HOLISTA COLLTECH
LIMITED
ABN 24 094 515 992
ANNUAL REPORT
FOR THE YEAR ENDED 31 December 2016
For personal use only
Holista CollTech Limited
Page
3
4
5
7
10
11
13
15
26
34
35
36
37
38
39
80
81
85
Contents
About Us
Corporate Information
Chairman’s Report
Business Segment
Key Milestone
Low GI Spotlight
Message from our Partners
Directors’ Report
Corporate Governance Statement
Auditor's Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Independent Auditor's Report
ASX Additional Information
2
For personal use only
Holista CollTech Limited
ABOUT US
“We all strive to be healthy. Yet sometimes, making the right choice is beyond our control. That's where Holista
CollTech comes in. We have devoted our time into researching and finding natural solutions to help you improve their
health. After all, being healthy is the best gift you can give your body.”
CORPORATE PROFILE
Holista CollTech Ltd (“Holista”) is research-driven biotech company and is the result of the merger of Holista Biotech
Sdn. Bhd. and CollTech Australia Ltd.
Headquartered in Perth with extensive operations in Malaysia, Holista is dedicated to delivering first-class natural
ingredients and wellness products, and leads in research on herbs and food ingredients.
Holista, listed on the Australian Securities Exchange (ASX:HCT), researches, develops, manufactures and markets
“health-style” products to address the unmet and growing needs of natural medicine.
Holista has a suite of food ingredients which does not compromise on taste, odour and mouth-feel. This includes low-
Glycemic Index (“GI”) baked products, low sodium salt, low fat fried foods and low calories sugar.
It is the only company to produce sheep (ovine) collagen using patented extraction methods from Australia, and is on
track in nano-nising and encapsulating liposomes for the ovine collagen.
Holista aims to build a world class company focused on providing consumers with scientifically enhanced, engineered
and tested natural health supplements and consumer products.
3
For personal use only
Holista CollTech Limited
CORPORATE INFORMATION
ABN 24 094 515 992
Directors
Dr Rajen Manicka, Managing Director and Chief Executive Officer
Mr Daniel Joseph O’Connor, Non Executive Director
Mr Chan Heng Fai, Non Executive Director
Company secretary
Mr Jay Stephenson
Registered office
Holista CollTech Limited
ABN 24 094 515 992
283 Rokeby Road, Subiaco WA6008
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
4
For personal use only
Holista CollTech Limited
CHAIRMAN’S REPORT
Dear Shareholders,
On behalf of the Board of Directors (the “Board”), I am pleased to present the Annual Report and audited financial
statements of Holista CollTech Limited (“Holista” or the “Group”) for the new financial period ended 31 December 2016
(“FY2016”).
The new financial year end date, announced on 9 January 2017, will allow for greater administrative efficiency in
coordinating financial reporting requirements with our subsidiaries in Malaysia and the U.S.
It has been an eventful year for Holista, particularly for our breakthrough scientific formula for the world’s lowest
glycemic index (“GI”) in white bread. We secured new partnerships across several regions including signing four non-
disclosure agreements (“NDAs”) with leading food manufacturers from the Asia Pacific region to implement our low-GI
reducer in flour-based products.
Low-GI Breakthrough
To tackle the global pandemic of obesity and diabetes, we need to collaborate with major food manufactures and
restaurant chains to enhance their recipes and make their products healthier for consumers. The solution lies in adding
small amounts of simple, clean label ingredients to the flour mix without complex new equipment or changing the taste
and texture.
On 12 January 2016, we announced a major scientific breakthrough: a formula for low-GI white bread,
PANATURA®GI, in partnership with Europe’s largest independent bakery, VERIPAN Ingredients AG (“Veripan”). White
bread that was baked using our formula recorded a GI reading of 53 in tests at the University of Sydney, the lowest-
ever for a “clean-label” white bread.
On 12 December 2016, we broke ground again after the group announced that the University of Sydney successfully
tested four additional formulae of PANATURA®GI in white bread. Clinical trials showed that white bread made with four
different blends of the formula scored readings of 49, 51 and 54 (twice).
Holista’s low-GI formulae -- made from barley, fenugreek, ladies’ fingers and lentil - can be added to white flour to
dramatically reduce blood sugar levels without changing the taste or texture of the final baked product. The year in
review saw many breakthroughs for the Group in the low-GI segment and we expect major launches in the first half of
FY2017.
Subsequent to the financial year end, we announced on 6 January 2017 the collaboration with 2016 Nobel Prize
Nominee, Daryl Thompson, to file a patent for the world’s first low-GI sugar made out of all natural ingredients. Unlike
other alternatives, our natural low-GI sugar can be melted, baked and caramelized for use in all cooking applications.
The potential impact of our low-GI sugar could be significant. Holista’s low-GI sugar is expected to be launched in the
first half of 2017.
Holista Foods Formed
Holista also secured a landmark partnership with Nadja Foods LLC (“Nadja Foods”) to co-develop clean-label low-GI
muffins. On 6 April 2016, this partnership was extended to include healthy bagels, brownies and croutons. On 12 July
2016, the Group and Nadja Foods announced a 51-49 joint-venture company, Holista Foods (“Holista Foods”), to be
run by Nadja Piatka as CEO. Holista Foods, based in New York, will be the distributor for our low-GI products in North
America.
Nadja Foods’ network and track record with North American food manufacturers and restaurant chains will accelerate
market acceptance of Holista’s food ingredients. Holista Foods is also in discussions with Veripan to exclusively
distribute PANATURA®GI in North America.
We are proud to highlight another breakthrough for the Group in the low-GI space to develop the world’s first low-GI
noodles. On 21 October 2016, Holista Foods signed a Research and Development collaboration with Wing’s Food
Products (“Wing’s”) – a major North American noodle manufacturer – to develop the world’s first low-GI noodles.
Based in Canada, Wing’s has supplied noodles to the North American market since 1953. Wing’s will test Holista’s low-
GI ingredient for use in noodles and Holista will provide expertise on the application of its formula.
This will have a significant global impact for the Group. According to Statista, 50% of the world’s wheat is consumed as
noodles, led by China and Indonesia. In the United States alone, the noodle market is work US$270 million. In 2015,
the global demand for instant noodle amounted to 103.58 billion servings.
5
For personal use only
Holista CollTech Limited
Food-Grade Collagen
The year in review saw the Group upgrade the collagen plant in Collie, Australia, to produce food-grade collagen.
Food-grade collagen is expected to contribute better revenue as compared to its existing cosmetic-based collagen.
This will be ready for commercialization by the second half of FY2017.
We are confident that food-grade collagen will be a major revenue contributor for the Group. According to U.K.
biotechnology market research firm Meticulous Research, the global collagen market is expected to grow at a
compounded annual rate of 6.3% from 2015, and will reach a market size of US$3.97 billion by 2020. It also has
enormous market potential as it is safe for consumption by multiple major religious groups and cultures. Our collagen
product is sourced from Australia, the only country certified by the United States Department of Agriculture (USDA) to
have disease-free sheep.
Sales of Supplements
In the year in review, dietary supplements remained the Group’s main income contributor.
Revenue from dietary supplements increased due to the launch of new products – iNContro and BONEX ACTIV – as
well as an increase of product advisor staff. We will continue to source for more potential products and supply raw
materials to multi-level marketing companies.
Financial Performance
As announced on 9 January 2017, the Group changed its financial year end to 31 December (compared to 30 June
previously) as part of our initiatives to streamline administrative efficiencies for financial reporting across various
subsidiaries. In view of this, the financial period from July 2016 to December 2016 (i.e. six months) will be a transitional
one. Thereafter, the Group will adopt financial reporting on an annual basis, with respect to a 31 December year end.
Despite the strengthening of the US Dollar against the Australian Dollar and Malaysian Ringgit, the Group recorded a
net profit attributable to owners of the parent of $166,268 for the six months ended 31 December 2016 (“6M Dec
2016”). On a 12-month basis for the period ended 30 June 2016, the Group recorded a net loss attributable to owners
of the parent of $407,930.
The Group’s revenue for 6M Dec 2016 increased to $3.7 million compared to $3.0 million for the six months ended 31
December 2015 (“6M Dec 2015”). On a 12-month basis for the period ended 30 June 2016 (“12M FY June 2016”)
revenue increased to $6.3 million primarily due to higher contribution from the dietary supplements segment. The
higher revenue has played a key part in sustaining the Group’s advanced research in low-GI (glycemic index)
ingredients for white flour and low-GI sugar.
Outlook
Our performance during the year in review reflects confidence in the Group’s ability to expand to larger markets and
achieve global leadership for our brands.
The Group’s biggest opportunity in FY2017 is expected to come from applications in bakeries for Holista’s low-GI
reducer. Holista’s partnerships with Veripan AG in Europe and Nadja Foods LLC in North America, including the four
NDAs with leading flour and bread manufacturers in the Asia Pacific region is expected to generate revenue in FY2017.
We are currently pursuing more strategic or joint-venture partners to develop and distribute our healthy food
ingredients. We are confident that the work we undertook in FY2016 will position Holista favourably as a world-class
biotechnology company.
Appreciation
On behalf of the Board of Directors, I would like to express my deepest gratitude to all stakeholders for their support.
Thanks are also due to our research and development collaborators, retailers, suppliers and customers. I would also
like to extend my appreciation to fellow Board members for their guidance, support and advice.
Last but not least, I would like to thank the Group’s management team and staff for all their hard work.
We are committed to provide healthier alternatives to empower consumers with better choices. Together, we will
continue to achieve excellence in the coming years. We look forward to another exciting year ahead with all of you.
Thank you.
Dr. Rajen Manicka
Chairman
6
For personal use only
Holista CollTech Limited
BUSINESS SEGMENT
In the financial year under review, the principle activities within the consolidated group remained focus on three (3) core
areas which are Healthy Food
includes marketing
PANATURA®GI globally and upgrading the collagen plant in Perth to produce food-grade sheep collagen.
Ingredients, Dietary Supplements and Collagen. This
Healthy Food Ingredients
Dietary habits and trends are leading to a global pandemic of obesity-related diseases. In North America, the
increasing consumption of white-flour based products is leading to metabolic syndrome, a health pandemic which
includes symptoms such as obesity, type-2 diabetes and heart diseases.
Meanwhile, Asian diets are increasingly Westernised due to lifestyle trends. In 2014, Japan consumed more wheat
than rice for the first time in history. Starch – irrespective of the source whether rice or bread – usually turns to sugar in
the human body within 20 minutes and is a major contributor to obesity, diabetes and hypertension.
In the year under review, the Group’s focus areas for this business segment was the Glycemic Index (“GI”) Reducer.
Holista’s GI reducer, a formula which consists of barley, dhal, fenugreek and okra, dramatically reduces blood sugar
levels when added to white flour without changing the taste or texture of the final product.
We have made significant progress with our GI reducer since the 12 January 2016 announcement of our scientific
breakthrough in achieving the world’s lowest GI for white bread.
The Group partnered with Veripan Ingredients AG (“Veripan”), the largest independent bakery supplier based in
Europe, to develop and market PANTURA®GI, an all-natural sourdough. White bread made with PANATURA®GI has
been proven to achieve a significantly low GI reading of of 55.
Since the announcement of this breakthrough, we have signed four non-disclosure agreements with leading bread
makers in the Asia Pacific region. Launches from these agreements are expected in the first quarter of 2017. The
global white bread market is projected to be worth US$198.7 billion by 2020, according to Global Industry Analyst Inc.
On 3 March 2016, we began a partnership with Nadja Foods LLC (“Nadja Foods”) to co-develop clean-label low-GI
muffins for distribution in U.S. and Canada. The Group has successfully achieved a GI reading of 48 for muffins – the
lowest-ever clean-label reading for this product category – at GI Labs, a nutrition research organization in Toronto,
Canada. On 6 April 2016, Holista extended this partnership with Nadja Foods to include bagels, brownies and
croutons.
Nadja Piatka, is the founder of Nadja Foods which supplies healthy snacks and desserts to the food service industry,
restaurant chains and retail stores under private label and bran products. Founded in 1992, Nadja Foods customers
have included Subway Restaurants®, McDonald’s®, Sodexo®, Wegmans®, Price Copper and Tops. Nadja Piatka, a
former guest on the Oprah Winfrey Show, made her name with low-fat muffins which has been an ever stay on
McDonald’s Canada menu for 23 years.
On 12 July 2016, our U.S. subsidiary Litefood Inc (“Litefood”) announced the formation of a 51-49 joint venture
company, Holista Foods, with Nadja Foods LLC (“Nadja Foods”) to distribute our low-GI product in North America.
Holista foods has food manufacturing operations in the U.S. and Canada. It will be run by Nadja Piatka as CEO.
Nadja Foods’ network and track record with North American food manufacturers and restaurant chains will accelerate
market acceptance of Holista’s food ingredients. Holista Foods is also in discussion with Veripan to exclusively
distribute PANATURA®GI.
This is a landmark partnership as North America is well known to be the home of fast-food chains – entering this
market will present opportunity to the Group to generate income from this area in the near future. According to research
by Statista, baked goods account for over US$22.15 billion in retail sales across North America.
On 21 October 2016, Holista Foods secured its first major collaboration following the announcement of a Research and
Development collaboration with Wing’s Food Products (“Wing’s”) – a major North American noodle manufacturer – to
develop the world’s first low-GI noodles.
Based in Canada, Wing’s has supplied noodles to the North American market since 1953. Wing’s will test Holista’s low-
GI ingredient for use in noodles and Holista will provide expertise on the application of its formula. Once validated,
Wing’s and Holista Foods will enter a commercial agreement to distribute the low-GI noodles in to the North American
market.
In terms of wheat consumption, individuals are eating more noodles, especially the instant variety; low-GI noodles will
have a significant global impact for the Group. According to Statista, 50% of the world’s wheat is consumed as noodles,
led by China and Indonesia. In the United States alone, the noodle market is work US$270 million. In 2015, the global
demand for instant noodle amounted to 103.58 billion servings.
7
For personal use only
Holista CollTech Limited
On 12 December 2016, we broke ground again after the group announced that the University of Sydney successfully
tested four additional formulae of PANATURA®GI in white bread. Clinical trials showed that white bread made with four
different blends of the formula scored readings of 49, 51 and 54 (twice).
Subsequent to the financial year end, we announced on 6 January 2017 the collaboration with 2016 Nobel Prize
Nominee, Daryl Thompson, to file a patent for the world’s first low-GI sugar made out of all natural ingredients. Unlike
other alternatives, our natural low-GI sugar can be melted, baked and caramelized for use in all cooking applications.
The potential impact of our low-GI sugar could be significant as it can replace sugar in its many industrial applications
with minimal formulation challenges. As the product is made from natural ingredients, it is unlikely to face regulatory
hurdles. The Group expects to launch the product in the first half of 2017.
Having achieved significant progress with our GI Reducer, the next food ingredients which the group will focus on
developing will be the Low Sodium Salt, Low Fat Chip and Low-GI Sugar.
Our Low Sodium Salt, LITESALT™, reduces sodium levels in salt by 25% to 40%, significantly lowering the risk of
blood pressure and heart disease. This product also replaces sodium with a proprietary potassium blend without the
unpleasant metallic taste found in common table salts. It works equally well in water and oil-based foods.
Our Low Fat Chip, Neusolite™, combines FDA-compliant ingredients in our patent-pending two-stage wash system. It
dramatically reduces 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.
Dietary Supplements
This remains our main income contributor during the year with a strong distribution network throughout Malaysia. An
increase in revenue from dietary supplements was recorded at $3,641,576 for the six (6) month period ending 31
December 2016, as compared to $2,950,271 from the previous six (6) month period ending 31 December 2015.
The increase in revenue is attributed to the launch of new products and the increase in product advisor staff. For the
twelve (12) month period ending June 2016, revenue from Dietary Supplements was recorded at $5,961,312.
The Group markets and sells thirty-seven (37) different propriety supplements through our two wholly owned
subsidiaries.
These products include Pristin® MOPL™ contains third-generation Omega-3 sourced from herring caviar harvested by
Arctic Nutrition in Norway. It comes in unique phospholipids structure to make it both fat and water-soluble.
Pristin® MOPL™ is clinically proven to have significantly high absorption rate of nutrients than most products on the
market. Aside from human breast milk, Omega-3 phospholipids are abundant in herring fish roe, and have more than
twice the absorption rate fish oils typically sourced from salmon or krill. Aside from boosting cognitive performance, it
can improve overall function of the heart, liver, kidneys, lungs and skin.
The Group has implemented initiatives to increase its presence in the Dietary Supplements market. In the year under
review, we released two (2) new dietary supplement products in Malaysia: iNContro and BONEX ACTIV.
Developed in Sweden, iNContro is an all-natural spinach extract that helps to reduce hunger, control cravings and
enhance satiety. iNContro has the most amount of scientific support among all weight-loss supplements in the market
today with a total of nine (9) human clinical trials.
BONEX ACTIV is a supplement to help keep joints and bones healthy, developed using patented German technology
that reduces the size of its collagen hydrolysate molecules for excellent water-solubility and absorption.
Aside from this, the Group has also generated a new source of revenue by supplying raw material to multi-level
marketing companies. We will continue to source for new potential products in the next financial year.
Collagen
According to the U.K. biotechnology market research group Meticulous Research, the global collagen market is
expected to grow at a compounded annual growth rate of 6.3% from 2015 to reach a market size of US$3.97 billion by
2020. Growth rates in Asia, particularly China, are even faster.
In the year under review, the Group has produced small-size samples and invested in essential equipment for the
commercialization of a new range of food-grade collagen. Food grade collagen is expected to be ready for commercial
sale in the first quarter of 2017.
The Group is also working with a European research and development partner, Palma Biosciences, to develop variants
of highly absorbed collagen for food and cosmetic application with liposome technology.
8
For personal use only
The potential of Holista’s collagen products, Ovicoll (cosmetic-grade) and Ovinex (food-grade), is huge. Traditional
sources of collagen – bird, cow, fish or pig – potentially carry diseases such as mad-cow disease, avian flu or toxic
metal poisoning.
Holista CollTech Limited
Our mammalian-sourced sheepskin-based collagen products can be consumed without cultural, religious or health
concerns. It is sourced from sheep in Australia – the only country certified by the United States Department of
Agriculture to have disease-free sheep.
Sheep as a source of collagen is unique and does not present cultural and religious barriers seen with collagen from
cows and pigs. Ovicoll and Ovinex are also Halal certified by the Islamic Association of Kattaning.
Food grade collagen will be another important segment for the Group and we have begun optimising our Collie plant in
Australia. Samples are expected to be ready in the first half of 2017 and ready for commercial sale in the second half of
2017.
9
For personal use only
Holista CollTech Limited
KEY MILESTONES
12 December 2016
15 November 2016
21 October 2016
18 August 2016
12 July 2016
6 April 2016
3 March 2016
12 January 2016
University of Sydney successfully tested four additional formulae of PANATURA®GI in
white bread which scored readings of 49, 51 and 54 (twice).
Holista secured a 10% free carried interest in SeD Biomedical Inc, a bio-medical
research company incorporated in Delaware, USA.
Development of low-GI noodles with Wing’s of Canada, the largest noodle maker in
North America.
Holista signs non-disclosure agreements for research and development with four flour
and bread manufacturers in Asia Pacific to implement low-GI formula.
Holista and Nadja Foods form a 51-49 joint venture, Holista Foods, with Nadja Piatka
as CEO and Dr. Rajen Manicka taking-up a board seat.
Nadja Foods extends partnership with Holista to include a range of bagels, brownies
and croutons.
Nadja Foods LLC, founded by celebrity food expert Nadja Piatka, partners with Holista
to develop and distribute a range of healthy low-GI muffins exclusively for the U.S. and
Canadian market.
Holista and Swiss Bakery Ingredients Specialist Veripan announce major
breakthrough formulae to produce clean-label white bread with lowest glycemic index.
Holista’s stocks rocketed 300%.
Holista has been featured on:
The Edge
Bloomberg
Channel 7 (Australia)
New Straits Times
Business Times (Singapore)
BFM 89.9 (Radio)
10
For personal use only
Holista CollTech Limited
A GLOBAL SCIENTIFIC BREAKTHROUGH FOR HEALTHY WHITE BREAD
On 12 January 2016, Holista CollTech (“Holista” or the “Company”) announced that it had partnered VERIPAN AG, a
Swiss supplier of specialty bakery ingredients, for a global scientific breakthrough – a blend of natural ingredients that
significantly reduces blood sugar levels caused by consuming white bread.
The product, PANATURA®GI, was tested at the University of Sydney where it confirmed that the clean-label blend of
okra, dhal, barley and fenugreek, achieved the world’s lowest Glycemic Index (“GI”) reading for white bread, 53.
PANATURA®GI will only increase production costs marginally and comprise approximately 5%-7% of the final
formulation.
According to public health experts, rising consumption of white flour-based products is leading to a “metabolic
syndrome” epidemic, characterised by obesity, diabetes and heart disease.
GI is an indicator of different carbohydrate-containing foods' ability to raise blood glucose. GI values are measured
using methods such as clinical trials, which are only provided by select nutrition researchers worldwide.
Foods with a high-GI score contain rapidly digested carbohydrates, which trigger a large and rapid rise in the levels of
blood glucose and insulin. Experts believe that peaks in insulin levels are directly related to obesity, Type-2 diabetes
and risk of heart disease. In contrast, low-GI foods contain slowly digested carbohydrates, which produce a gradual,
relatively low rise in blood glucose and insulin levels.
Holista's formula for low-GI white bread was released to much fanfare. More than 30 media publications in Malaysia
and the region covered the story, with Bloomberg carrying an exclusive web feature on Asia's rising flour consumption.
HOLISTA FOODS: A PARTNERSHIP WITH CELEBRITY COOK, NADJA PIATKA
Holista’s PANATURA®GI has received significant attention from the market. Most notably, the Company forged a
longstanding partnership with celebrity cook and author, Ms. Nadja Piatka to develop and market various low-GI baked
products.
The joint venture company and subsidiary of Holista, Holista Foods, will be the Company’s vehicle to develop and
market the low-GI reducer for white bread and baked products for North America. Ms. Piatka will assume the post of
CEO at Holista Foods with Dr. Rajen Manicka, CEO of Holista, taking up a board seat.
Ms. Piatka is the President and CEO of Nadja Foods, the author of two bestselling cookbooks and a previous guest on
the Oprah Winfrey show. Nadja Foods (www.NadjaFoods.com) attained international fame on the back of Nadja’s own
US$100 investment. She has been frequently featured in mainstream media.
Founded in 1992, Nadja Foods is a leading healthy food supplier for restaurant chains and retail stores under private-
label and branded products. Its customers have included McDonald’s Canada as well as Subway Restaurants in the
U.S. and Canada. Nadja’s original Cranberry Orange fat-reduced muffin has been a McDonald’s Canada menu
mainstay for more than 20 years.
On 21 October 2016, Holista Foods announced that it had partnered Wing’s, a major North American noodle
manufacturer, to develop the world’s first low-GI noodles. Based in Ontario and Alberta, Canada, Wing’s has supplied
noodles to the North American market since 1953.
According to market research group Statista, almost 50% of the world’s wheat is consumed as noodles, led by China
and Indonesia, respectively. In comparison, only a quarter of the world’s wheat is consumed as bread. In the U.S.,
alone, the noodle market is worth US$270 million. In 2015 the global demand for instant noodles amounted to 103.58
billion servings.
OTHER LOW-GI DEVELOPMENTS
Beyond its successes with Holista Foods, there have been a number of developments with PANATURA®GI in the
market.
On 18 August 2016, Holista announced that it had signed Non-Disclosure Agreements with four of Asia Pacific’s top
flour and bread manufacturers to begin research trials to produce healthier baked products using its GI reducer.
Holista has also successfully tested four additional formulae of the proprietary PANATURA®GI in white bread. Two
recorded even lower readings than Holista’s original formula which scored the world’s lowest GI.
Looking forward, Holista is working to develop its low-GI formula for other applications such as sugar. The company
has collaborated with 2016 Nobel Prize Nominee, Mr. Daryl Thompson, to file a patent for the world’s first low-GI sugar
made out of all-natural ingredients.
11
For personal use only
Unlike other alternatives which can only be used in beverages, such as artificial sweeteners, Holista’s natural low-GI
sugar can be melted, baked and caramelised for use in all cooking applications.
The low-GI sugar formula is being refined before testing at the world renowned GI Labs in Toronto for final validation.
As the product is made from natural ingredients, it is unlikely to face regulatory hurdles. Holista expects to launch the
product before June 2017.
Holista CollTech Limited
12
For personal use only
Holista CollTech Limited
MESSAGE FROM OUR KEY PARTNERS
Ms. Nadja Piatka
CEO of Nadja Foods and CEO of Holista Foods
All over the world, cakes, cookies and other delicious desserts are part of the human diet. But there is a potential dark
side to this sweet-tooth craving – it is a major cause of obesity and diabetes.
As a bakery supplier to fast food chains for over 24 years, I have spent most of my career at Nadja Foods working to
meet this challenge. It began with the low-fat movement in the nineties when I first had great success with a line of
muffins I created. However, the science has moved on and it is increasingly clear that the new frontier is in lowering the
sugar content of foods to make them healthier.
The food and beverage industry is well aware of this. In North America, fast food chains are in a race to roll out
healthier menu items to win over customers. But how do we do it the natural way, without pricing products out of
reach? This is why it was important that we partnered with Holista. Dr Rajen and his team have laboured to develop
and validate the science of lowering the Glycemic Index, or GI, of common foods. Holista has set the gold standard for
clean-label GI reduction for white flour products.
Our joint venture aims to convince food manufacturers and fast food chains to accept a new and better way to make
food healthier. We will initially focus on North America where obesity and diabetes, linked to high glycemic foods, have
become a national emergency that has strained health care costs and negatively affected living standards.
After collaborating with Holista for the past few months, I’ve seen firsthand the potential to revolutionise the North
American food industry whilst meeting the concerns of food manufacturers. Given the market opportunity, it then made
sense to cement our partnership with Holista with our joint venture company, Holista Foods.
Holista has collaborated with Wing’s Food Products, a major noodle manufacturer across North America based in
Canada, to begin research and development on low-GI noodles. Once our product is independently tested and
validated at GI-Labs, a nutrition research organisation in Canada, we will enter a commercial agreement to
manufacture and distribute it. In the coming year, we will develop and market low-GI baked goods and mixes which can
be distributed to fast food companies, retailers, schools and hospitals.
I am very proud to be working with Dr Rajen and share his passion to improve the world’s health through better food.
Holista’s leading food innovation and science coupled with my experience and reputation has positioned us to become
major food industry leaders in North America.
Thank you!
Nadja Piatka
13
For personal use only
Holista CollTech Limited
MESSAGE FROM OUR KEY PARTNERS (continued)
Mr. Meiert J. Grootes
Chairman of VERIPAN AG, a partner of Holista CollTech
Obesity is a social burden generated by human that is one of the greatest threats to the global economy. It is more
serious than climate change, smoking or air pollution. Currently, more than half of all people in Europe are directly
affected by this social burden and more than 30 % are on a global level. From 1980 to 2014 the prevalence of obesity
more than doubled, with more than 2 billion adults aged 18 years and older overweight today. Obesity is a chronic
disease, growing in severity in both developed and developing countries, and reaching through all age groups. The
problem seems particularly acute in countries such as Malaysia and Singapore which have the highest incidences of
obesity in Southeast Asia (The Lancet, 2014).
In my opinion it was therefore clear from the beginning that the reformulation of food products should be one of the
main areas of our R&D program when it comes to battling the obesity crisis. This is why we at Veripan want to attack
the crisis head first and go after one of the biggest staple foods in the world: Our daily white bread. The global white
bread market alone is currently worth US$170 billion and it continues to grow. An increased consumption of white
bread has been linked in multiple studies to an increase in weight and especially in Asian countries with the
westernization of diets the effects are more and more visible.
With a Glycemic Index (GI) of 77, white bread is amongst the staple foods with the highest GI. Essentially, the
Glycemic Index is a simple way to measure the quality of the carbohydrates we consume on a daily basis. Foods with a
low GI (below 55) raise the blood sugar slower and sustain longer, making the person feel full for longer. A high GI
number however, lets the blood sugar spike, giving the person a sugar rush, which plummets shortly after causing a
quicker feeling of hunger. Furthermore, other side effects of the sugar low are decrease in mood, extreme tiredness
and less productivity.
In our partnership with Holista we have worked on a significant reduction of the GI of products that are made from white
flour – such as breads, muffins and noodles – in a simple and cost-effective way. On 12 January 2016, we were able to
announce a global scientific breakthrough: world’s first clean-label low GI white bread. Our innovation is made of a
combination of Holista’s proprietary natural GI lowering ingredients (GILiTE®), combined with Veripan’s proprietary
natural sourdough PANATURA®. With GI readings between 49 and 53 white breads made with PANATURA® GI show
the lowest GI reading ever achieved, and only increases production costs marginally without compromising the taste or
mouthfeel of the final product. Since the launch of our low-GI solution beginning of 2016, I have received numerous
positive responses and many enquiries from leading bread manufacturers all over the world.
Today, there are more than 2 billion overweight people all over the world and 600 million of them are obese. Just as
much as there is not a single cause for today’s obesity crisis there is also not a single solution. However, in the midst of
this crisis it is vital not to forget that obesity is preventable and that every problem also holds an opportunity.
Reformulation of food, such as developing a healthier white bread, much like PANATURA® GI, is an opportunity for
industries to produce healthier foods for global consumers.
I have full confidence that our partnership with Holista will truly change the way we produce and consume white flour
products. And the implications for individuals seeking a healthier lifestyle and for government health planners will be
significant.
Thank you!
Meiert J. Grootes
14
For personal use only
Holista CollTech Limited
DIRECTORS’ REPORT
During the financial year, the Group remained focused on its three (3) core areas:-
Dietary Supplement
Healthy Food Ingredients (including PANATURA®GI)
Sheep Collagen (Ovine)
Dietary Supplements
This remains the Group’s main income contributor during the year.
The revenue from dietary supplements was recorded at $3,641,576 for the six (6) month period ended 31 December
2016 as compared to $2,950,271 from the previous six (6) month period ended 31 December 2015 due to a launch of
new products and increase of product advisor staff.
Healthy Foods Ingredients
The Group’s key focuses are:
•Glycemic Index (“GI”) Reducer
•Low Sodium Salt
•Low Fat Chip
•Low Calorie Sugar
The Group made significant progress with its low-GI formula. On 12 January 2016, we announced our scientific
breakthrough in achieving the world’s first low-GI white bread in partnership with Veripan Ingredients AG (“Veripan”),
the largest independent bakery supplier based in Europe. This generated significant international media coverage,
including Bloomberg and Australia’s Today Tonight on Channel 7 as well as significant investor interest.
Sheep (Ovine) Collagen
This area of business registered decrease during the financial period due to the seasonal nature of cosmetic collagen.
We delivered 1,520kg of collagen during these 6 months as compared with 6,143kg in the previous reporting period.
Operating Results for the Year
For the six (6) month period ending December 31 2016, The Group recorded a profit from ordinary activities after tax
attributable to owners of the parent of $166,268 despite the strengthening of the US Dollar against the Australian Dollar
and Malaysian Ringgit.
The Group’s revenue for the six (6) month period ending December 2016 was recorded at $3,716,876 as compared
with the previous six (6) month period ending December 2015 which recorded $3,023,592. For the twelve (12) month
period ending June 2016, the group recorded a revenue of $6,263,671. This increase in revenue can mainly be
attributed to the increase of Dietary Supplement sales which offset the decrease in sales of cosmetic-grade sheep
collagen, as we stripped out the plant for the new Food-Grade collagen production line.
The Group believes that its food grade collagen is expected to contribute better revenue as compared to its existing
cosmetic-based collagen. From scientific studies, the recommended minimum dosage for food grade collagen is 5
grams a day (equivalent to 150 grams a month compared to 1 gram of cosmetic collagen per bottle). Food Grade
Collagen offers significantly greater opportunity.
Based on the above, the Group is optimistic that its new food grade collagen will be ready for commercialization in the
near future once the required equipment is commissioned in its plant in Collie, Australia in November 2016.
The Group’s dietary supplements business is targeted to continue growing in the coming financial year with the launch
of new products. The positive development of both the healthy food ingredients in the U.S. and food grade collagen in
Australia are expected to contribute positively to the Group in this coming financial year.
Financial Position
In the financial year under review, the Group’s net asset increased by $101,352 to $3,109,378 with warrants exercised.
15
For personal use only
Holista CollTech Limited
DIRECTORS’S REPORT (continued)
Significant Changes in the State of Affairs
There have been no significant changes in the state of affairs of the Group during the financial period ended 31
December 2016 other than disclosed elsewhere in this Annual Report.
Dividends
No dividends have been paid or declared since the start of the financial year and the directors do not recommend the
payment of a dividend in respect of the financial year.
Significant events after balance date
On 6 January 2017, the Group announced it has collaborated with 2017 Nobel Prize Nominee and emerging thought
leader in carbohydrate chemistry, Daryl Thompson, to file a patent for the world’s first low-Glycemic Index sugar made
out of all natural-ingredients.
On 9 January 2017, Dr Rajen Manicka was granted 9,000,000 performance right in the AGM.
On 23 March 2017, a total of 6,500,000 options (warrants) were granted to plant consultants and patent holders.
On 27 March 2017, Mr Chan Heng Fai exercised 6,012,698 warrants.
There has not been any other matter or circumstance that has arisen after balance date that has significantly affected,
or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of
affairs of the consolidated entity in future financial periods.
Likely developments and expected results
Disclosure of information regarding likely developments in the operations of the Group in future financial years and the
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 purification, waste water storage and wastewater disposal pipeline to the Collie Power Station marine
disposal outfall tank. During the financial year the Group's operations were materially conducted in accordance with the
guidelines of that licence.
Other than mentioned above, during and since the end of the financial year, the directors are not aware of any
particular or significant environmental issues which have been raised in relation to the Group's operations.
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.
Risk Profile: An exercise has been performed to assess the various business risks that impinge upon the Group. They
have 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.
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
16
For personal use only
Holista CollTech Limited
DIRECTORS' REPORT (continued)
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.
Assessment of Effectiveness: The management in the first instance assesses the effectiveness of the risk
management policies and in conjunction with the Audit Committee and External Auditors, instructs improvements to
be put in place.
Information on Directors
The names of directors who held office during or since the end of the year and until the date of this report are as follows.
Directors were in office for this entire year unless otherwise stated.
Names, qualifications, experience and special responsibilities
Dr Rajen Manicka - Managing Director
Dr Rajen Manicka, 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 its merger with Holista CollTech Limited in July 2009.
He is a prominent figure in the Malaysian biotech industry, an industry which receives significant support and
encouragement from the Malaysian government.
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.
Dr Rajen Manicka 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.
Dr Rajen Manicka 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
B.Bus, MBA, FAICD (Dip) CPM, AIMM, MAIM, MAIeX.
Mr Daniel has spent more than 30 years in the commercialization of intellectual property and has worked with R&D
teams across Asia, North America and Australia. He is a published author, mentor, coach, commercialization
consultant and Company Director. He is the Consultant Principal of the on-line coaching and mentoring group Incubate
IP. Mr Daniel is a member of the UN Task Force on Innovation and Competitiveness and works with Corporate
Leaders, inventors and R&D team managers who need greater traction and focus with patent portfolio management
and driving their commercialization projects (www.incub8IP.com). He has been a Director of Holista for more than 5
years.
Mr Daniel holds no other current directorships in listed companies and has no former directorships in listed companies
in the last three years.
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.
In 1987, Mr Chan Heng Fai acquired American Pacific Bank, a full service U.S. commercial bank, out of bankruptcy. He
recapitalised, refocused and grew the bank’s operations. Under his guidance, American Pacific Bank became a US
NASDAQ high asset quality bank, with zero loan losses for over 5 consecutive years before it was ultimately bought
and merged into Riverview Bancorp Inc. Prior to its merger with Riverview Bancorp Inc., in June 2004, American
17
For personal use only
Holista CollTech Limited
DIRECTORS' REPORT (continued)
Pacific Bank was ranked #13 by 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
headquartered in Denver, with 12 offices throughout USA.
Mr Chan Heng Fai also sits on the board of Singapore eDevelopment Limited.
Company Secretary
Mr Jay Stephenson
Mr Jay Stephenson holds a Master of Business Administration, is a Fellow of the Certified Practicing Accountants
(Australia), Chartered Professional Accountant (Canada), Certified Management Accountant (Canada), Member of the
Australian Institute of Company Directors and Fellow of the Governance Institute of Australia.
Mr Stephenson has over 25 years of business development including approximately 20 years as Director, Chief
Financial Officer and Company Secretary for various listed and unlisted entities. He has been involved in business
acquisitions, mergers, initial public offerings, capital raisings, as well as managing all areas of finance for companies.
He sits on the boards of Doray Minerals Limited, Drake Resources Limited, Strategic Minerals Corporation NL,
Nickelore Limited, Dragon Mountain Gold and Yonder and Beyond Group Limited as well as acts as Company
Secretary of Holista CollTech Limited and 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
Dr Rajen Manicka
Mr Daniel Joseph O’Connor
Mr Chan Heng Fai
2
2
2
2
2
2
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.
Directors
Dr Rajen Manicka
Mr Chan Heng Fai
Number of options over
ordinary shares
Number of fully paid
ordinary shares
-
9,817,468
73,914,400
38,827,633
On 27 March 2017, Mr Chan Heng Fai exercised 6,012,698 options, via his company Global eHealth Limited.
Options
2,136,500 (Jun 2016: 11,616,667) ordinary shares have been issued by the Company during the financial year as a
result of the conversion of convertible notes and the exercise of options.
At the date of this report there are 30,692,782 (Jun 2016: 31,829,283) unissued ordinary shares of the Company under
option.
18
For personal use only
Holista CollTech Limited
DIRECTORS' REPORT (continued)
Indemnification and insurance of Directors and Officers
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.
During the financial year Holista CollTech Limited has paid a premium of $Nil in respect of a contract to insure the
directors and officers of the Company and its controlled entities against any liability incurred in the course of their duties
to the extent permitted by the Corporations Act 2001. (Jun 2016: $17,381)
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 34 and forms part of this Directors' Report for the year ended 31 Dec
2016.
Non-Audit Services
No amounts were paid or payable to the auditors for non-audit services as outlined in Note 25 to the financial
statements.
Remuneration report (Audited)
This report outlines the remuneration arrangements in place for the key management personnel of Holista CollTech
Limited (the "Group") for the financial period ended 31 December 2016. The information provided in this remuneration
report has been audited as required by Section 308(3C) of the Corporations Act 2001.
The remuneration report details the remuneration arrangements for key management personnel ("KMP") who are defined
as those persons having authority and responsibility for planning, directing and controlling the major activities of the
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
Dr Rajen Manicka
Mr Daniel Joseph O’ Connor
Mr Chan Heng Fai
(ii) Executives
Mr Jay Stephenson (Company Secretary)
- Managing Director and
Chief Executive Officer
- Non-Executive Director
- Non-Executive Director
Except as noted, the named persons held their current position during the whole of the financial period and up to the
date of this report.
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.
19
For personal use only
Holista CollTech Limited
DIRECTORS' REPORT (continued)
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 maximum stakeholder benefit from the retention of a high quality Board and executive team.
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 period ended 31 December 2016 is detailed in Table 1 of this
report.
Senior manager and executive director remuneration
Remuneration consists of fixed remuneration and variable remuneration (comprising short-term and long-term incentive
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.
Senior managers are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including
cash and fringe benefits such as motor vehicles and expense payment plans. It is intended that the manner of payment
chosen will be optimal for the recipient without creating undue cost for the Group.
The fixed remuneration component of the company executives is detailed in Table 2.
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 $Nil bonus payment to its Malaysia
subsidiaries as per their employment contract. (Jun 2016: $13,018)
Employment Contracts
On 7 September 2010, the Group entered into an Employment Agreement with Dr Rajen Manicka to act as Chief
Executive Officer and Managing Director. On the 28 August 2015, the Board of Directors reviewed and renewed the
Employment Agreement of Dr Rajen Manicka 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.
20
For personal use only
Holista CollTech Limited
DIRECTORS' REPORT (continued)
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
Dr Rajen Manicka
10 July 2015
Initial 3 year period
3 months
AUD231,374
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 termination 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.
21
For personal use only
Holista CollTech Limited
DIRECTORS' REPORT (continued)
Table 1
Directors’ Remuneration
Short-term Employee benefits
Post-employment
benefit
Salary & Fees
$
-
15,000
18,000
36,000
112,361
231,374
130,361
282,374
Dec 2016
Jun 2016
Dec 2016
Jun 2016
Dec 2016
Jun 2016
Dec 2016
Jun 2016
Bonuses
$
-
-
-
-
-
9,592
-
9,592
Non-Monetary
Benefits
$
-
-
-
-
-
-
-
-
Super-
annuation
$
-
-
-
-
21,350
45,893
21,350
45,893
Other
$
-
-
-
-
-
-
-
-
Equity
Share
Options
$
-
-
-
-
-
-
-
-
Mr Daniel Joseph O’Connor
Mr Chan Heng Fai
Dr Rajen Manicka
Total
Total
$
-
15,000
18,000
36,000
133,711
286,859
151,711
337,859
Performance
Related %
-
-
-
-
Mr Daniel O’Connor remuneration was paid by way of fees to Xenex Consulting.
22
For personal use only
Holista CollTech Limited
DIRECTORS' REPORT (continued)
Table 2
Executives Remuneration
Short-term Employee benefits
Post-employment
benefit
Salary & Fees
$
Bonuses
$
Non-Monetary
Benefits
$
Super-
annuation
$
Other
$
Equity
Share
options
$
Mr.Kong Hon Khien
(resigned 30 June
2016)
Mr. Jay
Stephenson
Total
Dec 2016
Jun 2016
Dec 2016
Jun 2016
Dec 2016
Jun 2016
-
82,633
24,400
48,400
24,400
131,033
-
3,426
-
-
-
3,426
-
-
-
-
-
-
-
18,877
-
-
-
18,877
-
-
-
-
-
-
-
-
Total
$
-
104,936
24,400
48,400
24,400
153,336
Performance
Related %
-
-
-
-
-
23
For personal use only
DIRECTORS' REPORT (continued)
Details of employee share option plans
The Group believes that encouraging its directors and executives to become shareholders is the best way of aligning
their interests with those of its shareholders.
`Holista CollTech Limited
At present the Group does not have an employee share option plan.
Bonuses
No bonus was granted to the Directors. (Jun 2016: $9,592).
Share-based payments
No shares or options were issued as share based compensation during the year. (Jun 2016: nil)
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
Company is also in the midst of commercialising some of its patented technologies, namely its Healthy Food
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.
Ordinary shares held in Holista CollTech Limited (number)
Balance at beginning
of year
Granted as
remuneration
On Exercise of
Option
Net Change
Other
Balance at end
of year
31 December 2016
Directors
Mr Chan Heng Fai
32,514,935
Dr Rajen Manicka
73,914,400
Mr Daniel O’Connor
Executives
Mr Jay Stephenson
-
-
106,429,335
30 June 2016
Directors
Mr Chan Heng Fai
20,898,268
Dr Rajen Manicka
73,914,400
Mr Daniel O’Connor
Executives
Mr Jay Stephenson
-
-
94,812,668
Balance at beginning
of year
Granted as
remuneration
On Exercise of
Option
Net Change
Other
Balance at end
of year
-
-
-
-
-
300,000
-
-
-
300,000
-
-
-
-
-
32,814,935
73,914,400
-
-
106,729,335
-
-
-
-
-
5,366,667
6,250,000
32,514,935
-
-
-
-
-
-
73,914,400
-
-
5,366,667
6,250,000
106,429,335
24
For personal use only
`Holista CollTech Limited
DIRECTORS' REPORT (continued)
Options held in Holista CollTech Limited (number)
31 December 2016
Directors
Balance at beginning
of year
Granted
Exercised
Disposed
Balance at end
of year
Mr Chan Heng Fai
17,966,666
Dr Rajen Manicka
Mr Daniel O’Connor
Executives
Mr Jay Stephenson
30 June 2016
Directors
-
-
-
17,966,666
Balance at beginning
of year
Mr Chan Heng Fai
23,333,333
Dr Rajen Manicka
Mr Daniel O’Connor
Executives
Mr Jay Stephenson
-
-
-
23,333,333
-
-
-
-
-
(300,000)
(1,836,500)
15,830,166
-
-
-
-
-
-
-
-
-
(300,000)
(1,836,500)
15,830,166
Granted
Exercised
Disposed
Balance at end
of year
-
-
-
-
-
(5,366,667)
-
-
-
(5,366,667)
-
-
-
-
-
17,966,666
-
-
-
17,966,666
Value of options held by directors, exercised and lapsed during the year.
On 29th of July 2016, Mr Chan Heng Fai disposed 1,836,500 options to a third party.
On the 18th of August 2016 Mr Chan Heng Fai exercised 300,000 options.
No further options were exercised, forfeited or lapsed during the year.
END OF REMUNERATION REPORT
The Director’ Report incorporating the Remuneration Report is signed in accordance with a resolution of the Directors.
Dr Rajen Manicka
Director
Selangor, Malaysia
31 March 2017
25
For personal use only
`Holista CollTech Limited
CORPORATE GOVERNANCE STATEMENT
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
(3rd Edition)’ (Recommendations. The Recommendations are not mandatory, however, the Recommendations that
will not be followed have been identified and reasons have been provided for not following them.
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.
YES
A listed entity should have and disclose a
charter which:
(a)
sets out
the respective roles and
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.
(b)
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
26
the
composition,
The Board Charter sets out
the specific
responsibilities of the Board, requirements as to
the Boards
roles and
responsibilities of the Chairman and Company
the establishment, operation and
Secretary,
management of Board Committees, Directors
access to company records and information,
details of
relationship with
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
is
Secretary.
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
(i)
(ii)
to set measurable objectives
achieving gender diversity; and
the
both
annually
to
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
its progress
diversity policy and
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
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,
objectives,
the
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
is
to arrange an annual performance
evaluation of the senior executives.
6
the Board
(b) The Company’s Corporate Governance Plan
to conduct annual
requires
the senior executives.
performance of
Schedule
‘Performance Evaluation’
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:
NO
(a) have a nomination committee which:
(i)
(ii)
least
has at
three members, a
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
27
For personal use only
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
the members at
attendances of
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.
`Holista CollTech Limited
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.
The Board devotes time at board meetings
to discuss board succession issues. All
members of the Board are involved in the
the
Company’s nomination process,
to
maximum extent permitted under
the
Corporations Act and ASX Listing Rules.
The Board regularly updates the Company’s
board skills matrix (in accordance with
recommendation 2.2)
the
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
3
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
the board to be independent directors;
YES
28
(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
(b) if a director has an interest, position,
association or relationship of the type
the ASX
in Box 2.3 of
described
Corporate Governance Principles and
Recommendation (3rd Edition), but the
board is of the opinion that it does not
compromise
the
interest,
director,
position, association or relationship in
question and an explanation of why the
board is of that opinion; and
independence of
the nature of
the
the
(c) the length of service of each director
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
`Holista CollTech Limited
(b) The Board Charter requires Directors to
disclose their interest, positions, associations
the
that
and relationships and requires
regularly
independence of Directors
is
assessed by
the
in light of
interests disclosed by Directors. Details of
the
positions
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
length of service of each
requires
Director to be disclosed. The length of
service of each Director is provided in the
Annual Reports and Company website.
the
for
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
the Board will consider
independent
appointing a lead independent Director.
then
that a specific
The Board Charter states
to procure
is
the Board
responsibility of
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.
for Directors. The Board
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
the Corporate
is
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:
NO
(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
the Company’s Board
Clause 4(h) of
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
29
For personal use only
(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
`Holista CollTech Limited
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
the basis of a sound system of risk
on
management and
is
operating effectively.
internal control which
that
the
the
that
The Company’s Corporate Governance Plan
the
provides
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
Disclosure’ and details
the Company’s
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
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
Recommendation 6.2
A listed entity should design and implement an
investor relations program to facilitate effective
YES
The Company has adopted a Shareholder
Communications Strategy which aims to promote
and facilitate effective two-way communication
with investors. The Shareholder Communications
30
For personal use only
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
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
to
despatch of any notice of meeting
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
to
receive email notifications when an
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:
NO
(a) have a committee or committees
to
oversee risk, each of which:
(i)
has at
least three members, a
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
business risks the entity faces and to
31
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
full Board
Company’s Board Charter,
currently carries out
that would
ordinarily be assigned to the Audit and Risk
Committee under the written terms of reference
for that committee.
the
the duties
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
fulfilling
roles and
The Board devote time at annual board meeting
responsibilities
to
associated with overseeing risk and maintaining
the entity’s risk management framework and
associated
internal compliance and control
procedures.
(a) The
to
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
the Corporate Governance Plan is entitled
For personal use only
(b) disclose
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.
`Holista CollTech Limited
‘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
so how,
to economic,
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:
NO
(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
individual
period
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
ensuring
is
appropriate and not excessive.
remuneration
remuneration
that such
32
Due to the size and nature of the existing board
and the magnitude of the Company’s operations
the Company currently has no Remuneration
the
Committee. Pursuant
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 Limited
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 8.2
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.
(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
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
33
For personal use only
For personal use only CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE PERIOD ENDED 31 DECEMBER 2016
`Holista CollTech Limited
Notes
6 months to
December 2016
$
12 months to
June 2016
$
Revenue from continuing operations
Other income
Change in inventories of finished goods and work in progress
Raw materials and consumables used
Employee benefits expense
3
3
3
3
Depreciation and amortisation expense
11/12
Finance costs
Share based payments
Share of net loss of joint ventures
Other expenses
Profit/(Loss)/before income tax expense
Income tax (expense) / benefit
Profit/(Loss) after tax from continuing operations
Profit/(Loss) for the year
Other comprehensive income
27
22
3
4
3,716,876
6,263,671
351,404
505,910
(51,263)
62,184
(1,486,996)
(2,710,339)
(877,867)
(2,301,194)
(70,532)
(34,032)
(6,943)
(6,224)
(212,573)
(116,484)
-
-
(1,307,177)
(2,026,389)
227,246
(63,388)
(535,214)
126,843
163,858
(408,371)
163,858
(408,371)
Exchange differences on translation of foreign operations
(197,639)
(143,855)
Total comprehensive (loss) for the year
(33,781)
(552,226)
Profit/ (loss) attributable to :-
Owners of the parent
Non-controlling interest
Total comprehensive loss attributable to :-
Owners of the parent
Non-controlling interest
166,268
(407,930)
(2,410)
(441)
163,858
(408,371)
(25,769)
(545,209)
(8,012)
(7,017)
(33,781)
(552,226)
Basic profit/ (loss) per share (cents per share)
Diluted profit/ (loss) per share (cents per share)
6
6
0.10
0.09
(0.26)
(0.26)
The accompanying notes form part of these financial statements
35
For personal use only
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2016
`Holista CollTech Limited
31 December 2016
30 June 2016
Notes
$
$
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
Other financial assets-FV through profit or loss
Investment accounted using the equity method
Deferred tax asset
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Borrowings
Current tax liability
Provision for employee entitlements
Total Current Liabilities
Non-Current Liabilities
Deferred tax liability
Borrowings
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
(Accumulated losses)
Total parent entity interest
Non-controlling interest
Total Equity
The accompanying notes form part of these financial statements
36
7
8
10
9
11
12
9
22
4
13
14
4
29
4
14
15
16
16
17
58,105
348,434
2,040,254
891,340
596,101
1,225,334
1,021,325
961,677
3,585,800
3,556,770
1,569,356
1,069,574
321,986
360,174
111,019
99,085
75,728
397,645
-
141,381
2,461,620
1,684,328
6,047,420
5,241,098
1,672,621
1,272,059
718,700
6,569
6,516
305,611
50,119
-
2,404,406
1,627,789
770
532,866
533,636
-
605,283
605,283
2,938,042
2,233,072
3,109,378
3,008,026
10,798,705
10,670,515
1,896,643
2,081,737
(9,378,424)
(9,544,692)
3,316,924
3,207,560
(207,546)
(199,534)
3,109,378
3,008,026
For personal use only
Balance as at 1 July
2015
(Loss) for the year
Exchange differences
arising on translation of
foreign operations
Total comprehensive
loss for the year
Shares issued during
the year
Balance as at 1 July
2016
Profit/ (loss) for the
period
Exchange differences
arising on translation of
foreign operations
Total comprehensive
loss for the period
Shares issued during
the period
Options granted during
the period
Balance at 31
December 2016
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE PERIOD ENDED 31 DECEMBER 2016
`Holista CollTech Limited
Issued
Capital
$
Compound
Financial
Accumulated
Losses
Instrument
$
$
Option
Reserve
$
Foreign
Currency
Translation
$
Non-
controlling
interest
$
Total
$
Notes
9,286,702
137,501
(9,136,762)
2,242,994
(46,714)
(192,517)
2,291,204
-
-
-
-
-
-
(407,930)
-
(407,930)
-
-
-
-
-
22,736
-
(441)
(408,371)
(137,279)
(6,576)
(143,855)
(137,279)
(7,017)
(552,226)
-
-
-
-
-
-
1,276,734
(30,422)
22,736
(9,544,692)
2,265,730
(183,993)
(199,534)
(3,008,026)
1,414,235
(137,501)
Equity raising costs
(30,422)
Options granted during
the year
Balance at 30 June
2016
-
15 &
16
10,670,515
-
-
-
-
-
-
-
-
10,670,515
-
(9,544,692)
2,265,730
(183,993)
(199,534)
3,008,026
-
-
-
166,268
-
-
-
166,268
-
-
-
-
6,943
-
(2,410)
163,858
(192,037)
(5,602)
(197,639)
(192,037)
(8,012)
(33,781)
-
-
-
-
128,190
6,943
128,190
-
15 &
16
10,798,705
-
-
-
(9,378,424)
2,272,673
(376,030)
(207,546)
3,109,378
37
For personal use only
`Holista CollTech Limited
31 December 2016
30 June 2016
Notes
$
$
Inflows/(Outflows)
3,716,876
6,844,165
(3,331,165)
(6,760,418)
5,901
(24,080)
37,825
283,851
689,208
3,456
3,467
(117,181)
(106,808)
-
(5,757)
(532,427)
-
(115,703)
(48,144)
(919,097)
128,190
379,238
(23,575)
-
-
(377,453)
106,400
(123,489)
348,434
(166,840)
58,105
21,872
(9,255)
-
298,380
394,744
-
33
(24,259)
(3,322)
(69,618)
-
-
(260,966)
(251,064)
-
(609,196)
-
-
(84,340)
769,050
5,412
-
690,122
475,670
63,604
(190,840)
348,434
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD ENDED 31 DECEMBER 2016
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Finance costs
Other revenue
Net income tax received
Net cash provided by/ (used in) operating activities
Cash flows from investing activities
Proceeds from legal settlements
Proceeds from the sale of property, plant and equipment
Purchase of intellectual property
Purchase of property, plant and equipment
Prepayments made related to intangible assets
Increase in fixed deposits pledged
Transfer of work in progress from prepayments
Prepayment made related to property, plant and equipment
Investments in unlisted securities
Investment in joint venture
Net cash provided by/ (used in) investing activities
Cash flows from financing activities
Proceeds from exercise of warrants
Proceeds from borrowings
Repayment of borrowings
Proceeds from issue of shares
Withdrawal of fixed deposits
Advance loan to third party
Net cash provided by/ (used in) financing activities
7 (ii)
12
11
11
9
Net (decrease)/ increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at end of year
7 (i)
The accompanying notes form part of these financial statements
38
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 1: REPORTING ENTITY
Holista Colltech Limited is a company domiciled in Australia. The Company’s registered address is 283 Rokeby Road,
Subiaco WA 6008. The consolidated financial statements of the Group as at and for the period ended 31 December
2016 comprise the Company and its subsidiaries (together referred to as the ‘Group” and individually as “Group
Entities”) and the Group’s interest in associates and jointly controlled entities. The Group is a for-profit entity and
primarily involved in development and commercialisation of food ingredients and ovine collagen.
NOTE 2: SUMMARIES OF SIGNIFICANT ACCOUNTING POLICIES
a) Basis of preparation
The consolidated financial statements are general purpose financial statements which have been prepared in
accordance with the Australian Accounting Standards (AASBs) adopted by the Australian Accounting
Standards Board (AASB) and the Corporations Act 2001. The consolidated financial statements comply with
International Financial Reporting Standards (IFRS) adopted by the International Accounting Standards Board
(IASB).
The consolidated financial statements were authorised for issue by the Board of Directors on 31 March 2017.
Change in financial year end
The company has changed its financial year end from 30 June to 31 December. The current period figures relate
to six months from 1 July 2016 to 31 December 2016.
The comparative amounts disclosed in the financial report and related notes are not comparable as the lengths of
the periods differ by six months.
b) Principles of Consolidation
The consolidated financial statements incorporate all of the assets, liabilities and results of Holista CollTech
Limited 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.
The assets, liabilities and results of all subsidiaries are fully consolidated into the financial statements of the
Group 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-controlling interests are attributed their share of profit or loss and each
component of other comprehensive income. Non-controlling interests are shown separately within the equity
section of the statement of financial position and 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-existing equity interest in the subsidiary. Acquisition-related costs are expensed as
incurred. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business
39
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
`Holista CollTech Limited
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 proportionate share of the acquiree's net identifiable assets.
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 the net identifiable assets acquired is recorded as goodwill. If those amounts are less than
the fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts
has been reviewed, the difference is recognised directly in profit or loss as a bargain purchase.
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, being the rate at which a similar borrowing could be obtained from an
independent financier under comparable terms and conditions.
Contingent consideration is classified as either equity or a financial liability. Amounts classified as a financial
liability are subsequently remeasured to fair value with changes in fair value recognised in profit or loss.
d) Going Concern
The Group has reported a net profit after tax for the period of $163,858 and a cash inflow from operating
activities of $689,208. Its current assets of $3,585,800 exceed the current liabilities of $2,404,406.
This financial report is prepared on the going concern basis, which contemplates continuity of normal business
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 positive cash flows through its existing business and/ or raising of further equity.
The Group's cosmetic collagen business has generating revenue of $75,300. This area of business decrease
during the financial period due to the seasonal nature of cosmetic collagen.. Revenue from this business will
continue to grow in the coming year with an order on hand of 3,000kg from Thailand to be delivered by June
2017.
The Group has invested in some essential equipment at its Collie Plant to produce the Food Grade Collagen
on a higher scale. We expect this equipment to be commissioned in year 2017. The Group is confident that
this new source of revenue from Collie will contribute positively to the Group’s revenue in the coming financial
year as oral grade collagen is a large and growing global market.
Beside the cosmetic and food grade collagen, the Group will also enter into the Medical Grade collagen. The
Group expects to ship the first 10-kg medical-grade collagen, valued at over $140,000, from its plant in Collie,
Western Australia, starting in April 2017
On the Healthy Food Ingredients, we expect to see significant revenue in Australia, New Zealand and Europe
in the next 12 months. Our US subsidiary, LiteFood Inc formed a 51-49 joint venture company with Nadja
Foods LLC, to distribute our low-GI product in North America. This business segment will expected to
generate revenue in the next financial year.
Our sales of dietary supplement ingredients to companies in the Multi-Level Marketing space will continue to
grow. One of the Multi-Level Marketing company that we supply to has achieved revenue of US$689,800 in
the first 30 days of operations since launch in North America.
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 the Group fail to generate sufficient positive cash flows
and/or obtain funding when required. There is significant uncertainty as to whether the Group will continue as
a going concern and whether it will realise its assets and extinguish its liabilities in the normal course of
business and at the amounts stated in the financial report.
40
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
a)
Income tax
The income tax expense or benefit for the period is the tax payable on the current period's taxable income
based 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.
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 liabilities and their carrying amounts for financial reporting purposes.
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 accounting 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
recognition 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 temporary difference can be utilised.
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the
extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred
income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the
extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred income 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.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss.
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.
41
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
b) 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.
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 determine fair value. Adjustments to market values may be made having regard to the characteristics of the
specific 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).
For non-financial assets, the fair value measurement also takes into account a market participant's ability to
use the 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 arrangements) may be valued, where there is no observable market price in relation to the transfer of
such financial instruments, by reference to observable market information where such instruments are held as
assets. Where this information is not available, other valuation techniques are adopted and, where significant,
are detailed in the respective note to the financial statements.
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 in the circumstances and for which sufficient data is available to measure fair value. The
availability of sufficient and relevant data primarily depends on the specific characteristics of the asset or
liability being measured. The valuation 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.
-
Income approach: valuation techniques that convert estimated future cash flows or income and
expenses into a single discounted present value.
- Cost approach: valuation techniques that reflect the current replacement cost of an asset at its
current service capacity.
42
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
`Holista CollTech Limited
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when
pricing 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 reflect the assumptions that buyers and sellers would generally use when pricing the
asset or liability are considered 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 value measurements into one of three possible levels based on the lowest level that an input
that is significant to the measurement can be categorised into as follows:
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 data. If all significant inputs required to measure fair value are observable, the asset or
liability is included in Level 2. If one or more significant inputs are not based on observable market data, the
asset or liability is included in Level 3.
The Group would change the categorisation within the fair value hierarchy only in the following circumstances:
if a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or
(i)
vice versa; or
(ii) if significant inputs that were previously unobservable (Level 3) became observable (Level 2) or vice
versa.
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.
c)
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:
Raw materials - purchase cost on a first-in, first-out basis; and Finished goods and work-in-progress - cost of
direct materials and labour and a proportion of manufacturing overheads based on normal operating capacity
but excluding borrowing costs.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the sale.
d) 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.
43
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
`Holista CollTech Limited
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 5 years
Plant and equipment - over 3 to 5 years
The assets' residual values, useful lives and amortisation methods are reviewed, and adjusted if appropriate, at
each financial year end.
(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.
The recoverable amount of plant and equipment is the higher of fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax
discount rate that reflects current market assessments of the time value of money and the risks specific to the
asset.
For an asset that does not generate largely independent cash inflows, recoverable amount is determined for
the 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.
(ii) De-recognition and disposal
An item of property, plant and equipment is derecognised upon disposal or when no further future economic
benefits 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 and the carrying amount of the asset) is included in profit or loss in the year the asset is
derecognised.
e) Financial Instruments
Initial recognition and measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual
provisions to the instrument. For financial assets, this is equivalent to the date that the company commits itself
to either the purchase or sale of the asset.
Financial instruments are initially measured at fair value plus transaction costs, except where the instrument is
classified “at fair value through profit or loss’, in which case transaction costs are expensed to profit or loss
immediately.
Classification and subsequent measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest
method, or cost.
Amortised cost is calculated as the amount at which the financial asset or financial liability is measured at
initial 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.
44
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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 financial instrument to the net carrying amount of the financial asset or liability. Revisions to expected
future net cash flows will necessitate an adjustment to carrying amount with a consequential recognition of an
income or expense item in profit or loss.
(i) Financial assets at fair value through profit or loss
Financial assets classified as held for trading are included in the category 'financial assets at fair
value through profit or loss'. Financial assets are classified as held for trading if they are acquired for
the purpose of selling in the near term. Derivatives are also classified as held for trading unless they
are designated as effective hedging instruments. Gains or losses on investments held for trading are
recognised in profit or loss.
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that
are not quoted in an active market. Such assets are carried at amortised cost using the effective
interest method. Gains and losses are recognised in profit or loss when the loans and receivables are
derecognised or impaired, as well as through the amortisation process.
(iii) Held-to-maturity investments
Non-derivative financial assets with fixed or determinable payments and fixed maturity are classified
as held-to- maturity when the Group has the positive intention and ability to hold to maturity.
Investments intended to be held for an undefined period are not included in this classification.
Investments that are 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
amortised cost, gains and losses are recognised in profit or loss when the investments are
derecognised or impaired, as well as through the amortisation process. If the Group were to sell other
than an insignificant amount of held-to-maturity financial assets, the whole category would be tainted
and reclassified as available-for-sale.
(iv) Available-for-sale investments
Available-for-sale investments are those non-derivative financial assets that are designated as
available-for-sale or are not classified as any of the three preceding categories. After initial
recognition available-for sale 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 time the cumulative gain or loss previously reported
in equity is recognised in profit or loss. The fair value of investments that are actively traded in
organised financial markets is determined by reference to quoted 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,
discounted cash flow analysis and option pricing models.
(v) Financial liabilities
Non-derivative financial liabilities other than financial guarantees are subsequently measured at
amortised cost. Gains or losses are recognised in profit or loss through the amortisation process and
the financial liability is derecognised.
45
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Impairment
The Group assesses at each balance date whether a financial asset or group of financial assets is impaired.
(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 value of estimated future cash flows (excluding future credit losses that have not been incurred)
discounted at the financial asset's original effective interest rate (i.e. the effective interest rate computed at
initial recognition). The carrying amount of the asset is reduced either directly or through use of an allowance
account. The amount of the loss is recognised in profit or loss.
The Group first assesses whether objective evidence of impairment exists individually for financial assets that
are individually significant, and individually or collectively for financial assets that are not individually significant.
If it is determined that no objective evidence of impairment exists for an individually assessed financial asset,
whether significant or not, the asset is included in a group of financial assets with similar credit risk
characteristics and that group of financial assets is collectively assessed for impairment. Assets that are
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. Any subsequent reversal of an impairment loss is recognised in profit or loss, to the extent that
the carrying value of 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 difference between the asset's carrying amount and the present value of estimated future
cash flows, discounted at the current market rate of return for a similar financial asset.
(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 loss previously recognised in profit or loss, is transferred from equity to the statement of
comprehensive income. Reversals of impairment losses for equity instruments classified as available-for-sale
are not recognised in profit. Reversals of impairment losses for debt instruments are reversed through profit or
loss if the increase in an instrument's fair value can be objectively related to an event occurring after the
impairment loss was recognised in profit or loss.
De-recognition
(i) Financial assets
A financial asset or, where applicable, a part of a financial asset or part of a group of similar financial assets)
is derecognised when:
•
•
•
the rights to receive cash flows from the asset have expired;
the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay
them in full without material delay to a third party under a 'pass-through' arrangement; or
the Group has transferred its rights to receive cash flows from the asset and either:
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.
When the Group has transferred its rights to receive cash flows from an asset and has neither transferred nor
retained 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
46
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
`Holista CollTech Limited
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
A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires.
When an existing financial liability is replaced by another from the same lender on substantially different
terms, or the terms of an existing liability are substantially modified, such an exchange or modification is
treated as a de-recognition of the original liability and the recognition of a new liability, and the difference in
the respective carrying amounts is recognised in profit or loss.
f)
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.
Separate joint venture entities providing joint venturers with an interest to net assets are classified as a "joint
venture" 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 joint operations are included in the respective line items of the consolidated financial
statements.
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.
During the financial period a subsidiary of the Group, Lite Foods Inc, (74% ownership) has a joint venture with
Nadja Foods LLC known as Holista Foods Inc. Lite Foods Inc has 49% interest in this joint venture.
g)
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;
•
•
•
• How the intangible asset will generate probable future economic benefits;
•
The availability of adequate technical, financial and other resources to complete development and to
use or 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 the date when the intangible asset first meets the recognition criteria listed above.
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.
47
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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
Intangible assets acquired in a business combination are identified and recognised separately from goodwill
where they satisfy the definition of an intangible asset and their fair values can be measured reliably.
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.
h) 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 environment in which that entity operates. The consolidated financial statements are presented in
Australian dollars, which is the parent entity’s functional currency.
Transactions and balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at
the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate.
Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the
transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when
fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in profit or loss, except
where deferred in equity as a qualifying cash flow or net investment hedge.
Exchange differences arising on the translation of non-monetary items are recognised directly in other
comprehensive income to the extent that the underlying gain or loss is recognised in other comprehensive
income; otherwise the exchange difference is recognised in profit or loss.
Group companies
The financial results and position of foreign operation, whose functional currency is different from the Group’s
presentation currency, are translated as follows;
Assets and liabilities are translated at exchange rates prevailing at the end of the reporting period
Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Income and expenses are translated at average exchange rates for the period; and
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 of financial position. The cumulative amount of these differences is reclassified into profit or loss in
the period in which the operation is disposed of.
i) Employee leave benefits
(i) Wages, salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave
expected to be settled within 12 months of the balance date are recognised in other payables in respect of
employees' services up to the balance date. They are measured at the amounts expected to be paid when the
liabilities are settled. Liabilities for non-accumulating sick leave are recognised when the leave is taken and are
measured at the rates paid or payable.
48
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
`Holista CollTech Limited
(ii) Long service leave
The liability for long service leave is recognised in the provision for employee benefits and measured as the
present 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 bonds with terms to maturity and currencies that match, as closely as possible,
the estimated future cash outflows.
j) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation. Provisions are not recognised
for future operating losses.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract,
the reimbursement is recognised as a separate 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.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that
reflects the risks specific to the liability. When discounting is used, the increase in the provision due to the
passage of time is recognised as an interest expense.
k) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits available on demand with banks, other short-term
highly liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts
are reported within borrowings in current liabilities or the statement of financial position. For the purposes of the
statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as defined above, net
of outstanding bank overdrafts.
l) 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 extent that it is probable that the economic benefits will flow to the Group and the revenue
can be reliably measured. The following specific recognition criteria must also be met before revenue is
recognised:
(i) Sale of goods
Revenue is recognised when the significant risks and rewards of ownership of the goods have passed to the
buyer 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
Interest revenue is recognised on a time proportionate basis that takes into account the effective yield on the
financial asset.
m) 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.
49
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
`Holista CollTech Limited
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 the Group in making this determination include known significant financial difficulties of
the debtor, review of financial information and significant delinquency in making contractual payments to the
Group. The impairment allowance is set equal to the difference between the carrying amount of the receivable
and the present value of estimated future cash flows, discounted at the original effective interest rate. Where
receivables are short-term discounting is not applied in determining the allowance.
The amount of the impairment loss is recognised in the statement of profit or loss and other comprehensive
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 of amounts previously written off are credited against other expenses in the statement
of profit or loss and other comprehensive income.
n) Trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and
services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group
becomes obliged to make future payments in respect of the purchase of these goods and services. Trade and
other payables are presented as current liabilities unless payment is not due within 12 months.
o) 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.
All other borrowing costs are recognised in the profit or loss in the period in which they are incurred.
p) Goods and Services Tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST except:
when the GST incurred on a purchase of goods and services is not recoverable from the taxation authority,
in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the
expense item as applicable; and
receivables and payables, which are stated with the amount of GST included.
The net amount of GST recoverable from, or payable to, the taxation authority is included as part of
receivables or payables in the statement of financial position. Cash flows are included in the statement of cash
flows on a gross basis and the GST component of cash flows arising from investing and financing activities,
which is recoverable from, or payable to, the taxation authority, are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
q) Government grants
Grants from the government are recognised at their fair value where there is a reasonable assurance that the
grant will be received and the Group will comply with all attached conditions. Government grants relating to costs
are deferred and recognised in the profit or loss over the period necessary to match them with the costs that
they are intended to compensate. Government grants relating to the purchase of property, plant and equipment
are included in non-current liabilities as deferred income and are credited to profit or loss on a straight-line basis
over the expected lives of the related assets.
r) 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 in preparing these consolidated financial
statements. Those which may be relevant to the Group are set out below. The Group does not plan to adopt
these standards early.
50
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
`Holista CollTech Limited
AASB 9 Financial Instruments and associated Amending Standards (applicable for annual reporting period
commencing 1 January 2018).
The Standard will be applicable retrospectively (subject to the comment on hedge accounting below) and
includes revised requirements for the classification and measurement of financial instruments, revised
recognition and de-recognition requirements for financial instruments and simplified requirements for hedge
accounting.
Key changes made to this standard that may affect the Group on initial application include certain
simplifications to the classification of financial assets, simplifications to the accounting of embedded
derivatives, and the irrevocable election to recognise gains and losses on investments in equity instruments
that are not held for trading in other comprehensive income.
Although the directors anticipate that the adoption of AASB 9 may have an impact on the Group’s financial
instruments it is impractical at this stage to provide a reasonable estimate of such impact.
AASB 15: Revenue from Contracts with Customers (applicable to annual reporting periods commencing on or
after 1 January 2018).
When effective, this Standard will replace the current accounting requirements applicable to revenue with a
single, principles-based model. Except for a limited number of exceptions, including leases, the new revenue
model in AASB 15 will apply to all contracts with customers as well as non-monetary exchanges between
entities in the same line of business to facilitate sales to customers and potential customers.
The core principle of the Standard is that an entity will recognise revenue to depict the transfer of promised
goods or services to customers in an amount that reflects the consideration to which the entity expects to be
entitled in exchange for the goods or services. To achieve this objective, AASB 15 provides the following five-
step process:
identify the contract(s) with a customer;
identify the performance obligations in the contract(s);
determine the transaction price;
allocate the transaction price to the performance obligations in the contract(s); and
recognise revenue when (or as) the performance obligations are satisfied.
This Standard will require retrospective restatement, as well as enhanced disclosures regarding revenue.
Although the directors anticipate that the adoption of AASB 15 may have an impact on the Group's financial
statements, it is impracticable at this stage to provide a reasonable estimate of such impact.
AASB 16: Leases (applicable to annual reporting periods commencing on or after 1 January 2019).
When effective, this Standard will replace the current accounting requirements applicable to leases in AASB
117: Leases and related interpretations. AASB 16 introduces a single lessee accounting model that eliminates
the requirement for leases to be classified as either operating leases or finance leases. Lessor accounting
remains similar to current practice.
The main changes introduced by the new Standard are as follows:
recognition of the right-to-use asset and liability for all leases (excluding short term leases with less than
12 months of tenure and leases relating to low value assets);
depreciating the right-to-use assets in line with AASB 116: Property, Plant and Equipment in profit or loss
and unwinding of the liability in principal and interest components;
inclusion of variable lease payments that depend on an index or a rate in the initial measurement of the
lease liability using the index or rate at the commencement date;
application of practical expedient to permit a lessee to elect not to separate non-lease components and
instead account for all components as a lease; and
additional disclosure requirements.
51
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
`Holista CollTech Limited
Although the directors anticipate that the adoption of AASB 16 may have an impact on the Group's financial
statements, it is impracticable at this stage to provide a reasonable estimate of such impact. .(or the directors
anticipate that the adoption of AASB 15 will not have a material impact on the Group’s recognition of leases
and disclosures).
AASB 2014-10: Amendments to Australian Accounting Standards – Sale or Contribution of Assets between an
Investor and its Associate or Joint Venture (applicable to annual reporting periods commencing on or after 1
January 2018).
This Standard amends AASB 10: Consolidated Financial Statements with regards to a parent losing control
over a subsidiary that is not a “business” as defined in AASB 3: Business Combinations to an associate or
joint venture and requires that:
a gain or loss (including any amounts in other comprehensive income (OCI)) be recognised only to the
extent of the unrelated investor’s interest in that associate or joint venture;
the remaining gain or loss be eliminated against the carrying amount of the investment in that associate
or joint venture; and
any gain or loss from remeasuring the remaining investment in the former subsidiary at fair value also be
recognised only to the extent of the unrelated investor’s interest in the associate or joint venture. The
remaining gain or loss should be eliminated against the carrying amount of the remaining investment.
Although the directors anticipate that the adoption of AASB 2014-10 may have an impact on the Group's
financial statements, it is impracticable at this stage to provide a reasonable estimate of such impact.
Other standards not yet applicable
There are no other standards that are not yet effective and that would be expected to have a material impact
on the entity in the current or future reporting periods and on foreseeable future transactions.
s) Amendments to AASBs and new Interpretations that are mandatorily effective for the current reporting
period
The Group has adopted all of the new and revised Standards and Interpretations issued by the Australian
Accounting Standards Board (the AASB) that are relevant to their operations and effective for the current
period.
New and revised Standards and amendments thereof and Interpretations effective for the current period that
are relevant to the Group include:
AASB 2014-4 Amendments to Australian Accounting Standards – Clarification of Acceptable Methods of
Depreciation and Amortisation
AASB 2015-2 Amendments to Australian Accounting Standards – Disclosure Initiative: Amendments to
AASB 101
The adoption of these amendments has had no impact on the disclosures or the amounts recognised in the
Group’s consolidated financial statements
t)
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 in use and is determined for an individual asset, unless the asset does not generate
cash inflows that are largely 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.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-
tax discount rate that reflects current market assessments of the time value of money and the risks specific to
the asset. Impairment losses relating to continuing operations are recognised in those expense categories
52
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
`Holista CollTech Limited
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 recognised for the asset in prior years. Such reversal is recognised in profit or
loss unless the asset is carried at revalued 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.
u)
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 amount is recognised in profit or loss over the period of the borrowings using the effective
interest method. Fees 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.
Borrowings are removed from the statement of financial position when the obligation specified in the contract
is discharged, cancelled or expired. The difference between the carrying amount of a financial liability that
has been extinguished or transferred to another party and the consideration paid, including any non-cash
assets transferred or liabilities assumed, is recognised in profit or loss as other income or finance costs.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of
the liability for at least 12 months after the reporting period.
v)
Issued capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax, from the proceeds. 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.
w) Parent entity financial information
The financial information for the parent entity, Holista CollTech Limited, disclosed in Note 23 has been prepared
on the same basis as the consolidated financial statements, except as set out below.
(i) Investments in subsidiaries, associates and joint venture entities
Investments in subsidiaries, associates and joint venture entities are accounted for at cost in the financial
statements of Holista CollTech Limited. Dividends received from associates are recognised in the parent
entity's profit or loss, 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
53
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 2: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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.
x) Comparative Figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes in
presentation for the current financial period.
Where the Group retrospectively applies an accounting policy, makes a retrospective restatement or reclassifies
items in its financial statements, an additional (third) statement of financial position as at the beginning of the
preceding period in addition to the minimum comparative financial statements is presented.
NOTE 3: REVENUE AND EXPENSES
(a) Revenue
Sales revenue
Sale of goods
(b) Other income
Other Profit on disposal of property, plant and equipment
Bank interest and other interest receivable
Rental income
Research and development tax offset
Other income
Dividend receivable
(c) Expenses
Net increase / (decrease) in inventories
Raw materials and consumables used during production
Distribution costs
Advertising and promotion
Other expenses
Collie factory maintenance costs
Research - current year expense
Consultancy & professional services
Audit fees (note 25)
Operating lease rental expense
Provision for stock written off
Provision for doubtful debts
6 months to
December 2016
$
12 months to
June 2016
$
3,716,876
3,716,876
6,263,671
6,263,671
(65)
10,874
37,825
283,851
3,467
15,452
(19,145)
21,872
79,822
378,211
45,150
-
351,404
505,910
51,263
(62,184)
1,486,996
2,710,339
176,955
288,020
421,608
45,323
65,237
215,732
46,093
35,709
8,290
4,210
288,268
565,864
304,308
153,229
163,175
292,136
75,038
73,260
111,111
-
54
1,307,177
2,026,389
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 4: INCOME TAX
Income tax recognised in profit or loss
The major components of tax expense are:
Current tax
Deferred tax benefit recognised
Total tax expenses /(benefit)
`Holista CollTech Limited
31 December 2016
$
30 June 2016
$
63,388
-
63,388
-
(126,843)
(126,843)
The prima facie income tax benefit on pre-tax accounting loss from operations
reconciles to the income tax benefit in the financial statements as
follows:
Accounting profit/ (loss) before tax from continuing operations
Income tax expense calculated at 30%
227,246
(535,214)
68,174
(160,564)
Tax effect of amounts which are not deductible/(taxable) in calculating taxable
income:
Current year tax losses not recognised
Profit attributable to foreign subsidiaries
Research and development tax offset exempted from tax
Foreign tax losses not recognised
Non-deductible expenditure
Foreign income tax payable
Timing differences
Income tax expense / (benefit) reported in the consolidated statement of
comprehensive income
Current
Income tax payable in Malaysia
Non-current
Deferred tax assets
Deferred tax liabilities
Unrecognised deferred tax balances
Deferred Tax Assets
Tax losses Australia
Tax losses attributable to foreign subsidiaries
Total deferred tax assets not brought to account
55
63,161
(129,309)
62,301
12,453
(85,155)
(113,463)
2,781
89,425
63,388
(9,077)
509
194,646
(126,843)
4,118
63,388
(126,843)
6,569
50,119
99,085
141,381
770
-
1,080,469
923,087
2,003,556
1,017,307
1,007,842
2,025,149
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
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 taxable profits under Australian tax law. There has been no change in this tax rate since the previous reporting year.
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 no deferred tax asset has been recorded as it is not probable that taxable profit will be available in the
foreseeable future.
The parent entity has accumulated tax losses of $3,601,562 which are expected to be available indefinitely for offset
against future taxable profits of the parent company in which the losses arose. The recoupment of these losses is subject
to assessment of the Australian Taxation Office. The parent company has additional accumulated tax losses of
$7,938,150 which are not expected to be available to offset any future taxable profits as their origin cannot be determined.
No deferred tax asset has been recorded in relation to these tax losses as it is not probable that taxable profit will be
available in the foreseeable future and they may not be used to offset taxable.
NOTE 5: SEGMENT REPORTING
General Information
Identification of reportable segments
The Group has identified its operating segments based on the internal reports that are reviewed and used by the Board
of Directors (chief operating decision makers) in assessing performance and determining the allocation of resources.
Types of products and services by segment
(i) Supplements
This operating segment is involved in the manufacture and wholesale distribution of dietary supplements.
(ii) Sheep collagen
This operating segment is involved in the manufacture and distribution of cosmetic grade collagen.
(iii) Food ingredients
This operating segment is involved in the manufacture and wholesale distribution of healthy food ingredients.
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 in the annual financial statements of the Group.
(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 economic value from the asset. In most instances, segment assets are clearly identifiable on the basis of their
nature and 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.
56
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 5: SEGMENT REPORTING (continued)
(e) Segment Information
(i) Segment performance
Supplements Sheep Collagen Food Ingredients Corporate
Total
$
$
$
$
$
31 December 2016
REVENUE
External sales
Other revenue
3,641,576
75,300
-
-
Total segment revenue
3,641,576
75,300
Reconciliation of segment
revenue to group revenue
Total Group revenue
Segment net profit/(loss) from
-
-
-
- 3,716,876
351,404
351,404
351,404 4,068,280
4,068,280
continuing operations before tax
431,032
(194,514)
-
(9,272)
227,246
Net profit before tax from
continuing operations
30 June 2016
REVENUE
External sales
Other revenue
5,961,312
302,359
-
-
Total segment revenue
5,961,312
302,359
Reconciliation of segment
revenue to group revenue
Total Group revenue
Segment net profit/(loss) from
227,246
-
-
-
- 6,263,671
505,910
505,910
505,910 6,769,581
6,769,581
continuing operations before tax
751,467
(404,472)
-
(882,209)
(535,214)
Net loss before tax from
continuing operations
(535,214)
57
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 5: SEGMENT REPORTING (continued)
(ii) Segment assets
31 December 2016
Segment assets
Reconciliation of segment assets to Group assets:
Intersegment eliminations
Total Group assets
30 June 2016
Segment assets
Reconciliation of segment assets to Group assets:
Intersegment eliminations
Total Group assets
(iii) Segment liabilities
31 December 2016
Segment liabilities
Reconciliation of segment liabilities to Group
liabilities:
Intersegment eliminations
Total Group liabilities
30 June 2016
Segment liabilities
Reconciliation of segment liabilities to Group
liabilities:
Intersegment eliminations
Total Group liabilities
Supplements
Sheep
Collagen
Food
Ingredient
Total
$
$
$
$
5,548,246
4,372,886
(839,058)
9,082,074
(3,034,654)
6,047,420
5,227,613
3,533,158
897
8,761,668
(3,520,570)
5,241,098
Supplements
$
Sheep
Collagen
$
Food
Ingredients
Total
$
$
2,257,600
1,763,696
(41,864) 3,979,432
(1,041,390)
2,938,042
2,046,171
864,587
768,334 3,679,092
(1,446,020)
2,233,072
58
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 5: SEGMENT REPORTING (continued)
(iv) Revenue by geographical region
Revenue, including revenue from discontinued operations, attributable to external customers is disclosed below, based
on the location of the external customer:
Australia
Malaysia
United States
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
31 December 2016
30 June 2016
$
75,300
3,641,576
-
$
302,359
5,961,312
-
3,716,876
6,263,671
1,593,069
4,342,459
111,892
6,047,420
768,630
4,471,571
897
5,241,098
(vi) Major customers
The Group has a number of customers to whom it provides both products and services. Within the Food Ingredients
and Supplement segment, the Group supplies to a number of retailers through one single external distributor who
account for 67.7% of total revenue for this segment. The Group supplies to a few external customers for the Sheep
Collagen segment, where the major customer accounts for 98.4% of revenue for this segment.
NOTE 6: EARNINGS PER SHARE
Basic profit/ (loss) per share:
Continuing operations
Total basic profit/ (loss) per share
31 December 2016
30 June 2016
Cents per share
Cents per share
0.10
0.10
(0.26)
(0.26)
Net profit/ (loss) to owners
166,268
(407,930)
Diluted profit/ (loss) per share
Profit/ (loss) from continuing operations
Weighted average number of shares
0.09
(0.26)
166,268
171,128,350
(407,930)
159,711,568
59
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 7: CASH AND CASH EQUIVALENTS
Current
Cash at bank and on hand
`Holista CollTech Limited
31 December 2016
$
30 June 2016
$
58,105
348,434
58,105
348,434
Cash at bank earns interest at floating rates based on daily bank deposit rates.
(i) Reconciliation to the Statement of Cash Flows:
For the purposes of the statement of cash flows, cash and cash equivalents comprise cash on hand and at bank and
investments in money market instruments, net of outstanding bank overdrafts.
Cash and cash equivalents as shown in the statement of cash flows is reconciled to the related items in the statement
of financial position as follows:
Cash and cash equivalents
58,105
Cash and cash equivalents as per statement of cash flows 58,105
348,434
348,434
(ii) Reconciliation of (loss) for the year to net cash flows from
operating activities
Profit / (Loss) for the year after tax
Foreign exchange in profit & loss
Depreciation and amortisation
Loss on sale of non-current assets
Share based payment
Dividend receivable
Accrued interest payable
Accrued interest receivable
Share of loss of joint venture
Property plant and equipment written off
Non cash tax movement
Finance costs (non cash)
- (increase)/decrease in receivables
- Decrease/(increase) in inventories
- increase in payables
- (increase)/decrease in prepayments
-increase in provisions
Net cash provided by operating activities
60
163,858
(408,371)
46,429
70,532
(3,467)
6,943
(15,452)
9,952
(4,973)
6,224
65
5,550
209,718
-
-
-
-
-
-
-
43,066
(110,876)
-
(423,452)
129,985
331,463
321,519
6,516
689,208
61,521
431,454
(10,643)
4,721
211,670
-
394,744
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 8: CURRENT TRADE AND OTHER RECEIVABLES
Trade receivables (i)
Other receivables (ii)
`Holista CollTech Limited
31 December 2016
$
30 June 2016
$
1,367,066
673,188
1,159,226
66,108
2,040,254
1,225,334
(i) the average credit period on sales of goods and rendering of services is range from 30 to 90 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.
Amounts are considered as ‘past due’ when the debt has not been settled, with the terms and conditions agreed between the
group and the customer or counter party to the transaction.
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.
(ii) In the other receivables, it includes an amount advance of $417,941 to third party which attracts 5% interest on accrual
basis
Aging of past due but not impaired
0 – 30 days
30 – 60 days
60 – 90 days
90 - 120 days
Total
NOTE 9: OTHER ASSETS
Current
Security deposits (i)
Prepayments
Total
Non Current
Legal settlement proceeds due
Unlisted Investment (ii)
Total
-
-
-
4,115
4,115
400,794
195,307
596,101
5,238
354,936
360,174
59,864
13,119
-
20,595
93,578
428,748
532,929
961,677
8,694
388,951
397,645
(i) Security deposits are restricted cash. In order to obtain various financing facilities, banks in Malaysia require cash to be
deposited if other collateral is not available. These deposits are interest bearing and the interest is compounded and added to
the principal.
(ii) Unlisted investment (units in limited liability company). This investment has been treated as Level 3 investment since its
measurement has been based on unobservable inputs for the units.
61
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
`Holista CollTech Limited
NOTE 10: INVENTORIES
Raw materials - at cost
Finished goods - at cost
31 December 2016
$
30 June 2016
$
291,497
599,843
891,340
480,429
540,896
1,021,325
NOTE 11: PROPERTY, PLANT AND EQUIPMENT
Work in
Freehold land
Plant and
Motor
Progress
and building
equipment
vehicles
$
$
$
Total
$
$
-
532,427
-
-
-
-
Year ended 31 December 2016
At 1 July 2016, net of accumulated
depreciation and impairment
Transfer from prepayment
Additions
Disposals/write off
Depreciation charge for the year
Foreign currency exchange differences
At 31 Dec 2016, net of accumulated
depreciation and impairment
At 31 December 2016
Cost
Accumulated depreciation and impairment
815,028
205,152
49,394
1,069,574
-
-
-
-
106,808
(65)
-
-
-
(9,257)
(46,754)
(11,666)
(63,874)
(4,216)
(3,621)
532,427
106,808
(65)
(67,677)
(71,711)
532,427
741,897
260,925
34,107
1,569,356
532,427
2,385,557
1,711,209
148,160
4,777,353
-
(1,643,660)
(1,450,284)
(114,053)
(3,207,997)
Net carrying amount
532,427
741,897
260,925
34,107
1,569,356
The useful life of the assets was estimated as follows for both years:
Buildings
Plant and equipment
Motor vehicles
20 years
5 to 15 years
10 years
The carrying value of plant and equipment held under finance leases and hire purchase contracts at 31 December 2016 is
$34,107 (2016: $49,394) There were no additions during the year to motor vehicles held under finance leases and hire
purchase contracts.
The carrying value of property, plant and equipment temporarily idle is $ nil (2016 $ nil). Leased assets and assets under
hire purchase contracts are pledged as security for the related finance lease and hire purchase liabilities. Land and buildings
with a carrying amount of $741,897 (2016: $815,028) are subject to a first charge to secure a loan from RHB Bank, Malaysia.
During period ended 31 December 2016 the Group paid amount equivalent to $275,350 for spray dryer machinery to be
constructed by supplier. In the prior the Group had paid for the spray dryer machinery of $257,077 which was accounted as
deposit. This has been now classified as work in progress together with the amount paid in this current period of $275,350,
totalling to $532,427.
62
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 11: PROPERTY, PLANT AND EQUIPMENT (continued)
Year ended 30 June 2016
At 1 July 2015, net of accumulated depreciation and
impairment
Additions
Disposals
Depreciation charge for the year
Foreign currency exchange differences
At 30 June 2016, net of accumulated depreciation and
impairment
Freehold land
Plant and
Motor
and building
equipment
vehicles
$
$
$
Total
$
859,352
369,821
76,282
1,305,455
-
-
3,322
-
-
-
3,322
-
(19,535)
(165,619)
(24,564)
(209,718)
(24,789)
(2,372)
(2,324)
(29,485)
815,028
205,152
49,394
1,069,574
At 30 June 2016
Cost
Accumulated depreciation and impairment
Net carrying amount
2,462,764
1,645,890
123,484
4,232,138
(1,647,736)
(1,440,738)
(74,090)
(3,162,564)
815,028
205,152
49,394
1,069,574
Impairment Disclosure
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 31 December 2016 (2015: $nil). Whilst this extraction facility has been largely inactive since its
completion in 2005, the factory was reactivated in the 2014 financial year and has delivered 1,520kg (June 2016: 6,143kg)
of orders in the Dec 2016 financial year as received from a customer in Thailand.
NOTE 12: INTANGIBLE ASSETS
Period ended 31 December 2016
Opening balance as at 1 July 2016
Additions
Transfer from other assets
Disposals
Amortisation charge
Impairment losses
Reclassification and regrouping
Foreign currency exchange differences
Closing balance as at 31 December 2016
Patents and
licences
$
Total
$
75,728
75,728
117,181
117,181
137,886
137,886
(2,855)
(2,855)
(5,954)
(5,954)
321,986
321,986
Included in the intangible is payment to ATM Metabolics of AUD248,756 (USD180,000) for use of the brand Emulin Plus per
term sheet entered into on the 6 December 2015. The parties have not signed an executed agreement as at 31 December
2016.
63
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 12: INTANGIBLE ASSETS (continued)
Year ended 30 June 2016
Opening balance
Additions
Disposals
Amortisation charge
Reclassification and regroup
Foreign currency exchange differences
NOTE 13: TRADE AND OTHER PAYABLES
Trade payables
Non-trade creditors (i)
`Holista CollTech Limited
Patents and
licences
$
Total
$
189,190
189,190
24,259
(19,178)
(5,709)
24,259
(19,178)
(5,709)
(110,852)
(110,852)
(1,982)
75,728
(1,982)
75,728
31 December 2016
$
30 June 2016
$
731,688
940,933
438,809
833,250
1,672,621
1,272,059
(i) Included in the non-trade creditors is deferred revenue amounting of $84,140 which represents customer loyalty points and
is estimated based on the amount of loyalty points outstanding at reporting date that are expected to be redeemed.
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 related party loan are listed as follows:
31 December 2016
$
30 June 2016
$
Current
Bankers acceptance
Credit card
Financial leases
Term loans: (1)
Loan from related parties (2)
Total Current
Non-Current
After 1 year but not later than 5 years
Term loans: (1)
Financial leases
After 5 years
Term loans: (1)
Total Non-Current
64
313,338
-
12,998
35,285
357,079
718,700
163,645
47,834
211,479
321,387
321,387
532,866
262,498
(7,933)
13,767
37,279
-
305,611
137,270
59,055
196,325
408,958
408,958
605,283
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
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) First party Absolute Assignment of all rights, interest, title and benefits in and to property beneficially owned by a Subsidiary
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) Pledge of fixed deposits with licensed banks (refer to note 7)
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 of the company and a third party.
The bankers’ acceptance bears interest of 5.15% (2016: 5.43%).
The term Loan (1) is repayable over 240 monthly instalments (principal plus interest) of $5,119 which commenced on 1 July
2008. The term loan bears interest rates ranging from 5.20% (2016: 5.35) per annum.
Related party loan (2)
This loan amounting to US$250,000 has been advanced by associated company of a director. This loan attracts interest of
10% per annum. There is $9,952 of accrued interest until 31 December 2016 included in the liability amount.
Assets pledged as security.
The carrying amounts of assets pledged as security for current and non-current interest bearing liabilities are:
Current
Floating charge
Security deposits
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
31 December 2016
30 June 2016
400,794
891,340
1,292,134
428,748
1,021,325
1,450,073
741,897
815,028
-
741,897
2,034,031
-
815,028
2,265,101
Financing facilities available
At balance date, the following financing facilities had been negotiated and were available:
Total facilities:
Bank loan
Trade facilities
Finance lease
31 December 2016
$
30 June 2016
$
520,317
369,720
60,832
950,869
583,507
401,271
72,822
1,057,600
65
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 14: INTEREST-BEARING LOANS AND BORROWINGS (continued)
Facilities used at balance date
Bank loan
Trade facilities
Convertible notes
Finance lease
Facilities unused at balance date
Trade facilities
Total facilities
Facilities used at balance date
Facilities unused at balance date
NOTE 15: ISSUED CAPITAL
171,708,921 ordinary shares issued and fully paid
(2016:169,572,421)
Convertible notes nil
`Holista CollTech Limited
31 December 2016
$
30 June 2016
$
520,317
313,338
-
60,832
894,487
56,382
56,382
950,869
(894,487)
56,382
583,507
262,498
-
72,822
918,827
138,773
138,773
1,057,600
(918,827)
138,773
December 2016
$
June 2016
$
10,798,705
10,670,515
-
-
10,798,705
10,670,515
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.
66
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 15: ISSUED CAPITAL (continued)
Movements in ordinary share capital of the Company during the last two year were as follows;
Date
Details
No. of Shares
Issue Price
$
01/07/2016 Opening balance
19/08/2016 Options exercised
31/12/2016 Closing balance
169,572,421
2,136,500
171,708,921
10,670,515
$0.06
128,190
10,798,705
Date
Details
No. of Shares
Issue Price
$
01/07/2015 Opening balance
27/10/2015 Options exercised
08/03/2016 Shares issued
Less: costs of issue of shares
08/03/2016 Conversion of convertible notes (i)
28/04/2016 Warrants exercised
Less: costs on issue of shares
30/06/2016 Closing balance
(i) including the conversion rights of $137,501.
NOTE 16: ACCUMULATED LOSSES AND RESERVES
Accumulated Losses
Movements in accumulated losses were as follows:
Balance at beginning of financial year
Net profit/ (loss) for the year
Balance at end of financial year
Reserves
Compositions of reserves were as follows:
Foreign currency translation reserve
Options reserve
Movements in options reserve during the last year:
Foreign currency translation reserve (a)
Options reserve (b)
154,001,549
4,166,667
3,954,205
6,250,000
1,200,000
169,572,421
$0.06
$0.12
$0.10
$0.06
9,286,702
250,000
454,734
(22,737)
637,501
72,000
(7,685)
10,670,515
31 December 2016
$
30 June 2016
$
(9,544,692)
(9,136,762)
166,268
(407,930)
(9,378,424)
(9,544,692)
31 December 2016
$
30 June 2016
$
(376,030)
2,272,673
1,896,643
(183,993)
2,265,730
2,081,737
31 December 2016
$
30 June 2016
$
(192,037)
6,943
(185,094)
(137,279)
22,736
(114,543)
67
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 16: ACCUMULATED LOSSES AND RESERVES (continued)
Nature and purpose of reserves
(a) Foreign currency translation reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
statements of foreign subsidiaries.
(b) Option reserve
The option reserve records items recognised as expenses on valuation of share options. There are 30,692,782 (2016:
31,829,282) 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 (2016: 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
31 December 2016
$
30 June 2016
$
(199,534)
(192,517)
(2,410)
(5,602)
-
(441)
(6,576)
-
(207,546)
(199,534)
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.
Operating cash flows are used to maintain and expand operations, as well as to make routine expenditures such as tax,
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.
68
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 18: FINANCIAL INSTRUMENTS (continued)
(b) Categories of financial instruments
Financial assets
Cash and cash equivalents (i)
Trade and other receivables
Other assets
Unlisted investment
Financial liabilities (at amortised cost)
Trade and other payables
Borrowings (current and non-current)
`Holista CollTech Limited
31 December 2016
$
30 June 2016
$
58,105
2,040,254
406,302
354,936
1,672,621
1,251,566
348,434
1,225,334
688,507
-
1,272,059
910,894
(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 risk and cash flow interest rate risk.
(d) Market risk
The Group's activities expose it primarily to the financial risks of changes in foreign currency exchange rates, commodity
prices and exchange rates. The Group enters into a variety of derivative financial instruments to manage its exposure
to 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.
The Holista Group has an investment in a company classified as Tier 3, in that the investment company is unlisted. The
Holista Group investment is relatively new and has only recently commenced trading by the Tier 3 company investing in
another unlisted company that operates in the USA. No financial information is available on the latter investment and is
a company that has been set up to commercialise certain brain food (blood glucose control ingredients) in the USA and
elsewhere. Thus, in total the investment by the Holista Group and the underlying investment is subject to future market
conditions. The Holista Group has carried forward their investment at cost until such time a more reliable valuation
methodology can be used.
The Group has also 10% free carried interest in Sed BioMed Inc., a company incorporated in the State of Delaware,
USA in which Mr Chan Heng Fai is a significant shareholder.
(i) Foreign currency risk management
The Group undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate
fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign
exchange contracts.
69
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 18: FINANCIAL INSTRUMENTS (continued)
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:
Malaysian ringgit
United States dollar
Liabilities
Assets
December 2016
$
June 2016
$
December 2016
$
June 2016
$
2,257,599
1,855,148
2,990,903
2,982,579
69,154
191,023
874
97,449
Foreign currency sensitivity analysis
The Group is exposed to Malaysian ringgit (RM) and United States Dollar (USD) currency fluctuations.
The following table details the Group's sensitivity to a 10% increase and decrease in the Australian dollar against the
relevant foreign currencies. 10% is the sensitivity rate used when reporting foreign currency risk internally to key
management personnel and 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.
Profit or loss (i)
Other equity (ii)
RM and USD impact
Consolidated
Company
December 2016
$
(170,668)
260,919
June 2016
$
December 2016
$
June 2016
$
(25,533)
266,857
-
-
-
-
(i) This is mainly attributable to the exposure outstanding on receivables and payables at year end in the Group.
(ii) This is mainly as a result of the changes in fair value of the Australian net assets due to currency fluctuations.
(ii) Interest rate risk management
The company and the Group are exposed to interest rate risk as entities in the Group borrow funds at both fixed and
floating interest rates. The risk is managed by the Group by maintaining an appropriate mix between fixed and floating
rate borrowings.
The Company and the Group’s exposures to interest rate in financial assets and financial liabilities are detailed in the
liquidity 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-
derivative instruments at the balance date and the stipulated change taking place at the beginning of the financial year
and 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: net profit would increase by $2,662 (2016:$2,902) and decrease by $4,264 (2016: $4,207). This is mainly
attributable to the Group's exposure 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.
70
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 18: FINANCIAL INSTRUMENTS (continued)
(e) Credit risk management
Credit risk refers to the risk that counterparty will default on its contractual obligations resulting in financial loss to the
Group. The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral
where appropriate, as a means of mitigating the risk of financial loss from defaults. The Group only transacts with entities
that are rated the equivalent of investment grade and above. This information is supplied by independent rating agencies
where available and, if not available, the Group uses publicly available financial information and its own trading record to
rate its major 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
(f) Liquidity risk management
31 December 2016
$
30 June 2016
$
720,550
642,401
562,306
503,342
1,362,951
1,065,648
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 facilities by continuously monitoring forecast and actual cash flows and matching the
maturity profiles of financial assets and liabilities.
The following table details the company's and the Group's expected contractual maturity for its non-derivative financial
liabilities. These have been drawn up based on undiscounted contractual maturities of the financial liabilities including
interest that will be payable on these liabilities except where the Group anticipates that the cash flow will occur in a different
period.
December 2016
Non-interest bearing
Finance lease liabilities (4.56%)
Variable interest rate instruments (5.15%)
Fixed interest rate instruments (5.20%-10%)
Less than 1
Month
$
1-3
Months
$
3 months-
1 year
$
-
1,083
55,150
2,940
59,173
-
2,166
207,351
5,881
215,398
-
9,749
50,837
383,543
444,129
1-5 years
5+ years
$
-
47,834
-
$
-
-
-
163,645
321,387
211,479
321,387
71
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 18: FINANCIAL INSTRUMENTS (continued)
Less than 1
Month
$
1-3
Months
$
3 months-
1 year
$
June 2016
Non-interest bearing
Finance lease liabilities
Variable interest rate instruments
Fixed interest rate instruments
-
1,395
189,600
8,285
199,280
-
2,790
72,898
16,273
91,961
NOTE 19: COMMITMENTS
Operating lease commitments - Group as lessee
`Holista CollTech Limited
1-5 years
5+ years
$
-
-
$
-
-
-
374,519
111,079
430,599
111,079
12,556
56,080
-
-
73,352
85,908
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.
The Group has a 1-3 year lease for commercial office, retail shop and warehouse in Malaysia. The future minimum rental
payments under non cancellable tenancy agreements are $23,009.
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 31 Dec are as follows:
Within one year
After one year but not more than five years
After five years
Consolidated
Parent
31 December
2016
$
25,668
45,785
29,379
30 June
2016
$
27,023
54,965
29,379
100,832
111,367
31 December
2016
$
9,793
39,171
29,379
78,343
30 June
2016
$
9,793
39,171
29,379
78,343
Finance lease and hire purchase commitments - Group as lessee
The Group has finance leases and hire purchase contracts for various items of plant and machinery. These leases have
terms of renewal but no purchase options and escalation clauses. Renewals are at the option of the specific entity that
holds the lease.
72
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 19: COMMITMENTS (continued)
Future minimum lease payments under finance leases and hire purchase contracts together with the present value of the
net minimum lease payments are as follows:
Consolidated
Within one year
After one year but not more than five years
Later than five years
Total minimum lease payments
Less amounts representing finance charges
Present value of minimum lease payments
Capital commitments
Minimum Lease
Payments
$
Minimum Lease
Payments
$
15,425
51,401
-
66,826
(5,994)
60,832
16,741
64,158
-
80,899
(8,077)
72,822
At 31 December 2016 the Group has $nil (2016 $257,077) of capital commitments that have not otherwise been booked as
a liability. This is for the purchase of a spray dryer for the Collie plant.
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.
The following transactions occurred with related parties
Consolidated
Parent
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
Consultation fee paid to Samabudi Consulting Sdn
Bhd which director have interest
Loan and interest from Global eHealth Ltd which a
director have interest
Loan from subsidiary
Loan to subsidiary
31 December
2016
$
5,674
30 June
2016
$
11,973
5,674
5,674
11,973
11,973
24,019
357,079
-
-
-
-
-
-
31 December
2016
$
30 June
2016
$
-
-
-
-
-
-
-
-
-
-
1,189,413
677,740
(864,306)
(812,011)
398,120
35,919
325,107
(134,271)
73
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 20: RELATED PARTY DISCLOSURE (continued)
Lite Food Inc is 74% owned by the Group with the remaining 26% being held by private shareholders including the
company’s director Mr. Chan Heng Fai.
The Holista Group has made an investment in a Tier 3 classified company as referred to in Note 9 and Note 18. The Tier
3 investment company has invested in another unlisted company in which Mr Chan Heng Fai is Chairman and Dr Rajen
Manicka is the Chief Executive Officer. The cost of the investment by the Tier 3 company in the investment company
involving Mr Chan Heng Fai and Dr Rajen Manicka is US$375,460.
NOTE 21: INTEREST IN SUBSIDIARIES
Set out below are the Group’s subsidiaries at 30 December 2016. 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.
Name
Country of
Incorporation
Ownership Interest Held
by the Group
Proportion of Non-
controlling Interests
Holista Biotech Sdn Bhd
Total Health Concept Sdn Bhd
Alterni (M) Sdn Bhd
Medi Botanics Sdn Bhd
Lite Food Inc
Malaysia
Malaysia
Malaysia
Malaysia
United States of America
Dec 2016
June 2016 Dec 2016
June 2016
100%
100%
100%
100%
74%
100%
100%
100%
100%
74%
-
-
-
-
-
-
-
-
26%
26%
Subsidiaries financial statements used in the preparation of these consolidated financial statements have also been
prepared as at the same reporting date as the Group’s financial statements.
Summarised Financial Information of Subsidiaries with Material Non-controlling Interests
Set out below is the summarised financial information for each subsidiary that has non-controlling interests that are 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
Lite Food Inc
31 December 2016
$
30 June 2016
$
873
111,019
(69,154)
897
-
(54)
(840,992)
(768,280)
(798,254)
(767,437)
(207,546)
(199,534)
74
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 21: INTEREST IN SUBSIDIARIES (continued)
`Holista CollTech Limited
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.
Summarised Cash Flow Information
Net cash used in operating activities
Net cash from investing activities
Net cash from/(used in) financing activities
Effect of exchange rates on cash holdings in foreign currencies
Period ended
31 December 2016
Year ended
30 June 2016
$
-
(6,951)
(1,696)
(6,951)
(1,807)
-
(1,696)
(441)
-
Lite Food Inc
31 December 2016
$
30 June 2016
$
(9,270)
-
23,625
(1,696)
68,059
-
-
Net (decrease) in cash and cash equivalents
14,355
66,363
NOTE 22: JOINT VENTURE DISCLOSURES
On 12 July 2016, the Group and Nadja Foods LLC announced a 51-49 joint venture company, Holista Foods Inc, to be
run by Nadja Piatka as Chief Executive Officer. Holista Foods Inc will be the distributor for the Group’s low-GI products in
North America.
Set out below is the Group’s interest in joint ventures at 31 December 2016.
Name
Country of
Incorporation
Ownership Interest Held by the Group
December 2016
June 2016
Holista Foods Inc
United States of America
36.26%
-
The above joint venture is accounted for using the equity method in these consolidated financial statements.
Holista CollTech Ltd holds 74% of LiteFoods Inc and LiteFoods Inc hold 49% of Holista Foods Inc.
75
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 22: JOINT VENTURE DISCLOSURES (continued)
Summarised Financial Information of Group’s material joint venture
Set out below is the summarised financial information for each joint venture that are material to the Group:
Summarised Financial Position
Current assets
Non-current assets
Current liabilities
Non-current liabilities
Net liabilities
Group’s share of joint venture’s net assets
Summarised Financial Performance
Revenue
(Loss) after tax
Other comprehensive income after tax
Total comprehensive income
Group’s share of joint venture’s net income
Reconciliation to carrying amounts
Group’s share of joint venture’s opening net assets
Investments during period
Group’s share of joint venture’s comprehensive income
Group’s share of joint venture’s closing net assets
Period ended
31 December 2016
$
Year ended
30 June 2016
$
15,616
92,765
(3,800)
(117,284)
(12,703)
(6,224)
-
-
-
-
-
-
Period ended
31 December 2016
$
Year ended
30 June 2016
$
-
(12,703)
(12,703)
(6,224)
-
-
-
-
Period ended
31 December 2016
$
Year ended
30 June 2016
$
-
117,243
(6,224)
111,019
-
-
-
-
76
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 23: 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)
31 December 2016
$
30 June 2016
$
823,064
3,563,708
4,386,772
376,683
3,163,503
3,540,186
1,777,582
871,615
-
1,777,582
2,609,190
-
871,615
2,668,571
9,307,630
9,179,440
(8,971,113)
(8,776,600)
2,272,673
2,609,190
2,265,731
2,668,571
Period ended
31 December 2016
$
Year ended
30 June 2016
$
(194,513)
(492,007)
-
-
(194,513)
(492,007)
The parent company has capital commitments at 31 December 2016 of $nil (2016: $257,077).
The parent company has not entered into any guarantees on behalf of subsidiary entities.
The parent company other commitments are disclosed in Note 19.
NOTE 24: EVENTS AFTER THE REPORTING PERIOD
On 6 January 2017, the Group announced it has collaborated with 2017 Nobel Prize Nominee and emerging thought
leader in carbohydrate chemistry, Daryl Thompson, to file a patent for the world’s first low-Glycemic Index sugar made
out of all natural-ingredients.
On 9 January 2017, Dr Rajen Manicka was granted 9,000,000 performance rights in the AGM.
On 23 March 2017, a total of 6,500,000 options (warrants) were granted to plant consultant and patent holders.
On 27 March 2017, Mr Chan Heng Fai exercised 6,012,698 warrants.
There has not been any other matter or circumstance that has arisen after balance date that has significantly affected,
or may significantly affect, the operations of the consolidated entity, the results of those operations, or the state of
affairs of the consolidated entity in future financial periods.
77
For personal use only
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 25: AUDITOR'S REMUNERATION
`Holista CollTech Limited
31 December
2016
$
30 June
2016
$
Amounts received or due and receivable by Stantons International Audit and Consulting
for:
An audit or review of the financial report of the entity and any other entity in the Group
28,000
47,000
Amounts received or due and receivable by Russell Bedford LC & Company for
- an audit or review of the financial report of subsidiaries
Amounts received or due and receivable by auditors of group entities
18,093
46,093
28,037
75,037
NOTE 26: DIRECTORS AND EXECUTIVES DISCLOSURES
(a)
Details of Key Management Personnel
(i)
Directors
Dr Rajen Manicka
Mr. Daniel O’Connor
Mr. Chan Heng Fai
Executives
Mr Jay Stephenson
(ii)
Chief Executive
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.
Short-term employee benefits
Post-employment benefits
Total key management personnel compensation
(b)
Loans to Key Management Personnel
There are no loans to directors or executives.
(c)
Loans from key Management Personnel
31 December
2016
$
30 June
2016
$
154,761
426,425
21,350
64,770
176,111
491,195
The company enter into a loan agreement with Global eHealth Limited, which a director have interest.
78
For personal use only
`Holista CollTech Limited
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED 31 DECEMBER 2016
NOTE 27: SHARE BASED PAYMENTS
The company made a share based payment with a fair value of $6,943 during the year ended 31 December 2016
(2016: $22,737). The options were issued to a consultant for his contribution during the capital raising and valued at the
agreed service price.
Reconciliation of outstanding share options to Directors, employees and consultants.
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 31 Dec/30 Jun
Exercisable at 31 Dec/30 Jun
Number of
options
31 Dec 2016
31,829,282
1,000,000
-
WAEP 2016
$0.06
$0.25
-
Number of
options
30 Jun 2016
25,333,333
11,862,616
-
WAEP 2016
$0.06
$0.25
-
(2,136,500)
($0.06)
(5,366,667)
($0.06)
30,692,782
30,692,782
$0.11
$0.11
31,829,282
31,829,282
$0.06
$0.06
The options outstanding at 31 December 2016 have an exercise price in the range of $0.06 to $0.30 (2016: $0.06 to
$0.30) and weighted average remaining contractual life of 2 years (2016: 2 years). The weighted average share price
at the date of exercise for share options exercised in 2016 was $0.06 (2016: $0.06).
NOTE 28: CONTINGENT LIABILITIES
The Company has no contingent liabilities at 31 December 2016.
NOTE 29:PROVISION FOR EMPLOYEE BENEFITS
Provision for accrued annual leave
31 December 2016
$
30 June 2016
$
6,516
-
79
For personal use only
DIRECTORS’ DECLARATION
`Holista CollTech Limited
1.
a.
In the opinion of the directors of Holista CollTech Limited (the 'Company'):
the accompanying financial statements and notes are in accordance with the Corporations Act 2001 including:
i. giving a true and fair view of the consolidated entity's financial position as at 31 December 2016 and of its 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.
the financial statements and notes thereto are in accordance with International Financial Reporting Standards 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 Section 295A of the Corporations Act 2001 for the period ended 31 December 2016.
This declaration is signed in accordance with a resolution of the Board of Directors.
_______________________________
Dr Rajen Manicka
Director
Dated this 31 day of March 2017
80
For personal use only
For personal use only For personal use only For personal use only For personal use only Additional Information for Listed Public Companies
Additional information included in accordance with the Listing Rules of the Australian Securities Exchange Limited.
The information is current as at 8 March 2017.
`Holista CollTech Limited
1. Shareholdings
a)
Substantial shareholders of Holista CollTech Limited:
Name of shareholder
Dr Rajen Manicka
Mr Chan Heng Fai
Ms Sarinderjit Kaur
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
32,814,935
8,461,500
Number of
Shareholders
229
298
188
301
68
1,084
At the date of this report there were 458 shareholders who held less than a marketable parcel of shares holding
648,886 shares.
85
For personal use only
Additional Information for Listed Public Companies
a) 20 Largest Shareholders – Ordinary Shares:
DR RAJENDRAN MARNICKAVASAGAR
GLOBAL EHEALTH LIMITED
MS SARINDERJIT KAUR
HSBC CUSTODY NOMINEES
FAIRVIEW HOLDINGS PTY LTD
DR FATHIL MOHAMED
CHANDRA SEKARAN P PERUMAL
FRANJACK PTY LTD &
BNP PARIBAS NOMS PTY LTD
MR RAVINDRAN GOVINDAN
MR KOK WAH ONG
THANK KEATING PTY LTD
FAIRVIEW HOLDINGS PTY LTD
CATL PTY LTD
MRS SHIVANI KAMALANATHAN
IRSS NOMINEES (21) LIMITED
LIFESCIENCE SECURITIES LTD
MR RAVINDRAN GOVINDAN
DR JOHN MCKINNON SNOWDEN &
BERNE NO 132 NOMINEES PTY LTD
Number of Ordinary Fully
Paid Shares Held
73,875,000
32,814,935
8,461,500
6,893,547
4,750,000
4,211,274
3,333,333
3,300,000
2,314,884
2,061,119
1,696,220
1,300,000
1,020,000
900,000
738,089
660,000
600,000
534,468
533,683
530,645
150,528,697
`Holista CollTech Limited
% Held of Issued
Ordinary Capital
43.02
19.11
4.93
4.01
2.77
2.45
1.94
1.92
1.35
1.20
0.99
0.76
0.59
0.52
0.43
0.38
0.35
0.31
0.31
0.31
87.67
b)
Stock Exchange Listing
Listed securities in Holista CollTech Limited (HCT) are quoted on all member exchanges of the Australian Securities
Exchange.
86
For personal use only