Holista Colltech Limited
ABN 24094515992
Annual Report - 31 December 2021
Holista Colltech Limited
Corporate directory
31 December 2021
Directors
Dr Rajen Manicka
Mr Walter Edward Joseph
Mrs Loren King
Executive Chairman, Managing Director and Chief
Executive Officer
Non-Executive Director (appointed 28 June 2021)
Non-Executive Director (appointed 31 July 2021)
Company secretary
Mr Jay Stephenson (Appointed 01 September 2021)
Registered office and Principal
place
of business
Australia:
283 Rokeby Road
Subiaco, WA 6008
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
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
Level 2, 40 Kings Park Road
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
Share register
Auditor
Solicitors
Stock exchange listing
Holista Colltech Limited shares are listed on the Australian Securities Exchange (ASX
code: HCT)
Corporate Governance Statement
The Company's Corporate Governance Statement can be found on the company's
website:
https://www.holistaco.com/the-investors.html
Media Enquiries
Australia and New Zealand:
Vantage Point Partners
Email: brendon@vantagepointpartners.com.au
Telephone: +61 409 341 613
Global:
WeR1 Consultants Pte Ltd
1 Raffles Pl
Singapore 048616
Telephone: +65 67217161
Email: holista@wer1.net
1
Holista Colltech Limited
Contents
31 December 2021
Managing Directors' report
Directors' report
Auditor's independence declaration
Consolidated statement of profit or loss and other comprehensive income
Consolidated statement of financial position
Consolidated statement of changes in equity
Consolidated statement of cash flows
Notes to the consolidated financial statements
Directors' declaration
Independent auditor's report to the members of Holista Colltech Limited
Corporate Governance Statement
Shareholder information
General information
3
8
20
21
22
23
24
25
70
71
76
92
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
283 Rokeby Road
Subiaco
WA 6008
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 30 March 2022. The
directors have the power to amend and reissue the financial statements.
2
Holista Colltech Limited
Managing Directors' report
31 December 2021
About Us
Holista Colltech’s core business is to conduct research to find natural solutions so that people can live healthier lives.
The company holds proprietary solutions to help food manufacturers produce healthier alternatives – without use of
chemicals – that do not compromise tastes and mouth-feel. Other key products include scientific enhanced bestselling
natural health supplements and disease- free ovine collagen. Building on its partnership network and expertise,
Holista has also developed sanitising solutions for individual and corporate use to control pandemic infections.
Corporate Profile
Holista Colltech Ltd (Holista) is a research-driven biotech company, a result of the merger of Holista Biotech Sdn Bhd
and Colltech Australia Ltd. It is listed on the Australian Securities Exchange (ASX:HCT), headquartered in Perth and
has extensive operations in multiple countries, including 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 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 a low-calorie/Low-GI sugar substitute.
Holista is the only company in the world that produces ovine collagen from disease-free Australian sheep using
patented extraction methods.
Holista is a leader in Malaysia for the distribution of natural health supplements. It leverages on its R&D background
and scientific expertise to build a world-class company focused on providing consumers with scientifically enhanced
natural supplements and consumer products.
Further, the Company also has a range of all-natural, non-toxic and effective sanitisers for consumers and industrial
applications within its product portfolio.
3
Holista Colltech Limited
Managing Directors' report
31 December 2021
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
2021 (“FY2021”).
The period under review marks a significant turnaround for the Group with full-year revenue jumping 13% to a
record high of $8 million as net loss before tax improved significantly over the previous year. The pleasing result
was achieved despite the ongoing negative impact from COVID-19 with three out of four of Holista’s key divisions
delivering growth when compared to FY2020.
A summary on the performance of each of these divisions is outlined below:
Dietary Supplements
This is our largest division and it delivered a strong performance during the year with sales increasing 18% to
$6.2 million. Sales rebounded strongly from the easing in COVID-19 restrictions in Malaysia and an increase
consumer focus on health and wellbeing.
Another notable achievement by this business is the successful launch of a water-soluble vitamin D supplement
which provides an easy and effective way for consumers to boost levels of this important vitamin in their body.
Holista’s vitamin and health supplement brands are market leaders in Malaysia and the rebound in sales from
this business is likely to continue this year following what can only be described as a challenging FY2021 for the
division due to strict social restrictions to control the pandemic.
Healthy Food Ingredients
Holista’s Healthy Food Ingredients business division was another standout as sales lifted by 33% to $1.4 million
in 2021. The result was driven by increased orders for Holista’s proprietary GI Lite™ and 80LessTM products
from several international customers, including community marketing group HWH International and US-based
Costanzo’s Bakery, Inc.
Costanzo’s uses Holista’s proprietary GI-Lite™ Bread Pre-mix for a dedicated range of low-Glycemic Index (GI)
bread products, which is stocked at supermarkets in North America. The uplift in revenue from this business was
also driven by larger orders for 80LessTM healthy sugar substitute from drinks manufacturer and Malaysia stock
exchange-listed Rex Industry Berhad.
We believe the best is yet to come for this division following the signing of a collaboration term sheet with Country
Farms Sdn Bhd – a subsidiary of Malaysian conglomerate Berjaya Corporation Berhad. Country Farms is
partnering with Holista to develop healthier food options using the Group’s all-natural food ingredients and
supplements. These healthier foods could potentially be sold through Malaysian franchises owned by Berjaya,
including Starbucks, 7-Eleven and Kenny Rogers Roasters.
Ovine Collagen
The Collagen Manufacturing business division also grew strongly with sales up by 43% to $248,000 in 2021
compared to the previous corresponding period. The improvement is mainly due to increased orders from Behn
Meyer in Thailand as the COVID-19 restrictions eased. Behn Meyer is a specialty supplier for a wide variety of
industries across the globe. It uses Holista’s unique collagen product in the manufacture of some of its cosmetics.
Holista owns a patented process to extract collagen from sheep skin from its facility in Western Australia, and
Australian sheep products are highly prized due to their disease-free status.
These key advantages are the reasons behind interest from Guangzhou Sinbio Cosmetic Co Ltd, a Chinese
State-Owned Enterprise (SOE), in Holista’s unique offering as announced in May 2021. Sinbio is in the process
of testing Holista’s collagen, and if the tests are successful and once Chinese regulatory clearances are obtained,
Sinbio will sign a binding five-year agreement to purchase the entire 48-ton annual production capacity of
Holista’s existing plant in the first year of the contract.
The order will scale up to 144 tons in year two, 288 tons in year three and 576 tons in years four and five. Holista
will expand the plant to accommodate the step-up in orders from Sinbio.
4
Holista Colltech Limited
Managing Directors' report
31 December 2021
Infection Control
This division is the only one to report a slide in sales. Revenue from Infection Control fell to $227,443 in FY2021
from $664,919 in the previous year due largely to supply chain and other disruptions from COVID-19
However, sales have started to recover in recent months and the launch of new products are expected to further
lift the performance of this business in 2022.
5
Holista Colltech Limited
Managing Directors' report
31 December 2021
Outlook
Holista is in a strong position to build on the achievements it’s made in the previous financial year. We are expecting
to deliver further growth in revenue and earnings as trading conditions remained positive for our four business
divisions as we entered the new financial year.
For instance, the Supplements business continues to see strong demand for its supplements and vitamins in light of
the ongoing easing of COVID-19 social restrictions in Malaysia. The launch of Holista’s water soluble vitamin D
product is also expected to contribute to growth in this business. Vitamin D is increasingly being recognised as a key
nutrient for immunity and Holista will continue to leverage this opportunity in Malaysia and other countries.
The outlook for Food Ingredients is also bright following the 12th of October 2021 announcement of a term sheet
collaboration agreement (the Agreement) with Country Farms, a wholly owned subsidiary of Berjaya Corporation
Berhad, to customise and commercialise the Company’s unique healthy food innovations for several international
franchises under Berjaya’s umbrella.
Country Farms has completed the final testing of a healthier version of a croissant that will be launched in 327
Starbucks stores across Malaysia in the second half of 2022, and Holista expects more food products using its
technology to be announced later this year. Under the Agreement, Country Farms will be the Centre of Distribution
for Holista’s range of healthy food products for companies within the Berjaya group, which includes the franchises of
Starbucks, 7-Eleven and Kenny Rogers Roasters, amongst others. Holista is also working a range of plant-based
meats to complement the low GI range at the request of Starbucks Malaysia.
Meanwhile, the 2022 financial year could also herald an exciting period for our Ovine Collagen business. Guangzhou
Sinbio Cosmetic Co Ltd is undertaking tests and securing regulatory approval to import Holista’s cosmetic-grade
collagen into China. As part of this process, Holista’s Material Safety Data Sheet (MSDS) for bulk ovine collagen has
been granted approval by Chinese Customs. This will allow Holista to ship bulk raw collagen to the country for final
testing.
Finally, the Infection Control business is expected to stage a turnaround this year from improved sales of its
NatshieldTM sanitiser, nasal balm and wipes. The nasal balm was launched online in the 2021 December quarter and
will be sold in the United States through a multi-level marketing network in the near future.
Additionally, the previously announced SARS-CoV-2 rapid test kit branded as “Gene Sign” is awaiting final approval
by regulators in Colombia. Securing the approval in Colombia will also give Gene Sign corresponding approvals in
Brazil, Argentina and Mexico, thanks to an arrangement between the four countries.
In North America, Gene Sign is also in the process of gaining approval under the Medical Device Single Audit Program
(MDSAP) with the United States Food and Drug Administration (FDA). Separately, Gene Sign’s Reverse-
Transcription Loop-Mediated Isothermal Amplification (RT-LAMP) technology is undergoing final evaluation in the
United Kingdom to secure COVID Testing Devices Authorisation (CTDA) that will allow it to be sold in that market.
This time last year, I wrote about the bright outlook for 2021 and our strong full year results show that we were
successful in executing on our key growth strategies. This year is looking even brighter given the multiple significant
opportunities ahead of us, and I look forward to bringing you further updates throughout 2022.
Best regards,
DR RAJEN MANICKA
Executive Chairman, MD and CEO
6
Holista Colltech Limited
Managing Directors' report
31 December 2021
Key Milestones
Date
Milestone
12 October 2021
Holista signs a collaboration term sheet with Malaysian conglomerate Berjaya’s Country
Farms to develop healthy foods for leading franchises in the country.
16 September 2021
Natshield™ receives trademark approval for sales in China, which clears the way for
Holista to sell its industrial sanitising solution in the Chinese market.
27 August 2021
Holista delivers improved interim revenue and profit
18 June 2021
Holista granted approval from Malaysian authorities to sell SARS-CoV-2 rapid test kits and
secured first order for the kits.
13 May 2021
Potential deal to sell collagen product to Guangzhou Sinbio Cosmetic Co Ltd via an
exclusive agreement with Mutiara.
26 February 2021
Holista posts resilient full-year revenue and a positive 2021 outlook
7
Holista Colltech Limited
Directors' report
31 December 2021
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 2021.
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 Walter Edward Joseph
Mrs Loren King
Mr Chan Heng Fai
Mr Blair Michelson
Mr Daniel Joseph O’Connor
Executive Chairman, Managing Director and Chief Executive Officer
Non-Executive Director (appointed 28 June 2021)
Non-Executive Director (appointed 31 July 2021)
Non-Executive Director (resigned 28 June 2021)
Non-Executive Director (resigned 28 June 2021)
Non-Executive Chairman (resigned 31 July 2021)
Company secretary
Mr Stephenson appointed on 1 September 2021 as the Company Secretary, has been involved in business development for
over 30 years including the past 25 years as Director, Chief Financial Officer and Company Secretary for various listed and
unlisted entities in IT, food, neutraceuticals, resources, manufacturing, wine, hotels, and property. He has been involved in
business acquisitions, mergers, initial public offerings, capital raisings, business restructuring as well managing all areas of
finance for companies.
Currently he is a non-executive Director of Dragon Mountain Gold Limited, and Stonehorse Energy Limited as well as
Company Secretary for a number of ASX Listed resource and industrial companies and a Director of a number of private
companies.
Mr Walter Edward Joseph (resigned 1 September 2021).
Mr Blair Michelson (resigned 28 June 2021).
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 2021 (FY2021), 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
8
Holista Colltech Limited
Directors' report
31 December 2021
Operating and financial review
Group Operations Review:
Holista Colltech Limited (Holista or the Company) posted a 12.9% increase in group revenue to a record high of just over $8
million for the 12-months ended 31 December 2021 as the full year net loss before income tax expense narrowed significantly
to $1.2 million from a loss of $5.6 million in the previous year. Net loss after tax also improved materially to $1.4 million
versus $5.7 million in the previous year.
The improved result was achieved despite the negative impact of COVID-19 with three out of four of Holista’s key divisions
delivering strong growth over the previous corresponding period (pcp).
Dietary Supplements:
The Company’s Dietary Supplements business division continued to be the largest income contributor to the Group. Revenue
from this business jumped by 18% to $6.2 million as sales rebounded strongly from the easing of COVID-19 restrictions in
Malaysia, increased consumer focus on health and wellbeing, and the launch of a new health supplement called Hydro D in
Q3 FY2021.
Hydro D is a water-soluble vitamin D that has far better absorption compared to fat-soluble base and more efficient to
supplement the body’s immune system. Studies have also shown that deficiency in Vitamin D contributes to the causal
pathway of COVID-19 mortality risk and disease severity 1.
Holista is planning to develop other new products to be sold commercially this year, including chewable Omega-3 gummies
for children.
1 : https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0263069
Healthy Food Ingredients:
Holista’s Healthy Food Ingredients business division increased sales by 33% to $1.4 million in FY2021. The result was driven
by increased orders for Holista’s GI Lite™ innovation from US-based Costanzo’s Bakery, Inc. and HWH International, and
increased orders for its proprietary 80LessTM healthy sugar substitute from drinks manufacturer Rex Industry Berhad.
Ovine Collagen:
The Collagen Manufacturing business division also grew strongly in the period with sales up by 43% to $248,100 in FY 2021
compared to the previous corresponding period. The improvement is primarily due to increased orders from Behn Meyer in
Thailand as the COVID-19 restrictions eased.
Infection Control Solutions:
Holista’s Infection Control Solutions business division achieved sales of $227,443 in FY2021 compared with $664,919 in the
previous corresponding period. This is the second year that this business contributed to the Group’s revenue.
Supply chain disruptions from COVID-19 contributed to a drop in revenue, although sales have begun to recover in recent
months with the launch of new products, such as the nasal balm, expected to lift the performance of this business in 2022.
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 2021 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.
9
Holista Colltech Limited
Directors' report
31 December 2021
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.
10
Holista Colltech Limited
Directors' report
31 December 2021
Information relating to the directors
Name:
Title:
Qualifications:
Experience and expertise:
Dr Rajen Manicka
Executive Chairman, Managing Director and Chief Executive Officer
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:
Contractual rights to shares:
85,735,272
Nil
Nil
Nil
Name:
Title:
Qualifications:
Experience and expertise:
Mr Daniel Joseph O’Connor
Non-Executive Chairman (Resigned 31 July 2021)
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
11
Holista Colltech Limited
Directors' report
31 December 2021
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Mr Chan Heng Fai
Non-Executive Director (Resigned 28 June 2021)
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:
43,626,621 Ordinary Shares
Nil
Nil
Nil
Name:
Title:
Qualifications:
Experience and expertise:
Mr Blair Michelson
Non-Executive Director (Resigned 28 June 2021)
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 Walter Edward Joseph
Non-Executive Director (Appointed 28 June 2021)
N/A
Mr Joseph has a long and successful track record working in senior management and
consulting positions over the past five decades at several leading organisations,
including the National Australian Bank, Wesfarmers-Bunnings, P&O Ports, Water
Corporation of Western Australia (WA) Department of Commerce and Trade.
His expertise in planning, marketing, business development and operations will be a
valuable asset to Holista as the Company embarks on its next phase of growth.
None
Other current directorships:
Former directorships (last 3 years): None
Interests in shares:
Nil
12
Holista Colltech Limited
Directors' report
31 December 2021
Experience and expertise:
Name:
Title:
Qualifications:
Mrs Loren King
Non-Executive Director (Appointed 31 July 2021)
Bachelor in Psychology, Fellow Member of the Governance Institute of Australia
holding a Graduate Diploma of Applied Corporate Governance.
Mr Loren King has worked in corporate finance and senior administration roles with
ASX listed companies, stockbroking and corporate advisory services for the past 15
years. During this time, she gained valuable experience in dealing with all aspects of
corporate governance and compliance, specialising in initial public offerings (IPO),
backdoor listings, private capital raising and business development.
Other current directorships:
None
Former directorships (last 3 years): None
Interests in shares:
Nil
'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 2021,
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 Walter Edward Joseph
Mrs Loren King
Mr Daniel Joseph O’Connor
Mr Chan Heng Fai
Mr Blair Michelson
13
7
5
8
5
6
13
7
5
8
6
6
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
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 comprises
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.
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 $50,000 (2020: $17,418) 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.
13
Holista Colltech Limited
Directors' report
31 December 2021
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
There were no ordinary shares of Holista Colltech Limited issued on the exercise of options during the year ended 31
December 2021 and up to the date of this report.
Shares under Performance Rights
There were no unissued ordinary shares of Holista Colltech Limited under performance rights outstanding at the date of this
report.
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 $5,590 (2020: $5,870).
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 29 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 29 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
14
Holista Colltech Limited
Directors' report
31 December 2021
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
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 2021 is detailed in note 28 'Key management
personnel disclosures' of this consolidated financial statement.
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.
15
Holista Colltech Limited
Directors' report
31 December 2021
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 page 17 of this remuneration report.
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
There was a cash bonus of $17,231 granted and paid to Rajen Manicka as short-term incentive during the financial
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 (resigned 31 July 2021)
Chan Heng Fai (resigned 28 June 2021)
Blair Michelson (resigned 28 June 2021)
Walter Edward Joseph (appointed 28 June 2021)
Loren King (appointed 31 July 2021)
16
Holista Colltech Limited
Directors' report
31 December 2021
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
2021
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
Blair Michelson 2
Walter Joseph
Loren King 3
Executive-
Directors:
Rajen Manicka**
35,000
18,000
24,000
24,000
20,000
-
-
-
-
-
275,692
396,692
17,231
17,231
-
-
-
-
-
-
-
8,333
8,333
53,333
8,333
8,333
-
-
-
-
-
8,630
95,295
55,657
55,657
-
-
-
-
-
-
-
-
-
-
-
-
-
-
43,333
26,333
77,333
32,333
28,333
357,210
564,875
*
**
Other short term benefits represents D&O insurances of $8,333 for each director and additional consultancy fees paid
to directors. Mr Blair was also paid $45,000 for other services related to QA and QC maintenance for Collie plant during
the financial year.
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) Mrs. Loren remuneration was paid by way of fees to Risky Vulture Enterprise Pty Ltd.
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
Blair Michelson 2
Jonathan Pager 3
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.
Increase of cash salary and fees 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.
17
Holista Colltech Limited
Directors' report
31 December 2021
(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.
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. On 14 June 2021, the existing
contract was renewed for 3 years.
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 2021
Initial 3-year period
3 months
RM858,348 per annum
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 2021.
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 1
Walter Edward Joseph
Loren King
Total Ordinary Shares
1 Resigned on 28 June 2021
the year
compensation
performance
rights
other
the year
85,735,272
-
46,226,673
-
-
131,961,945
-
-
-
-
-
-
-
-
-
-
-
-
- 85,735,272
-
-
(2,600,052) 43,626,621
-
-
(2,600,052) 129,361,893
-
-
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
2,700,000
-
-
(2,700,000)
-
18
Holista Colltech Limited
Directors' report
31 December 2021
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
There are no officers of the Company who are former partners of Stantons.
Auditor
Stantons 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
___________________________
Dr Rajen Manicka
Executive Chairman, MD and CEO
30 March 2022
19
PO Box 1908
West Perth WA 6872
Australia
Level 2, 40 Kings Park Rd
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
30 March 2022
Board of Directors
Holista Colltech Limited
283 Rokeby Road,
Subiaco, WA 6008
Dear Directors
RE:
HOLISTA COLLTECH LIMITED
In accordance with section 307C of the Corporations Act 2001, I am pleased to provide the following
declaration of independence to the directors of Holista Colltech Limited.
As Audit Director for the audit of the financial statements of Holista Colltech Limited for the year ended
31 December 2021, I declare that to the best of my knowledge and belief, there have been no
contraventions of:
(i)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
Yours sincerely
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(An Authorised Audit Company)
Samir Tirodkar
Director
Liability limited by a scheme approved under Professional Standards Legislation
Stantons Is a member of the Russell
Bedford International network of firms
Holista Colltech Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 31 December 2021
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 (reversal)
Other expenses
Loss before income tax expense
Income tax expense
Loss after income tax expense for the year
Other comprehensive income
Items that may 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
2021
$
2020
$
4
5
6
6
39
6
8,023,129
7,106,635
100,400
368,739
460,942
(3,890,425)
(478,278)
(509,560)
(882,975)
(199,999)
(2,965,656)
(46,604)
(12,092)
(144,515)
(205,124)
360,109
(813,356)
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)
(1,204,004)
(5,593,980)
7
(153,030)
(86,587)
(1,357,034)
(5,680,567)
49,709
88,979
49,709
88,979
(1,307,325)
(5,591,588)
(100,825)
(1,256,209)
(197,400)
(5,483,167)
(1,357,034)
(5,680,567)
(344,067)
(963,258)
75,749
(5,667,337)
(1,307,325)
(5,591,588)
Cents
Cents
Basic loss per share
Diluted loss per share
38
38
(0.46)
(0.46)
(2.04)
(2.04)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
21
Holista Colltech Limited
Consolidated statement of financial position
As at 31 December 2021
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax refund due
Other current assets
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Deferred tax asset
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
Short-term provisions
Total non-current liabilities
Total liabilities
Net assets
Note
Consolidated
2021
$
2020
$
8
9
10
12
13
14
11
15
16
17
18
19
20
18
19
20
1,213,093
1,795,140
1,521,917
49,155
1,007,569
5,586,874
2,725,237
1,558,007
1,108,346
-
1,201,977
6,593,567
1,010,263
113,413
134,157
83,166
1,340,999
1,112,490
124,824
146,471
75,412
1,459,197
6,927,873
8,052,764
2,746,596
5,245
364,882
13,521
34,496
3,164,740
1,719,277
458,729
401,173
28,155
13,414
2,620,748
417,774
94,146
275,000
786,920
430,605
82,764
275,000
788,369
3,951,660
3,409,117
2,976,213
4,643,647
Equity
Issued capital
Reserves
Accumulated losses
Equity attributable to the owners of Holista Colltech Limited
Non-controlling interest
Total equity
21
22
23
24
21,707,478 21,707,478
(137,344)
(16,149,123)
5,421,011
(777,364)
(204,502)
(17,405,332)
4,097,644
(1,121,431)
2,976,213
4,643,647
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
22
Holista Colltech Limited
Consolidated statement of changes in equity
For the year ended 31 December 2021
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 21)
Transaction costs (note 21)
Transfer of expired options
balance
Exercise of performance rights
Shares based payment
expenses
-
-
-
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
Consolidated
Issued
capital
$
Share-based
Payments
Reserves
Foreign
Currency
Translation
Reserve
$
$
Accumulated
Losses
$
Non-
controlling
interest
$
Total equity
$
Balance at 1 January 2021
21,707,478
360,109
(497,453)
(16,149,123)
(777,364)
4,643,647
Loss after income tax expense
for the year
Other comprehensive income
for the year, net of tax
Total comprehensive income for
the year
Shares based payment
expenses
-
-
-
-
-
-
-
-
(1,256,209)
(100,825)
(1,357,034)
292,951
-
(243,242)
49,709
292,951
(1,256,209)
(344,067)
(1,307,325)
(360,109)
-
-
-
(360,109)
Balance at 31 December 2021
21,707,478
-
(204,502)
(17,405,332)
(1,121,431)
2,976,213
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
23
Holista Colltech Limited
Consolidated statement of cash flows
For the year ended 31 December 2021
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Finance costs
Interest received
Other revenue
Income tax paid
Government grants
Note
Consolidated
2021
$
2020
$
7,119,182
(8,678,056)
(46,604)
9,934
-
(169,503)
88,979
6,324,724
(10,342,180)
(68,406)
23,405
268,856
(74,009)
-
Net cash (used in) operating activities
36
(1,676,068)
(3,867,610)
Cash flows from investing activities
Purchase of property, plant and equipment
Purchase of intellectual property
Refund/(Increase) of deposits/investments
Net cash generated from/(used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from borrowings, net
Repayment of lease
Share issue transaction costs
Net cash provided by financing activities
Net (decrease)/increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Change in foreign currency held
14
15
21
(38,124)
(3,333)
91,809
(13,362)
(20,979)
(46,405)
50,352
(80,746)
-
131,935
(22,441)
-
6,527,337
121,669
(39,621)
(29,874)
109,494
6,579,511
(1,516,222)
2,725,237
4,078
2,631,155
101,400
(7,318)
Cash and cash equivalents at the end of the financial year
8
1,213,093
2,725,237
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
24
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
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 $1,357,034 (2020: $5,680,567 loss) and a net cash out-flow from operating
activities of $1,676,068 out-flow (2020: $3,867,610 out-flow). As at 31 December 2021, the Group's working capital amounted
to $2,422,134 (2020: $3,972,819 working capital), as disclosed in note 21 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 2022. 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 33.
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 2021 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.
25
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
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 consolidated 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.
26
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
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.
●
27
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
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 consolidated 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:
28
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
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.
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.
29
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
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 – impairment of property, plant and equipment (note 14 Property, plant and equipment)
Key estimate – impairment of goodwill (note 15 Intangible assets)
Key estimate – determining stand-alone selling price of the loyalty points (note 17 contract liabilities)
Key estimate – determining the lease term (note 19 Leases)
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.
30
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
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 88% (2020: 83%) of total revenue for this segment. For Food Ingredients business segments, the Group supplies
to a few major customers that accounts 62% (2020: 65%) of revenue for this segment. For Infections Control business
segments, the Group supplies to a few major customers that accounts 88% (2020: 81%) of revenue for these segments. The
Group supplies to a few external customers for the Ovine Collagen segment, where the major customer accounts for 100%
(2020: 89%) of revenue for this segment.
Segment Financial Performance
Year ended 31 December 2021
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
6,184,002
-
6,184,002
248,100
-
248,100
1,363,594
-
1,363,594
227,433
-
227,433
-
100,400
100,400
8,023,129
100,400
8,123,529
(5,063,689)
(742,426)
(2,019,746)
(433,694)
(1,067,978)
(9,327,533)
1,120,313
(494,326)
(656,152)
(206,261)
(967,578)
(1,204,004)
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)
31
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 3. Operating segments (continued)
As at 31 December 2021
Supplements
$
Sheep
Collagen
$
Food
Ingredients
$
Infection
Control
$
Corporate
$
Total
$
Segment Assets
Intra-segment eliminations
Total assets
3,341,994
-
3,341,994
6,103,998
-
6,103,998
1,824,902
-
1,824,902
328,595
-
328,595
(4,671,616)
(4,671,616)
- 11,599,489
(4,671,616)
6,927,873
Segment Liabilities
Intra-segment eliminations
Total liabilities
(1,893,284)
-
(1,893,284)
(2,430,009)
-
(2,430,009)
(4,600,567)
-
(4,600,567)
(526,165)
-
(526,165)
-
5,498,365
5,498,365
(9,450,025)
5,498,365
(3,951,660)
Total net assets
1,448,710
3,673,989
(2,775,665)
(197,570)
826,749
2,976,213
As at 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)
-
3,586,834
3,586,834
(6,995,951)
3,586,834
(3,409,117)
Total net assets
1,546,124
5,247,005
(2,261,744)
(597,438)
709,700
4,643,647
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
2021
$
2020
$
6,103,998
4,710,385
785,106
5,734,695
4,376,318
818,885
11,599,489 10,929,898
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
2021
$
2020
$
248,100
6,830,609
944,420
173,400
6,324,178
609,057
8,023,129
7,106,635
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:
32
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
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
2021
$
2020
$
8,023,129
7,106,635
Consolidated
2021
$
2020
$
6,184,002
248,100
1,363,594
227,433
5,243,791
173,400
1,024,525
664,919
8,023,129
7,106,635
248,100
6,830,609
944,420
173,400
6,324,178
609,057
8,023,129
7,106,635
8,023,129
7,106,635
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 Group 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.
33
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
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.
34
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
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 food 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 17 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 13 Right-of-return assets, note 16 Refund liabilities,
and note 17 Contract liabilities.
Note 5. Other income
Government Grants - Research and development
Government Grants - Cashflow Boost and JobKeeper Subsidy
Government Grants - Loan forgiven
Interest income
Other income
Total Other income
Consolidated
2021
$
2020
$
51,657
9,600
27,722
10,531
890
163,540
105,316
-
23,405
76,478
100,400
368,739
Accounting Policy for Interest Income
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 receipt of cash.
35
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 6. Loss before income tax
Loss before income tax includes the following specific expenses:
Impairment
Impairment of other assets
Impairment on credit losses
Impairment of goodwill
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 15.
Consolidated
2021
$
2020
$
-
144,515
-
-
448,086
2,341,655
520,655
46
144,515
3,310,442
267,779
120,394
41,383
95,880
90,288
197,632
267,913
77,103
13,463
110,306
86,334
195,628
813,356
750,747
1,935,235
243,742
82,104
478,946
125,342
100,287
1,988,208
247,538
98,478
316,637
152,071
88,689
2,965,656
2,891,621
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.
36
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 7. Income tax expense
Income tax expense
Current 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 25% (2020: 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
2021
$
2020
$
153,030
86,587
153,030
86,587
(1,204,004)
(5,593,980)
(301,001)
(1,538,345)
57,819
(12,914)
3,436
153,031
311,437
(95,240)
36,462
1,004,356
(44,974)
83,196
86,587
304,814
(108,225)
299,178
153,030
86,587
%
%
The applicable weighted average effective tax rates attributable to operating profit are as
follows:
12.71
1.55
The tax rates used in the above reconciliations is the corporate tax rate of 25% 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
2021
$
2020
$
2,555,930
1,216,432
2,468,942
1,439,059
3,772,362
3,908,001
Potential deferred tax assets attributable to tax losses have not been brought to account at 31 December 2021 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:
37
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
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 $10,219,782 (2020: $8,974,034) 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 $1,245,748 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.
38
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 7. Income tax expense (continued)
Accounting policy for Income tax expense
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.
39
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
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. Cash and cash equivalents
Current assets
Cash at bank
Cash on deposit
Consolidated
2021
$
2020
$
513,012
700,081
310,191
2,415,046
1,213,093
2,725,237
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.
40
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 9. Trade and other receivables
Current assets
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
2021
$
2020
$
3,669,889
(1,934,523)
1,735,366
3,138,830
(1,751,581)
1,387,249
5,507
180,623
294,534
(475,157)
54,267
119,634
180,623
294,534
(475,157)
51,124
1,795,140
1,558,007
2021
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
1,456,514
294,829
14,553
1
1,903,992
3,669,889
Allowance for expected credit
losses
Other receivables-net
(42,670)
59,774
-
-
-
-
1,473,618
294,829
14,553
-
-
1
(1,891,853)
(1,934,523)
-
59,774
12,139
1,795,140
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
Total
Trade receivables-Gross value
1,327,973
51,208
71,332
344,965
1,343,352
3,138,830
Allowance for expected credit
loss
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
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 2021 an allowance of $1,934,523 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 $1,082,810 (2020:
$1,071,048). During the year, the carrying amount of the allowance for credit losses amounted to $1,082,810
(2020:$1,071,048).
As at 31 December 2021, 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. In
prior year, an impairment of $475,157 has been made to fully impair the amounts advanced to a related party and a third
party.
41
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 9. Trade and other receivables (continued)
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.
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. Inventories
Current assets
Raw materials - at cost
Finished goods - at cost
Stock-in-transit
Consolidated
2021
$
2020
$
459,258
649,543
413,116
948,667
33,336
126,343
1,521,917
1,108,346
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. Right-of-use assets
Non-current assets
Properties
Motor vehicles
Consolidated
2021
$
2020
$
86,865
26,548
104,884
19,940
113,413
124,824
42
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 11. Right-of-use assets (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current financial year are set out below:
Consolidated
Balance at 1 January 2021
Additions
Disposals
Exchange differences
Depreciation expense
Properties
$
Motor
vehicles
$
104,884
-
-
-
(18,019)
19,940
22,601
(2,669)
393
(13,717)
Total
$
124,824
22,601
(2,669)
393
(31,736)
Balance at 31 December 2021
86,865
26,548
113,413
Consolidated
Balance at 1 January 2020
Disposals
Depreciation expense
Properties
$
Motor
vehicles
$
Total
$
122,902
-
(18,018)
36,080
(1,681)
(14,459)
158,982
(1,681)
(32,477)
Balance at 31 December 2020
104,884
19,940
124,824
Accounting policy for right-of-use assets
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 measurement 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.
43
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 12. Income tax refund due
Current assets
Income tax refund due
Note 13. Other current assets
Current assets
Prepayments
Security deposits
Other deposits
Loan to a related party
Right-of-return assets
Tax recoverable
Consolidated
2021
$
2020
$
49,155
-
Consolidated
2021
$
2020
$
318,703
33,616
14,518
511,246
129,486
-
239,412
320,463
21,566
481,641
101,134
37,761
1,007,569
1,201,977
In FY2020, there was an amount of $428,787 included in prepayments for deposit and advances previously made to
ProImmune Company LLC for supply contract. ProImmune Company LLC filed for purported breaches 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 2021 is related to loan to Galen BioMedical Inc. which is non-interest bearing and
repayable upon demand.
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.
Accounting policy for customer fulfilment costs
Customer fulfilment costs are capitalised as an asset when all the following are met: (i) the costs relate directly to the contract
or specifically identifiable proposed contract; (ii) the costs generate or enhance resources of the consolidated entity that will
be used to satisfy future performance obligations; and (iii) the costs are expected to be recovered. Customer fulfilment costs
are amortised on a straight-line basis over the term of the contract.
44
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 14. Property, plant and equipment
Non-current assets
Freehold land and buildings
Less: Accumulated depreciation and impairment
Plant and equipment
Less: Accumulated depreciation
Total property, plant and equipment
Consolidated
2021
$
2020
$
1,037,706
(339,933)
697,773
1,017,689
(314,367)
703,322
2,041,094
(1,728,604)
312,490
2,031,321
(1,622,153)
409,168
1,010,263
1,112,490
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 2020
Additions
Exchange rate differences
Depreciation expense
Balance at 31 December 2020
Additions
Exchange rate differences
Depreciation expense
Balance at 31 December 2021
Freehold land
and buildings
$
Plant and
equipment
$
778,385
-
(54,808)
(20,255)
703,322
-
13,834
(19,383)
539,533
13,362
(1,351)
(142,376)
409,168
38,124
610
(135,412)
Total
$
1,317,918
13,362
(56,159)
(162,631)
1,112,490
38,124
14,444
(154,795)
697,773
312,490
1,010,263
Land and buildings with a carrying amount of $697,773 (2020: $703,322) 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 2021 (2020: $nil).
Accounting policy for property, plant and equipment
Recognition and measurement
45
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 14. Property, plant and equipment (continued)
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 profit or loss 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:
Buildings
Plant and equipment
Motor vehicles
2021
Bottom
%
4.00
20.00
20.00
2021
Top
%
4.00
33.33
20.00
2020
Bottom
%
4.00
20.00
20.00
2020
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.
46
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 14. Property, plant and equipment (continued)
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 15. Intangible assets
Non-current assets
Goodwill
Patents and licences
Less: Accumulated amortisation
Consolidated
2021
$
2020
$
-
-
221,052
(86,895)
134,157
216,788
(70,317)
146,471
134,157
146,471
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 2020
Additions
Exchange differences
Impairment of assets
Write off of assets
Transfers (out)
Amortisation expense
Balance at 31 December 2020
Additions
Exchange differences
Transfers (out)
Amortisation expense
Balance at 31 December 2021
Goodwill
$
Patents and
licences
$
Total
$
572,378
-
(51,723)
(520,655)
-
-
-
-
-
-
-
-
-
203,743
20,979
(7,032)
-
(45,044)
(414)
(25,761)
146,471
3,333
2,881
(3,333)
(15,195)
776,121
20,979
(58,755)
(520,655)
(45,044)
(414)
(25,761)
146,471
3,333
2,881
(3,333)
(15,195)
134,157
134,157
47
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 15. 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.
Since the previous financial 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. As such, management has impaired the carrying amount of goodwill in full.
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
2021
years
2020
years
20
20
48
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 15. 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 16. Trade and other payables
Current liabilities
Trade payables
Accruals
Amounts due to a Director
Dividends payable
Refund liability
Other payables
Consolidated
2021
$
2020
$
1,370,345
668,649
-
23,734
340,753
343,115
829,857
433,102
21,588
22,360
368,905
43,465
2,746,596
1,719,277
Refer to note 26 for further information on financial instruments.
Included in the accruals is deferred revenue amounting of $27,892 (2020: $71,241) 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 $21,588 in the previous financial year refers to the accrued director fees of Mr
Chan as at 31 December 2020, that was paid during the year.
49
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 16. Trade and other payables (continued)
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
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 17. Contract liabilities
Current liabilities
Advance deposits and deferred revenue
Consolidated
2021
$
2020
$
5,245
458,729
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.
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.
50
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 18. Borrowings
Current liabilities
Term loan
Banker's acceptance
Loan from related parties
Other borrowings
Non-current liabilities
Term loan
Consolidated
2021
$
2020
$
20,029
330,022
14,367
464
29,027
358,611
13,535
-
364,882
401,173
417,774
430,605
782,656
831,778
Refer to note 26 for further information on financial instruments.
* Loan from a related party is repayable upon demand and non-interest bearing.
The bankers’ acceptance bears interest of 3.43% (2020: 3.70%).
The term loan is repayable over 240 monthly instalments (principal plus interest) of $2,923 (2020: $2,866) which commenced
on 1 October 2020. The term loan bears interest rates of 3.50% (2020: 3.77%) per annum.
Both facilities are secured by the following:
●
●
●
●
●
●
Fixed deposits with licensed banks of the Group and the Company;
Facility agreement;
First party assignment over the office lots of the Company;
Deed of assignment of rental proceeds;
Executed fresh letter of authorisation, memorandum of deposit and letter of off-set; and
Guarantee by a director of the Company.
Assets pledged as security of liabilities
The carrying amounts of assets pledged as security for borrowings are:
Inventories
Security deposits
Freehold land and buildings
At balance date, the following
financing facilities had been
negotiated and were available:
Total facilities
2021
$
Total facilities
2020
$
Facilities used
2021
$
Facilities used
2020
$
Consolidated
2021
$
2020
$
-
33,616
697,773
623,681
1,768
703,322
731,389
1,328,771
Unused
facilities
2021
$
Unused
facilities
2020
$
Term loan
Banker's acceptance
466,932
660,044
459,632
647,312
(466,932)
(330,022)
(459,632)
(358,611)
-
330,022
-
288,701
Total facilities at balance date
1,126,976
1,106,944
(796,954)
(818,243)
330,022
288,701
51
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 18. Borrowings (continued)
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 consolidated 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.
Note 19. Leases
Current liabilities
Current
Non-current liabilities
Non-current
Consolidated
2021
$
2020
$
13,521
28,155
94,146
82,764
107,667
110,919
Refer to note 26 for further information on financial instruments.
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.
52
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 19. 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 20. Short-term provisions
Current liabilities
Provision for employee entitlements
Non-current liabilities
Make good provision
Consolidated
2021
$
2020
$
34,496
13,414
275,000
275,000
309,496
288,414
Description of provisions
Provision for employee benefits represents amounts accrued for annual leave (AL) and long service leave (LSL). The
current portion for this provision includes the total amount accrued for AL entitlements and the amounts accrued for LSL
entitlements that have vested due to employees having completed the required period of service. The Group does not expect
the full amount of AL or LSL balances classified as current liabilities to be settled within the next 12 months. However, these
amounts must be classified as current liabilities since the Group does not have an unconditional right to defer the settlement
of these amounts in the event employees wish to use their leave entitlement.
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 estimated expenditure to be incurred to
reinstate the premises. 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.
53
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 20. Short-term provisions (continued)
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 consolidated statement of profit or loss and other comprehensive income net of any
reimbursement.
Provisions are measured at the present value or management's best estimate of the expenditure required to settle the present
obligation at the end of the reporting period.
If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects the
risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised
as an interest expense.
Note 21. Issued capital
Consolidated
2021
Shares
2020
Shares
2021
$
2020
$
Ordinary shares - fully paid
275,349,087 275,349,087 21,707,478 21,707,478
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
Date
Shares
Issue price
$
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
Balance
Balance
1 January 2020
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
-
-
31 December 2020
275,349,087
21,707,478
31 December 2021
275,349,087
21,707,478
54
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 21. Issued capital (continued)
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
Lapsed during the year
At reporting date
Options
At beginning of the year
Issued options
Expired options
At reporting date
Consolidated
2021
2020
2,700,000
-
(2,700,000)
-
9,000,000
(6,300,000)
-
2,700,000
Consolidated
2021
2020
- 30,000,000
- 18,000,000
(48,000,000)
-
-
-
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 2020.
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:
55
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 21. Issued capital (continued)
Working Capital
Cash and cash equivalents (note 8)
Trade and other receivables (note 9)
Inventories (note 10)
Income tax refund due (note 12)
Other current assets (note 13)
Trade and other payables (note 16)
Contract liabilities (note 17)
Current borrowings (note 18)
Leases (note 19)
Provisions (note 20)
Total Working Capital
Consolidated
2021
$
2020
$
1,213,093
1,795,140
1,521,917
49,155
1,007,569
(2,746,596)
(5,245)
(364,882)
(13,521)
(34,496)
2,725,237
1,558,007
1,108,346
-
1,201,977
(1,719,277)
(458,729)
(401,173)
(28,155)
(13,414)
2,422,134
3,972,819
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.
Note 22. Reserves
Foreign currency reserve
Share-based payment reserve
Consolidated
2021
$
2020
$
(204,502)
-
(497,453)
360,109
(204,502)
(137,344)
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 23. Accumulated losses
Consolidated
2021
$
2020
$
(16,149,123)
(1,256,209)
-
(12,455,239)
(5,483,167)
1,789,283
(17,405,332)
(16,149,123)
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
56
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 24. Non-controlling interest
Non-controlling interest
Note 25. Dividends
Consolidated
2021
$
2020
$
(1,121,431)
(777,364)
There were no dividends paid, recommended or declared during the current or previous financial year.
Note 26. 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.
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.
57
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 26. Financial instruments (continued)
The average exchange rates and reporting date exchange rates applied were as follows:
Australian dollars
US dollars
MY Ringgit
Indian Rupee
SG Dollar
Average exchange rates
Reporting date exchange
rates
2021
2020
2021
2020
0.7514
3.1134
55.5354
1.0096
0.6906
2.8996
-
-
0.7256
3.0301
53.9000
0.9799
0.7702
3.0897
-
-
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
Indian Rupee
SG Dollar
Assets
Liabilities
2021
$
2020
$
2021
$
2020
$
950,848
14,806,460
77,299
-
819,015
4,376,435
-
-
(2,504,006)
(11,928,951)
(66,135)
(2,395)
(519,454)
(2,633,743)
-
-
15,834,607
5,195,450
(14,501,487)
(3,153,197)
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at the
reporting date were as follows:
Consolidated - 2021
US dollars
MY Ringgit
Indian Rupee
Singapore Dollar
Consolidated - 2020
US dollars
MY Ringgit
AUD strengthened
AUD weakened
Effect on
Effect on
% change
equity
% change
equity
15%
15%
15%
15%
321,077
(142,446)
(31)
367
178,967
(15%)
(15%)
(15%)
(15%)
(321,077)
142,446
31
(367)
(178,967)
AUD strengthened
AUD weakened
Effect on
Effect on
% change
equity
% change
equity
15%
15%
(58,341)
(84,605)
(15%)
(15%)
(142,946)
58,341
84,605
142,946
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.
58
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 26. Financial instruments (continued)
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
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.
59
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 26. Financial instruments (continued)
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 consolidated statement of
financial position.
Consolidated - 2021
Non-derivatives
Non-interest bearing
Trade and other payables
Interest-bearing - variable
Borrowings
Leases
Total non-derivatives
Consolidated - 2020
Non-derivatives
Non-interest bearing
Trade and other 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
$
-
(2,746,596)
-
-
-
(2,746,596)
3.70%
5.89%
(366,432)
(23,165)
(3,136,193)
(35,076)
(18,813)
(53,889)
(105,229)
(32,117)
(137,346)
(403,379)
(64,714)
(468,093)
(910,116)
(138,809)
(3,795,521)
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)
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 27. 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:
60
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 27. Fair value measurement (continued)
●
●
●
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.
Note 28. 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 Walter Edward Joseph
Mrs Loren King
Executive Director, Managing Director and Chief Executive
Officer
Non-Executive Chairman (resigned 31 July 2021)
Non-Executive Director (resigned 28 June 2021)
Non-Executive Director (resigned 28 June 2021)
Non-Executive Director (appointed 28 June 2021)
Non-Executive Director (appointed 31 July 2021)
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
2021
$
2020
$
509,218
55,657
-
571,016
60,521
15,050
564,875
646,587
* Short-term employee benefits include other benefits of $50,000 (2020: $17,418) which represents D&O insurances as
disclosed in remuneration report.
61
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 29. Remuneration of auditors
During the financial year the following fees were paid or payable for services provided by Stantons, the auditor of the
company:
Audit services - Audit or review of the financial statements
Stantons
Russell Bedford LC & Company
Taxation and independent expert services provided by a related practice of the Auditor,
Stantons
Consolidated
2021
$
2020
$
59,000
31,288
54,000
32,333
5,590
5,870
95,878
92,203
Note 30. 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.
Since then, Gara Group has gone through changes in various sets of attorneys, cope with ongoing pandemic, has caused
little to no progress in the case. Due to Gara Group moved operation office from California to Florida, they have filed again
similar claims in Florida. Recently the parties have attempted to bring similar causes of action that are alleged in the Florida
into the California case. Although these cases are distinct and have separate parties, the plaintiffs are attempting right now
to combine the identical claims.
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 2 million. 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.
With the completion of the discovery phase of the litigation, both sides have filed respectively their own motions for summary
judgment in September 2021, which effectively seeks a judgment without trial on either sides’ respective claims and/or
defences. Depending on the court’s workload and resources available in the current pandemic environment, the earliest
judgement is expected sometime in the first half of 2022.
At the date of this report, it is premature to estimate any liabilities for this case.
ASIC
The Australian Securities and Investments Commission (ASIC) has commenced Federal Court proceedings against the
Company on 5 August 2021. The proceedings relate to allegedly false and misleading statements with respect to Holista’s
sanitiser products and partnership with Global Infection Control Consultants (GICC), which are said to have been
disseminated by the Company in the period from January 2020 to July 2020. ASIC claims that between April and July 2020
the Company was in breach of its continuous disclosure obligations. The proceedings also alleged that Dr Manicka, the
Company’s Chairman, Managing Director and CEO, breached his director’s duties to the Company by causing or permitting
the Company to engage in the conduct complained of by ASIC.
62
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 30. Contingent liabilities (continued)
The Company and its director have filed their respective concise statements on 23 November 2021 and 24 November 2021
respectively; as per the Court’s granted extension of time to file. The Court also directed ASIC to provide all the relevant
documents including transcripts pertaining to the claims in their concise statement of 4 August 2021 to the Company by 12
January 2022 in which ASIC duly provided and the Company duly received it. The case management hearing listed on 1
December 2021 was vacated. A mediation on this matter is to be scheduled on the first available date after 4 March 2022.
On 7 January 2022, the Court has listed the case for mediation on 28 April 2022.
At the date of this report, it is premature to estimate any liabilities for this case.
The prosecution commenced by ASIC in relation with Directors, Ex-Directors, and Ex-Company Secretaries is coverable by
the insurer of Director and Officers insurance policy.
Note 31. Commitments
The Group has no capital commitments at 31 December 2021 (31 December 2020: $nil).
Note 32. Related party transactions
Parent entity
Holista Colltech Limited is the parent entity.
Subsidiaries
Interests in subsidiaries are set out in note 34.
Key management personnel
Disclosures relating to key management personnel are set out in note 28 and the remuneration report included in the
directors' report.
Transactions with related parties
The following transactions occurred with related parties:
Transactions (P/L impact):
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
Legal fees paid by the Group on behalf of its directors, ex-company secretary and ex-
director
Sales to iGalen
Impairment expense related to trade receivables from iGalen
Impairment expense related to other receivables from iGalen (note 9)
Transactions (BS impact)
Loans to Galen Biomedical Inc., an entity 75% owned by Rajen Manicka
Amounts owed to a Director as disclosed in note 16
Consolidated
2021
$
2020
$
11,563
11,563
12,415
12,415
46,251
57,938
377,021
41,528
41,528
-
-
-
511,246
-
172,310
329,634
1,071,048
180,623
-
-
481,641
21,588
Receivable from and payable to related parties
Included in trade receivables is an amount due to iGalen (companies in which director has interest) of $41,528 (2020:
$1,071,048). During the year ended 31 December 2021, an allowance of $41,528 has been made.
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
63
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 32. Related party transactions (continued)
Terms and conditions
All transactions were made on normal commercial terms and conditions and at market rates.
Note 33. 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
Statement of financial position
Total current assets
Total non-current assets
Total assets
Total current liabilities
Total non-current liabilities
Total liabilities
Equity
Issued capital
Share-based payment reserve
Accumulated losses
Total equity
Parent
2021
$
2020
$
(1,212,903)
(4,864,845)
(1,212,903)
(4,864,845)
Parent
2021
$
2020
$
3,725,591
3,259,560
2,378,407
6,103,998
2,475,135
5,734,695
2,076,471
129,926
353,537
2,430,008
357,764
487,690
20,216,403 20,216,403
360,112
-
(15,329,510)
(16,542,413)
3,673,990
5,247,005
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 2021
(2020: Nil).
Contingent liabilities
The parent entity had no contingent liabilities as at 31 December 2021 (2020: Nil).
Contractual commitments
The parent company has no capital commitments at 2021 (2020: $nil). The parent company other commitments are disclosed
in note 31 Commitments.
64
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 33. Parent entity information (continued)
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.
Note 34. 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
2020
2021
%
%
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%
100.00%
53.00%
39.20%
67.00%
100.00%
100.00%
*
**
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 in year 2020. Inactive since incorporation.
65
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 34. 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
2021
$
2020
$
2021
$
2020
$
447,955
-
286,097
40,221
565,640
-
532,886
-
447,955
326,318
565,640
532,886
3,670,175
3,159,534
23,734
22,360
3,670,175
3,159,534
23,734
22,360
Net assets/(liabilities)
(3,222,220)
(2,833,216)
541,906
510,526
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 generated from/(used in) investing activities
Net cash provided by financing activities
972,143
(1,136,415)
484,509
(1,272,382)
(164,272)
(1,950)
(787,873)
(2,493)
(166,222)
(790,366)
42,832
140,286
(123,390)
(650,080)
506
(1,640)
-
(155,418)
13,993
173,193
Net (decrease)/increase in cash and cash equivalents
(1,134)
31,768
Note 35. Events after the reporting period
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
No matter or circumstance has arisen since 31 December 2021 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.
66
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 36. Reconciliation of loss after income tax to net cash (used in) operating activities
Loss after income tax expense for the year
(1,357,034)
(5,680,567)
Consolidated
2021
$
2020
$
Adjustments for:
Depreciation and amortisation
Interest income
Foreign exchange loss
Net share-based payments (reversed)/expensed
Impairment
Interest on lease liabilities
Write off intangible assets
Other
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
(Decrease)/increase in tax balances
Net cash (used in) operating activities
Note 37. Changes in liabilities arising from financing activities
199,999
(597)
-
(360,109)
144,515
-
-
(1,350)
220,869
-
376,631
168,170
3,310,442
7,334
45,044
-
(1,017,317)
(373,464)
(66,448)
1,151,127
21,082
(16,472)
(407,456)
(481,738)
(131,913)
(1,308,262)
(978)
14,814
(1,676,068)
(3,867,610)
Consolidated
Balance at 1 January 2020
Cash flows
Exchange differences
Balance at 31 December 2020
Cash flows
Exchange differences
Other changes
Short-term Long-term
borrowings borrowings
$
$
Leases
$
Total
$
337,341
92,291
(28,459)
401,173
151,632
7,246
(195,169)
436,236
29,378
(35,009)
430,605
(19,697)
6,866
-
148,139
(39,621)
2,401
110,919
(22,441)
566
18,623
921,716
82,048
(61,067)
942,697
109,494
14,678
(176,546)
Balance at 31 December 2021
364,882
417,774
107,667
890,323
Note 38. Earnings per share
Loss after income tax
Non-controlling interest
Consolidated
2021
$
2020
$
(1,357,034)
100,825
(5,680,567)
197,400
Loss after income tax attributable to the owners of Holista Colltech Limited
(1,256,209)
(5,483,167)
67
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 38. Earnings per share (continued)
Weighted average number of ordinary shares used in calculating basic earnings per share
275,349,087 268,852,114
Weighted average number of ordinary shares used in calculating diluted earnings per share 275,349,087 268,852,114
Number
Number
Basic loss per share
Diluted loss per share
Accounting policy for earnings per share
Cents
Cents
(0.46)
(0.46)
(2.04)
(2.04)
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.
All potential fully paid ordinary shares on issue would decrease the loss per share and are thus not considered dilutive.
Note 39. Share-based payments
Performance rights
As approved by shareholders 9 January 2017, the Company issued 2,700,000 performance rights to Dr Rajen Manicka with
non-market performance conditions attached. The performance conditions were not achieved on vesting date. Consequently,
the share-based expenses previously recognised in relation to the performance rights were fully reversed.
2021
Grant Date
Expire date
Balance at
the start of
the year
Granted
Exercised
Expired/
forfeited/
other
Balance at
the end of
the year
09/01/2017
09/01/2017
2020
09/01/2022
09/01/2022
1,800,000
900,000
-
-
-
-
(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
Expired/
forfeited/
other
Balance at
the end of
the year
3,600,000
2,700,000
1,800,000
900,000
-
-
-
-
-
-
-
-
(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 0
year (2020: 1 year).
The performance conditions linked to the performance rights are detailed below:
68
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2021
Note 39. Share-based payments (continued)
Class of
Performance
Right
Class C
Class D
Performance Condition
Performance
rights No.
Milestone Date Expiry Date
Performance
Condition
Satisfied
The Company achieving an
EBIT of at least $2.2m from
the sale of Low GI Products
The Company achieving an
EBIT of at least $4m from the
sale of Low GI Products
1,800,000
On or before 30
June 2021
5 years from the
date of issue
No
900,000
On or before 30
June 2021
5 years from the
date of issue
No
On milestone date, the performance conditions for Class C and Class D performance rights were not achieved.
Consequently, the share-based payments previously recognised in relation to the performance rights were fully reversed.
Reconciliation of (reversal)/recognition of share-based payments during the year:
Recognition of Share-based payment expenses - Options
Reversal of Share-based payment expenses - Performance Rights
Consolidated
2021
$
2020
$
-
(360,109)
168,170
-
(360,109)
168,170
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.
69
Holista Colltech Limited
Directors' declaration
31 December 2021
In the directors' opinion:
●
●
●
●
the attached consolidated 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 consolidated 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 consolidated financial statements and notes give a true and fair view of the consolidated entity's financial
position as at 31 December 2021 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
___________________________
Dr Rajen Manicka
Executive Chairman, MD and CEO
30 March 2022
70
PO Box 1908
West Perth WA 6872
Australia
Level 2, 40 Kings Park Rd
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
HOLISTA COLLTECH LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Holista Colltech Limited (the “Company”) and its controlled entities (“the
Group”), which comprises the consolidated statement of financial position as at 31 December 2021, the consolidated
statement of profit or loss and other comprehensive income, the consolidated statement of changes in equity and
the consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements,
including a summary of significant accounting policies, and the directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
giving a true and fair view of the Group’s financial position as at 31 December 2021 and of its financial
performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of our
report. We are independent of the Company in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110: Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern
As referred to Note 1 to the financial statements, the consolidated financial statements have been prepared on a
going concern basis. The Group incurred a loss after tax of $1,357,034 and net cash outflow from operating activities
of $1,676,068 for the financial year ended 31 December 2021, respectively. As at 31 December 2021, the Group
had cash and cash equivalents totalling $1,213,093 and working capital of $2,422,134.
The ability of the Group to continue as going concern is subject to the future profitability of the Group, the ability of
management to collect the receivables and sell the inventories. In the event that the Group is not successful in
commencing profitable operations, collecting receivables and selling the inventories, the Group may not be able to
meet their liabilities as and when they fall due and the realisable value of the Group’s assets may be significantly
less than book values.
Our opinion is not modified in respect of this matter.
Liability limited by a scheme approved under Professional Standards Legislation.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matters
How the matters was addressed in the audit
Revenue recognition
For the financial year ended 31 December 2021, the
Group’s sales revenue amounted to $8,023,129
(2020: $7,106,635). The Group earns revenue from
different business streams, with each stream having
differing revenue recognition points under the
Group’s revenue recognition policies (Note 4) and
Australian Accounting Standards.
On the basis of the significance of the amount to the
the
consolidated
processes used to determine the recognition point,
we have considered revenue recognition as a key
audit matter.
statements and
financial
Inter alia, our audit procedures included the following:
▪ Obtained a detailed understanding of each of the
sources of revenue and the related systems
processes for quantifying and recording revenue;
▪ Reviewed the working papers of the component
auditor with great care who audited 85% of the
total revenue;
▪ Evaluated a sample of contracts, identified
performance obligations, and agreed revenue
amounts to the records, including supporting
billing system and bank records;
▪ Performed cut-off procedures to ensure that the
revenue is recognised in the correct period;
▪ Assessed
the consistency of
the Group’s
accounting policies
revenue
in
recognition with the criteria prescribed by the
applicable standard, AASB 15 Revenue from
contracts with customers; and
respect of
▪ Assessed
the adequacy of
related
disclosures within the consolidated financial
statements.
the
Allowance for credit losses against trade and
other receivables
As at 31 December 2021, the Group’s trade and
accounts receivable gross balance amounted to
$4,204,820 (2020: $3,784,745).
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 (Note
9).
The allowance for expected credit losses represents
management’s best estimate of the impairment
losses incurred at the balance sheet date. The
Group assessed impairment on a forward-looking
basis and applied the simplified approach permitted
by AASB 9, which requires expected lifetime losses
to be recognised from initial recognition of the
receivables. As at 31 December 2021, the Group
recognised allowance
losses of
$2,409,680 (2020: 2,226,738) for its trade and other
receivables.
for credit
Inter alia, our audit procedures included the following:
the methodology applied
for credit
▪ Reviewed
the
allowance
loss calculation by
comparing it to the requirements of AASB 9
Financial Instruments and tested key underlying
assumptions used by management to calculate
the impairment provision;
in
▪ Held discussions with management and
challenged the judgments and estimates used to
determine if provision is required with reference
to supporting documentation and external
evidence where applicable;
▪ Reviewed the working papers of component
auditor with great care; and
▪ Assessed
the adequacy of
related
disclosures within the consolidated financial
statements.
the
Calculation of allowance for credit losses is a
complex area and requires management to make
significant assumptions on the customer payment
behaviour and other relevant risk characteristics
such as historical information and estimating the
level and timing of expected future cashflows. On
this basis, we identified provisioning allowance for
expected credit losses as a key audit matter.
Inventory valuation and existence
As at 31 December 2021, the Group’s inventories
(excluding stock-in-transit) amounted to $1,108,801
(2020: $982,003).
Inventories are carried at the lower of cost and net
realisable value on a first-in, first-out basis for both
raw materials and finished goods (Note 10).
Inventory valuation and existence was identified as
a key audit matter because of the variety and
volume of inventory items which are managed
across 4 warehouses in Malaysia and 1 warehouse
in USA and the judgment applied in the valuation of
inventory.
Completeness of provisions
As disclosed in Note 30 to the consolidated financial
statements, the Group has on-going litigations
against certain third parties and is under regulatory
review by ASIC.
is made
for claims
A provision
for alleged
negligence and regulatory matters when there is a
present obligation, as a result of a past event that
gives rise to a probable payment and when the
probability of the payment can be reliably estimated.
The provision is based on the estimated cost of
defending and settling claims and regulatory
matters.
Determining whether to provide, and if so, the
amount to provide involves a high degree of
judgment and estimation uncertainty. On this basis,
we have considered completeness of provision to
be a key audit matter.
Inter alia, our audit procedures included the following:
▪ Assessed
the
corresponding
inventory
observation instructions for Malaysia through the
component auditor and participated in inventory
counts in USA via zoom.
▪ Reviewed the working papers of component
auditor with great care;
▪ Performed test counts of selected items, agreed
listing and obtained
to
inventory
explanations for any variances noted;
final
the
▪ Reviewed the final stock listing for any slow-
moving and obsolete stock;
▪ Recalculated inventory valuation allowance as
appropriate; and
▪ Assessed
the adequacy of
related
disclosures within the consolidated financial
statements.
the
Inter alia, our audit procedures included the following:
▪ Held discussions with management to determine
the current status of the ongoing litigations and
inspected internal and third-party documentation
such as correspondences with lawyers and
relevant authorities where rulings have been
issued
the appropriateness of
expected cash outflows;
to assess
▪ Obtained direct confirmation from lawyers in
respect to the current status of ongoing claims
and actions against the Group to determine the
completeness of management’s assessment;
and
▪ Challenged the judgments and estimates used to
determine
to
provisions with
supporting documentation and considered
to exercise bias by
management’s ability
challenging
supporting
external evidence where applicable.
estimates
reference
against
Other Information
The directors are responsible for the other information. The other information comprises the information included in
the Group’s annual report for the year ended 31 December 2021 but does not include the financial report and our
auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly, we do not express any
form of assurance opinion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing
so, consider whether the other information is materially inconsistent with the financial report or our knowledge
obtained in the audit or otherwise appears to be materially misstated. If based on the work we have performed, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have
nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view under Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the
directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and
is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations or has no realistic
alternative but to do so.
Auditor's Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error and to issue an auditor's report that includes our opinion. Reasonable
assurance is a high level of assurance but is not a guarantee that an audit conducted under the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken based on this financial report.
As part of an audit under Australian Auditing Standards, we exercise professional judgement and maintain
professional skepticism throughout the audit. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor's judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation of the financial report that gives a true and fair view to
design audit procedures that are appropriate in the circumstances, but not to express an opinion on the effectiveness
of the entity's internal control.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as
fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.
We conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based on
the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor's report to the related disclosures in the financial report or, if
such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained
up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue
as a going concern.
We evaluate the overall presentation, structure and content of the financial report, including the disclosures, and
whether the financial report represents the underlying transactions and events in a manner that achieves fair
presentation.
We obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the direction,
supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in Internal control that we identify during our audit.
The Auditing Standards require that we comply with relevant ethical requirements relating to audit engagements.
We also provide the Directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the Directors, we determine those matters that were of most significance in
the audit of the financial report of the current period and are therefore key audit matters. We describe these matters
in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 31 December 2021.
In our opinion, the Remuneration Report of Holista Colltech Limited for the year ended 31 December 2021 complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report
under section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration
Report, based on our audit conducted under Australian Auditing Standards.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(An Authorised Audit Company)
Samir Tirodkar
Director
West Perth, Western Australia
30 March 2022
HOLISTA COLLTECH LIMITED
ACN 094 515 992
(Company)
Corporate Governance Statement
This Corporate Governance Statement is current as at 30 March 2022 and has been approved by the Board of the Company on that date.
This Corporate Governance Statement discloses the extent to which the Company will, as at the date it is admitted to the official list of the ASX, follow the
recommendations set by the ASX Corporate Governance Council in its publication Corporate Governance Principles and Recommendations – 4th Edition
(Recommendations). The Recommendations are not mandatory, however the Recommendations that will not be followed have been identified and reasons
provided for not following them along with what (if any) alternative governance practices the Company intends to adopt in lieu of the recommendation.
The Company has adopted a Corporate Governance Plan which provides the written terms of reference for the Company’s corporate governance duties.
Due to the current size and nature of the existing Board and the scale of the Company’s operations, the Board does not consider that the Company will gain
any benefit from individual Board committees and that its resources would be better utilised in other areas as the Board is of the strong view that at this stage,
the experience and skill set of the current Board is sufficient to perform these roles. Under the Company’s Board Charter, the duties that would ordinarily be
assigned to individual committees are currently carried out by the full Board under the written terms of reference for those committees.
The Company’s Corporate Governance Plan is available on the Company’s website at www.holistaco.com
RECOMMENDATIONS (4TH EDITION)
COMPLY
EXPLANATION
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1
(a)
A listed entity should have and disclose a board
charter which sets out the respective roles and
responsibilities of the Board, the Chair and
management, and includes a description of those
matters expressly reserved to the Board and those
delegated to management.
YES
The Company has adopted a Board Charter that sets out the
specific roles and responsibilities of the Board, the Chair and
management and includes a description of those matters
expressly reserved to the Board and those delegated to
management.
76
RECOMMENDATIONS (4TH EDITION)
COMPLY
EXPLANATION
The Board Charter sets out the specific responsibilities of the Board,
requirements as to the Board’s composition, the roles and
responsibilities of the Chairman and Company Secretary, the
establishment, operation and management of
Board
records and
Committees, Directors’ access
information, details of the Board’s relationship with management,
details of the Board’s performance review and details of the
Board’s disclosure policy.
to Company
A copy of the Company’s Board Charter, which is part of the
Company’s Corporate Governance Plan, is available on the
Company’s website.
Recommendation 1.2
A listed entity should:
(a)
undertake appropriate checks before appointing
a director or senior executive or putting someone
forward for election as a Director; and
(a)
provide
security holders with all material
information in its possession relevant to a decision
on whether or not to elect or re-elect a Director.
(a)
YES
(b)
(in
The Company has guidelines for the appointment and
selection of the Board and senior executives in its
Corporate Governance Plan. The Company’s Nomination
Committee Charter
the Company’s Corporate
Governance Plan) requires the Nomination Committee (or,
in its absence, the Board) to ensure appropriate checks
(including checks in respect of character, experience,
education, criminal record and bankruptcy history (as
appropriate)) are undertaken before appointing a person,
or putting forward to security holders a candidate for
election, as a Director. In the event of an unsatisfactory
check, a Director is required to submit their resignation.
Under the Nomination Committee Charter, all material
information relevant to a decision on whether or not to
elect or re-elect a Director must be provided to security
holders in the Notice of Meeting containing the resolution
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
The Company’s Nomination Committee Charter requires the
Nomination Committee (or, in its absence, the Board) to ensure
that each Director and senior executive is personally a party to a
written agreement with the Company which sets out the terms of
that Director’s or senior executive’s appointment.
The Company has written agreements with each of its Directors
and senior executives.
77
RECOMMENDATIONS (4TH EDITION)
COMPLY
EXPLANATION
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
Recommendation 1.5
YES
A listed entity should:
(a)
(b)
have and disclose a diversity policy;
through its board or a committee of the board set
measurable objectives
for achieving gender
diversity in the composition of its board, senior
executives and workforce generally; and
(c)
disclose in relation to each reporting period:
(i)
the measurable objectives set for that
period to achieve gender diversity;
(ii)
(iii)
the entity’s progress towards achieving
those objectives; and
either:
(A)
the respective proportions of men
and women on the Board, in
senior executive positions and
the whole workforce
across
(including how the entity has
defined “senior executive”
for
these purposes); or
responsibilities and
The Board Charter outlines
accountability of the Company Secretary. In accordance with
this, the Company Secretary is accountable directly to the Board,
through the Chair, on all matters to do with the proper functioning
of the Board.
roles,
the
The Company has adopted a Diversity Policy which
provides a framework for the Company to establish,
achieve and measure diversity objectives, including in
respect of gender diversity. The Diversity Policy is available,
as part of the Corporate Governance Plan, on the
Company’s website.
The Diversity Policy allows the Board to set measurable
gender diversity objectives and to continually monitor both
the objectives and the Company’s progress in achieving
them.
The measurable diversity objectives for each financial year
(if any),and the Company’s progress in achieving them,
will be detailed in the Company’s Annual Report
(i)
the Board does not anticipate there will be a need
to appoint any new Directors or senior executives
due to the scale of the Company’s existing and
proposed activities and the Board’s view that the
existing Directors and senior executives have
sufficient skill and experience to carry out the
Company’s plans;
(ii)
the application of
if it becomes necessary to appoint any new
Directors or senior executives, the Board will
consider
the measurable
diversity objectives and determined whether, given
the small size of the Company and the Board,
requIring specified objectectives to be met will
unduly
limit the Company from applying the
Diversity Policy as a whole and the Company’s
policy of appointing the best person for the job; and
(a)
(b)
(c)
78
RECOMMENDATIONS (4TH EDITION)
COMPLY
EXPLANATION
(iii)
the respective proportions of men and women on
the Board, in senior executive positions and across
the whole organisation (including how the entity
has defined “senior executive” for these purposes)
for each financial year will be disclosed in the
Company’s Annual Report.
N/A
(B)
the entity
is a “relevant
if
employer” under the Workplace
Gender Equality Act, the entity’s
recent “Gender Equality
most
in the
Indicators”, as defined
Workplace Gender Equality Act. If
the entity was in the S&P / ASX 300
Index at the commencement of
the
the
measurable
for
achieving gender diversity in the
composition of its board should
be to have not less than 30% of its
directors of each gender within a
specified period.
period,
objective
reporting
Recommendation 1.6
A listed entity should:
(a)
have and disclose a process for periodically
evaluating the performance of the Board, its
committees and individual Directors; and
YES
(b)
disclose for each reporting period whether a
performance evaluation has been undertaken in
accordance with that process during or in respect
of that period.
The Company’s Nomination Committee (or, in its absence,
the Board) is responsible for evaluating the performance of
the Board, its committees and individual Directors on an
annual basis. It may do so with the aid of an independent
advisor. The process for this is set out in the Company’s
Corporate Governance Plan, which is available on the
Company’s website.
The Company’s Corporate Governance Plan requires the
Company to disclose whether or not performance
evaluations were conducted during the relevant reporting
period. The Company intends to complete performance
evaluations in respect of the Board, its committees (if any)
in
and
accordance with the above process.
individual Directors for each financial year
(a)
(b)
79
RECOMMENDATIONS (4TH EDITION)
COMPLY
EXPLANATION
Recommendation 1.7
A listed entity should:
(a)
have and disclose a process for evaluating the
performance of its senior executives at least once
every reporting period; and
(b)
disclose for each reporting period whether a
performance evaluation has been undertaken in
accordance with that process during or in respect
of that period.
(a)
YES
(b)
The Company’s Nomination Committee (or, in its absence,
the Board) is responsible for evaluating the performance of
the Company’s senior executives on an annual basis. The
Company’s Remuneration Committee (or, in its absence,
the Board) is responsible for evaluating the remuneration
of the Company’s senior executives on an annual basis. A
senior executive,
these purposes, means key
management personnel (as defined in the Corporations
Act) other than a non-executive Director.
for
The applicable processes for these evaluations can be
found in the Company’s Corporate Governance Plan,
which is available on the Company’s website.
The Company’s Corporate Governance Plan requires the
Company to disclose whether or not performance
evaluations were conducted during the relevant reporting
period. The Company intends to complete performance
evaluations in respect of the senior executives (if any) for
each financial year in accordance with the applicable
processes.
At this stage, due to the current size and nature of the
existing Board and the scale of the Company’s operations,
the Company has not appointed any senior executives
other than the Executive Director.
Principle 2: Structure the Board to be effective and add value
Recommendation 2.1
The Board of a listed entity should:
PARTIALLY
(a)
have a nomination committee which:
(i)
has at least three members, a majority of
whom are independent Directors; and
(a)
The Company does not have a Nomination Committee.
The Company’s Nomination Committee Charter provides
for the creation of a Nomination Committee (if it is
considered it will benefit the Company), with at least three
members, a majority of whom are independent Directors,
and which must be chaired by an independent Director
is chaired by an independent Director,
(ii)
and disclose:
(iii)
(iv)
the charter of the committee;
the members of the committee; and
80
COMPLY
(b)
RECOMMENDATIONS (4TH EDITION)
(b)
(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
if it does not have a nomination committee,
disclose that fact and the processes it employs to
address Board succession issues and to ensure that
the Board has the appropriate balance of skills,
knowledge,
independence and
diversity to enable it to discharge its duties and
responsibilities effectively.
experience,
EXPLANATION
The Company does not have a Nomination Committee as
the Board considers that the Company will not currently
benefit from its establishment. In accordance with the
Company’s Board Charter, the Board carries out the duties
that would ordinarily be carried out by the Nomination
Committee under the Nomination Committee Charter,
including the following processes to address succession
issues and to ensure the Board has the appropriate
independence and
balance of
knowledge of the entity to enable it to discharge its duties
and responsibilities effectively:
(i)
devoting time at least annually to discuss Board
succession issues and updating the Company’s
Board skills matrix; and
skills, experience,
(ii)
all Board members being
the
Company’s nomination process, to the maximum
extent permitted under the Corporations Act and
ASX Listing Rules.
involved
in
Recommendation 2.2
A listed entity should have and disclose a Board skills matrix
setting out the mix of skills that the Board currently has or is
looking to achieve in its membership.
YES
Under the Nomination Committee Charter (in the Company’s
Corporate Governance Plan), the Nomination Committee (or, in
its absence, the Board) is required to prepare a Board skills matrix
setting out the mix of skills that the Board currently has (or is looking
to achieve) and to review this at least annually against the
Company’s Board skills matrix to ensure the appropriate mix of skills
to discharge its obligations effectively and to add value and to
ensure the Board has the ability to deal with new and emerging
business and governance issues.
The Company has a Board skill matrix setting out the mix of skills
and diversity that the Board currently has or is looking to achieve
in its membership. A copy will be available in the Company’s
Annual Report.
The Board Charter requires the disclosure of each Board member’s
qualifications and expertise. Full details as to each Director and
senior executive’s relevant skills and experience will be available
in the Company’s Annual Report.
81
RECOMMENDATIONS (4TH EDITION)
COMPLY
EXPLANATION
Recommendation 2.3
A listed entity should disclose:
(a)
the names of the Directors considered by the
Board to be independent Directors;
YES
(b)
Governance
if a Director has an interest, position or relationship
of the type described in Box 2.3 of the ASX
Corporate
and
Recommendations (4th Edition), but the Board is of
the opinion that it does not compromise the
independence of the Director, the nature of the
interest, position or relationship in question and an
explanation of why the Board is of that opinion;
and the length of service of each Director
Principles
(a)
(b)
(c)
The Board Charter requires the disclosure of the names of
Directors considered by the Board to be independent. The
Board considers there are two independent Directors
complies
The Company’s Annual Report will disclose the length of
service of each Director, as at the end of each financial
year.
Recommendation 2.4
A majority of the Board of a listed entity should be
independent Directors.
YES
The Company’s Board Charter requires that, where practical, the
majority of the Board should be independent.
The Board currently comprises a total of 3directors, 2 of whom are
considered to be independent. As such, independent directors
currently comprise the majority of the Board.
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.
NO
The Board Charter provides that, where practical, the Chair of the
Board should be an independent Director and should not be the
CEO/Managing Director.
The Chair of the Company is not an independent Director and is
also the CEO/Managing Director.
The Board does not have an independent Chair because it was
not feasible due to the company’s current size and Board
structure.
82
RECOMMENDATIONS (4TH EDITION)
COMPLY
EXPLANATION
Recommendation 2.6
A listed entity should have a program for inducting new
Directors and for periodically reviewing whether there is a
need for existing directors to undertake professional
development to maintain the skills and knowledge needed
to perform their role as Directors effectively.
YES
Principle 3: Instil a culture of acting lawfully, ethically and responsibly
Recommendation 3.1
A listed entity should articulate and disclose its values.
YES
its absence, the Board)
the Company’s Board Charter,
the
In accordance with
Nomination Committee (or,
is
in
responsible for the approval and review of induction and
continuing professional development programs and procedures
for Directors to ensure that they can effectively discharge their
responsibilities. The Company Secretary
for
facilitating inductions and professional development including
receiving briefings on material developments in laws, regulations
and accounting standards relevant to the Company.
responsible
is
(a)
(b)
The Company is committed to conducting all of its business
activities fairly, honestly with a high level of integrity, and in
compliance with all applicable laws, rules and regulations.
The Board, management and employees are dedicated
to high ethical standards and recognise and support the
Company’s commitment to compliance with these
standards.
The Company’s values are set out in its Code of Conduct
(which forms part of the Corporate Governance Plan) and
are available on the Company’s website. All employees
are given appropriate training on the Company’s values
and senior executives will continually reference such
values.
The Company’s Corporate Code of Conduct applies to
the Company’s Directors,
senior executives and
employees.
The Company’s Corporate Code of Conduct (which forms
part of the Company’s Corporate Governance Plan) is
available on the Company’s website. Any material
breaches of the Code of Conduct are reported to the
Board or a committee of the Board.
Recommendation 3.2
YES
(a)
A listed entity should:
(a)
have and disclose a code of conduct for its
Directors, senior executives and employees; and
(b)
ensure that the Board or a committee of the Board
is informed of any material breaches of that code.
(b)
83
RECOMMENDATIONS (4TH EDITION)
Recommendation 3.3
COMPLY
YES
A listed entity should:
(a)
(a)
have and disclose a whistleblower policy; and
ensure that the Board or a committee of the Board
is informed of any material incidents reported
under that policy.
EXPLANATION
The Company’s Whistleblower Protection Policy (which forms part
of the Corporate Governance Plan)
is available on the
Company’s website. Any material breaches of the Whistleblower
Protection Policy are to be reported to the Board or a committee
of the Board.
Recommendation 3.4
A listed entity should:
(a)
(b)
have and disclose an anti-bribery and corruption
policy; and
ensure that the Board or committee of the Board is
informed of any material breaches of that policy.
Principle 4: Safeguard the integrity of corporate reports
YES
The Company’s Anti-Bribery and Anti-Corruption Policy (which
forms part of the Corporate Governance Plan) is available on the
Company’s website. Any material breaches of the Anti-Bribery
and Anti-Corruption Policy are to be reported to the Board or a
committee of the Board.
Recommendation 4.1
(a)
The Board of a listed entity should:
PARTIALLY
(a)
have an audit committee which:
(i)
has at least three members, all of whom
are non-executive Directors and a majority
of whom are independent Directors; and
(ii)
is chaired by an independent Director,
who is not the Chair of the Board,
and disclose:
(iii)
(iv)
(v)
the charter of the committee;
the relevant qualifications and experience
of the members of the committee; and
in relation to each reporting period, the
number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
The Company does not have an Audit and Risk
Committee. The Company’s Corporate Governance Plan
contains an Audit and Risk Committee Charter that
provides for the creation of an Audit and Risk Committee
with at least three members, all of whom must be non-
executive Directors, and majority of the Committee must
be
independent Directors. The Committee must be
chaired by an independent Director who is not the Chair.
The Company does not have an Audit and Risk Committee
as the Board considers the Company will not currently
benefit from its establishment. In accordance with the
Company’s Board Charter, the Board carries out the duties
that would ordinarily be carried out by the Audit and Risk
Committee under the Audit and Risk Committee Charter
including the following processes to independently verify
the integrity of the Company’s periodic reports which are
not audited or reviewed by an external auditor, as well as
the processes for the appointment and removal of the
external auditor and the rotation of the audit engagement
partner:
84
RECOMMENDATIONS (4TH EDITION)
COMPLY
EXPLANATION
(b)
if it does not have an audit committee, disclose
that fact and the processes it employs that
independently verify and safeguard the integrity of
its corporate reporting, including the processes for
the appointment and removal of the external
auditor and the rotation of the audit engagement
partner.
Recommendation 4.2
YES
The Board of a listed entity should, before it approves the
entity’s financial statements for a financial period, receive
from its CEO and CFO a declaration that the financial
records of the entity have been properly maintained and
that the financial statements comply with the appropriate
accounting standards and give a true and fair view of the
financial position and performance of the entity and that
the opinion has been formed on the basis of a sound system
of risk management and internal control which is operating
effectively.
Recommendation 4.3
A listed entity 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
(i)
(ii)
the Board devotes time at biannual Board meetings
to fulfill the roles and responsibilities associated with
maintaining the Company’s internal audit function
and arrangements with external auditors; and
all members of the Board are involved in the
Company’s audit function to ensure the proper
maintenance of the entity and the integrity of all
financial reporting
The Company’s Audit and Risk Committee Charter requires the
CEO and CFO (or, if none, the person(s) fulfilling those functions)
to provide a sign off on these terms.
The Company intends to obtain a sign off on these terms for each
of its financial statements in each financial year.
The Company will include in each of its (to the extent that the
information contained in the following is not audited or reviewed
by an external auditor):
(a)
annual reports or on its website, a description of the
process it undertakes to verify the integrity of the
information in its annual directors’ report;
(b)
(c)
(d)
85
quarterly reports, or in its annual report or on its website, a
description of the process it undertakes to verify the
integrity of the information in its quarterly reports;
integrated reports, or in its annual report (if that is a
separate document to its integrated report) or on its
website, a description of the process it undertakes to
verify the integrity of the information in its integrated
reports; and
periodic corporate reports (such as a sustainability or CSR
report), or in its annual report or on its website, a
RECOMMENDATIONS (4TH EDITION)
COMPLY
EXPLANATION
Principle 5: Make timely and balanced disclosure
Recommendation 5.1
A listed entity should have and disclose a written policy for
complying with its continuous disclosure obligations under
listing rule 3.1.
YES
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 on the ASX Market Announcements
Platform ahead of the presentation.
Principle 6: Respect the rights of security holders
YES
YES
Recommendation 6.1
A listed entity should provide information about itself and its
governance to investors via its website.
YES
Recommendation 6.2
A listed entity should have an investor relations program
that facilitates effective two-way communication with
investors.
YES
Recommendation 6.3
A listed entity should disclose how it facilitates and
encourages participation at meetings of security holders.
YES
description of the process it undertakes to verify the
integrity of the information in these reports.
(a)
(b)
The Company’s Corporate Governance Plan details the
Company’s Continuous Disclosure policy.
The Corporate Governance Plan, which incorporates the
Continuous Disclosure policy,
the
Company’s website.
is available on
Under the Company’s Continuous Disclosure Policy (which forms
part of the Corporate Governance Plan), all members of the
Board will receive material market announcements promptly after
they have been made.
All substantive investor or analyst presentations will be released on
the ASX Markets Announcement Platform ahead of such
presentations.
Information about the Company and its governance is available
in the Corporate Governance Plan which can be found on the
Company’s website.
The Company has adopted a Shareholder Communications
Strategy which aims to promote and facilitate effective two-way
communication with investors. The Strategy outlines a range of
ways in which information is communicated to shareholders and
is available on the Company’s website as part of the Company’s
Corporate Governance Plan.
Shareholders are encouraged to participate at all general
meetings, including the annual general meeting of the Company.
Upon the despatch of any notice of meeting to Shareholders, the
Company Secretary shall send out material stating that all
Shareholders are encouraged to participate at the meeting.
86
RECOMMENDATIONS (4TH EDITION)
COMPLY
EXPLANATION
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 holders the option to
receive communications from, and send communications
to, the entity and its security registry electronically.
YES
YES
All substantive resolutions at securityholder meetings will be
decided by a poll rather than a show of hands.
All substantive resolutions at securityholder meetings will be
decided by a poll rather than a show of hands.
The Shareholder Communication Strategy provides that security
holders can register with the Company to receive email
notifications 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 queries should be referred to the Company
Secretary at first instance.
Principle 7: Recognise and manage risk
Recommendation 7.1
The Board of a listed entity should:
(a)
have a committee or committees to oversee risk,
each of which:
(i)
has at least three members, a majority of
whom are independent Directors; and
is chaired by an independent Director,
(ii)
and disclose:
(iii)
(iv)
(v)
the charter of the committee;
the members of the committee; and
as at the end of each reporting period, the
number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
(a)
YES
The Company does not have an Audit and Risk
Committee. The Company’s Corporate Governance Plan
contains an Audit and Risk Committee Charter that
provides for the creation of an Audit and Risk Committee
with at least three members, all of whom must be non-
executive Directors, and majority of the Committee must
be
independent Directors. The Committee must be
chaired by an independent Director who is not the Chair.
A copy of the Corporate Governance Plan is available on
the Company’s website.
87
RECOMMENDATIONS (4TH EDITION)
(b)
if it does not have a risk committee or committees
that satisfy (a) above, disclose that fact and the
process it employs for overseeing the entity’s risk
management framework.
COMPLY
(b)
Recommendation 7.2
The Board or a committee of the Board should:
YES
(a)
(b)
review the entity’s risk management framework at
least annually to satisfy itself that it continues to be
sound and that the entity is operating with due
regard to the risk appetite set by the Board; and
disclose in relation to each reporting period,
whether such a review has taken place.
Recommendation 7.3
A listed entity should disclose:
YES
(a)
(b)
if it has an internal audit function, how the function
is structured and what role it performs; or
if it does not have an internal audit function, that
fact and the processes it employs for evaluating
and continually improving the effectiveness of its
governance,
internal
control processes.
risk management and
(a)
(b)
(a)
88
EXPLANATION
The Company does not have an Audit and Risk Committee
as the Board considers the Company will not currently
benefit from its establishment. In accordance with the
Company’s Board Charter, the Board carries out the duties
that would ordinarily be carried out by the Audit and Risk
Committee under the Audit and Risk Committee Charter
including the following processes to oversee the entity’s risk
management framework, The Board devotes time at
regular board meetings to fulfill the roles and responsibilities
with overseeing risk and maintaining the entity’s risk
management
internal
compliance and control procedures.
framework and associated
The Audit and Risk Committee Charter requires that the
Audit and Risk Committee (or, in its absence, the Board)
should, at least annually, satisfy itself that the Company’s
risk management framework continues to be sound and
that the Company is operating with due regard to the risk
appetite set by the Board.
The Company’s Corporate Governance Plan requires the
Company to disclose at least annually whether such a
review of the Company’s risk management framework has
taken place.
The Audit and Risk Committee Charter provides for the
Audit and Risk Committee to monitor and periodically
review the need for an internal audit function, as well as
assessing the performance and objectivity of any internal
audit procedures that may be in place.
RECOMMENDATIONS (4TH EDITION)
COMPLY
EXPLANATION
Recommendation 7.4
A listed entity should disclose whether it has any material
exposure to environmental or social risks and, if it does, how
it manages or intends to manage those risks.
YES
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1
The Board of a listed entity should:
YES
(a)
have a remuneration committee which:
(i)
has at least three members, a majority of
whom are independent Directors; and
is chaired by an independent Director,
(ii)
and disclose:
(iii)
(iv)
(v)
the charter of the committee;
the members of the committee; and
as at the end of each reporting period, the
number of times the committee met
throughout the period and the individual
attendances of the members at those
meetings; or
The Audit and Risk Committee Charter requires the Audit and Risk
Committee (or, in its absence, the Board) to assist management
to determine whether the Company has any potential or
apparent exposure to environmental or social risks and, if it does,
put in place management systems, practices and procedures to
manage those risks.
The Company’s Corporate Governance Plan
requires the
Company to disclose whether it has any potential or apparent
exposure to environmental or social risks and, if it does, put in
place management systems, practices and procedures to
manage those risk.
Where the Company does not have material exposure to
environmental or social risks, report the basis for that determination
to the Board, and where appropriate benchmark the Company’s
environmental or social risk profile against its peers.
The Company will disclose this information in its Annual Report.
The Company does not have a Remuneration Committee.
The Company’s Corporate Governance Plan contains a
Remuneration Committee Charter that provides for the
creation of a Remuneration Committee (if it is considered
it will benefit the Company), with at least three members,
a majority of whom are be independent Directors, and
which must be chaired by an independent Director.
The Company does not have a Remuneration Committee
as the Board considers the Company will not currently
benefit from its establishment. In accordance with the
Company’s Board Charter, the Board carries out the duties
that would ordinarily be carried out by the Remuneration
Committee under the Remuneration Committee Charter
including the following processes to set the level and
composition of remuneration for Directors and senior
executives and ensuring that such
is
appropriate and not excessive:
remuneration
(a)
(b)
89
RECOMMENDATIONS (4TH EDITION)
COMPLY
EXPLANATION
(b)
if it does not have a remuneration committee,
disclose that fact and the processes it employs for
setting the level and composition of remuneration
for Directors and senior executives and ensuring
that such remuneration is appropriate and not
excessive.
The Board devotes time at an annual Board meeting to
assess the level and composition of remuneration for
Directors and senior executives;
Recommendation 8.2
A listed entity should separately disclose its policies and
practices regarding the remuneration of non-executive
Directors and the remuneration of executive Directors and
other senior executives.
YES
The Company’s Corporate Governance Plan requires the Board
to disclose its policies and practices regarding the remuneration
of Directors and senior executives, which is disclosed in the
remuneration report contained in the Company’s Annual Report
as well as being disclosed on the Company’s website.
Recommendation 8.3
A listed entity which has an equity-based remuneration
scheme should:
(a)
have a policy on whether participants are
permitted to enter into transactions (whether
through the use of derivatives or otherwise) which
limit the economic risk of participating in the
scheme; and
(b)
disclose that policy or a summary of it.
(a)
YES
The Company does not have an equity-based
remuneration scheme. The Company does not have a
policy on whether participants are permitted to enter into
transactions (whether through the use of derivatives or
otherwise) which limit the economic risk of participating in
the scheme.
Additional recommendations that apply only in certain cases
Recommendation 9.1
Not Applicable
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 has 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
Not Applicable
90
RECOMMENDATIONS (4TH EDITION)
COMPLY
EXPLANATION
A listed entity established outside Australia should ensure
that meetings of security holders are held at a reasonable
place and time.
Recommendation 9.3
Not Applicable
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.
91
Holista Colltech Limited
Shareholder information
31 December 2021
The shareholder information set out below was applicable as at 04 March 2022.
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
Twenty largest quoted equity security holders
The names of the twenty largest security holders of quoted equity securities are listed below:
GALEN BIOMEDICAL INC
BNP PARIBAS NOMINEES PTY LTD (IB AU NOMS RETAILCLIENT DRP)
818 CORPORATE PTY LTD (818 A/C)
MS SARINDERJIT KAUR
MR ANTHONY ROBERT RAMAGE
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
MR ROBERT GEMELLI
FAIRVIEW HOLDINGS PTY LTD (THE MANJULE SUPER A/C)
123 HOME LOANS PTY LTD
BNP PARIBAS NOMS PTY LTD (DRP)
DRISCOLL FUTURE PTY LTD (DRISCOLL SUPER FUND A/C)
MR HIMMAT SINGH
CHANDRA SEKARAN P PERUMAL
MR PETER KLIMIS
NEWECONOMY COM AU NOMINEES PTY LIMITED (900 ACCOUNT)
MR KOK SENG CHEN
DR FATHIL MOHAMED
GEMELLI HOLDINGS PTY LTD
MR RAVINDRAN GOVINDAN
Unquoted equity securities
There are no unquoted equity securities.
92
Ordinary shares
% of total
Number
of holders
shares
issued
4,989
184,000
1,286,589
26,950,573
246,922,936
-
0.07
0.47
9.79
89.67
275,349,087
100.00
363
-
Ordinary shares
% of total
shares
issued
Number held
58,514,245
43,795,209
13,000,000
9,675,785
7,947,062
7,847,019
7,224,138
6,747,243
6,014,285
5,965,058
5,312,701
3,750,000
3,500,000
3,333,333
1,876,029
1,718,230
1,482,459
1,230,000
1,167,773
1,111,119
21.25
15.91
4.72
3.51
2.89
2.85
2.62
2.45
2.18
2.17
1.93
1.36
1.27
1.21
0.68
0.62
0.54
0.45
0.42
0.40
191,211,688
69.43
Holista Colltech Limited
Shareholder information
31 December 2021
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
43,626,621
31.14
15.84
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.
93