IMMUTEP LIMITED - Annual Report 2014

Annual Report 2014

==> picture [16 x 13] intentionally omitted <==

ABN 90 009 237 889

CONTENTS

03 Corporate Directory
04 Chairman’s Letter
06 Review of Operations
11 Directors’ Report
21 Management Directory
40 Corporate Governance Report
49 Auditor’s Independence Declaration
52 Consolidated Statement of Comprehensive Income
53 Consolidated Balance Sheet
54 Consolidated Statement of Changes in Equity
55 Consolidated Statement of Cash Flows
56 Notes to the Consolidated Financial Statements
104 Directors’ Declaration
105 Independent Auditor’s Report to the Members of Prima BioMed Ltd

107 Shareholder Information

CORPORATE DIRECTORY

Directors	Ms Lucy Turnbull, AO_(Non – Executive Chairman)_
	Mr Marc Voigt_(Executive Director & Chief Executive Off cer from 9 July 2014)_
	Mr Albert Wong_(Non – Executive Deputy Chairman)_
	Mr Martin Rogers_(Non – Executive Director until 15 November 2013)_
	Dr Richard Hammel_(Non – Executive Director until 12 February 2014)_
	Dr Russell Howard_(Non – Executive Director)_
	Mr Pete Meyers_(Non – Executive Director appointed on 12 February 2014)_
	Mr Matthew Lehman_(Executive Director & Chief Executive Off cer until 9 July 2014)_
Company Secretary	Ms Deanne Miller
Registered off ce & prin-	Level 7
cipal place of business	151 Macquarie Street
	Sydney NSW 2000
Share Registry	Boardroom Pty Ltd
	Level 7, 207 Kent Street
	Sydney, NSW 2000
Auditor	PricewaterhouseCoopers
	201 Sussex Street
	Sydney, NSW 2000
Solicitors	Minter Ellison Lawyers
	Level 17, 88 Phillip Street
	Sydney NSW 2000
	K&L Gates
	Level 31, 1 O’Connell Street
	Sydney NSW 2000
	Australia
Banker	National Australia Bank Ltd
	Kew Branch
	Melbourne, Victoria 3000
Stock exchange listings	Prima BioMed Ltd shares are listed on the:
	Australian Securities Exchange (ASX code: PRR),
	NASDAQ (NASDAQ code: PBMD), and
	Deutsche Börse (ISIN code: US74154B2034)

Website address

www.primabiomed.com.au

CHAIRMAN’S LETTER

==> picture [140 x 209] intentionally omitted <==

Lucy Turnbull, AO

Dear Shareholder,

On behalf of the board of Prima BioMed, I am pleased to present the annual report for 2014. It has been a year of progress, with important achievements in our CVac development program, but we have also faced our share of challenges.

A key event in the past year was the announcement of the top-line data of our CAN-003 clinical study of patients in fi rst and second remission ovarian cancer. The impact of the data was signifi cant, leading to a refocusing of our organisation and clinical trial program from fi rst line remission ovarian cancer patients to second line remission patients.

As presented at the American Society of Clinical Oncology (ASCO) conference in May 2014, CVac demonstrated a clinically signifi cant improvement in median PFS as compared to standard of care for epithelial ovarian cancer patients in remission after second-line treatment, as well as a very encouraging trend in overall survival for patients in second line remission.

During the past year, we have consolidated our operational activities (our clinical trial program and our CVac manufacturing) in Germany. This makes it possible to gain the best possible advantage from the funding grants provided by the Free State of Saxony and to generate cost savings and enhance operational effi ciencies. This consolidation has generated considerable savings in the research and development costs associated with our CAN-004 clinical study, which is now focused on second remission ovarian cancer patients. We have also been preparing for the commencement of a pilot trial in resected pancreatic cancer and we are excited to explore CVac’s potential in this cancer indication.

and medical community and we have strengthened our regulatory position by receiving “Fast Track” designation from the FDA in the US. In addition we recently received a US patent grant for CVac.

commercial partnership.

Cash expenditure continues to be prudently managed and controlled. Prima BioMed has a solid cash balance of $23.2 million as at the end of June 2014.

In February 2014, Pete Meyers, currently CFO at TetraLogic Pharmaceuticals Corporation and formerly Co-Head of Global Healthcare Investment Banking at Deutsche Bank Securities Inc., joined the board of directors. He replaced Rick Hammel, who was a director of Prima for eight years. We thank Rick for his service as a director. Our Clinical Advisory Board has also been signifi cantly strengthened with the appointments of Professors Pujade-Lauraine, Marth, Monk and Vergote during the year, leaders in the fi eld of oncology.

Chief Business Offi cer since 2012. Having also held the position of General Manager of the Company’s European

==> picture [15 x 10] intentionally omitted <==

CHAIRMAN’S LETTER CONTINUED

Operations for the past two and a half years, and with his strong commercial background, the Board has every confi dence in Marc’s ability to steer Prima BioMed through its next phase towards commercial development. We gratefully acknowledge the past achievements of departing CEO Matt Lehman, who has helped us, design a robust clinical development and manufacturing program for CVac.

Finally, I would like to express appreciation to all shareholders for their ongoing support. We hope like the Prima board of directors and management team, you believe that you are making a valuable contribution to the fi ght against two of the toughest cancers there are – ovarian and pancreatic cancer – through new cancer immunotherapies.

Yours sincerely,

==> picture [180 x 40] intentionally omitted <==

Lucy Turnbull, AO Chairman Prima BioMed Ltd 27 August 2014

==> picture [16 x 10] intentionally omitted <==

REVIEW OF OPERATIONS

==> picture [141 x 205] intentionally omitted <==

Marc Voigt, Executive Director & CEO

Operating and Financial Review

On behalf of the directors and management team of Prima BioMed, I am pleased to report on our operations in the past fi nancial year.

changes and challenges. These milestones included clinical data analysis, refi nement of a robust clinical trial design, regulatory milestones, patent grants and the consolidation of our operations into Europe.

imately A$23.2 million in cash and term deposits to fund our continued investment in research and development. Other than the usual trade liabilities we have no debt. As in the past years we have also benefi ted from non-dilutive cash resources from the Australian R&D tax incentive program and two separate grants from the Saxony Development Bank in Germany.

During FY 14 we raised $6,845,000 in the share purchase plan shortfall placement in July and August 2013.

Financial Performance

Total other income for FY14 was $3,140,066 which was comparably less than the approximately $4 million in total other income received in the previous fi nancial year. This decrease was essentially due to lower foreign exchange gains and less interest income being earned during FY14 ($406,628 in FY14 vs. $1,417,613 in FY13). Encouragingly, we received signifi cantly more grant income ($2,004,198 in FY14 compared to $1,648,725 in FY13).

compared to FY13.

Total corporate administrative expense for FY14 was $4,092,623 ($4,851,195 in FY13). Most of this decrease was due to a signifi cant reduction in our administrative expenses ($2,496,308 in FY13 to $1,900,409 in FY14). Our ability to successfully reduce our corporate administration expenses refl ects our cost conscious behavior and efforts to continually strive to minimize expenses.

expenses for FY14 were our contracts with the Contract Research Organisations (CRO) and Contract Manufacturing Organisations (CMO) who we engage for our CVac clinical trial program. Due to our revised clinical trial program for CVac and consolidation of manufacturing into Germany we were able to lower our R&D expenses by $2,026,809 compared to the same period last year. This reduction was achieved as we renegotiated and terminated certain CRO and CMO contracts. Our R&D costs are expected to increase over the next fi nancial year as enrolment onto our CVac clinical trial program increases and we open further clinical sites.

==> picture [15 x 10] intentionally omitted <==

REVIEW OF OPERATIONS CONTINUED

CVac clinical development

on the data of our CAN-003 study. Prima’s clinical development of CVac is now strongly focused on the treatment of platinum-sensitive epithelial ovarian cancer patients who have no evidence of disease after second-line chemotherapy. This area represents a signifi cant medical need due to the high relapse rates and high morbidity associated with the disease. In 2014, Prima obtained “Fast Track” status for this program from the U.S. FDA which complements the previously granted “Orphan Drug” designation for epithelial ovarian cancer in both the United States and Europe. These designations confer advantages to the Company such as expedited regulatory reviews, reduced regulatory fees, and market exclusivity after product approval.

The Company estimates a potential market for CVac in this indication alone of up to 25,000 new patients per annum in the “major markets” of the United States, Australia, Japan, United Kingdom, Germany, France, Italy, and Spain, as well as signifi cant additional opportunities in other global markets.

CAN-003 phase 2 study

trial data. Top-line data from the 63 patient randomized phase 2 trial was presented at the European Cancer Congress (ECCO) in October 2013. Final progression-free survival data and interim overall survival data were presented at the American Society of Clinical Oncology annual meeting (ASCO) in May 2014.

==> picture [471 x 240] intentionally omitted <==

==> picture [16 x 10] intentionally omitted <==

REVIEW OF OPERATIONS CONTINUED

The primary endpoint of this trial was Progression-free Survival (PFS), defi ned as the time from randomization in the trial until the time of disease progression (recurrence of the cancer). CVac did not appear to have a measurable effect on PFS in the fi rst remission patients. However, the data indicated that CVac conferred a clinically meaningful improvement in PFS for those patients in second remission. There were 20 patients in second remission of which 10 were given CVac and 10 were standard of care. The median PFS time for the control group patients was 4.94 months, which is consistent with other published studies of ovarian cancer. The median PFS time for CVac patients was not reached, but is more than 12.91 months. This is very encouraging.

death from any causes, was also presented at ASCO. Prima expects the OS data to be mature enough for analysis by approximately the end of calendar year 2014. Interim trends indicate that, similarly to the PFS data, CVac is having a strong effect on OS in the second remission patient population.

Other CAN-003 endpoints suggest that CVac has minimal side effects and none of the toxicity one would expect with more traditional cancer therapies, such as chemotherapy. The immune monitoring completed during the trial indicates that CVac induces a killer T cell response that is specifi c to mucin 1, a prominent antigen target on the surface of many cancer cells.

performed for CVac. The magnitude of the increase in PFS, as well as the extended duration of the PFS intervals, in conjunction with the early OS data in the second remission patient group are very compelling signals. The strong signals observed validate our continued development strategy for CVac in this indication.

CAN-004 phase 2

of care in platinum-sensitive epithelial ovarian cancer patients who have no evidence of disease after second-line chemotherapy.

CAN-004 (or “CANVAS”) was originally designed as a randomized, 800-patient, phase 2/3 trial of CVac as compared to placebo for the treatment of ovarian cancer patients in f rst remission with a primary endpoint of PFS. Based on the CAN-003 trial data reported in late 2013, Prima suspended enrolment of new patients onto this trial and amended the CAN-004 protocol. Using the existing network built up for the previous program, Prima will enroll 210 ovarian cancer patients in second remission – a similar population that has thus far responded well in the CAN-003 protocol. The 210-patient cohort is intended to confi rm the trends observed in the CAN-003 trial in a larger patient population. The primary endpoint of the study is OS, with important secondary endpoints including PFS, time to next line treatment, quality of life, and immune monitoring. Convincing CAN-004 data would open multiple regulatory options for Prima and could put Prima in a good position to negotiate potential pharma partnerships.

We are in process of increasing the number of clinical sites and these are being prepared to allow patient enrolment. We expect the recruitment of this study to now be completed in the second half of calendar year 2015. This is longer than we originally planned due to further regulatory submission requests and current instability in the Ukraine. We will continue to keep shareholders informed about the global progress of this very important clinical trial.

==> picture [15 x 10] intentionally omitted <==

REVIEW OF OPERATIONS CONTINUED

CAN-301 trial in resected pancreatic cancer

The CAN-301 protocol is an up to 40-patient pilot, multicentre, single-arm trial of CVac for the maintenance treatment of resected pancreatic cancer patients. This trial will assess OS, PFS, adverse events, and immune monitoring. Prima believes that CVac would have potential applications in additional cancer types that over express mucin 1. If CAN-301 shows promise in pancreatic cancer, this will broaden the potential clinical applications for CVac and enhance the potential commercial value of the product. The fi rst clinical sites will be initiated during the fi rst quarter of the current fi nancial year and based on current projections, we expect the study to be fully recruited by mid next calendar year.

Both, the CAN-004 and CAN-301 clinical trials are supported by the Saxony Development Bank in Germany.

Manufacturing Operations

In the scale up to prepare for CAN-004, Prima has accomplished a number of unique and valuable milestones in its ability to transfer manufacturing technology, to reliably produce a comparable product in three different continents, to automate global logistics, standardise its cell collection processes, and meet manufacturing regulatory standards in a large number of potential markets including the US, Europe, and Asia-pacifi c.

For personalized cell-based products such as CVac, the scalability and cost of manufacturing are critical components of a commercially successful product. Prima has a dedicated team of manufacturing professionals based in Leipzig, Germany that are working together with our colleagues at the Fraunhofer Institute of Cell Therapy and Immunology to optimise our manufacturing processes and make them as cost effective as possible.

In conjunction with our revised CVac clinical development strategy, we have consolidated most of our manufacturing operations in Leipzig, Germany. The Fraunhofer and Prima teams in Leipzig will be providing CVac for our ongoing clinical trials. Longer term, it is expected that Prima’s manufacturing group in Germany would lead preparations for potential future phase 3 trials and cost-effective commercial scale up.

Consolidating the team

This past year, Prima made a number of important changes to the team to consolidate the Company’s operations in Germany.

as CEO and as a Company director. Marc Voigt, who has been the head of Prima’s European operations and CFO since 2012, was appointed as CEO and an Executive director.

as in Australia and the United States. We also use the services of a number of dedicated consultants and contract companies to support us in key areas of our clinical development programs.

==> picture [16 x 10] intentionally omitted <==

REVIEW OF OPERATIONS CONTINUED

Corporate development

We believe that industry collaborations and partnerships will be a key success factor for our longer term corporate development in order to create value for shareholders. This past year, we signed our fi rst corporate deal for CVac, licensing the CVac rights to the Neopharm Group in Israel and Palestine.

An active business development program remains an important goal for the coming years. Partnering and managing risks with a well-structured product portfolio is a key element to success in the biotech industry.

The granting of Prima’s US patent application in the US in July now sees our patent portfolio for CVac mature with all patents applied for having been granted. We are attentive to protecting the intellectual property we are developing – this includes considering opportunities for fi ling new patents when relevant, as well as protecting our know-how and processes.

Strategic focus and outlook

Prima remains focused on the successful clinical development of CVac as a potential treatment for ovarian cancer. We are also excited about the opportunity to expand the potential clinical applications of CVac and its commercial attractiveness through our exploratory trial in pancreatic cancer.

We will continue to optimise our operational platform and improve logistics.

progress of our new trials over the course of the coming year.

I would like to thank all Prima BioMed staff for their hard work and dedication during this period of change. And on behalf of everyone at Prima, I would like to thank our shareholders for their continued support, our physician investigators for their dedication to the CVac program, and most importantly, the patients who have given their time and energy to participate in the CVac trials.

Sincerely,

==> picture [96 x 58] intentionally omitted <==

Marc Voigt

Prima BioMed Ltd

27 August 2014

==> picture [15 x 10] intentionally omitted <==

DIRECTORS’ REPORT

The directors present their report on the consolidated entity (referred to hereafter as the ‘consolidated entity’ or 'group') consisting of Prima BioMed Ltd (referred to hereafter as the ‘Company’ or ‘parent entity’) and the entities it controlled at the end of, or during, the year ended 30 June 2014.

Directors

date of this report, unless otherwise stated:

Ms Lucy Turnbull, AO

Mr Albert Wong

Mr Martin Rogers (until 15 November 2013)

Dr Richard Hammel (until 12 February 2014)

Dr Russell Howard

Mr Pete Meyers (appointed on 12 February 2014)

Mr Matthew Lehman (until 9 July 2014)

Mr Marc Voigt (appointed on 9 July 2014)

Principal activities

development and commercialisation of licensed medical biotechnology.

Dividends

Review of operations

The loss for the consolidated entity after providing for income tax amounted to $13,343,381 (30 June 2013: $15,225,671).

signifi cantly affect:

Likely developments and expected results of operations

Information on likely developments in the operations of the consolidated entity and the expected results of operations have not been included in this report because the directors believe it would be likely to result in unreasonable prejudice to the consolidated entity.

Environmental regulation

Commonwealth or State law.

==> picture [16 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

Information on directors

==> picture [479 x 394] intentionally omitted <==

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

Ms Lucy Turnbull, AO – Non-Executive Chairman
–
Qualifi cations LLB University of Sydney, MBA AGSM
–
Experience and expertise Lucy Hughes Turnbull, AO is an urbanist, businesswoman
and philanthropist with longstanding interest in cities and
their planning and technological and social innovation.
She was appointed as a Director of Sealink Travel Group
Ltd in 2013. She chaired ASX listed WebCentral Ltd from
2004-2006 when it was acquired by ASX listed Melbourne IT
Limited. She was a director of Melbourne IT from 2006-2010. She chairs the Com-
mittee for Sydney and was Deputy Chair of the COAG Reform Council’s Cities Expert
Panel advising on its Metropolitan Strategic Planning Report. She was the fi rst fe-
male Lord Mayor of the City of Sydney from 2003-2004 and before that was Deputy
Mayor from 1999-2003. She is a board member of the Cancer Institute of NSW and
the Australian Technology Park, Redfern. In 2012 she was awarded an Honorary
Doctorate of Business by the University of NSW for her contribution to business,
philanthropy and local government. In 2011 she became an Offi cer of the Order of
Australia for distinguished service to the community, local government and business.
Date of appointment – 7 October 2010
–
Other current directorships Sealink Travel Group Ltd
Former directorships – Melbourne IT Ltd
(in the last 3 years)
–
Special responsibilities Chairman of the Remuneration Committee from 13 February 2014 and member of
the Audit and Risk Committee
Interests in shares – 20,059,576 fully paid ordinary shares
–
Interests in options 4,439,894 options
----- End of picture text -----

==> picture [15 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

==> picture [467 x 464] intentionally omitted <==

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

–
Mr Albert Wong Non-Executive Director and Deputy Chairman
–
Qualifi cations Bachelor of Commerce (UNSW), F Fin, MSDIA, FAICD
–
Experience and expertise Originally from Hong Kong, Mr Wong has lived in Australia
for over 39 years and has been involved in the stockbroking
and investment banking industry for over 30 years. He was
admitted as a Member of the Australian Securities Exchange
in 1988 and was the principal of Intersuisse Limited until
1995 when he established the Barton Capital group of
companies, including eStar Online, both companies were
listed on the Australian Securities Exchange. Mr Wong was a Founding Director
of Gujarat NRE Resources NL and Pluton Resources Limited. He has been the
business partner of former NSW Premier, The Hon. Neville Wran AC QC at Wran
Partners from 2004-2011. He served as Chairman of Winmar Resources Ltd from
2009-2014 and Deputy Chairman of Kimberly Diamonds Limited from 2011- 2014.
Mr Wong is Deputy Chairman of Prima BioMed Limited. Mr Wong has been widely
involved in philanthropic activities including his directorships on UNSW Foundation,
Ian Thorpe’s Fountain for Youth Foundation and Honorary Life Governor and Presi-
dent of the Physics Foundation at The University of Sydney. Mr Wong is a Fellow of
the Financial Services Institute of Australasia, a Master Stockbroker of the Securities
& Derivatives Industry Association and a Fellow of the Australian Institute of Compa-
ny Directors. Mr Wong is also currently a director of the Children‘s Medical Research
Institute and the CMRI Foundation.
–
Date of appointment 28 April 2010
Other current directorships – None
–
Former directorships Winmar Resources Ltd and Kimberley Diamond Ltd
(in the last 3 years)
–
Special responsibilities Chairman of Audit and Risk Committee (to 21 February 2014) and member of
Remuneration Committee
Interests in shares – 3,537,500 fully paid ordinary shares
Interests in options – None
----- End of picture text -----

==> picture [16 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

==> picture [479 x 357] intentionally omitted <==

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

Mr Martin Rogers – Non-Executive Director
–
Qualifi cations Bachelor of Chemical Engineering,
Bachelor of Science (UNSW)
–
Experience and expertise Martin Rogers is a successful startup investor and company
director. Mr Rogers has Chemical Engineering and Science
degrees and has a depth of experience in incubating
companies and publicly listed organisations. Mr Rogers
has experience in all aspects of fi nancial, strategic and
operational management and has helped raise over
$100m cash equity. Mr Rogers has been both an investor and senior executive in a
private funded advisory business in the science and biotechnology sectors, where
he was instrumental in signifi cantly increasing the value of those investments.
Mr Rogers also holds a number of not-for-profi t roles.
Date of appointment – 16 October 2007
Date of resignation – 15 November 2013
–
Other current directorships Cellmid Ltd, Consegna Group Ltd and OncoSil Medical Ltd
Former directorships – None
(in the last 3 years)
Special responsibilities – None
Interests in shares – 20,542,179 fully paid ordinary shares amount held as at
date of resignation
–
Interests in options 2,500,000 options amount held as at date of resignation
----- End of picture text -----

==> picture [15 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

==> picture [469 x 399] intentionally omitted <==

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

Dr Richard Hammel – Non-Executive Director
–
Qualifi cations BPharm, MSc, PhD
–
Experience and expertise Dr Hammel was the founding partner of ProPharma
International Partners in San Francisco, USA. ProPharma is
a pharmaceutical/ biotechnology consulting fi rm providing
a range of business, fi nancial and product development
services. He previously held senior management positions
with Connetics Corporation (Vice President Business
Development), Matrix Pharmaceuticals Inc (Vice President
Business Development, Sales and Marketing) and held several positions at Glaxo
Inc (Director, Professional Affairs; Director, New Business Development; and Direc-
tor, Marketing Services).
Dr Hammel is widely recognised in the USA, Europe and Japan for his extensive 30
years expertise in commercialisation and licensing in emerging and developing
biotechnology companies.
–
Date of appointment 24 January 2005
–
Date of resignation 12 February 2014
Other current directorships – None
Former directorships – None
(in the last 3 years)
–
Special responsibilities Chairman of Remuneration Committee (to 12 February 2014) and member of
Audit Risk and Compliance Committee (to 12 February 2014)
Interests in shares – 10,444,987 fully paid ordinary shares amount held as at
date of resignation
Interests in options – None
----- End of picture text -----

==> picture [16 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

==> picture [478 x 505] intentionally omitted <==

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

Dr Russell Howard – Non-Executive Director
Qualifi cations – PhD
–
Experience and expertise Dr. Russell Howard is an Australian scientist, CEO, and
entrepreneur; he was recently the overall winner of the
2013 Advance Global Australian Award for his global
impact on the biotechnology fi eld and green chemistry.
He was a pioneer in the fi eld of molecular parasitology
and in leading the commercialization of one of the most
important methods used widely today in molecular biology
called “DNA Shuffl ing“ or “Molecular Breeding.” He is an inventor of fi ve patents and
has over 140 scientifi c publications. After earning his PhD in biochemistry from
the University of Melbourne, Dr. Howard has held positions at a number of leading
research laboratories around the world, including the Immunoparasitology Labo-
ratory at the Walter & Eliza Hall Institute in Melbourne and the National Institute of
Health in Bethesda, Maryland where he became a tenured investigator. In industry,
Dr. Howard worked at Schering-Plough’s DNAX Research Institute of Molecular and
Cellular Biology in Palo Alto, California; was the President and Scientifi c Director
of Affymax, Inc.; and was the co-founder and CEO of Maxygen, Inc. after its spin-
out of Affymax-GlaxoWellcome. As Maxygen’s CEO, Dr. Howard led its IPO and a
secondary offering raising a total of US$ 260 million in capital. Under Dr. Howard,
Maxygen successfully developed and partnered dozens of technology applications
and products. After leaving Maxygen in 2008, Dr. Howard started the CleanTech
company Oakbio, Inc. and remains involved in a number of other innovative bio-
technology companies in the USA and Australia.
Dr Howard is also currently Chairman of NeuClone Pty Ltd and was appointed as
a Director of Circadian Technologies Ltd in 2013.
–
Date of appointment 8 May 2013
–
Other current directorships Circadian Technologies Ltd
Former directorships – None
(in the last 3 years)
Special responsibilities – Member of Remuneration Committee
Interests in shares – None
Interests in options – None
----- End of picture text -----

==> picture [15 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

==> picture [469 x 337] intentionally omitted <==

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

Mr Pete Meyers – Non-Executive Director
–
Qualifi cations BS, MBA
–
Experience and expertise Mr. Meyers is currently the Chief Financial Offi cer of
TetraLogic Pharmaceuticals Corporation, where he led the
execution of their successful IPO in December 2013. Prior
to his role at TetraLogic, Mr. Meyers was an accomplished
health care investment banker, holding a positions of
increasing responsibility at Dillon, Read & Co., Credit Suisse
First Boston LLC and, most recently, as Co-Head of Global
Health Care Investment Banking at Deutsche Bank Securities Inc. in New York. Mr.
Meyers earned a Bachelor of Science degree in fi nance from Boston College and
a Master of Business Administration degree from Columbia Business School. Mr
Meyers is currently also the Chairman and President of the Thomas M Brennan
Memorial Foundation, Inc.
–
Date of appointment 12 February 2014
Other current directorships – None
Former directorships – None
(in the last 3 years)
–
Special responsibilities Chairman of the Audit & Risk Committee from 21 February 2014
Interests in shares – None
Interests in options – None
----- End of picture text -----

==> picture [16 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

==> picture [478 x 455] intentionally omitted <==

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

Mr Matthew Lehman – Former Executive Director & Chief Executive Offi cer (CEO)
Qualifi cations – BA and MS
–
Experience and expertise Mr Lehman joined Prima as Chief Operating Offi cer in
February 2010. He has played a leading role in the
clinical development of CVac as well as the executive
management of the company. Prior to joining Prima, he
was the Chief Operating Offi cer for SPRI Clinical Trials, an
international contract research organization servicing
the biotechnology and pharmaceutical industries, where
he led the successful expansion of the business in the emerging Eastern European
markets. Over the years, Mr. Lehman has held various positions of increasing
responsibility in clinical development and biotechnology operations, with extensive
experience managing large teams across the United States and Europe. He has
been involved in hundreds of R&D programs in oncology and other therapeutic
areas, including key development contributions to a number of now FDA and EMA
approved products. Mr. Lehman is active in a number of industry organizations
with a strong interest in optimizing clinical research and effi cient deployment of
R&D expenditure.
–
Date of appointment 24 May 2012
Date of resignation 9 July 2014
Other current directorships – None
Former directorships – None
(in the last 3 years)
Special responsibilities – None
Interests in shares – 1,617,763 fully paid ordinary shares amount held as at date
of resignation
32,706 American Depositary Receipts (ADR) as at date of
resignation
–
Interests in options 2,104,441 options amount held as date of resignation
----- End of picture text -----

==> picture [15 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

==> picture [469 x 394] intentionally omitted <==

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

–
Mr Marc Voigt Executive Director & Chief Executive Offi cer (CEO)
Qualifi cations – MBA
–
Experience and expertise Marc has more than 16 years of experience in the fi nancial
and biotech industry, having joined the Prima team in 2011
as the General Manager, European Operations based in
Berlin, Germany. In May 2012, he became Prima’s Chief
Business Offi cer and in November 2012 its Chief Financial
Offi cer, as well as continuing to focus on its European
operations. Having started his career at the Allianz Group
working in pension insurances and funds, he moved to net.IPO AG, a publicly-listed
boutique investment bank in Frankfurt where he was focused on IPOs and venture
capital investments. Marc then worked for a number of years as an investment
manager for a midsize venture capital fund based in Berlin, specialising in health-
care. He also gained considerable operational experience while serving in different
management roles with Revotar Biopharmaceuticals, Caprotec Bioanalytics and
Medical Enzymes AG respectfully, where he handled several successful licensing
transactions and fi nancing rounds.
–
Date of appointment 9 July 2014
Other current directorships – None
Former directorships – None
(in the last 3 years)
Special responsibilities – None
Interests in shares – 720,000 fully paid ordinary shares
150 American Depositary Receipts (ADR)
–
Interests in options 1,171,754 options
----- End of picture text -----

‘Other current directorships’ quoted above are current directorships for listed entities only and excludes directorships in all other types of entities, unless otherwise stated.

‘Former directorships (in the last 3 years)’ quoted above are directorships held in the last 3 years for listed entities only and excludes directorships in all other types of entities, unless otherwise stated.

==> picture [16 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

Meetings of directors

The number of meetings of the Company’s Board of Directors and of each board committee held during the year ended 30 June 2014, and the number of meetings attended by each director were:

==> picture [469 x 155] intentionally omitted <==

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

Full Board Remuneration Committee Audit and Risk Committee
Attended Held Attended Held Attended Held
Ms Lucy Turnbull, AO 10 10 1 1 2 2
Mr Albert Wong 9 10 – – 2 2
Mr Martin Rogers 7 7 – – – –
Dr Richard Hammel 6 7 – – 1 1
Dr Russel Howard 10 10 1 1 – –
Mr Pete Meyers 3 3 – – – –
Mr Matthew Lehman 10 10 1 1 – –
----- End of picture text -----

relevant committee.

==> picture [15 x 10] intentionally omitted <==

MANAGEMENT DIRECTORY

Ms Deanne Miller,

General Counsel & Company Secretary

==> picture [102 x 131] intentionally omitted <==

Ms Miller has over 14 years of broad commercial experience having held legal, investment banking, regulatory compliance and tax advisory positions, including, Legal Counsel at RBC Investor Services, Associate Director at Westpac Group, Legal & Compliance Manager at Macquarie Group, Regulatory Compliance Analyst at the Australian Securities and Investment Commission, and Tax Advisor at KPMG. She joined Prima as General Counsel and Company Secretary in October 2012. She has a Combined Bachelor of Laws (Hons) and Bachelor of Commerce degree from the University of Sydney. She is admitted as a solicitor in NSW and member of the Law Society of NSW.

Dr Sharron Gargosky,

Dr Gargosky has 18 years’ experience in the biotechnology and pharmaceutical industries, and has worked in senior positions in organisations that have successfully received FDA approval for orphan drugs. She is responsible for managing the clinical team working on the Cvac immunotherapy cancer vaccine. Prior to joining Prima, Dr Gargosky was a member of ILMU consulting LLC, where she provided project management and operational expertise on pharmaceutical drug and biologic development – from early research to Phase IV Trials and the FDA approval process. Dr Gargosky has also previously held the positions of Chief Scientifi c Offi cer at Pulse Health LLC in Portland in the USA, and Chief Scientifi c Offi cer and Senior Vice President of Corporate Development at Hyperion Therapeutics Inc. in San Francisco. At Ucyclyd Pharma she managed the approval of orphan drug products (Ammonul) and the development of the NCE, and within Medics Pharmaceuticals, the successful BLA submission and approval for Reloxin. As Vice President of Business Development for Diagnostic System Laboratories she was responsible for business expansion through evaluation and implementation of new growth opportunities and patent portfolio management. Dr Gargosky has a Postdoctoral Fellowship in Pediatric Endocrinology from Stanford University in California, a PhD in biochemistry from the University of Adelaide in Australia (in collaboration with CSIRO Divisions of Human Nutrition, South Australia), First Class Honours in Biochemistry from the University of Adelaide, and a Bachelor of Science, Biochemistry (Distinction), Microbiology, Immunology & Virology (Distinction) from the University of Adelaide.

==> picture [16 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

REMUNERATION REPORT

The Directors are pleased to present the 2014 remuneration report which sets out remuneration information for Prima BioMed Ltd’s Non-Executive Directors, Executive Directors, and key management personnel.

Directors and key management personnel disclosed in this report

==> picture [420 x 228] intentionally omitted <==

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

Name Position
Ms Lucy Turnbull, AO Non – Executive Chairman
Mr Albert Wong Non – Executive Deputy Chairman
Mr Martin Rogers Non – Executive Director
Dr Richard Hammel Non – Executive Director
Dr Russell Howard Non – Executive Director
Mr Pete Meyers Non – Executive Director
Mr Matthew Lehman Former Executive Director & Chief Executive Offi cer
Mr Marc Voigt Executive Director & Chief Executive Offi cer
Key management personnel
Dr Sharron Gargosky Chief Technical Offi cer
Ms Deanne Miller General Counsel & Company Secretary
----- End of picture text -----

Mr Martin Rogers stood down as a Non-Executive Director effective from 15 November 2013. Dr Richard Hammel stood down as a Non-Executive Director effective from 12 February 2014 and Mr Pete Meyers appointed as a Non-Executive Director effective from 12 February 2014. Mr Marc Voigt replaced Mr Matthew Lehman as Executive Director and Chief Executive Offi cer on 9 July 2014.

The remuneration report is set out under the following main headings:

A Principles used to determine the nature and amount of remuneration
B Details of remuneration
C Service agreements
D Share-based compensation

==> picture [15 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

A Principles used to determine the nature and amount of remuneration

==> picture [5 x 9] intentionally omitted <==

Remuneration Policy

Remuneration Committee.

==> picture [5 x 8] intentionally omitted <==

Remuneration governance

The remuneration committee is a committee of the board. It is primarily responsible for making recommendations to the board on:

Non-Executive Director fees

remuneration levels of executive directors and other key management personnel

the over-arching executive remuneration framework and operation of the incentive plan, and

key performance indicators (KPI) and performance hurdles for the executive team.

Their objective is to ensure that remuneration policies and structures are fair and competitive and aligned with the long-term interests of the Company.

The Corporate Governance Statement provides further information on the role of this committee.

==> picture [5 x 8] intentionally omitted <==

Non-Executive Directors’ fees

Non-executive directors’ fees are determined within an aggregate directors’ fee pool limit, which is periodically recommended for approval by shareholders. The maximum currently stands at A$500,000 per annum and was approved by shareholders at the annual general meeting on 26 November 2010.

other than statutory superannuation, if applicable. Non-Executive Directors do not receive performance based bonuses and prior shareholder approval is required to participate in any issue of equity.

In the earlier stages of the Company’s development Non-Executive Directors were granted options in the Company as the Board considered it an appropriate means of attracting and retaining talented individuals to the Board given the fi scal constraints of a development stage company. The last of these options, which were approved at the Annual General Meeting in 2010, expired in December 2013. Whilst it was stated in the last Annual Report that the board did not intend to issue any further options to Non-Executive Directors, the Board believes that issuing options in lieu of cash for directors’ fees may still be appropriate in some circumstances in order to preserve cash. This is particularly so in light of the 3rd edition of the Corporate Governance Principles and Recommendations released by the ASX Corporate Governance Council (Council) on 27 March 2014, which in contrast to the 2[nd] edition, specifi es that it is generally acceptable for non-executive directors to receive securities as part of their remuneration to align their interest with the interests of other security holders.

==> picture [16 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

==> picture [5 x 8] intentionally omitted <==

Executive remuneration policy and framework

In determining executive remuneration, the board aims to ensure that remuneration practices are:

competitive and reasonable, enabling the Company to attract and retain key talent from both the domestic and international market places,

aligned to the Company’s strategic and business objectives and the creation of shareholder value, transparent, and

acceptable to shareholders.

The executive remuneration framework has three components:

short-term performance incentives, and

long-term incentives through participation in employee option plans.

Executive remuneration mix

In accordance with the Company’s objective to ensure that executive remuneration is aligned to Company performance, a portion of the executives’ target pay is “at risk”.

may be delivered as a combination of cash and prescribed non-fi nancial benefi ts at the executives’ discretion. Non-fi nancial benefi ts include health insurance. Executives are offered a competitive base pay that comprises the fi xed component of pay and rewards.

Independent remuneration information is obtained from sources such as independent salary surveys to ensure base pay is set to refl ect the market for a comparable role. Base pay for executives is reviewed annually to ensure the executive’s pay is competitive with the market.

The Company is currently in the process of conducting clinical trials of CVac for ovarian and pancreatic cancer patients in various countries throughout the world. The Company continues to develop its global platform for the manufacturing and logistics for cellular based therapies. In order to obtain the experience required to achieve the Company’s goals, it has been necessary to recruit management from the international marketplace. Accordingly, executive pay is also viewed in light of the market from which our executives are recruited in order to be competitive with the relevant market.

An executive’s pay is also reviewed on promotion. There is no guaranteed base pay increases included in any executives’ contracts. Superannuation benefi ts are paid on behalf of Australian based executives.

==> picture [15 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

(continued)

At this stage of the Company’s development, shareholder return is enhanced by the achievement of milestones in the development of the Company’s products. The Company’s Remuneration Policy is not directly based on its fi nancial performance, rather on industry practice, given the Company operates in the biotechnology sector and the Company’s primary focus is research activities with a long term objective of developing and commercialising the research & development results.

The Company envisages its performance in terms of earnings will remain negative whilst the Company continues in the research and development phase. Shareholder wealth refl ects this speculative and volatile market sector.

Short-term incentives

Executives have the opportunity to earn an annual short-term incentive (STI) depending on their accountabilities and impact on the organisation. STIs may be awarded at the end of a performance review cycle for meeting group and individual milestone achievements that align to the Company’s strategic and business objectives at the discretion of the board.

The remuneration committee is responsible for determining the amount of STI to be awarded. To assist in this assessment, the committee receives reports on performance from management. The committee has the discretion to adjust short term incentives downwards in light of unexpected or unintended circumstances.

In the current pre-commercialisation stage of the Company’s development, it is the Board’s preference to issue non-cash STIs.

Non-cash STIs are granted under the Executive Incentive Plan (EIP) which was approved by shareholders at the 2012 Annual General Meeting. In light of our increasing operations globally the Board reviewed the Company’s incentive arrangements to ensure that it continued to retain and motivate key executives in a manner that is aligned with members’ interests. As a result of that review, this ‘umbrella’ EIP was adopted to allow eligible executives to apply for the grant of performance rights and/or options. Equity incentives granted in accordance with the EIP Rules are designed to provide meaningful remuneration opportunities and will refl ect the importance of retaining a world-class management team. The Company endeavours to achieve simplicity and transparency in remuneration design, whilst also balancing competitive market practices in the United States, Germany, and Australia.

Long-term incentives

Long-term incentives are also provided to certain employees via the EIP which replaces the Global Employee Share Option Plan (GESOP). Whilst no LTIs have yet been granted under the EIP, it is the Board’s intention that any LTIs granted under the EIP will have a minimum vesting period of three years after the grant date.

Certain employees hold options which were granted under the previous GESOP or ESOP plans. The GESOP was approved by shareholders at the 2011 annual general meeting and was designed to provide long-term incentives for executives to deliver long-term shareholder returns.

Under GESOP, participants were granted options which vested after 12 months if the employees were still employed by the group at the end of the vesting period. Participation in the plan is at the board’s discretion and no individual had a contractual right to participate in the plan or to receive any guaranteed benefi ts.

==> picture [16 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

Long-term incentives (continued)

The establishment of the ESOP Plan was approved by shareholders on 30 April 2010. The Company has ceased to issue options under the ESOP. The ESOP was designed to provide long-term incentives for employees excluding directors to deliver long-term shareholder returns. Participation in the plan was at the board’s discretion and no individual had a contractual right to participate in the plan or to receive any guaranteed benefi ts. Options under the ESOP vested on grant date.

Voting and comments made at the Company’s 2013 Annual General Meeting

The Company addressed specifi c feedback at the AGM or throughout the year on its remuneration practices.

==> picture [15 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

B Details of remuneration

==> picture [5 x 9] intentionally omitted <==

Amounts of remuneration

the authority and responsibility for planning, directing and controlling the major activities of the consolidated entity) are set out in the following tables.

==> picture [484 x 355] intentionally omitted <==

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

30 June 2014 Short-term Benefi ts Post Long- Share-based Total
Employment term Payments
Benefi ts Benefi ts
Cash Cash Non Superannuation Long Termi- Options
salary bonus Monetary service nation Issued
and fees leave benefi ts
$ $ $ $ $ $ $ $
Non-Executive Directors
Ms L Turnbull, AO 137,835 - - 12,750 - - - 150,585
Mr A Wong 84,232 - - 7,792 - - - 92,024
Dr R Hammel [1] 63,682 - - - - - - 63,682
Mr M Rogers [2] 28,716 - - 2,656 - - - 31,372
Dr R Howard 90,000 - - - - - - 90,000
Mr Pete Meyers [3] - - - - - - - -
Executive Directors
Mr M Lehman 364,429 - 22,783 - - - 6,093 393,305
Other Key Management Personnel
Dr S Gargosky 325,614 - 1,445 - - - 15,027 342,086
Mr M Voigt 232,658 17,580 4,140 - - - 14,021 268,399
Ms D Miller 160,000 - - 14,800 2,379 - 6,778 183,957
1,487,166 17,580 28,368 37,998 2,379 - 41,919 1,615,410
----- End of picture text -----

1 Dr Richard Hammel stepped down as a non-executive director effective from 12 February 2014. He remained as a consultant with the company until 30 June 2014.

2 Mr Martin Rogers stepped down as a non-executive director effective from 15 November 2013.

3 Mr Pete Meyers was appointed as a non-executive director on 12 February 2014. Mr Meyers will be paid up to $105,000 per annum in equity or cash in lieu of equity if the terms of the equity grant is not approved by shareholders at the next AGM. No remuneration has been paid to Mr Meyers for the period of service to 30 June 2014.

==> picture [16 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

==> picture [505 x 393] intentionally omitted <==

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

30 June 2013 Short-term Benefi ts Post Long- Share-based Total
Employment term Payments
Benefi ts Benefi ts
Cash Cash Non Superannuation Long Termi- Options
salary bonus Monetary service nation Issued
and fees leave benefi ts
$ $ $ $ $ $ $ $
Non-Executive Directors
Ms L Turnbull, AO 156,052 - - 14,045 - - - 170,097
Mr A Wong 117,281 - - 10,555 - - - 127,836
Dr R Hammel 107,858 - - - - - - 107,858
Mr M Rogers [1] 45,916 - - 4,132 - - - 50,048
Dr R Howard [3] 15,000 - - - - - - 15,000
Executive Directors
Mr M Rogers [1] 141,667 - - 4,167 - - - 145,834
Mr M Lehman [2] 312,270 - 16,178 - - - 63,408 391,856
Other Key Management Personnel
Dr N Frazer [4] 241,877 - 28,076 - - 81,735 45,285 396,973
Mr I Bangs [5] 111,847 - - 10,066 - 67,864 23,083 212,860
Dr S Gargosky 290,226 - 760 - - - 32,759 323,745
Mr M Voigt 189,994 23,887 3,525 - - - 21,059 238,465
Ms D Miller [6] 94,256 10,000 - 9,383 - - - 113,639
1,824,244 33,887 48,539 52,348 - 149,599 185,594 2,294,211
----- End of picture text -----

1 Mr Martin Rogers stood down as CEO, effective from 31 August 2012 and remains on the board as a non-executive director effective from 1 September 2012. Mr Rogers ’ cash salary and fees includes a lump sum payment of $85,000 in lieu of notice for his resignation as CEO.

2 Mr Matthew Lehman became Chief Executive Offi cer effective from 1 September 2012.

3Dr Russell Howard was appointed as a Non-Executive Director on 8 May 2013.

4 Dr Neil Frazer stood down as Chief Medical Offi cer effective 30 June 2013. Dr. Frazer continues to advise the Company as a consultant through to 31 December 2013.

5 Following a restructure of the business, Mr Ian Bang ’ s role as CFO & Company Secretary became redundant on 31 December 2012.

6 Ms Deanne Miller commenced employment as General Counsel on 17 October 2012, initially on a part-time basis. Ms Miller was appointed as General Counsel & Company Secretary on 26 October 2012 and commenced full-time employment on 1 February 2013.

==> picture [15 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

==> picture [484 x 294] intentionally omitted <==

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

Name Fixed remuneration At risk – STI At risk – LTI
2014 2013 2014 2013 2014 2013
Non-Executive directors
Ms L Turnbull, AO 100% 100% – – – –
Mr A Wong 100% 100% – – – –
Dr R Hammel 100% 100% – – – –
Mr M Rogers 100% 100% – – – –
Dr R Howard 100% 100% – – – –
– – – – – –
Mr Pete Meyers
Executive directors
Mr M Lehman 98% 84% – – 2% 16%
Other Key Management Personnel
Dr N Frazer – 89% – – – 11%
Mr I Bangs – 89% – – – 11%
Dr S Gargosky 96% 90% – – 4% 10%
Mr M Voigt 88% 81% 7% 10% 5% 9%
Ms D Miller 96% 90% – 10% 4% –
----- End of picture text -----*

* The percentage applying to LTI is based on the value of the share based payment to the total remuneration.

==> picture [16 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

C Service agreements

Remuneration and other terms of employment for key management personnel are formalised in service agreements. The service agreements specify the components of remuneration, benefi ts and notice periods. Participating in the STI and LTI plans is subject to the Board’s discretion. Compensation paid to key management personnel is determined by remuneration committee on an annual basis with reference to market salary surveys. Determination of compensation for Non-Executive Directors is detailed on page 23, 24, 25, 26, 27, 28 and 29 on the directors’ report. Details of the current terms of these agreements are below. Unless stated otherwise, all salaries quoted below are as at 30 June 2014.

Mr Marc Voigt	–	Executive Director & CEO (previously Chief Business Off cer & Chief Financial Off cer)
Agreement commenced: - 9 July 2014
Details - The initial term is for a period of 3 years. Each party is to provide at least 6 months’ notice of its intention to extend the term of the contract. The contract can be terminated by either party upon at least 3 months’ notice if notice is provided within the f rst 6 months’ of the commencement date. Thereafter it can be terminated by either party upon 6 months’ notice. Prima may make payments in lieu of the period of notice, or for any unexpired part of that notice period.
Base salary including superannuation - EUR 195,000 (Salary as Executive Director & CEO effective 9 July 2014. Previously EUR 157,500 as CFO & CBO).

Dr Sharron Gargosky	–	Chief Technical Off cer
Agreement commenced: - 1 June 2011
Details - The agreement can be terminated with 3 months notice. The termination terms are payment of base salary in lieu of notice period.
Base salary including superannuation - USD 300,000

==> picture [15 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

==> picture [463 x 21] intentionally omitted <==

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

Ms Deanne Miller – General Counsel & Company Secretary
----- End of picture text -----

Agreement commenced:	-	17 October 2012
Details	-	The agreement can be terminated with 3 months notice.
		The termination terms are payment of base salary in lieu of notice period.
Base salary including superannuation	-	AUD 174,800

==> picture [463 x 21] intentionally omitted <==

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

Mr Matthew Lehman – Former Executive Director & CEO
----- End of picture text -----

Agreement commenced:	-	1 September 2012
Details	-	This agreement was terminated on 9 July 2014. Mr Lehman is entitled to receive 6 months’
		severance pay to be paid monthly over the 6 month period following his termination.
Base salary including superannuation	-	USD 335,760

Key management personnel have no entitlement to termination payments in the event of removal for misconduct or gross negligence.

==> picture [16 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

D Share-based compensation

==> picture [5 x 9] intentionally omitted <==

Issue of shares

There were no shares issued to directors and key management personnel as part of compensation during the year ended 30 June 2014.

==> picture [5 x 8] intentionally omitted <==

Options

ing years are as follows:

==> picture [463 x 66] intentionally omitted <==

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

Grant date Vesting date and Expiry date Exercise price Value %
exercisable date per option at grant Vested
date
$ $
----- End of picture text -----

6 December 2010	30 June 2013	6 December 2014	0.100	0.057	100
3 November 2011	3 November 2012	3 November 2014	0.279	0.087	100
26 August 2011	26 August 2011	6 December 2014	0.100	0.127	100
3 January 2012	3 January 2013	3 January 2015	0.233	0.087	100
1 August 2012*	31 December 2012	1 August 2015	0.185	0.051	100
1 August 2012	1 August 2013	1 August 2015	0.185	0.051	100
16 November 2012	1 August 2013	1 August 2015	0.185	0.058	100
20 February 2013	20 February 2014	20 February 2016	0.173	0.055	100
23 December 2013	1 July 2015	30 June 2018	0.077	0.028	66.6
24 January 2014	24 January 2014	30 June 2018	0.077	0.028	100

* Relates to options issued to Ian Bangs that were fully vested as part of his termination employment

==> picture [15 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

Options granted under the plan carry no dividend or voting rights.

When exercisable, each option is convertible into one ordinary share.

The exercise price of options under the EIP was based on amount equal to the 30 day VWAP of the Company’s shares traded on the ASX as at 27 August 2013, being the date on which the Remuneration Committee met to determine to grant the options. The EIP Rules allow Board discretion as to setting an exercise price. The exercise price for the grant of options under the EIP was equivalent to 194% of the market price on the day the options were issued on 24 December 2014.

The exercise price of options granted under the GESOP is based on the seven days weighted average price at which the Company’s shares are traded on the ASX immediately prior to and including the date of grant of the Option multiplied by 150%.

Details of options over ordinary shares in the Company provided as remuneration to each director and each of the key management personnel are set out below. When exercisable, each option is convertible into one ordinary share. The table further shows the percentages of the options granted under the Employee Option Plan that vested and/or were forfeited during the year. Further information on the options is set out in note 29 to the fi nancial statements.

The share-based payment expense for options granted to the individuals is allocated equally over the period from grant date to vesting date, and the amount is included in the remuneration tables above. Fair values at grant date are determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest rate for the term of the option.

Shares provided on exercise of remuneration options

No ordinary shares in the Company have been issued as a result of the exercise of remuneration options by a director.

Details of bonuses and share-based compensation

For each cash bonus and grant of options included in the tables on pages 27, 28 and 29, the percentage of the available bonus or grant that was paid, or that vested, in the fi nancial year, and the percentage that was forfeited because the person did not meet the vesting criteria is set out below.

==> picture [16 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

==> picture [465 x 260] intentionally omitted <==

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

Name Cash bonus Share-based compensation benefi ts (options)
Number
Value of of options Financial years
Year options at vested during in which options
Paid Forfeited granted No Granted grant date Vested the year Forfeited may vest
% % $ % %
2012 * 2,000,000 253,415 100 2,000,000 - 2012
Mr M Lehman - -
2013 *** 1,200,000 63,408 - - - 2014
Dr N Frazer - - 2010 * 2,000,000 114,400 100 2,000,000 - 2013
Mr I Bangs - - 2013 ** 450,000 23,083 100 450,000 - 2013
Dr S Gargosky - - 2012 ** 200,000 17,397 100 200,000 - 2013
2013 ** 700,000 32,759 - 700,000 - 2014
2014
Ms D Miller - - 2014 363,636 10,167 67 242,424 -
2015
2013 ** 450,000 21,059 - 450,000 - 2014
Mr M Voigt 100 -
2014 643,629 17,996 67 429,086 - 2014 & 2015
*----- End of picture text -----

* Options were granted under the ESOP and vested immediately on grant date (refer to page 25-26 – “Long term incentives”)

** Options were granted under the GESOP and vested after a period of twelve months from the grant date (refer to page 25-26 – “Long term incentives”)
*** Options were approved at the annual general meeting held on 16 November 2012.
**** Dr Frazer’s options were approved at the annual general meeting held on 26 November 2010.
* Options were granted under the EIP and vest in three equal tranches as follows:
33.3% to vest on December 31, 2013
33.3% to vest on June 30, 2014
33.3% to vest on June 30, 2015

Vesting is contingent upon the employee being continuously employed in good standing through the vesting period. The options are subject to accelerated vesting according to agreed terms in each person’s employment contract.

The Options are exercisable at an exercise price of A$ 0.0774 per Share at any time after vesting and prior to 5pm on 30 June 2018 (Expiry Date).

==> picture [15 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

Equity instruments held by key management personnel

The tables on the following page show the number of:

(i) Options over ordinary shares in the company
(ii) Shares in the company

family members and entities related to them.

There were no shares granted during the reporting period as compensation.

(i) Options holdings

==> picture [459 x 240] intentionally omitted <==

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

2014 Balance at start of Granted Exercised Other Changes Balance at end Vested and Unvested
the year of the year exercisable
Options over ordinary shares
Ms Lucy Turnbull, AO 14,439,894 - - (10,000,000) 4,439,894 4,439,894 -
Mr Albert Wong 7,500,000 - - (7,500,000) - - -
Mr Martin Rogers 12,500,000 - - (10,000,000) 2,500,000 2,500,000 -
Dr Richard Hammel 5,000,000 - - (5,000,000) - - -
Dr Russell Howard - - - - - - -
Mr Pete Meyers - - - - - - -
Mr Matthew Lehman 2,104,441 - - - 2,104,441 2,104,441 -
Dr Sharron Gargosky 900,000 637,275 - - 1,537,275 1,324,850 212,425
Mr Marc Voigt 528,125 643,629 - - 1,171,754 957,211 214,543
Ms Deanne Miller - 363,636 - - 363,636 242,424 121,212
42,972,460 1,644,540 - (32,500,000) 12,117,000 11,568,820 548,180
----- End of picture text -----*

* The above options during the year ended 30 June 2014 was lapsed.

==> picture [16 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

(ii) Shares holdings

==> picture [483 x 284] intentionally omitted <==

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

2014 Balance at start of the year Received during the year on Other changes during Balance at end of the year
the exercise of options the year
Ordinary shares
Ms Lucy Turnbull, AO 17,759,576 - 2,300,000 20,059,576
Mr Albert Wong 3,537,500 - - 3,537,500
Mr Martin Rogers 20,542,179 - - 20,542,179
Dr Richard Hammel 10,444,987 - - 10,444,987
Dr Russell Howard - - - -
- - - -
Mr Pete Meyers
Mr Matthew Lehman 1,617,763 - - 1,617,763
4,400 - 28,306 32,706
Dr Sharron Gargosky 25,000 - (25,000) -
620,000 - 100,000 720,000
Mr Marc Voigt 150 - - 150
Ms Deanne Miller - - - -
Total ordinary shares 54,522,005 - 2,400,000 56,922,005
Total ADR 29,550 - 3,306 32,856
----- End of picture text -----*

* American Depository Receipts (ADR) traded on the NASDAQ

** As the date of resignation

==> picture [15 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

==> picture [5 x 8] intentionally omitted <==

Shares under option

Unissued ordinary shares of Prima BioMed Ltd under option at the date of this report are as follows:

==> picture [432 x 348] intentionally omitted <==

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

Date options granted Expiration Date Exercise Price Number Listed/Unlisted Options
9 November 2009 9 November 2014 $ 0.269 1,884,253 Unlisted
8 December 2009 8 December 2014 $ 0.236 1,884,253 Unlisted
12 January 2010 12 January 2015 $ 0.227 1,061,411 Unlisted
12 February 2010 12 February 2015 $ 0.235 1,118,211 Unlisted
18 March 2010 18 March 2015 $ 0.2277 1,075,269 Unlisted
6 May 2010 6 May 2015 $ 0.2500 500,000 Unlisted
20 May 2010 19 May 2015 $ 0.235 1,055,011 Unlisted
6 December 2010 6 December 2014 $ 0.100 2,000,000 Unlisted
26 August 2011 26 August 2014 $ 0.100 500,000 Unlisted
1 February 2011 1 February 2016 $0.339 740,741 Unlisted
03 November 2011 3 November 2014 $0.279 100,000 Unlisted
03 March 2012 3 January 2015 $0.2329 100,000 Unlisted
01 August 2012 1 August 2015 $0.1850 1,600,000 Unlisted
16 November 2012 1 August 2015 $0.1850 1,200,000 Unlisted
20 February 2013 20 February 2016 $0.1730 200,000 Unlisted
19 June 2013* 19 June 2017 $0.200 77,378,696 Listed
23 December 2013 30 June 2018 $0.0774 1,758,176 Unlisted
24 January 2014 30 June 2018 $0.0774 165,116 Unlisted
94,321,137
----- End of picture text -----**

No option holder has any right under the options to participate in any other share issue of the Company or any other entity.

Details of options granted to the key management personnel are disclosed on page 32 above. In addition, the following options were granted to offi cers who are among the fi ve highest remunerated offi cers of the Company and the group, but are not key management persons and hence not disclosed in the remuneration report:

Name of off cer	Date granted	Issue price of option	Number of options granted
Ms Marta Schilling 20 February 2013 24 January 2014 $0.173 $0.0774 200,000 165,116

==> picture [16 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

==> picture [5 x 8] intentionally omitted <==

and its controlled entities.

The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the offi cers in their capacity as offi cers of entities in the group, and any other payments arising from liabilities incurred by the offi cers in connection with such proceedings.

the improper use by the offi cers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the Company.

==> picture [5 x 9] intentionally omitted <==

Indemnity and insurance of auditor

Company or any related entity against a liability incurred by the auditor.

of the Company or any related entity.

==> picture [5 x 8] intentionally omitted <==

Proceedings on behalf of the Company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of the Company, or to 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 part of those proceedings.

No proceedings have been brought or intervened in on behalf of the Company with leave of the Court under section 237 of the Corporations Act 2001 .

==> picture [5 x 8] intentionally omitted <==

Non-audit services

The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Company and/or the group are important.

The board of directors has considered the position and, in accordance with advice received from the audit committee, is satisfi ed that the provision of the non-audit services is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001 . The directors are satisfi ed that the provision of non-audit services by the auditor, as set out below, did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons:

all non-audit services have been reviewed by the audit committee to ensure they do not impact the impartiality and objectivity of the auditor
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants .

==> picture [15 x 10] intentionally omitted <==

DIRECTORS’ REPORT CONTINUED

During the year the following fees were paid or payable for non-audit services provided by the auditor of the parent entity, its related practices and non-related audit fi rms:

==> picture [328 x 157] intentionally omitted <==

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

Consolidated
30 June 2014 30 June 2013
$ $
Other services
PwC Australian fi rm:
Other consulting 12,500 -
Other audit fi rm (MDHC)
Preparation of the tax return and other consulting - 9,841
Total remuneration of non-audit services 12,500 9,841
----- End of picture text -----

==> picture [5 x 8] intentionally omitted <==

Auditor’s independence declaration

A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 49.

==> picture [5 x 8] intentionally omitted <==

Auditor

Corporations Act 2001

This report is made in accordance with a resolution of directors.

On behalf of the directors

==> picture [145 x 53] intentionally omitted <==

Lucy Turnbull, AO Chairman Sydney

27 August 2014

==> picture [16 x 10] intentionally omitted <==

CORPORATE GOVERNANCE REPORT

The Board of Directors continues to adopt a Corporate Governance framework appropriate for the size, complexity and operations of the Company and its subsidiaries. The board continues to review the framework and the practices in place to ensure they meet the interests of Shareholders.

Unless otherwise stated, the Company’s Corporate Governance arrangement’s meet the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations. All charters and policies, referred to in this report are available on the Company’s website www.primabiomed.com.au or on request from the Company.

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 are outlined in the Prima BioMed Board Charter and include:

providing strategic guidance to the group including contributing to the development of and approving the corporate strategy
resources and major capital expenditure initiatives
overseeing and monitoring:
organisational performance and the achievement of the group’s strategic goals and objectives
the process for making timely and balanced disclosure of all material information concerning the entity that might be expected to have a material effect on the value of the Company’s securities
progress in relation to the Company’s diversity objectives and compliance with its diversity policy
acquisitions or divestments
liaison with the Company’s auditors
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
approving the Company’s remuneration framework
ensuring there are effective management processes in place and approving major corporate initiatives

CORPORATE GOVERNANCE REPORT CONTINUED

enhancing and protecting the reputation of the organisation
overseeing the operation of the group’s risk management framework and setting the risk appetite within which the Board expects management to operate
ensuring appropriate resources are available to senior management

Management is responsible for implementing the Company’s corporate strategy and operating within a risk appetite set by the Board. Management is responsible for the day to day running of the affairs of the consolidated entity and policy initiatives are formally delegated by the board to the managing director and senior executives. Management is also responsible for providing the Board with accurate, timely and clear information to enable the Board to perform its duties.

Structure the board to add value

The board is to be comprised of both executive and non-executive directors with a majority of non-executive directors. Non-executive directors bring a fresh perspective to the board’s consideration of strategic, risk and performance matters. In recognition of the importance of independent views and the board’s role in supervising the activities of management, the Chair is an independent non-executive director, the majority of the board are independent of management and, all directors are required to exercise independent judgement and review and constructively challenge the performance of management.

The Chair is elected by the full board and is required to meet regularly with the managing director. The Company maintains a mix of directors on the board from different genders, age groups, ethnicity and cultural and professional backgrounds who have complementary skills and experience.

The board is required to consider the appropriate mix of skills required by the board to maximise its effectiveness, its contribution to the group and to enable it to discharge its duties and responsibilities effectively.

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 that the size of the board is conducive to effective discussion and effi cient decision-making.

The board has determined that an independent director must be a non-executive and:

a substantial shareholder of the Company
is or has not been employed in an executive capacity by the Company or any other group member within three years before commencing to serve on the board
has not within the last three years 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

CORPORATE GOVERNANCE REPORT CONTINUED

otherwise associated directly or indirectly with a material supplier or customer
does not have 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.

Each director has a written agreement setting out the terms of his or her appointment.

in the directors’ report under the heading ‘Information on directors’. At the date of signing the directors’ report, there are fi ve non-executive directors, none of whom have relationships adversely affecting their independence and so are deemed independent. There is also one executive director on the board.

The Directors have the right to take independent professional advice at the expense of the Company as they determine necessary to carry out their duties.

The Company Secretary is accountable to the Board, through the Chair, on all matters relating to the proper functioning of the Board.

Performance evaluation

The board undertakes continuing self-assessment of its collective performance, the performance of the Chair and of its committees. The assessment also considers the adequacy of access to information and the support provided by management. Any action plans are documented together with specifi c performance goals which are agreed for the coming year. The Chair undertakes assessments of the performance of individual directors by meeting privately with each director to discuss this assessment.

The Board recognises the importance of performance evaluations and will continually assess the necessity and timing of future performance evaluations.

Senior Executives are subject to an annual performance evaluation. Each year, senior executives (including the CEO) establish a set of performance targets. These targets are aligned to the overall corporate strategy and strategic goals. In the case of the CEO, these targets are agreed between the CEO and the Remuneration Committee and approved by the full Board.

CORPORATE GOVERNANCE REPORT CONTINUED

Audit & Risk Committee

The membership of the Audit & Risk Committee comprises Non-Executive Directors only. The Chairman of the Audit & Risk Committee is a Non-Executive Director who is not the Chairman of the Board. The members of the Audit & Risk Committee are fi nancially literate and have an appropriate understanding of the industry in which the group operates.

The main responsibilities of the committee are to:

information published by the Company or released to the market
assist the board in reviewing the effectiveness of the organisation’s internal control environment
oversee the effective operation of the risk management framework
recommend to the board the appointment, removal and remuneration of the external auditors, and review the terms of their engagement, the scope and quality of the audit and assess performance
consider the independence and competence of the external auditor on an ongoing basis
review and approve the level of non-audit services provided by the external auditors and ensure it does not adversely impact on auditor independence
review and monitor related party transactions and assess their propriety
report to the board on matters relevant to the committee’s role and responsibilities.
receives regular reports from management and the external auditors
meets with the external auditors at least twice a year, or more frequently if necessary
whether they have been resolved
meets separately with the external auditors at least twice a year without the presence of management
provides the external auditors with a clear line of direct communication at any time to either the Chair of the Audit & Risk Committee or the Chair of the board.

The Audit & Risk Committee has authority, within the scope of its responsibilities, to seek any information it requires from any employee or external party.

Details of the role of the Audit & Risk Committee are provided in the Audit & Risk Committee Charter.

The Audit & Risk Committee has direct and unlimited access to the external Auditor.

CORPORATE GOVERNANCE REPORT CONTINUED

Remuneration Committee

The membership of the Remuneration Committee only comprises Non-Executive Directors. The Chairman of the Audit & Risk Committee is a Non-Executive Director.

The remuneration committee operates in accordance with its Charter. A copy of the Charter is available on the Company’s website. The remuneration committee advises the board on remuneration and incentive policies and practices generally, and makes specifi c recommendations on remuneration packages and other terms of employment for executive directors, other senior executives and non-executive directors. Committee members receive information from external remuneration experts on recent developments on remuneration and related matters.

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 specifi c formal job description. This job description is reviewed by the remuneration committee on an annual basis and, where necessary, is revised in consultation with the relevant employee.

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’. The committee 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. This includes overseeing processes in relation to meeting diversity objectives for executives and staff below board level.

Non-Executive Directors are paid their fees out of the maximum aggregate amount approved by shareholders for the remuneration of Non-Executive Directors. Non-Executive Directors do not receive performance based bonuses and do not participate in equity schemes of the Company without prior shareholder approval.

Current remuneration is disclosed in the Remuneration Report on page 27.

Nomination committee

establishment of a Nomination Committee of the Board of Directors as recommended by the ASX Corporate Governance Council. All matters which might be properly dealt with by a Nomination Committee are considered by full Board of Directors.

The Board assesses its composition to ensure that it has the skills, knowledge, experience, independence and diversity to enable it to discharge its duties and responsibilities in this area effectively. The Board considers the necessity to establish a Nomination Committee annually.

CORPORATE GOVERNANCE REPORT CONTINUED

External auditors

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. The engagement partner of the external auditor is to be rotated every 5 years and, once the partner appointment has ceased, not allowed to rotate back for a further period of 5 years.

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.

Diversity Policy

The Company recognises that both gender and other forms of diversity are important and will seek to promote gender diversity of its Board and to facilitate a range of diversity initiatives throughout the Company.

At present the Board does not have a formal diversity policy as recommended by the ASX Corporate Governance Council’s Principles and Recommendations. The Board believes that the Company is not of a size nor does not have a signifi cant workforce to require a formal diversity policy. A diversity policy will be formalised as Company develops and grows. At present the Board ensures that appropriate procedures and measures are introduced and responsibilities delegated to the Remuneration committee to ensure that the both the Board’s and the Company’s diversity objectives.

At the date of release of the 2014 Annual Report, the Company has 58% of its employees being female. The Board is comprised of fi ve directors with the Chairman being female. This is a participation rate of 20%.

Acting Ethically and Responsibly

The Company has a code of conduct which has been fully enforced by the board and applies to all directors and employees. The code requires the highest standards of behaviour and professionalism together with the practices necessary to maintain confi dence in the group and to ensure that the group fulfi ls its legal obligations and reasonable expectations of the its stakeholders.

All Company personnel must act with the utmost integrity and objectivity in carrying out their roles and responsibilities for the Company.

CORPORATE GOVERNANCE REPORT CONTINUED

Share trading policy

Whilst the Board encourages its Directors and employees to own securities in the Company, it is also mindful of its responsibility that the Company complies with the Corporations Act 2001 pertaining to ‘insider trading’ and its ‘proper duties in relation to the use of insider trading’.

To ensure that the above issues comply with the requirements of the Corporations Act 2001 , the Board has established and implemented a policy on share trading in the Company’s securities by Directors and employees.

Essentially, the policy restricts Directors and employees from acting on material information until it has been released to the market, adequate time has been given for this to be refl ected in the securities prices, and implements restrictions on share trading in the Company’s securities by Directors and employees during ‘Blackout periods’ as defi ned by the Share Trading Policy.

Continuous disclosure and shareholder communication

The Company has a continuous disclosure policy which sets out the procedures on the 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 procedures also include the arrangements the Company has in place to promote communication with shareholders and encourage effective participation at general meetings.

The General Counsel and Company Secretary has been nominated as the person responsible for communications with the Australian Securities Exchange (ASX), NASDAQ, and Deutsche Börse. This role includes responsibility for ensuring compliance with the continuous disclosure requirements in the ASX Listing Rules and overseeing and coordinating information disclosure to the ASX, NASDAQ, Deutsche Börse, analysts, brokers, shareholders, the media and the public.

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 website. 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.

Shareholders either receive a copy of the Company’s annual reports either by post or through electronic means. All Company announcements, media briefi ngs, details of Company meetings, press releases are available on the Company’s website. The Company arranges for advance notifi cation of signifi cant group briefi ngs and makes them widely accessible, including through the use of webcasting.

CORPORATE GOVERNANCE REPORT CONTINUED

Recognise and manage risk

The board is responsible for satisfying itself annually, or more frequently as required, that management has developed and implemented a sound system of risk management and internal control. Detailed work, particularly in respect of the Company’s s404 Sarbanes Oxley internal control reporting obligations and its fi nancial reporting and external audit processes, are delegated to the Audit & Risk Committee and reviewed by the full board. The Audit & Risk Committee is responsible for ensuring there are adequate policies in relation to risk management, compliance and internal control systems. They monitor the Company’s risk management by overseeing management’s actions in the evaluation, management, monitoring and reporting of material operational, fi nancial, compliance and strategic risks. In providing this oversight, the committee:

willing to accept, the management of risk and the processes for auditing and evaluating the Company’s risk management system
reviews group-wide objectives in the context of the abovementioned categories of corporate risk
assessment and management of the Company’s exposure to risk
these authorities on an annual basis, and
reviews compliance with agreed policies.

The committee recommends any actions it deems appropriate to the board for its consideration. Management is responsible for designing, implementing and reporting on the adequacy of the Company’s risk management and internal control system and has to report to the Audit & Risk Committee on the effectiveness of:

the risk management and internal control system during the year, and
the Company’s management of its material business risks.

At present the Company does not have an Internal Audit Function as recommended by the ASX Corporate Governance Council’s Principles and Recommendations. The Board is of the view that the Company is not of a size or complexity that would require a formal internal audit function. At present the company undertakes periodic internal and external reviews of its system of risk management and internal control and seeks the advice and recommendations of its external auditor in relation to its system of fi nancial control and compliance.

CORPORATE GOVERNANCE REPORT CONTINUED

Corporate reporting

mendation 4.2 of ASX Corporate Governance Council’s Principles and Recommendations, that,

(i) in their opinion:
view of the fi nancial position and performance of the Company
(ii) the above opinion has been formed based on a sound system of risk management and internal which is operating effectively.

==> picture [15 x 10] intentionally omitted <==

AUDITOR’S INDEPENDENCE DECLARATION

==> picture [429 x 608] intentionally omitted <==

==> picture [380 x 13] intentionally omitted <==

==> picture [16 x 10] intentionally omitted <==

FINANCIAL REPORT

  - Financial Statements

52 Consolidated Statement of Comprehensive Income
53 Consolidated Balance Sheet
54 Consolidated Statement of Changes in Equity
55 Consolidated Statement of Cash Flows
56 Notes to the Consolidated Financial Statements
104 Directors’ Declaration
105 Independent Auditor’s Report to the members of Prima BioMed Ltd

==> picture [596 x 222] intentionally omitted <==

==> picture [6 x 10] intentionally omitted <==

General information

Prima BioMed Ltd and its subsidiaries. The fi nancial statements are presented in the Australian currency.

Prima BioMed Ltd is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered offi ce and principal place of business is:

Level 7 151 Macquarie Street Sydney NSW 2000

A description of the nature of the consolidated entity’s operations and its principal activities is included in the review of operations and activities on pages 6 to 10 and in the directors’ report on pages 11 to 39, both of which are not part of these fi nancial statements.

The directors have the power to amend and reissue the fi nancial report.

Through the use of the internet, we have ensured that our corporate reporting is timely and complete.

www.primabiomed.com.au

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

==> picture [6 x 10] intentionally omitted <==

FOR THE YEAR ENDED 30 JUNE 2014

==> picture [469 x 584] intentionally omitted <==

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

Note Consolidated Group
30 June 2014 30 June 2013
$ $
OTHER INCOME
License income 15,929 –
Grant income 2,004,198 1,648,725
Gain on foreign exchange 406,628 1,417,613
Interest income 713,311 939,056
Total other income 3,140,066 4,005,394
Expenses
Research & development and intellectual property 5 (11,930,857) (14,005,259)
Corporate administrative expenses 5 (4,092,623) (4,851,195)
Depreciation and amortisation expense 5 (446,360) (254,024)
–
Changes in fair value of derivative fi nancial instruments (33,714)
Loss before income tax expense (13,329,774) (15,138,798)
Income tax expense 6 (13,607) (86,873)
Loss after income tax expense for the year (13,343,381) (15,225,671)
Other Comprehensive Income
Items that may be reclassifi ed to profi t or loss
Exchange differences on the translation of foreign operations (57,421) (35,332)
Other comprehensive loss for the year, net of tax (57,421) (35,332)
Total comprehensive loss for the year (13,400,802) (15,261,003)
Loss for the year is attributable to
Owners of Prima BioMed Ltd (13,343,381) (15,225,671)
(13,343,381) (15,225,671)
Total comprehensive loss for the year is attributable to
Owners of Prima BioMed Ltd (13,400,802) (15,261,003)
(13,400,802) (15,261,003)
Cents Cents
Basic earnings per share 28 (1.09) (1.42)
Diluted earnings per share 28 (1.09) (1.42)
----- End of picture text -----

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes

CONSOLIDATED BALANCE SHEET

==> picture [5 x 9] intentionally omitted <==

AS AT 30 JUNE 2014

==> picture [470 x 606] intentionally omitted <==

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

Note Consolidated Group
30 June 2014 30 June 2013
$ $
ASSETS
Current assets
Cash and cash equivalents 7 14,200,042 22,023,143
Current receivables 9 196,407 200,477
Held-to-maturity investments 8 9,000,000 8,000,000
Other current assets 10 1,287,359 1,584,679
Total current assets 24,683,808 31,808,299
Non-current assets
Plant and equipment 11 577,264 834,678
Intangibles 12 116,883 171,321
Total non-current assets 694,147 1,005,999
TOTAL ASSETS 25,377,955 32,814,298
Current liabilities
Trade and other payables 13 2,652,277 3,468,553
Derivative fi nancial instruments 15 – 33,714
Current tax payable 16,990 27,065
Employee benefi ts 14 101,569 30,800
Total current liabilities 2,770,836 3,560,132
Non-current liabilities
Employee benefi ts 16 14,799 5,748
Total non-current liabilities 14,799 5,748
TOTAL LIABILITIES 2,785,635 3,565,880
NET ASSETS 22,592,320 29,248,418
EQUITY
Contributed equity 17 149,014,372 142,326,977
Reserves 18 1,882,674 1,882,786
Accumulated losses (128,304,726) (114,961,345)
Equity attributable to the owners of Prima BioMed Ltd 22,592,320 29,248,418
TOTAL EQUITY 22,592,320 29,248,418
----- End of picture text -----

The above consolidated balance sheet should be read in conjunction with the accompanying notes

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

==> picture [6 x 10] intentionally omitted <==

FOR THE YEAR ENDED 30 JUNE 2014

==> picture [469 x 327] intentionally omitted <==

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

Consolidated Issued Capital Reserves Retained earnings Total equity
$ $ $ $
Balance at 1 July 2012 136,712,525 181,020 (99,735,674) 37,157,871
– –
Other comprehensive loss (35,332) (35,332)
for the year, net of tax
– –
Loss after income tax expense for the year (15,225,671) (15,225,671)
Total comprehensive loss for the year – (35,332) (15,225,671) (15,261,003)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs 5,614,452 – – 5,614,452
Issue of options – 1,547,574 – 1,547,574
Employee options scheme – 189,524 – 189,524
Balance at 30 June 2013 142,326,977 1,882,786 (114,961,345) 29,248,418
– –
Other comprehensive loss for the year, net of tax (57,421) (57,421)
– –
Loss after income tax expense for the year (13,343,381) (13,343,381)
Total comprehensive loss for the year – (57,421) (13,343,381) (13,400,802)
Transactions with owners in their capacity as owners:
Contributions of equity, net of transaction costs 6,687,395 – – 6,687,395
Employee options scheme – 57,309 – 57,309
Balance at 30 June 2014 149,014,372 1,882,674 (128,304,726) 22,592,320
----- End of picture text -----

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes

CONSOLIDATED STATEMENT OF CASH FLOWS

==> picture [5 x 9] intentionally omitted <==

FOR THE YEAR ENDED 30 JUNE 2014

==> picture [470 x 436] intentionally omitted <==

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

Note Consolidated Group
30 June 2014 30 June 2013
$ $
Cash fl ows related to operating activities
Payments to suppliers and employees (inclusive of goods and services tax) (16,928,382) (18,921,138)
License income 15,929 –
Interest received 704,778 1,295,095
Tax paid (23,684) (59,808)
Grant income 2,004,198 1,648,725
Net cash (outfl ow) from operating activities (14,227,161) (16,037,126)
Cash fl ows related to investing activities
Payments for held-to-maturity investments (9,000,000) (8,000,000)
Funds from held-to-maturity investments 8,000,000 21,045,423
Payments for plant and equipment (103,675) (507,924)
Net cash (outfl ow)/infl ow from investing activities (1,103,675) 12,537,499
Cash fl ows related to fi nancing activities
Proceeds from issue of shares and options 6,845,001 7,714,250
Share issue transaction costs (157,606) (552,224)
Net cash infl ows from fi nancing activities 6,687,395 7,162,026
Net (decrease)/increase in cash and cash equivalents (8,643,441) 3,662,399
Effect of exchange rate on cash and cash equivalents 820,340 1,369,028
Cash and cash equivalents at the beginning of the year 22,023,143 16,991,716
Cash and cash equivalents at the end of the year 7 14,200,042 22,023,143
----- End of picture text -----

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

==> picture [6 x 10] intentionally omitted <==

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

These policies have been consistently applied to all years presented, unless otherwise stated. The fi nancial statements are for the consolidated entity consisting of the Company and its subsidiaries.

==> picture [5 x 8] intentionally omitted <==

(a) Basis of preparation

Standards and Interpretations issued by the Australian Accounting Standards Board (‘AASB’) and the Corporations Act 2001 . Prima BioMed Ltd is a for-profi t entity for the purpose of preparing the fi nancial statement.

(i) Compliance with IFRS

Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).

(ii) New and amended standards adopted by the group

cial year beginning 1 July 2013 affected any of the amounts recognised in the current period or any prior period and are not likely to affect future periods.

(iii) Early adoption of standards

The group has not elected to apply any pronouncements before their operative date in the annual reporting period beginning 1 July 2013.

(iv) Historical cost convention

applicable, fi nancial assets and liabilities (including derivative fi nancial instruments) at fair value through profi t or loss.

(v) Critical accounting estimates

requires management to exercise its judgement in the process of applying the consolidated entity’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are signifi cant to the fi nancial statements are disclosed in note 3.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [5 x 8] intentionally omitted <==

(b) Principles of consolidation

Subsidiaries are all entities over which the group has control. The group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the group.

==> picture [5 x 8] intentionally omitted <==

(c) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker (CODM), who is responsible for allocating resources and assessing performance of the operating segments, has been identifi ed as the Board of Directors.

==> picture [5 x 8] intentionally omitted <==

(d) Foreign currency translation

(i) Functional and presentation currency

the primary economic environment in which the entity operates (‘the functional currency’). The consolidated fi nancial statements are presented in Australian dollars, which is the Prima BioMed Ltd’s functional and presentation currency.

(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profi t or loss, except when they are deferred in equity as qualifying cash fl ow hedges and qualifying net investment hedges or are attributable to part of the net investment in a foreign operation.

Foreign exchange gains and losses that relate to borrowings are presented in the income statement, within fi nance costs. All other foreign exchange gains and losses are presented in the income statement on a net basis within other income or other expenses.

Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equities held at fair value through profi t or loss are recognised in profi t or loss as part of the fair value gain or loss and translation differences on non-monetary assets such as equities classifi ed as available-for-sale fi nancial assets are recognised in other comprehensive income.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(d) Foreign currency translation (continued)

(iii) Group companies

economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows:

assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet
income and expenses for each income statement and statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions), and
all resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other fi nancial instruments designated as hedges of such investments, are recognised in other comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated exchange differences are reclassifi ed to profi t or loss, as part of the gain or loss on sale.

==> picture [5 x 8] intentionally omitted <==

(e) Revenue recognition

Revenue is measured at the fair value of the consideration received or receivable.

The group recognises revenue when the amount of revenue can be reliably measured, it is probable that future economic benefi ts will fl ow to the entity and specifi c criteria have been met for each of the group’s activities as described below. The group bases its estimates on historical results, taking into consideration the type of customer, the type of transaction and the specifi cs of each arrangement.

(i) Interest Income

Interest income is recognised as interest accrues using the effective interest method. This is a method of calculating the amortised cost of a fi nancial asset and allocating the interest income over the relevant period using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through the expected life of the fi nancial asset to the net carrying amount of the fi nancial asset.

(ii) Grant Income

Grants from the governments, including Australian Research and Development Rebates and Saxony Development Bank (“Sächsische Aufbaubank”) from Germany, are recognised at their fair value when there is a reasonable assurance that the grant will be received and the Company will comply with all attached conditions. Government grants relating to operating costs are recognised in the Statements of Comprehensive Income as other income.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [5 x 8] intentionally omitted <==

(f) Income tax

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and to unused tax losses.

The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the reporting period in the countries where the Company’s subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated fi nancial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of goodwill.

Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profi t or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in foreign operations where the Company is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.

Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Prima BioMed Ltd and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation. As a consequence, these entities are taxed as a single entity and the deferred tax assets and liabilities of these entities are set off in the consolidated fi nancial statements.

other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [5 x 8] intentionally omitted <==

(g) Impairment of assets

changes in circumstances indicate that they might be impaired. Other assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount.

The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifi able cash infl ows which are largely independent of the cash infl ows from other assets or groups of assets (cash-generating units). Non-fi nancial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at the end of each reporting period.

==> picture [5 x 8] intentionally omitted <==

(h) Cash and cash equivalents

hand, deposits held at call with fi nancial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignifi cant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities in the balance sheet.

==> picture [5 x 8] intentionally omitted <==

(i) Current receivables

Current receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Amount receivable in relation to Goods and Services Tax (GST) and Value Added Tax (VAT) are due from the local taxation authorities and recorded based on the amount of GST and VAT paid on purchases. They are presented as current assets unless collection is not expected for more than 12 months after the reporting date.

Collectability of current receivables is reviewed on an ongoing basis. Receivables which are known to be uncollectible are written off by reducing the carrying amount. An allowance account is used when there is objective evidence that the group will not be able to collect all amounts due.

==> picture [5 x 8] intentionally omitted <==

(j) Inventories

Stock on hand is stated at the lower of cost and net realisable value. Cost comprises purchase and delivery costs, net of rebates and discounts received or receivable.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [5 x 8] intentionally omitted <==

investment and held-to-maturity investments. The classifi cation depends on the purpose for which the investments were acquired.

classifi ed as held-to-maturity, re-evaluates this designation at the end of each reporting date.

(i) Loans and receivables

quoted in an active market. They are included in current assets, except for those with maturities greater than 12 months after the reporting period which are classifi ed as non-current assets. Loans and receivables are included in trade and other receivables (note 9) in the balance sheet.

(ii) Held-to-maturity investments

maturities that the group’s management has the positive intention and ability to hold to maturity. If the group were to sell other than an insignifi cant amount of held-to-maturity fi nancial assets, the whole category would be tainted and reclassifi ed as available-for-sale. Held-to-maturity fi nancial assets are included in non-current assets, except for those with maturities less than 12 months from the end of the reporting period, which are classifi ed as current assets.

Measurement

not at fair value through profi t or loss, transaction costs that are directly attributable to the acquisition of the fi nancial asset. Transaction costs of fi nancial assets carried at fair value are expensed in profi t or loss.

Loans and receivables and held-to-maturity investments are subsequently carried at amortised cost using the effective interest method. Available-for-sale fi nancial assets and fi nancial assets at fair value through profi t or loss are subsequently carried at fair value. Gains or losses arising from changes in the fair value of the ‘fi nancial assets at fair value through profi t or loss’ category are presented in profi t or loss within other income or other expenses in the period in which they arise.

revenue from continuing operations when the group’s right to receive payments is established.

Impairment

asset or group of fi nancial assets is impaired. A fi nancial asset or a group of fi nancial assets is impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(continued)

events that occurred after the initial recognition of the asset (a ‘loss event’) and that loss event (or events) has an impact on the estimated future cash fl ows of the fi nancial asset or group of fi nancial assets that can be reliably estimated. In the case of equity investments classifi ed as available-for-sale, a signifi cant or prolonged decline in the fair value of the security below its cost is considered an indicator that the assets are impaired.

Assets carried at amortised cost

For loans and receivables, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash fl ows (excluding future credit losses that have not been incurred) discounted at the fi nancial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in profi t or loss.

If a loan or held-to-maturity investment has a variable interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the group may measure impairment on the basis of an instrument’s fair value using an observable market price.

If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in profi t or loss. Impairment testing of current receivables is described in note 1(g).

==> picture [5 x 8] intentionally omitted <==

(l) Derivatives that do not qualify for hedge accounting

Certain derivative instruments do not qualify for hedge accounting. Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised immediately in profi t or loss and are included in other income or other expenses.

==> picture [5 x 9] intentionally omitted <==

(m) Plant and equipment

Plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the acquisition of the items.

Depreciation on other assets is calculated using the straight-line method to allocate their cost, net of their residual values, over their estimated useful lives as follows:

Computer – 3 years Plant and equipment – 3-5 years Furniture – 3-5 years

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate at the end of each reporting period.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(m) Plant and equipment (continued)

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 (note 1(g)).

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included in corporate administrative expenses through the profi t or loss.

==> picture [5 x 8] intentionally omitted <==

(n) Intangible assets

(i) Intellectual property

Costs incurred in acquiring intellectual property are capitalized and amortised on a straight line basis over a period of up to 20 years.

Costs include only those costs directly attributable to the acquisition of the intellectual property. 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 (note 1(g)).

(ii) Research and development

Research expenditure on internal projects is recognised as an expense as incurred. Costs incurred on development projects (relating to the design and testing of new or improved products) are recognised as intangible assets when it is probable that the project will, after considering its commercial and technical feasibility, be completed and generate future economic benefi ts and its costs can be measured reliably. The expenditure capitalised comprises all directly attributable costs, including costs of materials, services, direct labour and an appropriate proportion of overheads. Other expenditures that do not meet these criteria are recognised as an expense as incurred.

As the Company has not met the requirement under the standard to capitalise costs in relation to development, these amounts have been expensed.

Development costs previously recognised as an expense are not recognised as an asset in a subsequent period. Capitalised development costs are recorded as intangible assets and amortised from the point at which the asset is ready for use on a straight line basis over its useful life.

==> picture [5 x 8] intentionally omitted <==

(o) Trade and other payables

year which are unpaid.

The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are presented as current liabilities unless payment is not due within 12 months from the reporting date.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [5 x 8] intentionally omitted <==

(p) Finance costs

Finance costs are expensed in the period in which they are incurred.

==> picture [5 x 8] intentionally omitted <==

(i) Short-term obligations

expected to be settled wholly within 12 months after the end of the period in which the employees render the related service are recognised in respect of employees’ services up to the end of the reporting period and are measured at the amounts expected to be paid when the liabilities are settled. The liability for accumulating annual leave is recognised in the provision for employee benefi ts. All other short-term employee benefi t obligations are presented as payables.

The liability for long service leave and annual leave are not expected to be settled wholly within 12 months after the end of the period in which the employees render the related service. They are therefore recognised in the provision for employee benefi ts and measured as the present value of expected future payments to be made in respect of services provided by employees up to the end of the reporting period using the projected unit credit method. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service. Expected future payments are discounted using market yields at the end of the reporting period of government bonds with terms and currencies that match, as closely as possible, the estimated future cash outfl ows. Remeasurements as a result of experience adjustments and changes in actuarial assumptions are recognised in profi t or loss. The obligations are presented as current liabilities in the balance sheet if the entity does not have an unconditional right to defer settlement for at least twelve months after the reporting period, regardless of when the actual settlement is expected to occur.

for all Australian resident employees to complying third party superannuation funds. The group has no statutory obligation and does not make contributions on behalf of its resident employees in the USA and Germany. The group’s legal or constructive obligation is limited to these contributions. Contributions to complying third party superannuation funds are recognised as an expense as they become payable.

(iv) Share-based payments

Global Employee Shares Option Plan (GESOP). Information relating to these schemes is set out in note 29.

with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted, which includes any market performance conditions and the impact of any non-vesting conditions but excludes the impact of any service and non-market performance vesting conditions.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(iv) Share-based payments (continued)

Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specifi ed vesting conditions are to be satisfi ed. At the end of each period, the entity revises its estimates of the number of options that are expected to vest based on the non-marketing vesting conditions. It recognises the impact of the revision to original estimates, if any, in profi t or loss, with a corresponding adjustment to equity.

expiry date. The group recognises termination benefi ts when it is demonstrably committed to terminating the employment of current employees.

(vi) Bonus plan

The group recognises a liability and an expense for bonuses. The group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

==> picture [5 x 8] intentionally omitted <==

(r) Contributed equity

Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds.

==> picture [5 x 9] intentionally omitted <==

(s) Earnings per share

(i) Basic earnings per share

Basic earnings per share is calculated by dividing:

ordinary shares
bonus elements in ordinary shares issued during the year and excluding treasury shares.

(ii) Diluted earnings per share

into account:

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.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [5 x 8] intentionally omitted <==

(t) Goods and Services Tax and other similar taxes (‘GST’)

Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense.

Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the taxation authority is included with other receivables or payables in the balance sheet.

ing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash fl ows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.

==> picture [5 x 8] intentionally omitted <==

(u) New Accounting Standards and Interpretations adopted and not yet early adopted

New and amended standards adopted by the group

commencing 1 July 2013:

AASB 10 Consolidated Financial Statements , AASB 11 Joint Arrangements , AASB 12 Disclosure of Interests in Other Entities , AASB 128 Investments in Associates and Joint Ventures , AASB 127
Separate Financial Statements and AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards
AASB 2012-10 Amendments to Australian Accounting Standards – Transition Guidance and other
Amendments which provides an exemption from the requirement to disclose the impact of the change in accounting policy on the current period
AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13
AASB 119 AASB 2011-10 Amendments to Australian Accounting Standards arising from AASB 119 (September 2011)
AASB 2012-5 Amendments to Australian Accounting Standards arising from Annual Improvements 2009-2011 Cycle, and
AASB 2012-2 Amendments to Australian Accounting Standards – Disclosures – Offsetting Financial Assets and Financial Liabilities

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(u) New Accounting Standards and Interpretations adopted and not yet early adopted (continued) The adoption of the above standards did not result in signifi cant changes in accounting policies or adjustments to the amounts recognised in the fi nancial statements. These standards only affected the disclosures in the notes to the fi nancial statements.

New standards and interpretations not yet adopted

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2014 reporting periods and have not been early adopted by the group. The group’s assessment of the impact of these new standards and interpretations is set out below.

==> picture [481 x 61] intentionally omitted <==

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

Title of standard Nature of change Impact Mandatory application date/
Date of adoption by group
----- End of picture text -----

AASB 9	AASB 9 addresses the	When adopted, the standard	Must be applied for f nancial
Financial Instruments	classif cation, measurement	will not have any signif cant	years commencing on or after
	and derecognition of f nancial	impact as on the f nancial	1 January 2018.
	assets and f nancial liabilities.	statements unless the Com-
	Since December 2013, it also	pany acquires f nancial assets
	sets out new rules for hedge	and liabilities.
	accounting.	There will be no impact on
		the group’s accounting for
		f nancial assets, as the new
		requirements only affect the
		accounting for available-for-
		sale f nancial assets and the
		group does not have any
		such assets.
		There will be no impact on
		the group’s accounting for
		f nancial liabilities, as the
		new requirements only affect
		the accounting for f nancial
		liabilities that are designated
		at fair value through prof t or
		loss and the group does not
		have any such liabilities.
		There will be no impact on
		hedge account or disclosures
		as the forward contracts
		do not qualify as hedge
		accounting.

There are no other standards that are not yet effective and that are expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [5 x 8] intentionally omitted <==

the same basis as the consolidated fi nancial statements, except as set out below.

(i) Investments in subsidiaries, associates and joint venture entities

(ii) Tax consolidation legislation

Prima BioMed Ltd and its wholly-owned Australian controlled entities have implemented the tax consolidation legislation. The head entity, Prima BioMed Ltd, and the controlled entities in the tax consolidated group account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand alone taxpayer in its own right.

The entities have also entered into a tax funding agreement under which the wholly-owned entities fully compensate for any current tax payable assumed and are compensated by the head entity for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to the head entity under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the wholly-owned entities’ fi nancial statements.

The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each fi nancial year. The head entity may also require payment of interim funding amounts to assist with its obligations to pay tax instalments. Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as current amounts receivable from or payable to other entities in the group. Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreement are recognised as a contribution to (or distribution from) wholly-owned tax consolidated entities.

(iii) Share-based payments

The grant by the Company of options over its equity instruments to the employees of subsidiary undertakings in the group is treated as a capital contribution to that subsidiary undertaking. The fair value of employee services received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to investment in subsidiary undertakings, with a corresponding credit to equity.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [6 x 10] intentionally omitted <==

NOTE 2. FINANCIAL RISK MANAGEMENT

liquidity risk. The group’s overall risk management program focuses on the unpredictability of fi nancial markets and seeks to minimise potential adverse effects on the fi nancial performance of the group. The group uses derivative fi nancial instruments such as foreign exchange contracts to hedge certain risk exposures. Derivatives are exclusively used for hedging purposes, i.e. not as trading or other speculative instruments. The group hedges its foreign exchange risk exposure arising from future commercial transactions and recognised assets and liabilities using forward contracts. The group uses different methods to measure different types of risk to which it is exposed. These methods include sensitivity analysis and cash fl ow forecasting in the case of foreign exchange and aging analysis for credit risk.

Risk management is carried out by senior management under policies approved by the board of directors. Management identifi es, evaluates and hedges fi nancial risks in close co-operation with the group’s operating units. The board provides the principles for overall risk management, as well as policies covering specifi c areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative fi nancial instruments and non-derivative fi nancial instruments, and investment of excess liquidity.

==> picture [5 x 9] intentionally omitted <==

(a) Market risk

Foreign exchange risk

The group operates internationally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the US dollar and Euro.

Foreign exchange risk arises from future commercial transactions and recognised assets and liabilities denominated in a currency that is not the entity’s functional currency. The risk is measured using sensitivity analysis and cash fl ow forecasting.

Management has set up a policy to manage the Company’s exchange risk within the group companies. The group hedges its foreign exchange risk exposure arising from future commercial transactions and recognised assets and liabilities using forward contracts.

the next twelve months and carried as derivatives held for trading and measured through income statement. This policy is reviewed regularly by directors from time to time.

The group’s exposure to foreign currency risk at the end of the reporting period, expressed in Australian dollar, was as follows:

==> picture [470 x 103] intentionally omitted <==

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

30 June 2014 30 June 2013
USD EUR Other USD EUR Other
Cash in bank 75,802 5,273,585 – 3,015,975 10,239,231 –
– –
Trade and other payables (365,450) (17,489) (772,903) (824,912)
Forward exchange contracts
– – – –
- buy foreign currency (29,828) (3,885)
----- End of picture text -----

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(a) Market risk (continued)

Sensitivity

by 10% against the US dollar with all other variables held constant, the group’s post-tax loss for the year would have been $28,965 higher/$28,965 lower (2013 – $618,702 higher/$471,691 lower), mainly as a result of foreign exchange gains/losses on translation of US dollar denominated fi nancial instruments and from foreign forward exchange contracts which are detailed in the above table. Profi t is more sensitive to movements in the Australian dollar/US dollar exchange rates in 2014 than was the position in 2013 due to the increased amount of forward foreign exchange contracts. Any impact on the equity will result from changes in retained earnings.

10% against the Euro with all other variables held constant, the group’s post-tax loss for the year would have been $525,610 higher/$525,610 lower (2013 – $1,330,630 higher/$1,111,729 lower), mainly as a result of foreign exchange gains/losses on translation of Euro denominated fi nancial instruments and from foreign forward exchange contracts.

The group’s exposure to other foreign exchange movements is not material.

==> picture [5 x 8] intentionally omitted <==

(b) Credit risk

instruments and deposits with banks. For banks, only independently rated parties with a minimum rating of ‘A’ are accepted.

external credit ratings:

==> picture [469 x 172] intentionally omitted <==

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

30 June 2014 30 June 2013
$ $
Cash at bank and short-term bank deposits
AA- 14,200,042 22,023,143
Held-to-maturity investment
AA- 9,000,000 8,000,000
Derivative fi nancial instruments
AA- – 33,714
----- End of picture text -----

Held to maturity investments represent term deposits with a maturity period greater than 3 months and less than 12 months.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [5 x 8] intentionally omitted <==

(c) Liquidity risk

end of the reporting period the group held deposits at call of $14,200,042 (2013 – $22,023,143) that are expected to readily generate cash infl ows for managing liquidity risk.

Management monitors rolling forecasts of the group’s liquidity reserve cash and cash equivalents (note 7) on the basis of expected cash fl ows. In addition, the group’s liquidity management policy involves projecting cash fl ows in major currencies and considering the level of liquid assets necessary to meet these.

As outlined in Note 3, the Company’s monitoring of its cash requirements extends to the consideration of potential capital raising strategies and an active involvement with its institutional and retail investor base.

tractual maturities for:

for an understanding of the timing of the cash fl ows.

months equal their carrying balances as the impact of discounting is not signifi cant.

==> picture [469 x 331] intentionally omitted <==

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

Contractual maturities of fi nancial liabilities Less than 6 months 6-12 months Total contractual Carrying Amount (assets) /
cash fl ows liabilities
At 30 June 2014 $ $ $ $
Non-Derivatives
Trade and other payables 2,652,277 – 2,652,277 2,652,277
2,652,277 2,652,277 2,652,277
Contractual maturities of fi nancial liabilities Less than 6 months 6-12 months Total contractual Carrying Amount (assets) /
cash fl ows liabilities
At 30 June 2013 $ $ $ $
Non-Derivatives
Trade and other payables 3,468,553 – 3, 468,553 3, 468,553
Derivatives
Gross settled (forward foreign exchange contracts)
(Infl ow) (4,715,613) (13,818,639) (18,534,252) (18,534,252)
Outfl ow 4,706,344 13,861,622 18,567,966 18,567,966
(9,269) 42,983 33,714 33,714
----- End of picture text -----

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [5 x 8] intentionally omitted <==

(d) Fair value measurements

or for disclosure purposes.

AASB 7 Financial Instruments: Disclosures requires disclosure of fair value measurements by level of the following fair value measurement hierarchy:

(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
(b) inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (as prices) or indirectly (derived from prices) (level 2), and
(c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (level 3).

At 30 June 2013	Level 1	Level 2	Level 3	Total
	$	$	$	$
Liabilities
Derivative f nancial instrument	– 33,714 – 33,714
Total liabilities	– 33,714 – 33,714

ing and available-for-sale securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for fi nancial assets held by the group is the current bid price. These instruments are included in level 1.

derivatives) is determined using valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on entity specifi c estimates. If all signifi cant inputs required to fair value an instrument are observable, the instrument is included in level 2.

level 3. This is the case for unlisted equity securities.

The use of quoted market prices or dealer quotes for similar instruments.

The fair value of interest rate swaps is calculated as the present value of the estimated future cash fl ows based on observable yield curves.
The fair value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date.

remaining fi nancial instruments.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(d) Fair value measurements (continued)

There were no changes in level 1 and level 3 instruments held for year ended 30 June 2014 and 30 June 2013. During the year, the company settled the forward contracts disclosed as level 2 above and recognised this as a loss in the consolidated statement of comprehensive income.

==> picture [6 x 9] intentionally omitted <==

NOTE 3. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a fi nancial impact on the entity and that are believed to be reasonable under the circumstances.

The group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by defi nition, seldom equal the related actual results. The estimates and assumptions that have a signifi cant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next fi nancial year are discussed below.

Income taxes

The group has not recognised deferred tax assets relating to carried forward tax losses and taxable temporary differences since the group is currently in a loss making position and unable to generate taxable income to utilise the carried forward tax losses and taxable temporary differences. The utilisation of the tax losses also depends on the ability of the entity to satisfy certain tests at the time the losses are recouped. The group is subject to income taxes in Australia and jurisdictions where it has foreign operations. Signifi cant judgement is required in determining the worldwide provision for income taxes. There are certain transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. The group estimates its tax liabilities based on the group’s understanding of the tax law. Where the fi nal tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.

Share-based payment transactions

The consolidated entity measures the cost of equity-settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using the Black-Scholes model taking into account the terms and conditions upon which the instruments are granted. The accounting estimates and assumptions relating to equity-settled share-based payments would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact profi t or loss and equity. Refer to note 29 - share-based payment.

Research and development

The consolidated entity has expensed all internal research and development expenditure incurred during the year as the costs relate to the initial expenditure for research and development of biopharmaceutical products and the generation of future economic benefi ts is not considered probable given the current stage of development. It was considered appropriate to expense the research and development costs as they did not meet the criteria to be capitalised under AASB 138 Intangible Assets.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

NOTE 3. CRITICAL ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS (continued)

Going concern

activities since its inception. As at 30 June 2014, the Group holds cash and cash equivalents of $14,200,042 (2013: $22,023,143) and held-to-maturity investments of $9,000,000 (2013: $8,000,000) with maturities ranging from 4 to 6 months. In line with the Company’s fi nancial risk management, the directors have carefully assessed the fi nancial and operating implications of the above matters, including the expected cash outfl ows of ongoing research and development activities of the Company. Based on this consideration, the directors are of the view that the Group will be able to pay its debts as and when they fall due for at least 12 months following the date of these fi nancial statements and that it is appropriate for the fi nancial statements to be prepared on a going concern basis.

Monitoring and addressing the ongoing cash requirements of the Group is a key focus of the directors. This involves consideration of alternate future capital raising initiatives and an active engagement with potential retail and institutional investors alike.

==> picture [6 x 9] intentionally omitted <==

NOTE 4. SEGMENT REPORTING

The consolidated entity is organised into two operating segments, being Cancer Immunotherapy and Other R & D. The internal reports that are reviewed and used by Management and the Board of Directors (who are identifi ed as the Chief Operating Decision Makers (‘CODM’)) use this segment reporting in assessing performance and in determining the allocation of resources. There is no aggregation of operating segments. The CODM reviews earnings/loss before tax.

Types of products and services

The principal products and services of each of these operating segments are as follows:

Cancer Immunotherapy
Other Research & Development

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

NOTE 4. SEGMENT REPORTING (continued)

==> picture [5 x 8] intentionally omitted <==

Operating segment information

==> picture [473 x 605] intentionally omitted <==

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

30 June 2014 Cancer Immunotherapy Other R & D Unallocated Consolidated
$ $ $ $
Other Income
Revenue – – 15,929 15,929
Grant income 2,004,198 – – 2,004,198
Gain on foreign exchange – – 406,628 406,628
Interest income – – 713,311 713,311
Total other income 2,004,198 – 1,135,868 3,140,066
Segment Result
–
Depreciation and amortisation (433,074) (13,286) (446,360)
–
Other expenses (11,386,363) (1,497,051) (12,883,414)
Loss before income tax expense (11,819,437) – (1,510,337) (13,329,774)
Income tax expense (13,607)
Loss after income tax expense (13,343,381)
Total segment assets 25,377,955 – – 25,377,955
Total segment liabilities 2,785,635 – – 2,785,635
net of other income
30 June 2013 Cancer Immunotherapy Other R & D Unallocated Consolidated
$ $ $ $
Other Income
Grant income 1,648,725 – – 1,648,725
Gain on foreign exchange – – 1,417,613 1,417,613
Interest income – – 939,056 939,056
Total other income 1,648,725 – 2,356,669 4,005,394
Segment Result
–
Depreciation and amortisation (241,814) (12,210) (254,024)
Other expenses (13,914,144) (6,317) (964,313) (14,884,774)
Loss before income tax expense (14,155,958) (6,317) (976,523) (15,138,798)
Income tax expense (86,873)
Loss after income tax expense (15,225,671)
Total segment assets 32,814,298 – – 32,814,298
Total segment liabilities 3,565,880 – – 3,565,880
----- End of picture text -----*

* net of other income

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [6 x 10] intentionally omitted <==

NOTE 5. EXPENSES

==> picture [469 x 489] intentionally omitted <==

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

Consolidated
30 June 2014 30 June 2013
$ $
Loss before income tax includes the following specifi c expenses:
Research & development and intellectual property
Research and development 11,825,668 13,852,477
Intellectual property management 105,189 152,782
Total research & development and intellectual property 11,930,857 14,005,259
Corporate administrative expenses
Auditor’s remuneration 222,720 259,340
Directors fee and employee expenses 1,969,494 2,095,547
Administrative expenses 1,900,409 2,496,308
Total corporate administrative expenses 4,092,623 4,851,195
Depreciation
Plant and equipment 370,237 186,940
Computer 18,987 11,039
Furniture and fi ttings 2,698 1,607
Total depreciation 391,922 199,586
Amortisation and impairment
Patents 54,438 54,438
Total depreciation and amortisation 446,360 254,024
----- End of picture text -----*

* $ 433,074 (2013: $ 241,814) relates to R&D

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [6 x 10] intentionally omitted <==

NOTE 6. INCOME TAX EXPENSES

==> picture [470 x 473] intentionally omitted <==

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

Consolidated
30 June 2014 30 June 2013
$ $
Numerical reconciliation of income tax expense to prima facie tax payable
Loss before income tax expense (13,329,774) (15,138,798)
Tax at the Australian tax rate of 30 % (3,998,932) (4,541,639)
Tax effect amounts which are not deductible/(taxable) in calculating taxable income:
Non-deductible expenses 439,652 1,022,310
Non-assessable income (479,616) (432,636)
–
Capital listing fee (586,143)
Other – 83,243
Difference in overseas tax rates 569 3,630
(4,624,471) (3,865,092)
Net adjustment to deferred tax assets and liabilities 4,638,078 3,951,965
for tax losses and temporary differences not recognised
Income tax expense 13,607 86,873
Income tax expense relates to tax payable in the United States
Consolidated
30 June 2014 30 June 2013
$ $
Deferred tax assets not recognised
Deferred tax assets not recognised comprises temporary differences attributable to:
Carried forward tax losses benefi t 27,329,078 22,562,084
Temporary differences (402,644) 147,615
Total deferred tax assets not recognised 26,926,434 22,709,699
----- End of picture text -----

ognised in the consolidated balance sheet as the recovery of this benefi t is not probable. There is no expiration date for the tax losses carried forward. The estimated amount of cumulative tax losses at 30 June 2014 was $91,096,926 (2013 - $75,206,946).

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [6 x 10] intentionally omitted <==

NOTE 7. CURRENT ASSETS – CASH AND CASH EQUIVALENTS

	Consolidated	Consolidated
	30 June 2014	30 June 2013
	$	$
Cash on hand	1,344 1,376
Cash at bank	9,698,698 22,021,767
Cash on deposit	4,500,000 –
	14,200,042 22,023,143

The above cash and cash equivalent are held in AUD, USD, and Euro. The interest rates on these deposits range from 0% to 3.54% in 2014 (2013 – 0% to 3.05%).

==> picture [6 x 9] intentionally omitted <==

NOTE 8. HELD-TO-MATURITY INVESTMENTS

	Consolidated	Consolidated
	30 June 2014	30 June 2013
	$	$

Term deposits	9,000,000 8,000,000
	9,000,000 8,000,000

Held to maturity investments represent term deposits with a maturity period greater than 3 months and less than 12 months. These term deposits are denominated in AUD and have interest rates of 3.75% in 2014 (2013 – 4.39% to 4.50%). The group’s exposure to interest rate risk is discussed in note 2. The maximum exposure to credit risk at the end of the reporting period is the carrying amount of each class of held to maturity investment mentioned above.

==> picture [6 x 9] intentionally omitted <==

NOTE 9. CURRENT RECEIVABLES

	Consolidated	Consolidated
	30 June 2014	30 June 2013
	$	$
GST receivable	196,407 200,477
	196,407 200,477

Due to the short term nature of these receivables, the carrying value is assumed to be their fair value and at 30 June 2014. No receivables were impaired or past due.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [6 x 10] intentionally omitted <==

NOTE 10. OTHER CURRENT ASSETS

	Consolidated	Consolidated
	30 June 2014	30 June 2013
	$	$
Prepayments*	1,090,608 1,410,249
Security deposit	31,252 17,463
Accrued interest	165,499 156,967
	1,287,359 1,584,679

* Prepayments are in relation to the deposits paid to organisations involved in the clinical trials.

==> picture [6 x 9] intentionally omitted <==

NOTE 11. NON-CURRENT ASSETS - PLANT AND EQUIPMENT

==> picture [470 x 344] intentionally omitted <==

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

Plant and Computer Furniture and fi ttings Total
Equipment
$ $ $ $
At 1 July 2012
Cost or fair value 622,564 23,988 12,678 659,230
Accumulated depreciation (157,575) (9,855) (7,872) (175,302)
Net book amount 464,989 14,133 4,806 483,928
Year ended 30 June 2013
Opening net book amount 464,989 14,133 4,806 483,928
Exchange differences 43,523 108 483 44,114
Additions 465,513 36,733 5,678 507,924
– –
Disposal (1,702) (1,702)
Depreciation charge (186,940) (11,039) (1,607) (199,586)
Closing net book amount 787,085 38,233 9,360 834,678
At 30 June 2013
Cost or fair value 1,119,560 59,075 12,425 1,191,060
Accumulated depreciation (332,475) (20,842) (3,065) (356,382)
Net book amount 787,085 38,233 9,360 834,678
----- End of picture text -----

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

NOTE 11. NON-CURRENT ASSETS - PLANT AND EQUIPMENT (continued)

==> picture [469 x 273] intentionally omitted <==

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

Plant and Computer Furniture and fi ttings Total
Equipment
$ $ $ $
Year ended 30 June 2014
Opening net book amount 787,085 38,233 9,360 834,678
Exchange differences 29,565 833 435 30,833
Additions 100,568 3,107 – 103,675
– – – –
Disposal
Depreciation charge (370,237) (18,987) (2,698) (391,922)
Closing net book amount 546,981 23,186 7,097 577,264
At 30 June 2014
Cost or fair value 1,248,948 62,789 12,765 1,324,502
Accumulated depreciation (701,967) (39,603) (5,668) (747,238)
Net book amount 546,981 23,186 7,097 577,264
----- End of picture text -----

==> picture [6 x 9] intentionally omitted <==

NOTE 12. NON-CURRENT ASSETS - INTANGIBLES

==> picture [469 x 277] intentionally omitted <==

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

Patents
$
At 1 July 2012
Cost or fair value 1,915,671
Accumulated amortisation and impairment (1,689,912)
Net book amount 225,759
Year ended 30 June 2013
Opening net book amount 225,759
Amortisation charge (54,438)
Closing net book amount 171,321
At 30 June 2013
Cost or fair value 1,915,671
Accumulated amortization and impairment (1,744,350)
Net book amount 171,321
----- End of picture text -----

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

NOTE 12. NON-CURRENT ASSETS - INTANGIBLES (continued)

==> picture [470 x 206] intentionally omitted <==

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

Patents
$
Year ended 30 June 2014
Opening net book amount 171,321
Amortisation charge (54,438)
Closing net book amount 116,883
At 30 June 2014
Cost or fair value 1,915,671
Accumulated amortisation and impairment (1,798,788)
Net book amount 116,883
----- End of picture text -----

==> picture [6 x 10] intentionally omitted <==

NOTE 13. CURRENT LIABILITIES - TRADE AND OTHER PAYABLES

	Consolidated	Consolidated
	30 June 2014	30 June 2013
	$	$
Trade payables	2,216,723 3,087,398
Other payables	435,554 381,155
	2,652,277 3,468,553

NOTE 14. CURRENT LIABILITIES - EMPLOYEE BENEFITS

	Consolidated	Consolidated
	30 June 2014	30 June 2013
	$	$

Annual leave	101,569 30,800

al entitlements where employees have completed the required period of service. The entire amount of the provision is presented as current, since the group does not have an unconditional right to defer settlement for any of these obligations.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [6 x 10] intentionally omitted <==

NOTE 15. DERIVATIVE FINANCIAL INSTRUMENTS

	Consolidated	Consolidated
	30 June 2014	30 June 2013
	$	$

Derivative f nancial instruments	– 33,714

The group entered into forward exchange contracts which did not satisfy the requirements for hedged accounting. The group didn’t enter any forward exchange contracts as at 30 June 2014. The amount above was the fair value of the forward exchange contracts as at 30 June 2013. These contracts were held with National Australia Bank. These contracts were subject to the risk management policies in note 2.

==> picture [6 x 9] intentionally omitted <==

NOTE 16. NON-CURRENT LIABILITIES - EMPLOYEE BENEFITS

	Consolidated	Consolidated
	30 June 2014	30 June 2013
	$	$

Long service leave	14,799 5,748

==> picture [6 x 9] intentionally omitted <==

NOTE 17. EQUITY - CONTRIBUTED

	Consolidated	Consolidated
	30 June 2014	30 June 2013
	$	$
Fully paid ordinary shares 17(a)	139,352,418 132,665,023
Options over ordinary shares	9,661,954 9,661,954
	149,014,372 142,326,977

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

NOTE 17. EQUITY – CONTRIBUTED (continued)

==> picture [469 x 354] intentionally omitted <==

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

(a) Ordinary Shares Note 30 June 2014 30 June 2013
No. $ No. $
At the beginning of reporting period 1,143,146,838 132,665,023 1,066,063,388 127,050,571
Shares issued during year i) 85,562,500 6,845,000 77,083,450 6,166,676
Exercise of options (Shares issued during the year) ii) 3 1 – –
Transaction costs relating to share issues (157,606) (552,224)
At reporting date 1,228,709,341 139,352,418 1,143,146,838 132,665,023
2014 Details Note Number Issue Price Total
$ $
Share purchase plan i) 85,562,500 0.080 6,845,000
Exercise of PRRO options ii) 3 0.200 1
Transaction costs relating to share issues (157,606)
85,562,503 6,687,395
2013 Details Note Number Issue Price Total
$ $
Share purchase plan i) 77,083,450 0.080 6,166,676
Transaction costs relating to share issues (552,224)
77,083,450 5,614,452
----- End of picture text -----

Ordinary shares

Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the Company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares have no par value.

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Options

Information relating to the Company’s Global Employee Share Option Plan, including details of options issued, exercised and lapsed during the fi nancial year and options outstanding at the end of the reporting period, is set out in note 29.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

NOTE 17. EQUITY – CONTRIBUTED (continued)

Unlisted Options

==> picture [469 x 295] intentionally omitted <==

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

Expiration Date Exercise Price Number Code
9 November 2014 $ 0.269 1,884,253 PRRAS
8 December 2014 $ 0.236 1,884,253 PRRAU
12 January 2015 $ 0.227 1,061,411 PRRAY
12 February 2015 $ 0.235 1,118,211 PRRAW
18 March 2015 $ 0.2277 1,075,269 PRRAZ
6 May 2015 $ 0.2500 500,000 PRRAC
19 May 2015 $ 0.235 1,055,011 PRRAD
6 December 2014 $ 0.100 2,000,000 PRRAL
26 August 2014 $ 0.100 500,000 PRRAL
1 February 2016 $ 0.339 740,741 PRRAL
3 November 2014 $ 0.279 100,000 PRRAL
3 January 2015 $ 0.2329 100,000 PRRAL
1 August 2015 $ 0.1850 2,800,000 PRRAL
20 February 2016 $ 0.1730 200,000 PRRAL
30 June 2018 $ 0.0774 1.923,292 PRRAE
Total 16,942,441
----- End of picture text -----

Share buy-back

There is no current on-market share buy-back.

Capital risk management

The consolidated entity’s objectives when managing capital are to safeguard its ability to continue as a going concern, so that they can continue to provide returns for shareholders and benefi ts for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

In order to maintain or adjust the capital structure, the consolidated entity may adjust the amount of dividends paid to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debt.

The consolidated entity would look to raise capital when an opportunity to invest in a business or company was seen as value adding relative to the current parent entity’s share price at the time of the investment. The consolidated entity is not actively pursuing additional investments in the short term as it continues to integrate and grow its existing businesses in order to maximise synergies.

Share purchase plan and shortfall placements

In April 2013 the Company undertook a share purchase plan (SPP). This SPP was open to existing shareholders and allowed them to purchase up to $15,000 worth of fully paid ordinary shares in the company. These shares

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

were offered at $0.08 each. The Company intended to issue up to $15 million worth of new ordinary shares in the Company with any shortfall shares from the SPP being offered to institutional and sophisticated investors at the same terms as the SPP.

We raised a total of $14,559,250 from the SPP and a series subsequent SPP shortfall placements to sophisticated investors who were offered the remaining capacity from the SPP with shares also issued at $0.08. We raised $1,062,988 from SPP shortfall placements prior to 30 June 2013 and $6,845,000 in SPP shortfall placements in this fi nancial year.

==> picture [6 x 10] intentionally omitted <==

NOTE 18. EQUITY – RESERVES AND RETAINED EARNINGS

==> picture [470 x 401] intentionally omitted <==

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

Consolidated
30 June 2014 30 June 2013
$ $
(a) Reserves
Options issued reserve 1,547,574 1,547,574
Foreign currency translation reserve (211,145) (153,724)
Share-based payments reserve 546,245 488,936
1,882,674 1,882,786
Movements in options issued reserve were as follows:
Opening balance 1,547,574 –
Options issued during the year – 1,547,574
Ending balance 1,547,574 1,547,574
Movements in foreign currency translation reserve were as follows:
Opening balance (153,724) (118,392)
Currency translation differences arising during the year (57,421) (35,332)
Ending balance (211,145) (153,724)
Movements in share-based payments reserve were as follows:
Opening balance 488,936 299,412
Employee options issued during the year 57,309 189,524
Ending balance 546,245 488,936
----- End of picture text -----

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

NOTE 18. EQUITY – RESERVES AND RETAINED EARNINGS (continued)

	Consolidated	Consolidated
	30 June 2014	30 June 2013
	$	$
(b) Retained Earnings
Movements in retained earnings were as follows:
Opening balance	(114,961,345) (99,735,674)
Net loss for the year	(13,343,381) (15,225,671)
Ending balance	(128,304,726) (114,961,345)

==> picture [5 x 8] intentionally omitted <==

(c) Nature and purpose of reserves

(i) Options issued reserve

In May 2013 the Company announced an options entitlement issue of one option for every 4 shares held by existing shareholders. 77,378,699 options were issued at $0.02 per option with an exercise price of $0.20. The options expire on 19 June 2017. Each option is exercisable for one ordinary share in capital of the Company. These options are exercisable at any time before its expiry date.

(ii) Foreign currency translation reserve

Exchange differences arising on translation of the foreign controlled entity are recognised in other comprehensive income as described in note 1(d) and accumulated in a separate reserve within equity. The cumulative amount is reclassifi ed to profi t or loss when the net investment is disposed of.

(iii) Share-based payments reserve

The options based payments reserve is used to recognise the grant date fair value of options issued to employees but not exercised. For a reconciliation of movements in the share-based payment reserves refer to note 29.

==> picture [6 x 9] intentionally omitted <==

NOTE 19. EQUITY - DIVIDENDS

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [6 x 10] intentionally omitted <==

NOTE 20. KEY MANAGEMENT PERSONNEL DISCLOSURES

==> picture [5 x 9] intentionally omitted <==

(a) Directors and key management personnel compensation

	Consolidated	Consolidated
	30 June 2014	30 June 2013
	$	$
Short-term employee benef ts	1,533,114 2,056,269
Post-employment benef ts	40,377 52,348
Share-based payments	41,919 185,594
	1,615,410 2,294,211

==> picture [5 x 8] intentionally omitted <==

(b) Equity instrument disclosures relating to key management personnel

(i) Options provided as remuneration and shares issued on exercise of such options

Details of options provided as remuneration and shares issued on the exercise of such options, together with terms and conditions of the options, can be found in the remuneration report on pages 23-37.

(ii) Shareholding

agement personnel of the group, including their personally related parties, are set out below. There were no shares granted during the reporting period as compensation.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

NOTE 20. KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)

==> picture [469 x 284] intentionally omitted <==

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

2014 Balance at start of the Received during the year on the Other changes Balance at end of the year
year exercise of options during the year
Ordinary shares
Ms Lucy Turnbull, AO 17,759,576 – 2,300,000 20,059,576
Mr Albert Wong 3,537,500 – – 3,537,500
Mr Martin Rogers 20,542,179 – – 20,542,179
Dr Richard Hammel 10,444,987 – – 10,444,987
Dr Russell Howard – – – –
– – – –
Mr Pete Meyers
Mr Matthew Lehman 1,617,763 – – 1,617,763
4,400 28,306 32,706
Dr Sharron Gargosky 25,000 – (25,000)
Mr Marc Voigt 620,000 – 100,000 720,000
150 – 150
Ms Deanne Miller – – –
Total ordinary shares 54,522,005 – 2,400,000 56,922,005
Total ADR 29,550 – 3,306 32,856
----- End of picture text -----*

* American Depository Receipts (ADR) traded on the NASDAQ

** As the date of resignation

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

NOTE 20. KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)

==> picture [469 x 316] intentionally omitted <==

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

30 June 2013 Balance at start of Share Purchase Plan (SPP) and Other changes Balance at end of the year
the year shortfall placement during the year
Ordinary shares
Ms Lucy Turnbull, AO 4,622,076 12,687,500 450,000 17,759,576
Mr Albert Wong 3,350,000 187,500 – 3,537,500
Mr Martin Rogers 30,834,179 187,500 (10,479,500) [1] 20,542,179
Dr Richard Hammel 10,257,487 187,500 – 10,444,987
Dr Russell Howard – – – –
Mr Ian Bangs 100,000 – – 100,000
Mr Matthew Lehman 1,100,000 412,500 105,263 1,617,763
– – 4,400 4,400
Dr Neil Frazer 112,000 112,000
1,000 – – 1,000
Dr Sharron Gargosky – – 25,000 25,000
Mr Marc Voigt – 312,500 307,500 620,000
– 150 150
Ms Deanne Miller –
Total ordinary shares 50,375,742 13,975,000 (9,616,737) 54,734,005
Total ADR 1,000 – 29,550 30,550
----- End of picture text -----

* American Depositary Receipts (ADR) traded on the NASDAQ

1 related shares sold by the director to the market

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

NOTE 20. KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)

(iii) Option holdings

tor and other members of key management personnel of the consolidated entity, including their personally related parties, is set out below:

==> picture [469 x 253] intentionally omitted <==

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

30 June 2014 Balance at start of Granted Exercised Other Changes Balance at end Vested and Unvested
the year of the year exercisable
Options over ordinary
shares
Ms Lucy Turnbull, AO 14,439,894 – – (10,000,000) 4,439,894 4,439,894 –
Mr Albert Wong 7,500,000 – – (7,500,000) – – –
Mr Martin Rogers 12,500,000 – – (10,000,000) 2,500,000 2,500,000 –
Dr Richard Hammel 5,000,000 – – (5,000,000) – – –
Dr Russell Howard – – – – – – –
– – – – – – –
Mr Pete Meyers
Mr Matthew Lehman 2,104,441 – – – 2,104,441 2,104,441 –
Dr Sharron Gargosky 900,000 637,275 – – 1,537,275 1,324,850 212,425
Mr Marc Voigt 528,125 643,629 – – 1,171,754 957,211 214,543
Ms Deanne Miller – 363,636 – – 363,636 242,424 121,212
42,972,460 1,644,540 – (32,500,000) 12,117,000 11,568,820 548,180
----- End of picture text -----

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

NOTE 20. KEY MANAGEMENT PERSONNEL DISCLOSURES (continued)

==> picture [476 x 258] intentionally omitted <==

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

30 June 2013 Balance at start of Granted Entitlement Other Balance at end Vested and Unvested
the year options Changes of the year exercisable
Options over ordinary shares
Ms Lucy Turnbull, AO 10,000,000 – 4,439,894 – 14,439,894 14,439,894 –
Mr Albert Wong 7,500,000 – – – 7,500,000 7,500,000 –
Mr Martin Rogers 10,000,000 – 2,500,000 – 12,500,000 12,500,000 –
Dr Richard Hammel 5,000,000 – – – 5,000,000 5,000,000 –
Dr Russel Howard – – – – – – –
Mr Matthew Lehman 500,000 1,200,000 404,441 – 2,104,441 904,441 1,200,000
Dr Neil Frazer 2,000,000 – – – 2,000,000 2,000,000 –
Mr Ian Bangs – 450,000 100,000 – 550,000 550,000 –
Dr Sharron Gargosky 200,000 700,000 – – 900,000 200,000 700,000
Mr Marc Voigt – 450,000 78,125 – 528,125 78,125 450,000
Ms Deanne Miller – – – – – – –
35,200,000 2,800,000 7,522,460 – 45,522,460 43,172,460 2,350,000
----- End of picture text -----

==> picture [6 x 9] intentionally omitted <==

NOTE 21. REMUNERATION OF AUDITORS

During the year the following fees were paid or payable for services provided by the auditor of the parent entity, its related practices and non-related audit fi rms.

	Consolidated	Consolidated
	30 June 2014	30 June 2013
	$	$
PwC Australia
Audit or review of the f nancial report	209,420 257,700
Other consulting	12,500 –
Total remuneration of PwC Australia	221,920 257,700

Non PwC audit f rm
Audit or review of the f nancial report	– –
Preparation of the tax return and other consulting	– 9,841
Total remuneration of non-PwC audit f rm	– 9,841
Total auditor’s remuneration	221,920 267,541

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [6 x 10] intentionally omitted <==

NOTE 22. CONTINGENT LIABILITIES

There were no other material contingent liabilities in existence at 30 June 2014 and 30 June 2013.

==> picture [6 x 9] intentionally omitted <==

NOTE 23. COMMITMENTS FOR EXPENDITURE

There were no material capitals or leasing commitments at 30 June 2014 and 30 June 2013.

==> picture [6 x 9] intentionally omitted <==

NOTE 24. RELATED PARTY TRANSACTIONS

Parent entity

Prima BioMed Ltd is the parent entity.

Subsidiaries

Interests in subsidiaries are set out in note 25.

Key management personnel

Disclosures relating to key management personnel are set in note 20.

Receivable from and payable to related parties

There were no trade receivables from or trade payables due to related parties at the reporting date.

Loans to/from related parties

There were no loans to or from related parties at the reporting date.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [6 x 9] intentionally omitted <==

NOTE 25. SUBSIDIARIES

in accordance with the accounting policy described in note 1:

==> picture [456 x 179] intentionally omitted <==

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

Country of Class of Shares Equity holding
incorporation 30 June 2014 30 June 2013
% %
Arthron Pty Ltd Australia Ordinary – 100
Cancer Vac Pty Ltd Australia Ordinary 100 100
Oncomab Pty Ltd Australia Ordinary – 100
Panvax Pty Ltd Australia Ordinary – 100
Prima BioMed USA Inc USA Ordinary 100 100
PRR Middle East FZLLC UAE Ordinary 100 100
Prima BioMed GmbH Germany Ordinary 100 100
Prima BioMed Australia Pty Ltd Australia Ordinary 100 100
Prima BioMed IP Pty Ltd Australia Ordinary 100 100
----- End of picture text -----*

* Companies were deregistered on 31 July 2013

==> picture [6 x 10] intentionally omitted <==

NOTE 26. EVENTS OCCURRING AFTER THE REPORTING DATE

Marc Voigt was appointed as Chief Executive Offi cer of Prima on the 9[th] July 2014. Mr Voigt, Prima’s Chief Business Offi cer and Chief Financial Offi cer as well as General Manager of the Company’s European Operations, replaces US based Matthew Lehman who stepped down from the Board but remains as an adviser to the Company to facilitate an orderly transition.

The decision follows the Company’s recent shift in its operational focus to Europe, where its clinical trials and manufacturing of CVac have been centralised to generate cost savings and enhance operational effi ciencies. The Company’s European manufacturing facility is based in Leipzig, Germany where Prima benefi ts from a significant funding grant from the Saxony Development Bank to carry out its CVac development program in Europe.

cantly affect the consolidated entity’s operations, the results of those operations or the consolidated entity’s state of affairs in future fi nancial years.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [6 x 10] intentionally omitted <==

NOTE 27. RECONCILIATION OF LOSS AFTER INCOME TAX TO NET CASH USED IN OPERATING ACTIVITIES

==> picture [469 x 331] intentionally omitted <==

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

Consolidated
30 June 2014 30 June 2013
$ $
Loss after income tax expense for the year (13,343,381) (15,225,671)
Adjustments for:
Depreciation and amortisation 446,360 254,024
(Decrease)/increase in income tax payable (10,077) 27,065
Add back share based payments 57,309 189,524
Unrealised gain on exchange through the profi t and loss (908,594) (1,446,771)
Change in operating assets and liabilities:
Decrease in current receivables 4,071 79,907
Decrease in inventories – 191,726
Decrease in other operating assets 297,320 809,055
(Decrease)/increase in trade and other payables (816,276) 627,971
Increase/(decrease) in employee benefi ts 79,821 (88,926)
(Decrease) in derivative fi nancial instruments (33,714) (1,455,030)
Net cash used in operating activities (14,227,161) (16,037,126)
----- End of picture text -----

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [6 x 10] intentionally omitted <==

NOTE 28. EARNINGS PER SHARE

==> picture [470 x 243] intentionally omitted <==

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

Consolidated
30 June 2014 30 June 2013
$ $
Loss after income tax (13,343,381) (15,225,671)
Loss after income tax attributable to the owners of Prima BioMed Ltd (13,343,381) (15,225,671)
Number Number
Weighted average number of ordinary shares used in calculating basic earnings per share 1,220,083,929 1,075,381,168
Weighted average number of ordinary shares used in calculating diluted earnings per share 1,220,083,929 1,075,381,168
Cents Cents
Basic earnings per share (1.09) (1.42)
Diluted earnings per share (1.09) (1.42)
----- End of picture text -----

==> picture [5 x 8] intentionally omitted <==

Information concerning other notes and options issued:

The following table summarizes the convertible notes, listed options and unlisted options that were not included in the calculation of weighted average number of ordinary shares because they are anti-dilutive for the periods presented.

==> picture [470 x 67] intentionally omitted <==

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

30 June 2014 30 June 2013
Number Number
Listed options 77,378,696 77,378,699
Unlisted options 16,942,441 47,519,149
----- End of picture text -----

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [6 x 10] intentionally omitted <==

==> picture [5 x 9] intentionally omitted <==

NOTE 29. SHARE-BASED PAYMENTS

(a) Executive Incentive Plan (EIP)

Equity incentives are granted under the Executive Incentive Plan (EIP) which was approved by shareholders at the 2012 Annual General Meeting. In light of our increasing operations globally the Board reviewed the Company’s incentive arrangements to ensure that it continued to retain and motivate key executives in a manner that is aligned with members’ interests. As a result of that review, an ‘umbrella’ EIP was adopted to which eligible executives are invited to apply for the grant of performance rights and/or options. Equity incentives granted in accordance with the EIP Rules are designed to provide meaningful remuneration opportunities and will refl ect the importance of retaining a world-class management team. The Company endeavours to achieve simplicity and transparency in remuneration design, whilst also balancing competitive market practices in the United States, Germany, and Australia.

Set out below are summaries of options granted under the EIP:

2014 Grant date	Balance at start of the year	Granted during the year	Exercised during the year	Forfeited during the year	Balance at end of the year	Vested and exercisable at end of the year
	Number	Number	Number	Number	Number	Number
23 December 2013 30 June 2018 0.0774	– 1,758,176 – – 1,758,176 1,172,117
24 January 2014 30 June 2018 0.0774	– 165,116 – – 165,116 165,116

Total	– 1,923,292 – – 1,923,292 1,337,233
Weighted average exercise price 0.0774	0.0774

No options expired during the periods covered by the above tables.

The weighted average share price at the date of exercise of options exercised during the year ended 30 June 2014 was $0.0774 (2013 – not applicable). The weighted average remaining contractual life of share options outstanding at the end of the period was 4 years. Options vest in three equal tranches, 33.3% vested on 31 December 2013, 33.3% vested on 30 June 2014, and 33.3% to vest on 30 June 2015. Vesting is contingent upon the employee being continuously employed in good standing through the vesting period. The options are subject to accelerated vesting according to agreed terms in each person’s employment contract.

Fair value of options granted

The assessed fair value at grant date of options granted during the year ended 30 June 2014 were $0.028 and $0.037 (2013 – not applicable). The fair value at grant date is determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(a) Executive Incentive Plan (EIP) (continued)

The model inputs for options granted during the year ended 30 June 2014 included:

Vested options are exercisable for a period of 36 months after vesting
exercise price: $0.0774
grant date: 23 December 2013 and 24 January 2014
expiry date: 30 June 2018
share price at grant date: $0.04 and $0.05
expected price volatility of the Company’s shares: 112% and 116%
expected dividend yield: nil%
risk-free interest rate: 2.92% and 2.81%

The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any expected changes to future volatility due to publicly available information.

==> picture [5 x 8] intentionally omitted <==

(b) Global Employee Share Option Plan (GESOP)

The establishment of the GESOP Plan was approved by shareholders at the 2011 annual general meeting. The GESOP is designed to provide long-term incentives for employees excluding directors to deliver long-term shareholder returns. Under the plan, participants are granted options based on certain performance standards being met. Participation in the plan is at the board’s discretion and no individual has a contractual right to participate in the plan or to receive any guaranteed benefi ts.

Options granted under the plan carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share. The exercise price of options is based on the volume weighted average price at which the Company’s shares are traded on the Australian Securities Exchange (ASX) during the seven days up to and including the date of the grant.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(b) Global Employee Share Option Plan (GESOP) (continued)

Set out below are summaries of options granted under the GESOP:

==> picture [483 x 457] intentionally omitted <==

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

2014 Expiry date Exercise Balance at Granted Exercised Forfeited Balance at Vested and exercis-
Grant date price start of the during the during the during the year end of the able at end of the
year year year year year
Number Number Number Number Number Number
3 November 2011 3 November 2014 0.279 100,000 – – – 100,000 100,000
3 January 2012 3 January 2015 0.233 100,000 – – – 100,000 100,000
1 August 2012 1 August 2015 0.185 1,600,000 – – – 1,600,000 1,600,000
16 November 2012 1 August 2015 0.185 1,200,000 – – – 1,200,000 1.200,000
20 February 2013 20 February 2016 0.173 200,000 – – – 200,000 200,000
Total 3,200,000 – – – 3,200,000 3,200,000
Weighted average 0.189 0.189
exercise price
2013 Expiry date Exercise Balance at Granted Exercised Forfeited Balance at Vested and exercis-
Grant date price start of the during the during the during the year end of the able at end of the
year year year year year
Number Number Number Number Number Number
3 November 2011 3 November 2014 0.279 100,000 – – – 100,000 100,000
3 January 2012 3 January 2015 0.233 100,000 – – – 100,000 100,000
1 August 2012 1 August 2015 0.185 – 1,600,000 – – 1,600,000 450,000
16 November 2012 1 August 2015 0.185 – 1,200,000 – – 1,200,000 –
20 February 2013 20 February 2016 0.173 – 200,000 – – 200,000 –
Total 200,000 3,000,000 – 3,200,000 650,000
Weighted average 0.189 0.184 0.189
exercise price
----- End of picture text -----

No options expired during the periods covered by the above tables.

There were no share options exercised during the year (2013 – $nil). The weighted average remaining contractual life of share options outstanding at the end of the period was 1 years (2013 – 2 years). Options vested after a period of twelve months from the grant date.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(b) Global Employee Share Option Plan (GESOP) (continued)

Fair value of options granted

There were no options granted during the year ended 30 June 2014 (2013 - $0.06 and $0.07 cents per option). The fair value at grant date is determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

The model inputs for options granted during the year ended 30 June 2013 included:

Vested options are exercisable for a period of 24 months after vesting
exercise price: $0.185 and $0.173
grant date: 1 August 2012, 16 November 2012, and 20 February 2013
expiry date: 1 August 2015 and 20 February 2016
share price at grant date: $0.12 and $0.13
expected price volatility of the Company’s shares: 91% and 89%
expected dividend yield: nil%
risk-free interest rate: 2.59%, 2.51%, and 2.88%

==> picture [5 x 9] intentionally omitted <==

(c) Employee Share Option Plan (ESOP)

The establishment of the ESOP Plan was approved by shareholders on 30 April 2010. The Company has ceased to issue options under the ESOP.

The ESOP was designed to provide long-term incentives for employees excluding directors to deliver long-term shareholder returns. Under the plan, participants were granted options based on certain performance standards being met. Participation in the plan was at the board’s discretion and no individual had a contractual right to participate in the plan or to receive any guaranteed benefi ts. Options under the ESOP vested on grant date.

Options granted under the ESOP carried no dividend or voting rights. Each options granted under the ESOP is convertible into one ordinary share. The exercise price of options granted under the ESOP is $0.10 per option.

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

(c) Employee Share Option Plan (ESOP) (continued)

Set out below are summaries of options granted under the ESOP:

2014 Grant date	Balance at start of the year	Granted during the year	Exercised during the year	Forfeited during the year	Balance at end of the year	Vested and exercisable at end of the year
	Number	Number	Number	Number	Number	Number
26 August 2011 26 August 2014 0.10 500,000 – – – 500,000 500,000

Total 500,000 – – – 500,000 500,000
Weighted average exercise price 0.10 0.10 0.10

2013 Grant date	Balance at start of the year	Granted during the year	Exercised during the year	Forfeited during the year	Balance at end of the year	Vested and exercisable at end of the year
	Number	Number	Number	Number	Number	Number
26 August 2011 26 August 2014 0.10 500,000 – – – 500,000 500,000

Total 500,000 – – – 500,000 500,000
Weighted average exercise price 0.10 0.10 0.10

No options expired during the periods covered by the above tables.

The share price at the date of exercise of options exercised during the year ended 30 June 2014 was $nil (2013 – $nil). The remaining contractual life of share options outstanding at the end of the period was 1 year. Options vested immediately on grant date.

Fair value of options granted

There were no options granted during the year ended 30 June 2014 (2013 – $nil). The fair value at grant date is determined using a Black-Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

100

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [5 x 8] intentionally omitted <==

d) Options issued to directors with shareholders approval

At the 2010 annual general meeting, shareholders approved the issue of 34,500,000 options to the directors. Options granted under the plan carry no dividend or voting rights. When exercisable, each option is convertible into one ordinary share. The exercise price of options is $0.20 for 32,500,000 and $0.10 for 2,000,000.

Set out below are summaries of options granted with shareholders approvals:

==> picture [469 x 392] intentionally omitted <==

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

2014 Expiry date Exercise Balance at Granted Exercised Lapsed during Balance at Vested and
Grant date price start of the during the during the the year end of the exercisable
year year year year at end of the
year
Number Number Number Number Number Number
6 December 2010 6 December 2013 0.20 32,500,000 – – (32,500,000) – –
6 December 2010 6 December 2014 0.10 2,000,000 – – – 2,000,000 2,000,000
Total 34,500,000 – – (32,500,000) 2,000,000 2,000,000
Weighted average 0.10 0.194 0.10 0.10
exercise price
2013 Expiry date Exercise Balance at Granted Exercised Lapsed during Balance at Vested and
Grant date price start of the during the during the the year end of the exercisable
year year year year at end of the
year
Number Number Number Number Number Number
6 December 2010 6 December 2013 0.20 32,500,000 – – – 32,500,000 32,500,000
6 December 2010 6 December 2014 0.10 2,000,000 – – – 2,000,000 2,000,000
Total 34,500,000 – – – 34,500,000 34,500,000
Weighted average 0.194 0.194 0.194 0.194
exercise price
----- End of picture text -----

* these options were issued to Neil Frazer and had a 4 year vesting period and were fully vested as at 30 June 2013 upon his termination employment

There were 32,500,000 options lapsed during the periods.

101

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [5 x 8] intentionally omitted <==

(e) Expenses arising from share-based payment transactions

Total expenses arising from option-based payment transactions recognised during the period as part of employee benefi t expense were as follows:

==> picture [469 x 85] intentionally omitted <==

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

Consolidated
30 June 2014 30 June 2013
$ $
Share based payment expense 57,309 189,524
----- End of picture text -----

==> picture [6 x 9] intentionally omitted <==

NOTE 30. PARENT ENTITY INFORMATION

Set out below is the supplementary information about the parent entity:

Statement of comprehensive income

	Parent	Parent
	30 June 2014	30 June 2013
	$	$

Loss after income tax	(15,651,281) (15,813,154)
Total comprehensive income	(15,651,281) (15,813,154)

102

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED

==> picture [469 x 263] intentionally omitted <==

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

Parent
30 June 2014 30 June 2013
$ $
Total current assets 20,313,908 29,805,323
Total assets 20,314,845 29,811,104
Total current liabilities 977,777 1,925,647
Total liabilities 1,341,709 1,931,393
Equity
- Contributed equity 149,014,372 142,326,977
- Reserves 2,093,819 2,036,509
- Accumulated losses (132,135,056) (116,483,775)
Total equity 18,973,135 27,879,711
----- End of picture text -----

There are no guarantees entered into by the parent entity.

Contingent liabilities of the parent entity

Refer to note 22 for details in relation to contingent liabilities as at 30 June 2014 and 30 June 2013.

Capital commitments - Property, plant and equipment

The parent entity did not have any capital commitments for property, plant and equipment at as 30 June 2014 and 30 June 2013.

103

DIRECTOR’S DECLARATION

==> picture [6 x 10] intentionally omitted <==

in the directors’ opinion:

(a) Corporations Act 2001 , including:

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

performance for the fi nancial 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.

as issued by the International Accounting Standards Board.

quired by section 295A of the Corporations Act 2001.

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

On behalf of the directors

==> picture [150 x 57] intentionally omitted <==

Lucy Turnbull, AO Chairman

104

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PRIMA BIOMED LTD

==> picture [429 x 608] intentionally omitted <==

==> picture [380 x 13] intentionally omitted <==

105

INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF PRIMA BIOMED LTD CONTINUED

==> picture [429 x 608] intentionally omitted <==

==> picture [381 x 13] intentionally omitted <==

106

SHAREHOLDER INFORMATION

The shareholder information set out below was applicable as at 5 August 2014.

There are a total of 1,228,709,341 ordinary fully paid shares on issue held by 12,477 holders

==> picture [6 x 9] intentionally omitted <==

Distribution of equitable securities

Analysis of number of equitable security holders by size of holding:

	Number of holders of ordinary shares
1 – 1,000 362
1,001 – 5,000 1,733
5,001 – 10,000 1,779
10,001 – 100,000 6,458
100,001 – and over 2,145
Total 12,477
Holding less than a marketable parcel 367

107

SHAREHOLDER INFORMATION CONTINUED

==> picture [6 x 10] intentionally omitted <==

Equity security holders

Twenty largest quoted equity security holders

The names of the twenty largest security holders of quoted equity securities are listed below:

==> picture [469 x 415] intentionally omitted <==

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

Top 20 holders of ordinary shares Ordinary shares held
Number held % of total shares
issued
National Nominees Ltd 90,997,909 7.406
JP Morgan Nominees Australia Ltd 18,212,146 1.482
Ms Lucy Turnbull, AO 17,034,576 1.386
Citicorp nominees Pty Ltd 13,501,947 1.099
UBS Wealth Management Australia Nominees Pty Ltd 11,679,178 0.951
Mr Dimce Spaseski & Mrs Maja Spaseska 8,966,692 0.730
Structure Investments Pty Ltd 7,485,179 0.609
H Cornwell & Son Pty Ltd 6,647,500 0.541
Mr Thomas Tscherepko 6,000,000 0.488
ABN AMRO Clearing Sydney Nominees Pty Ltd 5,862,745 0.477
Macenrock Pty Ltd 5,534,923 0.450
IRPAC PTY LTD 4,836,072 0.394
Laguna Bay Capital Pty Ltd 4,200,000 0.342
Mr Goh Geok Khim 4,000,000 0.326
Mr Antolik Tscherepko 4,000,000 0.326
GKDM Super Pty Ltd 3,600,100 0.293
HSBC Custody Nominees (Australia) Limited 3,593,752 0.292
Mr Joseph Jaajaa 3,500,000 0.285
Climax Holdings Pty Ltd 3,310,659 0.269
Mr Calogero Joseph Barbagiovanni & Mr Raffaele Guadagnino 3,053,572 0.249
226,016,950 18.395
----- End of picture text -----

108

SHAREHOLDER INFORMATION CONTINUED

==> picture [470 x 415] intentionally omitted <==

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

Top 20 holders of listed options Options
Number held % of total options
issued
Mr Edward Mcclafferty 6,000,000 7.754
Ms Lucy Turnbull, AO 4,258,644 5.504
Structure Investments Pty Ltd 2,500,000 3.231
Mr Goh Geok Khim 2,000,000 2.585
Mr Robert Richard Taylor & Mrs Karilyn Kay Taylor 1,500,000 1.939
Mr Peter David Newton & Mrs Ann Louise Newton 1,250,000 1.615
Mr Jayson Charles Medway & Mrs Deirdre Grace Medway 1,025,000 1.325
Miss Kim Foon Goon 750,000 0.969
Mr Ian Wilton & Ms Sharon Lawler Froome 650,000 0.840
Mr Tim Handley-Garben & Mrs Petah Handley-Garben 600,000 0.775
Mr Terrence John Ahern 625,000 0.808
Mr Peter John Woods & Mrs Marlene Denise Woods 546,875 0.707
Mr Earl John Churchill Gray & Mrs Margaret Elizabeth Gray 508,928 0.658
Acewin Pty Ltd 500,000 0.646
Dr Hein Ngoc Nguyen & Mrs Thao Thu Nguyen 500,000 0.646
JP Morgan Nominees Australia Ltd 486,858 0.629
Citicorp nominees Pty Ltd 426,500 0.551
HWR Nominees Pty Ltd 425,000 0.549
Mr Matthew Lehman 404,441 0.523
Mr John Richard O’Toole 387,390 0.501
25,344,636 32.755
----- End of picture text -----

109

SHAREHOLDER INFORMATION CONTINUED

==> picture [6 x 10] intentionally omitted <==

Unquoted equity securities

Number on issue Number of holders

Options issued under the Prima BioMed Ltd
16,942,441
14

==> picture [6 x 9] intentionally omitted <==

Substantial holders

There are no substantial holders in the Company.

==> picture [6 x 10] intentionally omitted <==

Voting rights

The voting rights attached to ordinary shares are set out below:

Ordinary shares

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Options

No voting rights.

110

==> picture [596 x 96] intentionally omitted <==

111

==> picture [596 x 227] intentionally omitted <==

Prima BioMed Ltd

Level 7, 151 Macquarie Street, Sydney, NSW 2000 Telephone : + 61 (0) 2 9276 1224 Facsimile : + 61 (0) 2 9276 1284 www.primabiomed.com.au ABN : 90 009 237 889

AI assistant

IMMUTEP LIMITED — Annual Report 2014

65122_rns_2014-10-09_142aa458-8a3b-4c58-bc5a-5feeeb54eee0.pdf

Annual Report 2014

Dear Shareholder,

Operating and Financial Review

Financial Performance

CVac clinical development

CAN-003 phase 2 study

CAN-004 phase 2

CAN-301 trial in resected pancreatic cancer

Manufacturing Operations

Consolidating the team

Corporate development

Strategic focus and outlook

Sincerely,

Marc Voigt

Directors

Principal activities

Dividends

Review of operations

Likely developments and expected results of operations

Environmental regulation

Information on directors

DIRECTORS’ REPORT CONTINUED

Meetings of directors

Ms Deanne Miller,

Dr Sharron Gargosky,

REMUNERATION REPORT

A Principles used to determine the nature and amount of remuneration

Remuneration Policy

Remuneration governance

Non-Executive Directors’ fees

Executive remuneration policy and framework

Executive remuneration mix

(continued)

Short-term incentives

Long-term incentives

Long-term incentives (continued)

Voting and comments made at the Company’s 2013 Annual General Meeting

B Details of remuneration

Amounts of remuneration

C Service agreements

D Share-based compensation

Issue of shares

Options

Shares provided on exercise of remuneration options

Details of bonuses and share-based compensation

Equity instruments held by key management personnel

(i) Options holdings

(ii) Shares holdings

Shares under option

Indemnity and insurance of auditor

Proceedings on behalf of the Company

Non-audit services

Auditor’s independence declaration

Auditor

Lay solid foundations for management and oversight

Structure the board to add value

CORPORATE GOVERNANCE REPORT CONTINUED

Performance evaluation

Audit & Risk Committee

Remuneration Committee

Nomination committee

External auditors

Diversity Policy

Acting Ethically and Responsibly

Share trading policy

Continuous disclosure and shareholder communication

Recognise and manage risk

Corporate reporting

FINANCIAL REPORT

Contents

General information

FOR THE YEAR ENDED 30 JUNE 2014

FOR THE YEAR ENDED 30 JUNE 2014

FOR THE YEAR ENDED 30 JUNE 2014

NOTE 1. SIGNIFICANT ACCOUNTING POLICIES

(a) Basis of preparation

(i) Compliance with IFRS

IMMUTEP LIMITED Annual Report 2014