Holista Colltech Limited
ABN 24094515992
Annual Report - 31 December 2020
Holista Colltech Limited
Directors' report
31 December 2020
Directors
Dr Rajen Manicka
Mr Daniel Joseph O’Connor
Mr Chan Heng Fai
Mr Blair Michelson
Company secretary
Mr Blair Michelson
Managing Director & Chief Executive
Officer
Non-Executive Chairman
Non-Executive Director
Non-Executive Director
Registered office
Principal place of business
Share register
Auditor
Solicitors
Australia:
Level 5,
126 Phillip Street,
Sydney NSW 2000
Malaysia:
Unit 1201, 12th Floor,
Amcorp Trade Centre, PJ Tower
No. 18, Persiaran Barat
46000 Petaling Jaya, Malaysia
Telephone: +603 7965 2828
Facsimile: +603 7965 2777
Email: enquiries@holistaco.com
Website: www.holistaco.com
Unit 1201, 12th Floor,
Amcorp Trade Centre, PJ Tower
No 18, Persiaran Barat,
46000 Petaling Jaya, Malaysia
Computershare Investor Services Pty Limited
Level 11, 172 St Georges Terrace
PERTH WA 6000
Telephone: 1300 850 505 (investors within Australia)
Telephone: +61 (0)3 9415 4000
Email: web.queries@computershare.com.au
Website: www.investorcentre.com
Stantons International
Street: Level 2, 1 Walker Avenue
West Perth WA 6005, Australia
Telephone: +61(0)8 9481 3188
Facsimile: +61(0)8 9321 1204
Edwards Mac Scovell
Level 1/8 St Georges Terrace
Perth WA 6005, Australia
Telephone: +61(0)8 6245 0222
Stock exchange listing
Holista Colltech Limited shares are listed on the Australian Securities Exchange (ASX
code: HCT)
Media Enquiries
Australia and New Zealand:
Vantage Point Partners
Email:
brendon@vantagepointpartners.com.au
Telephone: +61 409 341 613
Global:
WeR1 Consultants Pte Ltd
3 Phillip Street #12-01
Singapore 048693
Telephone: +65 67374844
Email: holista@wer1.net
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Contents
Managing Director’s Report
Key Milestones
Message from our Key Partners
Director’s report
Auditor's independence declaration
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors' declaration
Independent auditor’s report
Corporate governance statement
Additional information for Listed Public Companies
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Holista Colltech Limited
Directors' report
31 December 2020
About Us
Holista Colltech’s core business is to conduct research to find natural solutions so that people can live healthier lives. It
holds proprietary solutions to help food manufacturers produce healthier alternatives – without use of chemicals – that do
not compromise tastes and mouth-feel. Building on its network Holista has also developed sanitising solutions for individual
and corporate use to prevent pandemic infection.
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 Sydney and has
extensive operations in Malaysia and North America.
In the Food Ingredients space, Holista specialises in herbs and natural products that allow food manufacturers to produce
healthier products. Mindful that the people find it difficult to change eating habits despite the growing incidence of diabetes
and obesity, Holista has created a suite of ingredients that does not compromise on taste, odour and mouthfeel. It has
brought to markets thus far, low-Glycemic Index (GI) bread, noodles/pasta and flatbreads as well as low-calorie/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 is a leader in Malaysia for the distribution of natural health supplements. It leverages on its research background
and scientific network to build a world-class company focused on providing consumers with scientifically enhanced natural
supplements and consumer products.
The outbreak of the COVID-19 pandemic has accelerated the development and market outreach of its infection control
solutions, in partnership with Global Infection Control Consultants LLC (“GICC”). Holista is the exclusive distributor of the
all-natural Path-Away ® active ingredient developed by U.S.-based GICC for use as a sanitiser. It is also jointly developing
with GICC a nasal sanitising balm and other solutions to combat airborne infection.
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Holista Colltech Limited
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Managing Director’s Report
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 2020 (“FY2020”).
The period under review has been the toughest time for many of us, both professionally and personally, but Holista
shareholders can at least take heart that our company is emerging from the COVID-19 global crisis in a stronger position.
While Holista recorded a net loss after tax of $5.7 million in FY2020, this was largely driven by one-off factors and our
revenues were resilient. Group revenue held relatively steady at over $7 million in the financial year as strong growth in our
Healthy Food Ingredients and Infection Control Solutions businesses offset declines in the Dietary Supplements and Ovine
Collagen divisions – both of which were severely hindered by the pandemic.
Your Board of Directors and I believe that the Group will deliver an improved result in the current financial year as the world
overcomes the impact of COVID-19 and as the growth momentum in our Healthy Food and Infection Control businesses
continue to accelerate.
Healthy Food Ingredients: Breakthrough on International Markets Despite COVID-19
Our efforts to commercialise our organic and natural-tasting healthy food ingredients after seven years of research and
development is paying off as our unique technology was validated through two significant developments in the past financial
year:
i)
We secured a sizeable order from US-based Constanzo’s Bakery (“Costanzo’s”) for the Group’s proprietary GI-
Lite™ Bread Pre-mix for a dedicated range of low-Glycemic Index (GI) bread rolls. Constanzo’s is an established
baked goods supplier to deli chains and major supermarkets across North America. Constanzo’s has committed
to purchase a minimum of 165 tons of GI-Lite™ worth around US$1.9 million (~A$2.5 million) in the first 12
months of the agreement, and this increases to 220 tons (~US$2.5 million) in each of the next two years.
ii)
Holista also received sizable orders from two leading Asian food and beverage manufacturers during the year
in review, although these orders were more modest than anticipated due to the impact of the pandemic.
Malaysian-listed Rex Industry Bhd purchased 80Less™, which is Holista’s proprietary low-GI, low-calorie sugar
substitute that can reduce the sugar content of food and drinks without altering the taste of the product or leaving
an after-taste. The order was placed as part of Rex’s five-year agreement with Holista that is estimated to be
worth around A$7 million in total. Meanwhile, Kawan Food Berhad placed orders for GI-Lite™, which it used to
develop the world’s first healthy Low-GI Asian flatbread.
As vaccination programmes are rolled out around the world and border restrictions ease, we will increase our marketing
efforts to build on the sales momentum we have achieved in FY2020. The outlook for our unique healthy food ingredients is
bright as demand is expected to increase due to demographic factors and the prospect of more countries adopting a “sugar-
tax” to combat the ever increasing rates of obesity.
Infection Control Solutions: Further growth opportunities post COVID
Another significant development – propelled by the outbreak of COVID-19 in early 2020 – was the traction achieved by our
Infection Control Solutions business. Holista secured global distribution rights from US-based Global Infection Control
Consultants LLC (GICC) to distribute an active ingredient known as Path-Away® just before COVID-19 was declared a global
pandemic.
Path-Away® is the active ingredient in Holista’s NatShield™ branded sanitisers that are sold through retail outlets in
Malaysia. The popularity of NatShield™ is driven by consumers looking for an efficacious all-natural and alcohol-free hand
sanitiser, which has been independently proven to be effective against a a range of pathogens, including SARS-CoV-2 (the
virus that causes COVID-19).
We aren’t stopping with hand sanitisers. Holista is close to launching a nasal sanitising balm containing ProtecteneTM, which
was acquired from GICC. ProtecteneTM shares the same properties as Path-Away® but is gentler on skin and can be applied
to sensitive parts of the body.
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Holista has also commenced an application with the Therapeutic Goods Administration of Australia (TGA) for labelling
rights to claim Natshield™ and Protectene™ as being effective against COVID-19.
Further, Holista has partnered with GICC to pursue opportunities for the M3® system outside the US. The system works
by dispensing Path-Away® through heating, ventilation and air-conditioning (HVAC) systems to treat airborne viruses. M3®
could prove to be an indispensable tool in controlling the spread of new highly contagious variants of COVID-19 in buildings
and hotel quarantine facilities.
Outlook
The volatility created by the global pandemic is expected to persist in 2021, but there has been a marked improvement in
trading conditions across much of the Group’s operations since the start of the current financial year.
The strong momentum achieved by the Healthy Food Ingredients business is expected to continue as Costanzo’s launches
a range of Low-GI white bread products using Holista’s technology in the 2nd Quarter of 2021 across North America. The
healthier and better tasting white bread is expected to be a significant growth driver for Holista from 2021 onwards.
Additionally, orders from Kawan Foods and Rex Industry are anticipated to improve this year as the disruptions from the
pandemic in Malaysia and Singapore ease further. We are also close to commercialising low-calorie and low-GI tapioca
pearls and sugar syrup for use in bubble tea. The pearls will complement Holista’s range of healthier food product
ingredients, including those for flatbreads, noodles and white bread.
Growing demand for sanitising solutions is also expected to persist in 2021 and beyond, even as mass COVID-19 vaccines
are rolled out around the world. The ongoing long-term use of sanitisers bodes well for NatShield™ and Protectene™ as
Holista believes consumers will increasingly turn to all-natural and gentler solutions compared to alcohol-based products.
Our plans to expand Holista’s infection control offering will provide an additional growth avenue for the Group in the current
financial year. This includes launching our sanitising nasal balm in the United States, Malaysia and Singapore this year
and offering the M3® system for building ventilation and fogging applications to enterprise and government clients.
Holista filed a global patent for the nasal sanitising balm in July 2020 and has commissioned a TGA application to classify
its sanitisers as “Therapeutic Goods” and for labelling rights to claim their effectiveness against COVID-19 after we
successfully demonstrated that Path-Away® can kill 99.9% of SARS-CoV-2 in an independent lab.
Meanwhile, the Company’s Dietary Supplements and Ovine Collagen businesses are recovering from the coronavirus
economic conditions in FY2020. There has been a notable resumption in orders for Holista’s dietary supplements across
all markets since the 4th quarter of 2020, while enquiry levels for its collagen product from cosmetics manufacturers around
Asia have also increased.
This year is shaping up to be a big year for Holista, and I look forward to bringing you further updates throughout 2021.
Best regards,
DR RAJEN MANICKA
Managing Director
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Key Milestones
Date
11 December 2020
27 November 2020
18 November 2020
19 October 2020
01 October 2020
14 September 2020
02 September 2020
03 June 2020
08 May 2020
20 April 2020
11 March 2020
Milestone
Holista announced a collaboration with GICC LLC to offer a “List N” certified pandemic
infection solution to disinfect buildings.
Holista commissioned an application to the Therapeutic Goods Administration (TGA) to
allow NatShield™ and Protectene™ to be labelled as effective in killing COVID-19 and be
classified as “Therapeutic Goods”. This certification will allow Holista to label its products
sold in Australia to be effective against COVID-19.
Holista received its first orders for GI Lite™ low-GI bread pre-mix from US bakery chain
Constanzo’s which is set to launch the world’s lowest clean label all-natural Low-GI white
bread in North America.
Path-Away®’s Anti Pathogenic Aerosol Solution successfully tested by Microbac
Laboratories of U.S. against SARS-CoV-2 the virus that causes COVID-19. Path-Away has
achieved this benchmark in all instances with a 100% success rate and has met all criteria
during the test.
Holista signed a three-year exclusive deal with U.S bread supplier Constanzo’s for its
patented GI Lite™ low-GI bread pre-mix and to work with Costenzo’s to launch the world’s
lowest low glycaemic index (GI) clean label white bread with a GI score of 46 as validated
by Sydney University .
Holista signed a partnership agreement with Eight Mercatus USA who will act as its
strategic and marketing partner in North America. Eight Mercatus will help Holista redesign
it’s branding strategy and develop sales channels for NatShield products, Low GI bread
range and other water-soluble supplements products.
Holista partnered with Path-Away® developer GICC LLC for the production of the M3 HVAC
systems for all markets outside North America.
Sydney University has validated a low-GI tortilla developed by Holista and Kawan Food to
have a GI reading of 54 which is 30% lower compared to other versions of flatbread sold
around the world.
Holista filed a global patent for Natshield™ nasal sanitising balm containing Path-Away®.
Holista’s NatShield™ containing Path-Away® successfully tested by a leading U.K. bio-
safety laboratory to be 99.9% effective against the feline coronavirus, a surrogate of
COVID-19.
Holista Biotech Sdn Bhd (a wholly owned subsidiary of Holista) has signed a five-year
contract to supply minimum annual order purchase of A$1.4m of 80Less by Rex Industry.
The supply agreement represents the first commercialisation of 80Less™ low sugar
formulation by Holista.
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Message from our Key Partners
MS. NADJA PIATKA
CEO of Nadja Foods and CEO of Holista Foods
All over the world, fast food, desserts and soft drinks have become part of modern lifestyle. Diet is a major cause of obesity
and diabetes but food habits are hard to change. The challenge is to help food manufacturers produce healthier food without
changing processes to much of increasing their costs significantly.
As a bakery supplier to fast-food chains for over 24 years, I have spent most of my career working to meet this challenge.
It began with the low-fat movement in the nineties when I achieved great success with a line of muffins I created. However,
the science has moved on; 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.
Moreover, there is increasing awareness about diets containing a high-Glycaemic Index (GI) and the high correlation with
diabetes and obesity. People are trying to make conscious health decisions. The food and beverage industry is well aware
of this. Hence, industry manufacturers and fast-food chains worldwide are in a race to roll out healthier options to win over
customers.
The weak link – and the great opportunity for Holista Foods – is in the food manufacturing process: how can they produce
healthier options that taste as good while remaining profitable. Working with Dr Rajen and his team, we have developed
and received validation for GI Lite™ that lowers the GI of white flour-based products while maintaining the original taste of
the food products.
After collaborating with Holista CollTech 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.
FY2019 has been a great year for Holista Foods as we kicked off the year by collaborating with Malaysia’s Kawan Food
Berhad to co-produce low-GI versions of Asian flatbreads – paratha (roti canai) and chapatti. They have been successfully
tested as low-GI by the University of Sydney and will be launched in April 2020 in the U.S. followed by Malaysia markets.
We also won the 2019 U.S.A. Taste Championships Award of Excellence for two types of our low-GI pasta, spaghetti and
linguine. We also commenced maiden shipment for our low-GI noodles to Express Trading Canada to be exported to China
as well as received regulatory approval for our noodles in South Korea followed by a maiden purchase order by HWH
Global, a Korean multi-level marketing company. The low-GI noodles are already sold on Amazon. Holista Foods also
appointed iLevel Brands, a national broker sales team, to increase market presence in North American retail stores. We
are delighted to announce that our ground work in 2019, which included increased efficiencies in production and exciting
rebranding and packaging, has quickly propelled us into many new distribution centres across the US and Canada in the
first quarter of 2020. Strong sales are expected for 2020 as major grocery store chains are placing Holista low GI pasta on
their shelves.
We expect to launch by June 2020 the first low GI white bread in North America through our collaboration with Costanzo’s
Bakery, a large US based bread manufacturer. Preliminary testing results on the white buns have been very positive.
Apart from underscoring our quality for our existing products, we also launched our proprietary low-GI, low-calorie refined
sugar, 80Less™ that is made from two natural internationally approved substances, Sucrose and Sucralose and can
replace sugar in all applications. We have appointed All Gold Imports as its distributor in Canada and the U.S.
We also collaborated with another Malaysian company, SunFresh Fruit Hub Sdn Bhd to co-produce low-GI versions bubble
tea ingredients – tapioca pearls, sugar syrup and sugar caramel (brown sugar) while using GI Lite™ and 80Less™ to
produce low-GI tapioca pearls and sugar syrup respectively and introducing proprietary brown sugar (sugar caramel) made
of molasses which derives the same sweetness with lower calories. This collaboration is expected to have positive sales
outcomes for both GI Lite™ and 80Less™.
During the coming year, we will continue to look for collaborations for our proprietary products – GI Lite™ and 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.
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I am very proud to be working with Dr Rajen and his team. 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
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31 December 2020
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 Westernisation 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 2020.
Thank you!
Meiert J. Grootes
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31 December 2020
DR ARTHUR MARTIN
Founder and President Principal Research Scientist of Global Infection Control Consultants LLC (GICC LLC) and Member
of Holista’s Scientific Advisory Board.
Currently, the entire world is suffering from the pandemic of COVID-19, a novel coronavirus that originated from Wuhan,
China, on 17 November 2019. As I write, the disease has affected more than 169,500 and killed over 6,500 people, leaving
people panicking and unsure of how to protect themselves.
While I am deeply saddened by the tragic outcome, I am also excited by GICC LLC’s partnership with Holista in offering a
solution to address this pandemic. Together, we are making available hand-held sanitisers and other products that use an
active ingredient, Path-Away®, developed by GICC LLC. Such sanitisers can offer the first line of defence in preventing
infection of such coronaviruses which usually attack humans via the eyes, the mouth or the nose – the last being most
vulnerable.
Path-Away® has been developed after years of research into the properties of certain plants. Made entirely from natural
substances it contains no alcohol, which is present in most sanitisers. It works by attacking the cell walls of the microbes,
inhibiting their uptake of amino acids – the basic building block of cells – needed for reproduction. The microbes then clump
together and kill themselves in the process.
This organic, broad-spectrum anti-pathogenic solution has been proven to effective as a sanitiser against more than 170
fungi, bacteria, yeasts and all previously known corona-type viruses. It is tested at several WHO-approved laboratories and
approved by several government authorities including the U.S. Food and Drug Administration (FDA), the Food and Safety
Authority and Environmental Protection Authority of New Zealand and the Malaysian Ministry of Health with special
reference to the H1N1 virus.
Working with Holista, we have facilitated tests on Path-Away® to prove its efficacy against COVID-19. The tests are being
conducted at a leading microbiology lab in the U.K. and results are expected by the middle of April 2020.
After the COVID-19 health situation worsened, I visited Kuala Lumpur in February 2020. I am very encouraged by the
efforts of the Holista team under the leadership of Dr Rajen Manicka. The team practices stringent controls and has resolved
the initial issues with bottling shortage, while also increasing the size range of the hand-held NatShield™ that uses Path-
Away®.
On that visit, and after assessing the scale of the problem arising from COVID-19 as well as from influenza (which will
particularly impact Europe during the winter season), GICC LLC has made two decisions:
●
19 March 2020 - Co-development with Holista of the world’s first nasal sanitizing balm using Path-Away®; we plan to
file a joint patent and commence production all by the second half of 2020.
3 March 2020 - Granting Global distribution rights to Holista for NatShield™ sanitiser which will later include the nasa
sanitising balm.
●
The COVID-19 situation has thrown into sharp focus the need to address airborne infection. While our work with Holista is
primarily focused on saving lives, we will also look into ways to partner and bring other solutions using Path-Away® to help
industry segments. These include infection control for animals and plants, to boost agriculture production, personal care
products, and protection of textiles during shipment and logistics.
Based in Bluffton, South Carolina, USA, GICC LCC offers expertise relating to the control of pathogenic contamination and
the dynamics of the pathogenic bio-aerosol connection to the human infection matrix.
Thank you!
Dr Arthur Martin
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Director’s report
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 2020.
Holista is listed on the Australian Securities Exchange (ASX:HCT).
Directors
The following persons were directors of Holista Colltech Limited during the whole of the financial year and up to the date of
this report, unless otherwise stated:
Dr Rajen Manicka
Mr Daniel Joseph O’Connor
Mr Chan Heng Fai
Mr Blair Michelson
Mr Jonathan Pager
Mr Brett Fraser
Managing Director and Chief Executive Officer
Non-Executive Director
Non-Executive Chairman (appointed 11 Aug 2020)
Non-Executive Director
Non-Executive Director (appointed 11 August 2020)
Non-Executive Director (appointed 2 July 2020 and resigned
11 August 2020)
Non-Executive Director (resigned 2 July 2020)
Company secretary
Mr Blair Michelson (appointed 11th August 2020 as both Non-Executive Director and Company Secretary of the Company.
Mr Michelson has over 30 years' experience as a management consultant in the areas of risk, compliance, governance and
systems, and asset management across a wide range of industries in Australia and overseas. He is currently the
Director/Proprietor of two boutique consultancies, Qualita International and Alpha Asset Management Systems and has
previously consulted to Government, Not-for-profit, public, and large and small private clients.
Mr Dean Jagger (appointed 13th July 2020 and resigned 11th August 2020)
Mr Stuart Usher (appointed 21st February 2020 and resigned 13th July 2020)
Mr Brett Fraser and Mr Jay Stephenson as Joint Company Secretaries (resigned 21st February 2020).
Dividends paid or recommended
There were no dividends paid, recommended or declared during the current or previous financial year.
Principal activities
During the financial year ended 31 December 2020 (FY2020), the Group, consisting of Holista Colltech Limited (Holista) and
its controlled entities, remained focused on four core areas:
●
●
●
●
Healthy Food Ingredients
Infection Control Solutions
Dietary Supplements
Ovine Collagen
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Operating and financial review
Holista delivered steady revenues for the year ended 31 December 2020 despite the global COVID-19 crisis that had a
material but temporary impact on Group earnings.
Holista recognised total revenue of $7.1 million for the 12-month ended 31 December 2020, which was 2.1% below that of
2019 (2019: $7.2 million), as weakness in parts of its business due to the impact of COVID-19 was offset by strong growth
in two key divisions.
Statutory net profit before tax for 2020 was a loss of $5.6 million compared with a net loss of $0.7 million in the previous year
that were largely due to significant one-off items. These included impairment of $3.3 million and legal costs $0.2 million
associated with certain legal matters commenced during the year with various parties as described in note 31 'Contingent
liabilities'.
The 2020 disruption caused by the global pandemic on Holista’s operations and change in the Group’s sales mix accounted
for the balance of the difference between losses recorded in 2020 and 2019. Holista’s fastest growing businesses have
smaller margins due to the required investments to build scale, expand into new markets and launch new product offerings.
Operations Review
a. Healthy Food Ingredients
Holista’s Healthy Food Ingredients division is gaining momentum with sales increasing by 625% over the year before to just
over $1 million in 2020. The growth is bolstered by orders from Kawan Food Berhad, which has developed the world’s first
healthy low-Glycemic Index (GI) Asian flatbread using GI Lite™, and Rex Industry Berhad for Holista’s proprietary 80Less™
(low-calorie and low-GI) sugar substitute for use in its drinks. However, restrictions to control the spread of COVID-19 in
Malaysia and Singapore meant that orders from Kawan and Rex in FY2020 were lower than was originally forecasted at the
start of the year.
The division’s strong growth was also partly due to the expansion into the North American market with Costanzo’s Bakery,
Inc. signing a binding agreement during FY2020 (announced October 2020) to purchase around US$2 million a year of
Holista’s GI Lite™ Bread Premix, for three years.
Another significant event during the course of the year was the validation from the University of Sydney that tortillas made
with GI Lite™ were at least 30% healthier compared to traditional versions of flatbreads sold around the world.
Holista’s proprietary food ingredients technologies can also be applied to the manufacture of healthier noodles, tapioca pearls
(used in bubble tea) and sugar syrup without sacrificing taste.
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b. Infection Control Solutions
Holista’s Infection Control Solutions business was another growth contributor as it achieved sales of $665,000 in FY2020.
This is the first year that this business contributed to Group revenue as COVID-19 drove demand for its NatShieldTM range
of products, which uses PathAway®.
PathAway® is made from all-natural ingredients and independent tests at Microbac Laboratories, Inc. have shown it to be
99.9% effective against the SARS-CoV-2 virus that causes COVID-19. Microbac is a US Department of Defense (DoD) and
Environmental Laboratory Accreditation Program (ELAP) accredited laboratory.
Holista entered into a non-binding collaboration term sheet for a joint-venture (JV) in September 2020 with its long-standing
US partner Global Infection Control Consultants LLC (GICC) to manufacture and market the M3® system, which works by
dispensing Path-Away® through heating, ventilation and air-conditioning (“HVAC”) systems in buildings to treat harmful
pathogens, including airborne viruses. PathAway® is currently awaiting “List N” certification in the US. List N is managed by
the US Environmental Protection Agency (EPA) and products on List N are deemed by the EPA to kill SARS-CoV-2. As at
the reporting date, the JV has not been formed.
From December of last year, Holista was able to start offering a List N solution to disinfect buildings and kill coronavirus by
using the M3® system with Bioesque, which is secured from Laboratoire M2, while awaiting List N certification for
PathAway®. The same range is also under registration with the Australian Therapeutic Goods Administration to be offered
along with M3®..
A further significant development during FY2020 was the acquisition of the intellectual property and all associated rights to
Protectene™ by Holista from GICC. Protectene™ has all the benefits of PathAway® but is gentler on skin. The acquisition
enables Holista to offer sanitising products that can be used on sensitive parts of the body, such as a nasal balm.
The nasal balm formulation is now finalised and will be launched in the United States, Malaysia and Singapore in the 2nd
Quarter of 2021. In the interim, the nasal balm will undergo tests to show efficacy against coronavirus at the Pantai Medical
Centre in Kuala Lumpur, Malaysia. The Company is also close to engaging a leading hospital in New York City to undertake
further tests.
c. Dietary Supplements
The Company’s Dietary Supplements division continued to be the largest income contributor to the group in 2020. Revenue
from this business decreased by 21% to $5.2 million due to COVID-19 social restrictions and lockdowns in markets Holista
operates in.
While operating conditions were challenging, Holista launched a new health supplement called Forti-5 in Malaysia to boost
the body’s immune system and to fight infections in the 4th Quarter of 2020. Forti-5 stimulates the body’s natural production
of glutathione with three essential amino acids.
Holista is developing other new products to be sold commercially this year, including chewable Omega-3 gummies for
children.
d. Ovine Collagen
The Collagen Manufacturing business was also impacted by the fallout from the global pandemic with sales falling 62% to
$173,000 in FY2020 as most of our cosmetics manufacturing customers closed their production facilities for some time during
the pandemic.
Significant changes in the state of affairs
There were no significant changes in the state of affairs of the consolidated entity during the financial year.
Events after the reporting period
No matter or circumstance has arisen since 31 December 2020 that has significantly affected, or may significantly affect the
consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial
year.
Future Developments, Prospects and Business Strategies
There are no other likely developments, future prospects and business strategies not included in this Directors’ report.
14
Holista Colltech Limited
Directors' report
31 December 2020
Environmental regulation
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 waste water 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
●
Assessment of Effectiveness
Pursuant to the Company's Board Charter, the full Board carries out the duties
of the Audit 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.
The management in the first instance assesses the effectiveness of the risk
management policies and in conjunction with the Audit Committee (comprise
the full Board of Directors) and External Auditors, instructs improvements to be
put in place.
15
Holista Colltech Limited
Directors' report
31 December 2020
Information relating to the directors
Name:
Title:
Qualifications:
Experience and expertise:
Dr Rajen Manicka
Managing Director and Chief Executive Officer (Appointed July 2009)
Non-independent
B Ph. (Hons)
Dr Rajen Manicka began his career as an intern pharmacist at the Kuala Lumpur
General Hospital from 1986 - 1987. In 1987 he spent a year as a community
pharmacist. Over a period of 9 years, Dr Rajen worked for several pharmaceutical
companies including Roche and CIBA Pharmaceuticals in various capacities starting
as a medical representative, product manager and eventually as 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
the Malaysian
government.
from
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.
Other current directorships:
None
Former directorships (last 3 years): None
Interests in shares:
Interests in options:
Interests in rights:
85,735,272
Nil
1,800,000 Class C Performance Rights
900,000 Class D Performance Rights
Nil
Contractual rights to shares:
Name:
Title:
Qualifications:
Experience and expertise:
Mr Daniel Joseph O’Connor
Non-Executive Chairman (Appointed as Non-Executive Director in November 2011 and
appointed as Non-Executive Chairman on 11 August 2020)
Independent
B.Bus, MBA, FAICD (Dip) CPM, AIMM, MAIM, MAIeX.
Mr O’Connor 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.
Other current directorships:
None
Former directorships (last 3 years): None
Interests in shares:
Interests in options:
Interests in rights:
Contractual rights to shares:
Nil
Nil
Nil
Nil
16
Holista Colltech Limited
Directors' report
31 December 2020
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Mr Chan Heng Fai
Non-Executive Director (Appointed 13 June 2013)
Independent
Mr Chan has restructured over 35 companies in different industries and countries in
the past 40 years.
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, 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.
Mr Chan also sits on the board of Alset EHome International, Inc., Alset International
Limited (formerly known as Singapore eDevelopment Limited), Document Security
Systems, Inc. and OptimumBank Holdings Inc.
Former directorships (last 3 years): None
Interests in shares:
Interests in options:
Interests in rights:
Contractual rights to shares:
46,226,673 Ordinary Shares
Nil
Nil
Nil
Name:
Title:
Qualifications:
Experience and expertise:
Mr Blair Michelson
Non-Executive Director (appointed on 11 August 2020)
N/A
Mr Michelson has over 30 years experience as a management consultant in the areas
of risk, compliance, governance and systems, and asset management across a wide
range of industries in Australia and overseas. He is currently the Director/Proprietor of
two boutique consultancies, Qualita International and Alpha Asset Management
Systems and has previously consulted to Government, Not-For-Profit, public, and large
and small private clients
Other current directorships:
None
Former directorships (last 3 years): None
Interests in shares:
Interests in options:
Interests in rights:
Contractual rights to shares:
Nil
Nil
Nil
Nil
Name:
Title:
Qualifications:
Experience and expertise:
Mr Jonathan Pager
Non-Executive Director (appointed 2 July 2020 and resigned on 11 August 2020)
Master of economics, CA
Mr Jonathan Pager has over 25 years of experience as a management consultant and
corporate adviser across a wide range of industries in Australia and overseas. During
his career, Jonathan has worked with both large and small companies and has
completed a broad range of transactions and raisings in both public and private markets
Managing Director of Pager Partners Corporate Advisory
Other current directorships:
Former directorships (last 3 years): None
Interests in shares:
Interests in options:
Interests in rights:
Contractual rights to shares:
Nil
Nil
Nil
Nil
17
Holista Colltech Limited
Directors' report
31 December 2020
Name:
Title:
Qualifications:
Experience and expertise:
Mr Brett Fraser
Non-Executive Director (resigned 2 July 2020)
FCPA, F.FIN, FGIA
Mr Fraser is an experienced ASX company director and has worked in the finance and
securities industry for over 30 years. He has started, managed, owned and operated
businesses across wine, health, finance, media, brewing, tourism, and mining. For
many years, Mr Fraser has been a consultant to companies on sell side transactions,
business acquisitions, business strategy and restructuring, initial public offerings,
capital raisings and corporate governance. He is a Fellow of CPA Australia, Financial
Services Institute of Australasia and Governance Institute of Australia, and holds a
Bachelor of Business (Accounting) and Graduate Diploma in Finance from the
Securities Institute of Australia. Mr Fraser is currently a director of Sundance
Resources Limited and a former director of Aura Energy Limited, Drake Resources
Limited, Doray Minerals Limited, Blina Minerals NL, Brainytoys Limited, Empire
Resources Limited and Gage Roads Brewing Co Limited.
Sundance Resources Limited
Other current directorships:
Former directorships (last 3 years): Aura Energy Limited, Blina Minerals NL
Nil
Interests in shares:
Nil
Interests in options:
Nil
Interests in rights:
Nil
Contractual rights to shares:
'Other current directorships' quoted above are current directorships for listed entities only and excludes directorships of all
other types of entities, unless otherwise stated.
'Former directorships (last 3 years)' quoted above are directorships held in the last 3 years for listed entities only and excludes
directorships of all other types of entities, unless otherwise stated.
Meetings of directors
The number of meetings of the company's Board of Directors ('the Board') held during the year ended 31 December 2020,
and the number of meetings attended by each director were:
Full Board
Nomination and
Remuneration Committee
Audit and Risk Committee
Attended
Held
Attended
Held
Attended
Held
Dr Rajen Manicka
Mr Daniel Joseph O’Connor
Mr Chan Heng Fai
Mr Blair Michelson
Mr Jonathan Pager
Mr Brett Fraser
15
15
14
4
4
5
15
15
15
4
11
7
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Held: represents the number of meetings held during the time the director held office.
At the date of this report, both the Nomination and Remuneration Committee and the Audit and Risk Committees comprise
the full Board of Directors. The Directors believe the Company is not currently of a size nor are its affair 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.
18
Holista Colltech Limited
Directors' report
31 December 2020
Indemnity and insurance of officers
Indemnification
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.
Insurance premiums
During the financial year the Group has paid a premium of $17,418 (2019: $20,064) 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).
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the company
or any related entity.
Shares under option
There were no unissued ordinary shares of Holista Colltech Limited under option outstanding at the date of this report.
Shares issued on the exercise of performance rights
The following ordinary shares of Holista Colltech Limited were issued during the year ended 31 December 2020 and up to
the date of this report on the exercise of performance rights granted:
Type of performance rights
Class A Performance Rights
Class B Performance Rights
Exercise
price
Number of
shares issued
$0.105
$0.105
3,600,000
2,700,000
6,300,000
Shares under Performance Rights
Unissued ordinary shares of Holista Colltech Limited under performance rights at the date of this report are as follows:
Type of performance rights
Class C Performance Rights
Class D Performance Rights
Number of
shares under
Performance
rights
Exercise
Price
$0.15
$0.15
1,800,000
900,000
2,700,000
Non-audit services
During the year, no fees were paid or payable for other services provided by Stantons International Audit and Consulting Pty
Ltd. However, Marsden International, an affiliate of Stantons International provided tax compliance and independent expert
services. Non-audit fees amounted to $5,870(2019: $11,518).
19
Holista Colltech Limited
Directors' report
31 December 2020
Details of the amounts paid or payable to the auditor for non-audit services provided during the financial year by the auditor
are outlined in note 30 to the financial statements.
The directors are satisfied that the provision of non-audit services during the financial year, by the auditor (or by another
person or firm on the auditor's behalf), is compatible with the general standard of independence for auditors imposed by the
Corporations Act 2001.
The directors are of the opinion that the services as disclosed in note 30 to the financial statements do not compromise the
external auditor's independence requirements of the Corporations Act 2001 for the following reasons:
●
all non-audit services have been reviewed and approved to ensure that they do not impact the integrity and objectivity
of the auditor; and
none of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor's own work, acting in a management or decision-making capacity for the company,
acting as advocate for the company or jointly sharing economic risks and rewards.
●
Proceedings on behalf of the 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.
Auditor's independence declaration
A copy of the auditor's independence declaration as required under section 307C of the Corporations Act 2001 is set out
immediately after this directors' report.
Remuneration report (audited)
Key management personnel (KMP)
The remuneration report details the key management personnel remuneration arrangements for the consolidated entity, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of KMP remuneration
Service agreements
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
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:
●
●
●
set competitive remuneration packages to attract and retain high calibre employees
link executive rewards to shareholder value creation; and
establish appropriate, demanding performance hurdles for variable executive remuneration
20
Holista Colltech Limited
Directors' report
31 December 2020
Remuneration committee
The Nomination and Remuneration Committee is responsible for determining and reviewing remuneration arrangements for
its directors and executives, and currently its responsibilities 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.
Remuneration structure
In accordance with best practice Corporate Governance, the structure of non-executive director and executive remuneration
is separate and distinct.
Non-Executive director remuneration
The Board seeks to set aggregate remuneration at a level that provides the Company with the ability to attract and retain
directors of the highest calibre, whilst incurring a cost that is acceptable to shareholders. The ASX Listing Rules specify that
the aggregate remuneration of non-executive directors shall be determined from time to time by a general meeting. The latest
determination was at the Annual General Meeting held on 1 December 2003 when shareholders approved an aggregate
remuneration of $200,000 per year.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned
amongst directors is reviewed annually. The Board considers advice from external shareholders as well as the fees paid to
non-executive directors of comparable companies when undertaking the annual review process.
Each director receives a fee for being a director of the Company. An additional fee is also paid for each Board committee on
which a director sits. The payment of additional fees for serving on a committee recognises the additional time commitment
required by directors who serve on one or more sub committees.
The remuneration of non-executive directors for the year ended 31 December 2020 is detailed in note 29 'Key management
personnel disclosures' of this remuneration report.
Additionally, the reward framework should seek to enhance executives' interests by:
●
●
●
rewarding capability and experience
reflecting competitive reward for contribution to growth in shareholder wealth
providing a clear structure for earning rewards
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Senior manager and executive director remuneration
Remuneration consists of fixed remuneration and variable remuneration (comprising short-term and long-term incentive
schemes).
Fixed Remuneration
Fixed remuneration is reviewed annually by the 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 note 29 of this remuneration report.
21
Holista Colltech Limited
Directors' report
31 December 2020
Variable Remuneration
The aggregate of annual payments available for KMP across the Group is subject to the approval of the Nomination and
Remuneration Committee during the year.
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
●
●
Short-term incentives
No short-term incentives in the form of cash bonuses were granted during the year.
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.
Service Contracts
Remuneration and other terms of employment for the directors and other KMP are formalised in contracts of employment.
Engagement of Remuneration Consultants
During the financial year, the Company did not engage any remuneration consultants.
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.
Details of KMP remuneration
Amounts of remuneration
Details of the remuneration of key management personnel of the consolidated entity are set out in the following tables.
The key management personnel of the consolidated entity consisted of the following directors of Holista Colltech Limited:
●
●
●
●
●
●
Rajen Manicka
Daniel Joseph O’Connor (appointed as Non-Executive chairman 11 Aug 2020)
Chan Heng Fai
Blair Michelson (appointed 11 Aug 2020)
Brett Fraser (appointed 21 Feb 2020 and resigned 2 Jul 2020)
Jonathan Pager (appointed 2 Jul 2020 and resigned 11 Aug 2020)
22
Holista Colltech Limited
Directors' report
31 December 2020
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
2020
Cash salary
and fees
$
Cash
bonus
$
Non-
monetary
$
Other*
$
Super-
annuation
$
Long
service
leave
$
Equity-
settled
$
Total
$
Non-Executive
Directors:
Daniel Joseph
O’Connor** 1
Chan Heng Fai 2
Blair Michelson 3
Jonathan Pager
Brett Fraser**
Executive-
Directors:
Rajen Manicka***
53,000
36,000
18,000
17,333
21,500
-
-
-
-
-
296,018
441,851
11,747
11,747
-
-
-
-
-
-
-
17,903
2,903
79,903
2,903
10,903
-
-
-
-
2,043
2,903
117,418
58,478
60,521
-
-
-
-
-
-
-
15,050
-
-
-
-
85,953
38,903
97,903
20,236
34,446
-
15,050
369,146
646,587
*
**
Other short term benefits represents D&O insurances of $2,903 for each director and additional consultancy fees paid
to directors.
Increase of cash salary and fees from $48,000 to $53,000 is due to position change from Non-Executive Director to
Non-Executive Chairman.
*** Super-annuation refers to Malaysia entitlement calculated at 19% of the total of the Short-term benefits.
(1) Mr. Daniel remuneration was paid by way of fees to Kickstart Plus Pty Ltd
(2) Mr. Blair remuneration was paid by way of fees to Qualita International
(3) Mr. Jonathan remuneration was paid by way of fees to Pager Partners Corporate Advisory
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
2019
Non-Executive
Directors:
Daniel Joseph
O’Connor 1
Chan Heng Fai
Executive
Directors:
Rajen Manicka
Salary,fees
Profit share
and leave and bonus monetary
$
Non-
$
$
Other*
$
Super-
annuation
$
Long
service
leave
$
Equity-
settled
$
Total
$
48,000
36,000
286,202
370,202
-
-
-
-
-
-
-
-
6,688
6,688
-
-
6,688
20,064
54,382
54,382
-
-
-
-
-
-
-
-
54,688
42,688
347,272
444,648
*
Other short term benefits represents D&O insurances of $6,688 for each director.
(1) Mr.Daniel remuneration was paid by way of fees to Kickstart Plus Pty Ltd
23
Holista Colltech Limited
Directors' report
31 December 2020
Service agreements
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.
Name:
Commencement date:
Termination date of contract:
Period of notice for
resignation/termination:
Remuneration:
Termination (with cause):
Termination (without cause):
Dr Rajen Manicka
10 July 2018
Initial 3-year period
3 months
RM817,464 per annum with annual 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.
Share-based compensation
Issue of shares
There were no shares issued to directors as part of compensation during the year ended 31 December 2020.
Performance rights
The terms and conditions of each grant of performance rights over ordinary shares affecting remuneration of directors in this
financial period or future reporting years are as follows:
Name
Number of
options
granted
Grant date
Vesting date and
exercisable date
Expiry date
Exercise price at grant date
Fair value
per option
Rajen Manicka
2,700,000 09/01/2017
30/06/2021
30/06/2021
$0.00
$0.15
In financial year 2017, 9,000,000 performance rights were granted to Dr Manicka. From these, during FY2020, 6,300,000
shares were issued as a result of the same number of options exercised that had previously been granted as compensation.
Please refer to note 40 'Share-based payments'.
Additional disclosures relating to key management personnel
Shareholding
The number of shares in the Company held during the financial year by each director and other members of key management
personnel of the consolidated entity, including their personally related parties, is set out below:
Balance at Received
the start of
as part of Exercise of Disposals/
Balance at
the end of
Ordinary shares
Rajen Manicka
Daniel Joseph O’Connor
Chan Heng Fai
Total Ordinary Shares
Option holding
the year
compensation
performance
rights
other
the year
79,435,272
-
46,226,673
125,661,945
-
-
-
-
6,300,000
-
-
6,300,000
- 85,735,272
-
-
- 46,226,673
- 131,961,945
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
Options over ordinary shares
Daniel Joseph O’Connor
3,500,000
3,500,000
-
(7,000,000)
-
24
Holista Colltech Limited
Directors' report
31 December 2020
Performance rights holding
The number of performance rights over ordinary shares in the company held during the financial year by each director of the
consolidated entity, including their personally related parties, is set out below:
Balance at
the start of
the year
Granted
Expired/
forfeited/
other
Balance at
the end of
the year
Vested
Performance rights over ordinary shares
Rajen Manicka
9,000,000
-
(6,300,000)
-
2,700,000
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.
This concludes the remuneration report, which has been audited.
Officers of the company who are former partners of Stantons International
There are no officers of the Company who are former partners of Stantons International .
Auditor
Stantons International continues in office in accordance with section 327 of the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Mr Daniel Joseph O'Connor
Non-executive Chairman
31 March 2021
25
Holista Colltech Limited
Auditor's independence declaration
26
Holista Colltech Limited
Contents
31 December 2020
General information
The financial statements cover Holista Colltech Limited as a consolidated entity consisting of Holista Colltech Limited and
the entities it controlled at the end of, or during, the year. The financial statements are presented in Australian dollars, which
is Holista Colltech Limited's functional and presentation currency.
Holista Colltech Limited is a listed public company limited by shares, incorporated and domiciled in Australia. Its registered
office and principal place of business are:
Registered office
Level 5,
126 Phillip Street,
Sydney NSW 2000,
Australia
Principal place of business
Unit 1201, 12th Floor,
Amcorp Trade Centre, PJ Tower
No 18, Persiaran Barat,
46000 Petaling Jaya, Malaysia
A description of the nature of the consolidated entity's operations and its principal activities are included in the directors'
report, which is not part of the financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 31 March 2021. The
directors have the power to amend and reissue the financial statements.
27
Holista Colltech Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 31 December 2020
Consolidated statement of profit or loss and other comprehensive income
Revenue from contracts with customers
Other income
Expenses
Changes in inventories of finished goods and work in progress
Raw materials and consumables used
Distribution costs and other costs of sales
Advertising and promotion
Consultancy and professional fees
Depreciation and amortisation expense
Employee benefits
Finance costs
Foreign exchange (loss)
Impairment
Research and development
Share-based payments expense
Other expenses
Loss before income tax expense
Income tax expense
Loss after income tax expense for the year
Other comprehensive income
Items that will not be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Loss for the year is attributable to:
Non-controlling interest
Owners of Holista Colltech Limited
Total comprehensive income for the year is attributable to:
Non-controlling interest
Owners of Holista Colltech Limited
Note
Consolidated
2020
$
2019
$
4
5
6
6
40
6
7,106,635
7,257,778
368,739
147,131
363,950
(3,484,941)
(404,327)
(473,592)
(939,209)
(220,869)
(2,891,621)
(68,406)
(381,130)
(3,310,442)
(339,850)
(168,170)
(750,747)
197,844
(3,277,420)
(467,599)
(431,186)
(502,222)
(305,355)
(2,824,511)
(88,820)
(38,790)
407,096
(132,275)
(90,524)
(628,846)
(5,593,980)
(777,699)
7
(86,587)
(126,335)
(5,680,567)
(904,034)
88,979
44,092
88,979
44,092
(5,591,588)
(859,942)
(197,400)
(5,483,167)
(214,183)
(689,851)
(5,680,567)
(904,034)
75,747
(5,667,335)
(66,319)
(793,623)
(5,591,588)
(859,942)
Basic loss per share
Diluted loss per share
Cents
Cents
39
39
(2.04)
(2.04)
(0.29)
(0.29)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
28
Holista Colltech Limited
Consolidated statement of financial position
As at 31 December 2020
Consolidated statement of financial position
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use asset
Intangible assets
Deferred tax asset
Other non-current assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Contract liabilities
Borrowings
Leases
Short-term provisions
Total current liabilities
Non-current liabilities
Borrowings
Leases
Provisions
Total non-current liabilities
Total liabilities
Net assets
Note
Consolidated
2020
$
2019
$
8
9
10
11
12
13
14
15
16
17
18
19
20
19
20
21
2,725,237
1,558,007
1,108,346
1,201,977
6,593,567
101,400
3,218,105
675,782
1,010,820
5,006,107
1,112,490
124,824
146,471
75,412
-
1,459,197
1,317,918
158,982
776,121
137,921
529,489
2,920,431
8,052,764
7,926,538
1,719,277
458,729
401,173
28,155
13,414
2,620,748
2,626,814
515,719
337,341
39,702
17,687
3,537,263
430,605
82,764
275,000
788,369
436,236
108,437
275,000
819,673
3,409,117
4,356,936
4,643,647
3,569,602
Equity
Issued capital
Reserves
Accumulated losses
Equity attributable to the owners of Holista Colltech Limited
Non-controlling interest
Total equity
22
23
24
25
21,707,478 14,548,515
2,329,439
(12,455,239)
4,422,715
(853,113)
(137,344)
(16,149,123)
5,421,011
(777,364)
4,643,647
3,569,602
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
29
Holista Colltech Limited
Consolidated statement of changes in equity
For the year ended 31 December 2020
Share-based
Payments
Reserves
Foreign
Currency
Translation
Reserve
Issued
capital
Accumulated
Losses
Non-
controlling
interest
Total equity
Consolidated statement of changes in equity
Consolidated
$
$
$
$
$
$
Balance at 1 January 2019
14,548,515
4,899,791
(228,428)
(13,869,412)
(786,794)
4,563,672
Adjustment for change in
Accounting policy - AASB 16
Balance at 1 January 2019 -
restated
Loss after income tax expense
for the year
Other comprehensive income
for the year, net of tax
Total comprehensive income for
the year
Transactions with owners in
their capacity as owners:
Recognition of performance
rights
Transfer of expired option
balance
Transfer to and from reserves
-
-
-
(224,652)
-
(224,652)
14,548,515
4,899,791
(228,428)
(14,094,064)
(786,794)
4,339,020
-
-
-
-
-
-
-
-
-
-
(689,851)
(214,183)
(904,034)
(103,772)
-
147,864
44,092
(103,772)
(689,851)
(66,319)
(859,942)
90,524
-
-
(2,347,593)
-
-
18,917
2,347,593
(18,917)
-
-
-
90,524
-
-
Balance at 31 December 2019
14,548,515
2,642,722
(313,283)
(12,455,239)
(853,113)
3,569,602
Consolidated
Issued
capital
$
Share-based
Payments
Reserves
Foreign
Currency
Translation
Reserve
$
$
Accumulated
Losses
$
Non-
controlling
interest
$
Total equity
$
Balance at 1 January 2020
14,548,515
2,642,722
(313,283)
(12,455,239)
(853,113)
3,569,602
Loss after income tax expense
for the year
Other comprehensive income
for the year, net of tax
Total comprehensive income for
the year
Shares issued during the year
(note 22)
Transaction costs (note 22)
Transfer of expired options
balance
Exercise of performance rights
Shares based payment
expenses (note 40)
-
-
-
6,527,337
(29,874)
-
-
-
-
-
-
661,500
(1,505,783)
(945,000)
-
168,170
-
(5,483,167)
(197,400)
(5,680,567)
(184,170)
-
273,149
88,979
(184,170)
(5,483,167)
75,749
(5,591,588)
-
-
-
-
-
-
-
1,505,783
283,500
-
-
-
-
-
-
6,527,337
(29,874)
-
-
168,170
Balance at 31 December 2020
21,707,478
360,109
(497,453)
(16,149,123)
(777,364)
4,643,647
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
30
Holista Colltech Limited
Consolidated statement of cash flows
For the year ended 31 December 2020
Consolidated statement of cash flows
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Finance costs
Interest received
Other revenue
Income tax paid
Note
Consolidated
2020
$
2019
$
6,324,724
(10,342,180)
(68,406)
23,405
268,856
(74,009)
7,231,436
(7,422,701)
(83,839)
9,221
133,678
(28,770)
Net cash (used in) operating activities
37
(3,867,610)
(160,975)
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intellectual property
Loans repaid/(advanced), net
Increase / Refund of deposits/investments
Net cash (used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from/(Repayment of) borrowings, net
Repayment of lease
Share issue transaction costs
Net cash generated from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Change in foreign currency held
12
14
22
(13,362)
(20,979)
-
(46,405)
(70,985)
(39,548)
73,226
52,516
(80,746)
15,209
6,527,337
121,669
(39,621)
(29,874)
-
(83,840)
(33,168)
-
6,579,511
(117,008)
2,631,155
101,400
(7,318)
(262,774)
357,705
6,469
Cash and cash equivalents at the end of the financial year
8
2,725,237
101,400
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
31
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Notes to the consolidated financial statements
Note 1. Significant accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out either in the respective
notes or below. These policies have been consistently applied to all the years presented, unless otherwise stated.
New or amended Accounting Standards and Interpretations adopted
The consolidated entity has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board ('AASB') that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
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 after tax for the year of $5,680,567 (2019: $904,034 loss) and a net cash out-flow from operating
activities of $3,867,610 out-flow (2019: $160,975 out-flow). As at 31 December 2020, the Group's working capital amounted
to $3,972,819 (2019: $1,468,844 working capital), as disclosed in note 22 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.
As the world battle against COVID 19 pandemic is far from over, the Group is confident that the revenue from different
business segments will continue to grow and contribute positively to its cashflows and profitability in the year 2021. The
Group is optimistic about its ability to meets all its liabilities.
Should the Group not be able to continue as a going concern, it may be required to realise its assets and discharge its
liabilities other than in the ordinary course of business and at amounts that differ from those stated in the financial report.
The financial report does not include any adjustments relating to the recoverability and classification of recorded assets or
liabilities that might be necessary should he group not continue as a going concern.
Basis of preparation
These general purpose financial statements have been prepared in accordance with Australian Accounting Standards and
Interpretations issued by the Australian Accounting Standards Board ('AASB') and the Corporations Act 2001, as appropriate
for for-profit oriented entities. These financial statements also comply with International Financial Reporting Standards as
issued by the International Accounting Standards Board ('IASB').
Historical cost convention
The financial statements have been prepared under the historical cost convention, except for, where applicable, the
revaluation of financial assets and liabilities at fair value through profit or loss, financial assets at fair value through other
comprehensive income, investment properties, certain classes of property, plant and equipment and derivative financial
instruments.
Parent entity information
In accordance with the Corporations Act 2001, these financial statements present the results of the consolidated entity only.
Supplementary information about the parent entity is disclosed in note 34.
Principles of consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Holista Colltech Limited
('company' or 'parent entity') as at 31 December 2020 and the results of all subsidiaries for the year then ended. Holista
Colltech Limited and its subsidiaries together are referred to in these financial statements as the 'consolidated entity'.
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity controls an entity
when the consolidated entity is exposed to, or has rights to, variable returns from its involvement with the entity and has the
ability to affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from
the date on which control is transferred to the consolidated entity. They are de-consolidated from the date that control ceases.
32
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 1. Significant accounting policies (continued)
Intercompany transactions, balances and unrealised gains on transactions between entities in the consolidated entity are
eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies
adopted by the consolidated entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in ownership interest,
without the loss of control, is accounted for as an equity transaction, where the difference between the consideration
transferred and the book value of the share of the non-controlling interest acquired is recognised directly in equity attributable
to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of profit or loss and
other comprehensive income, statement of financial position and statement of changes in equity of the consolidated entity.
Losses incurred by the consolidated entity are attributed to the non-controlling interest in full, even if that results in a deficit
balance.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including goodwill, liabilities and
non-controlling interest in the subsidiary together with any cumulative translation differences recognised in equity. The
consolidated entity recognises the fair value of the consideration received and the fair value of any investment retained
together with any gain or loss in profit or loss.
Foreign currency translation
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.
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.
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:
●
●
●
assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
income and expenses are translated at average exchange rates for the period; and
retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Exchange differences arising on translation of foreign operations 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.
Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed in the
consolidated entity's normal operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within
12 months after the reporting period; or the asset is cash or cash equivalent unless restricted from being exchanged or used
to settle a liability for at least 12 months after the reporting period. All other assets are classified as non-current.
33
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 1. Significant accounting policies (continued)
A liability is classified as current when: it is either expected to be settled in the consolidated entity's normal operating cycle;
it is held primarily for the purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period. All other liabilities
are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
Financial assets
Classification
From 1 January 2018, the Group classifies its financial assets in the following measurement categories:
● Those to be measured subsequently at fair value (either through OCI or through profit or loss), and
● 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.
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.
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.
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:
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.
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
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.
●
34
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 1. Significant accounting policies (continued)
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.
Investments
Investments includes non-derivative financial assets with fixed or determinable payments and fixed maturities where the
consolidated entity has the positive intention and ability to hold the financial asset to maturity. This category excludes financial
assets that are held for an undefined period. Investments are carried at amortised cost using the effective interest rate method
adjusted for any principal repayments. Gains and losses are recognised in profit or loss when the asset is derecognised or
impaired.
Value added taxes
Value-added tax (VAT) is the generic team 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 Services Tax or GST), hereafter collectively referred
to as GST.
Revenues, expenses, and assets are recognised net of the amounts 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.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the tax authority.
Fair Value
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
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:
35
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 1. Significant accounting policies (continued)
●
●
●
Level 1:Measurements based on quoted prices (unadjusted) in active markets for identical assets or liabilities that the
entity can access at the measurement date.
Level 2:Measurements based on inputs other than quoted prices included in Level 1 that are observable for the asset
or liability, either directly or indirectly
Level 3:Measurements based on unobservable inputs for the asset or liability
The fair values of assets and liabilities that are not traded in an active market are determined using one or more valuation
techniques. These valuation techniques maximise, to the extent possible, the use of observable market data. If all significant
inputs required to measure fair value are observable, the asset or liability is included in Level 2. If one or more significant
inputs are not based on observable market data, the asset or liability is included in Level 3.
The Group would change the categorisation within the fair value hierarchy only in the following circumstances:
●
●
If a market that was previously considered active (Level 1) became inactive (Level 2 or Level 3) or vice versa; or
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.
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:
●
●
●
Market approach: valuation techniques that use prices and other relevant information generated by market transactions
for identical or similar assets or liabilities.
Income approach: valuation techniques that convert estimated future cash flows into income and expenses into a single
discounted present value.
Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service capacity.
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.
Note 2. Critical accounting judgements, estimates and assumptions
The preparation of the consolidated financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually evaluates its judgements
and estimates in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its
judgements, estimates and assumptions on historical experience and on other various factors, including expectations of
future events, management believes to be reasonable under the circumstances. There are no critical accounting judgements,
estimates and assumptions that are likely to affect the current or future financial years.
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.
36
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 2. Critical accounting judgements, estimates and assumptions (continued)
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:
●
●
●
●
●
●
●
Key estimate – taxation (note 7 Income Tax)
Key estimate – impairment of property, plant and equipment (note 12 Property, plant and equipment)
Key estimate – impairment of goodwill (note 14 Intangible assets)
Key estimate – determining stand-alone selling price of the loyalty points (note 18 contract liabilities)
Key estimate – determining the lease term (note 20 Leases)
Key estimate - determining the cost of equity-settled transactions (note 40 Share-based payments)
Key estimate - determining the allowance for expected credit losses (note 9 trade and other receivables)
Note 3. Operating segments
Identification of reportable operating 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; Ovine Collagen; Infection Control Solutions; Food Ingredients;
and Corporate.
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.
Types of products and services
The principal products and services of each of these operating segments are as follows:
Supplements
Ovine collagen
Food ingredients
Infection control
This operating segment is involved in the manufacture and wholesale distribution of dietary
supplements.
This operating segment is involved in the manufacture and distribution of cosmetic grade
collagen.
This operating segment is involved in the manufacture and wholesale distribution of healthy
food ingredients.
This operating segment is involved in the infection control solutions.
Intersegment 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.
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.
37
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 3. Operating segments (continued)
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.
Major customers
The Group has a number of customers to whom it provides both products and services.
Within the Supplement segment, the Group supplies to a number of retailers through one single external distributor who
accounts for 83% (2019: 77.1%) of total revenue for this segment. For Food Ingredients and Infections Control business
segments, the Group supplies to a few major customers that accounts 71% (2019: Nil) of revenue for this segment. The
Group supplies to a few external customers for the Ovine Collagen segment, where the major customer accounts for 89%
(2019: 97.0%) of revenue for this segment.
Segment Financial Performance
Year ended 31 December 2020
Supplements
$
Sheep
Collagen
$
Food
Ingredients
$
Infection
Control
$
Corporate
$
Total
Revenue
External sales
Other income
Total segment revenue
Reconciliation of segment
revenue to group revenue:
Total expenses
Segment (loss) from continuing
operations before tax
5,243,791
-
5,243,791
173,400
-
173,400
1,024,525
-
1,024,525
664,919
-
664,919
-
368,739
368,739
7,106,635
368,739
7,475,374
(5,413,679)
(671,672)
(1,499,563)
(1,265,290)
(4,219,150)
(13,069,354)
(169,888)
(498,272)
(475,038)
(600,371)
(3,850,411)
(5,593,980)
Year ended 31 December 2019
Supplements
$
Sheep
Collagen
$
Food
Ingredients
$
Infection
Control
$
Corporate
$
Total
$
Revenue
External sales
Other income
Total segment revenue
Reconciliation of segment
revenue to group revenue:
Total expenses
Segment (loss) from continuing
operations before tax
6,633,235
-
6,633,235
460,750
-
460,750
163,793
-
163,793
-
-
-
-
147,131
147,131
7,257,778
147,131
7,404,909
(6,222,006)
(804,156)
(577,076)
-
(579,370)
(8,182,608)
411,229
(343,406)
(413,283)
-
(432,239)
(777,699)
38
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 3. Operating segments (continued)
At as 31 December 2020
Supplements
$
Sheep
Collagen
$
Food
Ingredients
$
Infection
Control
$
Corporate
$
Total
$
Segment Assets
Intra-segment eliminations
Total assets
2,891,061
-
2,891,061
5,734,695
-
5,734,695
2,178,633
-
2,178,633
125,509
-
125,509
(2,877,134)
(2,877,134)
- 10,929,898
(2,877,134)
8,052,764
Segment Liabilities
Intra-segment eliminations
Total liabilities
(1,344,937)
-
(1,344,937)
(487,690)
-
(487,690)
(4,440,377)
-
(4,440,377)
(722,947)
-
(722,947)
-
3,576,834
3,576,834
(6,995,951)
3,576,834
(3,419,117)
Total net assets
1,546,124
5,247,005
(2,261,744)
(597,438)
699,700
4,633,647
Year ended 31 December 2019
Supplements
$
Sheep
Collagen
$
Food
Ingredients
$
Infection
Control
$
Corporate
$
Total
Segment Assets
Intra-segment eliminations
Total assets
5,537,369
-
5,537,369
6,251,379
-
6,251,379
1,157,761
-
1,157,761
Segment Liabilities
Intra-segment eliminations
Total liabilities
(1,450,949)
-
(1,450,949)
(2,450,226)
-
(2,450,226)
(2,877,338)
-
(2,877,338)
Total Net assets
4,086,420
3,801,153
(1,719,577)
-
-
-
-
-
-
-
(5,019,971)
(5,019,971)
- 12,946,509
(5,019,971)
7,926,538
-
2,421,577
2,421,577
(6,778,513)
2,421,577
(4,356,936)
(2,598,394)
3,569,602
Assets by geographical region
The location of segment assets (before intra-segment eliminations) by geographical location of the assets is disclosed below:
Australia
Malaysia
United States
Total assets
Consolidated
2020
$
2019
$
5,734,695
4,376,318
818,885
6,251,379
5,537,369
1,157,761
10,929,898 12,946,509
Revenue by geographical area
Revenue attributable to external customers is disclosed below, based on the location of the external customer:
Australia
Malaysia
United States
Total revenue
Consolidated
2020
$
2019
$
173,400
6,324,178
609,057
460,750
6,633,235
163,793
7,106,635
7,257,778
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:
39
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 3. Operating segments (continued)
●
●
●
●
Depreciation and amortisation
Gains or losses on sales of financial and non-financial assets
Investment income
Corporate transaction accounting expense
Accounting policy for operating segments
Operating segments are presented using the 'management approach', where the information presented is on the same basis
as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation
of resources to operating segments and assessing their performance.
Note 4. Revenue from contracts with customers
Revenue from contracts with customers
Disaggregation of revenue
The disaggregation of revenue from contracts with customers is as follows:
Supplements
Sheep Collagen
Food Ingredients
Infection Control
Geographical regions
Australia
Malaysia
United States
Timing of revenue recognition
Goods transferred at a point in time
Consolidated
2020
$
2019
$
7,106,635
7,257,778
Consolidated
2020
$
2019
$
5,243,791
173,400
1,024,525
664,919
6,633,235
460,750
163,793
-
7,106,635
7,257,778
173,400
6,324,178
609,057
460,750
6,633,235
163,793
7,106,635
7,257,778
7,106,635
7,257,778
Accounting policy for Revenue from contracts with customers
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:
●
●
●
●
●
Identify the contract with a customer;
Identify the performance obligations in the contract and determine at what point they are satisfied;
Determine the transaction price;
Allocate the transaction price to the performance obligations; and
Recognise the revenue as the performance obligations are satisfied.
40
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 4. 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:
●
●
●
the customer simultaneously receives and consumes the benefits provided by the Group's performance as the Group
performs;
the Group's performance creates or enhances an asset that the customer controls as the asset is created or enhanced;
or
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.
Sale of health care products
Sale of health care products comprise revenue from supplements, food ingredients and infection control.
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.
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.
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.
41
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 4. Revenue from contracts with customers (continued)
Royalty income
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.
Sale of raw ingredients
Sale of raw ingredients comprise sales from sheep collagen, food ingredients and infection control.
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.
Customer loyalty points
Deferred revenue in respect to customer loyalty points is recognised in accordance with note 18 Key estimates –Deferred
revenue for customer loyalty points
Assets and liabilities arising from rights of return
Assets and liabilities arising from rights of return in accordance with note 11 Right-of-return assets, note 17 Refund liabilities,
and note 18 Contract liabilities.
Note 5. Other income
Government Grants - Research and development
Government Grants - Cashflow Boost and JobKeeper Subsidy
Interest income
Other income
Other income
Consolidated
2020
$
2019
$
163,540
105,316
23,405
76,478
133,678
-
9,221
4,232
368,739
147,131
Accounting Policy for Interest Income
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 income is recognised on a time proportionate basis that considers the effective yield on the financial asset.
Accounting Policy for Government grants
Government grants are recognised upon receipts of cash.
42
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 6. Loss before income tax
Loss before income tax includes the following specific expenses:
Impairment
Impairment of other assets (note 11)
Impairment of funds loaned recovered
Impairment on credit losses (note 9)
Impairment of intangibles – Emulin trademark (note 14)
Impairment of goodwill (note 14)
Doubtful debts expensed
Total impairment
Other Expenses
Compliance and regulatory costs
Insurance
Other expenses
Collie factory maintenance costs
Audit fees
Office expense and other occupancy costs
Total Other Expenses
Employee Benefit Expense Short-term
Salary and wages, including directors fees
Superannuation
Medical and Insurance
Bonus and Incentive
Travel
Others
Total Employee Benefit Expense Short-term
Accounting policy for Impairment on credit losses
Refer to note 9
Accounting policy for Impairment on Intangibles including Goodwill
Refer to note 14
Consolidated
2020
$
2019
$
448,086
-
2,341,655
-
520,655
46
-
(511,744)
-
104,350
-
298
3,310,442
(407,096)
267,913
77,103
13,463
110,306
86,334
195,628
117,648
64,700
33,063
117,922
89,486
206,027
750,747
628,846
1,988,208
247,538
98,478
316,637
152,071
88,689
1,940,099
250,409
68,643
280,643
211,483
73,234
2,891,621
2,824,511
Accounting policy for Employee Benefit Expense Short-term
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.
Accounting policy for 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 profit or loss as incurred.
43
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 7. Income tax expense
Income tax expense
Current Income tax
Deferred Income tax
Aggregate income tax expense
Numerical reconciliation of income tax expense and tax at the statutory rate
Loss before income tax expense
Tax at the statutory tax rate of 27.5%
Non-deductible expenses
Research and development tax offset exempted from tax
Foreign tax losses not recognised
Foreign income tax payable
Deferred tax asset not brought to account
Profit attributable to foreign subsidiaries
Timing differences
Income tax expense
Consolidated
2020
$
2019
$
36,235
50,352
126,335
-
86,587
126,335
(5,593,980)
(777,699)
(1,538,345)
(213,867)
1,004,356
(44,974)
83,196
86,587
304,814
(108,225)
299,178
27,818
(36,761)
182,365
126,335
93,465
-
(53,020)
86,587
126,335
%
%
The applicable weighted average effective tax rates attributable to operating profit are as
follows:
1.55
(16.24)
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.
The foreign income 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.
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:
Tax losses Australia
Tax losses attributable to foreign subsidiaries
Consolidated
2020
$
2019
$
2,468,942
1,439,059
2,165,402
1,355,863
3,908,001
3,521,265
Potential deferred tax assets attributable to tax losses have not been brought to account at 31 December 2020 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:
44
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 7. Income tax expense (continued)
i. 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 Group 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 Group 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 $8,974,034 (2019: $7,870,251) 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 $1,103,783 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.
Accounting policy for Income tax benefit
The income tax expense or benefit for the period is the tax payable on the current period's taxable income based on the
applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to
temporary difference and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the Company's subsidiaries and associates operate and generate taxable income.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation
is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the
tax authorities.
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from
or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or
substantively enacted by the balance date.
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of assets and
liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences except:
●
●
When the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and that, at the time of the transaction, affects neither the accounting
profit nor taxable profit or loss; or
When the taxable temporary difference is associated with investments in subsidiaries, associates or interests in joint
ventures, and the timing of the reversal of the temporary difference can be controlled and it is probable that the
temporary difference will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and
unused tax losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary
differences and the carry-forward of unused tax credits and unused tax losses can be utilised, except:
●
●
When the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of
an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss; or
When the deductible temporary difference is associated with investments in subsidiaries, associates or interests in joint
ventures, in which case a deferred tax asset is only recognised to the extent that it is probable that the temporary
difference will reverse in the foreseeable future and taxable profit will be available against which the temporary
difference can be utilised.
45
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 7. Income tax expense (continued)
The carrying amount of deferred income tax assets is reviewed at each balance date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to be recovered. Deferred income tax assets and
liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss. Deferred tax
assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current
tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority.
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 8. Current assets - cash and cash equivalents
Cash at bank
Cash on deposit
Consolidated
2020
$
2019
$
310,191
2,415,046
101,400
-
2,725,237
101,400
Accounting policy for cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and
which are subject to an insignificant risk of changes in value.
46
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 9. Current assets - trade and other receivables
Trade receivables
Less: Allowance for expected credit losses
Other receivables
Amounts advanced to a related party
Amounts advanced to a third party
Less: allowance for expected credit losses
Interest receivable
Consolidated
2020
$
2019
$
3,138,830
(1,751,581)
1,387,249
2,623,781
-
2,623,781
119,634
180,623
294,534
(475,157)
51,124
62,964
180,623
294,534
-
56,203
1,558,007
3,218,105
2020
Not past due
Past due up
to 30 days
Past due 31-
60 days
Past due 61-
90 days
Past due over
90 days
Net
Trade receivables-Gross value
1,327,973
51,208
71,332
344,965
1,343,352
3,138,830
Allowance for expected credit
losses
Other receivables-net
(20,796)
170,758
-
-
(58,824)
(332,797)
(1,339,164)
(1,751,581)
-
-
-
170,758
1,477,935
51,208
12,508
12,168
4,188
1,558,007
2019
Not past due
Past due up
to 30 days
Past due 31-
60 days
Past due 61-
90 days
Past due over
90 days
Total
Trade receivables-Gross value
1,444,093
285,142
76,504
Other receivables-net
594,324
-
-
2,038,417
285,142
76,504
-
-
-
818,042
2,623,781
-
594,324
818,042
3,218,105
The average credit period on sales of goods and rendering of services ranges from 30 to 240 days. Interest is not charged.
During the year ended 31 December 2020 an allowance of $1,751,581 has been made for estimated irrecoverable trade
receivable amounts arising from past sale of goods, 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.
Included in trade receivables is an amount due from companies in which a director has interest of $1,071,048 (2019:
$1,413,601). During the year ended 31 December 2020, an allowance of $1,071,048 (2019: $Nil) has been made.
As at 31 December 2019, the amounts advanced to a related party of $180,623 charged interest at 3% and the amount
advanced to a third party of $294,534 charged interest at 3% in its first year and 5% in its second year, on accrual basis.
During the year ended 31 December 2020, an impairment of $475,157 has been made to fully impair the amounts advanced
to a related party and a third party.
Accounting policy for trade and other receivables
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.
47
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 9. Current assets - trade and other receivables (continued)
Trade and other receivables are initially recognised at fair value and subsequently measured at amortised cost using the
effective interest method, less any allowance for expected credit losses.
Accounting policy for allowance for expected credit losses
The Group assesses impairment 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.
Note 10. Current assets - inventories
Raw materials - at cost
Finished goods - at cost
Stock-in-transit - at cost
Consolidated
2020
$
2019
$
948,667
33,336
126,343
302,726
373,056
-
1,108,346
675,782
Accounting policy for inventories
Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its present
location and conditions are accounted for as follows:
●
●
Raw materials - purchase cost on a first-in, first-out basis; and
Finished goods and work-in-progress - cost of direct materials and labour and a proportion of manufacturing overheads
based on normal operating capacity but excluding borrowing costs.
Stock-in-transit is stated at the lower of cost and net realisable value. Cost comprises of purchase and delivery costs, net of
rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated costs of completion
and the estimated costs necessary to make the sale.
Note 11. Current assets - Other current assets
Prepayments
Security deposits
Other deposits
Loan to a related party
Right-of-return assets
Tax recoverable
48
Consolidated
2020
$
2019
$
239,412
320,463
21,566
481,641
101,134
37,761
614,602
303,921
14,645
-
77,652
-
1,201,977
1,010,820
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 11. Current assets - Other current assets (continued)
Included in prepayment was an amount of $448,086 for deposit and advances previously made to ProImmune Company
LLC for supply contract. As disclosed in December 2019 annual report, ProImmune Company LLC filed for purported
breached of supply contracts by the Company in February 2020. As it is not practical to estimate when the decision of the
court will be made, the prepayments has been fully impaired.
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.
Loan to a related party as at 31 December 2020 is related to loan to Galen BioMedical Inc. which is non-interest bearing and
repayable upon demand. Refer to note 16 for more details.
Accounting policy for 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.
Note 12. Non-current assets - property, plant and equipment
Freehold land and buildings
Less: Accumulated depreciation and impairment
Plant and equipment
Less: Accumulated depreciation
Total property, plant and equipment
Consolidated
2020
$
2019
$
1,017,689
(314,367)
703,322
2,577,466
(1,799,081)
778,385
2,031,321
(1,622,153)
409,168
2,025,588
(1,486,055)
539,533
1,112,490
1,317,918
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial year are set out
below:
Consolidated
Balance at 1 January 2019
Additions
Exchange rate differences
Reclassification to right-of-use assets
Depreciation expense
Balance at 31 December 2019
Additions
Exchange rate differences
Depreciation expense
Freehold land
and buildings
$
Plant and
equipment
$
Motor
Vehicles
$
791,187
-
15,035
-
(27,837)
778,385
-
(54,808)
(20,255)
613,714
70,985
314
-
(145,480)
539,533
13,362
(1,351)
(142,376)
Total
$
1,429,087
70,985
15,805
(24,642)
(173,317)
1,317,918
13,362
(56,159)
(162,631)
1,112,490
24,186
-
456
(24,642)
-
-
-
-
-
-
Balance at 31 December 2020
703,322
409,168
49
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 12. Non-current assets - property, plant and equipment (continued)
Land and buildings with a carrying amount of $703,322 (2019: $778,385) are subject to a first charge to secure a loan from
CIMB Bank, Malaysia.
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 2020 (2019: $nil).
Accounting policy for property, plant and equipment
Recognition and measurement
Freehold 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 table
below) and impairment losses (see accounting policy for impairment below).
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.
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.
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.
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.
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical cost includes
expenditure that is directly attributable to the acquisition of the items.
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.
Depreciation rates and methods are reviewed annually for appropriateness. The depreciation rates used for the current and
comparative periods are:
50
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 12. Non-current assets - property, plant and equipment (continued)
Buildings
Plant and equipment
Motor vehicles
2020
Bottom
%
4.00
20.00
20.00
2020
Top
%
4.00
33.33
20.00
2019
Bottom
%
4.00
20.00
20.00
2019
Top
%
4.00
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.
Impairment of property, plant and equipment
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. The
assessment will consider both external and internal sources of information. If such an indication exists, an impairment test is
carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less
costs of disposal and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying amount over its
recoverable amount is recognised immediately in profit or loss. Where it is not possible to estimate the recoverable amount
of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
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.
Note 13. Non-current assets - right-of-use asset
Properties
Motor vehicles
No additions to the right-of-use assets were made during the reporting period.
Depreciation charge of right-of-use assets
Properties
Motor vehicles
Other
Interest expense (included in finance cost)
Consolidated
2020
$
2019
$
104,884
19,940
122,902
36,080
124,824
158,982
Consolidated
2020
$
2019
$
18,019
14,458
-
32,477
13,741
6,184
7,785
27,710
7,334
26,354
Leased assets and assets under hire purchase contracts are pledged as security for the related finance lease and hire
purchase liabilities.
51
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 13. Non-current assets - right-of-use asset (continued)
Accounting policy for Right-of-Use Asset
The Group recognises a right-of-use asset at the commencement date of the lease. The right-of-use asset is initially
measured at cost. The cost of right of use assets includes the amount of lease liabilities recognised, adjusted for any lease
payments made at or before the commencement date, plus initial direct costs incurred and an estimate of costs to dismantle,
remove or restore the leased asset, less any lease incentives received.
Right-of-use assets are measured at cost comprising the following:
●
●
●
●
The amount of the initial measurement of lease liability
Any lease payments made at or before the commencement date less any lease incentives received
Any initial direct costs, and
Restoration costs.
Subsequent to initial measurement, the right of use asset is depreciated on a straight-line basis over the shorter of the lease
term and the estimated useful life as follows:
●
●
Motor vehicles 5 years
Properties (in Processing factory) 3 – 30 years
Right of use assets are subject to impairment and are adjusted for any remeasurement of lease liabilities.
Extension and termination options
An extension options is included in a property of the Group. This is used to maximise operational flexibility in terms of
managing the assets used in the Group’s operations. The extension option held is exercisable only by the Group and not by
the respective lessor.
Note 14. Non-current assets - intangible assets
Goodwill
Patents and licences
Less: Accumulated amortisation
Consolidated
2020
$
2019
$
-
572,378
216,788
(70,317)
146,471
314,864
(111,121)
203,743
146,471
776,121
52
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 14. Non-current assets - intangible assets (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial years are set out
below:
Consolidated
Balance at 1 January 2019
Additions
Impairment
Exchange differences
Amortisation expense
Balance at 31 December 2019
Additions
Exchange differences
Impairment of assets
Write off of assets
Transfers (out)
Amortisation expense
Balance at 31 December 2020
Goodwill
$
Patents and
licences
$
Total
$
568,161
-
-
4,217
-
572,378
-
(51,723)
(520,655)
-
-
-
386,556
17,285
(104,350)
4,292
(100,040)
203,743
20,979
(7,032)
-
(45,044)
(414)
(25,761)
954,717
17,285
(104,350)
8,509
(100,040)
776,121
20,979
(58,755)
(520,655)
(45,044)
(414)
(25,761)
-
146,471
146,471
Patents and licences
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 Group has reached an out of court settlement with ATM Metabolics in November 2019 and the
Group no longer will be selling the trademark Emulin. As a consequence, the Group has fully impaired the carrying amount
of the asset related in respect to this trademark which amounted to $104,350 in prior year.
53
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 14. Non-current assets - intangible assets (continued)
Goodwill impairment testing
Goodwill relates to the acquisition of the food ingredients business in the USA. Consequently, the carrying amount of goodwill
was allocated to the food ingredients CGU.
The recoverable amount of goodwill has been determined based on a value-in-use calculation using cash flow projections
for the food ingredients business in the USA. Cash flows beyond the five-year forecast are extrapolated using estimated
terminal growth rates.
In the current year, there has been considerable volatility in the economic environment as a result of COVID-19. Management
has carefully assessed the impact of COVID-19 and the implications of lower economic activity on its operations.
Management has observed that there has been a significant impact in the performance of the food ingredients business in
the USA.
Based on management's current assessment, the carrying amount of the food ingredient's CGU exceeds its recoverable
amount and consequently, the Group has recorded an impairment charge of $520,655 in respect of the Food Ingredients
CGU in USA.
Accounting policy on Intangible assets
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.
The following useful lives are used in the calculation of amortisation:
Patents and Licenses
2020
%
2019
%
20
20
54
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 14. Non-current assets - intangible assets (continued)
Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of the acquisition of the business
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.
Impairment of non-financial assets, including goodwill
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and are tested annually
for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other non-
financial assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its
recoverable amount.
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The value-in-use is the
present value of the estimated future cash flows relating to the asset using a pre-tax discount rate specific to the asset or
cash-generating unit to which the asset belongs. Assets that do not have independent cash flows are grouped together to
form a cash-generating unit.
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.
Note 15. Non-current assets - Deferred tax asset
Deferred tax asset*
* Arising in Malaysian subsidiary
Note 16. Non-current assets - Other non-current assets
Loans to a related party
55
Consolidated
2020
$
2019
$
75,412
137,921
Consolidated
2020
$
2019
$
-
529,489
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 16. Non-current assets - Other non-current assets (continued)
Loan to a related party as at 31 December 2019 is related to loan to Galen BioMedical Inc. The loan is supported by shares
held in the Company. The Company re-assessed this loan as at 31 December 2020. It was determined that the borrower
has sufficient capability to settle the loan and therefore no impairment of credit losses is provided at 31 December 2020
(2019: nil).
The loan is non-interest bearing and is repayable on demand, hence was reclassified as current asset in the current financial
year (refer to Note 11). Galen Biomedical owns shares on the Company which are not pledged as collateral and are free
from any encumbrances
Refer to note 1 for further information on fair value measurement.
Accounting policy for 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.
Note 17. Current liabilities - trade and other payables
Trade payables
Accruals
Amounts due to a Director
Dividends payable
Refund liability
Other payables
Consolidated
2020
$
2019
$
829,857
433,102
21,588
22,360
368,905
43,465
1,581,813
381,740
89,109
24,581
391,813
157,758
1,719,277
2,626,814
Refer to note 27 for further information on financial instruments.
Included in the accruals is deferred revenue amounting of $71,241 (2019: $68,598) 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.
Amounts due to a Director which amounted to $ 21,588 (2019: $89,109) refers to the accrued director fees of Mr Chan as at
31 December 2020.
Accounting policy for Trade and other payables
Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to
the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future
payments in respect of the purchase of these goods and services. Trade and other payables are presented as current
liabilities unless payment is not due within 12 months.
Accounting policy for Refund liability
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).
Accounting policy for loyalty points programme
56
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 17. Current liabilities - trade and other payables (continued)
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 Group updates its estimates of the points that will be redeemed
and any adjustments to the contract liability balance are charged against revenue.
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 Group updates its estimates of the points that will be redeemed
and any adjustments to the contract liability balance are charged against revenue.
Note 18. Current liabilities - contract liabilities
Advance deposits
Consolidated
2020
$
2019
$
458,729
515,719
Accounting policy for 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.
Note 19. - Borrowings
Current Borrowings
Term Loan
Banker's acceptance
Loan from a related party*
Total Current Borrowings
Non-Current Borrowings
Term Loan
Total Borrowings
* Loan from a related party is repayable upon demand and non-interest bearing.
57
Consolidated Consolidated
2020
$
2019
$
29,027
358,611
13,535
401,173
57,045
265,416
14,880
337,341
430,605
436,236
831,778
773,577
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 19. Borrowings (continued)
The bankers’ acceptance bears interest of 3.7% (2019: 5.23%) and is secured by the following:
●
●
●
●
Pledge of fixed deposits with licensed banks;
Execution of a fresh letter of authorisation, memorandum of Deposit and letter of set off;
First-party assignment over the office lots of the Company; and
Joint and several guarantees from a Director of the Company
The term loan is repayable over 240 monthly instalments (principal plus interest) of $2,866 (2019: $5,119) which commenced
on 1 October 2020. The term loan bears interest rates of 3.77% (2019: 5.77%) per annum and is secured by the following:
●
●
●
First-party absolute assignment of all rights, interest, title and benefits in and to property beneficially owned by a
Subsidiary Company;
Corporate Guarantee by subsidiary company; and
Personal Guarantee by a Director of the subsidiary company.
Assets pledged as security of liabilities
The carrying amounts of assets pledged as security for current borrowings are:
Inventories
Security deposits
Freehold land and buildings
At balance date, the following
financing facilities had been
negotiated and were available:
Total facilities
2020
$
Total facilities
2019
$
Facilities used
2020
$
Facilities used
2019
$
Consolidated
2020
$
2019
$
623,681
1,768
703,322
675,782
14,645
778,385
1,328,771
1,468,812
Unused
facilities
2020
$
Unused
facilities
2019
$
Term loan
Banker's acceptance
459,632
647,312
493,281
348,772
(459,632)
(358,611)
(493,281)
(265,416)
-
288,701
-
83,356
Total facilities at balance date
1,106,944
842,053
(818,243)
(758,697)
288,701
83,356
Accounting policy for 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.
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.
58
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 20. Leases
Current
Leases
Non-Current
Leases
Total Leases
Consolidated
2020
$
2019
$
28,155
39,702
82,764
108,437
110,919
148,139
Accounting policy for lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities at the present value of lease payment to be
made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any
lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid
under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain
to be exercised by the Group and payments of penalties for terminating a lease, if the assessment of lease term reflects the
Group exercising the option to terminate. The variable lease payments that do not depend on an index or a rate are
recognised as expense in the period on which the event or condition that triggers the payments occurs. The present value
of lease payments is discounted using the interest rate implicit in the lease or, if the rate cannot be readily determined, the
Group's incremental borrowing rate.
The lease liability is measured at amortised cost using the effective interest method. After the commencement date, the
amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made.
The amount of lease liability is remeasured when there is a change in future lease payments arising from a change in an
index or rate, if there is a change in the Group's estimate of the amount expected to be payable under a residual value
guarantee, or if the Group changes its assessment of whether it will exercise a purchase, extension or termination option.
When the lease liability is remeasured, a corresponding adjustment is made to the carrying amount of the right of use asset,
or is recognised in profit or loss if the carrying amount of the right of use asset has been reduced to zero.
The Group has elected not to recognise right-of-use assets and lease liabilities for short term leases that have a lease term
of 12 months or less and do not contain a purchase option, and leases of low value assets. The Group recognises the lease
payments associated with these leases as an expense on a straight-line basis over the lease term.
59
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 20. Leases (continued)
Critical judgements in determining the lease term
In determining the lease term, management considers all facts and circumstances that create an economic incentive to
exercise an extension option, or not exercise a termination option. Extension options (or periods after termination options)
are only included in the lease term if the lease is reasonably certain to be extended (or not terminated).
For leases of motor vehicles, warehouse, and processing factory, the following factors are normally the most relevant:
If there are significant penalties to terminate (or not extend), the Group is typically reasonably certain to extend (or not
terminate).
If any leasehold improvements are expected to have a significant remaining value, the Group is typically reasonably certain
to extend (or not terminate).
Otherwise, the Group considers other factors including historical lease durations and the costs and business disruption
required to replace the leased asset.
Most extension options in vehicles leases have not been included in the lease liability, because the Group could replace the
assets without significant cost or business disruption.
The lease term is reassessed if an option is actually exercised (or not exercised) or the Group becomes obliged to exercise
(or not exercise) it. The assessment of reasonable certainty is only revised if a significant event or a significant change in
circumstances occurs, which affects this assessment, and that is within the control of the lessee. No change or revise in
lease terms during the financial year.
Note 21. Non-current liabilities - provisions
Long-Term Provision
Make good provision
Consolidated Consolidated
2020
$
2019
$
275,000
275,000
Make good provision
The Company is required to restore the leased site of its Collagen Extraction Facility to their original condition at the end of
the respective lease terms. A make good provision has been recognised for the present value of the estimated expenditure
required to remove any leasehold improvements. These costs have been capitalised as part of the right-of- use assets and
are amortised over the shorter of the term of the lease and the useful life of the assets.
The Directors valued the make good provision based upon a third-party estimate provided to the Company.
Accounting policy for provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is
probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable
estimate can be made of the amount of the obligation. Provisions are not recognised for future operating losses.
When the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the
reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating
to any provision is presented in the statement of 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.
60
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 22. Equity - issued capital
Consolidated
2020
Shares
2019
Shares
2020
$
2019
$
Ordinary shares - fully paid
275,349,087 234,039,087 21,707,478 14,548,515
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion
to the number of and amounts paid on the shares held. On a show of hands every holder of ordinary shares present at a
meeting in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote. Ordinary shares
have no par value and the Company does not have a limited amount of authorised capital.
Movements in ordinary share capital
Details
Balance
Balance
Collateral placement with Acuity Capital
Collateral placement with Acuity Capital
Collateral placement with Acuity Capital
Collateral placement with Acuity Capital
Collateral placement with Acuity Capital
Exercise of performance rights
Collateral placement with Acuity Capital
Share issue transaction costs, net of tax
Date
Shares
Issue price
$
1 January 2019
234,039,087
14,548,515
31 December 2019
13 January 2020
11 February 2020
11 February 2020
19 February 2020
4 March 2020
8 April 2020
20 April 2020
234,039,087
385,000
6,500,000
5,500,000
12,000,000
10,625,000
6,300,000
-
-
14,548,515
27,337
800,000
-
1,800,000
1,700,000
661,500
2,200,000
(29,874)
$0.071
$0.123
-
$0.150
$0.160
$0.105
-
-
Balance
31 December 2020
275,349,087
21,707,478
Collateral Placement Agreement (CPA)
On the 7 February 2018, the Company entered into a Controlled Placement Agreement (CPA) with Acuity Capital. On 13
January 2020, Acuity Capital agreed to extend the expiry date of the CPA from 31 December 2019 to 31 January 2022.
Furthermore, on 4 March 2020, the Company and Acuity Capital extended the CPA for an additional $5,000,000, taking the
maximum value under the facility to $10,000,000.
In addition to the above, the Company issued 5,500,000 additional collateral shares to Acuity Capital on 11 February 2020.
On 20 April 2020, the Company announced that it has further utilised the CPA facility and raised a further $2,200,000 without
issuing any additional share capital. The Company has fully utilised the CPA facility and has terminated the CPA with Acuity
Capital effective immediately.
Performance rights
At beginning of the year
Exercised during the year
At reporting date
Consolidated
2020
$
2019
$
9,000,000
(6,700,000)
2,300,000
9,000,000
-
9,000,000
61
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 22. Equity - issued capital (continued)
Options
At beginning of the year
Issued options
Expired options
At reporting date
Consolidated
2020
$
2019
$
30,000,000 34,954,205
18,000,000
-
(4,954,205)
(48,000,000)
- 30,000,000
Capital Management
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 2019.
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 (note 8)
Trade and other receivables (note 9)
Inventories (note 10)
Other current assets (note 11)
Trade and other payables (note 17)
Contract liabilities (note 18)
Current borrowings (note 19)
Leases (note 20)
Provisions
Total Working Capital
Consolidated
2020
$
2019
$
2,725,237
1,558,007
1,108,346
1,201,977
(1,719,277)
(458,729)
(401,173)
(28,155)
(13,414)
101,400
3,218,105
675,782
1,010,820
(2,626,814)
(515,719)
(337,341)
(39,702)
(17,687)
3,972,819
1,468,844
Accounting policy for issued capital
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.
62
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 23. Equity - reserves
Foreign currency reserve
Share-based payment reserve
Consolidated
2020
$
2019
$
(497,453)
360,109
(313,283)
2,642,722
(137,344)
2,329,439
Foreign currency reserve
The foreign currency translation reserve is used to record exchange differences arising from the translation of the financial
statements of foreign subsidiaries.
Share-based payments reserve
The share-based payment reserve records the value of options and performance rights issued the Company to its employees
or consultants.
Note 24. Equity - accumulated losses
Accumulated losses at the beginning of the financial year
Loss after income tax expense for the year
Transfer from options reserve
Accumulated losses at the end of the financial year
Note 25. Equity - non-controlling interest
Non-controlling interest
Note 26. Equity - dividends
Consolidated
2020
$
2019
$
(12,455,239)
(5,483,167)
1,789,283
(11,765,388)
(689,851)
-
(16,149,123)
(12,455,239)
Consolidated
2020
$
2019
$
(777,364)
(853,113)
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 27. Financial instruments
Financial risk management objectives
The Group's activities expose it to a variety of financial risks: market risk (including foreign currency risk, price risk and
interest rate risk), credit risk and liquidity risk. The Group's overall risk management program focuses on the unpredictability
of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group.
63
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 27. Financial instruments (continued)
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.
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. 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.
Foreign currency risk
The consolidated entity undertakes certain transactions denominated in foreign currency and is exposed to foreign currency
risk through foreign exchange rate fluctuations.
Foreign exchange risk arises from future commercial transactions and recognised financial assets and financial liabilities
denominated in a currency that is not the entity's functional currency. The risk is measured using sensitivity analysis and
cash flow forecasting.
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.
The average exchange rates and reporting date exchange rates applied were as follows:
Australian dollars
US dollars
MY Ringgit
Average exchange rates
Reporting date exchange
rates
2020
2019
2020
2019
0.6906
2.8996
0.6952
2.8791
0.7702
3.0897
0.7006
2.8672
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at the
reporting date were as follows:
Consolidated
US dollars
MY Ringgit
Assets
Liabilities
2020
$
2019
$
2020
$
2019
$
819,015
4,376,435
1,157,761
5,660,244
(519,454)
(2,633,743)
(234,676)
(3,657,844)
5,195,450
6,818,005
(3,153,197)
(3,892,520)
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at the
reporting date were as follows:
64
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 27. Financial instruments (continued)
Consolidated - 2020
% change
profit before
tax
Effect on
equity
% change
profit before
tax
Effect on
equity
AUD strengthened
Effect on
AUD weakened
Effect on
US dollars
MY Ringgit
15%
15%
-
-
-
(58,341)
(84,605)
(142,946)
(15%)
(15%)
-
-
-
58,341
84,605
142,946
Consolidated - 2019
% change
profit before
tax
Effect on
equity
% change
profit before
tax
Effect on
equity
AUD strengthened
Effect on
AUD weakened
Effect on
US dollars
MY Ringgit
15%
15%
-
-
-
(199,170)
(104,324)
(303,494)
(15%)
(15%)
-
-
-
199,170
104,324
303,494
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.
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.
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 expected credit losses that represents its estimate of incurred losses in respect of
trade and other receivables.
●
Credit risk exposures
65
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 27. Financial instruments (continued)
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 consolidated
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.
●
Impairment losses
The ageing of the Group's trade and other receivables at reporting date is disclosed in note 9.
Liquidity risk
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, 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, contract liabilities, borrowings and lease liabilities 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.
Remaining contractual maturities
The following are the contractual maturities of financial assets and financial liabilities of the Group:
The following tables detail the consolidated entity's remaining contractual maturity for its financial instrument liabilities. The
tables have been drawn up based on the undiscounted cash flows of financial liabilities based on the earliest date on which
the financial liabilities are required to be paid. The tables include both interest and principal cash flows disclosed as remaining
contractual maturities and therefore these totals may differ from their carrying amount in the statement of financial position.
Consolidated - 2020
Non-derivatives
Non-interest bearing
Trade payables
Other loans
Interest-bearing - variable
Borrowings
Leases
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
-
(1,719,277)
(13,535)
-
-
-
-
-
-
(1,719,277)
(13,535)
3.70%
5.89%
(394,655)
(29,048)
(2,156,515)
(25,683)
(15,830)
(41,513)
(77,050)
(37,027)
(114,077)
(320,855)
(64,714)
(385,569)
(818,243)
(146,619)
(2,697,674)
66
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 27. Financial instruments (continued)
Consolidated - 2019
Non-derivatives
Non-interest bearing
Trade payables
Other loans
Interest-bearing - variable
Borrowings
Leases
Total non-derivatives
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
-
(2,626,814)
(14,880)
-
-
-
-
-
-
(2,626,814)
(14,880)
5.33%
5.54%
(356,242)
(42,283)
(3,040,219)
(82,570)
(30,626)
(113,196)
(202,852)
(44,848)
(247,700)
(248,654)
(73,440)
(322,094)
(890,318)
(191,197)
(3,723,209)
The cash flows in the maturity analysis above are not expected to occur significantly earlier than contractually disclosed
above.
Offsetting financial assets and financial liabilities
Financial assets and financial liabilities are offset and the net amount reported in the statement of financial position where
the consolidated entity currently has a legally enforceable right to offset the recognised amounts, and there is an intention to
settle on a net basis or realise the asset and settle the liability simultaneously. The net amount shows the impact on the
consolidated entity's statement of financial position if all set off rights were exercised.
Fair value of financial instruments
Unless otherwise stated, the carrying amounts of financial instruments reflect their fair value. Refer to note 1 for accounting
policy on fair value measurement.
Note 28. Fair value measurement
Valuation techniques for fair value measurements categorised within level 2 and level 3
The Group selects a valuation technique that is appropriate in the circumstances and for which sufficient data is available to
measure fair value. The availability of sufficient and relevant data primarily depends on the specific characteristics of the
asset or liability being measured. The valuation techniques selected by the Group are consistent with one or more of the
following valuation approaches:
●
●
●
Market approach: valuation techniques that use prices and other relevant information generated by market transactions
for identical or similar assets or liabilities.
Income approach: valuation techniques that convert estimated future cash flows or income and expenses into a single
discounted present value.
Cost approach: valuation techniques that reflect the current replacement cost of an asset at its current service capacity.
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.
67
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 29. Key management personnel disclosures
Directors
The following persons were directors and key management personnel of Holista Colltech Limited during the financial year:
Dr Rajen Manicka
Mr Daniel Joseph O’Connor
Mr Chan Heng Fai
Mr Blair Michelson
Mr Jonathan Pager
Mr Brett Fraser
Managing Director & Chief Executive Officer
Non-Executive Chairman
Non-Executive Director
Non-Executive Director (appointed on 11 August 2020)
Non-Executive Director (appointed 2 July 2020 and resigned
on 11 August 2020)
Non-Executive Director (resigned 2 July 2020)
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.
Compensation
The aggregate compensation made to directors and other members of key management personnel of the consolidated entity
is set out below:
Short-term employee benefits*
Post-employment benefits - Defined contribution superannuation funds
Share-based payments
Consolidated
2020
$
2019
$
571,016
60,521
15,050
390,266
54,382
-
646,587
444,648
* Short-term employee benefits include other benefits of $17,418 (2019: $20,064) which represents D&O insurances as
disclosed in remuneration report.
Note 30. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Stantons International , the auditor
of the company:
Audit services - Audit or review of the financial statements
Stantons International
Russell Bedford LC & Company
Taxation and independent expert services provided by a related practice of the Auditor,
Stantons International
Consolidated
2020
$
2019
$
54,000
32,333
55,200
32,640
5,870
11,518
92,203
99,358
68
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 31. Contingent liabilities
Gara Group
On September 27,2019, iGalen (a related company and a customer of the Group), filed an action against Gara Group, Inc.
and others alleging breach of contract. This complaint stems from the Gara Group’s failure to provide services including
product fulfillment, software development and maintenance of non-site platform which manages the Company’s back office
and managing the Company’s social media sites. Gara Group filed a complaint against the Company for breach of contract.
The exposure to the Company always exists, however, management maintains its claims and anticipates recovering from
Gara Group. It is too early in the case to determine amounts of recovery or exposure.
ProImmune Company LLC ("Pro immune")
The present lawsuit involves four claims brought by Proimmune against the Company for breach of four distinct contracts
which seeks total damages of USD 2million. The Company has completed the discovery phase of the litigation where after
attempting to seek dismissal of the claims brought against it, the Company has answered the complaint of ProImmune
Company LLC and asserted its own counterclaims against ProImmune for breach of contract as well as one claim for breach
of express warranty, both of which seeking monetary damages in excess of USD300,000 plus interest.
Upon completion of this discovery phase of the litigation, both sides will each file their own motions for summary judgment,
which effectively seeks a judgment without trial on either sides’ respective claims and/or defences.
The parties are obligated to engage in good faith settlement discussions at the close of discovery and a decision on the
competing motions will likely take the balance of 2021 to be rendered.
At the date of this report, it is premature to estimate any material contingent liabilities for this case.
ASIC
The Australian Securities and Investments Commission (ASIC) has made determinations pursuant to sections 708A(2) and
713(6) of the Corporations Act 2001 (Cth) restricting the Company from relying on the exceptions in sections 708A and 713
to issue a reduced-content prospectus, and to use exemptions for reduced disclosure in fundraising documents until
16 October 2021 (reduced disclosure).
ASIC has also stated that its investigation into the Company’s conduct is ongoing. Holista is cooperating with the ASIC in its
investigation.
At the date of this report, it is premature to estimate any material contingent liabilities for this case. In the circumstances
where there are any prosecution commenced by ASIC in relation with Directors, Ex-Directors, and Ex-Company Secretaries
could be cover by the insurer of Director and Officers insurance policy.
Note 32. Commitments
The Group has no capital commitments at 31 December 2020 (31 December 2019: $nil).
Note 33. Related party transactions
Parent entity
Holista Colltech Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 35.
Key management personnel
Disclosures relating to key management personnel are set out in note 29 and the remuneration report included in the
directors' report.
69
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 33. Related party transactions (continued)
Transactions with related parties
The following transactions occurred with related parties:
Payment for other expenses:
Professional fees paid to Sumita K & Associates for provision of legal advice. Mrs Sumita’s
husband is a director of the Holista Biotech Sdn Bhd
Director fee paid to Mrs Sumita
Consulting fees paid to Samabudi Consulting Sdn Bhd which certain directors of Holista
Biotech Sdn Bhd have interest
Impairment (reversal) related to loans to Galen Biomedical Inc.
Amounts owed to a Director as disclosed in note 17
Loans to Galen Biomedical Inc., an entity 75% owned by Rajen Manicka
Sales to iGalen
Impairment expense related to trade receivables from iGalen
Impairment expense related to other receivables from iGalen (note 19)
Consolidated
2020
$
2019
$
12,415
12,415
12,604
12,604
57,938
-
21,588
481,641
329,634
1,071,048
180,623
58,272
(511,744)
89,109
529,489
498,677
-
-
Receivable from and payable to related parties
Included in trade receivables is an amount due to iGalen (companies in which director has interest) of $1,071,048 (2019:
$1,413,601). During the year ended 31 December 2020, an allowance of $1,071,048 has been made.
Included in other receivables is an amount due to iGalen (companies in which director has interest) of $180,623 (2019:
$180,623). An allowance of $180,623 has been made,
Loans to/from related parties
Included in trade and other payables is an amount due to Director of $21,588 (2019: $24,581) and in current borrowings loan
from related party of $13,535 (2019: $14,880).
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 34. Parent entity information
Set out below is the supplementary information about the parent entity.
Statement of profit or loss and other comprehensive income
Loss after income tax
Total comprehensive income
Parent
2020
$
2019
$
(4,864,845)
(806,407)
(4,864,845)
(806,407)
70
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 34. Parent entity information (continued)
Statement of financial position
Total current assets
Total assets
Total current liabilities
Total liabilities
Equity
Issued capital
Share-based payment reserve
Accumulated losses
Total equity
Parent
2020
$
2019
$
3,259,560
3,270,301
5,734,695
5,896,442
129,926
2,088,406
487,690
2,450,227
20,216,403 13,057,442
2,642,722
(12,253,949)
360,112
(15,329,510)
5,247,005
3,446,215
Guarantees entered into by the parent entity in relation to the debts of its subsidiaries
There are no guarantees entered into by Holista CollTech Limited for the debts of its subsidiaries as at 31 December 2020
(2019: Nil).
Contingent liabilities
The parent entity had no contingent liabilities as at 31 December 2020 (2019: Nil)
Contractual commitments
The parent company has no capital commitments at 2020 (2019: $nil). The parent company other commitments are disclosed
in Note 34 Commitments.
Significant accounting policies
The accounting policies of the parent entity are consistent with those of the consolidated entity, as disclosed in note 1, except
for the following:
●
●
●
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent entity.
Investments in associates are accounted for at cost, less any impairment, in the parent entity.
Dividends received from subsidiaries are recognised as other income by the parent entity and its receipt may be an
indicator of an impairment of the investment.
71
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 35. Interests in subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described in note 1:
Name
Principal place of business /
Country of incorporation
Holista Biotech Sdn Bhd
Total Health Concept Sdn Bhd
Alterni (M) Sdn Bhd
Medi Botanics Sdn Bhd
Revonutrix Sdn Bhd
Holista Ingredients India Private Ltd *
Holista Infection Control Pte Ltd **
LiteFoods Inc **
Holista Foods Inc. (74% owned by LiteFoods Inc.)
HF Pre IPO Fund I LLC
Ovicoll LLC ***
Holista Life LLC ***
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
India
Singapore
USA
USA
USA
USA
USA
Ownership interest
2019
2020
%
%
100.00%
100.00%
100.00%
100.00%
100.00%
51.00%
100.00%
53.00%
39.20%
67.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
51.00%
-
53.00%
39.20%
67.00%
-
-
*
**
Incorporated in 2018. The company has been inactive since incorporation.
Lite Foods 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.
*** Incorporated during the ear. Inactive since incorporation.
72
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 35. Interests in subsidiaries (continued)
Summarised financial information
Summarised financial information of the subsidiary with non-controlling interests that are material to the consolidated entity
are set out below:
Summarised statement of financial position
Current assets
Non-current assets
Total assets
Current liabilities
Total liabilities
LiteFoods Group(LiteFoods
Inc. and Holista Foods Inc.) HF Pre IPO Fund I LLC
2020
$
2019
$
2020
$
2019
$
286,097
40,221
43,333
528,603
532,886
-
56,336
397,811
326,318
571,936
532,886
454,147
3,159,534
2,852,757
22,360
24,581
3,159,534
2,852,757
22,360
24,581
Net assets/(liabilities)
(2,833,216)
(2,280,821)
510,526
429,566
Summarised statement of profit or loss and other
comprehensive income
Revenue and other income
Expenses
Loss before income tax expense
Income tax expense
Loss after income tax expense
Other comprehensive income
Total comprehensive income
Statement of cash flows
Net cash (used in) operating activities
Net cash from investing activities
Net cash from financing activities
484,509
(1,272,382)
163,793
(789,272)
(787,873)
(2,493)
(625,479)
-
(790,366)
(625,479)
140,286
(147,281)
(650,080)
(772,760)
(155,418)
13,993
173,193
(574,298)
54,229
507,711
Net increase/(decrease) in cash and cash equivalents
31,768
(12,358)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(26,901)
(26,901)
-
-
-
-
Note 36. Events after the reporting period
No matter or circumstance has arisen since 31 December 2020 that has significantly affected, or may significantly affect the
consolidated entity's operations, the results of those operations, or the consolidated entity's state of affairs in future financial
years.
73
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 37. Reconciliation of loss after income tax to net cash (used in) operating activities
Loss after income tax expense for the year
(5,680,567)
(904,034)
Consolidated
2020
$
2019
$
Adjustments for:
Depreciation and amortisation
Foreign exchange loss
Net share-based payments expensed
Impairment
Interest on lease liabilities
Write off intangible assets
Change in operating assets and liabilities:
(Increase) in receivables
(Increase) in inventories
(Increase) in prepayments
Decrease/(increase) in trade and other payables
Decrease/(increase) in other provisions
Increase tax balances
Net cash (used in) operating activities
Note 38. Changes in liabilities arising from financing activities
220,869
376,631
168,170
3,310,442
7,334
45,044
305,355
38,790
90,524
(407,096)
26,354
-
(407,456)
(481,738)
(131,913)
(1,308,262)
(978)
14,814
(153,334)
(224,809)
(56,139)
1,017,872
7,978
97,564
(3,867,610)
(160,975)
Consolidated
Balance at 1 January 2019
Cash flows
Exchange differences
Changes due to AASB 16
Other changes
Balance at 31 December 2019
Cash flows
Exchange differences
Short-term Long-term
borrowings borrowings
$
$
Leases
$
Asset
finance
$
328,177
4,719
6,184
-
(1,739)
337,341
92,291
(28,459)
487,960
(88,559)
9,207
-
27,628
436,236
29,378
(35,009)
-
(33,168)
-
178,399
2,908
148,139
(39,621)
2,401
Total
$
879,639
(117,008)
16,589
113,699
28,797
921,716
82,048
(61,067)
942,697
63,502
-
1,198
(64,700)
-
-
-
-
-
Balance at 31 December 2020
401,173
430,605
110,919
Note 39. Earnings per share
Loss after income tax
Non-controlling interest
Consolidated
2020
$
2019
$
(5,680,567)
197,400
(904,034)
214,183
Loss after income tax attributable to the owners of Holista Colltech Limited
(5,483,167)
(689,851)
74
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 39. Earnings per share (continued)
Weighted average number of ordinary shares used in calculating basic earnings per share
268,852,114 234,039,087
Weighted average number of ordinary shares used in calculating diluted earnings per share 268,852,114 234,039,087
Number
Number
Basic loss per share
Diluted loss per share
Accounting policy for earnings per share
Cents
Cents
(2.04)
(2.04)
(0.29)
(0.29)
Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of Holista Colltech Limited, excluding
any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding
during the financial year, adjusted for bonus elements in ordinary shares issued during the financial year.
Diluted earnings per share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to take into account the
after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted
average number of shares assumed to have been issued for no consideration in relation to dilutive potential ordinary shares.
d
All potential fully paid ordinary shares on issue would decrease the loss per share and are thus not considered dilutive.
Note 40. Share-based payments
In August 2020, Holista issued 18,000,000 Unlisted Options to directors and suppliers. The Unlisted Options have expired
and are escrowed during the year.
The Unlisted Options have been valued using the Black Scholes Model. The fair value of the unlisted options is $0.043 and
expense of $77,400 has been recognised during the year ended 31 December 2020 as part of Share-based payments
expense. Of the 18 million unlisted options granted during the year, 3.5 million was issued to Daniel O'Connor which has a
fair value of $15,050.
Set out below are summaries of options granted under the Company's share option plan:
2020
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
23/03/2017
23/06/2017
23/06/2017
23/06/2017
26/07/2017
20/10/2017
31/08/2020
23/03/2020
23/06/2020
23/06/2020
23/06/2020
01/08/2020
20/10/2020
31/12/2020
$0.200 10,000,000
6,000,000
$0.200
3,000,000
$0.250
2,000,000
$0.300
2,000,000
$0.100
$0.200
7,000,000
$0.200
-
-
-
-
-
-
- 18,000,000
30,000,000 18,000,000
-
-
-
-
-
-
-
-
(10,000,000)
(6,000,000)
(3,000,000)
(2,000,000)
(2,000,000)
(7,000,000)
(18,000,000)
(48,000,000)
-
-
-
-
-
-
-
-
Weighted average exercise price
$0.205
$0.200
$0.000
$0.203
$0.000
75
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 40. Share-based payments (continued)
2019
Grant date
Expiry date
price
Exercise
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
23/03/2017
23/06/2017
23/06/2017
23/06/2017
26/07/2017
20/10/2017
01/01/2015
01/01/2015
23/03/2020
23/06/2020
23/06/2020
23/06/2020
01/08/2020
20/10/2020
08/03/2019
31/12/2019
$0.200 10,000,000
6,000,000
$0.200
3,000,000
$0.250
2,000,000
$0.300
2,000,000
$0.100
7,000,000
$0.200
3,954,205
$0.300
1,000,000
$0.200
34,954,205
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 10,000,000
6,000,000
-
3,000,000
-
2,000,000
-
2,000,000
-
7,000,000
-
-
(3,954,205)
(1,000,000)
-
(4,954,205) 30,000,000
Weighted average exercise price
$0.216
$0.000
$0.000
$0.000
$0.205
Recognised as share-based payment expense
Consolidated
2020
$
2019
$
168,170
90,524
Performance rights
As approved by shareholders 9 January 2017, the Company issued 9,000,000 performance rights to Dr Rajen Manicka in
rewarding his performance, and to align their interests with those of Shareholders on the terms as detailed below and as
detailed below:
2020
Grant Date
Expire date
Balance at
the start of
the year
Granted
Exercised
09/01/2017
09/01/2017
09/01/2017
09/01/2017
2019
09/01/2022
09/01/2022
09/01/2022
09/01/2022
3,600,000
2,700,000
1,800,000
900,000
-
-
-
-
Grant date
Milestone date
09/01/2017
09/01/2017
09/01/2017
09/01/2017
09/01/2022
09/01/2022
09/01/2022
09/01/2022
Balance at
the start of
the year
Granted
Exercised
3,600,000
2,700,000
1,800,000
900,000
-
-
-
-
Expired/
forfeited/
other
Balance at
the end of
the year
(3,600,000)
(2,700,000)
-
-
-
-
1,800,000
900,000
Expired/
forfeited/
other
Balance at
the end of
the year
-
-
-
-
3,600,000
2,700,000
1,800,000
900,000
-
-
-
-
-
-
-
-
The weighted average remaining contractual life of performance rights outstanding at the end of the financial period was 1
year (2019: 2 years)
76
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2020
Note 40. Share-based payments (continued)
The performance conditions linked to the performance rights are detailed below:
Class of
Performance
Right
Class A
Class B
Class C
Class D
Performance Condition
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
3,600,000
On or before 30
June 2020
5 years from the
date of issue
Yes
Upon the Company securing
the patents associated with its
Low GI Products.
2,700,000
On or before 30
June 2020
5 years from the
date of issue
Yes
The Company achieving an
EBIT of at least $2.2m from
the sale of Low GI Products
1,800,000
On or before 30
June 2021
5 years from the
date of issue
No, probability
employed in
estimated 100%
The Company achieving an
EBIT of at least $4m from the
sale of Low GI Products
900,000
On or before 30
June 2021
5 years from the
date of issue
No, probability
employed in
estimated 100%
Accounting policy for Share-based payments
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.
77
Holista Colltech Limited
Directors' declaration
31 December 2020
Directors' declaration
In the directors' opinion:
●
●
●
●
the attached financial statements and notes comply with the Corporations Act 2001, the Accounting Standards, the
Corporations Regulations 2001 and other mandatory professional reporting requirements;
the attached financial statements and notes comply with International Financial Reporting Standards as issued by the
International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes give a true and fair view of the consolidated entity's financial position as at
31 December 2020 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and
payable.
The directors have been given the declarations required by section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act 2001.
On behalf of the directors
___________________________
Mr Daniel Joseph O'Connor
Non-executive Chairman
31 March 2021
78
Holista Colltech Limited
Shareholder information
31 December 2020
Independent auditor’s report
79
Holista Colltech Limited
Shareholder information
31 December 2020
80
Holista Colltech Limited
Shareholder information
31 December 2020
81
Holista Colltech Limited
Shareholder information
31 December 2020
82
Holista Colltech Limited
Shareholder information
31 December 2020
83
Holista Colltech Limited
Shareholder information
31 December 2020
84
Holista Colltech Limited
Shareholder information
31 December 2020
Corporate governance statement
The Board is responsible for establishing the Company’s corporate governance framework. In establishing its corporate
governance framework, the Board has referred to the 4th 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.
AND
COMPLY
(YES/NO)
PRINCIPLES
RECOMMENDATIONS
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1
A listed entity should have and
disclose a charter which:
(a)
EXPLANATION
YES
chair
sets out the respective roles
the
and responsibilities of
board,
and
the
management; and
includes a description of those
matters expressly reserved to
the board and those delegated
to management.
(b)
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,
relationship with
details of
management,
the Board’s
performance review and details of the Board’s
disclosure policy.
A copy of the Company’s Board Charter is
stated
the Corporate
Governance Plan which is available on the
Company’s website.
the Board’s
details
in Schedule 1 of
of
Recommendation 1.2
A listed entity should:
(a) undertake appropriate checks
before appointing a person, or
putting
security
holders a candidate for election,
as a director; and
forward
to
(b) provide security holders with all
material information relevant to a
decision on whether or not to
elect or re-elect a director.
Recommendation 1.3
A listed entity should have a
written agreement with each
director and senior executive
setting out the terms of their
appointment.
YES
YES
(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
that Director’s or senior
executive’s appointment.
terms of
85
Holista Colltech Limited
Shareholder information
31 December 2020
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.
YES
the
roles,
The Board Charter outlines
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.
includes
board:
(i)
AND
PRINCIPLES
RECOMMENDATIONS
Recommendation 1.5
A listed entity should:
(a) have a diversity policy which
the
requirements
for
to set measurable objectives
for achieving gender diversity;
and
(ii) to assess annually both the
the entity’s
objectives and
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
towards
its progress
achieving them; and
(ii) either:
(A)
the
respective
proportions of men and
women on the board, in
senior executive positions
the whole
and across
organisation
(including
how the entity has defined
“senior executive”
for
these purposes); or
“Gender
the
entity’s
Equality
Indicators”, as
defined in the Workplace
Gender Equality Act
2012.
(B)
COMPLY
(YES/NO)
EXPLANATION
NO
(not followed in
full)
(a) The Company has adopted a Diversity Policy.
(i) The Diversity Policy provides a framework
for the Company to achieve a list of 6
measurable objectives that encompass
gender equality.
for
(ii) The Diversity Policy provides
the
monitoring and evaluation of the scope and
currency of
the Diversity Policy. The
company is responsible for implementing,
monitoring
the
measurable objectives.
reporting
and
on
(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
its annual performance
in
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.
86
Holista Colltech Limited
Shareholder information
31 December 2020
Recommendation 1.6
A listed entity should:
(a) have and disclose a process for
the
its
individual
the board,
evaluating
periodically
performance of
committees
directors; and
in
relation
to each
reporting period, whether a
performance
evaluation was
undertaken in the reporting period
in accordance with that process.
(b) disclose
and
Recommendation 1.7
A listed entity should:
(a) have and disclose a process for
the
senior
evaluating
of
periodically
performance
executives; and
its
(b) disclose
in
relation
to each
reporting period, whether a
performance
evaluation was
undertaken in the reporting period
in accordance with that process.
YES
YES
the Board and
(a) The Board is responsible for evaluating the
performance of
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.
(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.
the Board
(b) The Company’s Corporate Governance Plan
to conduct annual
requires
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.
Principle 2: Structure the board to add value
Recommendation 2.1
The board of a listed entity should:
(a) have a nomination committee
NO
which:
(i)
(ii)
has at least three members,
a majority of whom are
independent directors; and
is chaired by an independent
director,
and disclose:
(iii)
(iv)
the charter of the committee;
the members
the
committee; and
of
(v) as at
the end of each
reporting period, the number
of times the committee met
throughout the period and
the individual attendances of
those
the members at
meetings; or
it employs
(b) if it does not have a nomination
committee, disclose that fact and
the processes
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.
the magnitude of
(a) Due to the size and nature of the existing Board
the Company’s
and
operations the Company currently has no
Nomination Committee. Pursuant to clause
4(h) of the Company’s Board Charter, the full
that would
Board carries out
ordinarily be assigned
the Nomination
Committee under the written terms of reference
for that committee.
the duties
to
The duties of the Nomination Committee
are outlined
the
Company’s Corporate Governance Plan
available online on
the Company’s
website.
in Schedule 5 of
The Board devotes time at each board meeting
to discuss board succession
issues. All
members of the Board are involved in the
the
Company’s nomination process,
to
maximum extent permitted under
the
Corporations Act and ASX Listing Rules.
The Board regularly updates the Company’s
board skills matrix
(in accordance with
recommendation 2.2) to assess the appropriate
balance of skills, experience, independence
and knowledge of the entity.
87
Holista Colltech Limited
Shareholder information
31 December 2020
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
its
to
membership.
achieve
in
Recommendation 2.3
A listed entity should disclose:
(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
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
does
that
it
YES
Board Skills Matrix
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
Number of
Directors
that Meet
the Skill
4
4
4
4
4
4
4
4
4
4
4
0
4
4
0
(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.
(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.
YES
requires
is
(b) The Board Charter requires Directors
to
disclose their interest, positions, associations
that
and
the
relationships and
independence of Directors
regularly
assessed by the Board in light of the interests
disclosed by Directors. Details of the Directors
associations
interests,
and
relationships are provided
the Annual
in
Reports and Company website.
(c) The Board Charter provides
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.
positions
for
(c) the length of service of each
director
88
Holista Colltech Limited
Shareholder information
31 December 2020
Recommendation 2.4
A majority of the board of a listed
entity should be
independent
directors.
YES
The Board Charter
that where
practical the majority of the Board will be
independent.
requires
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
development
professional
opportunities for Directors. The Board is
responsible for the approval and review of
professional
induction
development programs and procedures for
Directors to ensure that they can effectively
discharge their responsibilities.
continuing
and
(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.
YES
YES
providing
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
appropriate
and
development
professional
continuing
opportunities
directors to develop and maintain
the skills and knowledge needed to
perform their role as a director
effectively.
Principle 3: Act ethically and responsibly
Recommendation 3.1
A listed entity should articulate
and disclose its values.
Recommendation 3.2
A listed entity should:
(a) have a code of conduct for its
directors, senior executives and
employees; and
for
YES
(b) disclose that code or a summary of
it.
Recommendation 3.3
A listed entity should:
(a) have and disclose a
whistleblower policy; and
the board
ensure that the board or a
(b)
committee of
is
informed of any material incidents
reported under that policy.
Recommendation 3.4:
A listed entity should:
(a) have and disclose an anti-
bribery and corruption policy;
and
ensure that the board or
(b)
committee of
is
informed of any material breaches
of that policy.
the board
Principle 4: Safeguard integrity in financial reporting
89
Holista Colltech Limited
Shareholder information
31 December 2020
Recommendation 4.1
The board of a listed entity should:
(a) have an audit committee which:
NO
(i)
(ii)
has at least three members,
all of whom are non-
executive directors and a
majority
are
independent directors; and
is chaired by an independent
director, who is not the chair
of the board,
of whom
and disclose:
(iii)
(iv)
the charter of the committee;
relevant qualifications
the
and experience of
the
members of the committee;
and
in relation to each reporting
period, the number of times
the
met
committee
throughout the period and
the individual attendances of
the members at
those
meetings; or
(v)
the magnitude of
(a) Due to the size and nature of the existing Board
and
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
and
responsibilities associated with maintaining the
Company’s
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.
internal audit
fulfilling
roles
the
to
(b) if
it employs
it does not have an audit
committee, disclose that fact and
the processes
that
independently verify and safeguard
the
financial
reporting, including the processes
for the appointment and removal of
the external auditor and the rotation
of the audit engagement partner.
integrity of
its
appropriate
it approves
Recommendation 4.2
The board of a listed entity should,
before
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
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 should disclose its
process to verify the integrity of
any periodic corporate report it
releases to the market that is not
audited or reviewed by an external
auditor.
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.
90
Holista Colltech Limited
Shareholder information
31 December 2020
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
YES
(b) disclose that policy or a summary
of it.
Recommendation 5.2
A listed entity should ensure that
its board receives copies of all
material market announcements
promptly after they have been
made.
Recommendation 5.3
A listed entity that gives a new and
substantive investor or analyst
presentation should release a
copy of the presentation materials
Market
on
Announcements Platform ahead
of the presentation.
ASX
the
(a) The Board Charter provides details of the
In addition,
Company’s disclosure policy.
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.
YES
All directors are provided a copy of all material
announcements by the Company Secretary
promptly after they have been released to the
market
to
Pursuant
the Company’s Continuous
Disclosure Policy and the ASX Listing Rules,
any materials distributed at analyst and media
briefings are lodged first with ASX. The
Company will not disclose any information that
a reasonable person might regard as being
price sensitive unless such information has
previously been released
the market
through the ASX or is otherwise already in the
public domain.
to
Principle 6: Respect the rights of security holders
Recommendation 6.1
listed entity should provide
A
information about
its
governance to investors via its
website.
itself and
YES
the Company and
its
Information about
governance
the Corporate
Governance Plan which can be found on the
Company’s website.
is available
in
Recommendation 6.2
A listed entity should design and
implement an
investor relations
program to facilitate effective two-
way communication with investors.
Recommendation 6.3
A listed entity should disclose the
policies and processes it has in
place to facilitate and encourage
participation at meetings of security
holders.
YES
YES
The Company has adopted a Shareholder
Communications Strategy which aims
to
two-way
promote and
communication with investors. The Shareholder
Communications Strategy outlines a range of
ways in which information is communicated to
shareholders.
facilitate effective
relations
that as a part of
investor
The Shareholder Communication Strategy
the Company’s
states
developing
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
91
Holista Colltech Limited
Shareholder information
31 December 2020
Recommendation 6.4
A listed entity should ensure that
all substantive resolutions at a
meeting of security holders are
decided by a poll rather than by a
show of hands.
Recommendation 6.5
A listed entity should give security
to receive
holders
communications from, and send
communications to, the entity and
its security registry electronically.
the option
YES
YES
Principle 7: Recognise and manage risk
Recommendation 7.1
The board of a listed entity should:
(a) have a committee or committees to
NO
oversee risk, each of which:
(i) has at least three members, a
are
majority
independent directors; and
(ii) is chaired by an independent
of whom
director, and disclose:
(iii) the charter of the committee;
(iv) the members
committee; and
of
the
(v) as at the end of each reporting
period, the number of times the
committee met throughout the
individual
period and
attendances of the members at
those meetings; or
the
(b) if it does not have a risk committee
that satisfy (a)
or committees
above, disclose that fact and the
process it employs for overseeing
the entity’s
risk management
framework.
92
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.
At the 2020 AGM of the Company, all
resolutions were decided by way of a poll. The
Company anticipates
resolutions
shareholder meetings in the future will also be
decided by way of a poll.
that all
Security holders can
the
Company to receive email notifications when
an announcement is made by the Company to
the ASX.
register with
Shareholder queries should be referred to the
Company Secretary at first instance.
Due to the size and nature of the existing
Board and the magnitude of the Company’s
operations the Company currently has no
Audit and Risk Committee. Pursuant to Clause
4(h) of the Company’s Board Charter, the full
Board currently carries out the duties that
would ordinarily be assigned to the Audit and
Risk Committee under the written terms of
reference for that committee.
The role and responsibilities of the Audit and
Risk Committee are outlined in Schedule 3 of
the Company’s Corporate Governance Plan
available online on the Company’s website.
to
fulfilling
The Board devote time at annual board
meeting
and
responsibilities associated with overseeing risk
and maintaining the entity’s risk management
framework and associated internal compliance
and control procedures.
roles
the
internal
includes
(a) The Company process for risk management
and
a
compliance
requirement to identify and measure risk,
monitor the environment for emerging factors
and trends that affect these risks, formulate
risk management strategies and monitor the
performance of risk management systems.
Schedule 8 of the Corporate Governance Plan
is entitled ‘Disclosure – Risk Management’
the Company’s disclosure
and details
requirements with
risk
management review procedure and internal
compliance and controls.
respect
the
to
(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.
environmental
Schedule 3 of the Company’s Corporate Plan
the Company’s risk management
details
systems which assist
identifying and
in
managing potential or apparent business,
social
economic,
sustainability risks (if appropriate). Review of
the Company’s risk management framework is
conducted at least annually, and reports are
continually created by management on the
efficiency and effectiveness of the Company’s
risk management framework and associated
internal compliance and control procedures.
and
Holista Colltech Limited
Shareholder information
31 December 2020
YES
Recommendation 7.2
The board or a committee of the
board should:
(a) review
entity’s
the
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.
Recommendation 7.3
A listed entity should disclose:
(a) if it has an internal audit function,
how the function is structured and
what role it performs; or
YES
that
fact and
(b) if it does not have an internal audit
function,
the
processes it employs for evaluating
the
and continually
risk
effectiveness
management and internal control
processes.
improving
its
of
Recommendation 7.4
listed entity should disclose
A
whether, and if so how, it has any
material exposure to environmental
and social risks and, if it does, how
it manages or intends to manage
those risks.
YES
Principle 8: Remunerate fairly and responsibly
93
Holista Colltech Limited
Shareholder information
31 December 2020
Recommendation 8.1
The board of a listed entity should:
(a) have a remuneration committee
NO
which:
(i)
has at least three members,
a majority of whom are
independent directors; and
is chaired by an independent
director,
and disclose:
(ii)
(iii)
(iv)
the charter of the committee;
the
the members
committee; and
of
(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 remuneration
committee, disclose that fact and
the processes it employs for setting
level and composition of
the
for directors and
remuneration
senior executives and ensuring
that
is
appropriate and not excessive.
remuneration
such
and
Recommendation 8.2
A listed entity should separately
disclose its policies and practices
regarding the remuneration of non-
the
directors
executive
remuneration of executive directors
and other senior executives and
ensure that the different roles and
responsibilities of non-executive
directors compared to executive
directors
senior
executives are reflected in the level
their
and
remuneration.
Recommendation 8.3
A listed entity which has an equity-
based remuneration scheme
should:
(a) have a policy on whether
composition
other
and
of
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.
the magnitude of
Due to the size and nature of the existing board
and
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
the
would ordinarily be assigned
Remuneration Committee under the written
terms of reference for that committee.
the
The
in
Remuneration Committee are outlined
Schedule 4 of
the Company’s Corporate
Governance Plan available online on the
Company’s website.
responsibilities of
role and
to
to
the
fulfilling
The Board devote time at annual board
meetings
roles and
responsibilities associated with setting the
level and composition of remuneration for
Directors and senior executives and
ensuring
is
appropriate and not excessive.
remuneration
that such
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
the
scheme. The Board must review and
approve any equity-based plans.
in
(b) A copy of
Governance Plan
Company’s website.
the Company’s Corporate
the
is available on
94
Holista Colltech Limited
Shareholder information
31 December 2020
Recommendation 9.1
A listed entity with a director who
does not speak the language in
which board or security holder
meetings are held or key corporate
documents are written should
disclose the processes it had in
place to ensure the director
understands and can contribute to
the discussions at those meetings
and understands and can
discharge their obligations in
relation to those documents.
Recommendation 9.2
A listed entity established outside
Australia should ensure that
meetings of security holders are
held at a reasonable place and
time.
Recommendation 9.3
A listed entity established outside
Australia, and an externally
managed 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.
Not applicable
Not applicable
Not applicable
95
Holista Colltech Limited
Shareholder information
31 December 2020
Additional information for Listed Public Companies
The shareholder information set out below was applicable as at 29 March 2021.
Distribution of equitable securities
Analysis of number of equitable security holders by size of holding:
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Holding less than a marketable parcel
Equity security holders
Ordinary shares
% of total
Number
of holders
shares
issued
257
538
438
967
259
0.03
0.65
1.24
12.64
85.44
2,459
100.00
1,018
-
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
Ordinary shares
% of total
shares
issued
Number held
58,514,245
46,430,201
9,675,785
7,683,535
6,721,299
6,014,285
4,823,551
4,000,000
3,500,000
3,333,333
3,043,192
2,451,408
2,063,695
1,696,894
1,696,220
1,568,230
1,482,459
1,111,119
1,099,459
1,072,000
21.25
16.86
3.51
2.79
2.44
2.18
1.75
1.45
1.27
1.21
1.11
0.89
0.75
0.62
0.62
0.57
0.54
0.40
0.40
0.39
167,980,910
61.00
GALEN BIOMEDICAL INC
BNP PARIBAS NOMINEES PTY LTD (IB AU NOMS RETAILCLIENT DRP)
MS SARINDERJIT KAUR
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
FAIRVIEW HOLDINGS PTY LTD (THE MANJULE SUPER A/C)
BNP PARIBAS NOMS PTY LTD (DRP)
123 HOME LOANS PTY LTD
MR HIMMAT SINGH
CHANDRA SEKARAN P PERUMAL
818 CORPORATE PTY LTD (818 A/C)
DR FATHIL MOHAMED
MR ROBERT GEMELLI
MR PETER KLIMIS
MR KOK WAH ONG
NEWECONOMY COM AU NOMINEES PTY LIMITED (900 ACCOUNT)
MR KOK SENG CHEN
MR RAVINDRAN GOVINDAN
STARLAND NOMINEES PTY LTD (THE STARLAND A/C)
MR JASON ACHESON MORRIS
Unquoted equity securities
There are no unquoted equity securities.
96
Holista Colltech Limited
Shareholder information
31 December 2020
Substantial holders
Substantial holders in the company are set out below:
DR.RAJEN MANICKA
GLOBAL EHEALTH LIMITED
Voting rights
The voting rights attached to ordinary shares are set out below:
Ordinary shares
% of total
shares
issued
Number held
85,735,272
46,226,673
31.14
16.79
Ordinary shares
On a show of hands every member present at a meeting in person or by proxy shall have one vote and upon a poll each
share shall have one vote.
There are no other classes of equity securities.
97