For personal use only · 2012. 9. 28. · DIRECTORS REPORT 2 Directors Report The directors present...

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Consegna Group Limited (formerly Helicon Group Limited)

ABN 12 107 903 189

Full Year Statutory Accounts

For The Year Ended 30 June 2012

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CONSEGNA GROUP LIMITED (FORMERLY HELICON GROUP LIMITED ) AND CONTROLLED ENTITIES ABN 12 107 903 189

DIRECTORS REPORT

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Directors Report

The directors present their report on the Company together with the financial report of the consolidated entity being the Company and its subsidiaries for the financial year ended 30 June 2012. 1. Directors The names of directors in office at any time during or since the end of the year are: Mr Roderick Tomlinson Non-Executive Chairman

Appointed as director on 12 April 2011, resigned 3 September 2012 Mr Tomlinson is a qualified Industrial Chemist who was Chief Chemist of Smith + Nephew Australia and post this was head of research for Ensign Laboratories. He then started his own business, Soltec Group which he sold in 1996 to FH Faulding and Co Pharmaceuticals for more than $20million. Rod continued to advise Faulding on drug delivery systems prior to retiring in 1998. Post this he was a director at a division of FH Faulding and Co Pharmaceuticals. Rod has his own High Tech Investment Fund and has assisted in the funding of one of Consegna Group!s products, BreatheAssist" . Effective 3 September he assumed the role of Executive chair of the Scientific Committee.

Mr Fabio Pannuti Managing Director and appointed Executive Chairman on 3 September 2012

Appointed as director on 24 February 2011. Mr Pannuti has extensive experience building technology and resources companies. He has had direct experience in many successful mergers and acquisitions, and has been involved with high profile deals such as the acquisition of oil bunkering stations on the Panama Canal, acquisition of the Van Diemen!s Land Company (a Royal Charter vehicle, incorporated in 1826 and one of the world!s oldest public companies) and the merger of the largest advertising and media agency in Eastern Europe. Many of the assets have been listed on public markets including NASDAQ and ASX. He is a member of the Audit and Remuneration Committees Listed company directorships held in the last three years are as follows:

Company Status Isonea Limited Appointed as a director 20 October 2010

and resigned on 31 March 2012 Imugene Limited Appointed as a Chairman 27 July 2012

Mr Brendan Fleiter Appointed as director on 14 November 2011. Mr. Fleiter has extensive commercial experience having practiced as a commercial lawyer for many years before spending 13 years with the Crazy John!s group as a non-executive director and later CEO. He was a non executive director of the ASX listed People Telecom Ltd for seven years before its merger with M2 Telecom Ltd and is currently a non executive director of Australia Post. He is also a director of several not for profit organizations. He chairs the Audit and Remuneration Committees.

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Lord Simon Reading Appointed as director on 1 March 2012 Lord Reading has been a long-standing member of the House of Lords in the United Kingdom, a member of the London Stock Exchange, he has chaired numerous public company boards throughout the globe and is currently a director and /or trustee of several overseas funds and world recognised high profile charitable organisations.

Mr Peter Abrahamson GAICD Non-Executive Director

Appointed as director on 5th April 2005. Ceased as Executive Director 31st March 2010. Appointed as Non-Executive Director on 1st April 2010. Resigned as a Director on 29 February 2012. Mr Abrahamson has held the positions of Vice President # Asia Pacific of AMO Asia Ltd (Hong Kong based), Managing Director # East Asia, of Allergan Asia Limited (Hong Kong based), Managing Director of Allergan Australia Pty Ltd, Marketing Director of Allergan Australia Pty Ltd, Director of Business Development # Faulding Pharmaceuticals for FH Faulding Pty Ltd, Director of Sales and Marketing # Faulding Pharmaceuticals for FH Faulding Pty Ltd and Marketing Manager # Prescription Products for Wellcome Australia Limited. Mr Abrahamson has extensive senior management experience in the pharmaceuticals industry in the Asia Pacific region, and in recent years he has also conducted a successful consultancy advising companies on strategic and operational issues. Mr Abrahamson is a graduate member of the Australian Institute of Company Directors (GAICD).

Mr Martin Rogers Non-Executive Director and Deputy Chairman

Appointed as director on 3rd September 2012. Mr Rogers has Chemical Engineering and Science degrees and has a successful track record in incubating companies and publicly listed organisations. He has experience in all aspects of financial, strategic and operational management and has raised over $100m cash equity. Mr Rogers has been both an investor and senior executive in a privately funded advisory business in the science and biotechnology sectors, where he was instrumental in significantly increasing the value of those investments. Mr Rogers has also held roles with the management committee of the National Breast Cancer Foundation and Trustee of the University of Sydney Physics Foundation and International Science School.

Company Status Prima BioMed Limited

Appointed as a director 20 October 2010 and resigned on 31 March 2012

Mr Justyn Stedwell Company Secretary

Appointed Company Secretary on 22 June 2011 Mr Stedwell is a professional Company Secretary with over five years experience as a Company Secretary in ASX listed companies within various industries including IT & Telecommunications, Biotechnology, and Mining. He is currently also the Company Secretary of ASX listed companies Anittel Group Limited, Motopia Limited, Imugene Limited and Solagran Limited. He has completed a Bachelor of Business & Commerce (Management & Economics) at Monash University, a Graduate Diploma of Accounting at Deakin University, a Graduate Diploma in Applied Corporate Governance with Chartered Secretaries Australia and Graduate Certificate of Applied Finance with Kaplan Professional.

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

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2. Directors Meetings The numbers of directors! and other meetings attended by each of the Directors during the financial year are:

Directors Meetings Audit & Remuneration Committee Meetings (*)

A B A B Mr R Tomlinson 8 7 - - Mr F Pannuti 8 8 - - Mr B Fleiter 5 5 - - Lord S Reading 3 2 - - Mr P Abrahamson 5 5 - -

(*) The Audit and Remuneration Committees were formed in May 2012, prior to this the full Board at the time attended to the Audit and Remuneration Governance requirements. A= Number of meetings held while in office B= Meetings attended 3. Principal Activities The principal activities of the Company continue to be in the pharmaceutical area, of medical devices in particular. Consegna Group Limited!s purpose is to identify, acquire and commercialise late stage therapeutic delivery technologies. The Company targets high value markets and indications using an acquisition strategy driven by strategic value creation, patent protection and realisation criteria. The Company employs a low fixed overhead model with a panel of successful best in field regulatory, intellectual property and scientific advisors. 4. Operating Results The consolidated entity!s net loss for the financial year ended 30 June 2012 amounted to $1,308,494 (2011: $1,128,712). The consolidated entity!s net assets at 30 June 2012 were $20,401,549 (2011: $15,245,076) 5. Review of Operations, Likely Developments and Expected Results A review of operations, likely developments and expected results is included in the Chairman!s letter. 6. Significant Changes in the State of Affairs During the financial year Consegna Group completed the following acquisitions: LINGUET On 15 August 2011, the Company announced that it had completed the acquisition of the unique Buccal drug delivery system known as LINGUET from OzPharma Pty Ltd. Buccal delivery technology enhances the clinical benefits of existing pharmaceuticals thereby extending the period of exclusivity and patent life of these products. LINGUET, which is close to commercialization stage, will therefore be of particular interest to both multinational research based and generic pharmaceutical companies as they seek to identify new strategic differentiators. Clinical benefits of LINGUET include significant reduction in side effects and speed of action of the applied medication. The Linguet acquisition provides a valuable addition to Consegna Group Limited!s existing drug delivery technology portfolio. As announced to the ASX on 1 May 2012, the Company agreed to sell its share holding in Lingual Consenga Pty Ltd ($Lingual%) to Imugene Limited ($IMU%) in consideration of 100 million shares in IMU. The transaction was subsequently settled on 17 July 2012. Financial information relating to Lingual is set out below in the Note 6 of the financial statements. Aspen Medisys On 22 December 2011 the Company announced that it had executed an agreement to acquire Aspen MediSys LLC (AML). AML owns an exciting energized nanoparticle technology for the treatment of tumors. The types of tumors that may be treated by this nanotechnology include tumors associated with ovarian, lung and pancreatic cancers.

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Acquisition of the remaining 19% of Leading Edge Instruments In April 2012, the Company exercised 2 call option agreements (Call Option 1 and Call Option 2) with each of the Vendors of Leading Edge Instruments Limited (LEI), pursuant to which:

a) Upon exercise of Call Option 1 on 16 April 2012, Consegna Group increased its shareholding in LEI by 9.5% through an offer to LEI Shareholders in which each transferred 50% of their Remaining Equity (or 9.5% of the entire issued share capital) held by them in LEI to Consegna Group in consideration across all LEI shareholders of 126,000,000 Shares.

b) Upon exercise of Call Option 2 on 18 April 2012, Consegna Group increased its shareholding in LEI by 9.5%

through an offer to LEI Shareholders in which each transferred 50% of their remaining equity (or 9.5% of the entire issued share capital) held by them in LEI to Consegna Group in consideration across all LEI Shareholders of 126,000,000 Shares.

Share issues The following shares were issued during the year and up to the date of this report: Date of Issue Purpose of the issue Number of Shares 16 August 2011 Issued as consideration for fees payable 7,733,333 16 August 2011 Issued as consideration for fees payable 16,900,000 8 September 2011 Private Placement 44,900,000 4 November 2011 Acqusition of Linguet IP 1,370,000 16 November 2011 Exercise of Options 3,800,000 23 November 2011 Exercise of Options 7,500,000 5 December 2011 Issued as consideration for fees payable 6,820,000 21 December 2011 Private Placement 24,520,000 13 January 2012 Exercise of Options 1,500,000 13 January 2012 Exercise of Options 650,000 17 January 2012 Issued as consideration for fees payable 5,000,000 17 January 2012 Issued as consideration for fees payable 1,465,138 25 January 2012 Private Placement 37,500,000 5 March 2012 Private Placement 5,500,000 5 March 2012 Exercise of Options 750,000 20 March 2012 Issued as consideration for fees payable 2,062,000 20 March 2012 Exercise of Options 500,000 20 March 2012 Exercise of Options 1,900,000 16 April 2012 Exercise of LEI call option 1 126,000,000 18 April 2012 Exercise of LEI call option 2 126,000,000 1 May 2012 Termination of Call Option on Linguet IP 25,000,000 10 May 2012 Issued as consideration for fees payable 250,000 4 July 2012 Aspen Medisys Deposit 7,948,140 13 July 2012 Lind Partners Funding Agreement Commitment Fee 8,869,180 20 July 2012 Private Placement and Loan Conversion 18,341,322 15 August 2012 Private Placement Lind Partners Funding Agreement 7,692,308 17 August 2012 Issued as consideration for fees payable 3,000,000 14 September 2012 Issued as consideration for fees payable 6,500,000 19 September 2012 Private Placement Lind Partners Funding Agreement 12,500,000 Option Issues The following options were issued during the year and up to the date of this report: Date of Issue Purpose of the issue Number of Options Exercise Price 2 November 2011 Private Placement 44,900,000 $0.025 7 December 2011 Issue to Directors 20,000,000 $0.05 7 December 2011 Issue to Directors 20,000,000 $0.10 21 December 2011 Private Placement 24,520,000 $0.035 23 December 2011 Issue under ESOP 30,000,000 $0.045 25 January 2012 Private Placement 12,500,000 $0.035 29 February 2012 Private Placement 6,000,000 $0.03 5 March 2012 Private Placement 1,166,667 $0.035 13 July 2012 Lind Partners Funding Agreement

Commitment Fee 10,000,000

$0.0236

20 July 2012 Issued as consideration for fees payable 20,000,000 $0.03

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DIRECTORS REPORT

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7. Dividends No dividends have been paid or declared for payment by the company since the end of the previous financial year and until the date of this report. 8. Events Subsequent to Reporting Date LINGUET As announced to the ASX on 1 May 2012, the Company agreed to sell its share holding in Lingual Consenga Pty Ltd ($Lingual%) to Imugene Limited ($IMU%) in consideration of 100 million shares in IMU. The transaction was subsequently settled on 17 July 2012. Financial information relating to Lingual is set out below in the Note 6 of the financial statements. Share Purchase and Convertible Security Agreement Lind Partners LLC On 13 July 2012, the Company executed a Share Purchase and Convertible Security Agreement ($Agreement%) with the Australian Special Opportunity Fund, LP, which is managed by the Lind Partners, LLC (together, $Lind%) a New York based alternative asset management company. The Agreement provides Consegna with a funding facility that will allow the required funding for operations until the Group achieves a position with positive cashflow. 9. Directors Interests At the date of this report the directors! interests in shares and options of the Company are: Ordinary Shares Options Mr R Tomlinson 24,434,488 10,000,000 Mr F Pannuti 74,312,763 20,000,000 Mr B Fleiter - - Lord S Reading - - Mr P Abrahamson (*) 5,069,040 14,000,000 Martin Rogers (**) 3,000,000 3,835,333 (*) not a director as at 29 February 2012 (**) commenced as a director 3 September 2012 10. Indemnification and Insurance of Directors and Officers 10.1 Indemnifying the auditor The Company has not given any indemnities or entered into any agreements to indemnify the auditor, or paid or agreed to pay insurance premiums in relation thereto, during or since the financial year. 10.2 Directors and Officers indemnity The Company has paid insurance premiums for annual cover in respect of directors! and officers! liability insurance contracts for officers of the Company and its subsidiaries. In accordance with usual commercial practice, the insurance contract prohibits disclosure of details of the nature of the liabilities covered by the insurance, the limit of indemnity and the amount of the premium paid under the contract. 11. Non Audit Services There were no non audit services provided by the Company!s auditor, HLB Mann Judd (Vic Partnership) during the 2012 financial year.

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12. Unissued Shares Under Option At the date of this report, the unissued ordinary shares of Consegna Group Limited under option are as follows:

Grant Date Date of Expiry Exercise Price Number Under Option 23/11/2009 31/05/2013 $0.20 4,000,000 11/11/2010 30/06/2015 $0.01 25,000,000 02/11/2011 31/12/2014 $0.025 30,300,000 07/12/2011 07/12/2014 $0.05 20,000,000 07/12/2011 07/12/2014 $0.10 20,000,000 21/12/2011 31/12/2013 $0.035 22,520,000 23/12/2011 31/12/2014 $0.045 30,000,000 25/01/2012 31/01/2013 $0.035 12,500,000 29/02/2012 28/02/2015 $0.03 6,000,000 05/03/2012 31/01/2013 $0.035 1,166,667 13/07/2012 17/07/2015 $0.0236 10,000,000 20/07/2012 28/02/2015 $0.03 20,000,000

201,486,667 The following options lapsed during, or since the end of the financial year:

Grant Date Date of Expiry Exercise Price Number of Options 12/09/2007 28/09/2011 $0.20 2,000,000

2,000,000

The following options were exercised during, or since the end of the financial year:

Exercise Date Exercise Price Number of Options 16/11/2011 $0.025 3,800,000 23/11/2011 $0.025 7,500,000 13/01/2012 $0.035 1,500,000 13/01/2012 $0.025 650,000 05/03/2012 $0.025 750,000 20/03/2012 $0.035 500,000 20/03/2012 $0.025 1,900,000

16,600,000 No person entitled to exercise options has or had any right to by virtue of options to participate in any share issue of any other body corporate. F

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13. Environmental Regulations and Performance The consolidated entity is not subject to any significant environmental legislation. 14. Proceedings on Behalf of Company Leadenhall VRG Pty Ltd has taken legal action against Vibrovein Pty Ltd for alleged unclaimed invoices. The matter is listed for prehearing conference on 16th October 2012. The claim is for $31,350. Consegna Group Limited is vigorously defending this as the services have been paid in full. No other person has applied for leave of the Court to bring proceedings on behalf of the company or intervene in any proceeding to which the company is a party for the purpose of taking responsibility on behalf of tor for any part of these proceedings. 15. Remuneration Report - Audited 15.1 Principles of Compensation The Board!s policies for determining the amount and nature of compensation of key management personnel of the Group are as follows:

The compensation structure for key management personnel is based on a number of factors, including length of service, specific experience of the individual, the individual!s performance and contribution to the Group, and the overall performance of the Group.

The compensation structure of individual key management personnel is embodied in individual service contracts that include incentives designed to reward key management personnel for results achieved and to retain their services, as well as to create goals congruence between directors, executives and shareholders. The board!s policy for determining remuneration is based on the following:

I. The policy is developed and approved by the board II. All KMP receive a base remuneration

III. Performance incentives are generally only paid once predetermined key performance indicators (KPI!s) have been met

IV. Incentives paid in the form of options are designed to align the interests of the directors and company with those of the shareholders.

All remuneration paid to KMP is valued at the cost to the company and expensed. KMP are also entitled and encouraged to participate in the employee share and option arrangements to align their interest with shareholders. 15.2 Fixed Remuneration Fixed compensation consisted of a base salary (calculated on a total cost basis, including any fringe benefits tax related to employee benefits) as well as employer contributions to superannuation funds. Compensation levels are reviewed annually by the audit and remuneration committee through a process that considers individual and company achievement.

15.3 Performance linked remuneration Performance linked compensation includes short term incentives (STI), in the form of cash bonuses paid only upon the achievement of predetermined Key Performance Indicators (KPI). Long term incentives (LTI) provided are options over ordinary shares in the Company.

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Performance remuneration is designed to align the targets of the business units with the targets of those executives in charge of meeting those targets. Incentive based payments may be granted to executives based on specific annual targets and key performance indicators ('KPI') being achieved. KPI include financial and/or operational performance targets. In addition, equity payments in the form of share options may be issued to Key Management Personnel ('KMP') or non-executive directors to further align their interests with the performance of the company. 15.4 Short term incentive Bonus (STI) No STI bonuses were granted to KMP during the financial year ended 30 June 2012. 15.5 Long term incentives (LTI)

The following Options were granted to KMP or non-executive directors during the financial year ended 30 June 2012. They vested on granting. Grant Date Date of Expiry Exercise

Price Number Fair Value

Fabio Pannuti 07/12/2011 07/12/2014 $0.05 10,000,000 $210,000 Fabio Pannuti 07/12/2011 07/12/2014 $0.10 10,000,000 $190,000 Rod Tomlinson 07/12/2011 07/12/2014 $0.05 5,000,000 $105,000 Rod Tomlinson 07/12/2011 07/12/2014 $0.10 5,000,000 $95,000 Peter Abrahamson 07/12/2011 07/12/2014 $0.05 5,000,000 $105,000 Peter Abrahamson 07/12/2011 07/12/2014 $0.10 5,000,000 $95,000 Justyn Stedwell 23/12/2011 31/12/2014 $0.045 5,000,000 $120,000

$920,000 15.6 Executive Service agreements The following were the Group!s Key Management Personnel during the financial year: Mr R Tomlinson Chairman

Resigned 3 Sept 2012 Mr A Ellem Chief Financial Officer

Appointed 1 April 2012 Mr P Abrahamson Non-Executive Director

Resigned 28 Feb 2012 Dr N Ede Chief Technical Officer

Appointed 30 April 2012 Mr B Fleiter Non-Executive Director Mr J Stedwell Company Secretary Lord S Reading Non-Executive Director Mr F Pannuti Executive Chairman Compensation and other terms of employment for the Managing Director and other Key Management Personnel are formalised in a service agreement. 2012 Name: Fabio Pannuti Title: Managing Director Executive Chairman effective 3 September 2012 Term of agreement: Standard Rolling Agreement (No fixed term) Details: Mr Pannuti shall receive fixed remuneration of $42,000 (2011: $22,000) per month plus GST. He may be entitled to additional performance based remuneration upon achievement of performance targets and key performance indicators to be agreed upon by the Board and Mr Pannuti in due course. The Services agreement also includes the provision of Marketing and Administrational services. Consegna Group Limited also rents the office premises from Inverness Group Holdings Pty Ltd a company owned and controlled by Mr. Pannuti. These details are disclosed in note 24 of the financial statements. Mr Pannuti may resign from his position and thus terminate the agreement by giving one-month notice to the company. The company may at any time terminate the contract by giving Mr Pannuti three months notice in writing or payment of fees in lieu of such notice. Upon termination, Mr Pannuti is entitled to any bonus accrued (where any bonus is payable subject to the terms of the contract). The company may terminate the contract at any time without notice if serious

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DIRECTORS REPORT

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misconduct has occurred. Where serious misconduct has occurred there is no entitlement to any payment other than accrued salary and leave (if any). 2012 Name: Dr Nicholas Ede PhD Title: Chief Technology Officer appointed 30 April 2012 Term of agreement: Executive Services Agreement (No fixed term) Details: Dr Ede shall receive fixed remuneration of $196,200 per annum inclusive of superannuation. He may be entitled to participate in the Employee Share Option Plan based upon achievement of performance targets and key performance indicators to be agreed upon by the Board and Dr Ede in due course. Dr Ede may resign from his position and thus terminate the agreement by giving two months notice to the company. The company may also terminate the contract anytime by giving Dr Ede two months notice in writing or payment of fees in lieu of such notice. Upon termination, Dr Ede is entitled to any bonus accrued (where any bonus is payable subject to the terms of the contract). The company may terminate the contract at any time without notice if serious misconduct has occurred. Where serious misconduct has occurred there is no entitlement to any payment other than accrued salary and leave (if any). 2012 Name: Andrew Ellem Title: Chief Financial Officer appointed 1 April 2012 Term of agreement: Standard Rolling Agreement (No fixed term) Details: M V Anderson & Co a Chartered accounting firm that Mr. Ellem is a partner of receives a fixed monthly retainer of $10,000 per month excluding GST. As a KMP Andrew may be entitled to participate in the Employee Share Option Plan based upon achievement of performance targets and key performance indicators to be agreed upon by the Board and Mr. Ellem in due course. M V Anderson & Co also provide Taxation Services to the company. This is remunerated on a standard hourly consultancy service agreement. The retainer and services agreement can be terminated with 1 month notice by either party. 2012 Name: Justyn Stedwell Title: Company Secretary appointed 22 June 2011 Term of agreement: Standard Rolling Agreement (No fixed term) Details Mr. Stedwell receives a fixed monthly retainer of $3,000 per month excluding GST. As a KMP Justyn may be entitled to participate in the Employee Share Option Plan based upon achievement of performance targets and key performance indicators to be agreed upon by the Board and Mr. Stedwell in due course. The monthly retainer agreement may be terminated with 1 month notice by either party 15.7 Non-executive Directors In accordance with best practice corporate governance, the structure of non-executive directors and executive remunerations is separate and distinct. Fees and payments to non-executive directors reflect the demands which are made on, and the responsibilities of, the directors. Non-executive directors' fees and payments are reviewed annually by the Board of Directors. The Board of Directors considers advice from external sources as well as the fees paid to non-executive directors of comparable companies when undertaking the annual review process. Each director receives a fee for being a director of the company. The Chairman's fees are determined independently to the fees of other non-executive directors based on comparative roles in the external market. The chairman is not present at any discussions relating to determination of his own remuneration. The base fee for a non-executive director is presently $60,000 pa and for the non-executive chairman $84,000 pa, plus GST. Directors invoice the Company monthly for these amounts on a pro rata basis.

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Directors! fees cover all main board activities and committee memberships. 15.8 Equity Instruments All options refer to options over ordinary shares of Consegna Group Limited which are exercisable on a one for one basis. (a) Options and rights over equity instruments granted as compensation Details on options over ordinary shares in the Company that have been granted as compensation to each key management person and details on options vested and exercisable are as follows: Director/KMP Grant Date Date of

Expiry Exercise

Price Granted No.

Vested No.

Value Per Option (*) at

Grant Date ($)

Peter Abrahamson 23/11/2009 31/05/2013 $0.20 4,000,000 4,000,000 0.015 Fabio Pannuti 07/12/2011 07/12/2014 $0.05 10,000,000 10,000,000 0.021 Fabio Pannuti 07/12/2011 07/12/2014 $0.10 10,000,000 10,000,000 0.019 Rod Tomlinson 07/12/2011 07/12/2014 $0.05 5,000,000 5,000,000 0.021 Rod Tomlinson 07/12/2011 07/12/2014 $0.10 5,000,000 5,000,000 0.019 Peter Abrahamson 07/12/2011 07/12/2014 $0.05 5,000,000 5,000,000 0.021 Peter Abrahamson 07/12/2011 07/12/2014 $0.10 5,000,000 5,000,000 0.019 Justyn Stedwell 23/12/2011 31/12/2014 $0.045 5,000,000 5,000,000 0.024 49,000,000 49,000,000 (*) The value of the options has been determined at grant date in accordance with Australian Accounting Standards. (b) Exercise of options granted as compensation During the reporting period, no options granted as compensation were exercised, whether issued previously or in the current year. (c) Payments to persons before taking office During the reporting period no payments were made to key management personnel as consideration for them agreeing to hold office.

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15.9 Details of Remuneration STI

Post Employment

Superannuation

Shared Based

Payments(*) Total

Value of remuneration not related to performance

Salary &

fees Cash other

Non-monetary benefits

2012 Non-executive Directors

Mr R Tomlinson 84,000 - - - 200,000 284,000 29.57% Mr P Abrahamson 49,500 - - - 200,000 249,500 19.84% Mr B Fleiter 29,667 - - - 29,667 100% Lord S Reading 36,948 - - - - 36,948 100% Executive

Mr F Pannuti 430,000 - - 400,000 830,000 51.8% Mr N Ede 55,087 - - - - 55,087 100% Mr A Ellem 30,300 - - - - 30,300 100% Mr J Stedwell 33,480 120,000 153,480 21.81% Total 748,982 - - 920,000 1,668,982 2011 Non-executive Directors

Mr R Tomlinson 21,000 - - - - 21,000 100% Mr P Abrahamson 32,132 - - - - 32,132 100% Dr S Sassine 60,313 - - - - 60,313 100% Mr G Boden 72,809 - - - - 72,809 100% Executive

Mr. F Pannuti 237,661 - - - - 237,661 100% Total 423,915 - - - - 423,915 (*) The share based payments are recorded at the valuation at the time of issue under the Black Scholes methodology of valuing options. 15.10 Relationship between Remuneration Policy and Company s Performance The remuneration policy has been tailored to increase goal congruence between shareholders, directors and executives. Two methods have been adopted by the board to achieve this aim, the first being a performance-based bonus on KPI!s, and the second being the issue of options to the majority of Directors and executives to encourage alignments of personal and shareholder interests. The company believes that this policy was effective over the last period. The company has achieved two further acquisitions during the year increase value and achieving the company!s objectives of acquiring assets that are in distressed and close to commercialisation, fast tracking them for either sale, licence or revenue generation. End of Audited Remuneration Report.

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16. Auditors Independence Declaration The auditor!s independence declaration as required under section 307C of the Corporations Act 2001 is set out on page 14 of the financial report. This Report of the Directors, incorporating the Audited Remuneration Report is signed in accordance with a resolution of the Directors. On behalf of the Directors Yours sincerely Fabio Pannuti

Managing Director and Chairman 28 September 2012

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AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of the financial report of Consegna Group Limited for the year ended 30 June 2012, I declare that to the best of my knowledge and belief, there have been no contraventions of:

a) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

b) any applicable code of professional conduct in relation to the audit.

This declaration is in respect of Consegna Group Limited and the subsidiaries it controlled during the year.

HLB Mann Judd Chartered Accountants

Jude Lau Melbourne Partner 28 September 2012

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CORPORATE GOVERNANCE STATEMENT

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Commensurate with the spirit of the ASX Corporate Governance Principles and Recommendations, the Company has followed each recommendation where the Board has considered the recommendation to be an appropriate benchmark for corporate governance practices, taking into account factors such as the size of the Company and the Board, resources available and activities of the Company. Where, after due consideration, the Company's corporate governance practices depart from the Principles and Recommendations, the Board has offered full disclosure of the nature of, and reason for, the adoption of its own practice. Unless disclosed below, all the ASX Corporate Governance Principles and Recommendations have been applied for the financial year ended 30 June 2012. Functions of the Board and Management The Board is ultimately responsible for all matters relating to the running of the Company. The main task of the Board is to drive the performance of the Company. The Board!s role is to govern the Company rather than to manage it. In governing the Company, the Directors must act in the best interests of the Company as a whole. It is the role of senior management to manage the Company in accordance with the direction and delegations of the Board; the Board will oversee the activities of management in carrying out these delegated duties. The Board has the final responsibility for the successful operations of the Company. Successful operations will usually be manifest by achieving optimum shareholder value. The Board is responsible for articulating the following:

• The objectives and strategic direction of the Company; and • The values of the Company, including how it will treat and interact with all stakeholders;

Without intending to limit this general role of the Board, the principal functions and responsibilities of the Board will include the following:

1. Leadership of the Organisation: overseeing the Company and establishing codes that reflect the values of the Company;

2. Strategy Formulation: to set and review the overall strategy and goals for the Company and ensuring that there are policies in place to govern the operation of the Company;

3. Overseeing Planning Activities: the development of the Company!s strategic plan; 4. Shareholder Liaison: ensuring effective communications with shareholders through an appropriate

communications policy; 5. Company Finances: ensuring there are adequate resources provided to achieve the objectives; 6. Human Resources: establishing appropriate human resource policies and ensuring there are adequate human

resources for the Company to be successful; 7. Ensuring the Health, Safety and Well-Being of Employees: in conjunction with the senior management team,

developing, overseeing and reviewing the effectiveness of the Company!s occupational health and safety systems to ensure the well-being of all employees;

8. Delegation of Authority: delegating appropriate powers to the CEO and the senior management team to ensure the effective day-to-day management of the Company; and

9. Ensuring there is appropriate Corporate Governance.

Evaluating the Performance of Senior Executives The Board conducts performance reviews of key management personnel (KMP) when deemed appropriate. The Board assesses the performance of KMP against qualitative and quantitative key performance indicators relevant to each KMP. A performance review of some members of KMP was conducted during the 2012 financial year in accordance with this process and further reviews will be conducted in the 2013 financial year.

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Board Composition The skills, experience and expertise relevant to the position of each director who is in office at the date of the annual report and their term of office are detailed in Section 1 of the directors! report. The Board assesses whether a director is independent in accordance the ASX Corporate Governance Council!s independence guidelines. The Board of Consegna Group consists of a majority of independent directors with three of four directors being independent. Throughout the 2012 financial year, the Board was chaired by independent director, Rod Tomlinson, and the roles of the Chairman and CEO/Managing Director were not exercised by the same individual. On 3 September 2012, Rod Tomlinson resigned as a Director and the Chairman of the Company. Fabio Pannuti who is the Managing Director of the Company and who is not independent was appointed Chairman of the Company upon Rod Tomlinson!s resignation. The Board believes that it is appropriate at this critical stage of the Company!s development to have the Chairman involved in the management and operations of the Company. Given that three of the four directors on the Board are independent, the Board believes there is sufficient independent presence on the Board to allow the Chairman to be engaged in an executive capacity and for the Board to maintain independent judgement. Given the size of the Company and the Board, it is deemed appropriate that the whole Board sit as the nomination committee when that is required. The composition of the Board is reviewed in the context of changes in the Company!s circumstances and is reviewed as and when required. Statement concerning availability of independent professional advice If a director considers it necessary to obtain independent professional advice to properly discharge the responsibility of his office as a director, then, provided the director first obtains approval for incurring such expense from the chairperson, the Company will pay the reasonable expenses associated with obtaining such advice. Ethical Standards The Board acknowledges and emphasises the importance of all directors and employees maintaining the highest standards of corporate governance practice and ethical conduct. A code of conduct has been established requiring directors and employees to: & act honestly and in good faith; & exercise due care and diligence in fulfilling the functions of office; & avoid conflicts and make full disclosure of any possible conflict of interest; & comply with the law; & encourage the reporting and investigating of unlawful and unethical behaviour; and & comply with the share trading policy outlined in the code of conduct. Diversity Policy In accordance with ASX recommendations the Company has implemented a Diversity Policy. Consegna Group is an equal opportunity employer and aims to recruit staff at all levels from as diverse a pool of qualified candidates as reasonably possible based on their skills, qualifications and experience.

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The following information is provided in relation to gender diversity within the organisation.

Women on the Board 0 of 4 Women employees/consultants in the organisation (not including directors)

3 of 8

Total women in organisation 3 of 12 Women in senior executive positions 2 of 6

The Company is currently satisfied with the level of diversity within the organization and in senior management positions and therefore has not set specific measurable objectives in regards to gender diversity. However the Company does intend to increase the level of gender diversity within the organization in the future. Trading Policy The Company!s policy regarding directors and employees trading in its securities is set by the Board of Directors in the Company!s Share Trading Policy. The policy restricts directors and employees from acting on material information until it has been released to the market and adequate time has been given for this to be reflected in the security!s prices. Audit Committee & Remuneration Committee Subsequent to the composition of the Board being reduced to three members, the full Board decided to sit as the Audit Committee and the Remuneration Committee. However, on 24 May 2012 following an increase in the size of the Board to four Board members, the Board established an Audit and Remuneration Committee. The Audit and Remuneration Committee is Chaired by Brendan Fleiter who is an independent director. Fabio Pannuti is a member of the Audit and Remuneration Committee and is not an independent director. Given the Board only consists of 4 members, the Board believes that a committee consisting of two Board members (one of whom is independent and Chair of the Committee) is appropriate. The Company has an Audit and Remuneration Committee Charter, which is published on the Company!s website.

Performance Evaluation

An annual performance evaluation of the Board and all Board members was not conducted. The Board intends to appoint an independent consultant on consideration of the Board!s expansion. Disclosure The Company has written policies to ensure compliance with disclosures required under the ASX Listing Rules. The Managing Director and the Company Secretary are responsible for compliance. The continuous disclosure policy is available on the Company!s website. Shareholders Rights Shareholders are entitled to vote on significant matters impacting on the business, which include the election and remuneration of directors, changes to the constitution and receipt of annual and interim financial statements. Shareholders are strongly encouraged to attend and participate in the Annual General Meetings of Consegna Group Limited, to lodge questions to be responded by the Board and/or the CEO, and are able to appoint proxies. The Company has designed a communications policy for promoting effective communication with shareholders. The policy is available on the Company!s website.

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Risk Management

The Board considers identification and management of key risks associated with the business as vital to maximise shareholder wealth. A yearly assessment of the business!s risk profile is undertaken and reviewed by the Board, covering all aspects of the business from the operational level through to strategic level risks. The CEO has been delegated the task of implementing internal controls to identify and manage risks for which the Board provides oversight. The effectiveness of these controls is monitored and reviewed regularly. Chief Executive Officer & Chief Financial Officer Certifications The Chief Executive Officer and the Chief Financial Officer have provided a written statement to the Board that:

• the company!s financial reports present a true and fair view, in all material respects, of the company!s financial condition and operational results are in accordance with relevant accounting standards; and

• the company!s risk management and internal compliance and control system is operating efficiently and effectively in all material respects.

Remuneration Policies

The remuneration committee reviews executive packages annually by reference to Company performance, executive performance, comparable information from industry sectors and other listed companies and independent advice. No such advice was obtained during the year. The performance of executives is measured against criteria agreed half yearly which is based on the forecast growth of the company!s profits and shareholder value. The policy is designed to attract the highest calibre executives and reward them for performance, which results in long-term growth in shareholder value. The structure of remuneration of executive and non-executive directors is set out in the Audited Remuneration Report (or section 15 of the Directors! report). The amount of remuneration for all key management personnel for the Company, including all monetary and non-monetary components, are detailed in the Audited Remuneration Report (or section 15.9 of the Directors! report). All remuneration paid to executives is valued at the cost to the Company and expensed. Shares given to executives are valued as the difference between the market price of those shares and the amount paid by the executive. Options are valued using the Black-Scholes methodology. The Board expects that the remuneration structure implemented will result in the Company being able to attract and retain the best executives to run the consolidated entity. It will also provide executives with the necessary incentives to work to grow long-term shareholder value.

There are no schemes for retirement benefits other than statutory superannuation for non-executive directors.

Other Information

Further information relating to the company!s corporate governance practices and policies has been made publicly available on the company!s website at www.consegna.com.

The Company has placed the following information on its website: & Statement of Board and Management Functions. & Policy and procedure for selection and appointment of new Directors. & Summary of code of conduct for Directors and key executives. & Summary of policy on securities trading. & Audit & Remuneration Committee Charter. & Policy and procedure for selection of external auditor and rotation of audit engagement partners. & Summary of policy and procedure for compliance with continuous disclosure requirements. & Summary of arrangement regarding communication with and participation of shareholders. & Summary of Company's risk management policy and internal compliance and control system. & Process for performance evaluation of the Board and Board committees. & Corporate Code of Conduct. & Diversity Policy

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http://www.consegna.com/

CONSEGNA GROUP LIMITED (FORMERLY HELICON GROUP LIMITED ) AND CONTROLLED ENTITIES

ABN 12 107 903 189

19

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME For the year ended 30 June 2012

Consolidated

Note

2012 2011 $ $

Continuing operations

Other Operating Income 2(a)

37,500

33,720

Interest Revenue 2(a)

39,508

58,981

Discount on Acquisition of Bargain Purchase 2(a)

5,438,740 -

Total Revenue

5,515,748

92,701

Employee benefits expense 3 (1,005,885) (52,558) Depreciation and amortisation 2(b) (15,172) (2,279) Accounting and secretarial services (258,029) (119,534) Travel and accommodation (605,424) (55,133) Consulting fees (2,229,831) (367,473) Directors! fees (266,494) (99,773) Directors' benefits - options issued 19 (800,000) - Insurances (23,722) (10,144) Regulatory expenses (87,713) (44,860) Legal expenses (212,556) (174,342) Finance costs (166,575) (6,901) Development costs (90,523) - Other expenses from operating activities (575,224) (288,416) LOSS BEFORE TAXES (821,400) (1,128,712)

Income tax (expense)/benefit 4

59,276 - NET LOSS AFTER TAXES FROM CONTINUING OPERATIONS (762,124) (1,128,712) DISCONTINUED OPERATIONS

Net loss from discontinued operations after tax 6 (546,370) -

OTHER COMPREHENSIVE INCOME - - NET LOSS/COMPREHENSIVE INCOME/(LOSS) FOR THE YEAR (1,308,494) (1,128,712) Attributable to:

Members of the parent entity (1,301,293) (1,076,250) Non controlling interests (7,201) (52,462)

TOTAL COMPREHENSIVE LOSS attributable to members of the parent entity (1,301,293) (1,076,250)

EARNINGS / (LOSS) PER SHARE - Cents Continuing and discontinued operations # basis & diluted 7 (0.20) (0.36)

Continuing operations # basis & diluted 7 (0.12) (0.36) Discontinued operations # basis & diluted 7 (0.08) -

The accompanying notes form part of these consolidated financial statements.

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ABN 12 107 903 189

20

CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at 30 June 2012

Consolidated 2012 2011

Note $ $

ASSETS CURRENT ASSETS Cash and cash equivalents 8 446,113 961,503 Trade and other receivables 9 74,949 213,785 Inventory 10 2,628 - Other current assets 11 138,057 5,010 Non-current assets held for sale 6 2,859,592 - TOTAL CURRENT ASSETS 3,521,339 1,180,298

NON-CURRENT ASSETS Property, plant and equipment 12 206,954 20,299 Intangible assets 13 22,143,968 14,518,212

TOTAL NON-CURRENT ASSETS 22,350,922 14,538,511 TOTAL ASSETS 25,872,261 15,718,809

CURRENT LIABILITIES Trade and other payables 14 1,012,452 454,694 Deferred Purchase Consideration 21 1,835,862 - Interest bearing liability 15 45,266 19,039 Liabilities directly associated with disposal assets held for sale 6 2,386,241 - TOTAL CURRENT LIABILITIES 5,279,821 473,733 NON-CURRENT LIABILITIES Deferred Purchase Consideration 21 190,891 - TOTAL NON-CURRENT LIABILITIES 190,891 -

TOTAL LIABILITIES 5,470,712 473,733 NET ASSETS 20,401,549 15,245,076

EQUITY Issued capital 16 31,815,310 19,058,343 Reserve 17 (b) 1,833,783 313,783 Reserve - Transactions with NCI 17 (b) (6,158,687) - Accumulated losses 17 (a) (7,088,857) (5,787,564) EQUITY ATTRIBUTABLE TO MEMBERS 20,401,549 13,584,562

Non-controlling interests - 1,660,514 TOTAL EQUITY 20,401,549 15,245,076


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ABN 12 107 903 189

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY For the year ended 30 June 2012

Issued Capital

(Accumulated Losses)

Reserves Reserves - NCI

Total Non Controlling

Interests

Total Equity

Note $ $ $ $ $ $ $

Consolidated

Balance at 1 July 2010

4,841,926 (4,711,314)

313,783

-

444,395 -

444,395

Loss for the year 17

- (1,076,250) -

- (1,076,250) (52,462) (1,128,712)

Other comprehensive Income for the year

- - -

- - - - Total comprehensive income/(loss) for the year

- (1,076,250) -

- (1,076,250) (52,462) (1,128,712)

Non-controlling interests on acquisition of subsidiary

- - -

- - 1,747,063

1,747,063

Shares issued during period 16

14,414,934 - -

-

14,414,934 -

14,414,934

Capital raising costs 16 (198,517) - -

- (198,517) (34,087) (232,604)

Share based payments

- - -

- - - -

Balance at 30 June 2011

19,058,343 (5,787,564)

313,783

-

13,584,562

1,660,514

15,245,076

Balance at 1 July 2011

19,058,343 (5,787,564)

313,783

-

13,584,562

1,660,514

15,245,076

Loss for the year 17 - (1,301,293) -

- (1,301,293) (7,201) (1,308,494)

Other comprehensive Income for the year

- - -

- - - Total comprehensive income/(loss) for the year

- (1,301,293) -

- (1,301,293) (7,201) (1,308,494)

De-recognise non-controlling interests purchase of 19% of LEI

- - -

1,653,313

1,653,313 (1,653,313) -

Issue of shares on exercise of options with non-controlling entities - - (7,812,000) (7,812,000) - (7,812,000)

Shares issued during period 16

13,093,909 - -

-

13,093,909 -

13,093,909

Capital raising costs 16 (336,942) - -

- (336,942) - (336,942)

Share based payments

- -

1,520,000

-

1,520,000 -

1,520,000

Balance at 30 June 2012

31,815,310 (7,088,857)

1,833,783 (6,158,687)

20,401,549 -

20,401,549


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ABN 12 107 903 189

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CONSOLIDATED STATEMENT OF CASH FLOWS For the year ended 30 June 2012

Consolidated

2012 2011

Note $ $ CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees (2,983,513) (967,420)

Interest received

39,509

58,981 Interest paid (47,981) (6,551)

Receipts from customers

-

32,860

R&D tax refund

59,276

- Net cash provided by / (used in) operating activities 8(ii) (2,932,709) (882,130)

CASH FLOWS FROM INVESTING ACTIVITIES Bank accounts acquired via business combination 21

3,920

12,570 Purchase of property, plant and equipment (118,693) (1,463)

Purchase of intellectual property (400,680) -

Loan made to non-related third party (223,921) -

Net cash provided by / (used in) investing activities (739,374) 11,107

CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from issue of shares

3,586,000

1,868,934

Capital raising costs paid (336,942) (198,517)

Receipts from director-related entities

- (272,555)

Repayment of borrowings (92,365) (19,694)

Net cash provided by / (used in) financing activities

3,156,693

1,378,168

Net increase/(decrease) in cash and cash equivalents held (515,390) 507,145

Cash and cash equivalents at 1 July

961,503

454,358

Cash and cash equivalents at 30 June

446,113

961,503

The accompanying notes form part of these consolidated financial statements. F

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NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2012

23

Consegna Group Limited (Formerly $Helicon Group Limited%), is a listed public company on ASX and is incorporated and domiciled in Australia. These consolidated financial statements and notes represent those of Consegna Group Limited (Formerly $Helicon Group Limited%) and Controlled Entities (the $consolidated entity% or $Group%). The separate financial statements of the parent entity, Consegna Group Limited (Formerly $Helicon Group Limited%), have not been presented within this financial report as permitted by the Corporations Act 2001. The financial statements were authorised for issue on 28 September 2012 by the directors of the company. Note 1: Statement of Significant Accounting Policies (a) Statement of Compliance The financial report complies with Australian Accounting Standards (AASBs). Compliance with AASBs ensures that the financial report, comprising the financial statements and notes thereto, complies with International Financial Reporting Standards (IFRS). (b) Basis of Preparation

The financial statements are general purpose financial reports, which have been prepared in accordance with the requirements of Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The Group is a for profit for financial reporting purpose under Australian Accounting Standards. The accounting policies detailed below have been consistently applied to all of the years presented unless otherwise stated. Except for the cash flow information, these financial statements have been prepared on an accruals basis and are based on historical costs, modified where applicable by the measurements at fair value of selected assets and liabilities. These financial statements are presented in Australian dollars, which is the Group!s presentation and functional currencies. (c) Basis of Consolidation The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by Consegna Group Limited (Formerly Helicon Group Limited) at the end of the reporting period. A controlled entity is any entity over which the company has the ability and right to govern the financial and operating policies so as to obtain benefits from the entity!s activities. Where controlled entities have entered or left the Group during the year, the financial performance of those entities is included only for the period of the year that they were controlled. A list of controlled entities is contained in Note 24 to the financial statements. In preparing the consolidated financial statements, all intragroup balances and transactions between entities in the consolidated group have been eliminated in full on consolidation. Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent, are reported separately within the equity section of the consolidated statement of financial position and statement of comprehensive income. The non-controlling interests in the net assets comprise their interests at the date of the original business combination and their share of changes in equity since that date.

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NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2012

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)

24

Business Combination Business combinations occur where an acquirer obtains control over one or more businesses. A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed are recognised (subject to certain limited exemptions). When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is remeasured each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date. All transaction costs incurred in relation to the business combination are expensed to the statement of comprehensive income. The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase. Changes in ownership interests The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the group. A change in ownership interest results in an adjustment between the carrying amount of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and the consideration paid or received is recognised in a separate reserve within the equity attributable to owners of Consegna Group Limited. Goodwill Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the sum of:

(i) the consideration transferred; (ii) any non-controlling interest; and (iii) the acquisition date fair value of any previously held equity interest;

over the acquisition date fair value of net identifiable assets acquired. The acquisition date fair value of the consideration transferred for a business combination plus the acquisition date fair value of any previously held equity interest shall form the cost of the investment in the separate financial statements. Fair value uplifts in the value of pre-existing equity holdings are taken to the statement of comprehensive income. Where changes in the value of such equity holdings had previously been recognised in other comprehensive income, such amounts are recycled to profit or loss. The amount of goodwill recognised on acquisition of each subsidiary in which the Group holds less than a 100% interest will depend on the method adopted in measuring the non-controlling interest. The Group can elect in most circumstances to measure the non-controlling interest in the acquiree either at fair value (full goodwill method) or at the non-controlling interest!s proportionate share of the subsidiary!s identifiable net assets (proportionate interest method). In such circumstances, the Group determines which method to adopt for each acquisition and this is stated in the respective notes to these financial statements disclosing the business combination. Under the full goodwill method, the fair value of the non-controlling interests is determined using valuation techniques which make the maximum use of market information where available. Under this method, goodwill attributable to the non-controlling interests is recognised in the consolidated financial statements.

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Refer to Note 21 for information on the goodwill policy adopted by the Group for acquisitions. Goodwill on acquisition of subsidiaries is included in intangible assets. Goodwill on acquisition of associates is included in investments in associates. Goodwill is tested for impairment annually and is allocated to the Group!s cash-generating units or groups of cash-generating units, representing the lowest level at which goodwill is monitored not larger than an operating segment. Gains and losses on the disposal of an entity include the carrying amount of goodwill related to the entity disposed of. Changes in the ownership interests in a subsidiary are accounted for as equity transactions and do not affect the carrying amounts of goodwill. (d) Income Tax The income tax expense (benefit) for the year comprises current income tax expense (benefit) and deferred tax expense (benefit). Current income tax expense (benefit) charged to profit or loss is the tax payable on taxable income. Current tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation authority. Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances during the year as well unused tax losses. Current and deferred income tax expense (benefit) is charged or credited outside profit or loss when the tax relates to items that are recognised outside profit or loss. Except for business combinations, no deferred income tax is recognised from the initial recognition of an asset or liability where there is no effect on accounting or taxable profit or loss. Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled and their measurement also reflects the manner in which management expects to recover or settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary differences and unused tax losses are recognised only to the extent that it is probable that future taxable profit will be available against which the benefits of the deferred tax asset can be utilised. Where temporary differences exist in relation to investments in subsidiaries and associates, deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary difference can be controlled and it is not probable that the reversal will occur in the foreseeable future. Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur. Deferred tax assets and liabilities are offset where: (a) a legally enforceable right of set-off exists; and (b) the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where it is intended that net settlement or simultaneous realisation and settlement of the respective asset and liability will occur in future periods in which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled. (e) Property, Plant and Equipment Each class of property, plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment losses.

Plant and equipment Plant and equipment are measured on the cost basis and therefore carried at cost less accumulated depreciation and any accumulated impairment. In the event the carrying amount of plant and equipment is greater than the estimated recoverable amount, the carrying amount is written down immediately to the estimated recoverable amount and

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impairment losses are recognised either in profit or loss or as a revaluation decrease if the impairment losses relate to a revalued asset. A formal assessment of recoverable amount is made when impairment indicators are present. The carrying amount of 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 that will be received from the asset!s employment and subsequent disposal. The expected net cash flows have been discounted to their present values in determining recoverable amounts. Subsequent costs are included in the asset!s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred. Depreciation The depreciable amount of all fixed assets is depreciated on a straight-line basis over the asset!s useful life to the consolidated entity commencing from the time the asset is held ready for use. The depreciation rates used are: office equipment # 10%; motor vehicle # 25%. The assets! residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period. An asset!s carrying amount is written down immediately to its recoverable amount if the asset!s carrying amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are included in the statement of comprehensive income. (f) Financial Instruments

Initial recognition and measurement

Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions to the instrument. For financial assets, this is equivalent to the date that the Group commits itself to either the purchase or sale of the asset (ie trade date accounting is adopted). Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is classified $at fair value through profit or loss%, in which case transaction costs are expensed to profit or loss immediately. Classification and subsequent measurement

Financial instruments are subsequently measured at fair value, amortised cost using the effective interest rate method, or cost. Amortised cost is the amount at which the financial asset or financial liability is measured at initial recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation of the difference between that initial amount and the maturity amount calculated using the effective interest method. Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are applied to determine the fair value for all unlisted securities, including recent arm!s length transactions, reference to similar instruments and option pricing models. The effective interest method is used to allocate interest income or interest expense over the relevant period and is equivalent to the rate that discounts estimated future cash payments or receipts (including fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the financial asset or financial liability. Revisions to expected future net cash flows will necessitate an adjustment to the carrying value with a consequential recognition of an income or expense item in profit or loss.

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The Group does not designate any interests in subsidiaries, associates or joint venture entities as being subject to the requirements of Accounting Standards specifically applicable to financial instruments. The Group!s financial instruments are limited to cash, accounts receivable, other financial assets and liabilities and interest bearing liabilities.

i) Financial assets at fair value through profit or loss

Financial assets are classified at $fair value through profit or loss% when they are held for trading for the purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated as such to avoid an accounting mismatch or to enable performance evaluation where a Group of financial assets is managed by key management personnel on a fair value basis in accordance with a documented risk management or investment strategy. Such assets are subsequently measured at fair value with changes in carrying value being included in profit or loss.

ii) Loans and receivables

Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market and are subsequently measured at amortised cost. Loans and receivables are included in current assets, where they are expected to mature within 12 months after the end of the reporting period.

iii) Financial liabilities

Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised cost.

Derivative instruments

Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently remeasured to their fair value at the end of each reporting period. The accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument, and if so, the nature of the item being hedged. As the Group does not qualify for hedging accounting, changes in the fair value of all its derivative instruments are recognised immediately in profit or loss and are included in other income or other expenses. Impairment

At the end of each reporting period, the Group assesses whether there is objective evidence that a financial instrument has been impaired. A financial asset or group of financial assets is deemed to be impaired if and only if, there is objective evidence of impairment as a result of one or more events (a $loss event) having occurred, which has an impact on the estimated future cash flows of the financial asset(s). Derecognition

Financial assets are derecognised where the contractual rights to receipt of cash flows expire or the asset is transferred to another party whereby the Group no longer has any significant continuing involvement in the risks and benefits associated with the asset. Financial liabilities are derecognised where the related obligations are discharged, cancelled or expired. The difference between the carrying value of the financial liability extinguished or transferred to another party and the fair value of consideration paid, including the transfer of non-cash assets or liabilities assumed, is recognised in profit or loss. (g) Impairment of Non-Financial Assets At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. The assessment will include the consideration of external and internal sources of information, including dividends received from subsidiaries, associates or jointly controlled entities deemed to be out of pre-acquisition profits. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset!s fair value less costs to sell and value in use, to the asset!s carrying amount. Any excess of the asset!s carrying amount over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with another Standard (eg in accordance with the revaluation model in AASB 116). Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other Standard.

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Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which the asset belongs. Impairment testing is performed annually for goodwill and intangible assets with indefinite lives and those not yet ready for use. (h) Intangibles other than Goodwill Intangible assets that meet the recognition criteria of AASB138 Intangible Assets are capitalized at cost at the date of acquisition. Expenditure on intangible assets that does not meet the recognition criteria is charged against profits in the year in which the expenditure is incurred. Following initial recognition the cost model is applied to intangible asset classes. The useful life of intangible assets is assessed as either finite or infinite. Amortisation of intangible assets with finite useful lives is charged against profits. The costs of intangible assets with an infinite life are not amortised. Intangible assets are tested for impairment where an indicator or impairment exists and in the case of indefinite life intangibles annually, either individually or at the cash generating unit level. (i) Intellectual property Intellectual property acquired as part of a business combination is recognised separately from goodwill. Intellectual property is carried at cost, which is its fair value at the date of acquisition less accumulated amortisation and impairment losses. Intellectual property is amortised over its useful life commencing from the completion of development. The Group will carry its Intellectual property at cost whilst it is under development and it is subject to annual impairment testing. (ii) Patents and trademarks Patents and trademarks are recognised at cost of acquisition. Patents and trademarks have a finite life and are carried at cost less any accumulated amortisation and any impairment losses. Patents and trademarks are amortised over their useful lives. (iii) Research and development Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies identify that the project is expected to deliver future economic benefits and these benefits can be measured reliably. Development costs have a finite life and are amortised on a systematic basis based on the future economic benefits over the useful life of the project. Gains or losses arising from de-recognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in profit or loss when the asset is derecognised. (i) Foreign Currency Transaction and Balances Functional and presentation currency The functional currency of each of the Group!s entities is measured using the currency of the primary economic environment in which that entity operates. The financial statements are presented in Australian dollars which is the Company!s functional and presentation currency. Transaction and balances Foreign currency transactions are translated into functional currency using the exchange rates prevailing at the date of the transaction. Foreign currency monetary items are translated at the year end exchange rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when fair values were determined.

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Exchange differences arising on the translation of monetary items are recognised in profit or loss, except where deferred in equity as a qualifying cash flow or net investment hedge. Exchange differences arising on the translation of non-monetary items are recognised directly in equity to the extent that the gain or loss is directly recognised in equity; otherwise the exchange difference is recognised in profit or loss. Group Companies The financial results and position of foreign operations, whose functional currency is different from the Group!s presentation currency, are translated as follows:

# assets and liabilities are translated at exchange rates prevailing at the end of the reporting period; # income and expenses are translated at average exchange rates for the period where the average rate

approximates the rate at the date of transaction; and # retained earnings are translated at the exchange rates prevailing at the date of the transaction.

Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars are recognised in other comprehensive income and included in the foreign currency translation reserve in the statement of financial position. These differences are recognised in profit or loss in the period in which the operation is disposed of. (j) Equity settled transactions Options

The Company provides benefits to employees, industry consultants and senior management of the Group in the form of share based payments. Share-based payments to employees are measured at the fair value of the instruments issued and amortised over the vesting periods. Share-based payments to non-employees are measured at the fair value of goods or services received or the fair value of the equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or services are received. The corresponding amount is recorded to the option reserve. The fair value of options is determined using the Black-Scholes pricing model. The number of shares and options expected to vest is reviewed and adjusted at the end of each reporting period such that the amount recognised for services received as consideration for the equity instruments granted is based on the number of equity instruments that eventually vest. Refer to note 18 of the employee share option plan. Shares

The Company established an Executive Incentive Scheme, under which the first allocation of shares was made to the CEO after shareholders! approval in 2007. The scheme provides that 500,000 Remuneration Shares will be issued to the participating executive, financed by interest free, limited recourse loan, secured only by the proceeds from sale of the shares. The Remuneration Shares were issued on each anniversary of the Company!s admission to the ASX official list being on 21 September 2007 and 2008 and the price at which the Remuneration Shares were be issued was the volume-weighted price of shares traded on ASX in the 30 days prior to each anniversary date. The Remuneration Shares were recorded as being issued free until such time as the shares are sold, when the loan repayment proceeds will be recorded as issued capital. All shares issued under the Executive Incentive Scheme with non-recourse loans are considered to be options and are accounted for in accordance with the note above on options. The maximum number of shares to be issued during the current three year term of the executive!s contract was 1,500,000.

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(k) Employee benefits Provision is made for the company!s liability for employee benefits arising from services rendered by employees to the end of the reporting period. Employee benefits that are expected to be settled within one year have been measured at the amounts expected to be paid when the liability is settled. Employee benefits payable later than one year have been measured at the present value of the estimated future cash outflows to be made for those benefits. In determining the liability, consideration is given to employee wage increases and the probability that the employee may satisfy any vesting requirements. Those cash flows are discounted using market yields on national government bonds with terms to maturity that match the expected timing of cash flows attributable to employee benefits. (l) Cash and Cash Equivalents Cash and cash equivalents include cash on hand, deposits available on demand with banks, other short-term highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are reported within short-term borrowings in current liabilities in the consolidated statement of financial position. (m) Revenue Revenue is measured at the fair value of the consideration received or receivable after taking into account any trade discounts and volume rebates allowed. When the inflow of consideration is deferred, it is treated as the provision of financing and is discounted at a rate of interest that is generally accepted in the market for similar arrangements. The difference between the amount initially recognised and the amount ultimately received is interest revenue. Interest revenue is recognised using the effective interest rate method. (n) Borrowing Costs All borrowing costs are expensed in the Consolidated Statement of Comprehensive Income in the period in which they are incurred. (o) Goods and Services Tax (GST) Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO). Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount of GST recoverable from, or payable to, the ATO is included with other receivables or payables in the consolidated statement of financial position. Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities, which are recoverable from, or payable to, the ATO are presented as operating cash flows included in receipts from customers or payments to suppliers. (p) Comparative Figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year. (q) Critical Accounting Estimates and Judgements The directors evaluate estimates and judgments incorporated into the financial report based on historical knowledge and best available current information. Estimates assume a reasonable expectation of future events and are based on current trends and economic data, obtained both externally and within the Group.

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Share-based Payments

The value attributed to share options and remuneration shares issued is an estimate calculated using an appropriate mathematical formula based on an option pricing model. The choice of models and the resultant option value require assumptions to be made in relation to the likelihood and timing of the conversion of the options to shares and the value and volatility of the price of the underlying shares. Refer to note 19 for more details. Impairment

The Group assesses impairment at the end of each reporting period by evaluating conditions and events specific to the Group!s holding of intangible assets with indefinite lives and goodwill. Recoverable amounts are assessed using value-in-use calculations, which incorporate various key assumptions. Value-in-use calculations performed in assessing recoverable amounts incorporate a number of key estimates. Refer to note 13 for the impairment assessment undertaken in respect of the intangible balance. No impairment was recognised as at 30 June 2011 and 2012. Acquisition Accounting

In accounting for the acquisitions made during the current and prior year, the Group had to make a number of judgements and estimates in determining the fair value of the amounts acquired and the purchase consideration paid / payable. Some of these required value in use calculations to be prepared. Refer to note 13 and 21. (r) Trade and other payables Trade payables and other payables are carried at cost and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. (s) Earnings per share Basic earnings per share is calculated as net profit/(loss) attributable to members of the Company, adjusted to exclude any costs of servicing equity (other than dividends), divided by the weighted average number of ordinary shares, adjusted for any bonus element. The diluted earnings per share is calculated as net profit/loss attributable to members of the Company, adjusted for: • costs of servicing equity (other than dividends); • the after tax effect of dividends and interest associated with dilutive potential ordinary shares that have been

recognised as expenses; and other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the

• weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus element.

(t) Issued capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. (u) Application of the going concern basis The financial report has been prepared on a going concern basis, which assumes the settlement of liabilities and realisation of assets in the normal course of business. The directors believe that this basis of accounting is appropriate after considering the following factors:

• The Company has a demonstrated record of being able to raise fund to supplement its working capital as evident from the fact that the Company successfully raised approximately $3.25 million (2011:$1.67 million) (after costs) during the financial year.

• The Directors have in place processes to control and monitor the Group!s costs structure via the manner in which the Group has been structured.

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• The Group is presently implementing/executing strategies with a view to generating a sustainable source of royalty income. The Group having executed the financing deal with Lind Partners as detailed in note 27 past 30 June 2012.

It is recognised that should the Company not be able to monitor its costs, continue to raise funds or execute its strategy to generate royalty income, the Group may not be able to realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts nor to the amounts and classification of liabilities that might be necessary should the Group not continue as a going concern. (v) Adoption of new and revised standards The following new standards and amendments to standards are mandatory for the first time for the financial year beginning 1 July 2011:

• Amendments to AASB 7 'Financial Instruments: Disclosure • Amendments to AASB101 Presentation of Financial Statements and, • AASB 124 Related Party Disclosures (revised December 2009)

The adoption of these standards did not have a material impact on the current period or any prior period and is not likely to affect future periods. (w) New Accounting Standards for Application in Future Periods The AASB has issued new and amended Accounting Standards and Interpretations that have mandatory application dates for future reporting periods and which the Group has decided not to early adopt. A discussion of those standards which are applicable to the Group and their impact is as follows:

• AASB 9: Financial Instruments (December 2010) (applicable for annual reporting periods commencing on or after 1 January 2015) This Standard includes revised requirements for the classification and measurement of financial instruments, as well as recognition and derecognition requirements for financial instruments. The Group has not yet determined any potential impact on the financial statements.

The key changes made to accounting requirements include: - simplifying the classifications of financial assets into those carried at amortised cost and those carried

at fair value; - simplifying the requirements for embedded derivatives; - removing the tainting rules associated with held-to-maturity assets;

- removing the requirements to separate and fair value embedded derivatives for financial assets carried at amortised cost;

- allowing an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument;

- requiring financial assets to be reclassified where there is a change in an entity!s business model as they are initially classified based on: (a) the objective of the entity!s business model for managing the financial assets; and (b) the characteristics of the contractual cash flows; and

- requiring an entity that chooses to measure a financial liability at fair value to present the portion of the change in its fair value due to changes in the entity!s own credit risk in other comprehensive income, except when that would create an accounting mismatch. If such a mismatch would be created or enlarged, the entity is required to present all changes in fair value (including the effects of changes in the credit risk of the liability) in profit or loss.

• AASB 10: Consolidated Financial Statements, AASB 11: Joint Arrangements, AASB 12: Disclosure of Interests

in Other Entities, AASB 127: Separate Financial Statements (August 2011), AASB 128: Investments in

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Associates and Joint Ventures (August 2011) and AASB 2011# 7: Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards [AASB 1, 2, 3, 5, 7, 9, 2009# 11, 101, 107, 112, 118, 121, 124, 132, 133, 136, 138, 139, 1023 & 1038 and Interpretations 5, 9, 16 & 17] (applicable for annual reporting periods commencing on or after 1 January 2013). AASB 10 replaces parts of AASB 127: Consolidated and Separate Financial Statements (March 2008, as amended) and Interpretation 112: Consolidation # Special Purpose Entities. AASB 10 provides a revised definition of control and additional application guidance so that a single control model will apply to all investees. The Group has not yet been able to reasonably estimate the impact of this Standard on its financial statements.

• AASB 13: Fair Value Measurement and AASB 2011# 8: Amendments to Australian Accounting Standards arising from AASB 13 [AASB 1, 2, 3, 4, 5, 7, 9, 2009# 11, 2010# 7, 101, 102, 108, 110, 116, 117, 118, 119, 120, 121, 128, 131, 132, 133, 134, 136, 138, 139, 140, 141, 1004, 1023 & 1038 and Interpretations 2, 4, 12, 13, 14, 17, 19, 131 & 132] (applicable for annual reporting periods commencing on or after 1 January 2013). AASB 13 defines fair value, sets out in a single Standard a framework for measuring fair value, and requires disclosures about fair value measurement. AASB 13 requires: # inputs to all fair value measurements to be categorised in accordance with a fair value hierarchy; and # enhanced disclosures regarding all assets and liabilities (including, but not limited to, financial assets and

financial liabilities) to be measured at fair value. These Standards are not expected to significantly impact the Group.

• AASB 2011# 9: Amendments to Australian Accounting Standards # Presentation of Items of Other Comprehensive Income [AASB 1, 5, 7, 101, 112, 120, 121, 132, 133, 134, 1039 & 1049] (applicable for annual reporting periods commencing on or after 1 July 2012). The main change arising from this Standard is the requirement for entities to group items presented in other comprehensive income (OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently. This Standard affects presentation only and is therefore not expected to significantly impact the Group.

(x) Non-Current Assets (or Disposal Groups) held for Sale and Discontinued Operations

Non-current assets (or disposal groups) are classified as held for sale if their carrying amount will be recovered principally through a sale transaction rather than through continuing use and a sale is considered highly probable. They are measured at the lower of their carrying amount and fair value less costs to sell, except for assets such as deferred tax assets, assets arising from employee benefits, financial assets and investment property that are carried at fair value and contractual rights under insurance contracts, which are specifically exempt from this requirement. An impairment loss is recognised for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. A gain is recognised for any subsequent increases in fair value less costs to sell of an asset (or disposal group), but not in excess of any cumulative impairment loss previously recognised. A gain or loss not previously recognised by the date of the sale of the non-current asset (or disposal group) is recognised at the date of derecognition. Non-current assets (including those that are part of a disposal group) are not depreciated or amortised while they are classified as held for sale. Interest and other expenses attributable to the liabilities of a disposal group classified as held for sale continue to be recognised.

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Non-current assets classified as held for sale and the assets of the disposal group classified as held for sale are presented separately from the other assets in the statement of financial position. The liabilities of a disposal group classified as held for sale are presented separately from other liabilities in the statement of financial position. A discontinued operation is a component of the company that has been disposed of or is classified as held for sale and that represents a separate major line of business or geographical area of operations, is part of a single co - ordinated plan to dispose of such a line of business or area of operations, or is a subsidiary acquired exclusively with a view to resale. The results of discontinued operations are presented separately in the statement of comprehensive income.

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Note 2: Revenues and Expenses

Consolidated

2012 2011 (a) Revenues Note $ $ Operating activities - Discount on Acquisition due to Bargain Purchase 21 5,438,740 -

- Bank interest received

39,508

58,981

- Other Operating Income

37,500

33,720

Total revenue 5,515,748 92,701

(b) Expenses 2012 2011 Loss from ordinary activities before income tax expense has been determined after charging the following items: $ $

Depreciation of equipment

15,172

2,279

Impairment of receivable

9,218 -

24,390

2,279 Share based payments expense 1,520,000 - Note 3: Employee benefits expense Consolidated

2012 2011

Note $ $ Wages and salaries 308,099 - Other associated staff costs 2,432 - Superannuation contributions 26,574 - Increase/(decrease) in annual leave liability 22,148 (31,442) Share based payments expense 19 720,000 84,000

1,079,253 52,558

Less discontinued operation portion (73,368) -

1,005,885 52,558

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Note 4: Income Tax (Expense) / Benefit The Group has not commenced significant trading. At its current stage of operational development the Group is not in a position to satisfy the accounting criteria of AASB112: Income Taxes to bring to account the benefit of its tax losses. Accordingly no current or deferred income tax benefits have yet been brought to account. Consolidated 2012 2011 $ $ Current Tax 59,276 - A reconciliation between income tax (expense) / benefit and the product of accounting result before income tax multiplied by the Group's applicable income tax rate is as follows:

Accounting loss before tax (1,308,494) (1,128,712) Prima facie tax benefit on loss from ordinary activities before income tax at 30% (2011: 30%)

(392,548) (338,614) Tax effect of: - Non-assessable income (1,642,872) - - Non-deductible expenses 498,423 6,805 - Adjustment to prior year estimate 59,276 - (1,477,721) (331,809) Add: Tax effect of capital raising costs not recognised (101,083) (59,555) (1,578,804) (391,364) Less: - income tax benefit not brought to account 1,638,080 (391,364) Income tax benefit bought to account 59,276 - The applicable weighted average effective tax rates: 4.04% 0% 2012 2011 Current income tax benefit not brought to account relates to items credited or charged to:

$ $

- Statement of comprehensive income 355,938 246,351 - Statement of changes in equity - - 355,938 246,351 (a) Deferred tax Assets not recognised

Temporary differences 101,083 59,555 Unrecognised tax losses [operating losses] 3,188,985 1,619,697 Offset by DTL - related to acquisition of Aspen Medisys not recognised note (21) (1,631,000) - 1,659,068 1,679,252 The Company has no capital losses for income tax purposes and the undeducted tax losses referred to above are wholly comprised of operating losses. The amount of Unrecognised Tax Asset relating to items that have been charged or credited to Equity:

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Note 4: Income Tax (Expense) / Benefit (continued)


$ $ Charged to share capital; transaction costs 101,083 59,556

- - (b) Deferred Tax Liability Temporary differences

Note 5: Segment Reporting The Group has operated in one segment, being the identification, acquisition and commercialisation of late stage therapeutic delivery technologies. The segment details are therefore fully reflected in the body of the financial report. Note 6: Assets and Liabilities Classified as Held for Sale As announced to the ASX on 1 May 2012, the Company agreed to sell its share holding in Lingual Consenga Pty Ltd ($Lingual%) to Imugene Limited ($IMU%) in consideration of 100 million shares in IMU. The transaction was subsequently settled on 17 July 2012. Financial information relating to Lingual is set out below. The financial performance of the discontinued operations, which has been included in the loss per the statement of comprehensive income is as follows: Revenue - Expense (546,370) Loss (546,370) Loss attributable to members of parent entity (546,370) The assets and liabilities of Linguet, which have been classified as disposal assets and related liabilities as at 30 June 2012 are as follows: ASSETS

Intangibles - IP 2,859,591 Cash and short-term deposits 1

2,859,592 LIABILITIES Royalty Payable 2,386,241

2,386,241 Net assets classified as held for sale 473,351

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Note 7: Earnings (Loss) Per Share Consolidated

2012 2011

$ $ Reconciliation of earnings to profit/(loss): Loss (1,308,494) (1,128,712)

Loss attributable to non-controlling interest (7,201) (52,462)

(1,301,293) (1,076,250) Basic earnings/(loss) per share (cents) (0.20) (0.36) Loss from continuing operations: (762,124) (1,128,712) Loss attributable to non-controlling interest (7,201) (52,462)

(754,923) (1,076,250) Basic earnings/(loss) per share (cents) from continuing operations (0.12) (0.36)

Loss from discontinued operations: (546,370) - Loss attributable to non-controlling interest - -

(546,370) -

Basic earnings/(loss) per share (cents) from discontinuing operations (0.08)

-

Weighted average number of ordinary shares outstanding during the year used to calculate basic EPS. 662,791,093 298,594,961

Weighted average number of ordinary shares outstanding during the year used to calculate dilutive EPS 735,657,234 298,594,961

Diluted earnings per share is not disclosed as the result is anti-dilutive in nature. Note 8: Cash and Cash Equivalent

Consolidated 2012 2011 $ $ Cash at bank and on hand

446,113

961,503 Cash at bank earns interest at floating rates based on daily bank deposit rates. The effective interest rate was 3.50% (2011: 4.75%). (i) Reconciliation to Consolidated Statement of Cash Flows:

For the purposes of the consolidated statement of cash flows, cash and cash equivalents comprise cash on hand and at bank. Cash at the end of the financial year as shown in the consolidated statement of cash flows is reconciled to items in the consolidated statement of financial position as follows:

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Note 8: Cash and Cash Equivalent (continued) Consolidated 2012 2011

$ $ Cash and cash equivalents

446,113

961,503 ii) Reconciliation of loss for the year to net cash flows from operating activities

2012 2011 $ $ (Loss) for the year (1,308,494) (1,128,712) Cash flows excluded from loss attributable to operating activities: Non-cash flows in loss:

Depreciation

15,172

2,279

Impairment of receivables and prepayments

9,218 -

Equity settled share based payments

1,520,000

146,000

Bad debt recovery (37,500)

-

Discount on Acquisition of Bargain Purchase (5,438,740)

-

Discount expenses

103,363

- Settlement of payables via shares 1,364,925 Other 26,228

Change in net assets and liabilities, net of effects from acquisition and disposal of businesses:

(Increase)/decrease in assets:

Trade and other receivables

108,078 (66,229) Inventory (2,629) -

Other current assets

(95,547)

97,963 Increase/(decrease) in liabilities:

Current payables and accruals

803,218

66,569

Net cash provided by / (used in) operating activities (2,932,708) (882,130)

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Note 9: Current Trade and Other Receivables Consolidated 2012 2011 Current: $ $ Other receivables

9,218

14,576 Allowance for Impairment (9,218) Related party receivables

2,618

24,159 Receivable from third party

-

125,000 Provision for Impairment

- (125,000) GST receivable

72,331

175,050

74,949

213,785 During March to June 2009, the Company advanced $125,000 to Jess Mining, a Peruvian incorporated company in which Dr Saliba Sassine had a 50% interest. The advance was made with the approval of the three non-associated directors of the Company at that time and was made on an arm!s length basis as set out in an information memorandum circulated to various parties, including the Company, offering investment into the Jess Mining venture. In satisfaction of this Debt Laconia Resources Limited (ABN 29 137 984 297) issued shares to the value of $37,500 on 21/06/12, which are shown as other income (see note 2a). All of the Group!s receivable are denominated in Australian Dollars and do not carry any foreign exchange risk. Due to the short-term nature of the current receivables, their carrying value is assumed to approximate their fair value. The table below details the Group's credit risk (prior to collateral and other credit elements). Amounts are considered past due when the debt has not been settled within normal credit terms.

Not Past Due Past Due But

Not Impaired Past Due and

Impaired Consolidated 2012 2011 2012 2011 2012 2011

$ $ $ $ $ $ Current

Other receivables

-

14,576

-

-

9,218

-

Related party receivables

2,618

24,159

-

-

-

-

GST receivable

72,331

175,050

-

-

-

-

Receivable from third party

-

-

-

-

-

125,000

74,949

213,785

-

-

9,218

125,000

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Note 10: Inventories Consolidated 2012 2011

$ $ Inventory 2,628 - 2,628 - Note 11: Other Current Assets


$ $ Prepayments: Purchases 100,557 5,010 Other 37,500 - 138,057 5,010 Note 12: Property, Plant and Equipment Consolidated

2012 2011

$ $ Office equipment At cost 197,800 32,456 Accumulated depreciation (67,357) (12,157)

Net carrying amount 130,443 20,299

Motor Vehicle At cost 86,368 - Accumulated depreciation (9,857) -

Net carrying amount 76,511 -

Total Property, Plant and Equipment 206,954 20,299

Movement in Carrying Amount: Office Equipment Carrying Amount at the beginning of the year 20,299 5,323 Additions 32,331 17,255 Additions via acquisition of subsidiary 83,133 - Depreciation (5,320) (2,279)

Carrying amount at the end of the year 130,443 20,299

Motor Vehicle Carrying Amount at the beginning of the year - - Additions 86,368 - Depreciation (9,857) - Carrying amount at the end of the year 76,511 20,299

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Note 13: Intangible Assets

Consolidated

Note

2012 2011

$ $

Development costs

350,680

-

Goodwill at cost

4,951,995

4,951,995

Intellectual property at cost

16,841,293

9,566,217

22,143,968

14,518,212

Movement in Carrying Amounts:

Development

costs Goodwill Intellectual property Total

Carrying amount at 1 July 2010

-

-

-

-

Acquisition via business combination 21

-

4,951,995

9,566,217

14,518,212

Carrying amount at 30 June 2011

-

4,951,995

9,566,217

14,518,212

Additions # internal development

350,680 -

-

350,680

Additions by acquisition (Linguet" ) - -

2,859,591

2,859,591 Reclassified to disposal assets - - (2,859,591) (2,859,591) Acquisition via business combination (Aspen MediSys) 21 - -

7,275,076

7,275,076

Carrying amount at 30 June 2012

350,680

4,951,995

16,841,293

22,143,968 In regard to the intellectual properties acquired during the current year (Aspen MediSys and Linguet" ), the directors have assessed these assets to have an indefinite life until they are commercialised. They will be subjected to impairment testing annually together with the Group!s other intellectual property at 30 June. As stated in note 6, with the decision to sell the shares in Lingual Consegna Pty Ltd, the Linguet intangible asset has been reclassified as a disposal asset held for sale.

Details of the purchase consideration Linguet

The purchase consideration comprised of the following:

1. Cash consideration of $50,000; 2. Share consideration of 1,370,000 shares valued at 3 cents/share, totalling $41,100; 3. Deferred purchase consideration consisting of royalty payable on sales receipt at a rate of 15% totalling $2.386

million and the value of the call option issued to the vendors totalling $382,250. Details used to calculate the deferred purchase consideration identified in 3 are outlined below:

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Note 13: Intangible Assets (continued) Royalty payable The value of the royalty payable has been determined by preparing a DCF model using the following key assumptions (which have been determined with reference to a comparable licensing transaction as well as considering other data).

- Probability of having to pay the royalty # 25%; - Expected patent grant date of Jan 2013 with expected licensing date of Jan 2015; and - Present value of the royalty stream of approximately $63.633 million determined using an expected upfront

payment $30 million and recurring royalty stream of $25 million per annum for a period of 13 years, discounted using a rate 25%

Call option The value of the option has been determined using the following key assumptions:

- The 25 million shares which the Company has to issue in the event of terminating the call option under the purchase agreement;

- Probability of having to issue the 25 million shares of 25%; - Probable date of terminating the option of June 2013; - Risk free rate of 3.72%; - Volatitilty factor of 162%; and - Expected value of the shares of approximately 6 cents.

The call option was settled on 1 May 2012 via the issue of share totally $382,250. Details of how the fair value Aspen Medisys technology was established, as part of a business combination, are provided in note 21. Impairment testing of goodwill and intellectual property ( IP ) Goodwill is allocated to cash-generating units, which are based on the group!s reporting segment. At 30 June 2012, the group had only a single reporting segment as identified in note 5. The recoverable amount of the goodwill and Leading Edge Instruments Limited intellectual property ($IP%) and internal development cost has been determined by the Board by preparing a value in use calculation. Value-in-use is calculated based on the present value of cash flow projections over the expected product life of the relevant IP with the period extending beyond five years extrapolated using an estimated growth rate. The cash flows were discounted using a discount rate ranging between 15 # 18% (2011 15%-18%) at the beginning of the budget period. The growth rate used was 3% (2011 3%). The budgets reflected the Board!s best estimate of the products! expected market share and the Company!s expected royalty revenue. Costs were determined taking into account the expected cost structure as well as estimated weighted average inflation rates over the period. Discount rates used were pre-tax rates. The Company also engaged the service an of external valuer which specialised in the appraisal and valuation of IP and knowledge-based intangible assets, including in-process R&D ($IPR&D%), which includes amongst other things medical devices, diagnostic systems, pharmaceuticals, genetic and recombinant DNA technologies, stem cell therapies and complementary and alternative medicines. The valuation report supported the Company!s assessment that the IP and goodwill had not been impaired at 30 June 2012 and 2011. In respect of Linguet the net assets to be sold is lower then the purchase consideration receivable and no impairment was recorded. In respect of the Aspen Medisys IP subsequent to obtaining the independent valuation to apply acquisition accounting as highlighted in note 21 the board updated the valuation as at 30 June 2012, in order to test the Aspen IP for impairment.

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Note 13: Intangible Assets (continued) The assumptions used to determine the value of the animal business at 30 June 2012 remained the same as those used at 31 December 2011. The assumptions to value the human business were updated as follows: Assumptions Scenario A Scenario B Market value of technology $337M $19.209M Probability of matching 10% 33% Time required to achieve outcome 6 years 3.5 years Discount rate 25% 25% No impairment loss was recognised as a result of the impairment assessment undertaken by the Board of Directors as at 30 June 2012. Note 14: Trade and Other Payables Consolidated 2012 2011 Current $ $ Unsecured Trade and other payables (i) 883,710 177,506 Accruals 128,717 31,752 Related party payables (ii) 25 245,436 1,012,452 454,694

i) Trade and other payables are non-interest bearing and are normally settled on 30-day terms.

ii) For terms and conditions relating to related party payables refer to note 24. Note 15: Interest Bearing Liability Consolidated 2012 2011 Current

$ $

Lumney finance # unsecured 26,130 19,039 Macquarie Premium Funding - unsecured 19,136

45,266 19,039 Note 16: Issued Capital 949,811,605 (2011: 502,191,134) Ordinary shares issued and fully paid

2012 2011 $ $

Ordinary Shares

Issued and fully paid 33,173,974

20,158,295

Cost of raising share capital (1,358,664) (1,099,952)

31,815,310

19,058,343 Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number of shares held. At all shareholder!s 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.

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Note 16: Issued Capital (continued) Movement in ordinary shares on issue 2012 2011 No. $ No. $ At 1 July 20,158,295 19,058,343 99,676,454 4,841,926 03/09/2010 Rights Issues @$0.0125 - 36,542,133 456,777 04/10/2010 Placement of Rights Issue Shortfall @$0.0125 - - 112,972,547 1,412,157 24/02/2011 Acquisition of Leading Edge Instruments Ltd - - 248,000,000 12,400,000 29/06/2011 Issued for Services @$0.022 - - 500,000 11,000 29/06/2011 Issued for Services @$0.03 - - 4,500,000 135,000 16/08/2011 Issued for Services @$0.03 7,733,333 232,000 - - 16/08/2011 Issued for Services @$0.03 16,900,000 507,000 - - 08/09/2011 Private Placement @$0.02 44,900,000 898,000 - - 04/11/2011 Acquisition of Linguet IP @$0.03 1,370,000 41,100 - - 16/11/2011 Exercise of Options @$0.025 3,800,000 95,000 - - 23/11/2011 Exercise of Options @$0.025 7,500,000 187,500 - - 15/12/2011 Issued for Services @$0.02 6,820,000 136,400 - - 21/12/2011 Private Placement @$0.025 24,520,000 613,000 - - 13/01/2012 Exercise of Options @$0.025 650,000 16,250 - - 13/01/2012 Exercise of Options @$0.035 1,500,000 52,500 - - 17/01/2012 Issued for Services @$0.038 2,500,000 95,000 - - 17/01/2012 Issued for Services @$0.04 2,500,000 100,000 - - 17/01/2012 Issued for Services @$0.029 1,465,138 42,489 - - 25/01/2012 Private Placement @$0.04 37,500,000 1,500,000 - - 05/03/2012 Private Placement @$0.04 3,500,000 140,000 - - 05/03/2012 Issued for services @$0.04 2,000,000 80,000 - - 05/03/2012 Exercise of Options @$0.025 750,000 18,750 - - 20/03/2012 Exercise of Options @$0.035 500,000 17,500 - - 20/03/2012 Exercise of Options @$0.025 1,900,000 47,500 - - 20/03/2011 Issued for Services @$0.035 2,062,000 72,170 - - 16/04/2012 Exercise of LEI call option 1 @$0.032 126,000,000 4,032,000 - - 18/04/2012 Exercise of LEI call option 1 @$0.03 126,000,000 3,780,000 - - 01/05/2012 Termination of call option @$0.03 25,000,000 382,250 - - 10/5/2012 Issued for Services @$0.03 250,000 7,500 - - Less Costs of Capital Raising at 30 June

(336,942)

- (198,517)

467,778,766

31,815,310

502,191,134

19,058,343

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Note 16: Issued Capital (continued) Capital management The Company controls the capital of the Group in order to maintain a sustainable debt to equity ratio, generate long term shareholder value and ensure it can fund its operation and continue as a going concern. There are no externally imposed capital requirements. Management manages the Group!s capital by assessing the Group!s financial risk and adjusting its capital structure in response to changes in these risks and the market. These responses include the management of debt levels and share issues. There have been no changes in the strategy adopted by management to control the capital of the Group since the prior year. Note 17: Accumulated losses and Reserves Note 17(a): Accumulated losses Consolidated 2012 2011 $ $

Movements in accumulated losses were as follows: Balance at 1 July (5,787,564) (4,711,314) Net loss for the year (1,301,293) (1,076,250) Balance at 30 June (7,088,857) (5,787,564) Note 17(b): Reserves Consolidated 2012 2011 $ $

Reserve comprises of:

Options reserve 1,833,783 313,783 NCI reserve (6,158,687) - (4,324,904) 313,783 Movements in reserves were as follows: Balance at 1 July 313,783 313,783 Transaction with Non Controlling Interest (6,158,687) Share based payments - employees/directors 1,520,000 - Balance at 30 June (4,324,904) 313,783 The option reserve is used to record expense on valuation of employee share options. NCI reserve is used to record adjustments arising from transactions with non-controlling interest.

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Note 18: Options Consolidated 2012 2011 Movements in options were as follows:

No.

Weighted Average Price

$ No.

Weighted Average Price

$ Balance at 1 July 31,000,000 0.047 6,000,000 0.020 Options issued 159,086,667 0.044 25,000,000 0.010 Options exercised (16,600,000) 0.026 - - Options lapsed/ expired (2,000,000) 0.200 - - Balance at 30 June 171,486,667 0.044 31,000,000 0.047

All options issued vested on granting. The options outstanding at 30 June 2012 have the following terms attached:

• 4,000,000 options granted 23 November 2009 are exercisable at $0.20 per share on or before 31 May 2013. • 25,000,000 options issued pursuant to the closing of the rights issue shortfall underwriting. They are exercisable at

$0.01 on or before 30 June 2015. The options were issued at $0.0001 each.

• 30,300,000 options granted 2 November 2011 are exercisable at $0.025 per share on or before 23 December 2014.

• 20,000,000 options granted 7 December 2011 are exercisable at $0.05 per share on or before 7 December 2014.

• 20,000,000 options granted 7 December 2011 are exercisable at $0.10 per share on or before 7 December 2014. • 22,520,000 options granted 21 December 2011 are exercisable at $0.035 per share on or before 31 December

2013. • 30,000,000 options granted 23 December 2011 are exercisable at $0.045 per share on or before 31 December

2014.

• 12,500,000 options granted 25 January 2012 are exercisable at $0.035 per share on or before 31 January 2013.

• 6,000,000 options granted 29 February 2012 are exercisable at $0.03 per share on or before 28 February 2015.

• 1,166,667 options granted 5 March 2012 are exercisable at $0.035 per share on or before 31 January 2013. The weighted average remaining contractual life of options outstanding at year end was 2.255 years (2011:3.49 years). As at the date of exercise, the weighted average share price of the options exercised during the year was $0.0341. The Company established an employee share option plan on 29 November 2011 to provide ongoing incentive to employees and consultants of the Company to strive for groups performance. All employees and consultants are entitled to participate in the plan. The options are issued for no consideration and carry no entitlements to voting rights or dividends of the Group. The number available to be granted is determined by the Board and is based on performance measures established by the Board.

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Note 19: Share Based Payments a) Share options granted to employees and directors as share based payments: Employees:

On 23 December 2011, 30,000,000 share options were granted to employees in accordance with the Consegna Group Limited!s employee share option plan to take up ordinary shares at an exercise price of $0.045 each. The options are exercisable on or before 31 December 2014. The options hold no voting or dividend rights and are not transferrable.

Grant Date

Number

23 December 2011 30,000,000 The weighted average fair value of options granted during the year was $0.024 (2011: $0.00). These values were calculated used the Black-Scholes option pricing model applying the following inputs:

Weighted average exercise price: $0.045 Weighted average life of the option: 3 years Expected share price volatility 160.9% Risk-free interest rate 3.79%

The options vested on grant date.

Historical Volatility has been the basis for determining expected share price volatility as it is assumed that this is indicative of future movements. The life of the options is based on historical exercise patterns, which may not eventuate in the future. Included under employee benefits expense in the statement of comprehensive income is $720,000 which relates to equity-settled share-based payment transactions (2011: $0).

Directors: On 29 November 2011, 40,000,000 share options were granted to directors under shareholders! approval as detailed below. The options are exercisable on or before 7 December 2014. The options hold no voting or dividend rights and are not transferrable. Options granted to directors are as follows:

Grant Date

Number

Exercise Price

29 November 2011 20,000,000 $0.05 29 November 2011 20,000,000 $0.10

The weighted average fair value of the first tranche of director options granted during the year was $0.021 (2011: $0). These values were calculated used the Black-Scholes option pricing model applying the following inputs:

Weighted average exercise price: $0.050 Weighted average life of the option: 2.98 years Expected share price volatility 163.9% Risk-free interest rate 3.99%

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Note 19: Share Based Payments (continued) Historical Volatility has been the basis for determining expected share price volatility as it is assumed that this is indicative of future movements. The life of the options is based on historical exercise patterns, which may not eventuate in the future.

The weighted average fair value of the second tranche of director options granted during the year was $0.019 (2011: $0). These values were calculated used the Black-Scholes option pricing model applying the following inputs:

Weighted average exercise price: $0.10 Weighted average life of the option: 2.98 years Expected share price volatility 163.9% Risk-free interest rate 3.99%

Historical Volatility has been the basis for determining expected share price volatility as it is assumed that this is indicative of future movements. The life of the options is based on historical exercise patterns, which may not eventuate in the future.

Included under directors! benefits # options issued expense in the statement of comprehensive income is $800,000 which relates to equity-settled share-based payment transactions (2011: $0). Note 20: Financial Instruments, Risk Management Objectives and Policies As disclosed in Section 3 of the Directors! report, it is the Company!s objective to identify, acquire and commercialise late stage therapeutic delivery technologies. The Company targets high value markets and indications using an acquisition strategy driven by strategic value creation, patent protection and realisation criteria. It has funded its activities from the proceeds of ordinary share capital raisings. The Group!s financial instruments are limited to cash at bank, interest bearing liabilities, receivables and payables. (i) Financial Management The Managing Director approves and monitors actual and budgeted expenditure on an ongoing basis. The Board is provided with monthly financial reports and the Board meets regularly to consider the Group!s financial affairs. Financial modelling of the Group!s future trading operations is an important prospective financial management tool used by the Group for the identification and assessment of potential future financial risks and the development of mitigation strategies. (ii) Financial Risks The main risks the Group is exposed to through its financial instruments are liquidity risk, credit risk and market risk (price risk and interest rate risk). Credit risk Exposure to credit risk relating to financial assets arises from the potential non-performance by counterparties of contract obligations that could lead to a financial loss to the Group. The Group has no significant concentrations of credit risk with any single counterparty or group of counterparties, with the exception of the GST amount owing as at 30 June 2011 and 2012. Risk is also minimised through investing surplus funds in financial institutions that maintain a high credit rating. The maximum exposure to credit risk by class of recognised financial assets at the end of the reporting period, excluding the value of any collateral or other security held, is equivalent to the carrying value and classification of those financial assets (net of any provisions) as presented in the consolidated statement of financial position.

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Note 20: Financial Instruments, Risk Management Objectives and Policies (continued) Liquidity risk Liquidity risk arises from the possibility that the Group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The Group manages this risk through the following mechanisms:

• preparing forward-looking cash flow analysis in relation to its operational, investing and financing activities; • monitoring undrawn credit facilities; • obtaining funding from a variety of sources; • maintaining a reputable credit profile; • managing credit risk related to financial assets; and • only investing surplus cash with major financial institutions.

Refer to note 1(u) for further information. Market risk This is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices will affect the Group!s income and expenses or the value of its holdings of financial instruments. The objectives of market risk management are to manage and control market risk exposures. The Group is not exposed to a material level of currency risk, despite having a US based subsidiary. Its main market risk exposure is to interest rate risk and price risk. Interest rate risk The Group!s exposure to interest rate risk, which is the risk that a financial instrument!s value will fluctuate as a result of changes in market interest rates is limited to assets and liabilities bearing variable interest rates. In the context of the Group!s financial instruments, interest rate risk is limited to a potential opportunity cost in relation to returns on cash deposits bearing variable interest rate and is managed by the monitoring of short-term deposit rates offered by banks. The Group has minimal borrowings and such borrowing carry a fixed rate of interest. Accordingly, its exposure to interest rate is assessed to be minimal. The interest rate and maturity profile of the Company!s financial instruments is as follows:

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Note 20: Financial Instruments, Risk Management Objectives and Policies (continued)

2012

Weighted Average Effective

Interest Rate Floating

Interest Rate Non Interest

Bearing Fixed Interest

Bearing Total % $ $ $ $

Financial Assets: Cash and cash equivalents 3.50

446,113

-

-

446,113


-

74,949

-

74,949

Total Financial Assets 446,113

74,949

-

521,062

Financial Liabilities: Trade and other payables -

1,012,451

-

1,012,451

Deferred purchase consideration - 2,026,753 - 2,026,753 Interest bearing liabilities 9.82 - -

45,266

45,266

Total Financial Liabilities

-

3,039,204

45,266

3,084,470

Net Financial Assets/(Liabilities) 446,113 (2,964,255) (45,266) (2,563,408)

2011

Weighted Average Effective

Interest Rate Floating

Interest Rate Non Interest

Bearing Interest Bearing Total

% $ $ $ $ Financial Assets: Cash and cash equivalents 4.75

961,503

-

-

961,503


-

213,785

-

213,785

Total Financial Assets 961,503

213,785

-

1,175,288

Financial Liabilities: Trade and other payables -

454,694

-

454,695

Interest bearing liabilities - -

19,039

19,039


-

454,694

19,039

473,734

Net Financial Assets/(Liabilities) 961,503 (240,909) (19,039)

701,554

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Note 20: Financial Instruments, Risk Management Objectives and Policies (continued) Maturity

profile:

Carrying Amount Contractual Cash Flow Within 1 Year 1-5 Years Total 2012 2011 2012 2011 2012 2011 2012 2011 2012 2011

Financial Assets: $ $ $ $ $ $ $ $ $ $

Cash and cash equivalents

446,113

961,503

446,113

961,503

446,113

961,503

-

-

446,113

961,503


74,949

213,785

74,949

213,785

74,949

213,785

-

-

74,949

213,785

Total Financial Assets

521,062

1,175,288

521,062

1,175,288

521,062

1,175,288

-

-

521,062

1,175,288

Financial Liabilities:

Interest bearing liabilities

45,266

19,039

45,266

19,039

45,266

19,039

-

-

45,266

19,039

Deferred Purchase Consideration

2,026,753

-

2,026,753

-

1,835,862

-

190,891

-

2,026,753

-

Trade and other payables

1,012,452

454,694

1,012,452

454,695

1,012,452

454,695

-

-

1,012,452

454,695


3,084,471

473,733

3,084,471

473,734

2,893,580

473,734

190,891

-

3,084,471

473,734

Price risk The Group is not exposed to any commodity price risk. Fair Values The directors consider that the carrying amount of financial assets and liabilities recorded in the financial statements approximate their fair value. Financial Instruments measured at Fair Value The financial instruments recognised at fair value in the consolidated statement of financial position have been analysed and classified using a fair value hierarchy reflecting the significance of the inputs used in making the measurements. The fair value hierarchy consists of the following levels: - quoted prices in active markets for identical assets or liabilities (Level 1); - inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (as

prices) or indirectly (derived from prices) (Level 2); and - inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3). In 2012 and 2011, none of the Group!s assets and liabilities except for the deferred purchase consideration had their value determined using the fair value hierarchy. The deferred purchased consideration liability was determined as a level 3 instrument. The value of the loss recognised from revaluing the liability was $103,362. The amount is included in other expenses in the consolidated statement of comprehensive income.

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Note 20: Financial Instruments, Risk Management Objectives and Policies (continued) Sensitivity Analysis The following table illustrates sensitivities to the Group!s exposures to change in interest rates and equity prices. The table indicates the impact on how profit and equity values reported at the end of the reporting period would have been affected by changes in the relevant risk variable that management considers to be reasonably possible. These sensitivities assume that the movement in a particular variable is independent of other variables. Interest rate risk Other price risk -1% -1% 1% 1% -5% -5% 5% 5% 2012 Net

result Equity Net result Equity Net

result Equity Net result Equity

Cash 446,113 (4,461) (4,461) 4,461 4,461 - - - - Total increase/(decrease) (4,461) (4,461) 4,461 4,461 - - - -

Interest rate risk Other price risk

-1% -1% 1% 1% -10% -10% 10% 10% 2011 Net

result Equity Net result Equity Net

result Equity Net result Equity

Cash 961,503 (9,615) (9,615) 9,615 9,615 - - - - Total increase/(decrease) (9,615) (9,615) 9,615 9,615 - - - -

Note 21: Business Combinations Aspen MediSys LLC On 22 December 2011, the company settled on the acquisition of 100% of the voting shares of Aspen MediSys LLC ($Aspen%). Aspen is an unlisted company, based in the United States of America, with a technology that centres on the use of heated nano particles to treat tumours without damaging surrounding tissue to animals and humans (being Aspen targeted markets). The Group acquired Aspen to expand its suite of innovative medical technologies. The acquisition of Aspen resulted in the recognition of IP totalling approximately $7.275 million (Note 13). The initial accounting for the acquisition of Aspen MediSys LLC has been provisionally determined at acquisition date using the following key factors. Purchase consideration

The purchase consideration for the purchase of 100% of the shares in Aspen included a nominal upfront payment of $1, followed by performance and time dependant milestone payments to be made in the form of fully paid ordinary shares in the company. The Performance Milestones are as follows:

- Tranche 1 # Issue of shares equal to $1,410,000 based on the weighted average trading price for the 5 days period immediately preceding the date of calculation (referred to as $VWAP%). Shares are to be issued on 1 July 2012 or such date earlier as may be nominated, in writing, by the company at its sole discretion. This Tranche has been extended to 31 October 2012 due to some IP transfers being delayed;

- Tranche 2 # Issue of shares equal to $940,000 based on VWAP. The shares are to be issued immediately preceding the successful closing and submission of a final study report of a safety and efficacy study in animals of Aspen!s technology to be conducted at the University of California;

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Note 21: Business Combinations (continued)

- Tranche 3 # Issue of shares equal to $470,000 based on VWAP. The shares are to be issued on completion of the first commercial sale of a product incorporating the Aspen!s technology;

- Tranche 4 - Issue of shares equal to $470,000 based on VWAP. The shares are to be issued when the cumulative sales of a product incorporating Aspen!s technology attain at least $10 million.

On the acquisition date the directors made a number of key judgements and assumptions to determine the fair value of the consideration paid/payable for the purchase of Aspen. These key judgements and assumptions are summarised below:

Payment Contract amount Expected timing Probability Discount rate Fair value

$ $ Cash 1 Not applicable Not applicable Not applicable 1 Tranche 1 1,410,000 30 June 2012 100% 25% 1,261,528 Tranche 2 940,000 30 June 2013 70% 25% 470,970 Tranche 3 470,000 1 June 2014 49% 25% 131,831 Tranche 4 470,000 30 June 2016 34% 25% 59,061 Total 3,290,001 1,923,391

As at 30 June 2012, the fair value of the liability was adjusted to $2,026,753 and the movement of $103,362 recognised in profit or loss. Fair value of Aspen

Methodologies and Assumptions In complying with the requirements of AASB 3 Business Combinations, the Board necessarily had to determine the provisional fair value of the assets and liabilities of Aspen and the following key judgements and assumptions were made. The acquisition date fair value of Aspen was preliminary and may be adjusted as a result of obtaining additional legal clarification as to IP registrations held by Aspen. Animal business The provisional fair value of the Animal Business was calculated using a discounted cash flow model incorporating the following key assumptions: • 70% probability of achieving cash flow forecasts; • Sales of product based on the Animal Business to commence by 30 June 2014; and • Discount rate of 25% applied; Human Business The provisional fair value of the Human Business was calculated based on the market value of two peer companies (scenario A and scenario B) holding similar technology and using it for similar purposes. Key assumptions applied were as follows: Assumptions Scenario A Scenario B Market value of technology $249.81M $30.618M Probability of matching 10% 33% Time required to achieve outcome 6 years 3.5 years Discount rate 25% 25% The acquisition date fair value of the intellectual property is preliminary and may be adjusted as a result of obtaining additional information.

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Note 21: Business Combinations (continued) Discount on acquisition The Group has accounted for this acquisition at fair market values of the identifiable assets and liabilities of Aspen, which resulted in the recognition of a discount on acquisition. As a result, the Group has recognised a discount on acquisition in the consolidated statement of comprehensive income of $5,438,740 being the difference between the fair value of the consideration of $1,923,391 and the provisional fair value of the assets and liabilities acquired of $7,362,131 as outline below. The Board believes that the bargain purchase was achieved due to the vendors having insufficient capital to bring Aspen!s technology to a stage of commercialisation.

Business Combination Aspen MediSys LLC 22-Dec-11

Fair Value Recognised on Acquisition Current Assets

Cash at Bank

3,944

Total Current Assets

3,944 Non Current Assets

Intellectual Property # Thermotherapy Technology

7,275,053

Plant & Equipment

133,014 Acc Dep (49,880)

Total Non Current Assets 7,358,187

Total Assets

7,362,131

Total Liabilities

-

Net Assets

7,362,131

Interest Acquired Present Value of Purchase Consideration 1,923,391 Discount on Acquisition 5,438,740 Acquisition related costs of $45,167 are included in other expenses in the statement of comprehensive income. Directly attributable costs of raising equity have been included as a deduction from equity. No deferred tax liability has been recognised in respect of the IP recognised from this acquisition at acquisition date as the value of carried forward tax losses as at 31 December 2011 totalled approximately $6.879 million (or resulted in deferred tax assets of $2.063 million), was sufficient to offset the estimated deferred tax liability of approximately $1.631 million.

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Note 21: Business Combinations (continued) Acquisition of Leading Edge Instruments Ltd (2011) On 24 February 2011 the company completed the acquisition of 81% of the voting shares of Leading Edge Instruments Ltd (LEI), an unlisted public company that controls two near-market medical device technologies, BreatheAssist" and Vibrovein" by issuing 248,000,000 shares in CGP. The fair value of the consideration paid was determined with reference to the Company!s share price on 24 February 2011, which was assessed as the acquisition date. The fair value of the identifiable assets and liabilities of LEI as at the date of acquisition were calculated as follows: Fair Value Current Assets Cash and Cash Equivalents 12,570 Trade and Other Receivables 106,864 Prepayments 89,900 Total Current Assets 209,334 Non Current Assets Intellectual Property 9,566,217 Plant & Equipment 15,792 Total Non Current Assets 9,582,009 Total Assets 9,791,343 Current Liabilities Trade and Other Payables (557,542) Interest Bearing Liability (38,733) Total Current Liabilities (596,275) Net identifiable assets acquired 9,195,068 Less: Non-controlling Interest (1,747,063) Add: Goodwill 4,951,995 Purchase consideration 12,400,000

Had the results relating to Leading Edge Instruments Limited been consolidated from 1 July 2010, the consolidated loss of the consolidated group would have been $1,577,912, however total revenue would have not changed. The loss has been calculated using the group!s accounting policies. The goodwill is attributable to the knowledge and experience of key management personnel of LEI.

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Note 22: Commitments and Contingencies Unquantifiable Contingencies At 30 June 2012, Consegna Group Limited was involved in a litigation matter (2011: Nil) for losses allegedly suffered by claimant (Leadenhall VRG Pty Ltd vs Vibrovein Pty Ltd). Consegna Group Limited has denied liability and is vigorously defending the claim. It is not possible to estimate the amounts of any eventual payments that may be required in relation to this claim. There are no other known significant liabilities or contingent assets as at the date of this report, other than as disclosed in this financial report.

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Note 23: Parent Entity Disclosures The financial information for the parent entity, as disclosed in this note has been prepared on the same basis as the consolidated financial statements, except as set out below: (i) Investments in subsidiaries, associates and joint venture entities Investments in subsidiary are accounted for at cost in the financial statements of Company. Dividends received from subsidiary are recognised in the parent entity!s profit or loss, rather than being deducted from the carrying amount of these investments. (i) Financial position 2012 2011 Assets $ $ Current assets 1,719,428 1,634,572 Current other financial assets - 5,544,000

Total current assets 1,719,428 7,178,572

Non-current assets 28,735,918 12,405,242

Total assets 30,455,346 19,583,814

Liabilities Current liabilities 2,945,822 224,574 Current other financial liabilities - 5,544,000

Total current liabilities 2,945,822 5,768,574

Non-current liabilities 98,744 -

Total liabilities 3,044,566 5,768,574

Net Assets 27,410,780 13,815,240

Equity

Issued capital 31,815,310 19,058,343 Accumulated losses (6,238,313) (5,556,886) Reserves: Share-based payments 1,833,783 313,783

Total equity 27,410,780 13,815,240

Year Ended Year Ended (ii) Financial performance 2012 2011 $ $ Profit / (Loss) for the year (681,428) (846,623) Other comprehensive income - - Total comprehensive income / (loss) for the year (681,428) (846,623)

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Note 23: Parent Entity Disclosures (continued) (iii) Guarantees The company has not entered into any guarantees in the current or prior financial years in relation to debts of its subsidiaries. There are no contractual commitments as at 30 June 2011 and 2012 other than those already disclosed in note 22. Note 24: Related Party Disclosures The consolidated financial statements include the financial statements of Consegna Group Limited (formerly Helicon Group Limited) and the subsidiaries listed in the following table.

Name

Country of Incorporation

Equity Interest %

Investment $

2012 2011 2012 2011 Helicon (Asia) Pty Ltd* Australia 100 100 1 1 Helicon (China) Pty Ltd* Australia 100 100 1 1 Helicon (Korea) Pty Ltd* Australia 100 100 1 1 Helicon International Limited* Australia 100 100 - - Leading Edge Instruments Ltd (LEI)* Subsidiaries of LEI:

Australia 100 81 20,212,000 12,400,000

- Vibrovein Pty Ltd ** Australia 100 81 6,422,675 6,422,675 - ASAP BreatheAssist Pty Ltd

** Australia 100 81 3,000,000 3,000,000

Lingual Consegna Pty Ltd Australia 100 - 1 - Aspen Medysis LLC America 100 - 7,362,131 - * Consegna Group Limited (formerly Helicon Group Limited) is the ultimate Australian parent entity and ultimate parent of the Group. ** represents the carrying value recognised by LEI. Listed below are the balances owing to the Company at 30 June 2012 & 2011.

(i) Name of Entity Loans

2012 $

2011 $

Helicon (Korea) Pty Ltd 118,040 117,814 Helicon (Asia) Pty Ltd 160,195 160,195 Helicon (China) Pty Ltd 390,535 390,309 Helicon International Limited - - Leading Edge Instruments Ltd 1,093,750 625,121 ASAP BreatheAssist Pty Ltd 30,286 20,161 Vibrovein Pty Ltd 47,946 - Lingual Consegna Pty Ltd - - Total 1,840,752 1,313,600

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Note 24: Related Party Disclosures (continued) Helicon International Limited was incorporated as a wholly owned subsidiary of Helicon Group Limited on 5 May 2010. On this date 100% ownership of Helicon (Korea) Pty Ltd, Helicon (Asia) Pty Ltd and Helicon (China) Pty Ltd was transferred to Helicon International Limited. The loans owing from Helicon (Korea) Pty Ltd, Helicon (Asia) Pty Ltd and Helicon (China) Pty Ltd to Consegna Group limited (formerly Helicon Group Limited) were also transferred to Helicon International Limited. The loans to Helicon (Korea) Pty Ltd, Helicon (Asia) Pty Ltd, and Helicon (China) Pty Ltd have been impaired to nil. The investment in Helicon International has been impaired to $nil in the books of Helicon Group. On the 2nd of August 2011 the company incorporated Lingual Consegna Pty Ltd, a 100% owned subsidiary, with 1,000,000 shares originally issued for $0.000001 per share. The company at balance date had contracted to sell 100% of the shares in Lingual Consegna Pty Ltd to Imugene Limited an ASX listed company. This is detailed in note 6 of the financial statements. On the 18th of April 2012 Consegna Group Limited (formerly Helicon Group Limited) acquired the minority interest in Leading Edge Instruments Limited. This was completed by the company exercising both call options on over the remaining shareholders of Leading Edge Instruments Limited as granted under the Sale of Shares Agreement dated 23 December 2010. Mr Pannuti and Mr Tomlinson being shareholders of Leading Edge Instruments Limited received shares as outlined in note 26(d). The following table provides the total amount of transactions that were entered into with related parties for the relevant financial year. Unless otherwise stated, transactions with director related entities are on normal commercial terms and conditions no more favourable than those available to other parties and excludes remuneration outlined in note 26.

Related Party Year Transactions with Related parties *

(Payable)/Receivable at 30 June

MV Anderson (i) ** 2012 83,852 (24,200) 2011 64,652 (64,652) Inverness Group Holdings Pty Ltd (ii) ** 2012 176,661 (5,461) 2011 237,661 (227,412)

24,159 Fabio Pannuti (iii) 2012 - (25) 2011 - (18,024) Boden Corporate Services (iv) 2012 - - 2011 72,809 - Sassine & Associates (v) 2012 - - 2011 - -

* excludes costs incurred by the Directors and their related on behalf of the Group which were subsequently reimbursed to the Directors & related entities.

** included as part of trade and other payables in note 14.

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Note 24: Related Party Disclosures (continued) Loans to/from Key Management Personnel There were no loans to Key Management Personnel, other than as disclosed in Note 14.

i. The Company has engaged MV Anderson, Chartered Accountants, to provide taxation, corporate and business advisory services on a normal commercial fee for services basis. Some of the partners own shares in Leading Edge Instruments Ltd and as a consequence own shares in the company.

In April 2012 Andrew Ellem a partner of M V Anderson & Co was appointed Chief Financial Officer of the company. Remuneration for these services are billed by and paid to M V Anderson & Co and have been disclosed in note 26.

ii. Inverness Group Holdings, a company associated with Mr Fabio Pannuti, provided corporate consulting, administration and executive marketing services, office premises in Melbourne, and office equipment to Leading Edge Instruments Limited and the company during the year. Inverness was paid fees for the provision of Executive Marketing Services of $97,856 this is provided by employees of Inverness, $78,805 for the provision of the office premises in Melbourne.

iii. Fabio Pannuti a Director of Inverness Group was reimbursed $588,639 during the year for expenses incurred. He also loaned Vibrovein Pty Ltd $25.

iv. Boden Corporate Services Pty Ltd has provided services of company secretary, accounting and administration from March 2007 to 6 May 2011 and is paid fees on an hourly basis, at rates which vary according to the staff involved. Mr Boden resigned as a director on 6 May 2011. Boden Corporate Services Pty Ltd was not paid during the 2012 financial year ($72,809 for 2011).

v. Dr Sassine resigned as a director on 12 April 2011.

Outstanding balances at year-end are unsecured, interest free and settlement occurs in cash. Note 25: Auditors' Remuneration Consolidated 2012 2011 The auditors for Consegna Group Limited (Formerly "Helicon Group Limited") are HLB Mann Judd

$ $

An audit or review of the financial report of the entity and any other entity in the consolidated group

Half year 17,080 13,000 Full year 38,740 30,000 Under provision previous year - 11,481 55,820 54,481

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Note 26: Key Management Personnel Compensation (a) Details of Key Management Personnel i) Directors

Mr Peter Abrahamson Executive Director and Chief Executive Officer (resigned 31 March 2010) Non- Executive Director (appointed 1 April 2010 resigned 29 February 2012)

Dr Rod Tomlinson Non- Executive Chairman (resigned 3 September 2012) Mr Fabio Pannuti Managing Director (appointed 24 February 2011)

Executive Chairman (appointed 3 September 2012) Mr. Brendan Fleiter Non-Executive Director (appointed 14 November 2011) Lord Simon Reading Non-Executive Director (appointed 1 March 2012) On the 3 September 2012 Mr. Martin Rogers was appointed to the Board as a Non-Executive director. Dr. Rod Tomlinson resigned as Non Executive Chairman. ii) Executives Dr Nicholas Ede Chief Technical Officer (appointed 30 April 2012) Mr Andrew Ellem Chief Financial Officer (appointed 1 April 2012) Mr Justyn Stedwell Company Secretary (appointed 22 June 2011) Compensation policy and details of remuneration of Key Management Personnel are included in the Remuneration Report, as part of the Directors! Report. Consolidated 2012 2011 (b) Aggregate compensation of key management personnel $ $ Salary & Fees 748,982 423,915 Cash Other - - Non- Monetary Benefits - - Post- employment Benefits - - Share Based Payments (see note 19) 920,000 - 1,668,982 423,915 (c) Number of Options Held by Key Management Personnel

* Net Change Other includes those options that have lapsed as well as options issued during the year.

Balance 30/06/10

Granted

Options Exercised

Net Change Other*

Balance 30/06/11

Balance At Date Of

Resignation

Totals at 30/06/11 Vested

Exercisable

Mr P Abrahamson 4,000,000 4,000,000 - (4,000,000) 4,000,000 n/a 4,000,000 4,000,000

4,000,000 4,000,000 - (4,000,000) 4,000,000 n/a 4,000,000 4,000,000

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Note 26: Key Management Personnel Compensation (continued)

(d) Shareholdings of Key Management Personnel Balance

30/06/10 Received as

Compensation Options

Exercised Net Change

Other* Balance At

Date of Resignation

Balance 30/06/11

Mr P Abrahamson 2,033,616 - - 3,035,424 n/a 5,069,040Mr F Pannuti - - - 36,859,135 n/a 36,859,135Mr. R Tomlinson - - - 12,119,507 n/a 12,119,507 2,033,616 - - 52,014,066 n/a 54,047,682 Balance

30/06/11 Received as

Compensation Options

Exercised Net Change

Other** Balance At

Date of Resignation

Balance 30/06/12

Mr P Abrahamson 5,069,040 - - n/a 5,069,040 Mr F Pannuti 36,859,135 - - 37,453,628 n/a 74,312,763Mr R Tomlinson 12,119,507 - - 12,314,981 n/a 24,434,488 54,047,682 - - 49,768,609 5,069,040 98,747,251 * Net Change Other refers to shares purchased or sold during the financial year as well as the acquisition of Leading Edge Instruments Pty Ltd. ** Net Change in the 2012 year refers to shares issued under the company!s exercise of a call option on the remaining 19% of Leading Edge Instruments Limited (LEI) as disclosed under the Sale of Shares Agreement entered into on 23 December 2010

All transactions with directors and other executives, other than those arising from the exercise of remuneration options, are entered into under terms and conditions no more favourable than those the Company would have adopted if dealing at arms length. Inverness Group Holdings Pty Ltd and Ecosse Equities Pty Ltd are LEI vendors and companies associated with Consegna Group Limited (formerly Helicon Group Limited) Managing Director, Fabio Pannuti. Fabio Pannuti is the sole director of and shareholder of Inverness Group Holdings Pty Ltd and Ecosse Equities Pty Ltd. Taefu Pty Ltd, a company associated with Consegna Group Limited (formerly Helicon Group Limited) former Chairman, Rod Tomlinson, is a vendor of LEI. Rod Tomlinson is a director and shareholder of Taefu Pty Ltd.

Balance

30/06/11

Granted Options Exercis

ed

Net Change Other*

Balance 30/06/12

Balance At Date Of

Resignation

Totals at 30/06/12 Vested

Exercisable

Mr P Abrahamson 4,000,000 10,000,000 - - 14,000,000 14,000,000 - -

Mr F Pannuti - 20,000,000 - - 20,000,000 n/a 20,000,000 20,000,000

Dr R Tomlinson - 10,000,000 - - 10,000,000 n/a 10,000,000 10,000,000

Mr Justyn Stedwell - 5,000,000 - - 5,000,000 n/a 5,000,000 5.000.000

4,000,000 45,000,000 - - 49,000,000 14,000,000 35,000,000 35,000,000

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Note 27: Events Subsequent to Balance Date On 13 July 2012, the Company executed a Share Purchase and Convertible Security Agreement ($Agreement%) with the Australian Special Opportunity Fund, LP, which is managed by the Lind Partners, LLC (together, $Lind%) a New York based alternative asset management company. The Agreement provides Consegna with a funding facility as follows:

• The issue of ordinary shares of Consegna of up to $5,275,000 with monthly draw downs over the next 24 months, at a minimum rate of $75,000 per month. The price at which shares will be issued is 90% of the average of the 3 consecutive daily Volume Weighted Average Prices ($VWAPs%) during a specific period prior to the issuance of shares. (The Company may elect not to issue shares if the issue price would be less than an agreed floor price).

• Consegna has issued an unsecured convertible security to Lind with a face value of $400,000 and a term of 24 months at a zero % interest rate. The conversion price at which shares will be issued under the convertible security is 90% of the average of the 3 consecutive daily VWAPs during a specific period prior to the issuance of shares.

• Lind has been granted 10,000,000 options exercisable at $0.0236 which is 120% of the VWAP per share for the 20 consecutive trading days immediately prior to the date of the execution of the Agreement. These options are valued at $182,000 as per the Black Scholes valuation method and will be accounted for as an equity derivative.

• The facility can be cancelled at any time within the first 6 months by paying a cancellation fee of $100,000. Alternatively, it can be cancelled after 6 months for no consideration.

• Consegna has also paid to Lind a commencement fee of $175,000 by way of 8,869,180 Consegna shares and will be accounted for as an equity transaction.

The terms of the Agreement expressly allow Consegna to carry out additional private placements of equity, rights issues and shareholder purchase plans as may be optimal to their capital management plan. In addition, the Agreement does not restrict the company!s ability to enter into strategic industry partnerships. The Floor Price for Consegna Group Limited is $0.014. If the VWAP falls below this the company has the option to repay the upfront subscription by repaying 105% of the month!s subscription, or in the case of the convertible security by repaying 115% of the amount repayable consisting of 70% of the amount repayable in cleared funds and 45% of the by issuance of shares. The Base Price for Lind is $0.012. If the share price is below the base price for 2 consecutive days Lind may elect to postpone any subscription up to 60 days. It is expected that the issue of ordinary shares under this Agreement to be dilutive to existing shareholders. The Company is not able to determine the extent of such dilution until the shares have been issued under the terms of this Agreement.

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ABN 12 107 903 189

Director s Declaration

65

Director s declaration In accordance with a resolution of the directors of Consegna Group Limited (formerly Helicon Group Limited), I state that:

1. In the opinion of the directors:

a. The financial statements, notes and the additional disclosures included in the directors! report designated as audited, of the consolidated entity are in accordance with the Corporations Act 2001, including:

i. Giving a true and fair view of the consolidated entity!s financial position as at 30 June 2012 and of its performance for the year ended on that date; and

ii. Complying with Australian Accounting Standards and Corporations Regulations 2001;

iii. Complying with International Reporting Financial Standards as disclosed in note 1(a); and

iv. There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable taking into account the factors outlined note 1 (u) of the financial statements.

2. This declaration has been made after receiving the declarations required to be made to the directors in accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June 2012.

Fabio Pannuti Managing Director and Chairman Dated this 28th day of September 2012

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Independent Auditor’s Report to the Members Of Consegna Group Limited (formerly “Helicon Group Limited”) Report on the Financial Report We have audited the accompanying financial report of Consegna Group Limited (“the Company”), which comprises the consolidated statement of financial position as at 30 June 2012, the consolidated statement of comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration for the consolidated entity. The consolidated entity comprises the Company and the entities it controlled at the year’s end or from time to time during the financial year. Directors’ Responsibility for the Financial Report The directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the financial report that is free from material misstatement, whether due to fraud or error. In Note 1(a), the directors also state, in accordance with Accounting Standard AASB 101: Presentation of Financial Statements, that the consolidated financial statements comply with International Financial Reporting Standards. Auditor’s Responsibility Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in accordance with Australian Auditing Standards. Those standards require that we comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the financial report is free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company’s preparation and fair presentation of the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the directors, as well as evaluating the overall presentation of the financial report. Our audit did not involve an analysis of the prudence of business decisions made by directors or management. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Independence

In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.

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Auditor’s Opinion In our opinion:

(a) the financial report of Consegna Group Limited is in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the consolidated entity’s financial position as at 30 June

2012 and of its performance for the year ended on that date; and (ii) complying with Australian Accounting Standards and the Corporations Regulations

2001; and (b) the financial report also complies with International Financial Reporting Standards as

disclosed in Note 1(a). Report on the Remuneration Report We have audited the Remuneration Report included in the directors’ report for the year ended 30 June 2012. The directors of the company are responsible for the preparation and presentation of the Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Auditor’s Opinion In our opinion, the Remuneration Report of Consegna Group Limited for the year ended 30 June 2012 complies with section 300A of the Corporations Act 2001. Matters relating to the electronic presentation of the audited financial report and remuneration report This auditor’s report relates to the financial and remuneration report of Consegna Group Limited for the financial year ended 30 June 2012 published in the annual report and included on the Company’s website. The Company’s directors are responsible for the integrity of the Company’s website. We have not been engaged to report on the integrity of this web site. The auditor’s report refers only to the financial and remuneration report. It does not provide an opinion on any other information which may have been hyperlinked to/from the financial and remuneration report. If users of the financial and remuneration report are concerned with the inherent risks arising from publication on a website, they are advised to refer to the hard copy of the audited financial and remuneration report to confirm the information contained in this website version of the financial and remuneration report.

HLB Mann Judd Chartered Accountants

Jude Lau Melbourne Partner 28 September 2012

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ASX ADDITIONAL INFORMATION

68

1. Ordinary Shares

The information set out below was applicable at 24 September 2012. (i) Distribution of equitable securities Analysis of number of shareholders by size of holding:

Number of holders of ordinary shares

Number of ordinary shares

1 to 1,000 13 1,849 1,001 to 5,000 8 36,307 5,001 to 10,000 87 837,751 10,001 to 100,000 327 17,768,352 100,001 and over 517 996,018,296 Total 952 1,014,662,555

Holding less than a marketable parcel: 213 Analysis of number of option holders (unlisted) by size of holding:

Number of holders of options

Number of options

1 to 1,000 0 0 1,001 to 5,000 0 0 5,001 to 10,000 1 8,333 10,001 to 100,000 21 1,383,329 100,001 and over 123 200,095,0025 Total 145 201,486,667

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(ii) Equity security holders The names of the twenty largest security holders of quotes equity securities are listed below:

Holder name Number held % of issued Capital

1 NATIONAL NOMINEES LIMITED 96,600,000 9.52%

2 HSBC CUSTODY NOMINEES AUSTRALIA LIMITED 66,250,185 6.53%

3 PAZ MARYANKA 34,500,698 3.40%

4 AJG PTY LTD 33,163,224 3.27%

5 STICTION PTY LTD 31,938,213 3.15%

6 PROFESSIONAL PAYMENT SERVICES PTY LTD 30,225,000 2.98%

7 OZPHARMA PLTY LTD 25,000,000 2.46%

8 TAEFU PTY LTD 24,434,488 2.41%

9 GERARD A O!BRIEN & HELEN M O'BRIEN < O!BRIEN S/F A/C> 22,656,311 2.23%

10 KENSINGTON & PARK GROUP HOLDINGS PTY LTD 20,360,282 2.01%

11 ECOSSE EQUITIES PTY LTD 19,031,299 1.88%

12 INVERNESS GROUP HOLDINGS PLTY LTD 18,422,329 1.82%

13 RONDA AUST PTY LTD 14,600,738 1.44%

14 PINK INVESTMENTS PTY LTD 13,005,352 1.28%

15 PROFESSIONAL PAYMENT SERVICES PTY LTD 12,620,000 1.24%

16 CELTIC CAPITAL PTY LTD <THE CELTIC CAP A/C> 11,549,999 1.14%

17 TERRAIN CAP LIMITED 10,700,060 1.05%

18 JOHN DELLA BOSCA <JA&JG DELLA BOSCA FAMILY A/C> 9,900,000 0.98%

19 AJ CAMERON PTY LTD <ANDREW CAMERON S/F> 9,767,392 0.96%

20 SILVERTOP INVESTMENTS PTY LTD <ACORN S/F A/C> 8,658,574 0.85%

513,384,144 50.60% (iii) Substantial holders Substantial holders in the Company are set out below: (iv) Voting rights The voting rights attached to ordinary shares are set out below:

Ordinary Shares

On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each share shall have one vote.

Holder Number held % of total shares on issue NATIONAL NOMINEES LIMITED 96,600,000 9.52% HSBC CUSTODY NOMINEES AUSTRALIA LIMITED 66,250,185 6.53%

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(v) Stock Exchange Listing

Quotation has been granted for all the ordinary shares of the company on all Member Exchanges of the Australian Securities Exchange Limited.

2. Unquoted Options holder information (i) Distribution of unquoted options holders numbers

A total of 201,486,667 options are on issue. 151,466,667 options are on issue to 145 holders of ordinary securities. 50,000,000 options are on issue to one director and five employees under the Consegna Group Limited employee option plan.

(ii) Voting Rights

Unlisted options do not entitle the holder to any voting rights

(iii) Holders of more than 20% of unquoted options

There are no holders of more than 20% of unquoted securities.

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For personal use only · 2012. 9. 28. · DIRECTORS REPORT 2 Directors Report The directors present...

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