OSTEOPORE LIMITED
AND ITS CONTROLLED ENTITIES
ACN 630 538 957
CONSOLIDATED ANNUAL REPORT
FOR THE YEAR ENDED 31 DECEMBER 2019
Osteopore Limited and its Controlled Entities
Consolidated Annual Report
For the year ended 31 December 2019
CORPORATE INFORMATION
Directors
Brett Sandercock
Geoff Pocock
Professor Teoh Swee Hin
Stuart Carmichael
Company Secretary
Deborah Ho
Registered and Principal Office
Ground Floor, 16 Ord Street
West Perth WA 6005
Telephone: +61 8 9482 0500
Share Register
Link Market Services
1A Homebush Bay Drive
Rhodes NSW 2138
Auditor
Grant Thornton Audit Pty Ltd
Central Park
Level 43, 152-158 St Georges Terrace
Perth WA 6000
Solicitors
HWL Ebsworth Lawyers
Level 20, 240 St Georges Terrace
Perth WA 6000
Website
https://www.osteopore.com/
Osteopore Limited and its Controlled Entities
Consolidated Annual Report
For the year ended 31 December 2019
CONTENTS
Letter from the Chairman
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
Additional ASX Information
PAGE
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19
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55
56
59
Osteopore Limited and its Controlled Entities
Letter from the Chairman
On behalf of the Board, I am pleased to present the 2019 Annual Report to shareholders.
Osteopore Limited (“Osteopore” or the “Company”) is an Australian / Singaporean medical device company,
developing a range of 3D printed biomimetic, bioresorbable scaffolds for regenerative bone healing. During
the year the Company successfully completed an initial public offering (IPO) raising $5.25 million (before costs)
and listed on the Australia Stock Exchange in September 2019. As part of the IPO transaction, the Company
also successfully acquired Osteopore International Pte Ltd, a Singaporean company that has over the past 15
years been developing and commercialising the Osteopore technology.
Regenerative medicine facilitates and supports the body's natural healing process. Osteopore’s regenerative
scaffolds biomimic the cancellous bone microarchitecture that facilitates the natural stages of bone healing.
The scaffolds are made of a US FDA approved polymer called polycaprolactone (PCL). PCL is bioresorbable,
malleable, slow-degrading and possesses mechanical strength similar to trabecular bone. While the body is
naturally regenerating bone, the PCL scaffold is also being resorbed by the body, so that once the healing is
complete, the Osteopore scaffold is fully resorbed, resulting in no foreign materials remaining in the body. This
minimises late complications such as infection, extrusion, dehiscence or fracture; issues that can be common,
and in some cases result in serious complications when permanent implants are used in treatment of bone
defects.
Osteopore's products are fabricated in-house using proprietary 3D printing technology that is precise and
allows for customisation of shape and the geometry necessary for superior therapeutic effect. The use of 3D
printers also enables the easy scalability of Osteopore’s business model, aiding the Company’s commercial
objectives of increasing market penetration.
The Company’s products are the product of over 10 years development in leading Singaporean universities,
and have secured key international regulatory clearances including FDA and CE Mark clearances. Osteopore’s
products have now been successfully used over 30,000 times, and the Company has been distributing these
products commercially for several years and continues to build its revenue base.
Funds raised in the IPO have been, and continue to be used to accelerate the Company’s business
development activities, as the Company seeks to increase revenues in existing markets and seeks to enter
into larger markets including the USA, China, Australia and the EU. Since IPO, the Company has reached key
milestones including reaching record revenue totals for the 2019 financial year, and securing an initial
Memorandum of Understanding to enable the Company to provide products to a specific Hainan hospital to
treat Chinese patients in Hainan. In addition, the Company has been investing in its manufacturing capability
and recruiting key additional staff to drive sales and ensure the Company has the capacity to deliver as product
demand increases.
Despite the Company now facing the most challenging capital markets environment in at least a decade, the
Company is pleased to have received strong support from Australian investors, who see the significant
potential that the ongoing commercialization of the Osteopore technology offers. On behalf of the Board and
the rest of the Osteopore management team, I look forward to the continued support of shareholders and
investors as we continue to commercialise the Osteopore technology.
Yours faithfully
Brett Sandercock
Non-Executive Chairman
Osteopore Limited
3
Osteopore Limited and its Controlled Entities
Directors’ Report
For the year ended 31 December 2019
The Directors present their report, together with the consolidated financial report for Osteopore Limited
(“Osteopore” or the “Company”) and its controlled entities (“Group”), for the year ended 31 December 2019.
Directors
The names and particulars of the Director of the Company during or since the end of the financial year are:
Name
Position
Date Appointed
Date Resigned
Brett Sandercock
Geoff Pocock
Professor Teoh Swee Hin
Stuart Carmichael
Goh Khoon Seng
Brett Tucker
Non-Executive Chairman
Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
24 June 2019
24 June 2019
24 June 2019
11 December 2018
11 December 2018
11 December 2018
-
-
-
-
24 June 2019
24 June 2019
Principal Activities
Osteopore Limited is an Australian and Singapore based medical technology company commercialising a
range of bespoke products specifically engineered to facilitate bone healing across multiple therapeutic areas.
Osteopore's patented technology fabricates specific micro-structured scaffolds for bone regeneration through
3D printing and bioresorbable material.
Osteopore's patent protected scaffolds are made from proprietary polymer formulations, that naturally dissolve
overtime to leave only natural healthy bone tissue, significantly reducing post-surgery complications that are
commonly associated with permanent bone implants.
Significant Changes in State of Affairs
In September 2019, the Company listed on the Australian Securities Exchange (“ASX”) with the issue of
26,250,000 fully paid ordinary shares at $0.20 per share as part of its IPO for a total consideration of $5.25
million.
Acquisition of Osteopore International Pte Ltd
On 17 May 2019, the Company and Osteopore International Pte Ltd entered into an implementation agreement
to complete the purchase of 100% of the issued capital of Osteopore International Pte Ltd in consideration for
an aggregate of 71,027,008 Shares, which was amended on 12 June 2019 (Acquisition). The Acquisition
was completed on the 17 September 2019.
Initial Public Offer
On 18 July 2019, the Company issued a Prospectus for an initial public offer of 26,250,000 share at an issue
price of A$0.20 to raise $5,250,000 (before costs) (“Public Offer” or ”IPO”). The Prospectus also incorporated
an offer of:
(a) 71,027,008 Shares issued to the Vendors (or nominees) pursuant to the Acquisition (“Consideration
Offer”); and
(b) 2,500,000 Options issued to the Lead Manager (or its nominees) in part consideration for advisory
services provided to the Company (“Lead Manager Offer”).
A Replacement Prospectus was subsequently lodged on 25 July 2019.
4
Osteopore Limited and its Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Significant Changes in State of Affairs (Continued)
Following the completion of the IPO on the 23 September 2019, the Company issued the following securities
and was admitted to the official list of the Australian Securities Exchange (ASX):
-
-
-
26,250,000 fully paid ordinary shares at a price of $0.20 per share pursuant to the Public Offer;
71,027,008 fully paid ordinary shares at a deemed price of $0.20 to the Vendors (or nominees)
pursuant to the Consideration Offer; and
2,500,000 unlisted options exercisable at $0.25 each on or before 30 June 2022, at $0.0001 per option
to the Lead Manager, Alto Capital (or its nominees), pursuant to the Lead Manager Offer.
Review of Operations
In September 2019, the Company listed on the ASX with the issue of 26,250,000 fully paid ordinary shares at
$0.20 per share as part of its IPO for a total consideration of $5.25 million.
During the year ended 31 December 2019 and following the acquisition of Osteopore International Pte Ltd, the
Group has increased investment in a number of initiatives that are expected to drive revenue growth and
business development. These include increasing business development activities as well as increases in the
Company’s production capability to address increased product demand.
In November, Osteopore signed a Memorandum of Co-Operation (MoC) with Boao Yiling Life Care Centre in
the Boao Lecheng International Medical Tourism Pilot Zone, Hainan province, China. The agreement will see
both companies co-operate on developing rhinoplasty procedures and securing National Medical Products
Administration (NMPA) registration for Osteopore’s products in China.
In December, the Company appointed former President & CEO of Cochlear (ASX: COH) Jack O’Mahony as
Board Advisor to assist the Company on strategic business development.
During the year the Company continued to investigate additional therapeutic applications for the Company’s
technology platform. The Company is currently undertaking clinical trials for use of the Osteopore’s technology
in the growing field of dental implants, where regeneration of the alveolar ridge height represents a significant
unmet therapeutic need. Results of the clinical trials are expected during 2020, which are a necessary
requirement for gaining further regulatory clearance and reimbursement of the Osteopore’s products in this
therapeutic application.
Review of Results
The net loss for the year ended 31 December 2019 was $2,382,341 (2018: $nil). The Group had a net asset
position as at 31 December 2019 of $2,967,280 (2018: $3).
For the period 17 September 2019 (acquisition date) to 31 December 2019, the Group recorded $0.41 million
in revenues and gross profit of $0.29 million. This was mainly from the Group’s wholly owned subsidiary,
Osteopore International Pte Ltd. Growth is expected after the successful listing onto ASX in September 2019.
Administrative expenses of $2.45 million mainly comprises of the listing and common control transaction of
Osteopore International Pte Ltd, that contributed approximately $0.63 million, and share-based payment
expenses of $0.83 million.
Net operating cash outflows reflect the above developments and were approximately $1.75 million during the
year. Osteopore ends the financial year with a cash balance of approximately $3.29 million.
The Company confirms that during the financial year ended 31 December 2019, it used its cash and assets in
a form readily convertible to cash, in a manner consistent with its business objectives.
5
Osteopore Limited and its Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Directors’ Details
Brett Sandercock
Experience
B Econ, C.A. (Aust)
Non-Executive Chairman (Appointed 24 June 2019)
Mr Sandercock was appointed Chief Financial Officer of Resmed Limited
(NYSE: RMD, ASX: RMD) in January 2006. Previously he served as
Resmed’s Vice President of Treasury and Finance from November 2004
until December 2005, and group accountant and controller from 1998 to
2004.
Before joining ResMed, Mr Sandercock was Manager of Financial
Accounting and Group Reporting at Norton Abrasives from 1996 to 1998.
He also held finance and accounting roles from 1994 to 1996 at Health
Care of Australia. From 1989 to 1994, he worked at PriceWaterhouse
Coopers in Sydney, specialising in audits of clients across distribution and
manufacturing financial services, technology, and other industries.
Mr Sandercock holds a bachelor's in economics from Macquarie University
in Sydney and is a Chartered Accountant.
Interest in Shares & Options
155,039 fully paid ordinary shares
500,000 unlisted options exercisable at $0.25 per option, expiring 30 June
2022
Other Listed Entity
Directorships
Mr Sandercock has no current and has had no previous listed entity
directorships in the last three years.
Geoff Pocock
Executive Director (Appointed 24 June 2019)
Experience
B Sc (1st Hons), B. LLB
Postgraduate Diploma in
Applied Finance and
Investment from the
Securities Institute of
Australia
Mr Pocock has significant experience as a corporate advisor and strategy
consultant advising companies on commercialisation and IP management,
business development, mergers and acquisitions strategy and raising
equity capital from private and public equity markets.
Mr Pocock is currently the Principal of Polaris Consulting (WA) Pty Ltd, and
was formerly the Managing Director of Hazer Group Ltd, an ASX-listed
cleantech chemical engineering company, commercialising a novel low
cost and low emission graphite and hydrogen production process initially
developed by the University of Western Australia.
Mr Pocock previously spent several years as a research scientist in the
biopharmaceutical industry in Australia and the United Kingdom.
Interest in Shares & Options
168,539 fully paid ordinary shares
1,200,000 unlisted options exercisable at $0.25 per option, expiring 30
June 2022
Other Listed Entity
Directorships
Current
Non-Executive Director of Emvision Medical Devices Limited (ASX:EMV)
Previous
Managing Director of Hazer Group Ltd (ASX: HZR) (Resigned April 2018)
6
Osteopore Limited and its Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Directors’ Details (Continued)
Professor Teoh Swee Hin
Experience
B Eng (1st Hons), PhD
Materials Engineering
(Singapore)
Non-Executive Director (Appointed 24 June 2019)
is
in
Prof Teoh is the President's Chair, School of Chemical and Biomedical
Engineering (SCBE). He holds a joint appointment with the Lee Kong Chian
School of Medicine (LKC Med) at Nanyang Technological University. His
contribution
translation of 3D
the development and clinical
bioresorbable scaffolds. Majoring in Materials Engineering (B. Eng - 1st
Class Hon and PhD, Monash University), his research journey focused on
translating the materials research to biomedical benefits. He is a Fellow of
the Academy of Engineers Singapore and Chief Engineer at Skin Research
Institute of Singapore. His research focused on the study of mechanisms
that promote cells proliferation and differentiation as a result of mechno
induction through load bearing scaffolds for tissue regeneration and
remodelling.
Prof Teoh's pioneering work on 3D printed scaffold led to him receiving the
prestigious "Golden Innovation Award" at the Far East Economic Review,
and the Institute of Engineers "Prestigious Engineering Achievement
Award" in 2004. His group was ranked 1st in bone tissue engineering
scaffolds in World Web of Science 2010. He was honoured with the Special
Award for "Scientific Life-Time Achievement in Bone Tissue Engineering"
at Bone-Tec 2015, Stuttgart. As a part of SG50 celebrations, he was
featured as one of Singapore's profiled scientists in the book titled
"Singapore's Scientific Pioneers".
Professor Teoh is presently the Chairman, Singapore Academy, Asia
Regulatory Professional Association (ARPA). He sits in as board of editors
Tissue Engineering, Journal of Tissue Engineering and Regenerative
Medicine, Journal of Mechanical Behaviour of Biomedical Materials,
Journal of Oral & Maxillofacial Research and Proceedings of the Institution
of Mechanical Engineers Part H: Journal of Engineering in Medicine.
Interest in Shares & Options
7,030,309 fully paid ordinary shares
1,500,000 unlisted options exercisable at $0.25 per option, expiring 30
June 2022
Other Listed Entity
Directorships
Prof Teoh has no current and has had no previous listed entity directorships
in the last three years.
7
Osteopore Limited and its Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Directors’ Details (Continued)
Stuart Carmichael
Experience
B Com, C.A (Aust)
Non-Executive Director (Appointed 11 December 2018)
Mr Carmichael is a Chartered Accountant with over 20 years of experience
in the provision of corporate advisory services both within Australia and
internationally. Mr Carmichael is a partner and director of Ventnor Capital
Pty Ltd and Ventnor Securities Pty Ltd which specialises in the provision of
corporate and financial advice to small cap ASX listed companies including
capital raisings, initial public offerings, corporate restructures and mergers
and acquisitions.
Interest in Shares & Options
1,000,001 fully paid ordinary shares
500,000 unlisted options exercisable at $0.25 per option, expiring 30 June
2022
Other Listed Entity
Directorships
Current
Non-Executive Chairman of Schrole Limited (ASX:SCL)
Non-Executive Chairman of K-TIG Limited (ASX:KTG)
Non-Executive Director of De.mem Limited (ASX:DEM)
Non-Executive Director of ClearVue Technologies Limited (ASX:CPV)
Non-Executive Director of Swick Mining Services Limited (ASX:SWK)
Previous
-
Goh Khoon Seng
Experience
M.Eng (Mech) (Singapore),
Non-Executive Director (Appointed 11 December 2018)
(Resigned 24 June 2019)
Chief Executive Officer (Appointed 23 September 2019)
Mr Goh's 30-year career spans both start-ups and global multinational
corporations, with
research and development,
manufacturing, regional sales and marketing, and country management.
Prior to joining Osteopore Mr Goh spent over 20 years with Medtronic plc
(Medtronic plc is the world's largest medical device company) and Edwards
Lifesciences Asia in various senior management roles.
responsibilities
in
Mr Goh has been a Director of Osteopore International Pte Ltd, since 2015
and has been involved in all aspects of the Company.
Mr Goh holds a Masters in Engineering (National University of Singapore)
and post graduate diploma with Chartered Institute of Marketing (UK).
Interest in Shares & Options
6,835,316 fully paid ordinary shares
3,500,000 unlisted options exercisable at $0.25 per option, expiring 30
June 2022
Other Listed Entity
Directorships
Mr Goh has no current and has had no previous listed entity directorships
in the last three years.
8
Osteopore Limited and its Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Directors’ Details (Continued)
Brett Tucker
Experience
Non-Executive Director (Appointed 11 December 2018)
(Resigned 24 June 2019)
Mr Tucker is a Chartered Accountant and has acted as Company Secretary
to a number of ASX listed and private companies across a range of
industries.
Interest in Shares & Options
15,505 fully paid ordinary shares
Other Listed Entity
Directorships
Mr Tucker has no current and has had no previous listed entity
directorships in the last three years.
Company Secretary
Ms Deborah Ho is an Associate Member of the Governance Institute of Australia. Ms Ho has over six years of
experience in company secretarial, corporate compliance and financial accounting matters. She has acted as
Company Secretary to a number of ASX listed and private companies.
Meetings of Directors
The number of meetings of the company's Board of Directors ('the Board') and of each Board committee held
during the financial year ended 31 December 2019 and the number of meetings attended by each director
were:
Board Meeting
Audit & Compliance Committee
Meetings*
Eligible to
Attend
8
8
8
9
9
1
Attended
8
8
7
9
8
1
Eligible to
Attend
-
-
-
-
-
-
Attended
-
-
-
-
-
-
Brett Sandercock
Geoff Pocock
Prof Teoh Swee Hin
Stuart Carmichael
Goh Khoon Seng
Brett Tucker
*
these are conducted by the Board as a whole, as part of board meetings.
The Board also approved eighteen (18) circular resolutions during the year ended 31 December 2019 which
were signed by all Directors of the Company.
Matters Subsequent to The End of The Financial Year
In March 2020, the World Health Organisation declared the outbreak of a novel coronavirus (COVID-19) as a
pandemic, which continues to spread throughout Australia. The spread of COVID-19 has caused significant
volatility in Australian and international markets. There is significant uncertainty around the breadth and
duration of business disruptions related to COVID-19, as well as its impact on the Australian and international
economies and, as such, the Company is unable to determine if it will have a material impact to its operations.
The Directors are not aware of any other matter or circumstance that has arisen since the end of the financial
year that, in their opinion, has significantly affected or may significantly affect in future financial years, the
operations of the Group, the results of those operations or the Group’s state of affairs.
Likely Developments and Expected Results of Operations
The Group will continue to implement its global growth strategy to increase revenue and penetrate new
markets. Continued investigation to additional therapeutic applications for the technology platform.
9
Osteopore Limited and its Controlled Entities
Directors’ Report
For the year ended 31 December 2019
REMUNERATION REPORT (AUDITED)
The remuneration report details the key management personnel remuneration arrangements for the Company,
in accordance with the requirements of the Corporations Act 2001 and the Corporation Regulations 2001. Key
management personnel are those persons having authority and responsibility for planning, directing and
controlling the activities of the Group, directly or indirectly, including all directors.
The key management personnel of Osteopore Limited for the financial year consists of:
• Brett Sandercock (Non-Executive Chairman (Appointed 24 June 2019))
• Geoff Pocock (Executive Director (Appointed 24 June 2019))
• Professor Teoh Swee Hin (Non-Executive Director (Appointed 24 June 2019))
• Stuart Carmichael (Non-Executive Director (Appointed 11 December 2018))
• Goh Khoon Seng (Non-Executive Director (Resigned 24 June 2019))
(Chief Executive Officer (Appointed 23 September 2019))
• Brett Tucker (Non-Executive Director (Resigned 24 June 2019))
• Lim Jing (Chief Technology Officer (Appointed 17 September 2019))
Principles used to Determine the Nature and Amount of Remuneration
Remuneration levels for Directors and senior executives of the Company will be competitively set to attract
and retain appropriately qualified and experienced Directors and senior executives. The Board may obtain
independent advice on the appropriateness of remuneration packages given trends in comparative companies
both locally and internationally and the objectives of the Group’s remuneration strategy. No such advice was
obtained during the current year.
The remuneration structures explained below are designed to attract suitably qualified candidates, reward the
achievement of strategic objectives, and achieve the broader outcome of creation of value for shareholders.
The remuneration structures take into account:
•
•
•
•
the capability and experience of the Directors and senior executives;
the Directors and senior executives’ ability to control the relevant performance;
the Group’s performance; and
the amount of incentives within each Directors and senior executive’s remuneration.
Remuneration packages include a mix of fixed remuneration and variable remuneration and short and long-
term performance-based incentives. Short-term incentives include Osteopore’s Employee Securities Incentive
Plan. The Company’s Employee Securities Incentive Plan allows the Board from time to time, in its absolute
discretion, make a written offer to any Eligible Participant (as defined in the Plan) to apply for Securities, upon
the terms set out in the Plan and upon such additional terms and conditions as the Board determines. In
exercising that discretion, the Board may have regard to the following (without limitation):
I.
II.
III.
IV.
The Eligible Participant’s length of service with the Group;
The contribution made by the Eligible Participant to the Group;
The potential contribution of the Eligible Participant to the Group; or
Any other matter the Board considers relevant.
Fixed remuneration consists of base remuneration, as well as employer contributions to superannuation funds
where applicable. Remuneration levels will be, if necessary reviewed annually by the Board through a process
that considers the overall performance of the Group. If required, external consultants provide analysis and
advice to ensure the Directors’ and senior executives’ remuneration is competitive in the market place.
Before a determination is made by the Company in a general meeting, the aggregate sum of the fees
payable by the Company to the Non-Executive Directors is a maximum of AU$500,000 per annum.
10
Osteopore Limited and its Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Service Agreements
Remuneration and other terms of employment for key management personnel are formalised in service
agreements. Details of these agreements are as follows:
Geoff Pocock
Executive Director
Goh Khoon Seng
Chief Executive Officer
Commenced: 1 June 2019
Term: 12 months or until terminated
Remuneration: Base salary of AU$96,000 (exclusive of superannuation)
and a day rate of $1,250 for any international or interstate business travel
requirements
Commenced: 23 September 2019
Term: Indefinite term until terminated
Remuneration: Base salary of SG$244,000 per annum (inclusive of CPF),
and 11,184,433 Consideration Shares upon successful admission onto
ASX
Lim Jing
Chief Technology Officer
Commenced: 17 November 2014
Term: Indefinite term until terminated
Remuneration: Base salary of SG$6,500 per month (exclusive of CPF)
Details of Remuneration
Fixed Remuneration
At Risk – STI
At Risk – LTI
2019
2018
2019
2018
2019
2018
Directors
Brett Sandercock
Geoff Pocock
Prof Teoh Swee Hin
Stuart Carmichael
Goh Khoon Seng
Brett Tucker
100%
100%
100%
100%
100%
100%
Key Management Personnel
Lim Jing
100%
-
-
-
100%
100%
100%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11
Salary
and fees
$
Short-term benefits
Cash
bonus
$
Non-
monetary
$
Post-employment
benefits
Super-
annuation
$
Share-based payments
Equity-settled Equity-settled
shares
$
options
$
Total
$
Osteopore Limited and its Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Details of Remuneration (Continued)
Details of the remuneration of key management personnel of the Company are set out in the following tables.
2019
Directors
Brett Sandercock 1
Geoff Pocock 1
Prof Teoh Swee Hin 1
Stuart Carmichael
Goh Khoon Seng 3
Brett Tucker 2
Key Management Personnel
Lim Jing
2018
Directors
Stuart Carmichael
Goh Khoon Seng
Brett Tucker
20,000
106,000
15,000
15,000
205,634
-
34,337
395,971
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,900
-
1,425
1,425
11,927
-
5,109
21,786
-
-
-
-
1 Appointed on 24 June 2019
2 Resigned on 24 June 2019
3 Resigned as Director on 24 June 2019, and was appointed as CEO on the 23 September 2019
-
-
-
-
-
-
-
-
-
-
57,688
138,452
173,064
57,688
403,817
-
79,588
244,452
189,489
74,113
621,378
-
-
830,709
39,446
1,248,446
-
-
-
-
-
-
-
-
12
Osteopore Limited and its Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Share-based Compensation
Options Issued as Remuneration
The terms and conditions of each grant of options over ordinary shares affecting remuneration of directors and
other key management personnel in this financial year or past reporting years are as follows:
2019
Directors
Brett Sandercock
Geoff Pocock
Prof Teoh Swee Hin
Stuart Carmichael
Goh Khoon Seng
Brett Tucker
Number of
Options
Granted Grant Date
Vesting
Date
Expiry
Date
Exercise
Price ($)
Fair Value
per Option
($)
500,000 23/06/2019 23/06/2019 30/06/2022
1,200,000 23/06/2019 23/06/2019 30/06/2022
1,500,000 23/06/2019 23/06/2019 30/06/2022
500,000 23/06/2019 23/06/2019 30/06/2022
3,500,000 23/06/2019 23/06/2019 30/06/2022
-
-
-
-
$0.25
$0.25
$0.25
$0.25
$0.25
-
$0.1154
$0.1154
$0.1154
$0.1154
$0.1154
-
Key Management Personnel
Lim Jing
-
-
-
-
-
-
There were no options issued in the year ended 31 December 2018.
Options granted carry no dividend or voting rights. All options were granted over unissued fully paid ordinary
shares in the company. Options vest based on the provision of service over the vesting period whereby the
executive becomes beneficially entitled to the option on vesting date. Options are exercisable by the holder as
from the vesting date. There has not been any alteration to the terms or conditions of the grant since the grant
date. There are no amounts paid or payable by the recipient in relation to the granting of such options other
than on their potential exercise.
Values of options over ordinary shares granted, exercised and lapsed for directors and other key management
personnel as part of compensation are set out below:
Value of
options
Granted/vested
during the
period
$
57,688
138,452
173,064
57,688
403,817
-
Directors
Brett Sandercock
Geoff Pocock
Prof Teoh Swee Hin
Stuart Carmichael
Goh Khoon Seng
Brett Tucker
Key Management Personnel
Lim Jing
-
Value of options
exercised during
the period
$
Value of options
lapsed during the
period
$
Remuneration
consisting of
options for the
period
%
-
-
-
-
-
-
-
-
-
-
-
-
-
-
72
57
91
78
65
-
-
13
Osteopore Limited and its Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Additional Disclosures Relating to Key Management Personnel
Shareholding
The number of shares in the Company held during the financial years ended 31 December 2019 and 31
December 2018 by each director and other members of key management personnel of the Company, including
their personally related parties, is set out below:
Balance at
the start of
the year
Received as
part of
remuneration
Additions
Disposals /
Other
-
-
-
1
1
1
-
3
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
155,039
168,539
7,030,309
1,000,000
6,835,315
15,504
2,360,000
17,564,706
1
1
1
3
-
-
-
-
-
-
-
-
-
-
-
-
Balance at
the end of
the year / at
resignation
155,039
168,539
7,030,309
1,000,001
6,835,316
15,505
2,360,000
17,564,709
1
1
1
3
Option holding
The number of options over ordinary shares in the company held during the financial years ended 31 December
2019 and 31 December 2018 by each director and other members of key management personnel of the
Company, including their personally related parties, is set out below:
Balance at
the start of
the year
Granted
Exercised
Expired /
Forfeited /
Other
Balance at
the end of
the year
2019
Directors
Brett Sandercock
Geoff Pocock
Prof Teoh Swee Hin
Stuart Carmichael
Goh Khoon Seng
Brett Tucker
Key Management Personnel
Lim Jing
2018
Directors
Stuart Carmichael
Goh Khoon Seng
Brett Tucker
2019
Directors
Brett Sandercock
Geoff Pocock
Prof Teoh Swee Hin
Stuart Carmichael
Goh Khoon Seng
Brett Tucker
Key Management Personnel
Lim Jing
-
-
-
-
-
-
-
-
500,000
1,200,000
1,500,000
500,000
3,500,000
-
-
7,200,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
500,000
1,200,000
1,500,000
500,000
3,500,000
-
-
7,200,000
14
Osteopore Limited and its Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Additional Disclosures Relating to Key Management Personnel (Continued)
2018
Directors
Stuart Carmichael
Goh Khoon Seng
Brett Tucker
Balance at
the start of
the year
Granted
Exercised
Expired /
Forfeited /
Other
Balance at
the end of
the year
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Other Equity-related Key Management Personnel Transactions
There have been no other transactions involving equity instruments apart from those described in the tables
above relating to shareholdings and options.
Other Transactions with Key Management Personnel and/or their Related Parties
There were no other transactions conducted between the Group and Key Management Personnel or their
related parties, apart from those disclosed above and below, that were conducted other than in accordance
with normal employee, customer or supplier relationships on terms no more favourable than those reasonably
expected under arm’s length dealings with unrelated persons.
Brett Sandercock – Travel reimbursements
Polaris Consulting (WA) Pty Ltd (director related entity of Mr Pocock)
– Travel reimbursements
Prof Teoh – Travel reimbursements
Ventnor Capital Pty Ltd (director related entity of Mr Carmichael)
– Corporate advisory (IPO and acquisition), company secretarial and
registered office services
Ventnor Securities Pty Ltd (director related entity of Mr Carmichael)
– Capital raising fees
Loans to/from related parties
Amount due to director – Mr Goh Khoon Seng 1
Amount due to director – Prof Teoh 1
Amount due to related party – Irenne Pte Ltd (director related entity of Prof
Teoh) 1
Consolidated
31 Dec 2019 31 Dec 2018
$
$
74
23,132
1,666
202,923
158,088
385,883
-
-
-
-
-
-
Consolidated
31 Dec 2019 31 Dec 2018
$
$
60,469
5,298
311,507
377,274
-
-
-
-
1 Amounts due to directors and related party are non-trade, unsecured, interest-free and repayable on demand.
End of Remuneration Report (Audited)
15
Osteopore Limited and its Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Share Options
At the date of this report, the unissued ordinary shares of the Company under option are as follows.
Number of
Options Granted
7,200,000
2,500,000
Grant Date
23/06/2019
17/09/2019
Expiry Date
30/06/2022
30/06/2022
Exercise Price ($)
$0.25
$0.25
Fair Value per
Option ($)
$0.115
$0.111
Non-Audit Services
During the year, Grant Thornton Audit Pty Ltd, the Company’s auditors, performed services in relation to the
investigating account’s report for the prospectus in addition to their statutory audit duties. Details of the
amounts paid to the auditor for non-audit services provided during the financial year by the auditor are outlined
in Note 20.
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 20 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.
Indemnification of Officers and Auditors
The Group has not otherwise, during or since the financial year, except to the extent permitted by law,
indemnified or agreed to indemnify an officer or auditor of the Company or of any related body corporate
against a liability incurred as such an officer or auditor.
Proceedings of 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
The auditor’s independence declaration as required under Section 307C of the Corporations Act 2001 has
been received and immediately follows the Directors’ Report.
Dividends Paid or Recommended
No dividends were paid or recommended during the year ended 31 December 2019.
16
Osteopore Limited and its Controlled Entities
Directors’ Report
For the year ended 31 December 2019
Corporate Governance
In recognising the need for the highest standards of corporate behaviour and accountability, the Directors
support and have adhered to principles of sound corporate governance. The Company continued to follow
best practice recommendations as set out by 3rd edition of the ASX Corporate Governance Council’s
Corporate Governance Principles and Recommendations. Where the Company has not followed best practice
for any recommendation, explanation is given in the Corporate Governance Statement which is available on
the Company’s website.
Signed in accordance with a resolution of the Directors.
Brett Sandercock
Non-Executive Chairman
31 March 2020
17
Central Park, Level 43
152-158 St Georges Terrace
Perth WA 6000
Correspondence to:
PO Box 7757
Cloisters Square
Perth WA 6000
T +61 8 9480 2000
F +61 8 9480 2050
E info.wa@au.gt.com
W www.grantthornton.com.au
Auditor’s Independence Declaration
To the Directors of Osteopore Limited
In accordance with the requirements of section 307C of the Corporations Act 2001, as lead auditor for the audit of Osteopore
Limited for the year ended 31 December 2019, I declare that, to the best of my knowledge and belief, there have been:
a
b
no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
L A Stella
Partner – Audit & Assurance
Perth, 31 March 2020
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
Osteopore Limited and its Controlled Entities
Consolidated Statement of Profit or Loss and Other Comprehensive Income
For the year ended 31 December 2019
Consolidated
Note
31 Dec 2019
$
From Date of
Incorporation
to 31 Dec 2018
$
Revenue
Cost of sales
Gross profit
Other income
Selling and distribution expenses
Administrative expenses
Operating profit
Finance costs
Loss before income tax
Income tax benefit
Loss for the year
Other comprehensive income
Items that may be reclassified subsequently to profit or loss
Foreign currency translation
Total comprehensive loss attributable to the owners
4
6
411,600
(123,472)
288,128
2,458
(209,065)
(2,448,230)
(2,366,709)
(15,632)
(2,382,341)
-
(2,382,341)
(33,293)
(2,415,634)
Basic and diluted loss per share (cents)
19
(8.26)
The above consolidated statement of profit or loss and other comprehensive income should be read in
conjunction with the accompanying notes
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19
Osteopore Limited and its Controlled Entities
Consolidated Statement of Financial Position
As at 31 December 2019
Note
Consolidated
31 Dec 2019 31 Dec 2018
$
$
ASSETS
Current Assets
Cash and cash equivalents
Trade receivables
Other assets
Inventories
Total Current Assets
Non-Current Assets
Property, plant and equipment
Right-of-use asset
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Borrowings
Lease liabilities
Total Current Liabilities
Non-Current Liabilities
Lease liabilities
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSET
EQUITY
Issued capital
Reserves
Accumulated losses
TOTAL EQUITY
7
8
9
10
11
12
13
14
15
15
16
17
3,294,809
542,233
114,416
23,527
3,974,985
241,040
68,858
309,898
4,284,883
721,039
521,909
45,901
1,288,849
28,754
28,754
1,317,603
2,967,280
19,190,063
(13,840,442)
(2,382,341)
2,967,280
3
-
-
-
3
-
-
-
3
-
-
-
-
-
-
-
3
3
-
-
3
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes
20
Osteopore Limited and its Controlled Entities
Consolidated Statement of Changes in Equity
For the year ended 31 December 2019
Issued Capital
$
Share Based
Payment
Reserve
$
Common
Control
Reserve
$
Foreign
Currency
Translation
Reserve
$
Incorporated at 11 December 2018
Balance at 31 December 2018
Loss after income tax
Other comprehensive loss
Total comprehensive loss for the year
Seed capital raise (Note 16)
Pre-IPO raise (Note 16)
Initial public offer (Note 16)
Share issue costs (Note 16, 17)
Acquisition of Osteopore International Pte Ltd
(Note 3)
Options issued (Note 17)
3
3
-
-
-
-
-
-
-
-
2,000
252,000
5,250,000
(519,342)
-
-
-
277,593
-
-
-
-
-
-
-
-
-
14,205,402
-
(14,915,451)
-
830,709
-
Accumulated
Losses
$
Total Equity
$
-
-
-
-
3
3
-
(33,293)
(33,293)
(2,382,341)
-
(2,382,341)
(2,382,341)
(33,293)
(2,415,634)
-
-
-
-
-
-
-
-
-
-
-
-
2,000
252,000
5,250,000
(241,749)
(710,049)
830,709
Balance at 31 December 2019
19,190,063
1,108,302
(14,915,451)
(33,293)
(2,382,341)
2,967,280
The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes
21
Osteopore Limited and its Controlled Entities
Consolidated Statement of Cash Flows
For the year ended 31 December 2019
Consolidated
31 Dec 2019
Note
Cash flows from operating activities
Loss before income tax
Adjustments for
Depreciation expense
Share based payment expense
Gain on asset disposed
Operating cash flows before changes in working capital
Changes in trade receivables
Changes in other assets
Changes in inventory
Changes in trade and other payables
Net cash (used in) operating activities
Cash flows from investing activities
Cash acquired through acquisition of Osteopore International
Pte Ltd
Acquisition of plant and equipment
Net cash provided by investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payment of share issue costs
Repayment of borrowings
Repayment of lease principal
Net cash provided by financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
17
11
3
16
$
(2,382,341)
72,564
830,709
(236)
(1,479,304)
(147,192)
(80,977)
23,618
(64,908)
(1,748,763)
485,607
(79,573)
406,034
5,504,000
(241,749)
(595,450)
(29,266)
4,637,535
3,294,806
3
3,294,809
From Date of
Incorporation
to 31 Dec 2018
$
-
-
-
-
-
-
-
-
-
-
-
-
-
3
-
-
-
3
3
-
3
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes
22
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 1. Significant Accounting Policies
General
These consolidated financial statements and notes represent those of Osteopore Limited (the “Company”) and
its controlled entities (“Group”). In accordance with the Corporations Act 2001, these financial statements
present the results of the Group only. Supplementary information about the Company is disclosed in Note 27:
Parent Entity Disclosures. The financial report was authorised for issue by the Board on 31 March 2020.
Basis of Preparation
The financial report is a general purpose financial report which has been prepared in accordance with
Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements
of the Australian Accounting Standards Board (“AASB”) and the Corporations Act 2001. Osteopore Limited is
a for-profit entity for financial reporting purposes under Australian Accounting Standards. Compliance with the
Australian Accounting Standards ensures that the financial statements and notes also comply with
International Financial Reporting Standards as issued by the International Accounting Standards Board.
Except for cash flow information, the financial report has been prepared on an accruals basis and is based on
historical costs, modified where applicable, by the measurement at fair value of selected financial assets and
financial liabilities. Cost is based on the fair values of the consideration given in exchange for assets.
The financial statements have been presented in Australian dollars (AUD), which is the functional currency of
the Company. The functional currency of the Company’s controlled entities is Singapore Dollars (SGD).
Acquisition
On 17 September 2019, the Company completed the 100% acquisition of ordinary shares of Osteopore
International Pte Ltd (“OIS”). As consideration for the acquisition, Osteopore Limited issued 71,027,008
ordinary shares with the following total consideration at acquisition totalling $14,205,402. Mr Goh Khoon Seng
was appointed as the Chief Executive Office, and the OIS management team has assumed responsibility of
the management of the merged entity.
OIS principal activities are manufacture of medical implants for use in surgery and trading of medical devices
and implants.
The acquisition has been accounted for with reference to common controlled entities. The Group has adopted
the predecessor accounting method to form one enlarged group. The Company has recorded the excess
consideration above the net assets of OIS to a common control reserve. Refer to Note 3.
Foreign Currency
Transactions and Balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing at
the date of the transaction. Foreign currency monetary items are translated at the year-end exchange rate.
Non-monetary items measured at historical cost continue to be carried at the exchange rate at the date of the
transaction. Non-monetary items measured at fair value are reported at the exchange rate at the date when
fair values were determined.
Exchange differences arising on the translation of monetary items are recognised in the statement of profit and
loss and other comprehensive income. Exchange differences arising on the translation of non-monetary items
are recognised directly in equity to the extent that the gain or loss is directly recognised in equity; otherwise
the exchange difference is recognised in the statement of profit and loss and comprehensive income.
23
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 1. Significant Accounting Policies (Continued)
Foreign Currency (Continued)
Foreign Operation
The financial results and position of foreign controlled entities whose functional currency is different from the
presentation currency are translated as follows:
• Assets and liabilities are translated at year-end exchange rates prevailing at that reporting date;
•
• Retained earnings are translated at the exchange rates prevailing at the date of the transaction.
Income and expenses are translated at average exchange rates for the period; and
Exchange differences arising on translation of foreign controlled entities are transferred directly to the foreign
currency translation reserve in the statement of financial position. These differences are recognised in the
statement of profit or loss and other comprehensive income in the period in which the operation is disposed.
New or Amended Accounting Standards and Interpretations Adopted
The Group has adopted all of the new or amended Accounting Standards and Interpretations issued by the
Australian Accounting Standards Board that are mandatory for the current reporting period. Accounting
Standards and Interpretations adopted by the Group that are mandatory for the current reporting period:
AASB 16 Leases
AASB 16 replaces AASB 117 Leases and introduces a single lessee accounting model that requires a lessee
to recognise right-of-use assets and lease liabilities for all leases with a term of more than 12 months, unless
the underlying asset is of low value. Right-of-use assets are initially measured at cost and lease liabilities are
initially measured on a present value basis. Subsequent to initial recognition:
(a) Right-of-use assets are accounted for on a similar basis to non-financial assets, whereby the right-of-
use asset is accounted for on a cost basis unless the underlying asset is accounted for on a revaluation
basis, in which case if the underlying asset is:
i.
Investment property, the lessee applies the fair value model in AASB 140 Investment Property to
the right-of-use asset; or
ii. Property, plant or equipment, the applies the revaluation model in AASB 116 Property, Plant and
Equipment to all of the right-of-use assets that relate to that class of property, plant and
equipment; and
(b) Lease liabilities are accounted for on a similar basis to other financial liabilities, whereby interest
expense is recognised in respect of the lease liability and the carrying amount of the lease liability is
reduced to reflect the principal portion of lease payments made.
AASB 16 substantially carries forward the lessor accounting requirements of the predecessor standard, AASB
117. Accordingly, under AASB 16 a lessor continues to classify its leases as operating leases or finance leases
subject to whether the lease transfers to the lessee substantially all of the risks and rewards incidental to
ownership of the underlying asset, and accounts for each type of lease in a manner consistent with the current
approach under AASB 117.
In accordance with the transition requirements of AASB 16, the Group has elected:
(a) To apply AASB 16 retrospectively to those contracts that were previously identified as leases under
the predecessor standard, with the cumulative effect of initially applying the new standard recognised
at the beginning of the current reporting period (i.e. at 1 January 2019). Accordingly, comparative
information has not been restated; and
(b) The Group has elected to use the transition practical expedient allowing the standard to be applied
only to contracts that were previously identified as leases applying AASB 117 and Interpretation 4.
24
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 1. Significant Accounting Policies (Continued)
New or Amended Accounting Standards and Interpretations Adopted (Continued)
The application of AASB 16 resulted in the recognition of right-of-use assets with an aggregate carrying amount
of $103,921 and corresponding lease liabilities with an aggregate carrying amount of $53,451. The weighted
average incremental borrowing rate applied in the calculation of the initial carrying amount of lease liabilities
was 10.88%.
The following is a reconciliation of total operating lease commitments acquired on 17 September 2019 following
the acquisition of Osteopore International Pte Ltd:
Total operating lease commitments acquired at 17 September 2019
Recognition exemptions
Lease payments not recognised
Operating lease liabilities before discounting
Discounted using incremental borrowing rate
Operating lease liabilities
Total lease liabilities recognised under AASB 16 at 17 September 2019
$
-
64,435
64,435
(10,984)
53,451
53,451
New Accounting Standards and Interpretations Not Yet Mandatory
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early
adopted.
Effective date
(annual reporting
periods
beginning on or
after)
1 January
2020
Likely impact on
initial application
When these
amendments are first
adopted for the year
ending 31 December
2020, there will be
no material impact
on the financial
statements.
New / revised
pronouncement
AASB 2018-6
Amendments to
Australian Accounting
Standards –
Definition of a
Business
No previous
pronouncement
Nature of change
AASB 2018-6 amends AASB 3 to clarify
the definition of a business, assisting
entities to determine whether a transaction
should be accounted for as a business
combination or as an asset acquisition.
The amendments:
• clarify
that
that
to
to be considered a
business, an acquired set of activities
include, at a
and assets must
minimum, an input and a substantive
together significantly
process
contribute
to create
the ability
outputs;
remove the assessment of whether
market participants are capable of
replacing any missing
inputs or
processes and continuing to produce
outputs;
•
• add guidance and illustrative examples
to help entities assess whether a
been
process
substantive
acquired;
has
• narrow the definitions of a business
and of outputs by focusing on goods
25
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
New / revised
pronouncement
AASB 2018-7
Amendments to
Australian Accounting
Standards –
Definition of Material
No previous
pronouncement
AASB 2019-1
Amendments to
Australian Accounting
Standards –
References to the
Conceptual
Framework
No previous
pronouncement
AASB 2019-2
Amendments to
Australian Accounting
Standards –
Implementation of
AASB 1059
No previous
pronouncement
Nature of change
and services provided to customers
and by removing the reference to an
ability to reduce costs; and
• add an optional concentration test that
permits a simplified assessment of
whether an acquired set of activities
and assets is not a business.
the
also
Australian
AASB 2018-7 principally amends AASB
101 and AASB 108. The amendments
refine the definition of material in AASB
101. The amendments clarify the definition
of material and its application by improving
the wording and aligning the definition
across
Accounting
Standards and other publications. The
amendment
some
supporting requirements in AASB 101 in
the definition to give it more prominence
and
explanation
accompanying the definition of material.
Australian
AASB
Accounting Standards, Interpretations and
other pronouncements
the
revised Conceptual
issuance of
for Financial Reporting
Framework
(Conceptual Framework).
includes
amends
clarifies
2019-1
reflect
the
the
to
The application of Conceptual Framework
is limited to
• For profit entities that have public
accountability
• Other for-profit entities that voluntarily
the Conceptual
to apply
elect
Framework
AASB 2019-2 amends AASB 16 Leases
and AASB 1059 Service Concession
Arrangements: Grantors
to
amend
transitional
to service
concession arrangements and incorporate
editorial amendments
relating
relief
Effective date
(annual reporting
periods
beginning on or
after)
Likely impact on
initial application
1 January
2020
When these
amendments are first
adopted for the year
ending 31 December
2020, there will be
no material impact
on the financial
statements.
1 January
2020
When these
amendments are first
adopted for the year
ending 31 December
2020, there will be
no material impact
on the financial
statements.
1 January
2020
When these
amendments are first
adopted for the year
ending 31 December
2020, there will be
no material impact
on the financial
statements.
26
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
New / revised
pronouncement
AASB 2019-5
Amendments to
Australian Accounting
Standards –
Disclosure of the
Effect of New IFRS
Standards Not Yet
Issued in Australia
No previous
pronouncement
Nature of change
1054
Australian
to
AASB 2019-5 makes amendments
Additional
AASB
Disclosures by adding a disclosure
requirement for an entity intending to
comply with IFRS standards to disclose the
information specified in paragraphs 30 and
31 of AASB 108 Accounting Policies,
Changes in Accounting Estimates and
Errors on the potential effect of an IFRS
standard that has not yet been issued by
the AASB. This ensures that for-profit
publicly accountable entities complying
with Australian Accounting Standards can
assert compliance with IFRS standards.
Effective date
(annual reporting
periods
beginning on or
after)
1 January
2020
Likely impact on
initial application
When this Standard
is first adopted for
the year ending 31
December 2020,
additional
disclosures may be
necessary if there
are any
pronouncements
issued by the
International
Accounting
Standards Board that
have not yet been
issued by the AASB
at the date of
authorisation of the
entity’s financial
report.
Principles of Consolidation
Subsidiaries are all those entities over which the Group has control. The Group controls an entity when the
Group 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 Group. They are de-consolidated from the date that control
ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the Group 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 Group.
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 Group. Losses incurred by the Group are attributed to the non-controlling interest in full, even if that
results in a deficit balance.
27
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 1. Significant Accounting Policies (Continued)
Business Combinations
The Group applies the acquisition method in accounting for business combinations unless transacting a
business combination under common control.
Under the acquisition method, the consideration transferred by the Group to obtain control of a subsidiary is
calculated as the sum of the acquisition-date fair value of assets transferred, liabilities incurred and the equity
interest’s issued by the Group, which includes the fair value of any asset or liability arising from a contingent
consideration arrangement. Acquisition costs are expensed as incurred.
The Group recognises identifiable assets acquired and liabilities assumed in a business combination
regardless of whether they have been previously recognised in the acquiree’s financial statements prior to the
acquisition. Assets acquired and liabilities assumed are measured at their acquisition-date fair value.
Goodwill is stated after separate recognition of identifiable intangible assets. It is calculated as the excess of
the sum of: (a) fair value of consideration transferred; (b) the recognised amount of any non-controlling interest
in the acquisition; and (c) acquisition-date fair value of any existing equity interest in the acquiree, over the
acquisition-date fair values of identifiable net assets. If the fair values of identifiable net assets exceed the sum
calculated above, the excess amount (i.e. gain on a bargain purchase) is recognised in profit or loss
immediately.
Where business combinations occur under common control, these are scoped out of AASB 3: Business
Combinations, and therefore a suitable accounting policy needs to be adopted in accordance with the hierarchy
in AASB 108: Accounting Policies, Changes in Accounting Estimates and Errors. This hierarchy requires the
adoption of a policy that provides users of the financial statements with relevant and reliable information about
the financial position and performance of the reporting entity. Therefore certain accounting policy choices are
available for this business combination. The reporting entity has the choice to either apply the purchase method
(applying a fair value approach to the acquisition value) or to apply the pooling of interest method where the
combination is recorded at carrying value at the date of acquisition. Further, the reporting entity may elect to
restate the comparatives for the results of both businesses while under common control.
Given the continuing common control of the ultimate parent of the businesses, the Directors consider that is
appropriate to use the pooling of interest method to account for the transaction using the carrying value at the
date of acquisition for the acquired assets and liabilities rather than remeasuring to more subjective and
uncertain fair values. The Directors have elected to not restate comparatives.
All transaction costs incurred in relation to the business combination are expensed to the statement of
comprehensive income.
Revenue Recognition
Sale of Goods
To determine whether to recognise revenue, the Group follow a 5 step process:
Identifying the contract with a customer
Identifying the performance obligations
1.
2.
3. Determining the transaction price
4. Allocating the transaction price to the performance obligations
5. Recognising revenue when/as the performance obligation(s) are satisfied.
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of the
goods, being when the goods have been shipped to the specific location agreed with the customer.
28
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 1. Significant Accounting Policies (Continued)
Revenue Recognition (Continued)
Following delivery, the customer has full discretion over the disposition of the goods, bears the primary
responsibility and risks of obsolescence and loss in relations to the goods, as either the customer has accepted
the goods in accordance with the sales contract the acceptance provision have lapsed, or the Company has
objective evidence that all criteria for acceptance have been satisfied. A receivable is recognised by the
Company when the goods are delivered to the customer as this represents the point in time at which the right
to consideration becomes unconditional, as only the passage of time is required before payment is due.
No element of financing is deemed present as the sales are made with a credit term of 30-60 days, which is
consistent with market practice. Revenue is the amount of consideration to which the entity excepts to be
entitled in exchange for transferring promised goods or services. Revenue is shown net of estimated customer
returns, rebates and other similar allowances.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating the interest income over the relevant period
using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts through
the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
Government Grants
Government grants are recognised when there is reasonable assurance that the grant will be received, and all
attaching conditions will be complied with. Where the grant relates to an asset, the fair value is recognised as
deferred capital grant on the statement of financial position and is amoritsed to profit and loss over the expected
useful life of the relevant asset by equal annual instalments.
When the grant relates to operating expenditure, the grant income is recognised on a systematic basis in the
profit or loss over the periods necessary to match the related cost which they are intended to compensate.
Income Tax
The income tax expense or benefit for the period is the tax payable on that period's taxable income based on
the applicable income tax rate for each jurisdiction, adjusted by the changes in deferred tax assets and
liabilities attributable to temporary differences, unused tax losses and the adjustment recognised for prior
periods, where applicable.
There are many transactions and calculations undertaken during the ordinary course of business for which the
ultimate tax determination is uncertain. The consolidated entity recognises liabilities for anticipated tax audit
issues based on the consolidated entity's current understanding of the tax law. Where the final tax outcome of
these matters is different from the carrying amounts, such differences will impact the current and deferred tax
provisions in the period in which such determination is made.
Deferred tax assets and liabilities are recognised for temporary differences at the tax rates expected to be
applied when the assets are recovered or liabilities are settled, based on those tax rates that are enacted or
substantively enacted. Deferred tax assets are recognised for deductible temporary differences and unused
tax losses only if it is probable that future taxable amounts will be available to utilise those temporary
differences and losses.
29
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 1. Significant Accounting Policies (Continued)
Income Tax (Continued)
The carrying amount of recognised and unrecognised deferred tax assets are reviewed at each reporting date.
Deferred tax assets recognised are reduced to the extent that it is no longer probable that future taxable profits
will be available for the carrying amount to be recovered. Previously unrecognised deferred tax assets are
recognised to the extent that it is probable that there are future taxable profits available to recover the asset.
Deferred tax assets and liabilities are offset only where there is a legally enforceable right to offset current tax
assets against current tax liabilities and deferred tax assets against deferred tax liabilities; and they relate to
the same taxable authority on either the same taxable entity or different taxable entities which intend to settle
simultaneously.
Tax consolidation
Osteopore Limited and its wholly-owned subsidiaries have not formed an income tax consolidated group under
tax consolidation legislation.
Goods and Services Tax ('GST') and Other Similar Taxes
Revenues, expenses and assets are recognised net of the amount of associated GST, unless the GST incurred
is not recoverable from the tax authority. In this case it is recognised as part of the cost of the acquisition of
the asset or as part of the expense.
Receivables and payables are stated inclusive of the amount of GST receivable or payable. The net amount
of GST recoverable from, or payable to, the tax authority is included in other receivables or other payables in
the statement of financial position.
Cash flows are presented on a gross basis. The GST components of cash flows arising from investing or
financing activities which are recoverable from, or payable to the tax authority, are presented as operating
cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
tax authority.
Segment Reporting
An operating segment is a component of the Group that engages in business activities from which it may earn
revenues and incur expenses (including revenues and expenses relating to transactions with other
components of the same entity), whose operating results are regularly reviewed by the Group's chief operating
decision maker to make decisions about resources to be allocated to the segment and assess its performance
and for which discrete financial information is available. This includes start-up operations which are yet to earn
revenues. Management will also consider other factors in determining operating segments such as the
existence of a line manager and the level of segment information presented to the board of directors. Operating
segments have been identified based on the information provided to the chief operating decision makers –
being the executive management team.
The group aggregates two or more operating segments when they have similar economic characteristics, and
the segments are similar in each of the following respects:
• Nature of the products and services;
• Nature of the production processes;
• Type or class of customer for the products and services;
• Methods used to distribute the products or provide the services; and if applicable
• Nature of the regulatory environment.
30
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 1. Significant Accounting Policies (Continued)
Segment Reporting (Continued)
Operating segments that meet the quantitative criteria as prescribed by AASB 8 are reported separately.
However, an operating segment that does not meet the quantitative criteria is still reported separately where
information about the segment would be useful to users of the financial statements. Information about other
business activities and operating segments that are below the quantitative criteria are combined and disclosed
in a separate category for “all other segments”.
Current and Non-Current Classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is classified as current when: it is either expected to be realised or intended to be sold or consumed
in the Group'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 Group’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.
Cash and Cash Equivalents
Cash and cash equivalents include 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.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost includes all expenses directly
attributable to the manufacturing process as well as suitable portions of related production overheads, based
on normal operating capacity. Costs of ordinarily interchangeable items are assigned using the first in, first out
cost formula. Net realisable value is the estimated selling price in the ordinary course of business less any
applicable selling expenses. When necessary, allowance is provided for damaged, obsolete and slow-moving
items to adjust the carrying value of inventories to the lower of cost and net realisable value.
Property, Plant and Equipment
Property, plant and equipment is measured on the cost basis less depreciation and impairment losses.
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 been discounted to their present values in determining recoverable amounts.
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.
31
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 1. Significant Accounting Policies (Continued)
Property, Plant and Equipment (Continued)
Depreciation
The depreciable amount of all fixed assets is depreciated over its useful life commencing from the time the
asset is held ready for use. Depreciation is computed using the straight-line method to write off the cost of
these assets over their estimated useful lives as follows:
• Computer
• Furniture and fittings
• Plant and machinery
• Leasehold improvements
1 year
5 years
6 years
5 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date
and where adjusted, shall be accounted for as a change in accounting estimate. Where depreciation rates or
method are changed, the net written down value of the asset is depreciated from the date of the change in
accordance with the new depreciation rate or method.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains
and losses are included in profit or loss.
Impairment of Non-Financial Assets
The carrying amounts of the Company’s non-financial assets are reviewed at each reporting date to determine
whether there is any indication of impairment. If any such indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate
the recoverable amount of an individual asset, the Company estimate the recoverable amount of the cash-
generating unit to which the asset belongs.
Recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use,
the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects
current market assessments of the time value of money and the risks specific to the asset.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount,
the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment
loss is recognised immediately in profit or loss.
Where an impairment loss subsequently reverses, the carrying amount of the asset (cash-generating unit) is
increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does
not exceed the carrying amount that would have been determined had no impairment loss been recognised
for the asset (cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately
in profit or loss.
Recognition, initial measurement and derecognition
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual
provisions of the financial instrument and are measured initially at fair value adjusted by transactions costs,
except for those carried at fair value through profit or loss, which are measured initially at fair value.
Subsequent measurement of financial assets and financial liabilities are described below.
Financial assets are derecognised when the contractual rights to the cash flows from the financial asset expire,
or when the financial asset and all substantial risks and rewards are transferred. A financial liability is
derecognised when it is extinguished, discharged, cancelled or expires.
32
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 1. Significant Accounting Policies (Continued)
Financial Instruments
Classification and subsequent measurement of financial assets
Except for those trade receivables that do not contain a significant financing component and are measured at
the transaction price in accordance with AASB 15, all financial assets are initially measured at fair value
adjusted for transaction costs (where applicable)
For the purpose of subsequent measurement, financial assets other than those designated and effective as
hedging instruments are classified into the following categories upon initial recognition:
•
•
•
•
amortised cost
fair value through profit or loss (FVPL)
equity instruments at fair value through other comprehensive income (FVOCI)
debt instruments at fair value through other comprehensive income (FVOCI)
All income and expenses relating to financial assets that are recognised in profit or loss are presented within
finance costs, finance income or other financial items, except for impairment of trade receivables which is
presented within other expenses.
Classifications are determined by both:
•
•
The entities business model for managing the financial asset
The contractual cash flow characteristics of the financial assets
All income and expenses relating to financial assets that are recognised in profit or loss are presented within
finance costs, finance income or other financial items, except for impairment of trade receivables, which is
presented within other expenses.
Financial assets at amortised cost
Financial assets are measured at amortised cost if the assets meet the following conditions (and are not
designated as FVPL):
•
•
they are held within a business model whose objective is to hold the financial assets and collect its
contractual cash flows
the contractual terms of the financial assets give rise to cash flows that are solely payments of principal
and interest on the principal amount outstanding
After initial recognition, these are measured at amortised cost using the effective interest method. Discounting
is omitted where the effect of discounting is immaterial. The Group’s cash and cash equivalents, trade and
most other receivables fall into this category of financial instruments as well as government bonds that were
previously classified as held-to-maturity under AASB 139.
There are no FVPL and FVOCI instruments for the group.
Impairment of Financial assets
AASB 9’s impairment requirements use more forward-looking information to recognize expected credit losses
– the ‘expected credit losses (ECL) model’. Instruments within the scope of the new requirements included
loans and other debt-type financial assets measured at amortised cost and FVOCI, trade receivables, contract
assets recognised and measured under AASB 15 and loan commitments and some financial guarantee
contracts (for the issuer) that are not measured at fair value through profit or loss.
33
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 1. Significant Accounting Policies (Continued)
Financial Instruments (Continued)
The Group considers a broader range of information when assessing credit risk and measuring expected credit
losses, including past events, current conditions, reasonable and supportable forecasts that affect the
expected collectability of the future cash flows of the instrument.
In applying this forward-looking approach, a distinction is made between:
•
•
financial instruments that have not deteriorated significantly in credit quality since initial recognition
or that have low credit risk (‘Stage 1’) and
financial instruments that have deteriorated significantly in credit quality since initial recognition and
whose credit risk is not low (‘Stage 2’).
‘Stage 3’ would cover financial assets that have objective evidence of impairment at the reporting date. ‘12-
month expected credit losses’ are recognised for the first category while ‘lifetime expected credit losses’ are
recognised for the second category.
Measurement of the expected credit losses is determined by a probability-weighted estimate of credit losses
over the expected life of the financial instrument.
Trade and other receivables and contract assets
The Group makes use of a simplified approach in accounting for trade and other receivables as well as contract
assets and records the loss allowance at the amount equal to the expected lifetime credit losses. In using this
practical expedient, the Group uses its historical experience, external indicators and forward-looking
information to calculate the expected credit losses using a provision matrix.
Classification and measurement of financial liabilities
As the accounting for financial liabilities remains largely unchanged from AASB 139, the Group’s financial
liabilities were not impacted by the adoption of AASB 9. However, for completeness, the accounting policy is
disclosed below.
The Group’s financial liabilities include borrowings, trade payables and other payables.
Financial liabilities are initially measured at fair value, and, where applicable, adjusted for transaction costs
unless the Group designated a financial liability at fair value through profit or loss.
Subsequently, financial liabilities are measured at amortised cost using the effective interest method except
for derivatives and financial liabilities designated at FVPL, which are carried subsequently at fair value with
gains or losses recognised in profit or loss (other than derivative financial instruments that are designated and
effective as hedging instruments). The Group derecognises financial liabilities when, and only when, the
Group’s obligations are discharged, cancelled or they expire. The Company does not hold any financial
liabilities classified as fair value through profit or loss measurement category.
All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in profit
or loss are included within finance costs or finance income.
Leases
As described above, the Group has applied AASB 16 using the modified retrospective approach and therefore
comparative information has not been restated. This means comparative information is still reported under
AASB 117 and IFRIC 4.
34
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 1. Significant Accounting Policies (continued)
Accounting policy applicable from 1 January 2019
The Group as a lessee
For any new contracts entered into on or after 1 January 2019, the Group considers whether a contract is, or
contains a lease. A lease is defined as ‘a contract, or part of a contract, that conveys the right to use an asset
(the underlying asset) for a period of time in exchange for consideration’. To apply this definition the Group
assesses whether the contract meets three key evaluations which are whether:
• The contract contains an identified asset, which is either explicitly identified in the contract or implicitly
specified by being identified at the time the asset is made available to the Group
• The Group has the right to obtain substantially all of the economic benefits from use of the identified
asset throughout the period of use, considering its rights within the defined scope of the contract
• The Group has the right to direct the use of the identified asset throughout the period of use. The
Group assess whether it has the right to direct ‘how and for what purpose’ the asset is used throughout
the period of use.
Measurement and recognition of leases as a lessee
At lease commencement date, the Group recognises a right-of-use asset and a lease liability on the balance
sheet. The right-of-use asset is measured at cost, which is made up of the initial measurement of the lease
liability, any initial direct costs incurred by the Group, an estimate of any costs to dismantle and remove the
asset at the end of the lease, and any lease payments made in advance of the lease commencement date
(net of any incentives received).
The Group depreciates the right-of-use assets on a straight-line basis from the lease commencement date to
the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The Group also
assesses the right-of-use asset for impairment when such indicators exist. At the commencement date, the
Group measures the lease liability at the present value of the lease payments unpaid at that date, discounted
using the interest rate implicit in the lease if that rate is readily available or the Group’s incremental borrowing
rate.
Lease payments included in the measurement of the lease liability are made up of fixed payments (including
in substance fixed), variable payments based on an index or rate, amounts expected to be payable under a
residual value guarantee and payments arising from options reasonably certain to be exercised.
Subsequent to initial measurement, the liability will be reduced for payments made and increased for interest.
It is remeasured to reflect any reassessment or modification, or if there are changes in in-substance fixed
payments. When the lease liability is remeasured, the corresponding adjustment is reflected in the right-of-use
asset, or profit and loss if the right-of-use asset is already reduced to zero.
The Group has elected to account for short-term leases and leases of low-value assets using the practical
expedients. Instead of recognising a right-of-use asset and lease liability, the payments in relation to these are
recognised as an expense in profit or loss on a straight-line basis over the lease term. On the statement of
financial position, right-of-use assets have been included in property, plant and equipment (except those
meeting the definition of investment property) and lease liabilities have been included in trade and other
payables.
35
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 1. Significant Accounting Policies (Continued)
Leases (Continued)
Accounting policy applicable before 1 January 2019
The Group as a lessee
Management applies judgment in considering the substance of a lease agreement and whether it transfers
substantially all the risks and rewards incidental to ownership of the leased asset. Key factors considered
include the length of the lease term in relation to the economic life of the asset, the present value of the
minimum lease payments in relation to the asset’s fair value, and whether the Group obtains ownership of the
asset at the end of the lease term.
Leases of fixed assets where substantially all the risks and benefits incidental to the ownership of the asset,
but not the legal ownership, is transferred to entities in the Group are classified as finance leases.
Finance leases are capitalised by recording an asset and a liability at the lower of the amounts equal to the
fair value of the leased property or the present value of the minimum lease payments, including any guaranteed
residual values. Lease payments are allocated between the reduction of the lease liability and the lease interest
expense for the period.
Leased assets are depreciated over the shorter of their estimated useful lives or the lease term. Lease
payments for operating leases, where substantially all the risks and benefits remain with the lessor, are
charged as expenses in the periods in which they are incurred. Lease incentives under operating leases are
recognised as a liability and amortised on a straight-line basis over the life of the lease term.
Trade and Other Payables
These amounts represent liabilities for goods and services provided to the Group prior to the end of the
financial year and which are unpaid. Due to their short-term nature they are measured at amortised cost and
are not discounted. The amounts are unsecured and are usually paid within 30 days of recognition.
Borrowings
Loans and borrowings are initially recognised at the fair value of the consideration received, net of transaction
costs. They are subsequently measured at amortised cost using the effective interest method.
Where there is an unconditional right to defer settlement of the liability for at least 12 months after the reporting
date, the loans or borrowings are classified as non-current
Borrowing costs
Borrowing costs include interest, amortisation of discounts or premiums relating to borrowings, amortisation of
ancillary costs incurred in connection with arrangement of borrowings and lease finance charges. Borrowing
costs are expensed as incurred.
Employee Benefits
Short-Term Benefits
Short-term employee benefit obligations, including accumulated compensated absences, are measured on an
undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount
expected to be paid under short-term cash bonus if the Group has a present legal or constructive obligation to
pay this amount as a result of past service provided by the employee, and the obligation can be estimated
reliably.
36
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 1. Significant Accounting Policies (Continued)
Employee Benefits (Continued)
Defined Contribution plans
The Group participates in the defined contribution national pension schemes as provided by the laws of the
countries in which it has operations. A defined contribution plan is a post-employment benefit plan under which
an entity pays fixed contributions into a separate entity and will have no legal or constructive obligation to pay
further amounts.
Other Employee Entitlements
Employee entitlements to annual leave and long service leave are recognised when they accrue to employees.
Accruals is made for the estimated liability for unconsumed leave as a result of services rendered by
employees up to the end of the reporting period.
Fair Value Measurement
When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure
purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a
liability in an orderly transaction between market participants at the measurement date; and assumes that the
transaction will take place either: in the principal market; or in the absence of a principal market, in the most
advantageous market.
Fair value is measured using the assumptions that market participants would use when pricing the asset or
liability, assuming they act in their economic best interests. For non-financial assets, the fair value
measurement is based on its highest and best use. Valuation techniques that are appropriate in the
circumstances and for which sufficient data are available to measure fair value, are used, maximising the use
of relevant observable inputs and minimising the use of unobservable inputs.
Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that
reflects the significance of the inputs used in making the measurements. Classifications are reviewed at each
reporting date and transfers between levels are determined based on a reassessment of the lowest level of
input that is significant to the fair value measurement.
For recurring and non-recurring fair value measurements, external valuers may be used when internal
expertise is either not available or when the valuation is deemed to be significant. External valuers are selected
based on market knowledge and reputation. Where there is a significant change in fair value of an asset or
liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs
applied in the latest valuation and a comparison, where applicable, with external sources of data.
Share-Based Payments
Equity-settled and cash-settled share-based compensation benefits are provided to employees.
Equity-settled transactions are awards of shares, or options over shares that are provided to employees in
exchange for the rendering of services. Cash-settled transactions are awards of cash for the exchange of
services, where the amount of cash is determined by reference to the share price.
The cost of equity-settled transactions are measured at fair value on grant date. Fair value is independently
determined using either the Binomial or Black-Scholes option pricing model that takes into account the exercise
price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility
of the underlying share, the expected dividend yield and the risk free interest rate for the term of the option,
together with non-vesting conditions that do not determine whether the Company receives the services that
entitle the employees to receive payment. No account is taken of any other vesting conditions.
37
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 1. Significant Accounting Policies (Continued)
Share-Based Payments (Continued)
The cost of equity-settled transactions are recognised as an expense with a corresponding increase in equity
over the vesting period. The cumulative charge to profit or loss is calculated based on the grant date fair value
of the award, the best estimate of the number of awards that are likely to vest and the expired portion of the
vesting period. The amount recognised in profit or loss for the period is the cumulative amount calculated at
each reporting date less amounts already recognised in previous periods.
The cost of cash-settled transactions is initially, and at each reporting date until vested, determined by applying
either the Binomial or Black-Scholes option pricing model, taking into consideration the terms and conditions
on which the award was granted. The cumulative charge to profit or loss until settlement of the liability is
calculated as follows:
• During the vesting period, the liability at each reporting date is the fair value of the award at that date
multiplied by the expired option of the vesting period.
• From the end of the vesting period until settlement of the award, the liability is the full fair value of the
liability at the reporting date.
All changes in the liability are recognised in profit or loss. The ultimate cost of cash-settled transactions is the
cash paid to settle the liability.
Market conditions are taken into consideration in determining fair value. Therefore, any awards subject to
market conditions are considered to vest irrespective of whether or not that market condition has been met,
provided all other conditions are satisfied.
If equity-settled awards are modified, as a minimum an expense is recognised as if the modification has not
been made. An additional expense is recognised, over the remaining vesting period, for any modification that
increases the total fair value of the share-based compensation benefit as at the date of modification.
If the non-vesting condition is within the control of the Company or employee, the failure to satisfy the condition
is treated as a cancellation. If the condition is not within the control of the Company or employee and is not
satisfied during the vesting period, any remaining expense for the award is recognised over the remaining
vesting period, unless the award is forfeited.
If equity-settled awards are cancelled, it is treated as if it has vested on the date of cancellation, and any
remaining expense is recognised immediately. If a new replacement award is substituted for the cancelled
award, the cancelled and new award is treated as if they were a modification.
Issued Capital
Ordinary shares are classified as equity. Issued and paid up capital is recognised at the fair value of the
consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are
recognised directly in equity as a reduction of the share proceeds received.
Basic loss per share is determined by dividing the operating profit / (loss) after income tax attributable to
members of the Company by the weighted average number of ordinary shares outstanding during the financial
year
Diluted loss per share adjusts the amounts used in the determination of basic loss per share by taking into
account unpaid amounts on ordinary shares and any reduction in loss per share that will probably arise from
the exercise of options outstanding during the financial year.
38
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 1. Significant Accounting Policies (Continued)
Dividends
Dividends are recognised when declared during the financial year and no longer at the discretion of the
company.
Critical Accounting Judgements, Estimates and Assumptions
The preparation of the 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. The resulting accounting judgements and estimates will seldom equal the related actual
results. The judgements estimates and assumptions 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.
Share-Based Payments
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of
the equity instruments at the date at which they are granted. The fair value is determined by using either the
Binomial or Black-Scholes model taking into account the terms and conditions upon which the instruments
were granted. The accounting estimates and assumptions relating to equity-settled share-based payments
would have no impact on the carrying amounts of assets and liabilities within the next annual reporting period
but may impact profit or loss and equity.
Note 2. Controlled Entities
The consolidated financial statements incorporate the assets, liabilities and results of the following wholly-
owned subsidiaries in accordance with the accounting policy described in Note 1.
Osteopore International
Pte Ltd
Country of
Incorporation
Singapore
Osteopore Medico Pte Ltd
Singapore
Principal Activities
Manufacture and trade
medical implants
Manufacture and trade
medical implants
Ownership
2019 (%)
Ownership
2018 (%)
100
100
-
-
39
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 3. Acquisition – Osteopore International Pte Ltd
On 17 September 2019, the Company completed the 100% acquisition of ordinary shares of Osteopore
International Pte Ltd (“OIS”) for a total consideration of $14,205,402. OIS principal activities are manufacture
of medical implants for use in surgery and trading of medical devices and implants. The Board of Directors of
the merged entity was restructured such that two of the four directors comprise of OIS nominees. Prof Teoh
Swee Hin, a nominee of OIS serves as a Non-Executive Director, Mr Goh Khoon Seng was appointed as the
Chief Executive Officer, and the OIS management team has assumed responsibility of the management of the
merged entity. The acquisition has been accounted for with reference to common controlled entities. The
Group has adopted the predecessor accounting method to form one enlarged group. The Company has
recorded the excess consideration above the net assets of OIS to a common control reserve.
As consideration for the acquisition of 100% of the issued OIS securities, Osteopore Limited issued 71,027,008
ordinary shares with the following total consideration and fair value of net identifiable liabilities at acquisition
date.
Share value on 17 September 2019
Shares issued at acquisition date
Total consideration
Fair value of identifiable assets and liabilities held at acquisition date
Cash and cash equivalents
Trade receivables
Other assets
Inventories
Property, plant and equipment
Trade and other payables
Provisions
Borrowings
Total fair value of identifiable net liabilities
Common control reserve
Note 4. Revenue
Sale of goods
All sale of goods is recognised at a point in time.
17 Sep 2019
$
0.20
71,027,008
14,205,402
485,607
395,041
33,439
47,145
198,732
(666,075)
(86,579)
(1,117,359)
(710,049)
14,915,451
Consolidated
31 Dec 2019 31 Dec 2018
$
$
411,600
-
40
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 4. Revenue (Continued)
The Group’s revenue disaggregated by primary geographical markets is as follows:
Singapore
Other countries
Note 5. Expenses
Selling and distribution
Marketing expense
Travel expense
Administrative expenses
IPO costs
Legal and professional fees
Share-based payment expense
Depreciation expense
Employee expenses
Key management personnel
Salaries and other related costs
Contributions to defined contribution plans
Other personnel
Salaries and other related costs
Contributions to defined contribution plans
Consolidated
31 Dec 2019 31 Dec 2018
$
$
399,588
12,012
411,600
-
-
-
Consolidated
31 Dec 2019 31 Dec 2018
$
$
112,537
94,803
625,771
216,182
830,709
72,564
395,971
21,786
54,001
85,536
-
-
-
-
-
-
-
-
-
-
41
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 6. Income Tax
The prima facie tax on loss before income tax in reconciled to the income
tax as follows:
Loss before income tax
(2,382,341)
-
Consolidated
31 Dec 2019 31 Dec 2018
$
$
Prima facie tax payable on loss from ordinary activities before income tax
at 30% (2018: 30%)
Non-assessable non-exempt
Non-deductible expenditure
Foreign tax rate differential (Singapore)
Movement in unrecognised deferred tax assets
Income tax benefit
Tax loss carried forward:
Australia
Singapore
Total
(714,702)
42,207
249,213
61,188
362,094
-
1,459,605
2,138,040
3,597,645
-
-
-
-
-
-
-
-
-
The Group has following tax losses arising in entities in Australia and Singapore that are available indefinitely
to be offset against the future taxable profits of the Group. The potential deferred tax assets, arising from tax
losses (as disclosed above) are not brought to account as management is of the view that there is uncertainty
in the realisation of the related tax benefits through future taxable profits. The amount of these benefits is
based on the assumption that no adverse change will occur in income tax legislation and the anticipation that
the Group will derive sufficient future assessable income to enable the benefit to be realised and comply with
the conditions of deductibility imposed by law.
Note 7. Cash and Cash Equivalents
Consolidated
31 Dec 2019 31 Dec 2018
$
$
Cash in bank and on hand
3,294,809
3
The carrying amounts of cash and cash equivalents approximate their fair value and are denominated in the
following currencies:
Singapore dollar
Australia dollar
United States dollar
457,620
2,836,173
1,016
3,294,809
-
3
-
3
42
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 8. Trade Receivables
Trade receivables
Less expected credit losses
Consolidated
31 Dec 2019 31 Dec 2018
$
$
542,223
-
542,233
-
-
-
Trade receivables are non-interest bearing and generally on 30 days term (2018: 30 days). For allowance for
expected credit losses analysis at the end of the reporting period, please refer to Note 23.
Customers with balances past due but without provision for impairment
Not past due
Past due 0 – 30 days
Past due 31 – 60 days
Past due 61 days
Note 9. Other Assets
Prepayments
Deposits
Note 10. Inventories
Raw materials
Work in progress
Finished goods
155,244
83,387
31,680
271,922
542,233
-
-
-
-
-
Consolidated
31 Dec 2019 31 Dec 2018
$
$
98,623
15,793
114,416
-
-
-
Consolidated
31 Dec 2019 31 Dec 2018
$
$
13,838
585
9,104
23,527
-
-
-
-
43
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 11. Property, Plant and Equipment
Furniture &
Fittings
$
Consolidated
Plant &
Machinery
$
Leasehold
Improvements
$
Total
$
Computers
$
90,767
93,684
290,853
297,487
772,791
(75,615)
(49,486)
(204,035)
(202,615)
(531,751)
15,152
44,198
86,818
94,872
241,040
-
-
-
75,896
14,871
-
90,767
-
-
-
74,237
1,378
-
75,615
-
-
-
69,736
26,056
(2,108)
93,684
-
-
-
47,085
4,273
(1,872)
49,486
-
-
-
287,542
3,311
-
290,853
-
-
-
267,066
30,421
-
297,487
-
-
-
700,240
74,659
(2,108)
772,791
-
-
-
194,964
9,071
-
204,035
-
-
-
185,223
17,392
-
202,615
-
-
-
501,509
32,114
(1,872)
531,751
2019
Cost
Less accumulated
depreciation
Cost
Balance at 11 Dec 2018
Additions
Balance at 31 Dec 2018
Assets acquired (Note 3)
Additions
Disposals
Balance at 31 Dec 2019
Accumulated Depreciation
Balance at 11 Dec 2018
Depreciation
Balance at 31 Dec 2018
Assets acquired (Note 3)
Depreciation
Disposals
Balance at 31 Dec 2019
Note 12. Right-Of-Use Asset
Cost
Less accumulated depreciation
Cost
Balance at the beginning of the year
Adjustment on transition to AASB 16
Balance at the end of the year
Accumulated depreciation
Balance at the beginning of the year
Depreciation
Balance at the end of the year
Consolidated
31 Dec 2019 31 Dec 2018
$
$
103,921
(35,063)
68,858
-
103,921
103,921
-
35,063
35,063
-
-
-
-
-
-
-
-
-
44
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 13. Trade and Other Payables
Trade payables
Accruals
Other payables
Consolidated
31 Dec 2019 31 Dec 2018
$
$
211,449
417,413
92,177
721,039
-
Trade payables are due to third parties, unsecured, interest-free and repayable according to credit terms of 30
days (2018: 30 days). The carrying amounts of trade payables approximate their fair value and are
denominated in the following currencies:
Singapore dollar
Australia dollar
Note 14. Borrowings
Amounts due to directors (Note 21)
Amounts due to related party (Note 21)
Amounts due to third parties
Premium funding
132,131
79,318
211,449
-
-
-
Consolidated
31 Dec 2019 31 Dec 2018
$
$
65,767
311,507
113,371
31,264
521,909
-
-
-
-
-
Amounts due to directors, related party and third parties are non-trade, unsecured, interest-free and repayable
on demand. Premium funding relates to funding on Directors’ and Officers’ insurance.
Note 15. Lease Liabilities
Current
Non-Current
Amounts recognised in the statement of profit or loss and other comprehensive income
Depreciation expense on right of use asset (Note 12)
Interest expense
35,063
8,497
Consolidated
31 Dec 2019 31 Dec 2018
$
$
45,901
28,754
74,655
-
-
-
-
-
45
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 15. Lease Liabilities (Continued)
The Group has leases for the office and photocopier. The lease liabilities are secured by the related underlying
assets. Future minimum lease payments at 31 December 2019 were as follows:
Within 1 Year
Minimum Lease Payments
1-5 Years
After 5 Years
Total
Lease payments
Finance charges
Net present value
59,062
(13,161)
45,901
36,999
(8,245)
28,754
-
-
-
96,061
(21,406)
74,655
Note 16. Issued Capital
2019
$
No. of
Shares
2018
$
No. of
Shares
Fully paid ordinary shares
101,230,502
19,190,063
3
3
Ordinary shares entitle the holder to participate in dividends and the proceeds on the winding up of the
Company in proportion to the number of and amounts paid on the shares held. The fully paid ordinary shares
have no par value and the Company does not have a limited amount of authorised capital. 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 is no current on-market share buy-back.
Movements in ordinary share capital
Date
No. of
Shares
Issue price
($)
$
Balance at 11 December 2018
Incorporation of Company 1
Balance at 31 December 2018
Issue of shares – seed capital raise
Issue of shares – pre-IPO raise
Shares issued – consideration offer 2
Shares issued – public offer
Share issue costs
Balance at 31 December 2019
11/12/2018
6/6/2019
19/6/2019
23/9/2019
23/9/2019
-
3
3
2,000,000
1,953,491
71,027,008
26,250,000
-
101,230,502
1.00
0.001
0.129
0.20
0.20
-
3
3
2,000
252,000
14,205,402
5,250,000
(519,342)
19,190,063
1 Osteopore Limited was incorporated on 11 December 2018.
2 Shares were issued to shareholders of Osteopore International Pte Ltd upon completion of acquisition. Refer
to Note 3 for more details on acquisition of Osteopore International Pte Ltd.
46
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 17. Reserves
Common control reserve (Note 3)
Share based payment reserve
Foreign currency translation reserve
Consolidated
31 Dec 2019 31 Dec 2018
$
$
(14,915,451)
1,108,302
(33,293)
(13,840,442)
-
-
-
-
Share Based Payment Reserve
The share-based payment reserve arises from the equity-settled compensation plan issued to its director,
provided that the director remains in continuous employment with the Company from the date of grant. Equity-
settled compensation plan is share of commons stock that vest and restricted share units are awards that will
result in a payment if performance goals are achieved or the awards otherwise vest. The terms and conditions
of these awards are established in the employment contract.
Balance at 11 December 2018
No movements in period
Balance at 31 December 2018
Options issued to key management personnel (Note 18)
Options issued to lead manager (Note 18)
Balance at 31 December 2019
Note 18. Share Based Payment Expense
No. of
Options
$
-
-
-
-
7,200,000
2,500,000
9,700,000
830,709
277,593
1,108,302
On 23 June 2019, 7,200,000 unlisted options exercisable at $0.25 expiring on 30 June 2022 were issued to
key management personnel. The fair value of the options issued was estimated at the date of grant using the
Black-Scholes option pricing model below.
On 17 September 2019, 2,500,000 unlisted options exercisable at $0.25 expiring on 30 June 2022 at an issue
price of $0.0001 were issued to Alto Capital under the Lead Manager Offer, upon completion of the acquisition
of Osteopore International Pte Ltd. The fair value of the options issued was estimated at the date of grant using
the Black-Scholes option pricing model below.
Grant
Date
Expiry
Date
23/06/2019 30/06/2022
17/09/2019 30/06/2022
Share
Price at
Grant
Date
$0.20
$0.20
Exercise
Price
$0.25
$0.25
Expected
Volatility
100%
100%
Dividend
Yield
0%
0%
Risk-Free
Interest
Rate
0.89%
0.85%
Fair Value
at Grant
Date
$0.115
$0.111
47
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 18. Share Based Payment Expense (Continued)
Set out below are the options exercisable at the end of the financial year:
Grant Date
23/06/2019
17/09/2019
Expiry Date
30/06/2022
30/06/2022
31 Dec 2019
No. of Options
31 Dec 2018
No. of Options
7,200,000
2,500,000
9,700,000
-
-
-
Note 19. Loss per Share
The following reflects the income and data used in the calculations of basic and diluted loss per share:
Consolidated
31 Dec 2019 31 Dec 2018
No. of
Shares
No. of
Shares
Weighted average number of ordinary shares used in calculating basic
and diluted loss per share
28,845,411
Loss for the year used in calculating operating basic and diluted loss per
share
(2,382,341)
$
$
Basic and diluted loss per share
Cents
Cents
(8.26)
3
-
-
As the Group incurred a loss for the period, the options on issue have an anti-dilutive effect, therefore the
diluted EPS is equal to the basic EPS. A total of 9,700,000 share options (2018: nil) which could potentially
dilute EPS in the future have been excluded from the diluted EPS calculation because they are anti-dilutive for
the current year presented.
Note 20. Auditors’ Remuneration
Consolidated
31 Dec 2019 31 Dec 2018
$
$
Remuneration from Audit and Review of Financial Statements
Audit and review of financial statements (Grant Thornton Australia)
Other Services
Investigating accountant’s report (Grant Thornton Australia)
37,000
26,829
63,829
-
-
-
48
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 21. Key Management Personnel Disclosures
Short term employee benefits
Post-employment benefits
Share based payment benefits
Loans to/from related parties
Amount due to director – Mr Goh Khoon Seng 1
Amount due to director – Prof Teoh 1
Amount due to related party – Irenne Pte Ltd (director related entity of Prof
Teoh) 1
Consolidated
31 Dec 2019 31 Dec 2018
$
$
395,971
21,786
830,709
1,248,446
60,469
5,298
311,507
377,274
-
-
-
-
-
-
-
-
1 Amounts due to directors and related party are non-trade, unsecured, interest-free and repayable on demand
(Note 14).
Note 22. Segment Reporting
The Company has identified its operating segments based on the internal reports that are used by the Board
in assessing performance and in determining the allocation of resources. Given the Company’s operations
since incorporation, the Board has identified two relevant business segments based on the Group’s
geographical presence – Singapore and Australia. The following tables are an analysis of the Group’s revenue
and results by reportable segment for the year ended 31 December 2019 and 2018.
2019
Revenue from customers
Intersegment revenue
Gross revenue
Other income
Total revenue
Singapore
$
Australia
$
Consolidated
$
399,588
-
399,588
295
399,883
12,012
-
12,012
2,163
14,175
411,600
-
411,600
2,458
414,058
Loss for the year
(470,679)
(1,911,662)
(2,382,341)
49
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 22. Segment Reporting (Continued)
2019
Current assets
Non-current assets
Total assets
Total liabilities
2018
Revenue from customers
Intersegment revenue
Gross revenue
Other income
Total revenue
Loss for the year
Current assets
Non-current assets
Total assets
Total liabilities
Singapore
$
Australia
$
Consolidated
$
1,074,751
309,898
1,384,649
2,900,234
-
2,900,234
3,974,985
309,898
4,284,883
1,193,158
124,445
1,317,603
-
-
-
-
-
-
3
-
3
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
3
-
3
-
Revenues from external customers in the Group’s domicile, Australia, as well as its major markets, Singapore
have been identified on the basis of the customer’s geographical location and are disclosed in Note 4. During
2019, 37% of the Group’s revenues depended on a single customer in Singapore.
Note 23. Financial Instruments
The Group’s activities expose them to credit risk, liquidity risk and market risk – currency, interest rate and
price. The Group’s overall risk management strategy seeks to minimise adverse effects from the volatility of
financial markets on the Group’s financial performance.
The Board of Directors is responsible for setting the objectives and underlying principles of financial risk
management for the Company. Management then establishes the detailed policies such as authority levels,
oversight responsibilities, risk identification and measurement, and exposure limits, in accordance with the
objectives and underlying principles approved by the Board of Directors.
There have been no changes to the Group’s exposure to these financial risks or the way it manages the risk,
except for its credit risk. Market risk exposures are measured using sensitivity analysis indicated below.
Credit Risk
Credit risk refers to the risk that counterparty will default on its contractual obligation, resulting in financial loss
to the Group. A default on a financial asset is when the counterparty fails to make contractual payments as
per agreed terms. This definition of default is determined by considering the business environment in which
entity operates and other macro-economic factors.
50
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 23. Financial Instruments (Continued)
Credit Risk (Continued)
Risk Management
The Group has adopted a policy of only dealing with creditworthy counterparties as a means of mitigating the
risk of financial loss from defaults. The Group do not require collateral from its customers. The Group’s major
classes of financial assets are trade and other receivables.
Trade receivables that are neither past due nor impaired are substantial companies with good collection track
record with the Group. Trade receivables are subjected to credit risk exposure. The Group has identified
significant concentration of credit risks for trade receivables as follows:
Consolidated
31 Dec 2019 31 Dec 2018
%
%
Largest customer percentage of trade receivables
53
-
Impairment of Financial Asset
The Group has the following financial assets that are subject to insignificant credit losses where the expected
credit loss (‘ECL’) model has been applied using the following approaches below. The Group did not identify
any underperforming or non-performing financial assets during the year (2018: nil). Hence there was no write-
off or provisions necessary for the financial assets in the past 12 months.
To measure the expected credit losses, trade receivables were grouped based on shared credit risk
characteristics. Receivables are written off when there is no reasonable expectation of recovery, such as a
debtor failing to engage in a repayment plan with the Group.
The Group has not experienced any instances of non-payment from its customers over the past 12 months
and has used their repayment pattern as a basis for estimation to estimate its ECL for the current year. The
Group did not determine the default risk of it financial instruments as most of its trade receivables are historical
clients that have no bad debt history.
For the purpose of impairment assessment, other receivables are considered to have low credit risk as they
are not due for payment at the end of the reporting period and there has been no significant increase in the
risk of default on the receivables since initial recognition. Accordingly, the loss allowance is measured at an
amount equal to 12-month ECL.
In determining the ECL, the historical default experience and financial position of the counterparties are taken
into account, adjusted for factors that are specific to the debtors and general economic conditions of the
industry in which the debtors operate, in estimating the probability of default of each of these financial assets
occurring within their respective loss assessment time horizon, as well as the loss upon default in each case.
There has been no change in estimation techniques or significant assumptions made during the current
reporting period in assessing the loss allowance for other receivables.
Market Risk
Market risk is the risk that changes in market price, such as interest rates and foreign exchange rates will affect
the Group’s income. The objective of market risk management is to manage and control market risk exposures
within acceptable parameters, while optimising the return on risk.
51
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 23. Financial Instruments (Continued)
Market Risk (Continued)
Foreign Currency Risk
The Group’s foreign exchange risk results mainly from cash flows from transactions denominated in foreign
currencies. At present, the Group does not have any formal policy for hedging against currency risk. The Group
ensures that the net exposure is kept to an acceptable level by buying or selling foreign currencies at spot
rates, where necessary, to address short term imbalances between entities.
The carrying amount of the Group's foreign currency denominated financial assets and financial liabilities at
the reporting date were as follows:
Singapore dollar
United States dollar
2019
2018
Assets
$
Liabilities
$
Assets
$
Liabilities
$
1,383,633
1,016
1,384,649
1,193,158
-
1,193,158
-
-
-
-
-
-
The Group had net assets denominated in foreign currencies of $191,491 (2018: $nil). At 31 December 2019,
if the Singapore dollar weakened by 10% against these foreign currencies with all other variables held
constant, the Group’s loss before tax would have been $19,149 lower (2018: $nil) and equity would have been
$19,149 higher (2018: $nil). The percentage change is the expected overall volatility of the significant
currencies, which is based on management’s assessment of reasonable possible fluctuations taking into
consideration movements over the last 6 months each year and the spot rate at each reporting date. The net
foreign exchange loss included in administrative expenses for the year ended 31 December 2019 was $4,961
(2018: $nil).
Interest Rate Risk
The Group’s exposure to the risks of changes in market interest rates relates primarily to the Group’s short-
term deposits with a floating interest rate. These financial assets with variable rates expose the Group to cash
flow interest rate risk. All other financial assets and liabilities in the form of receivables and payables are non-
interest bearing. The Group does not engage in any hedging or derivative transactions to manage interest rate
risk. The Group has not entered any hedging activities to cover interest rate risk. Regarding its interest rate
risk, the Group does not have a formal policy in place to mitigate such risks.
The following table set out the carrying amount by maturity of the Group’s exposure to interest rate risk and
the effective weighted average interest rate for each class of these financial instruments.
Fixed Interest Rate
Maturing
Non-
Interest
Bearing
< 1 Year
1 – 5
Years
>
5 years
Floating
Interest
Rate
Total
Weighted
Average
Interest
Rate
$
$
$
$
$
$
458,636
-
-
- 2,836,173 3,294,809
1.29%
2019
Financial assets
Cash and cash
equivalents
Sensitivity analysis was not performed on 2018 balances are the financial assets that were exposed to interest
rate risks were insignificant.
52
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 23. Financial Instruments (Continued)
Liquidity Risk
The Group manages liquidity risk by maintaining sufficient cash reserves and marketable securities and
through the continuous monitoring of budgeted and actual cash flows. No liquidity risk has been disclosed for
the Group as the Group’s financial assets and liabilities are contractually due on demand or within one year,
and the undiscounted cash flows approximate the carrying amounts as reported on the statement of financial
position.
Fair Values
For other assets and liabilities, the net fair value approximates their carrying value. The Group has no financial
assets or liabilities that are readily traded on organised markets and has no financial assets where the carrying
amount exceeds net fair values at the reporting date.
The aggregate net fair values and carrying amounts of financial assets and financial liabilities are disclosed in
the statement of financial position and in the notes to the financial statements.
Note 24. Contingent Assets and Liabilities
The Directors of the Group are not aware of any contingent liabilities which require disclosure in the financial
year ended 31 December 2019 (2018: nil).
Note 25. Commitments
From 1 January 2019, the Group has recognised right-of-use assets for operating leases. There are no other
commitments noted as at 31 December 2019 (31 December 2018: nil).
Note 26. Subsequent Events
In March 2020, the World Health Organisation declared the outbreak of a novel coronavirus (COVID-19) as a
pandemic, which continues to spread throughout Australia. The spread of COVID-19 has caused significant
volatility in Australian and international markets. There is significant uncertainty around the breadth and
duration of business disruptions related to COVID-19, as well as its impact on the Australian and international
economies and, as such, the Company is unable to determine if it will have a material impact to its operations.
The Directors are not aware of any other matter or circumstance that has arisen since the end of the financial
year that, in their opinion, has significantly affected or may significantly affect in future financial years, the
operations of the Group, the results of those operations or the Group’s state of affairs.
53
Osteopore Limited and its Controlled Entities
Notes to the Consolidated Financial Statements
For the year ended 31 December 2019
Note 27. Parent Entity Disclosures
The following information has been extracted from the books and records of the legal parent, being Osteopore
Limited and has been prepared in accordance with Accounting Standards. Osteopore Limited was incorporated
in December 2018, hence the comparative results are from incorporation date, 11 December 2018.
Financial Position
Total current assets
Total non-current assets
Total assets
Total current liabilities
Total liabilities
Net assets
Issued capital
Reserves
Accumulated losses
Total equity
Financial Performance
Loss for the year
Other comprehensive income
Total comprehensive loss
Consolidated
31 Dec 2019 31 Dec 2018
$
$
2,900,234
191,491
3,091,725
124,445
124,445
2,967,280
19,190,063
(13,807,149)
(2,415,634)
2,967,280
(2,415,634)
-
(2,415,634)
3
-
3
-
-
3
3
-
-
3
-
-
-
The Parent Entity has no capital commitments and has not entered into a deed of cross guarantee nor are
there any contingent liabilities at the year end.
54
Osteopore Limited and its Controlled Entities
Directors’ Declaration
For the year ended 31 December 2019
The Directors’ of the Group declare that:
1.
In the Directors’ opinion, the financial statements and accompanying notes set out on pages 19 to 54
are in accordance with the Corporations Act 2001 and:
a) comply with Accounting Standards and the Corporations Regulations 2001; and
b) give a true and fair view of the Group’s financial position as at 31 December 2019 and of its
performance for the year ended on that date;
2. Note 1 confirms that the financial statements also comply with International Financial Reporting
Standards (IFRSs) as issued by the International Accounting Standards Board (IASB);
3.
In the Directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay
its debts as and when they become due and payable;
4. The remuneration disclosures included in pages 10 to 15 of the directors’ report (as part of the audited
Remuneration Report), for the year ended 31 December 2019, comply with section 300A of the
Corporations Act 2001; and
This declaration is made in accordance with a resolution of the Board of Directors and is signed for and on
behalf of the directors by:
Brett Sandercock
Non-Executive Chairman
31 March 2020
55
Central Park, Level 43
152-158 St Georges Terrace
Perth WA 6000
Correspondence to:
PO Box 7757
Cloisters Square
Perth WA 6000
T +61 8 9480 2000
F +61 8 9480 2050
E info.wa@au.gt.com
W www.grantthornton.com.au
Independent Auditor’s Report
To the Members of Osteopore Limited
Report on the audit of the financial report
Opinion
We have audited the financial report of Osteopore Limited (the Company) and its subsidiaries (the Group), which
comprises the consolidated statement of financial position as at 31 December 2019, the consolidated statement of profit or
loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash
flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant
accounting policies, and the Directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
a giving a true and fair view of the Group’s financial position as at 31 December 2019 and of its performance for the
year ended on that date; and
b 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 believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Emphasis of matter – COVID-19
We draw attention to Note 26 of the financial report, which describes the circumstances relating to the material subsequent
event regarding COVID-19 and the uncertainty surrounding any potential financial impact on the financials. Our opinion is not
modified in respect of this matter.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
report of the current 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.
In addition to the matter described in the Emphasis of Matter – COVID -19 section, we have determined the matters described
below to be the key audit matters to be communicated in our report.
Grant Thornton Audit Pty Ltd ACN 130 913 594
a subsidiary or related entity of Grant Thornton Australia Ltd ABN 41 127 556 389
www.grantthornton.com.au
‘Grant Thornton’ refers to the brand under which the Grant Thornton member firms provide assurance, tax and advisory services to their clients
and/or refers to one or more member firms, as the context requires. Grant Thornton Australia Ltd is a member firm of Grant Thornton International
Ltd (GTIL). GTIL and the member firms are not a worldwide partnership. GTIL and each member firm is a separate legal entity. Services are
delivered by the member firms. GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate one
another and are not liable for one another’s acts or omissions. In the Australian context only, the use of the term ‘Grant Thornton’ may refer to
Grant Thornton Australia Limited ABN 41 127 556 389 and its Australian subsidiaries and related entities. GTIL is not an Australian related entity to
Grant Thornton Australia Limited.
Liability limited by a scheme approved under Professional Standards Legislation.
Key audit matter
Common Control Acquisition (Note 3)
During the period Osteopore Limited (“OSL”) acquired
Osteopore International Pte Limited (“OSI”).
Management determined that this acquisition was a common
control business combination. AASB 3 Business Combinations
specifically excludes common control business combinations
from its guidance, allowing management to apply the
purchase method or the pooling of interests method of
accounting. Management has adopted the pooling of interests
method to account for the acquisition from the completion date
of the acquisition being 17 September 2019.
This is a key audit matter given the nature of the transaction
and the judgement involved in determining the most
appropriate accounting treatment.
How our audit addressed the key audit matter
Our procedures included, amongst others:
Obtaining and reviewing the terms and conditions
contained in the Sales and Purchase agreements;
Obtaining the acquisition trial balance and performing
opening balance audit procedures to evaluate the
completeness and accuracy of assets acquired and
liabilities assumed;
Ensuring the total cost of the combinations included all
elements of consideration paid and payable with reference
to signed purchase agreements;
Evaluating management’s purchase price allocation
documentation and challenging their assessment of the
book values recorded for assets and liabilities recorded;
Re-calculating the common control reserve balances
reported by deducting the net assets acquired by the total
costs of the combinations; and
Ensuring the appropriateness of related financial statement
disclosures.
Information other than the financial report and auditor’s report thereon
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 2019, 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 we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial report or our knowledge obtained in the audit or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are
required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the financial report
The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view 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 Group’s ability 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 have 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.
A further description of our responsibilities for the audit of the financial report is located at the Auditing and Assurance
Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our
auditor’s report.
Report on the remuneration report
Opinion on the remuneration report
We have audited the Remuneration Report included in pages 10 to 15 of the Directors’ report for the year ended 31
December 2019.
In our opinion, the Remuneration Report of Osteopore Limited, for the year ended 31 December 2019 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.
GRANT THORNTON AUDIT PTY LTD
Chartered Accountants
L A Stella
Partner – Audit & Assurance
Perth, 31 March 2019
Osteopore Limited and its Controlled Entities
ASX Additional Information
Additional information required by the Australian Securities Exchange and not shown elsewhere in this report
is as follows. The information is current at 27 March 2020.
ORDINARY FULLY PAID SHARES
Substantial Shareholders
The names of the substantial shareholders (who hold 5% of more of the issue capital) are listed below:
Name
THE RAIN MAKER MGMT PTE LTD
MR TEOH SWEE HIN
MR GOH KHOON SENG
MR MARCUS LIEW
THE RAIN MAKER MGMT SDN BHD
BNP PARIBAS NOMS PTY LTD
Number of shares %
9,285,927
7,030,309
6,835,316
6,342,785
5,498,737
5,429,040
40,422,114
9.17
6.94
6.75
6.27
5.43
5.36
39.93
Distribution of Shareholders
Number of Holders
Number of Shares
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
TOTAL
406
615
326
414
51
1,812
293,644
1,691,526
2,651,120
11,813,207
84,781,005
101,230,502
There were nil holders of ordinary shares holding less than a marketable parcel.
Top Twenty Shareholders
The names of the twenty largest holders of quoted shares are listed below:
Name
Number of shares %
THE RAIN MAKER MGMT PTE LTD
THE RAIN MAKER MGMT SDN BHD
BNP PARIBAS NOMS PTY LTD
MR MARCUS LIEW
CHING-YUAN HUANG
HO-CHWAN INVESTMENT CO LTD
MR HANRY YU
ROUND TABLE PARTNERS BERHAD
MR MICHAEL MARCUS LIEW
CITICORP NOMINEES PTY LIMITED
TAN SIOW KHOON
MR LOW KOON POH
MS IRENE NG AI CHEN
MR GARY THOMAS CUNNINGHAM & MRS LORILIE SUSAN
CUNNINGHAM
MS GRACE HOW PEI YEN
ARIS NOMINEES PTY LTD
DR SALIM CASSIM
MR SHANE HOEHOCK WEE
ALBESDA PTY LTD
MR MOHAAMAD SHAMIN BIN MOHAAMAD SAHAFI
9,285,927
5,498,737
5,429,040
4,642,785
4,211,529
3,158,647
3,155,552
1,924,875
1,700,000
1,600,448
1,223,250
1,143,014
325,000
277,000
218,464
200,000
200,000
150,000
150,000
325,000
44,646,268
15.08
8.93
8.82
7.54
6.84
5.13
5.12
3.13
2.76
2.60
1.99
1.05
0.53
0.45
0.35
0.32
0.32
0.24
0.24
0.53
72.49
59
Osteopore Limited and its Controlled Entities
ASX Additional Information
UNQUOTED OPTIONS
The Company has 9,700,000 unquoted options exercisable at $0.25 each, expiring on 30 June 2022.
Option Holders
The name of the option holders (who hold 20% of more of the unquoted options issued) are listed below:
Name
KHOON SENG GOH
Distribution of Option Holders
Number of shares %
3,500,000
3,500,000
36.08
36.08
Number of Holders
Number of Options
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001 - and over
TOTAL
-
-
1
4
7
12
ON-MARKET BUY BACK
There is no current on-market buy back.
-
-
10,000
190,000
9,500,000
9,700,000
VOTING RIGHTS
All ordinary shares carry one vote per share without restriction. Options have no voting rights.
RESTRICTED SECURITIES
The Company’s restricted securities (including voluntary restricted securities) are listed below:
Restricted Securities
42,385,990 ordinary fully paid shares, restricted for 24 months from 23 September 2019.
427,094 ordinary fully paid shares, restricted for 12 months from 19 June 2019.
9,700,000 unquoted options exercisable at $0.25 each, expiring on 30 June 2022, restricted for 24 months
from 23 September 2019.
USE OF PROCEEDS
In accordance with listing rule 4.10.19, the Company confirms that it has used its cash and assets in a form
readily convertible to cash in a way consistent with its business objectives at the time of admission.
60