Kazia Therapeutics Annual Report 2021

68 Kazia Therapeutics Limited 8 Annual Report 2021 KAZIA THERAPEUTICS LIMITED Independent auditor’s report to the members of Kazia Therapeutics Limited Accounting for license agreements under AASB15 Revenues from Contracts with Customers (Note 2, Note 3 and Note 5) During the year, the Group entered into the following transactions:  On 1 March 2021, the Group entered into an exclusive worldwide license agreement with Oasmia Pharmaceutical AB (Oasmia), granting Oasmia the worldwide rights to develop and commercialise Cantrixil; and  On 29 March 2021 the Group entered into a licensing agreement with Simcere Pharmaceutical Group Ltd (Simcere), granting Simcere the rights to develop and commercialise Paxalisib, in the Greater China territory. The transactions included the receipt if upfront cash payments of US$4 million and US$7million made to the Group from Oasmia and Simcere respectively. This is a key audit matter due to the materiality of the transactions and the judgement required by management in accounting for these transactions in accordance with AASB15 Revenue from Contracts with Customers. Our procedures included, amongst others:  obtaining and reviewing copies of the license agreements to understand the terms and conditions of the transactions;  reviewing management’s accounting papers documenting the accounting treatments, including in relation to the applicability of AASB15;  agreeing key terms of agreements utilised in managemen t’s assessment;  challenging key assumptions made by management in its assessment of accounting treatments;  making enquiries of management’s experts; and  assessing the adequacy of the relevant disclosures within the financial statements. Information other than the financial report and auditor’s report t hereon The Directors are responsible for the other information. The other information comprises the information included in the Group ’s annual report for the year ended 30 June 2021, but does not include the financial report and our auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the financial report The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial report, the Directors are responsible for assessing the Group ’ s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. 6 8