Immuron Ltd — Regulatory Filings 2007

Feb 27, 2007

28 February, 2007.

Company Announcement Office, Australian Stock Exchange Ltd., 4 th Floor, 20 Bridge Street, Sydney. NSW. 2000

Appendix 4D & Chairman's Half-Yearly Report, 31 December, 2006.

Dear shareholder,

The Board of Anadis Limited has decided to sell its building at Campbellfield, Melbourne, to release approximately \$1.2 million in cash for the Company's use. Anadis will lease the building back at market rates.

The cash injection should ensure that the necessary expenditure for our Enterovirus 71 project will be available as and when required.

On other fronts, our research projects – including our research into influenza and nosicomial diseases - continue successfully.

Nutraceutical initiatives have attracted interest from a major food company. Discussions are at an advanced stage.

Our manufacturing business is proceeding well, and we are attracting new clients. It continues to generate reasonable margins to help fund our research.

The Board of Anadis Limited is conducting a strategic review of the Company and its operations, the results of which will be reported to shareholders in due course.

Regards.

Billy Ma

Philip Molyneux. Chairman

ANADIS LIMITED ABN 80 063 114 045

4 Capital Link Drive Campbellfield Victoria Australia 3061 Ph (61) 3 9358 6388 Fax (61) 3 9358 6399 email: info@anadis.com.au website: www.anadis.com.au

ANADIS Limited ABN: 80 063 114 045 ASX Half-year information - 31 December 2006.

Lodged with the ASX under Listing Rule 4.2A.
This information should be read in conjunction with the 30 June 2006 Annual Report.

Contents

Results for Announcement to the Market	(Appendix 4D item 2)
Half-year report (ASX Listing rule 4.2A1)
Supplementary Appendix 4D Information (Appendix 4D items 3 to 9)

ANADIS Limited Half-year ended 31 December 2006 (Previous corresponding period: Half-year ended 31 December 2005)

Results for Announcement to the Market

$N/A$

Revenue from ordinary activities (Appendix 4D item 2.1)	down	3.8%	to	2,383,581
Profit/(loss) from ordinary activities after tax attributable to members (Appendix 4D item $2.2$ )	down	38.0%	to	(1,252,128)
Net profit/(loss) for the period attributable to members (Appendix 4D item $2.3$ )	down	38.0%	ŧο	(1,252,128)

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 (Appendix 4D item 2.5)

Explanation of Revenue (Appendix 4D item 2.6)

Revenue is down due to lower research and development funding and lower interest received on cash deposits.

Sales of goods \$2,077,488 represented the largest contribution (87.2%) to revenue. Additional revenue received comprised \$257,670 in outside research and development funding and \$48,423 interest received on cash deposits.

Explanation of Profit/(loss) from ordinary activities after tax (Appendix 4D item 2.6)

The reduction in the loss (38.0%) from the previous year is primarily due to lower marketing costs.

ANADIS Limited Interim financial report for the half-year ended $-31$ December 2006

$\mathcal{A}$

Contents	page
Directors' Report	5
Auditor's Independence Declaration	6
Income Statements	7
Balance Sheets	8
Statement of Changes in Equity	9
Cash Flow Statements	10
Notes to the financial statements	11
Directors' declaration	14
Independent review report to the members	15

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 2006 and any public announcements made by Anadis Limited during the interim reporting period in accordance with the continuous disclosure requirements of the Corporations Act 2001.

Your directors present their report on Anadis Limited for the half-year ended 31 December, 2006.

Directors

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

Philip G. Molyneux (Chairman), Conor J. Graham (Managing Director & CEO), Dr. Peter J. Jenkins, Arie L. Nudel. Prof Roy Robins-Browne, and Roman Zwolenski

Review of operations and results

The directors are pleased to report that in the six months to 31 December, 2006, a number of important milestones were achieved. These achievements are set out in the accompanying letter to the Australian Stock Exchange Ltd., signed by the Chairman and dated 28 February, 2007.

Auditors Independence

A copy of the auditors' independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 6.

Signed in accordance with a resolution of the directors.

Billy M

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P. Molyneux Director.

C. Graham Director

Melbourne, 28 February, 2007.

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Freshwater Place 2 Southbank Boulevard SOUTHBANK VIC 3006 GPO Box 1331L MELBOURNE VIC 3001 DX77 Website:www.pwc.com/au Telephone +61 3 8603 2869

Auditor's Independence Declaration

As lead auditor for the audit of Anadis Limited for the half year ended 31 December 2006, 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 Anadis Limited during the period.

Afsehøber

Anton Linschoten Partner PricewaterhouseCoopers

Melbourne 28 February 2007

ANADIS Limited Income Statements For the half-year ended 31 December 2006

	Half-year
	2006
	\$	\$
Revenue from continuing operations	2,077,488	2,066,925
Other income	306,093	411,129
Raw materials and consumables used	(1, 394, 221)	(1,321,669)
Employee benefits expense	(1,227,911)	(1,215,321)
Depreciation	(80, 222)	(85, 492)
Finance costs
Research and development - external	(309, 963)	(348, 375)
Factory overheads	(93, 830)	(107,608)
Directors' fees	(117,500)	(117,500)
Shareholder relations	(98, 527)	(105, 110)
Travel expenses	(44, 532)	(70, 031)
Product marketing - external	(76,066)	(913, 915)
Consultants costs	(2,710)	(56, 743)
Corporate and administrative expenses	(190, 227)	(157, 446)
Loss before income tax	(1,252,128)	(2,021,156)
Income tax benefit
Loss from continuing operations	(1,252,128)	(2,021,156)
Net loss for the half year	(1,252,128)	(2,021,156)
Loss attributable to members of Anadis Limited	(1,252,128)	(2,021,156)
Loss per share for the loss from continuing operations attributable to the ordinary equity holders of the company	Cents	Cents
Basic earnings per share	(1.27)	(2.18)
Diluted earnings per share	(1.27)	(2.18)
Loss per share attributable to the ordinary equity holders of the company
Basic earnings per share	(1.27)	(2.18)
Diluted earnings per share	(1.27)	(2.18)

The above Income Statements should be read in conjunction with the accompanying notes.

ANADIS Limited Balance Sheets As at 31 December 2006

$\blacksquare$

	31 December 2006	30 June 2006
	\$	\$
ASSETS
CURRENT ASSETS
Cash & cash equivalents	1,119,268	1,434,265
Receivables	965,310	815,670
Held to maturity Investments		1,100,000
Inventories	1,698,122	1,589,705
Other assets	49,929	58,805
	3,832,629	4,998,445
Assets classified as held for sale	862,605
TOTAL CURRENT ASSETS	4,695,234	4,998,445
NON-CURRENT ASSETS
Property, plant and equipment	697,198	1,626,806
TOTAL NON-CURRENT ASSETS	697,198	1,626,806
TOTAL ASSETS	5,392,432	6,625,251
LIABILITIES
CURRENT LIABILITIES
Accounts payable	1,091,363	1,181,920
Provisions	60,791	53,239
Other	237,441	151,325
TOTAL CURRENT LIABILITIES	1,389,595	1,386,484
NON-CURRENT LIABILITIES
Provisions	74,204	60,120
TOTAL NON-CURRENT LIABILITIES	74,204	60,120
TOTAL LIABILITIES	1,463,799	1,446,604
NET ASSETS	3,928,633	5,178,647
EQUITY
Contributed equity
Reserves	18,729,796	18,729,796
Accumulated losses	80,319	78,205
TOTAL EQUITY	(14,881,482)	(13, 629, 354)
	3,928,633	5,178,647

The above Balance Sheets should be read in conjunction with the accompanying notes

ANADIS Limited Statements of Changes in Equity
For the half-year ended 31 December, 2006

	Half-year
	2006	2005
Total equity at the beginning of the half-year	5,178,647	6,958,398
Net income recognised directly in equity (Loss) for the half-year	(1,252,128)	(2,021,156)
Total recognised income and expense for the period	(1,252,128)	(2,021,156)
Transactions with equity holders in their capacity as equity holders:
Contributions of equity, net of transaction costs (note 3)		113,000
Share options	2,114	32,688
	2,114	145,688
Total equity at the end of the half-year	3,928,633	5,082,930

The above Statements of Changes in Equity should be read in conjunction with the accompanying notes

ANADIS Limited Cash Flow Statements For the half-year ended 31 December 2006

	Half-year
	2006 Inflow /	2005 Inflow/
	(Outflow) \$	(Outflow) \$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers (inclusive of goods and services
$\tan$ )	2,167,759	2,300,753
Payments to suppliers and employees (inclusive of goods
and services tax)	(3,952,465)	(4, 778, 794)
Interest received	(1,784,706)	(2, 478, 041)
Grants received	16,261	76,253
R&D tax refund	364,553	191,734
Interest paid
Net Cash (outflow) from Operating Activities	(1,403,892)	(2,210,054)
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment	(13,219)	(58, 916)
Proceeds from maturing debentures	1,100,000	2,097,217
Investment in debentures
Net Cash inflow/(outflow) from Investing Activities	1,086,781	2,038,301
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares & other equities	2,114	145,688
Share placement costs
Net Cash inflow from Financing Activities	2,114	145,688
Net increase/(decrease) in cash & cash equivalents	(314,997)	(26,065)
Cash and cash equivalents at beginning of financial year	1,434,265	178,660
Cash and cash equivalents at the end of the half-year	1,119,268	152,595

The above Cash Flow Statements should be read in conjunction with the accompanying notes.

ANADIS Limited Notes to the financial statements 31 December 2006

Note 1. Summary of significant accounting policies

Basis of preparation

This general purpose financial report for the interim half-year reporting period 31 December, 2006 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, 2006 and any public announcements made by Anadis 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, 2006 the Company's cash and investments were approximately \$1.1 million and for the six months end 31 December, 2006 the Company experienced operating losses of \$1.2 million and operating net cash outflows of \$1.4 million. As a result of the continuing losses and cash outflows from operations the Directors have assessed the Company's ability to continue as a going concern and to pay its debts as and when they fall due.

The Company's ability to fund its operations is dependent upon obtaining income from the commercialisation of its research and development projects, supplemented by contract manufacturing and grant incomes, and from the raising of additional capital through new sources of financing. Ultimately, the Company's continuation as a going concern is dependent upon achieving profitable operations through the successful commercialisation of its products and technology.

As a result of the difficulty in predicting the timing and quantum of income from the commercialization of its products and technology, including Travelan and EV71, there is significant uncertainty as to 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 12 months providing access to adequate financial resources. Specifically, in July 2006 the Company signed a further two year contract with Aussie Bodies ensuring a supplementary income flow from contract manufacturing, in August 2006 the Company signed contracts for the distribution of Travelan internationally. Furthermore, the Company has a history of successful capital raising, including the raising of \$1.6 million in June 2006, and the Directors are confident of the Company's ability to raise further capital.

The board of Anadis Limited has decided to sell its building at Campbellfield, Melbourne, to release approximately \$1.2 million in cash for the company's use. Anadis will lease the building back at market rates.

Also in February, 2007 the Company received a R&D tax refund of \$282,524.

Accordingly, the Directors have prepared the financials 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.

Segment information Note 2.

Geographical Segment:

The Company operates in one geographic segment, Australia.

Business Segment:

The Company operates in two business segments being the conduct of Research & Development activities and manufactures health foods.

Half year 2006	\$ Manufacturing	S Research & Development	S Unallocated	\$ Total
Sales to external customers	2,077,488			2,077,488
Interest revenue			48,423	48,423
Other income		257,670		257,670
Total segment revenue & income	2,077,488	257,670	48,423	2,383,581
Segment result	131,723	(551, 038)	(832, 813)	(1,252,128)
Taxation
Profit/(Loss) after tax	131,723	(551,038)	(832, 813)	(1,252,128)
Segment assets	3,839,965	237,095	1,315,372	5,392,432
Segment liabilities	667,685	435,194	360,920	1,463,799
Depreciation	46,208	20,748	13,266	80,222
Other non-cash expense	(861)	(681)	11,713	10, 171
Acquisition of non-current segment assets	6,919		6,300	13,219

Notes to the financial statements 31 December 2006 (continued)

Note 2. Segment information (continued)

Half year 2005	S Manufacturing	\$ Research & Development	Ś. Unallocated	\$ Total
Sales to external customers	2,066,925			2,066,925
Interest revenue			67,114	67,114
Other income		344,015		344,015
Total segment revenue & income	2,066,925	344,015	67,114	2,478,054
Segment result	(620, 412)	(519, 977)	(880,767)	(2,021,156)
Taxation
Profit/(Loss) after tax	(620, 412)	(519, 977)	(880,767)	(2,021,156)
Segment assets	3,694,622	365,789	1,742,208	5,802,619
Segment liabilities	249,953	173,619	296,116	719,689
Depreciation	47,396	24,471	13,625	85,492
Other non-cash expense	(12, 733)	7,065	55,431	49,764
Acquisition of non-current segment assets	44,276	443	14,197	58,916

Segment information is prepared in conformity with the current accounting policy and the accounting standard AASB 114 Segment Reporting

Note 3. Equity securities issued

	2006 Shares	2005 Shares	2006 3	2005 S
Issue of ordinary shares during the half-year
Exercise of options issued to contractor	$\blacksquare$	100,000		25,500
Exercise of options issues under the Anadis
Executive Share Option Plan No. 1		250,000		87.500
Cancellation of shares held in escrow for an entity
in which Mr. Graham is a related party		$-644.277$
		-294.277		113,000

Note 4. Events occurring after the balance sheet date

• On 17 January, 2007 the Company announced 'US Commercialisation Subsidiary to Capitalise on $1$ . R&D'. The Company will utilise the services of Bio Vance Medical LLC to provide the management for this new entity being established during the first half of 2007, through a primarily options based compensation arrangement.
• Research & Development tax refund. On the 8 February, 2007 the Company received a $2.$ R&D tax refund for the 2005/06 year totalling \$282,524.40.
• Issue of employee qualifying shares. On 13 February, 2007 the Board issued a total of 78,750 fully paid 3. shares to employees under an Employee Share Plan at a deemed price of 26.6 cents per share.

ANADIS Limited Directors' Declaration

In the Directors' opinion:

• (a) the financial statements and notes set out on pages 5 to 13 are in accordance with the Corporations Act 2001, including,
• 1. complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
• 1. giving a true and fair view of the Company's financial position as at 31 December 2006 and of its performance, as represented by the results of its operations, changes in equity and its cash flows, 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.

Bien Ma

lapul -

P Molyneux Director

C Graham Director

Melbourne 28 February 2007

PRICEWATERHOUSE COPERS ®

INDEPENDENT AUDITOR'S REVIEW REPORT to the members of Anadis Limited

PricewaterhouseCoopers ABN 52 780 433 757

Freshwater Place 2 Southbank Boulevard SOUTHBANK VIC 3006 GPO Box 1331L MELBOURNE VIC 3001 DX 77 Website:www.pwc.com/au Telephone +61 3 8603 1000

Report on the Half-Year Financial Report

We have reviewed the accompanying half-year financial report of Anadis Limited, which comprises the balance sheet as at 31 December 2006, and the income statement, statement of changes in equity and cash flow statement for the half-year ended on that date, other selected explanatory notes and the directors' declaration for Anadis Limited (the company).

Directors' Responsibility for the Half-Year Financial Report

The directors of the company are responsible for the preparation and fair presentation of the halfvear financial report in accordance with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Act 2001. This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of the half-year 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.

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 an Interim 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 company's financial position as at 31 December 2006 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 Anadis 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. It also includes reading the other information included with the financial report to determine whether it contains any material inconsistencies with the financial report. 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.

For further explanation of a review, visit our website http:/www.pwc.com/au/financialstatementaudit.

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PRICEWATERHOUSE COPERS

While we considered the effectiveness of management's internal controls over financial reporting when determining the nature and extent of our procedures, our review was not designed to provide assurance on internal controls.

Our review did not involve an analysis of the prudence of business decisions made by directors or management.

Independence

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

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 Anadis Limited is not in accordance with the Corporations Act 2001 including:

(a) giving a true and fair view of the company's financial position as at 31 December 2006 and of its performance for the half-year ended on that date; and

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

Material Uncertainty Regarding Continuation as a Going Concern

Without qualification to the conclusion expressed above, attention is drawn to the following matter. As a result of the matters described in Note 1, there is significant uncertainty whether the company will be able to continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report.

/recumpoham lagos

PricewaterhouseCoopers

Afsekøber

Anton Linschoten Partner

Melbourne 28 February 2007

ANADIS Limited 31 December 2006 Supplementary Appendix 4D information

(Appendix 4D item ) Backing ъ
-----	2006
share Net tangible asset backing per ordinary _________	SHARE .