Immuron Ltd — Interim / Quarterly Report 2012

Feb 27, 2012

Immuron Limited ABN: 80 063 114 045 ASX Half year information – 31 December 2011.

Lodged with the ASX under Listing Rule 4.2A. This information should be read in conjunction with the 30 June 2011 Annual Report.

Contents

Results for Announcement to the Market (Appendix 4D item 2) 2 Half-year report (ASX Listing rule 4.2A1) 3

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Immuron Limited Half-year ended 31 December 2011 (Previous corresponding period: Half-year ended 31 December 2010)

Results for Announcement to the Market

				$
Revenue from ordinary activities (Appendix 4D item 2.1)	Up	109.6%	to	210,728
Net (loss) from continuing activities after tax attributable to members (Appendix 4D item 2.2)	Down	9.4%	to	1,308,518
Net profit/ (loss) for the period attributable to members (Appendix 4D item 2.3)	Down	9.4%	to	1,308,518
Dividends/distributions (Appendix 4D item 2.4)	Amount per security		Franked amount per security
Final dividend_(prior year)_	Nil		Nil
Interim dividend	Nil		Nil
Record date for determining entitlements to the	interim dividend
			N/A

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Immuron Limited Interim financial report for the half year ended 31 December 2011

Contents	Page
Directors’ Report	4
Auditor’s Independence Declaration	7
Statement of Comprehensive Income	8
Statement of Financial Position	9
Statement of Changes in Equity	10
Statement of Cash Flows	11
Notes to the financial statements	12
Directors’ Declaration	16
Independent Auditor’s review report to the members	17

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report for the year ended 30 June 2011 and any public announcements made by Immuron Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001 . The Directors have the power to amend and reissue the condensed interim financial report.

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Immuron Limited Directors Report 31 December 2011

Your Directors present their report on Immuron Limited for the half-year ended 31 December, 2011.

Directors

The following persons were Directors of Immuron Limited during the half-year and up to the date of this report:

Prof. Colin B Chapman (Chairman) Prof. Roy Robins-Browne - Resigned 7 February 2012 Simon S Sallka - Resigned 7 February 2012 Dr Elane Zelcer

Dr Stewart Washer – Appointed 7 February 2012

Review of operations

During the last six months the Company has continued to focus on the following four items with the intention of increasing value for shareholders:

1. Travelan: increasing sales of Travelan through distribution agreements with significant partners for overseas markets.

2. NASH: obtaining FDA clearance for the IND allowing the Company to commence its Phase IIb clinical trial for its NASH product, IMM124E, with a view to partnering with a large biotech/pharma company.

3. Influenza: continuing development of the influenza product with the objective of commencing first human trials in 2012.

4. Controlling expenditures in respect of R & D costs incurred by our collaboration partners. This reduction was partially achieved by leveraging the grants provided directly to some of our collaboration partners for ongoing research projects enabling the Company to add to its future product pipeline.

The loss for the six months of $1,308,518 was $136,253 less than the corresponding 2010 period. This reduction was contributed to by controlling expenses and through the Company receiving its first upfront licence fee for its Travelan product. That fee from Paladin Labs Inc. for at least a 15 year licence for the territories of Canada, Latin America and a number of sub-Saharan African countries amounted to $480,215 ($CAD500,000).

The following summary sets out the contributions from each of the main business segments to the loss for the current and the 2010 periods.

Research & Product Development Segment Revenues Expenditures Segment contribution Hyper immune Products Revenues Cost of sales & other expenses Segment contribution	2011 $’000 - (751) (751) 211 (186) 25	2010 $’000 - (990) (990) 101 (90) 11	Variation $’000 - 239
			239
			110 (96)
			14

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Corporate Revenues, including interest received Corporate expenses Segment contribution Total Loss for period	490 (1,073) (583) (1,309)	38 (504) (466) (1,445)	452 (569)
			(117)
			136

Research & Product Development Segment

During the current six months the Company achieved an important milestone in the ongoing development of its NASH /Fatty Liver product with approval received from the US Federal and Drug Administration (FDA) to conduct a Phase IIb clinical trial. The trial, currently in its planning stage, will be conducted in six locations across three countries - the USA, Australia and Israel. The trial will commence when sufficient funds become available.

The main focus of our product development during the current period was on NASH with the preparation of the IND application to the FDA, together with the critically important task of building the relevant intellectual property portfolio.

A number of ongoing development projects being conducted at Hadassah Medical Centre by our Medical Director, Professor Yaron Ilan, were put on hold. Development activities continued on our influenza and C/difficile programmes but since both of our partners on these projects, University of Melbourne and Monash University respectively, are conducting the research with the assistance of specific grants, there was little direct funding assistance required by the Company during the current or the comparative periods.

The main areas of R&D costs for the two periods were as follows:

	2011	2010
	$,000	$,000	Variation
Direct R&D costs from Hadassah Medical Centre	90	263	173
Preparation of NASH FDA IND application costs	191	104	(87)
Patent cost incurred in Australia and USA	182	135	(47)
International regulatory requirements for the potential registration of
Travelan and our influenza products	63	-	(63)
Consultants and staffing costs	154	351	197
	680	853	173

Hyperimmune Products/Travelan

This segment is for sales of our hyperimmune products, but excludes income and related expenses from licence fees and royalties.

The significant growth in our revenue for this period reflects the sales of Travelan to Nycomed Australia. This growth reflects the increased penetration that Nycomed is making in new markets, particularly through the direct promotion of Travelan to doctors and pharmacies rather than via the normal wholesale channels.

We expect growth to continue during the current year and whilst it is not a significant contributor to our margins it provides a significant example and benefits our ongoing discussions with potential overseas distributors.

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Corporate

As noted above, Immuron received its first up front licence fee for the distribution of Travelan. This reflects the substantial costs that the Company committed in the current period in seeking additional markets for Travelan together with potential partners for the development, and eventual commercialisation of our NASH product.

In a number of our announcements to the ASX during the past year we have stated the potential size of the market for the NASH product, IMM124E, and noted that currently there is a significant unmet demand for a product to treat NASH. To assist management in identifying potential partners for NASH and Travelan, the Company engaged the advisory services of the New York based firm, Roberts Mitani LLC. This firm specialises in the biotech sector and was instrumental in introducing and assisting in finalising the Paladin licence transaction. They continue to be engaged in assisting with a number of ongoing business opportunities. Their fees and expenses, together with the legal fees incurred in finalising the Paladin transaction, amounted to $172,000 for the current period with no comparable cost in the 2010 period.

With the Company’s current strategy of focusing on commercialisation and maximising its commercial opportunities, during the past twelve months there has been a significantly increase in business development costs with the engagement of additional personnel and consultants. These costs, including associated overseas travel to attend conferences and meet with potential partners, was $298,000 (2010, $125,000).

Auditor’s Independence Declaration

A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 7.

Signed in accordance with a resolution of the Directors.

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E Zelcer Director Melbourne 28 February 2012

C B Chapman Director

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Auditors’ Independence Declaration

As lead auditor for the review of Immuron Limited for the half year ended 31 December 2011 , I declare that to the best of my knowledge and belief, there have been:

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

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

This declaration is in respect of Immuron Limited during the period.

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Lisa Harker Partner PricewaterhouseCoopers

Melbourne 28 February 2012

Liability limited by a scheme approved under Professional Standards Legislation.

PricewaterhouseCoopers, ABN 52 780 433 757 Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au

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Immuron Limited Statement of Comprehensive Income for the half year ended 31 December 2011

Notes Revenue from continuing operations Other income 2 Raw materials and consumables used Employee and consultants costs Depreciation Research and development – external Directors’ fees Shareholder relations Product marketing & export development Corporate and administrative expenses Finance costs Loss before income tax Income tax benefit Loss from continuing operations 2 Net loss for the half year Total comprehensive loss for the half year Basic earnings per share (Loss) from continuing operations attributable to the ordinary equity holders of the company (Loss) attributable to the ordinary equity holders of the company Diluted earnings per share (Loss) from continuing operations attributable to the ordinary equity holders of the company (Loss) attributable to the ordinary equity holders of the company NTA Backing Net tangible asset backing per ordinary share	Half year 2011 2010 $ $ 210,728 100,560 489,926 40,796 (162,631) (84,546) (498,639) (561,556) (6,449) (8,922) (571,506) (602,780) (132,846) (111,800) (83,996) (51,864) (69,652) (39,868) (467,813) (122,672) (15,640) (2,120) (1,308,518) (1,444,771) - - (1,308,518) (1,444,771) (1,308,518) (1,444,771) (1,308,518) (1,444,771) Cents Cents (0.004) (0.46) (0.004) (0.46) (0.004) (0.46) (0.004) (0.46) Cents Cents 0.0002 0.21	Half year 2011 2010 $ $ 210,728 100,560 489,926 40,796 (162,631) (84,546) (498,639) (561,556) (6,449) (8,922) (571,506) (602,780) (132,846) (111,800) (83,996) (51,864) (69,652) (39,868) (467,813) (122,672) (15,640) (2,120) (1,308,518) (1,444,771) - - (1,308,518) (1,444,771) (1,308,518) (1,444,771) (1,308,518) (1,444,771) Cents Cents (0.004) (0.46) (0.004) (0.46) (0.004) (0.46) (0.004) (0.46) Cents Cents 0.0002 0.21
		(1,444,771) -
		(1,444,771)
		(1,444,771)
		(1,444,771)
		Cents (0.46) (0.46) (0.46) (0.46) Cents 0.21

The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.

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Immuron Limited Statement of Financial Position 31 December 2011

Notes ASSETS CURRENT ASSETS Cash & cash equivalents Trade & other receivables Inventories Other assets TOTAL CURRENT ASSETS NON-CURRENT ASSETS Property, plant and equipment Intangible assets Investments TOTAL NON-CURRENT ASSETS TOTAL ASSETS LIABILITIES CURRENT LIABILITIES Trade & other payables Provisions TOTAL CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Contributed equity 3 Reserves 3 Accumulated losses TOTAL EQUITY	31 December 2011 $ 673,135 105,133 235,681 111,018 1,124,967 23,563 1,460,587 31 1,484,181 2,609,148 1,085,110 3,000 1,088,110 1,088,110 1,521,038 28,731,570 682,331 (27,892,863) 1,521,038	30 June 2011 $ 750,814 33,594 290,900 96,127
		1,171,435
		28,162 1,460,587 31
		1,488,780
		2,660,215
		924,836 3,000
		927,836
		927,836
		1,732,379
		27,721,517 595,207 (26,584,345)
		1,732,379

The above Statement of Financial Position should be read in conjunction with the accompanying notes.

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Immuron Limited Statement of Changes in Equity For the half-year ended 31 December 2011

Balance at 1 July 2010 Total comprehensive loss for the half year Transactions with owners in their capacity as owners Contributions of equity, net of transaction costs Balance 31 December 2010 Balance 1 July 2011 Total comprehensive loss for the half year Transactions with owners in their capacity as owners Contributions of equity, net of transaction costs Employee share options- value of employee services Balance 31 December 2011	Contributed equity $ 26,964,091 - 207,864 27,171,955 27,721,517 1,010,053 28,731,570	Reserves $ 388,366 - - 388,366 595,207 78,508 8,616 682,331	Accumulated losses $ (23,989,166) (1,444,771) - (25,433,937) (26,584,345) (1,308,518) - (27,892,863)	Total $ 3,363,291 (1,444,771) 207,864
				2,126,384
				1,732,379 (1,308,518) 1,088,561 8,616
				1,521,038

The above Statement of changes in equity should be read in conjunction with the accompanying notes.

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Immuron Limited Statement of Cash Flows For the half year ended 31 December 2011

CASH FLOWS FROM OPERATING ACTIVITIES Receipts from customers (inclusive of goods and services tax) Payments to suppliers and employees (inclusive of goods and services tax) Interest received Interest paid Net Cash (outflow) from Operating Activities CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property, plant and equipment Net Cash inflow/(outflow) from Investing Activities CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares & other equities Share placement costs Net Cash inflow from Financing Activities Net increase/(decrease) in cash & cash equivalents Cash and cash equivalents at beginning of the half year Cash and cash equivalents at the end of the half-year	Half year 2011 2010 Inflow / Inflow / (Outflow) (Outflow) $ $ 640,478 225,334 (1,541,334) (1,319,095) (900,856) (1,093,761) 9,710 37,796 (15,640) (2,120) (906,786) (1,058,085) (1,849) (16,404) (1,849) (16,404) 861,952 218,804 (30,996) (10,940) 830,956 207,864 (77,679) (866,625) 750,814 1,882,224 673,135 1,015,599	Half year 2011 2010 Inflow / Inflow / (Outflow) (Outflow) $ $ 640,478 225,334 (1,541,334) (1,319,095) (900,856) (1,093,761) 9,710 37,796 (15,640) (2,120) (906,786) (1,058,085) (1,849) (16,404) (1,849) (16,404) 861,952 218,804 (30,996) (10,940) 830,956 207,864 (77,679) (866,625) 750,814 1,882,224 673,135 1,015,599
		(1,093,761) 37,796 (2,120)
		(1,058,085)
		(16,404)
		(16,404)
		218,804 (10,940)
		207,864
		(866,625) 1,882,224
		1,015,599

The above Statement of Cash Flows should be read in conjunction with the accompanying notes.

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Immuron Limited Notes to the financial statements 31 December 2011

Note 1. Summary of significant accounting policies

Basis of preparation

This general purpose financial report for the half-year reporting period ended 31 December, 2011 has been prepared in accordance with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Act 2001.

This interim financial report does not include all the notes of the type normally included in an annual financial report. Accordingly, this report is to be read in conjunction with the annual report of the year ended 30 June, 2011 and any public announcements made by Immuron Limited during the interim reporting period with the continuous disclosure requirements of the Corporations Act 2001.

The accounting policies adopted are consistent with those of the previous financial year and corresponding interim reporting period.

Going concern

At 31 December 2011, the Company’s cash and investments were $673,135 (30 June 2011 $750,814), and for the half year ended 31 December 2011, the Company experienced an operating loss of $1,308,518 (2010 $1,444,771), and a net cash outflow of $906,786 (2010 $1,058,085) from operating activities and expenses associated with research and product development programs. For the 12 months to 31 December 2012 the Company has budgeted for operating cash outflows to exceed its normal operating cash inflows.

In order to fund the budgeted cash outflows for the 12 months to 31 December 2012, the Directors anticipate that during this period the Company will enter into new licensing agreements for Travelan for new territories which will generate additional cash to fund the ongoing operations. In addition, the Company will be considering alternative sources of capital to ensure there are sufficient funds for the remainder of the 2012 financial year.

Subsequent to the half year, the Directors finalised a funding facility with Paladin Labs Inc. for $CAD 1.5 M (see note 5 on page 15 of this report) of which $CAD 1.0M ($AUD 949,378) was drawn down in January 2012. The facility is available to the Company for a period of three years and, at the option of Paladin, may be settled by the issue of equity in the Company. The funds drawn down under the facility will assist in funding the current strategy of the Company through the expansion of markets for Travelan and developing the markets for NASH.

Given the nature of product development in biotech companies and the difficulty in predicting the timing and quantum of income from the commercialisation of its products and technology, the inherent uncertainties involved in raising funds from investors, and adherence to cash flow budgets there is material uncertainty that may cast significant doubt on whether the Company will be able to continue as a going concern and realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

However, the Directors are confident that the Company's planned initiatives will be successfully achieved during the next twelve months and these will continue to provide adequate access to financial resources. The Directors are also confident of the Company’s ability to raise further capital if the need arises.

Accordingly, the Directors have prepared the financial statements on a going concern basis. As such, the financial statements do not include any adjustments as to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the entity not continue as a going concern.

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Immuron Limited Notes to the financial statements 31 December 2011

Note 2. Segment information

Management has determined that the business segments of research and product development and hyperimmune products are the main business segments used for internal reporting purposes to the Management Executive Team. Other items of income and expense not directly attributable to those two segments are disclosed as a corporate cost segment.

(a) Primary reporting format- business segments

2011 Half year Total segment revenue Total segment other income Revenue and other income from external customers EBITDA Total assets 2010 Half year Total segment revenue Total segment other income Revenue and other income from external customers EBITDA Total assets	R &D $ - - - (751,270) 1,468,898 - - - (990,386) 1,462,587	Hyper Immune Products $ 210,728 - 210,728 25,198 419,467 100,560 - 100,560 16,014 253,501	Corporate $ - 489,926 489,926 (561,451) 720,783 - 40,796 40,796 (497,153) 1,085,245	Total 210,728 489,926
				700,654
				(1,287,523)
				2,609,148
				100,560 40,796
				141,356
				(1,471,525)
				2,801,333

A reconciliation of earnings before interest, tax, depreciation and amortisation (EBITDA) to net loss for the half year is as follows:

EBITDA loss Interest revenue Finance costs Depreciation and loss on disposal of fixed assets Amortisation of share option costs Loss for half year from continuing operations	Half year 2011 $ (1,287,523) 9,710 (15,640) (6,449) (8,616) (1,308,518)	Half year 2010 $ (1,471,525) 37,796 (2,120) (8,922) - (1,444,771)

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Immuron Limited Notes to the financial statements 31 December 2011

Note 2. Segment information (continued)

Other income includes the upfront licence fees of $480,215 received from Paladin Labs for the distribution of Travelan in the Canadian, Caribbean, Brazil and sub-Sahara territories.

Note 3. Equity movements ( 1 ) Contributed equity Contributed equity at beginning of half year Issue of ordinary shares and options during the half-year Shares and options issued for cash at 7.0 cents on 25 August 2011 Value of options issued transferred to options reserve Shares and options issued under non-renounceable share issue to shareholders at 7.0 cents on 8 November 2011 Value of options issued transferred to options reserve Shares and options issued to consultants in lieu of fees Shares issued for cash at 6.5cents per share on 21 July 2010 Shares issued for cash at 6.5 cents per share on 2 August 2010 Lesscosts associated with equity raisings Contributed equity at end of half year (2) Reserves Share – based payments reserve Movements Balance 1 July 2011 Value attributable to options attaching to shares Option expense Options issued to consultants Balance 31 December 2011 Note 4 Contingencies	2011 Shares 2010 Shares 325,714,800 311,051,948	2011 $ 27,721,517	2010 $ 26,964,091
	7,380,000 - 7,613,663 - 1,010,504 - 2,523,076 - 843,142 -	516,600 (27,552) 532,957 (50,956) 70,000 - - (30,996)	- - - - - 164,000 54,804 (10,940)
	341,718,967 314,418,166	28,731,570	27,171,955
		595,207 78,508 8,616 682,331	388,366 - -
			388,366

Contingent liability $ 142,016

The Company has received grant funds totalling $142,016 from the State Government of Victoria under the terms of the Vistech Grant. Under the terms of the grant agreement, the Company has the obligation to repay the grant monies received upon the receipt of any funds from the commercial exploitation of the technology developed under the grant project. Therefore, a contingent liability exists in respect of the amount up to $142,016 if the Company receives any future proceeds from the commercialisation of the grant technology.

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Immuron Limited Notes to the financial statements 31 December 2011

Note 5 Events occurring after the reporting period

Following completion of a Distribution and Licence Agreement with Paladin Labs Inc. (Paladin) on 28 November 2011, the Company entered into a secured Senior Convertible Debenture with Paladin. Under the terms of the debenture Paladin has provided the Company with a total financing facility of $CAD 1.5 million of which a drawdown of $CAD 1.0 million ($AUD 949,378) was made in January 2012. The funds provided by Paladin are for working capital purposes and will be used to continue the international expansion of Travelan.

A summary of the terms of the Debenture is as follows:

• The term of the facility is for 3 years terminating on 23 December 2014

• During the term of the agreement Paladin has the right to convert any or the entire principal sum outstanding into ordinary shares of Immuron Limited at a conversion price of $AUS0.0473 per share. There is also an automatic conversion event if the capitalised value of Immuron reaches a particular trigger point.

• The funding facility is secured by a charge over the Company’s bank accounts, receivables and inventories, and future revenue streams from royalty and licence receipts.

• Interest on the funds advanced under the facility is payable at the rate of 10% per annum.

The debenture will be accounted for as a financial liability with an embedded written option due to the Company’s obligation to deliver shares at a future date. This option will be valued in accordance with Australian Accounting Standards and any changes to the value of the option due to movements in the Company’s share price and exchange movements will be taken through the profit and loss account.

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Immuron Limited Directors’ Declaration

In the Directors’ opinion:

• (a) the financial statements and notes set out on pages 8 to 15 are in accordance with the Corporations Act 2001 , including;

• complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and

• giving a true and fair view of the Company’s financial position as at 31 December 2011 and of its performance for the half year ended on that date; and

• (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable.

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

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E Zelcer C B Chapman Director Director

Melbourne 28 February, 2012

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Independent auditor’s review report to the members of Immuron Limited

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Immuron Limited, which comprises the statement of financial position as at 31 December 2011, and the statement of comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, selected explanatory notes and the directors’ declaration for Immuron Limited.

Directors’ responsibility for the half-year financial report

The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity , in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the entity’s financial position as at 31 December 2011 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001 . As the auditor of Immuron Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report.

A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Independence

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

Freshwater Place, 2 Southbank Boulevard, SOUTHBANK VIC 3006, GPO Box 1331, MELBOURNE VIC 3001 T: 61 3 8603 1000, F: 61 3 8603 1999, www.pwc.com.au

Liability limited by a scheme approved under Professional Standards Legislation.

PricewaterhouseCoopers, ABN 52 780 433 757

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Conclusion

Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of Immuron Limited is not in accordance with the Corporations Act 2001 including:

• (a) giving a true and fair view of the entity’s financial position as at 31 December 2011 and of its performance for the half-year ended on that date; and

• (b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

Material Uncertainty Regarding Continuation as a Going Concern

Without qualifying our opinion, we draw attention to Note 1 in the financial report. Note 1 comments on the company being dependent on commercialisation of its research and development projects and further investment by investors. These conditions, along with other matters as set forth in Note 1, indicate the existence of a material uncertainty which may cast significant doubt about the company’s ability to continue as a going concern, and therefore the entity may be unable to realise its assets and discharge its liabilities in the normal course of business and at the amounts satisfied in the financial report.

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PricewaterhouseCoopers

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Lisa Harker Partner

Melbourne 28 February 2012

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