Holista Colltech Annual Report 2018

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FY2018 Annual Report · Holista Colltech

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MAKING NATURE WORK FOR YOU,
GOING GLOBAL

Holista CollTech Limited

ABN 24 094 515 992

283, Rokeby Road

SUBIACO WA 6008

Tel : +618 6141 3500

Fax: +618 6141 3599

www.holistaco.com

Holista CollTech
Annual Report 2018

ABOUT US
WE ALL STRIVE TO BE HEALTHY. YET SOMETIMES, MAKING
THE RIGHT CHOICE IS BEYOND OUR CONTROL. HOLISTA
COLLTECH CARRIES OUT RESEARCH TO FIND NATURAL
SOLUTIONS SO PEOPLE CAN ENJOY HEALTHY AND ORGANIC
ALTERNATIVES TO TASTY BUT UNHEALTHY PROCESSED AND
BAKED FOODS. NO COMPROMISE ON TASTE, ODOUR AND
MOUTH-FEEL. EVERYONE CAN ENJOY THEIR FAVOURITE
FOODS AND STILL BE HEALTHY.

CORPORATE PROFILE

Holista CollTech Ltd (Holista) is a research-driven biotech company, a result of the merger of Holista
Biotech Sdn. Bhd. and CollTech Australia Ltd. It is listed on the Australian Securities Exchange (ASX:HCT),
headquartered in Perth and has extensive operations in Malaysia.

Dedicated to deliver top-notch organic ingredients and wellness products, Holista specialises in herbs and
food ingredients. It researches, develops, manufactures and markets “health-style” products to address
the unmet and growing needs of natural medicine.

Mindful that people find it difficult to change eating habits despite the growing pandemic of diabetes
and obesity, Holista has created a suite of ingredients that does not compromise on taste, odour and
mouthfeel. These healthy and organic ingredients include the low-Glycaemic Index (GI) flour mix for
noodles, pasta and flatbreads and baked products, low-sodium salt, low-fat fried foods and low-calories
sugar and low-GI sugar.

Holista is the only company in the world that produces ovine collagen from Australian sheep using
patented extraction methods. It is on track to nano-nise and encapsulate 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.

CORPORATE
DIRECTORY

CURRENT 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

JOINT COMPANY SECRETARY
Mr Brett Fraser
Mr Jay Stephenson

REGISTERED OFFICE

Street + Postal: 283 Rokeby Road

iii

Telephone:
Facsimile:
Email:
Website:

AUDITORS

SUBIACO WA 6008
+61 (0)8 6141 3500
+61 (0)8 6141 3599
enquiries@holistaco.com
www.holistaco.com

Stantons International
Street:

Level 2, 1 Walker Avenue
WEST PERTH WA 6005
AUSTRALIA
+61(0)8 9481 3188
+61(0)8 9321 1204

Telephone:
Facsimile:

SHARE REGISTRY

Computershare Investor Services Pty Limited
Level 11, 172 St Georges Terrace
PERTH WA 6000
Telephone:
Telephone:
Email:
Website:

1300 850 505 (investors within Australia)
+61 (0)3 9415 4000
web.queries@computershare.com.au
www.investorcentre.com

SECURITIES EXCHANGE

Australian Securities Exchange
Level 40, Central Park, 152-158 St Georges Terrace
Perth WA 6000
Telephone:
Telephone:
Facsimile:
Website:
ASX Code

131 ASX (131 279) (within Australia)
+61 (0)2 9338 0000
+61 (0)2 9227 0885
www.asx.com.au
HCT

CONTENTS

Managing Director’s Report

Key Milestones

Messages from our Key Partners

Investor Engagement

Directors’ Report

Auditor’s Independence Declaration

Consolidated Statement of Profit or Loss and other
Comprehensive Income

Consolidated Statement of Financial Position

Consolidated Statement of Changes in Equity

Consolidated Statement of Cash Flows

Notes to the Consolidated Financial Statements

100

Directors’ Declaration

101

Independent Auditor’s Report

106

Corporate Governance Statement

116

Additional Information for Listed Public Companies

Holista CollTech LimitedABN 24 094 515 992 annual report 2018

MANAGING
DIRECTOR’S REPORT

Managing Director’s Report (Continued)

Dr. Rajen Manicka
Managing Director

Dear Shareholders,

On behalf of the Board of Directors (the Board) of

Holista CollTech Limited (Holista or the Group),
I am pleased to present our Annual Report and
audited financial statements for the financial
year ended 31 December 2018 (FY2018).

Apart from serving as a scorecard of our performance and significant
events during the year in review, this Annual Report will also offer a
glimpse of what you can expect in FY2019 and beyond.

Overall, FY2018 was an exciting year for Holista. We scored a major
breakthrough as we penetrated global markets with our clean label
(chemical-free) low-Glycaemic Index (”GI”) solutions for flour-based
products, chiefly noodles. This bodes extremely well for our ongoing
efforts to improve global nutrition and better meet the needs of food
manufacturers. In all that we do, we aspire to not only maintain the
taste and texture of the final product but also ensure it is affordable
and well-liked by consumers.

Success of Low-GI Flour-Based Products: Going Global

As you may recall, we received scientific validation from the
University of Sydney for Panatura GI in January 2016. This formula,
developed with Veripan AG of Europe, significantly lowers the GI for
white bread. It marked a major milestone in our quest to address
the global pandemic of obesity and diabetes caused by unhealthy
diets.

We have worked on a significant reduction of the GI of white flour
based baked goods – such as bread, biscuits, muffins and noodles – in a
natural, simple and cost-effective way. Over the past year, we worked
with the team at Veripan and its partners to launch the world’s first “clean
label” low GI bread. With the support of an Australian consortium,

Low
Glycemic
Index

GI Rating

11g

Protein

Low

Sodium

Sugar

achievement has opened doors for
us to establish collaborations and
partnerships to widen our market
reach, including in China.

80Less – Low-Calorie sugar

The rising pandemic of diabetes and
obesity has prompted a number
of countries to levy or propose a
sugar tax to change consumption
habits. In seeking to address these
health issues, we announced on 14
February 2019 our breakthrough
solution 80Less, which is five times
sweeter than ordinary sugar but
It
contains 80% fewer calories.
comprises sucrose
(table sugar)
and very low levels of sucralose (an
intense sweetener derived from
sugarcane).

we intend to launch a low GI white
bread in Australia in May-June 2019.

To this end, a special purpose global
brand is being developed to convey
the low GI message. This will be
fully backed by the Glycaemic Index
Foundation, a not-for-profit health
promotion charity supported by the
University of Sydney and Diabetes
NSW & ACT. A global rollout will
follow once the brand is launched in
Australia as we are convinced that
our innovation will finally be ready
for markets worldwide in 2019 and
beyond.

For now, what has caught the eye of
the market is our low-GI flour-based
noodles, which are developed using
okra, dhal, barley and fenugreek. On
19 October 2017, a noodle formula
developed by our U.S. subsidiary,
Holista Foods, was tested with a
GI rating of 38 (versus 60 for most
noodles). This formula has been
endorsed by the Glycemic Index
Foundation and
line with
guidelines and recommendations
This
from Diabetes

Canada.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018GI
=
38
(Low)www.HolistaFoods.comLow
Glycemic
IndexnoodlesClean
LabelCooks
in
3
Minutes11g
Protein
0g
SugarLow
SodiumGI
=
38
(Low)www.HolistaFoods.comLow
Glycemic
IndexnoodlesClean
LabelCooks
in
3
Minutes11g
Protein
0g
SugarLow
Sodium

Managing Director’s Report (Continued)

Collagen

in FY2017

Revenue for this segment decreased
to
from $413,000
$215,000
in FY2018 due to a
planned temporary shutdown of our
plant in Collie, Perth, for an upgrade.
Expected to be fully operational in
FY2019, this division has already
secured orders worth $567,000.

The global collagen market size
is expected
reach US$663
billion by 2025, growing at an
annual compounded rate of 6.5%,
according to the Collagen Market
is due to
Analysis Report. This
rising demand for collagen from
industries
including healthcare,
food and beverage, cosmetics and
anti-ageing.

There has also been steady growth in
the cosmetics industry with respect
to the global collagen market.
Against this backdrop, cosmetics-
grade collagen
to
contribute the most to our revenue
for the collagen segment in the
coming years.

is expected

Financial Performance

revenue

in FY2018

increased
Overall, our
(4.91%)
by approximately 5%
to $7,940,555
from
$7,569,007 in FY2017. We narrowed
our net loss attributable to owners of
the parent by approximately 46.80%
to $1,612,147 from $3,030,290 in
FY2017.

Corporate Developments

On 6 August 2018, we successfully
completed our Share Purchase Plan
(SPP). Under the SPP, each eligible
shareholder is entitled to subscribe
for up to $15,000 shares from the

We see our product as a potent
weapon in the battle against sugar
overconsumption worldwide.

The funds raised from the SPP will
allow us to strengthen our marketing
and R&D efforts especially
in
FY2019.

Appreciation

On behalf of the Board, I would like
to thank all stakeholders for your
patience and support,
including
our R&D collaborators, retailers,
suppliers and customers. I am very
grateful to our management team
and all our staff for their continuous
dedication and hard work. I look
forward to another exciting year
ahead with all of you.

Thank you.

DR RAJEN MANICKA
Managing Director

fully-paid ordinary shares at an issue
price of 7 cents per share.

We received a total number of
applications of 8,756,525 new
shares from eligible shareholders,
and we accepted all the shareholder
subscriptions.

Outlook

I remain positive about our medium-
to long-term prospects in view of
the significant achievements during
FY2018 and immediately after.

We remain optimistic of a major
effort to launch a global low GI
clean label white bread starting in
Australia. This will be followed by a
global roll out.

While there were delays in the

shipment of Low-GI noodles to
China (as per our agreement with
Express Trading Canada), we are
working hard to ensure that the
offtake can commence in FY2019.
When that happens, the revenue
contributions will be significant.

On our partnership with Kawan
Food, we will commence production
of Low-GI flatbreads – starting with
paratha and chapatti – in the form
of frozen dough. They are scheduled
to hit Malaysian stores by May/ June
2019 and the U.S. market two to
three months later.

For our new
low-calorie sugar
launch of
imminent
80Less, the
the Malaysian sugar tax (delayed
by three months to 1 July 2019) is
expected to hasten discussions we
have with beverage manufacturers.

industry,
of

We look forward to collaborating
with different players in the food
including
and beverage
manufacturers
beverages
(sweetened drinks) and biscuits,
to roll out 80Less. We have begun
discussions
in Malaysia with
potential customers keen on a
solution ahead of the imposition
of the nationwide sugar tax on
1 July 2019.

Besides 80Less, we are also
advanced
a more
developing
formula called 80Less Premium.
This will be 40 times sweeter than
ordinary sugar. Both 80Less and
80Less Premium leave no after-taste
and offer the same sensory effects
as those of sugar. They can also
replace sugar in every application
and even reduce logistics costs for
the transportation and storage of
sugar.

Dietary Supplements

The Dietary Supplements division
has remained our primary revenue
contributor since FY2014. In FY2018,
this division again accounted for the
lion’s share of our revenue, although
it had its share of challenges. While
Holista has a strong distribution
network in Malaysia, the domestic
market underperformed in FY2018
as
local currency
weakness)
impacted consumers’
purchasing power. Nonetheless,
segment
revenue
increased 7% to $7,699,489
in
FY2018 from $7,176,607 in FY2017.

inflation (and

from

this

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018KEY
MILESTONES

14 Feb 2018

Holista signed an MoU with North-America’s leading noodle maker, Wing’s Group of Canada
to supply our patented low-GI noodle mix. For the first year (FY2018), we achieved a sales
order of US$20,000. We expect this sales order to increase in FY2019 and beyond.

20 Jul 2018

Holista Foods secured
rights to manufacture
and distribute our “clean
label” gluten-free flour
blend in North America,
the world’s
largest
market for gluten-free
products. Holista Foods
will produce and market
the flour blend with
carbohydrates,
lower
and no
less
additives,
improvers,
enzymes or gums.

sugar

22 Mar 2018

25 Jun 2018

Holista Foods and Wing’s Group
announce a formula for low-GI
spaghetti which will be offered
for North American markets
initially.

Low-GI spaghetti
listed
on e-commerce platform
Amazon.
(The product
has already been featured
under Amazon’s Choice)

5 Jul 2018

Holista Foods signed an agreement with Express Trading Canada to
export Low-GI noodles to China. Finalisation of this order will contribute
significantly to our performance and underscore our credentials as a
significant player in the world noodle market. Based on the agreement,
the indicative orders are $12 million.

2019

26 Nov 2018

11 Dec 2018

16 Jan 2019

14 Feb 2019

Holista Foods
announces the
global launch of
its low-GI pasta

Holista Foods appointed Hilary’s
Salesmaster as the exclusive
distributor of Low-GI noodles
in Canada. Hilary’s has a
strong presence in Canada and
distributes to major health,
retail and convenience stores.
Its range of healthy bars and
beverages includes the 5-Hour
Energy Drink, the leading energy
drink in North America.

listed

Holista
partners
Kawan Food Berhad,
a leading frozen food
manufacturer
and
in
exporter
Malaysia, to produce
Low-GI versions of
chapatti and
the
Malaysian favourite
– roti canai. This
marks
entry
the
of Holista’s Low-GI
flatbreads.

Holista completed and successfully
tested 80LessTM, a proprietary sugar
formulation with a low-glycaemic
Index (Low GI) that is five times
sweeter than ordinary sugar, and
without any after taste. 80LessTM
seeks to address challenges faced
by food and drink manufacturers
increasing proposals by
amidst
countries to impose a sugar tax to
curb excessive sugar intake which
is seen as a major cause of obesity
and diabetes.

Holista has been featured on:

Ms. Nadja Piatka
CEO of Nadja Foods and
CEO of Holista Foods

MESSAGES FROM
OUR KEY PARTNERS

All over the world, fast food, desserts and soft drinks are a part of the
modern lifestyle. However, there is a potential dark side to these tasty
processed foods and sweet-tooth cravings – 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, science has moved on, and it
is increasingly clear that the new frontier is to provide healthy yet tasty
versions for most of the products in the food and beverage industry.

The food and beverage industry is well aware of this. Hence, industry
manufacturers and fast food chains in most of the countries are in a race to
roll out healthier options to win over customers. But how do we do it the
natural way, without pricing products out of reach? Hence, our partnership
with Holista. Dr Rajen and his team have laboured to develop and validate
the science of lowering the Glycaemic Index, or GI, of common foods.
Holista has set the gold standard for clean-label GI reduction for white
flour products. Recently, his team has also curated a formula for low-calorie
sugar.

After collaborating with Holista for the past few years, I’ve seen first-hand
the potential to revolutionise the global food and beverage industry whilst
meeting the concerns of food and drink manufacturers. Given the market
opportunity, it then made sense to cement our partnership with Holista
through our joint-venture company, Holista Foods.

In the last two years, we have launched three products – low-GI versions
of noodles and different types of pasta. Sales of our low-GI products have
begun in North America and on the American e-commerce platform,
Amazon. We also signed an agreement with Express Trading Canada
to export our low-GI noodles to China. Once this deal is finalised, it will
contribute significantly to our performance and position us as one of the
significant players in the world noodle market.

During the coming year, we plan to look for collaborations for our
proprietary low-calorie sugar, 80Less and continue to develop and market
low-GI baked and flour-based goods and mixes which can be distributed to
fast food companies, retailers, schools and hospitals.

Our joint venture aims to convince food and drink manufacturers and fast
food chains to accept a new and better way to make food healthier. We
have broadened our focus from North America to Asia, especially Malaysia
and China, where obesity and diabetes, linked to high glycaemic foods,
have become a serious problem that has strained health care costs and
negatively affected living standards.

I am very proud to be working with Dr Rajen. I 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 have positioned
us to become major food industry leaders in North America and beyond.

Thank you!

Nadja Piatka

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018Messages from our Key Partners (Continued)

Messages from our Key Partners (Continued)

Mr. Meiert J. Grootes
Chairman of VERIPAN AG,
a partner of Holista CollTech

Obesity is one of the greatest threats to the global economy. This man-
made social problem is more serious than climate change, smoking or air
pollution. It impacts half of Europe and 30% of the global population. In
the 34 years up to 2014, the prevalence of obesity more than doubled –
more than 2 billion adults aged 18 years and older are overweight today.
Obesity is a chronic disease, growing in severity in both developed and
developing countries, and affects 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, the reformulation of food products should, from the onset,
have been one of the main areas of our R&D efforts to combat obesity.
This is why we at Veripan sought to tackle the crisis head first by targeting
one of the biggest staple foods in the world – white bread which many
people eat almost daily.

The global white bread market alone is currently worth US$170 billion,
and it continues to grow. Multiple studies have linked an increase in
white bread consumption to weight gain. This is observed particularly in
Asian countries where the effects of recent Westernization of diets are
increasingly evident.

With a Glycaemic Index (GI) of 77, white bread has the highest GI reading
among staple foods. Essentially, the GI is a simple way to measure the
quality of the carbohydrates we consume daily. Foods with a low GI
(below 55) raise the blood sugar more slowly and sustain longer, making
the person feel full for longer. A high GI number, however, means that
blood sugar will spike, giving the person a sugar rush, which plummets
shortly after, causing a quicker feeling of hunger.

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 bread,
muffins and noodles – in a simple and cost-effective way.

The past year we have worked very hard to launch the first low GI breads in
the market. Together with an Australian consortium we intend to launch a
low GI white bread in Australia in May-June 2019. For this launch a special
purpose brand, which will be disclosed soon, has been developed. Our
product is fully backed by the GI foundation, and after a successful launch
in Australia a global roll-out is planned. The past years have been a long
and bumpy journey; however, we are convinced that our innovation will
finally hit global markets in 2019.

Thank you!

Meiert J. Grootes

Malaysia is Asia’s most obese nation with an obesity rate of 13.3% and
ranks 12th in the world for the incidence of diabetes. Awareness of
these pandemics is lacking; and with lack of awareness, people remain
reluctant to change their diets or eating habits

Kawan Food Berhad is dedicated to providing consumers with authentic,
safe and high-quality products at affordable price. It has an unwavering
commitment to excellence, innovation, reliability, growth, fairness and
good citizenship.

Kawan Food is a major supplier of frozen ethnic food with main
product categories such as bakery, bun, chapatti, dessert, finger food,
frozen vegetable, paratha and spring roll pastry. It currently exports to
approximately 40 countries including U.S., Canada, U.K., France, Australia
and the United Arab Emirates (U.A.E).

In the flatbread category, Kawan Food produces Malaysia’s favourite
food – roti canai. Consumed almost daily in households, the local staple
currently contains lots of fats and carbohydrates.

We had watched with excitement what Holista was doing for bread and
noodles. Moreover, in January 2019 we partnered Holista CollTech to
produce Low-GI roti canai and other low-GI flatbreads. Our goal is clear –
how can we offer a healthier version of basic foods which are affordable
and yet do not compromise taste and mouth-feel.

We believe the Glycaemic Index will become an essential standard in the
coming years. People will become more and more aware of the types of
carbohydrate (good, medium and bad) and the impact on blood sugar as
well as the correlation to short-term and long-term health.

We look forward to working with Holista to deliver these enhanced
products to the market and also help educate our consumers about the
concept and its attendant benefits.

Thank you!

Timothy Tan

Mr. Timothy Tan
Managing Director of
Kawan Food Berhad

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018INVESTOR
ENGAGEMENT

During the year
in review,
Holista CollTech stepped up
its outreach to regional media
and investors, led by Dr Rajen
Manicka, Chairman and CEO of
Holista CollTech, and celebrity
chef Ms Nadja Piatka, CEO of
Holista Foods in the U.S. Apart
from a number of features
in trade and business media,
Holista also hosted events in
Kuala Lumpur, Malaysia, where
Dr Rajen and Ms Piatka shared
the Holista story and promoted
the company’s products and
partnerships.

INVESTOR ENGAGEMENT (Continued)

Holista’s engagements during the year include:

Dr Rajen’s interview on Singapore business
radio station, Money FM 89.3, where he
discussed the war on diabetes and food
economics of the future;

Two features in Food Navigator Asia, a leading
news portal for the food industry, about Holista’s
sales to Wing’s Food in Canada as well as its
export of low-GI noodles to China;

An investor briefing co-hosted by Ms Piatka and
Dr Rajen, where they shared their insights on the
future of the low-GI market, opportunities for
low-GI noodles in China and Malaysia’s ongoing
battle with diabetes; and

A joint media briefing held after the financial year-
end, where Holista and Bursa-listed Kawan Food
Berhad announced that they would join forces to
develop low-GI roti canai, paratha and chapatti in
Malaysia.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018DIRECTORS’
REPORT

Directors’ report (Continued)

Your directors present their report on the consolidated entity, consisting of Holista CollTech Limited (Holista or the
Company) and its controlled entities (collectively the Group), for the financial year ended 31 December 2018.

Dividends paid or recommended

There were no dividends paid or recommended during the financial year ended 31 December 2018.

Holista is listed on the Australian Securities Exchange (ASX:HCT).

Directors

The names of Directors in office at any time during or since the end of the year are:
n Dr Rajen Manicka
n Mr Daniel Joseph O’Connor
n Mr Chan Heng Fai

Managing Director and Chief Executive Officer
Non-executive Director
Non-executive Director

Directors have been in office since the start of the financial year to the date of this report unless otherwise
stated. For additional information of Directors including details of the qualifications of Directors please refer
to paragraph 7 Information relating to the directors of this Directors Report.

Company secretary

The following people held the joint position of Company Secretary at the end of the financial year:

Qualifications

FCPA, F.Fin, B.Bus. FGIA

Experience

Mr Fraser has worked in the finance and securities industry for
over 25 years’ and has owned and operated businesses across
wine, health, finance, media and mining.

In addition, Mr Fraser is a Fellow of Certified Practicing
Accountants; Fellow of the Financial Services Institute of
Australasia; Fellow of the Governance Institute of Australia and
Grad Dip Finance, Securities Institute of Australia; Bachelor of
Business (Accounting). Mr Fraser also holds an International
Marketing Institute - AGSM Sydney.

Qualifications MBA, FCPA, CMA, FCIS, MAICD

Experience

Mr Stephenson has been involved in business development
for over 30 years including the past 25 years as Director, Chief
Financial Officer and Company Secretary for various listed
and unlisted entities in IT, food, resources, manufacturing,
wine, hotels, and property. He has been involved in business
acquisitions, mergers, initial public offerings, capital raisings,
business restructuring as well managing all areas of finance for
companies.

Mr Brett Francis
Fraser

Mr Jay Richard
Stephenson

Significant Changes in the state of affairs

There have been no significant changes in the state of affairs of the Group during the financial year ended 31
December 2018 other than disclosed elsewhere in this Annual Report.

Operating and financial review
5.1. Nature of Operations Principal Activities

During the financial year, the Group remained focused on its three core areas:
n Dietary Supplements
n Healthy Food Ingredients
n Sheep (Ovine) Collagen

5.2. Operations Review

a. Dietary Supplements

The Dietary Supplements division has remained the main revenue contributor for Holista since
the past five years (FY2014- FY2018). Even though Holista has a strong distribution network in
Malaysia, the Malaysian market remains a challenge for us due to inflation (and weakness of the
ringgit relative to major currencies) which has impacted purchasing power. In spite of this, there
has been a steady increase in our revenue on a year-on-year basis.

During the year in review, revenue for this segment increased 7% to $7,699,489 in FY2018 from
$7,176,684 in FY2017.

b. Healthy Foods Ingredients

During the financial year, the Group focused on:
n Low-Glycaemic Index (GI) Reducer
n Low-GI Sugar - 80Less

Low-Glycaemic Index (GI) Reducer

Building on its patented low-GI reducer formula for flour products, during the year under review
the Group focused on collaborations and partnerships that will help the Group enter different food
markets. Our strategy remains unchanged – providing healthier yet tasty alternatives to unhealthy
processed and baked food products amidst rising global concerns about obesity and diabetes
caused by diet.

On 14th February 2018, we signed a three-year MOU with North-America’s leading noodle maker,
Wing’s Group of Canada, to supply our patented low-GI noodle mix. We have spent the last few
months settling all the regulatory hurdles in entering the China market. A 20-foot container will
leave for China after February. We expect this sales order to increase over FY2019 and beyond.

During the year, together with Wing’s Group we also developed a low-GI spaghetti which has been
successfully sold in North America on the online e-commerce platform Amazon. Even though our
sales on Amazon began in June 2018, the product has already been featured under Amazon’s
Choice. We also started working with Wing’s group to develop a range of pasta products.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018

Directors’ report (Continued)

Operating and financial review (Continued)

On 26th November 2018, our U.S. subsidiary Holista Foods appointed Hilary’s Salesmaster as its
exclusive distributor of low-GI noodles in Canada where the latter has a strong presence. Hilary’s
distributes to major health, retail and convenience stores. Its range of healthy bars and beverages
includes the 5-Hour Energy Drink, the leading energy drink in North America. Holista will leverage on
Hilary’s extensive distribution network in North America to distribute other low-GI pasta products.

On 11th December 2018, Holista Foods launched two new varieties of low-GI pastas – fettuccini
and pappardelle. They were produced along with Wing’s Group and have a GI reading of 38 instead
of the global average of 65.

Subsequent to the end of FY2018, on 16th January 2019, we partnered with Kawan Food Berhad,
Malaysia’s leading frozen food manufacturer and worldwide exporter of Asian delicacies, to produce
low-GI versions of chapati and the Malaysian favourite – roti canai. Our target markets for these
flat-bread products would be Malaysia and the U.S. We expect to our products to hit the stores by
April or May 2019 in Malaysia and by June or July 2019 in the U.S.

Low-GI sugar - 80Less

The rising global pandemic of diabetes and obesity has put the focus on sugar. Several countries
are introducing or are proposing a sugar tax to influence eating behaviour and diets. On 14th
February 2019, we launched our proprietary low-GI sugar 80LessTM that is five times sweeter than
the ordinary sugar and leaves no after taste. It is made up of sucrose (table sugar) and very low
levels of sucralose (an intense sweetener derived from sugarcane). It contains 80% less calories. It
can replace sugar in every application.

We will be completing low GI studies on 80LessTM at the University of Sydney by the end of April.
This will give 80LessTM a low GI status as well.

We have begun discussions with potential customers in Malaysia who are keen to offer a new
solution ahead of the imposition of sugar tax on April 1, 2019.

c. Collagen (Food grade, ovine grade and med grade)

During the year in review (FY2018), revenue for this segment decreased from $392,400 to $215,068
as the plant was shut down for upgrade and process improvement. The business segment is fully
operational for FY2019, and has already collected orders worth $567,000 in the early FY2019.

The global collagen market size is expected to reach US$663 billion by 2025, progressing at a
compounded annual growth rate of 6.5% during the forecast period as per the Collagen Market
Analysis Report. This is due to the accelerating demand for collagen from end-user industries
involved in healthcare, food and beverage, cosmetics and anti-aging. There has also been a strong
growth in the cosmetic industry with respect to the global collagen market and hence the cosmetic
grade collagen is expected to contribute the most to revenue within the collagen sector in the
coming years.

During the year in review, we completed the renovation of our ovine collagen plant in Collie, Perth.
We also received ISO 9002 certification which states that our cosmetic collagen meets the quality
requirements of International Standards Organisation. We are preparing to work with a European
cosmetic company for a high-end cosmetic collagen and we are also receiving orders from Thailand
for cosmetic collagen. We are preparing to file a nano-patent for cosmetic collagen and we have
also renewed our halal status for all collagen types produced at our Collie plant.

Operating and financial review (Continued)

5.2. Operations Review (Continued)

Now with the ISO 9002 certification, we can produce feedstock for medical grade collagen. We are
now in a midst of completing a trial order for a healthcare company based in the United States.

Adding on to these, we have also completed the pilot scale of our food collagen plant. This will
allow us to produce food grade hydrolysed collagen for use and sale in the supplement industry.

5.3.

Financial Review

The financial statements have been prepared on a going concern basis, which contemplates the
continuity of normal business activity and the realisation of assets and the settlement of liabilities
in the ordinary course of business. The Group incurred a loss for the year of $2,203,360 (2017:
$3,174,268 loss).

The Group’s revenue for the year ending 31 December 2018 was recorded at $7,940,555 as compared
with the previous year ending 31 December 2017 which recorded $7,569,007.

After a drop in 2018 due the plant shut down and upgrade to improve processes, the Group’s cosmetic
collagen business has bounced back and is expected to generate revenue of $567,000 with a growth
of 163% over 2018. There is also expected business with a multi-level company in Malaysia. This will
be a much higher margin business.

The Group has invested in some essential equipment at its Collie Plant to produce the Food Grade
Collagen on a higher scale. 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.

In addition to the cosmetic and food grade collagen, the Group has also entered into the medical grade
collagen and received its ISO certification and has started supplying samples to overseas customers.

In respect to the Healthy Food Ingredients, we expect to see significant revenue in Australia and Asia
and Europe in the next 12 months from the low-GI white bread, flat breads and biscuits. Our US
indirect subsidiary, Holista Foods Inc, to distribute our low-GI product in North America and has met
with success with the low GI noodles. This business segment is expected to generate revenue in next
financial year.

The Group also launched 80Less – a low calorie sugar replacement that would a useful tool for
companies trying the meet lower sugar requirement to avoid the sugar tax. “80% less sugar” is also a
very powerful label claim in an increasingly “sugar hating world”.

Our own dietary supplements grow from 7% to $7,699,489 in FY2018 and will continue to grow.

Our sales of dietary supplement ingredients to companies in the Multi-Level Marketing space will in
the carbohydrate management, immunity boosting and stem cell boosting segments saw a -1% decline
last year but will see growth this year as we ramp up activities there.

The net assets of the Group have increased from 31 December 2017 by $1,080,160 to $4,563,672 at
31 December 2018 (2017: $3,483,512).

As at 31 December 2018, the Group’s cash and cash equivalents increased from 31 December 2017 by
$236,723 to $357,705 at 31 December 2018 (2017: $120,982) and had working capital of $2,464,785
(2017: $964,764 working capital), as noted in Note 23.1.3 Going Concern on page 91.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018Directors’ report (Continued)

Directors’ report (Continued)

Operating and financial review (Continued)

5.4. Events Subsequent to Reporting Date

There are no other significant after balance date events that are not covered in this Directors’ Report
or within the financial statements as disclosed in Note 14 Events subsequent to reporting date on
page 79.

5.5.

Future Developments, Prospects and Business Strategies

Likely developments, future prospects and business strategies of the operations of the Group and the
expected results of those operations, not otherwise disclosed in this report, have not been included
in this report as the Directors believe that the inclusion of such information would be likely to result in
unreasonable prejudice to the Group.

5.6. Environmental Regulations

Holista has operated under environmental licence L7998/2003/3 issued by the Western Australian
Department of Water and Environmental Regulation 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.

The Group’s operations are not subject to any other significant environmental regulations in the
jurisdictions it operates in, namely Australia, Malaysia, and the United States.

Risk Management

The Group takes risk management seriously and has put in place the following procedures:

Oversight

Risk Profile

Risk
Management

Compliance
and Control

Pursuant to the Company’s Board Charter, the full Board carries out the duties of the Audit and
Risk Committee including to direct, review, and initiate corrective action in matters of internal
control and minimise risk exposures compatible with a Group of this size and nature.

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
affected, what controls might be put in place and whether the resulting levels of exposure are
acceptable.

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 (SOPs) 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.

SOPs have been drawn up, circulated and regularly monitored to ensure adherence to company
policy. They include the various cash, purchasing, sales, and payment cycles, and payroll. Levels
of Authority have been set, divisions of duty are made and multiple signature approvals imposed.
Regular checks are made by management to ensure that these controls are indeed in place and
complied with.

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 relating to the directors

Qualifications

B Ph. (Hons)

Experience

Dr Rajen Manicka

Managing Director
and
Chief Executive Officer

Appointed July 2009

Dr Rajen Manicka, 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.

Interest in Shares
and Options

79,435,272 Ordinary Shares
3,600,000
2,700,000
1,800,000
900,000

Class A Performance Rights
Class B Performance Rights
Class C Performance Rights
Class D Performance Rights

Directorships
held in other
listed entities

None

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018Directors’ report (Continued)

Directors’ report (Continued)

Information relating to the directors (Continued)

8. Meetings of directors and committees

Qualifications

B.Bus, MBA, FAICD (Dip) CPM, AIMM, MAIM, MAIeX.

During the financial year eight meetings of Directors (including committees of Directors) were held.
Attendances by each Director during the year are stated in the following table.

Experience

Mr O’Conner has spent more than 30 years in the commercialisation
of intellectual property and has worked with R&D teams across Asia,
North America, and Australia. He is a published author, mentor,
coach, commercialisation consultant, and Company Director. He
is the Consultant Principal of the on-line coaching and mentoring
group Incubate IP. Mr O’Connor 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 commercialisation
projects (www.incub8IP.com). He has been a Director of Holista for
more than five years.

Mr Daniel Joseph
O’Connor

Non-Executive Director

Interest in Shares
and Options

3,500,000

Options

Appointed November
2011

Directorships
held in other
listed entities

None

DIRECTORS’
MEETINGS

REMUNERATION
AND
NOMINATION
COMMITTEE

FINANCE AND
OPERATIONS
COMMITTEE

AUDIT
COMMITTEE

Number
eligible
to attend

Number
Attended

Number
eligible
to
attend

Number
Attended

Number
eligible
to
attend

Number
Attended

Number
eligible
to
attend

Number
Attended

Rajen Manicka

Daniel Joseph
O’Connor

Chan Heng Fai

At the date of this report, the Audit, Nomination, and Finance and
Operations Committees comprise the full Board of Directors. The
Directors believe the Company is not currently of a size nor are
its affairs of such complexity as to warrant the establishment of
these separate committees. Accordingly, all matters capable of
delegation to such committees are considered by the full Board
of Directors.

Qualifications

Mr Chan has restructured over 35 companies in different industries
and countries in the past 40 years.

Indemnifying officers or auditor
9.1.

Indemnification

Mr Chan Heng Fai

Non-Executive Director

Appointed 13 June
2013

Experience

Interest in Shares
and Options

Directorships
held in other
listed entities

In 1987, Mr Chan 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 five 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 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 acquired and ran a regional investment banking and
securities broking-dealing business headquartered in Denver, with 12
offices throughout USA.

46,226,673 Ordinary Shares

Mr Chan also sits on the board of Singapore eDevelopment Limited.

The Company has agreed to indemnify all the directors of Holista 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.

9.2.

Insurance premiums

During the financial year the Group has paid a premium of $17,230 (2017: $17,230) 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
(Cth).

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018

Directors’ report (Continued)

10. Options

10.1. Unissued shares under option

At the date of this report, the unissued ordinary shares of the Company under option (listed and
unlisted) are as follows:

Grant Date

Date of Expiry

Exercise Price
$

Number under
Option(i)

23 Mar 2017

23 Mar 2020

18 May 2017

23 Mar 2020

18 May 2017

31 Dec 2019

23 Jun 2017

23 Jun 2020

23 Jun 2017

23 Jun 2020

23 Jun 2017

23 Jun 2020

26 Jul 2017

1 Aug 2020

16 Oct 2017

16 Oct 2020

0.20

0.10

0.20

0.25

0.30

0.10

0.20

6,500,000

3,500,000

1,000,000

6,000,000

3,000,000

2,000,000

7,000,000

31,000,000

(i) Subsequent to 31 December 2018, 3,954,205 $0.30 options granted on 11 April 2016, expired on 8 Mar 2019

No person entitled to exercise the option has or has any right by virtue of the option to participate in
any share issue of any other body corporate.

10.2. Shares issued on exercise of options

3,500,000 (2017: 12,330,166) ordinary shares have been issued by the Company during the financial
year as a result of the exercise of options.

11. Non-audit services

During the year, Stantons International Audit and Consulting Pty Ltd, the Company’s auditor, provided taxation
compliance and independent expert services, in addition to their statutory audits. Non-audit fees amounted to
$15,015 (2017: $nil). Details of remuneration paid to the auditor can be found within the financial statements
at Note 18 Auditor’s Remuneration on page 81.

In the event that non-audit services are provided by Stantons International Audit and Consulting Pty Ltd, the
Board has established certain procedures to ensure that the provision of non-audit services are compatible
with, and do not compromise, the auditor independence requirements of the Corporations Act 2001 (Cth).
These procedures include:

n non-audit services will be subject to the corporate governance procedures adopted by the Company and
will be reviewed by the Board to ensure they do not impact the integrity and objectivity of the auditor;
and

11. Non-audit services (Continued)

n ensuring non-audit services do not involve reviewing or auditing the auditor’s own work, acting in a
management or decision-making capacity for the Company, acting as an advocate for the Company or
jointly sharing risks and rewards.

12.

Proceedings on behalf of company

No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring
proceedings on behalf of the company, or to intervene in any proceedings to which the company is a party,
for the purpose of taking responsibility on behalf of the company for all or part of those proceedings.

No proceedings have been brought or intervened in on behalf of the company with leave of the Court under
section 237 of the Corporations Act 2001.

13. Auditor’s independence declaration

The lead auditor’s independence declaration under section 307C of the Corporations Act 2001 (Cth) for the
year ended 31 December 2018 has been received and can be found on page 29 of the annual report.

14. Remuneration report (audited)

The information in this remuneration report has been audited as required by s308(3C) of the Corporations
Act 2001 (Cth).

14.1. Key management personnel (KMP)

KMP have authority and responsibility for planning, directing and controlling the activities of the
Group. KMP comprise the directors of the Company and key executive personnel:
n Dr Rajen Manicka
Managing Director Chief Executive Officer
n Mr Daniel Joseph O’Connor
Non-Executive Director
n Mr Chan Heng Fai
Non-Executive Director

14.2. Principles used to determine the nature and amount of remuneration

a. Remuneration philosophy

The performance of the Company depends upon the quality of the KMP. The philosophy of the
Company in determining remuneration levels is to:
o set competitive remuneration packages to attract and retain high calibre employees;
o ink executive rewards to shareholder value creation; and
o establish appropriate, demanding performance hurdles for variable executive remuneration.

b. Remuneration committee

Currently the responsibilities of the Remuneration Committee are undertaken by the full Board.

The Remuneration Committee of the Board of Directors of the Company is responsible for
determining and reviewing compensation arrangements for the directors, the CEO and the
executive team.

The Remuneration Committee assesses the appropriateness of the nature and amount of
remuneration of directors and executives on a periodic basis by reference to relevant employment
market conditions with an overall objective of ensuring maximum stakeholder benefit from the
retention of a high quality KMP.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018Directors’ report (Continued)

Directors’ report (Continued)

14. Remuneration report (audited) (Continued)

14.2. Principles used to determine the nature and amount of remuneration (Continued)

c. Remuneration structure

In accordance with best practice Corporate Governance, the structure of non-executive director
and executive remuneration is separate and distinct.

d. 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 2018 is detailed
in section 14.3 of this remuneration report.

e. Senior manager and executive director remuneration

Remuneration consists of fixed remuneration and variable remuneration (comprising short-term
and long-term incentive schemes).

f. Fixed Remuneration

Fixed remuneration is reviewed annually by the Board. 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 section 14.3 of this
remuneration report.

g. Variable Remuneration

The aggregate of annual payments available for KMP across the Group is subject to the approval of
the Remuneration Committee During the year.

h. Performance Based Remuneration – Short-term and long-term incentive structure

The Board will review short-term and long-term incentive structures from time to time. Any
incentive structure will be aligned with shareholders’ interests
o Short-term incentives
No short-term incentives in the form of cash bonuses were granted during the year.
o Long-term incentives

The Board has a policy of granting incentive options and performance rights to KMP with
exercise prices above market share price. As such, incentive options granted to executives will
generally only be of benefit if the executives perform to the level whereby the value of the
Group increases sufficiently to warrant exercising the incentive options granted.

The executive Directors will be eligible to participate in any short term and long-term incentive
arrangements operated or introduced by the Company (or any subsidiary) from time to time.

i. Service Contracts

Remuneration and other terms of employment for the directors and other KMP are formalised in
contracts of employment.

j. Engagement of Remuneration Consultants

During the financial year, the Company did not engage any remuneration consultants.

k. Relationship between Remuneration of KMP and Earnings

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 financial years is not related to the Company’s
performance.

14.3. Directors and KMP remuneration

Details of the remuneration of the Directors and KMP of the Group (as defined in AASB 124 Related
Party Disclosures) are set out in the following table.

2018 – Group

Group KMP

Short-term benefits

Post-
employment
benefits

Long-
term
benefits

Termination
benefits

Equity-settled
share-based
payments

Total

Salary,
fees and
leave

Profit
share
and
bonuses

258,170

10,245

Rajen
Manicka(1)

Daniel Joseph
O’Connor(2)

46,000

Chan Heng Fai

36,000

340,170

10,245

Non-

monetary Other

Super-
annuation

Other

Equity /

Perf. Rights Options

51,000

- 319,415

46,000

36,000

- 401,415

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018

Directors’ report (Continued)

14. Remuneration report (audited) (Continued)

14.3. Directors and KMP remuneration (Continued)

14. Remuneration report (audited) (Continued)

14.5. Share-based compensation

2017 – Group

Group KMP

Short-term benefits

Post-
employment
benefits

Long-
term
benefits

Termination
benefits

Equity-settled
share-based
payments

Total

Salary,
fees and
leave

Profit
share
and
bonuses

Non-

monetary Other

Super-
annuation

Other

224,881

48,000

Rajen
Manicka(1)

Daniel Joseph
O’Connor(2)

Chan Heng Fai

36,000

308,881

42,728

Equity Options

- 1,033,291

- 1,300,900

- 192,036

240,036

36,000

- 1,033,291 192,036 1,576,936

(1)

(2)

In respect to Dr Manicka’s equity-settled share-based payments, Dr Manicka was issued 9,000,000 performance rights in
accordance with terms and conditions as detailed in Note 20.2.1g
In respect to Mr O’Connor’s equity-settled share-based payments, Mr O’Connor was issued 3,500,000 options in accordance
with terms and conditions as detailed in Note 20.2.1a

14.4. Service Agreements

a. Employment Agreement with Dr Rajen Manicka

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 2 July 2018, 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.

A summary of the terms of his employment are as follows:
o Commencement date
o Termination date of contract
o Period of notice for resignation/termination 3 months
o Remuneration

10 July 2018
Initial 3-year period

o Termination (with cause)

o Termination (without cause)

annual

annum with

RM778,524 per
increments of 3% - 5%.
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.

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. At present the Group does not have an
employee share option plan.

No shares or options were issued as share based compensation during the year (2017: nil)

There were no equity instruments issued during the year to Directors as a result of options exercised
that had previously been granted as compensation.

a. Securities received that are not performance-related

No members of KMP are entitled to receive securities that are not performance-based as part of
their remuneration package.

b. Options and Rights Granted as Remuneration

No equity instruments were granted in the financial year ended 31 December 2018. During the
financial year ended 31 December 2017 9,000,000 performance rights were granted to Dr Manicka
and 3,500,000 options were granted to Mr O’Connor as remuneration as detailed note 20 Share-
based payments.

14.6. KMP equity holdings

a. Fully paid ordinary shares of Holista CollTech Limited held by each KMP

2018 – Group

Group KMP

Received
during
the year as
compensation
No.

Balance at
start of year
No.

Received
during
the year on
the exercise
of
options
No.

Other
changes
during the
year
No.

Balance at
end of year
No.

Rajen Manicka(1)

73,914,400

Daniel Joseph
O’Connor

Chan Heng Fai(1)

45,145,101

119,059,501

6,663,331

80,577,731

1,081,572

46,226,673

7,744,903 126,804,404

(1) Other changes during the year, related to shares subscribed to under an entitlement issue, and settlement
of $438,371 (Dr Manicka: $362,661; and Mr Chan: $75,710) in respect to director fees and loans accrued up
to August 2018. The Company issued 6,262,444 shares (Dr Manicka: 5,180,872; and Mr Chan 1,081,572) in
respect to this settlement.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018
Directors’ report (Continued)

Directors’ report (Continued)

14. Remuneration report (audited) (Continued)

14.6. KMP equity holdings (Continued)

14. Remuneration report (audited) (Continued)

14.6. KMP equity holdings (Continued)

a. Fully paid ordinary shares of Holista CollTech Limited held by each KMP (Continued)

b. Options in Holista CollTech Limited held by each KMP (Continued)

2017 – Group

Group KMP

Received
during
the year as
compensation
No.

Balance at
start of year
No.

Rajen Manicka

73,914,400

Daniel Joseph
O’Connor

Chan Heng Fai

32,814,935

106,729,335

b. Options in Holista CollTech Limited held by each KMP

Received
during
the year on
the exercise
of
options
No.

Other
changes
during the
year
No.

12,330,166

Balance at
end of year
No.

73,914,400

45,145,101

12,330,166

- 119,059,501

2018 –
Group

Group KMP

Balance at
start of
year
No.

Granted as
Remuneration
during the
year
No.

Exercised
during the
year
No.

Other
changes
during the
year
No.

Balance at
end of
year
No.

Vested and
Exercisable
No.

Not
Vested
No.

Rajen
Manicka

Daniel
Joseph
O’Connor

3,500,000

Chan Heng
Fai

3,500,000

- 3,500,000 3,500,000

2017 –
Group

Group KMP

Balance at
start of
year
No.

Granted as
Remuneration
during the
year
No.

Exercised
during the
year
No.

Other
changes
during the
year
No.

Balance at
end of
year
No.

Vested and
Exercisable
No.

Not
Vested
No.

Rajen
Manicka

Daniel
Joseph
O’Connor

Chan Heng
Fai(1)

3,500,000

- 3,500,000

15,830,166

- (12,330,166) (3,500,000)

3,500,000

15,830,166

3,500,000 (12,330,166) (3,500,000) 3,500,000

- 3,500,000

(1)

In respect to Mr Chan, other changes during the year relate to an off-market transfer of 3,500,000 options for
consideration of $210,000 ($0.06 per option) to an unrelated third-party.

c. Performance rights of Holista CollTech Limited held by each KMP

2018 – Group

Group KMP

Received
during
the year as
compensation
No.

Balance at
start of year
No.

Received
during
the year on
the exercise
of
options
No.

Other
changes
during the
year
No.

Rajen Manicka

9,000,000

Daniel Joseph
O’Connor

Chan Heng Fai

9,000,000

Balance at
end of year
No.

9,000,000

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018Directors’ report (Continued)

14. Remuneration report (audited) (Continued)

14.6. KMP equity holdings (Continued)

c. Performance rights of Holista CollTech Limited held by each KMP (Continued)

2017 – Group

Group KMP

Rajen Manicka

Daniel Joseph
O’Connor

Chan Heng Fai

Received
during
the year as
compensation
No.

9,000,000

Balance at
start of year
No.

Received
during
the year on
the exercise
of
options
No.

Other
changes
during the
year
No.

Balance at
end of year
No.

9,000,000

14.7. Other Equity-related KMP Transactions

There have been no other transactions involving equity instruments other than those described in the
tables above relating to options, rights and shareholdings.

14.8. KMP Loans

There are no loans to or from KMP as at 31 December 2018 (2017: nil)

14.9. Other transactions with KMP and or their Related Parties

As disclosed Note 5.4.3, the Group has amounts due to Directors of $21,000 (2017: 297,601). During
the year, the Company settled $438,371 (Dr Manicka: $362,661; and Mr Chan: $75,710) in respect
to director fees and loans accrued up to August 2018. The Company issued 6,262,444 shares (Dr
Manicka: 5,180,872; and Mr Chan 1,081,572) in respect to this settlement. There have been no
other transactions in addition to those described in the tables or as detailed in Note 17 Related party
transactions.

END OF REMUNERATION REPORT

This Report of the Directors, incorporating the Remuneration Report, is signed in accordance with a resolution of
directors made pursuant to s.298(2) of the Corporations Act 2001 (Cth).

DR RAJEN MANICKA
Managing Director
Dated this Wednesday, 29 March 2019

HOLISTA COLLTECH LIMITED
AND CONTROLLED ENTITIES
ABN 24 094 515 992

AUDITOR’S INDEPENDENCE
ANNUAL REPORT
DECLARATION
31 December 2018

Auditor's independence declaration
Under Section 307c Of The Corporations Act 2001 (Cth)
To The Directors Of Holista Colltech Limited

TO BE RECEIVED FROM
AUDITORS

P a g e | 21

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018

CONSOLIDATED STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE INCOME

FOR THE YEAR ENDED 31 DECEMBER 2018

CONSOLIDATED STATEMENT
OF FINANCIAL POSITION

AS AT 31 DECEMBER 2018

Continuing operations

Revenue
Other income

Change in inventories of finished goods and work in progress
Raw materials and consumables used
Distribution costs and other costs of sales
Consultancy and professional fees
Depreciation and amortisation
Employment costs
Finance costs
Foreign exchange gain / (loss)

Share-based payments expense
Research and development
Advertising and promotion
Impairment
Other expenses

Loss before tax
Income tax (expense) / benefit

Net loss for the year
Other comprehensive income, net of income tax
n Items that will not be reclassified subsequently to profit or loss
n Items that may be reclassified subsequently to profit or loss:

o Foreign currency movement

Other comprehensive income for the period, net of tax
Total comprehensive income attributable to members of the
parent entity
(Loss) / profit for the period attributable to:
n Non-controlling interest
n Owners of the parent
Total comprehensive income attributable to:
n Non-controlling interest
n Owners of the parent
Earnings per share:

Basic loss per share (cents per share)
Diluted loss per share (cents per share)

Note

1.1
1.2

2.3

20
20

2.2
2.1

4.1

2018
$

2017
$

7,940,555
136,387

8,076,942
(581,132)
(3,546,608)
(483,955)
(552,998)
(257,378)
(3,015,353)
(83,486)
57,974

(90,523)
(157,657)
(313,187)
(370,771)
(760,146)

(2,078,278)
(125,082)

7,569,007
338,736

7,907,743
51,564
(3,868,768)
(370,260)
(861,427)
(224,514)
(2,379,167)
(83,580)
(78,053)

(1,589,954)
(468,223)
(556,481)
(152,205)
(661,161)

(3,334,486)
160,218

(2,203,360)

(3,174,268)

182,997

(37,405)

(2,020,363)

(3,211,673)

(591,213)
(1,612,147)

(143,978)
(3,030,290)

(593,223)
(1,427,140)

(143,978)
(3,067,695)

19
19

₵
(0.78)
N/A

₵
(1.69)
N/A

Current assets

Cash and cash equivalents

Trade and other receivables

Inventories

Other current assets

Total current assets

Non-current assets

Property, plant, and equipment

Intangible assets

Deferred tax asset

Other non-current assets

Total non-current assets

Total assets

Current liabilities

Trade and other payables

Borrowings

Current tax liabilities

Short-term provisions

Total current liabilities

Non-current liabilities

Borrowings

Total non-current liabilities

Total liabilities

Net assets

Equity

Issued capital

Reserves

Accumulated losses

Non-controlling interest

Total equity

Note

5.1

5.2

6.1

5.3.1

6.2

6.3

4.6

5.3.2

5.4

5.5.1

4.5

6.4

5.5.2

2018
$

2017
$

357,705

3,019,017

442,621

978,795

120,982

1,807,114

956,236

876,746

4,798,138

3,761,078

1,429,087

1,557,436

954,717

231,646

13,844

858,803

292,526

343,912

2,629,294

3,052,677

7,427,432

6,813,755

1,973,888

349,232

523

9,710

2,557,670

222,975

7,588

8,081

2,333,353

2,796,314

530,407

533,929

2,863,760

3,330,243

4,563,672

3,483,512

7.1.1

7.4

14,548,515

11,538,515

4,671,363

4,395,833

(13,869,412)

(12,257,265)

(786,794)

(193,571)

4,563,672

3,483,512

The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the accompanying notes.

The consolidated statement of financial position is to be read in conjunction with the accompanying notes.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018
CONSOLIDATED STATEMENT
OF CHANGES IN EQUITY

FOR THE YEAR ENDED 31 DECEMBER 2018

CONSOLIDATED STATEMENT
OF CASH FLOWS

FOR THE YEAR ENDED 31 DECEMBER 2018

a
t
o
T

8
7
3
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2
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(

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6
4
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3
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1
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t
a
t
s
d
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t
a
d

i
l

o
s
n
o
c
e
h
T

Cash flows from operating activities

Receipts from customers

Payments to suppliers and employees

Interest received

Finance costs

Other revenue

Income tax paid

Note

2018
$

2017
$

7,277,030

8,362,462

(9,362,904)

(8,017,323)

16,494

(83,486)

6,302

(75,235)

(47,400)

(35,284)

Net cash (used in) / generated from operating activities

5.1.2a

(2,200,266)

240,922

Cash flows from investing activities

Purchase of intellectual property

Purchase of property, plant, and equipment

Loans provided, net

Net cash acquired on acquisition

Refund of / (Increase in) deposits / investments

(88,668)

(46,272)

(287,677)

218,483

(68,663)

(161,940)

(257,166)

28,035

(104,579)

5.1.2e.ii,iii

Net cash used in investing activities

(204,134)

(564,313)

Cash flows from financing activities

Proceeds from issue of shares

Proceeds from exercise of options

Shares issued to non-controlling interest

Proceeds from / (Repayment of) borrowings, net

5.1.2b

Net cash provided by financing activities

2,361,631

210,000

59,320

379,049

128,968

(120,362)

2,630,951

387,655

Net increase in cash and cash equivalents held

226,551

64,264

Cash and cash equivalents at the beginning of the year

Change in foreign currency held

Cash and cash equivalents at the end of the year

5.1

120,982

10,172

357,705

58,105

(1,387)

120,982

The consolidated statement of cash flows is to be read in conjunction with the accompanying notes.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018

NOTES TO THE CONSOLIDATED
FINANCIAL STATEMENTS

FOR THE YEAR ENDED 31 DECEMBER 2018

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

In preparing the 2018 financial statements, Holista Colltech Limited has grouped notes into sections under five key
categories:
n Section A: How the numbers are calculated ........................................................................................................ 35

n Section B: Risk ....................................................................................................................................................... 64

n Section C: Group structure ................................................................................................................................... 71

n Section D: Unrecognised items ............................................................................................................................. 78

n Section E: Other Information ................................................................................................................................ 80

Significant accounting policies specific to each note are included within that note. Accounting policies that are
determined to be non-significant are not included in the financial statements.

The presentation of the notes to the financial statements has changed from the prior year and is supported by
the IASB’s Disclosure Initiative. As part of this project, the AASB made amendments to AASB 101 Presentation of
Financial Statements which have provided preparers with more flexibility in presenting the information in their
financial reports.

The financial report is presented in Australian dollars, except where otherwise stated.

SECTION A. HOW THE NUMBERS ARE CALCULATED

This section provides additional information about those individual line items in the financial statements that the
directors consider most relevant in the context of the operations of the entity, including:

(a) accounting policies that are relevant for an understanding of the items recognised in the financial statements.
These cover situations where the accounting standards either allow a choice or do not deal with a particular
type of transaction.

(b) analysis and sub-totals.

(c)

information about estimates and judgements made in relation to particular items.

Note 1 Revenue and other income

1.1

Revenue

Sale of goods

1.2 Other Income

Gain / (loss) on disposal of property, plant and equipment

Interest income

Rental income

Research and development grant income

Other income

1.3 Accounting policy

1.3.1 Revenue from contracts with customers

2018
$

2017
$

7,940,555

7,569,007

7,940,555

7,569,007

17,651

16,494

94,082

8,160

136,387

(33)

6,302

54,593

134,137

143,737

338,736

Revenue is recognised on a basis that reflects the transfer of promised goods or services to customers at
an amount that reflects the consideration the Company expects to receive in exchange for those goods
or services.

Revenue is recognised by applying a five-step process outlined in AASB 15 which is as follows:

Step 1:
Step 2:

Identify the contract with a customer;
Identify the performance obligations in the contract and determine at what point they are
satisfied;

Step 3: Determine the transaction price;
Step 4: Allocate the transaction price to the performance obligations; and
Step 5: Recognise the revenue as the performance obligations are satisfied.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 1 Revenue and other income (Continued)

1.3 Accounting policy (Continued)

1.3.1 Revenue from contracts with customers (Continued)

Revenue is recognised when or as a performance obligation in the contract with customer is satisfied,
i.e. when the control of the goods or services underlying the particular performance obligation is
transferred to the customer. A performance obligation is a promise to transfer a distinct goods or service
(or a series of distinct goods or services that are substantially the same and that have the same pattern
of transfer) to the customer that is explicitly stated in the contract and implied in the Group’s customary
business practices.

Revenue is measured at the amount of consideration to which the Group expects to be entitled in
exchange for transferring the promised goods or services to the customers, excluding amounts collected
on behalf of third parties such as sales taxes or services taxes. If the amount of consideration varies due
to discounts, rebates, refunds, credits, incentives, penalties or other similar items, the Group estimates
the amount of consideration to which it will be entitled based on the expected value or the most likely
outcome. If the contract with customer contains more than one performance obligation, the amount
of consideration is allocated to each performance obligation based on the relative stand-alone selling
prices of the goods or services promised in the contract. Revenue is recognised to the extent that it is
highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur
when the uncertainty associated with the variable consideration is subsequently resolved.

The control of the promised goods or services may be transferred over time or at a point in time. The
control over the goods or services is transferred over time and revenue is recognised over time if:

i. the customer simultaneously receives and consumes the benefits provided by the Group’s

performance as the Group performs;

ii. the Group’s performance creates or enhances an asset that the customer controls as the asset is

created or enhanced; or

iii. the Group’s performance does not create an asset with an alternative use and the Group has an

enforceable right to payment for performance completed to date.

Revenue for performance obligation that is not satisfied over time is recognised at the point in time at
which the customer obtains control of the promised goods or services.

1.3.2 Sale of health care products

Revenue from sales of health care products is recognised at the point in time when control of the
asset is transferred to the customer, i.e. upon delivery of goods to the customers. Some contracts for
the sale of health care products provide customers with a right of return and volume rebates. The
rights of return and volume rebates give rise to variable consideration.

a. Rights of return

Certain contracts provide a customer with a right of return the goods within a specific period.
The Group uses its accumulated historical experience to estimate the level of returns using the
expected value method because this method best predicts the amount of variable consideration
to which the Group will be entitled. The constraining estimates of variable consideration are also
applied in order to determine the amount of variable consideration that can be included in the
transaction price. For goods that are expected to be returned, instead of revenue, the Group
recognises a refund liability. A right of return assets and corresponding adjustment to cost of sales
is also recognised for the right to recover products from a customer.

Note 1 Revenue and other income (Continued)

1.3 Accounting policy (Continued)

1.3.2 Sale of health care products (Continued)

b. Volume rebates

The Group provides retrospective volume rebates to certain customers once the quantity of
products purchased during the period exceeds a threshold specified in the contract. Rebates are
offset against amounts payable by the customer. To estimate the variable consideration for the
expected future rebates, the Group applies the most likely amount method for contracts with
a single-volume threshold and the expected value method for contracts with more than one
volume threshold. The selected method that best predicts the amount of variable consideration
is primarily driven by the number of volume thresholds contained in the contract. The Group then
applies that requirements on constraining estimates of variable consideration and recognised a
refund liability for the expected future rebates.

1.3.3 Sale of health care products through single level direct selling

Revenue from single level direct selling of health care products is recognised at the point in time
when control of the asset is transferred to the customer, i.e. upon delivery of goods to the customers.

1.3.4 Sale of raw ingredients

Sales based royalties are recognised at the later of when the subsequent sale occurs and the
satisfaction of the performance obligation to which some or all of the sales-based royalty has been
allocated.

1.3.5 Royalty income

Revenue from sales of raw ingredients are recognised at the point in time when the control of the
asset is transferred to the customer, i.e. upon delivery of goods to the customers.

1.3.6

Interest income
Interest revenue is recognised in accordance with Note 3.1 Finance income and expenses.

1.3.7 Customer loyalty points

Deferred revenue in respect to customer loyalty points is recognised in accordance with Note 5.4.5
Key estimates – Deferred revenue for customer loyalty points

1.3.8 Assets and liabilities arising from rights of return

Assets and liabilities arising from rights of return in accordance with Notes 5.3.5b Right of return
assets, 5.4.4b Refund liabilities, and 5.4.4c Contract liabilities.

1.3.9 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.

1.3.10 Change in Accounting Policy

The effect of adopting AASB 15 is explained in Note 24.

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 2 Loss before income tax

The following significant revenue and expense items are relevant
in explaining the financial performance:
2.1 Other Expenses:

Note

n Compliance and regulatory costs
n Insurance
n Other expenses
n Collie factory maintenance costs
n Audit fees
n Office rental expense and occupancy costs
n Provision for stock written off

2.2

Impairment:

n Doubtful debts
n Impairment of intangibles
n Impairment of funds loaned

5.3.2

2.2.1 Accounting policy

a. Impairment of financial assets

Refer to note 5.6.1d

b. Impairment of non-financial assets

Refer to note 6.5.1

2.3

Employment costs 2.3

n Salary and wages
n Director Fees
n Superannuation
n Medical and Insurance
n Bonus and Incentive
n Travel
n Others

2018
$

141,440

57,278

118,677

106,089

101,420

235,242

760,146

(9,295)

380,066

370,771

2017
$

99,958

45,025

33,831

130,471

72,782

273,627

5,467

661,161

19,217

1,310

131,678

152,205

2018
$

2017
$

1,854,581

1,188,683

153,717

254,677

71,717

368,468

238,104

74,089

368,790

173,169

57,263

284,892

246,647

59,723

3,015,353

2,379,167

Note 2 Loss before income tax (Continued)

2.3 Employment costs (Continued)

2.3.1 Accounting policy

a. Short-term benefits

Liabilities for employee benefits for wages, salaries and annual leave that are expected to be settled
within 12 months of the reporting date represent present obligations resulting from employees’
services provided to the reporting date and are calculated at undiscounted amounts based on
remuneration wage and salary rates that the Group expects to pay at the reporting date including
related on-costs, such as workers compensation insurance and payroll tax.

Non-accumulating non-monetary benefits, such as medical care, housing, cars and free or subsidised
goods and services, are expensed based on the net marginal cost to the Group as the benefits are
taken by the employees.

b. Other long-term benefits

The Group’s obligation in respect of long-term employee benefits other than defined benefit plans,
such as long service leave, is the amount of future benefit that employees have earned in return
for their service in the current and prior periods plus related on-costs; that benefit is discounted to
determine its present value, and the fair value of any related assets is deducted. The discount rate is
the Reserve Bank of Australia’s cash rate at the report date that have maturity dates approximating
the terms of the Company’s obligations. Any actuarial gains or losses are recognised in profit or loss
in the period in which they arise.

c. Retirement benefit obligations: Defined contribution superannuation funds

A defined contribution plan is a post-employment benefit plan under which an entity pays fixed
contributions onto a separate entity and will have no legal or constructive obligation to pay further
amounts. Obligations for contributions to defined contribution superannuation funds are recognised
as an expense in the income statement as incurred.

d. Termination benefits

When applicable, the Group recognises a liability and expense for termination benefits at the earlier
of: (a) the date when the Group can no longer withdraw the offer for termination benefits; and (b)
when the Group recognises costs for restructuring pursuant to AASB 137 Provisions, Contingent
Liabilities and Contingent Assets and the costs include termination benefits. In either case, unless
the number of employees affected is known, the obligation for termination benefits is measured
on the basis of the number of employees expected to be affected. Termination benefits that are
expected to be settled wholly before 12 months after the annual reporting period in which the
benefits are recognised are measured at the (undiscounted) amounts expected to be paid. All other
termination benefits are accounted for on the same basis as other long-term employee benefits.

e. Equity-settled compensation

The fair value of options granted is recognised as an employee expense with a corresponding
increase in equity. The fair value is measured at grant date and spread over the period during which
the employees become unconditionally entitled to the options. The fair value of the options granted
is measured using the Black-Scholes pricing model, considering the terms and conditions upon
which the options were granted. The amount recognised is adjusted to reflect the actual number
of share options that vest except where forfeiture is only due to market conditions not being met.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018
Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 3 Other Significant Accounting Policies related to items of profit and loss

Note 4 Income tax (Continued)

3.1

Finance income and expenses

Finance income comprises interest income on funds invested (including available-for-sale financial assets),
gains on the disposal of available-for-sale financial assets and changes in the fair value of financial assets at
fair value through profit or loss. Interest revenue is recognised on a time proportionate basis that considers
the effective yield on the financial asset.

Financial expenses comprise interest expense on borrowings calculated using the effective interest method,
unwinding of discounts on provisions, changes in the fair value of financial assets at fair value through profit
or loss and impairment losses recognised on financial assets. All borrowing costs are recognised in profit or
loss using the effective interest method.

Borrowing costs directly attributable to the acquisition, construction or production of assets that necessarily
take a substantial period of time to prepare for their intended use or sale, are 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 income in the period in which they are incurred.

Foreign currency gains and losses are reported on a net basis.

4.2

Reconciliation of income tax expense to prima facie tax
payable

2018
$

2017
$

The prima facie tax payable/(benefit) on loss from ordinary
activities before income tax is reconciled to the income tax
expense as follows:
Accounting loss before tax

Prima facie tax on operating loss at 27.5% (2017: 27.5%)

Add / (Less) tax effect of:
o Profit attributable to foreign subsidiaries
o Research and development tax offset exempted from tax
o Foreign tax losses not recognised
o Foreign income tax payable / (refundable)
o Non-deductible expenses
o Timing differences
o Deferred tax asset not brought to account

(2,078,278)

(3,334,486)

(571,526)

(916,984)

(5,730)

(25,872)

205,375

125,082

213,453

(95,261)

279,561

(9,382)

(36,888)

45,037

(160,218)

109,005

7,265

801,947

Note 4 Income tax

Income tax expense/(benefit) attributable to operating loss

125,082

(160,218)

4.1

Income tax (benefit) / expense

Note

Current tax

Deferred tax

Deferred income tax expense included in income tax expense
comprises:
n Increase / (decrease) in deferred tax assets
n (Increase) / decrease in deferred tax liabilities

4.6

2018
$

2017
$

125,082

(160,218)

125,082

(160,218)

(6.02)

4.80

4.3

The applicable weighted average effective tax rates
attributable to operating profit are as follows:

a. The tax rates used in the above reconciliations is the
corporate tax rate of 27.5% 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.

b. The foreign tax payable relates to the Malaysian
corporate entities, where the current corporate tax rate
is 24%. 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.

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 4 Income tax (Continued)

4.4

4.5

Balance of franking account at year end of the parent

Current tax liabilities

Foreign Income tax payable

4.6 Deferred tax assets

Tax losses

Net deferred tax assets

4.7

Tax losses and deductible temporary differences

Unused tax losses and deductible temporary differences for
which no deferred tax asset has been recognised, that may
be utilised to offset tax liabilities:
n Tax losses Australia
n Tax losses attributable to foreign subsidiaries

2018
$

nil

523

231,646

2017
$

nil

7,588

292,526

2,071,937
1,173,499

1,792,376
968,124

3,245,436

2,760,500

Potential deferred tax assets attributable to tax losses have not been brought to account at 31 December
2018 because the directors do not believe it is appropriate to regard realisation of the deferred tax assets as
probable at this point in time. These benefits will only be obtained if:

the Group derives future assessable income of a nature and of an amount sufficient to enable the benefit
from the deductions for the loss to be realised

ii. the company continues to comply with conditions for deductibility imposed by law; and
iii. no changes in tax legislation adversely affect the Group in realising the benefit from the deductions for the

loss.

Balances disclosed in the financial statements and the notes thereto, related to taxation, are based on the
best estimates of directors. These estimates consider both the financial performance and position of the
company as they pertain to current income taxation legislation, and the directors understanding thereof.
No adjustment has been made for pending or future taxation legislation. The current income tax position
represents that directors’ best estimate, pending an assessment by tax authorities in relevant jurisdictions.

The parent company has accumulated tax losses of $7,534,316 (2017: $6,517,731) 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 4 Income tax (Continued)

4.8 Accounting policy

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:

n 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

n 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:

n 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

n 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

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 4 Income tax (Continued)

4.8 Accounting policy (Continued)

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.

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.

Where the Group receives the Australian Government’s Research and Development Tax Incentive, the Group
accounts for the refundable tax offset under AASB 112. Funds are received as a rebate through the parent
company’s income tax return.

Note 5 Financial assets and financial liabilities

5.1

Cash and cash equivalents

Cash at bank

2018
$

2017
$

357,705

120,982

357,705

120,982

5.1.1 The Group’s exposure to interest rate risk and a sensitivity analysis for financial assets and liabilities

are disclosed in Note 8 Financial risk management.

Note 5 Financial assets and financial liabilities (Continued)

5.1 Cash and cash equivalents (Continued)

5.1.2 Cash Flow Information

a. Reconciliation of cash flow from operations to loss after

income tax

Loss after income tax

Cash flows excluded from loss attributable to operating
activities
Non-cash flows in (loss)/profit from ordinary activities:

n Depreciation and amortisation
n Foreign exchange (gain) / loss
n Net share-based payments expensed
n Impairment
n Accrued interest payable or capitalised
n Loss on disposal of property, plants, and equipment
Changes in assets and liabilities, net of the effects of
purchase and disposal of subsidiaries:

n (Increase)/ decrease in receivables
n Decrease/(increase) in inventories
n Increase in prepayments
n (Decrease)/increase in trade and other payables
n Increase in provisions

n Increase/(decrease) tax balances

2018
$

2017
$

(2,203,360)

(3,174,268)

257,378

(57,974)

90,523

370,771

(17,651)

(857,255)

593,713

(198,539)

(257,183)

1,629

77,682

224,514

78,053

2,536,595

152,205

8,345

69,413

(87,198)

(154,607)

781,610

1,729

(195,502)

Cash flow (used in)/generated from operations

(2,200,266)

240,922

b. Reconciliation of liabilities arising from financing activities

Non-cash changes

2017
$

Cash flows
$

Acquisitions
$

Foreign
Exchange
$

Fair Value
Changes
$

Short-term borrowings

209,009

101,661

Long-term borrowings

498,857

(52,697)

Asset finance

49,038

10,356

Total liabilities from
financing activities

756,904

59,320

17,507

41,800

4,108

63,415

2018
$

328,177

487,960

63,502

879,639

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 5 Financial assets and financial liabilities (Continued)

5.1 Cash and cash equivalents (Continued)

5.1.2 Cash Flow Information (Continued)

c. Credit and loan standby arrangement with banks

Refer Note 5.5.6 Financing facilities available.

d. Non-cash investing and financing activities

2018

During the year, the Company settled $438,371 in respect to director fees and loans accrued
through the issue of 6,262,444 shares. Refer also Note 5.4.3 for further details.

2017

A loan amounting to US$250,000 was advanced by an associated company of a Director. On 24
March 2017, 6,012,698 options were exercised to affect the settlement of a loan of $360,762 from
Global eHealth Limited, a related party.

Refer also to acquisitions of entities at Notes 5.1.2e Acquisition of entities: HF Pre IPO Fund I LLC
and 5.1.2f Acquisition of entities: Holista Foods Inc..

e. Acquisition of entities: HF Pre IPO Fund I LLC

Note

2017
$

HF Pre IPO Fund I LLC

On 1 January 2017 Holista Colltech Limited acquired 67% of the
ordinary share capital and voting rights in HF Pre IPO as described
in Note 10.1

i. Purchase consideration:

Consideration exchanged

ii. Cash acquired:

Cash held by HF Pre IPO Fund I LLC at date of acquisition

10.1

156

iii. Assets and liabilities held at acquisition date (excluding cash)

excluded from the consolidated statement of cash flow:
§ Trade and other receivables
§ Other current assets
§ Trade and other payables

54,417

503,336

(23,800)

10.1

354,936

5.1.3 Accounting policy

5.1 Cash and cash equivalents (Continued)

5.1.2 Cash Flow Information (Continued)

f. Acquisition of entities: Holista Foods Inc.

Note

2017
$

On 16 October 2017, LiteFoods Inc. (LiteFoods) (a subsidiary of
the Company), acquired an additional 25% of the ordinary share
capital and voting rights of Holista Foods Inc as described in Note
10.2

i. Purchase consideration:

§ Loans deemed to form part of the consideration
§ Consideration exchanged

10.2.1

Total consideration

ii. Cash acquired:

528,044

503

528,547

Cash in-flow on acquisition

10.2.3

27,879

iii. Assets and liabilities held at acquisition date (excluding cash)

excluded from the consolidated statement of cash flow:
§ Other current assets
§ Property, plant, and equipment
§ Trade and other payables
§ Interest-bearing loans and borrowings (net of loans deemed

10.2.3

to form part of consideration)

256

2,132

(9,983)

(635)

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.

5.2

Trade and other receivables

5.2.1 Current

Trade receivable

Amounts advanced to a related party

Amounts advanced to a third party

Other receivables

Note

5.2.3

5.2.4

2018
$

2017
$

2,379,411

258,082

290,301

91,223

1,404,003

258,082

145,029

3,019,017

1,807,114

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 5 Financial assets and financial liabilities (Continued)

5.2 Trade and other receivables (Continued)

5.2.2 The Group’s exposure to credit rate risk is disclosed in Note 8 Financial risk management.

5.2.3 The average credit period on sales of goods and rendering of services ranges from 30 to 240 days.
Interest is not charged. No allowance has been made for estimated irrecoverable trade receivable
amounts arising from 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, within
the terms and conditions agreed between the Group and the customer or counter party to the
transaction.

5.2.4 Amounts advanced to related party $258,082 (2017: $258,082) and third party of $290,301 (2017:
$nil) attracts interest at 3% in its first year and 5% in its second year, on accrual basis. Amounts
advanced to a related party are repayable on 1 September 2019. Amounts advanced to a third party
are presently repayable on demand due to a technical default on the funds advanced.

5.2.5 Accounting policy

Trade receivables are generally due for settlement within periods ranging from 30 to 240 days.
Receivables expected to be collected within 12 months of the end of the reporting period are classified
as current assets. All other receivables are classified as non-current assets.

Trade and other receivables are initially recognised at fair value and subsequently measured at
amortised cost using the effective interest method, less any provision for impairment. 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. (see also Note 5.6.1).

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.

5.3 Other assets

5.3.1 Current

Security deposits

Other deposits

Prepayments

Right of return assets

5.3.2 Non-current

Loans to related parties

Less: Impairment

Note

5.3.4

2018
$

289,283

80,165

548,453

60,894

978,795

2017
$

417,177

109,655

349,914

876,746

5.3.3

2.2

525,588

(511,744)

475,590

(131,678)

13,844

343,912

5.3.3 The balances as at 31 December 2018 and 31 December 2017 are related to funds loans to Galen

BioMedical Inc.

5.3.4 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.

5.3.5 Accounting policy
a. Loans

Loans are non-derivative financial assets with fixed or determinable payments that are not quoted
in an active market and are subsequently measured at amortised cost.

Loans are included in current assets, except for those which are not expected to mature within 12
months after the end of the reporting period.

b. Right of return assets

Right of return assets represents the Group’s right to recover the goods expected to be returned
by customers. The asset is measured at the former carrying amount of the inventory, less any
expected costs to recover the goods, including any potential decrease in the value of the returned
goods. At the end of each reporting period, the Group updates the measurement of the asset
arising from the changes in expectations about products to be returned.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 5 Financial assets and financial liabilities (Continued)

5.4 Trade and other payables

5.4.1 Current

Unsecured

Trade payables

Accruals

Advance deposits and deferred revenue

Amounts due to Directors

Dividends payable

Refund liability

Other payables

Note

5.4.2

5.4.5

5.4.3

2018
$

2017
$

715,796

499,778

386,017

21,000

24,400

312,407

14,490

746,687

609,208

624,590

297,601

22,079

257,505

1,973,888

2,557,670

5.4.2 Included in the accruals is deferred revenue amounting of $54,873 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.

5.4.3 Amounts due to Directors are comprised of $21,000 (2017: $60,710) due to Mr Chan and nil due to

Dr Manicka (2017: $236,891) and in respect to accrued director fees.

During the year, the Company settled $438,371 (Dr Manicka: $362,661; and Mr Chan: $75,710) in
respect to director fees and loans accrued up to August 2018. The Company issued 6,262,444 shares
(Dr Manicka: 5,180,872; and Mr Chan 1,081,572) in respect to this settlement.

5.4.4 Accounting policy

a. Loans

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.

b. Refund liabilities

A refund liability is the obligation to refund some or all of the consideration received (or receivable)
from the customer and measured at the amount the Group ultimately expects it will have to
return to the customer. At the end of each reporting period, the Group updates its estimates
of refund liabilities for changes in expectations about the amount of refunds and recognise the
corresponding adjustments as revenue (or reductions of revenue).

c. Contract liabilities

A contract liability is the obligation to transfer goods and services to a customer for which the
Group has received consideration from the customer. If a customer pays consideration before
the Group transfers goods or services to the customer, a contract liability is recognised when the
payment is made or the payment is due (whichever is earlier). Contract liability is recognised as
revenue when the Group performs under the contract.

5.4 Trade and other payables

5.4.5 Key estimates – Deferred revenue for customer loyalty points

The Group operates loyalty points programme which allows customers to accumulate points that can
be redeemed for free products. The loyalty points give rise to a separate performance obligation as
they provide a material right to the customer. A portion of the transaction price is allocated to the
loyalty points awarded to customers based on relative stand-alone selling price and recognised as a
contract liability until the points are redeemed. Revenue is recognised upon redemption of products
by the customer.

When estimating the stand-alone selling price of the loyalty points, the Group considers the likelihood
that the customer will redeem the points. At the end of each reporting period, the Company updates
its estimates of the points that will be redeemed and any adjustments to the contract liability balance
are charged against revenue.

5.5

Interest-bearing loans and borrowings

5.5.1 Current

Banker’s acceptance

Leases

Term loan

Loan from related parties

5.5.2 Non-current

Term loan

Leases

Note

5.5.3

5.5.4

2018
$

269,743

21,055

58,434

2017
$

156,349

13,966

52,019

641

349,232

222,975

487,960

42,447

530,407

498,857

35,072

533,929

5.5.3 The bankers’ acceptance bears interest of 5.15% (2017: 5.15%) and is secured by the following:

i. Facility Agreement;
ii. Pledge of fixed deposits with licensed banks (refer to Note 5.3.1)
iii. Execution of a fresh letter of authorisation, memorandum of Deposit and letter of set off;
iv. First-party assignment over the office lots of the Company; and
v. Joint and several guarantees from certain Directors of the Company and a third-party.

5.5.4 The term loan 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% (2017: 520%) per
annum is secured by the following:
i. As principal Instrument, an “all monies” Facilities Agreement stamped to the amount of facilities

advanced;

ii. First-party absolute assignment of all rights, interest, title and benefits in and to property

beneficially owned by a Subsidiary Company;

iii. Corporate Guarantee by subsidiary company for $823,949; and
iv. Personal Guarantee for $823,949 by a Director of the subsidiary company.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 5 Financial assets and financial liabilities (Continued)

5.5

Interest-bearing loans and borrowings (Continued)

5.5.5 Assets pledged as security

Floating charge

Inventories

Security deposits

Total current assets pledged as security
First mortgage

Freehold land and buildings

Total non-current assets pledged as security

6.1

5.3.1

6.2.3

5.5.6 Financing facilities available

2018
$

442,621

80,165

2017
$

956,236

109,655

522,786

1,065,891

791,187

742,023

1,313,973

1,807,914

At balance date, the
following financing
facilities had been
negotiated and were
available:

Term loan

Banker’s acceptance

Finance lease

Total facilities at
balance date

Total facilities

Facilities used

Facilities unused

2018
$

546,394

379,027

63,502

2017
$

2018
$

2017
$

550,876

(546,394)

(550,876)

2018
$

2017
$

379,027

(269,743)

(156,349)

109,284

222,678

49,038

(63,502)

(49,038)

988,923

978,941

(879,639)

(756,263)

109,284

222,678

5.5.7 Accounting policy

a. 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.

Note 5 Financial assets and financial liabilities (Continued)

5.5

Interest-bearing loans and borrowings (Continued)

5.5.7 Accounting policy (Continued)

a. Borrowings (Continued)

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.

b. Leases

Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the
asset, but not the legal ownership, are transferred to entities in the Group are classified as finance
leases.

Leased assets are depreciated on a straight-line basis over their estimated useful lives where it is
likely that the Group will obtain ownership of the asset or over the term of the lease.

5.6 Other Significant Accounting Policies related to Financial Assets and Liabilities

5.6.1 Investments and other financial assets

a. Classification

From 1 January 2018, the group classifies its financial assets in the following measurement
categories:
n those to be measured subsequently at fair value (either through OCI or through profit or loss),

and

n those to be measured at amortised cost.

The classification depends on the entity’s business model for managing the financial assets and
the contractual terms of the cash flows.

For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI.
For investments in equity instruments that are not held for trading, this will depend on whether
the group has made an irrevocable election at the time of initial recognition to account for the
equity investment at fair value through other comprehensive income (FVOCI).

The group reclassifies debt investments when and only when its business model for managing
those assets changes.

b. Recognition and derecognition

Regular way purchases and sales of financial assets are recognised on trade-date, the date on
which the group commits to purchase or sell the asset. Financial assets are derecognised when the
rights to receive cash flows from the financial assets have expired or have been transferred and the
group has transferred substantially all the risks and rewards of ownership.

c. Measurement

At initial recognition, the group measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly
attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at
FVPL are expensed in profit or loss.

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 5 Financial assets and financial liabilities (Continued)

Note 6 Non-financial assets and financial liabilities

5.6 Other Significant Accounting Policies related to Financial Assets and Liabilities (Continued)

5.6.1 Investments and other financial assets (Continued)

c. Measurement (Continued)

Financial assets with embedded derivatives are considered in their entirety when determining
whether their cash flows are solely payment of principal and interest.

i. Debt instruments

Subsequent measurement of debt instruments depends on the group’s business model for
managing the asset and the cash flow characteristics of the asset. There are three measurement
categories into which the group classifies its debt instruments:
n Amortised cost: Assets that are held for collection of contractual cash flows where those
cash flows represent solely payments of principal and interest are measured at amortised
cost. Interest income from these financial assets is included in finance income using the
effective interest rate method. Any gain or loss arising on derecognition is recognised directly
in profit or loss and presented in other gains/(losses) together with foreign exchange gains
and losses. Impairment losses are presented as separate line item in the statement of profit
or loss.

n FVOCI: Assets that are held for collection of contractual cash flows and for selling the
financial assets, where the assets’ cash flows represent solely payments of principal and
interest, are measured at FVOCI. Movements in the carrying amount are taken through
OCI, except for the recognition of impairment gains or losses, interest income and foreign
exchange gains and losses which are recognised in profit or loss. When the financial asset
is derecognised, the cumulative gain or loss previously recognised in OCI is reclassified
from equity to profit or loss and recognised in other gains/(losses). Interest income from
these financial assets is included in finance income using the effective interest rate method.
Foreign exchange gains and losses are presented in other gains/(losses) and impairment
expenses are presented as separate line item in the statement of profit or loss.

n FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL.
A gain or loss on a debt investment that is subsequently measured at FVPL is recognised in
profit or loss and presented net within other gains/(losses) in the period in which it arises.

ii. Equity instruments

The group subsequently measures all equity investments at fair value. Where the group’s
management has elected to present fair value gains and losses on equity investments in OCI,
there is no subsequent reclassification of fair value gains and losses to profit or loss following the
derecognition of the investment. Dividends from such investments continue to be recognised
in profit or loss as other income when the group’s right to receive payments is established.

Changes in the fair value of financial assets at FVPL are recognised in other gains/(losses) in the
statement of profit or loss as applicable. Impairment losses (and reversal of impairment losses)
on equity investments measured at FVOCI are not reported separately from other changes in
fair value.

d. Impairment

From 1 January 2018, the group assesses on a forward-looking basis, the expected credit losses
associated with its debt instruments carried at amortised cost and FVOCI. The impairment
methodology applied depends on whether there has been a significant increase in credit risk.

For trade receivables, the group applies the simplified approach permitted by AASB 9, which
requires expected lifetime losses to be recognised from initial recognition of the receivables.

6.1

Inventories

Raw materials - at cost

Finished goods - at cost

6.1.1 Accounting policy

2018
$

141,996

300,625

442,621

2017
$

627,987

328,249

956,236

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:

n Raw materials - purchase cost on a first-in, first-out basis; and

n 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.

6.2 Property, plant, and equipment

Note

Freehold land and buildings
Accumulated depreciation and impairment

Plant and equipment

Accumulated depreciation

Motor vehicles

Accumulated depreciation

Total plant and equipment

2018
$

2017
$

2,557,156

2,408,331

6.2.4

(1,765,969)

(1,666,308)

791,187

1,952,920

742,023

2,052,091

(1,339,206)

(1,248,318)

613,714

156,642

803,773

151,891

(132,456)

(140,251)

24,186

11,640

1,429,087

1,557,436

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 6 Non-financial assets and financial liabilities (Continued)

6.2 Property, plant, and equipment (Continued)

6.2.1 Movements in Carrying Amounts

Freehold land
and buildings
$

Plant and
Equipment
$

Motor
Vehicles
$

Total
$

Carrying amount at the beginning
of the year

Transfers between classes

Additions

Disposals / write-offs

Depreciation expense

Foreign currency exchange
differences

742,023

20,267

803,773

(20,267)

20,565

(45,651)

11,640

1,557,436

29,675

(1)

50,240

(45,652)

(33,257)

(147,825)

(18,103)

(199,185)

62,154

3,119

975

66,248

Carrying amount at the end of year

791,187

613,714

24,186

1,429,087

6.2.2 The carrying value of plant and equipment held under finance leases and hire purchase contracts at
31 December 2018 is $24,186 (2017: $11,640). There acquired motor vehicles amounting to $28,753
held hire purchase contracts during the year (2017: nil).

6.2.3 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 $791,187 (2017:
$742,023) are subject to a first charge to secure a loan from RHB Bank, Malaysia.

6.2.4 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 2018 (2017: $nil).

6.2.5 Accounting policy

a. Recognition and measurement

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.

Items of plant and equipment are measured on the cost basis and carried at cost less accumulated
depreciation (see below) and impairment losses (see accounting policy 6.5.1 Impairment of non-
financial assets).

Cost includes expenditure that is directly attributable to the acquisition of the asset. The cost of self-
constructed assets includes the cost of materials and direct labour, any other costs directly attributable
to bringing the asset to a working condition for its intended use, and the costs of dismantling and
removing the items and restoring the site on which they are located, and an appropriate proportion
of production overheads. 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.

6.2 Property, plant, and equipment (Continued)

6.2.5 Accounting policy (Continued)

a. Recognition and measurement (Continued)

Where considered material, the carrying amount of property, plant, and equipment is reviewed
annually by Directors to ensure it is not in excess of the recoverable amount from these assets. The
recoverable amount is assessed on the basis of the expected net cash flows that will be received
from the asset’s employment and subsequent disposal. The expected net cash flows have not been
discounted to their present values in determining recoverable amounts.

Where parts of an item of property, plant, and equipment have different useful lives, they are
accounted for as separate items of plant and equipment.

b. Subsequent costs

The cost of replacing part of an item of plant and equipment is recognised in the carrying amount
of the item if it is probable that the future economic benefits embodied within the part will flow to
the Group and its cost can be measured reliably. Any costs of the day-to-day servicing of plant and
equipment are recognised in the income statement as an expense as incurred.

c. Depreciation

Depreciation is charged to the income statement on a straight-line basis over the asset’s useful life to
the Group commencing from the time the asset is held ready for use. Leasehold improvements are
depreciated over the shorter of either the unexpired period of the lease or the estimated useful lives
of the improvements. All leasehold improvements are presently impaired.

Depreciation rates and methods are reviewed annually for appropriateness. The depreciation rates
used for the current and comparative period are:

n Buildings
n Plant and equipment
n Motor Vehicles

2018
%

4.00

2017
%

4.00

20.00 to 33.33

20.00

The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at the end of
each reporting period. An asset’s carrying amount is written down immediately to its recoverable
amount if the asset’s carrying amount is greater than its estimated recoverable amount.

d. Derecognition 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.

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 6 Non-financial assets and financial liabilities (Continued)

6.3

Intangible assets

Goodwill
Patents and licences

Accumulated amortisation

6.3.1 Movements in Carrying Amounts

Carrying amount at the beginning of the year
Additions
Disposals / write-offs
Amortisation expense
Foreign currency exchange differences

Carrying amount at the end of year

Note

6.3.2

Goodwill
$

514,113
-
-
-
54,048

568,161

2018
$

568,161
510,905

2017
$

514,113
393,999

(124,349)

(49,309)

Patents and
licences
$

344,690
111,222
(23,162)
(58,192)
11,998

386,556

Total
$

858,803
111,222
(23,162)
(58,192)
66,046

954,717

6.3.2 Included in the intangible is payment made to ATM Metabolics of $255,030 (USD180,000) for use of the
brand Emulin Plus per term sheet entered into on 6 December 2015. Exclusive Product Management
and Distribution Agreement was signed on 9 January 2017.

The Company has filed a counter law suit against ATM Metabolics (refer also in Note 15) alleging it had
violated the terms of the agreement. The Company continues to sell under the trademark of Emulin
Plus.

6.3.3 Allocation of goodwill to cash-generating units (CGU)

Goodwill has been allocated for impairment testing purposes to the Food Ingredients unit. Before
recognition of impairment losses, the carrying amount of goodwill (other than goodwill relating to
discontinued operations) was allocated to CGU as follows.

n Food Ingredients

2018
$

2017
$

568,161

514,113

The recoverable amount of the Group’s Food Ingredients CGU has been determined based on a value in
use calculation which uses cash flow projections based on financial budgets approved by the directors
utilising the following key assumptions:

The key assumptions used in the value in use calculations for the Food Ingredients CGU are as follows:
n Revenue (cash in-flows) have been extrapolated at a growth rate of 10.00%
n Expenses (cash out-flows) have been extrapolated at a growth rate of 10.00%
n Discount rate is based upon a weighted average cost of capital of 11.38%.

The directors believe that any reasonably possible further change in the key assumptions on which
recoverable amount is based would not cause Food Ingredients CGU carrying amount to exceed its
recoverable amount.

6.3

Intangible assets (Continued)
6.3.4 Accounting policy

a. 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.

b. Intangible assets acquired in a business combination

Intangible assets acquired as part of a business combination, other than goodwill, are initially
measured at their fair value at the date of the acquisition. Intangible assets acquired separately are
initially recognised at cost. Indefinite life intangible assets are not amortised and are subsequently
measured at cost less any impairment. Finite life intangible assets are subsequently measured at cost
less amortisation and any impairment. The gains or losses recognised in profit or loss arising from
derecognition of intangible assets are measured as the difference between net disposal proceeds
and the carrying amount of the intangible asset. The method and useful lives of finite life intangible
assets are reviewed annually. Changes in the expected pattern of consumption or useful life are
accounted for prospectively by changing the amortisation method or period.

c. Subsequent measurement

The following useful lives are used in the calculation of amortisation:

n Licenses
n Software

d. Goodwill

2018
%

20.00
25.00

2017
%

10.00
25.00

Goodwill arising on an acquisition of a business is carried at cost as established at the date of the
acquisition of the business (see 12.1.1) less accumulated impairment losses, if any.

For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating
units (CGU) (or groups of CGUs) that is expected to benefit from the synergies of the combination.

A CGU to which goodwill has been allocated is tested for impairment annually, or more frequently
when there is an indication that the unit may be impaired. If the recoverable amount of the CGU is
less than its carrying amount, the impairment loss is allocated first to reduce the carrying amount
of any goodwill allocated to the unit and then to the other assets of the unit pro rata based on the
carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in
profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.

On disposal of the relevant CGU, the attributable amount of goodwill is included in the determination
of the profit or loss on disposal.

6.3.5 Key estimates – Impairment of goodwill

Determining whether goodwill is impaired requires an estimation of the value in use of the cash
generating units to which goodwill has been allocated. The value in use calculation requires the directors
to estimate the future cash flows expected to arise from the cash-generating unit and a suitable discount
rate in order to calculate present value. Where the actual future cash flows are less than expected, a
material impairment loss may arise.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 6 Non-financial assets and financial liabilities (Continued)

6.5 Other Significant Accounting Policies related to Non-Financial Assets and Liabilities (Continued)

6.5.1 Impairment of non-financial assets (Continued)

cash-generating units are allocated first to reduce the carrying amount of any goodwill allocated to
the units and then to reduce the carrying amount of the other assets in the unit on a pro rata basis.

The recoverable amount of an asset or cash-generating unit is the greater of its 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, the recoverable amount is determined for the cash-generating unit to which the asset
belongs.

Impairment losses recognised in prior periods are assessed at each reporting date for any indications
that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a
change in the estimates used to determine the recoverable amount. An impairment loss is reversed
only to the extent that the asset’s carrying amount does not exceed the carrying amount that
would have been determined, net of depreciation and amortisation, if no impairment loss had been
recognised.

6.4 Provisions

Provision for employee entitlements

6.4.1 Description of provisions

Note

6.4.1

2018
$

9,710

2017
$

8,081

Provision for employee benefits represents amounts accrued for annual leave (AL) and long service
leave (LSL). The current portion for this provision includes the total amount accrued for AL entitlements
and the amounts accrued for LSL entitlements that have vested due to employees having completed
the required period of service. The Group does not expect the full amount of AL or LSL balances
classified as current liabilities to be settled within the next 12 months. However, these amounts must
be classified as current liabilities since the Group does not have an unconditional right to defer the
settlement of these amounts in the event employees wish to use their leave entitlement.

6.4.2 Accounting policy

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result
of a past event, it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Provisions are not recognised for future operating losses.

When the Group expects some or all of a provision to be reimbursed, for example under an insurance
contract, the reimbursement is recognised as a separate asset but only when the reimbursement is
virtually certain. The expense relating to any provision is presented in the statement of 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.

6.5 Other Significant Accounting Policies related to Non-Financial Assets and Liabilities

6.5.1 Impairment of non-financial assets

The carrying amounts of the Group’s non-financial assets, other than deferred tax assets (see
accounting policy at note 4.8) are reviewed at each reporting date to determine whether there is
any indication of impairment. If any such indication exists then the asset’s recoverable amount is
estimated.

An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit
exceeds its recoverable amount. A cash-generating unit is the smallest identifiable asset group that
generates cash flows that largely are independent from other assets and groups. Impairment losses
are recognised in the income statement, unless the asset has previously been revalued, in which
case the impairment loss is recognised as a reversal to the extent of that previous revaluation with
any excess recognised through the income statement. Impairment losses recognised in respect of

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 7 Equity

7.1

Issued capital

Note

2018
No.

2017
No.

2018
$

2017
$

Fully paid ordinary shares at no par

value

234,039,087

184,039,087

14,548,515

11,538,515

7.1.1 Ordinary shares

2018
No.

2017
No.

2018
$

2017
$

At the beginning of the year

184,039,087

171,708,921

11,538,515

10,798,705

7.1.3

Shares issued during the year:
n 24.03.17 Options ex. at $0.06
n 18.04.17 Options ex. at $0.06
n 14.06.17 Options ex. at $0.06
n 26.09.17 Options ex. at $0.06
n 05.10.17 Options ex. at $0.06
n 06.02.18 Controlled placement

6,012,698

1,666,667

1,500,000

1,484,134

360,762

100,000

90,000

89,048

with Acuity Capital

7.1.4

6,500,000

n 06.08.18 Entitlement Issue at

$0.07 per share

n 06.08.18 Entitlement Issue at

$0.07 per share

n 17.10.18 Options ex. at $0.06
Transaction costs relating to share
issues

33,737,556

5.4.3

7.3

6,262,444

3,500,000

10,000

2,361,631

438,369

210,000

(10,000)

At reporting date

234,039,087

184,039,087

14,548,515

11,538,515

7.1.2 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.

7.1.3 On 24 March 2017, 6,012,698 options were exercised to affect the settlement of a loan of $360,762

from Global eHealth Limited, a related party.

7.1.4 On 6 February 2018, the Company entered into a Controlled Placement Agreement (CPA) with Acuity

Capital. As collateral for the CPA, the Company issued 6,500,000 shares.

7.1.5 Accounting policy

Ordinary issued capital is recorded at the consideration received. Incremental costs directly attributable
to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any
related income tax benefit. Ordinary issued capital bears no special terms or conditions affecting income
or capital entitlements of the shareholders.

Note 7 Equity (Continued)

7.2 Performance shares

Note

2018
No.

2017
No.

Performance shares

20.2.1g

9,000,000

7.3 Options

At beginning of the year
n Options exercisable at 25 cents expiring 31 December 2019
n Options exercisable at 20 cents expiring 20 March 2020
n Options exercisable at 10 cents expiring 31 December 2019
n Options exercisable at 20 cents expiring 23 June 2020
n Options exercisable at 25 cents expiring 23 June 2020
n Options exercisable at 30 cents expiring 23 June 2020
n Issued to Patent Consultant exercisable at 10 cents expiring 1

August 2020

n Issued to Holista Foods Inc. shareholder/director and I Galen
consultant exercisable at 20 cents expiring 20 October 2020

n Expired Options
Options exercised at 6 cents per share

At reporting date

7.4 Reserves

Foreign currency translation reserve

Share-based payment reserve

Note

2018
No.

2017
No.

46,362,616

30,692,782

10,000,000

1,000,000

6,000,000

3,000,000

2,000,000

7,000,000

(7,908,411)

(3,000,000)

7.1

(3,500,000)

(12,330,166)

34,954,205

46,362,616

Note

7.4.1

7.4.2

2018
$

2017
$

(228,428)

4,899,791

(413,435)

4,809,268

4,671,363

4,395,833

7.4.1 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.

7.4.2 Share-based payment reserve (formerly Option reserve)

The share-based payment reserve records the value of options and performance rights issued the
Company to its employees or consultants.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018
Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

SECTION B. RISK

This section of the notes discusses the Group’s exposure to various risks and shows how these could
affect the Group’s financial position and performance

Note 8 Financial risk management (Continued)

8.2 Specific Financial Risk Exposures and Management

Note 8 Financial risk management

8.1

Financial Risk Management Policies

This note presents information about the Group’s exposure to each of the above risks, its objectives, policies
and procedures for measuring and managing risk, and the management of capital.

The Group’s financial instruments consist mainly of deposits with banks, short-term investments, and
accounts payable and receivable.

The Group does not speculate in the trading of derivative instruments.

A summary of the Group’s financial assets and liabilities is shown below:

Floating
Interest
Rate

357,705

Fixed
Interest
Rate

13,844

Non-
interest
Bearing

Floating
Interest
Rate

2018
Total

357,705

120,982

Fixed
Interest
Rate

Non-
interest
Bearing

2017
Total

120,982

3,019,017 3,019,017

430,342

13,844

- 1,807,114 1,807,114

343,912

526,832

343,912

Financial Assets
o Cash and cash
equivalents
o Trade and other
receivables

o Other assets excl.
prepayments
o Investments
o Loans, net of impairment

Total Financial Assets

Financial Liabilities

Financial liabilities at
amortised cost
o Trade and other

payables
o Borrowings

Total Financial Liabilities

816,137

63,502

1,973,888 2,853,527

707,225

49,038 2,558,311 3,314,574

Net Financial Assets /
(Liabilities)

(458,432)

(49,658)

1,475,471

967,381 (586,243)

294,874 (224,365)

(515,734)

The main risk the Group is exposed to through its financial instruments are credit risk, liquidity risk and
market risk consisting of interest rate, foreign currency risk and equity price risk.

The Board of directors has overall responsibility for the establishment and oversight of the risk management
framework. The Board adopts practices designed to identify significant areas of business risk and to effectively
manage those risks in accordance with the Group’s risk profile. This includes assessing, monitoring and
managing risks for the Group and setting appropriate risk limits and controls. The Group is not of a size nor
is its affairs of such complexity to justify the establishment of a formal system for risk management and
associated controls. Instead, the Board approves all expenditure, is intimately acquainted with all operations
and discuss all relevant issues at the Board meetings. The operational and other compliance risk management
have also been assessed and found to be operating efficiently and effectively.

8.2.1 Credit risk

Exposure to credit risk relating to financial assets arises from the potential non-performance by
counterparties of contract obligations that could lead to a financial loss to the Group.

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.

The Group establishes an allowance for impairment that represents its estimate of incurred losses in
respect of trade and other receivables.

357,705

13,844

3,449,359 3,820,908

120,982

343,912 2,333,946 2,798,840

n Credit risk exposures

1,973,888 1,973,888

- 2,557,670 2,557,670

816,137

63,502

879,639

707,225

49,038

641

756,904

The maximum exposure to credit risk is that to its alliance partners and that is limited to the carrying
amount, net of any provisions for impairment of those assets, as disclosed in the statement of
financial position and notes to the financial statements.

Credit risk related to balances with banks and other financial institutions is managed by the Group
in accordance with approved Board policy. Such policy requires that surplus funds are only invested
with financial institutions residing in Australia, where ever possible.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 8 Financial risk management (Continued)

8.2 Specific Financial Risk Exposures and Management (Continued)

8.2.1 Credit risk (Continued)

n Impairment losses

8.2.2 Liquidity risk (Continued)

n Contractual Maturities

The ageing of the Group’s trade and other receivables at reporting date was as follows:

The following are the contractual maturities of financial assets and liabilities of the Group:

Trade receivables

Not past due

Past due up to 30 days

Past due 31 days to 60 months

Past due 61 days to 90 months

Past due over 90 months

Other receivables

Not past due

Total

8.2.2 Liquidity risk

Gross
2018
$

Impaired
2018
$

Past due but not
impaired
2018
$

Net
2018
$

2,021,763

71,281

122,069

109,487

54,811

2,379,411

639,606

3,019,017

2,021,763

71,281

122,069

109,487

54,811

2,379,411

71,281

122,069

109,487

54,811

357,648

639,606

3,019,017

357,648

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due.
The Group’s approach to managing liquidity is to ensure, as far as possible, that it will always have
sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without
incurring unacceptable losses or risking damage to the Group’s reputation.

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.

Typically, the Group ensures that it has sufficient cash to meet expected operational expenses for a
period of 60 days, including the servicing of financial obligations; this excludes the potential impact of
extreme circumstances that cannot reasonably be predicted, such as natural disasters.

The financial liabilities of the Group include trade and other payables as disclosed in the statement of
financial position. All trade and other payables are non-interest bearing and due within 30 days of the
reporting date.

Within 1 Year

Greater Than 1 Year

Total

2018
$

2017
$

2018
$

2017
$

2018
$

2017
$

Financial liabilities due for
payment

Trade and other payables

1,973,888

2,557,670

1,973,888

2,557,670

Borrowings

349,232

222,975

530,407

533,929

879,639

756,904

Total contractual outflows

2,323,120

2,780,645

530,407

533,929

2,853,527

3,314,574

Financial assets

Cash and cash equivalents

357,705

120,982

Trade and other receivables

3,019,017

1,807,114

357,705

120,982

3,019,017

1,807,114

Loans, net of impairment

13,844

343,912

13,844

343,912

Total anticipated inflows

3,376,722

1,928,096

13,844

343,912

3,390,566

2,272,008

Net inflow/(outflow) on
financial instruments

1,053,602

(852,549)

(516,563)

(190,017)

537,039

(1,042,566)

It is not expected that the cash flows included in the maturity analysis could occur significantly
earlier or at significantly different amounts.

8.2.3 Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates
and equity prices will affect the Group’s income or the value of its holdings of financial instruments.
The objective of market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return.

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 Group has also 10% free carried interest in Global Biolife Inc. (formerly Sed BioMed Inc.), a
company incorporated in the State of Delaware, USA in which Mr Chan is a significant shareholder.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 8 Financial risk management (Continued)

8.2 Specific Financial Risk Exposures and Management (Continued)

8.2.3 Market risk (Continued)
a. Interest rate risk

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.

b. Foreign exchange risk

Exposure to foreign exchange risk may result in the fair value or future cash flows of a financial
instrument fluctuating due to movement in foreign exchange rates of currencies in which the
Group holds financial instruments which are other than the AUD functional currency of the Group.

c. Price risk

Price risk relates to the risk that the fair value or future cash flows of a financial instrument will
fluctuate because of changes in market prices. The Group does not presently hold material amounts
subject to price risk. As such the Board considers price risk as a low risk to the Group.

8.2.4 Sensitivity Analyses

The following table illustrates sensitivities to the Group’s exposures to changes in interest rates. The
table indicates the impact on how profit and equity values reported at balance sheet date would have
been affected by changes in the relevant risk variable that management considers to be reasonably
possible. These sensitivities assume that the movement in a particular variable is independent of other
variables.

a. Interest rates

Year ended 31 December 2018

±50 basis points change in interest rates
Year ended 31 December 2017

±50 basis points change in interest rates

b. Foreign exchange

Year ended 31 December 2018

±10% of Australian dollar strengthening/weakening
against the Malaysian ringgit
Year ended 31 December 2017

±10% of Australian dollar strengthening/weakening
against the Malaysian ringgit

Profit
$

Equity
$

± (2,292)

± (2,931)

Profit
$

Equity
$

± nil

± 399,494

± nil

± 350,514

8.2.4 Sensitivity Analyses (Continued)

c. Foreign exchange

Year ended 31 December 2018

±10% of Australian dollar strengthening/weakening
against the United States dollar
Year ended 31 December 2017

±10% of Australian dollar strengthening/weakening
against the United States dollar

8.2.5 Net Fair Values

a. Fair value estimation

Profit
$

Equity
$

± nil

± 160,257

± nil

± 36,328

The fair values of financial assets and financial liabilities are presented in the table in Note 8.1 and
can be compared to their carrying values as presented in the statement of financial position. Fair
values are those amounts at which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties in an arm’s length transaction.

Financial instruments whose carrying value is equivalent to fair value due to their nature include:
n Cash and cash equivalents;
n Trade and other receivables; and
n Trade and other payables.

The methods and assumptions used in determining the fair values of financial instruments are
disclosed in the accounting policy notes specific to the asset or liability.

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 9 Capital Management

SECTION C. GROUP STRUCTURE

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.

The working capital position of the Group was as follows:

Cash and cash equivalents

Trade and other receivables

Inventories

Other current assets

Trade and other payables

Borrowings

Current tax liabilities

Current provisions

Working capital position

Note

5.1

5.2

6.1

5.3

5.4

5.5

4.5

6.4

2018
$

357,705

3,019,017

442,621

978,795

2017
$

120,982

1,807,114

956,236

876,746

(1,973,888)

(2,557,670)

(349,232)

(222,975)

(523)

(9,710)

(7,588)

(8,081)

2,464,785

964,764

This section provides information which will help users understand how the group structure affects the
financial position and performance of the group as a whole. In particular, there is information about:

(a) changes to the structure that occurred during the year as a result of business combinations and

the disposal of a discontinued operation

(b) transactions with non-controlling interests, and

(c)

interests in joint operations.

A list of significant subsidiaries is provided in note 16. This note also discloses details about the group’s
equity accounted investments.

Note 10 Business combinations

10.1 HF Pre IPO Fund I LLC

On 1 January 2017, Holista Colltech Limited (Holista), acquired 67% of the ordinary share capital and voting
rights of HF Pre IPO Fund I LCC (HF Pre IPO). This transaction constitutes a business combination under
AASB 3.

10.1.1 Acquisition consideration

The fair value of the consideration for the issued capital of HF Pre IPO was $354,936.

10.1.2 Goodwill

The identifiable net assets of the acquiree are remeasured to their fair value on the date of acquisition
(i.e. the date that control passes. Goodwill is calculated as the difference between the fair value of
consideration transferred less the fair value of the identified net assets of the acquired. Details of the
transaction are as follows:

Fair value of:

Consideration given for controlling interest

Non-controlling interest

Fair value of identifiable assets and liabilities held at acquisition
date:

Cash

Trade and other receivables

Other current assets

Trade and other payables

Fair value of identifiable assets and liabilities assumed

Goodwill

Note

5.1.2e

2017
$

354,936

179,173

534,109

156

54,417

503,336

(23,800)

534,109

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 10 Business combinations (Continued)

10.2 Holista Foods Inc. (Continued)

10.2.3 Goodwill (Continued)

Fair value of identifiable assets and liabilities held at acquisition date:
n Cash
n Other current assets
n Property, plant, and equipment
n Trade and other payables
n Interest-bearing loans and borrowings

Fair value of identifiable assets and liabilities assumed

Note

5.1.2f

Fair value
$

27,879

256

2,132

(9,983)

(635)

19,649

Goodwill

6.3.1

509,411

Note 10 Business combinations (Continued)

10.2 Holista Foods Inc.

On 16 October 2017, LiteFoods Inc. (LiteFoods) (a subsidiary of the Company), acquired an additional 25%
in the ordinary share capital and voting rights of Holista Foods Inc. This transaction constitutes a business
combination under AASB 3.

10.2.1 Acquisition consideration

As consideration for the issued capital of Holista Foods Inc., LiteFoods paid $503 for an additional
396 shares. LiteFoods also had loans to Holista Foods Inc. amounting to $528,044, for total deemed
consideration of $528,547.

10.2.2 Fair value of previously held interest

An equity interest previously held in the acquiree (Holista Foods Inc.) which qualified as an equity
accounted investment is treated as if it were disposed of and reacquired at fair value on the acquisition
date. Accordingly, it is remeasured to its acquisition date fair value, and any resulting gain or loss
compared to its carrying amount is recognised in profit or loss. Any amount that has previously been
recognised in other comprehensive income, and that would be reclassified to profit or loss following
a disposal, is similarly reclassified to profit or loss. In addition, non-controlling interests are measured
on the date of acquisition.

Investment in joint venture entity

Share of associate's loss to the date of acquisition

Carrying value at date of acquisition

Implied value of previously held interest

Fair valuation on deemed disposal and acquisition of joint venture entity

Fair valuation of non-controlling interests

10.2.3 Goodwill

249

(249)

249

Nil

264

Fair value of:
n Deemed consideration given additional equity
n Previously held interest
n Non-controlling interest

Note

Fair value
$

5.1.2f

528,547

249

264

529,060

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 11 Interest in subsidiaries

11.1 Information about principal subsidiaries

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.
Investments in subsidiaries are accounted for at cost. Each subsidiaries country of incorporation is also its
principal place of business:

Note 11 Interest in subsidiaries (Continued)

11.3 Summarised financial information of
subsidiaries with material NCI

LiteFoods Group
(LiteFoods Inc. and Holista
Foods Inc.)

HF Pre IPO Fund I LLC

2018
$

2017
$

2018
$

2017
$

Percentage Owned

11.3.1 Summarised financial position

n Holista Biotech Sdn Bhd
n Total Health Concept Sdn Bhd
n Alterni (M) Sdn Bhd
n Medi Botanics Sdn Bhd
n Revonutrix Sdn Bhd
n Holista Ingredients India Private Ltd (1)
n LiteFoods Inc. (2)
n Holista Foods Inc. (74% owned by LiteFoods Inc.)
n HF Pre IPO Fund I LLC

Country of

Incorporation

Malaysia

India

USA
USA

USA

Class of

Ordinary

Ordinary
Ordinary

Ordinary

2018

100.0

51.0

53.0
39.2

67.0

2017

100.0

53.0
39.2

67.0

(1) Holista Ingredients India Private Ltd was incorporated by the Company and an independent third party during the year. The

company was inactive from incorporation.

(2) LiteFoods Inc is 53% owned by the Group with the remaining 47% being held by private shareholders including the

Company’s Director Mr. Chan Heng Fai

11.2 During the 2017 financial year the Company and non-controlling interests (NCI) contributed additional capital
to LiteFoods Inc. (LiteFoods). The Company contributed $129,994; however, due to the contributions on NCI
(and related increase in NCI ownership), its share in LiteFoods was reduced by 21% to 53%. Consequently,
the Company’s interests and NCI were adjusted to reflect the new relative interests. Components of
equity relating to NCI were reallocated between the amounts attributable to the parent’s owners and NCI.
Differences between the consideration paid and the amount by which NCI were adjusted and recognised in
equity, and attributed to owners of the parent.

Current assets

Non-current assets

Current liabilities

Non-current liabilities

Net assets

26,641

525,233

(33,112)

22,892

515,506

(18,663)

(2,166,691)

(1,255,450)

50,601

343,912

(22,078)

50,601

343,912

(22,078)

518,762

519,735

372,435

Carrying amount of NCI

254,193

519,735

226,440

239,864

11.3.2 Summarised financial performance

Revenue

Loss for the year

25,998

(766,599)

(165,429)

(380,066)

(131,704)

Total comprehensive income

(740,601)

(165,429)

(380,066)

(131,704)

Loss attributable to NCI

Distributions paid to NCI

11.3.3 Summarised cash flow information

Net cash used in operating activities

(689,768)

Net cash used in investing activities

Net cash from financing activities
Net decrease in cash and cash
equivalents

686,530

(165,457)

(377,564)

507,550

(689,768)

(543,021)

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 12 Other Significant Accounting Policies related to Group Structure

Note 12 Other Significant Accounting Policies related to Group Structure (Continued)

12.1 Basis of consolidation

As at reporting date, the assets and liabilities of all controlled entities have been incorporated into the
consolidated financial statements as well as their results for the year then ended. Where controlled entities
have entered (left) the Consolidated Group during the year, their operating results have been included
(excluded) from the date control was obtained (ceased).

12.1.1 Business combinations

Business combinations are accounted for using the acquisition method as at the acquisition date,
which is the date on which control is transferred to the Group. Control exists when the Group is
exposed to variable returns from another entity and has the ability to affect those returns through
its power over the entity.

The Group measures goodwill at the acquisition date as:
n the fair value of the consideration transferred; plus
n the recognised amount of any non-controlling interests in the acquire; plus
n if the business combination is achieved in stages, the fair value of the existing equity interest in

the acquiree;

less
n the net recognised amount of the identifiable assets acquired and liabilities assumed.

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.

The consideration transferred does not include amounts related to settlement of pre-existing
relationships. Such amounts are generally recognised in profit or loss.

Costs related to the acquisition, other than those associated with the issue of debt or equity securities,
that the Group incurs in connection with a business combination are expensed as incurred.

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.

Any contingent consideration payable is recognised at fair value at the acquisition date. If the
contingent consideration is classified as equity, it is not remeasured and settlement is accounted for
within equity. Otherwise, subsequent changes to the fair value of the contingent consideration are
recognised in profit or loss.

12.1 Basis of consolidation (Continued)

12.1.2 Subsidiaries

Subsidiaries are entities controlled by the Group. The financial statements of subsidiaries are
included in the consolidated financial statements from the date that control commences until the
date that control ceases.

The accounting policies of subsidiaries have been changed when necessary to align them with the
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.

The grant by the company of options over its equity instruments to the employees of subsidiary
undertakings in the group is treated as a capital contribution to that subsidiary undertaking. The
fair value of employee services received, measured by reference to the grant date fair value, is
recognised over the vesting period as an increase to investment in subsidiary undertakings, with a
corresponding credit to equity.

Losses applicable to the non-controlling interests in a subsidiary are allocated to the non-controlling
interests even if doing so causes the non-controlling interests to have a deficit balance.

A list of controlled entities is contained in Note 11 Interest In Subsidiaries of the financial statements.

12.1.3 Loss of control

Upon the loss of control, the Group derecognises the assets and liabilities of the subsidiary, any non-
controlling interests and the other components of equity related to the subsidiary. Any surplus or
deficit arising on the loss of control is recognised in profit or loss. If the Group retains any interest
in the previous subsidiary, then such interests are measured at fair value at the date control is lost.
Subsequently it is accounted for as an equity-accounted investee or as an available-for-sale financial
asset depending on the level of influence retained.

12.1.4 Transactions eliminated on consolidation

All intra-group balances and transactions, and any unrealised income and expenses arising from
intra-group transactions, are eliminated in preparing the consolidated financial statements.

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

SECTION D. UNRECOGNISED ITEMS

Note 14 Events subsequent to reporting date

This section of the notes includes other information that must be disclosed to comply with the
accounting standards and other pronouncements, but that is not immediately related to individual
line items in the financial statements.

Note 13 Commitments

13.1 Operating lease commitments - Group as lessee

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.

Note 15 Contingent liabilities

The Group has a 1-year lease for a warehouse in Malaysia. The future minimum rental payments under non-
cancellable tenancy agreements are nil (2017: $6,781).

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 $8,620 increased by CPI per hectare per annum.

ATM Metabolics filed a claim for unspecified damages the Company in May 2018 in relation to alleged to a breach
of contract/warranty. The Company has disclaimed liability and is defending the action. It is not practical to estimate
the potential effect of this claim but legal advice indicates that it is not probable that a significant liability will arise.
The Company has filed a counter law suit alleging ATM Metabolics had violated the terms of the agreement.

Future minimum rentals payable under non-cancellable operating leases as at 31 December are as follows:

There are no other contingent liabilities as at 31 December 2018 (31 December 2017: Nil).

Within one year

After one year but not more than five years

After five years

Total

Consolidated

Parent

2018
$

8,620

34,480

8,620

51,720

2017
$

15,401

34,480

25,860

75,741

2018
$

8,620

34,480

8,620

51,720

2017
$

15,401

34,480

25,860

75,741

13.2 Finance lease and hire purchase commitments - Group as lessee

The Group has finance leases and hire purchase contracts for certain motor vehicles. The tenure for the hire
purchases is 5-7 years. These leases have terms of renewal but no purchase options and escalation clauses.
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:

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

13.3 Capital commitments

None.

Consolidated

2018
$

23,898

45,364

69,262

(5,762)

63,500

2017
$

17,623

35,072

52,695

(3,657)

49,038

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

SECTION E. OTHER INFORMATION

Note 18 Auditor’s remuneration

Note 16 Key Management Personnel compensation (KMP)

Dr Rajen Manicka

The names and positions of KMP are as follows:
n
n Mr Daniel Joseph O’Connor
n Mr Chan

Managing Director and Chief Executive Officer
Non-Executive Director
Non-Executive Director

Information regarding individual directors and executives’ compensation and some equity instruments disclosures
as required by the Corporations Regulations 2M.3.03 is provided in the Remuneration report table on page 21.

Short-term employee benefits

Post-employment benefits

Share-based payments

Total

Note 17 Related party transactions

2018
$

350,415

51,000

2017
$

308,881

42,728

1,225,327

401,415

1,576,936

Transactions between related parties are on normal commercial terms and conditions no more favourable than
those available to other parties unless otherwise stated.

Legal fees paid to Sumita K & Associates for
provision of legal advice. Mrs Sumita’s husband is
a director of the Company

Director fee paid to Mrs Sumita

Consultation fee paid to Samabudi Consulting Sdn
Bhd which director have interest

Impairment of loans to Galen Biomedical Inc., and
entity 75% owned by Rajen Manicka (refer also note
5.3.2)

Consolidated

2018
$

11,938

47,750

2017
$

10,919

49,134

380,066

131,678

Parent

2018
$

2017
$

Loan from subsidiary

Loan to subsidiary

1,067,617

1,889,450

2,172,321

1,367,018

Remuneration of the auditor for:
n Auditing or reviewing the financial reports:
o Stanton's International (Australia)

o Russell Bedford LC & Company (Malaysia)

n Taxation and independent expert services provided by a related practice of

the Auditor, Stanton's International (Australia)

2018
$

2017
$

69,850

31,170

15,015

116,035

45,000

27,782

72,782

Note 19 Earnings per share (EPS)

19.1 Reconciliation of earnings to profit or loss

Loss for the year

Less: loss attributable to non-controlling equity interest

Loss used in the calculation of basic and diluted EPS

19.2 Weighted average number of ordinary shares outstanding

during the year used in calculation of basic EPS

Weighted average number of dilutive equity instruments
outstanding

19.3 Weighted average number of ordinary shares outstanding

during the year used in calculation of basic EPS

19.4 Earnings per share

Basic EPS (cents per share)

Diluted EPS (cents per share)

Note

2018
$

2017
$

(2,203,360)

(3,174,268)

(591,213)

(143,978)

(1,612,147)

(3,030,290)

2018
No.

2017
No.

206,708,950

179,185,314

19.5

N/A

206,708,950

179,185,314

2018
₵

(0.78)

N/A

2017
₵

(1.69)

N/A

19.5

19.5 As at 31 December 2018 the Group has 34,954,205 unissued shares under options (2017: 46,362,616) and
9,000,000 performance shares on issue (2017: 9,000,000). The Group does not report diluted earnings per
share on losses generated by the Group. During the 2018 year the Group’s unissued shares under option and
partly-paid shares were anti-dilutive.

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 20 Share-based payments

Note 20 Share-based payments (Continued)

20.1 Share-based payments:

Note

Recognised as Share-based payment expense
Recognised in Consultancy and professional services

20.2.1a,d,e,f,g

20.2.1b,c, e

2018
$

90,523
-

2017
$

1,589,954
624,410

Recognised in Research and Development expenses

20.2.1c

322,231

Gross share-based payments

90,523

2,536,595

20.2 Share-based payment arrangements in effect during the period

20.2.1 Share-based payments recognised in profit or loss

a. Director options - Daniel O’Connor

As approved by shareholders 18 May 2017 the Company issued 3,500,000 Options to provide a
performance linked incentive component in the Directors’ remuneration packages to assist the
Company in rewarding his performance, and to align their interests with those of Shareholders on
the terms as detailed below and in Note 20.4:

Number under Option

Date of Expiry

Exercise Price

Vesting Terms

3,500,000

23 March 2020

$0.20

Immediately upon issue

b. Plant Consultant and Patent Holders Options

On 23 March 2017 the Company granted 6,500,000 Options to Patent Holders and Plant Consultant
in the proportions as follows, and as detailed below and in Note 20.4:
• Professor Jaya Henry
• Mr Neville King
• GRDG Sciences LLC

2,000,000
2,000,000
2,500,000

Number under Option

Date of Expiry

Exercise Price

Vesting Terms

6,500,000

23 March 2020

$0.20

Immediately upon issue

c. Patent Holder and Consultant Options

On 23 June 2017, in consideration for a pro-biotics patent and consultancy services, the
Company granted 11,000,000 Options to Biolife Ingredients GmbH (Biolife) and Palm Best
Limited (Palm) as detail below:

Number under Option Date of Expiry Exercise Price

Issued To

Vesting Terms

6,000,000

3,000,000

2,000,000

23 June 2020

$0.20

$0.25

$0.30

50% Biolife / 50% Palm Immediately upon issue

50% Biolife

Immediately upon issue

20.2 Share-based payment arrangements in effect during the period (Continued)

20.2.1 Share-based payments recognised in profit or loss (Continued)

d. Co-Inventor and Patent Provider Options

On 26 July 2017 the Company granted 2,000,000 Options to Professor Jaya Henry, co-inventor of
the Low GI and Low Sodium Patents, as detailed below and in Note 20.4:

Number under Option

Date of Expiry

Exercise Price

Vesting Terms

2,000,000

23 March 2020

$0.20

Immediately upon issue

e. Incentive Options

On 16 October 2017 the Company granted 7,000,000 Options to incentivise joint venture partners
and consultants to the Company in the proportions as follows, and as detailed below and in Note
20.4:
• Ms Nadja Piatka
• Nadja Foods LLC
• Palm Best Limited

2,000,000
3,000,000
2,000,000

Number under Option

Date of Expiry

Exercise Price

Vesting Terms

7,000,000

16 October 2020

$0.20

Immediately upon issue

f. Subsidiary Director Options

In consideration for serving on the Board of LiteFoods Inc. the Company issued Mr Roscoe Michael
Moore Jr 1,000,000 Options as detailed below and in Note 20.4:

Number under Option

Date of Expiry

Exercise Price

Vesting Terms

1,000,000

31.12.19

$0.1000

Immediately upon issue

g. Director Performance Rights
As approved by shareholders 9 January 2017 the Company issued 9,000,000 performance rights
to Dr Rajen Manicka to provide a performance linked incentive component in the Directors’
remuneration packages to assist the Company in rewarding his performance, and to align their
interests with those of Shareholders on the terms as detailed below and as detailed below and in
Note 20.5:

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 20 Share-based payments (Continued)

20.2 Share-based payment arrangements in effect during the period (Continued)

20.4 Fair value of options granted during the period

20.2.1 Share-based payments recognised in profit or loss (Continued)

g. Director Performance Rights (Continued)

Performance Condition

Class of
Performance
Right

Performance
rights
No.

Milestone Date

Expiry Date

Performance
Condition
Satisfied

Upon the Company signing
a binding agreement for the
sale, distribution, licensing
and/or manufacturing of at
least 3 Low GI Products.

Upon the Company
securing the patents
associated with its Low GI
Products.

The Company achieving an
EBIT of at least $2.2m from
the sale of Low GI Products.

The Company achieving
an EBIT of at least $4m
from the sale of Low GI
Products.

3,600,000

30 June 2020

2,700,000

30 June 2020

1,800,000

30 June 2021

900,000

30 June 2021

5 years from
the date of
issue

Yes

5 years from
the date of
issue

No, probability
employed in
estimated 100%

5 years from
the date of
issue

No, probability
employed in
estimated
100%

20.3 Movement in share-based payment arrangements during the period

A summary of the movements of all Company options issued as share-based payments is as follows:

2018

2017

Outstanding at the beginning of the year
Granted
Exercised
Expired

Number of
Options

46,362,616
-
(3,500,000)
(7,908,411)

Weighted
Average Exercise
Price

$0.2033
-
$0.0600
$0.2250

Number of
Options

30,692,782
31,000,000
(12,330,166)
(3,000,000)

Outstanding at year-end

34,954,205

$0.2127

46,362,616

Exercisable at year-end

34,954,205

$0.2127

46,362,616

Weighted
Average Exercise
Price

$0.1100
$0.2016
$0.0600
$0.1000

$0.2033

a. 3,500,00 options were exercised during the year at $0.06 cents per option.
b. The weighted average remaining contractual life of options outstanding at year end was 1.32 years (2017:
1.89 years). The weighted average exercise price of outstanding options at the end of the reporting period
was $0.2127 (2017: $0.2055).

c. The fair value of the options granted to employees is deemed to represent the value of the employee

services received over the vesting period.

The fair value of the options granted to employees is deemed to represent the value of the employee services
received over the vesting period.

No options were granted during the year. The weighted average fair value of options granted during the 2017
year was $0.0204

20.5 Fair value of performance rights granted during the period

The probability ability of conditions being met represents an estimate by management.

20.5.1 Accounting policy

The grant-date fair value of equity-settled share-based payment arrangements granted to holders
of equity-based instruments (including employees) are generally recognised as an expense, with a
corresponding increase in equity, over the vesting period of the awards. The amount recognised as
an expense is adjusted to reflect the number of awards for which the related service and non-market
performance conditions are expected to be met, such that the amount ultimately recognised is based
on the number of awards that meet the related service and non-market performance conditions at
the vesting date.

For share-based payment awards with non-market conditions, the grant-date fair value of the
share-based payment is measured to reflect such conditions and there is no true-up for differences
between expected and actual outcomes. In determining the fair value of share-based payments
granted, a key estimate and judgement is the volatility input assumed within the pricing model.

The Company uses historical volatility of the Company to determine an appropriate level of volatility
expected, commensurate with the expected instrument’s life

20.5.2 Key estimate

The Group measures the cost of equity-settled transactions with employees by reference to the fair
value of the equity instruments at the date at which they are granted. The fair value is determined
by an internal valuation using a Black-Scholes option pricing model, using the assumptions detailed
above.

Note 21 Operating segments

21.1 Identification of reportable segments

The Group has identified its operating segments based on the internal reports that are provided to the Board
of Directors (the Board) on a monthly basis and in determining the allocation of resources. Management
has identified the operating segments based on the principal activities – Supplements; Sheep Collagen; Food
Ingredients; and Corporate.

21.2 Basis of accounting for purposes of reporting by operating segments

21.2.1 Accounting policies adopted

Unless stated otherwise, all amounts reported to the Board, being the chief decision maker 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.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 201821.2 Basis of accounting for purposes of reporting by operating segments

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 21 Operating segments (Continued)

21.2 Basis of accounting for purposes of reporting by operating segments (Continued)

21.4 Segment Financial Performance

21.2.2 Inter-segment transactions

All such transactions are eliminated on consolidation of the Group’s financial statements.

Inter-segment loans payable and receivable are initially recognised at the consideration received/
to be received net of transaction costs. If inter-segment loans receivable and payable are not on
commercial terms, these are not adjusted to fair value based on market interest rates. This policy
represents a departure from that applied to the statutory financial statements.

21.2.3 Segment assets

Where an asset is used across multiple segments, the asset is allocated to that segment that receives
majority economic value from that asset. In the majority of instances, segment assets are clearly
identifiable on the basis of their nature and physical location.

21.2.4 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. Borrowings and tax liabilities are generally considered
to relate to the Group as a whole and are not allocated. Segment liabilities include trade and other
payables and certain direct borrowings.

21.2.5 Unallocated items

The following items of revenue, expenses, assets and liabilities are not allocated to operating
segments as they are not considered part of the core operations of any segment:

n Depreciation and amortisation
n Gains or losses on sales of financial and non-financial assets
n Investment income
n Corporate transaction accounting expense

21.3 Types of products and services by segment

21.3.1 Supplements

This operating segment is involved in the manufacture and wholesale distribution of dietary
supplements.

21.3.2 Sheep collagen

This operating segment is involved in the manufacture and distribution of cosmetic grade collagen.

21.3.3 Food ingredients

This operating segment is involved in the manufacture and wholesale distribution of healthy food
ingredients.

Year ended 31 December 2018

Revenue
n External sales
n Other income

Total segment revenue
Reconciliation of segment revenue
to group revenue:

Total group revenue and other
income

Segment profit/(loss) from
continuing operations before tax

Loss before income tax

Year ended 31 December 2017

Revenue
n External sales
n Other income
Total segment revenue

Reconciliation of segment revenue
to group revenue:
n Intra-segment eliminations
Total group revenue and other
income

Segment profit/(loss) from
continuing operations before tax
Loss before income tax

Supplements
$

Sheep
Collagen
$

Food
Ingredients
$

Corporate
$

Total
$

7,699,489

215,068

25,998

7,940,555

136,387

7,699,489

215,068

25,998

136,387

8,076,942

1,213,228

(404,341)

(617,809)

(2,269,356)

(2,078,278)

8,076,942

7,176,607

392,400

7,176,607

392,400

7,569,007

338,736

7,907,743

330,632

(516,509)

(158,984)

(2,989,625)

(3,334,486)

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 21 Operating segments (Continued)

21.5 Segment Financial Position

At as 31 December 2018

Segment Assets
Reconciliation of segment assets to
group assets:
n Intra-segment eliminations
Total assets

Segment Liabilities
Reconciliation of segment liabilities to
group liabilities
n Intra-segment eliminations
Total liabilities

As at 31 December 2017

Segment Assets
Reconciliation of segment assets to
group assets:
n Intra-segment eliminations
Total assets

Segment Liabilities
Reconciliation of segment liabilities to
group liabilities
n Intra-segment eliminations
Total liabilities

Supplements
$

Sheep
Collagen
$

Food
Ingredients
$

Corporate
$

Total
$

5,361,905

5,915,794

621,638

11,899,337

(4,471,905)

7,427,432

1,366,962

1,174,106

2,224,204

4,765,272

Note 21 Operating segments (Continued)

21.6 Revenue by geographical region

Revenue attributable to external customers is disclosed below,
based on the location of the external customer:

Australia

Malaysia

United States

Total revenue

Note

2018
$

2017
$

215,068

392,400

7,699,489

7,176,607

25,998

21.4

7,940,555

7,569,007

21.7 Assets by geographical region

The location of segment assets by geographical location of the
assets is disclosed below:

(1,901,512)

2,863,760

Australia

Malaysia

United States

Total assets

5,361,905

5,915,794

621,638

5,073,769

4,512,336

932,911

21.5

11,899,337

10,519,016

4,512,336

5,073,769

932,911

10,519,016

21.8 Major customers

(3,705,261)

6,813,755

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 58.3% (2017: 56.4%) 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 93.0%
(2017: 99.4%) of revenue for this segment.

1,007,196

2,191,435

1,296,191

4,494,822

(1,164,579)

3,330,243

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 22 Parent entity disclosures

Note 23 Statement of significant accounting policies

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.

This note provides a list of the significant accounting policies adopted in the preparation of these consolidated
financial statements to the extent they have not already been disclosed in the other notes above. These policies
have been consistently applied to all the years presented, unless otherwise stated.

22.1 Financial Position of Holista CollTech Limited

Note

Current assets

Non-current assets

Total assets

Current liabilities

Non-current liabilities

Total liabilities

Net assets

Equity

Issued capital

Share-based payment reserve

Accumulated losses

Total equity

22.2 Financial performance of Holista CollTech Limited

Loss for the year

Other comprehensive income

Total comprehensive income

22.3 Guarantees

2018
$

43,688

2017
$

68,093

5,517,170

5,005,677

5,560,858

5,073,770

1,174,107

2,191,435

1,174,107

2,191,435

4,386,751

2,882,335

13,057,442

10,047,441

4,899,791

4,809,268

(13,570,482)

(11,974,374)

4,386,751

2,882,335

2018
$

2017
$

(1,596,108)

(3,003,260)

(1,596,108)

(3,003,260)

There are no guarantees entered into by Holista CollTech Limited for the debts of its subsidiaries as at 2018
(2017: none).

22.4 Contractual commitments

The parent company has no capital commitments at 2018 (2017: $nil). The parent company other
commitments are disclosed in Note 13 Commitments.

22.5 Contingent liabilities

There are no guarantees entered into by Holista CollTech Limited for the debts of its subsidiaries as at 2018
(2017: none).

23.1 Basis of preparation

23.1.1 Reporting Entity

Holista Colltech Limited (Holista or the Company) is a listed public company limited by shares,
domiciled and incorporated in Australia. These are the consolidated financial statements and notes
of Holista and controlled entities (collectively the Group). The financial statements comprise the
consolidated financial statements of the Group. For the purposes of preparing the consolidated
financial statements, the Company is a for-profit entity. The Group is a for-profit entity and is
primarily involved in the Dietary Supplements, Healthy Food Ingredients, and Sheep (Ovine) Collagen
industries.

The separate financial statements of Holista, as the parent entity, have not been presented with this
financial report as permitted by the Corporations Act 2001 (Cth).

23.1.2 Basis of accounting

These financial statements are general purpose financial statements which have been prepared in
accordance with Australian Accounting Standards and Interpretations of the Australian Accounting
Standards Board (AAS Board) and International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB), and the Corporations Act 2001 (Cth).

Australian Accounting Standards (AASBs) set out accounting policies that the AAS Board has
concluded would result in a financial report containing relevant and reliable information about
transactions, events and conditions to which they apply. Compliance with AASBs ensures that the
financial statements and notes also comply with IFRS as issued by the IASB.

The financial statements were authorised for issue on 29 March 2019 by the directors of the
Company.

23.1.3 Going Concern

The financial report has been prepared on a going concern basis, which contemplates the continuity
of normal business activity and the realisation of assets and the settlement of liabilities in the
ordinary course of business.

The Group incurred a loss for the year of $2,203,360 (2017: $3,174,268 loss) and a net cash out-
flow from operating activities of $2,200,266 (2017: $240,922 in-flow). As at 31 December 2018, the
Company working capital of $2,464,785 (2017: $964,764 working capital), as disclosed in Note 9 of
the Issued capital note.

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.

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 23 Statement of significant accounting policies (Continued)

23.1 Basis of preparation (Continued)

23.1.3 Going Concern (Continued)

23.1 Basis of preparation (Continued)

23.1.5 New and Amended Standards Adopted by the Group

After a drop in 2018 due the plant shut down and upgrade to improve processes, the Group’s
cosmetic collagen business has bounced back and is expected to generate revenue of $567,000 in
2019 with a growth of 163% over 2018. There is also expected business with a multi-level company
in Malaysia. This will be a much higher margin business.

In addition to the cosmetic and food grade collagen, the Group has also entered into the medical
grade collagen and received its ISO certification and has started supplying samples to overseas
customers.

In respect to the Healthy Food Ingredients, the Group expect to see significant revenue in Australia
and Asia and Europe in the next 12 months from the low-GI white bread, flat breads and biscuits. The
Group’s US indirect subsidiary, Holista Foods Inc, to distribute our low-GI product in North America
and has met with success with the low GI noodles. This business segment is expected to generate
revenue in next financial year.

The Group also launched 80Less – a low calorie sugar replacement that would a useful tool for
companies trying the meet lower sugar requirement to avoid the sugar tax. “80% less sugar” is also
a very powerful label claim in an increasingly “sugar hating world”.

The Group’s sales of dietary supplement ingredients to companies in the Multi-Level Marketing
space declined by 1% last year but are expected to grow in FY2019 as the Group ramps up activities
in this space. These supplement ingredients are for carbohydrate management, immunity boosting
and stem cell boosting segments.

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.

23.1.4 Comparative figures

Where required by AASBs comparative figures have been adjusted to conform to changes in
presentation for the current financial year.

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.

The Group has applied the following standards and amendments for the first time for their annual
reporting period commencing 1 January 2018:

n AASB 9 Financial Instruments;
n AASB 15 Revenue from Contracts with Customers;
n AASB 2016-5 Amendments to Australian Accounting Standards - Classification and Measurement

of Share-based Payment Transactions;

n Interpretation 22 Foreign Currency Transactions and Advance Consideration.

The group also elected to adopt the following amendments early:

n AASB 2018-1 Amendments to Australian Accounting Standards - Annual Improvements 2015-

2017 Cycle.

The classification and measurement requirements of AASB 9 did not have a significant impact to the
Group. The effects upon the adoption of AASB 15 have been disclosed in note 24

23.2 Value added taxes

Value-added tax (VAT) is the generic term for the broad-based consumption taxes that the Group is exposed
to such as: Australia (Goods and Services Tax or GST) and in Malaysia (Goods and Sales Tax or GST), hereafter
collectively referred to as GST.

Revenues, expenses, and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the taxation authority. In these circumstances the GST is recognised as part
of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the
statement of financial position are shown inclusive of GST.

The net amount of GST recoverable from, or payable to, the Australian Taxation Office (or jurisdictional
equivalent) is included as a current asset or liability in the balance sheet.

Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of
investing and financing activities, which are disclosed as operating cash flows.

Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to,
the taxation authority.

23.3 Foreign currency transactions and balances

23.3.1 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 legal parent entity’s functional and presentation
currency.

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 23 Statement of significant accounting policies (Continued)

23.3 Foreign currency transactions and balances (Continued)

23.3.2 Transaction 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 the 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 gain or loss is directly recognised in other
comprehensive income, otherwise the exchange difference is recognised in the profit or loss.

23.3.3 Group companies and foreign operations

The financial results and position of foreign operations whose functional currency is different from
the Group’s presentation currency are translated as follows:

n assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
n income and expenses are translated at average exchange rates for the period; and
n retained earnings are translated at the exchange rates prevailing at the date of the transaction.

Exchange differences arising on translation of foreign operations are transferred directly to the
Group’s foreign currency translation reserve in the statement of financial position. These differences
are recognised in the profit or loss in the period in which the operation is disposed.

23.4 Use of estimates and judgments

The preparation of consolidated financial statements requires management to make judgements, estimates
and assumptions that affect the application of policies and reported amounts of assets and liabilities, income
and expenses. These estimates and associated assumptions are based on historical experience and various
factors that are believed to be reasonable under the circumstances, the results of which form the basis of
making the judgements about carrying values of assets and liabilities that are not readily apparent from
other sources. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates
are recognised in the period in which the estimate is revised and in any future periods affected.

Judgements made by management in the application of AASBs that have significant effect on the consolidated
financial statements and estimates with a significant risk of material adjustment in the next year are discussed
in Note 23.4.1.

23.4.1 Critical Accounting Estimates and Judgments

Management discusses with the Board the development, selection and disclosure of the Group’s
critical accounting policies and estimates and the application of these policies and estimates. The
estimates and judgements that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are discussed below.

23.4 Use of estimates and judgments (Continued)

23.4.1 Critical Accounting Estimates and Judgments (Continued)

a. Key judgements and estimates – Business Combinations

Refer Note 10 Business combinations.

b. Key estimate – Taxation

Refer Note 4 Income Tax.

c. Key estimate – Impairment of goodwill

Refer Note 6.3 Intangible assets.

23.5 Fair Value

23.5.1 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 AASB.

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 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 (i.e. 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 (i.e. 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 considers 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.

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

Note 23 Statement of significant accounting policies (Continued)

23.5 Fair Value (Continued)

23.5.2 Fair value hierarchy

AASB 13 Fair Value Measurement 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

Level 2

Level 3

Measurements based on
quoted prices (unadjusted)
in active markets for identical
assets or liabilities that the
entity can access at the
measurement date.

Measurements based on
inputs other than quoted
prices included in Level 1 that
are observable for the asset
or liability, either directly or
indirectly.

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:
n if a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or

vice versa; or

n 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.

23.5.3 Valuation techniques

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:

n Market approach: valuation techniques that use prices and other relevant information generated

by market transactions for identical or similar assets or liabilities.

n Income approach: valuation techniques that convert estimated future cash flows or income and

expenses into a single discounted present value.

n Cost approach: valuation techniques that reflect the current replacement cost of an asset at its

current service capacity.

23.5 Fair Value (Continued)

23.5.3 Valuation techniques (Continued)

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.

23.6 New Accounting Standards and Interpretations not yet mandatory or early 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 financial statements.
Those which may be relevant to the Group are set out below. The Group does not plan to adopt these
standards early.

a. AASB 16: Leases (applicable to annual reporting periods commencing on or after 1 January 2019).

AASB 16 removes the classification of leases as either operating leases or finance leases for the lessee
effectively treating all leases as finance leases. Short term leases (less than 12 months) and leases of
a low value are exempt from the lease accounting requirements. Lessor accounting remains similar to
current practice.

The main changes introduced by the new Standard are as follows:

i. 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);

ii. 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;

iii. 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;

iv. 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

v. additional disclosure requirements.

The Directors anticipate that the adoption of AASB 16 will not have a material impact on the Group’s
recognition of leases and disclosures).

Notes to the Consolidated Financial Statements (Continued)
For The Year Ended 31 December 2018

8,472,259

(531,704)

Subsequent to the lodgement of the ASX Appendix 4E:

Note 24 Effects of Changes in Accounting Policy

The Group and the Company applied AASB 15 using the modified retrospective method of adoption with the date
of initial application of 1 January 2018. Under this method, the cumulative effect of all contracts that are not
completed as at 1 January 2018 is recognised at the date of initial application as an adjustment to the opening
balance of retained earnings. The comparative information was not restated and continues to be reported under
AASB 118.

Set out below, are the amounts by which each financial statement line item of the Group is affected as at and for
the year ended 31 December 2018 as a result of the adoption of AASB 15. Had the Group continued to report in
accordance with AASB 118 Revenue for the year ended 31 December 2018, it would have reported the following
amounts in the financial:

At as 31 December 2018

Revenue

Cost of Sales

Administrative expenses

Loss before income tax

Inventories

Right of return assets

Refund liabilities

Other payables and accruals

Total equity

Note

24.1,24.2

24.2

24.1

24.1,24.2

24.2

24.1,24.2

As reported
2018
$

Amounts
reported under
previous AASB$

Increase /
(Decrease)
$

7,940,555

(4,611,695)

(5,407,138)

(2,078,278)

442,621

60,894

(312,407)

(1,661,481)

(4,563,672)

(4,670,685)

(5,778,201)

(1,976,627)

503,515

(1,973,888)

(4,665,323)

58,990

371,063

(101,651)

(60,894)

60,894

(312,407)

312,407

101,651

The reasons for the significant changes in each of the financial statements line item of the Group as at 31 December
2018 and for the year ended 31 December 2018 are described below following.

24.1 Volume rebates

The Group offers its customers volume rebates where the Group will make cash payment to its customers
once the customers reaches a specified cumulative level of purchase.

Under AASB 118, the Group estimated the expected volume rebates using the weighted average amount of
rebates approach and included an accrual for rebates in other payables and accruals with a corresponding
adjustment to the administrative expenses. Under AASB 15, retrospective volume rebates give rise to variable
consideration and should be estimated at contract inception to determine the transaction price. To estimate
the variable consideration to which it will be entitled, the Group applied the most likely outcome method
for contracts with single volume threshold and the expected value method for contracts with more than one
volume threshold.

Upon adoption of AASB 15, when the Group accounts for consideration payable to a customer as a reduction
to the transaction price, a liability would be recorded until the related payments to the customers are made.

Note 24 Effects of Changes in Accounting Policy (Continued)

24.2 Rights of return

The Group provides the customers with a right to return the goods within a specified period.

Under AASB 15, the consideration received from the customers is variable because the contract allows
the customers to return the products. Revenue is recognised to the extent that it is highly probable that
a significant reversal in the amount of cumulative revenue recognised will not occur. The Group used the
expected value method to estimate the goods that will be returned. For goods expected to be returned, the
Group presented a refund liability and an asset for the right to recover products from a customer separately
in the statement of financial position.

Note 25 Adjustments made subsequent to the lodgement of the ASX Appendix 4E

a. In the statement of comprehensive income, the Group reallocated $120,757 from Other expenses to Distribution

costs as follows:

i.
Increase in – Distribution costs: $120,757;
ii. Decrease in – Other expenses: ($120,757);
This reallocation had no effect on net profit.

b. In the statement of position, the Group reallocated the following balances

Increase in Other current assets: 13,844;

i.
ii. Decrease in Other non-current assets: (13,844);
iii. Increase in Deferred tax asset: 13,957;
iv. Reduction of asset balance in Current tax liability: (13,957);
v. Decrease in Current borrowings: (79,489);
vi. Increase in Non-current borrowings: 79,489;
This reallocation had no effect on net assets.

c. Issued capital was corrected to recognise $10,000 in transaction costs, correcting to total balance in equity.

Note 26 Company details

The registered office of the Company is:

Address:
Street:

Telephone:
Facsimile:

283 Rokeby Road
SUBIACO WA 6008
+61 (0) 8 6141 3500
+61 (0) 8 6141 3599

Postal:

PO Box 52
WEST PERTH WA 6872

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018DIRECTORS’
DECLARATION

INDEPENDENT AUDITOR’S REPORT

Stantons International Audit and Consulting Pty Ltd
trading as

Chartered Accountants and Consultants

The Directors of the Company declare that:

The financial statements and notes, as set out on pages 30 to 99, are in accordance with the Corporations Act
2001 (Cth) and:

(a)

comply with Accounting Standards;

INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
HOLISTA COLLTECH LIMITED

(b) are in accordance with International Financial Reporting Standards issued by the International Accounting

Report on the Audit of the Financial Report

PO Box 1908
West Perth WA 6872
Australia

Level 2, 1 Walker Avenue
West Perth WA 6005
Australia

Tel: +61 8 9481 3188
Fax: +61 8 9321 1204

ABN: 84 144 581 519
www.stantons.com.au

Standards Board, as stated in Note 1 to the financial statements; and

ended on that date of the Group.

(d)

the Directors have been given the declarations required by s.295A of the Corporations Act 2001 (Cth);

in the directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its debts
as and when they become due and payable.

100

This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on behalf of
the directors by:

Our Opinion

We have audited the financial report of Holista Colltech Limited (the Company and its controlled
entities (the Group), which comprises the consolidated statement of financial position as at 31
December 2018, the consolidated statement of comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and
notes to the financial statements, including a summary of significant accounting policies, and the
directors' declaration.

In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:

101

(i)

(ii)

giving a true and fair view of the Group's financial position as at 31 December 2018 and of
its financial performance for the year then ended; and
complying with Australian Accounting Standards and the Corporations Regulations 2001.

DR RAJEN MANICKA
Managing Director
Dated this Friday, 29 March 2019

Basis for Opinion

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor's Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the Group in accordance with the
auditor independence requirements of the Corporations Act 2001 and the ethical requirements of
the Accounting Professional and Ethical Standards Board's APES 110 Code of Ethics for
Professional Accountants (the Code) that are relevant to our audit of the financial report in Australia.
We have also fulfilled our other ethical responsibilities in accordance with the Code.

We confirm that the independence declaration required by the Corporations Act 2001, which has
been given to the directors of the Company, would be in the same terms if given to the directors as
at the time of this auditor's report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.

Material Uncertainty Related to Going Concern

Without modifying our opinion expressed above, attention is drawn to the following matter:

As referred to Note 23.1.3 to the financial statements, the consolidated financial statements have
been prepared on a going concern basis. The Group incurred a loss of $2,203,360 and cash outflow
from operating activities of $2,200,266 for the financial year ended 31 December 2018, respectively.
As at 31 December 2018, the Group had cash and cash equivalents totalling $357,705, working
capital of $2,464,785.

Liability limited by a scheme approved
under Professional Standards Legislation

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018

Independent Auditor’s Report(Continued)

The ability of the Group to continue as going concern is subject to the future profitability of the
Group and/or successful recapitalisation of the Company. In the event that the Group is not
successful in commencing profitable operations and or raising further capital, the Group may not be
able to meet their liabilities as and when they fall due and the realisable value of the Group’s assets
may be significantly less than book values.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the financial report of the current year. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.

Key Audit Matters

How the matter was addressed in the audit

102

Carrying value of amounts advanced to a related
party and a third party

At 31 December 2018, the Group has advanced an
amount to a related party totaling $258,082 and to a
third party totaling $290,301 inclusive of accrued
interest. The amount advanced to a related party is
repayable by 1 September 2019 and attracts 5%
interest. The amount advanced to a third party is
repayable on upon demand and attracts 5% interest.
Refer to Note 5.2.4 to the financial statements.

The Group has advanced funds to its related party
and a third party in relation to the selling of the
“Emulin Plus” brand
in North America. The
recoverability of the receivable is a key audit matter,
due to the size of the balance (being 7.4% of the total
assets of the Group) and the level of judgement
in evaluating managements’
required by us
assessment of its recoverability.

Carrying value of intangible assets

At 31 December 2018,
the Group recognised
intangibles of $954,717. Refer to Note 6.3 to the
financial statements.

Included in the total intangible assets of the Group is
the goodwill acquired from the acquisition of one
subsidiary in the prior year amounting to $568,161.

licenses, and

this amounted

The remaining intangible asset balance relates to
to
patents and
$386,556. Based on the agreement dated 9 January
2017, the Group has the licence to use the “Emulin
Plus” trademark for a period of 5 years with an
automatic renewal period of an additional 5 years,
provided that there is no termination during the initial
period. During the year, the Group commenced its
legal proceedings against the owner of the “Emulin
Plus” trademark.

Inter alia, our audit procedures included the following:

i. Obtained

external

confirmation

the

receivables as at 31 December 2018;

ii. Discussed with key management personnel the

terms of the loan and its recoverability;

iii. Performed audit work to ascertain the financial

position of the borrower; and

iv. Audited the sales forecast provided by the
borrowers and assessed reasonableness of the
forecasts provided.

Inter alia, our audit procedures included the following:

i. Auditing the appropriateness of management’s
evaluation of the carrying value of intangible
assets to determine any asset impairment;

ii. Auditing and assessing for reasonableness, the
Group’s assumptions and estimates used to
determine
the
intangible assets;

the recoverable amount of

iii. Ascertained as

there are any
to whether
indicators that would give rise to an impairment;

iv. Auditing the value in use calculation, including
assessing the recoverable amount of the cash-
generating unit (“CGU”) and thus ensuring that
the recoverable amount of the CGU is higher
than the carrying amount of goodwill recorded
as at 31 December 2018; and

The Group is required to annually test the intangibles
balance for impairment. This annual impairment test
is significant to our audit because the balance of
$954,717 (12.9% of the total assets of the Group) as
at 31 December 2018 is material to the financial
statements.

Management’s assessment process of the carrying
value of goodwill is highly judgmental and is based
on assumptions, specifically in respect of the sales
forecast from the sale of “low-GI” noodles for the
next 5 years. In addition, estimates and judgments
in assessing
were also used by management
recoverability in relation to the use of “Emulin Plus”
brand.

Revenue recognition

The Group’s revenue amounted to $7,940,555.

The Group has applied AASB 15 using the modified
retrospective method of adoption with the initial date
of application of 1 January 2018. Under this method,
the cumulative effect of all contracts that are not
completed as at 1 January 2018 are recognised at
the date of initial application as an adjustment to the
retained earnings. The
opening balance of
restated and
comparative
continues to be reported under AASB 118.

information was not

Recognition of the Group’s revenue is complex due
to volume rebates offered to its customers where the
Group will make cash payments to its customers
once the customer reaches a specified cumulative
level of purchase. At the same time, the Group
provides the customers with a right to return the
goods within a specified period.

This is considered to be a key audit matter as the
recognition of revenue involves significant judgment
and estimates made by Management including the
determination of
that
should be estimated at the inception of the contract
to determine the transaction price.

the variable consideration

Refer to Note 24 to the financial statements.

v. Assessing the variables involved in ascribing a
value to the licence for “Emulin Plus” per the
sales forecasts, including the change in the
useful life of the licence and taking into account
the future plans with respect to this licence (in
light of the legal proceedings surrounding this
licence).

Inter alia, our audit procedures included the following:

i. We have audited the Group’s implementation of
AASB 15, including recognition of the effect on
opening equity and changes to procedures,
accounting guidelines, disclosures and systems
to support the correct revenue recognition. We
reviewed and discussed the group accounting
the effect on opening equity and
policy,
disclosures with Management, including key
accounting estimates and judgments made by
management.

ii. Determined whether revenue was appropriately
accounted for and disclosed within the financial
statements. This included:

103

 Evaluating

the revenue recognition
policies for all material sources of
revenue, performing detailed testing,
revenue was being
ensuring
recognised appropriately in line with
Australian Accounting Standards and
policies disclosed within the financial
statements;

that

 Substantively

testing a sample of
revenue transactions throughout the
financial year. This included tracing
to supporting sales
sales
invoices
documentation,
shipping
documentation and cash receipts to
ensure that it is in accordance with the
requirements of AASB 15.

 Assessed the accuracy of revenue
cut-off and completeness of deferred
revenue as at year-end.

Responsibilities of the Directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act
2001 and for such internal control as the directors determine is necessary to enable the preparation

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018

Independent Auditor’s Report(Continued)

104

of the financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the
Consolidated Entity to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless the directors either intend to
liquidate the Consolidated Entity or to cease operations, or has no realistic alternative but to do so.

Auditor's Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor's report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with the Australian Auditing Standards will always detect a
material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to
influence the economic decisions of users taken on the basis of this financial report.

As part of an audit in accordance with Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. An audit involves performing
procedures to obtain audit evidence about the amounts and disclosures in the financial report.

The procedures selected depend on the auditor's judgement, including the assessment of the risks
of material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's preparation of the
financial report that gives a true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity's internal control.

The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.

An audit also includes evaluating the appropriateness of accounting policies used and the
reasonableness of accounting estimates made by the Directors, as well as evaluating the overall
presentation of the financial report.

We conclude on the appropriateness of the Directors' use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Consolidated Entity's ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw attention in
our auditor's report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditor’s report. However, future events or conditions may cause the Consolidated
Entity to cease to continue as a going concern.

We evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in a
manner that achieves fair presentation.

We obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Consolidated Entity to express an opinion on the financial report. We
are responsible for the direction, supervision and performance of the Consolidated Entity audit. We
remain solely responsible for our audit opinion.

We communicate with the Directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in Internal control
that we identify during our audit.

The Auditing Standards require that we comply with relevant ethical requirements relating to audit
engagements. We also provide the Directors with a statement that we have complied with relevant

ethical requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where applicable,
related safeguards.

From the matters communicated with those charged with governance, we determine those matters
that were of most significance in the audit of the financial statements of the current year and are
therefore the key audit matters. We describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of
such communication.

Report on the Remuneration Report

We have audited the Remuneration Report included in pages 21 to 28 of the directors’ report for the
year ended 31 December 2018. The directors of the Company are responsible for the preparation
and presentation of the Remuneration Report in accordance with section 300A of the Corporations
Act 2001. Our responsibility is to express an opinion on the Remuneration Report, based on our
audit conducted in accordance with Australian Auditing Standards.

Opinion on the Remuneration Report

In our opinion the Remuneration Report of Holista CollTech Limited for the year ended 31
December 2018 complies with section 300A of the Corporations Act 2001.

105

STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(Trading as Stantons International)
(An Authorised Audit Company)

Martin Michalik
Director

West Perth, Western Australia
29 March 2019

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018

CORPORATE GOVERNANCE STATEMENT

Corporate governance statement (Continued)

The Board is responsible for establishing the Company’s corporate governance framework. In establishing its
corporate governance framework, the Board has referred to the 3rd edition of the ASX Corporate Governance
Councils’ Corporate Governance Principles and Recommendations.

The Corporate Governance Statement discloses the extent to which the Company follows the recommendations.
The Company will follow each recommendation where the Board has considered the recommendation to be an
appropriate benchmark for its corporate governance practices. Where the Company’s corporate governance
practices will follow a recommendation, the Board has made appropriate statements reporting on the adoption of
the recommendation. In compliance with the “if not, why not” reporting regime, where, after due consideration, the
Company’s corporate governance practices will not follow a recommendation, the Board has explained its reasons
for not following the recommendation and disclosed what, if any, alternative practices the Company will adopt
instead of those in the recommendation.

The Company’s governance-related documents can be found on its website at www.holistaco.com.

PRINCIPLES AND RECOMMENDATIONS

COMPLY EXPLANATION
(YES/NO)

106

Principle 1: Lay solid foundations for management and oversight

Recommendation 1.1
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
(b) includes a description of those matters expressly
reserved to the board and those delegated to
management.

Recommendation 1.2
A listed entity should:
(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.

YES

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

The Company has adopted a Board Charter.

The Board Charter sets out the specific responsibilities
of the Board, requirements as to the Boards
composition, the roles and responsibilities of the
Chairman and Company Secretary, the establishment,
operation and management of Board Committees,
Directors access to company records and information,
details of the Board’s relationship with management,
details of the Board’s performance review and details
of the Board’s disclosure policy.

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 forward to security
holders a candidate for election, as a director.
(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 notice of
meeting holding the 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.

PRINCIPLES AND RECOMMENDATIONS

COMPLY EXPLANATION
(YES/NO)

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:
(i) to set measurable objectives for achieving

gender diversity; and

(ii) to assess annually both the objectives and the

entity’s progress in achieving them;

(b) disclose that policy or a summary or it; and
(c) disclose as at the end of each reporting period:

(i) the measurable objectives for achieving gender
diversity set by the board in accordance with
the entity’s diversity policy and its progress
towards achieving them; and

(ii) either:

(A) the respective proportions of men and
women on the board, in senior executive
positions and across the whole organisation
(including how the entity has defined
“senior executive” for these purposes); or
(B) the entity’s “Gender Equality Indicators”, as
defined in the Workplace Gender Equality
Act 2012.

YES

Recommendation 1.6
A listed entity should:
(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
evaluation was
undertaken in the reporting period in accordance
with that process.

a performance

YES

The Board Charter outlines the roles, responsibility
and accountability of the Company Secretary. The
Company Secretary is accountable directly to the
Board, through the chair, on all matters to do with
the proper functioning of the Board.

(a) The Company has adopted a Diversity Policy.

NO
(not
followed
in full)

(i) The Diversity Policy provides a framework for
the Company to achieve a list of 6 measurable
objectives that encompass gender equality.
(ii) The Diversity Policy provides for the monitoring
and evaluation of the scope and currency of the
Diversity Policy. The company is responsible for
implementing, monitoring and reporting on
the measurable objectives.

107

(b) The Diversity Policy is stated in Schedule 9 of the
Corporate Governance Plan which is available on
the company website.

(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 report
each year, the measurable objectives, progress
against the objectives, and the proportion
of male and female employees in the whole
organisation, at senior management level and
at Board Level.

(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.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018Corporate governance statement (Continued)

Corporate governance statement (Continued)

PRINCIPLES AND RECOMMENDATIONS

COMPLY EXPLANATION
(YES/NO)

Recommendation 1.7

YES

A listed entity should:
(a) have and disclose a process for periodically
its senior

evaluating the performance of
executives; and

(b) disclose

relation

to each

reporting
period, whether a performance evaluation
was undertaken in the reporting period in
accordance with that process.

(b) The

(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.
Company’s

Corporate Governance
Plan requires the Board to conduct annual
performance of the senior executives. Schedule
6 ‘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.

108

Principle 2: Structure the board to add value

Recommendation 2.1

The board of a listed entity should:
(a) have a nomination committee which:

(i) has at least three members, a majority of

whom are independent directors; and
(ii) is chaired by an independent director,
and disclose:
(iii) the charter of the committee;
(iv) the members of the committee; and
(v) as at the end of each reporting period,
the number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or

(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.

NO (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 Committee
under the written terms of 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 each board meeting
to discuss board succession issues. All members
of the Board are involved in the Company’s
nomination process, to the maximum extent
permitted under the Corporations Act and ASX
Listing Rules.
The Board regularly updates the Company’s
(in accordance with
board skills matrix
recommendation 2.2) to assess the appropriate
balance of skills, experience, independence and
knowledge of the entity.

PRINCIPLES AND RECOMMENDATIONS

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.

COMPLY EXPLANATION
(YES/NO)

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

(1) Skill gap noticed however an external taxation firm
is employed to maintain taxation requirements.
(2) Skill gap noticed however an external IT firm
is employed on an ad hoc basis to maintain IT
requirements.

109

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018Corporate governance statement (Continued)

Corporate governance statement (Continued)

PRINCIPLES AND RECOMMENDATIONS

COMPLY EXPLANATION
(YES/NO)

PRINCIPLES AND RECOMMENDATIONS

COMPLY EXPLANATION
(YES/NO)

Recommendation 2.3
A listed entity should disclose:

YES

(a) the names of the directors considered by the

board to be independent directors;

(b) if a director has an interest, position, association
or relationship of the type described in Box 2.3
of the ASX Corporate Governance Principles and
Recommendation (3rd Edition), but the board is
of the opinion that it does not compromise the
independence of the director, the nature of the
interest, position, association or relationship in
question and an explanation of why the board is of
that opinion; and

110

(a) The Board Charter provides for 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.
(b) The Board Charter requires Directors to
disclose their interest, positions, associations
and relationships and requires
the
independence of Directors is regularly assessed
by the Board in light of the interests disclosed
by Directors. Details of the Directors interests,
positions associations and relationships are
provided in the Annual Reports and Company
website.

that

for

the
determination of the Directors’ terms and
requires the length of service of each Director
to be disclosed. The length of service of each
Director is provided in the Annual Reports and
Company website.

Recommendation 2.4

A majority of the board of a listed entity should be
independent directors.

YES

Recommendation 2.5

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 appropriate professional
development opportunities for continuing directors to
develop and maintain the skills and knowledge needed
to perform their role as a director effectively.

YES

The Board Charter requires that where practical the
majority of the Board will be independent.
Details of each Director’s
independence are
provided in the Annual Reports and Company
website.

The Board Charter provides that where practical,
the Chairman of the Board will be a non-executive
director. If the Chairman ceases to be independent
then the Board will consider appointing a lead
independent Director.

The Board Charter states that a specific responsibility
of the Board is to procure appropriate professional
development opportunities for Directors. The
Board is responsible for the approval and review of
induction and continuing professional development
to
programs and procedures
ensure that they can effectively discharge their
responsibilities.

for Directors

Principle 3: Act ethically and responsibly

Recommendation 3.1

A listed entity should:
(a) have a code of conduct for its directors, senior

YES

executives and employees; and
(b) disclose that code or a summary of it.

Principle 4: Safeguard integrity in financial reporting

(a) The Corporate Code of Conduct applies to the
Company’s directors, senior executives and
employees.

(b) The Company’s Corporate Code of Conduct is in
Schedule 2 of the Corporate Governance Plan
which is on the Company’s website.

Recommendation 4.1

The board of a listed entity should:
(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)

(v)

the charter of the committee;
the relevant qualifications and 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
attendances of the members at those
meetings; or

(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.

111

NO (a) Due to the size and nature of the existing
Board and the magnitude of the Company’s
operations the Company currently has no Audit
and Risk Committee. Pursuant to Clause 4(h)
of the Company’s Board Charter, the full Board
carries out the duties that would ordinarily
be assigned to the Audit and Risk Committee
under the written terms of reference for that
committee.
The role and responsibilities of the Audit and
Risk Committee are outlined in Schedule 3 of
the Company’s Corporate Governance Plan
available online on the Company’s website.
The Board devote time at annual board meetings
to fulfilling the 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.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018Corporate governance statement (Continued)

Corporate governance statement (Continued)

PRINCIPLES AND RECOMMENDATIONS

COMPLY EXPLANATION
(YES/NO)

PRINCIPLES AND RECOMMENDATIONS

COMPLY EXPLANATION
(YES/NO)

112

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.

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.

Principle 5: Make timely and balanced disclosure

Recommendation 5.1

A listed entity should:
(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.

YES

Principle 6: Respect the rights of security holders

Recommendation 6.1

A listed entity should provide information about itself
and its governance to investors via its website.

YES

Recommendation 6.2

A listed entity should design and implement an
investor relations program to facilitate effective two-
way communication with investors.

YES

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 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.

The Company’s Corporate Governance Plan
provides that the Board must ensure the Company’s
external auditor attends its AGM and is available to
answer questions from security holders relevant to
the audit.

(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.

Information about the Company and its governance is
available in the Corporate Governance Plan which can
be found on the Company’s website.

adopted

The Company has
Shareholder
Communications Strategy which aims to promote
and facilitate effective two-way communication with
investors. The Shareholder Communications Strategy
outlines a range of ways in which information is
communicated to shareholders.

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

The Shareholder Communication Strategy states that as
a part of the Company’s developing investor relations
program, Shareholders can register with the Company
Secretary to receive email notifications of when an
announcement is made by the Company to the ASX,
including the release of the Annual Report, half yearly
reports and quarterly reports. Links are made available
to the Company’s website on which all information
provided to the ASX is immediately posted.

Shareholders are encouraged to participate at all EGMs
and AGMs of the Company. Upon the despatch of
any notice of meeting to Shareholders, the Company
Secretary shall send out material with that notice of
meeting stating that all Shareholders are encouraged
to participate at the meeting.

113

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.

Principle 7: Recognise and manage risk

Recommendation 7.1

The board of a listed entity should:
(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

(ii) is chaired by an independent director, and

disclose:

(iii) the charter of the committee;
(iv) the members of the committee; and
(v) as at the end of each reporting period,
the number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or

(b) if it does not have a risk committee or committees
that satisfy (a) above, disclose that fact and the
process it employs for overseeing the entity’s risk
management framework.

YES

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.

NO Due to the size and nature of the existing Board
and the magnitude of the Company’s operations
the Company currently has no Audit and Risk
Committee. Pursuant to Clause 4(h) of the
Company’s Board Charter, the full Board currently
carries out the duties that would ordinarily be
assigned to the Audit and Risk Committee under
the written terms of reference for that committee.

The role and responsibilities of the Audit and
Risk Committee are outlined in Schedule 3 of the
Company’s Corporate Governance Plan available
online on the Company’s website.

The Board devote time at annual board meeting to
fulfilling the roles and responsibilities associated
with overseeing risk and maintaining the entity’s risk
management framework and associated internal
compliance and control procedures.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018Corporate governance statement (Continued)

Corporate governance statement (Continued)

PRINCIPLES AND RECOMMENDATIONS

COMPLY EXPLANATION
(YES/NO)

PRINCIPLES AND RECOMMENDATIONS

COMPLY EXPLANATION
(YES/NO)

YES

Recommendation 7.2

The board or a committee of the board should:
(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
ensure that they remain within the risk appetite
set by the board; and

(b) disclose in relation to each reporting period,

whether such a review has taken place.

114

Recommendation 7.3

A listed entity should disclose:
(a) if it has an internal audit function, how the function

YES

is structured and what role it performs; or

(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 and internal control processes.

Recommendation 7.4

A listed entity should disclose whether, and if so how,
it has regard to economic, environmental and social
sustainability risks and, if it does, how it manages or
intends to manage those risks.

YES

(a) The Company process for risk management and
internal compliance includes a requirement
to identify and measure risk, monitor the
environment
factors and
for emerging
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 ‘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 individual attendances of the members at
those meetings. Details of the meetings will be
provided in the Company’s Annual Report.

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.

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
the
continually created by management on
efficiency and effectiveness of the 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:
(a) have a remuneration committee which:

(i)

has at least three members, a majority of
whom are independent directors; and
is chaired by an independent director,

(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 committee met
throughout the period and the individual
attendances of the members at those
meetings; or

(b) if it does not have a remuneration committee,
disclose that fact and the processes it employs for
setting the level and composition of remuneration
for directors and senior executives and ensuring
that such remuneration is appropriate and not
excessive.

Recommendation 8.2

A listed entity should separately disclose its policies
and practices regarding the 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.

Recommendation 8.3

A listed entity which has an equity-based remuneration
scheme should:
(a) have a policy 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; and

(b) disclose that policy or a summary of it.

Due to the size and nature of the existing board
and the magnitude of the Company’s operations
the Company currently has no Remuneration
Committee. Pursuant to clause 4(h) of the Company’s
Board Charter, the full Board currently carries out
the duties that would ordinarily be assigned to the
Remuneration Committee under the written terms
of reference for that committee.

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 Board devote time at annual board meetings to
fulfilling the roles and responsibilities associated with
setting the level and composition of remuneration
for Directors and senior executives and ensuring that
such remuneration is appropriate and not excessive.

115

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

YES

(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 the Company’s Corporate Governance
Plan is available on the Company’s website.

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018ADDITIONAL INFORMATION
FOR LISTED PUBLIC COMPANIES

Additional Information for Listed Public Companies(Continued)

The following additional information is required by the Australian Securities Exchange in respect of listed public
companies.

Capital as at 18 March 2019.

Ordinary share capital

234,039,087 ordinary fully paid shares held by 980 shareholders.

Unlisted Options over Unissued Shares

Number of
Options

6,500,000

3,500,000

1,000,000

6,000,000

3,000,000

2,000,000

7,000,000

31,000,000

Exercise Price
$

0.20

0.10

0.20

0.25

0.30

0.10

0.20

Expiry
Date

23 Mar 2020

31 Dec 2019

23 Jun 2020

1 Aug 2020

16 Oct 2020

116

Performance Rights over Unissued Shares

Class of
Performance
Right

Performance Condition

Performance
rights
No.

Milestone Date

Expiry Date

Upon the Company signing
a binding agreement for the
sale, distribution, licensing
and/or manufacturing of at
least 3 Low GI Products.

Upon the Company securing
the patents associated with its
Low GI Products.

The Company achieving an
EBIT of at least $2.2m from
the sale of Low GI Products.

The Company achieving an
EBIT of at least $4m from the
sale of Low GI Products.

3,600,000

30 June 2020

5 years from the
date of issue

2,700,000

30 June 2020

1,800,000

30 June 2021

900,000

30 June 2021

5 years from the
date of issue

9,000,000

Voting Rights

The voting rights attached to each class of equity security are as follows:

n Ordinary shares: Each ordinary share is entitled to one vote when a poll is called, otherwise each

member present at a meeting or by proxy has one vote on a show of hands.

n Unlisted Options: Options do not entitle the holders to vote in respect of that equity instrument,
nor participate in dividends, when declared, until such time as the options are exercised or
performance shares convert and subsequently registered as ordinary shares.

n Performance Rights: A Performance Right does not entitle a Holder to vote on any resolutions
proposed at a general meeting of shareholders of the Company. A Performance Right does not
entitle a Holder to any dividends. A Performance Right does not entitle the Holder to participate
in the surplus profits or assets of the Company upon winding up of the Company. A Performance
Right is not transferable.

Substantial Shareholders as at 18 March 2019.

Name

Dr. Rajen Manicka

Global eHealth Limited

HSBC Custody Nominees (Australia) Limited

Number of Ordinary
Fully Paid Shares Held

% Held of Issued
Ordinary Capital

79,435,272

46,226,673

18,055,595

117

33.94

19.75

7.71

Distribution of Shareholders as at 18 March 2019.

Category (size of holding)

Total Holders

1 – 1,000

1,001 – 5,000

5,001 – 10,000

10,001 – 100,000

100,001 – and over

219

256

141

264

100

980

Number
Ordinary

75,614

753,498

1,101,672

8,923,495

223,184,808

234,039,087

% Held of Issued
Ordinary Capital

0.03

0.32

0.47

3.81

95.37

100.00

Unmarketable Parcels as at 18 March 2019

At the date of this report there were 519 shareholders who held less than a marketable parcel of
shares holding 6,667 shares.

On-Market Buy-Back

There is no current on-market buy-back.

Restricted Securities

The Company has no restricted securities

Holista CollTech LimitedABN 24 094 515 992 annual report 2018Holista CollTech LimitedABN 24 094 515 992 annual report 2018Additional Information for Listed Public Companies(Continued)

20 Largest Shareholders — Ordinary Shares as at as at 18 March 2019

Rank Name

Number of Ordinary
Fully Paid Shares Held

% Held of Issued
Ordinary Capital

Dr. Rajen Manicka

Global eHealth Limited

HSBC Custody Nominees (Australia) Limited

4. Ms Sarinderjit Kaur

Citicorp Nominees Pty Limited

Acuity Capital Investment Management Pty Ltd

Fairview Holdings Pty Ltd

6,214,285

Dr Fathil Mohamed

118

9. Mr Himmat Singh

10. Chandra Sekaran P Perumal

11. Franjack Pty Ltd & Aurjoe Pty Ltd

12. Mr Ravindran Govindan

13. Mr Kok Wah Ong

14. BNP Paribas Noms Pty Ltd

15. Koina Pty Limited

16. Bubobi Pty Ltd

17. Mr Kok Seng Chen

18. Pinewood Asset Pty Ltd

19. Harold Cripps Holdings Pty Ltd

20. Mr Philip Lai Kwok Leong

TOTAL

200,726,544

85.76

The Joint Company Secretaries are Brett Francis Fraser and Jay Richard Stephenson

Principal registered office

As disclosed in Note 26 Company details on page 99 of this Annual Report.

Registers of securities

As disclosed in the Corporate directory on page ii of this Annual Report.

Stock exchange listing

Quotation has been granted for all the ordinary shares of the Company on all Member Exchanges of the
Australian Securities Exchange Limited, As disclosed in the Corporate directory on page iii of this Annual
Report.

Use of funds

The Company has used its funds in accordance with its initial business objectives.

79,435,272

46,226,673

18,055,595

9,675,785

6,522,648

6,305,488

4,163,158

3,500,000

3,333,333

3,300,000

2,595,587

1,696,220

1,519,254

1,514,285

1,513,000

1,482,459

1,428,572

1,244,930

1,000,000

33.94

19.75

7.71

4.13

2.79

2.69

2.66

1.78

1.50

1.42

1.41

1.11

0.72

0.65

0.63

0.61

0.53

0.43

119

Holista CollTech LimitedABN 24 094 515 992 annual report 2018MAKING NATURE WORK FOR YOU,

GOING GLOBAL

Holista CollTech Limited
ABN 24 094 515 992

283, Rokeby Road
SUBIACO WA 6008
Tel : +618 6141 3500
Fax: +618 6141 3599

www.holistaco.com

Holista CollTech

Annual Report 2018