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The Manager
Company Announcements Office
The Australian Stock Exchange Limited
Dear Sir
re: Phosphagenics Limited
Appendix 4E/Financial Report
Enclosed for release to the market is the Appendix 4E Report and the Financial Report for the year ended 31 December 2005.
The FY 2005 Reports have been, for the first time, prepared on the basis of the Australian equivalent of the International Financial Reporting Standards (“A-IFRS”) and attention is drawn to Notes no. 2 and 26 to the Notes to the Financial Statements which outlines in detail the impact of adopting A-IFRS.
In addition, FY 2005 is the first year in which the Company has operated with Vital Health Sciences Pty Ltd as a wholly-owned subsidiary. In prior years the Company equity accounted its 36 per cent equity interest.
Under A-IFRS for FY 2005 the Company is reporting a consolidated after income tax expense loss of $7.32 million (2004 : $2.27 million). For the year the main variations that arose were:
1 The requirement to charge to the $3.07 m (2004 : NIL)
Income Statement Research Expenditure
2 Impairment of Carrying Values of $3.90 m (2004 : NIL)
Intangible Assets
As required, the Company commissioned chartered accounting firm, Deloitte Touche Tohmatsu (“Deloitte”) to undertake a valuation report on the carrying value of the Intellectual Property (“IP”). The report lead to the above impairment charge of certain patents the development of which has been deferred whilst the Company has concentrated on patents considered to have a higher and earlier commercialisation potential.
In this regard the Deloitte valuation recognised the development work undertaken in 2005 by the Company which had the effect of increasing by $68 million the value of the Company’s portfolio of patents as at 31 December 2005 $195 million. However, whilst the $3.9 million impairment relative to certain patents has had to be charged to the Income Statement and the Balance Sheet carrying value reduced, the increase in value recognised by the same valuing firm is not able to be recognised on the statutory Financial Statements. Refer Note no. 12 of the Notes to the Financial Statements.
Click on the link below to view Appendix 4E/2005 Financial Report
Yours faithfully
Phosphagenics Limited
per Mourice Garbutt
Company Secretary
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