HOLISTA
COLLTECH
ANNUAL REPORT
FOR THE YEAR ENDED 30 JUNE 2015
For personal use only ANNUAL REPORT
1
Corporate Information
About us
Chairman’s Report
Business Segment
Directors’ Reports
Corporate Governance Statement
Auditor’s Independence Declaration
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
ASX Additional Information
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CONTENT
For personal use only HOLISTA
COLLTECH
2
CORPORATE INFORMATION
ABN 24 094 515 992
Directors
Dato' Dr Rajen Manicka, Managing Director and Chief Executive Officer
Mr Daniel Joseph O’Connor, Non Executive Director
Mr Chan Heng Fai, Non Executive Director
Mr Kong Hon Khien
Company secretary
Mr Jay Stephenson
Holista CollTech Limited
ABN 24 094 515 992
Suite 12, Level 1, 11 Ventnor Avenue, West Perth, WA 6005
Telephone: (+618) 6141 3500
Facsimile: (+618) 6141 3599
Share register
Computershare Investor Services Pty Ltd
Level 11, 172 St Georges Terrace, Perth WA 6000
Telephone: (+618) 9323 2000
Facsimile: (+618) 9323 2033
Bankers
National Australia Bank
100 St Georges Terrace, Perth WA 6000
Auditors
Stantons International Audit and Consulting Pty Ltd
Level 2, 1 Walker Avenue West Perth WA 6005
Stock Exchange
Australian Securities Exchange (ASX)
ASX Code: HCT
For personal use only ANNUAL REPORT
3
ABOUT US
“We all strive to be healthy. Yet sometimes things are beyond our control.
For the things that are, there’s Holista Colltech. We have devoted all our
After all, being healthy is the best gift you can give to your body.”
Corporate Profile
Holista CollTech Ltd (“Holista”) is a research-driven biotech company and is the result of the
merger of Holista Biotech Sdn. Bhd. and CollTech Australia Ltd. Headquartered in Malaysia,
in research on herbs and food ingredients from Malaysia’s rainforest – the oldest in the world.
Holista researches, develops, manufactures and markets “health-style” products to address the
unmet and growing needs of natural medicine. It is the only company to produce sheep (ovine)
collagen using patented extraction methods, and is on track in nano-nising and encapsulating
liposomes for the ovine collagen.
enhanced, engineered and tested natural health supplements and consumer products.
For personal use only HOLISTA
COLLTECH
4
CHAIRMAN’S REPORT
Dear Shareholders,
30 June 2015 (“FY2015”).
in which our dietary supplements are sold) against the Australian dollar (our reporting currency). There was also some negative
foreign exchange impact from the stronger U.S. dollar, the currency in which one of our subsidiaries operates.
A major reason for the turnaround was the completion of major research and development (“R&D”) to improve our product line,
Fat. These ingredients are a major focus for fast food chains and food manufacturers, which are working to address the global
epidemic of obesity, diabetes and cardiovascular disease.
Having achieved our R&D goals, our focus going forward is to enhance future growth and shareholder value by expanding our
three core business pillars, forging strategic partnerships to widen our distribution channels, and moving up the value chain,
including quality assurance.
Business Review
The turnaround of our bottom-line was achieved on a 9% increase in turnover to A$6.79 million in FY2015 from A$6.23 million in
FY2014, mainly from sales of dietary supplements in Malaysia and of cosmetic grade sheep collagen, Ovicoll. Sales of the latter
have risen over the last three years, and reached A$187,715 in FY2015.
in the United States, a market with vast potential due to its many global fast food and processed food brands. We are actively
engaging with these players and promoting our proprietary Low Sodium Salt, Low Calorie Sugar, Low Glycemic Index (“GI”) and
Low Fat Chip.
Sales of Supplements
Malaysian sales of dietary supplements remain our largest revenue contributor. In FY2015, we secured exclusive rights to distribute
PRISTIN MOPL®, Norwegian herring caviar oil and the “third generation” extension of PRISTIN, our in-house brand which
leadership, and we are working to secure regulatory approval for the product beyond Malaysia.
We also secured distribution rights in Asia for EMULIN™, a patented natural plant-based compound to reduce blood sugar
directly on the skin to produce a “botox-like” effect, without needle injection. This technology involves tiny water- and fat-soluble
liposomes that penetrate the skin. The liposomes transport and reduce the toxicity of anti-ageing active ingredients which, after
our proprietary sheep collagen for cosmetic application on the skin, without the need for injections.
Food-grade Collagen
and Malaysia in FY2015, marking our brand’s entry into the global food grade collagen market. We believe it will be a new and
For personal use only
CHAIRMAN’S REPORT
ANNUAL REPORT
5
Developed from sheep skin – the consumption of which
is free of religious or cultural issues associated with pig
and cow sources – sourced from Australia (the only nation
TM
We intend to commence full commercial shipments of
food-grade sheep collagen in FY2016, which are expected
to record higher revenues compared to cosmetic collagen
in the near future. The daily dose of food-grade collagen is
150 grams a month, which is 150 times more than the single
gram recommended for cosmetic application.
We are targeting direct marketing companies, amongst
other sales and distribution channels, to launch our food-
grade collagen. Towards this end, the Group intends to
commission new equipment at its plant in Collie, Australia,
Healthy Food Ingredients
Having completed major R&D, our newly incorporated
U.S. subsidiary Litefood Inc. (“Litefood”) has commenced
active discussions in the country to commercialise our Low
Sodium Salt, Low Calorie Sugar, Low Glycemic Index (“GI”)
and Low Fat Chip.
I am also pleased to report that we have begun selling our
Low Sodium Salt and Low Calorie Sugar, albeit at a lower
scale, through a Malaysian subsidiary. We will focus on the
Business-to-Business (B2B) market to sell the ingredients,
as this model seems more appropriate than the Business-
to-Consumer (B2C) model, which will require substantial
capital.
Apart from discussions with fast food companies in the
of Sydney for a potential European customer, with results
expected in September 2015. Large-scale commercial
testing of the Low Fat Chip will begin in Europe in the last
quarter of FY2016.
Strategic Partnerships
During the year under review, we forged a strategic
partnership with U.S.-based multi-level marketing company
iGalen Pte Ltd (iGalen), which sells products that naturally
including Emulin and Ovinex, to a wide-ranging network
that includes the ASEAN countries and Australia.
Holista has been building international partnerships in
order to market key products and access biopharmaceutical
product patents and intellectual properties worldwide. We
expect sales to grow as we widen our distribution network
and increase our suite of products.
Quality Assurance
As part of our efforts to constantly move up the value chain,
Holista has spearheaded the launch of an anti-counterfeiting
security authentication pioneered by Sekuworks LLC
(“Sekuworks”). Sekuworks is an established security printer
and technology integrator that provides brand protection
and other anti-counterfeiting solutions, including currency-
printing technology.
Our premium PRISTIN MOPL® is now tagged with
to prevent
Sekuworks’ QR
track-and-trace system
secured at the highest level.
Outlook
Holista completed the bulk of our R&D during the year under
review, at a time when we also expanded our distribution
network and moved up the value chain. We expect to
drive future growth by introducing more new products –
especially cosmetic and food-grade sheep collagen, as well
as healthy food ingredients – to bigger markets.
FY2015, as well as our R&D efforts, have laid a strong
foundation that positions us as a world-class manufacturer
of proprietary food ingredients.
Appreciation
On behalf of the Board, I would like to personally thank our
period. I would also like to express my appreciation for our
R&D collaborators, retailers, suppliers and customers.
Most of all, I would like to convey my gratitude to my fellow
directors – past and present – for guiding the company
and charting our course, as well as my colleagues for their
continuous support and dedication.
In closing, allow me to reiterate Holista’s commitment to
adding value for our shareholders. I look forward to another
exciting year ahead with all of you.
- Dato’ Dr. Rajen Manicka
Chairman
For personal use only
HOLISTA
COLLTECH
BUSINESS SEGMENT
COSMETIC GRADE COLLAGEN
6
Holista CollTech is proud to be the world’s only ovine (sheep) collagen provider.
Sheep collagen is the future of collagen-based products. Our mammalian-sourced, sheepskin-based collagen uses sheep from
Australia, the only nation in the world to have disease-free sheep. It can be consumed without cultural, religious or health concerns,
toxic heavy metal poisoning.
Comparison of Collagen Sources
Human Body Temperature (37 C)
l
d
e
d
o
o
B
m
r
a
W
Mammal - Warm Blooded
• Genetically closest
• Better fit with human make-up
• Traceable
• No odour
• High thermal stability
• Larger yield
• Most researched
• Less lost in process
l
d
e
d
o
o
B
d
o
C
l
Fish (Marine)-Cold Blooded
• Contaminated with ocean toxins
• Low thermal stability
• Fish is becoming scarce
• Seldom traceable
• Emits odour
Closest
to human
In April 2015, Holista CollTech secured exclusive distribution rights for Geltox Skin Science, a
skin formulation that can be applied directly to the skin to produce a “botox-like” effect. This
technology involves tiny water- and fat-soluble liposomes that penetrate the skin. The liposomes
transport and reduce the toxicity of anti-ageing active ingredients which, after penetration,
technology to develop our proprietary sheep collagen for cosmetic application on the skin,
without the need for injections.
For personal use only
ANNUAL REPORT
BUSINESS SEGMENT (continued)
FOOD GRADE COLLAGEN
7
plant in Collie. OVINEX™ is the result of three years of research and development in Australia, the U.S. and Malaysia, and marks
As the solution to bone density problems, stiff joints, and skin woes, OVINEX™ can be consumed and included in drinks,
confectionery products, energy bars, yogurts and juices.
For personal use only HOLISTA
COLLTECH
BUSINESS SEGMENT (continued)
8
FUNCTIONAL FOOD INGREDIENTS
The basic building blocks of all food products, dubbed the 4-S Tsunami, are Salt, Sugar, Starch and Saturated Fat. These ingredients
are a major focus for fast food chains and food manufacturers, which are working to address the global epidemic of obesity,
diabetes and cardiovascular disease.
Our U.S.-incorporated subsidiary, LiteFoods,Inc., a specialty food ingredient company with research and development facilities in
Australia and Malaysia, concentrates on taking the guilt out of ‘guilty pleasures’ like fries, bread, sugar and salt.
LiteFoods’ proprietary Low Sodium Salt, Low Calorie Sugar, Low Glycemic Index (“GI”) and Low Fat Chip aim to create a healthier
eating experience.
Low Sodium Salt (LITESALTTM)
LITESALT reduces sodium levels in salt by 25% to 40%, significantly lowering the risk of blood pressure and heart disease. Our
reduced sodium salt product replaces sodium with a proprietary potassium blend without an unpleasant metallic taste, and works
equally well in water- and oil-based foods.
Low Fat Chip (NeusoliteTM)
NeusoliteTM combines FDA-compliant natural ingredients in our patent-pending two-stage wash system, which dramatically reduc-
es the amount of oil and saturated fat in deep-fried products such as chips. The final product reduces calories by up to 40%,
creating crispier and healthier fried food.
Low GI Bread (Gi LITETM)
Gi LITETM is a proprietary blend of ingredients based on two common Asian foods, okra (ladies finger) and the Indian mung beans,
used in very low concentration. They are added to the manufacturing process to create wholesome breads, buns and pizzas
without compromising taste. It reduces the glycemic index in bread by up to 40%, effectively delivering a low Gi ‘wholemeal bread’
with the look, taste and texture of white bread.
Low Calorie Sugar (ZEROVIATM, 80LESSTM)
ZEROVIATM is a zero-calorie sugar substitute that can be used for virtually any application (except as a bulking agent) with no
aftertaste. It can be used in cooking: a single teaspoon of ZEROVIATM is the equivalent of two teaspoons of sugar, with none of the
calories.
80LessTM – 80LESS is five times sweeter than sugar with 80% fewer calories. It is specifically designed and processed for use with
liquid and dry mix applications.
For personal use only ANNUAL REPORT
BUSINESS SEGMENT (continued)
9
DIETARY SUPPLEMENTS
The Supplements business segment of Holista CollTech forms our largest revenue stream, with a strong distribution network
throughout Malaysia. We market and sell 23 different proprietary supplements through our two wholly owned subsidiaries, with
new products in the pipeline.
These products include PRISTIN, our in-house brand which has dominated Malaysia’s Omega 3 supplements market for six
consecutive years; LACTO-5, probiotics to aid digestion; and MOO, a calcium and mineral extract from milk.
PRISTIN MOPL
During the year, we secured exclusive ASEAN distribution rights for PRISTIN MOPL®, an extension of our PRISTIN brand. This
“third-generation” Omega 3 supplement is sourced from premium Norwegian herring caviar, and is clinically proven to have a
While Omega 3 improves cognitive performance and prevents heart disease, it is not naturally produced by the human body
and must be absorbed from one’s diet. The body can only absorb about 15% of the Omega 3 contained in traditional (second-
PRISTIN MOPL®
incorporates phospholipids that surround the human cell. Aside from human breast milk, Omega 3 phospholipids
stable, preventing rancidity and gastric discomfort. Aside from boosting cognitive performance and preventing the risk of heart
.niks dna sgnul ,syendik ,revil ,traeh eht fo ytilanoitcnuf llarevo eht evorpmi nac sdipilohpsohp fo seititnauq hgih gnitsegni ,esaesid
Our premium PRISTIN MOPL is also tagged with Sekuworks LLC’s ( “Sekuworks”) QR track-and-trace system to prevent
®
and technology integrator that provides higher security brand protection and other anti-counterfeiting solutions, including
currency-printing technology.
For personal use only HOLISTA
COLLTECH
10
DIRECTORS’ REPORT
Dietary Supplements
This remains as the Group’s main income contributor during the year. Its revenue continues to grow despite challenging market
condition faced by its subsidiaries in Malaysia. Market conditions in Malaysia have changed during the past 12 months mainly
recently, the introduction of Goods and Service Tax (GST) by the Government of Malaysia. However, customers remain loyal to
the Company’s dietary supplements despite a growing number of competitors in not only the intense pharmacy business but also
with the Multi Level Marketing.
(5) new products in Malaysia to cater to market demand and to increase its market presence in the dietary supplement market.
Furthermore, the company has also generated new source of revenue by supplying raw materials to Multi-Level Marketing
companies. The Group will continue to source new potential products for the coming year.
Prudent cost management in this dietary supplement business in Malaysia has resulted in cost reduction from $3,587,119 to
$3,403,458 (5.1%) in the same time frame.
Sheep Collagen (Ovine)
as compared to 2,095kg in the previous reporting period.
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ANNUAL REPORT
DIRECTORS’ REPORT (continued)
11
and development of its food grade collagen formulation focusing on yield and quality. The Company has managed to produce
of this new range of product to support its existing cosmetic grade collagen. The potential of the food grade collagen is huge as
it is the only mammalian collagen in the market which is neutral to all religious groups and cultures. This is also an appeal of being
“Australian sourced” and “disease free”.
The company is also working with a European research &
development partner to develop variants of highly absorbed
collagen for food and cosmetic applications.
Healthy Food Ingredients
The Group’s key focuses are:-
• Low Sodium Salt
• Low Fat Chip
• Low Glycemic Index (“GI”)
• Low Calorie Sugar
During the year, Litefood Inc. (“Litefood”) which was incorporated in the United States of America (“USA”) continues to focus
on the commercialisation of this new market segment. The USA are well known to be the home of large fast food chains and by
being close to the market will present opportunities for the Group to generate income from this area in the near future. (www.
litefoodsinc.com).
The Group has begun to sell its Low Sodium Salt and Low Calorie Sugar albeit in lower scale through one of its subsidiaries in
Malaysia. The demand has been quite encouraging but has been quite limited as it is a Business to Consumer (B2C) market which
requires huge capital to promote. The Group believes that Business to Business (B2B) will be the most appropriate method to
the University of Sydney.
In the USA, it is working with several fast food companies.
Operating results for the year
The Group has recorded a 9% increase in revenue from $6,227,814 to $6,788,953 mainly from the Dietary Supplements and Sheep
Dollar against the Australian Dollar and Malaysia Ringgit. The Group’s investment in LiteFood to commercialise its Healthy Food
Ingredient business has also prevented the Group from recording better results.
For the past three (3) years, revenue generated from our cosmetic grade sheep collagen has been growing consistently with sales
despite the declining trend of animal based cosmetic products around the world.
Operating results for the year
The Group has recorded a 9% increase in revenue from $6,227,814 to $6,788,953 mainly from the Dietary Supplements and
of the US Dollar against the Australian Dollar and Malaysia Ringgit. The Group’s investment in LiteFood to commercialise its
Healthy Food Ingredient business has also prevented the Group from recording better results.
For the past three (3) years, revenue generated from our cosmetic grade sheep collagen has been growing consistently with sales
For personal use only
HOLISTA
COLLTECH
DIRECTORS’ REPORT (continued)
12
The Group believes that it’s yet to be launched food grade collagen is expected to contribute better revenue compared to its
become obvious:
Free of cultural and religious issues (compared to pig and cow sources)
free
-
-
-
Based on the above, the Group is optimistic that its new Food Grade Collagen will be ready for commercialisation in the near
the recommended minimum dosage for food grade collagen is 5gm a day (equivalent to 150gm a month). Comparing this
against 1gm of cosmetic collagen per bottle, Food Grade Collagen is expected to provide the Group with a much higher
return in the future.
launch of more exciting new supplements in the market. The positive development in both the Healthy Food Ingredients in
Financial Position
The Group’s net assets increased during the year by $761,812 to $2,291,204 with revenue being the principal contributor to the
funding of the Company’s operations for the year.
than disclosed elsewhere in this Annual Report.
Dividends
Likely developments and expected results
expected results of those operations is likely to result in unreasonable prejudice to the Group. Therefore, this information has
not been presented in this report.
Environmental legislation
Holista CollTech Limited has operated under environmental licence 7998/1 issued by the Western Australian Department
of Environment as prescribed under the Environmental Protection Act 1986. The licence relates to collagen extraction and
Risk Management
The Group takes risk management seriously and has put in place the following procedures:
Oversight: An Audit Committee has been established to direct, review and initiates corrective action in matters of internal
control and minimise risk exposures compatible with a group company of this size and nature.
been categorised according to which part or parts of the business would be effected, what controls might be put in place and
whether the resulting levels of exposure are acceptable.
For personal use only ANNUAL REPORT
DIRECTORS’ REPORT (continued)
13
Risk Management: The Group has taken decisions as to how it should manage the various categories of risk exposure
and they include the imposition of Standard Operating Procedures (SOP’s) for routine business transactions; mitigation policies
to lessen or obviate risks such as Insurance Policies and formal long term Agreements with critical suppliers; and hedging
arrangements if applicable.
Compliance and Control: Standard Operating Procedures have been drawn up, circulated and regularly monitored to ensure
adherence to company policy. They include the various cash, purchasing, sales, and payment cycles, and payroll. Levels of
Authority have been set, divisions of duty are made and multiple signature approvals imposed. Regular checks are made by
management to ensure that these controls are indeed in place and complied with.
and in conjunction with the Audit Committee and External Auditors, instructs improvements to be put in place.
Information on Directors
Dato’ Dr Rajen Manicka - Managing Director
Dato’ Dr Rajen, B Ph.(Hons) began his career as an intern pharmacist at the Kuala Lumpur General Hospital from 1986 - 1987.
In 1987 he joined Lee Pharmacy as a community Pharmacist. Over a period of 9 years, Dr Rajen worked for several reputable
pharmaceutical companies including Roche and CIBA Pharmaceuticals in various capacities including medical representative,
product manager and marketing manager. In 1995, he incorporated Total Health Concept, which was restructured into Holista
Biotech Sdn Bhd in January 2004 and has been Managing Director and major shareholder from inception of this group until
Dato’ Dr Rajen has been a guest lecturer in alternative medicine at the University of Malaysia, the National University of
Malaysia and the International Medical University in Malaysia. He was also a health columnist for the Sunday Times- Malaysia’s
second largest Sunday newspaper and writes a monthly column on biotech and business for The Edge, Malaysia’s largest
business weekly.
Dato’ Dr Rajen is a member of the Malaysian Ministry of Health Standing Committee for Traditional Medicine and until
March 2009 was on the board of Malaysian Herbal Corporation Sdn Bhd, a wholly owned subsidiary of the Malaysian Industry -
Government Group for High Technology.
Dato Dr Rajen holds no other current directorships in listed companies and has no former directorships in listed companies in
the last three years.
Mr Daniel Joseph O’Connor – Non Executive Director
Mr O’Connor has over 20 years in professional practice with a specialisation in Intellectual Property Commercialisation. He is
the Consultant Principal and major shareholder of Xenex Consulting and the Keys2Growth program, and has helped numerous
companies expand their international trading boundaries through planning, funding, and strategy.
Mr O’Connor holds a Bachelor of Business in marketing and a Master of Business Administration specialising in International
Business. He has commenced a doctoral degree in International Business, focused on the commercialisation of intellectual
is a member of the United Nations Subcomittee on Innovation and
Mr O’Connor holds no other current directorships in listed companies and has had no former directorships in listed companies
in the last three years.
For personal use only HOLISTA
COLLTECH
DIRECTORS’ REPORT (continued)
14
Mr Chan Heng Fai – Non Executive Director
Mr Chan Heng Fai has restructured over 35 companies in different industries and countries in the past 40 years.
high asset quality bank, with zero loan losses for over 5 consecutive years before it was ultimately bought and merged into
the Seattle Times “Annual Northwest’s Top 100 Public Companies” for the year 2003, and ranked #6 in the Oregon state [for
the year 2003], which ranked ahead of names such as Nike, Microsoft, Costco, AT&T Wireless and Amazon.com.
In 1997, Mr Chan Heng Fai acquired and ran a regional investment banking and securities broking-dealing business
Mr Kong Hon Khien
Kong Hon Khien is a Member of the Malaysia Institute of Accountants (MIA) and an Associate Member of the Chartered Institute
of Management Accountants (CIMA). He has more than 20 years of working experience from various industries ranging from
2 public companies listed on the Main Board of Bursa Malaysia prior to joining Holista CollTech Ltd.
Company Secretary
Mr Jay Stephenson
Chartered Institute of Secretaries.
Mr Stephenson has over 21 years of business development including approximately 20 years as Director, Chief Financial
CollTech Limited, Doray Minerals Limited, Drake Resources Limited, Strategic Minerals Corporation NL, Nickelore Limited and
Yonder and Beyond Group Limited as well as acts as Company Secretary for a number of ASX Listed resource and industrial
companies.
Directors’ Meetings
The number of meetings of directors (including meetings of committees of directors) held during the year and the numbers of
meetings attended by each director were as follows:
No of Directors’
Meeting held
No. Of Directors’
Meeting Attended
Dato’ Dr Rajen Manicka
Mr Daniel Joseph O’Connor
Mr Chan Heng Fai
4
4
4
4
4
4
Interests in the shares and options of the company and related bodies corporate
The following relevant interests in shares and options of the company or a related body corporate were held by the directors
as at the date of this report.
For personal use only
ANNUAL REPORT
DIRECTORS’ REPORT (continued)
Directors
Dato’ Dr Rajen Manicka
Mr Chan Heng Fai
15
Number of options over
ordinary shares
Number of fully paid ordinary
shares
-
23,333,333
73,914,400
20,898,268
Mr Chan Heng Fai is the director of Hengfai Business Development Pte Ltd which in addition to the above also currently holds
$500,000 convertible notes in Holista Colltech Ltd.
Options
of an option.
At the date of this report there are 25,333,333 unissued ordinary shares of the Company under option.
Holista CollTech Limited has agreed to indemnify all the directors of the Company for any liabilities to another person (other
than the Company or related body corporate) that may arise from their position as directors of the Company and its controlled
entities, except where the liability arises out of conduct involving a lack of good faith.
permitted by the Corporations Act 2001. (2014: $17,156)
Auditor Independence and Non-Audit Services
Section 307C of the Corporations Act 2001 requires our auditors, Stantons International Audit and Consulting Pty Ltd, to
provide the directors of the Company with an Independence Declaration in relation to the audit of the annual report. This
Independence Declaration is set out on page 31 and forms part of this Directors’ Report for the year ended 30 June 2015.
Non-Audit Services
Remuneration report (Audited)
This report outlines the remuneration arrangements in place for the key management personnel of Holista CollTech Limited
audited as required by Section 308(3C) of the Corporations Act 2001.
persons having authority and responsibility for planning, directing and controlling the major activities of the Group, directly
or indirectly, including any director (whether executive or otherwise) of the Parent Company, and includes the executives in
the Parent and the Group.
Key Management Personnel
(i) Directors
Dato’ Dr Rajen Manicka
Mr Daniel Joseph O’ Connor
Mr Chan Heng Fai
(ii) Executives
Mr Jay Stephenson (Company Secretary)
- Managing Director and
- Non-Executive Director
- Non-Executive Director
For personal use only HOLISTA
COLLTECH
DIRECTORS’ REPORT (continued)
this report.
16
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
The Remuneration Committee of the Board of Directors of the Company is responsible for determining and reviewing
compensation arrangements for the directors, the CEO and the executive team.
The Remuneration Committee assesses the appropriateness of the nature and amount of remuneration of directors and
executives on a periodic basis by reference to relevant employment market conditions with an overall objective of ensuring
Currently the responsibilities of the Remuneration Committee are undertaken by the full Board.
Remuneration structure
In accordance with best practice Corporate Governance, the structure of non-executive director and executive remuneration
is separate and distinct.
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 determined from time
to time by a general meeting. The latest determination was at the Annual General Meeting held on 1 December 2003 when
shareholders approved an aggregate remuneration of $ 200,000 per year.
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.
Each director receives a fee for being a director of the Company. An additional fee is also paid for each Board committee on
which a director sits. The payment of additional fees for serving on a committee recognises the additional time commitment
required by directors who serve on one or more sub committees.
The remuneration of non-executive directors for the year ended 30 June 2015 is detailed in Table 1 of this report.
Senior manager and executive director remuneration
schemes).
Fixed Remuneration
Fixed remuneration is reviewed annually by the Remuneration Committee. The process consists of a review of relevant
comparative remuneration in the market and internally and, where appropriate, external advice on policies and practices. The
Committee has access to external, independent advice where necessary.
be optimal for the recipient without creating undue cost for the Group.
For personal use only ANNUAL REPORT
DIRECTORS’ REPORT (continued)
17
Variable Remuneration
The aggregate of annual payments available for executives across the Group is subject to the approval of the Remuneration
Committee During the year, the Board of Directors approved $28,225 bonus payment to its Malaysia subsidiaries as per their
employment contract. (2014: $11,197)
Employment Contracts
and Managing Director. On the 28 August 2015, the Board of Directors reviewed and renewed the Employment Agreement
of Dato’ Dr Rajen as the Chief Executive Director and Managing Director of the Group. Saved for the changes below, all other
terms and conditions of the original Agreement dated 7 September 2010 remains the same.
A summary of the terms of his employment are as follows:
a)
b)
c)
d)
e)
Commencement date
Termination date of contract
Period of notice for resignation/termination
Remuneration
Termination - with cause
f)
Termination - without cause
Dato’ Dr. Rajen Manicka
10 July 2015
Initial 3 year period
3 months
RM692,160 (AUD229,054)
The Company may terminate at any time without notice if serious
misconduct has occurred. Where termination with cause occurs
employees are only entitled to entitlements up to the date of ter-
mination and any unvested options will immediately be forfeited.
The Agreement provides for the termination of the Agreement by
paying a severance payment of up to three months in addition to
notice period.
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HOLISTA
COLLTECH
DIRECTORS’ REPORT (continued)
DIRECTORS' REPORT (continued)
Holista CollTech Limited
20
Details of employee share option plans
Details of employee share option plans
The Group believes that encouraging its directors and executives to become shareholders is the best way of aligning
The Group believes that encouraging its directors and executives to become shareholders is the best way of aligning their
their interests with those of its shareholders.
interests with those of its shareholders.
At present the Group does not have an employee share option plan.
At present the Group does not have an employee share option plan.
Bonuses
Bonuses
No bonus was granted to the Directors except for Dr M. Rajendran, $19,862 for his contribution in the Malaysia
No bonus was granted to the Directors except for Dr M. Rajen Manicka, $19,862 for his contribution in the Malaysia operation.
operation. (2014 : $8,492).
(2014 : $8,492).
Share-based payments
Share-based payments
No shares or options were issued as share based compensation during the year.
No shares or options were issued as share based compensation during the year.
23,333,333 options (warrants) were issued to Mr Chan Heng Fai pursuant to his participation in the placement completed on
23,333,333 options (warrants) were issued to Mr Chan Heng Fai pursuant to his participation in the placement completed on 27
27 November 2013.
November 2013.
Options awarded and vested in Holista CollTech Limited (number) during the year ended 30 June 2014.
Options awarded and vested in Holista CollTech Limited (number) during the year ended 30 June 2014.
0
2
30 June 2014
Directors
Mr Chan Heng
Fai
Dato’ Dr
Rajen Manicka
Mr Daniel
O’Connor
Executives
Mr Kong Hon
Khien
Mr Jay
Stephenson
Awarded
Number
Award date
Fair value per option at
award date
$
Exercise
price
$
Expiry date
Number vested or
lapsed during year
23,333,333
27/11/ 2013
0.09
0.06
17/12/2018
23,333,333
-
-
-
-
23,333,333
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
23,333,333
Relationship between the remuneration policy and company performance
Relationship between the remuneration policy and company performance
The Company has been in an ongoing restructure of its operation since the reverse takeover in Year 2009. The
The Company has been in an ongoing restructure of its operation since the reverse takeover in Year 2009. The Company
Company is also in the midst of commercialising some of its patented technologies, namely its Healthy Food
is also in the midst of commercialising some of its patented technologies, namely its Healthy Food Ingredients and Sheep
Ingredients and Sheep Collagen. Accordingly, the Company’s remuneration policy during the current and the previous
four (4) financial years is not related to the Company’s performance.
related to the Company’s performance.
21
For personal use only
ANNUAL REPORT
DIRECTORS’ REPORT (continued)
21
Ordinary shares held in Holista CollTech Limited (number)
30 June 2015
Directors
Balance at beginning
of year
Granted as
remuneration
On Exercise of
Option
Net Change
Other
Balance at end
of year
Mr Chan Heng Fai
11,666,667
Dato’ Dr Rajen Manicka
73,914,400
Mr Daniel O’Connor
Executives
Mr Kong Hon Khien
Mr Jay Stephenson
-
-
-
85,581,067
-
-
-
-
-
-
-
-
-
-
-
-
9,231,601
20,898,268
-
-
-
-
73,914,400
-
-
-
9,231,601
94,812,668
12,731,601 shares issued to Mr Chan Heng Fai upon conversion of $1,000,000 convertible notes on 24 September 2014.
30 June 2014
Directors
Balance at beginning
of year
Granted as
remuneration
On Exercise of
Option
Net Change
Other
Balance at end
of year
Mr Chan Heng Fai
-
Dato’ Dr Rajen Manicka
77,039,400
Mr Daniel O’Connor
Executives
Mr Kong Hon Khien
Mr Jay Stephenson
-
-
-
-
-
-
-
-
-
-
-
-
-
11,666,667
11,666,667
(3,125,000)
73,914,400
-
-
-
-
-
-
77,039,400
8,541,667
85,581,067
For personal use only
HOLISTA
COLLTECH
DIRECTORS’ REPORT (continued)
Options held in Holista CollTech Limited (number)
22
30 June 2015
Directors
Balance at beginning
of year
Granted
Vested
Lapsed
Balance at end
of year
Mr Chan Heng Fai
23,333,333
Dato’ Dr Rajen Manicka
Mr Daniel O’Connor
Executives
Mr Kong Hon Khien
Mr Jay Stephenson
30 June 2014
Directors
Mr Chan Heng Fai
Dato’ Dr Rajen Manicka
Mr Daniel O’Connor
Executives
Mr Kong Hon Khien
Mr Jay Stephenson
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
23,333,333
Balance at beginning
of year
detnarG
Vested
Lapsed
-
-
-
-
-
-
23,333,333
-
-
-
-
23,333,333
-
-
-
-
-
-
-
-
-
-
-
-
23,333,333
-
-
-
-
23,333,333
Balance at end
of year
23,333,333
-
-
-
-
23,333,333
Value of options held by directors, exercised and lapsed during the year.
No options were exercised, forfeited or lapsed during the year. For details on the valuation of the options, including models and
assumptions used, please refer to note 26.
END OF REMUNERATION REPORT
The Director’ Report incorporating the Remuneration Report is signed in accordance with a resolution of the Directors.
Dato’ Dr. Rajen Manicka
Director
Selangor, Malaysia
28 September 2015
For personal use only
ANNUAL REPORT
CORPORATE GOVERNANCE STATEMENT
CORPORATE GOVERNANCE STATEMENT
Holista CollTech Limited
23
This Corporate Governance summary discloses the extent to which the Company will follow the recommendations set
by the ASX Corporate Governance Council in its publication ‘Corporate Governance Principles and Recommendations
This Corporate Governance summary discloses the extent to which the Company will follow the recommendations set by the
(3rd Edition)’ (Recommendations. The Recommendations are not mandatory, however, the Recommendations that
ASX Corporate Governance Council in its publication ‘Corporate Governance Principles and Recommendations (3rd Edition)’
will not be followed have been identified and reasons have been provided for not following them.
(Recommendations. The Recommendations are not mandatory, however, the Recommendations that will not be followed
The Company’s Corporate Governance Plan has been posted on the Company’s website at www.holistaco.com.
The Company’s Corporate Governance Plan has been posted on the Company’s website at www.holistaco.com.
PRINCIPLES AND RECOMMENDATIONS
COMPLY
(YES/NO)
EXPLANATION
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1
The Company has adopted a Board Charter.
A listed entity should have and disclose a
charter which:
YES
(a)
(b)
the respective roles and
sets out
responsibilities of the board, the chair
and management; and
includes a description of those matters
expressly reserved to the board and
those delegated to management.
Recommendation 1.2
A listed entity should:
YES
(a) undertake appropriate checks before
appointing a person, or putting forward to
security holders a candidate for election,
as a director; and
(b) provide security holders with all material
information relevant to a decision on
whether or not to elect or re-elect a
director.
Recommendation 1.3
A listed entity should have a written agreement
with each director and senior executive setting
out the terms of their appointment.
YES
Recommendation 1.4
The company secretary of a listed entity
should be accountable directly to the board,
through the chair, on all matters to do with the
proper functioning of the board.
Recommendation 1.5
A listed entity should:
(a) have a diversity policy which includes
requirements for the board:
YES
YES
the
composition,
The Board Charter sets out
the specific
responsibilities of the Board, requirements as to
roles and
the Boards
responsibilities of the Chairman and Company
Secretary,
the establishment, operation and
management of Board Committees, Directors
access to company records and information,
relationship with
details of
management, details of the Board’s performance
review and details of the Board’s disclosure
policy.
the Board’s
A copy of the Company’s Board Charter is stated
in Schedule 1 of the Corporate Governance Plan
which is available on the Company’s website.
(a) The Company has detailed guidelines for the
appointment and selection of the Board. The
Company’s Corporate Governance Plan
requires the Board to undertake appropriate
checks before appointing a person, or
putting
to security holders a
candidate for election, as a director.
forward
(b) Material information relevant to any decision
on whether or not to elect or re-elect a
Director will be provided to security holders
in
the
the notice of meeting holding
resolution to elect or re-elect the Director.
The Company’s Corporate Governance Plan
requires the Board to ensure that each Director
and senior executive is a party to a written
agreement with the Company which sets out the
terms of that Director’s or senior executive’s
appointment.
the
outlines
The Board Charter
roles,
responsibility and accountability of the Company
Secretary.
is
accountable directly to the Board, through the
chair, on all matters to do with the proper
functioning of the Board.
The Company
Secretary
(a) The Company has adopted a Diversity
Policy.
(i) The Diversity Policy provides a
framework for the Company to achieve
a list of 6 measurable objectives that
For personal use only
HOLISTA
COLLTECH
(i)
(ii)
to set measurable objectives
achieving gender diversity; and
to
the
both
annually
objectives and the entity’s progress in
achieving them;
assess
for
(b) disclose that policy or a summary or it;
and
(c) disclose as at the end of each reporting
period:
(i) the measurable
objectives
for
achieving gender diversity set by the
board in accordance with the entity’s
diversity policy and
its progress
towards achieving them; and
(ii) either:
(A)
the respective proportions of
men and women on the board,
in senior executive positions and
across the whole organisation
(including how the entity has
defined “senior executive” for
these purposes); or
the entity’s “Gender Equality
Indicators”, as defined in the
Workplace Gender Equality Act
2012.
(B)
Holista CollTech Limited
24
encompass gender equality.
(ii) The Diversity Policy provides for the
monitoring and evaluation of the scope
and currency of the Diversity Policy. The
company
for
implementing, monitoring and reporting
on the measurable objectives.
(b) The Diversity Policy is stated in Schedule 9
of the Corporate Governance Plan which is
available on the company website.
responsible
is
(c)
(i) The measurable objectives set by the
Board will be included in the annual key
performance indicators for the CEO, MD
and senior executives. In addition the
Board will review progress against the
objectives in its annual performance
assessment.
(ii) The Board will include in the annual
the measurable
report each year,
the
objectives,
objectives, and the proportion of male
and female employees in the whole
organisation, at senior management
level and at Board Level.
progress
against
Recommendation 1.6
A listed entity should:
YES
(a) have and disclose a process
for
periodically evaluating the performance of
the board, its committees and individual
directors; and
(b) disclose
in relation
to each reporting
period, whether a performance evaluation
was undertaken in the reporting period in
accordance with that process.
(a) The Board is responsible for evaluating the
performance of the Board and individual
directors on an annual basis. It may do so
with the aid of an independent advisor. The
process for this can be found in Schedule 6
of the Company’s Corporate Governance
Plan. .
(b) The Company’s Corporate Governance Plan
requires the Board to disclosure whether or
not performance evaluations were conducted
during the relevant reporting period. Details
of the performance evaluations conducted
will be provided in the Company’s Annual
Reports.
Recommendation 1.7
A listed entity should:
(a) have and disclose a process
for
periodically evaluating the performance of
its senior executives; and
(b) disclose
in relation
to each reporting
period, whether a performance evaluation
was undertaken in the reporting period in
accordance with that process.
YES
(a) The Board is responsible for evaluating the
performance of senior executives. The Board
to arrange an annual performance
is
evaluation of the senior executives.
6
the Board
(b) The Company’s Corporate Governance Plan
requires
to conduct annual
performance of
the senior executives.
‘Performance Evaluation’
Schedule
requires the Board to disclose whether or not
performance evaluations were conducted
during the relevant reporting period. Details
of the performance evaluations conducted
will be provided in the Company’s Annual
Report.
Principle 2: Structure the board to add value
Recommendation 2.1
The board of a listed entity should:
YES
(a) have a nomination committee which:
(i)
(ii)
least
three members, a
has at
majority of whom are independent
directors; and
is chaired by an
director,
independent
(a) Due to the size and nature of the existing
Board and the magnitude of the Company’s
operations the Company currently has no
Nomination Committee. Pursuant to clause
4(h) of the Company’s Board Charter, the full
Board carries out the duties that would
ordinarily be assigned to the Nomination
terms of
Committee under
the written
2
For personal use only
ANNUAL REPORT
Holista CollTech Limited
25
and disclose:
(iii)
(iv)
(v)
the charter of the committee;
the members of the committee; and
as at the end of each reporting
period, the number of times the
the
committee met
individual
period
attendances of
the members at
those meetings; or
throughout
the
and
(b) if
it does not have a nomination
committee, disclose that fact and the
processes it employs to address board
succession issues and to ensure that the
board has the appropriate balance of
skills, experience,
independence and
knowledge of the entity to enable it to
discharge its duties and responsibilities
effectively.
Recommendation 2.2
A listed entity should have and disclose a
board skill matrix setting out the mix of skills
and diversity that the board currently has or is
looking to achieve in its membership.
reference for that committee.
The duties of the Nomination Committee are
outlined in Schedule 5 of the Company’s
Corporate Governance Plan available online
on the Company’s website.
time
Board
devotes
The
at
[each/quarterly/annual board meeting(s)] to
discuss board succession
issues. All
members of the Board are involved in the
the
to
Company’s nomination process,
maximum extent permitted under
the
Corporations Act and ASX Listing Rules.
The Board regularly updates the Company’s
board skills matrix (in accordance with
the
2.2)
recommendation
appropriate balance of skills, experience,
independence and knowledge of the entity.
to assess
YES
Board Skills Matrix
Number of
Directors that
Meet the Skill
Executive & Non- Executive
experience
Industry experience &
knowledge
Leadership
Corporate governance &
risk management
Strategic thinking
Desired behavioural
competencies
Geographic experience
Capital Markets experience
Subject matter expertise:
- accounting
- capital management
- corporate financing
- industry taxation 1
- risk management
- legal
- IT expertise 2
3
1
3
3
3
3
3
3
3
3
3
0
3
3
0
(1) Skill gap noticed however an external
to maintain
is emplo4yed
taxation
firm
taxation requirements.
(2) Skill gap noticed however an external IT firm
is employed on an adhoc basis to maintain
IT requirements.
Recommendation 2.3
A listed entity should disclose:
(a) the names of the directors considered by
YES
3
(a) The Board Charter provides
the
disclosure of
the names of Directors
considered by the Board to be independent.
These details are provided in the Annual
Reports and Company website.
for
For personal use only
HOLISTA
COLLTECH
Holista CollTech Limited
26
the board to be independent directors;
(b) if a director has an interest, position,
association or relationship of the type
described
the ASX
in Box 2.3 of
Corporate Governance Principles and
Recommendation (3rd Edition), but the
board is of the opinion that it does not
the
compromise
director,
interest,
position, association or relationship in
question and an explanation of why the
board is of that opinion; and
the length of service of each director
independence of
the nature of
the
the
(c)
(b) The Board Charter requires Directors to
disclose their interest, positions, associations
that
and relationships and requires
the
regularly
is
independence of Directors
assessed by
the
light of
in
interests disclosed by Directors. Details of
positions
the
associations and relationships are provided
in
the Annual Reports and Company
website.
the Board
interests,
Directors
(c) The Board Charter provides
the
determination of the Directors’ terms and
requires
length of service of each
Director to be disclosed. The length of
service of each Director is provided in the
Annual Reports and Company website.
the
for
Recommendation 2.4
A majority of the board of a listed entity should
be independent directors.
YES
Recommendation 2.5
YES
The chair of the board of a listed entity should
be an independent director and, in particular,
should not be the same person as the CEO of
the entity.
Recommendation 2.6
A listed entity should have a program for
inducting new directors and providing
development
professional
appropriate
opportunities
to
for continuing directors
develop and maintain the skills and knowledge
needed to perform their role as a director
effectively.
YES
The Board Charter requires that where practical
the majority of the Board will be independent.
Details of each Director’s independence are
provided in the Annual Reports and Company
website.
The Board Charter provides that where practical,
the Chairman of the Board will be a non-
executive director. If the Chairman ceases to be
independent
the Board will consider
appointing a lead independent Director.
then
for Directors. The Board
that a specific
The Board Charter states
to procure
is
responsibility of
the Board
development
appropriate
professional
is
opportunities
the approval and review of
responsible
professional
induction
development programs and procedures
for
Directors to ensure that they can effectively
discharge their responsibilities.
continuing
for
and
Principle 3: Act ethically and responsibly
Recommendation 3.1
A listed entity should:
(a) have a code of conduct for its directors,
senior executives and employees; and
(b) disclose that code or a summary of it.
YES
(a) The Corporate Code of Conduct applies to
the Company’s directors, senior executives
and employees.
(b) The Company’s Corporate Code of Conduct
is
the Corporate
Governance Plan which is on the Company’s
website.
in Schedule 2 of
Principle 4: Safeguard integrity in financial reporting
Recommendation 4.1
The board of a listed entity should:
YES
(a) have an audit committee which:
(i)
(ii)
has at least three members, all of
whom are non-executive directors
and a majority of whom are
independent directors; and
is chaired by an
independent
director, who is not the chair of the
board,
and disclose:
(iii)
(iv)
the charter of the committee;
the
relevant qualifications and
(a) Due to the size and nature of the existing
Board and the magnitude of the Company’s
operations the Company currently has no
Audit and Risk Committee. Pursuant
to
Clause 4(h) of
the Company’s Board
Charter, the full Board carries out the duties
that would ordinarily be assigned to the Audit
and Risk Committee under the written terms
of reference for that committee.
The role and responsibilities of the Audit and
Risk Committee are outlined in Schedule 3
of the Company’s Corporate Governance
Plan available online on the Company’s
website.
The Board devote time at annual board
4
For personal use only
ANNUAL REPORT
Holista CollTech Limited
27
(v)
experience of the members of the
committee; and
in relation to each reporting period,
the number of times the committee
met throughout the period and the
individual
the
attendances
members at those meetings; or
of
(b) if it does not have an audit committee,
disclose that fact and the processes it
employs that independently verify and
safeguard the integrity of its financial
reporting, including the processes for the
appointment and removal of the external
auditor and
the rotation of the audit
engagement partner.
Recommendation 4.2
The board of a listed entity should, before it
approves the entity’s financial statements for a
financial period, receive from its CEO and
CFO a declaration that 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.
YES
Recommendation 4.3
A listed entity that has an AGM should ensure
that its external auditor attends its AGM and is
available to answer questions from security
holders relevant to the audit.
YES
to
the
fulfilling
meetings
roles and
responsibilities associated with maintaining
the Company’s internal audit function and
arrangements with external auditors. All
members of the Board are involved in the
Company’s audit function to ensure the
proper maintenance of the entity and the
integrity of all financial reporting.
The Company’s Corporate Governance Plan
states that a duty and responsibility of the Board
is to ensure that before approving the entity’s
financial statements for a financial period, the
CEO and CFO have declared that in their opinion
the financial records of the entity have been
financial
properly maintained and
statements
appropriate
comply with
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
risk
on
the basis of a sound system of
management and
is
operating effectively.
internal control which
that
the
the
that
The Company’s Corporate Governance Plan
provides
the
Company’s external auditor attends its AGM and
is available to answer questions from security
holders relevant to the audit.
the Board must ensure
Principle 5: Make timely and balanced disclosure
Recommendation 5.1
A listed entity should:
YES
(a) have a written policy for complying with its
continuous disclosure obligations under
the Listing Rules; and
(b) disclose that policy or a summary of it.
(a) The Board Charter provides details of the
Company’s disclosure policy. In addition,
Schedule 7 of the Corporate Governance
Plan is entitled ‘Disclosure – Continuous
the Company’s
Disclosure’ and details
disclosure requirements as required by the
ASX Listing Rules and other
relevant
legislation.
(b) The Board Charter and Schedule 7 of the
Corporate Governance Plan are available on
the Company website.
Principle 6: Respect the rights of security holders
Recommendation 6.1
A listed entity should provide information about
itself and its governance to investors via its
website.
YES
Recommendation 6.2
A listed entity should design and implement an
investor relations program to facilitate effective
YES
the Company and
its
Information about
governance
the Corporate
Governance Plan which can be found on the
Company’s website.
is available
in
the Company and
its
Information about
governance
the Corporate
Governance Plan which can be found on the
Company website.
is available
in
Shareholder
The Company has adopted a
to
Communications Strategy which aims
promote
two-way
facilitate
communication with investors. The Shareholder
effective
and
For personal use only
HOLISTA
COLLTECH
two-way communication with investors.
Recommendation 6.3
A listed entity should disclose the policies and
processes it has in place to facilitate and
encourage participation at meetings of security
holders.
YES
Recommendation 6.4
A listed entity should give security holders the
option to receive communications from, and
send communications to, the entity and its
security registry electronically.
YES
Holista CollTech Limited
28
Communications Strategy outlines a range of
ways in which information is communicated to
shareholders.
The
Shareholder Communication Strategy
states that as a part of the Company’s developing
investor relations program, Shareholders can
register with the Company Secretary to receive
email notifications of when an announcement is
made by the Company to the ASX, including the
release of the Annual Report, half yearly reports
and quarterly reports. Links are made available
to
the Company’s website on which all
information provided to the ASX is immediately
posted.
Shareholders are encouraged to participate at all
EGMs and AGMs of the Company. Upon the
despatch of any notice of meeting
to
Shareholders, the Company Secretary shall send
out material with that notice of meeting stating
that all Shareholders are encouraged
to
participate at the meeting.
Security holders can register with the Company
receive email notifications when an
to
announcement is made by the Company to the
ASX.
Shareholders queries should be referred to the
Company Secretary at first instance.
Principle 7: Recognise and manage risk
Recommendation 7.1
The board of a listed entity should:
YES
(a) have a committee or committees
to
oversee risk, each of which:
(i)
least
three members, a
has at
majority of whom are independent
directors; and
is chaired by an
director,
independent
(ii)
and disclose:
the charter of the committee;
(iii)
(iv)
the members of the committee; and
(v) as at the end of each reporting
period, the number of times the
the
committee met
period
individual
attendances of
the members at
those meetings; or
throughout
the
and
(b) if it does not have a risk committee or
committees
(a) above,
that satisfy
disclose that fact and the process it
employs for overseeing the entity’s risk
management framework.
Recommendation 7.2
The board or a committee of the board should:
YES
(a) review
the entity’s
risk management
framework with management at
least
annually to satisfy itself that it continues to
be sound, to determine whether there
have been any changes in the material
- Due to the size and nature of the existing
Board and the magnitude of the Company’s
operations the Company currently has no
Audit and Risk Committee. Pursuant
to
Clause 4(h) of
the Company’s Board
Charter, the full Board currently carries out
the duties that would ordinarily be assigned
to the Audit and Risk Committee under the
written terms of reference for that committee.
The role and responsibilities of the Audit and
Risk Committee are outlined in Schedule 3
of the Company’s Corporate Governance
Plan available online on the Company’s
website.
to
fulfilling
The Board devote time at annual board
meeting
and
responsibilities associated with overseeing
risk and maintaining
risk
management
framework and associated
internal compliance and control procedures.
the entity’s
roles
the
(a) The
for
Company
process
risk
internal compliance
management and
includes a requirement
identify and
measure risk, monitor the environment for
emerging factors and trends that affect
these risks, formulate risk management
strategies and monitor the performance of
risk management systems. Schedule 8 of
to
For personal use only
ANNUAL REPORT
Holista CollTech Limited
29
business risks the entity faces and to
ensure that they remain within the risk
appetite set by the board; and
in relation
to each reporting
period, whether such a review has taken
place.
(b) disclose
the Corporate Governance Plan is entitled
‘Disclosure – Risk Management’ and details
the Company’s disclosure requirements
with respect to the risk management review
procedure and internal compliance and
controls.
(b) The Board Charter requires the Board to
disclose the number of times the Board met
throughout the relevant reporting period,
and
the
members at those meetings. Details of the
meetings will be provided in the Company’s
Annual Report.
individual attendances of
the
Recommendation 7.3
A listed entity should disclose:
YES
(a) if it has an internal audit function, how the
function is structured and what role it
performs; or
Schedule 3 of the Company’s Corporate Plan
provides for the internal audit function of the
Company. The Board Charter outlines
the
monitoring, review and assessment of a range of
internal audit functions and procedures.
(b) if it does not have an internal audit
function, that fact and the processes it
employs for evaluating and continually
improving the effectiveness of its risk
management
control
processes.
internal
and
Recommendation 7.4
it has
A listed entity should disclose whether, and if
to economic,
so how,
environmental and social sustainability risks
and, if it does, how it manages or intends to
manage those risks.
regard
YES
Schedule 3 of the Company’s Corporate Plan
details the Company’s risk management systems
which assist in identifying and managing potential
or apparent business, economic, environmental
and social sustainability risks (if appropriate).
Review of the Company’s risk management
framework is conducted at least annually and
reports are continually created by management
on
the
the efficiency and effectiveness of
Company’s risk management framework and
associated
internal compliance and control
procedures.
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1
The board of a listed entity should:
YES
(a) have a remuneration committee which:
least
(i)
has at
three members, a
majority of whom are independent
directors; and
is chaired by an
director,
independent
(ii)
and disclose:
(iii)
(iv)
(v)
the charter of the committee;
the members of the committee; and
as at the end of each reporting
period, the number of times the
the
committee met
period
individual
attendances of
the members at
those meetings; or
throughout
the
and
(b) if
it does not have a remuneration
committee, disclose that fact and the
processes it employs for setting the level
and composition of
for
directors and senior executives and
is
ensuring
remuneration
remuneration
that such
Due to the size and nature of the existing board
and the magnitude of the Company’s operations
the Company currently has no Remuneration
Committee. Pursuant
the
full Board
Company’s Board Charter,
currently carries out
that would
the Remuneration
ordinarily be assigned
Committee under the written terms of reference
for that committee.
to clause 4(h) of
the
the duties
to
The role and responsibilities of the Remuneration
Committee are outlined in Schedule 4 of the
Company’s Corporate Governance Plan available
online on the Company’s website.
the
fulfilling
roles and
The Board devote time at annual board meetings
to
responsibilities
associated with setting the level and composition
of
for Directors and senior
executives and ensuring that such remuneration
is appropriate and not excessive.
remuneration
For personal use only
HOLISTA
COLLTECH
appropriate and not excessive.
Recommendation 8.2
and
regarding
A listed entity should separately disclose its
policies
the
practices
remuneration of non-executive directors and
the remuneration of executive directors and
other senior executives and ensure that the
different roles and responsibilities of non-
executive directors compared to executive
directors and other senior executives are
reflected in the level and composition of their
remuneration.
Holista CollTech Limited
30
YES
The Company’s Corporate Governance Plan
requires the Board to disclose its policies and
practices regarding the remuneration of non-
executive, executive and other senior directors.
Recommendation 8.3
A listed entity which has an equity-based
remuneration scheme should:
YES
to enter
(a) have a policy on whether participants are
permitted
transactions
(whether through the use of derivatives or
otherwise) which limit the economic risk of
participating in the scheme; and
(b) disclose that policy or a summary of it.
into
(a) Company’s Corporate Governance Plan
states that the Board is required to review,
manage and disclose the policy (if any) on
whether participants are permitted to enter
into transactions (whether through the use of
derivatives or otherwise) which limit the
economic risk of participating in the scheme.
The Board must review and approve any
equity based plans.
(b) A copy of
Governance Plan
Company’s website.
the Company’s Corporate
the
is available on
For personal use only
ANNUAL REPORT
31
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
28 September 2015
Board of Directors
Holista CollTech Limited
Suite 12, Level 1
11 Ventnor Avenue
West Perth WA 6005
Dear Directors
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
RE: HOLISTA COLLTECH LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide
the following declaration of independence to the directors of Holista CollTech Limited.
As Audit Director for the audit of the financial statements of Holista CollTech Limited for
the year ended 30 June 2015, I declare that to the best of my knowledge and belief, there
have been no contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to
the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
Yours faithfully
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Samir Tirodkar
Director
West Perth, Western Australia
Liability limited by a scheme approved
under Professional Standards Legislation
31
For personal use only
HOLISTA
COLLTECH
32
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED 30 JUNE 2015
Revenue from continuing operations
Other income
Raw materials and consumables used
Depreciation expense
Impairment
Finance costs
Share based payments
Other expenses
(Loss) after tax from continuing operations
Loss for the year
Other comprehensive income
Notes
3
3
3
3
2015
$
2014
$
6,788,953
6,227,814
352,163
287,788
441,192
72,934
(2,616,483)
(2,043,635)
(2,180,081)
(2,127,737)
11 & 12
(221,368)
12
26
3
4
-
(159,287)
(187,560)
(927,287)
(330,985)
-
(2,172,994)
(2,143,914)
(2,344,892)
107,771
(3,393,150)
(150,756)
19,419
(42,985)
(3,373,731)
(42,985)
(3,373,731)
Exchange differences on translation of foreign operations
Total comprehensive loss for the year
(22,759)
(31,443)
(65,744)
(3,405,174)
Owners of the parent
Non-controlling interest
Total comprehensive loss attributable to :-
Owners of the parent
Non-controlling interest
33,488
(3,280,822)
(76,473)
(92,909)
(42,985)
(3,373,731)
28,204
(3,306,330)
(93,948)
(98,844)
(65,744)
(3,405,174)
6
6
0.02
0.02
(2.41)
(2.41)
For personal use only ANNUAL REPORT
33
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2015
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total Current Assets
Non-Current Assets
Property, plant and equipment
Intangible assets
Deferred tax asset
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Borrowings
Other liabilities
Deferred tax liability
Current tax liability
Total Current Liabilities
Non-Current Liabilities
Borrowings
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
(Accumulated losses)
Total parent entity interest
Non-controlling interest
Total Equity
Notes
7
8
10
9
11
12
9
4
13
14
13
4
4
14
15
16
16
17
2015
$
497,766
1,782,314
1,010,682
179,612
3,470,374
2014
$
1,511,648
1,225,409
695,700
186,673
3,619,430
1,305,455
1,374,843
189,190
16,271
-
1,510,916
4,981,291
1,126,154
773,015
-
826
114,081
2,014,076
676,011
676,011
2,690,087
2,291,204
188,921
23,585
36,802
1,624,151
5,243,581
637,410
1,101,023
69,162
-
-
1,807,595
1,906,594
1,906,594
3,714,189
1,529,392
9,424,203
2,196,280
8,596,647
2,201,564
(9,136,762)
(9,170,250)
2,483,721
1,627,961
(192,517)
2,291,204
(98,569)
1,529,392
For personal use only HOLISTA
COLLTECH
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2015
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2015
34
Holista CollTech Limited
Balance as at 1
July 2013
(Loss) for the year
Exchange
differences arising
on translation of
foreign operations
Total
comprehensive
loss for the year
Non-controlling
interest
Shares issued
during the year
Options issued
-
-
-
-
700,000
-
Notes
Issued
Capital
$
Compound
Financial
Instrument
Accumulated
Losses
$
$
7,554,145
412,502
(5,889,428)
Option
Reserve
$
Foreign
Currency
Translation
$
Non-
controlling
interest
$
Total
$
-
-
-
-
-
-
2,242,994
-
(15,922)
-
2,061,297
-
(92,909)
(3,373,731)
(25,508)
(5,935)
(31,443)
(25,508)
(98,844)
(3,405,174)
-
-
-
-
275
275
-
-
-
700,000
2,242,994
(70,000)
-
-
-
-
-
-
-
(3,280,822)
-
(3,280,822)
-
-
-
Equity raising costs
(70,000)
Balance at 30
June 2014
15 &
16
8,184,145
412,502
(9,170,250)
2,242,994
(41,430)
(98,569)
1,529,392
Balance as at 1
July 2014
Profit/ (loss) for the
year
Exchange
differences arising
on translation of
foreign operations
Total
comprehensive
loss for the year
Shares issued
during the year
8,184,145
412,502
(9,170,250)
2,242,994
(41,430)
(98,569)
1,529,392
-
-
-
-
-
-
33,488
-
33,488
1,102,557
(275,001)
-
-
-
-
-
-
(76,473)
(42,985)
(5,284)
(17,475)
(22,759)
(5,284)
(93,948)
(65,744)
-
-
827,556
Balance at 30
June 2015
15 &
16
9,286,702
137,501
(9,136,762)
2,242,994
(46,714)
(192,517)
2,291,204
For personal use only
ANNUAL REPORT
35
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2015
Notes
2015
$
2014
$
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs
Net income tax received
Net cash (used in) operating activities
7 (ii)
Proceeds from the sale of property, plant and equipment
Purchase of intellectual property
Purchase of property, plant and equipment
Loan repayments (paid to) related parties
Net cash (used in) by investing activities
Repayment of borrowings
Proceeds from issue of shares
Net (decrease)/ increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
7 (i)
5,704,848
6,110,166
(6,027,297)
(6,815,024)
17,281
(5,907)
306,842
(4,233)
1,700
(5,319)
(113,142)
-
(116,761)
49,410
(1,872)
381,228
(276,092)
18,442
(57,662)
(16,789)
(283,074)
(339,083)
(699,525)
(1,655,778)
-
700,000
(699,525)
(955,778)
(820,519)
(1,570,953)
1,326,477
2,864,983
(8,192)
497,766
32,447
1,326,477
For personal use only HOLISTA
COLLTECH
36
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 1: REPORTING ENTITY
Holista CollTech Limited is a company domiciled in Australia. The Company’s registered address is Suite 12, Level 1, 11
30 June 2015 comprise the Company and its subsidiaries (together referred to as the ‘Group” and individually as “Group
involved in development and commercialisation of food ingredients and ovine collagen.
NOTE 2: SUMMARIES OF SIGNIFICANT ACCOUNTING POLICIES
a) Basis of preparation
accordance with the Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards
Board (AASB) and the Corporations Act 2001
Reporting Standards (IFRS) adopted by the International Accounting Standards Board (IASB).
b) Principles of Consolidation
and all of the subsidiaries. Subsidiaries are entities the parent controls. The parent controls an entity when it is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those
returns through its power over the entity. A list of the subsidiaries is provided in Note 21.
from the date on which control is obtained by the Group. The consolidation of a subsidiary is discontinued from
the date that control ceases. Intercompany transactions, balances and unrealised gains or losses on transactions
between Group entities are fully eliminated on consolidation. Accounting policies of subsidiaries have been changed
and adjustments made where necessary to ensure uniformity of the accounting policies adopted by the Group.
Equity interests in a subsidiary not attributable, directly or indirectly, to the Group are presented as “non-controlling
interests”. The Group initially recognises non-controlling interests that are present ownership interests in subsidiaries
and are entitled to a proportionate share of the subsidiary’s net assets on liquidation at either fair value or at the
non-controlling interests’ proportionate share of the subsidiary’s net assets. Subsequent to initial recognition, non-
statement of comprehensive income
c) Business combination
Business combinations occur when an acquirer obtains control over one or more businesses.
The acquisition method of accounting is used to account for all business combinations, including business
combinations involving entities or business under common control, regardless of whether equity instruments or
other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair value
of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration
transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-
acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions,
measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group
recognises any non-controlling interest in the acquiree either at fair value or at the non- controlling interests
The excess of the consideration transferred the amount of any non-controlling interest in the acquiree and the
acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of
For personal use only
ANNUAL REPORT
37
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted
to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate,
terms and conditions.
d) Going Concern
$4,233. Its current assets of $3,470,374 exceed the current liabilities of $1,563,606.
activities and realisation of assets and settlement of liabilities in the ordinary course of business. The ability of the
Group to continue to pay its debts as and when they fall due is dependent upon the Group’s ability to generate
The Group’s cosmetic collagen business has continued to grow, generating revenue of $187,715 (2014: $115,070)
from its Collagen Plant in Perth, Western Australia. Revenue from this business will continue to grow in the coming
year with an order on hand of 3,500kg from Thailand to be delivered by December 2015. There is an expectation that
more orders will be secured from January 2016 to June 2016 which promise to continue the growth of this business
segment.
During this reporting period, the Group has managed to produce small scale samples of its patented Food Grade
Collagen for its potential customers. The potential customers are currently working on formulating the Food Grade
Collagen into their food and/ or drinks. With this positive development, the Group plan to invest in some essential
equipment at its Collie Plant to produce the Food Grade Collagen on a higher scale. We expect this equipment
On the Healthy Food Ingredients, our marketing company, Litefood Inc. in the USA has continued to source potential
Low Glycaemic Index (G.I.) formulation at the University of Sydney, Australia. We expect positive results from this trial
support the commercialisation of the Food Grade Collagen and Healthy Food Ingredients business. With the
further capital raising exercises is a possibility should the need arise. While the Group is optimistic that its Malaysian
and Australian revenue will continue to grow and contribute positively in the future, it does realise the risk should
uncertainty as to whether the Group will continue as a going concern and whether it will realise its assets and
e)
Income tax
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary difference and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the
end of the reporting period in the countries where the Company’s subsidiaries and associates operate and generate
taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of
amounts expected to be paid to the tax authorities.
For personal use only
HOLISTA
COLLTECH
38
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those
that are enacted or 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
Deferred income tax liabilities are recognised for all taxable temporary differences except:
•
•
•
•
when the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the account-
ing profit nor taxable profit or loss; or
when the taxable temporary difference is associated with investments in subsidiaries, associates or interests in
joint ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that
the temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax
assets and unused tax losses, to the extent that it is probable that taxable profit will be available against which
the deductible temporary differences and the carry-forward of unused tax credits and unused tax losses can be
utilised, except:
when the deferred income tax asset relating to the deductible temporary difference arises from the initial recog-
nition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss; or
when the deductible temporary difference is associated with investments in subsidiaries, associates or interests
in joint ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the
temporary difference will reverse in the foreseeable future and taxable profit will be available against which the
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that
asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that
tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised
or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the
balance date.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax
assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and
the same taxation authority.
Holista CollTech Limited recognises its own current and deferred tax amounts and those current tax liabilities, current
tax assets and deferred tax assets arising from unused tax credits and unused tax losses which it has assumed from
its controlled entities within the tax consolidated group.
Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts
payable or receivable from or payable to other entities in the Group. Any difference between the amounts receivable
or payable under the tax funding agreement are recognised as a contribution to (or distribution from) controlled
entities in the tax consolidated group.
f) Fair Value of Assets and Liabilities
The Group measures some of its assets and liabilities at fair value on either a recurring or non-recurring basis,
depending on the requirements of the applicable Accounting Standard.
For personal use only ANNUAL REPORT
39
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly
(i.e. unforced) transaction between independent, knowledgeable and willing market participants at the measurement
date.
As fair value is a market-based measure, the closest equivalent observable market pricing information is used to
asset or liability. The fair values of assets and liabilities that are not traded in an active market are determined
using one or more valuation techniques. These valuation techniques maximise, to the extent possible, the use of
observable market data.
To the extent possible, market information is extracted from either the principal market for the asset or liability (ie the
market with the greatest volume and level of activity for the asset or liability) or, in the absence of such a market, the
most advantageous market available to the entity at the end of the reporting period (ie the market that maximises the
receipts from the sale of the asset or minimises the payments made to transfer the liability, after taking into account
transaction costs and transport costs).
asset in its highest and best use or to sell it to another market participant that would use the asset in its highest and
best use.
The fair value of liabilities and the entity’s own equity instruments (excluding those related to share-based payment
instruments, by reference to observable market information where such instruments are held as assets. Where this
Valuation techniques
In the absence of an active market for an identical asset or liability, the Group selects and uses one or more valuation
techniques to measure the fair value of the asset or liability, The Group selects a valuation technique that is appropriate
techniques selected by the Group are consistent with one or more of the following valuation approaches:
- Market approach: valuation techniques that use prices and other relevant information generated by market
transactions for identical or similar assets or liabilities.
-
-
into a single discounted present value.
service capacity.
the asset or liability, including assumptions about risks. When selecting a valuation technique, the Group gives
priority to those techniques that maximise the use of observable inputs and minimise the use of unobservable inputs.
Inputs that are developed using market data (such as publicly available information on actual transactions) and
observable, whereas inputs for which market data is not available and therefore are developed using the best
information available about such assumptions are considered unobservable.
Fair value hierarchy
AASB 13 requires the disclosure of fair value information by level of the fair value hierarchy, which categorises fair
measurement can be categorised into as follows:
For personal use only
HOLISTA
COLLTECH
40
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Level 1
Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity
can access at the measurement date.
Level 2
Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly or indirectly
Level 3
Measurements based on unobservable inputs for the asset or liability.
The fair values of assets and liabilities that are not traded in an active market are determined using one or more
valuation techniques. These valuation techniques maximise, to the extent possible, the use of observable market
The Group would change the categorisation within the fair value hierarchy only in the following circumstances:
(i)
if a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or vice versa;
or
(ii)
When a change in the categorisation occurs, the Group recognises transfers between levels of the fair value hierarchy
(i.e. transfers into and out of each level of the fair value hierarchy) on the date the event or change in circumstances
occurred.
g)
Inventories
Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its
present location and conditions are accounted for as follows:
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.
h) Property, plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the parts
is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying amount of the
plant and equipment as a replacement only if it is eligible for capitalisation.
Land and buildings are measured at fair value less accumulated depreciation on buildings and less any impairment
losses recognised after the date of the revaluation.
Depreciation is calculated on a straight-line basis over the estimated useful life of the assets as follows:
Buildings - over 25 years
Motor vehicles – over 10 years
Plant and equipment - over 5 to 20 years
The assets’ residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at each
(i) Impairment
The carrying values of plant and equipment are reviewed for impairment at each balance date, with recoverable
amount being estimated when events or changes in circumstances indicate that the carrying value may be impaired.
For personal use only ANNUAL REPORT
41
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. In
cash-generating unit to which the asset belongs, unless the asset’s value in use can be estimated to approximate fair
value.
Impairment exists when the carrying value of an asset or cash-generating units exceeds its estimated recoverable
amount. The asset or cash-generating unit is then written down to its recoverable amount. For plant and equipment,
impairment losses are recognised in the statement of comprehensive income in the cost of sales line item. However,
because land and buildings are measured at revalued amounts, impairment
losses on land and buildings are treated as a revaluation decrement.
(iii) De-recognition and disposal
are expected from its use or disposal.
Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net disposal proceeds
i) Financial Instruments
Initial recognition and measurement
purchase or sale of the asset.
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest method,
or cost.
Amortised cost
recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative amortisation
of the difference between that initial amount and the maturity amount calculated using the effective interest method.
The effective interest method is used to allocate interest income or interest expense over the relevant period and
is equivalent to the rate that discounts estimated future cash payments or receipts over the expected life of the
loss.
For personal use only HOLISTA
COLLTECH
42
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(ii) Loans and receivables
quoted in an active market. Such assets are carried at amortised cost using the effective interest method.
as well as through the amortisation process.
(ii) Held-to-maturity investments
held-to- maturity when the Group has the positive intention and ability to hold to maturity. Investments
intended to be held-to-maturity, such as bonds, are subsequently measured at amortised cost. This cost
is computed as the amount initially recognised minus principal repayments, plus or minus the cumulative
amortisation using the effective interest method of any difference between the initially recognised amount
and the maturity amount. This calculation includes all fees and points paid or received between parties to
the contract that are an integral part of the effective interest rate, transaction costs and all other premiums
and discounts. For investments carried at
impaired, as well as through the amortisation process.
(iv) Available-for-sale investments
investments are measured at fair value with gains or losses being recognised as a separate component of
equity until the investment is derecognised or until the investment is determined to be impaired, at which
market bid prices at the close of business on the balance date. For investments with no active market, fair
value is determined using valuation techniques. Such techniques include using recent arm’s length market
transactions, reference to the current market value of another instrument that is substantially the same,
(v) Financial liabilities
liability is derecognised.
Impairment
(i) Financial assets carried at amortised cost
If there is objective evidence that an impairment loss on loans and receivables carried at amortised cost has been
incurred, the amount of the loss is measured as the difference between the asset’s carrying amount and the present
carrying amount of the asset is reduced either directly or through use of an allowance account. The amount of the
For personal use only ANNUAL REPORT
43
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
individually assessed for impairment and for which an impairment loss is or continues to be recognised are not
included in a collective assessment of impairment.
If, in a subsequent period, the amount of the impairment loss decreases and the decrease can be related objectively
to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed.
the asset does not exceed its amortised cost at the reversal date.
(ii) Financial assets carried at cost
If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is
not carried at fair value (because its fair value cannot be reliably measured), or on a derivative asset that is linked to
and must be settled by delivery of such an unquoted equity instrument, the amount of the loss is measured as the
(iii) Available-for-sale investments
If there is objective evidence that an available-for-sale investment is impaired, an amount comprising the difference
between its cost (net of any principal repayment and amortisation) and its current fair value, less any impairment
if the increase in an instrument’s fair value can be objectively related to an event occurring after the impairment loss
De-recognition
(i) Financial assets
derecognised when:
•
•
•
full without material delay to a third party under a ‘pass-through’ arrangement; or
a) has transferred substantially all the risks and rewards of the asset, or
b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred
control of the asset.
substantially all the risks and rewards of the asset nor transferred control of the asset, the asset is recognised to the
extent of the Group’s continuing involvement in the asset. Continuing involvement that takes the form of a guarantee
over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum
amount of consideration received that the Group could be required to repay.
When continuing involvement takes the form of a written and/or purchased option (including a cash-settled option
or similar provision) on the transferred asset, the extent of the Group’s continuing involvement is the amount of the
transferred asset that the Group may repurchase, except that in the case of a written put option (including a cash-
settled option or similar provision) on an asset measured at fair value, the extent of the Group’s continuing involvement
is limited to the lower of the fair value of the transferred asset and the option exercise price.
(ii) Financial liabilities
de-recognition of the original liability and the recognition of a new liability, and the difference in the respective
For personal use only HOLISTA
COLLTECH
44
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
j)
Interests in Joint Arrangements
Joint arrangements represent the contractual sharing of control between parties in a business venture where
unanimous decisions about relevant activities are required.
and accounted for using the equity method.
Joint venture operations represent arrangements whereby joint operators maintain direct interests in each asset and
exposure to each liability of the arrangement. The Group’s interests in the assets, liabilities, revenue and expenses of
Gains and losses resulting from sales to a joint operation are recognised to the extent of the other parties’ interests.
When the Group makes purchases from a joint operation, it does not recognise its share of the gains and losses from
the joint arrangement until it resells those goods/assets to a third party.
k)
Intangibles Other than Goodwill
Intangible assets acquired separately
Intangible assets acquired separately are recorded at cost less accumulated amortisation and impairment. Amortisation
is charged on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method
is reviewed at the end of each annual reporting period, with any changes in these accounting estimates being
accounted for on a prospective basis.
Internally generated intangible assets - research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred. Where no
internally-generated intangible asset can be recognised, development expenditure is recognised as an expense in the
period as incurred.
An intangible asset arising from development (or from the development phase of an internal project) is recognised
if, and only if, all of the following have been demonstrated:
•
•
•
•
•
•
The technical feasibility of completing the intangible asset so that it will be available for use or sale;
The intention to complete the intangible asset and use or sell it;
The ability to use or sell the intangible asset;
sell the intangible asset; and
The ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same basis as intangible assets acquired separately.
The following useful lives are used in the calculation of amortisation:
Capitalised development
Licences
Software
5 years
10 years
4 years
Intangible assets acquired in a business combination
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less
accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets acquired
separately.
r values can be measured reliably.
For personal use only
ANNUAL REPORT
45
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
l) Foreign currency translation
Functional and presentation currency
The functional currency of each of the Group’s entities is measured using the currency of the primary economic
which is the parent entity’s functional currency.
Group companies
presentation currency, are translated as follows;
§ Assets and liabilities are translated at exchange rates prevailing at the end of the reporting period
§ Income and expenses are translated at average exchange rates for the period; and
§ Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations with functional currencies other than Australian dollars
are recognised in other comprehensive income and included in the foreign currency translation reserve in the statement
the operation is disposed of.
m)
(i) Wages, salaries, annual leave and sick leave
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.
(ii) Long service leave
value of expected future payments to be made in respect of services provided by employees up to the balance date.
Consideration is given to expected future wage and salary levels, experience of employee departures, and period of
service. Expected future payments are discounted using market yields at the balance date on national government
n) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event,
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 assets but only when the reimbursement is virtually certain. The expense
relating to any provision is presented in the statement of 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.
recognised as an interest expense.
o) Cash and cash equivalents
Cash comprises cash at bank and on hand. Cash equivalents are short term, highly liquid investments that are
f cash and cash
For personal use only
HOLISTA
COLLTECH
46
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
p) Revenue recognition
Revenue is measured at fair value of the consideration received or receivable. Amounts disclosed as revenue are net
of returns, trade allowances, rebates and amounts collected on behalf of third parties. Revenue is recognised to the
(i) Sale of goods
and the costs incurred or to be incurred in respect of the transaction can be measured reliably. Risks and rewards of
ownership are considered passed to the buyer at the time of delivery of the goods to the customer.
(ii) Rendering of services
Revenue from the rendering of services is recognised by reference to the stage of completion of the contract.
(iii) Interest income
asset.
q) Trade and other receivables
Trade receivables are measured on initial recognition at fair value and are subsequently measured at amortised cost
using the effective interest rate method, less any allowance for impairment. Trade receivables are generally due for
settlement within periods ranging from 15 days to 30 days.
Impairment of trade receivables is continually reviewed and those that are considered to be uncollectible are written
off by reducing the carrying amount directly. An allowance account is used when there is objective evidence that the
Group will not be able to collect all amounts due according to the original contractual terms. Factors considered by
set equal to the difference between the carrying amount of the receivable and the present value of estimated future
applied in determining the allowance.
income within other expenses. When a trade receivable for which an impairment allowance had been recognised
becomes uncollectible in a subsequent period, it is written off against the allowance account. Subsequent recoveries
comprehensive income.
r) Trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services
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.
s) Borrowing costs
Borrowing costs are capitalised that are directly attributable to the acquisition, construction or production of qualifying
assets where the borrowing cost is added to the cost of those assets until such time as the assets are substantially
ready for their intended use or sale.
t) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
For personal use only ANNUAL REPORT
47
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
·
·
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
disclosed net of the amount of GST recoverable from, or payable to, the taxation authority.
u) 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
to compensate. Government grants relating to the purchase of property, plant and equipment are included in non-
of the related assets.
v) New and Amended Accounting Policies Adopted by the Group
commencing 1 July 2014:
Investment Entities – Amendments to AASB 10, AASB 12 and AASB 127
investment entity under AASB 10 Consolidated Financial Statements and must be applied retrospectively, subject
to certain transition relief. The exception to consolidation requires investment entities to account for subsidiaries at
AASB 2013-3 Amendments to AASB 136 – Recoverable Amount Disclosures for Non-Financial Assets
The amendments include the requirement to disclose additional information about the fair value measurement when
the recoverable amount of impaired assets is based on fair value less costs of disposal. This amendment has resulted
Offsetting Financial Assets and Financial Liabilities - Amendments to AASB 132
These amendments clarify the meaning of ’currently has a legally enforceable right to set-off’ and the criteria for non-
simultaneous settlement mechanisms of clearing houses to qualify for offsetting and is applied retrospectively. These
amendments have no impact on the Group, since none of the entities in the Group has any offsetting arrangements.
AASB 2013-4 Amendments to Australian Accounting Standards - Novation of Derivatives and Continuation of
Hedge Accounting
These amendments provide relief from discontinuing hedge accounting when novation of a derivative designated
as a hedging instrument meets certain criteria and retrospective application is required. These amendments have no
impact on the Group as the Group has not novated any of its derivatives during the current or prior periods.
Interpretation 21 Accounting for Levies
Retrospective application is required for AASB Interpretation 21. This interpretation has
For personal use only
HOLISTA
COLLTECH
48
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
no impact on the Group as it has applied the recognition principles under AASB 137 Provisions, Contingent Liabilities
and Contingent Assets consistent with the requirements of AASB Interpretation 21 in prior years.
AASB 2014-1 Amendments to Australian Accounting Standards
The adoption AASB 2014-1 has required additional disclosures in our segment note. Other than that, the adoption
of these standards did not have any impact on the current period or any prior period and is not likely to affect future
periods.
New standards and interpretations not yet adopted. A number of new standards, amendments to standards and
interpretations issued by the AASB which are not yet mandatorily applicable to the Group have not been applied
The Group does not plan to adopt these standards early and the directors anticipate that adoption will not have a
Standard/Interpretation
Effective for annual
reporting periods be-
ginning on or after
Expected to be
initially applied in
ending
AASB 9 ‘Financial Instruments’ - and associated Amend-
ing Standards
1 January 2018
30 June 2018
AASB 15 ‘Revenue from Contracts with Customers’
1 January 2017
30 June 2017
Impairment of non-current assets
The Group assesses at each balance date whether there is an indication that an asset may be impaired. If any such
indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the
asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value
independent of those from other assets or groups of assets and the asset’s value in use cannot be estimated to be
close to its fair value. In such cases the asset is tested for impairment as part of the cash- generating unit to which
it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset
or cash-generating unit is considered impaired and is written down to its recoverable amount.
Impairment losses relating to continuing operations are recognised in those expense categories consistent with the
function of the impaired asset unless the asset is carried at revalued amount (in which case the impairment loss is
treated as a revaluation decrease).
An assessment is also made at each balance date as to whether there is any indication that previously
recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable
amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the
estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If that
is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot
exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been
amount, in which case the reversal is treated as a revaluation increase.
After such a reversal the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying
amount, less any residual value, on a systematic basis over its remaining useful life.
For personal use only ANNUAL REPORT
49
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
w)
Interest-bearing loans and borrowings
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently
measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption
paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is
probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down
occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the
fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.
The fair value of the liability portion of a convertible note is determined using a market interest rate for an equivalent
non-convertible note. This amount is recorded as a liability on an amortised cost basis until extinguished on
conversion or maturity of the note. The remainder of the proceeds is allocated to the conversion option. This is
recognised and included in shareholders’ equity, net of income tax effects.
extinguished or transferred to another party and the consideration paid, including any non-cash assets transferred
current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months
after the reporting period.
x)
Issued capital
are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue
of new shares or options for the acquisition of a new business are not included in the cost of acquisition as part of the
purchase consideration.
y)
(i) Investments in subsidiaries, associates and joint venture entities
as set out below.
rather than being deducted from the carrying amount of these investments.
(ii) Share-based payments
The grant by the company of options over its equity instruments to the employees of subsidiary undertakings in
the group is treated as a capital contribution to that subsidiary undertaking. The fair value of employee services
received, measured by reference to the grant date fair value, is recognised over the vesting period as an increase to
investment in subsidiary undertakings, with a corresponding credit to equity.
For personal use only
HOLISTA
COLLTECH
50
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 3: REVENUE AND EXPENSES
(a) Revenue
Sales revenue
Sale of goods
Bank interest receivable
(b) Other income
Other
on disposal of property, plant and equipment
Proceeds on legal settlement
Rebates
Rental income
Research and development tax offset
Other income
(c) Expenses
Net (decrease)/ increase in inventories
Raw materials and consumables used during production
Distribution costs
Advertising and promotion
Other expenses
Collie factory maintenance costs
Research - current year expense (i)
Consultancy & professional services
Audit fees (note 24)
Operating lease rental expense
2015
$
2014
$
6,771,672
6,178,404
17,281
49,410
6,788,953
6,227,814
833
-
-
62,722
288,528
80
18,442
26,875
352
-
395,523
-
352,163
441,192
(287,788)
2,616,483
72,934
2,043,635
358,975
582,360
239,092
131,390
137,182
547,766
68,697
78,452
359,227
595,185
337,765
121,800
233,148
506,812
125,804
65,151
2,143,914
2,344,892
(i) Under an exclusivity arrangement with Quick Service Holding Pty Ltd (QSRH) and an agreement to jointly share research
included here.
For personal use only ANNUAL REPORT
51
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 4: INCOME TAX (continued)
The major components of tax expense are:
Current tax
om operations
as
follows:
Income tax expense calculated at 30%
Tax effect of amounts which are not deductible/(taxable) in calculating taxable
income:
Utilisation of previously unrecognised tax losses
Current year tax losses not recognised
Research and development tax offset exempted from tax
2015
$
2014
$
150,756
-
150,756
17,383
(36,802)
(19,419)
177,701
32,331
)051,393,3(
(1,017,945)
(41,291)
-
(265,052)
(86,558)
88,239
258,650
150,756
13,681
-
465,306
(160,430)
(118,657)
95,263
734,486
(19,419)
1,976
Foreign tax losses not recognised
Non-deductible expenditure
Foreign income tax payable
Timing differences
hensive income
Current
Income tax payable in Malaysia
Non-current
Deferred tax assets
Deferred tax liabilities
Unrecognised deferred tax balances
Deferred Tax Assets
Tax losses
Tax losses attributable to foreign subsidiaries
Total deferred tax assets not brought to account
ment of compre-
150,756
(19,419)
150,756
826
-
-
-
36,802
955,007
1,172,678
2,127,685
996,297
1,181,320
2,177,617
For personal use only
HOLISTA
COLLTECH
52
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 4: INCOME TAX (continued)
The tax rates used in the above reconciliations is the corporate tax rate of 30% payable by the Australian corporate entity on
The foreign tax payable relates to the Malaysian corporate entities, where the current corporate tax rate is 25%. The Malaysian
corporate entities tax losses have unrecognised deferred tax assets in relation to unutilised tax losses carried forward for which
and they may not be used to offset taxable
NOTE 5: SEGMENT REPORTING
General Information
Directors (chief operating decision makers) in assessing performance and determining the allocation of resources.
Types of products and services by segment
(i) Healthy Food ingredients and Food supplements
.aisyalaM tuohguorht stnemelppus dna stneidergni doof fo elaselohw dna gnirutcafunam tcartnoc sesinagro tnemges ehT
All products produced are aggregated as one reportable segment as the products are similar in nature, manufactured and
distributed to a similar type of customers, and subject to a similar regulatory environment.
(ii) Sheep collagen
This operating segment is involved in the manufacture and distribution of cosmetic grade collagen.
(iii) Corporate
This segment supports operating segments (i) and (ii).
Basis of accounting for purposes of reporting by operating segments
(a) Accounting policies adopted
Unless stated otherwise, all amounts reported to the Board of Directors, being the chief operating decision makers with
respect to operating segments, are determined in accordance with accounting policies that are consistent to those adopted
(b) Intersegment transactions
The three segments operate independently and there are no intersegment sales.
(c) Segment assets
Where an asset is used across multiple segments, the asset is allocated to the segment that receives the majority of the
physical location.
(d) Segment liabilities
Liabilities are allocated to segments where there is a direct nexus between the incurrence of the liability and the operations of
the segment. Segment liabilities include trade and other payables and certain direct borrowings.
For personal use only ANNUAL REPORT
53
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 5: SEGMENT REPORTING (continued)
NOTE 5: SEGMENT REPORTING (continued)
(e) Segment Information
(e) Segment Information
(i) Segment performance
(i) Segment performance
30 June 2015
REVENUE
External sales
Interest revenue
Total segment revenue
Reconciliation of segment
revenue to group revenue
Total Group revenue
Segment net loss from
Supplements
Sheep
Collagen
Food
Ingredients
Corporate
Total
$
$
6,583,957
187,715
-
-
6,583,957
187,715
$
-
-
-
$
$
- 6,771,672
17,281
17,281
17,281 6,788,953
6,788,953
continuing operations before tax
1,610,522
(387,459)
(10,797) (1,104,495)
107,771
Net profit before tax from
continuing operations
30 June 2014
REVENUE
External sales
Interest revenue
6,063,334
115,070
-
-
Total segment revenue
6,063,334
115,070
107,771
-
-
-
- 6,178,404
49,410
49,410
49,410 6,227,814
6,227,814
Total Group revenue
Segment net loss from continuing
operations before tax
Net loss before tax from continuing
operations
1,410,703
(1,314,726)
(28,868)
(3,440,840) (3,373,731)
(3,373,731)
For personal use only
HOLISTA
COLLTECH
54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 5: SEGMENT REPORTING (continued)
Holista CollTech Limited
NOTE 5: SEGMENT REPORTING (continued)
(ii) Segment assets
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(ii) Segment assets
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 5: SEGMENT REPORTING (continued)
Supplements Sheep Collagen Food Ingredient
Total
$
$
$
$
(ii) Segment assets
30 June 2015
Segment assets
5,258,806
3,063,781
Supplements Sheep Collagen Food Ingredient
1,133 8,323,720
Total
Reconciliation of segment assets to Group assets:
$
$
Intersegment eliminations
30 June 2015
Total Group assets
Segment assets
Reconciliation of segment assets to Group assets:
30 June 2014
Intersegment eliminations
Segment assets
Total Group assets
Reconciliation of segment assets to Group assets
Intersegment eliminations
30 June 2014
Total Group assets
Segment assets
Reconciliation of segment assets to Group assets
(iii) Segment liabilities
Intersegment eliminations
Total Group assets
(iii) Segment liabilities
(iii) Segment liabilities
30 June 2015
Segment liabilities
Reconciliation of segment liabilities to Group
liabilities:
30 June 2015
Intersegment eliminations
Segment liabilities
Total Group liabilities
Reconciliation of segment liabilities to Group
liabilities:
Intersegment eliminations
30 June 2014
Total Group liabilities
Segment liabilities
Reconciliation of segment liabilities to Group
liabilities:
30 June 2014
Intersegment eliminations
Segment liabilities
Total Group liabilities
Reconciliation of segment liabilities to Group
liabilities:
Intersegment eliminations
Total Group liabilities
5,258,806
3,063,781
4,720,993
3,086,399
4,720,993
3,086,399
Supplements
$
Sheep
Collagen
$
$
$
(3,342,429)
4,981,291
1,133 8,323,720
(3,342,429)
3,638 7,811,030
4,981,291
(2,567,449)
5,243,581
3,638 7,811,030
(2,567,449)
5,243,581
Total
Food
Ingredients
$
$
Supplements
2,071,739
Sheep
1,172,251
Collagen
Food
Ingredients
Total
741,582 3,985,572
$
$
$
$
2,071,739
1,172,251
(1,295,485)
741,582 3,985,572
2,690,087
(1,295,485)
2,379,280
1,540,819
349,644 4,269,743
2,690,087
2,379,280
1,540,819
(555,554)
349,644 4,269,743
3,714,189
(555,554)
3,714,189
For personal use only
ANNUAL REPORT
Holista CollTech Limited
55
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 5: SEGMENT REPORTING (continued)
NOTE 5: SEGMENT REPORTING (continued)
(iv) Revenue by geographical region
(iv) Revenue by geographical region
Revenue attributable to external customers excluding interest is disclosed below, based on the location of the external customer:
Revenue attributable to external customers excluding interest is disclosed below, based on the location of the external customer:
Australia
Malaysia
Total revenue
(v) Assets by geographical region
The location of segment assets by geographical location of the assets is
disclosed below:
Australia
Malaysia
United States
Total assets
30 June 2015
30 June 2014
$
187,715
6,583,957
6,771,672
$
115,070
6,063,334
6,178,404
367,313
4,612,846
1,132
783,497
4,456,401
3,683
4,981,291
5,243,581
(vi) Major customers
(vi) Major customers
The Group has a number of customers to whom it provides both products and services. Within the Food Ingredients and Supplement
The Group has a number of customers to whom it provides both products and services. Within the Food Ingredients and
segment, the Group supplies to a number of retailers through one single external distributor who accounts for 75% of total revenue for
Supplement segment, the Group supplies to a number of retailers through one single external distributor who accounts for 75%
this segment. The Group supplies to a few external customers for the Sheep Collagen segment, where the major customer accounts
of total revenue for this segment. The Group supplies to a few external customers for the Sheep Collagen segment, where the
for 97% of revenue for this segment
major customer accounts for 97% of revenue for this segment
NOTE 6: EARNINGS PER SHARE
NOTE 6: EARNINGS PER SHARE
2015
2015
2014
2014
Cents per share
Cents per share
Cents per share
Cents per share
Basic profit/ (loss) per share:
Continuing operations
Continuing operations
Total basic profit/ (loss) per share
Net profit/ (loss)
Diluted profit/ (loss) per share
Weighted average number of shares
Effect of dilution
Weighted average number of shares (diluted)
Profit/ (loss) from continuing operations
Weighted average number of shares
Effect of dilution
Weighted average number of shares (diluted)
0.02
0.02
0.02
0.02
33,488
33,488
0.02
0.02
33,488
151,036,656
-
163,600,758
33,488
151,036,656
-
163,600,758
(2.41)
(2.41)
(2.41)
(2.41)
(3,280,822)
(3,280,822)
(2.41)
(3,280,822)
(2.41)
135,868,121
-
135,868,121
(3,280,822)
135,868,121
-
135,868,121
For personal use only
HOLISTA
COLLTECH
56
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 7: CASH AND CASH EQUIVALENTS
Current
Cash at bank and on hand (i)
Security deposits (ii)
2015
$
63,605
434,161
497,766
2014
$
181,060
1,330,588
1,511,648
deposited if other collateral is not available. These deposits are interest bearing and the interest is compounded and added
to the principal.
At 30 June 2015, the Group had available $140,123 (2014: $166,687) of undrawn committed borrowing facilities in respect of
which all conditions precedent had been met.
(i) Reconciliation to the Statement of Cash Flows:
in money market instruments, net of outstanding bank overdrafts.
Cash and cash equivalents
Bank overdraft
Security deposits
ing activities
(Loss) for the year after tax
Depreciation
Impairment losses
Share based payment
Finance costs (non cash)
Write off non-controlling share capital
Impairment of intangibles
Net gain on disposal of property, plant & equipment
- (increase) in receivables
- (increase) in inventories
- increase/(decrease) in payables
- increase in prepayments
- increase in tax provision
63,605
-
434,161
497,766
181,060
(185,171)
1,330,588
1,326,477
m operat-
)589,24(
)137,373,3(
(5,057)
221,368
-
-
84,442
-
-
-
(556,905)
(314,982)
488,744
7,060
114,082
(103,380)
187,560
782,729
2,172,994
330,526
274
57,948
-
(77,573)
(51,865)
(346,132)
-
-
Net cash used in operating activities
)332,4(
)290,672(
For personal use only
ANNUAL REPORT
57
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 7: CASH AND CASH EQUIVALENTS (continued)
(iii) Restricted Funds
The Groups total cash assets mentioned above included restricted bank accounts as follows
(a)
NOTE 8: CURRENT TRADE AND OTHER RECEIVABLES
Trade receivables
Other receivables
.
2015
$
2014
$
1,743,714
38,600
1,174,568
50,841
1,782,314
1,225,409
(i) the average credit period on sales of goods and rendering of services is 55 days. Interest is not charged. No allowance has
been made for estimated irrecoverable trade receivable amounts arising from the past sale of goods and rendering of services,
determined by reference to past default experience.
Sales in Malaysian entities are either on a cash basis or via a distributor. The terms of payment from this distributor are 50%
after net 45 days and 50% after net 65 days.
Aging of past due but not impaired
0 – 30 days
30 – 60 days
60 – 90 days
90 - 120 days
Total
NOTE 9: OTHER FINANCIAL ASSETS
Current
Prepayments
Non Current
Legal settlement proceeds due
Loan – Malaysia Pharmaceutical Society
Total
NOTE 10: INVENTORIES
Raw materials - at cost
Finished goods - at cost
310,793
83,349
21,674
90,668
506,484
6,644
21,235
3,904
1,172
32,955
179,612
186,673
15,148
1,123
16,271
2015
$
403,526
607,156
1,010,682
20,501
3,084
23,585
2014
$
361,254
334,446
695,700
For personal use only HOLISTA
COLLTECH
58
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 11: PROPERTY, PLANT AND EQUIPMENT
Year ended 30 June 2015
At 1 July 2015, net of accumulated depreciation and
impairment
Additions
Disposals
Depreciation charge for the year
Foreign currency exchange differences
At 30 June 2015, net of accumulated depreciation and
impairment
At 30 June 2015
Cost
Accumulated depreciation and impairment
Net carrying amount
Freehold land
Plant and
Motor
and building
equipment
vehicles
$
$
$
Total
$
844,759
432,400
97,684
1,374,843
-
-
(20,465)
35,058
113,142
(1,899)
-
-
113,142
(1,899)
(175,168)
(25,735)
(221,368)
1,346
4,333
40,737
859,352
369,821
76,282
1,305,455
2,491,804
1,944,208
(1,632,452)
(1,574,387)
859,352
369,821
127,136
(50,854)
76,282
4,563,148
(3,257,693)
1,305,455
The useful life of the assets was estimated as follows for both 2015 and 2014:
Buildings
Plant and equipment
Motor vehicles
20 years
5 to 15 years
10 years
hire purchase contracts.
The carrying value of property, plant and equipment temporarily idle is $ nil (2014 $ nil). Leased assets and assets under hire
ses and hire purchase contracts at 30 June 2015 is $76,282
Freehold land
and building
$
Plant and
equipment
$
Motor
vehicles
$
Total
$
Year ended 30 June 2014
At 1 July 2013, net of accumulated depreciation and
impairment
1,875,991
500,175
-
2,376,166
Additions
Disposals
Impairment
Depreciation charge for the year
Foreign currency exchange differences
At 30 June 2014, net of accumulated depreciation and
impairment
-
-
(927,287)
(78,962)
(24,983)
844,759
16,796
122,104
138,900
-
-
-
-
(83,787)
(24,811)
(784)
432,400
391
97,684
-
(927,287)
(187,560)
(25,376)
1,374,843
For personal use only
ANNUAL REPORT
59
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 11: PROPERTY, PLANT AND EQUIPMENT (continued)
At 30 June 2014
Cost
Accumulated depreciation and impairment
Net carrying amount
Impairment Disclosure
2,451,790
1,925,580
(1,607,031)
(1,493,180)
844,759
432,400
122,104
(24,420)
97,684
4,499,474
(3,124,631)
1,374,843
Collagen Extraction Facility in Collie, Western Australia
This facility was built on land subject to a 20 years lease entered into in June 2004. The facility buildings have a carrying value
of $nil as at 30 June 2015 (2014: $986,519). Whilst this extraction facility has been largely inactive since its completion in 2005,
year as received from a customer in Thailand.
world cosmetic collagen.
NOTE 12: INTANGIBLE ASSETS
Year ended 30 June 2015
Opening balance
Additions
Disposals
Amortisation charge
Impairment losses
Foreign currency exchange differences
Year ended 30 June 2014
Opening balance
Additions
Disposals
Amortisation charge
Impairment losses
Foreign currency exchange differences
Patents and licences
$
188,921
5,319
-
(8,303)
-
3,253
189,190
Patents and licences
$
189,219
57,662
-
-
(57,947)
(13)
188,921
Total
$
188,921
5,319
-
(8,303)
-
3,253
189,190
Total
$
189,219
57,662
-
-
(57,947)
(13)
188,921
For personal use only HOLISTA
COLLTECH
60
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 13: TRADE AND OTHER PAYABLES
Trade payables (i)
Non-trade creditors
Other payables
Unearned income
(i) Trade payables are non-interest bearing and are normally settled on 30-day terms
Secured
Bank overdraft
Total secured borrowings
2015
$
459,036
667,118
1,126,154
-
-
-
-
2014
$
290,001
347,409
637,410
69,162
69,162
185,171
185,171
NOTE 14: INTEREST-BEARING LOANS AND BORROWINGS
Borrowings shown in the Statement of Financial Position relate to borrowings through the Malaysia Companies, National
Australia Bank and convertible loan note holders are listed as follows:
Current
Bankers acceptance
Bank overdraft
Credit card
Financial leases
Term loans: (1)
Convertible notes (a)
Total Current
Non-Current
After 1 year but not later than 5 years
Term loans: (1)
Financial leases
Convertible notes (a)
After 5 years
Term loans: (1)
Financial leases
Total Non-Current
2015
$
273,015
-
(316)
13,474
36,372
450,470
773,015
166,557
60,895
-
227,451
434,480
14,080
448,560
676,011
2014
$
627,914
185,171
(280)
255,121
33,097
-
1,101,023
151,559
55,797
1,209,088
1,416,444
460,998
29,152
490,150
1,906,594
For personal use only ANNUAL REPORT
61
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 14: INTEREST-BEARING LOANS AND BORROWINGS (continued)
The borrowings of the Group and the Company are secured by the following:-
Term loan (1):
1) As principal Instrument, an “all monies” Facilities Agreement stamped to the amount of facilities advanced;
2)
Company;
3) Corporate Guarantee by subsidiary company for $823,949; and
4) Personal Guarantee for $823,949 by a Director of the subsidiary company.
Bankers’ Acceptance and bank overdraft:
5) Facility Agreement;
6)
7) Memorandum of Deposit and letter of set off;
8) Corporate Guarantee by a subsidiary company; and
9) Joint and several guarantees from certain Directors.
The bankers acceptance and bank overdraft bear interest of 4.81% to 8.50% (2014: 4.62% to 8.16%).
The term Loan (1) is repayable over 240 monthly instalments (principal plus interest) of $5,271 which commenced on 1 July
2008. The term loan bears interest rates ranging from 4.90% to 6.93% (2014: 4.71% to 6.66%) per annum.
Convertible notes
The parent entity issued 1,500,000 convertible notes for $1.5 million on 17 June 2013 to director Mr. Chan Heng Fai. The notes
and any accrued interest (payable at 1% per annum) are convertible into ordinary shares of the parent entity, at the option of
the holder, or repayable on 17 June 2016. The convertible notes will be convertible in to shares at the Issue Price ($0.08). On
the 24 September 2014 1,000,000 of the notes were converted to equity.
• Face value of notes issued
• Other equity securities – value of conversion rights
• Non-current liability
• Current liability
2015
$
500,000
78,031
(127,561)
-
450,470
2014
$
1,500,000
121,590
(412,502)
1,209,088
-
For personal use only
HOLISTA
COLLTECH
62
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 14: INTEREST-BEARING LOANS AND BORROWINGS (continued)
Assets pledged as security
The carrying amounts of assets pledged as security for current and non-current interest bearing liabilities are:
Current
Floating charge
Cash and cash equivalents
Inventories
Total assets pledged as security
Non-Current
First mortgage
Freehold land and buildings
Floating charge
Total non-current assets pledged as security
Total assets pledged as security
Financing facilities available
Total facilities:
• Bank overdraft
• Bank loan
• Trade facilities
• Convertible notes
• Finance lease
Facilities used at balance date
• Bank overdraft
• Bank loan
• Trade facilities
• Convertible notes
• Finance lease
Facilities unused at balance date
• Bank overdraft
• Trade facilities
Total facilities
Facilities used at balance date
Facilities unused at balance date
497,766
1,010,682
1,508,448
859,352
-
859,352
2,367,800
otiated and were available:
2015
$
-
637,408
413,138
450,470
88,449
1,589,465
2015
$
-
637,408
273,015
450,470
88,449
1,449,342
-
140,123
140,123
1,589,465
(1,449,342)
140,123
1,511,648
695,700
2,207,348
844,759
-
844,759
3,052,107
2014
$
329,580
645,654
982,147
1,209,088
340,070
3,506,539
2014
$
185,171
645,654
627,914
1,209,088
340,070
3,007,897
144,409
354,233
498,642
3,506,539
(3,007,897)
498,642
For personal use only ANNUAL REPORT
63
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 15: ISSUED CAPITAL
154,001,549 Ordinary shares issued and fully paid
Convertible notes 500,000 (2014: 1,500,000)– value of conversion rights
2015
$
9,286,702
137,501
9,424,203
2014
$
8,184,145
412,502
8,596,647
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion
to the number of and amounts paid on the shares held.
On a show of hands every holder of ordinary shares present at a meeting in person or by proxy, is entitled to one vote, and
upon a poll each share is entitled to one vote.
Ordinary shares have no par value and the company does not have a limited amount of authorised capital.
Movements in ordinary share capital of the Company during the last two year were as follows;
Date
Details
No. of Shares
Issue Price
$
01/07/2013 Opening balance
16/12/2013 Shares issued
Less: costs on issue of shares
30/06/2014 Closing balance
129,603,281
11,666,667
141,269,948
$0.06
7,554,145
700,000
(70,000)
8,184,145
Date
Details
No. of Shares
Issue Price
$
01/07/2014 Opening balance
24/09/2014 Shares issued on conversion of convertible notes
30/06/2015 Closing balance
141,269,948
12,731,601
154,001,549
$0.08
8,184,145
1,102,557
9,286,702
NOTE 16: ACCUMULATED LOSSES AND RESERVES
Accumulated Losses
Movements in accumulated losses were as follows:
Reserves
Compositions of reserves were as follows:
Foreign currency translation reserve
Options reserve
2015
$
(9,170,250)
33,488
(9,136,762)
2014
$
(5,889,428)
(3,280,822)
(9,170,250)
2015
$
(46,714)
2,242,994
2,196,280
2014
$
(41,430)
2,242,994
2,201,564
For personal use only HOLISTA
COLLTECH
64
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 16: ACCUMULATED LOSSES AND RESERVES (continued)
Movements in options reserve during the last year:
Foreign currency translation reserve (a)
Options reserve (b)
Nature and purpose of reserves
(a) Foreign currency translation reserve
statements of foreign subsidiaries.
(b) Option reserve
2015
$
(5,284)
-
(5,284)
2014
$
(25,508)
2,242,994
2,217,486
The option reserve records items recognised as expenses on valuation of share options. There are 25,333,333 options outstanding
at year end.
Share options
The company has previously had an employee share option scheme under which options to subscribe for the Group’s shares
have been granted to certain executives and other employees. No options have been issued during the year under this
scheme (2014: nil).
NOTE 17: NON-CONTROLLING INTEREST
Reconciliation of non-controlling interest in controlled entities:
Opening balance
Share of current year loss after income tax
Share of current year translation reserve
Share capital
NOTE 18: FINANCIAL INSTRUMENTS
(a) Capital risk management
2015
$
(98,569)
(76,473)
(17,475)
-
(192,517)
2014
$
-
(92,909)
(5,935)
275
(98,569)
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 debt and equity balance.
The Group’s overall strategy remains unchanged from 2011.
The capital structure of the Group consists of debt, cash and cash equivalents and equity attributable to equity holders of
the parent, comprising issued capital, reserves and accumulated losses.
None of the Group’s entities are subject to externally imposed capital requirements.
dividends and general administrative outgoings.
Gearing levels are reviewed by the Board on a regular basis in line with its target gearing ratio, the cost of capital and the
risks associated with each class of capital.
For personal use only ANNUAL REPORT
65
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 18: FINANCIAL INSTRUMENTS (continued)
Financial assets
Cash and cash equivalents (i)
Trade and other receivables
Other assets
Financial liabilities (at amortised cost)
Trade and other payables
Borrowings (current and non-current)
2015
$
2014
$
497,766
1,782,314
16,271
1,126,154
1,449,026
1,511,648
1,225,409
23,585
637,410
3,007,617
(i) Cash and cash equivalents comprise restricted amounts which all have varied maturity dates within the next 12 months.
(c) Financial risk management objective
The Group is exposed to market risk (including currency risk, fair value interest rate risk and price risk), credit risk, liquidity
(d) Market risk
foreign currency and commodity price risk including foreign exchange forward contracts to hedge the exchange rate and
commodity price risk arising on its production.
There has been no change to the Group’s exposure to market risks or the manner in which it manages and measures the risk
from the previous period.
(i) Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate
exchange contracts.
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:
Liabilities
2015
$
2014
$
Assets
2015
$
2014
$
Malaysian ringgit
2,071,738
2,379,280
3,253,872
3,086,190
Foreign currency sensitivity analysis
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 represents 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.
For personal use only HOLISTA
COLLTECH
66
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 18: FINANCIAL INSTRUMENTS (continued)
Other equity (ii)
RM impact
Consolidated
Company
2015
$
81,805
189,153
2014
$
63,474
154,558
2015
$
-
-
2014
$
-
-
(i) This is mainly attributable to the exposure outstanding on receivables and payables at year end in the Group
(ii) Interest rate risk management
borrowings.
risk management section of this note
(iii) Interest rate risk sensitivity analysis
The sensitivity analyses below have been determined based on the exposure to interest rates for both derivative and non-
held constant throughout the reporting period. A 50 basis point increase or decrease is used when reporting interest rate risk
internally to key management personnel and represents management’s assessment of the change in interest rates.
At balance date, if interest rates had been 50 basis points higher or lower and all other variables were held constant, the Group’s:
to interest rates on its variable rate borrowings.
The Group’s sensitivity to interest rates has decreased during the current period mainly due to the reduction in variable rate
debt instruments and the increase in interest rate swaps.
(e) Credit risk management
rated the equivalent of investment grade and above. This information is supplied by independent rating agencies where
customers. The Group’s exposure and the credit ratings of its counterparties are continuously monitored and the aggregate
value of transactions concluded is spread amongst approved counterparties. Credit exposure is controlled by counterparty
limits that are reviewed and approved by the risk management committee annually.
An analysis of the credit quality of trade and other receivables that are neither past due is as follows.
Customers with external credit rating
Other customers
- four or more years trading history with the Group
- less than four years or more trading history with the Group
2015
$
-
1,276,992
466,722
1,743,714
2014
$
-
1,140,253
34,315
1,174,568
For personal use only
ANNUAL REPORT
67
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 18: FINANCIAL INSTRUMENTS (continued)
(f) Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the board of directors, who have built an appropriate liquidity risk
management framework for the management of the Group’s short, medium and long-term funding and liquidity management
requirements. The Group manages liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing
liabilities.
Less than 1
Month
$
1-3
Months
$
3 months-
1 year
$
2015
Non-interest bearing
Finance lease liabilities (4.56%)
Variable interest rate instruments (5.45%)
Fixed interest rate instruments (3.18%)
-
1,436
195,208
8,561
205,205
-
2,873
77,808
16,816
97,496
Less than 1
Month
$
1-3
Months
$
3 months-
1 year
$
2014
Non-interest bearing
Finance lease liabilities
Variable interest rate instruments
Fixed interest rate instruments
-
29,853
189,686
9,705
229,244
-
59,705
436,575
22,732
519,012
NOTE 19: COMMITMENTS
Operating lease commitments - Group as lessee
1-5 years
5+ years
$
-
$
-
-
-
147,863
147,863
-
12,927
71,213
-
526,318
539,245
-
388,321
459,534
1-5 years
5+ years
$
-
96,548
$
-
-
105,810
330,655
1,962,118
83,656
-
183,254
28,106
97,446
280,333
2,192,966
414,311
The Group has entered into commercial leases on certain motor vehicles and items of machinery. These leases have an average
life of between 3 and 7 years with no renewal option included in the contracts. There are no restrictions placed upon the lessee
by entering into these leases.
annum.
The Group has a 20 year lease entered into in June 2004 for a site in Collie, Western Australia. The rent for this site is $9,742
increased by CPI per hectare per annum.
Future minimum rentals payable under non-cancellable operating leases as at 30 June are as follows:
For personal use only HOLISTA
COLLTECH
68
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 19: COMMITMENTS (continued)
Within one year
Consolidated
Parent
2015
$
25,426
39,171
39,172
2014
$
13,979
39,171
48,965
103,769
102,115
2015
$
9,973
39,171
39,172
92,486
2014
$
9,793
39,171
48,965
97,929
Finance lease and hire purchase commitments - Group as lessee
minimum lease payments are as follows:
Consolidated
Within one year
Total minimum lease payments
Present value of minimum lease payments
2015
2014
Present value
Of lease
Payments
$
Minimum
Lease
Payments
$
Present value
Of lease
Payments
$
17,014
65,676
14,185
96,875
-
96,875
272,812
66,216
30,333
369,360
(29,290)
340,070
257,731
63,077
29,673
350,481
-
350,481
Minimum
Lease
Payments
$
17,236
68,944
14,347
100,527
(12,078)
88,449
Capital commitments
At 30 June 2015 the Group has no capital commitments that have not otherwise been booked as a liability (2014 $ Nil).
NOTE 20: RELATED PARTY DISCLOSURE
Transactions with related parties
Transactions between related parties are on normal commercial terms and conditions no more favourable than those available to
other parties unless otherwise stated.
For personal use only ANNUAL REPORT
69
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
Consolidated
Parent
2015
$
2014
$
2015
$
2014
$
NOTE 20: RELATED PARTY DISCLOSURE (continued)
The following transactions occurred with related parties
Transactions with iGalen Sdn Bhd . Mdm Nora
Hassan is a director of the Malaysian Parent and
shareholder of iGalen Sdn Bhd.
-
-
Sales
Purchases
- Rental income
-
-
Talks and seminars
Purchase of membership package
Director fee paid to Mdm Nora Hassan
Legal services fee paid to Sumita K & Associates for
provision of legal advice. Mrs Sumita’s husband is a
director of Holista CollTech Limited
Director fee paid to Mrs Sumita
The following amounts have been advanced to related parties
64,956
(36,391)
62,722
(163,774)
(3,485)
4,181
8,363
12,544
(50,882)
-
-
-
-
-
-
8,062
12,093
20,155
Amounts due from iGalen Sdn Bhd. Mdm Nora
Hassan is a director of the Malaysian Parent and
shareholder of iGalen Sdn Bhd
Consolidated
Parent
2015
$
2014
$
2015
$
204,131
204,131
-
-
-
-
Lite Food Inc is 74% owned by the Group with the remaining 26% being held by private shareholders including our director
Mr. Chan Heng Fai.
NOTE 21: INTEREST IN SUBSIDIARIES
Set out below are the Group’s subsidiaries at 30 June 2015. The subsidiaries listed below have share capital consisting solely
of ordinary shares which are held directly by the Group and the proportion of ownership interest held equals the voting rights
held by the group. Each subsidiaries country of incorporation is also its principal place of business.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2014
$
-
-
For personal use only HOLISTA
COLLTECH
70
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 21: INTEREST IN SUBSIDIARIES (continued)
Name
Holista Biotech Sdn Bhd
Total Health Concept Sdn Bhd
Alterni (M) Sdn Bhd
Medi Botanics Sdn Bhd
Lite Food Inc
Country of
Incorporation
Malaysia
Malaysia
Malaysia
Malaysia
United States
of America
Ownership Interest Held by the Group
2015
100%
100%
100%
100%
74%
2014
100%
100%
100%
100%
74%
Proportion of Non-controlling
Interests
2015
2014
-
-
-
-
-
-
-
-
26%
26%
Summarised Financial Information of Subsidiaries with Material Non-controlling Interests
material to the Group:
Summarised Financial Position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net liabilities
Carrying amount of non-controlling interests
Summarised Financial Performance
Revenue
(Loss) after tax
Other comprehensive income after tax
Total comprehensive income
(Loss) attributable to non-controlling interests
Distributions paid to non-controlling interests
The information above is before intercompany eliminations
Lite Food Inc
30 June 2015
$
30 June 2014
$
1,133
-
(52)
(741,531)
(740,450)
(192,517)
3,683
-
(43)
(349 602)
(345,962)
(98,569)
Year ended
30 June 2015
$
Year ended
30 June 2014
$
-
-
(294,130)
(357,344)
-
(294,130)
(76,473)
-
-
(357,344)
(92,909)
-
For personal use only
ANNUAL REPORT
71
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 21: INTEREST IN SUBSIDIARIES (continued)
Summarised Cash Flow Information
Net cash used in operating activities
Net cash from investing activities
Effect of exchange rates on cash holdings in foreign currencies
Net decrease in cash and cash equivalents
Lite Food Inc
30 June 2015
$
30 June 2014
$
(294,130)
291,580
-
-
2,550
(357,027)
350,386
-
10,324
3,683
NOTE 22: PARENT ENTITY DISCLOSURES
Holista CollTech Limited is the ultimate Australian parent entity and ultimate parent of the Group.
Holista CollTech Limited did not enter into any trading transactions with any related party during the year.
Financial position
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net Assets
Equity
Issued capital
Accumulated losses
Reserves
Total Equity
Financial performance
(Loss) for the year
Other comprehensive income
Total comprehensive (loss)
30 June 2015
$
30 June 2014
$
80,438
2,987,839
3,068,277
726,277
450,470
1,176,747
1,891,530
7,933,129
(8,284,593)
2,242,994
1,891,530
382,782
2,712,057
3,094,839
340,172
1,209,087
1,549,259
1,545,580
7,105,572
(7,802,986)
2,242,994
1,545,580
Year ended
30 June 2015
$
Year ended
30 June 2014
$
(481,607)
(3,610,372)
-
-
(481,607)
(3,610,372)
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COLLTECH
72
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 22: PARENT ENTITY DISCLOSURES (continued)
The parent company has no capital commitments at 30 June 2015 (2014:Nil).
The parent company has not entered into any guarantees on behalf of subsidiary entities.
The parent company commitments are disclosed in Note 19.
NOTE 23: EVENTS AFTER THE REPORTING PERIOD
NOTE 24: AUDITOR’S REMUNERATION
2015
$
2014
$
Amounts received or due and receivable by Grant Thornton Audit Pty Ltd for:
Amounts received or due and receivable by Stantons International Audit and Consulting
for:
Amounts received or due and receivable by Russell Bedford LC & Company for
other entity in the Group
48,862
27,000
other entity in the Group
-
62,447
Amounts received or due and receivable by auditors of group entities
21,186
70,048
36,357
125,804
NOTE 25: DIRECTORS AND EXECUTIVES DISCLOSURES
(a)
(i)
Details of Key Management Personnel
Directors
Dato’ Dr Rajen Manicka
Mr. Daniel O’Connor
Mr. Chan Heng Fai
(ii)
Executives
Mr Kong Hon Khien
Mr Jay Stephenson
Non Executive Director
Non Executive Director
Company Secretary
Key management personnel remuneration has been included in the Remuneration Report section of the Directors’ Report.
The totals of remuneration paid to the key management personnel of the Company are as follows.
For personal use only
ANNUAL REPORT
73
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 25: DIRECTORS AND EXECUTIVES DISCLOSURES (continued)
Total key management personnel compensation
(b)
Loans to Key Management Personnel
There are no loans to directors or executives.
2015
$
466,016
68,127
534,143
2014
$
428,989
50,703
479,692
(c)
Other transactions and balances with Key Management Personnel other than transactions disclosed
in Note 20, the Company had the following transactions with Key Management Personel during the
year.
Balance at
beginning
of year
$
Conversion
during the
year
$
Convertible notes (i)
1,515,000
(1,000,000)
Total
1,515,000
(1,000,000)
Repayment
$
-
-
Interest
charged
$
7,350
7,350
Exchange
difference
$
-
-
Balance at
end of year
$
522,350
522,350
(i) The convertible note agreement was entered into with director Mr. Chan Heng Fai for a period of 3 years with interest charged
at 1% per annum. The fair value of the convertible notes at 30 June 2015 was $450,470 (2014: $1,209,087).
NOTE 26: SHARE BASED PAYMENTS
The company made no share based payments during the year ended 30 June 2015.
The company made the following share based payments during the year ended 30 June 2014:
Warrants issued
On 27 November 2013, 23,333,333 warrants were granted to interests associate non-executive director Mr Chan Heng Fai
as approved by shareholders at the Annual General Meeting held on the 27 November 2013. The warrants entitle the holder
to take up ordinary shares at an exercise price of $0.06 each. The warrants are exercisable on or before 17 December 2018.
The warrants have no vesting conditions, hold no voting rights and are transferable. A portion of the fair value of the warrants
($70,000) has been treated as equity raising costs (refer note 4) with the balance being expensed.
i) Fair value of warrants
The fair value of the warrants granted during the year to Mr Chan Heng Fai was $0.09. This value has been calculated using
the Black-Scholes option pricing model applying the following inputs;
Market price of shares:
$0.12
Estimated share price volatility:
81.06%
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HOLISTA
COLLTECH
74
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2015
NOTE 26: SHARE BASED PAYMENTS (continued)
Risk-free interest rate:
3.36%
Options issued
On 11 June 2014, 2,000,000 options were granted to a patent consultant as approved by the board of directors. The options
entitle the holder to take up ordinary shares at an exercise price of $0.10 each. The options are exercisable on or before 1
August 2017. The options have no vesting conditions, hold no voting rights and are transferable.
i) Fair value of options
The fair value of the options granted during the year to the patent consultant was $0.0046. This value has been calculated
using the Black-Scholes option pricing model applying the following inputs;
Market price of shares:
Estimated share price volatility:
Risk-free interest rate:
$0.045
50.58%
2.72%
Reconciliation of outstanding share options
The number and weighted average exercise prices (WAEP) of, and movements in, share options during the year
Outstanding at 1 July
Granted during the year
Forfeited during the year
Exercised during the year
Outstanding at 30 June
Exercisable at 30 June
Number of
options 2015
25,333,333
-
-
-
WAEP 2015
Number of
options 2014
WAEP 2014
$0.06
-
-
-
-
25,333,333
-
-
25,333,333
25,333,333
$0.06
$0.06
25,333,333
25,333,333
-
$0.06
-
-
$0.06
$0.06
The options outstanding at 30 June 2015 have an exercise price in the range of $0.06 to $0.10 (2014: $0.06) and weighted
average remaining contractual life of 3 years (2014: 4 years). The weighted average share price at the date of exercise for share
options exercised in 2015 was nil as no options were exercised (2014: nil).
NOTE 27: CONTINGENT LIABILITIES
The Company has no contingent liabilities at 30 June 2015.
For personal use only
ANNUAL REPORT
75
DIRECTORS’ DECLARATION
1.
In the opinion of the directors of Holista CollTech Limited (the ‘Company’):
a.
i.
performance for the year then ended; and
ii. complying with Australian Accounting Standards, the Corporations Regulations 2001, professional
reporting requirements and other mandatory requirements.
iii. The remuneration disclosures contained in the Remuneration Report comply with s300A of the
Corporations Act 2001
b.
there are reasonable grounds to believe that the company will be able to pay its debts as and when they become
due and payable.
c.
issued by the International Accounting Standards Board.
2. This declaration has been made after receiving the declarations required to be made to the directors in accordance with
ended 30 June 2015.
This declaration is signed in accordance with a resolution of the Board of Directors.
_______________________________
Dato’ Dr Rajen Manicka
Director
Dated this 28 day of September 2015
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COLLTECH
76
Stantons International Audit and Consulting Pty Ltd
trading as
Chartered Accountants and Consultants
PO Box 1908
West Perth WA 6872
Australia
Level 2, 1 Walker Avenue
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
HOLISTA COLLTECH LIMITED
Report on the Financial Report
We have audited the accompanying financial report of Holista CollTech Limited, which comprises
the consolidated statement of financial position as at 30 June 2015, the consolidated statement of
profit or loss and other comprehensive income, the consolidated statement of changes in equity
and the consolidated statement of cash flows for the year then ended, notes comprising a summary
of significant accounting policies and other explanatory information and the directors’ declaration of
the consolidated entity comprising the company and the entities it controlled at the year’s end or
from time to time during the financial year.
Directors’ responsibility for the Financial Report
The directors of the company are responsible for the preparation and fair presentation 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 is free from material misstatement, whether
due to fraud or error. In note 2 a), the directors also state, in accordance with Australian
Accounting Standard AASB 101 Presentation of Financial Statements, that the financial report,
comprising the financial statements and notes, complies with International Financial Reporting
Standards.
Auditor’s responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted
our audit in accordance with Australian Auditing Standards. These Auditing Standards require that
we comply with relevant ethical requirements relating to audit engagements and plan and perform
the audit to obtain reasonable assurance whether the financial report is free from material
misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial report. The procedures selected depend on the auditor’s judgement,
including the assessment of the risks of material misstatement of the financial report, whether due
to fraud or error. In making those risk assessments, the auditor considers internal control relevant
to the entity’s preparation and fair presentation of the financial report in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
An audit also includes evaluating the
opinion on the effectiveness of the entity’s internal control.
appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall presentation of the financial report.
Our audit did not involve an analysis of the prudence of business decisions made by directors or
management.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our audit opinion.
76
Liability limited by a scheme approved
under Professional Standards Legislation
For personal use only
ANNUAL REPORT
77
Independence
In conducting our audit, we have complied with the independence requirements of the Corporations
Act 2001.
Auditor’s opinion
In our opinion:
(a)
the financial report of Holista CollTech Limited is in accordance with the Corporations Act
2001, including:
(i)
(ii)
giving a true and fair view of the consolidated entity’s financial position as at 30
June 2015 and of its performance for the year ended on that date; and
complying with Australian Accounting Standards and the Corporations Regulations
2001.
(b)
the consolidated financial report also complies with International Financial Reporting
Standards as disclosed in note 2 a).
Emphasis of Matter Regarding Going Concern
Without qualification to the opinion expressed above, attention is drawn to the following matter:
As referred to in Note 2 d) to the consolidated financial statements, the consolidated financial
statements have been prepared on a going concern basis. At 30 June 2015 the consolidated entity
had cash and cash equivalents totalling $497,766 (including restricted cash of $434,161), working
capital of $1,456,298 and has incurred a profit before tax for the year of $107,771. The ability of the
Company and consolidated entity to continue as going concerns is subject to the future profitability
of the Company and consolidated entity. In the event that the consolidated entity is not successful
in maintaining profitability, the Company and its subsidiaries may not be able to meet their liabilities
as and when they fall due and the realisable value of the Company’s and its subsidiaries assets
may be significantly less than book values.
Report on the Remuneration Report
We have audited the remuneration report included in pages 16 to 23 of the directors’ report for the
year ended 30 June 2015. 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
Auditor’s opinion
In our opinion the remuneration report of Holista CollTech Limited for the year ended 30 June 2015
complies with section 300A of the Corporations Act 2001.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)
Samir Tirodkar
Director
West Perth, Western Australia
28 September 2015
77
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HOLISTA
COLLTECH
Additional Information for Listed Public Companies
78
Additional information included in accordance with the Listing Rules of the Australian Securities Exchange Limited.
The information is current as at 31 August 2015.
1. Shareholdings
a)
Substantial shareholders of Holista CollTech Limited:
Name of shareholder
Dato’ Dr Rajen Manicka
Mr Chan Heng Fai
Franjack Pty Ltd + Aurjoe Pty Ltd
b)
Distribution of equity – Listed securities:
Size of holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 – and over
Shares held
73,914,400
20,898,268
6,726,665
Number of
Shareholders
233
234
105
164
52
788
At the date of this report there were 413 shareholders who held less than a marketable parcel of shares holding 497,363 shares.
For personal use only ANNUAL REPORT
79
Additional Information for Listed Public Companies
c)
20 Largest Shareholders – Ordinary Shares:
DR. RAJENDRAN MARNICKAVASAGAR
HENGFAI BUSINESS DEVELOPMENT PTE LTD
FRANJACK PTY LTD + AURJOE PTY LTD
MS SARINDERJIT KAUR
DR FATHIL MOHAMED
FAIRVIEW HOLDINGS PTY LTD
MR CHEOK HUAT AW
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CHANDRA SEKARAN P PERUMAL
MR RAVINDRAN GOVINDAN
MR KOK WAH ONG
DBS VICKERS SECURITIES (SINGAPORE) PTE LTD
THANK KEATING PTY LTD
FAIRVIEW HOLDINGS PTY LTD
UOB KAY HIAN PRIVATE LIMITED
BAKERSFIELD HOLDINGS PTY LTD
MRS SHIVANI KAMALANATHAN
RHB SECURITIES SINGAPORE PTE LTD
IRSS NOMINEES (21) LIMITED
LIFESCIENCE SECURITIES LTD
d)
Stock Exchange Listing
Number of Ordinary
Fully Paid Shares Held
% Held of Issued Ordinary
Capital
73,914,400
20,898,268
6,726,665
6,625,000
4,311,274
4,029,564
4,000,000
3,440,873
3,333,333
2,061,119
1,817,746
1,760,000
1,300,000
1,085,436
793,181
786,666
738,089
711,666
660,000
600,000
48.00
13.57
4.37
4.30
2.80
2.62
2.60
2.23
2.16
1.34
1.18
1.14
0.84
0.70
0.52
0.51
0.48
0.46
0.43
0.39
139,593,280
90.64
Listed securities in Holista CollTech Limited (HCT) are quoted on all member exchanges of the Australian Securities Exchange.
For personal use only HOLISTA COLLTECH
Holista CollTech Limited
ABN 24 094 515 992
Suite 12, Level 1, 11 Ventnor Avenue,
West Perth, WA 6005
Tel : (+618) 6141 3500
Fax : (+618) 6141 3599
www.holistaco.com
For personal use only