ABN 24094515992
31 DECEMBER 2023
REPORT
ANNUAL
Holista Colltech Limited
Corporate directory
31 December 2023
Directors
Mr David Deloub
Mrs Loren King
Mr Lai Kwok Kin
Non-Executive Chairman
Non-Executive Director
Non-Executive Director (appointed 19 March 2024)
Company Secretary
Mr Jay Stephenson
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 17, 221 St Georges Terrace
Perth WA 6000
Telephone: 1300 850 505 (investors within Australia)
Telephone: +61 (0)3 9415 4000
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
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
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Holista Colltech Limited
Contents
31 December 2023
Letter from Chair
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
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The consolidated financial statements cover Holista Colltech Limited as a consolidated entity consisting of Holista Colltech
Limited (Company) and the entities it controlled at the end of, or during, the year (Group). The consolidated financial
statements are presented in Australian dollars. Holista Colltech Limited's functional and presentation currency is Australian
Dollars.
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 consolidated financial statements.
The financial statements were authorised for issue, in accordance with a resolution of directors, on 28 March 2023. The
directors have the power to amend and reissue the consolidated financial statements.
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Holista Colltech Limited
Directors' report
31 December 2023
About Us
Holista Colltech’s core business is to conduct research to find natural solutions so that people can live healthier lives.
The Group holds proprietary solutions to help food manufacturers produce healthier alternatives – without use of
chemicals – that do not compromise tastes and mouth-feel. Building on its 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 Group also has a range of all-natural, non-toxic and effective sanitisers for consumers and
industrial applications within its product portfolio.
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Holista Colltech Limited
Directors' report
31 December 2023
Letter from Chair
Dear Shareholders,
On behalf of the Board of Directors (the Board) of Holista Colltech Limited (Holista, the Company, or the Group), I
present our Annual Report and audited statements for the financial year ended 31 December 2023 (FY2023).
Update on ASIC Legal Matter
This report is being presented to you following significant corporate and legal developments having occurred
subsequent to the 2023 financial year end. On 19 March 2023 the Federal Court delivered judgement in relation to
ASIC’s civil proceedings against the Company. In brief, i) the Company been ordered to pay a pecuniary penalty of
$1.8 million; ii) the Company’s former CEO and Managing Director, Dr Rajen Marnickavasagar has been disqualified
from managing a corporation for four years; iii) the Company has been ordered to pay the plaintiff’s legal costs in
excess of $200,000; and iv) the Company has been ordered to file written submissions regarding the payment of the
pecuniary penalty in instalments.
Over the past three years the Board has continued to update shareholders on this legal matter. I draw your attention
to the judgement to provide context for the performance of the year under review, as well as the forward actions the
Company is taking to achieve corporate recovery and improve its financial position.
Review of Financial Performance
Our performance in FY2023 should be seen against the backdrop of our emergence from the nearly two years of
movement restrictions in Malaysia due to the pandemic. At the same time the aforementioned legal case consumed
significant management time and financial resources subsequently affecting management’s ability to develop and
launch new products and pursue new business opportunities.
While Group revenue declined 28% to $5.9 million in FY2023 compared to FY2022, Holista demonstrated resilience
by achieving a 70-basis point increase in gross margin to 49.1% and a 63% improvement in net operating cash
outflow to $410,000. These achievements were driven primarily by favourable changes in the sales mix and effective
cost controls. They helped to mitigate some of the losses from slower sales across Holista’s key divisions, as outlined
below.
Holista reported a FY2023 net loss after tax of $4.9 million (FY2022 net loss: $1.5 million) due to a combination of
unfavourable foreign exchange rates, increased research and development investments relating to new launches,
higher impairment charges, as well as abnormally high professional fees associated with the legal case referred to
above.
Impact of Court’s Decision on ASIC Matter
As a consequence of Dr Rajen Manika’s disqualification, Mr Lai Kwok Kin, a Singaporean who specialises in investor
relations and crisis communications, was appointed as an Independent Director on 19 March 2024. Through deemed
interest he is currently Holista’s fourth largest shareholder. The current Board now comprises three Independent
Directors who will all be due for re-election at the Annual General Meeting to be convened on 17 May 2024.
On the matter of the penalty, the Board and will be submitting a proposal to pay the penalty in instalments. The Board
hopes to achieve a balance between the progressive full settlement of the penalty and management of cashflow, a
balance necessary corporate recovery.
Over the past three years Holista has navigated through uncertainty, largely stemming from the ASIC legal matter.
This case tested our resilience and focused our commitment to compliance and governance. It also consumed
significant Group resources in terms of both human and financial capital.
The Court’s decision on 19 March 2024 and the immediate changes outlined above will eliminate a layer of uncertainty
which had held back product launches and affected negotiations with suppliers. At the same time, we expect our
non-operational costs to decline substantially in the current year. This closure of this matter will free up resources
and management time to re-focus on organic growth including the development and launch of new products, re-
branding of product lines, move to the online marketing and sales and the pursuit of additional business opportunities.
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Holista Colltech Limited
Directors' report
31 December 2023
We are currently working to arrange a payment plan for the penalty that will allow Holista to meet its obligations and
provide some latitude to manage the business. Effective liquidity management, contingent upon a structured
repayment schedule for the penalty, is paramount to ensuring the company’s ongoing viability and future success.
While the details of the ASIC legal case have been complex, the outcome has set a clear path forward for us. These
initiatives reflect our commitment to rectify the issues identified and fulfill our obligations while still providing scope
for the business to succeed.
The lessons learned serve as a bedrock for our future strategies and actions. With the resolution of the ASIC legal
case, we can now re-direct our full attention back to the core of our mission to harness the potential of our assets,
our people, and our innovations, to not only recover but also to thrive.
While the last financial year has been a challenging period, management expects to deliver an improved result for
FY2024 due to growth in revenue and operating leverage from cost efficiencies achieved in FY2023.
The restructuring of Holista’s sales and marketing team has been completed. Sales have been improved from the
low experienced in the second quarter of 2023. Consumer spending in Malaysia is starting to recover. The Company
intends to launch introduce a number of new innovations this year that are expected to bolster revenue and earnings.
These include a line of cosmetics containing exosomes1 and Holista’s patented ovine collagen, due to roll out in the
second half of this year. Holista also plans to expand its Holista-Nugevity product line to include new supplements.
These new innovations are expected to give the Dietary Supplements division an additional tailwind in FY2024.
Separately, the recent rebound in the Food Ingredients division is expected to persist. Discussions with Rex Industry
and other potential customers indicate that demand for Holista’s innovative ingredients should be higher in 2024 than
in the prior year.
Meanwhile, Holista is optimistic about the outlook for the Ovine Collagen division. The Group is in active negotiations
with Behn Meyer Thailand for a new supply agreement. It is also fielding enquiries from potential customers such as
Guangzhou Sinbio Cosmetic Co Ltd, a Chinese State-Owned Enterprise, which continues to test Holista’s ovine
collagen product for a new range of cosmetics.
Holista believes it will deliver improved results in FY2024 as a result of the expected growth of its two largest divisions,
Dietary Supplements and Food Ingredients, which contributed around 95% of total revenue in FY2023, is likely to
more than offset weakness in other divisions.
On behalf of the Board, I wish to thank suppliers, partners, customers, and shareholders for their past support this
last year.
Following three years of legal challenges and uncertainty, we now move forward with a clear vision and renewed
sense of purpose. We remain steadfast in our commitment to deliver value to shareholders and contribute positively
to our community and the wider economy.
Best regards,
David Deloub
Non-Executive Chair
1 Exosomes are found in biological fluids, such as saliva and blood, and have specialised functions in physiological processes, from coagulation
and waste management to intercellular communication.
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Holista Colltech Limited
Directors' report
31 December 2023
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 2023.
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:
Mr David Deloub
Mrs Loren King
Mr Lai Kwok Kin
Non-Executive Chairman
Non-Executive Director
Non-Executive Director (Appointed 19 March 2024)
Dr Rajen Manicka
Managing Director and Chief Executive Officer (disqualified 19 March 2024)
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, nutraceuticals, 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.
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 2023 (FY2023), the Group, consisting of Holista Colltech Limited and its
controlled entities, remained focused on the four core areas Healthy Food Ingredients, Dietary Supplements, Ovine Collagen
and Infection Control Solutions.
Group Operations Review
Holista Colltech Limited (Holista or the Company) recorded a 28% decline in Group revenue to $5.9 million, as net loss
after tax increased by 255.7% to $4.8 million in the financial year 2023 (FY2023) when compared to the prior year.
A challenging trading environment, particularly in Malaysia, and the restructuring of the sales team weighed on Group
performance in the period, although Holista believes that its performance in FY2024 will show a marked improvement over
last year.
Additionally, Holista delivered an increase in gross margin to 49.1% and a 63% improvement in net operating cash outflow
to $410K in FY2023 despite the headwinds.
During FY2023, the Group focused on its four core business areas as follows:
• Healthy Food Ingredients: Holista’s Health Food Ingredients division reported a 54.5% pcp decline in revenue to
$852,000 in FY2023. A slowdown in orders from customers in the United States more than offset robust demand
from Malaysia-based food and drinks manufacturer, Rex Industry Berhad (Rex Industry).
Sales from this division have started to recover steadily since hitting a low point of $107,000 in the second quarter
of FY2023. Revenue in the third and fourth quarters were $204,000 and $334,000 respectively.
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• Dietary Supplements: The Dietary Supplements division, Holista’s largest business by sales, recorded a 20.6%
decline in revenue for FY2023 to $4.8 million compared to a year earlier. This division has been most impacted by a
challenging trading environment, particularly in Malaysia. The sales team in Malaysia has undergone a recent
reorganisation.
Meanwhile, the launch of Holista-Nugevity branded plant-based protein supplement in October last year was still
ramping up. Due to the launch timing this new offering did not make a meaningful contribution in FY2023. However,
it is expected to be a key growth driver for the current year.
• Ovine Collagen: The performance of the Ovine Collagen division was largely steady with revenue of $301,000 in
FY2023 compared to $306,000 a year earlier.
Holista has a binding sales contract that ran to the end of FY2023 with cosmetics manufacturer, Behn Meyer
Thailand, with whom a new one is currently being renegotiated.
•
Infection Control: Finally, the Infection Control division – the newest and smallest revenue contributor – recorded
negligible sales last year. This business may provide optionality to Holista in the future.
Outlook
The last financial year has been a challenging period for Holista, but management is expecting to deliver an improved result
for FY2024 due to growth in total revenue and operating leverage from cost efficiencies achieved in the previous year.
Topline growth is expected to be driven by several factors. Firstly, the restructure of sales team has been successfully
completed and sales have been recovering since the 2023 second quarter low.
Economic headwinds in Malaysia are also easing with consumer spending starting to recover. This bodes well for Holista as
it intends to launch several new innovations in 2024 that are expected to bolster revenue and earnings.
This includes a line of cosmetics containing exosomes and Holista’s patented ovine collagen, in the second half of this year.
Holista also plans to expand its Holista-Nugevity product line to include new supplements. These new innovations are
expected to give the Dietary Supplements division an additional tailwind in FY2024.
Separately, the recent rebound in the Food Ingredients division is expected to persist. Discussions with Rex Industry and
other potential customers indicate that demand for Holista’s innovative ingredients should be higher in 2024 than in the prior
year.
Meanwhile, Holista is optimistic about the outlook for the Ovine Collagen division. The Group is in active negotiations with
Behn Meyer Thailand for a new supply agreement and is fielding enquiries from other potential customers.
Guangzhou Sinbio Cosmetic Co Ltd, a Chinese State-Owned Enterprise, continues to test Holista’s ovine collagen product
in a new range of cosmetics, although there is no certainty that a commercial agreement will eventuate.
Importantly, Holista believes it will deliver improved results in FY2024 even if the Ovine Collagen and Infection Control
businesses underperform. This is because the expected growth in its two largest divisions, Dietary Supplements and Food
Ingredients, which contributed around 95% of total revenue in FY2023, is likely to more than offset weakness in other parts
of the Group.
While there are several headwinds buffeting the global economy, Holista believes it is well positioned to overcome these
challenges, and that the Group’s short and longer-term outlook is generally positive. This optimism is grounded in the
following factors:
• Organic Growth in Key Markets: Holista’s largest divisions are strategically positioned in rapidly expanding markets
due to the increasing demand for health products. For example, the global health food ingredients market is projected
to grow at a compound annual growth rate (CAGR) of 7.8% from 2022 to 2027, reaching a value of US$146.3 billion2.
Similarly, the global vitamins and supplements market is forecasted to achieve a CAGR of 6.1% from 2021 to 2028,
reaching US$196.6 billion3.
2 https://www.marketsandmarkets.com/Market-Reports/health-ingredients-market-69194289.
3 htm2https://www.fortunebusinessinsights.com/vitamins-and-supplements-market-104051.
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Holista Colltech Limited
Directors' report
31 December 2023
• Potential Peaking of Inflation: Cost pressures have begun to ease since 2022. If this trend persists, as predicted
by numerous economists, it will positively impact Holista’s margins and further enhance the Group’s ability to
increase operating cash flow in the current financial year.
• Rebound in the Dietary Supplement Division: As previously outlined, there has been a significant improvement
in the sales of Holista’s market-leading supplements in Malaysia, following a subdued performance in the December
quarter. The rebound experienced in January 2023 has continued, and management anticipates a robust
performance from this division (which constitutes the largest cash contributor of the Group) in the current quarter
and beyond.
• Reopening of the Chinese Economy: The return to normal business operations in China is expected to unlock
new growth opportunities as highlighted earlier. While the success of these initiatives by Holista’s partners is not
imperative for driving further growth, these opportunities have the potential to significantly scale over the medium to
longer-term without necessitating significant investments from Holista's part to pursue.
Business Risks
There are specific risks associated with the activities of the Company and general risks which are largely beyond the control
of the Company and the Directors. The risks identified below, or other risk factors, may have a material impact on the future
financial performance of the Company.
All companies are exposed to risks and the Company continues to monitor risks associated with current activities whilst also
analysing the risks associated with any new opportunities.
The below risks are not exhaustive but are the minimum exposure areas observed by the Company. These risks may cover
such areas as:
Economic
General economic conditions, introduction of tax reform, new legislation, the general level of activity within the bio tech
industry, movements in interest and inflation rates and currency exchange rates may have an adverse effect on the
Company’s activities, as well as on its ability to fund those activities.
Future funding risk
In the future, the Company may require additional funds (whether by way of debt and/or equity), so as to, without limitation:
•
•
fund business development; and
fund corporate, administrative, and working capital needs.
Exchange Rate Risk
The Company with operations across Malaysia, Australia, and the USA, is exposed to exchange rate risks primarily involving
the Australian Dollar (AUD), Malaysian Ringgit (MYR), and the United States Dollar (USD). These risks arise from
transactional activities such as sales and purchases in different currencies, and from translating financial statements of
international operations into AUD, affecting our profitability and reported financial position. To mitigate these risks, we employ
strategies including natural hedging, use of financial derivatives like forward contracts, and diversification of currency
exposure. Despite the inherent volatility in currency exchange rates, our proactive risk management approach, including
monitoring market conditions and employing effective hedging strategies, aims to minimise the financial impact on Holista,
ensuring we remain resilient against the uncertainties of currency fluctuations.
Regulatory Risk
On 19 March 2023, the Federal Court Justice Sarah C Derrington has delivered her judgement in the matter between the
Company and the Australian Securities and Investments Commission (ASIC) in relation to ASIC’s civil penalty proceedings
(Order). A summary of the Order as it relates to the Company (the First Defendant) is outlined in the subsequent event
note.
As part of our commitment to uphold the highest standards of corporate governance and compliance, we continuously
monitor and assess the landscape of regulatory requirements that impact our operations globally. The regulatory environment
in which we operate is subject to change due to political, economic, and social pressures. It is important to acknowledge that
such changes can have significant implications for our business practices, cost structure, and competitive positioning.
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Holista Colltech Limited
Directors' report
31 December 2023
1. Changes in Legislation and Regulation: Our operations are governed by laws and regulations at local, national, and
international levels. Any changes in these legal frameworks can impose new obligations on our company. For instance,
amendments to tax laws, environmental regulations, data protection statutes, and employment legislation could necessitate
operational adjustments, entail additional compliance costs, or lead to exposure to new legal risks.
2. Compliance and Enforcement Trends: Regulatory bodies worldwide are enhancing their scrutiny and enforcement
activities across various sectors. An increase in enforcement actions can result in significant financial penalties, reputational
damage, and operational disruptions. We have implemented comprehensive compliance programs and internal controls to
mitigate such risks, but no system can completely eliminate the possibility of non-compliance.
3. Regulatory Approvals and Licenses: Certain aspects of our operations require approvals, permits, or licenses from
regulatory authorities. Delays in obtaining or renewing these approvals, or the revocation thereof, can impact our ability to
carry out our business activities, launch new products or services, and enter or expand in specific markets.
4. International Trade and Sanctions: Our international operations are subject to laws and regulations related to trade
compliance and economic sanctions. Changes in trade policies, tariffs, and sanctions regimes can affect our supply chains,
increase costs, or restrict access to key markets and technologies.
5. Environmental, Social, and Governance (ESG) Regulations: The evolving landscape of ESG-related regulations
requires us to continually adapt our business practices to meet higher standards of environmental stewardship, social
responsibility, and corporate governance. Non-compliance with ESG standards and regulations can affect investor
confidence and consumer perception, alongside potential legal and financial repercussions.
Risk Management Approach
To manage regulatory risks, we employ a proactive approach that includes regular monitoring of the regulatory environment,
engagement with legal and industry experts, and active participation in relevant trade associations. Our risk management
framework is designed to identify, assess, and mitigate regulatory risks, ensuring that we remain agile and compliant in a
dynamic regulatory landscape.
Outlook
We remain vigilant in monitoring regulatory developments and are committed to adapting our compliance strategies to meet
the challenges posed by the evolving regulatory environment. By maintaining open lines of communication with regulators,
staying informed about impending regulatory changes, and investing in compliance infrastructure, we aim to minimise our
regulatory risk exposure and safeguard our operations and strategic objectives.
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Holista Colltech Limited
Directors' report
31 December 2023
Information relating to the directors
Name:
Title:
Qualifications:
Experience and expertise:
Other current directorships:
Mr David Deloub
Non-Executive Chairman - Independent
Bachelor’s degree in economics with Honors and post graduate qualifications in
Banking and Finance.
Mr Deloub has over 30 years’ experience in the finance and corporate sectors. He has
held a number of executive positions including Chief Financial Officer at the ASX listed
Neptune Marine Services and Executive Director at Patersons Capital Partners, a Perth
based boutique advisory firm providing strategic and financial advice to ASX listed
companies. David has considerable corporate finance, business development and
financial market experience both in Australia the United States and Africa where he has
held senior management positions at Alinta Energy Limited , Neptune Marine Services
and Alcoa Inc in the US.
David currently holds executive Board positions on the ASX listed Stonehorse Energy
Limited and Avira Resources Limited.
Former directorships (last 3 years): He has previously held a number of non-executive board positions including; Neptune
Interests in shares:
Marine Services Limited, Merah Resources and Minquest Limited.
Nil
Experience and expertise:
Name:
Title:
Qualifications:
Mrs Loren King
Non-Executive Director - Independent
Bachelor of Science (Psychology), Graduate Diploma of Applied Corporate
Governance.
Mrs Loren King has worked in corporate finance and senior administration roles with
ASX listed companies, stockbroking and corporate advisory services for the past 18
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.
None
Other current directorships:
Former directorships (last 3 years): None
Interests in shares:
Nil
Name:
Title:
Qualifications:
Experience and expertise:
Mr Lai Kwok Kin
Non-Executive Director (Appointed 19 March 2024) - Independent
Bachelor in Arts, Post-graduate diploma Journalism.
Mr Lai is Founder and Managing Director of Singapore-based WeR1 Consultants Pte
Ltd which provides counsel for investor relations and crisis communications to
companies listed on regional exchanges
Other current directorships:
None
Former directorships (last 3 years): None
Interests in shares:
Shares held by spouse 9,675,785
Name:
Title:
Qualifications:
Experience and expertise:
Dr Rajen Manicka
Managing Director and Chief Executive Officer (disqualified 19 March 2024)
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.
Other current directorships:
None
Former directorships (last 3 years): None
Interests in shares:
85,735,272
from
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Holista Colltech Limited
Directors' report
31 December 2023
“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 2023,
and the number of meetings attended by each director were:
Full Board
Attended
Held
Nomination and
Remuneration Committee
Attended
Held
Audit and Risk Committee
Attended
Held
Dr Rajen Manicka
Mr Walter Edward Joseph
(resigned 6 April 2023)
Mr David Deloub
Mrs Loren King
11
3
8
11
11
3
8
11
4
-
4
4
4
-
4
4
4
-
4
4
4
-
4
4
Held: represents the number of meetings held during the time the director held office.
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 $nil (2022: $ nil) in respect of a contract to insure the directors
and officers of the Company and its controlled entities against any liability incurred in the course of their duties to the extent
permitted by the Corporations Act 2001 (Cth). The Group is currently working with its brokers to find an alternate policy.
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of the
company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the company
or any related entity.
Shares under option
There were no unissued ordinary shares of Holista Colltech Limited under option outstanding at the date of this report.
Shares issued on the exercise of performance rights
There were no ordinary shares of Holista Colltech Limited issued on the exercise of options during the year ended 31
December 2023 and up to the date of this report.
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Holista Colltech Limited
Directors' report
31 December 2023
Shares under Performance Rights
There were no unissued ordinary shares of Holista Colltech Limited under performance rights outstanding at the date of this
report.
Subsequent events
On 19 March 2023, the Federal Court Justice Sarah C Derrington has delivered her judgement in the matter between the
Company and the Australian Securities and Investments Commission (ASIC) in relation to ASIC’s civil penalty proceedings
(Order). A summary of the Order as it relates to the Company (the First Defendant) is outlined below:
1. Pursuant to s 1317G(1) of the Corporations Act 2001 (Cth) (the Act), the Company pay to the Commonwealth of
Australia a pecuniary penalty in the amount of $1,800,000 in respect of the contraventions of s 674(2) and 1041H
of the Act;
2. Pursuant to s 206C(1) of the Act, Dr Rajen Marnickavasagar (the Second Defendant or “Dr Marnickavasagar”), be
disqualified from managing a corporation for a period of 4 years, from the date of the Order;
3. The Company pay the plaintiff’s costs of the proceedings in so far as they exceed $200,000 to be taxed, if not
agreed; and
4. Within 14 days of service of the Order, the Company and the plaintiff file and serve written submissions, not
exceeding three pages in length, as to whether the pecuniary penalty ordered to be paid by the Company should
be paid in instalments.
On the same day, the Company advised that it appointed Mr Lai Kwok Kin as a Director of the Company.
Non-audit services
During the year, no fees were paid or payable for other services provided by Stantons International Audit and Consulting Pty
Ltd (“Stantons”). However, Marsden Stantons, an affiliate of Stantons provided tax compliance and independent expert
services. Non-audit fees amounted to $5,050 (2022: $5,510).
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 consolidated 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.
12
Holista Colltech Limited
Directors' report
31 December 2023
Remuneration report (audited)
Key management personnel (KMP)
The remuneration report details the key management personnel remuneration arrangements for the consolidated entity, in
accordance with the requirements of the Corporations Act 2001 and its Regulations.
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including all directors.
The remuneration report is set out under the following main headings:
●
●
●
●
Principles used to determine the nature and amount of remuneration
Details of KMP remuneration
Service agreements
Additional disclosures relating to key management personnel
Principles used to determine the nature and amount of remuneration
Remuneration philosophy
The performance of the Company depends upon the quality of the KMP. The philosophy of the Company in determining
remuneration levels is to:
●
●
●
set competitive remuneration packages to attract and retain high calibre employees
link executive rewards to shareholder value creation; and
establish appropriate, demanding performance hurdles for variable executive remuneration
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 2023 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
13
Holista Colltech Limited
Directors' report
31 December 2023
In accordance with best practice corporate governance, the structure of non-executive director and executive director
remuneration is separate.
Senior manager and executive director remuneration
Remuneration consists of fixed remuneration and variable remuneration (comprising short-term and long-term incentive
schemes).
Fixed Remuneration
Fixed remuneration is reviewed annually by the Board. The process consists of a review of relevant comparative
remuneration in the market and internally and, where appropriate, external advice on policies and practices. The Committee
has access to external, independent advice where necessary.
Senior managers are given the opportunity to receive their fixed (primary) remuneration in a variety of forms including cash
and fringe benefits such as motor vehicles and expense payment plans. It is intended that the manner of payment chosen
will be optimal for the recipient without creating undue cost for the Group.
The fixed remuneration component of the company executives is detailed in page 15 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 have been no cash bonuses issued 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
David Deloub
Loren King
14
Holista Colltech Limited
Directors' report
31 December 2023
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
$
Cash
bonus
$
Non-
monetary
$
Other
$
Super-
annuation
$
Long
service
leave
$
Equity-
settled
$
Total
$
12,000
48,000
44,167
306,407
410,574
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
58,466
58,466
-
-
-
-
-
-
-
-
-
-
12,000
48,000
44,167
364,873
469,040
2023
Non-Executive
Directors:
Walter Joseph
Loren King 1
Non-Executive
Chairman
David Deloub 2
Executive-
Directors:
Rajen Manicka3
*
Superannuation refers to Malaysia entitlement calculated at 19% of the total of the Short-term benefits.
Mrs Loren King’s remuneration was paid by way of fees to Risky Vulture Enterprise Pty Ltd.
(1)
(2) Mr David Deloub’s remuneration was paid by way of fees to DRD Corporate.
(3) Mr Rajen Manicka was disqualified 19 March 2024.
Short-term benefits
Post-
employment
benefits
Long-term
benefits
Share-
based
payments
Cash salary
and fees
$
Cash
bonus
$
Non-
monetary
$
Other
$
Super-
annuation
$
Long
service
leave
$
Equity-
settled
$
Total
$
48,000
48,000
-
-
289,533
385,533
46,850
46,850
-
-
-
-
6,0002
-
-
-
302
6,302
63,915
63,915
-
-
-
-
-
-
-
-
54,000
48,000
400,600
502,600
2022
Non-Executive
Directors:
Walter Joseph
Loren King 1
Executive-
Directors:
Rajen Manicka*
*
Superannuation refers to Malaysia entitlement calculated at 19% of the total of the Short-term benefits.
Mrs Loren King’s remuneration was paid by way of fees to Risky Vulture Enterprise Pty Ltd.
(1)
(2) Mr Walter Joseph received $6,000 as fees for ISO certificate consultation.
15
Holista Colltech Limited
Directors' report
31 December 2023
Service agreements
Dr Rajen Manicka
On 7 September 2010, the Group entered into an Employment Agreement with Dr Rajen Manicka to act as Chief Executive
Officer and Managing Director. On the 2 July 2018, the Board of Directors reviewed and renewed the Employment Agreement
of Dr Rajen Manicka as the Chief Executive Director and Managing Director of the Group. 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
RM778,524 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.
16
Holista Colltech Limited
Directors' report
31 December 2023
Mr David Deloub
Mr Deloub was appointed as a Non-Executive Chairman on 6 April 2023. Mr Deloub’s contract is $60,000 per annum,
effective on the date of appointment until further notice. No termination payments are applicable.
Mrs Loren King
Mrs King was appointed as a Non-Executive Director on 31 July 2021. Mrs King’s contract is $48,000 per annum, effective
on the date of appointment until further notice. No termination payments are applicable.
Share-based compensation
Issue of shares
There were no shares issued to directors as part of compensation during the year ended 31 December 2022.
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 Exercise of
the start of
the year
as part of performance Disposals/
rights
compensation
other
Balance at
the end of
the year
Ordinary shares
Rajen Manicka
Walter Edward Joseph
Loren King
Total Ordinary Shares
85,735,272
-
-
85,735,272
-
-
-
-
-
-
-
-
-
85,735,272
-
-
-
-
- 85,735,272
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
___________________________
David Deloub
Non-Executive Chair
28 March 2024
17
PO Box 1908
West Perth WA 6872
Australia
Level 2, 40 Kings Park Road
West Perth WA 6005
Australia
Tel: +61 8 9481 3188
Fax: +61 8 9321 1204
ABN: 84 144 581 519
www.stantons.com.au
28 March 2024
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 2023, I declare that to the best of my knowledge and belief, there have been no contraventions
of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
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
18
Holista Colltech Limited
Consolidated statement of profit or loss and other comprehensive income
For the year ended 31 December 2023
Income
Revenue from contracts with customers
Other income
Expenses
Changes in inventories of finished goods and work in progress
Raw materials and consumables used
Distribution costs and other costs of sales
Advertising and promotion
Consultancy and professional fees
Depreciation and amortisation expense
Employee benefits
Finance costs
Foreign exchange gain/(loss)
Impairment
Research and development
Other expenses
ASIC Penalty
(Loss) before income tax expense
Income tax expense
Consolidated
Note
2023
$
2022
$
4
5
6
6
6
30
5,946,909
8,241,225
34,416
73,388
(494,729)
(2,083,659)
(446,917)
(365,197)
(1,197,202)
(239,773)
(2,311,771)
(90,909)
93,700
(886,700)
(129,471)
(882,741)
(1,800,000)
565,881
(4,334,259)
(480,757)
(553,444)
(771,174)
(273,952)
(2,703,629)
(66,528)
45,373
(134,252)
(68,875)
(903,740)
-
(4,854,044)
(1,364,743)
7
(65,043)
(157,387)
(Loss) after income tax expense for the year
(4,919,087)
(1,522,130)
30)
67)
Other comprehensive loss
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive loss for the year, net of tax
Total comprehensive (loss) for the year
(Loss) for the year is attributable to:
Non-controlling interest
Owners of Holista Colltech Limited
Total comprehensive (loss) for the year is attributable to:
Non-controlling interest
Owners of Holista Colltech Limited
Basic (loss) per share
Diluted (loss) per share
(23,646)
22,491
(23,646)
22,491
(4,942,733)
(1,499,639)
(113,324)
(4,805,763)
(69,228)
(1,452,902)
(4,919,087)
(1,522,130)
(141,363)
(4,801,370)
(151,287)
(1,348,352)
(4,942,733)
(1,499,639)
Cents
Cents
38
38
(1.72)
(1.72)
(0.52)
(0.52)
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
19
Holista Colltech Limited
Consolidated statement of financial position
As at 31 December 2023
Consolidated
Note
2023
$
2022
$
Assets
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax recoverable
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
Long-term provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Equity attributable to the owners of Holista Colltech Limited
Non-controlling interest
8
9
10
12
13
14
11
15
7.1
16
17
18
19
20
18
19
20
21
22
23
24
59,767
1,047,928
658,168
91,735
450,225
2,307,823
117,528
1,321,880
1,411,962
68,204
1,146,780
4,066,354
716,972
254,178
7,443
64,554
1,043,147
898,361
335,884
104,610
67,831
1,406,686
3,350,970
5,473,040
7
7
6
-
7
7
0
7
4
124,824
146,471
75,412
4,724,872
59,867
929,789
32,668
51,146
5,798,342
2,269,349
52,851
483,087
37,050
40,530
2,882,867
408,073
196,895
333,819
938,787
457,562
242,218
333,819
1,033,599
6,737,129
3,916,466
(3,386,159)
1,556,574
21,787,478
(95,559)
21,787,478
(99,952)
(23,663,997) (18,858,234)
2,829,292
(1,272,718)
(1,972,078)
(1,414,081)
Total equity
(3,386,159)
1,556,574
The above consolidated statement of financial position should be read in conjunction with the accompanying notes
20
Holista Colltech Limited
Consolidated statement of changes in equity
For the year ended 31 December 2023
Consolidated
Foreign
Currency
Translation
Reserve
$
Issued
capital
$
Accumulated
Losses
$
Non-
controlling
interest
$
Total equity
$
Balance at 1 January 2022
21,707,478
(204,502) (17,405,332)
(1,121,431)
2,976,213
Loss after income tax expense
for the year
Other comprehensive income
for the year, net of tax
Total comprehensive
income/(loss) for the year
Shares based payment
expenses
-
(1,452,902)
(69,228)
(1,522,130)
104,550
-
(82,059)
22,491
104,550
(1,452,902)
(151,287)
(1,499,639)
-
-
-
80,000
-
-
-
80,000
Balance at 31 December 2022
21,787,478
(99,952)
(18,858,234)
(1,272,718)
1,556,574
Consolidated
Foreign
Currency
Translation
Reserve
$
Issued
capital
$
Accumulated
Losses
$
Non-
controlling
interest
$
Total equity
$
Balance at 1 January 2023
21,787,478
(99,952)
(18,858,234)
(1,272,718)
1,556,574
Loss after income tax expense
for the year
Other comprehensive income
for the year, net of tax
Total comprehensive
income/(loss) for the year
-
-
-
(4,805,763)
(113,324)
(4,919,087)
4,393
-
(28,039)
(23,646)
-
4,393
(4,805,763)
(141,363)
(4,942,733)
Shares issued during the year
-
-
-
-
-
Balance at 31 December 2023
21,787,478
(95,559)
(23,663,997)
(1,414,081)
(3,386,159)
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
21
Holista Colltech Limited
Consolidated statement of cash flows
For the year ended 31 December 2023
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Finance costs
Interest received
Income tax paid
Government grants
Net cash (used in) operating activities
Cash flows from investing activities
Purchase of property, plant and equipment
Increase/(Refund) of deposits/investments
Proceeds from disposal of property, plant and equipment
Consolidated
Note
2023
$
2022
$
6,883,981
(7,109,882)
(90,909)
2,546
(92,857)
-
9,236,287
(10,150,152)
(80,505)
854
(159,285)
41,357
(407,121)
(1,111,444)
10
(4,548)
(42,155)
-
(76,971)
(59,892)
31,177
Net cash (used in)/provided by investing activities
(46,703)
(105,686)
Cash flows from financing activities
Proceeds from issue of shares
Proceeds from borrowings, net
Repayment of borrowings
Repayment of lease liabilities
Net cash provided by financing activities
Net (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Change in foreign currency held
1,109
4,459,928
(4,001,527)
(41,090)
-
4,101,325
(3,943,332)
(37,140)
418,420
120,853
(35,404)
117,528
(22,357)
(1,096,277)
1,213,093
712
Cash and cash equivalents at the end of the financial year
8
59,767
117,528
101,400
(7,318)
5
7
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
22
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 1. Significant accounting policies
The principal accounting policies adopted in the preparation of the consolidated 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 $4,919,087(2022: $1,522,130 loss) and a net cash out-flow from operating
activities of $407,121 (2022: $1,111,444 out-flow). As at 31 December 2023, the Group's working capital amounted to
negative $3,490,519 (2022: $1,183,487 working capital), as disclosed in note 21 of the issued capital note.
On 19 March 2023, the Federal Court Justice Sarah C Derrington has delivered her judgement in the matter between the
Company and the Australian Securities and Investments Commission (ASIC) in relation to ASIC’s civil penalty proceedings
(Order). A summary of the Order as it relates to the Company (the First Defendant) is outlined below. Pursuant to s 1317G(1)
of the Corporations Act 2001 (Cth) (the Act), the Company pay to the Commonwealth of Australia a pecuniary penalty in the
amount of $1,800,000 in respect of the contraventions of s 674(2) and 1041H of the Act. Within 14 days of service of the
Order, the Company and the plaintiff file and serve written submissions, not exceeding three pages in length, as to whether
the pecuniary penalty ordered to be paid by the Company should be paid in instalments. As at the date of this financial report,
the payment plan has not yet been agreed.
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.
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 consolidated 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, 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 2023 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'.
23
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 1. Significant accounting policies (continued)
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.
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. The legal parent
entity's functional and presentation currency is Australian Dollars.
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 consolidated statement of financial position based on current and non-current
classification.
24
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 1. Significant accounting policies (continued)
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.
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.
25
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 1. Significant accounting policies (continued)
●
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.
●
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 (Sales and Service Tax or SST), 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.
26
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 1. Significant accounting policies (continued)
Fair value is the price the Group would receive to sell an asset or would have to pay to transfer a liability in an orderly
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:
●
●
●
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.
27
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 1. Significant accounting policies (continued)
Each valuation technique requires inputs that reflect the assumptions that buyers and sellers would use when pricing the
asset or liability including assumptions about risks. When selecting a valuation technique, the Group gives priority to those
techniques that maximise the use of observable inputs and minimise the use of unobservable inputs. Inputs that are
developed using market data (such as publicly available information on actual transactions) and reflect the assumptions that
buyers and sellers would generally use when pricing the asset or liability are considered observable, whereas inputs for
which market data is not available and therefore are developed using the best information available about such assumptions
are considered unobservable.
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.
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 – 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)
Key estimate – carrying amount of deferred tax assets (note 7 Income tax expense)
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.
28
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 3. Operating segments (continued)
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.
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 90% (2022: 91%) of total revenue for this segment. For Food Ingredients business segments, the Group supplies
to a few major customers that accounts 90% (2022: 70%) of revenue for this segment. The Group supplies to a few external
customers for the Ovine Collagen segment, where the major customer accounts for 100% (2022: 98%) of revenue for this
segment.
Segment Financial Performance
Year ended 31 December 2023
Supplements
$
Sheep
Collagen
$
Food
Ingredients
US+Malaysia
$
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
4,793,872
-
4,793,872
300,850 852,115
-
852,115
-
300,850
72
-
72
-
34,416
34,416
5,946,909
34,416
5,981,325
(4,310,601)
(667,656)
(1,889,031)
(207,273)
(3,760,808)
(10,835,369)
483,271
(366,806)
(1,036,916)
(207,201)
(3,726,392)
(4,854,044)
29
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 3. Operating segments (continued)
Year ended 31 December 2022
Supplements
$
Sheep
Collagen
$
Food
Ingredients
US+Malaysia
$
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
6,037,720
-
6,037,720
306,255
-
306,255
1,874,630
-
1,874,630
22,620
-
22,620
-
73,388
73,388
8,241,225
73,388
8,314,613
(5,156,078)
(638,972)
(2,368,498)
(265,134)
(1,250,673)
(9,679,355)
881,642
(332,717)
(493,868)
(242,514)
(1,177,285)
(1,364,742)
As at 31 December 2023
Supplements
$
Sheep
Collagen
$
Food
Ingredients
US+Malaysia
$
Infection
Control
$
Corporate
$
Total
$
Segment Assets
Intra-segment eliminations
Total assets
2,222,102
-
2,222,102
4,921,621
-
4,921,621
1,997,219
(651,755)
1,345,464
2,328
-
2,328
70,648
(5,211,193)
(5,140,545)
9,213,919
(5,862,949)
3,350,970
Segment Liabilities
Intra-segment eliminations
Total liabilities
(2,069,756)
-
(2,069,756)
(4,090,336)
-
(4,090,336)
(4,086,696)
287,258
(3,799,438)
364,219
-
364,219
98,015
3,684,635
3,586,621
(10,709,022)
3,971,893
(6,737,130)
Total net assets
152,346
831,286
(2,453,974)
(3,61,891)
(1,553,926)
(3,386,159)
As at 31 December 2022
Supplements
$
Sheep
Collagen
$
Food
Ingredients
US+Malaysia
$
Infection
Control
$
Corporate
$
Total
$
Segment Assets
Intra-segment eliminations
Total assets
3,069,194
-
3,069,194
5,256,297
-
5,256,297
2,289,398
(668,179)
1,621,219
196,633
-
196,633
(4,670,303)
(4,670,303)
- 10,811,522
(5,338,482)
5,473,040
Segment Liabilities
Intra-segment eliminations
Total liabilities
(1,765,545)
-
(1,765,545)
(2,748,008)
-
(2,748,008)
(4,987,737)
298,057
(4,689,680)
(415,065)
-
(415,065)
-
5,701,832
5,701,832
(9,916,355)
5,999,889
(3,916,465)
Total net assets
1,303,649
2,508,289
(3,068,461)
(218,432)
1,031,529
1,556,574
Assets by geographical region
The location of segment assets (before intra-segment eliminations) by geographical location of the assets is disclosed below:
30
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 3. Operating segments (continued)
Australia
Malaysia
United States
Total assets
Consolidated
2023
$
2022
$
4,921,621
3,123,790
1,189,007
5,256,297
4,269,912
1,285,313
9,234,418 10,811,522
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
2023
$
2022
$
300,850
5,565,567
80,493
306,255
6,909,072
1,025,898
5,946,910
8,241,225
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:
●
●
●
●
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
Consolidated
2023
$
2022
$
5,946,909
8,241,225
31
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 4. Revenue from contracts with customers (continued)
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
2023
$
2022
$
4,793,872
300,850
852,115
72
6,037,720
306,255
1,874,630
22,620
5,946,909
8,241,225
300,850
5,565,566
80,493
306,255
6,909,072
1,025,898
5,946,909
8,241,225
5,946,909
8,241,225
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.
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:
32
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 4. Revenue from contracts with customers (continued)
●
●
●
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.
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 sheep collagen, food ingredients, and infection control 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 11 Right-of-return assets, note 16 Trade and other
payables, and note 17 Contract liabilities.
33
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 5. Other income
Retention fee reversal
Government Grants – US COVID-19 Subsidy
Gain on disposal of property, plant and equipment
Interest income
Total Other income
Consolidated
2023
$
2022
$
31,870
-
-
2,546
-
41,357
31,177
854
34,416
73,388
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.
Note 6. Loss before income tax
Loss before income tax includes the following specific expenses:
Impairment
Impairment of other assets
Related Party Loans
Impairment of Goodwill
Bad debt written-off
Total impairment
Other Expenses
Compliance and regulatory costs
Insurance
Other expenses
Stocks written-off – finished goods
Collie factory maintenance costs
Audit fees
Operating lease and rental expense
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
34
Consolidated
2023
$
2022
$
542,339
104,363
239,998
-
-
134,252
886,700
134,252
158,774
82,864
19,487
203,321
103,296
121,476
193,523
164,964
92,723
16,179
228,976
109,825
108,989
182,084
882,741
903,740
1,750,988
228,980
77,949
38,658
140,710
74,486
1,946,537
249,448
81,185
171,151
126,810
128,498
2,311,771
2,703,629
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 6. Loss before income tax (continued)
Accounting policy for Expected credit losses
Refer to note 9.
Accounting policy for Impairment on Intangibles including Goodwill
Refer to note 15.
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.
35
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 7. Income tax expense
Income tax expense
Current Income tax
Deferred tax (Note 7.1)
-current year
-over provision in prior year
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% (2022: 26%)
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
Over/(under) provision of deferred tax
Timing differences
Income tax expense
Consolidated
2023
$
2022
$
65,043
172,722
-
-
65,043
(19,332)
3,997
157,387
(4,854,044)
(1,364,742)
(1,213,511)
(341,186)
732,914
-
47,411
65,043
365,712
(5,968)
-
73,442
101,550
(10,339)
28,590
172,722
257,632
(67,097)
(15,335)
30,850
65,043
157,387
%
%
The applicable weighted average effective tax rates attributable to operating profit are as
follows:
1.34
11.53
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
2023
$
2022
$
3,179,274
1,219,367
2,813,562
1,177,925
4,398,641
3,991,487
Potential deferred tax assets attributable to tax losses have not been brought to account at 31 December 2023 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:
36
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
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 consolidated 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 $12,812,811 (2022: $13,053,344) 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 $1,462,847 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 such taxable profit.
7.1 Deferred Tax Assets
Consolidated
2023
$
2022
$
67,831
83,166
(3,277)
-
(19,332)
3,997
64,554
67,831
Consolidated
2023
$
2022
$
109,181 111,747
(43,916)
(44,627)
64,554
67,831
Deferred tax assets at the beginning of the year:
Recognised in profit or loss
- Current year
- Over provision in previous years
Gross:
Deferred tax assets
Deferred tax liabilities
Deferred tax assets
37
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Deferred tax liabilities are in respect of the following:
Tax effects of:
Unrealised gain on foreign exchange
Differences between
- Accounting depreciation and finance lease payments
Right of return assets
Differences between
- Accounting depreciation and tax capital allowances
Consolidated
2023
$
2022
$
(11,140)
(13,345)
(64)
(32,786)
(134)
(29,768)
(637)
(669)
(44,627)
(43,916)
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.
38
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
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
2023
$
2022
$
59,767
-
117,528
-
59,767
117,528
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.
Note 9. Trade and other receivables
Current assets
Trade receivables
Less: Allowance for expected credit losses
Other receivables
Amounts advanced to a third party
Less: Allowance for expected credit losses
Interest receivable
39
Consolidated
2023
$
2022
$
3,032,562
(2,062,598)
969,964
3,293,464
(2,090,325)
1,203,139
20,397
475,157
(475,157)
57,567
60,620
475,157
(475,157)
58,121
1,047,928
1,321,880
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 9. Trade and other receivables (continued)
2023
Trade receivables-Gross value
Allowance for expected credit
loss
Other receivables-net
2022
Trade receivables-Gross value
Not past due
$
763,788
Past due up
to 30 days
$
286,311
Past due 31-
60 days
$
30,635
Past due 61-
90 days
$
26,408
Past due over
90 days
$
Total
$
1,925,420
3,032,562
-
77,964
-
-
-
-
-
(2,062,598)
(2,062,598)
-
-
77,964
841,752
286,311
30,635
26,408
(137,178)
1,047,928
Not past due
$
995,158
Past due up
to 30 days
$
205,432
Past due 31-
60 days
$
55,727
Past due 61-
90 days
$
Past due over
90 days
$
Total
$
-
2,037,147
3,293,464
Allowance for expected credit
losses
-
Other receivables-net
118,741
-
-
1,113,899
205,432
(55,727)
-
-
-
-
-
(2,034,598)
(2,090,325)
-
118,741
2,549
1,321,880
The average credit period on sales of goods and rendering of services ranges from 30 to 60 days. Interest is not charged.
During the year ended 31 December 2023 an allowance of $2,062,598 has been recognised 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 $1,086,419 (2022:
$1,091,838). During the year, the carrying amount of the allowance for credit losses amounted to $1,086,419 (2022:
$1,091,838).
As at 31 December 2023, the amounts advanced to a third party of $475,157 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. The related party ceased being a related party and moved to third party status
on 31 December 2021.
Accounting policy for trade and other receivables
Trade receivables are generally due for settlement within periods ranging from 30 to 60 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. 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.
40
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 10. Inventories
Current assets
Raw materials - at cost
Finished goods - at cost pre write off
Less: Finished goods stock written off
Finished goods - at cost
Stock-in-transit
Consolidated
2023
$
2022
$
164,507
466,695
(166,854)
464,348
193,820
600,124
1,040,814
(228,976)
1,411,838
-
658,168
1,411,962
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
2023
$
2022
$
115,096
139,082
141,026
194,858
254,178
335,884
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 2023
Exchange differences
Depreciation expense
Motor
Properties
$
vehicles
$
Total
$
141,026
(645)
(25,285)
194,858
(9,415)
(46,361)
335,884
(10,060)
(71,646)
Balance at 31 December 2023
115,096
139,082
254,178
41
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 11. Right-of-use assets (continued)
Consolidated
Balance at 1 January 2022
Additions
Exchange differences
Depreciation expense
Properties
$
Motor
vehicles
$
Total
$
107,583
58,819
5,830
243,572
113,413
302,391
- 358 358
(80,278)
(54,623)
(25,655)
Balance at 31 December 2022
140,747
195,137
335,884
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.
Note 12. Income tax refund due
Current assets
Income tax refund due
Consolidated
2023
$
2022
$
91,735
68,204
42
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 13. Other current assets
Current assets
Prepayments
Security deposits
Other deposits
Loan to a related party
Right-of-return assets
Consolidated
2023
$
2022
$
160,927
130,971
21,371
-
136,956
365,093
94,904
15,048
547,542
124,193
450,225
1,146,780
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 (refer to Note 30 for further details).
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 2023 is related to loan to Galen BioMedical Inc. which is non-interest bearing and
repayable upon demand. This loan has been written off as non-recoverable.
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.
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
43
Consolidated
2023
$
2022
$
1,000,876
(365,258)
635,618
1,051,694
(364,159)
687,535
2,080,207
(1,998,853)
81,354
2,089,353
(1,878,527)
210,826
716,972
898,361
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 14. Property, plant and equipment (continued)
Reconciliations
Reconciliations of the written down values at the beginning and end of the current and previous financial years are set out
below:
Consolidated
Balance at 1 January 2022
Additions
Exchange rate differences
Depreciation expense
Balance at 31 December 2022
Additions
Exchange rate differences
Depreciation expense
Balance at 31 December 2023
Freehold
land and
buildings
$
Plant and
equipment
$
Total
$
697,773
-
9,406
(19,644)
687,535
-
(33,222)
(18,695)
312,490
76,971
420
(179,055)
210,826
4,386
(2,196)
(131,662)
1,010,263
76,971
9,826
(198,699)
898,361
4,386
(35,418)
(150,357)
635,618
81,354
716,972
Land and buildings with a carrying amount of $635,618 (2022: $687,535) 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 2023 (2022: $nil).
Accounting policy for property, plant and equipment
Recognition and measurement
Freehold land and buildings are measured at cost 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.
44
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 14. Property, plant and equipment (continued)
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 profit or loss 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
2023
Bottom
%
4.00
20.00
20.00
2023
Top
%
4.00
33.33
20.00
2022
Bottom
%
4.00
20.00
20.00
2022
Top
%
4.00
33.33
20.00
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset's carrying amount is written down immediately to its recoverable amount if the asset's carrying amount is greater
than its estimated recoverable amount.
Impairment of property, plant and equipment
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. The
assessment will consider both external and internal sources of information. If such an indication exists, an impairment test is
carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset’s fair value less
costs of disposal and value in use, to the asset’s carrying amount. Any excess of the asset’s carrying amount over its
recoverable amount is recognised immediately in profit or loss. Where it is not possible to estimate the recoverable amount
of an individual asset, the group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Impairment losses recognised in prior periods are assessed at each reporting date for any indications that the loss has
decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine
the recoverable amount. An impairment loss is reversed only to the extent that the asset's carrying amount does not exceed
the carrying amount that would have been determined, net of depreciation and amortisation, if no impairment loss had been
recognised.
45
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 15. Intangible assets
Non-current assets
Goodwill
Patents and licences
Less: Accumulated amortisation
Consolidated
2023
$
2022
$
-
-
123,908
(116,465)
7,443
224,032
(119,422)
104,610
7,443
104,610
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 2022
Additions
Exchange differences
Transfers (out)
Amortisation expense
Balance at 31 December 2022
Additions
Exchange differences
Transfers (out)
Amortisation expense
Balance at 31 December 2023
Patents and
Goodwill
$
licences
$
Total
$
134,157
-
134,157
-
(14,147)
-
(15,400)
(14,147)
-
(15,400)
104,610
-
(5,674)
(77,644)
(13,849 )
104,610
-
(5,674)
(77,644)
(13,849
7,443
7,443
-
-
-
-
-
-
-
-
-
-
-
46
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
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
2023
years
2022
years
20
20
47
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
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
Consolidated
2023
$
2022
$
3,256,524
839,689
25,177
495,902
107,580
1,128,239
416,745
25,419
516,158
182,788
4,724,872
2,269,349
Current liabilities
Trade payables
Accruals
Dividends payable
Refund
Other payables
Refer to note 26 for further information on financial instruments.
48
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
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).
Note 17. Contract liabilities
Current liabilities
Advance deposits and deferred revenue
Consolidated
2023
$
2022
$
59,867
52,851
Deferred revenue amounting to $59,867 (2022: $52,851) 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.
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.
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.
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.
49
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 18. Borrowings
Current liabilities
Term loan
Banker's acceptance
Loan from related parties*
Non-current liabilities
Term loan
Consolidated
2023
$
2022
$
32,513
882,035
15,241
32,888
434,812
15,387
929,789
483,087
408,073
457,562
1,337,862
940,649
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 5.12% (2022: 4.53%).
The term loan is repayable over 240 monthly instalments (principal plus interest) of $2,896 (2022: $2,840) which commenced
on 1 October 2020. The term loan bears interest rates of 3.74% (2022: 3.84%) 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:
Security deposits
Freehold land and buildings
At balance date, the following
financing facilities had been
negotiated and were available:
Total facilities
2023
$
Total facilities
2022
$
Facilities used
2023
$
Facilities used
2022
$
Consolidated
2023
$
2022
$
130,971
635,618
94,904
687,535
766,589
782,439
Unused
facilities
2023
$
Unused
facilities
2022
$
Term loan
Banker's acceptance
1,337,861
2,069,009
490,450
1,170,647
(1,337,861)
(490,450)
(882,035) (434,812)
-
1,186,975
-
735,835
Total facilities at balance date
3,406,870
1,661,097
(2,219,896)
(925,262)
1,186,975
735,835
50
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
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
2023
$
2022
$
32,668
37,050
196,895
242,218
229,563
279,268
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.
51
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
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
2023
$
2022
$
51,146
40,530
333,819
333,819
384,965
374,349
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.
52
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
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
2023
Shares
2022
Shares
2023
$
2022
$
Ordinary shares - fully paid
278,800,067 278,800,067 21,787,478 21,787,478
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.
Options
At beginning of the year
Issued options
Expired options
At reporting date
Consolidated
2023
$
2022
$
-
-
- 20,000,000
(20,000,000)
-
-
-
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 2022.
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
53
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 21. Issued capital (continued)
The working capital position of the Group was as follows:
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
2023
$
2022
$
59,767
1,047,928
658,168
91,735
450,225
(2,924,872)
(59,867)
(929,789)
(32,668)
(1,851,146)
117,528
1,321,880
1,411,962
68,204
1,146,780
(2,269,349)
(52,851)
(483,087)
(37,050)
(40,530)
(3,490,519)
1,183,487
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
2023
$
2022
$
(95,559)
-
(99,952)
-
(95,559)
(99,952)
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
Accumulated losses at the beginning of the financial year
Loss after income tax expense for the year
Transfer from options reserve
Consolidated
2023
$
2022
$
(18,858,234)
(4,805,763)
(17,405,332)
(1,452,902)
Accumulated losses at the end of the financial year
(23,663,997)
(18,858,234)
54
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 24. Non-controlling interest
Non-controlling interest
Note 25. Dividends
Consolidated
2023
$
2022
$
(1,414,081 )
(1,272,718)
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.
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
MYR functional currency of the Group.
55
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
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
2023
2022
2023
2022
0.6644
3.0297
54.8696
0.8922
0.6947
3.0535
54.54
0.9575
0.6840
3.1416
56.88
0.9014
0.6775
2.9898
56.06
0.9102
The carrying amount of the consolidated entity's foreign currency denominated financial assets and financial liabilities at the
reporting date on its original currencies were as follows:
Assets
Liabilities
2023
2022
2023
2022
Consolidated
US dollars
MY Ringgit
Indian Rupee
SG Dollar
801,744
870,799
9,813,699 12,799,782
-
-
-
-
(2,494,198)
(2,560,810)
(9,009,935 ) (10,458,652)
-
(2,830)
-
(9,465)
If the relevant foreign currencies is strengthened by 15% against the functional currency of the Group, the effect in equity
will increase/decrease by:
10,615,443 13,670,581
(11,580,210)
(12,955,680)
Consolidated - 2023
US dollars
MY Ringgit
Indian Rupee
Singapore Dollar
Consolidated - 2022
US dollars
MY Ringgit
Indian Rupee
Singapore Dollar
AUD strengthened
AUD weakened
Effect on
Effect on
% change
equity
% change
equity
15%
15%
15%
15%
385,760
(38,377)
-
1,575
348,958
(15%)
(15%)
(15%)
(15%)
(385,760)
38,377
-
(1,575)
(348,958)
AUD strengthened
AUD weakened
Effect on
Effect on
% change
equity
% change
equity
15%
15%
15%
15%
117,456
(359,424)
-
425
(241,543)
(15%)
(15%)
(15%)
(15%)
(117,456)
359,424
-
(425)
241,543
The opposite applies if the relevant foreign currencies weaken by 15% against the functional currency of the Group.
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.
56
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
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.
57
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
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 - 2023
Non-derivatives
Non-interest bearing
Trade and other payables
Interest-bearing - variable
Borrowings
Leases
Total non-derivatives
Consolidated - 2022
Non-derivatives
Non-interest bearing
Trade and other payables
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
$
-
(2,724,872)
-
-
-
(2,724,872)
5.12%
3.74%
(929,789)
(229,564)
(1,159,353)
(22,378)
(12,589)
(34,967)
(70,851)
(39,857)
(110,708)
(314,844)
(177,117)
(491,961)
(1,337,862)
(459,127)
(1,796,989)
Weighted
average
interest rate
%
1 year or less
$
Between 1
and 2 years
$
Between 2
and 5 years
$
Over 5 years
$
Remaining
contractual
maturities
$
-
(2,269,349)
-
-
-
(2,269,349)
4.185%
3.61%
(503,304)
(38,388)
(2,811,041)
(29,752)
(15,582)
(45,334)
(94,425)
(49,108)
(143,533)
(420,513)
(217,313)
(637,826)
(1,047,994)
(320,391)
(3,637,734)
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:
58
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
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 David Deloub
Mrs Loren King
Managing Director and
Chief Executive Officer
Non-Executive Chairman
Non-Executive Director
Information regarding individual directors and executives’ compensation and some equity instruments disclosures as
required by the Corporations Regulations 2M.3.03 is provided in the Remuneration report.
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 and fees
Share-based payments
Consolidated
2023
$
2022
$
410,574
58,466
-
438,685
63,915
-
469,040
502,600
* Short-term employee benefits in year 2022 include other benefits of $6,302, which represents $6,000 in fees paid to Walter
Joseph for ISO certificate consultation and $302 to Rajen Manicka for other statutory employee benefit.
There are no other benefits included in Short-term employee benefits for the year 2023
59
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
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
Other
Taxation services provided by a related practice of the Auditor
Note 30. Contingent liabilities
ProImmune Company LLC ("Pro immune")
Consolidated
2023
$
2022
$
77,741
39,608
594
5,050
71,023
37,006
589
5,510
122,993
114,128
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. The court granted partial summary judgment on the issue of liability in favour of ProImmune, however failed to
award any damages until it received further legal briefing on whether or not (a) ProImmune had a duty to mitigate its damages
(in which case it could likely be awarded nothing or an amount to be determined) and (b) whether the last contract entered
into by the parties was still in full force and effect.
The Court granted its summary judgement on the issue of liability including legal costs of approximately USD 2.06 million in
favour of ProImmune in January 2024. Based on the Company’s legal advice, this is a non-final Judgement and the
Judgement is pending appeal and to this extent there has been no meaningful settlement discussion that have taken place
between the parties. The Company have filed an appeal on 4 March 2024 on this non final Judgement where it is expected
briefing of the appeal will take place over the next 30 to 60 days thereof and it is expected that a decision on the appeal may
be forthcoming no sooner than Q3 of 2024.
At the date of this report, pending the outcome of the appeal, it is premature to estimate any material contingent liabilities for
this case.
60
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
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 over a posted YouTube video on its efficacy 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
also claims that between April and July 2020 the Company was in breach of its continuous disclosure obligations. The
proceedings also alleged that Dr Marnicka, 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.
The Company and its directors, being the defendants of this case, have filed their respective concise statements to the Court
in 2021. A mediation on this matter was held on 28 April 2022 but with no avail and was ended by ASIC. The Company
have also filed in the expert evidence on which they intend to rely on at trial, the defendants’ and witnesses’ affidavits or a
written outline of evidence they anticipate giving at trial to the Court on 24 February 2023. The case management was
completed on 1 March 2023 with ordered evidence submission deadlines to be met by the plaintiff ie ASIC by 29 March 2023
and the defendants by 26 April 2023. The trial is set tentatively for 2 weeks from 9 to 20 October 2023 (inclusive) followed
by 1 week in reserve from 4 to 8 December 2023 (inclusive).
Prior to the trial dates scheduled in October 2023, a second mediation was accorded on 14 September 2023 as per the Court
directive. During the said mediation, both ASIC and Dr Manicka have agreed on the reduced allegations to only continuous
disclosures obligations and penalties was ascertained. Subject to the Court final determination, Dr Marnicka shall be
disqualified from managing a corporation for a period of 4 years and payment of a pecuniary penalty of $150,000 plus
reimbursement of ASIC’s costs of investigation and litigation in the sum of $200,000. These pecuniary penalties are covered
by the Directors and Officers insurance policy.
The mediation was then extended to 18 September 2023 where both ASIC and the Company could not reach an agreement
on the quantum of pecuniary penalty for breaching the reduced allegation of continuous disclosure obligations. The
mediation was then called off and with the cancellation of further mediation scheduled initially on 2 November 2023, both
ASIC and the Company have decided to sort the Court determination on pecuniary penalty in the hearing dates set on 6 and
7 of December 2023.
The proceeding was held on 6 December 2023 with a new Judge and the matter was initially scheduled to take two full days,
however the proceedings completed at the end of the first day. ASIC is seeking civil pecuniary penalties against the Company
as a result of the alleged failures by the Company to update the market. ASIC is also seeking costs orders against the
Company. Judgement was reserved following the conclusion of the hearing.
The Federal Court justice Sarah C Derrington delivered her judgement on 19 March 2024 where the Company is to pay a
pecuniary penalty of $1.8 million, Dr Marnicka shall be disqualified from managing a corporation for a period of 4 years and
the Company is to pay ASIC legal proceeding costs in so far as they exceed $200,000 to be taxed, if not agreed. Within 14
days of service of the Order, the Company and ASIC to file and serve written submissions as to whether the pecuniary
penalty ordered to be paid by the Company should be paid in instalments.
Inline with the judgement, the Company have provided a liability of $2 million for the financial year ended 31 December 2023.
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.
The Board has confirmed that as of the date of this report, other than those detailed above, there are no known additional
costs, fees, or penalties associated with the above.
61
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 31. Commitments
The Group has no capital commitments at 31 December 2023 (31 December 2022: $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, with insurance refund
Transactions (BS impact)
Loans to Galen Biomedical Inc., an entity 75% owned by Rajen Manicka
Consolidated
2023
$
2022
$
11,883
11,883
11,790
11,790
47,530
47,158
-
(60,544)
542,339
547,542
Receivable from and payable to related parties
Included in trade receivables is an amount due from iGalen (companies in which director has interest) of $nil (2022: $nil).
Loans to/from related parties
There were no loans to or from related parties at the current and previous reporting date.
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
62
Parent
2023
$
2022
$
(5,662,089)
(1,245,701)
(5,662,089)
(1,245,701)
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 33. Parent entity information (continued)
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
2023
$
2022
$
115,505
910,234
155,314
2,270,094
270,819
3,180,328
2,350,756
264,209
1,073,863
407,830
3,424,619
672,039
20,296,403 20,296,403
-
(17,788,114)
(23,450,203)
-
(3,153,800)
2,508,289
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 2023
(2022: Nil).
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.
63
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
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
2022
2023
%
%
100.00%
100.00%
100.00%
100.00%
100.00%
51.00%
100.00%
53.00%
39.00%
67.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
51.00%
100.00%
53.00%
39.00%
67.00%
100.00%
100.00%
*
**
Incorporated in 2018. The company has been deregistered.
Lite Foods Inc. is 53% owned by the Group with the remaining 47% being held by private shareholders including the
company's previous director, Mr Chan Heng Fai.
*** Incorporated in year 2020. Inactive since incorporation.
64
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
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.)
2023
$
2022
$
HF Pre IPO Fund I LLC
2022
$
2023
$
618,542
-
679,513
-
600,042
-
605,799
-
618,542
679,513
600,042
605,799
3,743,874
3,656,053
25,177
25,419
3,743,874
3,656,053
25,177
25,419
Net assets/(liabilities)
(3,125,332)
(2,976,540)
574,865
580,380
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
80,493
(267,322)
1,025,898
(1,139,311)
(186,370)
(1,942)
(113,413)
(1,126)
(188,771)
(114,539)
-
-
-
-
-
Other comprehensive income
39,979
29,438
(5,515)
Total comprehensive income
(148,792)
(85,101)
(5,515)
Statement of cash flows
Net cash (used in) operating activities
Net cash generated from/(used in) investing activities
Net cash provided by financing activities
Net (decrease) in cash and cash equivalents
`
-
-
-
-
(778)
-
-
(778)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
65
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 36. Reconciliation of loss after income tax to net cash (used in) operating activities
Loss after income tax expense for the year
(4,919,087)
(1,522,130)
Consolidated
2023
$
2022
$
Adjustments for Non-cash items:
Depreciation and amortisation
Interest income
Foreign exchange loss
Non-cash payment in lieu of services (through shares)
Stocks written-off – Finished goods
Net share-based payments (reversed)/expensed
Impairment
Interest on lease liabilities
ASIC Penalty
Other – stock written off
Change in operating assets and liabilities:
Decrease(Increase) in trade and other receivables
(Increase) in inventories
(Increase) in prepayments
Increase/(decrease) in trade and other payables
Increase/(decrease) in other provisions
(Decrease) in tax balances
Net cash (used in) operating activities
Note 37. Changes in liabilities arising from financing activities
239,773
-
-
-
166,854
886,700
-
1,800,000
-
273,952
-
-
80,000
228,976
-
134,252
-
-
273,952
753,794
204,166
177,947
10,616
(1,834)
308,749
(92,225)
(48,442)
(478,964)
6,034
(1,646)
(407,121)
(1,111,444)
Consolidated
Balance at 1 January 2022
Cash flows
Exchange differences
Other changes
Balance at 31 December 2022
Cash flows
Exchange differences
Other Changes
Short-term Long-term
borrowings borrowings
$
$
Leases
$
Total
$
364,882
118,205
-
-
417,774
39,788
-
-
107,667
(37,140)
208,741
890,323
120,853
-
208,741
483,087
486,793
-
(40,091)
457,562
(28,392)
279,268
(41,090)
- -
(21,097) (8,615)
1,219,917
417,310
-
(69,802)
Balance at 31 December 2023
929,789
408,073
229,563
1,567,425
Note 38. Earnings per share
Loss after income tax
Non-controlling interest
Consolidated
2023
$
2022
$
(4,919,087)
113,324
(1,522,130)
69,228
Loss after income tax attributable to the owners of Holista Colltech Limited
(4,805,763)
(1,452,902)
66
Holista Colltech Limited
Notes to the consolidated financial statements
31 December 2023
Note 38. Earnings per share (continued)
Weighted average number of ordinary shares used in calculating basic earnings per share
278,800,067 276,821,233
Weighted average number of ordinary shares used in calculating diluted earnings per share 278,800,067 276,821,233
Number
Number
Basic loss per share
Diluted loss per share
Accounting policy for earnings per share
Cents
Cents
(1.72)
(1.72)
(0.52)
(0.52)
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.
67
Holista Colltech Limited
Directors' declaration
31 December 2023
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 2023 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
___________________________
David Deloub
Non-Executive Chair
28 March 2023
68
PO Box 1908
West Perth WA 6872
Australia
Level 2, 40 Kings Park Road
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 subsidiaries (“the
Group”), which comprises the consolidated statement of financial position as at 31 December 2023, 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
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 2023 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 Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards
Board's APES 110: Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material Uncertainty Relating to Going Concern
As referred to in Note 1 to the financial statements, the financial statements have been prepared on a going
concern basis. On 31 December 2023, the Group had cash and cash equivalents totalling $59,767, net
deficiencies of $3,386,159, incurred a loss after tax for the year of $4,919,087 and incurred net cash outflows
from operating activities of $409,667.
These matters, and other matters disclosed in Note 1, indicate that a material uncertainty exists that may cast
significant doubt on the Group’s ability to continue as going concern.
Liability limited by a scheme approved under Professional Standards Legislation
Stantons Is a member of the Russell
Bedford International network of firms
69
The ability of the Group to continue as a going concern is subject to the future profitability of the Group, and the
ability of management to collect the receivables and sell its inventories. The Group’s ability to generate revenue
from its operations also depends on the proper utilisation of its property, plant and equipment, intangible assets
and right-of-use assets.
In the event that the Group is not successful in commencing profitable operations, collecting receivables, selling
the inventories and properly utilising its non-current assets, the Group may not be able to meet its liabilities as
when they fall due and the realisable value of the Group’s assets, may be significantly less than book values.
Our opinion is not modified in respect of this matter.
Key Audit Matters
In addition to the matter described in the Material Uncertainty Related to Going Concern section, we have
determined the matters described below to be Key Audit Matters to be communicated in our report.
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 were addressed in the audit
Revenue recognition
revenue amounted
For the financial year ended 31 December 2023,
the Group’s sales
to
$5,946,909 (2022: $8,241,225). 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).
financial statements and
On the basis of the significant of the amount to the
the
consolidated
processes used to determine the recognition point,
we have considered revenue recognition as a key
audit matter.
Allowance for credit losses against trade and
other receivables
As at 31 December 2023, the Group’s trade and
other receivables gross balance amounted to
$3,585,683 (2022: $3,887,362).
initially
Trade and other
recognised at
fair value and subsequently
measured at amortised cost using the effective
receivables are
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;
▪
▪
▪
▪
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 in respect of revenue
recognition with the criteria prescribed by the
applicable standard, AASB 15 Revenue from
contract with customers; and
Assessed
related
the adequacy of
disclosures within the consolidated financial
statements.
the
Inter alia, our audit procedures included the
following:
the
Reviewed methodology applied
allowance
loss calculation by
for credit
comparing it to the requirements of AASB 9
Financial
tested key
by
used
underlying
Instruments and
assumptions
in
▪
2
70
Key Audit Matters
interest method, less any allowance for credit
losses (Note 9).
How the matters were addressed in the audit
management to calculate the impairment
provision;
for expected credit
The allowance
losses
represents management’s best estimate of the
impairment losses incurred at the balance 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 the initial
recognition of the receivables. As at 31 December
2023, the Group recognised allowance for credit
losses of $2,537,755 (2022: $2,565,482) for its
trade and other receivables.
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 2023, the Group’s inventories
(excluding stock-in-transit) amounted to $464,348
(2022: $1,411,962).
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 management
across 4 warehouses
the
judgment applied in the valuation of inventory.
in Malaysia and
▪
▪
▪
Held discussion 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 in accordance with
the requirements of ASA 600; and
related
the adequacy of
Assessed
disclosures within the consolidated financial
statements.
the
Inter alia, our audit procedures included the
following:
▪
▪
▪
▪
▪
Performed stock-take procedures and agreed
the samples to the final inventory listing and
obtained explanations
for any variances
noted;
Performed substantive testing to ensure that
the inventories have been recorded on a first-
in-first-out basis;
Reviewed the final stock listing for any slow-
moving and obsolete stock;
Recalculated inventory valuation allowance
as appropriate; and
Assessed
related
the adequacy of
disclosures within the consolidated financial
statements.
the
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 2023 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.
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71
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation 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 in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with Australian Auditing Standards, we exercise professional judgement and
maintain professional scepticism throughout the audit. An audit involves performing procedures to obtain audit
evidence about the amounts and disclosures in the financial report.
The procedures selected depend on the auditor's judgement, including the assessment of the risks of material
misstatement of the financial report, whether due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the entity's preparation of the financial report that gives a true and fair view
in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity's internal control.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of
accounting estimates made by the Directors, as well as evaluating the overall presentation of the financial report.
We conclude on the appropriateness of the Directors' use of the going concern basis of accounting and, based
on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may
cast significant doubt on the 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.
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72
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 pages 13 to 16 of the directors’ report for the year ended
31 December 2023.
In our opinion, the Remuneration Report of Holista Colltech Limited for the year ended 31 December 2023
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
in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on
the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.
STANTONS INTERNATIONAL AUDIT AND CONSULTING PTY LTD
(An Authorised Audit Company)
Samir Tirodkar
Director
West Perth, Western Australia
28 March 2024
5
73
HOLISTA COLLTECH LIMITED
ACN 094 515 992
(Company)
Corporate Governance Statement
This Corporate Governance Statement is current as at 28 March 2024 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)
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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.
The Board Charter sets out the specific responsibilities of the Board,
roles and
requirements as
responsibilities of
the
establishment, operation and management of Board Committees,
Directors’ access to Company records and information, details of the
Board’s
the Board’s
performance review and details of the Board’s disclosure policy.
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.
to
the Chairman and Company Secretary,
relationship with management, details of
the Board’s composition,
the
74
RECOMMENDATIONS (4TH EDITION)
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EXPLANATION
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
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
Recommendation 1.3
A listed entity should have a written agreement with each Director
and senior executive setting out the terms of their appointment.
YES
Recommendation 1.4
The Company Secretary of a listed entity should be accountable
directly to the Board, through the Chair, on all matters to do with
the proper functioning of the Board.
Recommendation 1.5
A listed entity should:
(a)
(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
disclose in relation to each reporting period:
(c)
YES
YES
(a)
(b)
requires
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 (in the
Company’s Corporate Governance Plan)
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.
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.
The Board Charter outlines the roles, responsibilities and 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.
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
the Corporate
is available, as part of
Governance Plan, on the Company’s website.
The Diversity Policy allows the Board to set measurable gender
diversity objectives and
the
to continually monitor both
objectives and the Company’s progress in achieving them.
(a)
(b)
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EXPLANATION
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 currently has 1 woman Director of the
Company. 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;
if it becomes necessary to appoint any new Directors or
senior executives, the Board will consider the application
of the measurable diversity objectives and determined
whether, given the small size of the Company and the
Board, requiring specified objectives 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
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.
(ii)
(iii)
COMPLY
(c)
RECOMMENDATIONS (4TH EDITION)
(i)
(ii)
(iii)
the measurable objectives set for that period to
achieve gender diversity;
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 across the
whole workforce (including how the
entity has defined “senior executive”
for these purposes); or
(B)
if the entity is a “relevant employer”
under
the Workplace Gender
Equality Act, the entity’s most recent
“Gender Equality
Indicators”, as
defined in the Workplace Gender
Equality Act. If the entity was in the
the
S&P / ASX 300
commencement of
reporting
period, the measurable objective for
achieving gender diversity in the
composition of its board should be to
have not
its
directors of each gender within a
specified period.
than 30% of
Index at
less
the
N/A
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RECOMMENDATIONS (4TH EDITION)
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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
reporting period whether a
disclose
performance evaluation has been undertaken
in
accordance with that process during or in respect of that
period.
for each
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
reporting period whether a
disclose
for each
in
performance evaluation has been undertaken
accordance with that process during or in respect of that
period.
(b)
(b)
YES
YES
The Company’s Nomination Committee 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) and individual
Directors for each financial year in accordance with the above
process.
The Company’s Nomination Committee (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, for these purposes, means key
management personnel (as defined in the Corporations Act)
other than a non-executive Director.
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.
(a)
(b)
(a)
(b)
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RECOMMENDATIONS (4TH EDITION)
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EXPLANATION
Principle 2: Structure the Board to be effective and add value
(a)
YES
The Board has a Nomination Committee made up of three
independent directors.
The Nomination Committee members are Loren King, David
Deloub and Mr Lai Kwok Kin.
The Charter of the committee is located in the Company
Corporate Governance Plan. The Committee met 4 times
throughout the year.
Recommendation 2.1
The Board of a listed entity should:
(a)
have a nomination committee which:
(i)
has at least three members, a majority of
whom are independent Directors; and
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
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, experience,
independence and diversity to enable it to discharge its
duties and responsibilities effectively.
(b)
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 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.
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RECOMMENDATIONS (4TH EDITION)
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EXPLANATION
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.
Board Skills Matrix
Executive and Non-Executive
experience
Industry experience and knowledge
Leadership
Corporate governance and risk
management
Strategic thinking
Desired behavioural competencies
Geographic experience
Capital markets experience
Accounting
Capital management
Corporate financing
Industry taxation1
Risk management
Legal2
IT expertise3
Number of
Directors that
meet the skill
3
3
3
3
3
3
3
3
1
3
3
0
2
0
0
1.
2.
3.
Skill gap noticed however an external taxation firm is employed to maintain taxation
requirements.
Skill gap noticed however an external legal firm is employed to maintain legal
requirements.
Skill gap noticed however an external IT firm is employed on an adhoc basic to
maintain IT requirements.
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.
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.
(a)
(b)
(c)
79
Recommendation 2.3
A listed entity should disclose:
(a)
the names of the Directors considered by the Board to
be independent Directors;
YES
RECOMMENDATIONS (4TH EDITION)
(b)
if a Director has an interest, position or relationship of
the type described in Box 2.3 of the ASX Corporate
Governance Principles 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
COMPLY
EXPLANATION
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 3 directors, 3 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.
YES
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 an independent Director and is not the
CEO/Managing Director.
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
In accordance with the Company’s Board Charter, the Nomination
Committee is responsible for the approval and review of induction and
continuing professional development programs and procedures for
their
Directors
responsibilities. The Company Secretary is responsible for facilitating
inductions and professional development including receiving briefings on
material developments in laws, regulations and accounting standards
relevant to the Company.
they can effectively discharge
to ensure
that
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.
(a)
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RECOMMENDATIONS (4TH EDITION)
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EXPLANATION
Recommendation 3.2
A listed entity should:
(a)
have and disclose a code of conduct for its Directors,
senior executives and employees; and
ensure that the Board or a committee of the Board is
informed of any material breaches of that code.
(b)
Recommendation 3.3
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.
Recommendation 3.4
A listed entity should:
(a)
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.
(b)
Principle 4: Safeguard the integrity of corporate reports
Recommendation 4.1
The Board of a listed entity should:
(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
is chaired by an independent Director, who is
not the Chair of the Board,
(ii)
(b)
(a)
(b)
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.
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.
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.
YES
YES
YES
(a)
YES
The Company has 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.
(i)
The audit and risk committee has three members, all of
which are independent non-executive Directors
and disclose:
81
RECOMMENDATIONS (4TH EDITION)
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EXPLANATION
(iii)
(iv)
(v)
the charter of the committee;
the relevant qualifications and experience of
the members of the committee; and
in relation to each reporting period, the number
of times the committee met throughout the
period and the individual attendances of the
members at those meetings; or
(b)
if it does not have an audit committee, disclose that fact
and the processes it employs that independently verify
and safeguard the integrity of its 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
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.
(ii)
(iii)
(iv)
(v)
The audit and risk committee is chaired by Loren King
who is not the Chair of the board.
The charter of the committee is disclosed on the
Company website.
The qualifications of the members of the committee are
disclosed in this Annual Report.
The Committee met 4 times during the past financial
year.
YES
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.
Recommendation 4.3
A listed entity should disclose its process to verify the integrity of
any periodic corporate report it releases to the market that is not
audited or reviewed by an external auditor.
YES
The Company 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;
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
(b)
(c)
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RECOMMENDATIONS (4TH EDITION)
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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.
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.
YES
YES
YES
Principle 6: Respect the rights of security holders
Recommendation 6.1
A listed entity should provide information about itself and its
governance to investors via its website.
Recommendation 6.2
A listed entity should have an investor relations program that
facilitates effective two-way communication with investors.
YES
YES
(d)
(a)
(b)
periodic corporate reports (such as a sustainability or CSR
report), or in its annual report or on its website, a description of
the process it undertakes to verify the integrity of the
information in these reports.
The Company’s Corporate Governance Plan details
Company’s Continuous Disclosure policy.
The Corporate Governance Plan, which incorporates the
Continuous Disclosure policy, is available on the Company’s
website.
the
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.
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RECOMMENDATIONS (4TH EDITION)
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EXPLANATION
Recommendation 6.3
A listed entity should disclose how it facilitates and encourages
participation at meetings of security holders.
YES
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
Principle 7: Recognise and manage risk
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.
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.
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)
the charter of the committee;
the members of the committee; and
(a)
YES
The Company has 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.
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RECOMMENDATIONS (4TH EDITION)
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EXPLANATION
(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 risk committee or committees that
satisfy (a) above, disclose that fact and the process it
employs for overseeing the entity’s risk management
framework.
(b)
Recommendation 7.2
The Board or a committee of the Board should:
(a)
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:
(a)
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, risk
management and internal control processes.
(b)
(b)
YES
YES
(a)
(b)
(a)
The Audit and Risk Committee Charter requires that the Audit
and Risk Committee 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.
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
The Audit and Risk Committee Charter requires the Audit and Risk
Committee 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.
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RECOMMENDATIONS (4TH EDITION)
COMPLY
EXPLANATION
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.
Principle 8: Remunerate fairly and responsibly
YES
(a)
(b)
(c)
(d)
The Company has a remuneration committee which is made up
of three independent directors.
The Charter of the committee is found on the Company website.
The Members of the committee are Loren King, David Deloub
and Lai Kwok Kin
The committee met 4 times during the past financial year.
Recommendation 8.1
The Board of a listed entity should:
(a)
have a remuneration committee which:
(i)
has at least three members, a majority of
whom are independent Directors; and
is chaired by an independent Director,
(ii)
and disclose:
(iii)
(iv)
(v)
the charter of the committee;
the members of the committee; and
as at the end of each reporting period, the
number of times the committee met throughout
the period and the individual attendances of
the members at those meetings; or
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.
(b)
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
Recommendation 8.3
A listed entity which has an equity-based remuneration scheme
should:
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.
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.
(a)
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RECOMMENDATIONS (4TH EDITION)
(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
disclose that policy or a summary of it.
(b)
COMPLY
EXPLANATION
Additional recommendations that apply only in certain cases
Recommendation 9.1
A listed entity with a director who does not speak the language in
which board or security holder meetings are held or key corporate
documents are written should disclose the processes it 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
A listed entity established outside Australia should ensure that
meetings of security holders are held at a reasonable place and
time.
Recommendation 9.3
A listed entity established outside Australia, and an externally
managed listed entity that has an AGM, should ensure that its
external auditor attends its AGM and is available to answer
questions from security holders relevant to the audit.
Not Applicable
Not Applicable
Not Applicable
87
Holista Colltech Limited
Shareholder information
31 December 2023
The shareholder information set out below was applicable as at 28 March 2024.
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
818 CORPORATE PTY LTD <818 A/C>
MS SARINDERJIT KAUR
CITICORP NOMINEES PTY LIMITED
MR ROBERT GEMELLI
MR ANTHONY ROBERT RAMAGE
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
FAIRVIEW HOLDINGS PTY LTD
123 HOME LOANS PTY LTD
BNP PARIBAS NOMS PTY LTD UOBKH A/C R'MIERS
DRISCOLL FUTURE PTY LTD
MR HIMMAT SINGH
CHANDRA SEKARAN P PERUMAL
IDE SUPER PTY LTD
PERPETUAL CAPITAL INVESTMENTS PTY LTD
JAZ FUTURE FUND PTY LTD
MRS JALPABEN NILESHKUMAR SHAH
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
MR PETER KLIMIS
Unquoted equity securities
There are no unquoted equity securities.
88
Ordinary shares
% of total
Number
of holders
shares
issued
4,850
160,887
1,087,873
21,812,383
255,734,074
-
0.06
0.39
7.82
91.73
278,800,067
100.00
623
-
Ordinary shares
% of total
shares
issued
Number held
58,514,245
36,305,083
13,544,100
9,675,785
8,201,949
7,915,016
7,859,500
7,829,702
6,358,570
5,300,000
4,258,201
3,750,000
3,500,000
3,333,333
3,005,221
3,000,000
2,515,500
2,2,309,864
2,131,422
1,876,029
20.99
13.02
4.86
3.47
2.94
2.84
2.82
2.81
2.28
1.90
1.53
1.35
1.26
1.20
1.08
1.08
0.90
0.83
0.76
0.67
191,038,282
68.52
Holista Colltech Limited
Shareholder information
31 December 2023
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
36,159,845
30.75
12.97
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.
89