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&lt;br /&gt; Mesoblas&lt;br /&gt; Annual Re&lt;br /&gt; &lt;br /&gt; t Limited&lt;br /&gt; port 2009 &lt;br /&gt; &lt;br /&gt; &lt;br /&gt; Contents Page&lt;br /&gt; Message from the Chairman 1&lt;br /&gt; Executive Director&rsquo;s Report 2&lt;br /&gt; Directors&rsquo; Report 8&lt;br /&gt; Auditors&rsquo; Independence Declaration 25&lt;br /&gt; Corporate Governance 26&lt;br /&gt; Financial Statements 33&lt;br /&gt; Directors&rsquo; Declaration 67&lt;br /&gt; Independent Audit Report <a title="Mesoblast Annual Report 2009 page 1" href="http://viewer.zmags.com/publication/656a4a62?page=1">MesoblasAnnual Ret Limitedport 2009 </a> MesoblasAnnual Ret Limitedport 2009 <a title="Mesoblast Annual Report 2009 page 2" href="http://viewer.zmags.com/publication/656a4a62?page=2">Contents </a> Contents <a title="Mesoblast Annual Report 2009 page 3" href="http://viewer.zmags.com/publication/656a4a62?page=3">Message from the ChairmanOn behalf of Mes</a> Message from the ChairmanOn behalf of Mes<a title="Mesoblast Annual Report 2009 page 4" href="http://viewer.zmags.com/publication/656a4a62?page=4">Executive Director&rsquo;s ReportThe Year in Re</a> Executive Director&rsquo;s ReportThe Year in Re<a title="Mesoblast Annual Report 2009 page 5" href="http://viewer.zmags.com/publication/656a4a62?page=5">Development of a Global Spinal FranchiseInterver</a> Development of a Global Spinal FranchiseInterver<a title="Mesoblast Annual Report 2009 page 6" href="http://viewer.zmags.com/publication/656a4a62?page=6">Bone Marrow Aspirateand Wisconsin, is co</a> Bone Marrow Aspirateand Wisconsin, is co<a title="Mesoblast Annual Report 2009 page 7" href="http://viewer.zmags.com/publication/656a4a62?page=7">Identification of MPC </a> Identification of MPC <a title="Mesoblast Annual Report 2009 page 8" href="http://viewer.zmags.com/publication/656a4a62?page=8">&bull; Continued evaluation of the safety and effectiv</a> &bull; Continued evaluation of the safety and effectiv<a title="Mesoblast Annual Report 2009 page 9" href="http://viewer.zmags.com/publication/656a4a62?page=9">Pictured at the awards ceremony (l-and Profess</a> Pictured at the awards ceremony (l-and Profess<a title="Mesoblast Annual Report 2009 page 10" href="http://viewer.zmags.com/publication/656a4a62?page=10">Directors&rsquo; ReportThe Board of Directors of </a> Directors&rsquo; ReportThe Board of Directors of <a title="Mesoblast Annual Report 2009 page 11" href="http://viewer.zmags.com/publication/656a4a62?page=11">Key AchievementsDevelopment of a global spinal f</a> Key AchievementsDevelopment of a global spinal f<a title="Mesoblast Annual Report 2009 page 12" href="http://viewer.zmags.com/publication/656a4a62?page=12">In the first instance, Mesoblast aims to make its</a> In the first instance, Mesoblast aims to make its<a title="Mesoblast Annual Report 2009 page 13" href="http://viewer.zmags.com/publication/656a4a62?page=13">FundingIn April this year, Mesoblast Limited suc</a> FundingIn April this year, Mesoblast Limited suc<a title="Mesoblast Annual Report 2009 page 14" href="http://viewer.zmags.com/publication/656a4a62?page=14">Investment In Angioblast Systems, Inc.Mesoblast </a> Investment In Angioblast Systems, Inc.Mesoblast <a title="Mesoblast Annual Report 2009 page 15" href="http://viewer.zmags.com/publication/656a4a62?page=15">Significant Changes in the State of AffairsNo si</a> Significant Changes in the State of AffairsNo si<a title="Mesoblast Annual Report 2009 page 16" href="http://viewer.zmags.com/publication/656a4a62?page=16">Information on DirectorsBrian Jamieson, Non-exe</a> Information on DirectorsBrian Jamieson, Non-exe<a title="Mesoblast Annual Report 2009 page 17" href="http://viewer.zmags.com/publication/656a4a62?page=17">Byron McAllister, Non-executive Director &ndash; BS M.A</a> Byron McAllister, Non-executive Director &ndash; BS M.A<a title="Mesoblast Annual Report 2009 page 18" href="http://viewer.zmags.com/publication/656a4a62?page=18">Meetings of DirectorsThe number of meetings of t</a> Meetings of DirectorsThe number of meetings of t<a title="Mesoblast Annual Report 2009 page 19" href="http://viewer.zmags.com/publication/656a4a62?page=19">Remuneration ReportThe directors of the Comp</a> Remuneration ReportThe directors of the Comp<a title="Mesoblast Annual Report 2009 page 20" href="http://viewer.zmags.com/publication/656a4a62?page=20">Relationship between remuneration policy and comp</a> Relationship between remuneration policy and comp<a title="Mesoblast Annual Report 2009 page 21" href="http://viewer.zmags.com/publication/656a4a62?page=21">B.Remuneration of Key Management PersonnelDetail</a> B.Remuneration of Key Management PersonnelDetail<a title="Mesoblast Annual Report 2009 page 22" href="http://viewer.zmags.com/publication/656a4a62?page=22">Details of the remuneration of each director of M</a> Details of the remuneration of each director of M<a title="Mesoblast Annual Report 2009 page 23" href="http://viewer.zmags.com/publication/656a4a62?page=23">Sharebased payments Other </a> Sharebased payments Other <a title="Mesoblast Annual Report 2009 page 24" href="http://viewer.zmags.com/publication/656a4a62?page=24">C. Service AgreementsThe non-executive directors</a> C. Service AgreementsThe non-executive directors<a title="Mesoblast Annual Report 2009 page 25" href="http://viewer.zmags.com/publication/656a4a62?page=25">D. Share-Based CompensationOptions to purchase f</a> D. Share-Based CompensationOptions to purchase f<a title="Mesoblast Annual Report 2009 page 26" href="http://viewer.zmags.com/publication/656a4a62?page=26">Value of options issued to directors and key mana</a> Value of options issued to directors and key mana<a title="Mesoblast Annual Report 2009 page 27" href="http://viewer.zmags.com/publication/656a4a62?page=27">PricewaterhouseCoopersABN 52 780 433 757Freshw</a> PricewaterhouseCoopersABN 52 780 433 757Freshw<a title="Mesoblast Annual Report 2009 page 28" href="http://viewer.zmags.com/publication/656a4a62?page=28">Corporate GovernanceMesoblast Limited (t</a> Corporate GovernanceMesoblast Limited (t<a title="Mesoblast Annual Report 2009 page 29" href="http://viewer.zmags.com/publication/656a4a62?page=29">The term in office held by each Director in offic</a> The term in office held by each Director in offic<a title="Mesoblast Annual Report 2009 page 30" href="http://viewer.zmags.com/publication/656a4a62?page=30"> Nerve root nowdecompressed </a> Nerve root nowdecompressed <a title="Mesoblast Annual Report 2009 page 31" href="http://viewer.zmags.com/publication/656a4a62?page=31"> MPCs addedMesoblast </a> MPCs addedMesoblast <a title="Mesoblast Annual Report 2009 page 32" href="http://viewer.zmags.com/publication/656a4a62?page=32"> Mesoblast </a> Mesoblast <a title="Mesoblast Annual Report 2009 page 33" href="http://viewer.zmags.com/publication/656a4a62?page=33"> Mesoblast </a> Mesoblast <a title="Mesoblast Annual Report 2009 page 34" href="http://viewer.zmags.com/publication/656a4a62?page=34">32</a> 32<a title="Mesoblast Annual Report 2009 page 35" href="http://viewer.zmags.com/publication/656a4a62?page=35">Financ atementsfor the ye 30 Jun</a> Financ atementsfor the ye 30 Jun<a title="Mesoblast Annual Report 2009 page 36" href="http://viewer.zmags.com/publication/656a4a62?page=36">Income Statementfor the year ended 30 June 2009</a> Income Statementfor the year ended 30 June 2009<a title="Mesoblast Annual Report 2009 page 37" href="http://viewer.zmags.com/publication/656a4a62?page=37">Statement of Changes in Equityfor the year ended</a> Statement of Changes in Equityfor the year ended<a title="Mesoblast Annual Report 2009 page 38" href="http://viewer.zmags.com/publication/656a4a62?page=38">Balance Sheetas at 30 June 2009Note </a> Balance Sheetas at 30 June 2009Note <a title="Mesoblast Annual Report 2009 page 39" href="http://viewer.zmags.com/publication/656a4a62?page=39">Cash Flow Statementfor the year ended 30 June 20</a> Cash Flow Statementfor the year ended 30 June 20<a title="Mesoblast Annual Report 2009 page 40" href="http://viewer.zmags.com/publication/656a4a62?page=40">Notes to the Financial Statementsfor the year en</a> Notes to the Financial Statementsfor the year en<a title="Mesoblast Annual Report 2009 page 41" href="http://viewer.zmags.com/publication/656a4a62?page=41">1. SIGNIFICANT ACCOUNTING POLICIES CONTINUEDGoi</a> 1. SIGNIFICANT ACCOUNTING POLICIES CONTINUEDGoi<a title="Mesoblast Annual Report 2009 page 42" href="http://viewer.zmags.com/publication/656a4a62?page=42">1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED(b)</a> 1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED(b)<a title="Mesoblast Annual Report 2009 page 43" href="http://viewer.zmags.com/publication/656a4a62?page=43">1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED(g)</a> 1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED(g)<a title="Mesoblast Annual Report 2009 page 44" href="http://viewer.zmags.com/publication/656a4a62?page=44">1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED(k)</a> 1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED(k)<a title="Mesoblast Annual Report 2009 page 45" href="http://viewer.zmags.com/publication/656a4a62?page=45">1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED(p)</a> 1. SIGNIFICANT ACCOUNTING POLICIES CONTINUED(p)<a title="Mesoblast Annual Report 2009 page 46" href="http://viewer.zmags.com/publication/656a4a62?page=46">(v) New and revised accounting standards and inte</a> (v) New and revised accounting standards and inte<a title="Mesoblast Annual Report 2009 page 47" href="http://viewer.zmags.com/publication/656a4a62?page=47">30 June 30 June </a> 30 June 30 June <a title="Mesoblast Annual Report 2009 page 48" href="http://viewer.zmags.com/publication/656a4a62?page=48">3. SEGMENT INFORMATION(a) Description of segmen</a> 3. SEGMENT INFORMATION(a) Description of segmen<a title="Mesoblast Annual Report 2009 page 49" href="http://viewer.zmags.com/publication/656a4a62?page=49">3. SEGMENT INFORMATION CONTINUED(c) Segment rec</a> 3. SEGMENT INFORMATION CONTINUED(c) Segment rec<a title="Mesoblast Annual Report 2009 page 50" href="http://viewer.zmags.com/publication/656a4a62?page=50">4. INCOME TAX EXPENSE(a) Reconciliation of incom</a> 4. INCOME TAX EXPENSE(a) Reconciliation of incom<a title="Mesoblast Annual Report 2009 page 51" href="http://viewer.zmags.com/publication/656a4a62?page=51">6. EARNINGS PER SHARENet loss used in calculatin</a> 6. EARNINGS PER SHARENet loss used in calculatin<a title="Mesoblast Annual Report 2009 page 52" href="http://viewer.zmags.com/publication/656a4a62?page=52">10. INVESTMENTS ACCOUNTED FOR USING THE EQUITY ME</a> 10. INVESTMENTS ACCOUNTED FOR USING THE EQUITY ME<a title="Mesoblast Annual Report 2009 page 53" href="http://viewer.zmags.com/publication/656a4a62?page=53">30 June 30 June </a> 30 June 30 June <a title="Mesoblast Annual Report 2009 page 54" href="http://viewer.zmags.com/publication/656a4a62?page=54">13. ISSUED CAPITALOrdinary shares participate i</a> 13. ISSUED CAPITALOrdinary shares participate i<a title="Mesoblast Annual Report 2009 page 55" href="http://viewer.zmags.com/publication/656a4a62?page=55">30 June 30 June </a> 30 June 30 June <a title="Mesoblast Annual Report 2009 page 56" href="http://viewer.zmags.com/publication/656a4a62?page=56">30 June 30 June </a> 30 June 30 June <a title="Mesoblast Annual Report 2009 page 57" href="http://viewer.zmags.com/publication/656a4a62?page=57">18. SHARE-BASED PAYMENTSThe Company has adopted</a> 18. SHARE-BASED PAYMENTSThe Company has adopted<a title="Mesoblast Annual Report 2009 page 58" href="http://viewer.zmags.com/publication/656a4a62?page=58">18. SHARE-BASED PAYMENTS CONTINUED(a) Existing </a> 18. SHARE-BASED PAYMENTS CONTINUED(a) Existing <a title="Mesoblast Annual Report 2009 page 59" href="http://viewer.zmags.com/publication/656a4a62?page=59">18. SHARE-BASED PAYMENTS CONTINUED(a) Existing </a> 18. SHARE-BASED PAYMENTS CONTINUED(a) Existing <a title="Mesoblast Annual Report 2009 page 60" href="http://viewer.zmags.com/publication/656a4a62?page=60">18. SHARE-BASED PAYMENTS CONTINUED(a) Existing </a> 18. SHARE-BASED PAYMENTS CONTINUED(a) Existing <a title="Mesoblast Annual Report 2009 page 61" href="http://viewer.zmags.com/publication/656a4a62?page=61">18. SHARE-BASED PAYMENTS CONTINUED(b) Fair valu</a> 18. SHARE-BASED PAYMENTS CONTINUED(b) Fair valu<a title="Mesoblast Annual Report 2009 page 62" href="http://viewer.zmags.com/publication/656a4a62?page=62">18. SHARE-BASED PAYMENTS CONTINUED(d) Share opt</a> 18. SHARE-BASED PAYMENTS CONTINUED(d) Share opt<a title="Mesoblast Annual Report 2009 page 63" href="http://viewer.zmags.com/publication/656a4a62?page=63">19. KEY MANAGEMENT PERSONNEL COMPENSATION CONTINU</a> 19. KEY MANAGEMENT PERSONNEL COMPENSATION CONTINU<a title="Mesoblast Annual Report 2009 page 64" href="http://viewer.zmags.com/publication/656a4a62?page=64">19. KEY MANAGEMENT PERSONNEL COMPENSATION CONTINU</a> 19. KEY MANAGEMENT PERSONNEL COMPENSATION CONTINU<a title="Mesoblast Annual Report 2009 page 65" href="http://viewer.zmags.com/publication/656a4a62?page=65">20. RELATED PARTY TRANSACTIONS(a) Equity intere</a> 20. RELATED PARTY TRANSACTIONS(a) Equity intere<a title="Mesoblast Annual Report 2009 page 66" href="http://viewer.zmags.com/publication/656a4a62?page=66">20. RELATED PARTY TRANSACTIONS CONTINUED(c) Tra</a> 20. RELATED PARTY TRANSACTIONS CONTINUED(c) Tra<a title="Mesoblast Annual Report 2009 page 67" href="http://viewer.zmags.com/publication/656a4a62?page=67">21. FINANCIAL RISK MANAGEMENT CONTINUED(a) Mark</a> 21. FINANCIAL RISK MANAGEMENT CONTINUED(a) Mark<a title="Mesoblast Annual Report 2009 page 68" href="http://viewer.zmags.com/publication/656a4a62?page=68">21. FINANCIAL RISK MANAGEMENT CONTINUED(b) Cred</a> 21. FINANCIAL RISK MANAGEMENT CONTINUED(b) Cred<a title="Mesoblast Annual Report 2009 page 69" href="http://viewer.zmags.com/publication/656a4a62?page=69">Directors&rsquo; DeclarationIn accordance wit</a> Directors&rsquo; DeclarationIn accordance wit<a title="Mesoblast Annual Report 2009 page 70" href="http://viewer.zmags.com/publication/656a4a62?page=70">PricewaterhouseCoopersABN 52 780 433 757Indepe</a> PricewaterhouseCoopersABN 52 780 433 757Indepe<a title="Mesoblast Annual Report 2009 page 71" href="http://viewer.zmags.com/publication/656a4a62?page=71">Independent auditor&rsquo;s report to the members ofMe</a> Independent auditor&rsquo;s report to the members ofMe<a title="Mesoblast Annual Report 2009 page 72" href="http://viewer.zmags.com/publication/656a4a62?page=72">Shareholder InformationA. SUBSTANTIAL S</a> Shareholder InformationA. SUBSTANTIAL S<a title="Mesoblast Annual Report 2009 page 73" href="http://viewer.zmags.com/publication/656a4a62?page=73">D. TWENTY LARGEST HOLDERS OF QUOTED SECURITIEST</a> D. TWENTY LARGEST HOLDERS OF QUOTED SECURITIEST<a title="Mesoblast Annual Report 2009 page 74" href="http://viewer.zmags.com/publication/656a4a62?page=74">Mesoblast Limited ABN 68 109 431 870Board of Dir</a> Mesoblast Limited ABN 68 109 431 870Board of Dir<a title="Mesoblast Annual Report 2009 page 75" href="http://viewer.zmags.com/publication/656a4a62?page=75"></a> <a title="Mesoblast Annual Report 2009 page 76" href="http://viewer.zmags.com/publication/656a4a62?page=76"></a>