Consolidated Statement of Financial Position

Annual Report for the year ended 30 June 2020 Adherium Limited • ABN 24 605 352 510 Adherium is a provider of digital health solutions and a global leader in connected respiratory medical devices, with more than 170,000 sold globally. The company develops, manufactures and supplies a broad range of connected medical devices for respiratory medications for patients, pharmaceutical companies, healthcare providers and contract research organisations. Adherium’s Hailie ® solution is designed to achieve better adherence for patients and provide visibility to parents and caregivers. It does this by tracking medication use and reminding the user when it is time to take doses, and by providing physicians access to usage history to better understand patients’ patterns in their asthma and COPD. These tools ultimately enable people who live with asthma or COPD to more easily manage their condition alongside their physician. Company Overview Table of Contents Chairman’s Report 02 CEO’s Report 04 Directors’ Report (including Remuneration Report) 06 Auditor’s Independence Declaration 20 Consolidated Statement of Profit or Loss and Other Comprehensive Income 22 Consolidated Statement of Financial Position 23 Consolidated Statement of Changes in Equity 24 Consolidated Statement of Cash Flows 25 Notes to the Consolidated Financial Statements 26 Directors’ Declaration 45 Independent Auditor’s Report 46 Australian Securities Exchange Additional Information 51 2 Chairman’s Report I am pleased to be able to provide the Chairman’s statement for Adherium and comment on the opportunity for the business and the progress made in the last twelve months. Having known Adherium for over five years and worked extensively in the respiratory and medical device space there are three primary reasons why I believe that Adherium has strong prospects for the future: • the newly introduced US reimbursement framework for remote patient monitoring; • the development of a focused, credible and relevant business strategy; and • the appointment of a strong, experienced and well qualified management team to lead the execution of strategy and operational management of the business. Game Change in Environment and Opportunity The unmet need for better assessment and management of adherence in the respiratory field remains as critical today as ever. Approximately $34 billion is estimated to be spent in the USA on avoidable healthcare costs for uncontrolled COPD and asthma patients. Patients and carers struggle with poor inhalation technique aggravated by the range and complexity of different devices provided by pharmaceutical companies Adherium has its proven Hailie ® technology designed to address these issues, and existing industry-leading clinical evidence of the impact of its use in reducing symptoms and as well as cost. This has been the case for a number of years. However, the recent introduction of reimbursement to physicians for remote patient monitoring (RPM) greatly increases the motivation for physicians to employ this technology. Put simply, reimbursement for RPM is a game changer for the digital sensor medical device industry and creates enormous opportunity for Adherium. Adherium is moving quickly to establish a base for sustained, recurring revenue streams with business partners who have well-established direct physician, provider and patient models. Hailie ® has the potential to be the the preferred respiratory inhalation monitoring system, enabling better clinical and financial outcomes for physicians, payers and patients with severe, uncontrolled asthma and COPD. Additionally, beyond adherence monitoring Adherium has the potential to leverage our respiratory channel partner and software technology platform by adding remote monitoring solutions for a range of respiratory diagnostics and devices, creating a portfolio of options for integrated patient assessment, data analysis and data aggregation. Further opportunities lie beyond this including the monetization of aggregated data across multiple sensor platforms and patient groups along with remote patient monitoring beyond the respiratory therapeutic area. Prior to 2019 there were no direct financial incentives for physicians and health care providers to engage with patients with remote monitoring devices. However, since 2019 reimbursement codes have been introduced to pay physicians approximately $1,400 p/a for each patient utilising RPM devices such as those provided by Adherium. This, along with the COVID-19 pandemic, is helping to drive a profound change in patient and physician behaviour and provides the catalyst for the adoption of remote monitoring on an unprecedented scale. We are already seeing a number of companies accelerating their activities in this space including monitoring tools providers such as Livongo, and the addition of remote sensing capabilities by medical device providers such as Medtronic. Focused Strategy Adherium’s strategy has also evolved significantly combining the learnings from the past with a credible, relevant and focused approach for the future. The strategy is clear. 1. To focus on the patient segment with the highest unmet medical need, i.e. severe asthma and COPD patients, who incur the largest economic cost to the healthcare systems. The use of electronic monitoring tools to assess these patients is now flagged as a recommended step in the GINA (Global Initiative for the treatment of asthma) and, with over 1.3 million severe asthma and COPD patients in the US, represents a very meaningful segment for the business. 2. To focus our go-to-market commercial approach through business partners who are established and already operate with respiratory physicians and patients and are thereby positioned to enable physician and provider access to the US reimbursement codes. This is being done with our commercial partners HGE Health and Trudell Medical’s US Monaghan Medical commercial team. Adherium will continue to be open to collaborating with single pharma company sponsors but will not focus on this as its primary commercial go-to- market model. Adherium continues to work closely with AstraZeneca on a number of revenue-generating projects and is committed to mutually valuable focused collaboration going forwards. 3. To further differentiate our portfolio of devices and access the US remote monitoring codes through the simultaneous collection of physiological measures (airflow) alongside the existing monitoring of adherence. At the same time, Adherium is working with our technology partners Planet Innovation in Annual Report 2020 Adherium Ltd 3 Melbourne, upgrading hardware and software functionality to simplify ease of use, data capture and reporting for customers and adding the new physiological measure related to the US reimbursement codes. Given the high level of interest in the digital remote monitoring space competitiveness is an important consideration for Adherium. Adherium and its strategy is differentiated in its product offering (proven Hailie ® technology combined with the development of an industry leading range of physiologically enabled devices in asthma and COPD), its commercial model partnering with channel partners rather than pharma sponsors and open approach to data reporting and portal use integrating with existing provider platforms as opposed to limiting usage to an Adherium provided data access approach and management tool alone. The combination of differentiation in product technology, business model and integrated customer solutions approach is compelling and competitive. Adherium continues to partner with Summatix, a Class 2 regulated digital device platform, to take advantage of the emerging opportunities of its proprietary data related to data monetization. Adherium continues to see its collaboration with Summatix as an important further differentiator as we progress with our commercial partners and move beyond the commercial continuum of initial patient adoption and population monitoring. The strategy being adopted by Adherium reflects key learnings in the business since the IPO. The previous strategy targeted all asthma patients including the mild to moderate patient group which appears to be an attractive proposition given the huge patient numbers. However, this approach did not target the patients where symptom control and economic burden are recognised to be the greatest problem. Adherium previously adopted a commercial model prioritising individual pharma company sponsorship. For physicians, patient compliance and competence of device use is a problem which impacts the efficacy of multiple devices and is typically not related to one single branded device. Adherium’s technology solution, therefore, needs to be available across a wider range of inhalation devices enabling physicians to have a range of reliever and maintenance device sensors that may be used according to the patient’s individual needs. Additionally, where we previously directly lead the commercialisation activities, our commercial investment is now focused in supporting our well-established in market partners, HGE Health and Trudell. The previous approach was attractive from the perspective of future margin generation but unattractive given the significant upfront financial cost and operational capability, scale and risk required. Overall our strategy is well thought through in terms of phasing and scale-up of investment linked to key milestones, initially focused over the next two years. It can be considered in three phases. Phase 1 is the testing and adaptation of the operational components of the new US channel partnerships up to the end of CY Q1 2021. Following that, Phase 2, Adherium should start to see the initial scaling up of customer and commercial traction, through its channel partners. From the beginning of 2022, Phase 3, Adherium should have established and scaling revenue generation in the US and be in the position to start to extend its commercial focus outside the US. Strengthening Leadership and Relevant Management Capability As indicated in my introductory words the strengthening of the leadership team is the third important positive component to the positive outlook for Adherium going forwards. With Mike Motion as CEO (UK based), Anne Bell as CFO (Australia based), Geoff Feakes joining the team as CTO (Australia based), and Jane Lapon (Canada based) leading pricing and reimbursement Adherium now has a management team with over 100 years industry experience including in the respiratory, pharmaceutical, drug and device development, remote monitoring, digital and global commercial arenas. This represent a major step up in the leadership capability, strategy and sector relevance of the business alongside my own respiratory drug device experience and network and the broad commercial, technology and finance experience of the existing Board. A key part of Adherium’s activities this year has been to secure the necessary financing to support the business. This has been addressed with the successful refinancing and rights issue completed in January 2020 raising $5.4 million. This was followed by the investment of $5 million from the BioScience Managers Translation Fund 1 reflecting their mandate to invest in Australian innovative technology development activity. On behalf of the Board I would particularly like to thank all the investors who have participated in the funding of the business and all investors for their continued commitment to the business. I look forward to your on-going support as we seek additional funding in the future to execute on a path to profitability. I would like to thank the Board and Jeremy Curnock Cook, Bryan Mogridge, Bill Hunter and Bruce McHarrie in particular, for their significant support in the operational restructuring and participation in the refinancing of the business in 2019. I would also like to give a formal note of thanks on behalf of the Board and all those associated with Adherium to my predecessor Thomas Lynch, who sadly passed away in April. In addition, I would like to thank all the Adherium team who despite the changes to the business and recent challenges presented by COVID-19 are highly motivated and engaged in supporting the new Adherium strategy implementation. Conclusion With the turnaround completed, lessons learned and a revised strategy and team in place, the business is making positive steps forward. Adherium is now well positioned to realise its unfulfilled promise. As well as providing US physicians with a financially attractive tool to improve patient management Adherium represents a compelling investment opportunity for investors given comparative valuations for many companies in the digital health technology field. James Ward-Lilley Non-executive Chairman Annual Report 2020 Adherium Ltd 4 CEO’s Report Dear Shareholder 2020 has brought unprecedented challenges and change across many aspects of our lives – including a paradigm shift in the way in which medicine is practised and patients are managed by their doctors. In this respect, COVID-19 has worked as a positive driver for our business and I am pleased to report significant progress in advancing the new growth strategy we defined last year. Our commercial strategy is focused initially on the USA and on leveraging Adherium’s technology to address the high unmet need of patients with severe/difficult- to-treat asthma and chronic obstructive pulmonary disease (COPD) – patients who represent a preventable healthcare cost of US$34 billion. Recent changes to the US health payment structure work to our advantage, and we have made great strides in being able to capitalise on these, with two US respiratory specialist channel partners signed this year, and funding secured for a research and development collaboration that will significantly strengthen our position. To reframe the reimbursement framework, in 2018, the Centers for Medicare & Medicaid Services (CMS) – the single largest payer for health care in the USA – announced criteria for the reimbursement of remote patient monitoring (RPM) and telehealth services. Adherium identified the opportunity this presented – by adding physiological data capture to existing technology, our sensors would provide “connected care” and a path to payment through the RPM Current Procedural Terminology (CPT) coding system for providers. The value to Adherium comes not only from the use of our technology, but also from the data generated from that usage, which has significant inherent value in its potential to inform more personalised treatment solutions and more effective healthcare spending. From a clinical perspective, our primary focus is on solving the persistent medical problem of prescription non-adherence. Adherium’s Hailie ® sensor technology and cloud-based data platform have been shown in clinical trials to improve patient outcomes and reduce acute respiratory attacks by transforming the way in which patients with asthma and COPD follow their prescribed inhaled medication dosage and schedule. By using Adherium’s systems, doctors also collect longitudinal medical data to help them better diagnose, manage, and treat patients. By improving medication adherence, Adherium increases the effectiveness of the medication regime, helping to enhance patients’ quality of life while lowering the overall treatment cost. This year, we set out clear pathways to demonstrate our value proposition to providers and payers in the US, focusing on commercial execution through the two major distribution channel partnerships announced in April: 1. HGE Health is a full-service remote COPD disease management specialist in the US. HGE contracts with insurance companies /payers to manage large COPD patient populations through its clinical call centres. Their digital platform and technology-enabled services, HGE Care, are supported by a nurse led clinical call centre – the “humanware” enabler for pulmonary and primary care physicians to remotely care for patients from anywhere in the US. They help patients use technology to better understand and manage changes in their COPD symptoms, confident that professional and personalised support is always available. We are now working to integrate Adherium’s Hailie ® technology into HGE Health’s established telemedicine service to better assess, manage, and treat high-risk respiratory patients through a 100-patient pilot program in CYQ3/4 2020. For the pilot we are evaluating the combination of our Hailie ® sensors to monitor patients' inhaled medication adherence and compliance, with the patients' use of the HGE Care app to self-report symptoms, and the call centre staff using an algorithm to review their symptom and medication use-data on a daily basis. If a trend towards exacerbation is identified, the call centre will intervene through a telephone consultation, and may also make a prescription review recommendation to the patient’s physician. HGE reduces the frequency and severity of exacerbations and the number of ER admissions, which represent a very high cost burden and can incur insurance penalties. In the pilot through the enhanced HGE- Adherium service we believe patients will enjoy better care and outcomes, while providers and payers should see substantial cost benefits over baseline and historic savings. 2. Monaghan Medical Corporation is the specialist US respiratory device subsidiary of the Trudell Medical Group, a globally recognised leader in the manufacture and supply of innovative, high-quality, patient-oriented aerosol drug delivery devices and respiratory management solutions, Trudell is also a 13% shareholder in Adherium. We signed a head-of-terms sales and distribution agreement with Monaghan to leverage the access their salesforce has to the specialist asthma centres that manage the severe and difficult- to-treat asthmatics we target. Monaghan’s dedicated Annual Report 2020 Adherium Ltd 5 salesforce has an in-depth understanding of these patients and strong relationships with the physicians that we need to reach. The beauty of this partnership is that Monaghan benefits from a valuable incremental product offering and from data captured through our Hailie ® system that will increase their insights into the patient population they specialise in – helping them stay at the forefront of innovative solutions for the physicians they sell to. In building the relationship and validating our business model, we are working closely with Monaghan over the next few quarters to train key accounts in the use of our technology establishing a network of expert centres to support early commercialisation. These two channels allow Adherium to participate in the new reimbursement environment in US healthcare in distinct yet complimentary ways. The benefit for Adherium is that revenue is generated through multiple channels. In disease management customers are charged a per-patient, per-sensor, per-month fee, in addition to a proportion of any risk-share savings the insurance companies realise and in addition, once doctors gain access to the CPT code with our physiological data capture technology, we will levy a charge for services providing that access. Through our distributor channel we gain revenue from both sensor sales and the licensing of software and data access. This brings me to another strategically critical relationship that was also signed in April this year – with Planet Innovation (PI), a Melbourne-based healthtech innovation and commercialisation company. We have struck a strategic device hardware and software development collaboration with them for our next-generation Hailie ® technology. This will incorporate the physiological data capture functionality required to access the CPT reimbursement and will give physicians more and better quality information about patients and how well they are controlling their disease as well as an audit trail to support their claims for reimbursement. By working with Planet Innovation, Adherium will gain the full benefit of the investment announced in May by the BioScience Managers Translation Fund 1 (BMTF1), which has invested $5 million in Adherium now, with an option (if exercised within 18 months of issue) to invest a further $5million. BMTF1 has a specific mandate to invest in Australian-based innovative healthcare technology, and so on the back of this investment and the Planet Innovation partnership, Adherium will base both its R&D and innovation capability in Melbourne. This investment, along with the $5.4 million rights issue completed earlier in the year, puts Adherium in a solid position to commercialise its business and support its software and hardware development programme in 2020. In addition to these new partnerships, we continue to work closely with our long-term pharma partner AstraZeneca, with whom we are establishing a new commercial framework that will place a higher emphasis on the value of the data generated by our sensors in addition to the transactional revenue from sales. We continue to support several substantial clinical trials and innovative development work being funded by AstraZeneca. We have significantly strengthened the leadership and management team bringing highly qualified and relevant experience to the business. Following a period working as CCO and COO, I took on the role of CEO in April, with Anne Bell also joining as CFO. Jane Lapon also joined the business, bringing significant experience to leading the pricing and market access activity. Most recently in August 2020, Geoff Feakes was appointed CTO and will be based in Melbourne to focus on the execution of our software and hardware development programme with Planet Innovation. In addition to the executive appointments James Ward-Lilley was appointed Chairman in April 2020, bringing a wealth of knowledge of the respiratory disease and devices market, having previously worked for AstraZeneca PLC and Vectura PLC. Moving forward, between now and the end of 2022 we are working on a three-phase commercialisation plan: 1. Testing and proving of HGE and Trudell business and commercial operations models and Adherium sensor/ software user experience with limited initial sensor sales (CY Q3, 2020 – Q1, 2021); 2. Scale up of HGE and Trudell activity with progressive revenue growth alongside introduction of first wave new sensors enabling physiological/peak flow measurement; Development completion and market launch of full range of physiologically enabled sensor and software in both COPD and Asthma (CY Q2, 2021 to Q4, 2021); and 3. Revenue scale-up through US partner activity with all major new sensors on market; Potential expanded scale up in EU/ROW territories; Potential next wave device development including nebuliser/ integrated sensors (CY Q4 2021 into 2022) We are all thoroughly energised by the opportunity in front of Adherium – in the US and ultimately in other major markets. I am confident that the mix of skill and experience on our board and management team, the partnerships we have established and the progress we have made in moving forward our strategy positions us very well for success. Yours faithfully Mike Motion CEO and Executive Director Annual Report 2020 Adherium Ltd 6 Directors’ Report The Directors present their report on the consolidated entity (the Group), consisting of Adherium Limited (the Company or Adherium) and the entities it controlled at the end of, or during, the year ended 30 June 2020, together with the independent auditor’s report thereon. Directors The Directors of the Company at any time during the year and until the date of this report are: Mr James Ward-Lilley, BA (Hons), MBA. Age 55. Independent Non-Executive Chair Appointed as a Director and Chairman 14 April 2020. Mr Ward-Lilley had an extensive 28 year global pharmaceutical career at AstraZeneca before becoming Chief Executive Officer of Vectura Group PLC (the inhaled formulation and device development specialist) in September 2015. At Vectura he was responsible for leading the business through a critical period including the successful merger with Skyepharma. James stepped down in June 2019 leaving Vectura as a growing, cash generative business with a strong balance sheet and positive pipeline momentum. At AstraZeneca James had a number of increasingly senior roles including leading the business in China to become the number one pharmaceutical company in the market in 2008. He went on to become Regional Vice President for Central Eastern Europe and the Middle East and led AstraZeneca’s investor relations team during the transition of Chair, CEO and strategy as Leif Johansson and Pascal Soriot joined the business. Mr Ward-Lilley’s last role at AstraZeneca was to lead the Respiratory, Inflammation & Autoimmunity franchise with responsibility for the revitalisation of one of AstraZeneca's three core therapeutic areas including the acquisitions of Almirall's respiratory business and Pearl Therapeutics. He was responsible for leading AstraZeneca’s corporate device strategy in 2014/15 and was the key sponsor for AstraZeneca’s initial investment in Adherium at the time of the IPO in 2015. Mr Ward-Lilley is CCO for UK based Aerogen Group and a director for its subsidiary Aerogen Pharma Ltd. He has not held any other Australian public company directorships in the last three years. Mike Motion, B.Sc (Hons). Age 58. Chief Executive Officer and Executive Director Appointed as a Director 24 April 2020. Mr Motion has over 35 years’ corporate experience in medical devices and pharmaceuticals starting his commercial career at Baxter Healthcare in 1984 working in manufacturing, sales and marketing and commercial leadership roles at UK, European and global levels. This was across a number of therapeutic areas including nutrition, infectious diseases and oncology. Mr Motion joined Biocompatibles in 2005 to lead the commercialisation of its Interventional Oncology portfolio, setting up a direct sales force in the US and a global network of distributors in EMEA, APAC, China and Japan. After growing the business to about UK$40m per annum, Biocompatibles was acquired by BTG in 2011 for US$283m. At BTG Mr Motion held senior leadership roles as General Manager for Interventional Oncology and Head of Digital Innovation, developing and executing BTG’s digital health strategy in the therapeutic areas of oncology, anti-venom, vascular disease and respiratory. Latterly, he was Head of Varithena, the only NDA approved treatment for Chronic Venous Insufficiency, securing CPT coding and extensive payer coverage ahead of successful commercialisation in the US. Mike graduated in Aberdeen, Scotland with a BSc in Pharmacy. Mr Motion has not held any other Australian public company directorships in the last three years. Mr Jeremy Curnock Cook, MA. Age 71. Independent Non-Executive Director Appointed as a Director on incorporation of Adherium Limited on 17 April 2015. Mr Curnock Cook was formerly head of the life science private equity team at Rothschild Asset Management in the UK and an active investor in the Australian life science sector. At Rothschild, Mr Curnock Cook was responsible for the launch of the first dedicated biotechnology fund for the Australian market. Over his 40-year career, Mr Curnock Cook has specialised in creating value in emerging biotech enterprises, through active participation with management. He has served on over 40 boards in various roles, including chair of private and public biotechnology companies listed on NASDAQ, LSE, TSX and ASX. Mr Curnock Cook received his MA in Natural Sciences from Trinity College in Dublin, Ireland. He is currently Managing Director of BioScience Managers (manager of a major shareholder in Adherium), Chairperson of Avena Therapeutics and AmpliPhi Biosciences and sits on the board of Avita Medical, Rex Bionics Pty and Sea Dragon Ltd. Mr Curnock Cook was previously a director of Bioxyne Limited and Phylogica Limited. He has held no other Australian public company directorships in the last three years. Annual Report 2020 Adherium Ltd 7 Dr William Hunter, MD. Age 57. Indpendent Non-Executive Director Appointed as a Director on 17 December 2015. Dr Hunter has extensive experience in commercialising medical device technologies. He co-founded Angiotech Pharmaceuticals in 1992 and assumed the position of CEO in 1997 when Angiotech was a venture-stage, private, pre-clinical company with less than 50 employees. He led Angiotech through its IPO and listing on the Toronto Stock Exchange and NASDAQ. Dr Hunter has over 200 patents and patent applications to his name and products in which he was an inventor or co-inventor, including the TAXUS ® Drug-Eluting Coronary Stent, the Zilver PTX Peripheral Drug- Eluting Stent, the Quill barbed wound closure device and the 5-FU Anti-Infective Catheter. Combined, these products have generated revenues of over $12 billion and have helped the lives of over 15 million patients globally. He is currently President and CEO of Canary Medical Inc. and formerly Correvio Pharma Corp (NASDAQ: CORV). Dr Hunter is also a Director of Rex Bionics and an Industry Expert Advisor for BioScience Managers (manager of a major shareholder in Adherium). He has previously served as a director of Epirus Biopharmaceuticals (NASDAQ: EPRS) and Union Medtech. Dr Hunter completed his BSc from McGill University and a MSC and MD from the University of British Columbia. Dr Hunter served as a practising physician in British Columbia for five years. Dr Hunter held no other Australian public company directorships in the last three years. Mr Bruce McHarrie, B.Com, FCA, GAICD. Age 62. Independent Non-Executive Director Appointed as a Director on 20 July 2015. Mr McHarrie is currently an independent director and consultant with over 20 years’ experience in the health and life sciences sectors. He was formerly with Telethon Kids Institute in Perth, Western Australia, for 15 years, where his roles included Chief Financial Officer, Director of Operations and Director of Strategic Projects. Prior to joining Telethon Kids, Mr McHarrie was a Senior Manager at Deloitte in London before moving to Rothschild Asset Management as Assistant Director of the Bioscience Unit, a life sciences private equity group investing in early stage biotechnology and healthcare companies. Outside his role at Adherium, he is currently an advisor to BioScience Managers (manager of a major shareholder in Adherium), a director at AusCann (Australasian Medical Cannabis) and an independent consultant. Mr McHarrie is a Fellow of the Institute of Chartered Accountants Australia and New Zealand. He holds a Bachelor of Commerce from the University of Western Australia and is a graduate member of the Australian Institute of Company Directors. Mr McHarrie has held no other Australian public company directorships in the last three years. As noted, as an advisor to BioScience Managers, Mr McHarrie has an association with a significant shareholder of the Company. The board of directors is of the opinion that this does not compromise Mr McHarrie’s independence as to the best of the board’s knowledge he is not involved in decision making by BioScience Managers and the value of the advisory services provided is not material. Mr Matt McNamara BSc (Hons), MBA, GAICD. Age 56. Independent Non-Executive Director Appointed 18 October 2019. Mr McNamara is currently the Chief Investment Officer and director of Horizon 3 Biotech Pty Ltd. Mr McNamara has over 25 years’ experience in the Healthcare & Medical Sciences sector. After initially being a Molecular Biology Research Assistant, he spent 11 years in sales & marketing and general management with Merck &Co. and Johnson and Johnson Medical Pty Ltd respectively. He was CEO of a Life Sciences Venture Capital Fund, SciCapital Pty Ltd. and from 2005 –2019 was CIO of BioScience Managers’ healthcare funds. Mr McNamara is also a director of Avecho Biotechnology Limited (ASX: AVE). Mr Bryan Mogridge BSc, ONZM, FNZIOD. Age 74. Independent Non-Executive Director Appointed as a Director on 20 July 2015. Mr Mogridge has been a successful public company director for over 30 years. He has been CEO of two listed companies and has a background in science, manufacturing, investment and technology. His business philosophy is to be invested where he is involved and grow value for all shareholders. Mr Mogridge is currently Chairperson of BUPA ANZ, Thinxtra and SeaDragon Limited, and a director of Mainfreight and Clearspan. Until recently he was also Chairperson of Rakon Ltd. He also recently joined as a director of Auckland Regional Amenities Funding Board. Mr Mogridge also has significant involvement in philanthropy, chairing one of New Zealand’s most successful charities (The Starship Foundation) for 20 years, helping to transform sick children’s lives through New Zealand’s national children’s hospital “The Starship”. Mr Mogridge is currently a Trustee for The Starship Foundation. He has held no other Australian public company directorships in the last three years. Professor John Mills, AO, SB, MD, FACP, FIDSA, FRACP was an Independent Non-Executive Director until his resignation on 18 October 2019. Mr Thomas Lynch, BSc, FCA was Adherium's Independent Non-Executive Chairman until his untimely death in April 2020. Annual Report 2020 Adherium Ltd 8 Joint Company Secretaries Mr Rob Turnbull, B.Com, CA. Age 53. General Manager and Joint Company Secretary Appointed 21 August 2015. Mr Turnbull has over 25 years’ corporate experience, starting his career with PricewaterhouseCoopers where he worked in Auckland, Toronto, and London; and has almost 20 years’ experience with technology and life- sciences companies. Mr Turnbull has also been Chief Financial Officer for an ASX-listed biotech company undertaking multiple international studies ranging from preclinical to clinical Phase 3, and with operations in the United States, Australia and New Zealand. In addition to capital markets financing and compliance, treasury, tax, financial reporting, commercial contract negotiations and general management, he has been involved in M&A activity to acquire and develop specific technologies. Mr Turnbull graduated from Auckland University with a Bachelor of Commerce, and is a Chartered Accountant and member of Chartered Accountants Australia and New Zealand. Mr Mark Licciardo, B.Bus (Acc), GradDip CSP, FCSA, FCIS, FAICD. Age 56. Joint Company Secretary Appointed 10 May 2016. Mr Licciardo is Managing Director of Mertons Corporate Services Pty Ltd (Mertons) which provides company secretarial and corporate governance consulting services to ASX listed and unlisted public and private companies. Prior to establishing Mertons, Mr Licciardo was Company Secretary of the Transurban Group (2004-07) and Australian Foundation Investment Company Limited, Djerriwarrh Investments Limited, AMCIL Limited and Mirrabooka Investments Limited (1997-2004). Mr Licciardo has also had an extensive commercial banking career with the Commonwealth Bank and State Bank Victoria. Mr Licciardo is a former Chairman of Governance Institute of Australia (GIA) (formerly the Chartered Secretaries Australia) in Victoria, a fellow of both GIA and the Australian Institute of Company Directors (AICD), former Chairman of Melbourne Fringe Limited and a director of ASX listed Frontier Digital Ventures and several unlisted public and private companies. Directors’ Meetings The number of meetings of Directors (including meetings of committees of directors) held during the period and the number of meetings attended by each Director was as follows: Directors’ Meetings Audit & Risk Committee Meetings Nomination & Remumeration Committee Meetings Meetings eligible to attend Meetings attended Meetings eligible to attend Meetings attended Meetings eligible to attend Meetings attended J Ward-Lilley 44 -- - - M Motion 33 --- - J Curnock Cook 16 15 2*2* 11 W Hunter 1613 -- - - B McHarrie 16164 4 - - M McNamara 10102 2 -- B Mogridge 16134 4 11 T Lynch 117- - 11 J Mills 752 1- - *In attendance ex-officio. Committees of the Board The Company has established the following committees of the board, with membership in the year to 30 June 2020 as noted: CommitteeMembership Audit & Risk Bruce McHarrie (Chair), Non-Executive Director Matt McNamara, Non-Executive Director (appointed 25 November 2019) Bryan Mogridge, Non-Executive Director John Mills, Non-Executive Director (until resignation 18 October 2019) Nomination & Remuneration Bryan Mogridge (Chair), Non-Executive Director Jeremy Curnock Cook, Non-Executive Director James Ward-Lilley, Non-Executive Director (appointed 17 June 2020) Thomas Lynch, Non-Executive Director (until directorship ceased 3 April 2020) John Mills, Non-Executive Director (until resignation 18 October 2019) The committees’ Charters are available on the Company’s website. Annual Report 2020 Adherium Ltd 9 Principal Activities During the year, the principal continuing activity of the Group was the development, manufacture and supply of its Hailie ® (formerly Smartinhaler ®) digital health technologies which address sub-optimal medication use and improve health outcomes in chronic disease. Results and Dividends The net loss after tax of the Group for the year ended 30 June 2020 was $11,397,000. No dividends were paid, declared or recommended during the year ended 30 June 2020. Review of Operations Following the reorganisation in fiscal 2019 and the refocussing of the Adherium business in order to scale commercially, the 2020 year has been about taking those steps to implement the revised strategy to target reimbursement opportunities in the US within remote patient monitoring and telehealth services. These steps have included: 1. Building a new highly qualified management team which has seen the appointment during the year of James Ward-Lilley as Chairman, Mike Motion as CEO, Anne Bell as CFO, Geoff Feakes as CTO and Jane Lapon as Head of Pricing & Reimbursement; 2. Melbourne-based healthtech innovation and commercialisation company Planet Innovation has been retained as Adherium’s strategic R&D partner. A number development work streams are now underway in both hardware and software to capture physiological measures in the Hailie ® platform which will support access to reimbursement by physicians and providers; and 3. To support commercialisation initiatives funding was obtained through the issue of $2.9 million of Convertible Notes, and a $5.4 million Rights Issue to shareholders and new investors. Significant contributors to this funding included existing shareholders K One W One and Fidelity International, and new investors EGP Capital and Trudell Medical. In addition and most recently, a $5 million share placement to the BioScience Managers Translation Fund 1 has been completed. Progress has already been made in entering the US disease management market in the US. Relationships have been established with strategic partners HGE Health, a full-service remote COPD disease management specialist in the US, and Monaghan Medical Corporation, the specialist US respiratory device subsidiary of the Trudell Medical Group, a globally recognised leader in the manufacture and supply of innovative, high-quality, patient-oriented aerosol drug delivery devices and respiratory management solutions. Programmes involving Adherium’s Hailie ® solution in a US- based COPD patient population have already commenced. Revenue to 30 June 2020 was $2,218,000, compared with $2,779,000 in fiscal 2019. The reduction occurred across both sensors sales and engineering services on reduced customer orders, although per unit revenue on the 14,000 sensors delivered in 2020 was higher than in 2019 when 28,000 were sold, but included promotional pricing as part of Adherium’s direct-to-consumer channel launch in calendar 2018. This promotional pricing also impacted gross margin in the previous year. Research and development activities for the year ended 30 June 2020 amounted to $3,953,000 compared with $5,120,000 in the prior year. The reduction was predominantly associated with the significant re-architecture of the Hailie ® mobile patient app and physician platform in the prior year. Current year activities have included: • customer specific feature development and customisation in the Hailie ® mobile patient app and platform to support notifications for remote patient monitoring by physicians; • investigation of integrations with country specific health platforms in Europe and Asia; • strategic sensor and software development work with Planet Innovation to enhance Adherium’s leading device coverage position in both asthma and COPD with sensors and software developed to capture and integrate physiological data and enable physician monitoring and reimbursement activity in the US. Sales and marketing costs were $1,766,000 in the year to 30 June 2020, compared with $3,028,000 in the prior year. This reduction was largely a result of a full year of the more focussed organisational structure in fiscal 2020 compared to fiscal 2019. Sales and marketing initiatives in the current year have been very focussed and targeted in the US resulting in the relationships with HGE Health and Monaghan Medical noted above. Administrative expenses reduced from $4,345,000 in 2019 to $3,769,000 in 2020, again as a result of the full year impact of the reorganisation undertaken in the previous year and the resultant reduction in corporate staff and rationalisation of overhead. Non-cash costs included asset depreciation and amortisation expense of $335,000 (2019: $413,000), and fixed asset write-offs associated with further office rationalisation of $32,000 (2019: $270,000). Annual Report 2020 Adherium Ltd 10 While cost reductions were achieved across all areas compared to the previous year, the loss for the year was not significantly reduced at $11,397,000 compared to $11,794,000 in 2019. This was due largely to the financing cost of $2,601,000 in the year to 30 June 2020 related to the Convertible Notes prior to their conversion into shares and options. This financing cost is a non-cash expense and arose under accounting treatments from recognising finance charges and fair value measurements on the debt and derivate elements respectively of the Convertible Notes. Adherium ended the year to 30 June 2020 with cash of $4,584,000. In addition, subsequent to year end, and following approval by shareholders, the balance of $1.9 million of the $5 million investment commitment from BioScience Managers Translation Fund 1 was received. Significant Changes in the State of Affairs There have been no significant changes in the state of affairs of the Group during the financial year ended 30 June 2020. Events since the end of the Financial Year In May 2020, the Company agreed a $5 million investment commitment from the BioScience Managers Translation Fund 1 (BMTF1). The first tranche of $3.1 million (104,261,036 ordinary shares) was received in June 2020. Subsequent to the balance sheet date, shareholder approval was received to proceed with the balance of the investment and in August 2020 the Company received $1.9 million from BMTF1 and allotted a further 62,405,631 ordinary shares and 83,333,333 options with an exercise price of 6 cents for option and expiry date of 17 February 2022. There are no other matters or circumstances that have arisen since the end of the financial year that have significantly affected or may significantly affect the operations of the Group, the results of those operations or the state of affairs in future years. Likely Developments and Expected Results Commentary on the Group’s strategic direction and plan is set out in the Chairman's Report and CEO's Report on pages 2 to 5. Environmental Regulation The Group’s operations are not subject to any significant environmental Commonwealth or State regulations or laws. Directors’ Interests The relevant interest of each Director in shares and options over shares in the Company as notified by the Directors to the ASX in accordance with section 205G of the Corporations Act 2001 as at 30 June 2020 is: Director Ordinary SharesOptions over Ordinary Shares J Ward-Lilley -10,000,000 M Motion 600,00010,000,000 J Curnock Cook 1,192,734- W Hunter 1,612,734- B McHarrie 1,277,587- M McNamara 123,038- B Mogridge 12,858,965 *- * relevant interest includes 10,003,149 ordinary shares held in the Director’s capacity as trustee of the Company’s Employee Share Plan. Annual Report 2020 Adherium Ltd 11 Indemnification and Insurance of Directors and Officers The Company has entered into deeds of access, insurance and indemnity with each director and officer which contain rights of access to certain books and records of the Group for a period of seven years after the director or officer ceases to hold office. This seven-year period can be extended where certain proceedings or investigations commence before the seven-year period expires. In respect of the indemnity of the directors and officers, the Company is required, pursuant to the constitution, to indemnify all directors and officers, past and present, against all liabilities allowed under law. Under the deed of access, insurance and indemnity, the Company indemnifies parties against all liabilities to another person that may arise from their position as a director or an officer of the Company or its subsidiaries to the extent permitted by law. The deed stipulates that the Company will meet the full amount of any such liabilities, including reasonable legal costs and expenses. In respect of insurance being obtained on behalf of the directors and officers, the Company may arrange and maintain directors’ and officers’ insurance for its directors and officers to the extent permitted by law. Under the deed of access, insurance and indemnity, the Company must obtain such insurance during each director’s and officer’s period of office and for a period of seven years after a director or an officer ceases to hold office. This seven-year period can be extended where certain proceedings or investigations commence before the seven-year period expires. Disclosure of the insurance premiums and the nature of liabilities covered by such insurance are prohibited by the relevant contracts of insurance. Shares Under Option Unissued shares As at the date of this report, unissued ordinary shares of the Company under options comprised: Exercise price Total Number of Options Vested OptionsExpiry Date $0.134039 217,214217,21430 November 2020 $0.134039 542,952542,95216 December 2020 $0.134039 1,039,4281,039,4281 January 2021 $0.134039 259,857259,85724 March 2021 $0.040000 3,000,0003,000,0007 August 2021 $0.060000 83,333,333-17 February 2022 $0.134039 173,238173,23831 March 2022 $0.021900 27,519,46727,519,46729 January 2027 $0.040000 20,000,000-14 April 2027 Outstanding at 27 August 2020 136,085,489 32,752,156 The options over unissued ordinary shares do not entitle the holder to participate in any share issue of the Company or any entity in the Group. During the year ended 30 June 2020 and to the date of this report the following Directors of the Company or other key management personnel of the Group were granted options: Director/KMPNumber of OptionsExercise Price Expiry Date J Ward-Lilley 10,000,000$0.0414 April 2027 M Motion 10,000,000$0.0414 April 2027 B Mogridge 1,500,000 $0.047 August 2021 W Hunter 1,500,000 $0.047 August 2021 Details of fully paid ordinary shares issued on exercise of options in the year to 30 June 2020 are contained in the accompanying consolidated financial statements. Annual Report 2020 Adherium Ltd 12 Proceedings on behalf of the Company There are no legal or other proceedings being made on behalf of the Company or against the Company as at the date of this report. Non-audit Services The Company may decide to employ the auditor on assignments additional to their statutory audit duties where the auditor’s expertise and experience with the Company and/or the Group are important. The fees paid to PricewaterhouseCoopers for other services set out in note 6 of the Group’s financial statements for the year ended 30 June 2020 related to advice in relation to employee incentive plan structures. The directors are satisfied that the provision of these services during the year by the auditor did not impair the auditors’ independence. Auditor’s Independence Declaration A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 in relation to the audit for the financial year is provided with this report. Corporate Governance Statement The board of Directors of Adherium Limited is responsible for corporate governance. The board has prepared the Corporate Governance Statement (CGS) in accordance with the fourth edition of the ASX Corporate Governance Council’s Principles and Recommendations under which the CGS may be made available on the Company’s website. Accordingly, a copy of the Company’s CGS is available on the Adherium website at www.adherium.com under the Investors /Corporate Governance section. Annual Report 2020 Adherium Ltd 13 Remuneration Report (Audited) The Directors present the Group’s 2020 remuneration report which sets out the remuneration information for the Company’s Non-Executive Directors, Executive Director and other key management personnel of the Group. The report contains the following sections: (a) Details of key management personnel disclosed in this report (b) Remuneration governance (c) Executive remuneration policy and framework (d) Relationship between remuneration and Group performance (e) Non-Executive director remuneration policy (f) Details of remuneration of key management personnel (g) Service agreements (h) Details of share and option based compensation (i) Equity instruments held by key management personnel (j) Other transactions with key management personnel (a) Details of key management personnel disclosed in this report The following persons acted as key management personnel of the Company and the Group during the year ended 30 June 2020. (i) Non-Executive and Executive Directors • James Ward-Lilley Non-Executive Chairman (appointed 14 April 2020) • Mike Motion Executive Director (appointed 24 April 2020) and Group CEO (appointed 24 April 2020, previously appointed CCO 22 Novermber 2019, and COO from 14 April 2020) • Jeremy Curnock Cook Non-Executive Director (appointed on incorporation 17 April 2015) • William Hunter Non-Executive Director (appointed 17 December 2015) • Bruce McHarrie Non-Executive Director (appointed 20 July 2015) • Bryan Mogridge Non-Executive Director (appointed 20 July 2015) • John Mills Non-Executive Director (appointed 20 July 2015, resigned 18 October 2019) • Thomas Lynch Non-Executive Chairman (appointed 1 September 2016, ceased 3 April 2020) (ii) Other key management personnel • Anne Bell Chief Financial Officer (appointed 20 April 2020) • Rob Turnbull Joint Company Secretary (appointed 21 August 2015) and General Manager • Mark Licciardo Joint Company Secretary (appointed 10 May 2016) • Peter Stratford Chief Executive Officer (appointed 22 November 2019, resigned 11 February 2020) (iii) Changes since the end of the reporting period In the period after 30 June 2020 and up to the date of this report Geoff Feakes was appointed Chief Technology Officer (3 August 2020). There have been no other changes in key management personnel. (b) Remuneration Governance The Nomination and Remuneration Committee is a committee of the board. Its responsibilities include assisting the board in ensuring that the Company: • has coherent remuneration policies and practices which are observed and which enable it to attract and retain executives and directors who will create value for shareholders; • fairly and responsibly rewards executives having regard to the performance of the Company, the performance of the executive and the general pay environment; • provides disclosure in relation to the Company’s remuneration policies to enable investors to understand the costs and benefits of those policies and the link between remuneration paid to directors and key executives and corporate performance; and • complies with the provisions of the ASX Listing Rules and the Corporations Act. Annual Report 2020 Adherium Ltd 14 The primary purpose of the Nomination and Remuneration Committee is to support and advise the board in fulfilling its responsibilities to shareholders in ensuring that the board is appropriately remunerated, structured and comprised of individuals who are best able to discharge the responsibilities of directors by: • assessing the size, composition, diversity and skills required by the board to enable it to fulfil its responsibilities to shareholders, having regard to the Company’s current and proposed scope of activities; • assessing the extent to which the required knowledge, experience and skills are represented on the board; • establishing processes for the identification of suitable candidates for appointment to the board; • overseeing succession planning for the board and the Chief Executive Officer; • establishing processes for the review of the performance of individual directors and the board as a whole; • assessing the terms of appointment and remuneration arrangements for non-executive directors; and • assessment and reporting to the board in relation to: - executive remuneration policy; - the remuneration of executive directors; - the remuneration of persons reporting directly to the Chief Executive Officer, and as appropriate, other executive directors; - diversity plans, measurable diversity objectives and ensuring equality in remuneration across gender aligned, where relevant, with the ASX Corporate Governance Guidelines; - the Company’s recruitment, retention and termination policies and procedures; - superannuation arrangements; and - all equity-based plans. (c) Executive remuneration policy and framework Remuneration policy The policy for determining the nature and amount of remuneration of key management personnel is agreed by the board of directors as a whole on advice from the Nomination and Remuneration Committee. The board obtains professional advice where necessary to ensure that the Group attracts and retains talented and motivated directors and employees who can enhance the performance of the Group through their contributions and leadership. The Nomination and Remuneration Committee makes specific recommendations on the remuneration package and other terms of employment for the CEO having regard to his or her performance, relevant comparative information, and if appropriate, independent expert advice. For key management personnel, the Group provides a remuneration package that incorporates both cash-based remuneration and, if appropriate, share or option based remuneration. The contracts for service between the Group and key management personnel are on a continuing basis, the terms of which are to align executive performance- based remuneration with Group objectives. The Nomination and Remuneration Committee is also responsible for making recommendations to the board in relation to the terms of any issue of equity-based remuneration to employees, as part of their individual package, or a wider staff incentive and retention scheme, and for ensuring that any such issue is made in accordance with the ASX Listing Rules. Executive pay The executive pay and reward framework has three components: • base pay and benefits, including legislative superannuation; • short-term performance incentives; and • long-term incentives through participation in the Adherium employee share and option plans. A combination of some or all of these components comprises an executive’s total remuneration. Base pay Executives are offered a competitive base pay that comprises the fixed component of pay and rewards. Base pay for executives is reviewed annually to ensure that executive remuneration is competitive with the market. There are no guaranteed base pay increases included in any executives’ contracts. Short-term incentives (STI) Executives have a target STI opportunity depending on the accountabilities of the role and impact on the organisation. The STI is a cash and equity based incentive which forms part of the executive’s total compensation, representing between 0% and 150% of base salary. Each year, the Nomination and Remuneration Committee in conjunction with the CEO, will consider the appropriate targets and key performance indicators (KPIs) of each executive to link the STI plan and the level of payout if targets are met. This will include setting any maximum payout under the STI plan, and minimum levels of performance to trigger payment of STI. The targets and KPIs selected are chosen to align executive performance with the Group’s annual business objectives set by the board and encompassing business development, research & development, and cash management. Annual Report 2020 Adherium Ltd 15 The STI achievement is calculated and paid annually. The Nomination and Remuneration Committee in conjunction with the CEO assesses the extent to which targets and KPIs have been achieved at a Company and individual performance level to determine the STI to be paid. Measurement of achievement of the business objectives does not involve comparison with factors external to the Company. Long-term incentives (LTI) Long-term incentives are provided to certain employees via the Adherium Employee Share Plans and Executive Share Option Plan (the Plans). The board has the discretion to offer and issue to eligible employees including directors: • ordinary shares in the Company issued at an issue price determined by the board, with limited recourse loans where some or all of the issue price of the share awards are funded by way of a loan from the Company; or • options over ordinary shares in the Company with an exercise price determined by the board. The Plans are designed to focus directors, executives and staff on delivering long-term shareholder returns. Share and option awards issued under the Plans generally vest in three equal tranches over three years of continuing employment. If the vesting condition is not met, the related share or option award is forfeited and, where relevant, the loan cancelled such that the participant receives no benefit from unvested shares where the related loan is not repaid. Participation in the Plans is at the board’s discretion and staff do not have a contractual right to participate in the Plans. (d) Relationship between remuneration and Group performance The Group is presently in a business growth phase, as it undertakes continued product development, and seeks relevant regulatory approvals for its technologies and market penetration for its products, and this is the focus of executives and the board. During this phase expenditures continue to exceed revenues, and in the year ended 30 June 2020 the Group incurred a loss after tax of $11,397,000 (3.6 cent loss per share). In the year to 30 June 2020 the Company’s shares traded between 1.1 and 6.4 cents per share. Given the stage of the Group’s commercial development, the board does not utilise earnings per share as a performance measure and does not presently include the Company’s share price as a measure of executive performance. No dividends were paid, declared or recommended during the period ended 30 June 2020. (e) Non-Executive Director remuneration policy On appointment to the board, Non-Executive Directors enter into a service agreement with the Company in the form of a letter of appointment. The letter summarises the board policies and terms, including remuneration, relevant to the office of director. Non-Executive Directors receive a fee which is inclusive of fees for chairing or participating on board committees. They do not receive performance-based pay. Non-Executive Directors’ fees and payments are reviewed annually by the board. The Non-Executive Chairman’s fees are determined independently of the fees of Non-Executive Directors based on comparative roles in the external market. Non-Executive Chairman and Director fees were approved at the 2016 Annual General Meeting at $100,000 per annum for the Non-Executive Chairman (previously $80,000 per annum) and $50,000 for each Non-Execu- tive Director (previously $40,000 per annum). Legislative superannuation contributions are also paid where applicable. A Non-Executive Director may be paid fees or other amounts as the board determines where a Director performs ser - vices outside the scope of the ordinary duties of a Director. The Company may reimburse Non-Executive Directors for their expenses properly incurred as a Director or in the course of office. Annual Report 2020 Adherium Ltd 16 (f) Details of remuneration of key management personnel Remuneration for the year ended 30 June 2020 Short Term Benefits Post-Employment Benefits Incentive Share-based Payments Salaries & Fees $ Bonus $ Insurance & Other $ Superannuation $ Severance$ Value of Options / Loan Funded Shares 6 $ Tota l $ Performance Related Remuneration % Fixed Remuneration % Directors’ remuneration James Ward-Lilley 259,782 1 -- - -20,958280,740 7%93% Jeremy Curnock Cook 50,000 -- - -62150,621 1%99% William Hunter 50,000 -- - -62150,621 1%99% Bruce McHarrie 50,000 -- 3,755 -62154,376 1%99% Matt McNamara 37,351 -- 3,068 - -40,419 -100% Bryan Mogridge 50,000 -- - -62150,621 1%99% Thomas Lynch 75,000-- - -1,24276,242 2%98% John Mills 16,667 -- 861 -62118,149 3%97% Sub-total Directors 588,800-- 7,684 -25,305621,789 Executives’ remuneration - Mike Motion 2 385,349 35,418 - 4,250 -20,958445,975 13%87% Anne Bell 3 52,51410,503 - 4,989 - -68,006 15%85% Peter Stratford 4 299,086 -- - --299,086 -100% Mark Licciardo 5 7,083 -- - --7,083 -100% Rob Turnbull 229,030 57,241 - 6,871 -22,036315,178 25%75% Sub-total executives 973,062103,162 - 16,110 -42,9941,135,328 Total key management personnel 1,561,862 103,162 - 23,794 -68,2991,757,117 1. Consulting fee for the period to 30 June 2020. 2. Mike Motion was appointed CCO 22 November 2019, COO 14 April 2020, and CEO 24 April 2020. 3. Anne Bell was appointed CFO on 20 April 2020. 4. Peter Stratford was appointed CEO 22 November 2019 and resigned from the role 11 February 2020. 5. A company of which Mr Licciardo is a director received the fees from the Company for company secretarial and corporate governance consulting services. 6. The fair values of options and Loan Funded Shares are calculated at the date of grant using a Black-Scholes pricing model and allocated to each reporting period in accordance with vesting. The values noted represent the portion of the fair value of the options or loan funded shares allocated to the reporting period. Remuneration for the year ended 30 June 2019 Short Term Benefits Post-Employment Benefits Incentive Share-based Payments Salaries & Fees $Cash Bonus $ Insurance & Other $ Superannuation $ Severance $ Value of Options / Loan Funded Shares 5 $ Tota l $ Performance Related Remuneration % Fixed Remuneration % Directors’ remuneration Thomas Lynch 100,000-- - -5,323105,323 5%95% Jeremy Curnock Cook 50,000-- - -2,66152,661 5%95% William Hunter 50,000-- - -2,66152,661 5%95% Bruce McHarrie 50,000-- 3,760 -2,66156,421 5%95% John Mills 50,000-- 3,760 -2,66156,421 5%95% Bryan Mogridge 50,000 -- - -2,66152,661 5%95% Sub-total Directors 350,000 -- 7,520 -18,628376,148 Executives’ remuneration Arik Anderson 1 398,896199,37396,279 - 296,996(7,810) 6 983,734 19%81% David Allinson 2 219,93418,988 1,175 - -(492) 6 239,605 8%92% Garth Sutherland 3 295,455 80,414 - 12,713 138,809 (47,797) 6 479,594 7%93% Mark Licciardo 4 24,420 4 -- - --24,420 -100% Rob Tur