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									Annual Report




for the year ended 30 June 2002
ABN 12 010 657 351
Contents

Corporate Directory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      1
Chairman’s Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    2
Directors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .    3
Corporate Governance Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                  10
Statements of Financial Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                   11
Statements of Financial Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .              12
Statements of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .          13
Notes to the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .               14
Directors' Declaration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .      31
Independent Audit Report to the Members . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .                         32
Shareholder Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .         33




   ii     PSIRON Ltd Annual Report 2002
Corporate Directory

Directors
Stephen Jones (Chairman)
Dr Wolf Hanisch (Non-executive Chairman)
Julie Nutting (Non-Executive Director)
Ronald van der Pluijm (Managing Director)
Bryan Dulhunty (Executive Director)

Company Secretary
Bryan Dulhunty

Registered and Principal Office
Unit 8,
10 Anella Avenue
Castle Hill NSW 2154

Auditors
Bentleys MRI, Chartered Accountants
Level 26, AMP Place, 10 Eagle Street
BRISBANE QLD 4000

Share Registry & Register
Douglas Heck & Burrell
Level 22, 300 Queen Street
BRISBANE QLD 4000
Tel: (07) 3221 4244

Web-site
www.psiron.com

E-mail
investorrelation@psiron.com

Telephones
Tel: (02) 9659 8650
Fax: (02) 9659 8654




                                            PSIRON Ltd Annual Report 2002   1
Chairman’s Letter

Dear Shareholder
I am pleased to inform you that Psiron Ltd as the parent company has turned a profit of $144,769 for the financial
year 2002, and as such is one of the few Australian biotech companies to do so. Psiron has generated this
profit in line with its strategy whereby it adds value to its projects, businesses or investments before generating
an income for its shareholders. Last year we realised an income of $1.6 million from the sale of our diagnostic
business to Analytica Ltd. The Company made a subsequent investment of $800,000 in that company in return
for approximately 60% of the outstanding capital, and as such we will participate in the further growth of
that diagnostic business. As we also assumed board and management control, we have to consolidate Psiron’s
and Analytica’s results. The loss of the economic entity was $1.4 million. I am also content with this result as it
shows that the restructuring of Analytica has started to take effect.
During the year the Company has undertaken a whole range of activities, including:
• The sale of the diagnostic business to Analytica Ltd.
• The subsequent investment in Analytica. That company has since been restructured, refinanced and was
  re-quoted on the ASX on September 11 2002.
• A $600,000 investment in CBio, which is developing chaperonin 10, a potential treatment for
  autoimmune diseases such as multiple sclerosis and rheumatoid arthritis. The Company also negotiated
  the exclusive worldwide rights for all diagnostic applications that result from that research.
• Although many pharmaceutical companies are interested in our Sorafin platform technology, the Company
  has been unable to conclude an agreement as much of the early stage development work, such as dose
  ranging and toxicity, has not been done or been done insufficiently. The Company is addressing this by
  developing Sorafin AD, for atopic dermatitis (eczema), in which it will include the earlier development needs.
• Concluded a fully underwritten rights issue, raising $1.5 million.
The Company is aware of the Convertible Note expiring at the end of November. The Company is currently in
advanced discussions with Australian Biofund Investments Limited (an Hong Kong based investment company)
to ensure that adequate funding will be available to address this issue and for Psiron’s further development
programs.
In this respect, the Company is currently performing due diligence on Vapotronics, a company developing the
next generation pharmaceutical drug inhalation technology. Psiron has executed a call option agreement which
gives it the right to acquire approximately 58% of the outstanding Vapotronics share capital.
I am confident that the Company is on the right track and that we can look forward to a bright and successful
future.




Stephen Jones
Chairman




  2   PSIRON Ltd Annual Report 2002
Directors’ Report
For the year ended 30 June 2002


In accordance with the Corporations Act 2001, the Directors of Psiron Ltd ("the Company") submit their report
together with the accounts for the company for the year ended 30 June 2002 and the consolidated accounts
of the economic entity being the Company and its controlled entities for the year ended 30 June 2002.

Directors
The names and details of the Company’s directors in office at the date of this report are as follows:

I   Mr. Stephen Jones: Non-Executive Chairman
Mr Jones is a corporate recovery and turn-around specialist. He recently retired from a position of Chairman of
Greyhound Pioneer Australia Ltd, a position he held from July 1996 until September 1999. Initially as CEO, he
took this loss maker to its maiden profit in 1998. Previously, he turned around credit card provider International
Card Systems Australia Ltd, where he took control and was Executive Chairman in 1992, leaving the company
profitable in 1994. He is Chairman of Analytica Ltd, CBio Limited, Australia Technology Innovation Fund Limited
and Australian Biofund Limited (Hong Kong) and a former member of the Queensland Governments Innovation
Council and the Bioindustries Advisory Group.

I   Dr. Wolf Hanisch: Non-Executive
Dr Hanisch’s background is in the biotech healthcare industry in California and Australia. He has a broad
background in product and project commercialisation, new product and process development complemented
by extensive knowledge of international regulatory requirements.
He was directly involved in the successful Initial Public Offering (IPO) of IDEC Pharmaceuticals Inc (now a
$7 billion company) as well as having had significant exposure to a number of other IPOs through his linkages
with the California biotechnology and venture community.
He has worked on the clinical development of a number of biotech drugs now approved for use worldwide
including beta-Interferon (Betaseron), interleukin (Proleukin), TNF and monoclonal antibodies.
He maintains close contact with the international biotechnology and pharmaceutical industry and most
recently was a Director of Vapotronics Ltd, a US based and Brisbane founded medical technology company,
is the CEO of CBio Limited and non-executive director of Agribio Pty Ltd and Analytica Ltd.

I   Ms. Julie Nutting: Non-Executive
Ms Julie Nutting has both private and public sector experience in the health care industry. Her technical
background includes primarily regulatory affairs, health economics, and clinical trials. She has held senior
executive positions at Sandoz Australia Pty Ltd and Covance Pty Ltd where she was responsible for submissions to
the Australian and New Zealand governments for market entry of new health products. In 1997 she completed an
MBA at Macquarie University. She has experience in R&D agreements, product development and commercialisation,
and licensing to third parties. She is currently a Director of Analytica Ltd, a Director of the CRC for Asthma Ltd,
Astravia Ltd and S.S.H. Medical Limited.




                                                                            PSIRON Ltd Annual Report 2002      3
Directors’ Report continued...



I   Mr. Ronald van der Pluijm: Managing Director (appointed 25 July 2002)
Mr van der Pluijm has a strong background in healthcare and commerce and has held senior roles in both large
multinational and smaller private companies. He was Manager Business Development, Australia, New Zealand,
Asia and Africa for 3M Pharmaceuticals; Manager, Business Planning and Development at Alphapharm Pty Ltd
and a senior executive of Sandoz (now Novartis). Areas of expertise include regional partnering agreements,
growth strategies and product portfolio development. In 1994 he completed his MBA in South Korea. He is
also Managing Director of Analytica Ltd.

I   Mr. Bryan Dulhunty: Executive Director (appointed 25 July 2002)
Mr Dulhunty is a Chartered Accountant with over 25 years experience in high growth listed entities in roles
covering CEO, CFO and Company Secretarial. His company CoSA Pty Ltd provides Company Secretarial and
Financial Services to a number of listed and non-listed biotechnology companies.

Principal Activities
The principal activities of the economic entity during the financial year were:
• as a pro-active portfolio manager of biotechnology and pharmaceutical assets;
• as an investment manager in health care businesses, such as Analytica Ltd and CBio Ltd;
• as a developer, manufacturer and marketer of diagnostics blood test kits (only part of the year as this
  business was sold).

Operating Results
The consolidated loss of the economic entity after providing for income tax and extraordinary items amounted
to $1,315,831. (2001: Loss of $3,455,250).

Dividends Paid or Recommended
No dividends were paid and the Directors did not recommend a dividend to be paid.

Review of operations
Review of operations
The principal activities of the Company in the last financial year have been the sale of the diagnostic business to
Analytica Ltd and the subsequent investment in that company, the investment in CBio Ltd, the implementation
of strategy for the further development of Sorafin, the review of other business opportunities and the completion
of a fully underwritten rights issue.

Sale of diagnostic business to Analytica and subsequent investment in Analytica
On 30 November 2001 the sale of the diagnostic business to Analytica Ltd for $1.6 million was approved
by Analytica shareholders. This sale was in line with the Company’s strategy of building assets and creating
shareholder value by selling them off. This transaction was intended to enhance the value of the diagnostic
business itself as it would allow it to fully concentrate on building that business.




    4   PSIRON Ltd Annual Report 2002
Directors’ Report continued...



The Company made a subsequent investment of $800,000 in Analytica Ltd and received just over 60% of the
outstanding capital on a fully diluted basis. In that way Psiron is able to continue to benefit from the development
of the diagnostic business. In addition, Psiron obtained access to the projects undertaken by Analytica Ltd. Of
main interest in the Analytica Ltd portfolio of projects is a potential new generation anti-inflammatory, sPLA2.
Psiron assumed board and management control of Analytica to help ensure the return on its investment.
During the last half of the financial year Analytica was restructured. This involved relocating the Melbourne office
to the same premises in Castle Hill as the Diagnostic business operation. In addition, all Analytica projects were
reviewed, the Hong Kong subsidiary was closed, and an aggressive growth strategy for the diagnostic business was
implemented. Analytica has turned the corner and the Board is confident that it will be a good performing business.

CBio Ltd
The Company made a $600,000 investment in CBio, which is developing chaperonin 10, a potential treatment
for autoimmune diseases such as multiple sclerosis and rheumatoid arthritis. CBio is an unlisted public company.
Other major stakeholders in the project are the University of Queensland and CSL. The project is currently in the
pre-clinical stage with phase I human clinical trials expected to start early next year.
The Company also negotiated the worldwide exclusive rights for all diagnostic applications for chaperonin 10.
We expect that a diagnostic test measuring the (re)-growth of tumours as well as a very early stage pregnancy
test could be developed. We expect a prototype diagnostic test in October this year. This test will then have to
be scaled up and taken into clinical trials prior to commercialisation.

Sorafin
During the year negotiations were conducted with pharmaceutical companies to out-license the Sorafin tech-
nology. Although there is strong interest in the concept we have been unable to come to an agreement with a
company as important basic development work, such as formulation, stability, dose ranging, toxicity, pharmacology
and efficacy/safety had not been completed or been done inadequately. When the Sorafin technology was
originally licensed from the inventors by the Company in 1994, the decision was made to enter directly into human
clinical trials, and basic development work was left incomplete.
Late last year the Company renegotiated the terms of the licence agreement with the original inventors (and
patent holders) of Sorafin, extending the Company’s rights to the technology beyond psoriasis to cover all and
any other disease applications. For that reason the Company has formulated a strategy to develop Sorafin for
atopic dermatitis (eczema) called Sorafin-AD, starting with the basic development work. Where possible the
basic development work will be done in parallel for both atopic dermatitis and psoriasis. Once this program is
under way, the Company will continue discussion with a number of smaller European companies, in order to co-
ordinate the development of the product by companies interested in smaller regional markets (rather than global).
The Company is considering the creation of a development syndicate for Sorafin in psoriasis and atopic dermatitis.
The Company owns two sets of patents relating to Sorafin: one “Topical Gold” which has been granted in all major
markets and “Synergistic Gold-containing compounds”. The second patent has now been granted in Australia
and Singapore and is in the national phase in other countries..




                                                                             PSIRON Ltd Annual Report 2002      5
Directors’ Report continued...



The Heart Research Institute Contract
In June 2000, the Company entered into an $2.7 million, 3 year research and development contract with the
Heart Research Institute Pty Ltd (HRI) to support the development of a diagnostic test for heart disease and
a further project for the development of a potential treatment of that disease.
Early last year a dispute arose about the contractual terms of the agreement. As a result, the parties entered a
mediation process, which was not successful. Subsequently, the HRI sought settlement of the matter by expert
determination which the Company challenged successfully in court. The outcome will now be determined in
court which will allow a broader review of our claims.
Psiron claims that the therapeutic project as described by the contract had never started and for that reason
monies paid for this project should be returned. In relation to the diagnostic project the Company has asked
the HRI to account for all monies spent on that project and monies paid in excess of actual expenditure should
be returned. In addition Psiron claims damages.

Rights issue
The Company completed a fully underwritten rights issue, raising $1.5 million.

New business Opportunities
The Board reviewed a number of substantial new project opportunities. However, the combination of failure to
meet due diligence criteria and time frames left the Company unable to proceed on these projects reviewed.

Corporate Structure
Psiron Ltd is a company limited by shares that is incorporated and domiciled in Australia. Psiron Ltd has prepared
a consolidated financial report incorporating the entities that it controlled during the financial year, being:
• Analytica Ltd – 60.2% and its subsidiaries, Graesser Pty Ltd - 100% owned subsidiary: Graesser manages
  a Research & Development syndicate joint venture undertaking research on PLA2 inhibitors and YL Brands
  Pty Ltd - 95% owned subsidiary: a non-trading subsidiary.
• Psiron also controls 100% of the following non-trading subsidiairies, MS Therapeutics Pty Ltd, Medical
  Innovations Ltd, Diagnostics Australia Pty Ltd, Medical Innovations (Ireland) Limited, Medical Innovations
  (America) Corporation.

Environmental Regulation And Performance
The diagnostic business of the controlled entity operates from a TGA approved manufacturing facility at Castle
Hill in Sydney, Australia. The Company must meet strict compliance guidelines to maintain its licence. Other
than this there are no environmental regulations required to be met by the Consolidated entity.

Significant changes in the state of affairs
The following significant changes in the state of affairs of the parent entity occurred during the financial year:
• On 30 November 2001 the Shareholders approved the sale of the Diagnostic Business to Analytica Ltd for
  $1.6 million and the subsequent investment in Analytica Ltd of $800,000 in return for 60.2% of the
  outstanding Analytica share capital (on a fully diluted basis).




  6   PSIRON Ltd Annual Report 2002
Directors’ Report continued...



• On 28 February 2002 the Company concluded a fully underwritten 2 for 3 rights issue at 6 cents, raising
  approximately $1.5 million before costs.
• In February 2002 the Company invested $600,000 in CBio Ltd, which is developing chaperonin 10 a potential
  treatment for autoimmune diseases such as multiple sclerosis and rheumatoid arthritis. The Company also
  acquired the worldwide exclusive rights for all diagnostic applications that result from its development
  program of chaperonin 10.
• On 14 November 2001 Mr. Paul Ralph resigned as a Director.

Matters subsequent to the end of the financial year
The controlled entity Analytica Ltd was successfully re-quoted on the Australian Stock Exchange on
11 September 2002.
The Company has executed a call option agreement with Mr. Robert Voges, Chairman and founder of
Vapotronics Inc., a company developing the next generation pharmaceutical drug inhalation technology. The
call option agreement gives Psiron the right to acquire all Vapotronics’ shares owned by Mr Voges, approximately
58% of the outstanding share capital, before the end of the year for a combination of shares and cash.
A second patent for Sorafin in Australia has been awarded. This patent has a wider scope than the original
patent and will also extend the patent life for Sorafin.
No other matters or circumstances have arisen since the end of the financial year, which significantly affected
or may significantly affect the operations of the economic entity, the results of those operations or the state of
affairs of the economic entity in subsequent financial years.

Likely developments
The Company is currently in discussions with Australian Biofund Investments Limited (an Hong Kong based
investment company) of which Mr Stephen Jones is Chairman to ensure that adequate funding will be available for
Psiron’s development programs.

Meetings of Directors
During the financial year, 14 meetings of directors were held. Attendance’s were:

                                        Directors Meetings Eligible to attend Directors Meeting attended
Current Directors
   Mr. Stephen Jones (Chairman)                           14                                    14
   Dr Wolf Hanisch                                        14                                    12
   Ms Julie Nutting                                       14                                    14
Retired Directors
   Mr. Paul Ralph                                          5                                     5
Mr Ron van Der Pluijm and Mr Bryan Dulhunty were appointed as Directors on 25 July 2002.

Committees
The Company does not have a formally constituted audit committee. The auditors report directly to the Board.




                                                                           PSIRON Ltd Annual Report 2002      7
Directors’ Report continued...



Directors’ and Executive Emoluments
The emoluments of each Director and each of the executive officers of the Consolidated Entity are as follows.

  Cash Benefits               Directors’ Fees     Consulting (1)       Salary       Superannuation       Total
  Current Directors
  Mr S Jones
    Psiron Ltd                   34,167               54,750                 -           2,733          91,650
    Analytica Ltd                17,500                9,000                 -           1,400          27,900
  Dr W Hanisch
    Psiron Ltd                   25,000               23,247                 -           2,000          50,247
    Analytica Ltd                14,583                5,344                 -           1,167          21,094
  Ms J Nutting
   Psiron Ltd                    20,312               48,240                 -           1,625          70,177
   Analytica Ltd                 10,416                3,780                 -             833          15,029
  Retired Directors
  Mr P Ralph
    Psiron Ltd                    10,128              18,400                 -             810          29,338
  Executive Officers
  Mr R van der Pluijm
    Psiron Ltd                          -                   -         159,306           12,745         172,051
    Analytica Ltd                       -                   -                -                -               -
  Mr Bryan Dulhunty
   Psiron Ltd                           -             115,864                -                 -       115,864
   Analytica Ltd                        -              45,850                -                 -        45,850
1. Consulting fees were paid directly to Directors or to companies associated with Directors

Non-Cash Benefits
The following options were issued to Executive Officers or entities associated with them during the year:

  Entity                                                   Quantity              Expiry date       Exercise Price
  Perfume Only Pty Ltd                          (1)         50,000            12 August 04            20 cents
  Perfume Only Pty Ltd                          (1)        250,000            12 August 04            40 cents
  Tiger Trust                                   (2)        500,000          6 December 06              6 cents
  Tiger Trust                                   (2)        500,000          6 December 06             12 cents
  Tiger Trust                                   (2)        500,000          6 December 06             18 cents
  DCFT Pty Ltd                                  (3)        500,000          6 December 06              6 cents
  DCFT Pty Ltd                                  (3)        500,000          6 December 06             12 cents
  DCFT Pty Ltd                                  (3)        500,000          6 December 06             18 cents




  8   PSIRON Ltd Annual Report 2002
Directors’ Report continued...



(1) Perfume Only is an entity associated with Ron van der Pluijm. The issue of these performance based options
    were approved at the 30 November 2001 Shareholder’s Meeting. The options were issued on his appointment
    as CEO.
(2) Tiger Trust is an entity associated with Ron van der Pluijm. The issue of these performance based options
    were approved at the 30 November 2001 Shareholder’s Meeting. The performance criteria has been met for
    the first two tranches of options. The 3rd tranche (options exercisable at 18 cents) related to improvements
    in profitability and net assets per share as at 30 June 2003.
(3) DFCT Pty Ltd is an entity associated with Bryan Dulhunty. The issue of these performance based options
    were approved at the 30 November 2001 Shareholder’s Meeting. The performance criteria has been meet
    for the first two tranches of options. The 3rd tranche (options exercisable at 18 cents) related to improvements
    in profitability and net assets per share as at 30 June 2003.

Directors’ Interests in Shares And Options at the Date of this Report
                                                       Shares                                 Options
Directors                                     Direct             Indirect            Direct           Indirect
Stephen Jones                                    -                    -                 -                -
Dr Wolf Hanisch                                  -                    -                 -                -
Julie Nutting                                    -                    -                 -                -
Ronald van der Pluijm                            -                    -                 -            1,300,000
Bryan Dulhunty                                   -                    -                 -            1,000,000

No other benefits were received by the Directors of the Company

Directors’ and Auditors’ Indemnification
The Company has not, during or since the end of the financial year, in respect of any person who is or has been
an officer or auditor of the Company or a related body corporate:
• indemnified or made any relevant agreement for indemnifying against a liability incurred as an officer,
  including costs and expenses in successfully defending legal proceedings; or
• paid or agreed to pay a premium in respect of a contract insuring against a liability incurred as an officer
  for the costs or expenses to defend legal proceedings.

Directors’ Interest and Benefits
No Director has since or during the financial year received or become entitled to receive a benefit (other than
a benefit included in the aggregate amount of emoluments received or due and receivable by Directors shown
in the accounts or received as the fixed salary of a full time employee of the economic entity) by reason of a
contract made with the Director, with a firm of which he is a member, or with an entity in which he has a substantial
financial interest by the Company of an entity that the Company controlled, or a body corporate that was related
to the company when the contract was made or when the Director received or became entitled to receive the benefit.
Signed in accordance with a resolution of the Directors made pursuant to Section 298 (2) of the Corporations
Act 2001


Stephen Jones
Chairman
Dated: 17th September 2002


                                                                             PSIRON Ltd Annual Report 2002       9
Corporate Governance Statement
For the year ended 30 June 2002


The Board is responsible for the Corporate Governance of the economic entity including the setting and the
monitoring of the objectives, goals and corporate direction. Due to the size of the economic entity, the Board
closely interacts with the management of the economic entity and has established adequate systems of internal
control, assesses, monitors and manages business risk, and ensures adherence to appropriate ethical standards.

Board of Directors
The constitution requires:
• not less than three nor more than ten directors at any one time;
• one third of the directors shall retire from office and be eligible for re-election at every general meeting;
• no share qualifications for a director.
When a vacancy exists, through whatever cause, or where it is considered that the Board would benefit from the
services of a new director with particular skills, the Board considers candidates with the appropriate expertise
and experience. The Board then appoints the most suitable person who shall hold office until the conclusion of
the following annual general meeting of the company and shall be eligible for election at such annual general
meeting.
Each director has the right to seek independent professional advice regarding material matters concerning the
Company at the Company's expense after notifying the Chairman.

Remuneration
The remuneration of the Directors is set and shall not be increased except by the Company in general meeting
when notice of the proposed increase shall have been given to members in the notice convening the meeting.
The Board receives and reviews recommendations on remuneration packages for executive Directors, senior
employees and Directors themselves. Remuneration levels are competitively set to attract and retain the most
qualified and experienced directors and senior employees.

Audit Committee
The Company does not have a formally constituted Audit Committee of the Board of Directors. The functions of
the Audit Committee, such as the establishment and maintenance of the framework of internal control and
appropriate ethical standards for the management of the economic entity, are undertaken by the Board.

Risk Identification and Management
The Board meets on a regular basis and as part of the ongoing review of performance, current and possible
future business risks are identified. Once a business risk is identified, appropriate action is planned and instigated by
the Board. The results of the action plan are constantly reviewed and corrective action is taken as required.

Ethical Standards
The Company recognises the need for Directors and employees to observe the highest standards of behaviour
and business ethics. Directors and officers are expected to act in accordance with the law and with the highest
standards of propriety.




 10    PSIRON Ltd Annual Report 2002
Statements of Financial Performance
for year ended 30 June 2002


                                                Note        Economic Entity                Parent Entity
                                                         2002           2001          2002            2001
                                                          $              $              $              $
Sales Revenue                                            1,003,911    1,069,122       386,854       1,069,122
Interest income
– other persons                                           105,893       153,988      299,362         153,988
Other                                                            -             -    1,214,846          1,639
Total Income                                            1,109,804     1,223,110     1,901,062      1,224,749

Cost of goods sold                                        463,351      434,578        154,740        434,578
Research and Development costs                             125,112     927,564               -       927,564
Write down of Intellectual Property                        75,000      900,000               -              -
Write down of Investment in Subsidiary                            -           -              -     1,000,000
Borrowing costs
– director related activities                               3,312         7,950         3,312          7,950
– other persons                                           179,897       177,300       179,897        177,300
Royalties Paid                                                   -       49,195              -        49,195
Amortisation of Intangibles                                      -       33,334              -              -
Amortisation of Leasehold improvements                     32,993        30,009        17,324         30,009
Depreciation                                               30,927        25,962        16,421         25,962
Employee and administration costs                       1,624,972     2,092,468     1,384,599      2,092,468
Total Expenses                                          2,535,564     4,678,360     1,756,293      4,745,026
Profit/(Loss) from ordinary activities
before income tax                                2     (1,425,760) (3,455,250)        144,769    (3,520,277)
Income tax expense                               3                -             -            -                -
Profit/(Loss) from ordinary activities
after income tax                                       (1,425,760) (3,455,250)        144,769    (3,520,277)
Loss attributable to outside equity interests              109,929           -               -             -
Profit/(Loss) attributable to
members of the parent entity                    21     (1,315,831) (3,455,250)        144,769    (3,520,277)
Decrease in Asset Revaluation Reserve           20                -   1,000,000              -                -

Total change in equity other than those
resulting from transactions with owners
as owners                                              (1,315,831) (2,455,250)        144,769    (3,520,277)

Basic earnings per share (cents per share) 6                  (2.9)        (9.4)
Diluted earnings per share (cents per share) 6                (2.6)        (7.4)
The accompanying notes form part of these financial statements.




                                                                              PSIRON Ltd Annual Report 2002   11
Statements of Financial Position
As at 30 June 2002


                                        Note         Economic Entity                 Parent Entity
                                                  2002              2001          2002          2001
                                                   $                 $              $            $
Current Assets
Cash assets                               7      1,310,071        2,787,736     1,304,680     2,787,736
R and D Security Deposit                  8     30,212,611                 -             -             -
Receivables                               9        947,362          293,596       658,172       293,596
Inventories                              10        211,747          145,642              -      145,642
Total Current Assets                           32,681,791     3,226,974         1,962,852     3,226,974
Non-Current Assets
Plant & equipment                        11       193,092           217,625        13,692       217,625
Receivables                               9        21,077            41,615     1,628,401        41,615
Investments                              12       600,000                  -    1,400,000              -
Intangible assets                        13     1,958,753                  -             -             -
Total Non-Current Assets                        2,772,922          259,240      3,042,093      259,240
Total Assets                                   35,454,713         3,486,214     5,004,945     3,486,214
Current Liabilities
Payables                                 14       530,430          478,955        124,478      478,955
Interest-bearing liabilities             15     2,280,000                 -     2,280,000             -
Provisions                               16       448,734          113,632        401,849      113,632
Provision for Put Option                 17     30,212,611                -              -            -
Total Current Liabilities                      33,471,775          592,587      2,806,327      592,587
Non Current liabilities
Payables                                 14       200,000                  -              -            -
Interest-bearing liabilities             15              -        2,280,000               -   2,280,000
Total Non Current Liabilities                     200,000     2,280,000                   -   2,280,000
Total Liabilities                              33,671,775     2,872,587         2,806,327     2,872,587

Net Assets                                      1,782,938          613,627      2,198,617      613,627
Equity
Parent Entity Interest
Contributed Equity                       19     12,213,686 10,773,465           12,213,686 10,773,465
Reserves                                 20               -            -                  -            -
Accumulated losses                       21    (11,475,669) (10,159,838)       (10,015,069) (10,159,838)
Outside Equity Interest
Contributed Equity                               1,154,850                 -              -            -
Reserves                                                  -                -              -            -
Accumulated losses                               (109,929)                 -              -            -
Total Equity                                    1,782,938          613,627      2,198,617      613,627

The accompanying notes form part of these financial statements.


 12    PSIRON Ltd Annual Report 2002
Statements of Cash Flows
for the year ended 30 June 2002


                                          Note       Economic Entity                  Parent Entity
                                                   2002             2001           2002           2001
                                                     $                $              $                $
Cash Flows from Operating Activities      27
Receipts from customers                              988,487       1,049,606        715,786     1,049,606
Payments to suppliers and employees              (2,593,858)      (3,174,476)   (1,661,523)    (3,174,476)
Interest received                                    105,893          166,212       197,068        166,212
Borrowing costs and interest                       (204,671)       (185,250)      (169,900)     (185,250)
Net cash (used in) operating activities          (1,704,149)   (2,143,908)        (918,569)    (2,143,908)

Cash Flows from Investing Activities
Investment in controlled entity                            -                -     (300,000)              -
Investment in non-listed entity                   (600,000)                 -     (600,000)              -
Payments for property, plant and equipment          (16,353)       (229,429)              -     (229,429)
Loan to controlled entity                                  -                -     (507,324)              -
Refund of Security deposit                                 -          11,245              -        11,245
Net cash (used in) investing activities            (616,353)       (218,184)    (1,407,324)      (218,184)

Cash Flows from Financing Activities
Proceeds from Share Issue                           842,837       3,045,000        842,837      3,045,000
Net cash (used in) financing activities             842,837       3,045,000        842,837      3,045,000

Net (decrease)/increase in cash held             (1,477,665)         682,908    (1,483,056)      682,908
Cash at the beginning of the year                 2,787,736        2,104,828      2,787,736     2,104,828
Cash at the end of the year                  7    1,310,071       2,787,736       1,304,680     2,787,736
The accompanying notes form part of these financial statements.




                                                                          PSIRON Ltd Annual Report 2002   13
Notes to the Financial Statements
For the year ended 30 June 2002


1. Summary of Significant Accounting Policies
The financial report is a general purpose financial report that has been prepared in accordance with Accounting
Standards and other mandatory professional reporting requirements and the Corporations Act 2001. The financial
report has been prepared on an accrual basis and is based on historical costs and does not take into account
changing money values or, except where stated, current valuations of non-current assets.
Cost is based on the fair values of the consideration given in exchange for assets. The accounting policies have
been consistently applied, unless otherwise stated.
The following is a summary of the material accounting policies adopted by the economic entity in the preparation
of the financial report.
The financial report covers the economic entity of Psiron Ltd and controlled entities, and Psiron Ltd as an
individual parent entity. Psiron is a listed public company, incorporated and domiciled in Australia.

a) Principles of Consolidation
A controlled entity is any entity controlled by Psiron Ltd. Control exists where Psiron Ltd has the capacity to
dominate the decision making in relation to the financial and operating policies of another entity so that the
other entity operates with Psiron Ltd to achieve the objectives of Psiron Ltd.
All inter-company balances and transactions between entities in the economic entity, including any unrealised
profits or losses, have been eliminated on consolidation.
Where controlled entities have entered or left the economic entity during the year, their operating results were
included from the date control was obtained or until the date control ceased.
Outside interests in the equity and results of controlled entities are shown as a separate item in the consolidated
financial report.

b) Income Tax
The economic entity adopts the liability method of tax-effect accounting whereby the income tax expense is based
on the profit from ordinary activities adjusted for any permanent differences.
Timing differences, arising due to the different accounting periods in which items of revenue and expense are
included in the determination of accounting profit and taxable income, are brought to account as either a provision
for deferred income tax or an asset described as future income tax benefit at the rate of income tax applicable
to the period when the benefit will be received or the liability will become payable.
Future income tax benefits are not brought to account unless realisation of the asset is assured beyond reasonable
doubt. Future income tax benefits in relation to tax losses are not brought to account unless there is virtual
certainty of realisation of the benefit.
The amount of benefits brought to account or which may be realised in the future is based on the assumption
that no adverse change will occur in income taxation legislation and anticipates the economic entity will derive
sufficient future assessable income enabling the benefit to be realised and comply with the conditions of
deductibility imposed by the law.

c) Inventories
Inventories are measured at the lower of cost and net realisable value. The cost of manufactured products includes
direct materials, direct labour and an appropriate portion of variable and fixed overheads. Overheads are applied
on the basis of normal operating capacity. Costs are assigned on the basis of weighted average costs.




 14    PSIRON Ltd Annual Report 2002
Notes to the Financial Statements continued...




d) Property, Plant and Equipment
Each class of property, plant and equipment is carried at cost or fair value less, where applicable, any accumulated
depreciation.
The carrying amount of property, plant and equipment is reviewed annually by directors to ensure it is not in
excess of the recoverable amount from these assets. The recoverable amount is assessed on the basis of the
expected net cash flows, received from the assets' employment and subsequent disposal. The expected net cash
flows were not discounted to their present values in determining recoverable amounts.
The depreciable amount of all fixed assets is depreciated on a straight-line basis over their useful lives to the
economic entity commencing from the time the asset is held ready for use. Leasehold improvements are amortised
over the shorter of either the unexpired period of the lease or the estimated useful lives of the improvements.
The depreciation rates for each class of depreciable assets are:

  Class of Fixed Asset                                                               Depreciation Rate
  Leasehold Improvements                                                                      20%
  Plant & Equipment                                                                      20 – 40%


e) Other Financial Assets

Non-current investments
Non-current investments are carried at cost or at directors' valuation. The carrying amount of investments is
reviewed annually by directors to ensure it is not in excess of the recoverable amount of these investments. The
recoverable amount is assessed from the underlying net assets of non-listed investments. The expected net cash
flows from investments were not discounted to their present value in determining the recoverable amounts.

Research and Development Expenditure
Research and development costs are charged to profit from ordinary activities before income tax as incurred or
deferred where it is expected beyond any reasonable doubt that sufficient future benefits will be derived so as
to recover those deferred costs.

f) Intangibles

Patents and Trademarks
Patents and trademarks are valued in the accounts at cost of acquisition and amortised over the period of
expected realisation of their benefits.

Intellectual Property
Intellectual Property has been brought to account at Directors' valuation less a discount on acquisition arising
from the purchase of a controlling interest in Analytica Ltd. The valuation was based on the expected net cash
flows received from the assets employment. The expected net cash flows have been discounted to their present
values. No capital gains tax has been taken into account in determining revalued amounts. Amortisation of
Intellectual Property commences in the year following valuation.




                                                                            PSIRON Ltd Annual Report 2002      15
Notes to the Financial Statements continued...



g) Foreign Currency Transactions and Balances
Foreign currency transactions during the year are converted to Australian currency at the rates of exchange
applicable at the dates of the transactions. Amounts receivable and payable in foreign currencies at balance date
are converted at the rates of exchange ruling at that date.
The gains and losses from conversions of short-term assets and liabilities, whether realised or unrealised, are
included in operating profit before income tax as they arise.

h) Employee Entitlements
Provision is made for the economic entity's liability for employee entitlements arising from services rendered by
employees to balance date. Employee entitlements expected to be settled within one year together with entitle-
ments arising from wages and salaries, annual leave and sick leave which will be settled after one year, have
been measured at their nominal amount. Other employee entitlements payable later than one year have been
measured at the present value of the estimated future cash outflows to be made for those entitlements.
Contributions are made by the economic entity to employee superannuation funds and charged as expenses
when incurred.
The company operates an employee share scheme. Profits and losses incurred by employees, being the difference
between the market value and the purchase price of the underlying share, are not recorded by the Company as
remuneration paid to employees.

i) Cash
For the purposes of the statement of cash flows, cash includes:
• cash at call and at call deposits with banks or financial institutions, net of bank overdrafts
• investments in money market instruments with less than 14 days to maturity.

j) Comparative Figures
Where required by Accounting Standards, comparative figures have been adjusted to conform with changes in
presentation for the current financial year.

k) Revenue
Revenue from the provision of services or the sale of goods is recognised upon the delivery of the services and
goods to customers. All revenue is stated net of the amount of goods and services tax (GST).
Interest revenue is recognised on a proportional basis taking into account the interest rates applicable to the
financial assets.

l) Going Concern
Refer to comments in Note 29.




 16    PSIRON Ltd Annual Report 2002
Notes to the Financial Statements continued...




                                                          Economic Entity                  Parent Entity
                                                        2002            2001            2002           2001
                                                         $                $              $               $

2. Loss from Ordinary Activities
The following significant revenue and expense
items are relevant in explaining the financial
performance
Sale of Diagnostic Business                                   -              -        1,214,846               -
Write-down of Intellectual Property                     75,000        900,000                  -              -
Write-down of investment in subsidiaries                      -              -                 -     1,000,000
Research project funding                                      -       927,564                  -       927,564
Payments arising on termination of former directors           -       234,275                  -       234,275
Success fee on capital raising payable to a
director related entity                                        -       150,000                  -      150,000

3. Income Tax
The prima facie tax on the loss from ordinary
activities before income tax is reconciled to
the income tax as follows:
Prima facie tax payable on loss from ordinary
activities before income tax at 30%
(2001 34%)                                            (427,728)     (1,174,785)          43,431     (1,196,893)
Add Tax effect of:
– non deductible write down of intellectual
  property                                              22,500        306,000                 -               -
– non deductible write down of subsidiaries                   -              -                -        340,000
– other non deductible expenses                               -        14,700                 -          2,808
Less adjustment for change of tax rate to 30%                 -       100,480                 -        100,480
Future Income tax benefit not recognised               405,228        753,605                 -        753,605
Prior year tax losses recouped                                -              -         (43,431)               -
Income tax benefit attributable to loss from
ordinary activities before income tax                          -               -                -               -
The Directors estimate the potential future income tax benefit at 30 June 2002 in respect of tax-losses not
brought to account for the economic entity is $6,222,391 and for the parent entity $3,248,378.
This benefit for tax losses will only be obtained if:
i) the economic entity derives future assessable income of a nature and of an amount sufficient to enable
     the benefit from deductions for the losses to be realised;
ii) the economic entity continues to comply with the conditions for deductibility imposed by tax legislation; and
iii) no changes in tax legislation adversely affect the economic entity in realising the benefit from the deductions
     for the losses.

Franking Account
Balance of franking account at year end                        -               -                -               -



                                                                            PSIRON Ltd Annual Report 2002      17
Notes to the Financial Statements continued...




                                                          Economic Entity                   Parent Entity
                                                       2002            2001             2002             2001
                                                        $               $                 $               $
4. Remuneration and Retirement Benefits
a) Directors Remuneration
Total remuneration received or due and receivable by Directors including executive directors directly or indirectly,
from the parent entity or from any related corporation.
                                                     639,201         594,647           241,413       594,647
Number of parent entity Directors whose income from the parent entity and any related parties was within the
following bands:
$10,000 - $19,999                                         -              1             -             1
$20,000 - $29,999                                        1               3            1              3
$40,000 - $49,999                                         -              1             -             1
$50,000 - $59,999                                         -               -           1               -
$70,000 - $79,999                                        1                -           1               -
$80,000 - $89,999                                        1                -            -              -
$90,000 - $99,999                                         -              1            1              1
$110,000 - $119,999                                      1               2             -             2
$140,000 - $149,999                                       -              1             -             1
$160,000 - $169,999                                      1                -            -              -
$170,000 - $179,999                                      1                -            -              -
The names of the Directors in office at 30 June 2002 are:
Mr Stephen Jones, Non-Executive Chairman (appointed 21 November 2000)
Dr Wolf Hanisch, Non-Executive Director (appointed 21 November 2000)
Ms Julie Nutting, Non-Executive Director (appointed 21 November 2000)
Mr Ronald van der Pluijm (Managing Director of the controlled entity Analytica Ltd)
Mr Bryan Dulhunty (Executive Director of the controlled entity Analytica Ltd)
The names of the people who are not Directors at 30 June 2002 but held office during the year are:
Mr. Paul Ralph, Non-Executive Director

b) Executive Remuneration
Total remuneration received or due and receivable by executives officers of the parent and economic entity
from the parent entity, entities in the economic entity and any related entities for the management of the affairs of
the economic entity, whose remuneration is $100,000 or more whose incomes from the parent entity and any
related parties was within the following bands:
                                                     333,765          591,589         287,915        591,589
Number of executives whose income was within the following bands:
$100,000 - $109,999                                     -                     1                -             1
$110,000 - $119,999                                     -                      -              1               -
$160,000 - $169,999                                    1                       -               -              -
$170,000 - $179,999                                    1                       -              1               -
$210,000 - $219,999                                     -                     1                -             1
$260,000 - $269,999                                     -                     1                -             1



 18    PSIRON Ltd Annual Report 2002
Notes to the Financial Statements continued...




                                                        Economic Entity                   Parent Entity
                                                      2002           2001           2002            2001
                                                       $              $               $              $
5. Auditors Remuneration
Remuneration of the auditor of the parent entity
– auditing and reviewing the financial reports         36,709         29,900         17,959         29,900
– other services                                        2,750               -         6,421               -
                                                       39,459         29,900         24,380         29,900

6. Earnings per share
Basic earnings per share                            (2.9 cents)    (9.4 cents)
Diluted earnings per share                          (2.6 cents)    (7.4 cents)
Income and share data used in the
calculations of basic and diluted
earnings per share
Net Loss                                           (1,315,831)    (3,455,250)
Weighted average number of ordinary
shares on issue in the calculation of
basis earnings per share                           45,819,450     36,729,888
Effect of dilutive securities
Adjusted weighted average number of
Ordinary shares used in calculating
diluted earnings per share                         51,216,117     46,629,554

7. Cash Assets
Cash at Bank                                         410,071         787,736        404,680       787,736
Short-Term Investments                               900,000       2,000,000        900,000     2,000,000
                                                    1,310,071      2,787,736      1,304,680      2,787,736

8. Security Deposit
R & D Security Deposit                             30,212,611                -              -               -


These funds are on deposit with Bankers Trust Australia Ltd. The deposit funds are subject to a mortgage in
favour of the members of a Research and Development Syndicate (“the Investors”) who have entered into various
agreements with Graesser Pty Ltd (“the Researcher”) a controlled entity of Analytica Ltd to undertake research
under a joint venture known as the PLA2 Inhibitors Joint Venture (“PLA2JV”).
The Investors also hold a Put Option under which they may require the Researcher to purchase from them their
interest in PLA2JV for a sum equal to the amount of the funds in the Security Deposit Account. Accordingly,
these funds are presently not available to Analytica Ltd or its controlled entities (“Analytica Group”) and if the
Put Options are exercised by the Investors they will not become available to the Group at all, but will be paid
to the Investors. In that event the Analytica Group will acquire the interest of the Investors in the PLA2JV.
The Syndicate must be wound up by 30 August 2003. The Investors have indicated that they will exercise the
put option and have requested that the Syndicate be wound up. At the date of this report the Syndicate is in
the process of being wound up. It is expected that this process will be complete prior to 31 December 2002 and
all funds on deposit will be paid to the Investors (refer Note 17).

                                                                            PSIRON Ltd Annual Report 2002       19
Notes to the Financial Statements continued...




                                                     Economic Entity                  Parent Entity
                                                   2002           2001           2002           2001
                                                    $              $               $             $
9. Receivables
Current
Trade debtors                                    232,507         225,470               -      225,470
Other receivables                                714,855          68,126        658,172        68,126
                                                 947,362         293,596        658,172       293,596
Non-Current
Loan to subsidiary                                       -               -    1,607,324               -
Other receivables                                  21,077          41,615        21,077         41,615
                                                   21,077          41,615     1,628,401         41,615

10. Inventories
Inventories at cost
– Raw materials                                  162,535          99,888                -      99,888
– Work in Progress                                34,042          30,454                -      30,454
– Finished Goods                                   15,171         15,300                -      15,300
                                                  211,747        145,642                -     145,642

11. Plant and Equiptment
Plant & Equipment - at Cost                       132,515        210,782          34,248       210,782
Less: Accumulated Depreciation                   (59,237)      (143,200)        (20,556)     (143,200)
                                                   73,278         67,582         13,692        67,582
Leasehold Improvements - at Cost                 135,482        180,052                 -     180,052
Less: Accumulated Amortisation                   (15,668)       (30,009)                -     (30,009)
                                                  119,814        150,043                -     150,043
Total Property, Plant & Equipment                193,092         217,625         13,692        217,625
Reconciliation
Reconciliation of the carrying amounts at the beginning and end of the current and previous financial year
Plant, equipment at cost
Carrying amounts at beginning                      67,582         44,167          67,582        44,167
Additions                                          38,417         49,377                -       49,377
Disposals at WDV                                   (1,793)              -       (37,469)               -
Depreciation expense                             (30,927)       (25,962)        (16,421)      (25,962)
Balance at end of year                             73,278         67,582         13,692         67,582
Leasehold Improvements at cost
Carrying amounts at beginning                    150,043            7,469       150,043           7,469
Additions                                           2,764       180,052                 -     180,052
Disposals at WDV                                         -        (7,469)      (132,719)        (7,469)
Amortisation expense                             (32,993)       (30,009)         (17,324)     (30,009)
Balance at end of year                            119,814       150,043                 -     150,043




 20    PSIRON Ltd Annual Report 2002
Notes to the Financial Statements continued...




                                                                     Economic Entity                           Parent Entity
                                                                  2002                2001                 2002                2001
                                                                   $                   $                     $                  $
12.Investments at cost
Investment in controlled entity                                         -                       -        800,000                      -
Investment in unlisted entity                                    600,000                        -        600,000                      -
                                                                 600,000                        -      1,400,000                      -
The directors have reviewed the carrying
value of the investment in the unlisted entity
(CBio Ltd) and believe it is fairly valued.

13. Intangibles
Intellectual Property
– at Directors valuation                                       1,958,753                        -                   -                 -
less Accumulated amortisation                                           -                       -                   -                 -
                                                               1,958,753                        -                   -                 -
Intellectual Property is comprised of sPLA2
less discount on acquisition

14. Payables
Current
Trade creditors                                                  293,423              478,955               87,471          478,955
Amounts due to administrator                                     200,000                     -                    -                -
Other unsecured                                                   37,007                     -              37,007                 -
                                                                 530,430              478,955             124,478           478,955
Non-current
Amounts due to administrator                                     200,000                        -                   -                 -
                                                                 200,000                        -                   -                 -

15. Interest-Bearing Liabilities
Convertible Notes:
Current
Other Persons
– maturing 11 July 2002                                (a)       180,000                        -        180,000                      -
– maturing 30 November 2002                            (b)     2,100,000                        -      2,100,000                      -
                                                               2,280,000                        -      2,280,000                      -
Non Current
Other Persons
– maturing 11 July 2002                                (a)                 -         180,000                        -      180,000
– maturing 30 November 2002                            (b)                 -       2,000,000                        -    2,000,000
Director
– maturing 30 November 2002                            (c)                 -          100,000                       -       100,000
Total Non- current                                                         -       2,280,000                        -    2,280,000
a) They carry the right to convert at the higher of 50 cents per share and 10% discount to the prevailing market price at maturity. The notes
   were repaid on 11 July 2002
b) 4 Notes of $500,000, each paying 7.95% per annum maturing on 30 November 2002. Interest is payable monthly. The Notes carry
   the right to convert to ordinary shares at 45 cents per share or redeemed for cash on 30 November 2002.
c) 1 Note of $100,000 paying 7.95% per annum, maturing 30 November 2002. Interest is payable annually. The Note carries the right to
   convert to ordinary shares at 45 cents per share or redeemed for cash on 30 November 2002. This Note was issued to an entity associated
   with Mr P Ralph before his appointment as a director, for services rendered. Mr P Ralph resigned as a director on 14 November 2001.


                                                                                             PSIRON Ltd Annual Report 2002             21
Notes to the Financial Statements continued...




                                                      Economic Entity               Parent Entity
                                                    2002         2001          2002           2001
                                                     $            $              $             $
16. Provisions
Employee entitlements                               79,611         76,132       47,726         76,132
Litigation                                         300,000               -     300,000               -
Other                                               69,123         37,500       54,123         37,500
                                                   448,734        113,632       401,849       113,632
At 30 June 2002 excluding directors the
Company had 7 employees (2001: 10 )

17. Provision for Put Option
Provision for put option exercise                30,212,611              -             -             -

18. Capital and Leasing
    Commitments
Operating Lease commitments
Non-cancellable operating lease contracted
for but not capitalised in the financial
statements payable
– not later than 1 year                              70,845        70,845              -       70,845
– later than 1 year but not later than 2 years      141,690       212,535              -      212,535
                                                    212,535       283,380              -     283,380
                                                    2002         2001         Number         Number
                                                      $           $            2002           2001
19. Contributed Equity
Ordinary shares                            (a) 12,213,686      10,773,465    62,487,228    37,488,641
Listed Options                             (b)                               12,491,482              -
Unlisted Options
– Employee                                 (c)                               1,170,000      3,130,000
– Other                                    (d)                               5,450,000      2,150,000
(a) Ordinary shares
At the beginning of the reporting period         10,773,465     6,918,465    37,488,641 33,373,802
Shares Issued during the year
– 2 for 3 rights issued on 28 February 2002       1,499,599              -   24,993,316              -
– rights issue costs                                (60,010)             -             -             -
– exercise of 12 cent 31 December 02
  options                                               632              -        5,270              -
– 964,839 shares at 83.95 cents each
  on 11 July 2000                                          -      810,000              -     964,839
– 3,000,000 shares at $1.00 each on
  28 September 2000                                        -    3,000,000              -   3,000,000
– 150,000 employee share options
  exercised at 30 cents on various dates.                  -       45,000              -     150,000
At the end of the reporting period               12,213,686    10,773,465    62,487,227    37,488,641


 22    PSIRON Ltd Annual Report 2002
Notes to the Financial Statements continued...




                                                                    Economic Entity                        Parent Entity
                                                                 2002               2001             Number           Number
                                                                   $                  $               2002             2001
19. Contributed Equity (continued)
a) Ordinary shares (continued)
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to
the number of shares held. At shareholders 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.
b) Listed Options
Exercise Price 12 cents
Expiry Date 31 December 2002
At the beginning of the reporting period                                                                  -                    -
Options Issued during the year at no cost                                                       12,496,752                     -
Options exercised during the year                                                                   (5,270)                    -
Number at the end of the reporting period                                                       12,491,482                     -

(c) Unlisted Options - Employee share scheme
Movements in options issued under the employee
share scheme during the year
Number at the beginning of the reporting period                                                   3,130,000        3,260,000
– Issued                                                                                                   -           40,000
– Exercised                                                                                                -       (150,000)
– Lapsed                                                                                        (1,960,000)          (20,000)
Number at the end of the reporting period                                                         1,170,000        3,130,000

  Employee share scheme                            Number of                First                   Expiry                Exercise
  options – Date issued                             options             exercise date                date                  Price
  31 August 1999                                      150,000           31 August 02          30 August 09                 25 cents
  21 October 1999                                   1,000,000           31 August 02          21 October 09                44 cents
  18 April 2001                                        20,000             18 April 04            18 April 11               35 cents
Total on issue                                      1,170,000

The options are issued on the following terms
(i)    the options have a maximum life of ten years from the time they are granted. Options are exercisable after a minimum period of
       four years but may be exercised earlier if special conditions are met.
(ii) each option entitles the participant to acquire an unissued ordinary share in the company.
(iii) allocations of options will be limited to 10% of issued shares in the Company.
(iv) the exercise price of all options except those issued on 21 October 1999 is the market value at the date of grant. The exercise
       price of the options issued on 21 October 1999 is 120% of the market value at that date. Market value is the average market
       price of shares five trading days prior to issue.
(v) options are unlisted and are not transferable.
(vi) options not exercised within the prescribed period will lapse.
(vii) each option has no voting or dividend rights.
(viii) upon the exercise of the options, a participant will be entitled to receive any bonus issue shares which would have been received
       had the participant been a shareholder at the time of the bonus issue made pro-rata to other shareholders. Also, where the
       Company raises capital by way of a pro-rata rights issue to shareholders, there is a proportional adjustment made to the options
       price issue in such cases.
(ix) All full time employees for at least twelve months are eligible employees.




                                                                                         PSIRON Ltd Annual Report 2002             23
Notes to the Financial Statements continued...




                                                                    Economic Entity                      Parent Entity
                                                                   2002            2001           Number           Number
                                                                     $               $             2002             2001
19. Contributed Equity (continued)
d) Other unlisted options issued
Movements in options issued during the year
Number at the beginning of the reporting period                                                  2,150,000         300,000
– Issued                                                                                         3,300,000       1,850,000
Number at the end of the reporting period                                                        5,450,000        2,150,000


                                                                           Number of                 Expiry              Exercise
                                                                            options                   date                Price
Issued during the year
Perfume Only Pty Ltd                                         (1)              50,000              12 August 04           20 cents
Perfume Only Pty Ltd                                         (1)             250,000              12 August 04           40 cents
Tiger Trust                                                  (2)             500,000            6 December 06             6 cents
Tiger Trust                                                  (2)             500,000            6 December 06            12 cents
Tiger Trust                                                  (2)             500,000            6 December 06            18 cents
DCFT Pty Ltd                                                 (3)             500,000            6 December 06             6 cents
DCFT Pty Ltd                                                 (3)             500,000            6 December 06            12 cents
DCFT Pty Ltd                                                 (3)             500,000            6 December 06            18 cents
Issued in prior years
Colorado Investments Pty Ltd                                 (4)             300,000          30 August 02               20 cents
Heart Research Institute                                                     200,000             15 June 03              50 cents
Sir James Killen                                                             250,000        27 November 05               40 cents
Colorado Investments Pty Ltd                                 (4)             500,000        27 November 05                 $1.00
Colorado Investments Pty Ltd                                 (4)             500,000        27 November 05                 $1.50
Mr Richard Thomas                                                            200,000            15 April 04              50 cents
Mr Ralph Papandrea                                                           200,000            15 April 04              50 cents

1) Perfume Only is an entity associated with Ron van der Pluijm. The issue of these options were approved at the 30 November 2001
   Shareholders’ Meeting. The options were issued on his appointment as CEO.
2) Tiger Trust is an entity associated with Ron van der Pluijm. The issue of these performance based options were approved at the
   30 November 2001 Shareholders’ Meeting. The performance criteria has been met for the first two tranches of options. The 3rd
   tranche (options exercisable at 18 cents) related to improvements in profitability and net assets per share as at 30 June 2003.
3) DFCT Pty Ltd is an entity associated with Bryan Dulhunty. The issue of these performance based options were approved at the
   30 November 2001 Shareholders’ Meeting. The performance criteria has been met for the first two tranches of options. The 3rd
   tranche (options exercisable at 18 cents) related to improvements in profitability and net assets per share as at 30 June 2003.
4) The options were issued to an entity associated with Mr. Paul Ralph prior to his appointment as a director and in compensation
   for services rendered. Mr P Ralph resigned as a director on 14 November 2001.
  The following terms and conditions apply to all options issued:
  (a) options issued entitle the holder to acquire an unissued ordinary share in the company.
  (b) the options are unlisted and not transferable.
  (c) options not exercised in the prescribed period will lapse.
  (d) each option has no voting or dividend rights.




  24    PSIRON Ltd Annual Report 2002
Notes to the Financial Statements continued...




                                                          Economic Entity                      Parent Entity
                                                      2002              2001             2002              2001
                                                       $                 $                 $                $

20. Reserves
Asset Revaluation Reserve
Opening Balance                                                -       1,000,000                   -                -
Write back of prior year revaluation                           -     (1,000,000)                   -                -
Closing Balance                                                -                -                  -                -

21. Accumulated Losses
Accumulated losses at the
beginning of the year                             (10,159,838)       (7,704,588) (10,159,838) (6,639,561)
Loss for the year                                   (1,315,831)      (3,455,250)      144,769 (3,520,277)
Transfer from asset revaluation reserve                       -        1,000,000             -           -
Accumulated losses at the end of the year         (11,475,669)      (10,159,838) (10,015,069) (10,159,838)

22. Contingent Liabilities
The Company is currently in litigation with the Heart Research Institute (Heart Research Institute Limited [HRI]
and Heart Research Developments Pty Limited [HRD]).
In June 2000, the Company entered into an agreement with the Heart Research Institute to support the develop-
ment of a diagnostic test for heart disease and a further project for the development of a potential treatment of
that disease. On 12 February 2001 Psiron gave HRI notice of termination of the diagnostic project. The full
therapeutic study was not commenced. A legal dispute has arisen concerning the obligations of the parties
under the research contract, including the quantum of any payment outstanding to the HRI.
The Heart Research Institute Limited is claiming $556,887 with respect to the diagnostic project and Heart
Research Developments Pty Limited is claiming $212,542 with respect to the therapeutic project plus interest
and costs. Total HRI claim: $769,429 plus interest and costs.
Psiron is defending this claim and cross-claiming a refund of $119,350 and an account of the expenditure by
the HRI of the amounts paid for the diagnostic project, being $494,997, with interests on outstanding amounts
due and costs. Psiron is also claiming damages. Total Psiron claim: minimum of $119,350 plus up to $494,997
plus damages, interest and costs. Based on advice from its legal advisors Psiron directors believe the HRI claim
has no merit.

23. Related Parties
Transactions between related parties are on normal commercial terms and conditions no more favourable than
those available to other parties unless otherwise stated.
Transactions with related parties:

a) Share Transactions of Directors
As at the reporting date, Australian Technology Innovation Fund Ltd (ATIF) a company of which Mr Stephen
Jones and Dr Wolf Hanisch are directors held 9,956,396 ordinary shares and 4,978,198 listed 31 December 2002
12 cent options. No other director or director related entity either directly, indirectly or beneficially held any equity
interests in the parent entity or economic entity. At the 2001 reporting date Mr Paul Ralph was a Director and held
either directly, indirectly or beneficially 180,250 ordinary shares and 1,300,000 options. Mr Paul Ralph resigned
as a director on 14 November 2001.


                                                                               PSIRON Ltd Annual Report 2002        25
Notes to the Financial Statements continued...




b) Convertible Notes
As at the reporting date Directors and director-related entities did not hold directly indirectly or beneficially
any interest in convertible notes of the parent entity. At the 2001 reporting date Mr Paul Ralph was a director
and held either directly, indirectly or beneficially one convertible note of the value of $100,000. The Note carries
the right to convert to ordinary shares at 45 cents per share or redeemed for cash on 30 November 2002.
Terms of this note are detailed in Note 15. Mr Paul Ralph resigned as a director on 14 November 2001.

c) Other transactions with directors
Directors receive a fixed director’s fee. If any director performs additional services for the economic entity they are
paid a fee based on normal commercial terms. These payments are detailed in the Directors’ Report.
In addition in the year ended 30 June 2001 Mr. Paul Ralph whilst a director was paid $150,000 as a success fee
for the raising of $3,000,000 in share capital.

d) Transactions with director related entities
Investment in CBio Ltd: During the year the Company made an investment in CBio Ltd a company of which Mr
Stephen Jones and Dr Wolf Hanisch are directors. These directors excluded themselves from the decision to
make this investment. (refer Note 12)
Australian Technology Innovation Fund Ltd (ATIF) receivable: During the year the Company entered into an under-
writing agreement with ATIF a company of which Mr Stephen Jones and Dr Wolf Hanisch are directors. Under the
terms of this agreement ATIF was required to take up any shortfall in the prospectus. Payment for the shortfall and
receivable as at 30 June 2002 is required by 31 December 2002. The shortfall and receivable at 30 June 2002
amounted to $597,384. (refer Note 9)

24. Segment Information
                                   Manufacture and
                                    distribution of              Research and
    Industry Segment               medical products              Development                     Consolidated
                                  2002          2001          2002           2001           2002            2001
                                   $             $              $             $               $              $
Operating revenue
Sales to customers             1,003,911     1,069,122                -              -     1,003,911      1,069,122
Other                              9,230              -         96,663        153,987        105,893        153,987
Total Revenue                  1,013,141     1,069,122          96,663        153,987      1,109,804      1,223,109
Expenses
Operating expenses            (686,300)       (921,915)    (1,649,152) (1,828,876) (2,335,452) (2,750,791)
Significant items
– write down of IP                     -              -       (75,000) (1,000,000)     (75,000) (1,000,000)
– R and D costs                (125,112)              -              - (927,564)      (125,112) (927,564)
Total Expenses                 (811,412)      (921,915)    (1,724,152) (3,756,440) (2,535,564) (4,678,355)
Segment Result                  201,729        147,207     (1,627,489) (3,602,453) (1,425,760) (3,455,246)
Segment Assets                  623,841        845,511 34,830,872          2,640,703 35,454,713 3,486,214
Segment Liabilities             138,116        127,038 33,533,659          2,745,549 33,671,775 2,872,587
Ordinary operating
expenses are after
charging Depreciation
and Amortisation                  48,541        45,659          15,379         43,646         63,920         89,305
Assets acquired                    41,181             -               -              -         41,181              -

 26    PSIRON Ltd Annual Report 2002
Notes to the Financial Statements continued...




24. Segment Information (continued)
The economic entity derived income during the year ended 30 June 2002 from:
• The manufacture and distribution of medical products.
• Income from investment of surplus funds to support the economic entity's biotechnology, medical research
  and development programs.

Geographical Segment
The activities of the Company take place principally on the east coast of Australia.

25. Financial Instruments
The economic entity’s exposure to interest rate risk that a financial instrument’s value will fluctuate as a result of
changes in market interest rates and the effective weighted average interest rates on those financial assets and
financial liabilities, is as follows:

                                                          Weighted average                   Economic Entity
                                                        effective interest rate
                                                        2002            2001            2002            2001
                                                         $               $                $               $
FINANCIAL ASSETS:
Floating Interest rate
– Cash at bank                                          4.05            5.00           1,310,071     2,787,736
Non Interest Bearing
– Receivables                                                -               -          947,362        293,596
Total Financial assets                                                                2,257,433      3,081,332
FINANCIAL LlABILITIES:
Fixed Interest rates maturing within 1 year
– Convertible Notes                                     9.00            9.00            180,000                  -
– Convertible Notes                                     7.95            7.95          2,100,000                  -
Fixed Interest rates maturing 1 to 5 years
– Convertible Notes                                          -          9.00                    -      180,000
– Convertible Notes                                          -          7.95                    -    2,100,000
Non Interest
– Trade and Sundry creditors                                 -               -         730,430         478,955
Total Financial Liabilities                                                           3,010,430      2,758,955

Credit Risk: The economic entity has a sole Australian distributor for its subsidiary’s medical products.
Net fair value: All financial assets and liabilities are shown at their net fair value.




                                                                                 PSIRON Ltd Annual Report 2002       27
Notes to the Financial Statements continued...




26. Controlled Entities
                                                                                       Contributions to
                                          Country                                      Economic Entity
    Name                                  of Incorp          % Owned                Operating Profit/(Loss)
                                                         2002         2001           2002             2001
                                                                                       $               $
Controlled entities and contribution
to Economic Entity Loss:
Psiron Ltd                               Australia                               (1,285,350)      (2,520,277)
Controlled Entities of Psiron Ltd:
– MS Therapeutics Pty Ltd                Australia       100             100                 -               -
– Medical Innovations Ltd                Australia       100             100                 -               -
– Diagnostics Australia Pty Ltd          Australia       100             100                 -         (1,639)
– Medical Innovations
  (Ireland) Limited                        Ireland       100             100                 -      (533,334)
– Medical Innovations
  (America) Corporation                      USA        100              100               -        (400,000)
Analytica Ltd                            Australia      60.2                -      (184,613)                -
Controlled entities of Analytica Ltd
– Graesser Pty Ltd                       Australia       100                 -       44,203                      -
– YL Brands Pty Ltd                      Australia        95                 -             -                     -
                                                                                 (1,425,760)      (3,455,250)
Medical Innovations Limited, (Ireland), is a wholly owned subsidiary of Medical Innovations (America) Corporation.

                                                         Economic Entity                   Parent Entity
                                                      2002          2001            2002             2001
                                                       $             $                $               $
27. Cash flow Information
(i) Reconciliation of Cash Flow from operations with loss from ordinary activities after income tax
Net Cash (Outflow) from
Operating Activities                             (1,704,149)     (2,143,908)      (918,569)      (2,143,908)
Sale of Diagnostic Business                                  -              -     1,214,846                  -
Sale of working capital assets                               -              -        217,102                 -
Depreciation and Amortisation                       (63,920)        (89,305)        (33,745)         (55,971)
Loss on asset disposal                                (1,793)               -        (1,793)                 -
(Increase)/decrease in accounts payable             702,540        (345,040)        391,482        (343,401)
(Increase)/decrease in other payables               (27,007)                -       (37,007)                 -
(Decrease)/increase in prepaid expenses               54,421                -         16,120                 -
(Increase)/decrease in provisions                  (335,103)        (90,968)      (288,216)         (90,968)
(Decrease)/increase in Inventories                    66,106          28,611      (145,642)            28,611
(Decrease)/increase in trade debtors                    7,037         85,360      (225,471)           85,360
(Decrease)/increase in other receivables            (48,892)                -      (43,996)                  -
Write down of Intellectual Property                 (75,000)       (900,000)                -                -
Write down of Investment in Subsidiary                       -              -               -    (1,000,000)
Loss from ordinary activities after Income Tax   (1,425,760)     (3,455,250)        144,769      (3,520,277)



 28    PSIRON Ltd Annual Report 2002
Notes to the Financial Statements continued...




27. Cash flow Information (continued)
(ii) Acquisition Of Controlled Entity
Effective 1 December 2001 the parent entity acquired 60.2% of the issued share capital of the Analytica Ltd
group of companies for $800,000. Details of the acquisition are as follows:

  Fair value of identifiable net assets of controlled entity acquired
                                                                                              $
Receivables                                                                                 10,858
Plant and equipment                                                                          8,704
Intangibles                                                                              3,075,000
Creditors (including provision for restructuring)                                        (892,927)
                                                                                         2,201,635
Less Outside equity interest                                                             1,160,389
Discount on acquisition                                                                  1,041,246

Outflow of cash to acquire control
There was no outflow of cash to acquire control as equity was issued to the parent for $800,000. This cash
was then consolidated back into the group. The parent company had the following cash outlays
                                                                                              $
Cash consideration                                                                         800,000
Loan repaid                                                                              (500,000)
Underwriting fee paid by Analytica to Psiron                                              (30,000)
                                                                                          270,000

(iii) Sale Of Diagnostic Division
On 3 December 2001 the Company sold its diagnostic division to Analytica Ltd for $1.6 million. Analytica
then became a controlled entity. As a result the net assets of the diagnostic division are consolidated into the
financial reports of the Psiron group.
The assets and liabilities sold are as follows:
                                                                                              $
Stock                                                                                      227,083
Prepayment                                                                                   6,508
Fixed Assets                                                                               168,395
Provision for annual leave                                                                (16,835)
Goodwill                                                                                 1,214,849
                                                                                         1,600,000
The goodwill is eliminated on consolidation.

(iv) Financing Facilities
At 30 June 2002 the parent entity and its controlled entities had no credit standby arrangements, or used and
unused loan facilities




                                                                          PSIRON Ltd Annual Report 2002    29
Notes to the Financial Statements continued...




28. Events Subsequent to Reporting Date
There were no events of a significant nature subsequent to the reporting date other than the following:
a) Litigation with the Heart Research Institute as discussed in Note 22 Contingent Liabilities.
b) The controlled entity Analytica Ltd was successfully re-quoted on the ASX on 11 September 2002.

29. Going Concern
At 30 June 2002 the economic entity, represented by Psiron Ltd and its controlled entities, had a deficit of
current assets over current liabilities of $789,984 (2001 excess of $2,634,387) and total shareholders’ equity
of $1,782,938 (2001 $613,627).
The Directors are conscious of the convertible notes issued by Psiron Ltd totalling $2,100,000 which mature on
30 November 2002. To address this issue, the Directors are planning and executing a number of projects and trans-
actions which, if successful, would ensure the economic entity can meet all its obligations under the convertible
note deed. Due to these projects and transactions not yet being finalised, the Directors cannot form an opinion as
to whether sufficient cash will be available to wholly redeem, for cash, the convertible notes on their maturity.




 30    PSIRON Ltd Annual Report 2002
Directors’ Declaration
for the period ended 30 June 2002


The Directors of the company declare that:
1. the financial report, as set out on pages 13 to 32:
   (a) complies with Accounting Standards, other mandatory reporting requirements and the Corporations
       Act 2001; and
   (b) give a true and fair view of the financial position as at 30 June 2002 and of the performance for the
       year ended on that date.
2. subject to the matters discussed in Note 29, and the Independent Auditors Report, in the directors’
   opinion there are reasonable grounds to believe that the company will be able to pay its debts as and
   when they become due and payable.
This declaration is made in accordance with a resolution of the Board of Directors:




Stephen Jones
Chairman
17th September 2002




                                                                         PSIRON Ltd Annual Report 2002     31
Independent Audit Report to the Members
for the period 1 July 2001 to 30 June 2002


Scope
We have audited the attached financial report of Psiron Ltd and its controlled entities for the year ended
30 June 2002, consisting of the Directors’ Declaration, Statements of Financial Performance, Statements of
Financial Position, Statements of Cash Flows and Notes to and forming part of the financial report. The
financial report includes the consolidated financial statements of the economic entity comprising the company
and the entities it controlled at the year’s end or from time to time during the financial year. The company’s
directors are responsible for the financial report. We have conducted an independent audit of this financial
report in order to express an opinion on it to the members of the company.
Our audit has been conducted in accordance with Australian Auditing Standards to provide reasonable
assurance whether the financial report is free of material misstatement. Our procedures included examination,
on a test basis, of evidence supporting the amounts and other disclosures in the financial report and the evaluation
of accounting policies and significant accounting estimates. These procedures have been undertaken to form an
opinion whether, in all material respects, the financial report is presented fairly in accordance with Accounting
Standards, other mandatory professional reporting requirements in Australia and the Corporations Act 2001, so
as to present a view which is consistent with our understanding of the company’s and the economic entity’s
financial position and performance as represented by the results of their operations and their cash flows.
The audit opinion expressed in this report has been formed on the above basis.

Audit Opinion
In our opinion, the financial report of Psiron Ltd and its controlled entities is in accordance with:
(a) the Corporations Act 2001, including:
    i) giving a true and fair view of the company’s and the economic entity’s financial position as at 30 June 2002
       and of their performance for the year ended on that date; and
    ii) complying with Accounting Standards in Australia and the Corporations Regulations 2001.
(b) Other mandatory professional reporting requirements in Australia.

Significant Uncertainty Regarding Going Concern
Without qualification to the audit opinion expressed above, attention is drawn to the following matter:
Note 29 to the financial report sets out details and information on going concern. In that note the directors
state that there is a deficit of current assets over current liabilities. Additionally, the directors state that they cannot
form an opinion as to whether sufficient cash will be available to wholly redeem, for cash, the convertible notes
issued by Psiron Ltd on their maturity.
As a result of this matter, there is significant uncertainty whether Psiron Ltd will be able to continue as a going
concern. In those circumstances, the entity may be required to realise its assets and extinguish its liabilities other
than in the normal course of business and at amounts different to those stated in the financial report.




Bentleys MRI
Brisbane Partnership                                                               RJ Forbes
Chartered Accountants                                                              Partner
Dated at Brisbane this 17th day of September 2002




  32    PSIRON Ltd Annual Report 2002
Shareholders information
For the year ended 30 June 2002


ASX Additional Information
Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report
is as follows. The information is current as at 9 September 2002.

a) Twenty largest shareholders
The names of the twenty largest holders of quoted shares are:

                                                                       Listed ordinary shares
                                                          Number of shares              % of ordinary shares
Australian Technology Innovation Fund Limited                   9,956,396                     15.93%
Comp-World Limited                                              2,194,890                      3.51%
Dunns Creek Holdings Pty Limited                                 1,497,718                     2.39%
Camdare Pty Limited                                             1,036,201                      1.65%
Pacific Eagle Equities Pty Ltd                                  1,000,000                      1.06%
Gimbells Pty Ltd                                                  924,667                      1.47%
Selhold Pty Ltd                                                   719,673                      1.15%
Downport Pty Ltd                                                  700,000                      1.12%
Tamac Pty Ltd                                                     635,295                      1.01%
Mr Ian Milligan                                                   583,334                      0.93%
Mrs Emily Purnell                                                 500,000                      0.80%
Rawgrip Pty Limited                                               500,000                      0.80%
Mrs Bernice Ann Lindner                                           465,000                      0.74%
Rugg Corporation                                                  383,334                      0.61%
Mr John Ilhan                                                      358,419                     0.57%
Mr Marc Turner and Mr Shane Turner                                323,334                      0.51%
Mr David Nelson                                                   300,000                      0.48%
Maui Gold Pty Ltd                                                 300,000                      0.48%
Project Asia Pacific Pty Ltd                                      290,000                      0.46%
Keylyn Pty Ltd                                                    286,668                      0.45%
Total                                                        22,954,929                       36.73%

b) Distribution of equity securities
The number of shareholders, by size of holding, in each class of shares are:

                                                                                Ordinary Shares
                                                   Number of                      % of            Number of
                                                    holders                   shareholders          shares
1                      1,000                          193                         8.40               151,383
1,001                  5,000                         789                         34.37             2,549,456
5,001                  10,000                        548                         23.87             4,630,201
10,001                 100,000                       686                         29.89            22,630,068
100,001                and over                        79                         3.44            32,528,020
Total                                               2,295                      100.00             62,489,128
The number of shareholders holding less than a marketable parcel of shares are 1,551.




                                                                             PSIRON Ltd Annual Report 2002     33
c) Twenty largest listed option holders
The names of the twenty largest holders of quoted options are:

                                                                            Listed options
                                                           Number of shares             % of listed options
Australian Technology Innovation Fund Limited                   4,978,198                    39.85%
Trayburn Pty Ltd                                                 823,049                      6.58%
Gimbells Pty Ltd                                                 462,334                      3.70%
Tamac Pty Ltd                                                    265,000                      2.12%
Mrs Emily Purnell                                                250,000                      2.00%
Rawgrip Pty Limited                                              250,000                      2.00%
Mr Bin Mohamad Abas                                               182,502                     1.46%
Mr Marc Turner and Mr Shane Turner                                154,667                     1.23%
Maui Gold Pty Ltd                                                 150,000                     1.20%
Keylyn Pty Ltd                                                    143,334                     1.14%
L and K Burke Holdings Pty Ltd                                    125,000                     1.00%
Mr Ian Milligan                                                   116,667                     0.93%
Mr Louis Burke                                                    100,000                     0.80%
Firbank Holdings Pty Ltd                                          100,000                     0.80%
Telco and Technology Australia Pty Ltd                            100,000                     0.80%
Project Asia Pacific Pty Ltd                                       90,000                     0.72%
Jimlori Pty Limited                                                82,500                     0.66%
Mrs Bernice Ann Lindner                                            81,500                     0.65%
Rugg Corporation Pty Ltd                                           76,667                     0.61%
Ms Annie Li                                                        75,000                     0.60%
Total                                                           8,606,418                    68.90%

d) Distribution of listed options
The number of shareholders, by size of holding, in each class of options are:

                                                                                 Listed Options
                                                    Number of                   % of              Number of
                                                     holders                shareholders           shares
1                      1,000                          222                      35.46                  117,845
1,001                  5,000                          240                      38.33                 601,899
5,001                  10,000                           49                      7.82                 370,946
10,001                 100,000                         103                     16.45               3,498,140
100,001                and over                         12                      1.91               7,900,751
Total                                                  626                    100.00              12,489,581

e) Substantial shareholders
The names of substantial shareholders who have notified the Company in accordance with section 671B of
the Corporations Act 2001 are:
ATIF Ltd 15.93% of the issued capital

f) Voting Rights
All ordinary shares carry one vote per share without restriction.




 34     PSIRON Ltd Annual Report 2002

								
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