HEALTH HOUSE INTERNATIONAL LIMITED
(formerly VPCL Limited)
ABN 65 149 197 651
ANNUAL REPORT
For the Year Ended
30 June 2021
CONTENTS
Corporate directory
Directors’ report
Remuneration Report
Auditor’s independence declaration
Consolidated statement of profit or loss and other comprehensive Income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors’ declaration
Independent auditor’s report
Corporate governance statement
Additional securities information
2
3
11
18
19
20
21
22
23
64
65
69
78
All announcements and financial reports are available on our website: www.healthhouse.com.au.
- 1 -
CORPORATE DIRECTORY
NON-EXECUTIVE DIRECTORS
Christopher Mews
Hon Michael Rann
EXECUTIVE DIRECTORS
David Wheeler
Dr Henrik Sprengel
COMPANY SECRETARY
Tim Slate
PRINCIPAL & REGISTERED OFFICE
Level 3, 101 St Georges Terrace
PERTH WA 6000
AUSTRALIA
Telephone: +61 8 6558 0886
AUDITORS
HLB Mann Judd (WA) Partnership
Level 4, 130 Stirling Street
PERTH WA 6000
AUSTRALIA
SHARE REGISTER
Link Market Services
Central Park Level 4
152 St Georges Terrace
PERTH WA 6000
AUSTRALIA
Telephone: +61 8 6160 4455
SECURITIES EXCHANGE LISTING
Securities of Health House International Limited (formerly VPCL Limited) are listed on the Australian
Securities Exchange.
ASX Code: HHI
BANKERS
Westpac Banking Corporation
109 St George Terrace
PERTH WA 6000
AUSTRALIA
ATTORNEYS
Blackwall Legal LLP
Level 26, 140 St Georges Terrace
PERTH WA 6000
AUSTRALIA
- 2 -
Annual Report 2021
Health House International Limited (formerly VPCL Limited)
DIRECTORS’ REPORT
The directors present their report together with the financial statements of the Group consisting of
Health House International Limited (formerly VPCL Limited) (HHI or the Company) and the entities it
controlled for the financial year ended 30 June 2021. In order to comply with the provisions of the
Corporations Act 2001, the Directors report as follows:
DIRECTORS
The names of the directors who held office during or since the end of the year and until the date of
this report are as below. Directors were in office for this entire period unless otherwise stated:
David Wheeler
Chairman
Christopher Mews
Non-Executive Director
Hon Michael Rann
Non-Executive Director (appointed 19 March 2021)
Dr Henrik Sprengel
Executive Director (appointed 10 August 2021)
Leanne Graham
Executive Chairperson (resigned 19 March 2021)
Details on the background and qualifications of directors is contained elsewhere in this report.
COMPANY SECRETARY
Mr. Tim Slate was appointed as Company Secretary on 19 March 2021. Mr. Slate has a Bachelor of
Commerce from the University of Western Australia, is a Chartered Accountant, is an Associate
Member of the Governance Institute of Australia and is a Graduate of the Australian Institute of
Company Directors. Mr. Slate provides accounting and secretarial advice to private and public
companies. Mr Slate has over ten years’ experience in chartered accounting.
Prior to Mr. Slate’s appointment, Mr Christopher Mews was Company Secretary. Mr Christopher Mews
has remained on the board as a Non-Executive Director.
PRINCIPAL ACTIVITIES
Health House International Limited (formerly VPCL Limited) is an international pharmaceutical
distributor specialising in, but not limited to, the distribution of medicinal cannabis products across
Australasia, United Kingdom and Europe.
The Company is a fully licenced and regulated specialised importer, exporter, consolidator and
distributor of medicinal cannabis products, currently distributing medicinal cannabis products to
pharmacies, prescribers, specialist medicinal cannabis clinics and researchers across Australasia. With
its Wholesale Dealers and Controlled Drugs licences the Company supplies pharmacies, hospital,
government departments, veterinarians and other wholesalers with medicinal cannabis and general
pharmaceutical products across the UK and Europe.
Health House has supply agreements in place with a number of EU Good Manufacturing Practice (GMP)
certified manufacturers and producers of high-quality medicinal cannabis products. The EU GMP
licence is issued by the European Medicines Agency and is the most highly credentialled in the world
for compliance for the production and manufacturing of pharmaceutical grade medicinal products.
- 3 -
Annual Report 2021
Health House International Limited (formerly VPCL Limited)
DIRECTORS’ REPORT
Health House provides the following services and features to the pharmaceutical products supply
chain:
• warehouse management –Health House enters all products into a warehouse management
•
system for accurate inventory management
controlled drugs storage –Health House has special access areas and procedures in place to
deal with controlled drugs. Regular inventory checks are made to ensure secure storage
• delivery –Health House conducts daily deliveries made through secure logistics companies
and couriers
• pharmacy support –Health House provides inventory management and support logistics
solutions to empower pharmacists to focus on patients and remain competitive in the
market
• efficiency –Health House creates efficiency in the healthcare system. Pharmacists do not
need to order separately from multiple manufacturers nor manage inventory, saving time
and costs
safety & security –Health House ensures that medicines are properly and securely handled,
stored and delivered
reliability –Health House ensures its medicines are delivered in a time-efficient manner to a
range of pharmacies, care homes and clinics.
•
•
RESULTS
A summary of the operating results for the year ended 30 June 2021 is as follows:
• Revenue from ordinary activities was $8,449,564 representing a 41.3% increase on FY2020
$5,978,940
Loss after tax was ($5,307,296) representing a 111% increase on FY2020 ($2,524,775).
•
• Net cash outflow from operating activities was ($2,391,078) representing a 23% increase on
FY2020 ($1,938,237).
The table below sets out summary information about the consolidated entity’s earnings and
movement in shareholder wealth for the three years to 30 June 2021.
EBITDA1
Net profit/(loss) before tax
Net profit/(loss) after tax
Share price at start of year
Share price at end of year
Basic and Diluted loss per share
Return on Capital
30 June 2021
(4,738,298)
(5,322,572)
(5,307,296)
N/A
14.50
(0.04)
(0.68)
30 June 2020 30 June 2019
-
-
-
N/A
N/A
N/A
N/A
(2,039,866)
(2,588,622)
(2,524,775)
N/A
N/A
(0.04)
(1.22)
$
$
$
cps
cps
$
$
Note 1: EBITDA is a non-IFRS measure which represents earnings before interest, tax, depreciation and
amortisation. This is unaudited.
- 4 -
Annual Report 2021
Health House International Limited (formerly VPCL Limited)
DIRECTORS’ REPORT
30 June 2021
30 June 2020
30 June 2019
Net profit/(loss) after tax
Income tax benefit
Finance costs
Interest Revenue
Depreciation and amortisation
EBITDA1
$
$
$
$
$
$
(5,307,296)
15,276
(55,086)
3,031
(532,219)
(4,738,298)
(2,524,775)
63,847
(55,472)
337
(493,621)
(2,039,866)
-
-
-
-
-
-
DIVIDENDS PAID OR RECOMMENDED
The directors do not recommend the payment of a dividend and no amount has been paid or declared
by way of a dividend to the date of this report.
REVIEW OF OPERATIONS
Operating results
The consolidated loss of the group after providing for income tax attributable to owners of the parent
entity amounted to $5,307,296 (2020: $2,524,776).
Significant events
The Company, via its subsidiary, Health House Pharma Limited, purchased the trade and assets of Gees
Pharmacy, a web-based pharmacy business in the UK, for a total consideration of £332,623
(AUD$612,701) (refer to Note 22). The Company also secured additional financing of £536,500
(AUD$968,078) through an issue of equity in October 2020.
On 19 March 2021 Health House International Limited (Health House or HHI), formerly VPCL Limited
completed the acquisition of Health House Holdings Limited, issuing 115,298,743 shares in the
Company to the Health House vendors as consideration for the acquisition and 3,458,961 shares to
advisors (the Acquisition). The Company changed its name to Health House International Limited
following shareholder approval received at the Company’s general meeting of shareholders held on
29 January 2021 and also changed its ASX name and code to Health House International Limited
(ASX:HHI) effective from 24 March 2021.
Health House was reinstated to Official Quotation and commenced trading on the ASX on Friday, 16
April 2021, following its re-compliance with Chapters 1 and 2 of the ASX Listing Rules and successful
completion of a public offer to raise $3,500,000 (before costs).
Upon completion of the Acquisition, David Wheeler was appointed as Executive Chairman from Non-
Executive Director, the Hon Michael Rann was appointed Non-Executive Director, with Christopher
Mews continuing as a Non-Executive Director. Christopher Mews stepped down as Company Secretary
with Tim Slate being appointed as Company Secretary.
Leanne Graham stepped down as Non-Executive Director and Chair.
Since its reinstatement date, Health House further expanded its product offering through the
execution of a number of distribution agreements in Australia and the United Kingdom.
- 5 -
Annual Report 2021
Health House International Limited (formerly VPCL Limited)
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
DIRECTORS’ REPORT
During the period covered by this Financial Report, the financial position and performance of the
Group was particularly affected by the acquisition of Health House Holdings Limited from the Health
House Holdings Limited shareholders. Health House Holdings Limited
international
pharmaceutical distributor specialising in, but not limited to, the distribution of medicinal cannabis
products across Australasia, United Kingdom and Europe.
is an
On 19 March 2021 Health House International Limited (Health House or HHI), formerly VPCL Limited
completed the acquisition of Health House Holdings Limited. The Company changed its name to Health
House International Limited following shareholder approval received at the Company’s general
meeting of shareholders held on 29 January 2021 and also changed its ASX name and code to Health
House International Limited (ASX:HHI) effective from 24 March 2021. Under the principles of AASB3
Business Combinations, Health House Holdings Limited (the unlisted entity) is the accounting acquirer
in the deemed business combination and therefore, the transaction has been accounted for as an
acquisition of assets (share-based payment) under reverse acquisition principles. Refer Note 22 for
details.
In the opinion of the directors, there were no other significant changes in the state of affairs of the
Company that occurred during the financial year under review not otherwise disclosed in this report
or in the financial report.
AFTER BALANCE DATE EVENTS
The following occurred after the Balance Date:
Acquisition
On 11 May 2021, Health House International Limited announced the acquisition of 100% of the issued
capital of CanPharma.
CanPharma is a Germany based pharmaceutical distribution business focussed on medicinal cannabis.
CanPharma is a licenced manufacturer, pharmaceutical wholesale company and a licenced narcotic
drug dealer under German legislation. CanPharma also has an office in Barcelona.
The company distributes cannabis flowers and extracts and provides expertise for testing and analysing
medicinal cannabis products. It currently has a low volume of sales as set out below.
The transaction was completed on 10 August 2021.
Dr Henrik Sprengel was appointed as Executive Director and Mr David Attwood was appointed as Chief
Executive Officer.
- 6 -
Annual Report 2021
Health House International Limited (formerly VPCL Limited)
DIRECTORS’ REPORT
Consideration transferred
The key terms of the acquisition of CanPharma are set out below:
(a) Health House International Limited will issue 11,753,061 fully paid ordinary shares to the vendors
of CanPharma;
(b) Health House International Limited will issue 36 million Performance Shares; and
(c) Health House International Limited will issue 6,246,939 fully paid ordinary shares to settle certain
debts owed by CanPharma to related parties of CanPharma.
On 20 August 2021, Health House International Limited issued 0.9 million Performance Shares and 0.45
million fully paid ordinary shares to Gemelli Nominees Pty Ltd (“Gemelli”) as an introduction fee related
to the Proposed Transaction.
Performance Shares
A total of 36.9 million Performance Shares will be issued, as follows:
Management
CanPharma
Consideration
Vendors of
CanPharma
Introduction Fee
Gemelli Nominees
Class A Performance Shares
Class B Performance Shares
Class C Performance Shares
-
6,000,000
12,000,000
12,000,000
6,000,000
-
300,000
300,000
300,000
The terms of the Performance Shares are set out below:
Revenue Hurdle
Type of Revenue
Period of Revenue
Class A Performance Shares
Class B Performance Shares
Class C Performance Shares
€5,000,000
€10,000,000
€15,000,000
Cumulative
Cumulative
Cumulative
2 years
2 years
2 years
Based on the table above, the Performance Shares will convert to ordinary fully paid shares if
CanPharma generates cumulative revenue over a 2-year period from the Completion Date. The
Completion Date is the date of approval by Health House International Limited shareholders.
The Performance Shares do not have rights to any of the following:
Voting rights in Health House International Limited;
a)
Dividend rights in Health House International Limited;
b)
No rights to surplus profits or assets;
c)
No right to a return of capital;
d)
The Performance Shares are non-transferrable; and
e)
No right to participate in entitlements and bonus issues.
f)
The Performance Shares do contain a “change of control” provision which means if there is a change
of control event for Health House International Limited then the milestones will be deemed to have
been met and the Performance Shares will automatically convert into shares at the date of the change
in control event.
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Annual Report 2021
Health House International Limited (formerly VPCL Limited)
DIRECTORS’ REPORT
The Group has recognised the fair values of the identifiable assets and liabilities of CanPharma based
upon the best information available as of the reporting date.
Provisional business combination accounting is as follows:
Fair value of identifiable net assets
Unallocated purchase price
Total consideration
Net cash outflow arising on acquisition
Cash paid
Less: net cash acquired with the
subsidiary
Net cash inflow
$
(4,555,505)
8,695,505
4,140,000
$
-
304,662
304,662
Note: a loan agreement is in place and $1,870,752 has been provided to CanPharma subsequent to
year end.
FUTURE DEVELOPMENTS
Health House looks forward to implementing plans to grow the company as outlined in the Public Offer
prospectus, with a strong focus on growing revenues by expanding its core operations to become the
leading international pharmaceutical distributor specialising in medicinal cannabis products.
Distribution and geographical expansion
Health House is focused on expanding its operations in key strategic markets including Australasia,
South East Asia, the UK and Europe. It will do this by leveraging its existing and extensive industry
relationships, to enter into new distribution agreements to build out its product range and supplier
base.
Health House will focus on securing new supply agreements with GMP-certified producers and
manufactures of medicinal cannabis products to increase the volumes and continue to expand its
range products for distribution.
Health House will also focus on developing its distribution capability to pharmacies, doctors, hospitals
and specialist medicinal cannabis clinics.
Team and Marketing
To support its growing operations and expanding global footprint, Health House will strengthen its
team to support customers and suppliers and to focus on product sales and marketing together with
ongoing market development.
The company has expanded its work force to include regional employees for the development of the
business over the next 24 months. These roles will support the management and growth of the
company’s commercial and industry relationships in new and existing regions to expedite organic
growth and market penetration.
- 8 -
Annual Report 2021
Health House International Limited (formerly VPCL Limited)
DIRECTORS’ REPORT
Acquisitive expansion
Health House’s Board, management team and advisors have a proven track record of identifying and
implementing strategic acquisitions and successfully integrating these into existing businesses.
Health House is confident in its ability to fully and seamlessly integrate new subsidiaries, teams and
distribution channels into its operations to achieve long term value and organic revenue and
commercial growth
Health House believes that it continues to be well placed to attract and identify potential acquisition
targets in strategic markets to build out its business and expand its geographic distribution footprint.
Online platform
Health House is working towards improvements and expansion of the online platform.
MEETINGS OF DIRECTORS
The number of directors' meetings (including committees) held during the financial year and the
number of meetings attended by each director are:
Director
David Wheeler
Christopher Mews
Hon Michael Rann
Leanne Graham
INFORMATION ON DIRECTORS
Name
Appointed
Qualifications
Experience
Interest in Shares
Directors’ Meetings
Number Eligible to
Attend
10
10
3
7
Meetings
Attended
9
10
3
7
David Wheeler
14 April 2020
BA (Bus), SDIA
Mr Wheeler has more than 30 years executive management
experience, through general management, CEO and Managing
Director roles across a range of companies and industries. He has
worked on business projects in the USA, UK, Europe, New Zealand,
China, Malaysia, and the Middle East (Iran). Mr Wheeler has been
a Fellow of the Australian Institute of Company Directors (FAICD)
since 1990.
4,985,930 Fully Paid Ordinary Shares
- 9 -
Annual Report 2021
Health House International Limited (formerly VPCL Limited)
DIRECTORS’ REPORT
Name
Appointed
Qualifications
Experience
Interest in Shares
Name
Appointed
Qualifications
Experience
Interest in Shares
Name
Appointed
Qualifications
Experience
Interest in Shares
Performance Rights
in
the
Christopher Mews
13 July 2018
CPA, Bachelor of Business degree (Accounting) and is a Chartered
Company Secretary
Mr Mews has been in financial services for over 20 years and is
financial operation, governance and
experienced
listed
compliance of Managed
companies and unlisted companies. Mr Mews has held senior
positions in finance, corporate secretarial and compliance. In
these roles he has been a member of senior management and
participated in the due diligence and acquisition of Managed
Investment Schemes and participated in various capital raisings for
Managed Investment Schemes, ASX listed companies and unlisted
companies.
12,500 Fully Paid Ordinary Shares
Investment Schemes, ASX
Hon Michael Rann AC CNZM
19 March 2021
BA and MA (Hons) from the University of Auckland
Mr Rann served as a politician in Australia for 26 years where he
held roles dealing with both national and international relations
which included his ambassador roles to the UK and Italy.
Mr Rann now resides in London / Italy where he is the Chairman
of the UK registered charity The Power of Nutrition, and is a
member of the UK, US and Global boards of London
headquartered The Climate Group. He is a Visiting Professor at the
Policy Institute of King’s College London. He also holds the
positions of CEO to his London based business consultancy, Rann
Strategy Group.
226,085 Fully Paid Ordinary Shares
Dr Henrik Sprengel
10 August 2021
Postgraduate degrees in law (LLM, PhD) and an MBA (INSEAD,
Fontainebleau/Singapore)
Dr Sprengel is co-founder of both CanPharma and Kalapa Clinic
where he has gained extensive experience in the field of medicinal
cannabis. Before founding CanPharma, he was CEO of the
company builder Grupo HS3, which successfully launched several
international projects across a number of industries, with a focus
on internet and technology. Henrik started his career as a lawyer
at Clifford Chance; he later held several international senior
management positions in global media publishing company
Bertelsmann, and as country manager for Spain and Mexico for a
German media and tech company
5,816,250 Fully Paid Ordinary Shares
3,877,500 Performance Rights A – see Note 29
4,338,750 Performance Rights B – see Note 29
4,800,000 Performance Rights C – see Note 29
- 10 -
Annual Report 2021
Health House International Limited (formerly VPCL Limited)
Directorships of other listed companies
DIRECTORS’ REPORT
Directorships of other listed companies held by directors in the 3 years immediately before the end
of the financial year are as follows:
Name
David Wheeler
Company
Current directorships:
Non-Executive Chairman – Health House International Ltd from April
2021
Non-Executive Chairman – PVW Resources (previously Thred Ltd) from
August 2017
Non-Executive Director - Ragnar Metals Ltd from December 2017
Non-Executive Chairman - Avira Resources Ltd from September 2018
Non-Executive Director - Tyranna Resources Ltd from October 2019
Non-Executive Director - Syntonic Ltd from November 2019
Non-Executive Chairman - Blaze International Ltd from March 2020
Non-Executive Director - Delecta Ltd from June 2020
Non-Executive Director – Athena Resources Ltd from June 2021
Non-Executive Director – Cycliq Resources Ltd from June 2021
Former directorships:
Antilles Oil and Gas NL – from February 2016 to November 2018
Ultracharge Ltd – from December 2015 to August 2019
Christopher Mews
Hon Michael Rann
Dr Henrik Sprengel
No other listed directorships have been held by Mr Wheeler in the
previous three years.
Current directorships:
Non-Executive Director – Auscann Group Holdings Ltd from December
2019
Non-Executive Director – Cycliq Resources Ltd from June 2021
None
None
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for the key management personnel of
the Company for the financial year ended 30 June 2021. The information provided in this
remuneration report has been audited as required by Section 308(3C) of the Corporations Act 2001.
The remuneration report details the remuneration arrangements for key management personnel
(“KMP”) who are defined as those persons having authority and responsibility for planning, directing
and controlling the major activities of the Company, directly or indirectly, including any Director
(whether executive or otherwise) of the Company.
- 11 -
Annual Report 2021
Health House International Limited (formerly VPCL Limited)
DIRECTORS’ REPORT
Key Management Personnel
Directors
David Wheeler
Christopher Mews
Hon Michael Rann
Dr Henrik Sprengel (appointed 10 August 2021) (no remuneration during the year)
CEO
David Attwood (appointed 10 August 2021) (no remuneration during the year)
Remuneration philosophy
The performance of the Company depends upon the quality of the directors and executives. The
philosophy of the Company in determining remuneration levels is to:
set competitive remuneration packages to attract and retain high calibre employees;
link executive rewards to shareholder value creation; and
•
•
• establish appropriate, demanding performance hurdles for variable executive remuneration.
Remuneration committee
While the Company does not currently have a formal Remuneration Committee, the Board has
adopted a Remuneration Committee Charter, which determines payments to the non-executive
directors and reviews their remuneration annually, based on market practice, duties and
accountability. Independent external advice is sought when required.
Remuneration structure
In accordance with best practice Corporate Governance, the structure of non-executive director and
executive remuneration is separate and distinct.
Service Agreements
Executive Directors Remuneration
Executive Name
David Wheeler
Remuneration
Executive fee of $120,000 per annum. No service period in contract.
Dr Henrik Sprengel 2-year fixed term consultancy services agreement for EUR 13,330 per month.
This agreement has effect from 10 August 2021 and shall continue for the
period until 31 March 2022, at which time the parties shall enter into an
employment agreement with a fixed term to expire not less than 24 months
from 10 August 2021.
Non-executive Director remuneration
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability
to attract and retain Directors of the highest calibre, whilst incurring a cost that is acceptable to
shareholders.
The ASX Listing Rules specify that the aggregate remuneration of non-executive Directors shall be as
determined from time to time by a general meeting. The latest determination was prior to the
companies commencement of quotation on the ASX on July 2011 when shareholders approved an
aggregate remuneration of $500,000 per annum.
- 12 -
Annual Report 2021
Health House International Limited (formerly VPCL Limited)
DIRECTORS’ REPORT
The amount of aggregate remuneration sought to be approved by shareholders and the manner in
which it is apportioned amongst directors is reviewed annually. The Board considers advice from
external shareholders as well as the fees paid to non-executive directors of comparable companies
when undertaking the annual review process.
Fixed remuneration
Fixed remuneration consists of base remuneration (salary or consulting fees) including any FBT charges
as well as employer contributions to superannuation funds, where applicable. There was no use of
remuneration consultants during the year.
Remuneration levels are reviewed annually by the Board of Directors.
Performance linked remuneration
Long-term incentives can be provided as ordinary shares, options over ordinary shares or performance
rights convertible into ordinary shares of the Company. As determined, shareholders in a general
meeting will be asked to approve specific grants of shares, options and performance rights to Non-
Executive and Executive Directors as a form of remuneration.
Assessing performance
The Board of Directors is responsible for assessing performance against KPIs and determining the STI
and LTI to be paid.
Consequences of performance on shareholders wealth
In considering the Group’s performance and benefits for shareholder wealth, the Board of Directors
considers revenue, profit before tax, changes in share price and return of capital. The overall level of
key management personnel’s remuneration takes into account the expected performance of the
Group over a number of years.
- 13 -
Annual Report 2021
Health House International Limited (formerly VPCL Limited)
Details of the nature and amounts of emoluments of key management personnel
DIRECTORS’ REPORT
2021 Financial Year
Key Management
Person
Non-Executive
Directors:
Christopher Mews
Hon Michael Rann
(i)
Executive
Directors:
David Wheeler
62,000
16,337
120,000
-
-
-
Leanne Graham (ii)
31,500
45,000
229,837
45,000
SHORT TERM EMPLOYEE BENEFITS
Salary &
Fees
$
Consulting
Fees
$
Non
Monetary
$
POST
EMPLOYMENT
Superannuation
Contribution
$
EQUITY BASED
RENUMERATION
REMUNERATION
Total
$
-
-
-
-
-
Total
$
62,000
16,337
120,000
76,500
274,837
-
-
-
-
-
-
-
-
-
-
(i)
(ii)
Represents remuneration from 19 March 2021 to 30 June 2021
Resigned 19 March 2021
2020 Financial Year
Key Management
Person
Non-Executive
Directors:
David Wheeler (i)
Christopher Mews
Justin Klintberg (ii)
Executive
Directors:
Leanne Graham
SHORT TERM EMPLOYEE BENEFITS
Salary &
Fees
$
Consulting
Fees
$
Non
Monetary
$
POST
EMPLOYMENT
Superannuation
Contribution
$
10,500
42,000
-
-
31,500
60,000
42,000
65,000
126,000
125,000
-
-
-
-
-
-
-
-
-
-
EQUITY BASED
RENUMERATION
REMUNERATION
Total
$
-
-
-
-
-
Total
$
10,500
42,000
91,500
107,000
251,000
(i)
(ii)
Represents remuneration from 3 April 2020 to 30 June 2020
Represents remuneration from 1 July 2019 to 3 April 2020
- 14 -
Annual Report 2021
Health House International Limited (formerly VPCL Limited)
DIRECTORS’ REPORT
Performance Based Remuneration
The proportion of remuneration linked to performance and the fixed proportion are as follows:
Name
David Wheeler
Christopher Mews
Hon Michael Rann
David Attwood
Leanne Graham
Justin Klintberg
Fixed remuneration
2020
2021
At risk - STI
2020
2021
At risk - LTI
2020
2021
100%
100%
100%
-
100%
-
100%
100%
-
-
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Shares Issued to Key Management Personnel on Exercise of Options
No key management personnel exercised options during the years ended 30 June 2021 or 30 June
2020.
Shareholdings of Key Management Personnel
Number of shares held by Directors and Executives during the year as follows:-
2021 Financial Year
Balance
01/07/2020
Options
Exercised
Acquired
during
period (i)
At
Appointment/
(Resignation)
Balance
30/06/2021
Net Change
Other (1 for
50 share
consolidation)
David Wheeler
Christopher
Mews
Hon Michael
Rann
Leanne Graham
-
625,000
-
666,667
(i) Vendor and IPO Acquisition
2020 Financial Year
-
-
-
-
4,985,930
-
-
-
-
(612,500)
4,985,930
12,500
-
-
226,085
-
226,085
(13,333)
(653,334)
-
At
Appointment/
(Resignation)
-
-
-
-
Net Change
Other
Balance
30/06/2020
-
-
-
-
-
625,000
-
666,667
Balance
01/07/2019
Options
Exercised
Acquired/
(disposed)
David
Wheeler
Christopher
Mews
Justin
Klintberg
Leanne
Graham
-
625,000
-
666,667
-
-
-
-
-
-
-
-
- 15 -
Annual Report 2021
Health House International Limited (formerly VPCL Limited)
Option Holdings of Key Management Personnel
DIRECTORS’ REPORT
2021 Financial Year
Balance
01/07/2019
David Wheeler
Christopher Mews
Hon Michael Rann
Leanne Graham
Dr Henrik Sprengel
2020 Financial Year
-
-
-
-
-
Options
Granted as
Remuneration
-
-
-
-
-
Options
Acquired
Expired/forfeited
/other
Balance
30/06/2020
Number vested
and exercisable
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Balance
01/07/2019
-
1,666,667
1,555,601
7,333,334
Options
Granted as
Remuneration
-
-
-
-
David Wheeler
Christopher
Mews
Justin Klintberg
Leanne Graham
Options
Acquired
Expired/forfeited
/other
Balance
30/06/2020
Number vested
and exercisable
-
-
-
-
-
(1,666,667)
(1,555,601)
(7,333,334)
-
-
-
Performance Rights Holdings of Key Management Personnel
2021 Financial Year
Balance
01/07/2020
Dr Henrik Sprengel
(i)
David Attwood (i)
-
-
Performance
Rights
Granted
-
-
Acquired At Appointment/
(Resignation)
Balance
30/06/2021
-
-
-
-
-
-
Number
vested and
exercisable
-
-
(i) Received performance rights subsequent to year end. Refer to Note 29
Other transactions and balances with Key Management Personnel
Pathways Corporate Pty Ltd, a company of which Mr David Wheeler is a Director, charged the Group
Rent of $4,000 (2020: $nil) during the year on normal commercial terms and conditions. At balance
date $1,500 (2020: $nil) remained payable.
Voting of shareholders at last year’s annual general meeting
Health House International Limited received 97.2% of “yes” votes on its remuneration report for the
2020 financial year. The Group did not receive any specific feedback at the AGM or throughout the
year on its remuneration practices.
This concludes the Remuneration Report.
ENVIRONMENTAL ISSUES
The Group is not subject to any significant environmental legislation.
- 16 -
Annual Report 2021
Health House International Limited (formerly VPCL Limited)
INDEMNIFYING OFFICERS
DIRECTORS’ REPORT
The Company has in place an insurance policy insuring Directors and Officers of the Company against
any liability arising from a claim brought by a third party against the Company or its Directors and
officers, and against liabilities for costs and expenses incurred by them in defending any legal
proceedings arising out of their conduct while acting in their capacity as a Director or officer of the
Company, other than conduct involving a wilful breach of duty in relation to the Company.
In accordance with a confidentiality clause under the insurance policy, the amount of the premium
paid to the insurers has not been disclosed. This is permitted under Section 300(9) of the Corporations
Act 2001.
Indemnity and insurance of auditor
The company has not, during or since the end of the financial year, indemnified or agreed to indemnify
the auditor of the company or any related entity against a liability incurred by the auditor. During the
financial year, the company has not paid a premium in respect of a contract to insure the auditor of
the company or any related entity.
AUDITOR’S INDEPENDENCE DECLARATION AND NON-AUDIT SERVICES
Section 307C of the Corporations Act 2001 requires the Group’s auditors to provide the Directors of
Health House International Limited with an Independence Declaration in relation to the audit of the
financial report. A copy of that declaration is included on page 18 of the Annual Report.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of Court to bring proceedings on behalf of the Company or intervene
in any proceedings to which the Company is a party for the purpose of taking responsibility on behalf
of the Company for all or any part of those proceedings.
On behalf of the Board
David Wheeler
Chairman
Perth, 30 September 2021
- 17 -
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Health House International
Limited (formerly VPCL Limited) for the year ended 30 June 2021, I declare that to the best of my
knowledge and belief, there have been no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the
audit; and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
30 September 2021
D I Buckley
Partner
- 18 -
Annual Report 2021
Health House International Limited (formerly VPCL Limited)
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2021
NOTE
5
6
6
6
22
7
Revenue from continuing operations
Revenue
Interest revenue
Other revenue
Expenses
Cost of Sales
Administration
Directors’ fees
Depreciation and amortisation expense
Finance costs
Share based payment for reverse acquisition
(Loss) from continuing operations before income
tax expense
Income tax benefit
Net (Loss) after income tax
Other comprehensive (loss) / income
Foreign currency recognised on conversion
Total Comprehensive (Loss) for the Year
2021
$
2020
Restated
$
8,449,564
3,031
53,828
5,978,940
337
59,614
(6,680,531)
(4,599,322)
(116,837)
(532,219)
(55,086)
(1,845,000)
(4,636,822)
(3,378,996)
(62,602)
(493,621)
(55,472)
-
(5,322,572)
(2,588,622)
15,276
63,847
(5,307,296)
(2,524,775)
(73,310)
101,759
(5,380,606)
(2,423,016)
(Loss) per share, attributable to the owners
Basic and diluted (loss) per share
23
(0.04)
(0.04)
The accompanying notes form part of these consolidated financial statements.
- 19 -
Annual Report 2021
Health House International Limited (formerly VPCL Limited)
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2021
NOTE
2021
$
2020
Restated
$
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Financial assets at amortised cost
Inventory
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Financial assets at amortised cost
Investments
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Lease liabilities
Borrowings
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables
Lease liabilities
Borrowings
Deferred Tax Liability
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share capital
Translation reserve
Other reserves
Accumulated losses
TOTAL EQUITY
9
10
11
12
13
11
14
15
16
17
18
16
17
18
7
19
5,224,961
1,314,329
-
297,985
6,837,275
720,010
250,974
125,000
2,050,588
3,146,572
9,983,847
1,607,646
181,030
493,031
2,281,707
-
411,832
382,063
117,816
911,711
3,193,418
6,790,429
494,924
1,093,268
247,617
650,504
2,486,313
190,555
-
-
1,917,512
2,108,067
4,594,380
1,980,805
79,050
456,852
2,516,707
90,733
61,684
12,481
93,240
258,138
2,774,845
1,819,535
19,236,538
28,449
(4,642,487)
(7,832,071)
8,885,038
101,759
(4,642,487)
(2,524,775)
6,790,429
1,819,535
The accompanying notes form part of these consolidated financial statements.
- 20 -
Annual Report 2021
Health House International Limited (formerly VPCL Limited)
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2021
Balance as at 1 July 2019
Loss for the year
Other comprehensive income
Total comprehensive loss for the year
Issue of share capital
Consolidation adjustment
Balance at 30 June 2020 (Restated)
Balance as at 1 July 2020
Loss for the year
Other comprehensive loss
Total comprehensive loss for the year
Shares issued during the year
Deemed Consideration of issue of
ordinary shares by VPCL as purchase
consideration of HH (UK)
Shares issued under prospectus
Transaction costs relating to issue of
shares
Issued Capital
Accumulated Losses
Foreign Currency
Reserve
Other Reserves
Total
$
-
-
-
-
8,885,038
-
8,885,038
8,885,038
-
-
-
2,028,353
5,215,176
3,500,000
(392,029)
$
-
(2,524,775)
-
(2,524,775)
-
-
(2,524,775)
(2,524,775)
(5,307,296)
-
(5,307,296)
-
-
-
-
$
-
-
101,759
101,759
-
-
101,759
101,759
-
(73,310)
(73,310)
-
-
-
-
$
-
-
-
-
-
(4,642,487)
(4,642,487)
(4,642,487)
-
-
-
-
-
-
-
$
-
(2,524,775)
101,759
(2,423,016)
8,885,038
(4,642,487)
1,819,535
1,819,535
(5,307,296)
(73,310)
(5,380,606)
2,028,353
5,215,176
3,500,000
(392,029)
Balance at 30 June 2021
19,236,538
(7,832,071)
28,449
(4,642,487)
6,790,429
The accompanying notes form part of these consolidated financial statements.
- 21 -
Annual Report 2021
Health House International Limited (formerly VPCL Limited)
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2021
NOTE
2021
$
Cash Flows from Operating Activities
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Other income
Net cash used in operating activities
Cash Flows from Investing Activities
Purchase of bonds
Cash acquired - Gees Pharmacy
Cash acquired - VPCL Limited
Purchase of property, plant and equipment
Purchase of intangible assets
Net cash (used in) / from investing activities
Cash Flows from Financing Activities
Proceeds from issue of shares
Proceeds from issue of shares under prospectus
Payment of issue costs associated with issue of shares
Proceeds from loans
Repayment of loans
Payments of lease liabilities
Net cash from financing activities
Net increase in cash and cash equivalents
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at beginning of financial year
24
22
22
9,220,642
(11,627,461)
353
(39,614)
55,002
(2,391,078)
-
(340,784)
3,292,625
(80,989)
(2,053)
2,868,799
968,078
3,500,000
(392,029)
570,752
(148,732)
(234,301)
4,263,768
4,741,489
(11,452)
494,924
2020
$
5,065,923
(7,050,719)
-
(13,055)
59,614
(1,938,237)
(255,836)
-
587,571
(4,135)
(772,253)
(444,653)
2,524,140
-
-
422,127
-
(66,114)
2,880,153
497,263
(2,339)
-
Cash and cash equivalents at end of financial year
5,224,961
494,924
The accompanying notes form part of these consolidated financial statements.
- 22 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
SUMMARY OF ACCOUNTING POLICIES
(a)
Statement of significant accounting policies
The following is a summary of the significant accounting policies adopted by the Group in the preparation
of the financial report. The accounting policies have been consistently applied, unless otherwise stated.
For the purposes of preparing the financial report the Group is a for-profit entity.
The financial report covers the consolidated entity of Health House International Limited (“the legal
Parent”) and its subsidiaries (“the Group” or “Consolidated Entity”). Health House International Limited
(Health House International Limited) is a listed public company, incorporated and domiciled in Australia.
The entity’s principal activities are detailed in the Directors Report.
Reporting basis and conventions
The financial report is a general-purpose financial report that has been prepared in accordance with
Australian Accounting Standards including Australian Accounting Interpretations, other authoritative
pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a
financial report containing relevant and reliable information about transactions, events and conditions to
which they apply. Compliance with Australian Accounting Standards ensures that the financial statements
and notes also comply with International Financial Reporting Standards.
The financial report has been prepared on an accruals basis and is based on historical costs modified by the
revaluation of selected non-current assets, financial assets and financial liabilities for which the fair value
basis of accounting has been applied where relevant.
The financial statements are presented in Australian dollars which is Health House International Limited’s
functional and presentation currency.
The financial report complies with Australian Accounting Standards, which include Australian equivalents
to International Financial Reporting Standards (AIFRS). Compliance with AIFRS ensures that the financial
report, comprising the financial statements and notes thereto, complies with International Financial
Reporting Standards (IFRS).
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It also
requires management to exercise its judgement in the process of applying the consolidated entity's
accounting policies. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements, are disclosed in Note 2.
- 23 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
SUMMARY OF ACCOUNTING POLICIES (CONT.)
(b)
Adoption of new and revised standards
Changes in accounting policies on initial application of Accounting Standards
Standards and Interpretations applicable to 30 June 2021
In the year ended 30 June 2021, the Directors have reviewed all of the new and revised Standards and
Interpretations issued by the AASB that are relevant to the Group and effective for the current annual
reporting period. As a result of this review, the Directors have determined that there is no material impact
of the new and revised Standards and Interpretations on the Group and, therefore, no material change is
necessary to Group accounting policies.
Standards and Interpretations in issue not yet effective
The Directors have also reviewed all of the new and revised Standards and Interpretations in issue not yet
effective for the year ending 30 June 2021. As a result of this review, the Directors have determined that
there is no material impact of the new and revised Standards and Interpretations in issue not yet effective
on the Group and therefore no material change is necessary to Group accounting policies.
(c)
Going concern
The financial statements have been prepared on the going concern basis, which contemplates continuity
of normal business activities and the realisation of assets and settlement of liabilities in the normal course
of business.
As disclosed in the financial statements, the Group incurred a loss of $5,307,296 (2020: $2,524,775) and
had operating cash outflows of $2,391,078 for the year ended 30 June 2021 (2020: $1,938,237). As at 30
June 2021, the Group's held cash and cash equivalents of $5,224,961 (2020: $494,924).
The ability of the entity to continue as a going concern is dependent on Health House continuing to secure
distribution agreements within Australia, the UK and Germany, successfully commercializing CanPharma
branded extracts and flower product, securing supply contracts with the National Health Service in the
United Kingdom and the Malta government or securing additional funding through capital raising
activities to continue its operational and marketing activities. Should these be unsuccessful, there is a
material uncertainty relating to the Group’s ability to continue as a going concern and be able to realise
its assets and extinguish its liabilities in the normal course of business.
The directors have reviewed the Group’s financial position and are of the opinion that the use of the going
concern basis of accounting is appropriate as they believe the Group will be able to generate sufficient
revenue or secure funds to meet its commitments.
There are a number of inherent uncertainties relating to the Group’s future plans including but not limited
to:
• whether the Group is able to generate sufficient revenue within Australia;
• whether the Group is able to generate sufficient revenue within the United Kingdom;
• whether the Group is able to generate sufficient revenue from CanPharma operations;
• whether the Company will be able to raise equity in this current market; and
• whether the Group would be able to secure any other sources of funding.
- 24 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
SUMMARY OF ACCOUNTING POLICIES (CONT.)
(d)
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entities
controlled by the Company and its subsidiaries. Control is achieved when the Company:
• has power over the investee;
•
• has the ability to use its power to affect its returns.
is exposed, or has rights, to variable returns from its involvement in with the investee; and
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that
there are changes to one or more of the three elements listed above.
When the Company has less than a majority of the voting rights of an investee, it has the power over the
investee when the voting rights are sufficient to give it the practical ability to direct the relevant activities
of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing
whether or not the Company’s voting rights are sufficient to give it power, including,
•
the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of
the other vote holders;
• potential voting rights held by the Company, other vote holders or other parties; rights arising from
other contractual arrangements; and
• any additional facts and circumstances that indicate that the Company has, or does not have, the
current ability to direct the relevant activities at the time that decisions need to be made, including
• voting patterns at previous shareholder meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases
when the Company loses control of the subsidiary. Specifically, income and expenses of a subsidiary
acquired or disposed of during the year are included in the consolidated statement of comprehensive
income from the date the Company gains control until the date when the Company ceases to control the
subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of the
Company and to the non-controlling interests. Total comprehensive income of subsidiaries is attributed to
the owners of the Company and to the non-controlling interests even if this results in the controlling
interest having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting
policies in line with the Group’s accounting policies. All intragroup assets and liabilities, equity, income,
expenses and cash flows relating to transactions between members are eliminated in full on consolidation.
Changes in the Group’s ownership interest in existing subsidiaries
Changes in the Group’s ownership interest in subsidiaries that do not result in the Group losing control over
the subsidiaries are accounted for as equity transactions. The carrying amounts of the Group’s interests
and the non-controlling interests are adjusted to reflect the changes in their relative interests in
subsidiaries. Any difference between the amount paid by which the non-controlling interests are adjusted
and the fair value of the consideration paid or received is recognised directly in equity and attributed to the
owners of the Company.
- 25 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
SUMMARY OF ACCOUNTING POLICIES (CONT.)
When the Group loses control of a subsidiary, a gain or loss is recognised in profit or loss and is calculated
as the difference between:
• The aggregate of the fair value of the consideration received and the fair value of any retained
interest; and
• The previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and
any non-controlling interests.
All amounts previously recognised in other comprehensive income in relation to that subsidiary are
accounted for as if the Group had directly disposed of the related assets or liabilities of the subsidiary (i.e.
reclassified to profit and loss or transferred to another category of equity as specified/permitted by the
applicable AASBs). The fair value of any investment retained in the former subsidiary at the date when
control is lost is regarded as the fair value on initial recognition for subsequent accounting under AASB 9,
when applicable, the cost on initial recognition of an investment in an associate or a joint venture.
(e)
Foreign Exchange
Foreign currency transactions
Transactions in foreign currencies are initially recorded in the functional currency by applying the exchange
rates ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies
are retranslated at the rate of exchange ruling at the balance date. The Directors have determined that the
functional currency of the Group is Australian Dollars.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using the exchange
rates at the reporting date. The revenues and expenses of foreign operations are translated into Australian
dollars using the average exchange rates, which approximate the rates at the dates of the transactions, for
the period. All resulting foreign exchange differences are recognised in other comprehensive income
through the foreign currency reserve in equity.
The foreign currency reserve is recognised in profit or loss when the foreign operation or net investment is
disposed of.
(f)
Revenue Recognition
The Group enters into contracts for the sale and distribution of medicinal cannabis products and other
medical supplies. Revenue is recognised when the price is determinable, the product has been delivered in
accordance with the terms of the contract, the significant risks and rewards or ownership have been
transferred to the customer and collection of the sales price is reasonably assured. The performance
obligation is identified to be the delivery of supplies to the customer, and the transaction price is allocated
to the number of units delivered. These criteria for performance obligation are assessed to have occurred
once the product has been delivered to the customer.
- 26 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
SUMMARY OF ACCOUNTING POLICIES (CONT.)
(g)
Other income and expenses
Interest income
Interest income from a financial asset is recognised when it is probable that the economic benefits will flow
to the Group and the amount of revenue can be reliably measured. Interest income is accrued on a time
basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the
rate that exactly discounts estimated future cash receipts through the expected life of the financial asset
to that assets’ net carrying amount on initial recognition.
Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that
the grant will be received and the Group will comply with all attached conditions.
Government grants relating to costs are deferred and recognised in the profit or loss over the period
necessary to match them with the costs that they are intended to compensate.
Government grants relating to the purchase of property, plant and equipment are included in non-current
liabilities as deferred income and are credited to the statement of profit or loss and other comprehensive
income on a straight-line basis over the expected lives of the related assets.
Other income
Other income is recognised when it is received or when the right to receive payment is established.
(h)
Income Tax
The charge for current income tax expenses is based on the profit/loss for the year adjusted for any non-
assessable or disallowed items. It is calculated using tax rates that have been enacted or are substantively
enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes. Deferred tax is calculated
at the tax rates that are expected to apply to the period when the asset is realised or liability is settled.
Deferred tax is credited in the statement of profit or loss and other comprehensive income except where it
relates to items that may be credited directly to equity, in which case the deferred tax is adjusted directly
against equity.
Deferred income tax assets are recognised to the extent that it is probable that future tax profits will be
available against which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the
assumption that no adverse change will occur in income taxation legislation and the anticipation that the
Company will derive sufficient future assessable income to enable the benefit to be realised and comply
with the conditions or deductibility imposed by the law.
- 27 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
SUMMARY OF ACCOUNTING POLICIES (CONT.)
(i)
Other Taxes
Revenues, expenses and assets are recognised net of the amount of GST except:
• when the GST incurred on a purchase of goods and services is not recoverable from the taxation
authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as
part of the expense item as applicable; and
receivables and payables, which are stated with the amount of GST included.
•
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the statement of financial position.
Cash flows are included in the statement of cash flows on a gross basis and the GST component of cash
flows arising from investing and financing activities, which is recoverable from, or payable to, the taxation
authority are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to,
the taxation authority.
(j)
Segment Reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources
and assessing performance of the operating segments, has been identified as the Board of Directors of
Health House International Ltd.
(k)
Earnings per share
Basic earnings (loss) per share
Basic earnings per share (“EPS”) is calculated as net profit or loss, attributable to members, adjusted to
exclude any costs of servicing equity.
Diluted earnings (loss) per share
Diluted EPS earnings is calculated by adjusting the basic EPS earnings for the after tax effect of financing
costs and the effect of conversion to ordinary shares associated with dilutive potential ordinary shares,
rather than including the notional earnings on the funds that would have been received by the entity had
the potential ordinary shares been converted.
The diluted EPS weighted average number of shares includes the number of ordinary shares assumed to be
issued for no consideration in relation to dilutive potential ordinary shares, rather that the total number of
dilutive potential ordinary shares. The number of ordinary shares assumed to be issued for no consideration
represents the difference between the number that would have been issued at the exercise price and the
number that would have been issued at the average price.
The identification of dilutive potential ordinary shares is based on net profit or loss from continuing ordinary
operations, not net profit or loss and is applied on a cumulative basis, taking into account the incremental
earnings and incremental number of shares for each series of potential ordinary share.
- 28 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
SUMMARY OF ACCOUNTING POLICIES (CONT.)
(l)
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed
in the consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is
expected to be realised within 12 months after the reporting period; or the asset is cash or cash equivalent
unless restricted from being exchanged or used to settle a liability for at least 12 months after the reporting
period. All other assets are classified as non-current.
A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal
operating cycle; it is held primarily for the purpose of trading; it is due to be settled within 12 months after
the reporting period; or there is no unconditional right to defer the settlement of the liability for at least 12
months after the reporting period. All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
(m) Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly
liquid investments that are readily convertible to known amounts of cash and which are subject to an
insignificant risk of changes in value. Bank overdrafts are shown within short-term borrowings in current
liabilities on the statement of financial position.
(n)
Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any allowance for expected credit losses. Trade receivables are generally
due for settlement within 30 days.
The consolidated entity has applied the simplified approach to measuring expected credit losses, which
uses a lifetime expected loss allowance. To measure the expected credit losses, trade receivables have been
grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
(o)
Financial assets
Recognition and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset
expire, or when the financial asset and substantially all the risks and rewards are transferred.
A financial liability is derecognised when it is extinguished, discharged, cancelled or expires.
- 29 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
SUMMARY OF ACCOUNTING POLICIES (CONT.)
Classification and initial measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured
at the transaction price in accordance with AASB 15, all financial assets are initially measured at fair value
adjusted for transaction costs (where applicable).
For the purpose of subsequent measurement, financial assets, other than those designated and effective
as hedging instruments, are classified into the following categories:
•
•
•
•
amortised cost
fair value through profit or loss (FVTPL)
equity instruments at fair value through other comprehensive income (FVOCI)
debt instruments at fair value through other comprehensive income (FVOCI).
All income and expenses relating to financial assets that are recognised in profit or loss are presented within
finance costs, finance income or other financial items, except for impairment of trade receivables which is
presented within other expenses.
The classification is determined by both:
•
•
the entity’s business model for managing the financial asset
the contractual cash flow characteristics of the financial asset.
All income and expenses relating to financial assets that are recognised in profit or loss are presented within
finance costs, finance income or other financial items, except for impairment of trade receivables which is
presented within other expenses.
Subsequent measurement of financial assets
Financial assets at fair value through profit or loss (FVTPL)
Financial assets that are held within a different business model other than ‘hold to collect’ or ‘hold to
collect and sell’ are categorised at fair value through profit and loss. Further, irrespective of business
model financial assets whose contractual cash flows are not solely payments of principal and interest are
accounted for at FVTPL. All derivative financial instruments fall into this category, except for those
designated and effective as hedging instruments, for which the hedge accounting requirements apply.
The category also contains an equity investment. The Group accounts for the investment at FVTPL and did
not make the irrevocable election to account for the investment in unlisted and listed equity securities at
fair value through other comprehensive income (FVOCI). The fair value was determined in line with the
requirements of AASB 9, which does not allow for measurement at cost.
Assets in this category are measured at fair value with gains or losses recognised in profit or loss.
The fair values of financial assets in this category are determined by reference to active market
transactions or using a valuation technique where no active market exists.
- 30 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
SUMMARY OF ACCOUNTING POLICIES (CONT.)
(p)
Impairment of Assets
At each reporting date, the Group reviews the carrying values of tangible assets and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication exists,
the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in
use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable
amount is expensed to the statement of comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Group estimates the
recoverable amount of the cash-generating unit to which the asset belongs.
(q)
Inventories
Inventories are valued at the lower of cost and net realisable value.
Costs incurred in bringing each product to its present location and condition is accounted for as follows:
Finished goods – cost of direct materials and labour and a proportion of manufacturing overheads based
on normal operating capacity but excluding borrowing costs.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs
of completion and the estimated costs necessary to make the sale.
(r)
Property, Plant and Equipment
Plant and equipment is stated at historical cost or fair value less accumulated depreciation and impairment.
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant
and equipment (excluding land) over their expected useful lives as follows:
Plant and machinery
5 – 20 years
Computer equipment
Office equipment
5 years
3 years
Right of use asset
Length of lease
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, at
each reporting date.
Leasehold improvements are depreciated over the unexpired period of the lease or the estimated useful
life of the assets, whichever is shorter.
An item of property, plant and equipment is derecognised upon disposal or when there is no future
economic benefit to the consolidated entity. Gains and losses between the carrying amount and the
disposal proceeds are taken to profit or loss. Any revaluation surplus reserve relating to the item disposed
of is transferred directly to retained profits.
- 31 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
SUMMARY OF ACCOUNTING POLICIES (CONT.)
(s)
Right-of-use assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is measured
at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any lease
payments made at or before the commencement date net of any lease incentives received, any initial direct
costs incurred, and, except where included in the cost of inventories, an estimate of costs expected to be
incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the consolidated entity expects to obtain
ownership of the leased asset at the end of the lease term, the depreciation is over its estimated useful life.
Right-of use assets are subject to impairment or adjusted for any remeasurement of lease liabilities.
The consolidated entity has elected not to recognise a right-of-use asset and corresponding lease liability
for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on
these assets are expensed to profit or loss as incurred.
(t)
Intangible Assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured at
their fair value at the date of the acquisition. Intangible assets acquired separately are initially recognised
at cost. Indefinite life intangible assets are not amortised and are subsequently measured at cost less any
impairment. Finite life intangible assets are subsequently measured at cost less amortisation and any
impairment. The gains or losses recognised in profit or loss arising from the derecognition of intangible
assets are measured as the difference between net disposal proceeds and the carrying amount of the
intangible asset. The method and useful lives of finite life intangible assets are reviewed annually. Changes
in the expected pattern of consumption or useful life are accounted for prospectively by changing the
amortisation method or period.
Amortisation methods and useful lives
The Group amortises intangible assets with a limited useful life, using the straight-line method over the
following periods:
Website costs
10 years
Customer contracts
2-3 years
Customer contracts were acquired as part of a business combination (see Note 15 for details). They are
recognised at their fair value at the date of acquisition and are subsequently amortised on a straight-line
based on the timing of projected cash flows of the contracts over their estimated useful lives.
(u)
Goodwill
Goodwill arises on the acquisition of a business. Goodwill is not amortised. Instead, goodwill is tested
annually for impairment, or more frequently if events or changes in circumstances indicate that it might be
impaired, and is carried at cost less accumulated impairment losses. Impairment losses on goodwill are
taken to profit or loss and are not subsequently reversed.
- 32 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
SUMMARY OF ACCOUNTING POLICIES (CONT.)
(v)
Trade and other payables
Trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and
services provided to the Group prior to the end of the financial year that are unpaid and arise when the
Group becomes obliged to make future payments in respect of the purchase of these goods and services.
Trade and other payables are presented as current liabilities unless payment is not due within 12 months.
Employee leave benefits
Wages, salaries, annual leave and sick leave
Liabilities accruing to employees in respect of wages and salaries, annual leave, long service leave and sick
leave expected to be settled within 12 months of the balance date are recognised in other payables in
respect of employees’ services up to the balance date. They are measured at the amounts expected to be
paid when the liabilities are settled. Liabilities for non- accumulating sick leave are recognised when the
leave is taken and are measured at the rates paid or payable.
(w)
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Group has
received consideration (or an amount of consideration is due) from the customer. If a customer pays
consideration before the Group transfers goods or services to the customer, a contract liability is
recognised when the payment is made or the payment is due (whichever is earlier). Contract liabilities are
recognised as revenue when the Group performs under the contract.
(x)
Lease liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised
at the present value of the lease payments to be made over the term of the lease, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's
incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under
residual value guarantees, exercise price of a purchase option when the exercise of the option is reasonably
certain to occur, and any anticipated termination penalties. The variable lease payments that do not depend
on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts
are remeasured if there is a change in the following: future lease payments arising from a change in an
index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination
penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use
asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
- 33 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
SUMMARY OF ACCOUNTING POLICIES (CONT.)
(y)
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a
past event, it is probable that an outflow of resources embodying economic benefits will be required to
settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are
not recognised for future operating losses.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually
certain. The expense relating to any provision is presented in the statement of profit or loss and other
comprehensive income net of any reimbursement.
Provisions are measured at the present value or management’s best estimate of the expenditure required
to settle the present obligation at the end of the reporting period.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate
that reflects the risks specific to the liability.
When discounting is used, the increase in the provision due to the passage of time is recognised as an
interest expense.
(z)
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of
transaction costs. They are subsequently measured at amortised cost using the effective interest method.
The component of the convertible notes that exhibits characteristics of a liability is recognised as a liability
in the statement of financial position, net of transaction costs.
On the issue of the convertible notes the fair value of the liability component is determined using a market
rate for an equivalent non-convertible bond and this amount is carried as a non-current liability on the
amortised cost basis until extinguished on conversion or redemption. The increase in the liability due to the
passage of time is recognised as a finance cost. The remainder of the proceeds are allocated to the
conversion option that is recognised and included in shareholders equity as a convertible note reserve, net
of transaction costs. The carrying amount of the conversion option is not remeasured in the subsequent
years. The corresponding interest on convertible notes is expensed to profit or loss.
(aa)
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the
consolidated entity only. Supplementary information about the parent entity is disclosed in Note 26.
- 34 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
SUMMARY OF ACCOUNTING POLICIES (CONT.)
(bb)
Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether
equity instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred, equity
instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and the amount
of any non-controlling interest in the acquiree. For each business combination, the non-controlling interest
in the acquiree is measured at either fair value or at the proportionate share of the acquiree's identifiable
net assets. All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and liabilities
assumed for appropriate classification and designation in accordance with the contractual terms, economic
conditions, the consolidated entity's operating or accounting policies and other pertinent conditions in
existence at the acquisition-date.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-
controlling interest in the acquiree and the fair value of the consideration transferred and the fair value of
any pre-existing investment in the acquiree is recognised as goodwill. If the consideration transferred and
the pre-existing fair value is less than the fair value of the identifiable net assets acquired, being a bargain
purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the acquirer on
the acquisition-date, but only after a reassessment of the identification and measurement of the net assets
acquired, the non-controlling interest in the acquiree, if any, the consideration transferred and the
acquirer's previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts
the provisional amounts recognised and also recognises additional assets or liabilities during the
measurement period, based on new information obtained about the facts and circumstances that existed
at the acquisition-date. The measurement period ends on either the earlier of (i) 12 months from the date
of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value.
(cc)
Reverse Acquisition
A reverse acquisition occurs when the acquirer is the entity whose equity interests have been acquired and
the issuing entity is the acquiree. This might be the case when a private entity arranges to have itself
'acquired' by a smaller public entity as a means of obtaining a stock exchange listing. Although legally the
issuing entity is regarded as the parent and the private entity is regarded as the subsidiary, the legal
subsidiary is the accounting acquirer if it has the power to govern the financial and operating policies of the
legal parent so as to obtain benefits from its activities.
- 35 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
SUMMARY OF ACCOUNTING POLICIES (CONT.)
In a reverse acquisition, the cost of the business combinations is deemed to have been incurred by the legal
subsidiary in the form of equity instruments issued to the owners of the legal parent. The published price
of the equity instruments of the acquirer is used to determine the cost of the combination, or where this is
not available, the deemed fair value of its shares, and a calculation shall be made to determine the cost of
the combination, or where this is not available, the deemed fair value of its shares, and a calculation shall
be made to determine the number of equity instruments that acquirer would have to issue to provide the
same percentage ownership interest of the combined entity to the owners/shareholders of the acquirer as
they have in the combined entity as a result of the reverse acquisition. The fair value of the number of
equity instruments so calculated shall be used as the cost of the combination.
On 19 March 2021, VPCL Limited (now Health House International Limited, the legal parent entity) acquired
100% of the issued shares of Health House Holdings Limited (an unlisted entity). VPCL Limited changed its
name to Health House International Limited on 29 January 2021. Under the principles of AASB3 Business
Combinations, Health House Holdings Limited (the unlisted entity) is the accounting acquirer in the deemed
business combination and therefore, the transaction has been accounted for as a Share-based Payment
(asset acquisition) under reverse acquisition principles. Refer to Note 22 for details of the reverse
acquisition and its financial effects during the current financial year.
(dd)
Fair Value Measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure
purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date; and assumes that
the transaction will take place either: in the principal market; or in the absence of a principal market, in the
most advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming they act in their economic best interests. For non-financial assets, the fair value
measurement is based on its highest and best use. Valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value, are used, maximising the
use of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified into three levels, using a fair value hierarchy that
reflects the significance of the inputs used in making the measurements. Classifications are reviewed at
each reporting date and transfers between levels are determined based on a reassessment of the lowest
level of input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal
expertise is either not available or when the valuation is deemed to be significant. External valuers are
selected based on market knowledge and reputation. Where there is a significant change in fair value of an
asset or liability from one period to another, an analysis is undertaken, which includes a verification of the
major inputs applied in the latest valuation and a comparison, where applicable, with external sources of
data.
- 36 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
1.
SUMMARY OF ACCOUNTING POLICIES (CONT.)
(ee)
Share based payment transactions
For equity-settled share-based payment transactions, the Group measure the goods or services received,
and the corresponding increase in equity, directly, at the fair value of the goods or services received, unless
that fair value cannot be estimated reliably. If the fair value of the goods or service received cannot be
estimated reliably, the Group measure their value and the corresponding increase in equity, indirectly, by
reference to the fair value of the equity granted.
(ff)
Issued Capital
Ordinary shares are classified as equity. Issued and paid up capital is recognised at the fair value of the
consideration received by the Company. Incremental costs directly attributable to the issue of new shares
or options are shown in equity as a deduction, net of tax, from the proceeds.
2.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The directors evaluate estimates and judgments incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future
events and are based on current trends and economic data, obtained both externally and within the
Company.
Key estimates:
Goodwill and other indefinite life intangible assets
The consolidated entity tests annually, or more frequently if events or changes in circumstances indicate
impairment, whether goodwill and other indefinite life intangible assets have suffered any impairment, in
accordance with the accounting policy stated in Note 1. The recoverable amounts of cash-generating units
have been determined based on value-in-use calculations. These calculations require the use of
assumptions, including estimated discount rates based on the current cost of capital and growth rates of
the estimated future cash flows. Refer to Note 15 for further information.
Lease term
The lease term is a significant component in the measurement of both the right-of-use asset and lease
liability. Judgement is exercised in determining whether there is reasonable certainty that an option to
extend the lease or purchase the underlying asset will be exercised, or an option to terminate the lease will
not be exercised, when ascertaining the periods to be included in the lease term. In determining the lease
term, all facts and circumstances that create an economical incentive to exercise an extension option, or
not to exercise a termination option, are considered at the lease commencement date. Factors considered
may include the importance of the asset to the consolidated entity's operations; comparison of terms and
conditions to prevailing market rates; incurrence of significant penalties; existence of significant leasehold
improvements; and the costs and disruption to replace the asset. The consolidated entity reassesses
whether it is reasonably certain to exercise an extension option, or not exercise a termination option, if
there is a significant event or significant change in circumstances.
- 37 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
2.
CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONT.)
Incremental borrowing rate
Where the interest rate implicit in a lease cannot be readily determined, an incremental borrowing rate is
estimated to discount future lease payments to measure the present value of the lease liability at the lease
commencement date. Such a rate is based on what the Group estimates it would have to pay a third party
to borrow the funds necessary to obtain an asset of a similar value to the right-of-use asset, with similar
terms, security and economic environment.
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its
property, plant and equipment and finite life intangible assets. The useful lives could change significantly
as a result of technical innovations or some other event. The depreciation and amortisation charge will
increase where the useful lives are less than previously estimated lives, or technically obsolete or non-
strategic assets that have been abandoned or sold will be written off or written down.
Share based payments
Share-based payments are measured at the fair value of goods or services received or the fair value of the
equity instruments issued, if it is determined the fair value of the goods or services cannot be reliably
measured, and are recorded at the date the goods or services are received. The fair value of options is
determined using the Black-Scholes pricing model. The number of shares and options expected to vest is
reviewed and adjusted at the end of each reporting period such that the amount recognised for services
received as consideration for the equity instruments granted is based on the number of equity instruments
that eventually vest.
3.
CORRECTION OF ERROR
The financial report has been prepared based on an adjustment for the correction of prior period errors for
the year ended 30 June 2020. The errors relate to intangible assets, property plant and equipment, lease
liabilities and deferred tax.
- 38 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.
CORRECTION OF ERROR (CONT.)
Restated Statement of Profit and Loss and Other Comprehensive Income (extract):
2020
Adjustment
Correction of
Error
Revenue from continuing operations
Revenue
Interest revenue
Other revenue
Expenses
Cost of Sales
Administration
Directors’ fees
Depreciation and amortisation expense
Finance costs
(Loss) from continuing operations before
income tax expense
Income tax benefit
(Loss) for the year
2020
Restated
$
5,978,940
337
59,614
$
-
-
-
-
17,499
-
(86,545)
(1,108)
(4,636,822)
(3,378,996)
(62,602)
(493,621)
(55,472)
$
5,978,940
337
59,614
(4,636,822)
(3,396,495)
(62,602)
(407,076)
(54,364)
(2,518,468)
(70,154)
(2,588,622)
-
63,847
63,847
(2,518,468)
(6,307)
(2,524,775)
Other comprehensive income
-
-
-
Total Comprehensive (Loss) for the Year
(2,518,468)
(6,307)
(2,524,775)
- 39 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
3.
CORRECTION OF ERROR (CONT.)
Statement of financial position of comparative period (extract):
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Financial assets at amortised cost
Inventory
TOTAL CURRENT ASSETS
NON-CURRENT ASSETS
Property, plant and equipment
Intangible assets
TOTAL NON-CURRENT ASSETS
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Lease liabilities
Borrowings
TOTAL CURRENT LIABILITIES
NON-CURRENT LIABILITIES
Trade and other payables
Lease liabilities
Borrowings
Deferred Tax Liability
TOTAL NON-CURRENT LIABILITIES
TOTAL LIABILITIES
2020
Adjustment
Correction of
Error
2020
Restated
$
494,924
1,093,268
247,617
650,504
2,486,313
111,072
1,830,236
1,941,308
4,427,621
1,980,805
29,354
456,852
2,467,011
90,733
31,554
12,481
-
134,768
2,601,779
$
-
-
-
-
-
$
494,924
1,093,268
247,617
650,504
2,486,313
79,483
87,276
166,759
166,759
190,555
1,917,512
2,108,067
4,594,380
-
49,696
-
49,696
1,980,805
79,050
456,852
2,516,707
-
30,130
-
93,240
123,370
173,066
90,733
61,684
12,481
93,240
258,138
2,774,845
NET ASSETS
1,825,842
(6,307)
1,819,535
EQUITY
Share capital
Translation reserve
Other reserves
Accumulated losses
TOTAL EQUITY
8,885,038
101,759
(4,642,487)
(2,518,468)
-
-
-
(6,307)
8,885,038
101,759
(4,642,487)
(2,524,775)
1,825,842
(6,307)
1,819,535
- 40 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4.
OPERATING SEGMENTS
Identification of reportable operating segments
The consolidated entity is organised into two operating segments based on geographic location of
operations: Australia and United Kingdom. These operating segments are based on the internal reports that
are reviewed and used by the Board of Directors (who are identified as the Chief Operating Decision Makers
('CODM')) in assessing performance and in determining the allocation of resources.
The CODM reviews EBITDA (earnings before interest, tax, depreciation and amortisation). The accounting
policies adopted for internal reporting to the CODM are consistent with those adopted in the financial
statements.
The information reported to the CODM is on a monthly basis.
Intersegment receivables, payables and loans
Intersegment loans are initially recognised at the consideration received. Intersegment loans receivable
and loans payable that earn or incur non-market interest are not adjusted to fair value based on market
interest rates. Intersegment loans are eliminated on consolidation.
Operating segment information
2021
Segment Revenue
Sale of goods
Interest revenue
Other revenue
Total revenue
Segment Result
EBITDA
Depreciation and amortisation
Interest revenue
Finance costs
Loss before income tax expense
Income tax benefit
Loss after income tax expense
Australia
$
3,603,177
185
50,175
3,653,537
Australia
$
(2,551,467)
(29,736)
185
(3,055)
(2,584,073)
-
(2,584,073)
UK
$
Total
$
4,846,387
2,846
3,653
4,852,886
8,449,564
3,031
53,828
8,506,423
UK
$
Total
$
(2,186,831)
(502,483)
2,846
(52,031)
(2,738,499)
15,276
(2,723,223)
(4,738,298)
(532,219)
3,031
(55,086)
(5,322,572)
15,276
(5,307,296)
- 41 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
4.
OPERATING SEGMENTS (CONT.)
Segment assets and liabilities
Total assets
Total liabilities
Net assets (liabilities)
Other information
Australia
$
UK
$
Total
$
5,707,061
(1,025,769)
4,681,292
4,276,786
(2,167,650)
2,109,136
9,983,847
(3,193,419)
6,790,428
Additions to non-current assets excluding
financial instruments and deferred tax
301,348
1,094,270
1,395,618
2020
Segment Revenue
Sale of goods
Interest revenue
Other revenue
Total revenue
Segment Result
EBITDA
Depreciation and amortisation
Interest revenue
Finance costs
Profit before income tax expense
Income tax benefit
Profit after income tax expense
Segment assets and liabilities
Total assets
Total liabilities
Net assets (liabilities)
Other information
Australia
$
1,807,974
119
55,024
1,863,117
Australia
$
(428,508)
(53,767)
119
(6,392)
(488,548)
-
(488,548)
Australia
$
2,254,082
(914,898)
1,339,184
UK
$
Total
$
4,170,966
218
4,590
4,175,774
5,978,940
337
59,614
6,038,891
UK
$
Total
$
(1,611,358)
(439,854)
218
(49,080)
(2,100,074)
63,847
(2,036,227)
(2,039,866)
(493,621)
337
(55,472)
(2,588,622)
63,847
(2,524,775)
UK
$
Total
$
2,340,298
(1,859,948)
480,351
4,594,380
(2,774,846)
1,819,535
Additions to non-current assets excluding
financial instruments and deferred tax
112,912
1,096,261
1,209,173
5.
REVENUE
Revenue from contracts with customers
Sale of goods
2021
2020
$
8,449,564
$
5,978,940
- 42 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
5.
REVENUE (CONT.)
Timing of revenue recognition
Goods transferred at a point in time
2021
2020
$
8,449,564
$
5,978,940
The disaggregation of revenue from contracts with customers is as follows:
Consolidated -2021
Geographical regions
Sale of goods
Consolidated -2020
Geographical regions
Sale of goods
6.
OTHER INCOME AND EXPENSES
Australia
$
UK
$
Total
$
3,603,177
4,846,387
8,449,564
Australia
$
UK
$
Total
$
1,807,974
4,170,966
5,978,940
(a) Revenue
Interest revenue
Other revenue:
Sponsorship income
Government grants
(b) Expenses
Cost of sales:
- Direct costs
- Registrations
- Commissions payable
Administration expenses:
Salaries and other employee costs
-
- Audit and accountancy fees
-
Legal and professional fees
- Consulting fees
- Recompliance and acquisition
- Other administration expenses
2021
$
2020
$
3,031
337
-
53,828
53,828
9,591
50,023
59,614
6,611,065
64,470
4,996
6,680,531
4,573,677
49,635
13,510
4,636,822
2,482,743
286,238
111,380
649,541
304,752
764,668
4,599,322
1,493,772
211,625
249,388
908,963
-
515,248
3,378,996
- 43 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7.
INCOME TAX
Income tax expense
Current tax
Deferred tax
Total income tax expense
2021
$
-
15,276
15,276
2020
$
-
63,847
63,847
(a) The prima facie income tax on pre-tax accounting profit from operations reconciles to the income tax
expense in the financial statements as follows:
Loss for the year
Income tax charge/(benefit) calculated at 26% (2020:
23.25%)
2021
$
(5,322,572)
2020
$
(2,588,622)
(1,383,868)
(601,854)
Non-deductible expenses
Non-assessable income
Other deductible expenses
Difference in tax rate of subsidiaries
Unused tax losses not recognised as a deferred tax asset
Income tax expense/(benefit) reported in the Statement
of Profit or Loss and Other Comprehensive Income
544,672
(13,000)
(120,658)
74,889
882,689
907,719
(70)
-
59,329
(428,971)
(15,276)
(63,847)
(b) Deferred tax liabilities comprise:
Intangibles
(c) Unrecognised deferred tax balances:
2021
$
117,816
117,816
2020
$
93,240
93,240
2021
$
2020
$
The following deferred tax assets have not been brought
to account:
Unrecognised deferred tax asset – tax losses*
Unrecognised deferred tax asset – other temporary
differences
Net deferred tax assets not brought to account
1,407,614
32,915
524,925
-
1,440,529
524,925
* There are potential further deferred tax assets in respect of tax losses (with an estimated potential value
of $5.9m) of the holding company that are subject to a detailed analysis of the continuity of ownership test
but are not included above due to their uncertainty.
- 44 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
7.
INCOME TAX (CONT.)
The taxation benefits of tax losses and timing not brought to account will only be obtained if:
(i) assessable income is derived of a nature and of amount sufficient to enable the benefit from the
deductions to be realised;
(ii) conditions for deductibility imposed by the law are complied with; and
(iii) no changes in tax legislation adversely affect the realisation of the benefit from the deductions.
8. KEY MANAGEMENT PERSONNEL
Compensation
The aggregate compensation made to directors and other members of key management personnel of the
consolidated entity is set out below:
Short-term employee benefits
2021
$
2020
$
274,837
251,000
Pathways Corporate Pty Ltd, a company of which Mr David Wheeler is a Director, charged the Group Rent
of $4,000 (2020: $nil) during the year on normal commercial terms and conditions. At balance date $1,500
(2020: $nil) remained payable.
9. CASH AND CASH EQUIVALENTS
Current
Cash at bank and on hand
2021
$
2020
$
5,224,961
494,924
Cash at bank earns interest at fixed and floating rates based on daily bank and term deposit rates.
10. TRADE AND OTHER RECEIVABLES
Current
Trade and other receivables
GST / VAT receivable
Prepayments
Other receivables
Other
2021
$
624,110
156,011
394,880
139,328
-
1,314,329
2020
$
757,853
181,492
109,148
42,961
1,814
1,093,268
Group
Other receivables are non-trade receivables, and are non-interest bearing. The above amounts do not
bear interest and the Directors consider that the carrying amount is equivalent to their fair value.
- 45 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
10. TRADE AND OTHER RECEIVABLES (CONT.)
The Group applies the AASB 9 simplified approach to measuring expected credit losses using a lifetime
expected credit loss provision for trade receivables. To measure expected credit losses on a collective
basis, trade receivables are grouped based on similar credit risk and ageing. The Group’s primary customer
base is of a similar bracket and share the same characteristics, as such these have been treated as one
population. The other customer base relates to State customers, with no history of default, therefore, the
lifetime expected losses are considered to be $nil.
The rent deposits of $129,633 (2020: $15,515) will be fully refundable after the lease agreement ends on
30 June 2025.
Company
All amounts due from subsidiary undertakings are repayable on demand, and are non-interest bearing.
No allowances for ECL's have been made during the year ended 30 June 2021 (2020: $Nil).
11. FINANCIAL ASSETS AT AMORTISED COST
Current
Bonds
Non-current
Bonds
2021
$
-
2020
$
247,617
2021
$
250,974
2020
$
-
On 2 June 2020, the Group entered into a loan agreement with the Ministry for Health Central Procurement
and Supplies Unit of Malta. The bond is unsecured and bears no interest and is held in Euros. The bond is
renewable on an annual basis.
12. INVENTORIES
Current
Finished goods – at cost
2021
$
297,985
2020
$
650,504
- 46 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
13. PROPERTY PLANT AND EQUIPMENT
Computer
Equipment
Office
Equipment
Plant &
Machinery
$
$
$
Right of
Use Asset
Restated
$
Motor
Vehicles
Total
$
$
21,039
6,311
-
3,992
15,050
-
36,294
66,566
-
209,203
511,857
110,329
- 270,528
13,816 613,600
- 110,329
Cost
Balance as at 1 July 2020
Additions
Additional extension option
Balance as at 30 June 2021
27,350
19,042
102,860
831,389
13,816 994,457
Accumulated depreciation
Balance as at 1 July 2020
Charge for the year
1,753
4,996
1,194
5,424
5,949
8,263
71,077
173,488
-
79,973
2,303 194,474
Balance as at 30 June 2021
6,749
6,618
14,212
244,565
2,303 274,447
Net book value as at 30 June 2021
20,601
12,424
88,648
586,824
11,513 720,010
Net book value as at 30 June 2020
19,286
2,798
30,345
138,126
- 190,555
Office equipment of £7,500 (AUD$13,816) and motor vehicles of £7,500 (AUD$13,816) acquired during the
year ended 30 June 2021 in part relates to the assets acquired from Gees Pharmacy (refer to Note 22)
14. INVESTMENTS
Non-Current
Pro 9 Global Pty Ltd – at fair value
2021
$
125,000
2020
$
-
The investment is measured at fair value using level 2 hierarchy using a recent capital raise price.
- 47 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15. INTANGIBLES
Cost
At 1 July 2020 (Restated)
Additions
Movement in FX rates
At 30 June 2021
Amortisation
At 1 July 2020 (Restated)
Charge for the year
Movement in FX rates
At 30 June 2021
Website
Costs
74,170
1,750
1,116
77,036
3,820
7,690
57
11,567
Customer
Contracts
Restated
881,925
545,789
10,937
1,438,651
397,173
416,446
4,947
818,566
Goodwill
Total
1,362,410
-
2,624
1,365,034
2,318,505
547,539
14,677
2,880,721
-
-
-
-
400,993
424,136
5,004
830,133
Net book value as at 30 June 2021
65,469
620,085
1,365,034
2,050,588
Net book value as at 30 June 2020
70,350
484,752
1,362,410
1,917,512
Customer contracts of £240,001 (AUD$436,659) have been capitalised as part of the acquisition of trade
and assets from Gees Pharmacy Limited on 1 September 2020 (see Note 22 for details). The customer
contracts have been recognised at their fair value at the date of acquisition, and are subsequently amortised
on a straight-line based on the timing of projected cash flows of the contracts over their estimated useful
lives.
The recoverable amount of the consolidated entity's goodwill has been determined by a value-in-use
calculation using a discounted cash flow model, based on a 2 year projection period approved by
management and extrapolated for a further 3 years using a steady rate, together with a terminal value.
Key assumptions are those to which the recoverable amount of an asset or cash-generating units is most
sensitive.
The following key assumptions were used in the discounted cash flow model:
• 15% pre-tax discount rate;
• 5% per month projected revenue growth rate for the 2022 year;
• 5% per annum increase in operating costs and overheads
The discount rate of 15% pre-tax reflects management’s estimate of the time value of money and the
consolidated entity’s weighted average cost of capital adjusted for the risk free rate and the volatility of the
share price relative to market movements.
Management believes the projected 5% monthly in 2022 revenue growth rate is conservative, based on
growth in the market and Group historic growth.
- 48 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
15. INTANGIBLES (CONT.)
Management have increased costs in accordance with operational requirements in line with expected
increased activity.
There were no other key assumptions.
From our above assessment for the reporting period 30 June 2021, we are satisfied that there is no
indication that Goodwill may be impaired.
16. TRADE AND OTHER PAYABLES
Current (unsecured)
Trade payables
Other Creditors
Accruals
Employee related payables
Non-current (unsecured)
Deferred consideration
2021
$
1,236,139
68,195
195,189
108,123
1,607,646
2020
$
1,162,337
456,886
305,897
55,685
1,980,805
-
-
90,733
90,733
Trade and other payables and accruals principally comprise amounts outstanding for trade purchases and
ongoing costs and are non-interest bearing. For most suppliers no interest is charged on the trade payables
for the first 30 days from the date of the invoice. Thereafter, interest is chargeable on the outstanding
balances at various interest rates. The Group has financial risk management policies in place to ensure that
payables are paid within the credit timeframe. Due to the short-term nature of the trade payables the
carrying amount approximates fair value.
Other payables are non-trade receivables, and are non-interest bearing. The above amounts do not bear
interest and the Directors consider that the carrying amount is equivalent to their fair value.
All amounts due to group companies are repayable on demand, and are non-interest bearing.
As at 30 June 2020, there was £50,000 (AUD$90,970) of deferred consideration relating to the acquisition
of P&D Pharmaceuticals, which has since been written off as it is no longer payable as at 30 June 2021. The
deferred consideration balance was written off and recognised as a gain within other administrative
expenses.
- 49 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
17. LEASE LIABILITIES
Carrying value
Current liabilities
Non-current liabilities
2021
$
181,030
411,832
592,862
2020
Restated
$
79,050
61,684
140,734
The total cash outflow for leases during the period was $185,347 (2020: $66,114).
The Group leases buildings, the average lease term of which is 5 years. None of the leases held by the group
expired in the current financial year. Incremental borrowing rate used is 7% for Australian liabilities and 5%
for UK liabilities.
18. BORROWINGS
Current (secured)
Other loans
Current (unsecured)
Other loans
Non-current (secured)
Other loans
2021
$
-
2020
$
8,727
493,031
493,031
448,125
456,852
382,063
382,063
12,481
12,481
On 11 March 2020, the Group entered into a loan agreement with Gees Pharma Limited. This loan
agreement is unsecured, and bears interest at a rate of 5% per annum, which is repayable at the end of the
loan term. The loan is expected to be repaid by 30 June 2022, and as at 30 June 2021, the outstanding
amount is £78,228 (AUD$144,098) (30 June 2020: £74,556 (AUD$137,334)).
On 2nd June 2020, the Group entered into a loan agreement with Gees Pharma Limited. This loan
agreement is unsecured, and bears interest at a rate of 5% per annum, which is repayable at the end of the
loan term. The loan is expected to be repaid by 30 June 2022, and as at 30 June 2021, the outstanding
amount is £135,768 (AUD$250,088) (30 June 2020: £136,771 (AUD$251,936)).
During the year ended 30 June 2021 the Group received various funding from the UK government as
support for the COVID-19 pandemic, totalling £170,919 (AUD$314,838) (30 June 2020: nil). Of this, the
Department of Health and Social Care advance payment of £20,919 (AUD$38,533) is repayable from
October 2021 in 6 equal monthly instalments. This funding is interest free. The remaining £150,000
(AUD$276,304) funding provided under the CBILS loan scheme and bears an interest rate of 12.22% per
annum. Under the CBILS loan scheme, the UK Government will pay the interest accrued on this loan until
13 August 2021. This loan is repayable by 13 August 2023.
- 50 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
18. BORROWINGS (CONT.)
Also included within unsecured loans is a balance of EUR 27,927 (AUD$51,442) (30 June 2020: nil), which
relates to the Group's credit facility with Market Finance. This balance represents funds received in advance
from the credit facility, and there is no interest attached.
19. ISSUED CAPITAL
Issued Capital
2021
$
19,236,538
2020
$
8,885,038
Year to
30 June 2021
Year to
30 June 2020
No.
Year to
30 June 2021
$
Year to
30 June 2020
$
No.
Movements in ordinary shares on issue
At start of period
Share issued on incorporation
Ordinary shares issued
Ordinary shares issued in exchange for
shares in CliniCann
Movement in share premium
Share issue costs
Elimination of legal acquiree share capital
on reverse acquisition
Recognition of legal acquirer share
capital on reverse acquisition
Consolidation of capital 50 to 1
Shares issued to advisors – acquisition
related costs
Consideration shares
Shares issued under prospectus
Transaction costs relating to issue of
shares
Foreign exchange conversion
At end of period
101,698,310
-
-
1
8,885,038
-
-
-
13,600,433
14,259,800
2,028,353
7,298,306
-
-
-
(115,298,743)
1,130,846,123
(1,108,229,201)
3,458,961
115,298,743
17,500,000
-
-
87,438,509
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,215,176
3,500,000
(392,029)
-
1,586,732
-
-
-
-
-
-
-
-
-
-
158,874,626
101,698,310 19,236,538
8,885,038
At shareholders’ meetings, each ordinary share is entitled to one vote in proportion to the paid-up amount
of the share when a poll is called, otherwise each shareholder has one vote on a show of hands.
20. RESERVES
Foreign currency reserve
The reserve is used to recognise exchange differences arising from the translation of the financial
statements of foreign operations to Australian dollars. It is also used to recognise gains and losses on hedges
of the net investments in foreign operations.
- 51 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
20. RESERVES (CONT.)
Other reserves
The other reserve was created as a result of the acquisition by the Company of the entire issued share
capital of CliniCann Ltd. This acquisition was effected by a share-for-share exchange. In preparing
consolidated financial statements, the amount by which the fair value of the shares issued exceeded their
nominal value was recorded in an 'other' reserve on consolidation. This reserve is not considered to be
distributable.
21.
FINANCIAL INSTRUMENTS
The Group are exposed to the risks that arise from its use of financial instruments. This note describes the
objectives, policies and processes of the Group for managing those risks and the methods used to measure
them. Further quantitative information in respect of these risks is presented throughout these financial
statements.
Capital risk management
The Group manages its capital to ensure that it will be able to continue as a going concern whilst maximising
the return to stakeholders. The Group is funded by both of its shareholders through equity financing.
The capital structure of the Group consists of cash and cash equivalents and equity, comprising issued
capital and retained profits.
The Group has no externally imposed capital requirements.
Significant accounting policies
Details of the significant accounting policies and methods adopted, including the criteria for recognition,
the basis of measurement and the basis on which income and expenses are recognised, in respect of each
class of financial asset, financial liability and equity instrument are disclosed in the accounting policies
section of these financial statements.
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risk arises, are
as follows:
· Trade and other receivables;
· Trade and other payables;
· Cash and cash equivalents;
· Financial assets at amortised cost; and
· Borrowings
- 52 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21.
FINANCIAL INSTRUMENTS (CONT.)
Categories of financial instruments
2021
Variable
interest rate
$
Maturity dates
Non-
interest
bearing
Total
Less than
1 year
$
1-2 years
2-5 years
$
Over 5
years
$
$
$
Financial assets:
Trade and other
receivables
Financial assets at
amortised cost
Cash and cash equivalents
Investments
Financial liabilities:
1,314,329
-
-
250,974
5,224,961
-
-
-
-
125,000
-
-
-
-
-
-
-
-
-
-
1,314,329
1,314,329
250,974
250,974
5,224,961
5,224,961
125,000
125,000
1,607,646
1,607,646
-
-
875,094
592,862
-
-
-
Trade and other payables
1,607,646
Borrowings
Lease liabilities
Note 18
493,031
382,063
181,030
411,832
2020
Variable
interest rate
$
Financial assets:
Trade and other
receivables
Financial assets at
amortised cost
Cash and cash equivalents
Financial liabilities:
Less than
1 year
$
1,093,268
247,617
494,924
Trade and other payables
1,980,805
Borrowings
Lease liabilities
Note 18
456,852
79,050
Maturity dates
Non-
interest
bearing
Total
1-2 years
2-5 years
$
Over 5
years
$
$
$
-
-
-
90,734
12,481
61,684
-
-
-
-
-
-
-
-
-
-
-
-
1,093,268
1,093,268
247,617
247,617
494,924
494,924
2,071,538
2,071,538
-
-
469,333
140,734
Note: interest is immaterial to the Group and has not been included above.
Fair value measurements
The information set out below provides information about how the Group and Company determines fair
values of various financial assets and financial liabilities.
- 53 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21.
FINANCIAL INSTRUMENTS (CONT.)
The following table provides an analysis of financial instruments that are measured subsequent to initial
recognition at fair value, grouped into Levels 1 to 3 based on the degree to which the fair value is
observable:
•
Level 1 fair value measurements are those derived from quoted prices (unadjusted) in active
markets for identical assets or liabilities;
Level 2 fair value measurements are those derived from inputs other than quoted prices included
within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly
(i.e. derived from prices); and
Level 3 fair value measurements are those derived from valuation techniques that include inputs
for the asset or liability that are not based on observable market data (unobservable inputs).
•
•
All financial instruments are defined as any contract that gives rise to both the recognition of a financial
asset in one entity and a financial liability or equity instrument in another entity. The estimated fair value
of a financial instrument is the amount at which the instrument could be exchanged in the market. For the
purpose of estimating the fair value of financial assets maturing in less than one year, the Group uses the
market value. For other investments, the Group uses quoted prices in the market. In relation to financial
liabilities, since most loans are taken at variable rates or fixed rates that approximate to market rates, the
fair value of loans approximates their carrying value. The fair value disclosures relating to the Group’s
investments are disclosed in Note 14.
Financial risk management objectives
The Group’s finance function provides services to the business, co-ordinates access to domestic and
international financial markets, monitors and manages the financial risks relating to the operations of the
Group through internal risk assessments. These risks include credit risk, currency risk and capital risk.
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in
financial loss to the Group. Credit risk arises principally from the Group’s trade receivables, other financial
assets and its cash balances. The Group gives careful consideration to which organisations it uses for its
banking services in order to minimise credit risk. The Group applies the IFRS 9 simplified approach to
measuring expected credit losses using a lifetime expected credit loss provision for trade receivables. To
measure expected credit losses on a collective basis, trade receivables are grouped based on similar credit
risk and ageing. The Group’s primary customer base is of a similar bracket and share the same
characteristics, as such these have been treated as one population. The other customer base relates to
State customers, with no history of default, therefore, the lifetime expected losses are considered to be
$nil.
The concentration of the Group's credit risk is considered by counterparty, geography and currency. The
Group holds the majority of its cash with one bank in each country of operation.
There are no other significant concentrations of credit risk at the Statement of Financial Position date.
At 30 June 2021, the Group held no collateral as security against any financial asset. The carrying amount
of financial assets recorded in the financial statements, net of any allowances for losses, represents the
Group's maximum exposure to credit risk without taking account of the value of any collateral obtained. At
30 June 2021, there were no financial assets, other than trade receivables, that were past their due date.
As a result, there has been no impairment of other financial assets during the year.
- 54 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21.
FINANCIAL INSTRUMENTS (CONT.)
The Group maintains good relationships with its bank, which has a high credit rating and its cash
requirements are anticipated via both the annual budgetary process and the ongoing authorisation for
expenditure process. At 30 June 2021, the Group had $5,224,961 (2020: $494,924) of cash reserves.
Foreign currency risk
The Group undertakes certain transactions denominated in foreign currencies hence exposures to exchange
rate fluctuations arise. The Group does not manage these exposures with foreign currency derivative
products. The carrying amounts of the Group’s foreign currency denominated monetary assets and
monetary liabilities at the balance date expressed in Australian dollars are as follows:
British Pound Sterling (GBP)
Assets
Liabilities
Euro (EUR)
Assets
Liabilities
United States Dollars (USD)
Assets
Liabilities
Canadian Dollars (CAD)
Assets
Liabilities
2021
$
1,329,527
(842,803)
486,724
2020
$
606,793
(1,775,719)
(1,168,926)
2021
$
159,989
(174,092)
(14,103)
2021
$
-
-
-
2021
$
-
-
-
2020
$
579,717
(61,592)
518,126
2020
$
7,211
-
7,211
2020
$
-
(35,142)
(35,142)
The Group is exposed to British Pound Sterling (GBP), Euro (EUR), United States Dollars (USD) and Canadian
Dollar (CAD) currency fluctuations.
The following table details the Group’s sensitivity to a 10% increase and decrease in the Australian dollar
against the relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk
internally to key management personnel and represent management’s assessment of the possible change
in foreign exchange rates. The sensitivity analysis includes only outstanding foreign currency denominated
monetary items and adjusts their translation at the period end for a 10% change in foreign currency rates.
- 55 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
21.
FINANCIAL INSTRUMENTS (CONT.)
The sensitivity analysis includes external loans as well as loans to foreign operations within the Group where
the denomination of the loan is in a currency other than the currency of the lender or the borrower. A
positive number indicates an increase in profit and equity where the Australian Dollar weakens against the
respective currency. For a strengthening of the Australian Dollar against the respective currency there
would be an equal and opposite impact on the profit and equity and the balances below would be negative.
10% Increase
Profit/(loss) and equity – GBP
Profit/(loss) and equity – EUR
Profit/(loss) and equity – USD
Profit/(loss) and equity – CAD
10% Decrease
Profit/(loss) and equity – GBP
Profit/(loss) and equity – EUR
Profit/(loss) and equity – USD
Profit/(loss) and equity – CAD
2021
$
48,672
(1,410)
-
-
47,262
2021
$
(48,672)
1,410
-
-
(47,262)
2020
$
(116,893)
51,813
721
(3,514)
(67,873)
2020
$
116,893
(51,813)
(721)
3,514
67,873
Capital risk
The Group manages its capital to ensure that entities in the Group will be able to continue as a going
concern while maximising the return to stakeholders through the optimisation of the equity balance. The
capital structure of the Group consists of cash and cash equivalents and equity attributable to equity
holders of the parent, comprising issued capital, reserves and retained earnings (see Note 1 for going
concern statement).
Interest rate risk is not material to the Group.
22. ACQUISITIONS
Acquisition of Gees Pharmacy
On 1 September 2020, the Group purchased the trade and other assets of Gees Pharmacy, a web-based
pharmacy business in the UK, for a total consideration of £325,001 (AUD$598,661) (plus working capital
adjustments). The amounts recognised in respect of the identifiable assets acquired and liabilities assumed
are as set out in the table below:
- 56 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22. ACQUISITIONS (CONT.)
Office Equipment
Motor Vehicles
Stock
Working capital
Customer contracts
Deferred tax liability
Total identifiable assets acquired and liabilities assumed
Goodwill
The consideration is consisted of:
Cash
Deferred consideration
Issuing of shares
Total consideration transferred
$
13,815
13,815
128,942
14,040
545,790
(103,701)
612,701
-
$
340,784
14,040
257,877
612,701
In May 2021, £185,001 (AUD$337,693) was transferred to Ian Greenep in relation to the acquisition.
Reverse Acquisition of Health House Holdings Limited
On 19 March 2021 VPCL Limited (now Health House International Limited, the legal parent entity) acquired
100% of the issued share capital of Health House Holdings Limited. Health House Holdings Limited is a UK
incorporated entity which is an international pharmaceutical distributor specialising in, but not limited to,
the distribution of medicinal cannabis products across Australasia, United Kingdom and Europe.
Under the terms of the transaction VPCL Limited issued 115,298,743 shares in the Company to the vendors
of House House Holdings Limited, along with 3,458,961 shares to advisors resulting in VPCL Limited
acquiring 100% of the legal parent entity’s issued capital. The Company changed its name to Health House
International Limited following shareholder approval received at the Company’s general meeting of
shareholders held on 29 January 2021 and also changed its ASX code to HHI effective from 24 March 2021.
Notwithstanding that the transaction used the principles of a reverse acquisition as described in AASB 3
Business Combinations however, the transaction was not deemed a business combination on the basis that
VPCL Limited did not meet the definition of a business as noted in that standard.
The Group applied, by analogy, the guidance in AASB 3 on reverse acquisitions, resulting in Health House
Holdings Limited (the non-listed operating entity) being identified as the accounting acquirer and VPCL
Limited (the listed non-operating entity) being identified as the accounting acquiree. As the transaction is
not within scope of AASB 3, the transaction was treated as a share-based payment transaction (asset
acquisition) accounted for in accordance with AASB 2 Share-based Payments.
The Group consequently recognised a share-based payment of $1,845,000 in its statement of profit and
loss and other comprehensive income, representing the cost of the listing. The cost is calculated as the
difference in the fair value of the shares deemed to have been issued by Health House Holdings Limited
(the non-listed entity) and the fair value of the accounting acquiree's identifiable net liabilities.
- 57 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
22. ACQUISITIONS (CONT.)
Assets acquired and liabilities assumed:
Cash and cash equivalents
Trade and other receivables
Trade and other payables
Net Liabilities assumed
Share-based payment for reverse acquisition
Acquisition date fair value of the total consideration transferred
Net cash inflow arising on acquisition
$
3,292,625
212,096
(134,545)
3,370,176
1,845,000
5,215,176
Cash paid
Less: net cash acquired with the subsidiary
Net cash inflow
23.
EARNINGS PER SHARE
$
-
3,292,625
3,292,625
2021
$
2020
$
(a)
(Loss) used in the calculation of basic and dilutive loss per share
(5,307,296)
(2,524,775)
Basic loss per Share
Number of
Shares
Number of
Shares
(b) Weighted average number of ordinary shares outstanding
during the year used in the calculation of basic loss per share:
122,931,096
64,302,124
Basic (loss) per share
Diluted loss per Share
(0.04)
(0.04)
Number of
Shares
Number of
Shares
(b) Weighted average number of ordinary shares outstanding
during the year used in the calculation of diluted loss per share:
122,931,096
64,302,124
Diluted (loss) per share
(0.04)
(0.04)
- 58 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
24.
CASH FLOW INFORMATION
Reconciliation of net cash flow used in operating activities
with profit / (loss) after income tax
2021
$
2020
$
(Loss) for year
(5,307,296)
(2,524,775)
Cash flows in operating (loss)/profit classified as investing
activities
Non-cash flows in operating (loss)/profit
- Share based payments
- Finance charges
- Depreciation and amortisation
-
-
Cash flows not in operating (loss)/profit
Changes in assets and liabilities:
-
-
-
Net cash used in operating activities
(Increase)/Decrease in trade and other receivables
(Increase)/Decrease in inventory
Increase/(Decrease) in trade payables and other accruals
Interest income
Income tax benefit
1,845,000
55,086
532,219
-
(15,276)
-
55,472
493,621
(337)
(63,847)
(221,061)
352,519
367,731
(2,391,078)
(913,017)
(614,148)
1,628,794
(1,938,237)
Change in liabilities arising from financing liabilities
Balance at 1 July 2019
Leases recognised on the adoption of
AASB 16
Acquisition of leases / loans
Derecognition of leases
Repayments
Repayment relating to investing
activities
Interest paid
Other adjustments
Balance at 30 June 2020
Acquisition of leases / loans
Repayments
Interest paid
Other adjustments
Balance at 30 June 2021
Notes
Lease liability
-
-
219,018
-
(66,114)
-
(12,170)
-
140,734
671,231
(234,301)
24,477
(9,279)
592,862
- 59 -
Loans
-
-
422,126
-
-
-
-
47,206
469,332
570,752
(148,732)
6,159
(22,417)
875,094
Total
-
-
641,144
-
(66,114)
-
(12,170)
47,206
610,066
1,241,983
(383,033)
30,636
(31,696)
1,467,956
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
25. AUDITORS REMUNERATION
The auditors of the Company are PKF Littlejohn LLP (UK) / HLB
Mann Judd WA Partnership (AUS)
Remuneration of the auditor for:
- Auditing or reviewing the financial report – HLB Mann Judd
(WA) Partnership (AUS)
- Auditing or reviewing the financial report – PKF Littlejohn
(UK)
2021
$
2020
$
30,000
89,392
-
65,785
119,392
65,785
26.
PARENT ENTITY INFORMATION
The individual financial statements for the parent entity show the following aggregate amounts. The
information presented has been prepared using accounting policies as disclosed in Note 1.
Financial Position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Issued capital
Reserves
Accumulated losses
Financial Performance
Loss for the year
Total comprehensive loss
2021
$
2020
$
5,177,147
1,317,671
6,494,818
(317,620)
(119,188)
(436,808)
6,058,010
(19,236,538)
4,642,487
8,536,041
(6,058,010)
1,331,560
964,883
2,296,443
(418,353)
(58,555)
(476,908)
1,819,535
(9,018,924)
-
7,199,389
(1,819,535)
(8,536,041)
(8,536,041)
(7,199,389)
(7,199,389)
- 60 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
27.
INTERESTS IN SUBSIDIARY
The consolidated financial statements include the financial statements of Health House International Ltd
and the subsidiaries in the following table.
Country of
Incorporation % Equity Interest
2020
2021
HHI (Australia) Pty Ltd
Health House Australia Pty Ltd
CliniCann Limited
Health House Pharma Limited
Health House Holdings Limited
Health House Distribution UK Limited
HHP Malta (P&D Pharma) Limited
Australia
Australia
Australia
UK
UK
UK
Malta
100%
100%
100%
100%
100%
100%
100%
-
-
-
-
-
-
-
28. RELATED PARTY INFORMATION
Transactions between related parties are on commercial terms and conditions, no more favourable than
those available to other parties unless otherwise stated.
Transactions with director related entities:
Pathways Corporate Pty Ltd, a company of which Mr David Wheeler is a Director, charged the Group Rent
of $4,000 (2020: $nil) during the year on normal commercial terms and conditions. At balance date $1,500
(2020: $nil) remained payable.
29.
EVENTS SUBSEQUENT TO REPORTING DATE
Acquisition
On 11 May 2021, Health House International Limited announced the acquisition of 100% of the issued
capital of CanPharma.
CanPharma is a Germany based pharmaceutical distribution business focussed on medicinal cannabis.
CanPharma is a licenced manufacturer, pharmaceutical wholesale company and a licenced narcotic drug
dealer under German legislation. CanPharma also has an office in Barcelona.
The company distributes cannabis flowers and extracts and provides expertise for testing and analysing
medicinal cannabis products. It currently has a low volume of sales as set out below.
The transaction was completed on 10 August 2021.
Dr Henrik Sprengel was appointed as Executive Director and Mr David Attwood was appointed as Chief
Executive Officer.
- 61 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
29.
EVENTS SUBSEQUENT TO REPORTING DATE (CONT.)
Consideration transferred
The key terms of the acquisition of CanPharma are set out below:
(a)
Health House International Limited will issue 11,753,061 fully paid ordinary shares to the vendors
of CanPharma;
Health House International Limited will issue 36 million Performance Shares; and
Health House International Limited will issue 6,246,939 fully paid ordinary shares to settle certain
debts owed by CanPharma to related parties of CanPharma.
(b)
(c)
On 20 August 2021, Health House International Limited issued 0.9 million Performance Shares and 0.45
million fully paid ordinary shares to Gemelli Nominees Pty Ltd (“Gemelli”) as an introduction fee related to
the Proposed Transaction.
Performance Shares
A total of 36.9 million Performance Shares will be issued, as follows:
Management
CanPharma
Consideration
Vendors of
CanPharma
Introduction Fee
Gemelli Nominees
Class A Performance Shares
Class B Performance Shares
Class C Performance Shares
-
6,000,000
12,000,000
12,000,000
6,000,000
-
300,000
300,000
300,000
The terms of the Performance Shares are set out below:
Revenue Hurdle
Type of Revenue
Period of Revenue
Class A Performance Shares
Class B Performance Shares
Class C Performance Shares
€5,000,000
€10,000,000
€15,000,000
Cumulative
Cumulative
Cumulative
2 years
2 years
2 years
Based on the table above, the Performance Shares will convert to ordinary fully paid shares if CanPharma
generates cumulative revenue over a 2-year period from the Completion Date. The Completion Date is the
date of approval by Health House International Limited shareholders.
The Performance Shares do not have rights to any of the following:
Voting rights in Health House International Limited;
a)
Dividend rights in Health House International Limited;
b)
No rights to surplus profits or assets;
c)
No right to a return of capital;
d)
The Performance Shares are non-transferrable; and
e)
No right to participate in entitlements and bonus issues.
f)
The Performance Shares do contain a “change of control” provision which means if there is a change of
control event for Health House International Limited then the milestones will be deemed to have been met
and the Performance Shares will automatically convert into shares at the date of the change in control
event.
- 62 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
29.
EVENTS SUBSEQUENT TO REPORTING DATE (CONT.)
The Group has recognised the fair values of the identifiable assets and liabilities of CanPharma based upon
the best information available as of the reporting date.
Provisional business combination accounting is as follows:
Fair value of identifiable net assets
Unallocated purchase price
Total consideration
Net cash outflow arising on acquisition
Cash paid
Less: net cash acquired with the
subsidiary
Net cash inflow
$
(4,555,505)
8,695,505
4,140,000
$
-
304,662
304,662
Note: a loan agreement is in place and $1,870,752 has been provided to CanPharma subsequent to year
end.
30. CONTINGENCIES
As at the 30 June 2021 the Company did not have any contingent liabilities.
- 63 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
DIRECTORS' DECLARATION
In the directors' opinion:
•
•
•
•
the attached financial statements and notes comply with the Corporations Act 2001, the
Accounting Standards, the Corporations Regulations 2001 and other mandatory professional
reporting requirements;
the attached financial statements and notes comply with International Financial Reporting
Standards as issued by the International Accounting Standards Board as described in Note 1 to the
financial statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's
financial position as at 30 June 2021 and of its performance for the financial year ended on that
date;
there are reasonable grounds to believe that the company will be able to pay its debts as and when
they become due and payable; and
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations
Act 2001.
On behalf of the directors
David Wheeler
Chairman
Dated at Perth this 30 day of September 2021
- 64 -
INDEPENDENT AUDITOR’S REPORT
To the members of Health House International Limited (formerly VPCL Limited)
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Health House International Limited (formerly VPCL Limited)
(“the Company”) and its controlled entities (“the Group”), which comprises the consolidated
statement of financial position as at 30 June 2021, the consolidated statement of comprehensive
income, the consolidated statement of changes in equity and the consolidated statement of cash
flows for the year then ended, and notes to the financial statements, including a summary of
significant accounting policies, and the directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
a) giving a true and fair view of the Group’s financial position as at 30 June 2021 and of its
financial performance for the year then ended; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for
Professional Accountants (“the Code”) that are relevant to our audit of the financial report in
Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Material uncertainty related to going concern
We draw attention to Note 1 (c) in the financial report, which indicates that a material uncertainty
exists that may cast significant doubt on the entity’s ability to continue as a going concern. Our
opinion is not modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters. In addition to the matter described in the Material
Uncertainty Related to Going we have determined the matters described below to be the key audit
matters to be communicated in our report.
- 65 -
Key Audit Matter
How our audit addressed the key audit
matter
Asset Acquisition under Reverse Acquisition Principles
Refer to Note 22
During the year, VPCL Limited (now Health House
International Limited) acquired 100% of the issued
capital of Health House Holdings Limited a UK entity.
This transaction was enacted through the issuance of
shares in VPCL Limited, such that the shareholders of
Health House Holdings Limited obtained control of
VPCL Limited. Accordingly, management determined
that this transaction was a reverse acquisition under the
principles outlined in AASB 3 Business Combinations.
Although the guidance of AASB 3 was used to identify
the accounting acquirer and accounting acquiree, the
transaction itself was not within the scope of AASB 3,
with the transaction instead being identified as a share-
based payment transaction and therefore accounted for
under AASB 2 Share-based Payment. VPCL Limited
does not constitute a business on AASB 3 and therefore
the acquisition of VCPL Limited is an acquisition of
assets.
Accounting for this transaction and the disclosure
requirements are sufficiently complex,
requiring
assumptions and judgements in determine the fair
value of the consideration paid and net assets acquired.
Recoverable amount of goodwill
Refer to Note 15
The carrying amount of goodwill of $1,365,034,
recognised on acquisition of CliniCann Limited, is
required to be tested for impairment annually in
accordance with AASB 138 Intangible Assets and
AASB 136 Impairment of Assets.
It is due to size, complexity and judgement involved that
this is considered a key audit matter.
Our procedures included, but were not
limited to the following:
- We reviewed the relevant agreements
in order to gain an understanding of the
key
the
terms and conditions of
transaction;
- We
reviewed
management’s
assessment of the fair value of the
gross consideration paid, and agreed
the assessment
relevant
to
supporting information ;
the
- We ensured that the acquisition date
assets and liabilities of VPCL Limited
were fairly stated;
- We ensured that the net impact of the
reverse acquisition was correctly
reflected in the consolidated statement
of comprehensive income; and
- We assessed the adequacy of the
Group’s disclosures in respect to this
transaction, including the presentation
of the comparative information, being
that of Health House Holdings Limited
(UK).
Our procedures included, but were not
limited to the following:
- We assessed the appropriateness of
the allocated cash generating units;
- We assessed the appropriateness of
the methodology in the value in use
model and
key
assumptions;
the basis
for
- We assessed the value in use model for
consistency with the requirements of
Australian Accounting Standards;
- We performed sensitivity analyses
around the key inputs used in the cash
flow forecasts and the headroom impact
on the value in use model;
- We
reviewed
accuracy of the model;
the mathematical
- We compared the discounted cash flow
value to the carrying amount of assets
comprising the cash-generating unit;
- We considered whether the assets
comprising the cash-generating unit
had been correctly allocated;
- We assessed the reasonableness of
forecast cash flows;
- 66 -
- We considered the appropriateness of
the discount rate used; and
- We assessed the adequacy of the
disclosures made in the financial report.
Information other than the financial report and auditor’s report thereon
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 accordingly 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 ability of the Group
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.
Auditor’s responsibilities for the audit of the financial report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee
that an audit conducted in accordance with Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
-
Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by the directors.
-
- 67 -
-
-
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and
events in a manner that achieves fair presentation.
- Obtain sufficient appropriate audit evidence regarding the financial information of the entities
or business activities within the Group to express an opinion on the financial report. We are
responsible for the direction, supervision and performance of the Group audit. We remain
solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included within the directors’ report for the year ended
30 June 2021.
In our opinion, the Remuneration Report of Health House International Limited (formerly VPCL
Limited) for the year ended 30 June 2021 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
30 September 2021
D I Buckley
Partner
- 68 -
Annual Report 2021
Health House International Limited (formally VPCL Limited)
CORPORATE GOVERNANCE STATEMENT
This Corporate Governance Statement is current as at 30 September 2021 and has been approved by the
Board of the Company.
This Corporate Governance Statement discloses the extent to which the Company will follow the
recommendations set by the ASX Corporate Governance Council in its Corporate Governance Principles and
Recommendations 4th Edition (Recommendations). The Recommendations are not mandatory, however the
Recommendations that will not be followed have been identified and reasons for not following them, along
with what (if any) alternative governance practices have been adopted in lieu of the Recommendation.
The Company has adopted Corporate Governance Policies which provide written terms of reference for the
Company’s corporate governance practices. The Board of the Company has not yet formed an audit
committee and risk management committee.
The Company’s Corporate Governance Policies are available on the Company’s website at
www.healthhouse.com.au
Principle 1: Lay solid foundations for management and oversight
Roles of the Board & Management
The Board is responsible for evaluating and setting the strategic direction for the Company, establishing
goals for management and monitoring the achievement of these goals. The Chief Executive Officer (or
equivalent) is responsible to the Board for the day-to-day management of the Company.
The principal functions and responsibilities of the Board include, but are not limited to, the following:
• Appointment, evaluation and, if necessary, removal of the Chief Executive Officer, any other executive
directors, the Company Secretary and the Chief Financial Officer and approval of their remuneration;
• Determining, in conjunction with management, corporate strategy, objectives, operations, plans and
approving and appropriately monitoring plans, new investments, major capital and operating
expenditures, capital management, acquisitions, divestitures and major funding activities;
Establishing appropriate levels of delegation to the Chief Executive Officer to allow the business to be
managed efficiently;
•
• Approval of remuneration methodologies and systems;
• Monitoring actual performance against planned performance expectations and reviewing operating
information at a requisite level to understand at all times the financial and operating conditions of the
Company;
• Monitoring the performance of senior management, including the implementation of strategy and
•
ensuring appropriate resources are available;
Identifying areas of significant business risk and ensuring that the Company is appropriately positioned
to manage those risks;
• Overseeing the management of safety, occupational health and environmental issues;
•
Satisfying itself that the financial statements of the Company fairly and accurately set out the financial
position and financial performance of the Company for the period under review;
Satisfying itself that there are appropriate reporting systems and controls in place to assure the Board
that proper operational, financial, compliance, risk management and internal control processes are in
place and functioning appropriately;
Ensuring that appropriate internal and external audit arrangements are in place and operating
effectively;
•
•
• Authorising the issue of any shares, options, equity instruments or other securities within the
constraints of the Corporations Act and the ASX Listing Rules; and
Ensuring that the Company acts legally and responsibly on all matters and assuring itself that the
•
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Annual Report 2021
Health House International Limited (formally VPCL Limited)
Company has adopted, and that its practice is consistent with, a number of guidelines including:
− Code of Conduct;
− Continuous Disclosure Policy;
− Diversity Policy;
− Performance Evaluation Policy;
− Procedures for Selection and Appointment of Directors;
− Remuneration Policy;
− Risk Management and Internal Compliance and Control Policy.
− Securities Trading Policy; and
− Shareholder Communications Policy.
Subject to the specific authorities reserved to the Board under the Board Charter, the Board delegates to
the Chief Executive Officer responsibility for the management and operation of Health House International.
The Chief Executive Officer is responsible for the day-to-day operations, financial performance and
administration of Health House International within the powers authorised to him from time-to-time by
the Board. The Chief Executive Officer may make further delegation within the delegations specified by the
Board and will be accountable to the Board for the exercise of those delegated powers.
Further details of Board responsibilities, objectives and structure are set out in the Board Charter on the
Health House International website.
Board Committees
The Board considers that the Company is not currently of a size, nor are its affairs of such complexity to
justify the formation of separate committees at this time including audit, risk, remuneration or nomination
committees, preferring at this stage of the Company’s development, to manage the Company through the
full Board of Directors. The Board assumes the responsibilities normally delegated to the audit, risk,
remuneration and nomination Committees.
If the Company’s activities increase, in size, scope and nature, the appointment of separate committees will
be reviewed by the Board and implemented if appropriate.
Board Appointments
The Company undertakes comprehensive reference checks prior to appointing a director, or putting that
person forward as a candidate to ensure that person is competent, experienced, and would not be impaired
in any way from undertaking the duties of director. The Company provides relevant information to
shareholders for their consideration about the attributes of candidates together with whether the Board
supports the appointment or re-election.
The terms of the appointment of a non-executive director, executive directors and senior executives are
agreed upon and set out in writing at the time of appointment.
The Company Secretary
The Company Secretary is accountable directly to the Board, through the Chairman, on all matters to do
with the proper functioning of the Board, including agendas, Board papers and minutes, advising the Board
and its Committees (as applicable) on governance matters, monitoring that the Board and Committee
policies and procedures are followed, communication with regulatory bodies and the ASX and statutory
and other filings.
Diversity
The Board has adopted a Diversity Policy which provides a framework for the Company to establish and
achieve measurable diversity objectives, including in respect to gender, age, ethnicity and cultural diversity.
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Annual Report 2021
Health House International Limited (formally VPCL Limited)
The Diversity Policy allows the Board to set measurable gender diversity objectives (if considered
appropriate) and to assess annually both the objectives (if any have been set) and the Company’s progress
towards achieving them.
The Board considers that, due to the size, nature and stage of development of the Company, setting
measurable objectives for the Diversity Policy at this time is not appropriate. The Board will consider setting
measurable objectives as the Company increases in size and complexity.
The participation of women in the Company at the date of this report is as follows:
• Women employees in the Company
• Women in senior management positions
• Women on the Board
58%
0%
0%
The Company’s Diversity Policy is available on its website.
Board & Management Performance Review
On an annual basis, the Board conducts a review of its structure, composition and performance.
The annual review includes consideration of the following measures:
• comparing the performance of the Board against the requirements of its Charter;
• assessing the performance of the Board over the previous 12 months having regard to the corporate
strategies, operating plans and the annual budget;
• reviewing the Board’s interaction with management;
• reviewing the type and timing of information provided to the Board by management;
• reviewing management’s performance in assisting the Board to meet its objectives; and
• identifying any necessary or desirable improvements to the Board Charter.
The method and scope of the performance evaluation will be set by the Board and may include a Board
self-assessment checklist to be completed by each Director. The Board may also use an independent
adviser to assist in the review.
The Chairman has primary responsibility for conducting performance appraisals of Non-Executive Directors,
in conjunction with them, having particular regard to:
• contribution to Board discussion and function;
• degree of independence including relevance of any conflicts of interest;
• availability for and attendance at Board meetings and other relevant events;
• contribution to Company strategy;
• membership of and contribution to any Board committees; and
• suitability to Board structure and composition.
Given, the size of the Board, the changes to the composition of the Board in May 2021 and the current level
of operations of the Company, no formal appraisal of the Board was conducted during the financial year.
The Board conducts an annual performance assessment of the Chief Executive Officer against agreed key
performance indicators.
Independent Advice
Directors have a right of access to all Company information and executives. Directors are entitled, in
fulfilling their duties and responsibilities, to obtain independent professional advice on any matter
connected with the discharge of their responsibilities, with prior notice to the Chairman, at Health House
International’ expense.
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Annual Report 2021
Health House International Limited (formally VPCL Limited)
Principle 2: Structure the board to be effective and add value
Board Composition
During the financial year and to the date of this report the Board was comprised of the following members:
Name
David Wheeler
Position
Chairman
Christopher Mews
Non-Executive Director
Hon Michael Rann
Non-Executive Director
Dr Henrik Sprengel
Executive Director
Length of Service
1 year and 5 months
3 years and 3 months
2 months
6 months
Leanne Graham
Executive Chairperson (resigned 19 March 2021)
The Board currently consists of one Executive and three Non-Executive Directors.
Health House International Limited has adopted a definition of 'independence' for Directors that is
consistent with the Recommendations. Mr Chris Mews and Hon Michael Rann are considered to be
independent directors.
Board Selection Process
The Board considers that a diverse range of skills, backgrounds, knowledge and experience is required in
order to effectively govern Health House International Limited. The Board believes that orderly succession
and renewal contributes to strong corporate governance and is achieved by careful planning and continual
review.
The Board is responsible for the nomination and selection of directors. The Board reviews the size and
composition of the Board regularly and at least once a year as part of the Board evaluation process.
The Group does not have an established board skills matrix on the mix of skills and diversity for Board
membership. The Board continues to monitor the mix of skills and diversity on the Board however, due to
the size of the Group, the Board does not consider it appropriate at this time to formally set matrix on the
mix of skills and diversity for Board membership
The Group does not have an established board skills matrix on the mix of skills and diversity for Board
membership. The Board continues to monitor the mix of skills and diversity on the Board however, due to
the size of the Group, the Board does not consider it appropriate at this time to formally set matrix on the
mix of skills and diversity for Board membership.
The Charter of the Remuneration and Nomination Committee can be found on the Company’s website at
www.healthhouse.com.au
Induction of New Directors and Ongoing Development
New Directors are issued with a formal Letter of Appointment that sets out the key terms and conditions
of their appointment, including Director's duties, rights and responsibilities, the time commitment
envisaged, and the Board's expectations regarding involvement with any Committee work.
An induction program is in place and new Directors are encouraged to engage in professional development
activities to develop and maintain the skills and knowledge needed to perform their role as Directors
effectively.
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Annual Report 2021
Health House International Limited (formally VPCL Limited)
Principle 3: Instil a culture of acting lawfully, ethically and responsibly
The Company’s values can be found on the Company’s website at www.healthhouse.com.au.
The Company has implemented a Code of Conduct, which provides guidelines aimed at maintaining high
ethical standards, corporate behaviour and accountability within the Company.
All employees and Directors are expected to:
•
respect the law and act in accordance with it;
• maintain high levels of professional conduct;
•
•
•
•
respect confidentiality and not misuse Company information, assets or facilities;
avoid real or perceived conflicts of interest;
act in the best interests of shareholders;
by their actions contribute to the Company’s reputation as a good corporate citizen which seeks the
respect of the community and environment in which it operates;
perform their duties in ways that minimise environmental impacts and maximise workplace safety;
exercise fairness, courtesy, respect, consideration and sensitivity in all dealings within their workplace
and with customers, suppliers and the public generally; and
act with honesty, integrity, decency and responsibility at all times.
•
•
•
An employee that breaches the Code of Conduct may face disciplinary action including, in the cases of
serious breaches, dismissal. If an employee suspects that a breach of the Code of Conduct has occurred or
will occur, he or she must report that breach to the Company Secretary. No employee will be disadvantaged
or prejudiced if he or she reports in good faith a suspected breach. All reports will be acted upon and kept
confidential.
The Company has adopted a Whistleblower Protection Policy and an Anti-Bribery and Corruption Policy,
both of which can be found on the Company’s website at www.healthhouse.com.au. The Board is informed
of any material incidents under both policies.
Principle 4: Safeguard the integrity of corporate reports
The Board as a whole fulfils the functions normally delegated to the Audit Committee as detailed in the
Audit Committee Charter.
The Board is responsible for the initial appointment of the external auditor and the appointment of a new
external auditor when any vacancy arises. Candidates for the position of external auditor must
demonstrate complete independence from the Company through the engagement period. The Board may
otherwise select an external auditor based on criteria relevant to the Company’s business and
circumstances. The performance of the external auditor is reviewed on an annual basis by the Board.
The Board receives regular reports from management and from external auditors. It also meets with the
external auditors as and when required.
The external auditors attend Health House International' AGM and are available to answer questions from
security holders relevant to the audit.
Prior approval of the Board must be gained for non-audit work to be performed by the external auditor.
There are qualitative limits on this non-audit work to ensure that the independence of the auditor is
maintained.
There is also a requirement that the audit partner responsible for the audit not perform in that role for
more than five years.
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Annual Report 2021
Health House International Limited (formally VPCL Limited)
CEO and CFO Certifications
The Board, before it approves the entity’s financial statements for a financial period, receives from its CEO
and CFO (or, if none, the persons fulfilling those functions) a declaration provided in accordance with
Section 295A of the Corporations Act that, in their opinion, the financial records of the entity have been
properly maintained and that the financial statements comply with the appropriate accounting standards
and give a true and fair view of the financial position and performance of the entity and that the opinion
has been formed on the basis of a sound system of risk management and internal control which is operating
effectively.
Principle 5: Make timely and balanced disclosure
The Company has a Continuous Disclosure Policy which outlines the disclosure obligations of the Company
as required under the ASX Listing Rules and Corporations Act. The policy is designed to ensure that
procedures are in place so that the market is properly informed of matters which may have a material
impact on the price at which Company securities are traded.
The Board considers whether there are any matters requiring disclosure in respect of each and every item
of business that it considers in its meetings. Individual Directors are required to make such a consideration
when they become aware of any information in the course of their duties as a Director of the Company.
The Company is committed to ensuring all investors have equal and timely access to material information
concerning the Company.
The Board has designated the Company Secretary as the person responsible for communicating with the
ASX. The Chairman, Chief Executive Officer and the Company Secretary are responsible for ensuring that:
a) Company announcements are made in a timely manner, that announcements are factual and do not
omit any material information required to be disclosed under the ASX Listing Rules and Corporations
Act; and
b) Company announcements are expressed in a clear and objective manner that allows investors to assess
the impact of the information when making investment decisions.
Principle 6: Respect the rights of security holders
The Company recognises the value of providing current and relevant information to its shareholders.
The Company respects the rights of its shareholders and to facilitate the effective exercise of those rights
the Company is committed to:
•
communicating effectively with shareholders through releases to the market via ASX, the company
website, information mailed to shareholders and the general meetings of the Company;
giving shareholders ready access to clear and understandable information about the Company; and
•
• making it easy for shareholders to participate in general meetings of the Company.
The Company also makes available a telephone number and email address for shareholders to make
enquiries of the Company. These contact details are available on the “contact us” page of the Company’s
website.
Shareholders may elect to, and are encouraged to, receive communications from Health House
International and Health House International' securities registry electronically.
The Company maintains information in relation to its Constitution, governance documents, Directors and
senior executives, Board and committee charters, annual reports and ASX announcements on the
Company’s website.
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Annual Report 2021
Health House International Limited (formally VPCL Limited)
The Company ensures that all resolutions at a meeting of shareholders are decided by a poll rather than by
a show of hands.
Principle 7: Recognise and manage risk
The Board is committed to the identification, assessment and management of risk throughout Health House
International' business activities.
The Board is responsible for the oversight of the Company’s risk management and internal compliance and
control framework. The Company does not have an internal audit function. Responsibility for control and
risk management is delegated to the appropriate level of management within the Company with the Chief
Executive Officer having ultimate responsibility to the Board for the risk management and internal
compliance and control framework. Health House International has established policies for the oversight
and management of material business risks.
Health House International' Risk Management and Internal Compliance and Control Policy recognises that
risk management is an essential element of good corporate governance and fundamental in achieving its
strategic and operational objectives. Risk management improves decision making, defines opportunities
and mitigates material events that may impact security holder value.
Health House International believes that explicit and effective risk management is a source of insight and
competitive advantage. To this end, Health House International is committed to the ongoing development
of a strategic and consistent enterprise wide risk management program, underpinned by a risk conscious
culture.
Health House International accepts that risk is a part of doing business. Therefore, the Company’s Risk
Management and Internal Compliance and Control Policy is not designed to promote risk avoidance. Rather
Health House International' approach is to create a risk conscious culture that encourages the systematic
identification, management and control of risks whilst ensuring we do not enter into unnecessary risks or
enter into risks unknowingly.
Health House International assesses its risks on a residual basis; that is it evaluates the level of risk
remaining and considering all the mitigation practices and controls. Depending on the materiality of the
risks, Health House International applies varying levels of management plans.
The Board has required management to design and implement a risk management and internal compliance
and control system to manage Health House International’ material business risks. It receives regular
reports on specific business areas where there may exist significant business risk or exposure. The Company
faces risks inherent to its business, including economic risks, which may materially impact the Company’s
ability to create or preserve value for security holders over the short, medium or long term.
The Company has in place policies and procedures, including a risk management framework (as described
in the Company’s Risk Management and Internal Compliance and Control Policy), which is developed and
updated to help manage these risks. The Board does not consider that the Company currently has any
material exposure to environmental or social sustainability risks.
The Company’s process of risk management and internal compliance and control includes:
•
identifying and measuring risks that might impact upon the achievement of the Company’s goals and
objectives, and monitoring the environment for emerging factors and trends that affect those risks.
formulating risk management strategies to manage identified risks, and designing and implementing
appropriate risk management policies and internal controls.
•
• monitoring the performance of, and improving the effectiveness of, risk management systems and
internal compliance and controls, including regular assessment of the effectiveness of risk
management and internal compliance and control.
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Annual Report 2021
Health House International Limited (formally VPCL Limited)
The Board review’s the Company’s risk management framework at least annually to ensure that it continues
to effectively manage risk.
Management reports to the Board as to the effectiveness of Health House International’ management of
its material business risks on at each Board meeting.
Principle 8: Remunerate fairly and responsibly
The Board as a whole fulfils the functions normally delegated to the Remuneration Committee as detailed
in the Remuneration Committee Charter.
Health House International has implemented a Remuneration Policy which was designed to recognise the
competitive environment within which Health House International operates and also emphasise the
requirement to attract and retain high calibre talent in order to achieve sustained improvement in Health
House Internationals’ performance. The overriding objective of the Remuneration Policy is to ensure that
an individual’s remuneration package accurately reflects their experience, level of responsibility, individual
performance and the performance of Health House International.
The key principles are to:
•
•
link executive reward with strategic goals and sustainable performance of Health House International;
apply challenging corporate and individual key performance indicators that focus on both short-term
and long-term outcomes;
• motivate and recognise superior performers with fair, consistent and competitive rewards;
•
•
•
remunerate fairly and competitively in order to attract and retain top talent;
recognise capabilities and promote opportunities for career and professional development; and
through employee ownership of Health House International shares, foster a partnership between
employees and other security holders.
The Board determines the Company’s remuneration policies and practices and assesses the necessary and
desirable competencies of Board members. The Board is responsible for evaluating Board performance,
reviewing Board and management succession plans and determines remuneration packages for the
Executive Director, Non-Executive Directors and senior management based on an annual review.
Health House Internationals’ executive remuneration policies and structures and details of remuneration
paid to directors and senior managers (where appointed) are set out in the Remuneration Report.
Non-Executive Directors receive fees (including statutory superannuation where applicable) for their
services, the reimbursement of reasonable expenses and, in certain circumstances options. They do not
receive any termination or retirement benefits, other than statutory superannuation.
The maximum aggregate remuneration approved by shareholders for Non-Executive Directors is $500,000
per annum. The Directors set the individual Non-Executive Directors fees within the limit approved by
shareholders. The total fees paid to Non-Executive Directors during the reporting period were $246,000.
Executive directors and other senior executives (where appointed) are remunerated using combinations of
fixed and performance-based remuneration. Fees and salaries are set at levels reflecting market rates and
performance-based remuneration is linked directly to specific performance targets that are aligned to both
short and long term objectives.
In accordance with the Company’s Securities Trading Policy, participants in an equity based incentive
scheme are prohibited from entering into any transaction that would have the effect of hedging or
otherwise transferring the risk of any fluctuation in the value of any unvested entitlement in the Company’s
securities to any other person.
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Annual Report 2021
Health House International Limited (formally VPCL Limited)
Further details in relation to the Company’s remuneration policies are contained in the Remuneration
Report, within the Directors’ Report. The Charter of the Remuneration and Nomination Committee can be
found on the Company’s website at www.healthhouse.com.au.
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Annual Report 2021
Health House International Limited (formally VPCL Limited)
ASX ADDITIONAL INFORMATION
Additional information as required by the ASX Limited Listing Rules and not disclosed
elsewhere in this report is set out below. This information is current as at 21 September 2021
Distribution of equity security holders (number of holders)
Ordinary Shares
Performance Shares – Class A
Performance Shares – Class B
Performance Shares – Class C
–
1
1,000
401
-
-
-
–
1,001 –
5,000
415
-
-
-
5,001
10,000
219
-
-
-
–
10,001
100,000
510
9
14
-
100,001
and over
225
15
10
4
Total
1,771
24
24
4
There are 791 holders of shares holding less than a marketable parcel.
Quoted equity securities as at 21 September 2021
Equity Security
Ordinary Shares
Quoted
177,324,622
Voting rights
Ordinary shares carry one vote per share. There are no voting rights attached to the
options in the Company.
Unquoted Securities as at 21 September 2021
The number of unquoted securities on issue as at 21 September 2021:
Unquoted Securities
Performance Shares – Class A1
Number on Issue
12,300,000
Performance Shares – Class B2
12,300,000
Performance Shares – Class C3
12,300,000
Vesting conditions
Converted into shares subject to CanPharma achieving
cumulative revenues of €5,000,000 over 24 months
from the date of Completion
Converted into shares subject to CanPharma achieving
cumulative revenues of €10,000,000 over 24 months
from the date of Completion
Converted into shares subject to CanPharma achieving
cumulative revenues of €15,000,000 over 24 months
from the date of Completion
Persons holding more than 20% of a given class of unquoted securities as at 21 September 2021:
1. 32% held by Henrik Sprengel
2. 35% held by Henrik Sprengel, 24% held by David Attwood
3. 39% held by Henrik Sprengel, 39% held by David Attwood
Restricted equity securities as at 21 September 2021
The Company has the follow securities under ASX restricted escrow:
• 5,740,255 Fully paid ordinary shares escrowed until 9 October 2021
• 69,967,855 Fully paid ordinary shares escrowed until 19 March 2022;
• 5,562,900 Fully paid ordinary shares escrowed until 10 August 2022
• 24,007,838 Fully paid ordinary shares escrowed until 16 April 2023
• 12,887,100 Fully paid ordinary shares escrowed until 24 April 2023
• 4,850,160 Class A Performance Shares escrowed until 10 August 2022
• 7,449,840 Class A Performance Shares escrowed until 24 April 2023
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Annual Report 2021
Health House International Limited (formally VPCL Limited)
• 2,425,080 Class B Performance Shares escrowed until 10 August 2022
• 9,874,920 Class B Performance Shares escrowed until 24 April 2023
• 12,300,000 Class C Performance Shares escrowed until 24 April 2023
Substantial shareholders as at 21 September 2021
The Company has been notified of the following substantial shareholdings:
Mr Jason Peterson
New Frontier Pty Ltd
Gemelli Nominees Pty Ltd
Twenty largest holders of quoted shares as at 21 September 2021
Name
1 CITYSCAPE ASSET PTY LTD
2 NEW FRONTIER PTY LTD
3 GEMELLI NOMINEES PTY LTD
4 HENRIK SPRENGEL
5
PATHWAYS CORP INVESTMENTS PTY LTD
6 THE TRUST COMPANY (AUSTRALIA) LIMITED
7 PEKSE PTY LTD
8 KERYN LEE REYNOLDS
8 DOZEMEI PTY LTD
8 GOLDNEY PTY LTD
8 MR JOHN MURPHY
8 TISIA NOMINEES PTY LTD
13 STEFAN JACKER
14 SILVER BIRCH CAPITAL CORPORATION
15 HOLGER SPRENGEL
16 THE TRUST COMPANY (AUSTRALIA) LIMITED
17 DAVID ATTWOOD
18 KURT SPRENGEL
18 MR JOSHUA MURPHY
20 MR JACOB KAI MURPHY
TOTAL
Stock Exchange
17,336,651
11,161,239
10,558,085
No. of Shares %
13,459,365 7.59
11,161,239 6.29
10,558,085 5.95
5,816,250 3.28
4,885,929 2.76
4,000,000 2.26
2,663,032 1.50
2,663,032 1.50
2,500,000 1.41
2,141,622 1.21
2,000,000 1.13
1,901,754 1.07
1,797,030 1.01
1,762,301 0.99
1,712,340 0.97
1,650,000 0.93
1,608,660 0.91
1,502,820 0.85
1,500,000 0.85
1,500,000 0.85
76,783,459
43
The Company is listed on the Australian Securities Exchange and has been allocated the code
“HHI”. The “Home Exchange” is Perth.
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Annual Report 2021
Health House International Limited (formally VPCL Limited)
Other information
Health House International Limited, is incorporated and domiciled in Australia, and is a
publicly listed company limited by shares.
On-market buy-back
There is no current on-market buy-back.
- 80 -