the definition of a related party, clarifying its intended meaning and eliminating inconsistencies from the definition of a related party.	Beginning 1 January 2011	This will be adopted for the year ending 30 June 2012.	Management does not anticipate any impact on adoption.

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Notes to the Financial Statements

for the year ended 30 June 2010

32. Changes in Accounting Policies (continued)

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New or revised requirement	Effective for annual reporting periods beginning/ending on or after	More information	Impact on Group

Interpretation 19: Extinguishing Financial Liabilities with Equity Instruments. Requires the extinguishment of a financial liability by the issue of equity instruments to be measured at fair value (preferably using the fair value of the equity instrument issued) with the difference between the fair value of the instrument and the carrying value of the liability extinguished being recognised in profit or loss. The Interpretation does not apply where the conversion terms were included in the original contract (such as in the case of a convertible debt) or to common control transactions.	Beginning 1 July 2010	This will be adopted for the year ending 30 June 2011.	Management does not anticipate any impact on adoption.
AASB 2010-3 Amendments to Australian Accounting Standards arising from the Annual Improvements Project: Amendments to AASB 3, AASB 7, AASB 121, AASB 128, AASB 131, AASB 132 & AASB 139.	Beginning 1 July 2010	This will be adopted for the year ending 30 June 2011.	Management does not anticipate any impact on adoption.
AASB 2010-4 Further Amendments to Australian Accounting Standards arising from the Annual Improvements Project: Amendments to AASB 1, AASB 7, AASB 101 & AASB 134 and Interpretation 13	Beginning 1 July 2011	This will be adopted for the year ending 30 June 2012.	Management does not anticipate any impact on adoption.

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Directors’ Declaration

The directors of the company declare that:

the financial statements and notes, as set out on pages 30 to 72 are in accordance with the Corporations Act 2001 and:
(a) comply with Accounting Standards and the Corporations Regulations 2001 and other mandatory professional reporting requirements;
(b) give a true and fair view of the financial position as at 30 June 2010 and of the performance for the year ended on that date of the consolidated entity;
in the Directors’ opinion, there are reasonable grounds to believe that the company will be able to pay its debts as and when they become due and payable:
the financial statements and notes comply with International Financial Reporting Standards as disclosed in Note 1.
the Chief Executive Officer and Chief Finance Officer have each declared that:
(a) the financial records of 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.

This declaration is made in accordance with a resolution of the Board of Directors.

David Breeze Executive Chairman

Dated this 24th day of August 2010

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Independent Auditor’s Report

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Independent Auditor’s Report to the Members of BPH Corporate Limited

Report on the Financial Report

We have audited the accompanying financial report of BPH Corporate Limited, which comprises the statement of financial position as at 30 June 2010, the statement of comprehensive income, the statement of cash flows and the statement of changes in equity for the year ended on that date, 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 as set out on pages 30 to 73.

Directors’ Responsibility for the Financial Report

The directors of the company are responsible for the preparation and fair presentation of the financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 . This responsibility includes establishing and maintaining internal control relevant to the preparation and fair presentation of the financial report that is free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances. In Note 1, the directors also state, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements , that compliance with the Australian Accounting Standards ensures that the financial report, comprising the consolidated financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s Responsibility

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

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control, relevant to the entity’s preparation of the financial report that gives a true and fair view, 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 entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report.

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

Auditor’s Independence Declaration

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

Liability limited by a scheme approved under Professional Standards Legislation. Member of Deloitte Touche Tohmatsu

BPH Corporate Limited | A N N U A L R E P O R T 2010

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Auditor’s Opinion

In our opinion:

(a) the financial report of BPH Corporate 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 2010 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 consolidated financial statements also comply with International Financial Reporting Standards as disclosed in Note 1.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 15 to 18 of the director’s report for the year ended 30 June 2010. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

Auditor’s Opinion

In our opinion the Remuneration Report of BPH Corporate Limited for the year ended 30 June 2010, complies with section 300A of the Corporations Acts 2001 .

DELOITTE TOUCHE TOHMATSU

Chris Nicoloff

Partner Chartered Accountants Perth, 24 August 2010

BPH Corporate Limited | A N N U A L R E P O R T 2010

HEALTH + TECHNOLOGY + RESOURCES

Additional Securities Exchange Information

Additional information required by Australian Securities Exchange Limited and not shown elsewhere in this report as follows.

The information is made up to 17th August 2010

1. Substantial Shareholder

The name of the substantial shareholder listed in the company’s register is:

Shareholder	Shares	%
MEC Resources Ltd	23,303,379	11.26

2. Distribution of Shareholders

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----- Start of picture text -----

Range of Holding Shareholders Number Ordinary %
Shares
----- End of picture text -----

Range of Holding	Shareholders Number Ordinary Shares %
1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 and over	283 91,765 0.04 454 1,453,778 0.70 418 3,650,249 1.76 1,293 49,744,819 24.04 341 152,014,253 73.46
	2,789 206,954,864 100.00

The number of shareholders with less than a marketable parcel is 796, holding in total 1,890,918 shares.

3. Voting Rights - Shares

All ordinary shares issued by BPH Corporate Limited carry one vote per share without restriction.

4. Voting Rights - Options

The holders of employee options do not have the right to vote.

5. Restricted Securities

The Company does not have any restricted securities.

Number of Shares free of escrow 206,954,864

76 BPH Corporate Limited | A N N U A L R E P O R T 2010

6. Twenty Largest Shareholders as at 17th August 2010

The names of the twenty largest shareholders of the ordinary shares of the company are:

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----- Start of picture text -----

Name Number of ordinary % held of issued
fully paid shares ordinary capital
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Name	Number of ordinary fully paid shares % held of issued ordinary capital
MEC Resources Ltd Trandcorp Pty Ltd Jojo Enterprises PL Grandbridge Limited Avatar Equities PL Trandcorp Pty Ltd ANZ Nominees Ltd Bounty Oil and Gas NL Claymore Capital PL Igo Andy Act 2 PL Barry Sheedy and Assoc PL Major Peta and Andrew Mercieca Joseph Cyl Trading PL Gregory Gilbert Merrill Lynch Aust Nom PL Spinite PL Caduceus PL Calder Dax Marcus	23,303,379 9,545,000 8,367,701 6,778,200 4,251,701 3,183,852 2,800,281 2,711,088 2,642,900 2,000,000 2,000,000 1,000,000 1,000,000 1,000,000 1,000,000 961,538 961,538 850,340 850,340 850,000 11.26 4.61 4.04 3.28 2.05 1.54 1.35 1.31 1.28 0.97 0.97 0.48 0.48 0.48 0.48 0.46 0.46 0.41 0.41 0.41
	76,057,858 36,73

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14 View Street, North Perth Western Australia 6006 Telephone: (08) 9328 8366 Facsimile: (08) 9328 8733 Email: [email protected]

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BPH ENERGY LTD — Annual Report 2010

64555_rns_2010-10-05_b3148d25-4779-4b87-99f4-5cbeb33c1d3d.pdf

Contents

Directors

Auditor

Share Registry

Scientific Advisors

Australian Securities Exchange Listing

Registered Office

Principal Business Address

Australian Business Number

Chairman’s Letter

Company Focus and Developments

Advent Energy Limited

Offshore Sydney Basin – PEP 11

Exmouth sub-Basin region of the Carnarvon Basin

Company Focus and Developments

Onshore Bonaparte Basin

Central Petroleum

Biotechnology Portfolio

Molecular Discovery Systems

Novel Anti-Mitotic Cancer Theraperutics

Proposed mechanisms for rapid tumour vascular shutdown after treatment with CA-4-P or DMXAA.

Company Focus and Developments

Drug Discovery and High-Content Screening Technology

HLS5 Technology

Cortical Dynamics

BAR Technology

Company Focus and Developments

BAR Technology (continued)

Diagnostic Array Systems

Directors’ Report

Directors

Company Secretary

Principal Activities

Biotechnology

Molecular Discovery Systems (MDS)

HLS5 Project

Cortical Dynamics

Directors’ Report

Diagnostic Array Systems (DAS)

Advent Energy Limited

Operating Results

Dividends

Review of Operations

Financial Position

Significant Changes in State of Affairs

After Balance Date Events

Environmental Issues

Future Developments

Directors’ Report

Information on Directors

G Gilbert

D L Breeze

H Goh

D Ambrosini

Remuneration Report

Remuneration Policy

Directors’ Report

Remuneration Policy (continued)

Employment contracts of directors and senior executives

Details of Remuneration for the year ended 30 June 2010

2010

2010 (continued)

Directors’ Report

Details of Remuneration for the year ended 30 June 2010 (continued)

2009

2009 (continued)

Company performance, shareholder wealth and director and executive remuneration

Additioal Information

Meetings of Directors

Indemnifying Officers or Auditors

Non-audit Services

Directors’ Report

Options

Unlisted Options

Proceedings on Behalf of Company

Auditor’s Independence Declaration

Auditor’s Independence Declaration

BPH ENERGY LTD Annual Report 2010