INVION LIMITED — Annual Report 2018

Aug 27, 2018

ASX ANNOUNCEMENT

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Invion Limited ACN 76 094 730 417

Appendix 4E – Final Report

Financial year ended

30 June 2018

Results for announcement to the market

Current Reporting Period: 30 June 2018 Previous Reporting Period: 30 June 2017

Revenue and Net Profit

Revenue and Net Profit
	Up/Down from	% change form	$
	prioryear	prioryear	30 June 2018
Revenue from continuing operations	Up	175,546%	737,713
Total income	Up	410%	889,599
Loss from ordinary activities after tax	Up / increased	121%	(4,870,133)
Net Loss for the period	Up / increased	121%	(4,870,133)

Brief explanation of income and profit (loss)

The loss attributable to the owners of the Company for the period ended 30 June 2018 was $4,870,133 (2017: $2,199,737 loss). Included in the loss was $2,000,000 of impairment (2017: $4,400,000) and $1,325,135 of depreciation and amortisation (2017: $1,244,993). At 30 June 2018 the Group had net assets of $7,906,345 (2017: $4,007,199), an increase of $3,899,146. This increase primarily relates to the inlicence during the period of the development and commercialisation rights in Australian and New Zealand to the Photosoft[TM] technology. No dividend was recommended or paid during the period.

Performance and Shareholder Wealth

	2016	2017	2018
Earnings/(Loss) Per Share	(0.41)	(0.14)	(0.13)
Net tangible assets per share	0.00	0.00	0.00
Dividend per share	-	-	-
Share Price	$0.004	$0.003	$0.04
Statement of accumulated losses		2017	2018
Balance at the beginning of the year		(140,935,704)	(143,135,441)
Net loss attributable to members of the parent		(2,199,737)	(4,870,133)
Balance at end of the year		(143,135,441)	(148,005,574)

Audit Report

This Appendix 4E (Final Report) is based on the audited financial statements for the year ended 30 June 2018, which are attached.

Invion Limited ABN 76 094 730 417

722 High Street, East Kew, VIC 3102 Australia

P: +61 3 9081 6005 W: www.inviongroup.com

Invion Limited Financial report For the year ended 30 June 2018

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Contents

Directors’ Report	3
Consolidated statement of comprehensive income	18
Consolidated statement of financial position	19
Consolidated statement of changes in equity	20
Consolidated statement of cash flows	21
Notes to the financial statements	22
Directors’ declaration	47
Independent auditor’s report	48
Auditor’s independence declaration	53
Shareholder information	54
Corporate directory	57

2 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Directors’ Report

DIRECTORS’ REPORT

Your Directors present their report of the Invion Group for the financial year ended 30 June 2018. The Invion Group (“Group”) consists of Invion Limited (“Invion” or the “Company”) and its wholly owned subsidiary, Invion Inc. The names and details of the Company’s Directors in office during the financial year and until the date of this report are detailed below. Directors were in office for the entire period unless noted otherwise.

Mr Thian Chew Chairman (appointed 1 December 2017) Dr Greg Collier Managing Director & CEO Dr Mitchell Glass Executive VP R&D and Chief Medical Officer Dr James Campbell Non-executive Director Mr Warren Brown Non-executive Director (retired 22 March 2018) Mr Gregory Brown Alternate Director for Mr Warren Brown (retired 22 March 2018)

Mr Thian Chew

Chairman

Appointed Non-executive Director and Chairman, 1 December 2017

Mr Chew has over 25 years’ experience in investing, finance and transforming business operations. He is Managing Partner at Polar Ventures, a private investment and consulting firm that provides capital, strategic and operating solutions, focusing on small to mid-sized enterprises in Asia. Mr Chew was previously an Executive Director at Goldman Sachs (Hong Kong and New York) responsible for the firm’s proprietary investments including growth capital, private equity and special situations in both private and public companies. Prior to this, he was a Consultant Project Manager to Morgan Stanley, New York. Mr Chew also held a number of positions in KPMG across Asia Pacific including Director at KPMG Consulting (Singapore and Sydney) where he led several large scale operational restructuring, post-merger integration, transformation, and business performance improvement programs. As a Senior Manager at KPMG (Taipei and Melbourne), he led several business process re-engineering initiatives, and also performed financial and information technology audit, risk and assurance engagements across multiple industries. Mr Chew holds an MBA from the Wharton School (Palmer Scholar), MA from the Lauder Institute, University of Pennsylvania, and a Bachelor of Information Systems from Monash University. Mr Chew is an Adjunct Professor at HKUST’s MBA program and previously qualified as a chartered accountant.

Greg Collier PhD

Interim Executive Chair (until 30 November 2017)

Appointed Managing Director and CEO, 6 May 2013

Dr Collier has more than 25 years experience spanning operational, clinical and scientific aspects of pharmaceutical research, development and commercialisation. He has led the planning and execution of multiple commercial transactions including in and out licensing deals and major M&A activities, and he has successfully taken a drug from discovery through to regulatory approval. Notably, Dr Collier steered ChemGenex Pharmaceuticals from a research-based company with a market capitalisation of $10m to a company with completed clinical trials and regulatory dossiers submitted to the FDA and EMA. In 2011, ChemGenex was sold to Cephalon for $230m. Prior to his commercial pharmaceutical career, Dr Collier had an outstanding academic career resulting in over 150 peer reviewed publications, and senior authorship on 33 patents. Dr Collier was the inaugural Alfred Deakin Professor at Deakin University, and also held positions at Melbourne University, Monash University and the University of Toronto. In 2010, Dr Collier was awarded the Roche Award of Excellence for his contribution to the biotechnology industry. During the previous three years, Dr Collier has also served as a director of Gemini Biotechnology, Prevatex, Barwon Biotechnology, Fusion Biosciences Pty Ltd and Phosphagenics Limited (ASX:POH).

3 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Directors’ Report

Mitchell Glass M.D.

Executive Vice President R&D and Chief Medical Officer

Appointed Executive Director, 31 August 2012

Dr Mitchell Glass is a 27 year veteran of the pharmaceutical industry. His experience is broad: - ranging from senior positions in top ten pharmaceutical companies, to investment in and management of start-ups and biotechs. After seven years of research, teaching and patient care at the University of Pennsylvania, Dr Glass joined ICI Pharmaceuticals in 1988 where he established the pulmonary therapeutics group and led the development and submission of the antileukotriene ACCOLATE®. From 1995-6, Dr Glass was Vice President and Director at SmithKline Beecham where he was responsible for cardiovascular, respiratory, renal and metabolic drug development and commercialisation, including submission of the NDA/MAA for COREG®. From 1998 to 2003, Dr Glass was Chief Medical Officer and VP of Clinical Development and Regulatory Affairs of AtheroGenics Inc. (AGIX), where he led product development from IND to initiation of Phase 3 for AGI1067 and was a member of the IPO team. Dr Glass joined AQUMEN Biopharmaceuticals KK and NA as CEO of AQUMEN NA and a Main Board Director. Since 2008, Dr Glass has been a Director of OrphageniX Inc. (gene editing) and AVATAR Biotechnologies (biosimilars) and a consultant in R&D and fundraising to early stage therapeutics companies. Dr Glass graduated from the University of Chicago and is board certified in internal medicine, pulmonary and critical care medicine.

James Campbell PhD MBA

Non-executive Director

Appointed Non-executive Director, 26 February 2012

Dr James Campbell is a senior biotechnology executive with more than 25 years international experience in scientific research, research management, management consulting and venture capital. Dr Campbell has held research positions at the CNRS and the CSIRO. He is a principal of Gemini Biotechnology, a specialist biotechnology advisory services company advising life science companies on M&A, partnering and corporate strategy. Dr Campbell was an executive at ChemGenex Pharmaceuticals for nine years until the company was acquired in 2011, and has served on the investment committee of UniSeed, a $60 million pre-seed venture fund, and various state and local government advisory committees concerning biotechnology. During the previous three years, Dr Campbell has also served as a director of Medibio Limited (ASX:MEB), Gemini Biotechnology, Fusion Biosciences Pty Ltd and Vitality Devices. Dr Campbell is currently a non-executive director of Prescient Therapeutics Limited (ASX:PTX) and is the CEO/MD of Patrys Limited (ASX:PAB).

Warren Brown B Eng

Non-executive Director

Appointed Non-executive Director, 4 November 2011; retired 22 March 2018

Mr Warren Brown has extensive experience in managing large projects and large labour forces. He has strong skills in negotiating contracts and corporate strategy. Mr Brown formed a consulting engineering practice in 1992 that employed 25 people at the time of sale in 2005. Prior to this Mr Brown held a management position at Major Engineering Construction where he was responsible for engineering construction projects throughout Queensland. During the past four years Mr Brown has not served as a Director of another public company.

Gregory Brown (alternate Director for Warren Brown) ; retired 22 March 2018

Mr Gregory Brown was appointed as Alternate Director on 16 January 2012 to act for Mr Warren Brown at any meetings that Mr Warren Brown could not attend. Mr Brown holds a Bachelor of Business degree from the University of Queensland. He has spent his career in banking and presently is a Business Banking Manager with Westpac Banking Corporation.

4 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Directors’ Report

DIRECTORS’ INTERESTS IN INVION SECURITIES

In accordance with section 300(11) of the Corporations Act 2001, the interests of the Directors in the shares and options of Invion Limited, as at the date of this report were:

T Chew G Collier M Glass J Campbell	Number of Ordinary Shares Options
	545,217,721 - 23,437,599 - 8,706,932 8,812,500 4,186,772 -

COMPANY SECRETARY

Melanie Farris (FGIA, FCIS) BComn Grad Dip ACG

Ms Farris is an experienced governance, communications and operations executive. Currently nonexecutive director and chair of Synapse Australia Limited, and in company secretary, governance and operations roles with Invion Limited (ASX:IVX), Factor Therapeutics Limited (ASX:FTT), and Telix Pharmaceuticals Limited (ASX:TLX). Previous roles include with HRH The Prince of Wales’s Office, Global Asset Management, Imperial Cancer Research Fund, and The Prince’s Foundation. Melanie holds a Bachelor of Communication (Public Relations), and a Graduate Diploma in Applied Corporate Governance. She is a Fellow of the Governance Institute of Australia and a Fellow of the Institute of Chartered Secretaries (UK).

PRINCIPAL ACTIVITIES

The Invion Group consists of Invion Limited and its wholly owned subsidiary Invion, Inc. The Group has operations in Melbourne, Australia and Delaware, USA. The activity of Invion during the period was directed to expanding the Group’s business and develop its asset pipeline through the identification and inlicencing of new advanced clinical opportunities. In addition, the Company continued to seek to identify commercial partners for its existing assets.

OPERATING RESULTS AND DIVIDENDS

The loss after tax of the Group for the year ended 30 June 2018 was $4,870,133 (2017: $2,199,737 loss). Included in the loss was $2,000,000 of impairment (2017: $4,400,000) and $1,325,135 of depreciation and amortisation (2017: $1,244,993). No dividend was recommended or paid.

CORPORATE STRUCTURE

Invion Limited is an entity incorporated and domiciled in Australia. Invion’s shares have been publicly traded on the Australian Securities Exchange since its listing on 15 February 2011 (ASX:IVX). At 30 June 2018, the Group had three employees (2 FTE) (2017: 1 FTE).

REVIEW OF OPERATIONS

The Board’s overarching strategic objective for the Group has been to identify and in-licence novel drug assets, enhance the value of these assets by mitigating risk along each program’s clinical development pathway, and to ultimately realise the commercial potential of those assets.

Photosoft[TM] – a PhotoDynamic Therapy targeted to the treatment of a range of cancers

On 18 April 2017, the Company announced that it had entered into a strategic alliance with The Cho Group, a Hong Kong based group that funded and successfully commercialised a number of unique and advanced technologies, that represented an opportunity for Invion to expand its business and develop its

5 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Directors’ Report

asset pipeline through the identification and in-licensing of new advanced clinical opportunities. Through this process, Invion identified Photosoft™, a photodynamic therapy targeted to the treatment of cancers.

On 31 August 2017, Invion announced that it has entered a series of agreements with The Cho Group, (collectively, the Transaction). The Transaction comprised:

1. Exclusive Distribution and Licence Agreement: The Cho Group agreed to appoint Invion as exclusive distributor and licensee in Australia and New Zealand of the Photosoft™ technology for the treatment of cancers. In return for the exclusive licence, Invion agreed to issue new shares to The Cho Group (and/or associates) for a licence value of $5.5M at $0.002 per share;

2. R&D Services Agreement: Invion was engaged to conduct the clinical development of Photosoft™ globally. The Cho Group agreed to provide non-dilutive funding for the clinical trials and related development, in a clinical development program designed and managed by a joint steering committee between the two companies; and

3. Underwriting Agreement: The Cho Group agreed to fully underwrite a non-renounceable pro rata entitlement offer to Invion Shareholders, to raise up to approximately $2.5M to fund working capital and the costs of the Transaction.

The Shareholders of Invion approved these three agreements – the Transaction – at the Annual General Meeting held on 30 November 2017.

Invion is now leading the global clinical development of Photosoft™, and retains the commercialisation and distribution rights to Photosoft™ in Australia and New Zealand. The development of Photosoft™ is funded via an R&D agreement with The Cho Group, which sees The Cho Group providing non-dilutive funding to the company covering all development costs to meet pre-agreed development milestones.

Since the AGM, the activities of the Company have been focussed on the manufacturing and development plans for Photosoft™, the identification and engagement of specialist advisors and progressing pre-clinical and clinical development planning.

In March 2018, the Company announced it had signed a Research & Development Alliance Agreement with leading Australian medical research institute, Hudson Institute of Medical Research (“Hudson Institute”). The agreement provides a framework for Invion and Hudson Institute to collaborate on a range of research and development projects for the Photosoft[TM] technology for the treatment of cancers.

Also in March 2018, the Company announced the appointment of Dr Andrew Stephens, Group Head of the Ovarian Cancer Biomarkers Research Group at Hudson Institute of Medical Research, to its advisory board. Dr Stephens is regarded as one of Australia’s foremost experts in the field of ovarian cancer research.

Business Development for respiratory assets

Invion has continued to seek to identify commercial partners for its respiratory assets.

Nadolol: Currently contraindicated in airway disease, INV102 (nadolol) has been shown in a large, controlled phase 2 clinical trial to be safe and well tolerated by patients. The Company has shown that nadolol blocks the beta-arrestin pathway, which is strongly implicated in the phenotype of chronic airway disease, and that by blocking this pathway and reversing abnormal mucus production, nadolol represents a promising and novel method of treating an underlying cause of chronic airway diseases including asthma and COPD. This has formed the foundation of the Company’s messaging to potential partners and collaborators in business development discussions.

Zafirlukast: The Company’s position is that delivery of this FDA-approved non-steroidal drug via an inhaled route will provide superior benefit to patients and bypass problems currently associated with its systemic delivery. Invion’s manufacturing collaborator provided critical work on formulation and manufacturing that has enabled the Company to seek to partner this program, so as to progress the drug into clinical trials.

6 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Directors’ Report

Financial results

The loss attributable to the owners of the Company for the period ended 30 June 2018 was $4,870,133 (2017: $2,199,737 loss). Included in the loss was $2,000,000 of impairment (2017: $4,400,000) and $1,325,135 of depreciation and amortisation (2017: $1,244,993). At 30 June 2018 the Group had net assets of $7,906,345 (2017: $4,007,199), an increase of $3,899,146. This increase primarily relates to the in-licence during the period of the development and commercialisation rights in Australian and New Zealand to the Photosoft[TM] technology. No dividend was recommended or paid during the period.

These Financial Statements are prepared on a going concern basis. As a clinical-stage drug development company, and as in prior years, Invion has recorded an operating loss for the period.

Impairment of intangible assets

At each Balance Date, the Group assesses whether there is any indication that an intangible asset may be impaired. Where an indicator of impairment exists, the Group makes an estimate of recoverable amount, and where the carrying amount of an asset may exceed its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.

Following the acquisition via business combination of INV102 (nadolol) in 2012, its value was recorded on initial recognition at cost – being its fair value at the date of acquisition. The Board considers that, at the Balance Date, indicators of impairment existed for the respiratory asset INV102 (nadolol).

The Board remains confident in the science surrounding INV102 (nadolol) and the quality of its clinical development and clinical trial results. The Board determined the recoverable amount of the INV102 (nadolol) asset had decreased in the past year. The Financial Statements accompanying this Directors’ Report therefore record an impairment value of $2,000,000 (2017: $4,400,000).

Changes to issued capital (chronological order)

1) Issue of shares following Shareholder approval of The Cho Group transaction: On 4 December 2017, 2,750,000,000 shares were issued following Shareholder approval of The Cho Group transaction. Invion was appointed exclusive distributor and licensee in Australia and New Zealand of Photosoft[TM] technology for the treatment of all cancers. In return for the exclusive licence, Invion issued new Invion shares for a licence value of $5.5M at $0.002 per share.

2) Shares Issued in Rights Issue: On 15 March 2018, 1,245,557,694 new shares were issued following the completion of the fully underwritten non-renounceable rights issue entitlement offer announced on 12 February 2018 to raise approximately $2.5 million. Invion received valid applications from eligible shareholders for approximately 1.13 billion shares, representing a take up by eligible shareholders of approximately 92.69%, and valid applications under the top-up facility for approximately 1.30 billion shares. As the Entitlement Offer was over-subscribed, no new shares were issued to The Cho Group Limited, other than in its capacity as a shareholder.

3) Lapse of unlisted share options: During the year, 32,650,000 unlisted share options lapsed, unexercised.

4) Issue of unlisted share options: Invion announced on 1 September 2015 that it had granted options to a US institutional investor as part of a share placement. Shareholders were also advised at the 2015 Annual General Meeting that the options would be issued following the meeting. Due to an administrative oversight, some of the options were not issued. In accordance with the placement agreement, Invion issued 35,750,000 options to the investor on 17 April 2018.

5) Exercise of unlisted share options: During the months of April and May 2018, a total of 40,750,000 new shares were issued upon the exercise of unlisted share options. The share options had an exercise price of $0.01750 each and an expiry date of 18 November 2020. The exercise of the share options resulted in $713,125 capital inflow to the Company.

7 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Directors’ Report

The total issued securities of the Company are as follows:

	At 30 June 2018	At the date of this Report
Ordinary shares	5,492,272,967	5,492,272,967
Share Options	21,407,353	21,407,353

Other Funding arrangements

Loans from Directors/ Related Parties: In March 2015, the Company entered into agreements with each Invion Director whereby a total loan amount of $1,200,000 unsecured (non-equity related) debt funding was provided by Invion directors for working capital and for the repayment of outstanding liabilities. Further details are recorded in Note 22 – Related Party Transactions. The principal amount and accrued interest was repaid to each party to the loan on 15 March 2018 in full and final settlement of the loan.

Forward strategy

Invion is developing Photosoft[TM ] technology as an improved next generation Photodynamic Therapy. PDT uses non-toxic photosensitisers and visible light in combination with oxygen to produce cytotoxic-reactive oxygen that kills malignant cells, shuts down tumours and stimulates the immune system. In contrast to surgery, or radiotherapy and chemotherapy which are mostly immunosuppressive, PDT causes acute inflammation, expression of heat-shock proteins, and invasion and infiltration of a tumour by leukocytes.

Invion will conduct clinical development of Photosoft™ globally. The opportunities for treatment of skin cancer and other topical applications, as well as intravenous treatment of lung, ovarian and prostate cancer are being explored. Through it’s R&D services agreement with Invion, The Cho Group will provide non-dilutive funding for the clinical trials. The clinical development program is being designed and managed by a joint steering committee between the two companies.

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

There were no significant events after the Balance Date and at the date of this Report.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

Total equity is recorded at the Balance Date at $7,906,345 (2017: $4,007,199) an increase of $3,899,146. The movement is largely due to the issue of new shares during the year.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS

The likely developments in the operations of the Group and the expected results from those operations in future financial years will be affected by the success of management in securing one or more commercial transactions for one or more of the Group’s drug assets.

The Group has identified material risks that may impact success in the above plans, which are considered common to companies in the life sciences/ drug development sector. These material risks and the strategies in place to seek to manage each of these risks are detailed below.

1 - Clinical development risk : The general clinical and regulatory environment, and the availability of regulatory approvals for Invion’s drug assets, are relevant risk factors for Invion’s business. The Group seeks to mitigate clinical and regulatory risk by maintaining awareness of current clinical and regulatory issues and trends, and through the use of expertise in the development of future clinical development plans, including draft clinical trial protocols.

2 - Competition: one or more competitor product candidates may be sufficiently safe and effective to minimise the real or perceived value of Invion product candidates, thereby negatively affecting the value placed on our products for licensing or partnering. The Company aims to manage competition risk through ongoing market monitoring and analysis of the development pipelines and the competitor landscape.

8 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Directors’ Report

3 - Funding risk: The Company has a structured business development program and an R/D agreement for funding development plans, however to the extent the Company does not find an appropriate partner for its programs, it may need to raise further funds, which may not be available when required or only available on unfavourable terms.

ENVIRONMENTAL REGULATION AND PERFORMANCE

The Company’s operations are not subject to any significant environmental regulations under either Commonwealth or State legislation. Nonetheless, the Company aims to ensure high standards of environmental care. To help to ensure continued compliance, the Board and management maintain an awareness of relevant environmental legislation.

UNISSUED SHARES: SHARE OPTIONS

At the date of this report there were 21,407,353 (2017: 59,057,353) unissued ordinary shares under options. During the year ended 30 June 2018, 40,750,000 ordinary shares of Invion Limited were issued upon the exercise of share options granted.

DIRECTORS’ MEETINGS

The number of meetings of Directors and committees of Directors held in the year to 30 June 2018, and the number of meetings attended by each Director, is as follows:

	Board of Directors	Board of Directors	Audit & Risk Management	Audit & Risk Management	Nomination and Remuneration	Nomination and Remuneration
			Committee		Committee (ii)
	Meetings		Meetings		Meetings
	Eligible to attend	Meetings attended	Eligible to attend	Meetings attended	Eligible to attend	Meetings attended
T Chew	4	4	1	1	-	-
G Collier	8	8	-	-	-	-
M Glass	8	8	-	-	-	-
J Campbell	8	8	3	3	-	-
W Brown (i)	6	6	2	2	-	-

• (i) On 16 January 2012, with the approval of the Board, Mr Warren Brown appointed Mr Gregory Thomas Brown to act as an alternate Director at any Board Meeting which Mr Warren Brown is unable to attend. To the date of his retirement Mr Gregory Thomas Brown has not attended any meetings of the Board.

• (ii) Given the nature of activities and operations, the Nomination and Remuneration Committee did not meet during the year under review.

COMMITTEE MEMBERSHIP

At the date of this report the Company has the following Committees of the Board in place:

• Audit and Risk Management Committee, the members of which are independent Non-executive Director Dr James Campbell (chair) and non-independent Non-executive Director Mr Thian Chew.

• Nomination and Remuneration Committee, the members of which are independent Nonexecutive Director Dr James Campbell (chair) and non-independent Non-executive Director, Mr Thian Chew.

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Directors’ Report

REMUNERATION REPORT (AUDITED)

This remuneration report for the year ended 30 June 2018 outlines the remuneration arrangements of the Group in accordance with the requirements of the Corporations Act 2001 and its regulations. This information has been audited as required by section 308(3C) of the Corporations Act 2001.

The remuneration report details the remuneration arrangements for key management personnel (KMP) who are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company, directly or indirectly, including any Director, whether executive or otherwise.

For the purposes of this report, the term “Director” refers to Non-executive Directors (NEDs) only. “KMP” refers to Executive Directors and other key management personnel.

The names and details of the Directors and KMP of the Group in office during the financial year and until the date of this report are detailed below. Unless otherwise noted, Directors and KMP listed are in office at the date of the report. There were no changes to KMP after the Balance Date and before the date this financial report was authorised for issue.

(i) Non-executive Directors (i) Mr Thian Chew Chair Dr James Campbell Director Mr Warren Brown Director (retired 22 March 2018) Mr Gregory Brown Alternate Director (retired 22 March 2018)

(ii) Executive Directors Dr Greg Collier Managing Director & CEO Dr Mitchell Glass Executive Vice President R&D and Chief Medical Officer

(iii) Other key management (iii) Ms Melanie Farris Head of Operations and Company Secretary Mr Tom Coogan Consultant

(i) Mr Gregory Brown was appointed as an alternate Director on 16 January 2012. Mr Brown has not attended any meetings of the Board.

(iii) Ms Farris provides company secretary and head of operations services to the Company on a consulting basis. Mr Tom Coogan, of Coogans Pty Limited, provides the Company with accounting services. Ms Farris and Mr Coogan together provide the Chief Financial Officer declaration to Directors required under Section 295A of the Corporations Act.

Remuneration practice and philosophy

Details of the remuneration of the Directors and other key management personnel of Invion Limited are set out below. Directors and other key management personnel were in office for the full period unless otherwise stated.

10 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Directors’ Report

Remuneration for the year ended 30 June 2018

								Bonus	Bonus
								and	and
					STI	LTI	Total	Option	Option
						Share-based
		Superann-			Discretion-	payment
	Salary & Fees	uation	Other		ary Bonus	(Options)
	$	$	$		$	$	$	$	%
Non-executive Directors (i)
T Chew	52,500	-		-	-	-	52,500	-	0%
J Campbell	13,688	-		-	-	-	13,688	-	0%
W Brown	-	-		-	-	-	-	-	0%
G Brown	-	-		-	-	-	-	-	0%
	66,188	-		-	-	-	66,188	-	-
Executive Directors	(ii)
G Collier	218,333	20,742		-	-	4,221	243,296	4,221	2%
M Glass	38,867	-		-	-	-	38,867	-	0%
	257,200	20,742		-	-	4,221	282,163	4,221	-
Other KMP (iii)
M Farris	138,000	-		-	-	-	138,000	-	0%
T Coogan	31,378	-		-	-	-	31,378	-	0%
	169,378	-		-	-	-	169,378	-	-

(i) Due to the transitional and interim nature of Invion’s activities and operations in the Financial Year ended 30 June 2018, Non-Executive Directors forfeited a portion of fees payable.

(ii) During the Financial Year ended 30 June 2018, Executive Directors took a portion of salary and fees payable, forfeiting the balance.

(iii) M Farris provides company secretary and head of operations services to the Company on a consulting basis. T Coogan provides the Company with accounting services on a consulting basis. Ms Farris and Mr Coogan together provide the chief financial officer declaration to Directors required under Section 295A of the Corporations Act.

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Directors’ Report

Remuneration for the year ended 30 June 2017

								Bonus	Bonus
								and	and
					STI	LTI	Total	Option	Option
						Share-based
		Superann-			Discretion-	payment
	Salary & Fees	uation	Other		ary Bonus	(Options)
	$	$	$		$	$	$	$	%
Non-executive Directors (i)
J Campbell	-	-		-	-	2,429	2,429	2,429	100%
W Brown	-	-		-	-	1,619	1,619	1,619	100%
G Brown	-	-		-	-	-	-	-	0%
	-	-		-	-	4,048	4,048	4,048	-
Executive Directors (ii)
G Collier	33,000	3,135		-	-	22,072	58,207	22,072	38%
M Glass	36,716	-		-	-	16,193	52,909	16,193	31%
	69,716	3,135		-	-	38,265	111,116	38,265	-
Other KMP (iii)
M Farris	138,600	-		-	-	-	138,600	-	-
T Coogan	32,376	-		-	-	-	32,376	-	-
	170,976	-		-	-	-	170,976	-

(i) Due to the transitional and interim nature of Invion’s activities and operations in the Financial Year ended 30 June 2017, Non-Executive Directors forfeited all fees payable.

(ii) During the Financial Year ended 30 June 2017, Executive Directors took a portion of salary and fees payable, forfeiting the balance.

(iii) M Farris provides company secretary and head of operations services to the Company on a consulting basis. T Coogan provides the Company with accounting services on a consulting basis. Ms Farris and Mr Coogan together provide the Chief Financial Officer declaration to Directors required under Section 295A of the Corporations Act.

Standing Remuneration Policy and Principles used to determine the nature and amount of remuneration

The key principle of Invion’s remuneration policy is to ensure that remuneration is set at levels that will attract, motivate, reward and retain personnel to improve business results and thereby maximise stakeholder benefit. Remuneration is assessed by reference to employment market conditions, including benchmarking, as well as the relative size and nature of the Group’s operations. The financial and nonfinancial objectives of the Company are also considered when assessing the remuneration of Directors and other key management personnel. The Board has established a Nomination and Remuneration Committee which is responsible for, amongst other things, determining and reviewing compensation arrangements for key management personnel. The expected outcomes of the remuneration structure are:

• attraction of high quality management to the Group;

• retention and motivation of key personnel; and

• performance incentives that allow executives to share in the success of the group.

Remuneration incentives are discretionary, based on an individual’s performance against the agreed operational targets and business outcomes in the year.

12 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Directors’ Report

Nomination and Remuneration Committee

The objective of the Nomination and Remuneration Committee is to assist the Board of Invion Limited in fulfilling its duties and responsibilities by reviewing, advising and making recommendations to the Board on:

• (a) Nomination

• making recommendations to the Board in relation to Board composition, taking into account diversity objectives and the required mix of skills and experience;

• recommending to the Board a process for succession planning;

• recommending to the Board an induction process for new Directors;

• recommending and implementing a process for evaluating the performance of the Board, taking into account diversity objectives and the required mix of skills and experience;

• evaluating the performance of the CEO and other Key Management Personnel; and

• monitoring the implementation by management of the strategic objectives and policies listed above.

(b) Remuneration

• reviewing and implementing policies for the purposes of using remuneration to foster long-term growth and success;

• monitoring the implementation by management of the Board’s strategic objectives and policies;

• recommending to the Board remuneration for Non-executive Directors;

• recommending to the Board remuneration arrangements for the CEO and other Key management Personnel; and

• overseeing the implementation of any Company share plan or other incentive scheme (including the vesting and conversion to ordinary shares).

Directors’ fees and Non-executive Director remuneration

In accordance with the Constitution of the Company and ASX Listing Rules, the aggregate remuneration of Non-executive Directors is determined from time to time by General Meeting. The last determination for Invion Limited was made at the General Meeting of Shareholders held on 15 July 2011. At that Meeting, Shareholders approved an aggregate annual remuneration pool for Non-executive Directors of $750,000. The total Non-executive Director remuneration of Invion Limited for the year ended 30 June 2018 utilised $66,188 of this authorised amount. The Board will not seek an increase at the 2018 Annual General Meeting.

Fees to Non-executive Directors reflect the obligations, responsibilities and demands which are made on Directors. Non-executive Directors’ fees are reviewed periodically by the Board. In conducting these reviews the Board considers market information to seek to ensure that fees are in line with the market, as well as the financial position of the Company. Although the Chairman of the Board receives a higher fee, the remuneration of Non-executive Directors consists only of Directors fees, NEDs do not receive committee fees or retirement benefits. Non-executive Directors are however able to participate in incentive plans, if any, under which share Options and/or Performance Rights may be issued.

Executive Directors and other key management personnel remuneration

The Group aims to reward executives with a level and mix of remuneration commensurate with their position and responsibilities within the Group so as to:

• reward KMP for Group and individual performance;

• align the interest of KMP with those of shareholders; and

• ensure total remuneration is competitive by market standards.

KMP remuneration is fixed, with any bonuses being paid on an assessment by the Nomination and Remuneration Committee and approval by the Board. The Group has implemented a bonus scheme consisting of both a quantitative element based on the Group’s financial position and results; and a qualitative element based on an assessment of individual performance and contribution during the year.

Current KMP remuneration packages consist of the following key elements:

(i) Fixed remuneration – base salary, superannuation and non-monetary benefits; (ii) Variable remuneration – short term incentives (STI) and long term incentives (LTI).

The proportion of fixed and variable remuneration for each KMP is set out in the remuneration tables in this Remuneration Report.

13 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Directors’ Report

Fixed remuneration

KMP fixed remuneration is by salary package only, with an election to apportion this between salary and superannuation in the form of salary sacrifice. It is intended that the structure be optimal for the recipient without undue cost for the Group. There are no guaranteed base salary increases fixed in the contract of any KMP.

Company performance and the link to short-term and long-term incentives

• Short term incentive: rewards are issued based on an individual’s achievement of financial and nonfinancial measures and are specific to an individual’s contribution to the company.

• Long term incentive: the exercise price of share options is set to be not less than 150% of the ordinary share price on the day the options are issued, thereby linking the exercise of share options to the performance of the company. As at the date of this report, none of the options issued under the ESOP have been exercised.

Variable remuneration: short-term incentive (STI)

The Group operates an annual STI program and may award a discretionary cash bonus subject to a combination of Group-based financial and non-financial measures and demonstrated individual performance. Individual performance targets are set to represent the key drivers for Group success and are relevant to an individual’s role in the Group. They include the cash position of the Group, achievement against published milestone targets, and general performance. The total potential STI available is set at a level so as to provide sufficient incentive to achieve operational targets but also to ensure that the cost to the Group is reasonable in the circumstances. The STI program is solely discretionary and is considered on an annual basis by the Nomination and Remuneration Committee.

Variable remuneration: long-term incentive (LTI)

The objectives of the LTI plan are to reward KMP and other employees in a manner that aligns remuneration with the creation of shareholder wealth, and rewards staff for continued loyalty. Share options are issued under the company’s executive and employee share option plan (ESOP). Grants of share options to executives and staff are decided by the Nomination and Remuneration Committee. Options are typically, but not exclusively, granted to vest in equal portions over five years at a specific exercise price, the first vesting period occurring generally up to 12 months after the grant date. The terms of the options, and what happens to options in the event of cessation of employment, are at the discretion of the Board. However, if an option holder ceases employment prior to options vesting, the options are generally forfeited. If the options are vested at the time of cessation of employment, the option holder generally has 30 days after the last date of employment to exercise the options, unless the cessation of employment is due to death or disability. The conditions of the company’s ESOP provide that a recipient may not transfer, encumber or otherwise deal in the options.

At the date of this report there were 21,402,353 Options on issue under the ESOP. The exercise price, vesting conditions and expiry dates of Options under ESOP are variable. A summary of the numbers of Options issued under ESOP with these various terms is as detailed below:

14 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Directors’ Report

Exercise price	Vesting conditions			Expiry date		Number of options vested
- 19,700,000 Options have	- 3,402,353 Options	vest in		- 11,075,000	Options have	- 3,061,882 Options were
an exercise price of $0.12	equal portions over		five	an expiry	date of 9	vested at 30 June 2018
	years (20% per year)			November	2018
- 1,702,353 Options have						- 18,340,471 Options were
an exercise price of $0.04	- 18,000,000 Options	vest in		- 8,625,000	Options have	unvested at 30 June 2018
	accordance with		pre-	an expiry	date which is
	determined	clinical		10 years after the clinical
	development milestones			development milestone
				vesting event
				- 1,702,353	Options have
				an expiry	date of 9
				November	2019
Total Options on issue under	Total Options on issue under			Total Options	on issue under	Total Options on issue under
ESOP = 21,402,353	ESOP = 21,402,353			ESOP = 21,402,353		ESOP = 21,402,353

Employment contracts

All Executive Directors and KMP have rolling contracts, not limited by term. Details of current Executive Director contracts are as follows:

Executive	Remuneration	Notice period	STI and treatment of	LTI and treatment of LTI
			STI on termination	on termination
Dr Greg Collier	Base salary of	Resignation: six	Eligible to receive an	Eligible to participate in
	$330,000 subject to	months’ notice.	annual bonus of up	the company’s
	annual review. Exclusive of superannuation paid at government- determined levels	Termination: accrued legal entitlements plus severance of up to 12 months base salary (subject to any	to 30% of base salary. Payout of any performance bonus is at the discretion of the Board.	Employee Share Option Plan (ESOP). Any issue of shares or options is subject to shareholder approval.
	(currently 9.50%).	limitations under the	The treatment of STIs	The treatment of LTIs on
		Corporations Act).	on termination is at	termination is at Board
		Termination for	Board discretion.	discretion.
		cause: accrued legal
		entitlements.
Dr Mitchell Glass	Base salary of	Resignation: six	Eligible to receive an	Eligible to participate in
	$371,945	months’ notice.	annual bonus of up	the company’s
	(USD$277,200) subject to annual review. Employee benefits in the form of a health- insurance plan	Termination: accrued legal entitlements plus severance of up to 12 months base salary (subject to any	to 20% of base salary. Payout of any performance bonus is at the discretion of the Board.	Employee Share Option Plan (ESOP). Any issue of shares or options is subject to shareholder approval.
	reimbursement of up	limitations under the	The treatment of STIs	The treatment of LTIs on
	to $32,203	Corporations Act).	on termination is at	termination is at Board
	(USD$24,000) per annum.	Termination for cause: accrued legal	Board discretion.	discretion.
		entitlements.

15 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Directors’ Report

Shareholdings of Directors, Executives and Key Management Personnel for the year ended 30 June 2018

T Chew G Collier M Glass J Campbell W Brown M Farris T Coogan	Balance 1 July Shares issued from Options exercised Net Acquired/ (Disposed) Balance 30 June - 545,217,721 545,217,721 18,080,432 - 5,357,167 23,437,599 18,706,932 - (10,000,000) 8,706,932 3,229,794 - 956,978 4,186,772 11,069,640 - (11,069,640) - 108,000 - (52,000) 56,000 280,000 - - 280,000
	51,474,798 - 530,410,226 581,885,024

Option holdings of Directors, Executives and Key Management Personnel for year ended 30 June 2018

T Chew G Collier M Glass J Campbell W Brown M Farris T Coogan	Balance 1 July Remunerati on Options granted Lapsed Exer- cised Balance 30 June Vested 30 June Exercis- able 30 June Unexercis-able 30 June
	- - - - - - - - 2,000,000 - (2,000,000) - - - - - 8,812,500 - - - 8,812,500 - - 8,812,500 300,000 - (300,000) - - - - - 200,000 - (200,000) - - - - - - - - - - - - - - - - - - - - -
	13,312,500 - (2,500,000) - 8,812,500 - - 8,812,500

The disclosure of shares and options held by Key Management Personnel (KMP) are determined in accordance with the requirements of AASB 124, which requires that KMP holdings also include the holdings of ‘close family members’. Disclosure of ‘close family member’ holdings is not required by the Corporations Act 2001 and therefore the figures shown above may differ from those holdings reported in at Note 19 to the Consolidated Financial Statements.

Director Loans

In March 2015, the Company entered into loan agreements with each Invion Director subsequent to which unsecured (non-equity related) debt funding was provided by Invion directors to the Company for working capital and for the repayment of outstanding liabilities. The key terms of the loan:

• Advance: Each director/ related party loaned the Company $200,000 for a total loan amount from Directors/ related parties to the Company of $1,200,000;

• Interest rate: 10% per annum. Interest accrues daily and is payable at termination

• Term: Adjusted subsequently to the original agreement to be paid on the receipt of funds from the Right Issue in March 2018.

The principal amount and accrued interest was repaid to each party to the loan on 15 March 2018 in full and final settlement of the loan. G Collier, M Glass, J Campbell, and W Brown each received $69,272 in cash for interest related to their loans during the period.

16 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Directors’ Report

Invion Limited Performance and Shareholder Wealth

Relative movements in Basic Earnings per share, Net tangible assets per share and Dividend per share (cents per share) for the last five years are as follows. Period end share price has been included as one measure of shareholder wealth:

Earnings/(Loss) Per Share Net tangible assets per share Dividend per share Share Price	2014 2015 2016 2017 2018
	(1.27) (1.55) (0.41) (0.14) (0.13) 0.02 0.00 0.00 0.00 0.00 - - - - - $0.07 $0.019 $0.004 $0.003 $0.034

INDEMNITY

Subject to the Corporations Act and rule 26.2 of the Constitution of Invion Limited, the Company must indemnify each Director, Secretary and Executive Officer to the maximum extent permitted by law against any liability incurred by them by virtue of their holding office as, and acting in the capacity of, Director, Secretary or Executive Officer of the Company, other than:

• a) a liability owed to the Company or a related body corporate of the Company;

• b) a liability for a pecuniary penalty order under section 1317G Corporation Act or a compensation order under section 1317H Corporations Act;

• c) a liability owed to a person other than the Company that did not arise out of conduct in good faith.

The Company has paid premiums in respect of a contract insuring its Directors, the Company Secretary and Executive Officers for the financial year ended 30 June 2018. Under the Company’s Directors and Officers Liability Insurance Policy, the Company cannot release the nature of the liabilities insured by the policy or the amount of the premium.

Indemnification of auditors

To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of the terms of its audit engagement agreement, against claims by third parties arising from the audit. No payment has been made to indemnify Ernst & Young during or since the financial year.

AUDITOR INDEPENDENCE AND NON-AUDIT SERVICES

A statement of independence has been provided by the Company’s auditor, Ernst & Young, and is included in the attached financial report.

NON-AUDIT SERVICES

No non-audit services were conducted by the Company’s auditor in the financial year ended 30 June 2018.

Signed in accordance with a resolution of Directors

Thian Chew Chairman 28 August 2018

17 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

for the year ended 30 June 2018

Consolidated Statement of Comprehensive Income

Note Continuing Operations Revenue 6a Other income 6b Employee benefits expense 6e Depreciation, amortisation 6d Impairment of assets 6h Finance costs 6g Administration and corporate expense 6c Rent and occupancy expense Share based payment expense 20a Research and development costs 6f Patent costs Business development Loss before income tax from continuing operations Income tax benefit (expense) 7 Loss from continuing operations after income tax Other comprehensive income Items to be reclassified to profit or loss in subsequent periods: Unrealised exchange differences on translation of foreign subsidiary 16 Total comprehensive loss for the year Basic earnings per share for loss from continuing operations attributable to the ordinary equity holders of the parent Loss per share (cents) 17	2018 $ 2017 $ 737,713 - 151,886 174,407 (364,360) (82,112) (1,325,135) (1,244,993) (2,000,000) (4,400,000) (117,927) (144,380) (792,199) (561,312) (23,096) (1,214) (15,174) (61,014) (374,581) (30,889) (55,663) (103,442) (39,103) (434)
	(4,217,639) (6,455,383) (652,494) 4,255,646
	(4,870,133) (2,199,737)
	306,703 (484,308)
	(4,563,430) (2,684,045)
	(0.13) (0.14)

The Consolidated Statement of Comprehensive Income is to be read in conjunction with the notes to the Financial Statements.

18 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Consolidated Statement of Financial Position

as at 30 June 2018

Notes Current Assets Cash and cash equivalents 18a Trade and other receivables 8a Other current assets 9 Total Current Assets Non-Current Assets Property, plant and equipment 10 Intangible assets 11 Total Non-Current Assets Total Assets Current Liabilities Trade and other payables 12 Unearned revenue 12 Financial liabilities 12 Short-term provisions 13a Total Current Liabilities Non-Current Liabilities Deferred tax liabilities 7b Long-term provisions 13b Total Non-Current Liabilities Total Liabilities Net Assets Equity Issued capital 14 Reserves 16 Accumulated losses Total Equity	2018 $ 2017 $
	2,891,371 917,486 91,770 32,338 77,617 57,042
	3,060,758 1,006,866
	- 2,638 7,288,272 4,802,450
	7,288,272 4,805,088
	10,349,030 5,811,954
	782,070 492,567 886,264 - 20,295 1,257,101 93,024 55,087
	1,781,653 1,804,755
	652,494 - 8,538 -
	661,032 -
	2,442,685 1,804,755
	7,906,345 4,007,199
	132,140,700 123,693,298 23,771,219 23,449,342 (148,005,574) (143,135,441)
	7,906,345 4,007,199

The Consolidated Statement of Financial Position is to be read in conjunction with the notes to the Financial Statements.

19 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Consolidated Statement of Changes in Equity

for the year ended 30 June 2018

Note As at 1 July 2017 Loss for the period Other comprehensive income Total comprehensive income Issue of share capital 14 Transaction costs 14 Share based payment 20 As at 30 June 2018	Issued capital $ Options reserve $ Foreign currency translation reserve $ Convertible note reserve $ Accumulated losses $ Total equity $
	123,693,298 19,417,783 1,544,845 2,486,714 (143,135,441) 4,007,199 - - - - (4,870,133) (4,870,133) - - 306,703 - - 306,703
	- - 306,703 - (4,870,133) (4,563,430) 8,707,534 - - - - 8,707,534 (260,132) - - - - (260,132) - 15,174 - - - 15,174
	132,140,700 19,432,957 1,851,548 2,486,714 (148,005,574) 7,906,345

Note As at 1 July 2016 Loss for the period Other comprehensive income Total comprehensive income Issue of share capital 14 Transaction costs 14 Share based payment 20 As at 30 June 2017	Issued capital $ Options reserve $ Foreign currency translation reserve $ Convertible note reserve $ Accumulated losses $ Total equity $
	123,052,032 19,356,769 2,029,153 2,486,714 (140,935,704) 5,988,964 - - - - (2,199,737) (2,199,737) - - (484,308) - - (484,308)
	- - (484,308) - (2,199,737) (2,684,045) 656,682 - - - - 656,682 (15,416) - - - - (15,416) - 61,014 - - - 61,014
	123,693,298 19,417,783 1,544,845 2,486,714 (143,135,441) 4,007,199

The Consolidated Statement of Changes in Equity is to be read in conjunction with the notes to the Financial Statements.

20 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

for the year ended 30 June 2018

Consolidated Statement of Cash Flows

Notes Cash flows from/(used in) operating activities Payments to suppliers and employees Cash received from customer R&D tax rebate received Interest received Net cash used in operating activities 18b Cash flows from/(used in) investing activities Proceeds from bank guarantee Net cash provided by/ (used in) investing activities Cash flows from/(used in) financing activities Proceeds from borrowings Repayment of borrowings Repayment of accrued interest Proceeds from issue of shares Costs of capital raising Net cash provided by financing activities Net increase in cash held Net foreign exchange differences Cash and equivalents at beginning of the financial period Cash and equivalents at the end of the financial period 18a	2018 $ 2017 $
	(1,154,336) (857,331) 1,779,283 53 81,068 609,719 1,072 420
	707,087 (247,139)
	- 53,865
	- 53,865
	- 37,600 (1,237,600) - (415,634) - 3,207,534 656,682 (286,145) (15,416)
	1,268,155 678,866
	1,975,242 485,592 (1,357) (5,505) 917,486 437,399
	2,891,371 917,486

The Consolidated Statement of Cash Flows is to be read in conjunction with the notes to the Financial Statements.

21 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements for the year ended 30 June 2018

1. CORPORATE INFORMATION

Invion Limited is a for profit company limited by shares incorporated in Australia whose shares have been publicly traded on the Australian Securities Exchange since its listing on 15 February 2011 (ASX:IVX). Invion Limited is a clinical-stage life sciences (drug development) company. The Company is focused on the development and partnership for commercial gain of treatments for major market opportunities in a variety of cancer indications, chronic inflammatory and autoimmune diseases. The Invion Group (“the Group”) consists of Invion Limited (“Invion” or “the Company”) and its wholly owned subsidiary Invion, Inc. The Group has operations in Melbourne (Australia) and Delaware (USA). This consolidated financial report of Invion Limited for the year ended 30 June 2018 was authorised for issue in accordance with a resolution of the Directors on 28 August 2018.

2. SEGMENT REPORTING

The Invion Group operates as a clinical-stage life sciences (drug development) group with operations in Australia and the United States. The Group does not currently consider that the risks and returns of the Group are affected by differences in either the products or services it provides, nor the geographical areas in which the Group operates. As such the Group operates as one segment. Group performance is evaluated by the chief operating decision maker, which is the CEO, based on one segment, which consists of the entire Company’s operating profit or loss and is measured consistently with profit or loss in the consolidated financial statements. Group financing (including finance costs and finance income) and income taxes are managed on a Group basis.

3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

3.1. Statement of compliance

The financial report complies with Australian Accounting Standards and International Financial Reporting Standards as issued by the Australian Accounting Standards Board and International Accounting Standards Board. The financial report is presented in Australian dollars $.

New accounting standards and interpretations

Changes in Accounting Policy

The Group has adopted the following new and amended Australian Accounting Standards and AASB Interpretations as of 1 July 2017, none of which had a material impact on the financial position or performance of the Group:

• a) AASB 2016-1 Amendments to Australian Accounting Standards – Recognition of Deferred Tax Assets for Unrealised Losses

• b) AASB 2016-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to AASB 107

• c) AASB 2017-2 Amendments to Australian Accounting Standards – Further Annual Improvements 2014-2016 Cycle

The following amendments have been issued by the AASB but were not yet effective for the period ended 30 June 2018:

• a) AASB 2014-10 Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an Investor and its Associate or Joint Venture

• b) AASB 2016-5 Amendments to Australian Accounting Standards - Classification and Measurement of Share-based Payment Transactions

• c) AASB 2017-2 Amendments to Australian Accounting Standards - Transfers of Investment Property, Annual Improvements 2014-2016 Cycle and Other Amendments

• d) AASB 2016-6 Amendments to Australian Accounting Standards – Applying AASB 9 Financial Instruments with AASB 4 Insurance Contracts

22 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements for the year ended 30 June 2018

The Group has not elected to early adopt any new amendments that are issued but not yet effective. The future impacts of the above are being assessed by the Group

The following new standards have been issued by the AASB, but were not effective for the period ended 30 June 2018;

Title (Summarised)	Summary	Application date for Invion
AASB 15 Revenue from Contracts with Customers	AASB 15 provides a new five step model for recognising revenue earned from a contract with a customer and will supersede all current revenue recognition requirements under Australian Accounting Standards. The standard becomes mandatory for the Group for the 30 June 2019 financial year and the Group plans to adopt the new standard on the required effective date using the full retrospective method. Based on the procedures performed to date the Group does not expect there to be any material changes to net assets upon adoption.	Year ending 30 June 2019
AASB 9 Financial Instruments (December 2014)	AASB 9 Financial Instruments, published in December 2014, which replaces AASB 9 Financial Instruments (December 2009), AASB 9 Financial Instruments (December 2010), existing guidance in AASB 139 Financial Instruments: Recognition and Measurement and Interpretation 9 Reassessment of Embedded Derivatives. AASB 9 includes revised guidance on the classification and measurement of financial instruments, including a new expected credit loss model for calculating impairment on financial assets, and new general hedging accounting requirements. It also carries forward guidance on recognition and derecognition of financial instruments from AASB 139. AASB 9 is effective for annual reporting periods beginning 1 July 2018, with early adoption permitted. From the assessment performed to date it is expected AASB 9 will have an immaterial impact on the Group.	Year ending 30 June 2019
AASB 16 Leases	AASB 16 provides a single lessees accounting model whereby all leases are recorded on the statement of financial position. Lessees are required to recognise an asset and liability for all leases with the exemption of short term leases (less than 12 months) and low value leases. The standard becomes mandatory for Invion for the 30 June 2020 financial year. Invion does not intend to early adopt the standard. The Group has commenced an implementation process to identify the impacts on transition. Our preliminary assessment indicates that if the provisions of AASB 16 were applied in the current period, a number of operating leases will fall within the scope of AASB 16. At this stage, while we expect the impact of the new standard will result in changes to the current practice of accounting for leases, we are not yet in a position to reasonably estimate the impact on the financial statements including anticipated additional disclosures, however as Invion has no material leases, a material impact to the statement of financial position is not expected. In 2018, the Group will continue to assess the potential effect of AASB 16 on its consolidatedfinancialstatements.	Year ending 30 June 2020

23 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements for the year ended 30 June 2018

3.2. Basis of accounting

The financial report is a general purpose financial report, which has been prepared in accordance with the requirements of the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements of the Australian Accounting Standards Board. The financial report has also been prepared on a historical cost basis. New accounting standards and interpretations, including those issued but not yet effective, are detailed in Note 3.1. The effect of adopting new standards and interpretations effective this year are also disclosed at Note 3.1.

3.3. Going concern

The report has been prepared on a going concern basis. The Group incurred an operating loss after income tax of $4,563,430 (2017: $2,199,737) for the year ended 30 June 2018. At 30 June 2018 the Group had net assets of $7,906,345 (2017: net assets of $4,007,199) and net current assets of ($1,279,105) (2017: net current liabilities of $797,889). In common with other companies in the biotechnology sector, the Group’s operations are subject to risks and uncertainty due primarily to the nature of the drug development and commercialisation.

The ability of the Group to continue as a going concern and meet its strategic objectives is principally dependent upon funds continuing to be available for research and development expenditure and other principal activities. The Directors have identified funding risk as an area of uncertainty and material risk impacting the Group due to the dependency on the R&D Services Agreement with the Cho Group, and as similar to other companies in the biotechnology sector, recognise that further capital may be required to fund the Group’s activities.

The Directors are satisfied that notwithstanding the uncertainty, on the basis the Cho Group funding continues to be made available, there is a reasonable basis to conclude that adequate cash is available to meet the liabilities and commitments of the Group for a period of at least twelve months from the date of this report, and on that basis, are satisfied that the going concern basis of preparation is appropriate. No adjustment has been made to recorded assets and liability amounts and classifications should the group not continue as a going concern.

3.4. Basis of consolidation

The consolidated financial statements comprise the financial statements of Invion Limited and its whollyowned subsidiary Invion Inc., as at 30 June 2018. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary. Specifically, the Group controls a subsidiary if and only if the Group has:

• Power over the subsidiary (i.e. existing rights that give it the current ability to direct the relevant activities of the subsidiary);

• Exposure, or rights, to variable returns from its involvement with the subsidiary; and

• The ability to use its power over the subsidiary to affect its returns.

The Group re-assesses whether or not it controls a subsidiary if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the statement of comprehensive income from the date the Group gains control until the date the Group ceases to control the subsidiary.

Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the parent of the Group and to the non-controlling interests, even if this results in the noncontrolling interests having a deficit balance. When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation.

3.5. Convertible Notes

Convertible notes are recognised initially at fair value in the statement of financial position as financial liabilities, net of transaction costs. Subsequent to initial recognition convertible notes are measured at fair

24 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements for the year ended 30 June 2018

value through the profit and loss. The conversion option within the convertible note represents an embedded derivative. Embedded derivatives are only separated from the host contract if the criteria in AASB 139 are satisfied. Where interest is charged on convertible notes, the liability is increased over the term of the liability using the effect interest rate implicit in the note.

3.6. Property, plant and equipment (PPE)

Plant and equipment is stated at cost less depreciation and impairment in value. Depreciation is calculated on a straight line basis over the estimated useful life of the asset as follows:

	2018	2017
Plant and equipment	10%-50%	10%-50%
Computer equipment	20%-50%	20%-50%
Furniture and fittings	10%-20%	10%-20%

An item of property, plant and equipment and any significant part initially recognised is de-recognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit or loss when the asset is derecognised.

3.7. Acquisition of assets

All assets acquired including property, plant and equipment (PPE) and intangibles other than goodwill, are initially recorded at their cost of acquisition at the date of acquisition, being the fair value of the consideration provided plus incidental costs directly attributable to the acquisition. When equity instruments are issued as consideration, their market prices at the date of acquisition are used as fair value, except where the notional price at which they could be placed in the market is a better indication of fair value.

3.8. Recoverable amount of assets

At each Balance Date, the Group assesses whether there is any indication that an intangible asset or PPE may be impaired. Where an indicator of impairment exists, the Group makes a formal estimate of recoverable amount. Where the carrying amount of an asset exceeds its recoverable amount the asset is considered impaired and is written down to its recoverable amount. Recoverable amount is the greater of fair value less costs of disposal, and value in use. It is determined for an individual asset, unless the asset’s value in use cannot be estimated to be close to its fair value less costs to sell and it does not generate cash inflows that are largely independent of those from other assets or groups of assets, in which case, the recoverable amount is determined for the cash generating unit to which the asset belongs. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and risks specific to the asset.

3.9. Trade and other receivables

Trade receivables are recognised and carried at original invoice amount less a provision for any uncollectible debts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off as incurred. Terms of receivables are between 30 and 45 days. Interest is taken up as income on an accrual basis.

3.10. Intangible assets

Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. Internally generated intangible assets, excluding capitalised development costs, are not capitalised and expenditure is reflected in the profit and loss in the period in which the expenditure is incurred. The useful lives of intangible assets are assessed as either finite or indefinite. Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting

25 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements

for the year ended 30 June 2018

period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the income statement as the expense category that is consistent with the function of the intangible assets.

Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to determine whether the indefinite life continues to be supportable. If not, the change in useful life from indefinite to finite is made on a prospective basis.

Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the Consolidated Statement of Comprehensive Income when the asset is derecognised.

Patents – Intellectual Property

The Group made upfront payments to purchase patents. The patents have been granted for periods of up to 20 years by the relevant authority, often with the option of renewal at the end of this period.

Research and development

Research costs are expensed as incurred. Development expenditures on an individual project are recognised as an intangible asset when the Group can demonstrate:

• the technical feasibility of completing the intangible asset so that the asset will be available for use or sale;

• its intention to complete and its ability to use or sell the asset;

• how the asset will generate future economic benefits;

• the availability of resources to complete the asset; and

• the ability to measure reliably the expenditure during development

Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use. It is amortised over the period of the expected future benefit. Amortisation is recorded in the Consolidated Statement of Comprehensive Income. During the development, the asset is tested for impairment annually.

A summary of the policies applied to the Group’s intangible assets is as follows:

	Patents	Development Costs
Useful lives	Finite	Finite
Amortisation method used	Amortised on a straight-line basis over	Amortised on a straight-line basis over
	the period of the patent	the expected period of available use
Internally generated or acquired	Acquired	Internally generated

3.11. Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability; or, in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant's ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.

26 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements for the year ended 30 June 2018

The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

• Level 1: quoted (unadjusted) market prices in active markets for identical assets or liabilities

• Level 2: valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

• Level 3: valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between Levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.

At each reporting date, the Group reviews and analyses any movements in the values of assets and liabilities which are required to be re-measured or re-assessed as per the Group’s accounting policies. For this analysis, the Group verifies the major inputs applied in the latest valuation by agreeing the information in the valuation computation to contracts and other relevant documents.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy as explained above.

3.12. Income taxes

Deferred income tax liabilities are recognised for all taxable temporary differences except:

• where the deferred income tax liability arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit and loss; or

• In respect of deductible temporary differences associated with investments in subsidiaries, when the timing of the reversal of the temporary differences can be controlled and it is probably that the temporary differences will not reverse in the foreseeable future

Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward or unused tax assets an unused tax losses can be utilised except where the deferred income tax asset relating to the deductible temporary differences arise from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor the taxable profit or loss.

In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets is reviewed at each Balance Date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised. Deferred income tax asset and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantially enacted at the Balance Date. Income taxes relating to items recognised directly in equity are recognised in equity and not in the Consolidated Statement of Comprehensive Income.

3.13. Other taxes

27 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements for the year ended 30 June 2018

Revenues, expenses and assets and liabilities are recognised net of the amount of goods and services tax (GST) except:

• Where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of an asset or as part of an item of expense as applicable; or

• Where receivables and payables are stated with the amount of GST included.

The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position. Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority, are classified as operating cash flows. Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.

3.14. Cash and short term deposits

Cash and short-term deposits in the statement of financial position comprise cash at banks and on hand and short-term deposits with a maturity of three months or less. Bank overdrafts are carried at the principal amount. Interest is charged as an expense on an accrual basis.

3.15. Revenue recognition

Revenue is recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The following specific criteria must also be met before revenue is recognised:

• Revenues are recognised at fair value of the consideration received net of the amount of goods and services tax (GST) payable to the taxation authority.

• Contract research income is recognised as and when the relevant research expenditure is incurred. If the Group receives income in advance of incurring the relevant expenditure, it is treated as deferred income as the Group does not control the income until the relevant expenditure has been incurred.

• R&D tax rebate income is accrued following management’s determination of anticipated R&D tax rebate income, and is based on an assessment of R&D expenditure in the period and advice received from R&D tax advisors.

3.16. Foreign currency

The Group’s consolidated financial statements are presented in Australian Dollars, which is also the Parent’s functional currency. For each entity the Group determines the functional currency, and items included in the financial statements of each entity are measured using that functional currency.

−

Transactions and balances

Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates at the date the transaction first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Differences arising on settlement or translation of monetary items are recognised in profit and loss with the exception of monetary items that are designed as part of the hedge of the Group’s net investment of a foreign operation. These are recognised in other comprehensive income until the net investment is disposed of, at which time, the cumulative amount is reclassified to profit and loss. Tax charges and credits attributable to exchange differences on those monetary items are also recorded in other comprehensive income.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the date of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is treated in line with the recognition of gain or loss on change in fair value of the item (i.e. translation differences on items whose fair value gain or loss is recognised in other comprehensive income or profit or loss are also recognised in other comprehensive income or profit or loss, respectively).

28 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements for the year ended 30 June 2018

Any goodwill arising on the acquisition of a foreign operation and any fair value adjustments to the carrying amounts of assets and liabilities arising on the acquisition are treated as assets and liabilities of the foreign operation and translated at the spot rate of exchange at the reporting date.

− Group companies

On consolidation, the assets and liabilities of foreign operations are translated into Australian dollars at the rate of exchange prevailing at the reporting date and their income statements are translated at exchange rates prevailing at the dates of the transactions. The exchange differences arising on translation for consolidation are recognised in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in profit and loss.

3.17. Trade and other payables

Liabilities for trade creditors and other amounts are carried at amortised cost which is the fair value of the consideration to be paid in the future for goods and services, whether or not billed to the consolidated entity. Payables to related parties are carried at amortised loss. Interest, when charged by the lender, is recognised as an expense on an accrual basis.

3.18. Issued capital

Ordinary share capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a reduction of the share proceeds received.

3.19. Leased assets

Leases under which the Group assumes substantially all the risks and benefits of ownership are classified as finance leases. Other leases are classified as operating leases. Payments made under operating leases are expensed on a straight line basis over the accounting periods covered by the lease term, except where an alternative basis is more representative of the pattern of benefits to be derived from the leased property.

3.20. Superannuation

Contributions are made to approved employee superannuation funds at the rate as directed by the Superannuation Guarantee Legislation. For the period ending 30 June 2018, this was 9.50% of employees’ gross salaries. Contributions are recognised as an expense against income as they are made.

3.21. Employee provisions

Provisions are recognised when Invion has a present obligation as a result of a past event and it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. When Invion expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement. Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the Balance Date using a discounted cash flow methodology. The risks specific to the provision are factored into the cash flows and as such an applicable corporate bond rate relative to the expected life of the provision is used as a discount rate. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the time value of money and the risks specific to the liability. The increase in the provision resulting from the passage of time is recognised in finance costs.

Wages, Salaries and Annual Leave

Liabilities for employee benefits for wages, salaries and annual leave represent present obligations resulting from employees’ services provided to Balance Date, calculated at undiscounted amounts based on remuneration wage and salary rates that the Company expects to pay as at Balance Date, including related on-costs, such as workers compensation insurance and payroll tax.

Long Service Leave

The amount provided for employee benefits to long service leave represents the present value of the estimated future cash outflows to be made in connection with employees’ services provided up to Balance Date. The provision is calculated at discounted amounts based on remuneration wage and salary

29 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements for the year ended 30 June 2018

rates that the Company expects to pay as at Balance Date, including related on-costs, such as workers compensation insurance and payroll tax.

3.22. Government grants

Government grants are recognised at their fair value where there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. When the grant relates to an expense item, it is recognised as income over the periods necessary to match the grant on a systematic basis to the costs that it is intended to compensate. When the grant relates to an asset, the fair value is credited to a deferred income account and is released to the statement of comprehensive income over the expected useful life of the relevant asset by equal annual instalments.

3.23. Interest-bearing loans and borrowings

All loans and borrowings are initially recognised at cost, being the fair value of the consideration received net of issue costs associated with the borrowing. After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost using the effective interest method. Amortised cost is calculated by taking into account any issue costs and any discount or premium on settlement. Gains and losses are recognised in the statement of comprehensive income when the liabilities are de-recognised and as well as through the amortisation process.

3.24. Borrowing Costs

Borrowing costs include interest, amortisation of discounts or premiums relating to borrowings, amortisation of ancillary costs incurred in connection with arrangement for borrowings, finance charges in respect of finance leases and foreign exchange differences. Interest payments in respect of financial instruments classified as liabilities are included in borrowing costs. Ancillary costs incurred in connection with the arrangement of borrowings are netted against the relevant borrowings and amortised over their life. Borrowing costs are expensed as incurred unless they relate to qualifying assets. Qualifying assets are assets which necessarily take a substantial period of time to get ready for their intended use or sale. In these circumstances, borrowing costs are capitalised to the cost of the assets. Where funds are borrowed specifically for acquisition, construction or production of a qualifying asset, the capitalised amount of the borrowing costs include costs incurred in relation to that borrowing net of any interest earned on those borrowings. Where funds are borrowed generally, borrowing costs are capitalised using a weighted average capitalisation rate.

3.25. Earnings Per Share

Basic earnings per share (EPS) is calculated by dividing the net profit / (loss) attributable to members for the reporting period, after excluding any costs of servicing equity (other than ordinary shares and converting preference shares classified as ordinary shares for EPS calculation purposes), by the weighted average number of ordinary shares of the Company outstanding during the year. Diluted EPS is calculated by dividing the basic EPS earnings, adjusted by the after tax effect of financing costs associated with dilutive potential ordinary shares and the effect on revenues and expenses of conversion to ordinary shares associated with dilutive potential ordinary shares, by the weighted average number of ordinary shares and dilutive potential ordinary shares outstanding during the year. As the Company incurred a loss for the current and previous year, potential ordinary shares, being options to acquire ordinary shares, are considered non-dilutive and therefore not included in the diluted earnings per share calculation.

3.26. Share-Based Payment Transactions

The Group provides benefits to employees, including Directors, of the Group and to selected contractors in the form of share based payment transactions, whereby participants render services in exchange for shares or rights over shares (equity-settled transactions). The Group also provided benefits to an institutional investor as part as compensation for a funding agreement. The costs of the equity settled transactions with participants are measured by reference to the fair value at the date at which they are granted. The fair value is determined by using the Black Scholes option-pricing model. In valuing equity settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Invion Limited. The cost of equity settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award (vesting date). The cumulative expense recognised for equity settled transactions at each Balance Date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the Directors of the Company will ultimately vest. This opinion is based on the best available information at Balance Date. No adjustment is made for the likelihood of market performance conditions being met as the effect of

30 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements for the year ended 30 June 2018

these conditions is included in the determination of fair value at grant date. No expense is recognised for awards that do not ultimately vest. Where the terms of an equity settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as measured at the date of modification. Where an equity settled award is cancelled (other than a grant cancelled by forfeiture when the vesting conditions are not satisfied), it is treated as if it had vesting on the date of cancellation and any expense not yet recognised for the award is recognised immediately. However, if a new award is substituted for the cancelled award and designated as a replacement award on the date that it is granted, the cancelled and new award is treated as if it were a modification of the original award, as described in this paragraph.

3.27. Significant accounting judgements, estimates and assumptions

Management bases its judgements and estimates on historical experience and on other factors it believes to be reasonable under the circumstances, the result of which form the basis of the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions and conditions.

Management has identified the following critical accounting policies for which significant judgements, estimates and assumptions are made. Actual results may differ from these estimates under different assumptions and conditions and may materially affect financial results or the financial position reported in future periods. Further details of the nature of these assumptions and conditions may be found in the relevant notes to the financial statements.

Impairment

The Group assesses impairment of all assets at each reporting date by evaluating conditions specific to the Group and to the particular asset that may lead to impairment. If any such indication exists, the Group will estimate the recoverable amount of the asset. In assessing whether there is any indication that an asset may be impaired, the Group considers external and internal sources of information including market forces, the Group’s market capitalisation, evidence of obsolescence, significant changes with an adverse effect on the Group or its assets, and any financial projections.

Taxes

Determining income tax provisions involves judgment on the tax treatment of certain transactions. Deferred tax is recognised on tax losses not yet used and on temporary differences where it is probable that there will be taxable revenue against which these can be offset. Management has made judgments as to the probability of future taxable revenues being generated against which tax losses will be available for offset.

Share-based payment transactions

The Group measures the cost of equity-settled transactions with employees and other parties by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined with using a Black Scholes standard model, with the assumptions detailed in Note 20(b). 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 expenses and equity.

R&D Tax rebate income

R&D tax rebate income is accrued following management’s determination of anticipated R&D tax rebate income, and is based on an assessment of R&D expenditure in the period and advice received from R&D tax advisors.

4. FINANCIAL RISK MANAGEMENT

The Group’s principal financial instruments comprise receivables, payables, cash, short-term deposits, loans and borrowings. The main risks arising from the Group’s financial instruments are interest rate risk, foreign currency risk, credit risk and liquidity risk. The Group uses different methods to measure and manage different types of risks to which it is exposed. These include monitoring levels of exposure to interest rate and foreign exchange risk and making assessments of market forecasts for interest rate and foreign exchange. Ageing analyses and monitoring of specific credit allowances are undertaken to manage credit risk, and liquidity risk is monitored through the development of future rolling cash flow forecasts.

31 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements for the year ended 30 June 2018

Apart from loans for current and former directors, financial assets and liabilities have contractual maturities of less than twelve months.

4.1. Interest rate risk

The Group’s exposure to market interest rates relates primarily to its cash holdings. The Group constantly analyses its interest rate exposure. Within this analysis consideration is given to a mix of fixed and variable interest arrangements. The Group has performed a sensitivity analysis relating to its exposure to interest rate risk at Balance Date. This sensitivity analysis demonstrates the effect on the current year results which could result from a change in these risks. As at 30 June 2018, the effect on profit and equity as a result of changes in the interest rate, with all other variables remaining constant, would be as follows. The table below shows the impact on cash to exposure to variable interest rates:

	2018	2017
Changeinprofit/(loss) and equity before tax	$	$
Increase in interest rate by 2%	38,091	14,088
Decrease in interest rate by 2%	(38,091)	(14,088)

4.2. Foreign currency risk

The major foreign currency exposure is in US Dollars (USD). This is as a result of cash funds held and both receivable and payable contracts entered into in this currency. The Group maintains foreign currency bank accounts denominated in USD in order to minimise foreign currency risk exposure. The Group had a deficit of foreign currency receivables over payables of $(363,329) at 30 June 2018 (2017: $1,818,723 deficit). Cash held in USD and the investment in the US subsidiary, Invion, Inc., are the only assets exposed to foreign currency risk at the Balance Date. Trade creditors are the only liability exposed to foreign currency risk at the Balance Date. As at 30 June 2018, the effect on profit and equity as a result of changes in the value of the Australian Dollar to USD, with all other variables remaining constant, would be as follows:

	2018	2017
Changeinprofit/(loss) and equity	$	$
Improvement in AUD by 15%	(47,064)	(15,060)
Decline in AUD by 15%	63,679	20,372

4.3. Credit risk

The maximum exposure to credit risk, excluding the value of any collateral or other security, at balance date to standardised financial assets, is the carrying amount, net of any provisions for doubtful debts, as disclosed in the statement of financial position and notes to and forming part of the financial report. The Group does not have any material credit risk exposure to any single debtor or group of debtors under financial instruments.

4.4. Liquidity risk

Liquidity risk arises from the financial liabilities of the Group and the Group’s subsequent ability to meet its obligations to repay its financial liabilities as and when they fall due. The Group manages liquidity risk by monitoring forecast cash flows and ensuring that adequate cash resources will be available as and when required, as well as ensuring capital raising initiatives are conducted in a timely manner as required.

2018 Financial Liabilities Trade and other payables Notes payable (i) Total Financial Liabilities	1-6 months $ 6-12 months $ 1-5 years $ >5 years $ Total $
	782,070 - - - 782,070 - 20,295 - - 20,295
	782,070 20,295 - - 802,365

(i) Note Payable liabilities assumed on acquisition of Inverseon, Inc.

32 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements

for the year ended 30 June 2018

2017 Financial Liabilities Trade and other payables Loans from Directors (i) Notes payable (ii) Insurance funding Convertible note (iii) Total Financial Liabilities	1-6 months $ 6-12 months $ 1-5 years $ >5 years $ Total $
	492,567 - - - 492,567 1,200,000 - - - 1,200,000 - 19,501 - - 19,501 37,600 - - - 37,600 - - - - -
	1,730,167 19,501 - - 1,749,668

(i) Unsecured (non-equity related) debt funding was provided by Invion directors/ related parties for working capital and for the repayment of outstanding liabilities. Further details are recorded in Note 22 – Related Party Transactions.

(ii) Notes Payable liabilities were assumed on acquisition of Inverseon, Inc. in 2012

(iii) In 2016, the company had equity risk relating to the Convertible Note on issue to the Australian Special Opportunity Fund. The Convertible Note agreement terminated in March 2017.

4.5. Net fair values

The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced liquidation sale. The following methods and assumptions were used to estimate the fair values: cash and short-term deposits, receivables and other assets, trade and other current liabilities, convertible notes, loans from directors, and other unsecured loans approximate their carrying value largely due to the short-term maturities of these instruments. The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in the statement of Consolidated Statement of Financial Position and in the notes to and forming part of the financial report.

5. FAIR VALUE HIERARCHY

The financial liability in 2017 of $100,000 was associated with the convertible note which was measured using significant unobservable inputs (Level 3).

Valuation Technique

In determining Fair Value, consideration is given to the price that would be paid to transfer the liability in an orderly transaction between market participants at the measurement date. Determination of the fair value of the convertible note has thus taken into the contractual obligations of the Company, expectations regarding the timing of conversion, the conversion price/actual share price and the probability of any other events occurring that would result in an increase to the face value of the convertible note as set out in the contract with the counterparty. Disclosure of quantitative unobservable inputs has not been made as they are not expected to materially impact the amount recorded.

Reconciliation of recurring Level 3 fair value movements

Convertible Note Opening balance Reductions (i) Additions Closing balance	30 June 2018 30 June 2017 $ $ - 100,000 - (100,000) - -
	- -

(i) In 2016, the company had equity risk relating to the Convertible Note on issue to the Australian Special Opportunity Fund. The Settlement Deed provided for an increase to the face value of the note by $100,000 upon occurrence of events, including certain capital raisings, as set out in the agreement. The Deed expired in March 2017.

33 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

for the year ended 30 June 2018

Notes to the Financial Statements

6. INCOME & EXPENSES

INCOME & EXPENSES
(a) Revenue Contract research income (i) (b) Other Income Net unrealised foreign exchange gain/ (loss) Other income (ii) Interest received R&D tax rebate (c) Administration & corporate expenses: Legal fees Compliance costs Consulting fees incl. accounting, business development Insurance Other administration and corporate expenses (d) Depreciation & amortisation Amortisation: - Intellectual property - Licence fee Depreciation of non-current assets: - Plant and equipment (e) Employee benefits expense Salaries, wages and fees Superannuation Employee entitlements Other staff costs (f) Research and development Clinical trial costs Drug production and supply Feasibility studies (inhaled programs) Other research and development	2018 $ 2017 $
	737,713 - (12,534) 73,935 - 100,052 1,072 420 163,348 -
	151,886 174,407
	51,313 14,118 200,380 143,233 276,667 229,585 140,413 148,467 123,426 25,909
	792,199 561,312
	1,162,462 1,192,010 160,000 50,000 2,673 2,983
	1,325,135 1,244,993
	276,815 69,716 23,948 3,135 58,778 5,754 4,819 3,507
	364,360 82,112
	165,442 4,060 30,338 26,829 154,801 - 24,000 -
	374,581 30,889

34 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

for the year ended 30 June 2018

Notes to the Financial Statements

(g) Finance costs Interest expense on loans from Directors Interest expense on other secured loans (h) Impairment of assets Impairment expense related to intangible assets	111,457 128,820 6,470 15,560
	117,927 144,380
	2,000,000 4,400,000

(i) Fees earned from the Cho Group for Research and Development services provided.

(ii) Other income during 2017 consists of reversal of provision related to the Convertible Note Settlement Deed.

(b) A reconciliation between tax expense and the product of accounting loss before income tax multiplied by the Group’s applicable income tax rate is as follows: Accounting Loss before income tax At the Company’s statutory income tax rate of 27.5% (2017: 28.5%) Non tax deductible items – permanent differences Non assessable items – permanent differences Movement in temporary differences not recorded 7. INCOME TAX (a) Statement of comprehensive income Current income tax Current income tax benefit Deferred income tax Future income tax benefit arising from the reversal of the deferred tax liability recognised on acquisition of the subsidiary Recognition of deferred tax assets attributable to tax losses Income tax expense arising from the de-recognition of the deferred tax asset due to uncertainty of US loss carry forward Reversal of temporary difference Income tax losses not recognised as a deferred tax asset Income tax benefit / (expense) reported on the statement of comprehensive income	2018 $ 2017 $
	1,391,134 1,777,479 - 2,461,480 - 1,794,166 (652,494) - (1,296,260) (1,391,134) (481,218)
	(652,494) 4,255,646
	(4,217,639) (6,455,383) (1,159,851) (1,775,230) 62,188 16,779 (44,921) - (240,419) 1,296,260

35 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

for the year ended 30 June 2018

Notes to the Financial Statements

Tax benefit arising on amortisation and impairment of deferred tax liability acquired on acquisition Recognition of deferred tax assets attributable to tax losses De-recognition of the deferred tax asset due to uncertainty of US loss carry forward Foreign tax rate differential Current year losses not recognised	- 4,255,646 - 1,794,166 (652,494) (8,131) (19,027) 1,391,134 481,218
	(652,494) 4,255,646

Tax assets at 27.5% (2017: 27.5%) Domestic tax losses (i) Temporary differences – including balances in equity Subsidiary foreign tax losses (at 40%) Total unrecorded tax assets Deferred tax balances Deferred tax liability opening balance Effect of amortisation of intellectual property Effect of impairment on intellectual property Effect of foreign currency translation Deferred tax liability ending balance Deferred tax asset offset Net impact	2018 $ 2017 $
	811,495 32,004,438 240,419 1,876,531 - 1,797,936
	1,051,914 35,678,905
	2018 $ 2017 $
	1,794,166 4,155,435 (464,984) (476,804) (800,000) (1,769,508) 123,312 (114,957)
	652,494 1,794,166
	- (1,794,166)
	652,494 -

(i) Domestic tax losses represent the tax losses available since the transaction which resulted in a change of ownership

The Company’s tax rate is recorded as 27.5% as a result of the small business tax concession which became effective for the Company 1 July 2015.

The Deferred Tax Liability represents the notional tax payable on the value of the Intellectual Property and Funding Right at the time of acquisition of the subsidiary at the US tax rate of 40%. This liability reduces as the intellectual property and funding right are amortised.

In prior years, Invion has recorded significant estimated, unconfirmed and un-recouped losses as disclosed above. Invion had recognised future income tax benefit for the tax losses incurred by the Group up to the balance of the deferred tax liability. Due to the complexity of Invion’s changing shareholder base and operations, combined with income tax legislation, the amount of the Company’s available tax losses which are available for carry forward use cannot be determined with a sufficient degree of probability to recognise any further benefit. Companies can carry forward a tax loss indefinitely, and use it when they choose, provided they have either maintained the same ownership and control and/or carried on the same business since the tax loss was incurred. In the year

36 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements for the year ended 30 June 2018

to 30 June 2018, the Company experienced a material change in ownership. On this basis, for the period under review, the Company has not recognised tax losses which occurred prior to the change in ownership ($32,332,351). Management will undertake a detailed review of the ability to carry forward and use these prior losses on a needs basis. The losses disclosed as available may not be available in full.

The losses disclosed as at 30 June 2018 will only be obtained in future periods if future assessable income of a nature and of an amount sufficient to enable the benefit to be realised; the conditions for deductibility imposed by tax legislation continue to be complied with; and, no changes in tax legislation adversely affect Invion in realising the benefit.

8. TRADE & OTHER RECEIVABLES (a) Current Other debtors R&D tax rebate Unpaid share issue consideration Other – unsecured GST refundable	2018 $ 2017 $
	- 7,671 91,770 - - 10,000 - 10,340 - 4,327
	91,770 32,338

Terms and conditions

All receivables are non-interest bearing and are usually settled on terms of between 30 and 45 days. Credit risk is assessed as low on all receivables.

9. OTHER ASSETS Current – Prepayments 10. PROPERTY, PLANT AND EQUIPMENT Total property, plant and equipment - At Cost - Accumulated Depreciation and Amortisation Total written down value		2018 $ 2017 $
		77,617 57,042
		77,617 57,042
		2018 $ 2017 $ 19,667 18,897 (19,667) (16,259) - 2,638

37 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

for the year ended 30 June 2018

Notes to the Financial Statements

11. INTANGIBLE ASSETS

11. INTANGIBLE ASSETS
	INV102	INV104	PhotosoftTM	Total
	$	$	$	$
At July 2017	4,485,450	317,000	-	4,802,450
Acquisitions	-	-	5,500,000	5,500,000
Less: Accumulated amortisation	(1,162,463)	(50,000)	(110,000)	(1,322,463)
Less: impairment (i)	(2,000,000)	-	-	(2,000,000)
Foreign Exchange	308,285	-	-	308,285
At 30 June 2018	1,631,272	267,000	5,390,000	7,288,272
At July 2016	10,388,631	367,000	-	10,755,631
Acquisitions		-	-
Less: Accumulated amortisation	(1,192,010)	(50,000)	-	(1,242,010)
Less: impairment (i)	(4,400,000)	-	-	(4,400,000)
Foreign Exchange	(311,171)	-	-	(311,171)
At 30 June 2017	4,485,450	317,000	-	4,802,450

Description of intangible assets

INV102

The Group currently owns intellectual property on the drug assets INV102 (acquired in merger with Inverseon, Inc in August 2012). The INV102 patents owned by Invion are being amortised over the useful life of the patent, which has been reassessed during the period and reduced to have approximately 3 years remaining.

(i) Consideration of impairment

At each Balance Date, the Group assesses whether there is any indication that an intangible asset may be impaired. Where an indicator of impairment exists, the Group makes an estimate of recoverable amount, and where the carrying amount of an asset may exceed its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. Following the acquisition via business combination of INV102 (nadolol) in 2012, its value was recorded on initial recognition at cost – being its fair value at the date of acquisition. The Board considers that, at the Balance Date, indicators of impairment did exist for the respiratory asset INV102 (nadolol) as there has been further delay in monetising the asset. The Board remains confident in the science surrounding INV102 (nadolol) and the quality of its clinical development and clinical trial results. The Board determined the value of the INV102 (nadolol) asset had decreased in the past year. The Financial Statements therefore record an impairment value of $2,000,000 by way of assessing value in reference to the $0.002 share price of the capital transactions occurring during the year as reflective of the underlying assets at the date of the transaction. This is a level 3 fair value hierarchy assessment.

INV104

The Group currently owns intellectual property on the drug assets INV104 (acquired in merger with Inverseon, Inc in August 2012). On 28 October 2013, the Company announced the execution of an exclusive, worldwide licence agreement with US-based Accolade Pharma LLC, for intellectual property to develop inhaled formulations of INV104 (zafirlukast) for the treatment of asthma and other respiratory conditions. The in-licenced intellectual property is reflected as an intangible asset and is being amortised over the term of the licence agreement, to 1 January 2024.

38 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements

for the year ended 30 June 2018

(i) Consideration of impairment

The Directors do not consider there has been impairment triggers of the value of $267k (2017: $317k) in-licensed asset INV104 (zafirlukast) during the year and up until the date of this report.

Photosoft[TM]

Invion is developing Photosoft[TM ] technology as an improved next generation Photodynamic Therapy. The Photosoft[TM] commercialisation licence is reflected as an intangible asset and is being amortised over a 25 year period.

(i) Consideration of impairment

The Photosoft[TM] commercialisation licence is being carried at the value of the licence and distribution agreement less accumulated amortisation. The Directors are of the view that there have been no indicators of impairment to this carrying value due to both the short period since the transaction when an independent expert valued the licence, and the progress in the R&D development asset since that time.

INV103

Directors continue to fully impair the INV103 intellectual property given the uncertainties associated with the continued research and development of this asset.

12. TRADE & OTHER PAYABLES Trade creditors Accrued expenses Director related accruals GST payable 12.1 Deferred Income Unearned Income 12.1 Financial Liabilities Notes payable Loans from Directors and related parties Other secured loan (Insurance funding)	2018 $ 2017 $
	567,838 117,355 159,830 71,035 - 304,177 54,402 -
	782,070 492,567
	886,264 -
	886,264 -
	20,295 19,501 - 1,200,000 - 37,600
	20,295 1,257,101

Director related accruals reflect accrued interest on Director loans (see Note 22, Related Party Transactions).

The carrying amounts of the loans from Directors and related parties are a reasonable approximation of fair value.

39 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements for the year ended 30 June 2018

Trade creditors are non-interest bearing and are normally settled on 30-day terms. Details of payments made to Directors are set out in the Directors’ Report. Details of payments made to related parties are set out in Note 22 - Related Party Transactions.

Notes Payable related to Notes assumed in the acquisition on Inverseon Inc.

13. PROVISIONS Current - Short-term employment provisions Non-current - Long-term employment provisions 14. ISSUED CAPITAL Ordinary shares fully paid Movements in shares on issue As at 1 July Shares issued in Transaction (i) Shares issued in Rights Issue (ii) Shares issued on exercise of share options Transaction costs As at 30 June
	5,492,272,967 132,140,700 1,237,071,273 123,052,032 1,455,965,273 123,693,298 1,237,071,273 123,052,032 2,750,000,000 5,500,000 218,894,000 656,682 1,245,557,694 2,494,409 - - 40,750,000 713,125 - - - (260,132) - (15,416)
	5,492,272,967 132,140,700 1,455,965,273 123,693,298

(i) Issue of shares following Shareholder approval of The Cho Group transaction: On 4 December 2017, 2,750,000,000 shares were issued following Shareholder approval of The Cho Group transaction. Invion was appointed exclusive distributor and licensee in Australia and New Zealand of Photosoft[TM] technology for the treatment of all cancers. In return for the exclusive licence, Invion issued new Invion shares for a licence value of $5,500,000 at $0.002 per share.

(ii) Shares Issued in Rights Issue: On 15 March 2018, 1,245,557,694 new shares were issued following the completion of the fully underwritten non-renounceable rights issue entitlement offer announced on 12 February 2018 to raise approximately $2.5 million. Invion received valid applications from eligible shareholders for approximately 1.13 billion shares, representing a take up by eligible shareholders of approximately 92.69%, and valid applications under the top-up facility for approximately 1.30 billion shares. As the Entitlement Offer was over-subscribed, no new shares were issued to The Cho Group Limited, other than in its capacity as a shareholder.

3) Exercise of unlisted share options: During the months of April and May 2018, a total of 40,750,000 new shares were issued upon the exercise of unlisted share options. The share options had an exercise

40 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements for the year ended 30 June 2018

price of $0.01750 each and an expiry date of 18 November 2020. The exercise of the share options resulted in $713,125 capital inflow to the Company.

15. CAPITAL MANAGEMENT

Capital includes equity attributable to the equity holders of the Parent. The primary objectives of the Group’s capital management are to ensure adequate capital is maintained to support the continuance of the Group as a going concern, and to maintain optimal returns to shareholders and benefits to other stakeholders. The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders (if any), return capital to shareholders or issue new shares. No changes were made in the objectives, policies or processes for managing capital during the years ended 30 June 2018. The gearing ratios for the year ended 30 June 2018 and 30 June 2017 are as follows:

Total borrowings (at face value) Less: cash and cash equivalents Net debt / (cash) Total equity (including liabilities at face value) Total net debt plus equity Gearing ratio	2018 $ 2017 $
	20,295 1,257,101 (20,295) (917,486)
	- 339,615 7,906,345 4,007,199
	7,906,345 4,346,814
	0% 8%

16. RESERVES

16. RESERVES
Balance at 1 July Share based payment Translation of subsidiary Balance at 30 June	2018 $ 2017 $
	23,449,342 23,872,636 15,174 61,014 306,703 (484,308)
	23,771,219 23,449,342

Nature and purpose of reserves

The equity reserve records:

• (i) Option reserve: Items recognised as an expense with respect to share-based consideration; (ii) Foreign currency translation reserve: Translation of foreign subsidiary; and

• (iii) Convertible note reserve: The equity component of convertible notes.

41 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements

for the year ended 30 June 2018

17. EARNINGS PER SHARE Basic/diluted (loss) per share from continuing operations (cents per share) (i) Note: The basic/diluted earnings / (loss) per share for FY2017 has been restated following the Share Purchase Plan that occurred in FY2018. Income and share data used in the calculation of basic & diluted earnings per share: Loss from continuing operations after income tax expense Weighted average number of ordinary shares outstanding during the year used in calculation of basic & diluted EPS Effect of dilutive securities: - Share options (i) Adjusted weighted average number of ordinary shares outstanding during the year used in calculation of basic & diluted EPS

2018 $ 2017 $

(0.13) (0.14) (4,870,133) (2,199,737) 3,813,788,379 1,255,248,155 - - 3,813,788,379 1,580,122,545

(i) As the Company incurred a loss for the current year, potential ordinary shares - being options to acquire ordinary shares - are considered non-dilutive.

18. CASH AND CASH EQUIVALENTS

(a) Reconciliation of cash

For the purposes of the statement of cash flows, cash includes cash on hand and in banks and investments in money market instruments, net of outstanding bank overdrafts. Cash at the end of the financial period as shown in the statement of cash flows is reconciled to the related items in the statement of financial position as follows:

Cash at bank (b) Reconciliation of net cash flows from operating activities to operating loss after income tax Operating loss after taxation Non cash items Depreciation, Amortisation Equity based compensation Impairment of intangible assets	2018 $ 2017 $
	2,891,371 917,486
	2,891,371 917,486
	(4,870,133) (2,199,737) 1,325,135 1,244,993 15,174 61,014 2,000,000 4,400,000

42 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

for the year ended 30 June 2018

Notes to the Financial Statements

Revaluation of Convertible Security Non cash Financing costs Net foreign exchange Income Tax Expense (Benefit) Change in assets and liabilities (Increase)/decrease in receivables and prepayments Increase/(decrease) in payables (Decrease)/ increase in provisions (Decrease)/ increase in deferred income Net cash flows used in operating activities 19. KEY MANAGEMENT PERSONNEL (a) Compensation for key management personnel Short-term employee benefits Post-employment benefits Share based payments 20. SHARE-BASED PAYMENTS (a) Recognised share-based payment expense Expenses arising from equity-settled share-based payment transactions	- (100,000) - 105,861 11,242 (234,504) 652,494 (4,255,646) (94,334) 693,774 654,201 32,812 46,475 4,294 966,833 -
	707,087 (247,139)
	2018 $ 2017 $
	492,766 240,692 20,742 3,135 4,221 42,313
	517,729 286,140
	2018 $ 2017 $
	15,174 61,014
	15,174 61,014

(b) Types of share-based payment plans

Executive and Employee Share Option Plan (ESOP)

During the year ended 30 June 2018, no options were issued under the executive and employee share option plan, and no ordinary shares of Invion Limited were issued on the exercise of share options granted.

“Other” options

Invion announced on 1 September 2015 that it had granted options to a US institutional investor as part of a share placement. Shareholders were also advised at the 2015 Annual General Meeting that the options would be issued following the meeting. Due to an administrative oversight, some of the options were never issued. In accordance with the placement agreement, Invion issued 35,750,000 options to the investor on 17 April 2018.

43 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements for the year ended 30 June 2018

(c) Summary of options granted and lapsed during the year ending 30 June 2018

The following table illustrates the number and weighted average exercise price (WAEP) of, and movements in, share options issued during the year:

Outstanding at the beginning of year Options issued during the year (i) Options lapsed during the year Options exercised during year (ii) Outstanding at the end of the year	Number WAEP Number WAEP 2018 2018 2017 2017
	59,057,353 $0.0921 110,557,353 $0.0827 35,750,000 $0.0175 - - 32,650,000 $0.1138 51,500,000 $0.0140 40,750,000 $0.0175 - -
	21,407,353 $0.0921 59,057,353 $0.0921

(i) Issue of unlisted share options: See description for Other options above

(ii) Exercise of unlisted share options: During the months of April and May 2018, a total of 40,750,000 new shares were issued upon the exercise of unlisted share options. The share options had an exercise price of $0.0175 each and an expiry date of 18 November 2020. The exercise of the share options resulted in $713,125 capital inflow to the Company.

A total of 3,061,882 Share Options were vested and exercisable at 30 June 2018. The weighted average exercise price for these options is $0.08

The following average inputs were applied to the binomial option pricing model:

Weighted average exercise price	$0.08
Weighted average life of the option	55 months
Underlying share price	$0.052
Expected share price volatility	90%
Risk free interest rate	3.11%
Range of exercise price	$0.022 – $0.076

The expected life of the options is based on historical data and is not necessarily indicative of exercise patterns that may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not necessarily be the actual outcome. No other features of options granted were incorporated into the measurement of fair value.

21. COMMITMENTS AND CONTINGENCIES

Corporate commitments

Lease agreements for office premises, telephones and related office expenses expired in the prior period, therefore no commitments exist at balance sheet date.

R&D commitments

At the Balance Date, the Company had no contractual commitments relating to R&D development activities (30 June 2017: $nil).

On 30 March 2001, the Company entered into a Royalty Agreement with CSL Limited (CSL). This agreement was entered into contemporaneously with the Deed of Assignment, an agreement which assigned CSL’s rights to its Research Agreement with Uniquest Pty Ltd to CSL for payment of $125,000. The

44 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements for the year ended 30 June 2018

Royalty Agreements stipulates that Invion is to pay royalties to CSL after commercialisation of products developed under the Research Agreement.

22. RELATED PARTY TRANSACTIONS

Transactions with associates of The Cho Group

Mr Thian Chew, Chairman of Invion Limited, is Managing Partner of Polar Ventures Limited. Polar Ventures Limited and The Cho Group are associates in accordance with section 12(2) of the Corporations Act. The Cho Group has entered into a consultancy agreement with Polar Ventures, pursuant to the terms of which Polar Ventures has agreed to provide general advice and support for The Cho Group’s interests in its investment in Invion. In the year ended 30 June 2018, payments to Mr Chew consisted of director’s fees only. As detailed in the Remuneration Report, total payments to Mr Chew were in the amount of $52,500.

The Group was engaged to conduct the clinical development of Photosoft™ globally. The Cho Group agreed to provide funding for the clinical trials and related development, in a clinical development program designed and managed by a joint steering committee between the two companies. Current revenue during the period was $737,713 (2017: nil).

Loans from Directors/ Related Parties

In March 2015, the Company entered into loan agreements with each Invion Director subsequent to which unsecured (non-equity related) debt funding was provided by Invion directors to the Company for working capital and for the repayment of outstanding liabilities. The key terms of the loan:

• Advance: Each director/ related party loaned the Company $200,000 for a total loan amount from Directors/ related parties to the Company of $1,200,000;

• Interest rate: 10% per annum. Interest accrues daily and is payable at termination

• Term: Adjusted subsequently to the original agreement to be paid on the receipt of funds from the Right Issue in March 2018.

The principal amount and accrued interest was repaid to each party to the loan on 15 March 2018 in full and final settlement of the loan.

Transactions with the subsidiary

Invion Limited is the parent entity in the Group. Details of the Group’s subsidiary are set out below. During the period the parent transacted with the subsidiary. All transactions have been eliminated on consolidation.

% equity interest

	% equity interest
Name Country of incorporation Invion Inc. USA	2018 2017
	100% 100%

45 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Notes to the Financial Statements for the year ended 30 June 2018

23. PARENT NOTE

Information relating to Invion Limited (the Parent)

Current assets Total assets Current liabilities Total liabilities Issued capital Retained earnings / (losses) Reserves Profit / (loss) of the Parent entity Total comprehensive profit / (loss) of the Parent entity	2018 $ 2017 $
	3,058,610 980,805 9,531,381 5,680,280 1,616,498 473,081 1,625,036 1,673,081 132,140,700 123,693,298 (146,154,026) (145,224,505) 21,919,671 25,538,406 (929,521) (2,606,947) (929,521) (2,606,947)

No commitments or guarantees exist for the Parent entity at balance sheet date.

24. SUBSEQUENT EVENTS

There have been no material events subsequent to the Balance Date and prior to the date of the Report that are not reported in these Financial Statements.

25. AUDITOR’S REMUNERATION Amounts received or due and receivable by the auditors of the Company for: - an audit and review of the financial report	2018 $ 2017 $
	78,372 76,350
	78,372 76,350

46 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Directors’ Declaration

In the opinion of the Directors:

• the financial statements and notes of the Group are in accordance with the Corporations Act 2001 , including:

• i. giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its performance for the year ended on that date; and

• ii. complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the Corporations Regulations 2001 ;

• the financial statements and notes also comply with International Financial Reporting Standards as disclosed in Note 3.1; and

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

This declaration has been made after receiving the declarations required to be made to the Directors in accordance with section 295A of the Corporations Act 2001 for the financial year ending 30 June 2018.

Signed in Melbourne on 28 August 2018 On behalf of the Board

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Thian Chew Chairman

47 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Ernst & Young Tel: +61 7 3011 3333 111 Eagle Street Fax: +61 7 3011 3100 Brisbane QLD 4000 Australia ey.com/au GPO Box 7878 Brisbane QLD 4001

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Independent Auditor's Report to the Members of Invion Limited

Report on the Audit of the Financial Report

Opinion

We have audited the financial report of Invion Limited (the Company) and its subsidiaries (collectively the Group), which comprises the consolidated statement of financial position as at 30 June 2018, the consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001 , including:

• a) giving a true and fair view of the consolidated financial position of the Group as at 30 June 2018 and of its consolidated financial performance for the year ended on that date; and

• b) complying with Australian Accounting Standards and the Corporations Regulations 2001 .

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty Related to Going Concern

Without qualifying our opinion, we draw attention to Note 3.3 of the financial report which indicates that the Group incurred a loss from continuing operations after income tax of $4,563,430 for the year ended 30 June 2018 (30 June 2017: $2,684,045) and is dependent on the continued funding from its research and development financier to continue to fund its operations. These conditions indicate the existence of a material uncertainty that may cast significant doubt about the consolidated entity’s ability to continue as a going concern and therefore, the consolidated entity may be unable to realise its assets and discharge its liabilities in the normal course of business. The financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or to the amounts and classification of liabilities that might be necessary should the consolidated entity not continue as a going concern.

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

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Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For the matter below, our description of how our audit addressed the matter is provided in that context. In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have determined the matter described below to be the key audit matters to be communicated in our report.

We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Repor t section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report.

Impairment Assessment of Intellectual Property Intangible Assets

Why significant

How our audit addressed the key audit matter

At 30 June 2018 the Group recorded an impairment charge of $2.0 million in respect to intangible assets, leaving the Group with remaining intangibles assets of $7.3 million at 30 June 2018.

Australian Accounting Standards require the Group to assess throughout the reporting period whether there is any indication that an asset may be impaired, or whether the reversal of a previously recognised impairment charge may be required. If any such indication exists, the Group is required to estimate the recoverable amount of the asset.

The recoverability of intellectual property intangible assets associated with products in development, is dependent upon achieving successful trial results, obtaining required regulatory approvals, and being able to realise the intellectual property asset through to its commercialisation or sale. The Group performed a strategic review of its intangible assets during the period and as a result the Group identified indicators of impairment and recorded an impairment charge of $2.0 million.

Disclosure regarding this matter can be found in Note 11 of the financial report.

Our audit procedures included the following:

• Considered the Groups intentions to carry out significant research and development activities in the commercialisation of the products associated with its intangible assets.

• Assessed the Group’s ability to finance any planned future research and development activities.

• Considered the results of clinical trials, and review of regulatory announcements and approvals.

• Considered the Group’s plans for the commercialisation of products associated with certain intangible assets.

• We assessed the calculated recoverable amount that supported the impairment charge by evaluating the key assumptions made by the Group in its determination, which included involving our valuations specialists.

• Considered the relationship between asset carrying values and the Group’s market capitalisation.

• Assessed the related financial report disclosures for compliance with Australian Accounting Standards.

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

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• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.

• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion.

We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on the Audit of the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 10 to 17 of the directors' report for the year ended 30 June 2018.

In our opinion, the Remuneration Report of Invion Limited for the year ended 30 June 2018, complies with section 300A of the Corporations Act 2001 .

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

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Information Other than the Financial Report and Auditor’s Report Thereon

The directors are responsible for the other information. The other information comprises the information included in the Company’s 2018 Annual Report, but does not include the financial report and our auditor’s report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Directors for the Financial Report

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

In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

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Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001 . Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

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Ernst & Young

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Jennifer Barker Partner Brisbane 28 August 2018

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

Ernst & Young 111 Eagle Street Brisbane QLD 4000 Australia GPO Box 7878 Brisbane QLD 4001

Tel: +61 7 3011 3333 Fax: +61 7 3011 3100 ey.com/au

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Auditor’s Independence Declaration to the Directors of Invion Limited

As lead auditor for the audit of Invion Limited for the financial year ended 30 June 2018, I declare to the best of my knowledge and belief, there have been:

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

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

This declaration is in respect of Invion Limited and the entities it controlled during the financial year.

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Ernst & Young

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Jennifer Barker Partner 28 August 2018

A member firm of Ernst & Young Global Limited Liability limited by a scheme approved under Professional Standards Legislation

Shareholder Information

Invion Limited ACN 094 730 417

Registered Office

722 High Street East Kew VIC 3102 +61 (3) 9081 6005 www.inviongroup.com

Share Registry

Shareholder information in relation to shareholding or share transfer can be obtained by contacting the Company’s share registry: Link Market Services, Locked Bag A14, Sydney South, NSW, 1235 Tel: 1300 554 474 Fax: (02) 9287 0303 Email: registrars@linkmarketservices.com.au www.linkmarketservices.com.au

For all correspondence to the share registry, please provide your Security-holder Reference Number (SRN) or Holder Identification Number (HIN).

Change of address

Changes to your address can be updated online at www.linkmarketservices.com.au or by obtaining a Change of Address Form from the Company’s share registry. CHESS sponsored investors must change their address details via their broker.

Annual General Meeting

The Annual General Meeting will be held in Melbourne in October 2018 (date to be confirmed).

Annual report mailing list

All shareholders are entitled to receive the Annual Report. In addition, shareholders may nominate not to receive an annual report by advising the share registry in writing, by fax, or by email, quoting their SRN/HIN.

Securities exchange listing

Invion’s shares are listed on the Australian Securities Exchange and trade under the ASX code IVX. The securities of the Company are traded on the ASX under CHESS (Clearing House Electronic Sub-register System)

ASX Shareholder Disclosures

The following additional information is required by the Australian Securities Exchange in respect of listed public companies. The information is current as at 10 August 2018.

54 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

1. Total securities on issue

ASX code	Description Expiry Listed Unlisted
IVX IVXAM IVXAQ IVXAS IVXAT	Ordinary shares - 5,451,522,967 Options ($0.12) 09.11.18 19,700,000 Options ($0.04) 09.11.18 1,702,353 Options (0.0175) 18.11.20 5,005,000 Options (0.0175) 18.11.20 35,750,000 5,451,522,967 62,157,353
	TOTAL FULLY DILUTED 5,513,680,320

– Distribution of equity securities ordinary shares

The number of security investors holding less than a marketable parcel at 7 August 2018 was zero and they held zero securities.

Range	Securities	%	No. of holders	%
100,001 and Over	5,414,594,843	98.59	1,305	31.84
10,001 to 100,000	73,749,218	1.34	1,740	42.46
5,001 to 10,000	2,601,962	0.05	329	8.03
1,001 to 5,000	1,220,199	0.02	397	9.69
1 to 1,000	106,745	0.00	327	7.98
Total	5,492,272,967	100.00	4,098	100.00
Unmarketable Parcels	0	0.00	0	0.00

2. Voting rights

Shareholders in Invion Limited have a right to attend and vote at general meetings. At a general meeting, individual shareholder may vote in person or by proxy. All quoted and unquoted share options, and convertible notes, have no voting rights.

3. Substantial shareholders

The Company has not received notice from any shareholder as being a substantial holder in the Company.

Date notified	Substantial shareholder	Securities		%
14-Mar-18	Unlimited Innovation Group Limited		2,814,302,977		51.24
14-Mar-18	Polar Ventures Limited		545,217,721		9.93
14-Mar-18	Honsue Cho		283,751,482		5.17

4. Share buy-back

There is no current or planned buy-back of the Company’s shares.

5. Statement in accordance with ASX Listing Rule 4.10.19

The Company confirms that is has used the cash and assets in a form readily convertible to cash at the time of admission in a way consistent with its business objectives.

55 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

6. Twenty largest shareholders - ordinary shares

Rank	Name	10 Aug 2018	%IC
1	UNLIMITED INNOVATION GROUP LIMITED	2,814,302,977	51.24
2	POLAR VENTURES LIMITED	545,217,721	9.93
3	MR HONSUE CHO	283,751,482	5.17
4	BNP PARIBAS NOMINEES PTY LTD	125,187,123	2.28
5	RMWC PTY LTD	100,000,000	1.82
6	CITICORP NOMINEES PTY LIMITED	81,827,385	1.49
7	ACSLNC PTY LTD	60,000,000	1.09
8	HSBC CUSTODY NOMINEES(AUSTRALIA)LIMITED	52,984,498	0.96
9	MR ESMOND WONG & MRS QUYNH THI KIM NGUYEN	37,384,765	0.68
10	MR ESMOND WONG & MRS QUYNH THI KIM NGUYEN	25,368,194	0.46
11	MS YINQI LING	23,529,412	0.43
12	BNP PARIBAS NOMS PTY LTD	23,351,944	0.43
13	MR WEI JIN	22,166,369	0.40
14	J P MORGAN NOMINEES AUSTRALIA LIMITED	19,859,227	0.36
15	RETIREWELL COMMERCIAL SERVICES PTY LTD	19,719,614	0.36
16	BARWON BIOTECHNOLOGY PTY LTD	19,070,272	0.35
17	J & K LAY INVESTMENTS PTY LTD	15,000,000	0.27
18	MR WARWICK JOHN SPILLER & MRS CAROL ANN SPILLER	14,000,000	0.25
19	MS JIE SHEN	13,840,229	0.25
20	CARLOS ADOLFO MUNOZ	13,157,895	0.24
20	JEAN-LUC TETARD	13,157,895	0.24
	Total	4,322,877,002	78.71
	Balance of register	1,169,395,965	21.29
	Grand total	5,492,272,967	100.00

7. Twenty largest shareholders - quoted share options No options are quoted.

8. Holders of greater than 20% unquoted securities

The following shareholders hold greater than 20% or more of the following unquoted equity securities (by class) of the Company:

securities (by class) of the Company:
Class of unquoted equity security	Holders with >20% of the equities securities in each class	Number of equity securities held
Share options exercisable at $0.12 each	Dr Mitchell Glass	8,812,500
that vest and expire in accordance with
clinical development milestones

56 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018

Corporate Directory

Corporate Directory

Directors

Thian Chew, Chairman

Dr Greg Collier, Managing Director & CEO Dr Mitchell Glass, Executive VP R&D and CMO Dr James Campbell, Executive Director

Company Secretary Ms Melanie Farris

Registered Office 722 High Street East Kew Victoria 3102 P: (03) 9081 6005 E: investor@inviongroup.com W: www.inviongroup.com

Securities Exchange Listing Australian Securities Exchange ASX Code: IVX

Auditors Ernst & Young Brisbane Australia

Share Registry Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia P: 1300 554 474 F: (02) 9287 0303 W: www.linkmarketservices.com.au

Australian Business Number 76 094 730 417

57 | I n v i o n L i m i t e d Financial Report for the year ended 30 June 2018