Home' Acrux Annual Report : Acrux Annual Report 2016 Contents Income tax expense for the financial year was $5.1 million (2015: $5.7 million) representing approximately 28.3% of profit before
income tax. Fempharm Pty Ltd, a subsidiary of the parent entity received US$2 million in milestones on the marketing approval of
Lenzetto® in Europe. Fempharm profits were offset by prior accumulated tax losses which had not been previously recognised as
a deferred tax asset. The parent entity, Acrux Limited, received franked dividends totalling $14.0 million from subsidiary companies.
The parent entity’s tax rate payable on this income is 15%; however the franked dividends include an imputed tax credit of 30%.
The excess franking credits convert to tax losses that can be used in future periods to offset taxable income. For accounting purposes
the entity has not recognised a tax asset for these carried forward tax losses as the current operating structure of the entity is
unlikely to produce the quantum of future taxable income to enable Acrux Limited to utilise these carried forward losses.
Provisions are recognised when the consolidated entity has a legal or constructive obligation, as a result of past events, for which
it is probable that an outflow of economic benefits will result and that outflow can be reliably measured.
(l) Employee benefits
Provision is made for employee benefits accumulated as a result of employees rendering services up to the reporting date. These
benefits include wages and salaries, annual leave and long service leave.
Liabilities arising in respect of wages and salaries, annual leave and any other employee benefits expected to be settled within
12 months of the reporting date are measured at their nominal amounts based on remuneration rates, which are expected to be
paid when the liability is settled. All other employee benefit liabilities are measured at the present value of the estimated future
cash outflow to be made in respect of services provided by employees up to the reporting date.
Contributions are made by the consolidated entity to employee superannuation funds and are charged as expenses when the
obligation to pay them arises.
The consolidated entity recognises a provision when a bonus is payable in accordance with the employee’s contract of employment,
and the amount can be reliably measured.
Share based payments
The consolidated entity operates an Employee Share Option Plan (ESOP). The fair value of the options is recognised as an expense
in the Consolidated Statement of Comprehensive Income in the period(s) during which the employee becomes entitled to exercise
the options. The fair value of options at grant date is determined using a binomial option pricing model, and is recognised as an
employee expense over the period during which the employees become entitled to the option (the vesting period).
Termination benefits are payable when employment of an employee is terminated before the normal retirement date.
The consolidated entity recognises a provision for termination benefits when entitlement to contractual benefits arises or when
the entity can no longer withdraw the offer of non-contractual benefits.
Where necessary, comparative information has been reclassified and repositioned for consistency with current year disclosures.
(n) Financial instruments
Non-derivative financial instruments
Non-derivative financial assets consist of trade and other receivables and cash and cash equivalents. Financial assets are tested
for impairment at each financial year end to establish whether there is any objective evidence for impairment. Trade receivables are
carried at full amounts due less any provision for impairment. A provision for impairment is recognised when collection of the full
amount is no longer probable. Amounts receivable from other debtors are carried at full amounts due. Other debtors are normally
settled 30 days from month end unless there is a specific contract, which specifies an alternative date. Amounts receivable from
related parties are carried at full amounts due.
Non-listed investments in controlled entities, for which fair value cannot be reliably measured, are carried at cost and tested
ACRUX ANNUAL REPORT 2016 41
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