Annu l Repo t 2012 For personal use only - ASX2012/09/28 · Annu A l Repo R t 2012 For personal use only CONTENTS Chairman’s letter 2 Managing Director’s Report 3 Chief Scientific

A superior diagnostic for early stage ovarian cancer

Healthlinx

Delivering better health outcomes through early diagnosis

Annual Report 2012

HealthLinx Lim

ited Ann

uAl RepoRt 2012

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CONTENTS Chairman’s letter 2

Managing Director’s Report 3

Chief Scientific officer’s Report 4

Board of Directors 6

Scientific Advisory Committee 8

Statement of Corporate Governance 9

Directors’ Report 19

Financial Statements 36

ASX other Required Information 94

Corporate Directory 96

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HealthLinx Limited ■ Annual Report 2012

CytoGenDX appointed as Chinese partner for OvPlex™ study

September 2011

2012

OvPlex™ patent granted in Singapore

July 2012

KEY MILESTONES

US patent granted to HealthLinx for AGR2 biomarker

September 2012

Post-reporting

period

Sale of IP provides presence in US markets for HealthLinx assets

August 2012

INEX Innovation (Singapore) expands OvPlex™ distribution

into India

May 2012

Positive findings in South Korean study

for OvPlex™

June 2012

Second OvPlex™ trial interim results reports increased

diagnostic efficiency when compared to

CA125 alone

October 2011

Convertible note secured with La Jolla Cove Investors Inc

for $9m

December 2011

2011

License Agreement for IgY technology

executed with Sigma Aldrich

September 2011

Novel biomarker, AGR2, that predicts

clinical outcome validated in

preclinical studies

February 2012

OvPlex™ patent granted in Hong Kong

October 2011

INEX Innovation (Singapore) expands OvPlex™ distribution

into Malaysia

October 2011

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CHAIRMAN'S LETTER DR GREGORY E. RICE

Dear Shareholders

In 2011/12, HealthLinx focused on developing the market positions of its ovarian cancer diagnostic, OvPlex™ and IgY product, and to strengthen its intellectual property portfolio.

Based on the company’s previous and ongoing clinical trials of OvPlex™, HealthLinx continued to expand the global jurisdictions where OvPlex™ has been validated locally by leading healthcare professionals and implemented within the healthcare system. In particular, Oryzon Genomics was appointed distributor for OvPlex™ in Spain, with the option to extend exclusive license rights to Portugal, Andorra, France and Italy. HealthLinx’s Singapore partner INEX expanded its market distribution into Malaysia. In addition, CytogenDx Co Ltd was confirmed as the Chinese partner to generate regional performance data in preparation for an SFDA application for registration of OvPlex™ in China.

Data from a multinational trial of OvPlex™ were published in March 2012 further establishing its clinical utility. The company also reported very positive results of a collaborative trial of an ovarian cancer biomarker for the prediction of clinical outcome.

In terms of developing its IP portfolio, the Company had already secured the Australian patent for OvPlex™ (June 2011) and has subsequently secured the patent in Singapore (July) and Trademarks in China and South Korea, Malaysia, Israel and the United States. The Company further secured a US patent for its AGR2 to monoclonal antibody. HealthLinx has already been awarded a patent by the European patent organisation for the use of AGR2 as an ovarian cancer biomarker (May 2011).

Operationally, the company has undergone considerable reorganisation during 2011. In November 2011, Mr Nick Gatsios (the then current CEO) announced his resignation as of 30 June 2012. Mr Gatsios was a founding Director of the company and has worked tirelessly to deliver the company’s strategic objectives. Nick continues as a non-executive Director of the company. A new general manager, Vanessa Waddell was appointed effective 1 July 2012. In addition, 2 non-executive directors, Dr Stewart Washer and John Chiplin, resigned from the Board to pursue other professional opportunities. Their positions on the Board have not been replaced.

The Company provided shareholders with an opportunity to further engage in and support the company’s commercialisation activities via a Share Purchase Plan that closed in August 2011. To secure funds required to deliver strategic objectives, HealthLinx subsequently secured a convertible note funding agreement with La Jolla Cove Investors (December 2011) of up to US$9 million. This funding provided the opportunity to expand market jurisdiction and the intellectual property portfolio, as detailed above.

More recently (August 2012), the Board was approached to consider the sale of the company’s biomarker intellectual property and entered into a conditional binding Heads of Agreement to rigorously evaluate this opportunity. Following successful completion of Due Diligence processes, this opportunity will be placed before shareholders for consideration. If approved, the asset sale will provide an exciting opportunity for commercialisation in the US, which has been a long-standing objective of the Company.

The Chairman acknowledges, on behalf of the Board, the commitment and dedication of the staff of HealthLinx, and in particular, Vanessa Waddell (GM) and Dominic Autelitano (CSO) on their achievements this year. Also acknowledged is the contribution made by the Company Secretary Mr Mal Lucas-Smith and the members of the Scientific Advisory Committee, chaired by Assoc Prof Liz Dax.

Dr Gregory E. Rice Chairman

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HealthLinx Limited ■ Annual Report 2012MANAGING DIRECTOR’S REPORT MR NICK GATSIOS

The 2011-2012 financial year saw global markets collapse as a result of the European economic crisis with micro-cap companies being the hardest hit. HealthLinx was no exception to this rule however the company achieved significant inroads with its research programs, in particular the multi-centre, multi-national study and with its commercial revenue generating agreements that include territory expansion for OvPlex™ and patent licensing to Sigma Aldrich.

Some of the key highlights for the year can be summarised as follows;

• Vanessa Waddell has been appointed as the new General Manager of Operations in Australia;

• Completing recruitment for the second multi centre, multi-national study;

• Achieving statistical significance for the interim analysis of the second study;

• Publishing the interim results of the second study in the Journal of Translational Medicine;

• Securing grant of the OvPlex™ patent in Singapore and Hong Kong;

• Signing a new distribution agreement for Spain that includes expansion into France, Portugal and Italy;

• Working with INEX and expanding distribution of OvPlex™ in the South East Asian region to include:

• India; and

• Malaysia as new territories;

• Securing Trade Marks for OvPlex™ in over 6 countries including Europe under the Madrid Protocol;

• Completing an initial analysis of samples collected in the South Korean study;

• Signing a licensing deal with Sigma Aldrich for the IgY patent resulting in securing royalties against sales in Europe and Australia;

• Evaluating a novel bio-marker that may be a predictive marker for ovarian cancer survival and treatment;

• Appointing CytogeneDX as the company’s Chinese partner to undertake a pre SFDA study to assess OvPlex in the Chinese population; and

• Securing additional funding from La Jolla Cove Investments.

From all the independent OvPlex™ studies that have been conducted to date, OvPlex™ continues to demonstrate that it is statistical significantly better than CA125 alone in the diagnosis of ovarian cancer in symptomatic women. In the interim results of the second multi centre multi-national study where 742 samples were analysed OvPlex™ achieved specificity of 92.3% and

sensitivity of 76.4% versus CA125 specificity of 89.9% and sensitivity of 70.9%. When the area under the ROC curve was measured case versus control for all stages of the disease the percentage difference was 3%, OvPlex™ at 94.9% and CA125 at 91.9% this provided a p value of 0.007, and when comparing control to early stage the difference was 9.6% (CA125 at 81.2% and OvPlex™ at 90.9%) with a p value of 0.003.

These results are similar to the first OvPlex™ study that demonstrated the superiority of OvPlex™ over CA125 alone. Furthermore the recent preliminary results from the South Korean study also demonstrated the superiority of OvPlex™ over CA125 alone in increasing the specificity of the diagnosis of the disease hence reducing the number of false positive results. As a company we are very pleased with these results given that the label use for OvPlex™ is for use in “symptomatic women” as an aid in the diagnosis of these women.

I am personally pleased to see that the Board appointment of Ms Vanessa Waddell as the new General Manager of Australian Operations was one of vision and foresight and feel that Vanessa has an enormous amount of knowledge and experience in this sector that will prove to be an asset for the company.

Nick Gatsios Managing Director

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CHIEF SCIENTIFIC OFFICER’S REPORT DR DOMINIC AuTELITANO

Over the last twelve months, the major focus of HealthLinx’s research and development efforts have been on the multi-centre, multi-national biomarker trial that aims to further evaluate the performance of the OvPlex™ multimarker diagnostic test for ovarian cancer. Considerable progress has been made with all clinics reaching acceptable patient recruitment targets, allowing the sample collection phase of the trial to end in a timely manner. Determination of biomarker concentrations in the final set of patient samples is now underway. This will pave the way for analysis of the full sample set and construction of the final OvPlex™ algorithm. We are looking forward to seeing the performance of the OvPlex™ multimarker in this broad patient cohort that includes a range of clinical cases including patients with benign gynaecological conditions, borderline and malignant ovarian tumours. As we approach the end of the OvPlex™ multi-national trial, it is encouraging to see that, with respect to the ovarian cancer biomarker program, the company’s patent position continues to strengthen, thus placing HealthLinx in a strong position to capitalise on the value of these assets.

STATuS OF CuRRENT PROJECTS

OvPLEx™ MuLTIMARKER OvARIAN CANCER PATENTS

Following on from the previous granting of patents in Australia and Great Britain, the major patent application that covers the OvPlex™ multimarker test and its method of implementation has been granted this year in three additional jurisdictions, New Zealand, Hong Kong and Singapore. Prosecution of this patent is continuing in several other international jurisdictions including the major patent offices of the USA and Europe. Based on the experiences gained so far, we are confident that the remaining OvPlex™ patent applications should be successfully prosecuted.

OvPLEx™ MuLTIMARKER OvARIAN CANCER DIAGNOSTIC TRIAL

The performance of the OvPlex™ diagnostic is being tested in a larger, multi-centre, multi-national biomarker trial that includes a wide range of clinical cases including patients with benign gynaecological conditions as well as including a broader ethnic mix arising from the multi-national collection strategy.

Interim analysis from the present multinational trial was based on 742 clinical samples that were obtained under human research and ethics agreements with the Victorian Cancer Biobank, The West Australian Research & Tissue Network the National University Hospital in Singapore, the Mater Hospital, Brisbane and Southend University Hospital, Essex and measured in the first and second parts of the trial. This analysis provided a further snap-shot of the progress of the trial and demonstrated that the

OvPlex™ multimarker test performed significantly better than CA125 alone. The interim study findings have now been published in full in the Journal of Translational Medicine (Autelitano, D. et al. Performance of a multianalyte test as an aid for the diagnosis of ovarian cancer in symptomatic women. J Translational Med 2012. 10: 45. http://www.translational-medicine.com/content/10/1/45).

The third and last part of the trial will incorporate an additional set of approximately 300 samples that have been collected from specialist gynaecological oncology clinics at multiple sites in Australia and the UK. Professor Lewis Perrin, Mater Hospital Brisbane, Mr. Khalil Razvi, Southend University Hospital Essex and Dr John Green, University of Liverpool School of Cancer Studies have acted as principal investigators and have overseen local trial design at each site. As of June this year, all collection centres had ceased patient recruitment and final sample sets had been shipped to the HealthLinx laboratories in preparation for analysis on the Siemens clinical pathology platforms installed last year.

Measurement of biomarker concentrations in the final sample set is underway and it is expected that this analysis will be completed in early July 2012. The entire sample data set will then be used to finalise modelling to allow for an updated and enhanced algorithm to be generated. This algorithm is based on a broader clinical population that reflects the intended use as a diagnostic test for symptomatic women.

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ADDITIONAL INDEPENDENT TRIALS OF OvPLEx™

In South Korea, Professor Byoung-Gie Kim of Samsung Medical Centre and Sungkyunkwan (SKK) University School of Medicine is overseeing a trial of the OvPlex™ test in a local clinical setting that will facilitate the test being considered for approval by the Korean FDA. Patient recruitment commenced in January, 2011 and was completed in March 2012 with the recruitment of 220 patients that fulfilled the trial requirements. Mosaic Medical Pty Ltd have acted on behalf of HealthLinx as trial coordinators and have overseen the coding and handover over of anonymous samples to Seoul Clinical Laboratories (SCL) who have measured the concentrations of the five OvPlex™ biomarkers in the sample set. As a preliminary analysis, a new diagnostic algorithm generated from interim data collected from 742 patient samples from the ongoing OvPlex™ multinational trial was used to predict the status of the South Korean sample cohort. The preliminary analysis demonstrated that OvPlex™ provided a statistically significant advantage over the use of CA125 alone, particularly with respect to correctly classifying patients with benign gynecological conditions. Final analysis of the trial data will take place after implementation of the final OvPlex™ model that will be derived from the complete multinational OvPlex™ trial that is now nearing completion.

DEvELOPMENT OF CANCER BIOMARKER AGR2

AGR2 represents a novel tumour-related protein that has been shown to be upregulated in a variety of human cancers including carcinoma of the ovary, prostate and breast. AGR2 has also been implicated as a factor associated with metastatic spread of tumour cells and tumour cell growth.

COMPANY OvERvIEwHealthLinx holds an exclusive license for intellectual property from the University of Liverpool that covers the use of a specific AGR2 monoclonal antibody directed against a unique domain of AGR2. This unique domain distinguishes it from related proteins and allows for specific measurement or targeting of AGR2.

Following on from the first patent application granted by the European Patent Office in late July 2010, we are now pleased to report that this patent has also been granted in Australia and will be effective until August 2027. Examination of this application by the US patent office has progressed significantly and we are confident of a positive outcome in the near future.

We have been able to develop a test to detect circulating levels of AGR2 released into the bloodstream. This test has shown that some ovarian cancers over-express AGR2 and that this can be detected in the blood of some ovarian cancer patients. Initial studies showing that ovarian cancer patients displayed significantly elevated concentrations of plasma AGR2 prompted further investigation by including AGR2 as one of the novel biomarkers measured during the multinational OvPlex™ trial.

It is expected that all AGR2 measurements in the trial sample set will be completed by August 2012. Further analysis will be performed to ascertain whether AGR2 can provide additional diagnostic benefit and to determine the best way to utilise this marker.

A collaborative study with Associate Professor Jane Armes, Director of Clinical Pathology Services at the Mater Hospital Brisbane has recently been completed. A/Professor Armes had designed a large immunohistochemical localisation study to examine expression of several biomarkers in a wide collection of benign, borderline and malignant ovarian cancer biopsy specimens. Expression of AGR2 was examined as part of this study. This study has been successful and has generated some novel findings that have now been submitted for publication in a peer reviewed scientific journal. These new data give further insight into the expression of AGR2 in different types of ovarian tumours and its association with patient outcome.

Dr Dominic Autelitano Chief Scientific Officer

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BOARD OF DIRECTORS

PROFESSOR GREGORY E RICE

BSC (HONS), GRADDIPMGT,

MHA, PHD

NON-ExECuTIvE CHAIRMAN

Professor Greg Rice is a co-founder of HealthLinx and a co-inventor of key patents that underpin HealthLinx’s product development goals.

Professor Rice is an NHMRC Principal Research Fellow at the University of Queensland’s Centre for Clinical Research. He has an outstanding international reputation in reproductive biology, using both human and animal models. His academic qualifications include: BSc (Hons), PhD, Grad Dip Management and Master of Health Administration.

Professor Rice’s current research programs focus on the aetiology and early diagnosis of complications of pregnancy and reproductive tract cancers. His research teams are leaders in proteomic biomarker discovery platforms and the development of multiplex assay systems.

NICK GATSIOS

BB ACC, ADvDIPMKT

MANAGING DIRECTOR (RESIGNED 30 JuNE 2012)

Nick is a co-founder of HealthLinx, spinning the technology out of a leading Melbourne hospital in 2003. The company was privately funded for three years until Nick negotiated a reverse acquisition of an ASX listed company in late 2005. In February 2006 the transaction was completed with the company being re-capitalised to allow for the development of the OvPlex™ panel.

Nick was also co-founder of Teraform Advisory that was established in early 2001 to advise on the commercialisation of intellectual property emanating from universities and research institutes in Australia. He has been responsible for developing and establishing licence agreements and partnerships between appropriate partners which resulted in increased value of clients’ products/service and increased access to investment. Nick has an extensive network in local and international financial institutions with a strong focus in the US.

Nick has spent the past ten years building strong international networks and relationships where technology can be partnered and developed through to product and market. Nick has been successful in securing over $60 million in funding and grants. More recently Nick has been very active in establishing distribution channels for HealthLinx in targeted jurisdictions and establishing trials for regulatory approvals for OvPlex™.

JOHN EvANS

B.COM.(HONS), FCA, CPA, MAICD

INDEPENDENT DIRECTOR

John joined the Board on 7 March 2008. John holds a B.Com (Hons) degree and is a Fellow of the Institute of Chartered Accountants in Australia, and a member of CPA Australia and the Australian Institute of Company Directors. John is currently the principal of a Business Broking & Advisory practice, and advises a range of businesses in both the SME sector and larger corporate clients, on matters such as strategic planning, marketing, governance, and financial analysis.

Prior to this, John held a series of positions in Finance and General Management over a 15 year period, across a wide range of industries including telecommunications, banking and insurance, superannuation and funds management, media, hospitality, and property development. John’s approach to advising businesses balances the need for practical, achievable solutions with the need to always keep in sight the overall strategic objective. John is a director of two other listed companies, several private companies and one not-for-profit organisation, and provides Board consulting services to three other company groups.

Resigned as of 13 June 2012.

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DR STEwART wASHER

BSC (HON) PHD

INDEPENDENT DIRECTOR (RESIGNED 13 JuNE 2012)

Stewart has 20 years of senior executive and Board experience in commercial technology companies in the medical and agri-food sectors. He is currently the Investment Director of Octa Phillip Bioscience Managers, Chairman of iSonea Ltd (ASX:ISN) and a Director of Immuron Ltd (ASX:IMC).

He was previously the CEO of Calzada Ltd (ASX:CZD) and was the founding CEO of Phylogica Ltd (ASX:PYC) and before this, he was CEO of Celentis and managed the commercialisation of intellectual property from AgResearch in New Zealand with 650 Scientists and $130m revenues.

Stewart was previously the Chairman of Resonance Health Ltd (ASX:RHT) and Hatchtech Pty Ltd, a Director of iCeutica Pty Ltd and Investment Director of IB Managers Fund. He was also a Director AusBiotech Ltd and Senator of Murdoch University.

DR JOHN CHIPLIN

BPHARM, PHD, MRPHARMS

INDEPENDENT DIRECTOR (RESIGNED 13 JuNE 2012)

John Chiplin, PhD, has broad-based experience in the life science and technology industries, both from an operational and investment perspective. Most recently he was founding CEO of Arana Therapeutics, a new generation Antibody developer and a board member of Domantis, Inc. – prior to the acquisition of the companies by Cephalon and GSK respectively. Immediately prior to running Arana, Dr. Chiplin was head of the ITI Life Sciences Investment Fund in the UK.

His own investment vehicle, Newstar Ventures Ltd., has funded more than a dozen early stage companies in the past ten years. Dr. Chiplin’s Pharmacy and Doctoral degrees are from the University of Nottingham, UK, and he currently serves on the Boards/acts as an advisor to a number of international public/private companies and venture capital funds.

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SCIENTIFIC ADvISORY COMMITTEE

During the course of the year, membership of the Scientific Advisory Committee (SAC) remained unchanged.

HealthLinx’s core activity is to develop novel, non-invasive, serum/plasma-based, diagnostic products and the charter of the SAC is to review all research programs and advise the board on scientific integrity of the programs and their direction.

ASSOCIATE PROFESSOR ELIzABETH M DAx

CHAIRPERSON OF THE COMMITTEE

Elizabeth M Dax is an expert in the quality management of laboratory science and medicine, with extensive experience in project and financial management and research. She is well known as a consultant, an educator, and as an adviser in policy development in Australia and developing areas.

A/Prof Dax directed the NRL, a national program for assuring the quality of tests for transfusion transmissible infections and testing in Australian laboratories including the Australian Red Cross Blood Service. She also directed internationally the NRL’s programs supporting quality in 80-100 reference laboratories in the South-east Asian and Western Pacific regions and a WHO Collaborating Centre on Testing for HIV and other transmissible infections.

She has authored over 80 papers and 2 books as well as numbers of reports for WHO and government.

In 2011 as a recipient of a Commonwealth Board-ready scholarship, she graduated from an Australian Institute of Company Directors’ course. She chairs two not-for-profit company boards. She presently consults in laboratory quality management and development of laboratory systems.

ASSOCIATE PROFESSOR JANE ARMESDr Armes is a renowned clinical pathologist and researcher with broad expertise in women’s reproductive tract cancers, breast cancer and the application of advanced anatomical, histological and cytogenetic techniques for the analysis of such cancers.

Dr Armes has previously worked with: the Victorian Breast Cancer Research Consortium; Department of Pathology, University of Melbourne; Department of Pathology, Royal Women’s Hospital, Melbourne; and the Departments of Gynaecological Oncology and Pathology, Mercy Hospital for Women, Melbourne; before accepting her current appointment as Director of Anatomical Pathology Mater Adult Hospital, Brisbane, Queensland.

PROFESSOR MuRRAY MITCHELLProf Mitchell has more than 30 years experience in senior research positions spanning the United Kingdom, United States and Australasia. Currently he is the Deputy Director and Research Director of the Liggins Institute, University of Auckland and Deputy Director of the National Research Centre for Growth and Development. Prof Mitchell has contributed to more

than 400 publications during his career and is recognised as a leader in reproductive biology.

Prof Mitchell brings a wealth of both academic and commercial experience to the SAC and the company with focus on women’s health.

ASSOCIATE PROFESSOR MAHESH CHOOLANIAssociate Professor Mahesh Choolani is one of the most highly regarded Professors in Singapore. He is currently Associate Professor of Obstetrics & Gynaecology at the Yong Loo Lin School of Medicine at the National University of Singapore where his current programs include the Fetal Genetics Programme & Ovarian Cancer Programme, (Diagnostic Biomarker Discovery Laboratory) & the Fetal Therapy Programme (Fetal Therapy Laboratory).

Dr Choolani is also a Senior Consultant of Obstetrics & Gynaecology at the National University Hospital in Singapore, He has been awarded numerous awards, has contributed to hundreds of articles and publications and is currently named as the co-inventor of 8 patents.

Dr Gregory Rice attends all SAC meetings in an ex-officio capacity, in his role as Chairman and Scientific Director of the Company. Dr Dominic Autelitano attends the SAC meetings as the Chief Scientific Officer of the company and presents the development of the programs to the SAC for review and advice.

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HealthLinx Limited (“the “Company”) and the Board are committed to achieving and demonstrating the highest standards of corporate governance, consistent with the size and nature of the Company. This statement outlines the main corporate governance practices in place throughout the financial year.

The ASX Corporate Governance Council released revised Corporate Governance Principles and Recommendations on 2 August 2007 and further amendments in June 2010 and this Statement complies with those revised principles.

Having regard to the size of the Company and the nature of its enterprise, it is considered that the Company complies as far as possible with the spirit and intentions of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations as appropriate.

CHARTER FOR THE BOARD OF DIRECTORSAn important and basic corporate governance policy is the Charter for the Board of Directors which was adopted on 2 May 2006 and is reviewed each year. The Charter is a composite document which deals with all of the ASX corporate governance principles and guidelines and is available on the Company’s website.

The Charter, as supported by the Director’s Code of Conduct detailed at Principle 3, includes requirements for the following:

• The role of the Board;

• The Board structure;

• The skills required on the Board; and

• The Director’s general roles.

The relevant references in the Charter are noted under each of the principles listed below.

ASx PRINCIPLES OF GOOD CORPORATE GOvERNANCEThe following is a summary of the 8 Corporate Governance Principles including comments where applicable on the Recommendations, and extracts from the policies adopted by the Company which demonstrate how compliance has been achieved.

PRINCIPLE 1: LAY SOLID FOuNDATIONS FOR MANAGEMENT & OvERSIGHT

OPErATIOnS Of THE BOArD

The Board of Directors of the Company is responsible for all aspects of the management of the consolidated entity. The Board guides and monitors the businesses and affairs of the Company on behalf of the Security Holders and is committed to achieving and demonstrating the highest suitable standards of corporate governance commensurate with the size of the Company and the nature of the business. The principal functions, responsibilities and performance review requirements of the Board and the CEO are detailed in the Charter for the Board of Directors.

The Chairman reviews the performance of the Board on an annual basis.

The functions, responsibilities, remuneration and terms of each Director’s appointment are detailed in individual Letters of Appointment as are the same for Senior Executives in individual Employment Agreements all prepared in accordance with the guidelines included in the Charter for the Board of Directors.

BOArD rESPOnSIBILITIES

As the Board acts on behalf of Security Holders and is accountable to the Security Holders, the Board seeks to satisfy the financial and management expectations of the Security Holders, as well as other regulatory and ethical expectations and obligations. In addition, the Board is responsible for identifying areas of significant business risk and ensuring arrangements are in place to adequately manage those risks.

The Board appoints a Chief Executive Officer (“CEO”) who, for the purposes of this Statement can be either a Managing Director (“MD”) or a General Manager (GM) and the responsibility for the operation and administration of the Company is delegated to that person and the Executive team.

The Board has in place proper procedures to assess the performance of the MD and the Executive team and to ensure that the Executive team is appropriately qualified and experienced to discharge its responsibilities.

STATEMENT OF CORPORATE GOvERNANCEF

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Statement of Corporate Governance

The Board is responsible for ensuring that management’s objectives, activities and outcomes are aligned to the expectations, vision and business risks identified by the Board. The Board has a number of mechanisms in place to ensure this is achieved including receipt of detailed reports, and regular personal presentations to the Board by department heads and other senior executives which allows the Board to discuss relevant matters with those individuals and to ask questions on their performance, problems and issues.

BOArD POLICIES

Board policies or obligations have been established in the following areas:

• diversity;

• continuous disclosure;

• dealing in securities;

• related party dealings;

• conflict of interest and external advice;

• release of information;

• significant business risks; and

• ethical standards.

DIvErSITY

The Board has always been aware of the advantages that may flow from diversity in respect to gender, age, ethnicity and cultural background and has taken those factors into account when considering new appointments at all levels within the Company. During the year under review there were no female Directors, one mature age employee, no employees of differing ethnic background, five female employees including one with a management role, two female scientific advisors (one of whom is the Chair of the SAC) and one advisor of different ethnic background in the Company out of an aggregate of 16 including Directors, management,

other employees, contractors and scientific advisors. Effective 30 June 2012, the Managing Director (Mr Nick Gatsios) stepped down, but remains as a non-executive director, and was replaced by a female General Manager on 1 July 2012.

The Board adopted a Diversity Policy on 5 May 2011 which is provided in full below. In addition the Board also adopted a Diversity Strategy which includes measurable objectives for achieving cultural, gender and age diversity, and the progress in achieving the objectives will be reported in each Annual Report to shareholders.

DIvErSITY POLICY

The Diversity Policy adopted by the Board on 5 May 2011 is as follows:

1. GENERAL PuRPOSES AND PRINCIPLE

(a) The Company respects and values the competitive advantage of “diversity”, and the benefits of its integration throughout the Company, in order to enrich the Company’s perspective, improve corporate performance, increase shareholder value, and enhance the probability of achievement of the Company’s objectives (‘Principle”).

(b) This Principle will manifest itself in the following areas:

(i) strategic and operational:

(A) being attuned to diverse strategies to deliver the Company’s objectives;

(B) being attuned to diverse corporate, business and market opportunities; and,

(C) being attuned to diverse tactics and means to achieve those strategies in (A) and to take advantage of those opportunities in (B).

(ii) management:

(A) adding to, nurturing and developing the collective relevant skills, and diverse experience and attributes of personnel within the Company;

(B) ensuring the Company’s culture and management systems are aligned with and promote the attainment of the Principle, including having regard for domestic responsibilities.

Note: in the context of this paragraph 1(b)(ii) “Diversity” constitutes people at relevant levels within the Company (including board, senior executive, management and otherwise) with a diverse blend of skills, experiences, perspectives, styles and attributes gained from life’s journey, including on account of their culture, gender, age or otherwise.

(c) The Company will develop strategies, initiatives and programs to promote the Principle, including the achievement of gender diversity with respect to the matters referred to in paragraph 1(b)(ii).

(d) In particular, the Company will set measurable objectives, and targets or key performance indicators (KPIs), for the strategies, initiatives and programs to achieve gender diversity with respect to the matters referred to in paragraph 1(b)(ii).

(e) The Company will implement the strategies, initiatives, programs and measurable objectives referred to in (c) and (d).

(f) Management will monitor, review and report to the Board (including via the Nomination and Remuneration Committee) on the achievement of gender diversity with respect to the matters referred to in paragraph 1(b)(ii), and the Company’s progress under this policy.

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2. RESPONSIBILITY FOR THE POLICY(a) Although the Board retains

ultimate accountability for this Policy, the Board has delegated responsibility for Policy implementation to the CEO.

(b) In turn the CEO has delegated to the Company Secretary responsibility for administration of this Policy (including its reporting to the Board, or its relevant sub-committee, as appropriate.

3. MEASuRABLE OBJECTIvES, TARGETS AND KEY PERFORMANCE INDICATORS (KPIS) – GENDER DIvERSITY

With respect to gender diversity, management will:

(a) develop, for approval by the Board or its relevant sub-committee, as appropriate:

(i) measurable objectives concerning the strategies, initiatives and programs referred to in paragraph 1(c);

(ii) targets or KPIs to verify progress towards attainment of those measurable objectives.

(b) measure performance against those targets and KPIs;

(c) report from time to time on the progress of the matters referred to in (a) and (b).

4. COMPLIANCE REquIREMENTS(a) The Company will meet its

obligations with respect to the issue of “Diversity”, as may be required under the ASX Corporate Governance Principles and Recommendations (2nd Edition) (“ASX Principles”) and other regulatory requirements (if any) including by:

(i) establishing this Policy as a compliant policy under ASX Guideline 3.2(a) by:

(A) establishing measurable objectives for achieving gender diversity;

(B) the Board assessing annually the measurable objectives for achieving gender diversity and the progress in achieving them.

(ii) disclosing this policy or a summary of it under ASX Guideline 3.2 (b);

(iii) in its annual report, and in the terms of ASX Guideline 2.4, disclosing the processes the Board adopts and the criteria the Board takes into consideration in its selection of prospective new Board members;

(iv) in its annual report, and in the terms of ASX Principles 3.3 and 3.4, disclosing:

(A) the measurable objectives for achieving gender diversity set by the Board in the terms of this Policy;

(B) the progress from time to time towards achieving them;

(C) the proportions in the Company (relative to their male counterparts) of:

- female employees;

- females in senior executive positions;

- females on the Board.

(v) incorporating in the corporate governance statement in the Company’s annual report a statement as to the mix of skills and diversity that the Board is looking to achieve in membership of the Board, in the terms of ASX Guideline 2.6.

(b) The Company Secretary will assume line responsibility to ensure the Company meets its compliance and reporting obligations referred to in (a), including by collecting and collating all relevant data and ensuring that management processes and systems are adequate and effective for such reporting obligations to be met.

5. COMMuNICATION

The Company commits to the communication of this policy within the Company, and to its shareholders and the market, including via its website:

(i) by way of transparency and accountability; and

(ii) to better promote the prospects of attainment of the Principle.

6. ACCOuNTABILITY(a) Reporting and accountability in

the terms of this Policy will be a periodic item on the Board agenda.

(b) At least annually the Nomination and Remuneration Committee will report to the Board on progress towards attainment of the Principle with respect to the matters referred to in paragraph 1(b)(ii), and otherwise to facilitate the Board in meeting its Compliance requirements under paragraph 4.

7. ADDENDA TO THIS POLICY

The following shall constitute addenda to this Policy as if set out in this Policy:

(a) approved strategies, initiatives and programs and measurable objectives, targets and KPIs referred to in paragraph 1(c); and

(b) approved measurable objectives, targets and KPIs referred to in paragraph 1(d); as may apply from time to time.

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8. OvERRIDING CAvEAT

Nothing in this policy shall be taken, interpreted or construed so as to endorse:

(a) the principle criteria for selection and promotion of people to work within the Company, other than their overall relative prospect of adding value to the Company and enhancing the probability of achievement of the Company’s objectives;

(b) any discriminatory behaviour by or within the Company contrary to the law, or any applicable codes of conduct or behaviour for the Company or its personnel;

(c) any existing person within the Company any way feeling threatened or prejudiced by this policy in their career development or otherwise, merely because of their Diversity attributes at any time may be more, rather than less, common with others.

DIvErSITY STrATEgY

The Diversity Strategy lists the strategies, initiatives and programs, measurable objectives, targets and KPIs adopted by the Board on 5 May 2011 for the Group. Many of the strategies, initiatives and programs have already been achieved or put in place necessitating amendments to the Charter for the Board of Directors and to the Charter for the Nomination & Remuneration Committee. The amended Charters may be viewed on the Company’s web site.

The Strategy includes initiatives and programs designed to foster Diversity at Board level, at executive and management level and generally, commensurate with the nature and size of the Group. Progress with achievement of the Diversity Strategy will be reviewed by the Nomination & Remuneration Committee on an annual basis and the result reported to the Board. Progress will also be reported each year in the Directors’ Report section of the Annual Report.

THE rOLE Of THE CHAIrmAn

The role of the Chairman is clearly defined in the Charter for the Board of Directors. In summary, the Chairman is responsible for leading the Board, ensuring Directors are properly briefed in all matters relevant to their role and responsibilities, facilitating Board discussions and managing the Board’s relationship with shareholders and with the Company’s senior executives. In view of the small size of the Company and the small number of Directors, the Chairman continually reviews the performance of the Board and the individual Directors on an informal basis.

THE rOLE Of THE CEO

The role of the CEO is also clearly defined in the Charter for the Board of Directors. In summary, the CEO is responsible for implementing the Company strategies and policies, achieving the Company objectives and managing the business of the Company. The performance of the CEO is reviewed each year by the Nomination & Remuneration Committee at the time the CEO’s Remuneration Agreement is reviewed – June/ July annually. The CEO reviews the performance of the senior executives on an annual basis.

BOArD COmmITTEES

Establishment of Board committees is commensurate with the size of the Company as set out in each relevant Principle below. Detailed Terms of Reference or Charters have been adopted for each committee. If a specific committee has not been formed the relevant Terms of Reference or Charters have still been adopted however the responsibilities are handled directly by the Board. Details of the experience, expertise and qualifications of the committee members are set out on pages 23 to 25 and the number of meetings held and attendances is set out on page 25. Summaries of the responsibilities and membership of the committees is provided at each relevant Principle.

gOvErnAnCE

In view of the small size of the Company, the duty of governance is handled by the full Board and dealt with in accordance with the Charter for the Board of Directors and the Directors’ Code of Conduct.

nOmInATIOn

The duty of Nomination is handled by the Nomination & Remuneration Committee and dealt with in accordance with the Charter for the Board of Directors and the Diversity Policy.

nOn BOArD COmmITTEE

The Company has an established Scientific Advisory Committee (“SAC”) comprising a group of eminent, internationally recognised scientists, established to review the Company’s scientific endeavours, direction and research programs and advise the Board on how those scientific programs are progressing to time lines, milestones and budget and on any related issues.

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The SAC will also assist in the evaluation of any IP that may be under consideration by management. This will include but not be limited to the evaluation of the science and technical fit with Healthlinx existing IP and ease of integration. At the date of this Statement, the members are A/Prof Elizabeth Dax (Chair), Professor Murray Mitchell, Dr. Jane Armes, and A/Prof Mahesh Choolani. The Chairman of the Company, Dr Gregory Rice, and the CSO, Dr Dominic Autelitano, attend all SAC meetings in an ex-officio capacity. The SAC meets a minimum of four times per year two of which are joint meetings with the Board. If the need arises for additional meetings the SAC will convene to review and report back to the Board.

PRINCIPLE 2: STRuCTuRE THE BOARD TO ADD vALuE

The composition of the Board is determined in accordance with the following principles and guidelines:

• The Board should comprise at least three and no more than 9 Directors (determined by the Constitution) and at least two of the Directors shall ordinarily reside in Australia.

• The Chairman should preferably be an Independent Director.

• The Board shall comprise Directors with a diverse and appropriate range of qualifications and expertise including biotechnology, medical science, marketing, diversity attributes and accounting, and in the event of retirement of a Director with particular expertise, the Board, with the assistance of the Nomination & Remuneration Committee, will seek to appoint a Director with the skills, experience and diversity attributes required to

balance the needs of the Board in the operations of the Company, in accordance with the Diversity Strategy adopted by the Board.

• The Board shall meet monthly unless otherwise agreed by the Directors and follow meeting guidelines established to ensure that all Directors are made aware of, and have available all necessary information in a timely manner, to participate in an informed discussion of all agenda items.

• The Directors of the Company are elected at a General Meeting.

The Directors in office at the date of this statement are:

• Chairman (Independent) – Dr Gregory Edward Rice

• Non-Executive Director – Nick Gatsios

• Independent – John Richard Evans

Note: Nick Gatsios is classified as Non-Executive by virtue of his recent employment as Managing Director.

During the majority of the year under review, the Board was comprised of five Directors however Messrs Stewart Washer and John Chiplin both retired on 13 June 2012 citing work pressures, and have not yet been replaced.

Details of the Directors in office at the date of this report and during the year together with their experience, expertise and qualifications are set out on pages 21 to 23.

The Board maintains strict protocols to ensure that any potential or actual conflicts of interest and duty are properly identified and managed, to ensure Directors act in accordance with their fiduciary responsibilities.

Independent Directors are independent of management, do not have a substantial shareholding (i.e. less than 5%) and are free from any business or other relationship which could materially interfere with the exercise of their judgement. The commentary provided by the ASX Corporate Governance Principles and Guidelines has been considered when evaluating the independence of the Directors concerned.

Non-Executive Directors are independent of management but either have or control a substantial shareholding in the Company, i.e. 5% or more. At the date of this Report there is no Director with a holding greater than 5%.

The Director’s Code of Conduct detailed in Principle 3 includes an acknowledgement that Directors may obtain independent legal advice in order to discharge their duties properly.

PRINCIPLE 3: PROMOTE ETHICAL AND RESPONSIBLE DECISION-MAKING

The Charter for the Board of Directors deals with this issue in respect of Directors, the senior executives, staff and consultants of the Company.

The Board has adopted a Directors’ Code of Conduct which clarifies the standards of ethical behaviour required of the Directors and is relevant to several of the ASX Corporate Governance Principles. The Directors’ Code of Conduct is available on the Company’s web site. The following is a summary:

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DIrECTOrS’ CODE Of COnDuCT OvErvIEw

The Code of Conduct outlines the principles and standards Directors are required to abide by, and governs the way in which each of the Directors should conduct themselves in the discharge of their duties. This Code of Conduct should operate in addition to relevant laws that are in force from time to time and also in conjunction with all other Board Governance Policies.

1. Directors must act honestly, in good faith and in the best interests of the Company as a whole at all times.

2. Directors have a duty to use due care and diligence in fulfilling the functions of office and exercising the powers attached to that office.

3. Directors must always use the powers of the office for a proper purpose.

4. Directors must recognise that their primary responsibility is to the Company’s members as a whole but must, where appropriate, have regard for the interests of all stakeholders of the Company.

5. Directors must not make improper use of information acquired as a Director.

6. Directors must not allow personal interests, or the interests of any Associated Person, to conflict with the interests of the Company.

7. Directors have an obligation to be independent in judgement and actions and to take all reasonable steps to be satisfied as to the soundness of all decisions taken by the Board.

8. Confidential information received by a Director in the course of the exercise of Directors’ duties remains the property of the Company from which it was obtained and it is improper to disclose it, or allow it to be disclosed, unless that disclosure has been authorised by that Company, or required by law.

9. Directors should not engage in conduct likely to bring discredit upon the Company.

10. Directors have an obligation, at all times, to comply with the spirit, as well as the letter of the law and with the principles of this Code.

The Charter for the Board of Directors includes detailed guidelines for interpretation of the principles of the Code of Conduct.

CHArTEr fOr THE BOArD Of DIrECTOrS

The Charter for the Board of Directors is structured to promote ethical and responsible decision-making throughout the Company. All directors, executives, employees and consultants of the Company are expected to act with integrity and objectivity and maintain appropriate ethical standards and have the following duties:

• to act honestly, fairly and without prejudice in all commercial dealings and to conduct business with professional courtesy and integrity;

• to work in a safe, healthy and efficient manner, using their skills, time and experience to the maximum of their ability;

• to comply with applicable awards, Company policies and job requirements;

• not to knowingly make any misleading statements to any person or to be a party to any improper practice in relation to dealings with or by the Company;

• to ensure that the Company’s resources and property are used properly;

• not to disclose information or documents relating to the Company or its business, other than as required by law and the ASX Listing Rules and not to misuse any information about the Company or any other members of the consolidated entity.

TrADIng In COmPAnY SECurITIES

The Board adopted an updated Directors’ and Officers’ Share Trading Policy on 5 May 2011 which applies to all Directors, officers, senior management and other employees of the Company (“Designated Persons”) and supports this Principle through its provisions against insider trading and market manipulation. The Policy is available on the Company’s web site. In summary the trading restrictions are:

INSIDE INFORMATION

If a Designated Person has Inside Information (as defined in the policy) relating to the Company it is illegal for the Designated Person to:

(a) deal in (that is, apply for, acquire or dispose of) the Securities or enter into an agreement to do so; or

(b) procure another person to apply for, acquire or dispose of the Securities or enter into an agreement to do so; or

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(c) directly or indirectly communicate, or cause to be communicated, that information to any other person if the Designated Person knows, or ought reasonably to know, that the person would or would be likely to use the information to engage in the activities specified in paragraphs (a) or (b) above.

Designated Persons may only deal in the Company’s securities if they first obtain approval to do so and the Policy includes a procedure to obtain approval.

PROHIBITION TIME PERIODS

Designated Officers may trade in shares in the Company (as those expressions are defined in the Policy) only during a period (or “time window”) commencing 24 hours after any announcement to the Australian Stock Exchange (including without limitation an announcement of annual and half yearly results), and ending 30 days afterwards.

Even during a “time window” referred to above, Designated Officers may not trade in shares in the Company at any time when they are aware that any announcement of a major event or release of price sensitive information is likely to occur in the near future.

BLACK OuT PERIOD

Officers are not permitted to buy or sell the Company’s shares from December 31 each year until after the half yearly results announcement is made to the market and from June 30 each year until after the announcement of the full year’s results to the market or during the period commencing 4 weeks prior to the conclusion of any AGM of the Company.

ExCLuDED TRADING

Certain types of share trading transactions which are beyond the control of the Officer or result in no change to the beneficial holding of the Officer, are excluded from the restrictions imposed by the trading policy.

FINANCIAL PRODuCTS

Designated Persons are not permitted to deal at any time in financial products without the prior approval of the Board, such as options, warrants, futures or other financial products issued over the Securities by third parties such as banks and other institutions. An exception may apply where the Securities form a component of a listed portfolio or index product.

ETHICAL ISSuES POLICY

The Board adopted a specific Ethical Issues Policy on 22 January 2003 dealing with the scientific aspects of the Company’s operations which is the area that affects most of the Company officers, staff and consultants. The Policy is regularly reviewed and is still current. Given the nature of the Company’s business, strong ethical policies are considered to be essential. The items covered by the Ethical Issues Policy are:

• ethical issues in the Bio-marker discovery activities;

• ethical issues in the protein depletion technology;

• ethical issues in the Cryptomics™ discovery process;

• ethical issues in all other programs and activities;

• essential role of the Host Institution’s Ethical Boards in the Company’s activities;

• the Company uses non controversial techniques that have clear ethical approval;

• the Company ensures that donors/participants in its research are fully informed;

• the Company uses established guidelines for the acquisition of post mortem tissues;

• the Company use of animals has the approval of the Animal Ethics Board;

• the Company raises the bar for experimentation within ethically controversial areas;

• the Company’s approach to drug trials or related research on patients;

• responsibility for adherence to Company policies;

• time implications;

• costs of ethical review;

• international implications;

• legislation;

• partners; and

• practice update and Policy review.

IP AnD COmmErCIAL ISSuES

In view of the nature of the business of the Company, suitable terms of reference were adopted on 2 May 2006 to monitor and give guidance in respect to intellectual property and related commercial issues. In view of the small size of the Company this matter is handled by the full Board as required.

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PRINCIPLE 4: SAFEGuARD INTEGRITY IN FINANCIAL REPORTING

The Audit Committee is charged with safeguarding the integrity of the Company’s financial reporting by advising on and supervising internal controls and appropriate ethical standards for the financial and operational management and risk management of the Company. The committee also confirms the quality and reliability of the financial information prepared. The Company has adopted a detailed Charter for the Committee.

The Charter for the Board of Directors sets out the membership and responsibilities of the Committee as follows.

The Committee will comprise at least two independent directors one of whom will chair the meetings and should not contain any executive directors. The Committee responsibilities are:

• to review the adequacy of systems and standards of internal control with emphasis on risk management, financial reporting procedures and compliance;

• to review proposed announcements of financial results, financial statements, management questionnaires and external audit reports in advance of the Board;

• to receive any information it requires from management;

• to report its findings and recommendations directly to the Board;

• to provide a direct link from the Board to the external auditor, the nomination of the external auditor and reviewing the adequacy of the scope and quality of the annual statutory audit and half year audit review;

• to assess whether non-audit services provided by the external auditor are consistent with maintaining the external auditor’s independence. Each reporting period the external auditor provides an independence declaration in relation to the audit or review; and

• to provide advice to the Board in respect of whether the provision of the non-audit services by the external auditor is compatible with the general standard of independence of auditors imposed by the Corporations Act 2001.

During the year under review, the members of the committee were independent directors Messrs JR Evans (Chairman), J Chiplin and SJ Washer. Details of the qualifications and experience of the Committee members is set out on pages 21 to 23. Following the retirement of SJ Washer and J Chiplin on 13 June 2012, the responsibilities of the committee have been handled by the Board with JR Evans chairing that component of the relevant Board meeting.

The Chairman of the Audit Committee meets separately with the auditors as required from time to time to discuss the audit reviews and reports, to ensure that there are no outstanding issues and to assess the auditor’s continuing independence.

The Company Auditor is invited to attend the Annual General Meeting and be available to answer any questions the Shareholders may care to ask in respect to the financial statements of the Company. The Company has not yet adopted formal procedures for the selection, appointment and rotation of external auditors. However the annual audit fee negotiations are very robust and alternate quotes are obtained if considered necessary.

Each year the CEO will provide a statement to the Board in writing in respect to the integrity of the financial statements and the efficient and effective operation of the risk management and internal compliance and control systems.

Each year the CEO will provide a statement to the Board (see the Directors’ Report) that the Company’s financial reports present a true and fair view, in all material respects, of the Company’s financial condition and operational results and are in accordance with the relevant accounting standards. The statement also confirms that the assurance is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board.

PRINCIPLE 5: MAKE TIMELY AND BALANCED DISCLOSuRE

The Board has always been very conscious of its continuous and periodic disclosure obligations as set out in ASX Listing Rules 3 and 4 and has ensured that the requirements of those listing rules have been met at all times. The standard Board meeting agenda includes a review of past, current and forthcoming events and results to determine if there is information that should be disclosed in accordance with the Company’s Continuous and Periodic Disclosure Policy. The Company’s Continuous and Periodic Disclosure Policy is reinforced in the Charter for the Board of Directors. The policy is as follows:

POLICY

That the Company will do all things necessary to ensure compliance with Listing Rules 3 and 4 and to follow the guidelines and best practice recommendations as set out in Principle 5 where, in the opinion

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of the Board, those guidelines and recommendations are appropriate to the Company.

POLICY OBjECTIvES1. To establish a vetting and

authorisation process designed to ensure that Company announcements:

• are made in a timely manner;

• are factual;

• do not omit material information; and

• are expressed in a clear and objective manner that allows investors to assess the impact of the information when making investment decisions.

2. To establish a process to promote understanding of compliance within the Company.

3. To safeguard the confidentiality of corporate information to avoid premature disclosure.

In respect to Periodic Disclosure, the Listing Rules and guidelines require that the Board will ensure that the Security Holders and the market are periodically provided with all information necessary to assess the performance of the Company and the Directors.

Information to allow investors to monitor the performance of the Company is communicated by means of:

• the Annual Report which is available for distribution to all Security Holders;

• the Half-Yearly Report which is available for distribution to all Security Holders;

• periodic reports and special reports when matters of material interest arise;

• the Annual General Meeting and other meetings called to obtain approval of any Board action as required; and

• the Company website.

rESPOnSIBILITY

All Directors and the Company Secretary are responsible to ensure that the Company’s continuous and periodic disclosure policy is adhered to. The CEO works with the Chairman and the Company Secretary in respect to dealing with media contact and any external communications, such as analyst briefings.

PRINCIPLE 6: RESPECT THE RIGHTS OF SHAREHOLDERS

The Charter for the Board of Directors and the Directors’ Code of Conduct detailed at the beginning of this statement and the Directors’ and Officers’ Share Trading Policy detailed at Principle 3, all recognise legal and other obligations and support the legitimate interests of all stakeholders.

Fundamental to the rights of shareholders is an effective communication system utilising the methods detailed in Principle 5 and the Company web site. It is very important to ensure a clear and balanced understanding of the aims and objectives of the Company, and the progress being made towards them is readily determinable by interested parties.

The full text of Notices of Meetings and any Explanatory Memorandums plus any other relevant announcements made to the market, and information provided to analysts, is placed on the Company web site immediately following release to the ASX.

PRINCIPLE 7: RECOGNISE AND MANAGE RISK

The Charter for the Audit Committee requires the Committee to:

• ensure the Company’s risk management policies and procedures are adequate;

• monitor compliance with the Company’s risk management policies and procedures;

• keep itself appraised of the latest developments, policies and trends in relation to financial matters, rules and regulations to the extent that they may affect the Company or the market(s) in which the Company operates;

• oversee the establishment and implementation of a risk management system and review (at least annually) the effectiveness of the Company’s implementation of that system;

• review the Company’s internal financial control mechanisms and risk management policies;

• compile a risk profile of the material risks (including financial and non-financial matters) facing the Company;

• establish and implement a system for identifying, assessing, monitoring and managing material risk throughout the Company;

• review major non-financial regulatory matters through the use of a compliance monitoring reporting regime which covers the following areas of exposure:

• environment;

• safety and health;

• asset protection (including insurance);

• trade practices;

• discrimination and harassment;

• conflict of interest; and

• ethical standards.

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Each year the MD will provide a statement to the Board in writing in respect to the integrity of the financial statements and the efficient and effective operation of the risk management and internal compliance and control systems.

PRINCIPLE 8: REMuNERATE FAIRLY AND RESPONSIBLY

The Board has established a Nomination & Remuneration Committee charged with the responsibility to review and make recommendations to the Board on remuneration packages and policies related to the Non-executive Directors, Managing Director/CEO, and senior executives of the Company, and to ensure that the remuneration policies and practices are consistent with the Company’s strategic goals and human resource objectives.

The Committee, in conjunction with the Chairman of the Company, will review the performance of the CEO against the agreed parameters and KPIs and such review has taken place during the period under review.

During the period under review, the members of the Nomination & Remuneration Committee are Messrs J Chiplin (Chairman), JR Evans and SJ Washer. Following the retirement of J Chiplin and SJ Washer on 13 June 2012, the responsibilities of the committee are handled by the Board.

The Board has adopted a detailed Charter for the Nomination & Remuneration Committee. The Charter includes the following:

• Objectives;

• Composition;

• Meetings;

• Access; and

• Duties & Responsibilities including:

• Recommendations for the appointment or removal of Directors;

• assessment of necessary and desirable competencies including diversity attributes;

• review succession plans;

• evaluation of Board performance;

• advice on Director’s remuneration;

• advice on CEO’s remuneration;

• advice on senior management remuneration;

• employment packaging;

• staff policy and procedures;

• reporting; and

• remuneration reviews.

DIrECTOrS’ rEmunErATIOn

If an Executive Director is appointed, suitable remuneration will be approved by the Board. The Non-executive Directors are paid Director’s fees by the Company which may be in the form of a cash payment to the Director, cash conditional upon the purchase of shares in the Company or the issue of Options to acquire shares (options are subject to Shareholder approval). Proper expenses incurred in the course of the Company’s operations are reimbursed. The maximum aggregate amount of Non-Executive Director’s fees must be approved by the Company in a General Meeting.

The Board has established an Employee Share Options Plan to encourage and reward enhanced performance by senior management and staff subject to the performance of the Company. The independent and Non-executive Directors do not participate in the scheme and they are not paid any retirement benefits, other than superannuation.

The Remuneration Report included in the Directors’ Report details the remuneration policies of the Company.

COmPAnY wEB SITE

This Statement of Corporate Governance is available in the Investor Relations – Corporate Governance section of the Company website www.healthlinx.com.au together with further Corporate Governance information as appropriate.

gOvErnAnCE AnD POLICY rEvIEwS

The Corporate Governance policies and practices of the Company will be continually reviewed in accordance with the standards required of the Company by the Directors, the ASX, ASIC and other relevant stakeholders, to ensure that the highest appropriate governance standards are maintained.

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Your Directors present their report on the consolidated entity (referred to hereafter as the group) consisting of HealthLinx Limited and the entities it controlled at the end of, or during, the financial year ended 30 june 2012.

1. GENERAL INFORMATION

(a) DIRECTORS

The following persons were Directors of HealthLinx Limited at any time during, or since the end of, the year:

Names

• Nick Gatsios

• Gregory Rice

• Stewart Washer (resigned 13 June 2012)

• John Evans

• John Chiplin (resigned 13 June 2012)

All Directors have been in office since the start of the financial year to the date of this report, unless otherwise stated.

(b) COMPANY SECRETARY

The following person held the position of company secretary at the end of the financial year:

• Mr Mal LucasSmith, aged 69, has had over 40 years experience in finance, executive and non-executive management, property development, corporate secretarial and administrative services. During that period he spent 12 years with State Bank of New South Wales and 18 years with Australian Guarantee Corporation Limited. He left AGC of his own accord in September

1987 to form a corporate services business and has since worked within and consulted to the corporate, finance, property development, trust management and hospitality sectors. He provides corporate secretarial services to HealthLinx Limited, MediVac Limited, Earth Heat Resources Limited, and Centrebet International Limited plus several unlisted companies.

(c) PRINCIPAL ACTIvITIES

The principal activities of the Group during the financial year were:

• further clinical validation of OvPlex™ an ovarian cancer diagnostic targeting early detection of ovarian cancer in symptomatic women;

• the appointment of CPC, a CRO based in Denver Colorado to work with the company to draft a Pre IDE submission for the FDA with the view that this would lead to a pivotal study that would ultimately see OvPlex™ with FDA approvals;

• expanding distribution channels for OvPlex™ through agreements for Spain and Portugal, Malaysia and India;

• Completion of the South Korean study, in which preliminary data appears to be very favourable but final results of the study will not be known until the completion of the multi – centre, multi-national study is completed;

• initiation of an OvPlex pilot study in China;

• securing patents for the OvPlex™ panel in New Zealand, Hong Kong and Singapore; and

• securing grant of the IgY patent in Europe triggering the licensing event with Sigma for this intellectual property.

There have been no significant changes in the nature of the Group’s principal activities during the financial year.

2. BuSINESS REvIEw

(a) OPERATING RESuLTS

The consolidated loss of the Group after providing for income tax amounted to $1,967,572 (2011: loss of $2,338,085).

(b) REvIEw OF OPERATIONS

During the year, the Company has achieved a number of important milestones, including:

• launching OvPlex™ in Malaysia;

• entering into distribution agreements for Spain, Portugal and India;

• completing an interim analysis of the second multi centre, multi national study and achieving statistical significance for that data;

• completing recruitment and sample collection for the second study;

• continuing development of the AGR2 assay;

• securing grant of the OvPlex™ patent granted in New Zealand, Singapore and Hong Kong;

• completing the first stage of a collaboration for a pilot study in prostate cancer with the Garvan Institute;

• securing a licence from Sigma-Aldrich for the company’s IgY technology in Europe and Australia; and

• securing additional funding from US investors to continue building the company on the world stage.

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Directors' Report

For further details, please refer to the Company Overview earlier in this document.

(c) DIvIDENDS

No dividends were paid or declared since the start of the financial year (2011: no dividends).

3. OTHER ITEMS

(a) SIGNIFICANT CHANGES IN STATE OF AFFAIRS

Significant changes in the Group’s state of affairs were:

• a decrease in Net Assets of the Consolidated Entity from $2.5m to $2.4m, and of the Company from $0.6 to $0.5m;

• drawdown on the Equity Line Facility worth $871,155 with Dutchess Capital to December 2011; and

• entry into a Convertible Note agreement with La Jolla Cove Investors, Inc. worth USD9,000,000. USD950,000 was drawn down during the year.

(b) EvENTS SuBSEquENT TO REPORTING DATE

On the 3 August 2012, the company announced that it had entered into a conditional binding heads of agreement to effect the sale of the majority of the intellectual property assets of the company including OvPlex to Mane Cancer Diagnostics (San Diego, USA). HealthLinx will receive an upfront payment of USD$250,000 and 30% equity in the listed entity as consideration for the sale of assets, with the assets being valued by Mane Cancer Diagnostics at $6.25m. The transaction is subject to final due diligence and shareholder approval and is conditional upon Mane Cancer Diagnostics listing

on the NASDAQ exchange prior to 24 December 2012. HealthLinx retains ownership of the IgY assets with Mane Cancer Diagnostics securing a first right of refusal to acquire these assets.

(c) FuTuRE DEvELOPMENTS

The company is focussed on a number of activities in 2012-2013.

Completion of the analysis of results for the multi-centre, multi-national 1007 patient OvPlex™ second study is forecasted for October 2012. Interim analysis produced results that were similar to the first study and clearly demonstrated that OvPlex™ was statistically significantly better that CA125 alone when diagnosing symptomatic women. Upon conclusion of this study, HealthLinx will be in a position to implement a new OvPlex algorithm internationally.

The 220 patient study being conducted in South Korea for KFDA approvals has been completed and data will be reported post completion of the multi-centre, multi-national study outlined above.

The transaction announced on 3 August 2012 is targeted for completion by 24 December 2012. HealthLinx will be undertaking the required due diligence and shareholder approval requirements to facilitate closure of this transaction.

The company plans to commence a program to identify new assets for future development.

(d) ENvIRONMENTAL ISSuES

The Group’s operations are not regulated by any significant environmental regulation under a law of the Commonwealth or of a state or territory.

(e) NON-AuDIT SERvICES

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

Details of the amounts paid or payable to the auditor (Grant Thornton) for audit and non-audit services provided during the year are set out below.

The Board of Directors, in accordance with advice from the Audit Committee, is satisfied that the provision of non-audit services during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act 2001. The Directors are satisfied that the services disclosed below did not compromise the external auditor’s independence for the following reasons:

• all non audit services are reviewed and approved by the Audit Committee prior to commencement to ensure they do not adversely affect the integrity and objectivity of the auditor; and

• none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code of Ethics for Professional Accountants.

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The following fees were paid/payable to the external auditors during the year ended 30 June 2012:

2012$

2011$

Amounts paid/payable to Grant Thornton

Audit and other assurance services

– Auditing or reviewing the financial report 37,000 -

Amounts paid/payable to BDO Audit (NSW-VIC) Pty Ltd


– Auditing or reviewing the financial report 15,000 50,450

Total paid or payable 52,000 50,450

BDO Audit (NSW-Vic) Pty Ltd merged with Grant Thornton in Australia effective from 1 May 2012. As a result of the merger the Board resolved to appoint Grant Thornton Audit Pty Ltd as auditor on 21 June 2012. ASIC consent to the change was sought and granted on 12 July 2012.

(F) AuDITORS INDEPENDENCE DECLARATION

The lead auditor’s independence declaration for the year ended 30 June 2012 as required by Section 307C of the Corporations Act 2001 has been received and can be found on page 90 of the financial report.

4. DIRECTOR INFORMATION

(a) INFORMATION ON DIRECTORS

Nick Gatsios Managing Director (resigned as Managing Director 30 June 2012 – continuing as a Director)

Experience Nick is a co-founder of HealthLinx, spinning the technology out of a leading Melbourne hospital in 2003. The company was privately funded for three years until Nick negotiated a reverse acquisition of an ASX listed company in late 2005. In February 2006 the transaction was completed with the company being re-capitalised to allow for the development of the OvPlex™ panel.

Nick has spent the past ten years building strong international networks and relationships where technology can be partnered and developed through to product and market. Nick has been successful in securing over $60 million in funding and grants. More recently Nick has been very active in establishing distribution channels for HealthLinx in targeted jurisdictions and establishing trials for regulatory approvals for OvPlex™.

Interest in Shares and Options 7,697,195 shares and 1,360,000 options

Directorships held in other listed entities in the last 3 years

MediVac Limited

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Gregory Rice DirectorNon-Executive Chairman

Experience Professor Greg Rice is a co-founder of HealthLinx and a co-inventor of key patents that underpin HealthLinx’s product development goals.

Professor Rice’s current research programs focus on the aetiology and early diagnosis of complications of pregnancy and reproductive tract cancers. His research teams are leaders in proteomic biomarker discovery platforms and the development of multiplex assay systems.

Interest in Shares and options 6,524,615 shares and 50,000 options


None

Stewart Washer Director (Independent) (resigned 13 June 2012)

Experience Stewart has 20 years of senior executive and Board experience in commercial technology companies in the medical and agri-food sectors. He is currently CEO of Calzada Ltd (ASX:CZD) who are developing biodegradable polymers (NovoSorb) as tissue scaffolds for wound and bone repair and a peptide (AOD9604) for fat loss and bone health.

Stewart was the founding CEO of Phylogica Ltd (ASX:PYC) and before this, he was CEO of Celentis and managed the commercialisation of intellectual property from AgResearch in New Zealand with 650 Scientists and $130m revenues.

Stewart was previously the Chairman of Resonance Health Ltd (ASX:RHT) and Hatchtech Pty Ltd, a Director of iCeutica Pty Ltd and Investment Director of IB Managers Fund. He is currently a Director AusBiotech Ltd, the industry body for Biotechnology in Australia.

Interest in Shares and Options 136,364 shares and 100,000 options


Xceed Capital Limited Phylogica Limited Genesis Research and Development Limited Resonance Health Limited Calzada Limited

Committee Memberships Member of the Remuneration Committee Member of the Audit & Risk Management Committee

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John Chiplin Director (Independent) (resigned 13 June 2012)

Experience John Chiplin, PhD, has broad-based experience in the life science and technology industries, both from an operational and investment perspective. Most recently he was founding CEO of Arana Therapeutics, a new generation Antibody developer and a board member of Domantis, Inc. - prior to the acquisition of the companies by Cephalon and GSK respectively. Immediately prior to running Arana, Dr. Chiplin was head of the ITI Life Sciences investment fund in the UK. His own investment vehicle, Newstar Ventures Ltd., has funded more than a dozen early stage companies in the past ten years. Dr. Chiplin’s Pharmacy and Doctoral degrees are from the University of Nottingham, UK, and he currently serves on the Boards/acts as an advisor to a number of international public/private companies and venture capital funds.

Interest in Shares and Options Nil


Nil

Committee Memberships Member of the Audit & Risk Management Committee Chairman of the Remuneration Committee

John Evans Director (Independent)

Experience John holds a B.Com (Hons) degree and is a Fellow of the Institute of Chartered Accountants in Australia, and a member of CPA Australia and the Australian Institute of Company Directors. John is currently the principal of a Business Broking & Advisory practice, and advises a range of businesses in both the SME sector and larger corporate clients, on matters such as strategic planning, marketing, governance, and financial analysis. Prior to this, John held a series of positions in Finance and General Management over a 15 year period, across a wide range of industries including telecommunications, banking and insurance, superannuation and funds management, media, hospitality, and property development. John’s approach to advising businesses balances the need for practical, achievable solutions with the need to always keep in sight the overall strategic objective. John is a director of two other listed companies, several private companies and two not-for-profit organisations, and provides Board consulting services to two other company groups.

Interest in Shares and Options 648,922 shares and 100,000 options


MediVac Limited Intermoco Limited

Committee Memberships Chairman of the Audit & Risk Management Committee Member of the Remuneration Committee

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(b) MEETINGS OF DIRECTORS

During the financial year, attendances by each Director at Directors’ Meetings and Committee Meetings were as follows:

Directors’ Meetings

Audit & Risk Management

Committee MeetingsRemuneration

Committee Meetings

Eligible to attend

Number attended

Eligible to attend

Number attended

Eligible to attend

Number attended

Nick Gatsios 19 19 - - - -

Gregory Rice 19 18 - - - -

Stewart Washer 15 13 3 3 9 8

John Evans 19 19 3 3 9 9

John Chiplin 15 14 3 3 9 9

5. REMuNERATION REPORT (AuDITED)The remuneration report is set out under the following main headings:

(a) Principles used to determine the nature and amount of remuneration

(b) Details of remuneration

(c) Service agreements

(d) Sharebased compensation

(e) Additional information.

The following persons were Directors and key management personnel in office at any time during the financial year:

Position

Director

Nick Gatsios Managing Director (resigned as Managing Director at 30 June 2012, continuing as a Director)

Greg Rice Chairman (Non-Executive)

Stewart Washer Director (Independent) (Resigned 13 June 2012)

John Evans Director (Independent)

John Chiplin Director (Independent) (Resigned 13 June 2012)

Other Key Management Personnel

Mal Lucas-Smith Company Secretary

Dominic Autelitano Chief Scientific Officer

Jennifer Edwards Finance ManagerFor

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(a) PRINCIPLES uSED TO DETERMINE THE NATuRE AND AMOuNT OF REMuNERATION

The objective of the Group’s executive reward framework is to ensure reward for performance is competitive and appropriate for the results delivered. The framework aligns executive reward with achievement of strategic objectives and the creation of value for shareholders, and conforms to market best practice for delivery of reward. The Board ensures that executive reward satisfies the following key criteria for good reward governance practices:

• competitiveness and reasonableness;

• acceptability to shareholders;

• performance linkage/alignment of executive compensation;

• transparency; and

• capital management.

There is no relationship between Board policy and Healthlinx Ltd’s performance for the previous five years.

In consultation with biotech industry surveys on executive remuneration the Group has structured an executive remuneration framework that is market competitive and complimentary to the reward strategy of the organisation.

Alignment to shareholders’ interests:

• has economic future profits as a core component of plan design;

• focuses on sustained growth in shareholder wealth, consisting of the possibility of future dividends and growth in share price, and delivering a future return on assets as well as focusing the executive on key nonfinancial drivers of value; and

• attracts and retains high calibre executives.

Alignment to program participants’ interests:

• rewards capability and experience;

• reflects competitive reward for contribution to growth in shareholder wealth;

• provides a clear structure for earning rewards; and

• provides recognition for contribution.

The framework provides a mix of fixed and variable pay, and a blend of short and longterm incentives.

nOn-ExECuTIvE DIrECTOrS

Fees and payments to non-executive Directors reflect the demands which are made on, and the responsibilities of, the Directors. Non-executive Directors’ fees and payments are reviewed annually by the Board. The Board also consults biotech industry surveys to ensure non-executive Directors’ fees and payments are appropriate and in line with the market. The Chairman’s fees are determined independently to the fees of non-executive Directors based on comparative roles in the external market. The Chairman is not present at any discussions relating to determination of his own remuneration. Non-executive Directors do on occasions receive share options. Non-executive Directors may opt each year to receive a percentage of their remuneration in HealthLinx Limited shares, which would be acquired on-market.

DIrECTOrS’ fEES

The current base remuneration was last reviewed with effect from 12 June 2007. The Chairman’s remuneration is inclusive of committee fees, and non-executive Directors who chair a committee also do not receive additional yearly fees for such roles. Additional fees are payable to Directors for their membership on subsidiary boards (currently there are no subsidiary Boards).

Non-executive Directors’ fees are determined within an aggregate Directors’ fee pool limit, which is periodically recommended for approval by shareholders.

Shareholder approval for the 2011 Remuneration Report was not obtained at the last Annual General Meeting held on 2 November 2011. As a result, the 5,600,000 share options to be granted to the Managing Director, Mr N Gatsios, were not approved and subsequently not granted.

ExECuTIvE PAY

The executive pay and reward framework has four components:

• base pay and benefits;

• short-term performance incentives;

• long-term incentives through participation in the HealthLinx Limited’s Employee Option Plan; and

• other remuneration such as superannuation.

The combination of these comprises the executive’s total remuneration.

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BASE PAY

Base pay is structured as a ‘total employment cost’ package which may be delivered as a combination of cash and prescribed nonfinancial benefits at the executive’s discretion, subject to Group guidelines.

Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. Biotech industry remuneration surveys provide analysis to ensure base pay is set to reflect the market for a comparable role. Base pay for senior executives is reviewed – generally annually – to ensure the executive’s pay is competitive with the market. An executive’s pay is also reviewed on promotion. There are no guaranteed base pay increases included in any senior executives’ contracts.

BEnEfITS

Some Executives receive benefits consisting of car allowances.

rETIrEmEnT BEnEfITS

Retirement benefits are paid into each executive’s nominated superannuation fund.

SHOrT-TErm InCEnTIvES

If an employee (other than senior Executives) achieves predetermined milestones set by the board or if an extraordinary individual achievement is made, a general bonus payment of up to 5% of gross annual remuneration is available to all such employees during the annual review.

In respect of the senior Executives (currently, the Managing Director and Chief Scientific Officer (CSO)), each year key performance indicators (KPIs) are set. The Remuneration Committee sets the KPIs for the Managing Director and the Managing Director sets the KPIs for the CSO. The KPIs generally include measures relating to the Group and the individual, and include financial, scientific, strategy, and risk measures. The measures are chosen as they directly align the individual’s reward to the KPIs of the Group and to its strategy and performance.

At the end of the financial year, the Remuneration Committee assesses the actual performance of the Group and the individual against the KPIs set at the beginning of the financial year. Minimum sales targets are compared with actual product sales, and the terms achieved in respect of additional strategic agreements are compared with the Board’s desired terms. A percentage of the pre-determined maximum is awarded depending on results. No bonus is awarded where performance falls below the minimum.

The Remuneration Committee recommends the cash incentive to be paid to the individuals for approval by the Board. The method of assessment was chosen as it provides the Committee with an objective assessment of the individuals’ performances.

LOng-TErm InCEnTIvE: HEALTHLInx LTD EmPLOYEE OPTIOn PLAn

Information on the HealthLinx Limited Option Plan is set out on pages 30 to 32.

(b) DETAILS OF REMuNERATION

Details of the remuneration of the Directors and the key management personnel (as defined in AASB 124 Related Party Disclosures) of HealthLinx Limited and the HealthLinx Group are set out in the following tables. The key management personnel of HealthLinx Limited and the Group include the Directors as listed earlier in this Report, the Company Secretary, Chief Scientific Officer and the Finance Manager.

The cash bonuses are dependent on the satisfaction of performance conditions as set out in the section headed Short-Term Incentives above. All other elements of remuneration are not directly related to performance. No long service leave has been paid during the year.

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rEmunErATIOn fOr EACH DIrECTOr AnD KEY mAnAgEmEnT PErSOnnEL Of THE COnSOLIDATED EnTITY DurIng THE YEAr

Short term

employee benefits

Long term

employee benefits

Post-employment

benefitsShort term incentives

Equity settled share based

payments

2012

Salary and fees

$

Long service

leave accrued

$

Super-annuation

contribution $

Cash bonuses

$Shares

$Options

$Total

$

Proportion of remuner-ation that is

performance based

% Value of remuner-

ation that consists of

options

Directors

Nick Gatsios 335,238 - 28,583 30,000 - - 393,821 7.62% -

Gregory Rice 97,995 - 4,860 - - - 102,855 - -

Stewart Washer 34,286 - 3,086 - - - 37,372 - -

John Evans 39,149 - 3,240 - - - 42,389 - -

John Chiplin - - - - - - - - -

Total Director Remuneration 506,668 - 39,769 30,000 - - 576,437 5.20% -


Dominic Autelitano 168,578 37,358 15,172 12,110 - 480 233,698 5.18% 0.02%

Mal Lucas-Smith 50,000 - - - - - 50,000 - -

Jennifer Edwards 52,896 - 4,624 704 - 80 58,304 1.21% 0.15%

Subtotal Other Key Management Personnel 271,474 37,358 19,796 12,814 - 560 342,002 3.75% 0.02%

Dr Gregory Rice was not paid personally in his capacity as a Scientific consultant. Refer to Note 22(f) for payments of $45,996 (GST Excl) regarding the service contract between HealthLinx Limited & Aculeate Foresight & Strategic Planning Pty Limited, payments for which have been included in Short Term Employee Benefits in the tables in this section.

John Evans was not paid personally in his capacity as a financial consultant. Refer to Note 22(f) for payments of $3,149 (GST Excl) regarding the service contract between HealthLinx Limited & Rinnovate Pty Ltd, payments for which have been included in Short Term Employee Benefits in the tables in this section.

Jennifer Edwards was not paid personally in her capacity as a financial controller from 18 May 2012. Prior to 18 May 2012, payments were made on a normal employment contract. Refer to Note 22(f) for payments of $1,514 (GST Excl) regarding the service contract between HealthLinx Limited & Accountive Pty Ltd, payments for which have been included in Short Term Employee Benefits in the tables in this section.

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rEmunErATIOn fOr EACH DIrECTOr AnD KEY mAnAgEmEnT PErSOnnEL Of THE COnSOLIDATED EnTITY AnD THE PArEnT EnTITY DurIng THE PrIOr YEAr

Short term

employee benefits

Long term

employee benefits

Post-employment

benefitsShort term incentives

Equity settled share based

payments

2011

Salary and fees

$

Long service

leave accrued

$

Super-annuation

contribution $

Cash bonuses

$Shares

$Options

$Total

$

Proportion of remuner-ation that is

performance based

% Value of remuner-

ation that consists of

options

Directors

Nick Gatsios 335,545 13,528 28,958 5,000 - 20,440 403,471 1.2% 5.1%

Gregory Rice 102,595 - 4,680 - - - 107,275 - -

Stephen Copulos 18,000 - 1,620 - - - 19,620 - -

Stewart Washer 36,000 - 3,240 - - - 39,240 - -

John Evans 60,058 - 3,240 - - - 63,298 - -

John Chiplin 21,000 - - - - - 21,000 - -

Subtotal Directors Remuneration 573,198 13,528 41,738 5,000 - 20,440 653,904 - -


Dominic Autelitano 174,661 3,490 14,450 - - 610 193,211 - 0.3%

Mal Lucas-Smith 61,600 - - - - - 61,600 - -

Jennifer Edwards 30,016 46 2,119 - - - 32,181 - -

Subtotal Other Key Management Personnel 266,277 3,536 16,569 - - 610 286,992 - 0.2%

(c) SERvICE AGREEMENTS

The contracts for service between the Company and specified executives are formalised in service agreements. Each of these agreements provides for the provision of performance related cash bonuses and car allowances. The major provisions related to the agreements relating to remuneration are set out below:

n gATSIOS, mAnAgIng DIrECTOr• Term of agreement commencing 1 July 2009 and continuing until terminated in accordance with termination

provisions (no fixed term). Employment ceased on 30 June 2012.

• Base salary, inclusive of car allowance and Director’s Fee, for the year ended 30 June 2012 of $270,750, plus 9% superannuation.

• A cash bonus of $10,000, representing 2.5% of total remuneration was paid on 13 October 2011. A further $20,000 bonus was awarded by the Board in respect of meeting key performance indicators. This bonus was unpaid at 30 June 2012.

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• Short-term incentives available in further years comprising of:

• a maximum of $40,000, based on a series of key performance indicators.

• $30,000 for a successful NASDAQ listing and raising of US$10m.

• $500,000 payable in the event of a sale of all of the company’s shares or business to a third party, on terms approved by the Board.

• Issue of 400,000 options in the year ending 30 June 2012 at a strike price of $0.25 with an expiry date 4 years from issue. These options do not expire on termination of the contract.

Commencing 1 July 2012, Mr Gatsios has entered into a Consultancy Service Agreement on a monthly arrangement for General Management services. Fees payable under the Agreement have been determined based on prevailing market rates for the provision of comparable services by personnel of equivalent skills and experience.

Key terms of the Consultancy Service Agreement are:

• Commencement 1 July 2012, continuing until terminated in accordance with termination provisions (no fixed term).

• Service fee based on a daily rate.

• Entitlement to reimbursement of business-related expenses incurred in connection with the role.

Dr grEgOrY rICE, SCIEnTIfIC COnSuLTAnT

Dr Rice, under the trading name Aculeate, received contractual fees for his role as a Scientific Consultant (previously GM Science & Operations), the details of which have been disclosed in Note 22(f) of the Financial Report.

Fees payable under the Agreement have been determined based on prevailing market rates for the provision of comparable services by personnel of equivalent skills and experience. At the time of entering into the Agreement, Dr Rice was Non-Executive Chairman of the Company, and is paid separately a Director’s Fee of $52,000 p.a. for that role. Key terms of the Consultancy Agreement are:

• Commencement 1 July 2009, continuing until terminated in accordance with termination provisions (no fixed term).

• Service Fee $46,000 per annum.

• Entitlement to reimbursement of business-related expenses incurred in connection with the role.

The Company may terminate the above contract immediately on grounds of serious breach by the Consultant, or “without cause” by providing 3 months written notice. If the Company terminates the contract “without cause”, a payment equal to 3 months salary will become payable to the Consultant. Upon termination no additional benefits are payable to the Consultant.

Dr DOmInIC AuTELITAnO, CHIEf SCIEnTIfIC OffICEr• Term of agreement commencing

1 September 2008 and continuing until terminated in accordance with termination provisions (no fixed term).

• Base salary, inclusive of 9% Superannuation, for the year ended 30 June 2012 of $183,750. This was increased to $206,728 effective 1 July 2012.

• Short-term incentive of an amount to be determined each year by the Managing Director, and based on a series of key performance indicators of a scientific and operational nature.

• Annual issue of options on terms to be determined each year by the Managing Director in consultation with the Remuneration Committee. These options will not expire on termination of the contract. During the year ended 30 June 2012, 300,000 options were granted.

The Company may terminate the above contract for serious breach at anytime, or “without cause” by providing notice in accordance with prevailing industrial laws. If the Company terminates the contract “without cause”, a payment determined by prevailing industrial laws will become payable to the employee. No additional termination benefits are payable to the employee.

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(d) SHARE BASED COMPENSATION

SHArES ISSuED AS rEmunErATIOn

There were no shares issued as remuneration in 2012.

EmPLOYEE SHArE OPTIOn PLAn

The Group has established the HealthLinx Limited Employee Share Option Plan (ESOP) to assist in the attraction, retention and motivation of employees of the Group. A summary of the Rules of the Plan is set out below.

• All staff who have been continuously employed by the Group for a period of at least one year are eligible to participate in the plan, although the Board may waive the one-year minimum requirement.

• Each option is to subscribe for one fully paid ordinary share in the Company. Once issued, the options are subject to a holding period to be determined by the Board, during which time the options may not be exercised.

• Options are granted under the plan for no consideration. The exercise price of options will be determined by the Board, subject to a minimum price equal to the market value of the Company’s shares either (in the discretion of the Board) at the time the Board resolves to offer those options or at the time of vesting. The total number of shares subject of options issued under the Plan, when aggregated with issues pursuant to any other employee share plan, must not exceed 5% of the Company’s issued share capital.

• Shares issued as a result of the exercise of options will rank equally with the Company’s previously issued shares.

• Option holders may only participate in new issues of securities by first exercising their options.

• Shares or Options received under the Employee Share Option Plan are received for past service.

The terms and conditions of each grant of options affecting remuneration in the consolidated entity and the parent entity during the period as set out below. No amounts were paid or payable in respect of options issued.

The board does not have a specific policy in relation to people limiting their exposure risk related to share based payments. There is a trading policy where directors and staff communicate their intent to purchase or sell securities to both the Company Secretary and Chairman.

Employee Grant dateDate vested & exercisable Date of expiry

Exercise price

$

Value per option at

grant date $

Nick Gatsios 21 July 2011 21 July 2011 30 June 2015 0.25 0.0000

Dominic Autelitano 19 January 2012 19 January 2012 19 January 2019 0.03 0.0016

Jennifer Edwards 19 January 2012 19 January 2012 19 January 2019 0.03 0.0016

Details of options over ordinary shares in the Company provided as remuneration to each Director and key management personnel of HealthLinx Limited and the Consolidated entity are set out below. When exercisable, each option is convertible into one ordinary share of HealthLinx Limited. Further information on the options is set out in Note 25 to the financial statements.F

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Number of options granted during the year

Number of options vested during the year % Vested

2012 2011 2012 2011 2012 2011

Directors

Nick Gatsios 400,000 400,000 400,000 400,000 100% 100%

Gregory Rice - - - - - -

Stephen Copulos - - - - - -

Stewart Washer - - - - - -

John Evans - - - - - -

Total for Directors 400,000 400,000 400,000 400,000 100% 100%


Dominic Autelitano 300,000 100,000 300,000 100,000 100% 100%

Mal Lucas-Smith - - - - - -

Jennifer Edwards 50,000 - 50,000 - 100% -

Total for Other Key Management Personnel 350,000 100,000 350,000 100,000 100% 100%

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

The model inputs for options granted during the year ended 30 June 2012 included:

(i) Options are granted for no consideration;

(ii) Expected volatility (13.82% – 25.78%) has been determined by reference to the volatility of the Company’s share price over the past year and annualised by taking the square root of the historical information;

(iii) The risk free interest rate (4.44% - 4.25%) is based on the rates of interest payable on 10 year Treasury Bonds at the date the options were granted;

(iv) It has been assumed that the Company will pay no dividends; and

(v) The grant, exercise and expiry dates used for the options granted to the Directors and key management personnel of the Company in 2012 were:

Grant date Exercise date Expiry date

Directors

Nick Gatsios 21 July 2011 21 July 2011 30 June 2015


Dominic Autelitano 19 January 2012 19 January 2012 19 January 2019

Jennifer Edwards 19 January 2012 19 January 2012 19 January 2019

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At the Company’s Annual General Meeting in November 2011, approval from shareholders was granted for a renewal of the Employee Option Plan for a further three year period. There were no specific service or performance criteria attached to the above options.

SHArES PrOvIDED On ExErCISE Of rEmunErATIOn OPTIOnS

There were no options exercised during 2012.

(e) ADDITIONAL INFORMATION

DETAILS Of rEmunErATIOn: CASH BOnuSES AnD OPTIOnS

Details of cash bonuses paid to Directors or Key Management Personnel are set out in the tables on page 27.

For each grant of options included in the table on page 31, the percentage of the available grant that was paid, or that vested, in the financial year, and the percentage that was forfeited because the person did not meet the service and performance criteria is set out below. Options vest on conditions determined by the Board. No options will vest if the conditions are not satisfied, hence the minimum value of the option yet to vest is nil. The maximum value of the options yet to vest (if any) has been determined as the amount of the grant date fair value of the options that is yet to be expensed.

Year granted

Vested %

Forfeited %

Financial years in

which options

may vest

Minimum total value

of grant yet to vest

$

Maximum total value

of grant yet to vest

$

Director

Nick Gatsios 2012 100% - 2012 - -


Dominic Autelitano 2012 100% - 2012 - -

Jennifer Edwards 2012 100% - 2012 - -

This marks the end of the audited Remuneration Report.

6. INDEMNIFICATION OF OFFICERS AND AuDITORSDuring the financial year, HealthLinx Limited paid a premium of $24,030 (including GST) to insure the Directors, Officers, and Company Secretary of the Group.

The liabilities insured are legal costs that may be incurred in defending civil or criminal proceedings that may be brought against the officers in their capacity as officers of entities in the Group, and any other payments arising from liabilities incurred by the officers in connection with such proceedings. This does not include such liabilities that arise from conduct involving a wilful breach of duty by the officers or the improper use by the officers of their position or of information to gain advantage for themselves or someone else or to cause detriment to the Company. It is not possible to apportion the premium between amounts relating to the insurance against legal costs and those relating to other liabilities.

The company has not otherwise, during or since the end of the financial year, except to the extent permitted by law, indemnified or agreed to indemnify an officer or auditor of the company or any of its controlled entities against a liability incurred as such an officer or auditor.

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7. PROCEEDINGS ON BEHALF OF COMPANYNo person has applied for leave of Court to bring proceedings on behalf of the Company or intervene in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of those proceedings.

The Company was not a party to any such proceedings during the year.

8. OPTIONS

(a) AT THE DATE OF THIS REPORT, THE uNISSuED ORDINARY SHARES OF HEALTHLINx LIMITED uNDER LISTED OPTIONS ARE AS FOLLOwS:

Grant date Date of expiryExercise

priceNumber

under option

4 March 2010 31 December 2013 0.1000 14,750,000

(b) AT THE DATE OF THIS REPORT, THE uNISSuED ORDINARY SHARES OF HEALTHLINx LIMITED uNDER uNLISTED OPTIONS ARE AS FOLLOwS:


priceNumber

under option

12 September 2005 30 June 2015 1.7500 2,000

12 September 2005 31 July 2015 1.7500 240,000

15 January 2006 31 December 2015 1.7500 12,268

1 February 2007 31 January 2014 0.3000 80,000

1 June 2007 31 May 2014 0.3000 12,000

30 June 2007 30 June 2014 0.3000 22,000

14 August 2007 31 March 2014 0.3000 50,000

11 January 2008 7 November 2014 0.3000 200,000

14 February 2008 14 February 2015 0.7500 40,000

14 February 2008 14 February 2015 1.0000 40,000

1 December 2008 30 November 2015 0.1100 400,000

5 October 2009 5 April 2013 0.0865 2,500,000

30 October 2009 30 April 2013 0.1288 381,468

2 December 2009 2 December 2013 0.1200 400,000

4 December 2009 3 June 2013 0.1038 197,368

17 December 2009 17 December 2013 0.1200 130,000

31 December 2009 30 June 2013 0.1020 163,267

3 February 2010 2 August 2013 0.1009 139,027

4 March 2010 4 September 2013 0.1306 157,895

18 March 2010 31 March 2014 0.1700 200,000

1 April 2010 1 October 2013 0.1898 146,341

continued over

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Directors' Report


priceNumber

under option

5 May 2010 5 November 2013 0.1857 146,341

3 June 2010 31 December 2013 0.1600 4,500,000

7 June 2010 7 December 2013 0.1356 159,405

30 June 2010 30 December 2013 0.1358 109,756

1 July 2010 30 June 2015 0.2500 400,000

2 July 2010 30 January 2014 0.1079 139,405

2 August 2010 28 February 2014 0.0929 237,718

13 October 2010 29 April 2014 0.0902 220,264

2 November 2010 30 May 2014 0.0983 204,360

1 December 2010 30 June 2014 0.1018 202,156

23 December 2010 24 January 2014 0.1500 30,000

23 January 2011 31 January 2014 0.1500 180,000

2 February 2011 2 August 2014 0.0817 401,070

7 March 2011 7 September 2014 0.0749 288,462

6 April 2011 6 October 2014 0.0676 263,158

9 May 2011 9 November 2014 0.0673 183,299

9 June 2011 8 December 2014 0.0593 245,327

29 June 2011 29 December 2011 0.0388 2,000,000

12 July 2011 12 January 2015 0.0398 350,195

9 May 2011 9 November 2014 0.0673 183,299

9 June 2011 8 December 2014 0.0593 245,327

29 June 2011 29 December 2011 0.0388 2,000,000

12 July 2011 12 January 2015 0.0398 350,195

15 July 2011 15 January 2015 0.0367 3,089,567

21 July 2011 30 June 2015 0.2500 400,000

26 July 2011 26 January 2015 0.0388 2,500,000

1 August 2011 1 February 2015 0.0300 3,089,567

18 August 2011 18 February 2015 0.0300 2,422,350

2 September 2011 2 March 2015 0.0270 1,552,188

19 September 2011 19 March 2015 0.0240 3,089,567

10 October 2011 10 April 2015 0.0250 3,959,375

19 October 2011 19 April 2015 0.0190 450,000

4 November 2011 4 May 2015 0.0180 5,000,000

22 November 2011 22 May 2015 0.0180 3,375,000

12 December 2011 12 June 2015 0.0120 1,775,000

19 January 2012 19 January 2019 0.0250 600,000

Total 47,077,164

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

(c) SHARE OPTIONS GRANTED TO DIRECTORS AND THE MOST HIGHLY REMuNERATED OFFICERS

Details of options granted to the Directors and the most highly remunerated officers of HealthLinx Limited and the consolidated entity in the year ended 30 June 2012 can be found in Section (d) of the Remuneration Report on page 30.

Signed in accordance with a resolution of the Board of Directors:

Gregory Rice Chairman

Nick Gatsios Director

Dated this 31 August 2012

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FINANCIAL STATEMENTS

The financial statements are presented for the consolidated entity consisting of HealthLinx Limited and its subsidiaries. In accordance with changes to the Corporations Act 2001, information in relation to the parent entity is now presented in Note 11 rather than throughout the financial statements. The financial statements are presented in the Australian currency.

HealthLinx Limited is a company limited by shares, incorporated and domiciled in Australia.

Its registered office and principal place of business is:

HealthLinx Limited 576 Swan Street Richmond VIC 3121

A description of the nature of the consolidated entity’s operations and its principal activities is included in the Company Overview on pages 3-5 and in the Directors’ Report on pages 19-20, both of which are not part of these financial statements.

The financial statements were authorised for issue by the Directors on 31 August 2012. The Company has the power to amend and reissue the financial statements.

Through the use of the internet, we have ensured that our corporate reporting is timely, complete, and available globally at minimum cost to the Company. All press releases, financial reports and other information are available on our website: www.healthlinx.com.au

STATEMENT OF COMPREHENSIvE INCOME 37

STATEMENT OF FINANCIAL POSITION 38

STATEMENT OF CHANGES IN EquITY 39

CASH FLOw STATEMENT 40

NOTES TO FINANCIAL STATEMENTS 41

DIRECTORS’ DECLARATION 89

AuDITOR’S INDEPENDENCE DECLARATION 90

INDEPENDENT AuDITOR’S REPORT 91

ASx OTHER REquIRED INFORMATION 94

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STATEMENT OF COMPREHENSIvE INCOME FOR THE YEAR ENDED 30 JuNE 2012

Consolidated

Note2012

$2011

$

Revenue 5 190,445 44,136

Other income 5 3,000 1,584

Total revenue and other income 5 193,445 45,720

Employee benefits expense (1,063,846) (895,937)

Depreciation, amortisation and impairments 6 (115,574) (121,654)

Scientific consumables (133,988) (250,420)

Consulting and professional fees (418,240) (616,912)

Other expenses 7 (757,286) (786,875)

Finance expense 33 (10,142) (4,165)

Loss before income tax 6 (2,305,631) (2,630,243)

Income tax benefit 8 338,059 292,158

Net loss for the period (1,967,572) (2,338,085)

Total comprehensive income/(loss) for the period (1,967,572) (2,338,085)

Basic and diluted loss per share (cents per share) from continuing operations:

Overall operations 25 (0.08c) (1.5c)

The accompanying notes form part of the financial statements.

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Financial Statements

Consolidated

Note2012

$2011

$

ASSETS

Current assets

Cash and cash equivalents 9 123,802 110,239

Trade and other receivables 10 86,039 78,062

Total current assets 209,841 188,301

Noncurrent assets

Property, plant and equipment 12 44,786 69,168

Intangible assets 13 3,094,315 2,897,617

Total non-current assets 3,139,101 2,966,785

TOTAL ASSETS 3,348,942 3,155,086

LIABILITIES

Current liabilities

Trade and other payables 14 596,271 538,827

Short-term borrowings 15 217,078 -

Derivative Liability 15 51,687 -

Shortterm provisions 16 56,606 71,380

Total current liabilities 921,642 610,207

Noncurrent liabilities

Deferred tax liabilities 18 11,963 15,263

Other long-term provisions 17 3,642 24,025

Total non-current liabilities 15,605 39,288

TOTAL LIABILITIES 937,247 649,495

NET ASSETS 2,411,695 2,505,591

EQUITY

Equity attributable to owners of the parent:

Contributed equity 19 14,832,516 12,959,800

Reserves – Share option reserve 21 403,204 402,244

Accumulated losses 20 (12,824,025) (10,856,453)

TOTAL EQUITY 2,411,695 2,505,591


STATEMENT OF FINANCIAL POSITION AS AT 30 JuNE 2012

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Consolidated

30 June 2012 Note

Contributed Equity

$

Share Option Reserve

$

Accumulated Losses

$Total

$

Balance at 1 July 2011 12,959,800 402,244 (10,856,453) 2,505,591

Losses for the year - - (1,967,572) (1,967,572)

Total comprehensive income/(loss) for the year - - (1,967,572) (1,967,572)

Contributions of equity, net of transaction costs 1,763,216 - - 1,763,216

Share based payments as consideration of services rendered 26 109,500 - - 109,500

Employee share options 26 - 960 - 960

Transactions with equity holders in their capacity as equity holders 1,872,716 960 - 1,873,676

Balance at 30 June 2012 14,832,516 403,204 (12,824,025) 2,411,695

Consolidated

30 June 2011 Note

Contributed Equity

$

Share Option Reserve

$

Accumulated Losses

$Total

$

Balance at 1 July 2010 11,997,542 380,565 (8,518,368) 3,859,739

Losses for the year - (2,338,085) (2,338,085)

Total comprehensive income/(loss) for the year - (2,338,085) (2,338,085)

Contributions of equity, net of transaction costs 937,049 - - 937,049

Share based payments as consideration of services rendered 26 25,209 - - 25,209

Employee share options 26 - 21,679 - 21,679

Transactions with equity holders in their capacity as equity holders 962,258 21,679 - 983,937

Balance at 30 June 2011 12,959,800 402,244 (10,856,453) 2,505,591


STATEMENT OF CHANGES IN EquITY FOR THE YEAR ENDED 30 JuNE 2012

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CASH FLOw STATEMENT FOR THE YEAR ENDED 30 JuNE 2012

Consolidated

Note2012

$2011

$

Cash flows from operating activities:

Receipts from customers including GST 196,333 10,153

Payments to suppliers and employees including GST (2,369,394) (2,276,556)

Research & development tax concessions received 334,759 288,858

Interest received 10,210 31,022

Interest paid (11,936) (3,786)

Net cash provided by (used in) operating activities 27(a) (1,840,028) (1,950,309)

Cash flows from investing activities:

Proceeds from sale of plant and equipment - 2,729

Acquisition of property, plant and equipment - (8,009)

Receipt of government grants 125,000 350,000

Payments for intangibles (412,890) (756,403)

Net cash provided by (used in) investing activities (287,890) (411,683)

Cash flows from financing activities:

Proceeds from issue of share capital 1,891,458 967,750

Proceeds from borrowings 290,962 -

Payment of share issue costs (40,939) (30,701)

Net cash provided by (used in) financing activities 2,141,481 937,049

Net increase (decreases) in cash held 13,563 1,424,943

Cash at beginning of financial year 110,239 1,535,182

Cash at end of financial year 9 123,802 110,239


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NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JuNE 2012

1. STATEMENT OF SIGNIFICANT ACCOuNTING POLICIES

The principal accounting policies adopted in the preparation of the financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated. Pursuant to changes to the Corporations Act 2001, the financial statements presented are only for the consolidated entity consisting of HealthLinx Limited and its subsidiaries. Disclosures required in relation to the parent entity are presented in Note 11.

(a) BASIS OF PREPARATION

These financial statements are general purpose financial statements that have been prepared in accordance with Australian Accounting Standards (including Australian interpretations), other authoritative pronouncements adopted by the Australian Accounting Standards Board (AASB), and the Corporations Act 2001.

COmPLIAnCE wITH IfrS

The consolidated financial statements and notes of HealthLinx Limited comply with International Financial Reporting Standards (IFRS) and interpretations adopted by the International Accounting Standards Board (IASB).

HISTOrICAL COST COnvEnTIOn

These financial statements have been prepared under the historical cost convention.

CrITICAL ACCOunTIng ESTImATES

The preparation of financial statements in conformity with Australian Accounting Standards requires the use of certain critical accounting estimates.

It also requires management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements, are disclosed in Note 2.

(b) PRINCIPLES OF CONSOLIDATION

SuBSIDIArIES

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of HealthLinx Limited (''Company'' or ''parent entity'') as at 30 June 2012 and the results of all subsidiaries for the year then ended. HealthLinx Limited and its subsidiaries together are referred to in these financial statements as the Group or the consolidated entity.

Subsidiaries are all those entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases. The accounting policies of subsidiaries have been changed where necessary to align them with the policies adopted by the Group.

The purchase method of accounting is used to account for the acquisition of subsidiaries by the Group (refer to Note 1(d)).

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

Non-controlling interests in the results and equity of subsidiaries are shown separately in profit or loss and statement of financial position respectively.

Investments in subsidiaries are accounted for at cost in the parent entity disclosures of HealthLinx Limited in Note 11.

(c) GOING CONCERN

As a developing business the Group has experienced operating losses of $1,967,572 and net cash outflows from operating activities of $1,840,028, and has a deficiency in net tangible assets of $290,593. The continuing viability of the Group and its ability to continue as a going concern is dependent upon the Group being successful in its continuing efforts in accessing additional sources of capital and/or revenue.

As a result there is significant uncertainty whether the Group will continue as a going concern and, therefore, whether it will realise its assets and settle its liabilities and commitments in the normal course of business and at the amounts stated in the financial report. However, the Directors believe that the Group will be able to access sufficient sources of funds and, accordingly, have prepared the financial report on a going concern basis.

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NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JuNE 2012 continued


1. STATEMENT OF SIGNIFICANT ACCOuNTING POLICIES CONTINueD

(c) GOING CONCERN CONTINueD

At this time, the Directors are of the opinion that no asset is likely to be realised for an amount less than the amount at which it is recorded in the financial report at 30 June 2012.

Accordingly, no adjustments have been made to the financial report relating to the recoverability and classification of the asset carrying amounts or the amount and classification of liabilities that might be necessary should the Group not continue as a going concern.

Significant matters considered by the Directors in determining that it is appropriate for the financial report to be prepared on a going concern basis include:

• The company has executed additional distribution agreements in Spain and expansion into Malaysia and India with sales expected to commence post first quarter 2013;

• The group secured in November 2011 a $9m Convertible Note funding arrangement with La Jolla Investments, which provides regular monthly drawdowns to assist in the funding needs of the company;

• Historical attempts by the Group to raise further equity funding or other sources of finance have generally been successful, and the Group continues to investigate a number of potential alternative sources of long term funding.

(d) BuSINESS COMBINATIONS

The acquisition method of accounting is used to account for all business combinations, including business combinations involving entities or businesses under common control, regardless of whether equity instruments or other assets are acquired. Cost is measured as the fair value of the assets given, equity instruments issued or liabilities incurred or assumed at the date of exchange. Transaction costs that the Group incurs in connection with a business combination, including legal fees, due diligence fees, and other professional and consulting fees, are expensed as incurred.

Where equity instruments are issued in an acquisition, the fair value of the instruments is their published market price as at the date of exchange unless, in rare circumstances, it can be demonstrated that the published price at the date of exchange is an unreliable indicator of fair value and that other evidence and valuation methods provide a more reliable measure of fair value.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill (refer to Note 1(i)). If the cost of acquisition is less than the Group's share of the fair value of the identifiable net assets acquired, the difference is recognised directly in profit or loss, but only after a reassessment of the identification and measurement of the net assets acquired.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

(e) SEGMENT REPORTING

The Group determines and presents operating segments based on the information that is internally provided to the Managing Director, who is the Group’s chief operating decision maker.

An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. An operating segment’s operating results are regularly reviewed by the Group’s CEO to make decisions about resources to be allocated to the segment and assess its performance, and for which discrete financial information is available.

Segment results that are reported to the CEO include revenue and expense items directly attributable to a segment as well as those that can be allocated on a reasonable basis. Assets and liabilities are not allocated to operating segments. Other unallocated items comprise mainly head office and Group-wide expenses, and income tax amounts.

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(f) FOREIGN CuRRENCY TRANSLATION

The functional and presentation currency of HealthLinx Limited and its Australian subsidiaries is Australian dollars (A$).

Foreign currency transactions are translated into the functional currency using the exchange rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. Foreign exchange gains and losses resulting from settling foreign currency transactions, as well as from restating foreign currency denominated monetary assets and liabilities, are recognised in profit or loss, except for differences arising on the re-translation of available-for-sale equity instruments, a financial liability designated as a hedge of the net investment in a foreign operation, or qualifying cash flow hedges, which are recognised in other comprehensive income.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when fair value was determined.

Foreign currency gains and losses are reported on a net basis.

(g) FINANCIAL INSTRuMENTS

(i) nOn-DErIvATIvE fInAnCIAL ASSETS

The Group initially recognises loans and receivables and deposits on the date that they are originated. All other financial assets (including assets designated at fair value through profit or loss) are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument.

The Group derecognises a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets that is created or retained by the Group is recognised as a separate asset or liability.

Financial assets and liabilities are offset and the net amount presented in the Statement of Financial Position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

FINANCIAL ASSETS AT FAIR vALuE THROuGH PROFIT OR LOSS

At 30 June 2012, the Group does not hold any financial assets at fair value through profit or loss.

HELD-TO-MATuRITY INvESTMENTS

If the Group has positive intent and ability to hold debt securities to maturity, then they are classified as held-to-maturity. Held-to-maturity financial assets are recognised initially at fair value plus any directly attributable transaction costs. Held-to-maturity investments are subsequently measured at amortised cost using the effective interest method, less any impairment losses.

LOANS AND RECEIvABLES

Loans and receivables are financial assets with fixed or determinable payments that are not quoted in an active market. Such assets are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, loans and receivables are measured at amortised cost

using the effective interest method, less any impairment losses. Loans and receivables comprise trade and other receivables (refer to Note 1(p)).

Cash and cash equivalents comprise cash balances and at-call deposits with original maturities of three months or less (refer to Note 1(r)).

AvAILABLE-FOR-SALE FINANCIAL ASSETS

As at 30 June 2012, the Group does not hold any available-for-sale financial assets. Any such assets subsequently acquired would, subsequent to initial recognition, be measured at fair value and changes therein, other than impairment losses (see Note 1(g)(v)) and foreign exchange gains and losses on available-for-sale monetary items (see Note 1(f)) would be recognised in other comprehensive income. When an investment is derecognised, the cumulative gain or loss in equity would be transferred to profit or loss.

(ii) nOn-DErIvATIvE fInAnCIAL LIABILITIES

The Group initially recognises debt securities issued and subordinated liabilities on the date that they are originated. All other financial liabilities (including liabilities designated at fair value through profit or loss) are recognised initially on the trade date at which the Group becomes a party to the contractual provisions of the instrument. The Group derecognises a financial liability when its contractual obligations are discharged or cancelled or expire. Financial assets and liabilities are offset and the net amount presented in the Statement of Financial Position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously.

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(g) FINANCIAL INSTRuMENTS CONTINueD

(ii) nOn-DErIvATIvE fInAnCIAL LIABILITIES CONTINueD

The Group has (or has had during the reporting period) the following non-derivative financial liabilities: trade and other payables. These financial liabilities are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial liabilities are measured at amortised cost using the effective interest rate method.

All borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

(iii) SHArE CAPITAL

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects.

If the entity reacquires its own equity instruments, eg. as the result of a share buy back, those instruments are deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and the consideration paid including any directly attributable incremental costs (net of income taxes) is recognised directly in equity.

(iv) COmPOunD fInAnCIAL InSTrumEnTS

Compound financial instruments consist of convertible notes that can be converted to share capital at the option of the holder. Upon conversion

of the convertible notes, the number of shares to be issued does vary with changes in their fair value.

The fair value of a liability portion of a convertible note is determined using a market rate of interest for an equivalent non-convertible note and stated on an amortised cost basis until conversion or maturity of the notes. The remainder of the proceeds is allocated to the conversion option and is shown as equity. Issue costs are apportioned between the liability and equity components based on the allocation of proceeds to the liability and equity components when the instruments are first recognised.

Subsequent to initial recognition, the liability component of this compound financial instrument is measured at amortised cost using the effective interest method. Any equity component of this compound financial instrument is not remeasured subsequent to initial recognition.

Interest, dividends, losses and gains relating to the financial liability are recognised in profit or loss. Distributions to the equity holders will be recognised against equity, net of any tax benefit.

(v) ImPAIrmEnT Of fInAnCIAL ASSETS

A financial asset not carried at fair value through profit or loss is assessed at each reporting date to determine whether there is any objective evidence that it is impaired. A financial asset is considered to be impaired if objective evidence indicates that one or more events has occurred after the initial recognition of the asset, and that the loss event had had a negative effect on the estimated future cash flows of that asset that can be estimated reliably.

Objective evidence that financial assets (including equity securities) are impaired can include default or delinquency by a debtor, restructuring of an amount due to the Group on terms that the Group would not otherwise consider, indications that a debtor or issuer will enter bankruptcy, and the disappearance of an active market for a security. In addition, for an investment in an equity security, a significant or prolonged decline in its fair value below its cost is objective evidence of impairment.

The Group considers evidence of impairment for receivables and held-to-maturity investment securities at both a specific asset and collective level. All individually significant receivables and held-to-maturity investment securities found not to be specifically impaired are then collectively assessed for any impairment that has been incurred but not yet identified. Receivables and held-to-maturity investment securities that are not individually significant are collectively assessed for impairment by grouping together receivables and held-to-maturity investment securities with similar risk characteristics.

In assessing collective impairment, the Group uses historical trends of the probability of default, timing of recoveries, and the amount of loss incurred, adjusted for management’s judgement as to whether current economic and credit conditions are such that the actual losses are likely to be greater or less than suggested by historical trends.

An impairment loss in respect of a financial asset measured at amortised cost is calculated as the difference between its carrying amount and the present value of the estimated future cash flows discounted at the original effective interest rate.

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Losses are recognised in profit or loss and reflected in an allowance account against receivables. If applicable, interest on an impaired asset continues to be recognised through the unwinding of the discount. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment loss is reversed through profit or loss.

(h) PROPERTY, PLANT & EquIPMENT

PLAnT & EquIPmEnT

All plant and equipment is stated at historical cost, including costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management, less depreciation and any impairments.

DEPrECIATIOn

The depreciable amount of all plant and equipment is depreciated on a diminishing value basis, other than Computer software which is depreciated on a straight-line basis, over their useful lives to the Group commencing from the time the asset is held ready for use. Leasehold improvements are depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.

The depreciation rates used for each class of depreciable assets are:

Class of plant and equipment

Plant and equipment 15-50%

Office equipment 15-30%

Computer equipment 37.5%

Computer software 25%

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated recoverable amount (Note 1(j)).

Gains and losses on disposals are determined by comparing proceeds with carrying amount. These are included net in profit or loss. When revalued assets are sold, it is Group policy to transfer the amounts included in other reserves in respect of those assets to retained earnings.

(i) INTANGIBLE ASSETS

gOODwILL

Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary/associate at the date of acquisition. Goodwill on acquisitions of subsidiaries is included in intangible assets.

Goodwill is not amortised. Instead, goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold.

Impairment losses on goodwill cannot be reversed.

InTELLECTuAL PrOPErTY

Intellectual property is recognised at cost of acquisition. Intellectual property has a finite life and is carried at cost less any accumulated amortisation and any impairment losses. Intellectual property is amortised over its useful life, estimated to be 10 years. Amortisation is calculated over the cost of the asset, or another amount substituted for cost, less its residual value.

rESEArCH & DEvELOPmEnT

Expenditure on research activities, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, is recognised in profit or loss when incurred.

Development activities involve a plan or design for the production of new or substantially improved products and processes. Development expenditure is capitalised only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to complete development and to use or sell the asset. The expenditure capitalised includes the cost of materials, direct labour and overhead costs that are directly attributable to preparing the asset for its intended use. Other development expenditure is recognised in profit or loss as incurred.

Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment losses. It has a finite life and is amortised over its useful life, estimated to be 5 years.

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(j) IMPAIRMENT OF NON-FINANCIAL ASSETS

Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually for impairment or more frequently if events or changes in circumstances indicate that they might be impaired.

At each reporting date the Group assesses whether there is any indication that individual assets are impaired. Where impairment indicators exist, recoverable amount is determined and impairment losses are recognised in profit or loss where the asset's carrying value exceeds its recoverable amount. Recoverable amount is the higher of an asset's fair value less costs to sell and value in use. For the purpose of 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 the risks specific to the asset.

An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows from other assets or groups of assets (cash generating units).

(k) BORROwING COSTS

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Fees paid in the establishment of loan facilities, which are not incremental costs relating to the draw-down of the facility, are recognised as prepayments and amortised on a straight-line basis over the term of the facility.

All borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after the balance sheet date.

Finance expenses comprise interest expense on borrowings including convertible notes, unwinding of the discount on provisions, changes in the fair value of financial assets at fair value through profit or loss, and impairment losses recognised on financial assets.

In respect of borrowing costs relating to qualifying assets, the Group capitalises borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset as part of the cost of that asset.

(l) PROvISIONS

Provisions for legal claims, service warranties and make good obligations are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the obligation and the amount has been reliably estimated. Provisions are not recognised for future operating losses.

Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present obligation at the balance sheet date. The discount rate used to determine the present value reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is recognised as a finance expense.

(m) EMPLOYEE BENEFITS

wAgES & SALArIES, AnnuAL LEAvE & SICK LEAvE

Liabilities for wages and salaries, including non monetary benefits, are recognised in other payables, and for annual leave and accumulating sick leave expected to be settled within 12 months in provisions, in respect of employees' services up to the reporting date and are measured at the amounts expected to be paid when the liabilities are settled, on an undiscounted basis.

LOng SErvICE LEAvE

The liability for long service leave is recognised in the provision for employee benefits and measured as the present value of expected future payments to be made in respect of services provided by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience of employee departures and periods of service.

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Expected future payments are discounted using market yields at the reporting date on national government bonds with terms to maturity and currency that match, as closely as possible, the estimated future cash outflows.

SHArE BASED PAYmEnTS

Share based compensation benefits are provided to employees via the employee share option scheme. Information relating to this scheme is set out in Note 26.

The fair value of options granted under the employee share option scheme is recognised as an employee benefit expense with a corresponding increase in equity. The fair value is measured at grant date and recognised over the period during which the employees become unconditionally entitled to the options. The amount recognised as an expense is adjusted to reflect the number of option grants for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of grants that do not meet the related service and non-market performance conditions at the vesting date. For grants with non-vesting conditions, the grant date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

The fair value of options at grant date is independently determined using a Black Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

PrOfIT SHArIng & BOnuS PLAnS

The Group recognises a liability and an expense for bonuses and profit sharing based on a formula that takes into consideration the profit attributable to the Company’s shareholders after certain adjustments. The Group recognises a provision where contractually obliged or where there is a past practice that has created a constructive obligation.

TErmInATIOn BEnEfITS

Termination benefits are payable when employment is terminated before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after reporting date are discounted to present value.

DEfInED COnTrIBuTIOn PLAnS

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to defined contribution pension plans are recognised as an employee benefit expense in profit or loss in the periods during which services are rendered by employees.

(n) SHARE-BASED PAYMENTS

The Group measures the goods and services received by equity settled share based payment transactions as an increase in equity, directly, at the fair value of the goods or services rendered, unless that fair value cannot be estimated reliably. If the Group cannot estimate reliably the fair value of the goods or services rendered, the Group shall measure their value, and the corresponding increase in equity, indirectly, by reference to the fair value of the equity instruments granted.

If the equity instruments granted vest immediately, are unconditional and are not required to complete a specified period of service, the Group shall presume that services rendered by the counterparty as consideration for the equity instruments have been received. On grant date the Group recognises the services rendered in full, with a corresponding increase in equity.

If the equity instruments granted do not vest until the counterparty completes a specified period of service, the Group shall presume that the services to be rendered by the counterparty as consideration for those equity instruments will be received in the future, during the vesting period. The Group accounts for these services as they are rendered by the counterparty during the vesting period, with a corresponding increase in equity.

Share-based payment arrangements in which the Group receives goods or services as consideration for its own equity instruments are accounted for as equity-settled share-based payment transactions, regardless of how the equity instruments are obtained by the Group.

For the Group's policy on share based payments to employees, please refer to Note 1(m).

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(o) REvENuE RECOGNITION

Revenue is measured at the fair value of the consideration received or receivable. Amounts disclosed as revenue are net of returns, trade allowances, volume rebates, and duties and taxes paid. Revenue is recognised for the major business activities as follows:

Revenue from services performed is recognised when the service is provided.

Royalty revenue, in relation to sales of the Group’s OvPlex™ products by its distribution partners, is recognised when due and receivable in accordance with the Distribution Agreement entered into with the distribution partner.

Revenue from sale of Group’s OvPlex™ products is recognised when the significant risks and rewards of ownership have passed to the buyer and can be reliably measured. Risks and rewards are considered passed to buyer when goods have been delivered to the customer.

Government grants are recognised at fair value where there is reasonable assurance that the grant will be received and all grant conditions will be met. Grants relating to expense items are recognised as income over the periods necessary to match the grant to the costs they are compensating. Grants relating to assets are reflected as a reduction in the cost of acquiring or developing the asset.

Interest revenue is recognised as interest accrues using the effective interest method. The effective interest method uses the effective interest rate which is the rate that exactly discounts the estimated future cash receipts over the expected life of the financial asset.

(p) TRADE RECEIvABLES

Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment. Trade receivables are generally due for settlement within 30 days.

Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be uncollectible are written off. A provision for impairment of trade receivables is established when there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. Significant financial difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation, and default or delinquency in payments (more than 30 days overdue) are considered indicators that the trade receivable is impaired. The amount of the provision is the difference between the asset’s carrying amount and the present value of estimated future cash flows, discounted at the original effective interest rate.

Cash flows relating to short term receivables are not discounted if the effect of discounting is immaterial. The amount of the provision is recognised in profit or loss in other expenses.

(q) TRADE AND OTHER PAYABLES

These amounts represent liabilities for goods and services provided to the Group prior to the end of financial year which are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition.

(r) CASH AND CASH EquIvALENTS

For cash flow statement presentation purposes, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities on the balance sheet.

(s) GOODS & SERvICES TAx (GST)

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

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

Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which are recoverable from, or payable to the taxation authority, are presented as operating cash flow.

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(t) EARNINGS PER SHARE

BASIC EArnIngS PEr SHArE

Basic earnings per share is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.

DILuTED EArnIngS PEr SHArE

Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.

(u) INCOME TAx

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

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss.

Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.

Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity.

TAx COnSOLIDATIOn LEgISLATIOn

HealthLinx Limited and its wholly-owned subsidiaries have implemented the tax consolidation legislation for the whole of the financial year.

HealthLinx Limited is the head entity in the tax consolidated group. The separate taxpayer within a group approach has been used to allocate current income tax expense and deferred tax balances to wholly-owned subsidiaries that form part of the tax consolidated group.

HealthLinx Limited has assumed all the current tax liabilities and the deferred tax assets arising from unused tax losses for the tax consolidated group via intercompany receivables and payables because a tax funding arrangement has been in place for the whole financial year. The amounts receivable/payable under tax funding arrangements are due upon notification by the head entity, which is issued soon after the end of each financial year. Interim funding notices may also be issued by the head entity to its wholly-owned subsidiaries in order for the head entity to be able to pay tax instalments. These amounts are recognised as current intercompany receivables or payables.

(v) LEASES

At the inception of an arrangement, the Group determines whether such an arrangement is or contains a lease. A specific asset is the subject of a lease if fulfilment of the arrangement is dependent on the use of that specified asset. An arrangement conveys the right to use the asset if the arrangement conveys to the Group the right to control the use of the underlying asset. At inception or upon reassessment of the arrangement, the Group separates payments and other consideration required by such an arrangement into those for the lease and those for other elements on the basis of their relative fair values.

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(v) LEASES CONTINueD

If the Group concludes for a finance lease that it is impracticable to separate the payments reliably, an asset and a liability are recognised at an amount equal to the fair value of the underlying asset. Subsequently the liability is reduced as payments are made and an imputed finance charge on the liability is recognised using the Group’s incremental borrowing rate.

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset, but not the legal ownership that are transferred to entities in the Group are classified as finance leases.

Lease payments are allocated between the reduction of the lease liability and the lease interest expense for the period. Leased assets are depreciated on a diminishing value basis over the shorter of their estimated useful lives or the lease term.

Lease payments for operating leases, where substantially all of the risks and benefits remain with the lessor, are charged as expenses in the periods in which they are incurred.

(w) NEw ACCOuNTING STANDARDS & AASB INTERPRETATIONS ADOPTED

The AASB has issued AASB 1054 Australian Additional Disclosures and 2011-1 Amendments to Australian Accounting Standards arising from the Trans-Tasman Convergence Project, and made several minor amendments to a number of AASBs.

These standards eliminate a large portion of the differences between the Australian and New Zealand accounting standards and IFRS and retain only additional disclosures considered necessary. These changes also simplify some current disclosures for Australian entities and remove others. None of the new standards and amendments to standards that are mandatory for the first time for the financial year beginning 1 July 2012 affected any of the amounts recognised in the current period or any prior period and are unlikely to affect future periods.

(x) STANDARDS, AMENDMENTS AND INTERPRETATIONS TO ExISTING STANDARDS THAT ARE NOT YET EFFECTIvE AND HAvE NOT BEEN ADOPTED EARLY

Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2012 reporting periods, and have not yet been adopted by the Group. The Group’s and the parent entity’s assessment of the impact of these new standards and interpretations is set out below.

• AASB 2011-4 makes amendments to AASB 124 Related Party Disclosures to remove individual key management personnel disclosure requirements, to achieve consistency with the international equivalent (which includes requirements to disclose aggregate (rather than individual) amounts of KMP compensation), and remove duplication with the Corporations Act 2011. The amendments are applicable for annual periods beginning on or after 1 July 2013. The Group’s management have yet to assess the impact of these amendments.

• AASB 9 Financial Instruments (issued December 2009 and amended December 2010) amends the requirements for classification and measurement of financial assets. Several requirements have generally been carried forward unchanged from AASB 139 Financial Instruments: Recognition and Measurement into AASB 9, including the requirements relating to classification and measurement of financial liabilities and derecognition requirements for financial assets and liabilities. However, AASB 9 requires that gains or losses on financial liabilities measured at fair value are recognised in profit or loss, except that the effects of changes in the liability’s credit risk are recognised in other comprehensive income. Due to the recent release of these amendments and that adoption is only mandatory for the 30 June 2014 year end, the entity has not yet made an assessment of the impact of these amendments.

• IFRS 13 Fair Value Measurement (issued May 2011) establishes a single framework for measuring fair value of financial and non-financial items recognised at fair value in the statement of financial position or disclosed in the notes in the financial statements, rather than the current situation where fair value measurement requirements are included in several Accounting Standards. Due to the recent release of this standard, the group has yet to conduct a detailed analysis of the differences between the current fair valuation methodologies used and those required by IFRS 13. However, when this standard is adopted for the first time for the year ended 30 June 2014, there will be no impact on the

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financial statements because the revised fair value measurement requirements apply prospectively from 1 July 2013. Additionally, this standard requires increased disclosures for items measured at fair value in the statement of financial position, as well as items merely disclosed at fair value in the notes to the financial statements. When this standard is adopted for the first time on 1 July 2013, additional disclosures will be required about fair values.

• Amendments to IAS 1 Presentation of Items of Other Comprehensive Income (issued June 2011) amends the presentation of items of other comprehensive income (OCI) to align with presentation under US GAAP. This will result in the statement of comprehensive income changing its name to ‘statement of profit or loss and other comprehensive income.’ Items of OCI must also be groups together into two sections: those that could subsequently be reclassified into profit or loss and those that cannot. When this standard is first adopted for the year ended 30 June 2013, there will be no impact on amounts recognised for transactions and balances for 30 June 2013 (and comparatives). However, the statement of comprehensive income will include name changes and include subtotals for items of OCI that can subsequently be reclassified to profit or loss in future (e.g. foreign currency translation reserves) and those that cannot subsequently be reclassified (e.g. fixed asset revaluation surpluses).

2. CRITICAL ACCOuNTING ESTIMATES & JuDGEMENTS

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

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Refer also to Note 1(c) in relation to the adoption of the ‘going concern’ basis of accounting in the financial statements.

CARRYING vALuE OF GOODwILL

Goodwill of $1,887,220 was recognised in 2006 on the reverse acquisition of Theros Diagnostics Pty Ltd. AASB 136 Impairment of Assets requires goodwill to be tested for impairment annually.

AASB 136 defines the recoverable amount of an asset or group of assets as the higher of its fair value less costs to sell and value in use. Value in use is the present value of the future cash flows. There are inherent issues about assessing recoverability of HealthLinx Limited's assets as:

• HealthLinx Limited is engaged in scientific research activities and therefore future cash flows directly related to the current projects are difficult to predict; and

• There is not an active secondary market for such assets.

Goodwill is allocated to the consolidated entity’s cash-generating units (CGUs) identified according to operating segment. Goodwill has been allocated to the Diagnostics segment.

In 2011, the recoverable amounts of CGUs were determined based on fair value less costs to sell, which was determined by an independent valuer in 2011. Fair value less costs to sell was determined using discounted cash flow projections. These included the following assumptions:

• Cash flow projections over 5 years.

• 2.3% growth rate to extrapolate cash flow projections.

• 15% discount rate applied to cash flow projections.

Subsequent to balance date, the company entered into a binding conditional heads of agreement to sell its major assets for an implied value of US$6.25m. The Directors believe that this transaction provides the best assessment of the fair value of the Group Assets. On the basis of this fair value, the directors believe that there is no impairment in the carrying value of goodwill.

INCOME TAxES

The Group is subject to income taxes in Australia. The Group has not recognised deferred tax assets relating to carried forward tax losses to the extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same subsidiary against which the unused tax losses can be utilised. However, utilisation of the tax losses also depends on the ability of the entity to satisfy certain tests at the time the losses are recouped.

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2. CRITICAL ACCOuNTING ESTIMATES & JuDGEMENTS CONTINueD

INCOME TAxES CONTINueD

Due to the reverse acquisition in February 2006, there are some concerns that the entity may fail to satisfy the continuity of ownership test and therefore has to rely on the same business test. There have also been further significant changes in the shareholdings of the Company in the period since February 2006. Deferred tax assets relating to carried forward tax losses have not been recognised in either the consolidated or Company financial statements, as it is not considered probable that future taxable amounts will be available to obtain the benefits of temporary differences giving rise to such assets.

IMPAIRMENT OF INTELLECTuAL PROPERTY

In 2007, the Directors reduced the value of CR001 to $1 from a book value of $471,000 as it is no longer a core activity for the Company. This will be held in reserve as a future asset to be developed at a later date. They, however, still believe that value can be extracted from this asset and have chosen to maintain the prosecution of these patents in US, Canada, Australia & NZ, whilst a suitable collaborator is identified and secured to partner its future development.

Due to the continued delay in securing a partner to develop IP derived from the Cryptomics Platform and the ongoing cost of prosecuting certain patents associated with that platform, the Company has decided to allow these patents to lapse and hence has also impaired these assets to a value of $1.00.

Although the directors have considered it appropriate to record an impairment writedown on these assets, the Company is still pursuing commercialisation of the IP generated from the Dairy Australia project. The two discoveries, Bone Health and Adipogenesis (Fat Control) are being offered to commercial parties to in license for development.

3. FINANCIAL RISK MANAGEMENT

OvERvIEw

The Company and the Group have exposure to the following risks from their use of financial instruments:

• credit risk;

• liquidity risk;

• market risk; and

• operational risk.

This note presents information about the Company’s and Group’s exposure to each of the above risks, their objectives, policies and processes for measuring and managing risk, and the management of capital. Further quantitative disclosures are included throughout this financial report.

The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. The Board has established the Audit & Risk Management Committee (ARMC), which is responsible for developing and monitoring risk management policies. The ARMC reports regularly to the Board of Directors on its activities.

Risk management policies are established to identify and analyse the risks affecting the Company and Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s and Group’s activities. The Company and Group, through training and management standards and procedures appropriate for a small organisation, aim to develop a disciplined and constructive control environment in which all employees understand their roles and obligations.

The Group’s Audit & Risk Management Committee oversees how management monitors compliance with the Company’s and Group’s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company and Group. Being a relatively small organisation, there is no formal Internal Audit function.

CREDIT RISK

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers.

TrADE AnD OTHEr rECEIvABLES

The Group’s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Group’s customer base have minimal if any influence on credit risk. The Group’s largest customer comprised 87% of its revenue (2011: 51%).

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The Group has a credit policy under which potential new customers are analysed individually for creditworthiness before payment terms are offered. As the Group’s revenue has been derived principally from arrangements under pre-agreed contractual terms, credit limits are not considered relevant. If payment is not received within agreed credit terms, services or availability of licensed technology may be suspended pending clearance of the outstanding balance.

More than 75% of the Group’s operating revenue is from a customer that have been transacting with the Group for two or more years, and losses have rarely if ever been experienced. In monitoring credit risk, each customer is assessed individually rather than grouping customers according to credit characteristics, because the Group deals with only a small number of customers. The Board of Directors reviews and approves the terms of new service contracts entered into with customers, including credit terms granted.

The Group has reviewed the outstanding trade and other receivables at year end, and assessed that no provision for impairment is required, as all amounts are considered to be collectable. Further, the Group has considered possible adverse implications of the apparent economic downturn appearing from mid-2011, and determined that this has not provided any specific concerns in relation to credit risk. Refer to Note 32 for an analysis of exposure to credit risk.

guArAnTEES

Neither the Company nor the Group has provided financial guarantees to any third party.

LIquIDITY RISK

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation.

The Group adopts a project costing approach to allocate personnel costs, scientific consumable costs, intellectual property costs, and associated overhead costs to its various scientific programs. This assists in determining the appropriate fee for service to be charged to external customers on income-earning projects.

Through its capital raising and other ongoing initiatives, the Group aims to ensure it has sufficient cash reserves to meet operating expenses for at least the following 12 months, and regularly updates cash flow forecasts to monitor the cash position. During the financial year, the Group has secured an equity funding facility of US$9m over 48 months to assist with ongoing working capital requirements related to the Company’s research programs (Note 19(f)). The Group also continues to receive government grant funding from the State of Victoria in relation to these programs. (see Note 13).

Refer to Note 32 for an analysis of the contractual maturities of financial liabilities, including estimated interest payments.

MARKET RISK

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Group is not exposed to material levels of market risk. The Group has a minor exposure to currency risk in relation to purchases that are denominated in a currency other than Australian dollars. However, such purchases represent only a very small proportion of total Group expenses and entry into hedging activity in relation to such purchases is considered to be not warranted on a cost-benefit analysis.

The Group also has only a minor exposure to interest rate risk. Interest on credit card facilities is at a variable interest rate. Interest expense on these facilities is minor. Interest on Convertible Note facilities is at a fixed rate and hence not subject to market risk. Refer to Note 32 for sensitivity analysis relating to foreign exchange rates and interest rates.

OPERATIONAL RISK

Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Group’s processes, personnel, technology and infrastructure, and from external factors other than credit, market and liquidity risks, such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour. Operational risks arise from all of the Group’s operations.

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3. FINANCIAL RISK MANAGEMENT CONTINueD

OPERATIONAL RISK CONTINueD

The Group’s objective is to manage operational risk so as to balance the avoidance of financial losses and damage to the Group’s reputation with overall cost-effectiveness and to avoid control procedures that restrict initiative and creativity.

The primary responsibility for the development and implementation of controls to address operational risk is assigned to the Managing Director. This responsibility is supported by the development of standards for the management of operational risk in the following areas:

• requirements for appropriate segregation of duties, including the independent authorisation of transactions (where possible in the context of the Group’s low number of employees);

• requirements for the reconciliation and monitoring of transactions;

• compliance with regulatory and other legal requirements;

• documentation of controls and procedures;

• requirements for the periodic assessment of operational risks faced, and the adequacy of controls and procedures to address the risks identified;

• requirements for the reporting of operational losses and proposed remedial action;

• development of contingency plans;

• training and professional development;

• ethical and business standards; and

• risk mitigation, including insurance where this is effective.

Compliance with Group standards is monitored by the Audit & Risk Management Committee of the Board.

CAPITAL MANAGEMENT

The Board’s policy is to maintain a sufficiently strong capital base so as to maintain investor, creditor, and market confidence and to sustain future progress on the Group’s scientific programs. As the Group is still principally in the research and development phase in relation to its various programs, no dividends are yet paid by the Group as capital is conserved for future scientific expenditure commitments.

As the Group has not yet reached the point of deriving sufficient income from its programs to generate net profits, it has not assessed a return on capital target, nor can a return on capital yet be adequately calculated. The weighted average interest expense on borrowings was 3.88% (2011: 15.76%). The Group does not have a defined share buy-back plan, or other proposal for the purchase on-market of its own shares.

There were no changes to the Group’s approach to capital management during the year. Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements.F

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The Group’s debt-to-adjusted capital ratio at the end of the reporting period was as follows:

Consolidated

2012 $

2011 $

Total liabilities 937,247 649,495

Less: Cash and cash equivalents 123,802 110,239

Net debt 813,445 539,256

Total equity 2,411,695 2,505,591

Debt-to-adjusted-capital ratio at 30 June 33.7% 21.5%

4. OPERATING SEGMENTSUnder AASB 8 Operating Segments, segment information is presented using a 'management approach'; that is, segment information is provided on the same basis as information used for internal reporting purposes by the chief operating decision maker (executive management committee that makes strategic decisions).

(a) DESCRIPTION OF SEGMENTS

Management has determined the operating segments based on reports reviewed by the board for making strategic decisions. The board monitors the business based on product and geographic factors and have identified three business segments: Cryptomics, Diagnostics, and Peptide Research. Each of these segments involves scientific research and development in relation to intellectual property within the platform as described by its name. This has resulted in the scientific departments of Diagnostics, Cryptomics, and Peptide Research being aggregated into one reportable segment.

(b) INFORMATION ABOuT REPORTABLE SEGMENTS

Aggregated Scientific Departments

2012 $

2011 $

External segment revenues 186,551 14,170

Segment expenses (764,891) (852,098)

Net segment profit/(loss) (578,340) (837,928)

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4. OPERATING SEGMENTS CONTINueD

(c) RECONCILIATION OF REPORTABLE SEGMENT REvENuE, PROFIT/(LOSS), ASSETS & LIABILITIES AND OTHER MATERIAL ITEMS

2012 $

2011 $

Revenues

Total revenue for reportable segments (aggregated) 186,552 14,170

Finance revenue 3,893 29,966

Consolidated revenue 190,445 44,136

Profit or loss

Total profit/(loss) for reportable segments (aggregated) (578,340) (837,928)

Unallocated amounts:

Finance expense (10,142) (4,165)

Depreciation, amortisation and impairments (115,574) (121,654)

Share-based payments (109,500) -

Other corporate expenses (1,492,075) (1,668,496)

Consolidated profit/(loss) before income tax (2,305,631) (2,630,243)

ASSETS & LIABILITIES

Neither Assets nor Liabilities are allocated to individual segments. Information required to calculate such an allocation is not readily available, and the cost to calculate such information is considered to be excessive.

OTHEr mATErIAL ITEmS

None of Interest Revenue, Interest Expense, Capital Expenditure, Depreciation, Amortisation or Impairment charges is allocated to individual segments. Information required to calculate such an allocation is not readily available, and the cost to calculate such information is considered to be excessive.

(d) ENTITY-wIDE DISCLOSuRES

All revenue from external customers was from customers located outside of Australia.

All non-current assets are located in Australia.

Revenue of $176,843 (2011: $6,189) was earned from a single customer.

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5. REvENuE AND OTHER INCOMEConsolidated

2012 $

2011 $

Revenue from operating activities

Services revenue

Licence fee revenues 168,810 -

Product sales and royalty revenue 17,742 14,170

Interest received 3,893 29,966

Total operating revenue 190,445 44,136

Other income

Other income 3,000 1,584

Total other income 3,000 1,584

Total revenue and other income 193,445 45,720

6. LOSS FROM CONTINuING ACTIvITIESLoss before income tax includes the following specific expenses:

Consolidated

2012 $

2011 $

Rental expense on operating leases

minimum lease payments 92,627 86,940

Total rental expense on operating leases 92,627 86,940

Defined contribution plan superannuation contributions 73,459 63,629

Depreciation and amortisation

Scientific equipment depreciation 10,924 15,923

Office equipment depreciation 1,404 1,168

Computer hardware depreciation 2,825 4,890

Computer software depreciation 8,629 8,629

Leasehold improvements depreciation 600 424

Less Depreciation capitalised as development costs (5,031) (5,370)

Intangible assets amortisation 96,223 95,990

Impairment of intangible assets - -

Total depreciation and amortisation 115,574 121,654

Loss on sale of fixed assets - 1,171

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7. OTHER OPERATING ExPENSESConsolidated

2012 $

2011 $

Accounting fees 13,622 38,852

Auditors remuneration – parent entity 66,488 50,450

Computer expenses 14,297 16,929

Permits, licenses and fees 224,493 91,731

Insurance 36,626 45,194

Lease rentals on operating lease 92,627 86,940

Travel – domestic 26,201 51,804

Travel – overseas 100,210 212,700

Other operating expenses 182,722 192,275

Total 757,286 786,875

8. INCOME TAx BENEFIT

(a) THE COMPONENTS OF TAx BENEFIT COMPRISE:

Consolidated

Note2012

$2011

$

Current tax 334,759 288,858

Deferred tax 18 3,300 3,300

Total 338,059 292,158

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(b) THE PRIMA FACIE TAx ON LOSS FROM ORDINARY ACTIvITIES BEFORE INCOME TAx IS RECONCILED TO THE INCOME TAx AS FOLLOwS:

Consolidated

Note2012

$2011

$

Prima facie tax benefit on loss from ordinary activities before income tax at 30% (2011: 30%)

Consolidated entity 691,689 789,073

Less:

Tax effect of:

Deferred tax asset of tax loss and temporary differences not brought to account 28 432,131 526,084

R&D grant received (334,758) (288,858)

R&D costs not tax deductible 266,926 301,960

Other non taxed items (10,669) (42,271)

Income tax benefit attributable to entity 338,059 292,158

(c) uNRECOGNISED TAx LOSSES

Total tax losses have not been recognised in respect of the following:

Consolidated

2012 $

2011 $

Tax losses available 17,162,693 15,219,406

Total 17,162,693 15,219,406

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9. CASH & CASH EquIvALENTSConsolidated

2012 $

2011 $

Cash on hand 380 189

Cash at bank 67,112 16,308

Short-term bank deposits 56,310 93,742

Total 123,802 110,239

CASH AT BANK AND ON HAND

Cash on hand is non-interest bearing. Cash at bank earned interest rates between 0.02% and 3.65% (2011: 0.03% and 5.01%) depending on the level of funds from time to time. Cash at bank is subject to interest rate risk as it earns interest at floating rates. In 2012 the average floating interest rates for the Group were 1.11% (2011: 0.5%).

DEPOSITS AT CALL

The deposits earned interest rates between 2.3% and 4.04% (2011: 2.9% to 5.7%) during the year. These deposits have a maturity range of at call to 62 days. Deposits are subject to interest rate risk as they earn interest at floating rates. In 2012 the average floating interest rates for the Group were 3.65% (2011: 4.3%).

10. TRADE & OTHER RECEIvABLESConsolidated

2012 $

2011 $

CURRENT

Trade receivables 7,241 1,601

Allowance for doubtful debts - -

7,241 1,601

Prepayments 50,428 40,572

Goods and services tax (receivable) 28,370 31,803

Deferred expenditure - -

Other receivables - 4,086

Total 86,039 78,062

IMPAIRED RECEIvABLES

At 30 June 2012 there were no bad or doubtful debts.

EFFECTIvE INTEREST RATES AND CREDIT RISK

There is no effective interest rate on receivables.

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11. PARENT ENTITY DISCLOSuRESThe following details information related to the parent entity, HealthLinx Limited, at 30 June 2012. The information presented here has been prepared using consistent accounting policies as presented in Note 1.

2012 $

2011 $

Current assets 209,841 188,301

Non-current assets 1,210,009 1,026,692

Total assets 1,419,850 1,214,993

Current liabilities 921,646 610,211

Non-current liabilities 3,642 24,026

Total liabilities 925,288 634,237

Contributed equity 26,417,939 24,545,223

Accumulated losses (26,437,163) (24,477,292)

Option reserve 463,786 462,826

Other reserve 50,000 50,000

Total equity 494,562 580,757

Loss for the year (1,959,871) (2,330,385)

Other comprehensive loss for the year - -

Total comprehensive loss for the year (1,959,871) (2,330,385)

The parent company has not guaranteed any loans of the Group.

As detailed in Note 30, there are no contingent liabilities as at 30 June 2012.

As detailed in Note 29(b), there are no capital commitments at 30 June 2012.

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12. PROPERTY PLANT & EquIPMENTConsolidated

2012 $

2011 $

PLANT AND EQUIPMENT

Scientific equipment

At cost 318,248 318,248

Less accumulated depreciation (291,598) (280,674)

Total scientific equipment 26,650 37,574

Office equipment

At cost 15,992 15,992


Total office equipment 4,993 6,397

Computer equipment

At cost 48,775 48,775


Total computer equipment 4,449 7,273

Computer software

At cost 40,830 40,830


Total computer software 7,187 15,817

Leasehold improvements

At cost 4,465 4,465


Total leasehold improvements 1,507 2,107

Total property, plant and equipment 44,786 69,168

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(a) MOvEMENTS IN CARRYING AMOuNTS

Consolidated

Scientific equipment

$

Office equipment

$

Computer equipment

$

Computer software

$

Improve-ments

$Total

$

Balance at 30 Jun 2010 50,895 7,042 11,177 24,446 2,531 96,091

Additions 6,500 523 986 - - 8,009

Disposals (3,898) - - - - (3,898)

Depreciation (15,923) (1,168) (4,890) (8,629) (424) (31,034)

Balance at 30 Jun 2011 37,574 6,397 7,273 15,817 2,107 69,168

Additions - - - - - -

Disposals - - - - - -

Depreciation (10,924) (1,404) (2,824) (8,630) (600) (24,382)

Balance at 30 Jun 2012 26,650 4,993 4,449 7,187 1,507 44,786

(b) ASSETS PLEDGED AS SECuRITY

No assets have been pledged as security by the Group in respect of any borrowings.

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13. INTANGIBLE ASSETSConsolidated

2012 $

2011 $

Goodwill

Cost 1,887,220 1,887,220

Accumulated impairment losses - -

Net carrying value 1,887,220 1,887,220

Intellectual property

Cost 778,285 778,285

Accumulated amortisation and impairment (736,409) (725,409)

Net carrying value 41,876 52,876

Capitalised development costs

Cost 1,477,470 1,184,549

Accumulated amortisation and impairment (312,251) (227,028)

Net carrying value 1,165,219 957,521

Total intangibles 3,094,315 2,897,617

The Group has received government grants totalling $125,000 during the year (2011: $350,000) and has offset this amount against capitalised development costs.

Goodwill impairment disclosures have been included in Note 2.

(a) RECONCILIATION DETAILED TABLE

Consolidated

Intellectual property

$Goodwill

$

Capitalised devt costs

$Total

$

Year ended 30 June 2011

Opening balance 63,876 1,887,220 630,739 2,581,835

Additions - - 411,772 411,772

Impairment charges - - - -

Amortisation (11,000) - (84,990) (95,990)

Balance at 30 June 2011 52,876 1,887,220 957,521 2,897,617

Year ended 30 June 2012

Opening balance 52,876 1,887,220 957,521 2,897,617

Additions - - 292,921 292,921

Impairment charges - - - -

Amortisation (11,000) - (85,223) (96,223)

Balance at 30 June 2012 41,876 1,887,220 1,165,219 3,094,315

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14. TRADE & OTHER PAYABLESConsolidated

2012 $

2011 $

CURRENT

Unsecured liabilities

Trade payables and accrued expenses 596,260 529,846

Goods and services tax payable 11 8,981

Total 596,271 538,827

Payables are non-interest bearing and are payable within one year.

15. SHORT-TERM BORROwINGSConsolidated

2012 $

2011 $

CURRENT

Unsecured liabilities

Convertible note 217,078 -

Derivative liability 51,687 -

Total 268,765 -

16. SHORT-TERM PROvISIONSConsolidated

2012 $

2011 $

Employee entitlements 56,606 71,380

17. LONG-TERM PROvISIONSConsolidated

2012 $

2011 $

Employee entitlements 3,642 24,025For

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18. DEFERRED TAx LIABILITIES

(a) THE BALANCE COMPRISES TEMPORARY DIFFERENCES ATTRIBuTABLE TO:

Consolidated

2012 $

2011 $

Temporary differences attributable to intellectual property 11,963 15,263

Total 11,963 15,263

(b) MOvEMENTS IN DEFERRED TAx LIABILITIES:

Consolidated

2012 $

2011 $

The movement in deferred tax liabilities for each temporary difference during the year is as follows:

Temporary differences attributable to intellectual property

Opening balance at 1 July 15,263 18,563

Amortisation (3,300) (3,300)

Closing balance at 30 June 11,963 15,263

19. SHARE CAPITALConsolidated

2012 $

2011 $

Opening contributed equity 12,959,800 11,997,542

Shares issued during the year for cash 1,007,155 915,000

Other contributed equity - 60,000

Shares issued on conversion of Convertible Notes 797,000 -

Share-based payments for services rendered 109,500 25,209

Options exercised - -

Share issue expenses (40,939) (37,951)

Total 14,832,516 12,959,800

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(a) SHARE CAPITAL – PARENT ENTITY

Parent Ordinary Shares

2012 Number

2011 Number

On issue at 1 July 170,352,212 148,031,160

Issued as consideration for services rendered 14,584,323 240,459

Issued as collateral for Convertible Note Agreement - -

Issued as commitment fee for Equity Line Agreement - 6,179,133

Issued for cash 4,184,630 -

Issued on conversion of Convertible Notes 190,983,638 15,901,460

Options exercised - -

On issue at 30 June 380,104,803 170,352,212

(b) ORDINARY SHARES

Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to the number of and amounts paid on the shares held. At shareholder meetings, each ordinary share is entitled to one vote when a poll is called; otherwise each shareholder has one vote on a show of hands.

All ordinary shares issued are fully paid.

(c) ISSuANCE OF ORDINARY SHARES

In June 2011, the Company entered into an Equity Line Agreement facility with Dutchess Capital, the key terms of which are:

• Amount up to $3,000,000;

• Term 12 months;

• An initial Commitment Fee was payable, for which ordinary shares were issued in lieu of a cash payment.

• An upfront issue of 2,000,000 unlisted options.

• Monthly drawdowns between $75,000 and such higher amount as is calculated under a formula having reference to trading volumes in the shares;

During the year there were 1,165,296 shares issued to third parties in return for services performed.

Details in relation to shares issued pursuant to conversion of Convertible Notes are set out in Note 19(f).

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19. SHARE CAPITAL CONTINueD

(d) LISTED OPTIONS

Issue date Expiry dateExercise

priceNo. of

options

Listed options at 30 June 2011 14,750,000

Options issued during the period Nil

Total options issued during the period -

Options lapsed/forfeited during the period Nil

Total options lapsed/forfeited during the period -

Less options exercised during the period -

Total listed options at 30 June 2012 14,750,000

(e) uNLISTED OPTIONS

Information relating to unlisted options, including those issued pursuant to the HealthLinx Employee Share Option Plan, showing details of options issued, exercised and lapsed during the financial year and options outstanding at the end of the financial year, is set out on the following page.

Apart from grants made pursuant to the Employee Share Option Plan, unlisted options were also issued during the year to Springtree Special Opportunities Fund (refer Note 19(f)), to Dutchess Capital and to La Jolla Investors Inc. upon the activation of the funding agreement.


priceNo. of

options

Unlisted options at 30 June 2011 4,995,219

Options issued during the period 12 July 2011 12 January 2015 $0.0398 350,195

15 July 2011 15 January 2015 $0.0388 3,089,567

21 July 2011 30 June 2015 $0.2500 400,000

26 July 2011 26 January 2015 $0.0388 2,500,000

1 August 2011 1 February 2015 $0.0367 3,089,567

18 August 2011 8 February 2015 $0.0300 2,422,350

2 September 2011 2 March 2015 $0.0270 1,552,188

19 September 2011 19 March 2015 $0.0240 3,089,567

10 October 2011 10 April 2015 $0.0250 3,959,375

19 October 2011 19 April 2015 $0.0190 450,000

4 November 2011 4 May 2015 $0.0180 5,000,000

22 November 2011 22 May 2015 $0.0180 3,375,000

12 December 2011 12 June 2015 $0.0130 1,775,000

19 January 2012 19 January 2019 $0.0250 600,000

Total options issued during the period 31,652,809

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priceNo. of

options

Options lapsed forfeited during the period 10 February 2006 1 September 2011 $0.7500 200,000

Total options lapsed/forfeited during the period 200,000

Options exercised during the period Nil

Total options exercised during the period -

Total unlisted options at 30 June 2012 36,448,028

(f) CONvERTIBLE NOTE FACILITY(i) In October 2009, the Company entered into an unsecured subordinated Convertible Note facility with Springtree

Special Opportunities Fund LP, the key terms of which are:

• Amount up to $7,230,000;

• Term 36 months;

• Interest 0% per annum;


• One million ordinary shares were also issued as security against the Agreement. These shares may be cancelled without consideration or fully paid on completion of the Agreement at the option of the holder.

• Monthly drawdowns between $60,000 and $200,000;

• Monthly conversions of drawdowns into ordinary shares, at a price calculated using a formula based on average closing prices of the Company’s shares; and

• Issue of options to the noteholder at the time of each conversion into ordinary shares, with the number of options determined as 15% of the number of shares issued at each conversion.

This facility was terminated in July 2011.

(ii) In December 2011, the Company entered into an unsecured subordinated Convertible Note facility with La Jolla Cove Investors, Inc., the key terms of which are:

• Amount up to US$9,000,000;

• Term 48 months;

• Interest 4.75% per annum;


• One million ordinary shares were also issued as security against the Agreement. These shares may be cancelled without consideration or fully paid on completion of the Agreement at the option of the holder.

• Monthly drawdowns up to US$125,000 per month until October 2012 and thereafter at no less than US$80,000 per month; and

• Monthly conversions of drawdowns into ordinary shares, at a price calculated using a formula based on average closing prices of the Company’s shares.

• Convertible notes are convertible into shares in HealthLinx at conversion price, the lessor of:

- $0.10; or,

- 85% of the average of the three lowest variable weighted average share price during fifteen days prior to the election to convert.

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20. ACCuMuLATED LOSSESConsolidated

2012 $

2011 $

Accumulated losses at the beginning of the financial year (10,856,453) (8,518,368)


Accumulated losses at the end of the financial year (12,824,025) (10,856,453)

21. SHARE OPTION RESERvEConsolidated

2012 $

2011 $

Balance at 1 July 402,244 380,565

Option expense 960 21,679

Balance at 30 June 403,204 402,244

The reserve records funds set aside to recognise the fair value of options issued but not exercised.

22. KEY MANAGEMENT PERSONNEL DISCLOSuRES

(a) KEY MANAGEMENT PERSONNEL COMPENSATION

Consolidated

2012 $

2011 $

Short-term employee benefits 778,142 839,475

Long-term employee benefits 37,358 17,064

Post-employment benefits 59,565 58,307

Short-term incentives 42,814 5,000

Share-based payments 540 21,050

Termination benefits - -

Total 918,439 940,896

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(b) EquITY INSTRuMENT DISCLOSuRES RELATING TO KEY MANAGEMENT PERSONNEL

(i) OPTIOnS PrOvIDED AS rEmunErATIOn AnD SHArES ISSuED On ExErCISE Of SuCH OPTIOnS

Details of options provided as remuneration and shares issued on the exercise of such options, together with terms and conditions of the options, can be found in Note 26.

(ii) unLISTED OPTIOn HOLDIngS

The numbers of unlisted options over ordinary shares in the Company held during the financial year by each Director of HealthLinx Limited and other key management personnel of the Group, including their personally related parties, are set out below:

Balance 01/07/2011

Granted as remuneration Expired

Balance 30/06/2012

Total vested

Total vested &

exercisableTotal un-

exercisable

Directors

Nick Gatsios 960,000 400,000 - 1,360,000 1,360,000 1,360,000 -

Stewart Washer 100,000 - - 100,000 100,000 100,000 -

Gregory Rice 50,000 - - 50,000 50,000 50,000

John Evans 100,000 - - 100,000 100,000 100,000

John Chiplin - - - - - - -


Mal Lucas-Smith 150,000 - - 150,000 150,000 150,000 -

Dominic Autelitano 306,000 300,000 - 606,000 606,000 606,000 -

Jennifer Edwards - 50,000 - 50,000 50,000 50,000 -

Total 1,666,000 750,000 - 2,416,000 2,416,000 2,416,000 -

Number of Options Held by Key Management Personnel at 30 June 2011:

Balance 01/07/2010

Granted as remuneration Expired

Balance 30/06/2011

Total vested

Total vested &

exercisableTotal un-

exercisable

Directors

Nick Gatsios 640,000 400,000 (80,000) 960,000 960,000 960,000 -

Stewart Washer 100,000 - - 100,000 100,000 100,000 -

Gregory Rice 100,000 - (50,000) 50,000 50,000 50,000 -

John Evans 100,000 - - 100,000 100,000 100,000 -

Stephen Copulos 150,000 - - 150,000 150,000 150,000 -


Mal Lucas-Smith 200,000 - (50,000) 150,000 150,000 150,000 -

Dominic Autelitano 212,000 100,000 (6,000) 306,000 306,000 306,000

Total 1,502,000 500,000 (186,000) 1,816,000 1,816,000 1,816,000 -

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22. KEY MANAGEMENT PERSONNEL DISCLOSuRES CONTINueD

(c) SHAREHOLDINGS

The number of Shares held in the Company during the financial year by each Director of HealthLinx Limited and other key management personnel of the Group, including their personally related parties, are set out below and on the following page.

2012Balance

01/07/2011Received as

remunerationExercise

of optionsNet change

other**Balance

30/06/2012

Directors

Nick Gatsios 7,464,637 - - 232,558 7,697,195

Gregory Rice 6,524,615 - - - 6,524,615

Stewart Washer^ 136,364 - - - 136,364

John Evans 416,364 - - 232,558 648,922

John Chiplin^ - - - - -


Mal Lucas-Smith 736,364 - - - 736,364

Dominic Autelitano 159,000 - - - 159,000

Total 15,437,344 - - 465,116 15,902,460

**The ‘Net Change Other’ column above includes those shares that have been either sold or purchased by holders.

^Stewart Washer and John Chiplin resigned as directors of the Company on 13 June 2012.

2011Balance


remunerationExercise

of optionsNet change

other**Balance

30/06/2011

Directors

Nick Gatsios 7,464,637 - - - 7,464,637

Gregory Rice 6,524,615 - - - 6,524,615

Stephen Copulos^ 33,838,761 - - (759,446) 33,079,315

Stewart Washer 136,364 - - - 136,364

John Evans 416,364 - - - 416,364

John Chiplin - - - - -


Mal Lucas-Smith 736,364 - - - 736,364

Dominic Autelitano 159,000 - - - 159,000

Jennifer Edwards - - - - -

Total 49,276,105 - - (759,446) 48,516,659

**The ‘Net Change Other’ column above includes those shares that have been either sold or purchased by holders.

^Stephen Copulos resigned as Director on 6 December 2010.

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(d) LOANS TO KEY MANAGEMENT PERSONNEL

No loans were made to any Directors of HealthLinx Limited or to any other key management personnel (or their related parties) of the Group during the year.

(e) LISTED OPTION HOLDINGS

The number of listed options held in the Company during the financial year by each Director of HealthLinx Limited and other key management personnel of the Group, including their personally related parties, are set out below. There were no listed options granted during the period as compensation.

2012Balance


remunerationNet change

other**Balance

30/06/2012

Directors

Nick Gatsios 235,055 - 235,055

Gregory Rice 160,000 - 160,000

John Evans 35,000 - 35,000

John Chiplin - - -


Mal Lucas-Smith - - - -

Dominic Autelitano - - - -

Jennifer Edwards - - - -

Total 430,055 - - 430,055

2011Balance


remunerationNet change

other**Balance

30/06/2011

Directors

Nick Gatsios 235,055 - - 235,055

Gregory Rice 160,000 - - 160,000

Stephen Copulos 1,750,000 - - 1,750,000

John Evans 35,000 - - 35,000

John Chiplin


Mal Lucas-Smith 90,000 - (90,000) -

Dominic Autelitano - - - -

Total 2,270,055 - (90,000) 2,180,055

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22. KEY MANAGEMENT PERSONNEL DISCLOSuRES CONTINueD

(f) OTHER TRANSACTIONS wITH KEY MANAGEMENT PERSONNEL

A Director Dr G Rice, is a Director and shareholder of Aculeate Foresight and Strategic Planning Pty Limited. Aculeate provides consulting services to HealthLinx as the General Manager Science & Operations. Payments are included in Note 22(a) as part of total remuneration.

A Director J Evans is the principal of a corporate and business advisory firm, Rinnovate Pty Ltd. During the year, Rinnovate provided certain business advisory and accounting services to the Group. The services were provided on normal commercial terms and conditions. Payments are included in Note 22(a) as part of total remuneration.

A member of Key Management Personnel J Edwards is the principal of a bookkeeping and accounting firm Accountive Pty Ltd. During the year, Accountive provided certain business advisory and accounting services to the Group. The services were provided on normal commercial terms and conditions. Payments are included in Note 22(a) as part of total remuneration.

Aggregate amounts of each of the above types of other transactions with key management personnel:

AmOunTS rECOgnISED AS ExPEnSE

Consolidated

2012 $

2011 $

Consulting fees 45,996 45,996

Interest expense - -

Borrowing expenses - -

Advisory and accounting services 4,525 24,058

Total 50,521 70,054

AmOunTS rECOgnISED AS LIABILITIES

Consolidated

2012 $

2011 $

Accrued expenses - -

Trade payables - 372

Total - 372

There were no share-based payments recognised as share issue costs in equity, in respect of key management personnel, other than those disclosed as remuneration in this Note 22.F

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23. AuDITORS' REMuNERATIONConsolidated

2012 $

2011 $

Amounts paid/payable to Grant Thornton


– Auditing or reviewing the financial report 37,000 -

Taxation services

– Tax compliance services - -

Amounts paid/payable to BDO Audit (NSW-VIC) Pty Ltd


– Auditing or reviewing the financial report 15,000 50,450

Total paid or payable 52,000 50,450

24. RELATED PARTY TRANSACTIONS

(a) PARENT ENTITY

The parent entity within the Group is HealthLinx Limited.

(b) KEY MANAGEMENT PERSONNEL

Disclosures relating to key management personnel are set out in Note 22.

(c) OuTSTANDING BALANCES ARISING FROM SALES / PuRCHASES OF GOODS AND SERvICES

There were no balances outstanding at the reporting date in relation to transactions with related parties, other than as disclosed in relation to Key Management Personnel in Note 22.

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25. EARNINGS PER SHARE

(a) RECONCILIATION OF EARNINGS TO PROFIT OR LOSS

Consolidated

2012 $

2011 $

Loss for the year (1,967,572) (2,338,085)

Earnings used in calculation of basic and diluted EPS (1,967,572) (2,338,085)

(b) wEIGHTED AvERAGE NuMBER OF ORDINARY SHARES (DILuTED)

Consolidated

2012 2011

Weighted average number of ordinary shares outstanding during the year used in calculating basic EPS 256,579,899 155,115,616

Weighted average number of ordinary shares outstanding during the year used in calculating diluted EPS 256,579,899 155,115,616

As diluted EPS is calculated as a lower loss per share than basic EPS, diluted EPS is taken to be the same as basic EPS. There are 2,836,360 potential ordinary shares that could potentially dilute basic earnings per share in the future, which were not included in the calculation of diluted earnings per share because they are antidilutive for the periods presented.

26. SHARE-BASED PAYMENTS

(a) EMPLOYEE OPTION PLAN

The Group has established the HealthLinx Limited Employee Share Option Plan (ESOP) to assist in the attraction, retention and motivation of employees of the Group. A summary of the Rules of the Plan is set out below.

• All staff who have been continuously employed by the Group for a period of at least one year are eligible to participate in the plan, although the Board may waive the one-year minimum requirement.

• Each option is to subscribe for one fully paid ordinary share in the Company. Once issued, the options are subject to a holding period to be determined by the Board, during which time the options may not be exercised.

• Options are granted under the plan for no consideration. The exercise price of options will be determined by the Board, subject to a minimum price equal to the market value of the Company's shares either (in the discretion of the Board) at the time the Board resolves to offer those options or at the time of vesting. The total number of shares subject of options issued under the Plan, when aggregated with issues pursuant to any other employee share plan, must not exceed 5% of the Company's issued share capital.

• Shares issued as a result of the exercise of options will rank equally with the Company's previously issued shares.


• Shares or Options received under the Employee Share Option Plan are received for past service.For

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In November 2010, the Group established a second Employee Share Option Plan ("the non-discriminatory ESOP"), to cater for issues of options on a non-discriminatory basis to all qualifying employees, to reflect the latest changes in associated taxation legislation. A summary of the Rules of the non-discriminatory ESOP is set out below.

• Options, if granted, must be granted to a minimum of 75% of all permanent employees who have been continuously employed by the Group for a period of at least three year, although the Board may waive the three-year minimum requirement.

• Each option is to subscribe for one fully paid ordinary share in the Company. Once issued, the options are subject to a holding period to be determined by the Board, during which time the options may not be exercised. The default period is 3 years, or until the person ceases employment.

• Options are granted under the plan for no consideration. The exercise price of options will be determined by the Board, taking into account the market value of the Company's shares at the time the Board resolves to offer those options, and any other matters the Board considers relevant. The total number of shares the subject of options issued under the Plan, when aggregated with issues pursuant to any other employee share plan, must not exceed 5% of the Company's issued share capital.

• Shares issued as a result of the exercise of options will rank equally with the Company's previously issued shares.


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

Grant date Expiry dateExercise

priceBalance

01/07/2011Granted

as remun Exercised ExpiredBalance

30/06/2012Vested &

exercisable

12 Sep 2005 30 Jun 2015 1.75 2,000 - - - 2,000 2,000

12 Sep 2005 31 Jul 2015 1.75 240,000 - - - 240,000 240,000

15 Jan 2006 31 Dec 2015 1.75 12,276 - - - 12,276 12,276

1 Feb 2007 31 Jan 2014 0.30 80,000 - - - 80,000 80,000

1 Jun 2007 31 May 2014 0.30 12,000 - - - 12,000 12,000

30 Jun 2007 30 Jun 2014 0.30 22,000 - - - 22,000 22,000

14 Aug 2007 31 Mar 2014 0.30 50,000 - - - 50,000 50,000

11 Jan 2008 7 Nov 2014 0.30 200,000 - - - 200,000 200,000

14 Feb 2008 14 Feb 2015 0.75 40,000 - - - 40,000 40,000

14 Feb 2008 14 Feb 2015 1.00 40,000 - - - 40,000 40,000

1 Dec 2008 30 Nov 2015 0.11 400,000 - - - 400,000 400,000

2 Dec 2009 2 Dec 2013 0.12 400,000 - - - 400,000 400,000

17 Dec 2009 17 Dec 2013 0.12 130,000 - - - 130,000 130,000

18 Mar 2010 31 Mar 2014 0.17 200,000 - - - 200,000 200,000

1 July 2010 30 June 2015 0.20 400,000 - - - 400,000 400,000

23 Dec 2010 24 Jan 2014 0.15 30,000 - - - 30,000 30,000

23 Jan 2011 31 Jan 2014 0.15 180,000 - - - 180,000 180,000

21 July 2011 30 June 2015 0.25 - 400,000 - - 400,000 400,000

19 Jan 2012 19 Jan 2019 0.03 - 600,000 - - 600,000 600,000

Total 2,438,276 1,000,000 - - 3,438,276 3,438,276

Weighted average exercise price 0.27 0.11 0.00 0.00 0.29 0.29

The weighted average remaining contractual life of share options outstanding at the end of the period was 3.17 years.

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26. SHARE-BASED PAYMENTS CONTINueD

(a) EMPLOYEE OPTION PLAN CONTINueD

Set out below are the summaries of options granted under the plan as at 30 June 2011:

Grant date Expiry dateExercise

priceBalance

01/07/2010Granted

as remun Exercised ExpiredBalance

30/06/2011Vested &

exercisable

12 Sep 2005 30 Jun 2015 1.75 2,000 - - - 2,000 2,000

12 Sep 2005 31 Jul 2015 1.75 240,000 - - - 240,000 240,000

15 Jan 2006 31 Dec 2015 1.75 12,276 - - - 12,276 12,276

14 Jul 2006 31 Dec 2010 1.75 750 - - (750) - -

1 Aug 2006 31 Dec 2010 1.00 11,000 - - (11,000) - -

1 Sep 2006 31 Dec 2010 1.00 126,500 - - (126,500) - -

3 Oct 2006 31 Dec 2010 1.00 328,250 - - (328,250) - -

1 Dec 2006 31 Dec 2010 1.00 4,000 - - (4,000) - -

1 Feb 2007 31 Jan 2014 0.30 80,000 - - - 80,000 80,000

1 Jun 2007 31 May 2014 0.30 12,000 - - - 12,000 12,000

30 Jun 2007 30 Jun 2014 0.30 22,000 - - - 22,000 22,000

14 Aug 2007 31 Mar 2014 0.30 50,000 - - - 50,000 50,000

11 Jan 2008 7 Nov 2014 0.30 200,000 - - - 200,000 200,000

14 Feb 2008 14 Feb 2015 0.75 40,000 - - - 40,000 40,000

14 Feb 2008 14 Feb 2015 1.00 40,000 - - - 40,000 40,000

1 Dec 2008 30 Nov 2015 0.11 400,000 - - - 400,000 400,000

2 Dec 2009 2 Dec 2013 0.12 400,000 - - - 400,000 400,000

17 Dec 2009 17 Dec 2013 0.12 130,000 - - - 130,000 130,000

18 Mar 2010 31 Mar 2014 0.17 200,000 - - - 200,000 200,000

1 July 2010 30 June 2015 0.20 - 400,000 - - 400,000 400,000

23 Dec 2010 24 Jan 2014 0.15 - 30,000 - - 30,000 30,000

23 Jan 2011 31 Jan 2014 0.15 - 180,000 - - 180,000 180,000

Total 2,298,776 610,000 - (470,500) 2,438,276 2,438,276

Weighted average exercise price 0.5 0.34 0.00 1.00 0.36 0.36

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fAIr vALuE Of OPTIOnS grAnTED

The assessed fair value at grant date of options granted during the year ended 30 June 2012 was $0.0000 - $0.0016 per option. The fair value at grant date is independently determined using a Black Scholes option pricing model that takes into account the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option.

The model inputs for options granted during the year ended 30 June 2012 included:

(a) Options are granted for no consideration;

(b) Expected volatility (13.82% - 25.78%) has been determined by reference to the volatility of the Company's share price over the past year;

(c) The risk free interest rate (4.25% - 4.44%) is based on the rates of interest payable on 10 year Treasury Bonds at the date the options were granted;

(d) It has been assumed that the Company will pay no dividends; and

(e) The grant, exercise and expiry dates used for all the options are contained in the table above.

(b) EquITY INSTRuMENTS GRANTED FOR SERvICES RENDERED

During the year, equity instruments were issued for services rendered in relation to capital raising. The details are set out below:

Consolidated

2012 $

2011 $

Fair value of shares granted as commitment fee for Equity line agreement 797,000 200,000

Fair value of shares issued to directors and company secretary in lieu of cash fees - -

Fair value of shares issued to other service providers 109,500 -

Total 906,500 200,000

The fair value of the share based payments to other service providers is based on the Directors’ fair value estimation of services rendered. The fair value of the other equity-based payments is based on the market value of the shares at the date of grant.

(c) OPTIONS ISSuED FOR SERvICES RENDERED

During the year, options were issued for services rendered in relation to capital raising. The details are set out below:

Consolidated

2012 $

2011 $

Fair value of options granted to investment advisers for capital raisings - -

Total - -

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26. SHARE-BASED PAYMENTS CONTINueD

(d) ExPENSES ARISING FROM SHARE BASED PAYMENT TRANSACTIONS

Total expenses arising from share based payment transactions recognised during the period:

Consolidated

2012 $

2011 $

Shares issued to directors and company secretary in lieu of cash fees - -

Shares issued for other services rendered 109,500 25,209

Options issued under employee option plan 960 21,679

Total 110,460 46,888

27. CASH FLOw INFORMATION

(a) RECONCILIATION OF CASH FLOw FROM OPERATIONS wITH LOSS AFTER INCOME TAx

Consolidated

2012 $

2011 $


Non cash flows in profit

Amortisation 96,223 95,990

Depreciation 19,351 25,664

Impairment of intellectual property

Share based payments as consideration for services rendered - 25,209

Net loss on disposal of property, plant and equipment - 1,171

Net loss on disposal of subsidiary -

Share options expensed 960 21,679

Changes in assets and liabilities, net of the effects of purchase and disposal of subsidiaries

(Increase)/decrease in trade and term receivables (5,641) (1,051)

Increase/(decrease) in trade payables and accruals 60,878 192,828

Increase/(decrease) in deferred taxes payable (3,300) (3,300)

Increase/(decrease) in other current assets (5,769) (4,472)

Increase/(decrease) in provisions (35,158) 34,058

Cash flow from operations (1,840,028) (1,950,309)For

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(b) NON-CASH INvESTING ACTIvITIES

There were no non-cash investing activities during the year ended 30 June 2012 (2011: Nil).

(c) NON-CASH FINANCING ACTIvITIES

There were no non-cash financing activities during the year ended 30 June 2012 (2011: Nil).

28. TAxATIONDeferred tax assets not brought to account, the benefits of which will only be realised if the conditions for deductibility set out in Note 1(u) occur, are set out below.

Consolidated

2012 $

2011 $

Temporary differences 564,606 585,669

Tax losses:

operating losses* 16,598,087 14,633,737

Total 17,162,693 15,219,406

Potential tax benefit @ 30% 5,148,808 4,565,822

*Inclusive of adjusted tax losses.

Potential deferred tax assets attributable to tax losses carried forward have not been brought to account at 30 June 2012, because the Directors do not believe that it is appropriate to regard realisation of the future income tax benefits as probable.

Similarly, future benefits attributable to net temporary differences have not been brought to account, as the Directors do not regard the realisation of such benefits as probable.

This benefit for tax losses will only be obtained if:

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

(b) the Company complies with the conditions for deductibility imposed by the tax legislation; and

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

In addition, the availability of tax losses is subject to the Group successfully establishing deductibility, and in particular, satisfying either the continuity of ownership test or the same business test at the future time at which losses are sought to be recouped.

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29. CAPITAL & LEASING COMMITMENTS

(a) OPERATING LEASE COMMITMENTS

Non cancellable operating leases contracted for but not capitalised in the financial statements:

Consolidated

2012 $

2011 $

Payable – minimum lease payments

not later than 12 months 89,983 86,940

between 12 months and 5 years - -

Total 89,983 86,940

The operating lease is for the rental of laboratory and office space.

(b) CAPITAL COMMITMENTS

There were no capital commitments at 30 June 2012.

(c) TERMINATION COMMITMENTS

The service contracts of key management personnel include benefits payable on termination of the employees’ contracts in certain circumstances. Refer to section (c) of the Remuneration Report on page 28.

30. CONTINGENT LIABILITIES AND CONTINGENT ASSETSAn agreement was executed with Sigma Aldrich Co. LLC on 19 September 2011 that states upon issuance of a valid claim to the US patent application no. 11/983,203 an amount of US$175,000 will be payable to the company. The directors believe that the claim will be successful and therefore probable however no amounts have been recognised for this amount as the outcome is not virtually certain.

31. BuSINESS COMBINATIONSUnder the terms of a scheme of arrangement entered into between HealthLinx Limited (formerly Cryptome Pharmaceuticals Limited) and Theros Pty Limited (formerly HealthLinx Pty Limited) on 17 February 2006, the shareholders of Theros Pty Limited exchanged their shares in that entity for shares in HealthLinx Limited. Under AASB 3 Business Combinations, Theros Pty Limited was deemed to be the acquirer in this business combination. This transaction was therefore accounted for as a reverse acquisition under AASB 3. During the 2008 financial year Theros Pty Limited was deregistered. The consolidated financial statements of HealthLinx Limited have been prepared as a continuation of the consolidated financial statements of Theros Pty Limited.

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32. FINANCIAL INSTRuMENTSThe Group’s approach to financial risk management is outlined in Note 3. Set out below are the Group’s specific financial instrument exposures.

(a) CREDIT RISK

ExPOSurE TO CrEDIT rISK

The carrying amount of the Group’s financial assets represents the maximum credit exposure. The Group’s maximum exposure to credit risk at the reporting date was:

Carrying amount

Note2012

$2011

$

Cash & cash equivalents 9 123,802 110,239

Trade & other receivables 10 86,039 78,062

Total 209,841 188,301

The Group’s maximum exposure to credit risk for Trade Receivables at the reporting date was $7,241 (2011: $1,601). The entire exposure was attributable to customers located outside of Australia, and all customers were of the same type (royalties from product sales).

ALLOwAnCE fOr ImPAIrmEnT LOSSES

$7,241 of the Company’s or Group’s receivables at 30 June 2012 are past due (2011:$215). The ageing of the Company’s and Group’s Trade Receivables at the reporting date was:

Gross 2012

$

Impairment 2012

$

Gross 2011

$

Impairment 2011

$

Not past due - - 1,386 -

Past due 0 – 30 days - - - -

Past due 31-120 days 7,241 - - -

Past due over 120 days - - 215 -

Total 7,241 - 1,601 -

Based on historic default rates and a specific review of all receivables, the Group believes that no impairment allowance is necessary in respect of Trade Receivables not past due. Terms of trade with any customers were not renegotiated during the year. The Group has no held-to-maturity investments and, as such, no impairment analysis is required for such assets.F

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32. FINANCIAL INSTRuMENTS CONTINueD

(b) LIquIDITY RISK

The following are the contractual maturities of financial liabilities, including estimated interest payments, for the Group:

Carrying amount

$

Contract cashflows

$

6 months or less

$

6 to 12 months

$

1 to 2 years

$

2 to 5 years

$

More than 5 years

$

30 June 2012

Non-derivative financial liabilities

Trade and other payables 596,271 (596,271) (596,271) - - - -

Derivative financial liabilities

Convertible Notes 217,078 (217,078) (217,078) - - - -

Total 813,349 (813,349) (813,349) - - - -

Carrying amount

$

Contract cashflows

$

6 months or less

$

6 to 12 months

$

1 to 2 years

$

2 to 5 years

$

More than 5 years

$

30 June 2011

Non-derivative financial liabilities

Trade and other payables 538,827 (538,827) (538,827) - - - -

Derivative financial liabilities

None

Total 538,827 (538,827) (538,827) - - - -

(c) CuRRENCY RISK

ExPOSurE TO CurrEnCY rISK

The Group’s exposure (shown as Asset/(Liability) and Revenue/(Expense)) to foreign currency risk at reporting date was as follows, based on notional amounts (all amounts are shown as AUD equivalents, with column headings denoting the invoice-denominated currency):

EUR SGD GBP USD

30 June 2012

Trade and other payables - (8,708) (118,355) (10,383)

Trade and other receivables - - - -

Gross balance sheet exposure - (8,708) (118,355) (10,383)

Estimated forecast sales - 30,000 30,000 180,000

Estimated forecast purchases (15,000) (20,000) (50,000) (95,000)

Gross profit or loss exposure - 10,000 (20,000) 85,000

Net exposure (15,000) 1,292 (138,355) 74,617

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EUR SGD GBP USD

30 June 2011

Trade and other payables - - (27,880) (8,413)

Trade and other receivables - - - 215

Gross balance sheet exposure - - (27,880) (8,198)

Estimated forecast purchases - 30,000 30,000 250,000

Gross profit or loss exposure (15,000) (20,000) (50,000) (150,000)

Net exposure (15,000) 10,000 (20,000) 100,000

The following significant exchange rates applied during the year:

AUD Average rate Reporting date spot rate

2012 2011 2012 2011

GBP 0.6514 0.6390 0.6529 0.6667

USD 1.0319 1.0159 1.0191 1.0739

EUR 0.7707 0.7504 0.8092 0.7405

SGD 1.2992 1.3201 1.2940 1.3204

SEnSITIvITY AnALYSIS

As at reporting date, the Group is not aware of any market circumstances that would lead to a material risk of the Australian dollar varying by more than 10 percent from the levels inherent in the financial report. A 10 percent strengthening of the Australian dollar against the following currencies at 30 June would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant. The analysis is performed on the same basis for 2011.

Consolidated

Equity A$

Profit or loss A$

30 June 2012

GBP 10,782 10,782

USD 948 948

SGD 802 802

30 June 2011

GBP 2,788 2,788

USD 820 820

A 10 per cent weakening of the Australian dollar against the above currencies at 30 June would have had the equal but opposite effect on the above currencies to the amounts shown above, on the basis that all other variables remain constant.

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32. FINANCIAL INSTRuMENTS CONTINueD

(d) INTEREST RATE RISK

PrOfILE

At the reporting date, the interest rate profile of the Company’s and the Group’s interest-bearing financial instruments was:

Consolidated carrying amount

2012 $

2011 $

Fixed rate instruments

Long term borrowings - -

Variable rate instruments

Financial liabilities 1,959 11,314

Cash 123,423 110,050

fAIr vALuE SEnSITIvITY fOr fIxED rATE InSTrumEnTS

The Group does not account for any fixed rate financial assets and liabilities at fair value through profit or loss, nor does it have any derivatives designated as hedging instruments under a fair value hedge accounting model. Therefore a fair value change in interest rates at the reporting date would not affect profit or loss.

CASH fLOw SEnSITIvITY AnALYSIS fOr vArIABLE rATE InSTrumEnTS

As at reporting date, the Group is not aware of any market circumstances that would lead to a material risk of the prevailing interest rates varying by more than 100 basis points from the levels inherent in the financial report. An increase of 100 basis points in interest rates at the reporting date would have increased/(decreased) equity and profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign exchange rates, remain constant. The analysis is performed on the same basis for 2011. A 100 basis point decrease would have the opposite financial impact.

Profit or loss Equity

Consolidated 100bp

increase

Consolidated 100bp

increase

30 June 2012

Variable rate instruments - -

30 June 2011

Variable rate instruments (60) (60)

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(e) FAIR vALuES

fAIr vALuES vErSuS CArrYIng AmOunTS

The fair values of financial assets and liabilities, together with the carrying amounts shown in the balance sheet, are as follows:

30 June 2012 30 June 2011

Carrying amount

Fair value

Carrying amount

Fair value

Consolidated

Trade and other receivables 86,039 86,039 78,062 78,062

Cash and cash equivalents 123,802 123,802 110,239 110,239

Convertible notes (217,078) (217,078) - -

Trade and other payables (596,271) (596,271) (538,827) (538,827)

Total (603,508) (603,508) (350,526) (350,526)

Fair value of all financial liabilities, which is determined for disclosure purposes, is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at the reporting date. For convertible notes, the market rate of interest is determined by reference to likely rates available on similar debt financing facilities, having regard to market conditions and the Group’s credit status.

fAIr vALuE HIErArCHY

The Group does not have any financial instruments for which a fair value has had to be determined using a valuation method with inputs such as market data or other observable inputs.

33. FINANCE INCOME AND ExPENSE

RECOGNISED IN PROFIT OR LOSS

Consolidated

2012 $

2011 $

Interest income on bank deposits 3,893 29,966

Net foreign exchange gain - 626

Finance income 3,893 30,592

Interest expense on bank accounts - -

Interest expense on convertible notes (3,171) -

Interest expense on other financial liabilities measured at amortised cost (6,971) (4,165)

Net foreign exchange loss - -

Finance expense (10,142) (4,165)

Net finance income/(expense) (6,249) 26,427

No finance income or expense was recognised directly in equity (2011: Nil).

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34. EvENTS SuBSEquENT TO REPORTING DATEOn the 3 August 2012, the company announced that it had entered into a conditional binding heads of agreement to effect the sale of the majority of the intellectual property assets of the company including OvPlex to Mane Cancer Diagnostics (San Diego, USA). HealthLinx will receive an upfront payment of USD250,000 and 30% equity in the listed entity as consideration for the sale of assets, with the assets being valued by Mane Cancer Diagnostics at $6.25m. The transaction is subject to final due diligence and shareholder approval and is conditional upon Mane Cancer Diagnostics listing on the NASDAQ exchange prior to 24 December 2012. HealthLinx retains ownership of the IgY assets with Mane Cancer Diagnostics securing a first right of refusal to secure these assets.

35. COMPANY DETAILSThe Registered Office and principal place of business of the Company is:

HealthLinx Limited 576 Swan Street Richmond Victoria Australia 3121

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In the Directors’ opinion:

1. the financial statements and notes set out on pages 37 to 88 are in accordance with the Corporations Act 2001, including:

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

(B) giving a true and fair view of the consolidated entity's financial position as at 30 June 2012 and of its performance for the financial year ended on that date; and

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

3. the audited remuneration disclosures set out in Sections 5(a) to 5(e) of the Directors Report (as part of the Remuneration Report), for the year ended 30 June 2012, comply with Section 300A of the Corporations Act 2001 and the Corporations Regulations 2001; and

4. the notes to the financial statements include an explicit and unreserved statement of compliance with International Financial Reporting Standards.

The Directors have been given the declarations by the Chairman and Director required by section 295A of the Corporations Act 2001.

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

Gregory Rice Chairman Melbourne

Nick Gatsios Director Melbourne

DIRECTORS' DECLARATIONF

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AuDITOR'S INDEPENDENCE DECLARATION

The Rialto, Level 30 525 Collins St Melbourne Victoria 3000 GPO Box 4736 Melbourne Victoria 3001 T +61 3 8320 2222 F +61 3 8320 2200 E [email protected] W www.grantthornton.com.au

Grant Thornton Audit Pty Ltd ABN 91 130 913 594 ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia. Liability limited by a scheme approved under Professional Standards Legislation

Auditor’s Independence Declaration To the Directors of HealthLinx Limited

In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of HealthLinx Limited for the year ended 30 June 2012, I declare that, to the best of my knowledge and belief, there have been:

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

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

GRANT THORNTON AUDIT PTY LTD

Eric Passaris Partner - Audit & Assurance

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HealthLinx Limited ■ Annual Report 2012INDEPENDENT AuDITOR'S REPORT

The Rialto, Level 30 525 Collins St Melbourne Victoria 3000 GPO Box 4736 Melbourne Victoria 3001 T +61 3 8320 2222 F +61 3 8320 2200 E [email protected] W www.grantthornton.com.au

Grant Thornton Audit Pty Ltd ABN 91 130 913 594 ACN 130 913 594 a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389 Grant Thornton Australia Limited is a member firm within Grant Thornton International Ltd. Grant Thornton International Ltd and the member firms are not a worldwide partnership. Grant Thornton Australia Limited, together with its subsidiaries and related entities, delivers its services independently in Australia. Liability limited by a scheme approved under Professional Standards Legislation

Independent Auditor’s Report To the Members of HealthLinx Limited Report on the financial report We have audited the accompanying financial report of HealthLinx Limited, which comprises the consolidated statement of financial position as at 30 June 2012, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the year’s end or from time to time during the financial year.

Directors’ responsibility 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 of the financial report and have determined that the accounting policies used and described in Note 1 to the financial report, which form part of the financial report, are appropriate to meet the requirements of the Corporations Act 2001 and the needs of the members in accordance with Australian Accounting Standards and the Corporations Act 2001. This responsibility includes such internal controls as the directors determine are necessary to enable the preparation of the financial report to be free from material misstatement, whether due to fraud or error. The directors also state, in the notes to the financial report, in accordance with Accounting Standard AASB 101 Presentation of Financial Statements, that compliance with the Australian equivalents to International Financial Reporting Standards ensures that the financial report, comprising the financial statements and notes, complies with International Financial Reporting Standards.

Auditor’s responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards which require us to comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement.

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INDEPENDENT AuDITOR'S REPORT COnTInuED

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error.

In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial report 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 entity ’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the entity, as well as evaluating the overall presentation of the financial report.

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

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

Material uncertainty regarding continuation as a going concern Without qualifying our opinion, we draw attention to Note 1(c) in the financial report which indicates that the consolidated entity incurred a net loss of $1,967,572 during the year ended 30 June 2012 and, as of that date, the consolidated entity current liabilities exceeded its total current assets by $711,801. These conditions, along with other matters as set forth in the Notes, indicate the existence of a material uncertainty which 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, and at the amounts stated in the financial report.

Auditor’s opinion In our opinion:

a the financial report of HealthLinx Limited is in accordance with the Corporations Act 2001, including: i giving a true and fair view of the consolidated entity’s financial position as at 30

June 2012 and of its performance for the year ended on that date in accordance with the accounting policies described in Note 1; and

ii complying with Australian Accounting Standards to the extent described in Note 1 and complying with and the Corporations Regulations 2001; and

b the financial report also complies with International Financial Reporting Standards as disclosed in the notes to the financial statements.

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Basis of accounting Without modifying our opinion, we draw attention to Note 1 to the financial report, which describes the basis of accounting. The financial report has been prepared for the purpose of fulfilling the directors' financial reporting responsibilities under the Corporations Act 2001. As a result, the financial report may not be suitable for another purpose.

Report on the remuneration report We have audited the remuneration report included in pages 24 to 32 of the directors’ report for the year ended 30 June 2012 . The directors of the entity 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.

Auditor’s opinion on the remuneration report In our opinion, the remuneration report of Healthlinx Limited for the year ended 30 June 2012, complies with section 300A of the Corporations Act 2001.

GRANT THORNTON AUDIT PTY LTD

Eric Passaris Partner - Audit & Assurance

Melbourne, 31 August 2012

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ASx OTHER REquIRED INFORMATION

RANGE OF SHARES ISSuED – AS AT 19 SEPTEMBER 2012

Currently there are 481,896,454 shares held by 1,339 shareholders.

Range Holders

1 – 1,000 54

1,001 – 5,000 161

5,001 – 10,000 154

10,001 – 100,000 545

100,001 – over 425

Total 1,339

Less than marketable parcel of shares 1,070

TOP 20 SHAREHOLDERS

Number of Shares

Held %

Mr Boonsri Pewkliang & Mrs Katima Pewkliang <The B Pewkliang Fam A/C> 17,000,000 3.53

HSBC Custody Nominees (Australia) Limited 16,759,657 3.48

HSBC Custody Nominees (Australia) Limited <ST A/C> 16,489,658 3.42

Mr Hady Najib Gholmieh 15,081,547 3.13

La Jolla Cove Investors Inc 14,705,882 3.05

Miss Marianna Nicolina Rossi & Mr Philip David Lawson <The Lawson Rossi S/F A/C> 13,500,000 2.80

Dutchess Opportunity Fund II LP 10,000,000 2.08

Enta Pty Ltd <The Samuels Family A/C> 10,000,000 2.08

Mr Dimitrios Piliouras & Mrs Konstantina Piliouras <Energia Super Fund A/C> 10,000,000 2.08

Mr John Charles De Andrade & Mrs Lubov Vasily De Andrade <JLD A/C> 8,084,000 1.68

Innova8 Group Pty Ltd 8,030,512 1.67

Mr Nick Gatsios 7,959,831 1.65

Mr Lin Wang 6,946,793 1.44

Dr Gregory Rice 6,832,308 1.42

Ringland Mara Pty Ltd <H & E Taylor Super Fund A/C> 6,026,248 1.25

Mrs Helen Margaret Finger 6,000,000 1.25

Mr John William Wood 6,000,000 1.25

Prof John Vincent Yovich & Dr Jane Charlotte Yovich <Kimchel Family A/C> 5,764,241 1.20

Mr Yves Lahey & Mrs Christina Lahey 5,000,000 1.04

Bellset Nominees Pty Ltd 4,539,666 0.94

Top 20 total 194,720,343 40.41

Total remaining holders balance 287,176,111 59.59

vOTING RIGHTS

Shareholders are entitled to one vote for each share held. On a show of hands every shareholder present in person or by proxy shall have one vote and upon a poll, every shareholder so present shall have one vote for every share held.

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RANGE OF quOTED OPTIONS ISSuED – AS AT 19 SEPTEMBER 2012

Currently there are 14,750,000 quoted options held by 70 holders.

Range Holders

1 – 1,000 0

1,001 – 5,000 1

5,001 – 10,000 1

10,001 – 100,000 38

100,001 – over 30

Total 70

TOP 20 quOTED OPTIONHOLDERS

Number of Options

Held %

Hare Consulting Pty Ltd 1,862,500 12.63

Prof John Vincent Yovich & Dr Jane Charlotte Yovich <Kimchel Family A/C> 1,555,646 10.55

Exit Out Pty Ltd <The Discretionary A/C> 1,261,000 8.55

Menora Nominees Pty Limited 1,025,000 6.95

Mr Scott Greg Buchanan 750,000 5.08

Spinite Pty Ltd 625,000 4.24

Granby Park Pty Ltd <King Family A/C> 575,000 3.90

Stock Assist Group Pty Ltd 525,000 3.56

Mrs Baoxian Ji 430,000 2.92

Mr Mark Anthony Frood 380,000 2.58

Mr Tas Anastasi 375,000 2.54

Mr Angelo Rousselis 350,000 2.37

Mr Francis Henry Leach & Mrs Patricia Mary Leach 300,000 2.03

Sharechart Pty Ltd 300,000 2.03

Carc Pty Ltd 262,500 1.78

Mr Craig William Manners 250,000 1.69

Joel Moryosef 250,000 1.69

Sterling-Jackson Consortium Pty Ltd 250,000 1.69

Conrad Joseph Lawrence Goodger 213,000 1.44

M & M Family Pty Ltd 200,000 1.36

Top 20 total 11,739,646 79.59

Total remaining holders balance 3,010,354 20.41For

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DIRECTORS

Dr Gregory Rice (Chairman)

John Evans

Nick Gatsios

COMPANY SECRETARY

Malcolm Edward Lucas-Smith

REGISTERED OFFICE

576 Swan Street Richmond VIC 3121

Telephone (03) 9208 4200 Facsimile (03) 9208 4201

BuSINESS OFFICE


Telephone (03) 9208 4200 Facsimile (03) 9208 4201 E-mail [email protected]

Website www.healthlinx.com.au

POSTAL ADDRESS


Telephone (03) 9208 4200

Facsimile (03) 9208 4201

PATENT ATTORNEY TO THE COMPANY

Davies Collison Cave

1 Little Collins Street Melbourne VIC 3000

Telephone (03) 9254 2777 Facsimile (03) 9254 2770

SOLICITORS TO THE COMPANY

Holman Fenwick Willan

Level 39, 600 Bourke Street Melbourne VIC 3000

Telephone (03) 8601 4500

SHARE REGISTRY

Computershare Investor Services Pty Limited

ABN 48 078 279 277

Yarra Falls 452 Johnston St Abbotsford VIC 3067

Telephone 1300 850 505

AuDITORS

Grant Thornton

The Rialto Level 30, 525 Collins Street Melbourne VIC 3000

Telephone (03) 8320 2222

CORPORATE DIRECTORYF

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HealthLinx Limited576 Swan Street, Richmond VIC 3121T (03) 9208 4200 F (03) 9208 4201W www.healthlinx.com.au

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Documents

Annu l Repo t 2012 For personal use only - ASX2012/09/28 · Annu A l Repo R t 2012 For personal use only CONTENTS Chairman’s letter 2 Managing Director’s Report 3 Chief Scientific