Immuron Ltd — Regulatory Filings 2003

Sep 10, 2003

11^th September 2003

Company Announcements Office Australian Stock Exchange Ltd (ASX) 4^th Floor, 20 Bridge Street Sydney NSW 2000

Dear Sir/Madam

Please find herewith a company announcement "Preliminary Final Report 30 June, 2003 - Appendix 4E" for release and distribution to the market immediately.

Yours sincerely

CONOR GRAHAM

Managing Director & CEO

ANADIS Limited. ABN 80 063 114 045

ASX Preliminary final report - 30 June 2003

Appendix 4E - Lodged with the ASX under Listing Rule 4.3A

Contents

Results for Announcement to the Market
Preliminary consolidated statement of financial performance
Preliminary consolidated statement of financial position
Preliminary consolidated statement of cash flows
Other Appendix 4E Information	11

ANADIS Limited Year ended 30 June 2003 (Previous corresponding period: Year ended 30 June 2002)

Results for Announcement to the Market

Revenue from ordinary activities	up	56.8%	tο	3,429,488
(Loss) from ordinary activities after tax attributable to members	down	24.7%	ŧο	(1,279,584)
Net (loss) for the period attributable to members	down	24.7%	to	(1,279,584)

Dividends/distributions	Amount per security	Franked amount per security
Final dividend
Interim dividend

Record date for determining entitlements to the dividend

$\overline{N/A}$

Explanation of revenue

Sale of goods (\$3,058,560) represented the largest contribution (89%) to revenue. Additional revenue received comprised \$227,051 in outside research and development funding and \$143,877 interest received on cash deposits.

Explanation of Profit/(loss) from ordinary activities after tax

The reduction in the loss (24.7%) from the previous year is attributed to a research and development tax refund of \$335,729 and a 54% rise in customer sales at increased gross margins.

ANADIS Limited Preliminary consolidated statement of financial performance
For the year ended 30 June 2003

	Note	2003		2002
		\$		\$
Revenue from ordinary activities	1	3,429,488		2,187,150
Raw materials and consumables used		(2,018,555)		(1,363,039)
Employee benefits expense		(1,250,612)		(1,008,500)
Depreciation and amortisation expenses		(162, 381)		(150, 516)
Borrowing costs		(974)
Research and development - external		(961, 905)		(801, 889)
Corporate and administrative expenses		(650, 374)		(562,318)
Profit/ (loss) from ordinary activities before income tax benefit	2	(1,615,313)		(1,699,112)
Income tax benefit		335,729
Profit/ (loss) from ordinary activities after income tax benefit		(1, 279, 584)		(1,699,112)
		Cents	Cents
Basic earnings per share		(1.58)	(2.14)
Diluted earnings per share		(1.58)	(2.14)

ANADIS Limited Preliminary consolidated statement of financial position
As at 30 June 2003

		2003	2002
		\$	\$
CURRENT ASSETS
Cash		381,820	576,142
Receivables		654,093	519,737
Investments		2,130,000	2,800,000
Inventories		600,902	429,258
Other assets		46,605	39,498
TOTAL CURRENT ASSETS		3,813,420	4,364,635
NON-CURRENT ASSETS
Plant and equipment		1,830,224	1,883,143
Intangible assets		311,065	329,011
TOTAL NON-CURRENT ASSETS		2,141,289	2,212,154
TOTAL ASSETS		5,954,709	6,576,789
CURRENT LIABILITIES
Accounts payable		666,093	201,884
Interest bearing liabilities		10,195
Provisions		79,953	51,958
Other		113,828
TOTAL CURRENT LIABILITIES		870,069	253,842
NON-CURRENT LIABILITIES
Interest bearing liabilities		26,974
Provisions		14,303
TOTAL NON-CURRENT LIABILITIES		41,277
TOTAL LIABILITIES		911,346	253,842
NET ASSETS		5,043,363	6,322,947
EQUITY
Share capital		12,592,048	12,592,048
Accumulated losses	3	(7,548,685)	(6,269,101)
TOTAL EQUITY		5,043,363	6,322,947

ANADIS Limited Preliminary consolidated statement of cash flows
For the year ended 30 June 2003

	Note	2003 Inflow/ (Outflow) \$	2002 Inflow / (Outflow) \$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers (inclusive of goods and services
$\text{tax}$ )		3,193,836	2,089,159
Payments to suppliers and employees (inclusive of goods and services tax)		(4,822,377)	(4, 174, 787)
Interest received		180,101	165,875
Grants received		340,879
R&D tax refund		335,729
Borrowing costs		(974)
Net Cash Flow from Operating Activities	4	(772, 806)	(1,919,753)
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of plant and equipment Proceeds from maturing debentures		(91,516) 670,000	(94, 073) 1,736,094
Net Cash Flow from Investing Activities		578,484	1,642,021
CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares			546,938
Net Cash Flow from Financing Activities		$\overline{a}$	546,938
Net increase/(decrease) in cash held		(194, 322)	269,206
Cash at beginning of financial year		576,142	306,980
Effects of exchange rate on balances of cash			(44)
Cash at end of financial year	5	381,820	576,142

ANADIS Limited Notes to preliminary consolidated financial statements For the year ended 30 June 2003

Note 1. Revenue

	2003	2002
	S	\$
Revenue from Operating Activities
Sale of goods	3,058,560	1,981,753
Revenue from Outside Operating Activities
Interest	143,877	205,441
Government grants	200,773
Other grants	26,278
Foreign exchange gains - net		(44)
	370,928	205,397
Total Revenue	3,429,488	2,187,150

Note 2. Operating loss

Operating profit/(loss) before income tax expense includes the following specific expenses:

Cost of sales of goods	2,563,106	1,765,489
Amortisation – Goodwill	17.946	17.946
Depreciation	144.435	132.569
Borrowing costs	974
Provision for employee entitlements	63.331	66.290
Research and development expenditure - total	1.189,667	1,212,542
Rental expense relating to operating leases		6.680

Note 3. Accumulated losses

Accumulated losses at the beginning of the financial year	(6.269, 101)	(4.569, 989)
Net (loss)/ profit attributable to the members of Anadis	(1,279,584)	(1,699,112)
Accumulated (losses) at the end of the financial year	(7,548,685)	(6,269,101)

ANADIS LIMITED.

Notes (Continued)

Reconciliation of net cash used in operating activities to Note 4. operating loss

after income tax

	2003 S	2002 S
Operating loss after income tax	(1,279,584)	(1,699,112)
Adjustments:
Depreciation and amortisation	162,381	150,516
Foreign exchange gain		44
Change in Assets & Liabilities:
Decrease/(Increase) in inventories	(171, 644)	(114, 466)
Decrease/(Increase) in debtors and prepayments	(141, 462)	(154, 297)
(Decrease)/Increase in accounts payable	464.209	(38,915)
(Decrease)/Increase in other liabilities	113,828	(52,317)
(Decrease)/Increase in borrowings	37,169
(Decrease)/Increase in provisions	42,297	(11,216)
Net cash used by operating activities	(772, 806)	(1,919,753)

Note 5. Cash Reconciliation for the Statement of Cash Flows

	2003	2002
		S
Cash	160.713	22,192
Short term deposits	221,107	553.950
Balance per statement of cash flows	381.820	576.142

Material factors affecting the revenues and expenses of the economic entity for the current period

During the period revenue from ordinary activities increased 54% over the previous financial year and receipts from customers (inclusive of goods and services tax) increased by 53% over the previous financial year. One customer, Aussie Bodies Pty. Ltd., accounted for 89% of customer receipts (2002 -95%)

Material factors affecting the assets, liabilities and equity of the economic entity for the current period

Research and development expenditure continued to exceed the cash flow generated by the manufacturing division.

Material factors affecting the cash flows of the economic entity for the current period

During the period the company received a research and development tax refund for the previous financial year of \$335,729. Government grants for research and development activities totalled \$200,773.

ANADIS LIMITED.

Notes (Continued)

Reconciliation of income tax expense

The income tax expense for the financial year differs from the amount calculated on the profit/(loss). The differences are reconciled as follows	2003	2002
Loss from ordinary activities before income tax expense	(1,615,313)	(1,699,112)
Income tax calculated $@30\%$	(484, 594)	(509, 734)
Tax effect of permanent differences:
Research and development tax concession	(73, 866)	(70, 054)
Research and development tax refund	(335, 729)
Timing differences and tax losses not brought to account	551,595	572,903
Other items	6,865	6,884
Income tax expense/(benefit) attributable to operating profit/(loss)	(335, 729)
The future income tax benefit arising from tax losses not brought to account at balance date as a result of realisation of the
benefit not being virtually certain:	2,042.166	1,851,250

This benefit for tax losses will only be obtained if:

(a) the Company derives future assessable income of a nature and of an amount sufficient to enable the benefit from the deductions for the losses to be realised;

(b) the Company continues to comply with the conditions for deductibility imposed by the tax legislation; and

(c) no changes in tax legislation adversely affect the Company in realising the benefit from the deductions for the losses

ANADIS LIMITED. Notes (Continued)

Segment note

Business Segment:

The Company conducts research & development activities and manufactures health foods.

Geographical Segment: The Company operates within Australia.

2003	S Manufacturing	S Research & Development	S Unallocated	S Total
Operating revenue	3,058,560			3,058,560
Other revenue		227,051		227,051
Interest revenue			143,877	143,877
Total segment revenue	3,058,560	227,051	143,877	3,429,488
Segment result	537,966	(1,189,667)	(963, 612)	(1,615,313)
Segment assets	2,827,204	420,028	2,707,477	5,954,709
Segment liabilities	366.142	416,858	128,346	911,346
Depreciation & amortisation expense	91,742	45,477	25,162	162,381
Other non-cash expense			21,034	21,034
Acquisition of non-current segment assets	35.486	42.444	13,586	91,516

2002	\$ Manufacturing	T Research & Development	Ŝ Unallocated	S Total
Operating revenue	1,981,753			1,981,753
Other revenue			(44)	(44)
Interest revenue			205,441	205,441
Total segment revenue	1,981,753		205,397	2,187,150
Segment result	246,758	(1,212,542)	(733, 328)	(1,699,112)
Segment assets	2,600,817	423.061	3,552,911	6,576,789
Segment liabilities	157,988	11,723	84.131	253,842
Depreciation & amortisation expense	81,297	30,494	38,725	150,516
Other non-cash expense		$\blacksquare$	(11,216)	(11,216)
Acquisition of non-current segment assets	29,150		64.922	94,072

Events occurring after reporting date

Since the reporting date the Company has issued 50,000 22 cent options and 50,000 25 cents options to a consultant in lieu of fees. Both issues expire 5 June, 2006.

ANADIS Limited Supplementary Appendix 4E information

NTA Backing
	2003	2002
Net tangible asset backing per ordinary share	\$0.0583	\$0.0738
Commentary on results
Earnings per share
	2003	2002
	Cents	Cents
Basic earnings per share	(1.58)	(2.14)
Diluted earnings per share	(1.58)	(2.14)
	2003	2002
	Number	Number
Weighted average number of shares used as the denominator
Weighted average number of ordinary shares used as the denominator in calculating basic earnings per share	81,163,403	79,373,972
Weighted average number of ordinary shares and potential ordinary shares used as the denominator in
calculating diluted earnings per share	81,163,403	79,373,972

Reconciliation of earnings used in calculating earnings per share

The numerator used in calculation of both Basic EPS and Diluted EPS is a loss of \$1,279,584 and there are no reconciling items to the loss from ordinary activities before income tax expense.

Options

Options that have been granted are considered to be potential ordinary shares, however their conversion to ordinary shares does not increase the loss per share, as such the options are not dilutive and have not been included in the determination of diluted earnings per share. The options have not been included in the determination of basic earnings per share.

Annual Meeting

The annual meeting will be held as follows:

Place:	St. Michael's Church Hall, 120 Collins Street Melbourne.
Date:	11 November, 2003.
Time:	2.00 pm
Approximate date the annual
Report will be released:	7 October, 2003

Audit

This preliminary final report is based on accounts which have been audited. The audit report, which was unqualified, will be made available with the Company's financial report.