Immuron Ltd — Regulatory Filings 2005

Aug 9, 2005

10th August, 2005.

The Company Announcement Office, Australian Stock Exchange Limited, Sydney.

Subject: Preliminary Final Report 30 June, 2005 - Appendix 4E.

Dear Sir/Madam,

Following is the above Report for release.

On Behalf Of Anadis Limited

CONOR GRAHAM Managing Director & CEO

For further information contact

Conor Graham CEO 03 9358 6388 Phone: Email: info@anadis.com.au

ANADIS Limited. ABN 80 063 114 045

ASX Preliminary final report $-30$ June 2005

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

Contents

Results for Announcement to the Market	3.
Preliminary statement of financial performance
Preliminary statement of financial position	5.
Preliminary statement of cash flows	6.
Notes to preliminary financial statements	7.
Other Appendix 4E Information	12

ANADIS Limited Year ended 30 June 2005 (Previous corresponding period: Year ended 30 June 2004)

Results for Announcement to the Market

Revenue from ordinary activities	Up	35.1%	5.789,760
(Loss) from ordinary activities after tax attributable to members	Up	14.7%	(1,333,389)
Net (loss) for the period attributable to members	Up	14.7%	(1,333,389)

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

Record date for determining entitlements to the dividend

$N/A$

Explanation of revenue

Sale of goods (\$4,867,597) represented the largest contribution (84.1%) to revenue. Additional revenue received comprised \$687,375 in outside research and development funding and \$234,788 interest received on cash deposits.

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

The increase in the loss (14.7%) from the previous year is mainly attributed to the costs associate with the launch of our first product, Travelan, onto the market.

ANADIS Limited Preliminary statement of financial performance For the year ended 30 June 2005

	Note	2005	2004
		\$	\$
Revenue from ordinary activities	ĺ	5,789,760	4,284,872
Raw materials and consumables used		(3,065,639)	(2,354,881)
Employee benefits expense		(1,930.897)	(1,641,501)
Depreciation and amortisation expenses		(189,005)	(183, 341)
Borrowing costs		(168)	(2.434)
Research and development - external		(789,069)	(587,072)
Factory overheads		(263, 208)	(244, 021)
Directors' fees		(173,750)	(162, 500)
Travel expenses		(93, 282)	(81, 855)
Product marketing/advertising		(377, 696)	(4,693)
Corporate and administrative expenses		(540, 314)	(517,362)
Profit/ (loss) from ordinary activities before income tax benefit	2	(1,633,268)	(1, 494, 788)
Income tax benefit	3	299,879	332.753
Profit/ (loss) from ordinary activities after income tax benefit	4	(1, 333, 389)	(1,162,035)
		Cents	Cents
Basic earnings per share		(1.45)	(1.43)
Diluted earnings per share		(1.45)	(1.43)

The above preliminary statement of financial performance should be read in conjunction with the accompanying notes.

ANADIS Limited Preliminary statement of financial position
As at 30 June 2005

	Note	2005	2004
		${\mathbb S}$	\$
CURRENT ASSETS
Cash		178,660	311,834
Receivables		967,985	605,313
Investments		3,479,217	1,000,000
Inventories		1,288,980	802,309
Other assets		126,219	128,131
TOTAL CURRENT ASSETS		6,041,061	2,847,587
NON-CURRENT ASSETS
Plant and equipment		1,738,671	1,769,059
Intangible assets		275,173	293,119
TOTAL NON-CURRENT ASSETS		2,013,844	2,062,178
TOTAL ASSETS		8,054,905	4,909,765
CURRENT LIABILITIES
Accounts payable		773,954	677,483
Interest bearing liabilities			26,974
Provisions		192,601	127,234
Other		125,000
TOTAL CURRENT LIABILITIES		1,091,555	831,691
NON-CURRENT LIABILITIES
Provisions		22,898	46,746
TOTAL NON-CURRENT LIABILITIES		22,898	46,746
TOTAL LIABILITIES		1,114,453	878,437
NET ASSETS		6,940,452	4,031,328
EQUITY
Share capital		16,984,561	12,742,048
Accumulated losses	3	(10,044,109)	(8,710,720)
TOTAL EQUITY		6,940,452	4,031,328

The above preliminary statement of financial position should be read in conjunction with the accompanying notes.

ANADIS Limited Preliminary statement of cash flows For the year ended 30 June 2005

		2005	2004
		Inflow/	Inflow/
	Note	(Outflow)	(Outflow)
		\$	S
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers (inclusive of goods and services
(ax)		5,041,619	4,079,287
Payments to suppliers and employees (inclusive of goods
and services tax)		(8,107,640)	(6,081,966)
Interest received		184,854	101,389
Grants received		825,657	335,409
R&D tax rebate		299,879	332,753
Borrowing costs		(168)	(2, 434)
Net Cash Flow from Operating Activities	5	(1,755,799)	(1, 235, 562)
CASH FLOWS FROM INVESTING ACTIVITIES Purchase of plant and equipment Proceeds from maturing debentures Investments in debentures		(140, 671) (2,479,217)	(114, 424) 1,130,000
Net Cash Flow from Investing Activities		(2,619,888)	1,015,576
CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares Share placement cost		4,251,000 (8, 487)	150,000
Net Cash Flow from Financing Activities		4,242,513	150,000
Net increase/(decrease) in eash held		(133, 174)	(69,986)
Cash at beginning of financial year		311,834	381,820
Cash at end of financial year	6	178,660	311,834

The above preliminary statement of cash flow should be read in conjunction with the accompanying notes.

ANADIS Limited Notes to preliminary financial statements For the year ended 30 June 2005

Note 1 Revenue

	2005	2004
	\$	S
Revenue from Operating Activities
Sale of goods	4,867,597	3,677,553
Revenue from Outside Operating Activities
Interest	234,788	86,588
Government grants	471,868	424,019
Other grants	215,507	96,712
	922,163	607,319
Total Revenue	5,789,760	4,284,872
Note 2 Operating loss
Operating profit/(loss) before income tax expense includes
the following specific expenses:
Cost of sales of goods	4,004,243	3,072,443
Amortisation - Goodwill	17,946	17,946
Depreciation	171,059	165,395
Borrowing costs expensed	168	2,434
Research and development expenditure - net of Grants	905,114	762,872
Note 3 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;
Loss from ordinary activities before income tax expense	(1,633,268)	(1,494,788)
Income tax calculated $\omega$ 30% (2004 - 30%)	(489,980)	(448, 436)
Tax effect of permanent differences:
Research and development tax concession	(7,500)	(57,270)
Research and development tax rebate	(299, 879)	(332,753)
Timing differences and tax losses not brought to account	491,324	498,182
Other items	6,156	7,524
Income tax expense/(benefit) attributable to operating profit/(loss)	(299, 879)	(332,753)
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:	1,794,182	2,155,546

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 to preliminary financial statements (continued) For the year ended 30 June 2005

Note 4 Accumulated losses

	2005	2004
Accumulated losses at the beginning of the financial year	(8,710,720)	(7,548,685)
Net (loss)/ profit attributable to the members of Anadis	(1,333,389)	(1,162.035)
Accumulated (losses) at the end of the financial year	(10.044.109)	(8,710,720)

Note 5 Reconciliation of net cash used in operating activities to operating loss after income tax

Operating loss after income tax	(1,333,389)	(1,162,035)
Adjustments:
Depreciation and amortisation	189.005	183,341
Change in Assets & Liabilities:
(Increase) in inventories	(486, 671)	(201, 408)
(Increase) in debtors and prepayments	(360,760)	(32.746)
Increase in accounts payable	96.471	11,389
Increase/(Decrease) in other liabilities	125.000	(113.828)
(Decrease) in borrowings	(26.974)
Increase in employee benefits provisions	41,519	79,725
Net cash used by operating activities	(1,755,799)	(1,235.562)

Note 6 Cash Reconciliation for the Statement of Cash Flows

Cash	178.660	203.409
Short term deposits	$\overline{\phantom{a}}$	108.425
Balance per statement of cash flows	178.660	311.834

ANADIS Limited Notes to preliminary financial statements (continued) For the year ended 30 June 2005

Note 7 Segment information

Business Segment: The Company operates in two business segments being the conduct of Research & Development activities and the manufacture of health foods.

Geographical Segment: The Company operates in one geographical segment, Australia.

Primary reporting - business segments	$\mathbb S$ Manufacturing	S Research &	S Unallocated	\$ Total
2005		Development
Operating revenue	4,867,597			4,867,597
Other revenue		687,375		687,375
Interest revenue			234,788	234,788
Total segment revenue	4,867,597	687,375	234,788	5,789,760
Segment result	485,658	(905, 114)	(1,213,812)	(1,633,268)
Taxation		299,879		299,879
Profit/(Loss) after tax	485,658	(605,235)	(1,213,812)	(1,333,389)
Segment assets	3,751,687	466,913	3,836,305	8,054,905
Segment liabilities	446,852	315,975	351,626	1,114,453
Depreciation & amortisation expense	108,204	55,592	25,209	189,005
Other non-cash expense	14,995	5,798	20,726	41,519
Acquisition of non-current segment assets	122,843		17,828	140,671
Primary reporting - business segments	$\mathbb S$ Manufacturing	S Research &	S Unallocated	\$ Total
2004		Development
Operating revenue	3,677,553			3,677,553
Other revenue		520,731		520,731
Interest revenue Total segment revenue	3,677,553	520,731	86,588 86,588	86,588 4,284,872
Segment result	605,110	(762, 872)	(1,337,026)	(1,494,788)
Taxation		332,753		332,753
Profit/(Loss) after tax	605,110	(430, 119)	(1,337,026)	(1,162,035)
Segment assets	2,987,583	435,910	1,486,272	4,909,765
Segment liabilities	318,802	310,304	249,331	878,437
Depreciation & amortisation expense	98,398	55,612	29,331	183,341
Other non-cash expense	8,285	17,438	54,002	79,725

Note 8 Events occurring after reporting date

Mr. Arie Nudel was appointed a director on 12 July, 2005.

Note 9 Earnings Per Share

	2005	2004
	Cents	Cents
Basic earnings per share	(1.45)	(1.43)
Diluted earnings per share	(1.45)	(1.43)
	2005	2004
	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	91.687.239	81,310,802
Weighted average number of ordinary shares and potential ordinary shares used as the denominator in calculating diluted earnings per
share	91,687.239	81,310,802

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 \$1,333,389 (2004 - \$1,162,035) 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.

Note 10 Impact of adopting Australian equivalents to IFRS

The Australian Accounting Standards Board (AASB) is adopting International Financial Reporting Standards (IFRS) for application to reporting periods beginning on or after 1 January 2005. The AASB has issued Australian equivalents to IFRS, and the Urgent Issues Group has issue interpretations corresponding to IASB interpretations originated by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee. These Australian equivalents to IFRS are referred to hereafter as AIFRS. The adoption of AIFRS will be first reflected in the company's financial statements for the half-year ending 31 December 2005 and the year ending 30 June 2006.

Entities complying with AIFRS for the first time will be required to restate their comparative financial statements to amounts reflecting the application of AIFRS to that comparative period. Most adjustments required on transition to AIFRS will be made, retrospectively, against opening retained earnings as at 1 July 2004.

The Company Secretary has attended relevant training to assess the financial reporting implications of the above standards and a transition plan has been prepared for and approved by the Audit & Risk Committee to ensure the timely implementation of the new standards.

An analysis of all the AIFRS has identified the accounting policy changes that will be required. In some cased choices of accounting policies are available, including elective exemptions under Accounting Standard AASB 1 First-time Adoption of Australian Equivalents to International Financial Reporting Standards. These choices have been analysed to determine the most appropriate accounting policy for the Company.

The known or reliably estimated impacts on the financial report for the year ended 30 June, 2005 had it been prepared using AIFRS are set out below.

ANADIS Limited Notes to preliminary financial statements (continued) For the year ended 30 June 2005

Note 10 Impact of adopting Australian equivalents to IFRS (continued)

Although the adjustments disclosed in this note are based on management's best knowledge of the expected standards and interpretations, and current facts and circumstances, these may change. For example, amended or additional standards or interpretations may be issued by AASB and JASB. Therefore, until the Company prepares its first full AIFRS financial statements, the possibility cannot be excluded that the accompanying disclosures may have to be adiusted.

Major changes identified to date that will be required to the Company's existing accounting policies include the following:

Intangible assets - goodwill

Under AASB 3 Business Combinations, amortisation of goodwill will be prohibited, and will be replaced by annual impairment testing focusing on the cash flows of the related cash generating unit.

This will result in a change to the current accounting policy, under which goodwill is amortised on a straight line basis over the period during which the benefits are expected to arise and not exceeding 20 years.

If the policy required by AASB 3 had been applied during the year ended 30 June, 2005, goodwill at 30 June, 2005 would have been \$17,946 higher and amortisation expense for the year ended 30 June. 2005 would have been \$17,946 lower.

Equity-based compensation benefits.

Under AASB 2 Share-based Payment, from 1 July, 2004 the Company is required to recognise an expense for those options that were issued to employees under the Anadis Limited Employee Share Option Plan after 7 November, 2002 but that had not vested by 1 January, 2005. Options issued to contractors in lieu of fees will also need to be recognised as an expenses.

This will result in a change to the current accounting policy, under which no expense is recognised for equitybased compensation.

If the policy required by AASB 2 had been applied during the year ended 30 June, 2005, retained losses at 30 June, 2005 would have increased by \$43,260, with a corresponding increase in the share-based payment reserve. For the year ended 30 June, 2005 employee benefits expense would have been \$23,260 higher and Contractors Expense \$20,000 higher with corresponding increases in the net movement in the share-based payment reserve.

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

During the period revenue from ordinary activities increased 32.4% over the previous financial year and receipts from customers (inclusive of goods and services tax) increased by 23.6% over the previous financial year. One customer, Aussie Bodies Pty. Ltd., accounted for 83% of the Company's revenue (2004 - 85%)

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

Research and development expenditure and corporate costs 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 \$299,879 (2004 - \$332,753). Grants for research and development activities totalled \$825,657 (2004 - \$335,409).

ANADIS Limited Supplementary Appendix 4E information

NTA Backing

2005	2004
ALL 5 あいいちん	سمائيل لوان

Commentary on results

Refer to 'Explanation of Profit/(loss) from ordinary activities after tax' on page 3.

Annual Meeting

The annual meeting will be held as follows;

annual meeting will be neid as follows;
Place:	St. Michael's Church Hall, 120 Collins Street Melbourne.
Date:	8 November, 2005.
Time:	2.00 pm
Approximate date the annual
Report will be released:	4 October, 2005

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.