PBO Prospectus 2001

Prospectus
PanBio Limited
ABN 19 010 728 220
Underwriter
JP Morgan

PanBio Limited
ABN 19 010 728 220
Corporate Directory
Directors
Mr Ian Sandford (Chairman)
Mr Mel Bridges (Chief Executive Officer)
Mr Jim Kalokerinos (Non-Executive)
Mr Les Watson (Non-Executive)
Mr Tim Bosher (Non-Executive)
Company Secretary
Mr Phillip Auckland
PanBio Registered Office
116 Lutwyche Road
Windsor Brisbane QLD 4030
Share Registry
Computershare Investor Services Pty Limited
Level 3
60 Carrington Street
Sydney NSW 2000
Corporate Adviser
Ernst & Young Corporate Finance Pty Limited
Waterfront Place 5th Level
1 Eagle Street
Brisbane QLD 4000
Solicitor
Corrs Chambers Westgarth
Waterfront Place 35th Level
1 Eagle Street
Brisbane QLD 4000
Investigating Accountant and Auditor
Deloitte Touche Tohmatsu
Riverside Centre 26th Level
123 Eagle Street
Brisbane QLD 4000
Independent Expert
Deloitte Corporate Finance Pty Ltd
Riverside Centre 26th Level
123 Eagle Street
Brisbane QLD 4000
Underwriter
JP Morgan
Level 26
Grosvenor Place
225 George Street
Sydney NSW 2000

Contents
1 Investment Summary 7
2 Details of the Offer 11
3 Industry Overview 15
4 PanBio’s Business 19
5 Corporate Information 29
6 Financial Information 37
7 Risk Factors 45
8 Investigating Accountant’s Report 49
9 Report on Directors’ Financial Forecasts 70
10 Additional Information 72
11 Glossary of Terms 85
Important Information
This Prospectus is dated 22 February 2001 and was lodged with the
Australian Securities and Investment Commission ("ASIC") on that
date. PanBio Limited ABN 19 010 728 220 will apply for listing and
quotation of the Shares on Australian Stock Exchange Limited
("ASX") within seven days after the date of this Prospectus. ASIC
and ASX take no responsibility for the contents of this Prospectus.
No securities will be sold, issued or allotted on the basis of this
Prospectus later than 13 months after the date of this Prospectus.
The Offer does not constitute a public offer in any jurisdiction other
than Australia. The distribution of this Prospectus in jurisdictions
outside Australia may be restricted by law and therefore any person who
resides outside Australia and who receives this Prospectus should seek
advice on and observe any such restrictions. Any failure to comply with
these restrictions may constitute a violation of applicable securities laws.
This Prospectus does not constitute an offer or invitation in any place
where, or to any person whom, it would not be lawful to make such an
offer or invitation. The Offer constituted by the Prospectus in electronic
form is available only to persons (not including US Persons) receiving
this Prospectus in electronic form within Australia.
No person is authorised to give any information or to make any
representation in connection with the Offer as described in this
Prospectus which is not contained in this Prospectus. Any information
or representation not so contained may not be relied on as having
been authorised by the Company in connection with the Offer.
Investors should read this Prospectus in its entirety and if necessary
seek professional advice before deciding to apply for Shares.
The Corporations Law prohibits the Company from processing
Applications in the seven day period after the date of lodgement of
this Prospectus with ASIC. This period may be extended by ASIC by
up to a further seven days. This period is an exposure period to enable
the Prospectus to be examined by market participants prior to the
raising of funds. Applications received during the exposure period will
not be processed until after the expiry of that period. No preference
will be conferred on Applications received in the exposure period.
Defined terms and conditions used in this Prospectus are explained
in the Glossary.

The Directors are confident PanBio is well positioned to expand using its existing
technologies, extensive product range and proven business processes.

PanBio is an Australian biotechnology company that
develops, commercialises and markets diagnostic kits
for infectious diseases, including test kits for the
detection of mosquito-borne viruses including
Ross River Fever and Dengue Fever.
PanBio's product range includes more than 60 diagnostic
tests, most of which were developed in-house. They
are distributed to more than 55 countries through the
Company's operations in Australia and the United States,
and an extensive network of distributors.
The Company has an active research and development
(R&D) program designed to develop new technology
platforms and products. This R&D program is supported
by arrangements with a number of organisations
including the Cooperative Research Centre for Diagnostic
Technologies, companies and research institutions.
Arising out of the R&D program, the Company aims to
release a range of point-of-care rapid tests and molecular
diagnostic assays. Given the overseas trend towards
tests that can be completed within doctors’ surgeries,
and the increased understanding of the links between
disease and genetic disposition, these two areas present
growth opportunities and a platform for future expansion.
PanBio's performance and its commitment to quality
has been recognised with several awards, including the
Australia Quality Award. For seven consecutive years the
Company has been listed in Business Review Weekly's
'Top 100 Fastest Growing Australian Private Companies'
and has won a Queensland Innovative Manufacturer
Award for Export Achievement.
Through this Prospectus, PanBio is inviting investors to
subscribe for 17 million Shares at an Offer Price of $1.00
per Share, giving the Company a market capitalisation of
$51 million. PanBio will use the funds raised from the Offer
to accelerate its R&D efforts, further its sales and marketing
program and extend the Company's operations globally.
With the world-wide market for invitro diagnostics products
expected to reach US$22.9 billion by 2003, US$2.1 billion
of which is infectious disease products, the Directors are
confident PanBio is well positioned to expand using its
existing technologies, extensive product range and proven
business processes.
This Prospectus contains detailed information about
PanBio's operations, financial performance, experienced
management team and plans for future growth. It also
outlines the potential risks associated with the investment.
I encourage you to read this document carefully before
making your investment decision.
On behalf of PanBio's Board of Directors, I commend
this investment opportunity to you and look forward to
welcoming you as a shareholder.
Yours sincerely
Ian Sandford
Chairman
3
A Message from the Chairman

4
Key Information Summary
Key Dates
Offer opens 2 March 2001
Offer closes 23 March 2001
Dispatch of shareholder statements 4 April 2001
Expected commencement of trading of Shares on ASX 9 April 2001
All dates are indicative only and PanBio, with the Underwriter’s consent, reserves the right to close the Offer early, extend the Offer or
cancel the Offer, in each case without prior notice. Prospective investors are encouraged to submit their Applications as early as possible.
Offer Statistics
Offer Price per Share $1.00
Minimum Application (2000 Shares) $2,000
Number of Shares being offered pursuant to this Prospectus 17 million
Number of Shares on issue following completion of this Offer 51 million
Market Capitalisation at the Offer Price $51 million
Key Financial Information
HISTORICAL FORECAST
30 June 98 30 June 99 30 June 00 31 Dec 00 30 June 01 30 June 02
(Half-Year)
$000s $000s $000s $000s $000s $000s
Operating revenue (1)
5,273 6,424 7,675 5,431 11,423 14,959
EBITDAR (2)
1,143 1,585 1,612 953 1,650 2,105
Less R&D expense (3)
(720) (1,331) (1,366) (767) (1,909) (3,393)
Plus R&D grants & CRC income (4)
- 171 226 578 770 299
Depreciation & amortisation (200) (219) (331) (196) (490) (933)
Earnings before interest and tax 223 206 141 568 21 (1,922)
Net interest (51) (18) (135) (98) 16 88
Profit before tax 172 188 6 470 37 (1,834)
Income tax expense - - (2) (217) (170) -
Net profit/(loss) after tax 172 188 4 253 (133) (1,834)
Revenue multiple (times) (5)
4.5 3.4
Notes:
1 Operating revenue in the above table excludes Government grants for the purposes of R&D, CRC income and interest revenue.
2 EBITDAR - Earnings Before Interest, Tax, Depreciation, Amortisation and R&D.
3 The Company's policy is to expense all R&D expenditure as it is incurred.
4 EBIT to the half-year to 31 December 2000 includes revenue from the CRC for Diagnostic Technologies from a technology sale in the amount of $316,081.
In comparing performance, period to period allowance should be made for this income. It should also be noted that this income impacts on the income
tax for the December half-year, and the full 2001 year.
5 The Revenue multiple is based upon the Company's market capitalisation of $51 million at the Offer Price following completion of the Offer.

5
How To Apply
Applicants can apply for Shares by:
• Completing the Application Form accompanying this Prospectus; or
• Completing a paper copy of the relevant electronic Application Form which accompanies the electronic version of the Prospectus
(both of which can be downloaded from www.panbio.com.au).
Applications must be for a minimum of 2000 Shares and thereafter in multiples of 500 Shares. Completed Application Forms must be
accompanied by a cheque or bank draft for the full amount of the Application. Cheques must be made payable to "PanBio Limited
Share Offer" in Australian dollars, crossed "Not Negotiable" and be drawn on an Australian branch of an Australian bank.
Detailed instructions on how to complete the Application Form are set out on the reverse side of the Application Form
accompanying this Prospectus. Completed Application Forms and Application Monies should be mailed or delivered to the
Share Registry at:
Computershare Investor Services Pty Limited Computershare Investor Services Pty Limited
Level 2 GPO Box 7045
60 Carrington Street SYDNEY NSW 1115
SYDNEY NSW 2000

Investment Highlights
Track record of revenue growth
PanBio is a globally focussed Australian biotechnology
company with a 10-year track record of revenue growth.
Develops and commercialises products
PanBio has a proven ability to develop, commercialise
and market medical diagnostics to test for a range of
specific and emerging infectious diseases.
Major manufacturer of Mosquito-borne
viral diagnostics
The Company is a successful developer of arbovirus
diagnostics designed to detect a range of mosquito-borne
viral assays, including Ross River Fever and Dengue Fever.
Global markets and operations
PanBio's product range includes more than 60 tests,
the majority of which were developed in-house.
They are exported to over 55 countries via PanBio's
operations in Australia and the United States, and
through an international network of distributors.
Fast growing company
For seven consecutive years, PanBio has been listed
in Business Review Weekly's 'Top 100 Fastest Growing
Australian Private Companies'.
Active R&D program
The Company has an active R&D program designed
to develop new technologies and extend the product
range. This program is supported by arrangements with
research organisations including the Cooperative
Research Centre for Diagnostic Technologies, Stanford
University and Centers for Disease Control.
New diagnostic test platforms (eg point-of-care tests and
DNA/RNA diagnostics) offer major growth opportunities.
Experienced management and employee support
PanBio has an experienced management team, with
each manager contributing between 12 and 25 years
experience in their area of expertise. Management is
supported by a highly qualified group of employees,
many of whom are shareholders in the Company.
Quality focussed
Recipient of a range of prestigious awards including the
Australian Quality Award.
6

This section provides a summary of the investment
opportunity offered by PanBio. It should be read in
conjunction with the other more detailed sections of
the Prospectus before making any decision to apply
for Shares.
1.1 Business Overview
Established in 1988, PanBio develops, commercialises and
markets diagnostic testing kits for infectious diseases and
strives to be first to market with diagnostics to test for
emerging diseases. PanBio’s product range includes more
than 60 diagnostic kits for a number of infectious diseases
including Dengue Fever, Ross River Fever, Glandular
Fever and Whooping Cough. The Company’s products
are marketed to hospitals, pathology laboratories
and physicians. The company has distributors in more
than 55 countries world-wide.
The Company has an active R&D program designed
to develop new technology platforms and extend its
product range. This R&D is performed in-house and
in conjunction with a number of strategic research
partners. The Company has successfully commercialised
R&D developed both in-house and collaboratively.
The Company’s growth strategy consists of building on its
position in niche diagnostic products, accelerating its R&D
program, diversifying its product range and expanding its
intellectual property portfolio. The Directors believe these
strategies will allow PanBio to participate in emerging
segments of the infectious disease diagnostic market that
are forecast to experience rapid growth.
PanBio has delivered 10 years of revenue growth and has
internally funded the majority of its R&D program during
that period. PanBio has for seven consecutive years been
listed in Business Review Weekly’s “Top 100 Fastest
Growing Australian Companies”.
Over the last five years the Company has consistently
invested 13 to 20 per cent of its operating revenue on
R&D (excluding depreciation) while maintaining a
consistent track record of net profit. Since the 1997
financial year, R&D has been fully expensed.
8
Investment Summary

9
1.2 Financial Overview
The table below summarises the financial performance of PanBio for the years ended 30 June 1998, 30 June 1999, 30 June 2000,
the six months to 31 December 2000 and the Directors’ Forecasts for the financial years ending 30 June 2001 and 30 June 2002.
This information should be read in conjunction with the detailed financial information and risk factors set out in Sections 6 and 7, the
Investigating Accountant’s Report in Section 8 and the Independent Expert’s Report on Directors’ Financial Forecasts in Section 9.
Forecasts are, by nature, subject to uncertainty and unexpected events. Events may differ from those forecast and the differences may
be material. Accordingly, no guarantee or assurance can be given that the Directors’ Forecasts will be achieved.
HISTORICAL FORECAST
(Half-Year)
$000s $000s $000s $000s $000s $000s
5,273 6,424 7,675 5,431 11,423 14,959
EBITDAR (2)
1,143 1,585 1,612 953 1,650 2,105
(720) (1,331) (1,366) (767) (1,909) (3,393)
- 171 226 578 770 299
Net interest (51) (18) (135) (98) 16 88
Profit/(loss) before tax 172 188 6 470 37 (1,834)
4.5 3.4
Notes:
3 The Company's policy is to expense all R&D expenditure as it is incurred.
5 The Revenue multiple is based upon the Company's market capitalisation of $51 million at the Offer Price following completion of the Offer.

Investment Summary
10
The costs of the Offer are being borne by PanBio.
Listing PanBio's Shares on ASX will assist in increasing its
profile and provide the Company with an enhanced ability
to attract, retain and motivate employees.
1.5 Dividend Policy
Given the nature of PanBio's business and the investment
required to achieve the forecast growth, the Directors
do not anticipate paying dividends for the years ending
30 June 2001 or 2002. The extent of future dividends
and the level of franking will depend on the future profits
and the financial and taxation position of PanBio.
1.6 Risk Factors
There are a number of risk factors specific to the operations
of PanBio and there are risk factors relating to the biotechnology
industry and stockmarket in general. These risk factors
are discussed in Section 7 and prospective investors are
encouraged to read this section carefully.
1.7 Directors and Management
The Board comprises four non-executive Directors (including
the Chairman) and one executive Director. The day-to-day
operations are managed by a team of managers with between
12 and 25 years experience each in their area of expertise
including diagnostics, sales and marketing and finance.
1.8 Employee Share Plan and
Employee Option Plan
PanBio has established an Employee Share Plan and an
Employee Option Plan to provide incentives to attract and
retain key employees and executives, and to reward other staff
in the Company. Details of the Employee Share Plan and
Employee Option Plan are set out in Sections 10.2 and 10.3.
1.3 Description of the Offer
This Prospectus offers for subscription 17 million Shares
which, upon completion of the Offer, will represent
approximately 33.3 per cent of the issued capital of the
Company. The gross proceeds of the Offer will be $17 million.
Details of the Offer are set out in Section 2.
1.4 Purpose of the Offer
The Company plans to use the proceeds of the Offer
as follows:
Use $M
Research and development 6.0
Sales and marketing operations 2.6
Acquisitions/technology licensing 5.2
Working capital 1.5
Expenses of the Offer 1.7
Total 17
The funds allocated for R&D will be applied to accelerate
PanBio's R&D program which is aimed at expanding its
range of diagnostic products from existing technology
platforms and developing and commercialising new
diagnostic products and technology platforms. Section
4.3 contains details of the Company's R&D program.
The proceeds allocated to sales and marketing will be
used to establish and expand the Company's presence
in overseas markets, with particular emphasis on the
United States and Europe.
Approximately $5.2 million has been allocated to
the acquisition of businesses and technologies.
The Company plans to investigate acquisitions of
businesses complementary to its existing business in
the United States and Europe. If acquisitions do not
eventuate, the Company’s current intention would
be to allocate these funds to either R&D, expanding
its sales and marketing or licensing new technology.
PanBio's working capital requirements will increase as
a result of the growth and expansion of the business.
Following planned completion of the Offer, PanBio will
have sufficient working capital and cash reserves to
carry out the Company's stated objectives.

Details of the Offer
12
2.1 The Offer
PanBio offers for subscription 17 million Shares at an
Offer Price of $1.00 per Share, payable in full on
Application, to raise $17 million. The rights attaching to
these Shares are detailed in Section 10. No brokerage
or stamp duty is payable in respect of an Application for
Shares under this Prospectus.
2.2 Timetable - When to Apply
Completed Applications may be lodged at any time after
the Offer opens. The Offer will open on 2 March 2001 and
will close at 5.00pm Australian Eastern Standard Time
on 23 March 2001. The Company, with the Underwriter’s
consent, may extend or close the Offer early or withdraw
the Offer without prior notice.
Investors are encouraged to lodge their Applications as
soon as possible after the Offer opens.
2.3 How to Apply
Applicants can apply for Shares by:
• Completing the Application Form accompanying this
Prospectus; or
• Completing a paper copy of the relevant electronic
Application Form which accompanies the electronic
version of the Prospectus, both of which can be
downloaded from www.panbio.com.au
Applications must be for a minimum of 2,000 Shares
and thereafter in multiples of 500 Shares. Completed
Application Forms must be accompanied by a cheque or
bank draft for the full amount of the Application. Cheques
must be made payable to "PanBio Limited Share Offer" in
Australian dollars, crossed "Not Negotiable" and be drawn
on an Australian branch of an Australian bank.
Detailed instructions on how to complete the Application
Form are set out on the reverse side of the Application
Form accompanying this Prospectus. Completed
Application Forms and Application Monies should be
mailed or delivered to the Share Registry at:
Level 2
60 Carrington Street
SYDNEY NSW 2000
GPO Box 7045
SYDNEY NSW 1115

13
2.5 ASX Listing
Application will be made to ASX within seven days after
the date of this Prospectus for admission of PanBio to the
Official List and for its Shares to be quoted on ASX.
It is a term of the Offer that if PanBio does not make
application to ASX within that time or has not been admitted
to the Official List within three months of the date of this
Prospectus, any allotment or issue of Shares pursuant to
this Prospectus is void, and all Application Monies must
be refunded.
ASX takes no responsibility for this Prospectus or the
investment to which it relates. Admission to the Official
List should not be taken as an endorsement of PanBio
by ASX.
Following the allotment of Shares, successful Applicants
will receive a statement of shareholding that sets out the
number of Shares they have been allocated in the Offer.
It is expected that shareholding statements will be
dispatched by standard post by 4 April 2001.
The Company expects that trading on ASX will
commence on 9 April 2001.
It is the responsibility of Applicants to determine their
allocation prior to trading in Shares. Applicants trading
Shares before receiving a shareholding statement do so
at their own risk. PanBio and the Underwriter disclaim all
liability, whether in negligence or otherwise, to persons
who trade Shares before receiving their shareholding
statement whether on the basis of a confirmation of
allocation provided by PanBio or otherwise.
2.4 Allotment
The Company reserves the right to allocate Shares to
Applicants in full, to allocate a lesser number of Shares
than those for which an Application has been made, or
to decline an Application. Allotments will be made as
soon as possible after the close of the Offer.
In the event that no allotment is made to an Applicant,
their Application Monies will be returned in full. Where the
allotment is less than the number of Shares applied for,
the surplus Application Monies will be returned to the
Applicant. Interest will not be paid on any Application
Monies returned to an Applicant.
All Application Monies received with Applications will be
held by the Company on trust in a special purpose
account until acceptance of the Application and/or
return of funds to unsuccessful Applicants.
Successful Applicants will receive notification of allotment
of Shares as soon as practicable after the close of
the Offer.

Details of the Offer
14
2.6 CHESS
PanBio will apply to participate in CHESS and, in accordance
with the ASX Listing Rules and the SCH Business Rules,
will maintain an electronic issuer-sponsored subregister
and an electronic CHESS subregister.
2.7 Overseas Distribution
No action has been taken to register or qualify the
Shares or the Offer, or otherwise permit a public offering
of the Shares in any jurisdiction outside Australia.
The distribution of the Prospectus in jurisdictions outside
Australia may be restricted by law and, therefore,
persons who obtain this Prospectus should seek advice
on and observe any such restrictions. Any failure to
comply with these restrictions may constitute a violation
of applicable securities laws.
The Prospectus does not constitute an offer or an
invitation in any place outside Australia where, or to any
person to whom, it would be unlawful to make such an
offer or invitation. It is the responsibility of any Applicants
who are citizens or residents of jurisdictions outside of
Australia to ensure compliance with all laws of any
country which are relevant to their Applications.
2.8 Enquiries
Potential investors with questions on how to complete
the Application Form, or the contents of this Prospectus,
should contact their stockbroker, accountant, lawyer or
other professional adviser.
2.9 Electronic Prospectus
The Offer constituted by this Prospectus in electronic form
is available only to persons (not including United States
persons) receiving this Prospectus in electronic form within
Australia.
Persons who receive a copy of this Prospectus in
electronic form at www.panbio.com.au are entitled to
obtain a paper copy of the Prospectus (including any
relevant accompanying Application Form) free of charge,
during the Offer period by telephoning JP Morgan
on 1800 180 007.
2.10 Underwriting
The Offer is underwritten by Chase Securities Australia
Limited trading as JP Morgan ("Underwriter"). The
Underwriting Agreement is conditional upon the Company
receiving valid Applications for 3.6 million Shares from
persons that the Underwriter considers, acting reasonably,
have been referred or introduced to the Offer by the
Company or the Chairman of the Company and the delivery
to the Underwriter of executed escrow arrangements from
all the Company’s existing shareholders (excluding those
who became shareholders as a result of the employee
bonus issue referred to in the Investigating Accountant’s
Report). Details of the material terms of the Underwriting
Agreement, including the conditions of underwriting, the
commissions and other payments due
to the Underwriter and the circumstances in which the
agreement can be terminated, are set out in Section 10.
2.11 Ranking
Shares issued pursuant to this Prospectus will rank equally
in all respects with the existing fully paid Shares. Full details
of the rights attaching to Shares are contained in the
Company's Constitution, a summary of which is contained
in Section 10.

Industry Overview
16
PanBio is a biotechnology company operating in the health
care industry, specifically, in the world-wide diagnostics
industry. The Company specialises in developing and
manufacturing diagnostic testing kits for infectious diseases,
particularly emerging diseases including those borne by
mosquitoes (arboviruses) and animals (zoonoses).
3.1 World-wide Diagnostics Industry
The invitro diagnostics (IVD) industry involves the
development and production of chemical and biochemical
systems used in the diagnosis and monitoring of various
medical, industrial and environmental conditions. The value
of the world-wide invitro diagnostics market has been
estimated at $US20 billion in 2000 and is expected to grow
to $22.9 billion by 2003. Market segments that perform
diagnostic procedures include:
• the clinical diagnostics market (including hospitals,
private pathology laboratories, reference laboratories,
blood banks and patient point-of-care testing);
• the life sciences research market (including university
laboratories, private institutes, government and
corporate facilities); and
• the industrial market (including food and water quality
assurance programs, agricultural diagnostics and
animal health testing).
The clinical diagnostics industry involves the development
and manufacture of products used in performing tests
on samples of blood and other body fluids to detect
medical conditions. Modern health care practices rely
on these tests to:
• screen and detect a broad variety of illnesses through
biochemical changes;
• diagnose diseases with similar symptoms differentially,
leading to distinct intervention and therapy;
• monitor an existing condition by administering
therapeutic drug dosage levels to the patient; and
• determine the patient's prognosis or response to therapy
through test procedures, such as viral load monitoring.
3.2 Infectious Disease Diagnostics Industry
PanBio focuses on the infectious disease segment of the
clinical diagnostics market. Although infectious diseases
are estimated to kill more than 17 million people
world-wide every year, only 30 per cent are clinically
diagnosed. The resurgence in both 'old' and 'new'
infectious diseases, coupled with the desire for more
accurate tests, presents a significant opportunity for the
development of fast, accurate and simple diagnostic tests.
Growth in Infectious Disease
Most emerging infectious diseases are zoonotic (animal
borne), with rodents and arthropods (eg mosquito and
ticks) more commonly involved in direct transfer. This is
evidenced by the rapid spread of mosquito-borne viruses
like Dengue Fever as a result of natural and man-made
changes in the environment.
Computer models indicate many diseases will surge with
the heating of the earth's atmosphere. Mosquito-borne
disorders will become increasingly prevalent because their
insect carriers (vectors) are very sensitive to meteorological
conditions. Malaria and Dengue Fever are also expected
to spread dramatically as global temperatures increase.
Malaria is a problem in more than 90 countries inhabited
by some 2,400 million people or 40 per cent of the world's
population. World-wide prevalence of Malaria is in the
order of 300 to 500 million cases each year and it kills
more than one million people annually.
Dengue Fever is now endemic in more than 100 countries in
Africa, the Americas, the Eastern Mediterranean, South-East
Asia and the Western Pacific, putting two-fifths of the world's
population at risk of infection.

17
The appearance of West Nile virus in New York City last
summer caught the United States by surprise. Officials
were concerned that this virus, previously only known of
in Africa, Asia and parts of Europe, could find its way to
America and not be identified for many months resulting
in seven deaths.
Demand for Infectious Disease Diagnostics
The renewed prevalence of infectious diseases has
resulted in demand for highly sophisticated and versatile
diagnostics to identify a larger, more diverse range of
pathogens. Recent developments in biotechnology and
biomedical engineering have created unprecedented
opportunities for more speedy, accurate and convenient
diagnosis. Point-of-care rapid tests, of the type offered
by PanBio, provide faster turn-around time than
conventional methods. The development of resistant
disease strains is another challenge.
Point-of-care testing is one of the most promising areas
of development for infectious disease tests. It offers
almost immediate results with a range of benefits including:
rapid patient diagnosis resulting in earlier treatment with
more appropriate therapeutics; eliminating costly delays
and unnecessary quarantining; and cost savings for both
patients and insurers.
As health care resources become stretched, testing
guidelines and optimised treatment scheduling will become
increasingly important, demanding more timely delivery
of diagnostic test information. The result will be a growing
need for highly specific and sensitive diagnostics for
infectious diseases, greater emphasis on point-of-care
testing, and the use of sophisticated molecular diagnostic
tests that will allow for customised patient therapeutics.
During the next three to eight years, the market for
infectious disease tests is expected to be among the
most dynamic in the invitro diagnostics industry. PanBio
expects that in five years the industry will increasingly
focus on point-of-care rapid screening tests to detect
pathogens, and on nucleic acid (DNA) tests for earlier
detection and determination of treatment.
The market for point-of-care rapid infectious disease
tests performed in physicians' offices and clinics was
approximately $US350 million in 1998, and is expected
to grow to $US870 million by 2003. Point-of-care rapid
tests are forecast to experience 15 per cent growth
throughout the world. Increasingly sophisticated
technology and the use of saliva and urine as alternatives
to blood sampling is expected to stimulate the sales of
point-of-care rapid immunoassays world-wide, particularly
in developing countries.
Immunoassays form the largest and most diversified
segment of the market for infectious disease testing, and
cover a wide range of technologies and applications. The
world-wide market for laboratory-based infectious disease
immunoassays was $US1.7 billion in 1998, and is forecast
to grow to $US2.1 billion by 2003.
DNA probe-based testing is expected to lead a revolution
in infectious disease testing during the next three to eight
years. In 1997, routine clinical applications for DNA probe
tests were used for Tuberculosis, Hepatitis, Gonorrhoea,
HIV and Chlamydia. The market for molecular (DNA, RNA
based) infectious disease assays was estimated to be
around $US410 million in 1997, and is forecast to grow to
$US1.2 billion in 2003.

Industry Overview
The rapid development of the human genome project
and the trend in the United States towards managed
care offer exciting opportunities for the invitro diagnostics
industry. The convergence of genetic information and
advances in technology will continue to accelerate the
growth of molecular diagnostics. Diagnostic gene
detection products allow for detection and in some
cases quantification of the nucleic acid sequence that
uniquely identify an infectious disease agent, a human
genetic disease or a single individual. This category
includes DNA “chips” which are ordered arrays of
oligonucleotides (DNA sequences) immobilised on an
inorganic substrate. DNA chips provide a miniaturised
format for performing large numbers of reactions at once.
Genetic tests for various diseases represent a major area
of potential growth within the diagnostics market. It is
possible that the number of genetic tests performed will
increase significantly because of many disease causing
genes being identified by the human genome project.
The development of both point-of-care rapid tests and
molecular diagnostics offer the Company the opportunity
of partnering with pharmaceutical companies in the
development of new therapeutic drugs.
18

4.2 Current Operations
4.2.1 PanBio's Products
PanBio develops, commercialises and markets a range
of medical diagnostic kits used by hospitals, pathology
laboratories, general practitioners and research institutions
to test for a number of infectious diseases. Technologies
used to produce these diagnostic test kits include:
• Enzyme Linked Immunosorbent Assay (ELISA);
• Immunofluorescence (IFA);
• Lateral Flow Immunochromatographic Tests (Rapids);
• Latex Agglutination; and
• Immunoblot (Dip-S-Tick).
A break-up of PanBio's sales by product for the six
months to 31 December 2000 is illustrated in the
diagram below:
PanBio’s Business
20
4.1 Overview
PanBio is an Australian biotechnology company specialising
in developing, manufacturing and marketing diagnostic
testing kits for more than 27 infectious diseases including
Dengue Fever, Ross River Fever, Glandular Fever and
Whooping Cough. It is a successful developer of diagnostic
tests for arboviruses and provides a broad range of
products suitable for use in a variety of conditions.
The Company's product range includes more than 60
diagnostic tests, most of which are developed at its
Therapeutic Goods Administration (TGA) registered
facility in Australia and FDA/USDA approved facility in the
United States. The Company's products are exported to
more than 55 countries around the world through its
operations in Australia and the United States and through
a network of distributors.
PanBio has a 10-year track record of revenue growth
and for seven consecutive years, PanBio has been listed
in Business Review Weekly's 'Top 100 Fastest Growing
Australian Private Companies'. PanBio has received a
range of other national and state awards including the
Australian Quality Award.
The Company has an active R&D program supported
by its arrangements with a number of research
organisations and is in the process of patenting new
diagnostic technology platforms.
Sales by Technology Type
December 2000 - Half-Year
ELISA
47%
Rapids
10%
Contract
Manufacture/ CAP
5%
IFA
5%
Immunoblot
7%
Latex
4%
Distributed
Lines
19%
Other
3%

21
In Australia and the United States, PanBio sells directly
to its customers using the Company's sales and
marketing representatives. In other countries, the
Company uses distributors and has distribution
networks in Asia, Europe, North and South America.
The technologies used by the Company in its products
are detailed below.
ELISA
ELISA is a diagnostic test platform used for blood tests
that detect antibodies produced in response to an
infection or a vaccination. The 96-well microplate format
is one of PanBio's major technology platforms and,
because it is used in biomedical laboratories around the
world, PanBio has been able to use this technology to
market its mainstream diagnostic products globally.
ELISA is regarded as an efficient and cost-effective
technology because:
• customers have the flexibility to perform small batches
of samples using automation;
• tests can be processed manually, or with the use of
semi or fully automated instrumentation, depending on
the customer's needs;
• instrumentation for ELISA tests is widely available; and
• most manufactured kits provide all the reagents
necessary to perform the test.
ELISA tests can be designed to detect all three classes
of human antibody (IgG, IgM and IgA) and are usually
completed within two hours.
The technology is currently used by the Company to
manufacture tests for:
• Barmah Forest Virus
• Leptospira
• Whooping Cough
• Brucella
• Measles
• Dengue
• Q-Fever
• Epstein Barr Virus (Glandular Fever)
• Rickettsia Scrub Typhus
• Helicobacter Pylori
• Rickettsia Spotted Fever
• Human Herpes Virus type 6
• Ross River Virus
• Rubella

PanBio’s Business
22
IFA Tests
IFA tests are often used when sample numbers are small
or as a supplementary test for ELISAs. The tests are
usually processed manually.
IFA is sometimes the first test platform used to detect
antibodies and develop diagnostic products for emerging
infectious diseases, such as bacterial and viral diseases.
Tests manufactured by the Company using this
process include:
• Arbovirus screen • Japanese Encephalitis
• Dengue • Q-fever
• Ehrlichia • Rickettsial Diseases
• Human Granulocytic • Scrub Typhus
Ehrlichia • West Nile Virus
Rapid Tests
Point-of-care, or rapid tests are simple to perform, require
little or no sample manipulation, produce results in less than
30 minutes and can be used by non-laboratory personnel
with minimal training. Point-of-care rapid tests also:
• enable earlier diagnosis and treatment;
• eliminate the costly delays of unnecessary quarantining
of patients suspected of having highly infectious
diseases; and
• have the potential to save costs for both patients
and insurers.
The use of this technology is expected to grow as it
enables diagnosis to be performed outside the laboratory.
Point-of-care testing is an emerging area within
the invitro diagnostics market that offers future growth
potential. New technology is pushing clinical testing out
of traditional central laboratories to point-of-care sites.
The point-of-care testing market includes two major
segments: hospital and doctor’s offices/satellite facilities
(such as clinics and nursing homes).
Technology advances will make testing easier to perform
at the patients’ bedside. It is likely that some critical,
time-sensitive tests will move away from central
laboratories and closer to patients.
PanBio believes it is well positioned to take advantage of
the market trend in point-of-care testing.
Rapid tests offered by the Company are used to diagnose:
• Dengue
• Malaria (distributed product)
• Melioidosis (in clinical trials)
• Scrub Typhus (in clinical trials)
Latex Agglutination Tests
The Latex Agglutination test is normally carried out
manually at the point-of-care or in laboratories. The test,
which was one of the first technologies developed
commercially for immunoassays, relies on visual detection
of agglutination (clumping of small microparticles).
Latex Agglutination Tests offered by the Company are
used to detect:
• Candida (distributed product)
• Rickettsia rickettsii (Spotted Fever)
• Trichomonas (distributed product)

23
4.2.2 Distributed Products
As well as developing and manufacturing diagnostic
products the Company also has a range of products
which it distributes. These products supplement the
Company's manufactured products in select markets
including Australia, South America and New Zealand.
In some instances the manufacturer of the products
distributes PanBio products in their region.
4.2.3 Contract Manufacture
The Company undertakes limited contract manufacturing
of products for third parties. The Company anticipates
that revenue from this, as a percentage of the Company's
total revenue, will decrease over time.
4.2.4 Manufacturing Facilities
PanBio is licensed by the TGA to manufacture at its
premises in Brisbane, Australia and has a FDA/USDA
approved facility in Baltimore, United States. The
Australian operation also holds ISO9001 certification.
Consistent with regulatory requirements, both facilities
have routine laboratory space as well as special
containment laboratories suitable for working with certain
high risk micro-organisms, such as Japanese Encephalitis
and Yellow Fever. The Brisbane operation also has a
specially fitted DNA laboratory.
The majority of the Company's products are manufactured
in-house and current facilities have the capacity to
accommodate increased production volumes. The
assembling and packaging of a number of products based
on one of the Company's new technology platforms is
outsourced, however, in all cases, the key biological raw
materials are controlled by the Company irrespective of
whether these materials are produced internally using the
Company's biological production facility (eg microbial
antigens, monoclonal antibodies, immunofluorescent
slides) or sourced from external suppliers.
Dip-S-TicksTM
Dip-S-Ticks are a semi-quantitative enzyme immunoassay
that uses an ELISA dot technique to detect a number of
infectious diseases. The antigen is dispensed as discrete
dots onto a solid membrane and is read visually as a
coloured spot.
Tests manufactured by the Company using this
process include:
• Canine Lyme • Q-Fever
• Canine Multitest • Rickettsial Diseases
• Canine Rickettsia • Salmonella
• Dengue Fever • Scrub Typhus
• Leptospira • West Nile Virus

PanBio’s Business
24
4.2.5 Research and Development
Since 1996, PanBio has committed approximately
13 to 20 per cent of its operating revenue to R&D activities
and is forecast to spend between 16 and 23 per cent of
its revenue on these activities in the next two financial
years. This commitment to R&D expenditure has
enabled the Company to develop most of its product
range in-house.
PanBio is experienced not only in developing new
technology, but also bringing it successfully to market.
PanBio's in-house R&D activities are supported by
collaborative research. The Company is a founding
member of the Australian Cooperative Research Centre
for Diagnostic Technologies (CRC-DT), which includes
the Queensland University of Technology, the CSIRO,
La Trobe University and the Children's Health Research
Institute. The CRC-DT has already developed three
infectious disease diagnostic products and licensed a
major technology platform.
Under its agreement with the CRC-DT, PanBio has
a right of refusal on the commercialisation of any
technology developed. The Company is currently
assessing two technologies developed by the CRC-DT
for commercialisation.
PanBio also has arrangements supporting its R&D program
with research institutions, universities, commercial
organisations, the Armed Forces, and the Centers for
Disease Control (CDC). These organisations are located in
the United States, Thailand, Malaysia, Germany and the
United Kingdom. PanBio has relationships with WHO
reference laboratories which assist the Company in its
product development.
As well as continuing to develop new products using its
existing technology platforms, the Company has an active
R&D program aimed at developing new platforms. The
Company will seek to license any platforms developed,
on a non-exclusive basis, to other diagnostics and
pharmaceutical manufacturers for the development of
applications outside PanBio's core area of infectious
disease diagnostics. The Company intends to retain
exclusive rights to any such technology platforms for use
in infectious disease diagnostics. The Company aims to
achieve upfront license fees and earn an ongoing royalty
stream based on product sales from any licensee.
The details of the R&D activities that the Company
is currently undertaking are outlined in Section 4.3 -
Growth Prospects.

4.2.6 Intellectual Property
As discussed in Section 4.2.5, PanBio is committed to R&D both through its in-house activities and with its research arrangements.
These R&D activities have resulted in the lodgement of a number of patents on intellectual property. These are listed below:
Patent Description Status Current and Potential Outcomes
Homogeneous assay system Provisional patents filed in 1999 This technology is in the very early stage
(PQ2246) and 2000 (PQ9612). of development.
Universal lateral flow rapid diagnostic National Phase applications filed The Company will seek to license the
platform. The manufacture of generic in United States and Europe in 2000 manufacturing of the generic lateral flow strip.
pre-prepared lateral flow strips. based on PCT/AU98/01038. Licensing opportunities may arise from diagnostic
companies wishing to use the technology.
Analyte Detection PCT application lodged in 1999 Assay prototype in development.
based on PCT/AU00/00782.
Currently under review.
Filterplate design providing for wicking, National Phase applications filed in Manufacturing of the filterplate has been
separation of top from bottom component United States and Europe in 2000 licensed to a multinational company. If sales
and provision of a light path. based on PCT/AU98/01037. are made PanBio will receive a royalty. Demand
may be driven by industries performing a
variety of bioassays related to drug discovery.
Metal chelate filter International Patent Application filed The filter has proven useful for the capture and
in 2000 based on PCT/AU00/00477. purification of proteins. Licensing opportunities
are being actively sought to manufacture and
market the filter.
The Company plans to continue to lodge patent applications, where appropriate, as part of its strategy of protecting
its intellectual property.
25

PanBio’s Business
26
4.3 Growth Prospects
PanBio aims to continue its growth by accelerating its
R&D program to develop new technology platforms and
extend its current product range, expanding the
Company's operations globally and pursuing business
opportunities such as acquisitions that offer synergies
with the existing business.
Key growth initiatives are summarised below:
4.3.1 Accelerating R&D
PanBio plans to expand its intellectual property portfolio
through continued in-house research, collaborative
projects with research partners such as the CRC-DT,
and the acquisition or licensing of patented technologies.
The Company intends to continue its practice of
entering into arrangements with a variety of companies
and universities in Australia and overseas that offer
technologies that complement PanBio's existing platforms.
In addition, the Company plans to develop links with
pharmaceutical companies by providing technology
platforms that enhance programs such as drug discovery.
ELISA
ELISA technology continues to present market opportunities
and PanBio intends to continue to develop new infectious
disease assays on this existing platform. Several new tests are
planned for development and release over the next three years.
Point-of-care Rapid Tests
Lateral flow rapid tests present the next level of simplification
in diagnostics after ELISA. The benefits of these assays
have been detailed in earlier sections of the Prospectus.
PanBio has an active development program for the release
of new rapid tests. The Directors see this technology
platform as one of the key drivers of future growth.
Nucleic Acid Technology (DNA/RNA)
PanBio is researching Nucleic Acid technologies for diagnosis
of infectious diseases. DNA based diagnostic technologies
are one of the fastest growing segments in invitro diagnostic
technology today. Infectious disease gene detection products
currently account for the majority of sales in this market
category and this is likely to continue for a number of years
because the use of DNA probe-based assays offers significant
advantages for detecting viruses that are difficult to grow
(culture) by traditional methods. Because probe-based
assays allow faster identification of infectious diseases, fewer
resources are wasted on patients who do not need treatment
or special isolation precautions. Probe-based infectious
disease diagnostics have the potential to contribute to
lower overall patient treatment costs for certain diseases.
Traditional diagnostic technology relies on a serological
approach which detects antibody responses produced
by a patient's immune system during or after infection.
This methodology is slow and indirect because antibodies
cannot commonly be detected until days or weeks after
infection. By contrast, Nucleic Acid technologies directly
detect the DNA or RNA material, ie genes, of the
causative microorganism in blood or other body fluids
or tissues. This allows the earliest possible diagnosis of
infection, almost always before the detection of antibodies.
This includes the detection of pathogens (bacteria,
viruses, parasites), tumour markers and markers for
genetic diseases.
PanBio is developing Nucleic Acid methods using multiple
probes together to detect one of several pathogens in
a clinical sample or to distinguish between individuals.
The technology is also useful for monitoring therapy
effectiveness. Because of their sensitivity and specificity,
DNA probes are ideally suited to answer disease specific
diagnostic questions that depend on determining the
presence of a defined genetic marker associated with a
particular disease.

27
A key advantage of this technology is that it allows
the supply of unique generic filter strips suitable for a
variety of diagnostic applications (including DNA based
diagnostics) without the need for manufacturing
equipment. PanBio intends to license the technology for
the manufacture of rapid diagnostic products using
this technology platform in areas other than infectious
disease diagnostics.
Metal Chelate Filter Technology
PanBio has a patent pending (full International Patent
Application specification filed in 2000) for a filter membrane
bearing chelated metals. This technology was developed
from research carried out by the Company. The metal
chelate filter has potential for applications in the
biosciences industry, particularly in respect to protein
purification processes. The Company is seeking licensees
for this technology.
Homogeneous Assay Technologies
PanBio is investigating a variety of approaches to
develop a homogeneous assay platform for the detection
of antibodies, antigens and DNA. Homogeneous assays
are invitro assays that occur in liquid phase and are simple
to perform.
The Company has identified a technology developed by
a major United States university for a field not related to
invitro diagnostics. A Materials Transfer Agreement has
been signed and PanBio has received material with which
to begin applying the new technology. The Company has
filed a provisional patent with the Australian Patent Office
to protect diagnostic applications of this technology and is
collaborating with the CRC-DT.
Concurrent with the above project, PanBio has identified
a number of alternative homogeneous assay platforms
arising out of in-house research.
The development of nucleic acid diagnostic tests
provides opportunities to collaborate with pharmaceutical
companies in developing and monitoring more effective
drug development programs.
New Technologies
In 1998, PanBio secured a three-year, $975,000 R&D
START grant from the Australian Government to
fund research on its patented Fluid Phase System
technologies. These tests rely on liquid-phase incubation
of samples with reactants, rather than the absorption
or coating of surfaces or filters with assay-specific
immunosorbents or other assay-specific materials.
This research has spawned several new technology
concepts, a number of which are proceeding to new
patent applications:
Filterplate Design
PanBio has a patent pending (full National Phase
specification filed with the United States and European
patent offices in 2000) for a novel 96-well filterplate.
The potential applications of the technology lie in
bioscience, particularly in the drug discovery industry.
There may also be applications in the field of invitro
diagnostics.
Universal Lateral Flow Technology
PanBio has a patent pending (full National Phase
specification filed with the United States and European
patent offices in 2000) for a novel lateral flow rapid
diagnostic system. This technology creates a generic
lateral flow strip designed to be manufactured in very
large numbers at a low per unit cost. Development of
this technology has been satisfactory to date, with
the initial milestone Proof of Principle experiments
successfully completed.

PanBio’s Business
28
Dendrimer Nanotechnologies
PanBio is investigating the development of dendrimer
technologies, in particular their application to biotechnology.
Dendrimers are man-made macromolecules that are
symmetrical, consistent and mathematically predictable
unlike polymers that are snakelike and are used in
plastics, paints and coatings.
The invention of the dendrimer is part of the evolution
of nanotechnology. Nanotechnology involves materials
and systems whose structures and components exhibit
novel and significantly improved physical, chemical and
biological properties and processes because of their
very small size.
PanBio is developing a relationship with a company in
the United States with a view to forming a joint venture
to commercialise this technology. Successful completion
of this joint venture would provide PanBio with access
to new fields of business including pharmaceutical
development and new diagnostic platform technologies.
4.3.2 Increased Penetration in Domestic
and International Markets
The Company believes there are significant opportunities
to expand its product reach both domestically and
internationally. In particular, through the use of its United
States operations, PanBio plans to expand product sales
in North and South America and is investigating the
potential of opening a sales office in South America.
4.3.3 Acquisitions
PanBio intends to seek suitable business, product and
technology acquisitions that will enhance its position in
the growing invitro diagnostics industry. The decision
process will involve an investigation of the synergies with
the existing business and appropriate levels of return.

From top, left to right: Ian Sandford,
Mel Bridges, Jim Kalokerinos, Les Watson
and Tim Bosher

31
Ian Sandford (MBA (Exec), BE (Chem) (Hons), M EngSc, ASIA, FAICD)
Chairman
Ian joined PanBio in 1994 as a non-executive Director
and became non-executive Chairman in 1998. He has
20 years experience in corporate development and
management and for the past 12 years has worked as a
management consultant specialising in the formulation
and implementation of strategic management systems
and cultures.
Ian was Corporate Development Manager for Barossa
Co-operative Winery Ltd (Kaiser Stuhl), and Cudgen
RZ Limited, and later worked in the development
investment division of AIDC Limited.
From 1995 to 2000, Ian was an independent Director
of Norco Co-operative Limited and he is currently a
Director of Burnett Valley Ltd.
Ian holds a Bachelor of Chemical Engineering and a
Masters of Engineering Science from the University of
Queensland. He also holds an EMBA from the Australian
Graduate School of Management, is an Associate of the
Securities Institute of Australia and a Fellow of the
Australian Institute of Company Directors.
Mel Bridges (BAppSc, FAICD)
Chief Executive Officer and Director
Mel has 25 years experience in the global diagnostics
industry and has founded and managed successful
diagnostics and biotech based businesses.
He is a founder of PanBio. Previously he was on the
Board and was a founder of Pacific Diagnostics Pty Ltd,
which at the time was a scientific distribution company
in Australia and New Zealand.
Mel was a member of the Commonwealth Government
Roundtable on the Asian Financial Situation and is on the
Queensland Biotechnology Advisory Council and the
Australian Quality Council (AQC). He is a Director of the
CRC-DT and Diatech Pty Ltd.
Mel holds a Bachelor of Applied Science (Chemistry) from
the University of Southern Queensland and is a Fellow of
the Australian Institute of Company Directors (FAICD).
Jim Kalokerinos (BAppSc, BEcon, MAICD)
Non Executive Director
Jim is a founder of PanBio. He has more than 23 years
experience in the diagnostics industry including sales and
marketing in the health care sector having worked in
Australia and overseas.
Previously he was a founder of Pacific Diagnostics Pty Ltd,
a scientific distribution company in Australia and New
Zealand which became wholly owned by Baxter
Healthcare in 1993.
Other positions Jim has held include Director Pacific Region
and South America for Metra Biosystems, Inc and he is
presently Region Director Asia Pacific for Quidel
Corporation, a United States based rapid test
diagnostics company.
Jim holds a Bachelor of Science (Chemistry) from the
University of Southern Queensland and a Bachelor of
Economics from the University of Queensland.
Board of Directors

Board of Directors
32
Les Watson (BSc, MAICD)
Non-Executive Director
Les is a Director and shareholder of PanBio and has
more than 20 years experience as a medical scientist at
Queensland Medical Laboratories and Drs. Sullivan,
Nicolaides and Partners (Scientist in charge of the
Immunology Department).
His experience in the medical diagnostics industry
includes Product Manager of Immunology at Pacific
Diagnostics. He established Leroda Pty Ltd and is the
designer of PathFinder, an automated pathology
specimen and sample management instrument.
Les holds a Bachelor of Applied Science degree in
Medical Technology from the Queensland University
of Technology.
Tim Bosher (BComm (Hons), MBA, FCPA)
Non Executive Director
Tim has more than 28 years experience in management,
specialising in finance and investment.
He is currently a non-executive Director of Ci Technologies
Group Limited (ASX listed) and has held a number of
positions with that company during the past ten years
including Chairman, Managing Director and Finance Director.
He holds a Bachelor of Commerce (First Class Honours)
from the University of Queensland and an MBA from the
University of Hawaii. He is a Fellow, CPA Australia.

PanBio has received a range of national and state awards
including the Australian Quality Award.

From top, left to right: Phillip Auckland,
John Kapeleris, Carl Stubbings, Helene Paxton,
Dr Graeme Barnett, Helen Jennings,
Barbara Wyatt and Geoff Lambkin

Phillip Auckland (BBus (Acctg), FCPA)
Chief Financial Officer and Company Secretary
Phillip has 20 years experience in finance, accounting,
corporate planning and general management.
Before joining PanBio in 1997, Phillip was a Director of a
motor retail operation with two sites and four franchises
in northern New South Wales; General Manager for a
large metropolitan motor retail operation with four sites
and five franchises; State Dealer Development and
Administration Manager for Mazda Australia; and
Financial Analyst for JRA Ltd.
He has also held accounting positions in the finance,
construction and manufacturing sectors, and has
worked in audit with Hungerford Hancock & Offner.
Phillip is FCPA qualified and holds a Bachelor of
Business (Accounting) from the Queensland University
of Technology.
John Kapeleris, (BSc (Hons), Grad Dip Mgt, MBA, MASM, AIMM)
Marketing Manager
John joined PanBio in 1991, and has held several senior
positions including Research Scientist, Quality
Assurance Manager and R&D Manager. In 1995, he was
appointed Business Development Manager and in 1998
became Marketing Manager. He is currently responsible
for sales, marketing and customer service.
In 1994, John was a finalist in the Young Achiever Awards
for his contribution to the biotechnology industry.
Before joining PanBio, he was a scientist with Queensland
Medical Laboratories.
John holds a Bachelor of Science (Honours) and an
MBA from the University of Queensland and has
12 years experience in the diagnostics industry.
Carl Stubbings (BAppSc)
Vice President - PanBio InDx Inc. USA
Carl has 20 years experience in sales and marketing in the
health care industry with specific experience in diagnostics,
nuclear medicine, life sciences and private pathology.
Before joining PanBio in 1997, Carl was Business
Development Manager for Sydney Diagnostic Services
and Area Manager for Asia Pacific for Gelman Sciences
(USA). His other positions have included Sales and
Marketing Manager for Australian Radioisotopes and
National Sales Manager for Pacific Diagnostics.
Helene Paxton (MA, MT (ASCP))
Vice President - PanBio InDx Inc. USA
Helene has more than 25 years experience in the fields of
pathology, immunology and medical diagnostics. She is
the founder and former President of Integrated
Diagnostics Inc, acquired by PanBio in 1999.
Previously, Helene was Co-Department Head of
Immunology and Virology at the Maryland Medical
Laboratory Inc. She has also worked in marketing at
Kallestad Laboratories.
Helene holds a Master of Arts degree and is a qualified
medical technologist. She has published chapters of a
book on clinical immunology and numerous papers.
35
Senior Management

Senior Management
Dr Graeme Barnett (BSc, Dip. Sc, MSc, PhD)
Research Manager
Graeme has 23 years experience in medical microbiology
and virology.
He has been Research Manager for Fluid Phase Systems
and New Technologies at PanBio since 1996.
Other positions during his career include Scientific
Officer in paediatric microbiology at the Christchurch
School of Medicine, Clinical Scientific Officer in
microbiology at Royal North Shore Hospital in Sydney
and the Newcastle Mater Hospital and Principal Scientist
and Scientific Director of Virology in the Virology Unit of
the Hunter Area Pathology Service.
Graeme has written a number of research papers and
has also contributed to four PanBio patents.
Graeme holds a Bachelor's degree, a Post-Graduate
Diploma and a Master's degree in microbiology from the
University of Otago, a PhD in the serology of infection
and virology from the University of Newcastle and is a
Member of the Australian Society for Microbiology.
Helen Jennings (BAppSc)
Quality Manager
Helen has extensive experience in science and
management. She was appointed Quality Manager
at PanBio in 1994 after commencing work with the
Company as a research/quality control Scientist in 1989.
Prior to working with PanBio, Helen was a scientist at
Sullivan and Nicolaides Pathology Laboratory.
Helen holds a Bachelor of Science from the Queensland
University of Technology.
Barbara Wyatt (Assoc. Dip. Clin. Lab. Tech.)
Operations Manager
Barbara has more than 20 years experience as a
Research and Laboratory Technician. She commenced
work with PanBio in 1990 and has been responsible for
coordinating all facets of the manufacturing process
and the logistics of other key business activities within
the Company.
Barbara holds an Associate Diploma in Clinical
Laboratory Techniques from the Queensland University
of Technology.
Geoff Lambkin (BAppSc)
Production Manager
Geoff has over 26 years experience in medical diagnostics
and manufacturing and was a founding member of the
PanBio scientific staff. He was involved in the
development of the Company's first test kit for Ross River
infection and is currently responsible for the development,
manufacture and quality improvement of ELISA test kits.
Prior to joining PanBio, Geoff held the position of
senior scientist in the Serology Department of Sullivan
Nicolaides Pathology.
He holds a Bachelor of Applied Science from the
Queensland University of Technology.
36

Financial Information
38
6.1 Introduction
The table below summarises the financial performance of PanBio and its business for the financial years ended 30 June 1998,
30 June 1999, 30 June 2000, the six months to 31 December 2000 as well as the Directors' Forecasts for the financial years
ending 30 June 2001 and 30 June 2002.
The historical financial information is discussed in detail in the Investigating Accountant's Report in Section 8 of the Prospectus.
The historical financial results have been audited. The results for the years ended 30 June 1999 and 30 June 2000 were audited by
Deloitte Touche Tohmatsu. The results for the half-year ended 31 December 2000 were reviewed by Deloitte Touche Tohmatsu.
Deloitte Corporate Finance Pty Ltd has expressed their opinion on the forecasts in Section 9.
HISTORICAL FORECAST
(Half-Year)
$000s $000s $000s $000s $000s $000s
5,273 6,424 7,675 5,431 11,423 14,959
EBITDAR (2)
1,143 1,585 1,612 953 1,650 2,105
(720) (1,331) (1,366) (767) (1,909) (3,393)
- 171 226 578 770 299
Net interest (51) (18) (135) (98) 16 88
Profit before tax 172 188 6 470 37 (1,834)
4.5 3.4
Notes:
3 The Company has a policy to expense all R&D expenditure as it is incurred.
5 The Revenue multiple is based upon the Company's market capitalisation of $51 million at the date of the Offer Price following completion of the Offer.

39
($000)
Summary of PanBio’s Historical and Forecast Operating Revenue
1989 - 2002
1988/99 1989/90 1990/91 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02
OperatingRevenue($000)
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
Forecast Operating Revenue
Actual Operating Revenue
6.2 Review of Historical and Forecast Results
Operating Revenue
PanBio's operating revenue has grown consistently since its inception. This revenue growth has come through the expansion
of PanBio's product range to over 60 diagnostic kits, through increasing its Australian domestic sales volume, and through
expanding its exports. The graph below shows PanBio's historical operating revenue for the 12.5 years to 31 December 2000
and the forecast operating revenue for the financial years ending 30 June 2001 and 2002.
Financial Year

40
For the years to 30 June 2001 and 2002, the Directors
expect PanBio to achieve revenue growth in excess of
that achieved in 2000. This expected revenue growth
reflects the following factors:
• Continued growth in PanBio's underlying business
as sales to PanBio's customer base and range of
diagnostic products continues to expand. The
Directors believe that market penetration in current
export markets can be improved through increased
resources being invested in distributor management
and support.
• Expansion of PanBio's products into new
geographical markets. PanBio intends to direct
approximately $2.6 million of the float proceeds
towards the expansion of overseas sales including
implementation of a marketing plan focussed on
distributor development and management, technical
support and market analysis.
• Increased revenue resulting from the acquisition
of PanBio InDx. PanBio acquired PanBio InDx on
18 November 1999 so the 2000 financial results
encompass just over seven months of trading
revenue. The revenue forecasts for 2001 and 2002
both incorporate 12 months of revenue from the
United States based operations.
• Increased revenue associated with the availability
of the Dengue Fever rapid test. Revenue growth
slowed in the 2000 financial year due to supply
problems with the Company's largest selling product,
the Dengue rapid card test. The product has been
returned to market. The forecast for 2001 and
2002 assumes that further successful development is
undertaken on the product which results in increased
revenues from the sale of the product.
• Release of new ELISA, Nucleic Acid, and rapid
tests. The Directors expect to release a range of new
products in the proven ELISA format, the recently
released rapid strip test format, as well as Nucleic
Acid tests. The new product focus is being directed
primarily towards diseases with international
market potential.
• Increased revenue resulting from investing of the
proceeds of the Offer in PanBio's business.
The application of funds and resources to areas such
as Management Information Systems, e-commerce,
production automation, and intellectual property
management are expected to contribute to
increased revenue.
Earnings Before Net Interest, Tax, Depreciation,
Amortisation and R&D (EBITDAR)
EBITDAR, as used herein, consists of profit or loss from
operations before net interest, income tax, depreciation,
amortisation and R&D expenditure. EBITDAR as a per-
centage of total sales revenue is forecast to decrease
from 21 per cent in 2000 to 14 per cent in the 2001 and
2002 financial years as the Company focuses on building
revenue growth.
There are three factors causing the reduction in the
EBITDAR margin over the forecast period:
• The increase in global marketing and distributor
management costs in the 2002 year.
• Additional costs associated with maintaining a public
company such as ASX listing fees, share registry fees,
annual report preparation and distribution expenses and
additional professional fees.
• Factors relating to the acquisition of the United States
operation affecting the 2001 year. On acquisition the
United States operation had a lower EBITDAR ratio than
PanBio's Australian operation.

41
The Company has made an investment in Sales and
Marketing in the United States in 2001 aimed at driving
revenue growth there. This investment has a negative
impact on the ratio for the United States operation in
the short term, but is projected to increase sales by
38 per cent in the 2002 year, and improve the United
States EBITDAR ratio.
R&D Expenditure
Since 1996, PanBio has increased its investment in
R&D into a range of 13 to 20 per cent of its annual
operating revenue. The Company expects to increase
its investment in R&D to approximately 23 per cent of
operating revenue for the 2002 financial year. The
Company has allocated approximately $6 million of the
float proceeds to R&D initiatives. A summary of the key
initiatives to be undertaken over the forecast period is
outlined in Section 4.3 of this Prospectus.
Since the 1997 financial year the Company has had a
policy of expensing all R&D expenditure in the year it
is incurred. On this conservative basis of accounting
and with the increased spending on R&D in the 2001
and 2002 years the Directors have forecast a net loss
after tax of approximately $0.1 million in 2001 and
$1.8 million in 2002.
6.3 Key Forecast Assumptions
Forecasts are, by their nature, subject to uncertainty and
the unexpected. Events may differ from those forecast
and the differences may be material. Accordingly, no
guarantee or assurance can be given that the Directors'
Forecasts will be achieved.
Some specific risk factors, which may influence the
business and may impact on the Forecast, are
discussed in Section 7. Other factors influencing the
business are discussed throughout this Prospectus.
In addition, the analysis headed "Sensitivity Analysis"
in Section 6.4 indicates the sensitivity of the forecast to
changes in a number of key assumptions.
The principal assumptions underlying the Directors'
Forecasts for the years ending 30 June 2001 and 2002
are described below. The Forecasts have been prepared
by the Directors using best estimate assumptions and
were subject to an independent review by Deloitte
Corporate Finance Pty Ltd who concluded that the
forecasts, in all material respects, reflect the Directors'
assumptions and are presented on a basis consistent
with the Australian Accounting Standards applied by
the Company.
Deloitte Corporate Finance Pty Ltd have indicated that
nothing has come to its attention which causes it to
believe that the Directors' assumptions do not provide a
reasonable basis for the Forecasts and the Forecasts are
properly prepared in accordance with the assumptions.
The Forecasts must be read in conjunction with this
Prospectus in its entirety, and, in particular, after reviewing
the assumptions, the sensitivity analysis below, risk factors
in Section 7, and the report on the Directors' Forecasts in
Section 9.

42
Key Assumptions
The following are the key assumptions underlying the
Directors' Forecasts:
Operating Revenue Assumptions
• Operating revenue is forecast to increase by
approximately 50 per cent in 2001, from $7.7 million
in 2000 to $11.4 million in 2001. Operating revenue is
forecast to grow to approximately $15 million in 2002,
which represents a 32 per cent increase on the 2001
financial year. The revenue forecasts are based upon
PanBio management's assessment (having regard to
past experience), contracts that are already in place,
expected future customer demand and market trends
in health care, and the ability of and timeframe within
which the Company will further develop existing
products and commercialise new products.
Gross Margin and Cost of Sales Assumptions
• The forecast cost of sales represent the Directors'
expected cost of diagnostic product components
based on past experience, current supply and/or
manufacturing agreements, and agreements currently
under negotiation.
• Increases in international export sales are expected to
be accompanied by reducing product margins. The
Directors anticipate pressure on margins to result from
increasing demands from the Company's extensive
international distributor network. However, reduced
margins on export sales are expected to be partly
compensated by the release of new products with
higher margins throughout the forecast period.
Operating Cost Assumptions
• Operating expenses have been based on the
management's assessment, according to both past
experience and anticipated requirements. Operating
costs have been forecast to allow for current cost
structures and planned new initiatives including:
- Changes to the Company's organisational structure
and the appointment of additional staff in R&D,
marketing and production to support the
planned growth.
- Capital expenditure on systems, automated
manufacturing equipment and building improvements.
- R&D expenditure on currently identified projects.
- Export market expansion costs including increases
in travel, advertising and promotion, and a further
off-shore office.
- The inclusion of public company costs such as ASX
listing fees, annual report preparation and share
registry costs.
• Beyond the initiatives outlined above, the Company
intends to seek additional technology and product
development opportunities. The Directors have made
additional allowances in the forecasts for R&D,
patenting and licensing to cover these expenditures.
Other Assumptions
• Interest income has been estimated assuming a rate
of 5 per cent for 2001 and 3.5 per cent for 2002 on
cash balances.
• Debtors will meet their financial obligations to PanBio on
an average of 50 days and PanBio will pay its creditors
on a 30 day cycle excepting foreign suppliers offering
60 day terms.
• Income tax expense has been based upon the corporate
tax rate of 34 per cent for the year ending 30 June 2001
and 30 per cent for the year ending 30 June 2002. The
Company has also assumed a concessional 125 per cent
tax deduction rate applicable to eligible R&D expenditure.
• The United States dollar to Australian dollar exchange
rate will be United States 59 cents per A$1.00 for the
balance of the 2001 financial year, and United States
62 cents per A$1.00 for the 2002 financial year.

Operating revenue is forecast to increase by approximately 50 per cent in 2001,
from $7.7 million in 2000 to $11.4 million in 2001.

44
General Assumptions
The following general assumptions have been made in
preparing the forecasts:
• There will be no significant changes to the statutory,
legal and regulatory environments which would have a
materially adverse affect on the Company.
• There will be no significant changes in the prevailing
economic conditions in Australia.
• There will be no material amendments to any
agreement regarding PanBio's business.
• There will be no change in the accounting policies
prescribed by Australian Accounting Standards,
Statement of Accounting Concepts and other mandatory
professional reporting requirements which may have a
material effect on PanBio's accounts.
• There will be no material change in the competitive
environment.
• There will be no litigation that may materially affect
revenues or expenses of the Company.
• Good relations with employees will continue and there
will be no major industrial disputes or disturbances.
• The Offer will be fully subscribed and the Company
will receive, by April 2001, an amount of $17 million
before deducting issue costs of approximately
$1.7 million. The Company anticipates that GST on
these costs will be approximately $100,000.
• There will be no change in PanBio's capital structure
during the forecast period, other than explained in
this Offer.
• There will be no dividends paid during the forecast
period (2001 and 2002).
6.4 Sensitivity Analysis
The forecasts for the financial years ending 30 June 2001
and 30 June 2002 are sensitive to variations in certain
assumptions used in this preparation. A summary of the
effect these variations may have on the forecasts is outlined
in the table below. Care should be taken in interpreting
these sensitivities as they are shown in isolation when,
in most cases, the variations are interdependent.
It should also be noted that PanBio's business allows some
discretion in managing operating costs, enabling some
degree of counter measures in the event of unexpected
problems which are not allowed for in the sensitivities.
The effects of movements in a variable may be offset or
compounded by movements in other variables. The effect
on earnings before interest, tax, depreciation, amortisation
and research and development expenditure presented for
each sensitivity is not intended to be indicative or predictive
of the likely range of outcomes to be experienced with
respect to each sensitivity.
The sensitivities have been stated on the basis of
EBITDAR for the financial year ending 30 June 2001 and
30 June 2002, assuming no change in any other variable.
Key Assumptions / Change Impact on Impact on
Variables EBITDAR for EBITDAR for
FYE 2001 FYE 2002
$000s $000s
Sales +/- 10 per cent 599 844
Gross margin percentages +/- 5 per cent 567 744
on related sales
Exchange rate* $A/$US + 5 cents 9 (228)
Exchange rate* - 5 cents (9) 268
* Note from June 2001 a significant portion of the Company’s earnings will be in US dollars.

Risk Factors
46
7.1 Risk Factors
Like all businesses, PanBio is subject to risks and there are
many factors which may impact on the future performance
of the Company. Although some of these risks can be
mitigated by the use of safeguards and appropriate systems
and actions, many are outside the control of the
Directors and the Company.
Potential applicants for Shares in PanBio should carefully
consider the risk factors detailed below, in addition to
the other information included in this Prospectus.
7.2 Risks Specific to PanBio's Operations
Reliance on Key Personnel
PanBio currently employs a number of key management,
scientific and technical personnel. In addition, PanBio
believes that its future success depends, in part, on its
ability to attract and retain suitably qualified management,
scientific and technical personnel. Competition for such
personnel is intense.
PanBio has an Employee Share Plan and an Employee
Option Plan (the provisions of which are summarised in
Section 10) which are aimed at providing incentives,
promoting the recruitment and retention of key personnel
and linking employee performance with overall Company
performance. The Employee Share Plan and Employee
Option Plan do not guarantee PanBio will be successful
in attracting and retaining such personnel and failure to
do so may adversely affect PanBio's business, operating
results and financial condition.
Licensing and Compliance with
Regulatory Requirements
In order for the Company to continue operating it requires
licences from various regulatory authorities in various
jurisdictions including a licence under the Therapeutic
Goods Act in Australia and approvals and/or licences
under the Federal Food, Drug and Cosmetic Act and
the United States Public Health Service Act in the United
States. If any of these licences are suspended, withdrawn
or cancelled this will impact on the Company's ability to
continue its business.
The Company has commenced seeking registration of its
Australian manufactured products with the FDA in the
United States to enable it to sell those products in the
United States. There is no guarantee that registration will
be granted. If it is not granted this may adversely impact
on the Company's revenue.
Dependence on Collaboration
and Commercial Arrangements
PanBio relies on a number of collaborative and
commercial arrangements to carry out R&D and to
market, distribute and manufacture the Company's
products. The most important of these collaborative
arrangements are outlined in Section 4 and PanBio's
material contracts are summarised in Section 10. If any
of the parties to these arrangements are unable to carry
out their obligations under their arrangements with the
Company, or if any commercial arrangement is breached,
discontinued or terminated, this may impact on the
Company's ability to market, distribute, sell and
manufacture its products.

47
Intellectual Property and Patent Protection
The commercial success of the Company depends in
part on its ability (and that of its licensors) to obtain
patent protection for products in major markets and to
preserve the intellectual property of PanBio and its
collaborators. The current status of PanBio's patents
and patent applications are set out in Section 4.2.6.
No assurance is given that PanBio will develop technology
or products which are patentable or that patents will be
granted on pending or future applications. If patents are
granted, there is no guarantee they will be sufficiently
broad to protect PanBio's intellectual property rights and
exclude competitors with similar technology. Substantial
costs may be incurred if PanBio is required to defend its
intellectual property rights against third parties. There is
no assurance that obligations to maintain the intellectual
property of PanBio will not be breached or otherwise
become known in a manner which provides PanBio with
no practical recourse.
Patent applications are generally not published until 18
months after the date of priority applications, and in the
United States may not be published until the time of
grant. Details of new discoveries tend to become public
knowledge only some time after the actual discovery
and PanBio cannot be certain that it or its licensors were
the first to make the inventions covered by each pending
application or that PanBio or its licensors were the first
to file applications for such inventions. No assurance can
be given that any patents granted to PanBio or its licensors
will not be challenged, invalidated or circumvented or
that the rights granted thereunder will provide competitive
advantages to PanBio.
The commercial success of PanBio will also depend in part
on non-infringement of patents granted to third parties.
Competitors or potential competitors may have filed
applications for, or may have been granted, patents or
may obtain additional patents that arguably dominate
the products of PanBio or the technology it employs.
If patents granted to third parties contain claims embracing
PanBio's products or technology, PanBio may have to obtain
appropriate licences under these patents, to cease or alter
certain activities or processes, or to develop or obtain
alternative technology. There can be no assurance that, if
any licences are required, PanBio will be able to obtain any
such licence on commercially favourable terms, if at all.
Know-how forms an important part of the intellectual
property rights owned by the Company. Know-how is
the intangible knowledge of the Company, whether in
the minds of its employees or recorded in Company
documents, processes and procedures. Know-how may
be lost if key personnel cease to be employed by the
Company. Know-how is difficult to formally protect and,
although the Company's employment contracts and the
general law protect rights in confidential information, there
are limits to that protection, and know-how used by the
Company may be gained by the Company's competitors
if key personnel are employed by those competitors.
Product Development
There are many risks inherent in the development and
commercialisation of diagnostic products and other
medical products. Some diagnostic products are subject
to scrutiny by regulatory authorities which may result in
delays or even a failure to release the product to market.
PanBio cannot guarantee that its R&D will result in
marketable products. The Company's forecast revenue
assumes that further successful product development
will be undertaken on the Company's existing products.
If the Company is unable to further develop and/or
commercialise products as forecast this may adversely
impact on the Company's revenue.

Risk Factors
48
Product Liability
PanBio's business activities expose it to potential product
liability risks which are inherent in R&D, preclinical studies,
clinical trials, manufacturing, sales and marketing and the
use of diagnostic products. There can be no assurance
that future insurance cover will be available to the Company
at an acceptable cost, if at all, or that, in the event of any
claim, the level of insurance carried by the Company now
or in the future will be adequate or that a product liability
or other claim would not materially and adversely affect
PanBio's business, operating results and financial condition.
International Operations
A large proportion of PanBio's revenues are earned in
currencies other than the Australian dollar. In addition, if
PanBio's diagnostics development program expands
overseas, then a proportion of PanBio's expenses may
be incurred in currencies other than the Australian dollar.
Consequently, in the absence of PanBio entering into
appropriate hedging arrangements, volatility in the
Australian dollar exchange rates could result in fluctuations
in PanBio's operating results and financial condition.
In addition, PanBio will also be subject to any changes
to the political or legal environments in countries in
which it operates.
7.3 Industry Risks
Competition
PanBio's current and future potential competitors include,
among others, major diagnostics and biotechnology
companies with substantially greater resources than the
Company. There is no assurance that competitors will not
succeed in developing products that are more effective or
economic than any of those being developed by PanBio
or which would render PanBio's products obsolete and/or
otherwise uncompetitive. In addition, PanBio may not be
able to compete successfully against current or future
competitors where aggressive pricing policies are employed
to capture market share. Such competition could result in
price reductions, reduced gross margins and loss of market
share, any of which could materially adversely affect
PanBio's business, operating results and financial position.
7.4 General Investment Risks
General Stockmarket Risk
Investors should recognise that there are risks associated
with any share investment. The price at which the Company's
Shares trade may rise above or fall below the Offer Price,
depending on many factors, including local and international
stock markets, movements in interest rates, economic
conditions, changes in Government policy and investor
sentiment. In particular, investors should recognise that
the biotechnology sector of the stockmarket can be more
volatile than the stockmarket generally, which may result in
large fluctuations in the Company's Share price.
Changes in Government Policy
Any change in Government fiscal, monetary, regulatory
or foreign policy may affect PanBio's business.

Investigating Accountant’s Report 8
49

50
21 February 2001
The Directors
PanBio Limited
116 Lutwyche Road
WINDSOR QLD 4030
Dear Sirs,
Investigating Accountant’s Report
Introduction
This Report has been prepared at the request of the Directors of PanBio Limited (“PanBio”) for inclusion in a Prospectus to be dated on or about
21 February 2001 inviting participation in the issue of up to 17,000,000 fully paid ordinary Shares in PanBio at an issue price of $1.00 per Share.
Background
The Company was incorporated as Batdel Pty Ltd on 16 June 1987. On 9 February 1988 the name of the Company was changed to Kinetic Pty Ltd
and began operations manufacturing and selling reagents. Research and development on the current diagnostics test kit business commenced in
1991. The reagent business was sold in 1993 and the name of the Company was changed to PanBio Pty Ltd. The Company then fully pursued the
development and manufacture of diagnostic test kits for infectious diseases. On 18 November 1999 the Company acquired the business assets of
Integrated Diagnostics Inc. through their subsidiary, PanBio InDx Inc. for a combination of cash and notes payable in instalments over 3 years.
The Company was changed to an unlisted public company on 30 November 2000.
During the half-year ended 31 December 2000, 692 shares were issued for a total consideration of $9,147. As at 31 December 2000 the Company
had 506,829 shares on issue.
A bonus issue of 32,515,839 Shares to existing shareholders and 977,332 Shares to employees was made prior to the issue of this Prospectus to
effect the market capitalisation upon listing.
Scope of Report
The Directors have requested Deloitte Touche Tohmatsu to prepare an Investigating Accountant’s Report, which is to include the following
information:
• The consolidated profit and loss statement of PanBio for the half-year ended 31 December 2000, and the financial years ended 30 June 1998,
1999 and 2000;
• The consolidated balance sheet and consolidated statement of cash flows of PanBio for the half-year ended 31 December 2000, and the
financial year ended 30 June 2000;
• The proforma consolidated balance sheet of PanBio as at 31 December 2000 adjusted to include the funds proposed to be raised by this
Prospectus; and
• Notes to the financial information.
The proforma consolidated balance sheet has been prepared by the Company on a going concern basis. Accordingly, the amounts at which
assets are disclosed in this Report do not purport to be the amounts that would be realised if such assets were sold at the date of this Report.
This Report has been prepared to provide investors with information on the historical performance and state of affairs of PanBio. This Report does
not address the rights attaching to the Shares to be issued in accordance with the Prospectus, or the risks associated with such an investment.
The historical information for the financial years ended 30 June 1998, 1999 and 2000 has been extracted from the audited financial reports
pertaining to these periods.
Deloitte Touche Tohmatsu audited the financial statements of PanBio for the years ended 30 June 1999 and 2000. Another firm audited the
financial statements of PanBio for the year ended 30 June 1998.
The audit of PanBio was conducted in accordance with Australian Auditing Standards. Our procedures included examination, on a test basis, of
evidence supporting the amounts and other disclosures in the financial report, and the evaluation of significant accounting estimates. These
procedures were undertaken to form an opinion as to whether, in all material respects, the financial report was presented fairly in accordance with
Accounting Standards and other mandatory reporting requirements.
The historical information for the half-year ended 31 December 2000 was extracted from the financial report for that period, which has been subject
to review.
We have reviewed the financial information for the half-year ended 31 December 2000 and the proforma as at 31 December 2000. Our review has
been conducted in accordance with Australian Auditing Standard AUS 902 “Review of Financial Reports”. Our review was limited primarily to
inquiries of company personnel, review of the historical and proforma financial information, analytical procedures applied to the financial data,
performance of certain limited verification procedures and comparison of consistency in the application of accounting standards and policies.
These procedures do not provide all the evidence that would be required in an audit, thus the level of assurance provided is less than given in an
audit. We have not performed an audit and, accordingly, we do not express an audit opinion on the financial information for the half-year ended
31 December 2000 and the proforma information as at that date.
Deloitte Touche Tohmatsu
A.B.N. 19 003 833 127
Riverside Centre
Level 25 & 26
123 Eagle Street
Brisbane QLD 4001
GPO Box 1463
Brisbane QLD 4001 Australia
DX115
Telephone (07) 3308 7000
Facsimile (07) 3308 7001
www.deloitte.com.au

51
Opinion on Historical Financial Information
In our opinion:
• the consolidated profit and loss statement for the financial years ended 30 June 1998, 1999 and 2000;
• the consolidated statement of cash flows for the financial year ended 30 June 2000; and
• the consolidated balance sheet as at 30 June 2000
together with the notes thereto of PanBio is presented fairly in accordance with applicable Accounting Standards and other mandatory
professional reporting requirements (Urgent Issues Group Consensus Views) and the accounting policies adopted by PanBio as described in
Annexure 4.
Review Statement on Historical Financial Information
Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the financial information as set
out in Annexures 1, 2, 3 and 4 does not present fairly:
• the consolidated profit and loss statement, statement of cash flows and notes thereto of PanBio for the half-year ended 31 December
2000; and
• the consolidated balance sheet of PanBio as at 31 December 2000;
in accordance with applicable Australian Accounting Standards and other mandatory professional reporting requirements and the accounting
policies adopted by PanBio as described in the Annexure 4.
Review Statement on Proforma Financial Information
Based on our review, which is not an audit, nothing has come to our attention that causes us to believe that the proforma financial
information as set out in the Annexures to this Report does not present fairly the proforma consolidated balance sheet and cash flows of
PanBio as at 31 December 2000 on the basis of the assumptions used in its preparation as described in Note 1 of Annexure 4.
Subsequent Events
Subsequent to 31 December 2000 and up to the date of this Report, nothing has come to our attention that would cause us to believe
material transactions or events outside the ordinary course of business of PanBio have occurred, other than the matters dealt with in this
Report, which would require comment on, or adjustment to, the information contained in this Report, or which would cause such information
to be misleading.
Yours faithfully
DELOITTE TOUCHE TOHMATSU
Sarah Merridew
Partner
Chartered Accountants
The liability of Deloitte Touche Tohmatsu, is limited by, and to the extent of, the Accountants’ Scheme under the Professional Standards Act 1994 (NSW).

52
Note Audited Audited Audited Reviewed
Year Ended Year Ended Year Ended half-year Ended
30 June 98 30 June 99 30 June 00 31 Dec 00
$ $ $ $
Operating revenue 2 5,294,504 6,600,081 7,905,462 5,692,852
Earnings before interest,
tax, depreciation
amortisation and research
and development expense 1,142,997 1,584,977 1,612,065 952,251
Less: Research and
development expense 2 (719,965) (1,331,159) (1,366,075) (766,766)
Plus: Research and development
Grants and CRC income 2 - 171,400 226,067 577,934
Less: Depreciation and amortisation 2 (200,500) (219,362) (330,622) (196,176)
Earnings before interest and tax 222,532 205,856 141,435 567,243
Net interest expense (50,677) (18,127) (135,162) (97,550)
Operating profit before tax 2 171,855 187,729 6,273 469,693
Income tax attributable to
operating profit 3 - - (2,725) (217,286)
Operating profit after income tax 171,855 187,729 3,548 252,407
Retained profits at the beginning
of the financial year 933,071 1,054,869 1,191,984 1,195,532
Total available for appropriation 1,104,926 1,242,598 1,195,532 1,447,939
Dividends provided for or paid (50,057) (50,614) - -
Retained profits at the end
of the financial year 1,054,869 1,191,984 1,195,532 1,447,939
Notes to the historical financial information are contained in Annexure 4.
Historical Profit and Loss
Statement
Annexure 1
PanBio Limited

PBO Prospectus 2001

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