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2021 ANNUAL REPORT
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CONTENTS
CHAIRMAN’S LETTER
CEO REPORT
RÉDUIT
SWISSWELL
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE
DECLARATION
STATEMENT OF PROFIT OR LOSS
AND OTHER COMPREHENSIVE
INCOME
STATEMENT OF FINANCIAL
POSITION
STATEMENT OF CHANGES IN EQUITY
STATEMENT OF CASH FLOWS
NOTES TO THE FINANCIAL
STATEMENTS
DIRECTORS’ DECLARATION
CORPORATE DIRECTORY
INDEPENDENT AUDITOR’S REPORT
ASX ADDITIONAL INFORMATION
CORPORATE GOVERNANCE
STATEMENT
1
3
9
14
20
34
35
36
37
38
39
74
75
76
79
83
CHAIRMAN’S LETTER
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Dear Shareholders,
I am delighted to present this report for Wellfully Group (“Wellfully” or
“the Group”) for the year that ended 30 June 2021.
I would also like to
invite you to read the Chief Executive Officer report by Paul Peros for
a comprehensive review of our FY2021 operations and results.
I am happy to be able to report that with the work done through
FY2021, Wellfully is now operating as a fully-integrated science-based
wellness company – in line with our mission presented 2018. The year
has been marked by focus on infrastructure development, and the
corresponding diversification of commercial activities.
The Company has leveraged its technology portfolio to develop two disruptive consumer
brands: RÉDUIT in premium beauty and SWISSWELL in healthcare and wellness. While
RÉDUIT is celebrating its first birthday with a total of 10 applicator devices and 10
formulations across its unique Hairpods® and Skinpods®, SWISSWELL has finalised its go-to-
market preparations and launched the long-awaited Lubricen™ knee pain relief patches in
August 2021.
The existing products of Wellfully’s in-house brands are now selling into the blockbuster
consumer markets of personal care and beauty, beauty devices and pain relief patches.
With a combined annual growth rate of 7.3%, these are expected to reach US$ 0.5T by 2026.
Leveraging two decades of enhanced drug delivery R&D, and the experience of numerous
applications with international majors spanning beauty and healthcare, Wellfully is now
delivering innovative, patented products, designed to disrupt these markets and claim its
own positions in this multi-billion-dollar realities.
Sales of own branded products commenced in June 2020, and in addition to its direct-to-
consumer marketing activities, RÉDUIT is already engaged with over ten reputable retailers
across 8 countries, aiming to double its footprint in the short-term. SWISSWELL is not too
far behind: the brand initiated its presales campaigns in August and planning to ship the
first products in September 2021.
The new infrastructure, engineering and industrialisation capabilities and own product
platforms have also proven highly attractive to global industry partners across health and
beauty.
In addition to ongoing technology licensing activities, Wellfully has also successfully
engaged in joint development projects, as well as in 3rd party privately label collaborations
in the course of the year.
I deem that with the 2021 Annual Report, we are finally seeing the fruits of the labor of the
new Board and Management Team that are writing an exciting new chapter in their
respective, already strong business development records.
Kind regards,
Tony Varano
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CEO REPORT
FY2021 was a challenging, but important year for the Company. Notwithstanding the
constraints presented by the ongoing COVID-19 pandemic, Wellfully has managed to
complete the development activities set out across multiple fronts.
The Company has created an operations base and related infrastructure to allow for the
capture of value beyond technology licensing. Developing engineering, industrialisation
and topical formulation and production capabilities, as well as product management,
distribution and channel and content marketing capabilities, Wellfully is now able to scale
its vast enhanced drug deliveries technology portfolio across a series of commercial
activities from industry collaborations, to direct engagement with consumers through its in-
house brands.
With FY2021, the Company has become unique entity in the wellness space, combining
proprietary technology with a fully-integrated operations infrastructure, as well as its
consumer brands covering the premium beauty and wellness and health markets, ready to
drive innovation from research, through engineering and its own product platforms, all the
way to distribution and consumers.
In addition to its own brands, RÉDUIT and SWISSWELL, the year has also seen some of the
first collaborations within the industry scaling the new asset base beyond traditional R&D
activities.
We expect the FY2022 to be a year of growth and continued validation of both our
technology and growth strategy. We aim to continue our work on further developing a solid
basis for the sustainable creation of value.
In closing, I would like to thank all our employees on their efforts in building and developing
our organisation that by now spans four teams across three continents, as well as our
shareholders for their continued support and trust in our unique mission.
In continuation, you will find a brief overview of the key activities across Wellfully’s key
operation hubs across Australia, Asia and Europe.
ENHANCED DRUG DELIVERY INNOVATION LABORATORY
Perth, Australia
The Perth laboratory has been home to Wellfully’s innovation for over 20 years now, profiling
itself as one of the leading global centres for enhanced delivery technologies.
With 7 out of the total of 17 technology patents granted over the past couple of years, the
Perth team,
led by Wellfully’s founder Mr Jeffrey Edwards, continues its work on new
delivery technologies, driving the Company’s innovation pipeline for years to come.
Beyond pure R&D, the lab remains critical to the operation of the Company also due to its
long-standing tradition of product- and application-research. Through numerous
collaborations with leading global companies across personal care and health, the team has
gathered important project management and application development skillsets.
The team is also an integral part of the core product platforms development. From micro-
magnetic arrays, to field-in-motion systems, or the recent in-situ separation of mixtures
technologies, the Perth lab is making enhanced delivery a reality for all of Wellfully’s
products - and consumers around the world.
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CEO REPORT
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DEVICE TECHNOLOGY, ENGINEERING AND SOURCING CENTRE
Dongguan, China
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Created in 2019, the Dongguan-based device technology and sourcing centre has continued
to develop as the central hub of Wellfully’s operation.
In addition to its core focus on
engineering and industrialisation of devices, Dongguan has been increasingly been
supporting the activities of both the formulation labs in Switzerland, as well as the new
SWISSWELL product range in arrival. From the primary packaging of Skin- and Hairpods of
RÉDUIT, to the value chain of Lubricen, the Dongguan centre and its sourcing operation
have allowed for both faster time-to-market, as well as additional competitiveness across all
of Wellfully’s operations.
Dongguan was selected as a location due to its unique positioning within one of the largest
global technology and design centres. Placed in the Pear River Delta between Shenzhen
and Guangzhou, Dongguan is home to world-leading consumer technology and design
In addition to skilled and experienced talent, the
companies such as Apple and Luxottica.
Dongguan industrial district is also rich in high-quality suppliers and a competitive logistics
infrastructure.
Wellfully’s operation in Dongguan covers industrialisation engineering and tooling, new
components sourcing, device assembly operations, as well as logistics and supply-chain
management for all products of the Wellfully range.
FORMULATION LABORATORY AND TOPICALS PRODUCTION
Lugano, Switzerland
The work on the most recent of the additions to the Wellfully infrastructure has been
initiated in January 2021, and completed only eight months thereafter. The project, initially
planned for 2020, but delayed due to COVID-19 was accelerated in the course of the year in
order to ensure the supply of RÉDUIT’s Skin- and Hairpods.
Following a similar logic of ensuring the optimal location for the operation, Lugano in
Southern Switzerland was chosen as it is within the globally renown Swiss pharma and
biotech districts, as well as neighboring the cosmetics, beauty and personal care of Milano
and Lombardy, one of the most important industrials centres of Southern Europe, rich in
talent and specialist suppliers.
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The operation is focused on the evaluation of new ingredients, regulatory NPD coordination,
bulk production and filling operations for the RÉDUIT products. Current production
capacity is at up to 10.000 units of Skin- and Hairpods per day. The facility is in the process
of completing cGMP ISO 22716 certification.
From the consumer and positioning perspective, Lugano represents an important element
of the “Swiss Made” for both of the Company’s consumer brands.
Additional developments planned for the FY2022 period will also include increasing focus
on the sourcing and product management activities beyond the RÉDUIT brand.
DIGITAL MARKETING, MEDIA AND CONTENT CENTRE
Zagreb, Croatia
The focus of the operation in Croatia is digital marketing, covering activities from asset
creation and content management,
to digital media and channel collaborations
management.
The team is composed out of functional specialists with international backgrounds as the
city has over the past years become a hub for some of the new global unicorn companies
such as Bellabeat, Foreo and Rimac, that as of recently also includes the Bugatti brand.
In addition to specialist marketing functions ranging PR, media buying, e-commerce and
content management, the site also represents an attractive location for shared service
support activities such as customer care, logistics and administration, as well as a well-
positioned base for the increasing commercial B2B activities in Europe, both in terms of
talent availability and relative competitiveness.
Following a similar logic of ensuring the optimal location for the operation, Lugano in
Southern Switzerland was chosen as it is within the globally renown Swiss pharma and
biotech districts, as well as neighboring the cosmetics, beauty and personal care of Milano
and Lombardy, one of the most important industrials centres of Southern Europe, rich in
talent and specialist suppliers.
The organisation has grown dramatically over the past couple of years from less than 10
employees in Perth to over 100 across three continents.
It remains the key asset of Wellfully
in terms of driving growth and delivering value. The Company has taken great care to
ensure that each of the sites was carefully selected and placed in the best-suited location in
terms of competences, competitiveness, as well as brand- and market-related
considerations, building a foundation for the years to come.
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The developments of the infrastructure of the Company, have also placed Wellfully in a
unique position in terms of commercialisation opportunities. A fully-integrated value chain,
combined with proprietary technology and innovative products positioned to engage in and
potentially disrupt blockbuster markets such as beauty and personal care, or wellness were
quick to draw partner companies and open doors to novel collaboration opportunities.
TECHNOLOGY LICENSING - R&D based
Wellfully is continuing with its traditional commercial activities, working with multinational
partners in beauty, personal care and health in bringing enhanced delivery innovation in the
form of ad hoc, tailor-made solutions.
While the P&G collaboration was adjusted in order to allow the company use of its
technologies in skincare, a number of projects with the partner company are still ongoing.
Wellfully has also been increasing prospecting activities through the year engaging in a
series of new opportunities in healthcare.
Historically, the activity has been contributing A$ 1-2 M in revenues to the Company, and we
hope that the current portfolio of 2-3 interesting projects in the pipeline will allow Wellfully
to maintain, or even develop this commercial channel even further.
JOINT DEVELOPMENTS – Engineering & Sourcing based
The new engineering and sourcing capabilities have allowed Wellfully to engage in
commercial opportunities beyond the technology licensing.
Joint development project
prospecting activities have been underway through FY2021 with several potential partner
companies.
In addition to core technology, engineering and sourcing, these are also likely to allow for
industrial synergies and scale in execution. Wellfully is currently evaluating opportunities
with two partner companies in the beauty and personal care space.
Joint development collaborations should also allow for higher capture of more value in
terms of unit value for the products, or system components in discussion.
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PRIVATE LABELS – Product & Manufacturing based
The new industrial infrastructure has opened the commercial opportunities that allow for
the scaling of developed product and related industrial assets in the form of private label
collaborations.
Project have been evaluated in terms of complementarity and fit with the positioning of the
partner brands and networks.
The Company has engaged in a collaboration with BORK, a luxury retailer in Russia,
initiating the first phase of A$ 0.7 M out of a total target of A$ 2.0 M in value for the first year
engaging both the Dongguan as well as the Swiss operation for the production of products
based on the RÉDUIT platform.
Additional collaborations of that nature are in discussion with another potential partner
company.
OWN CONSUMER BRANDS – Marketing & Communications based
With RÉDUIT in premium beauty and SWISSWELL in health and wellness, Wellfully has
launched its own consumer brands through the past year.
In addition to scaling its complete infrastructure including marketing and communications
assets, the Company is also gathering important knowledge through direct engagement
with consumers, of value for the upstream collaborations.
In addition to the generation of direct sales, the development of and the experience with in-
house consumer brands is already providing the Company with valuable information
needed to further optimize the value and ensure success in industry collaborations.
RETAIL COLLABORATIONS – Joint Marketing Placements
Over the past 12 months, RÉDUIT has established collaborations with 10 retailers in 8
markets. These have been selected in terms of positioning fit and potential to boost the
brand’s reach and engagement with consumers.
The current retailers landscape spans beauty verticals such as Cult Beauty and Lookfantastic
as well as selective beauty chains such as Douglas. Wellfully aims to double its commercial
retailer footprint in the short term across new geographies in order to also ensure
diversification needed to reduce exposure to COVID-19-related lockdowns.
Retail collaborations also represent an important engagement and learning ground in the
form of joint marketing campaigns undertaken with partner companies, allowing the
Company’s brand to engage with consumers beyond its stand-alone perimeter.
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its new assets:
As the new infrastructure has become operative, Wellfully was quick in the commercial
scaling of
from engaging R&D in technology licensing, to using new
engineering and sourcing capabilities in joint development collaborations, product and
industrials assets for private label projects, and in-house content and consumer marketing
in working with own in-house brands, or with 3rd party retailer collaborations, the Company
is maximizing value capture along the complete value chain and, at the same time,
reducing commercial exposure and risk to single collaboration modalities, or partners.
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CHANGE OF COMPANY NAME
The Company announced it had changed its name from OBJ Limited to Wellfully Limited as
part of a rebranding aimed at alignment with the Company’s focus and activities moving
forward.
APPOINTMENTS
Anthony Wright was appointed to the board as a Non-Executive Director in April. Mr Wright
is a highly credentialled executive with more than 20 years’ experience across governance,
legal, strategy and sales and marketing roles. He has worked with leading Australian and
international organisations, including Transpacific Industries Group Ltd (now Cleanaway Ltd)
and the PGA Tour. At the time of his appointment, Mr Wright was an Executive Director of
LOD, a global leader in the legal, risk and compliance services market. Mr Wright had
previously founded Lexvoco and sold it to LOD/Bowmark Capital in 2019 which has ~500
staff across 12 countries.
The board renewal was followed by the appointment of Sergej Dolezil as Wellfully’s Chief
Financial Officer in May. Mr Dolezil began his career with KPMG working in audit, tax
consulting, and mergers and acquisitions.
In addition to more than eight years leading the
auditing departments of the largest regional energy and insurance companies, he held a
series of C-level and board positions with responsibilities spanning mergers and acquisitions,
fundraising, as well as general financial planning and administration management roles. Mr
Dolezil is based in Wellfully’s Zagreb office.
FUNDING ACTIVITIES
Wellfully completed two equity raisings during FY21 to support funding activities including
technology licensing, business development, the SWISSWELL launch, and general working
capital.
In Q1 FY21, the Company completed an entitlement offer and placement, together raising
up to approximately $3.74 million before costs. That was followed by an oversubscribed
placement in Q3, which raised $4.5 million from sophisticated and professional investors.
The placement was accompanied by an entitlement options offer (Loyalty Offer), which
raised an additional $123,322.
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In French ‘RÉDUIT’ means ‘reduced’
We reduce packaging. Amplify results.
Reduce time. Amplify efficacy.
Reduce steps. Amplify beauty.
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Our products are free from
unnecessary ingredients that
offer little benefit to skin and
hair. Instead, we concentrate
the actives to deliver
maximum benefit and
minimum waste.
The RÉDUIT Enhanced Delivery
treatment
actives
from the
Technology is
answering the
formulations, deeper
into the
industry’s biggest challenges –
skin, breaking through the initial
ineffective
application
and
protective barrier.
avoidance
unnecessary
ingredients used in formulations
while
allowing
for
a
new
paradigm in sustainability.
Our
proprietary
Enhanced
Delivery Technology - Magnetic
Misting utilizes diamagnetism in
water and other compounds to
improve skincare and haircare
treatment delivery by increasing
partitioning of actives from the
formulation and the effectiveness
of absorption itself.
RÉDUIT is poised to foster new
standards of sustainability in the
beauty industry. It’s at the core
of our name - ‘RÉDUIT’.
Our brand ethos is to deliver a
superior performance using a
fraction of product applied, all in
the
form of
user-friendly,
attractive products. We are
actively
aligning our
testing
activities to focus on real
life
applications,
relevant
consumers
and
for
their
The RÉDUIT devices contain a
understanding of the advantages
small,
non-invasive
induction
of enhanced drug delivery.
magnet
that helps push the
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RÉDUIT Applicators
Hair & Skinpods®
Medical-grade Silicone
Non-porous and clean for
every-day use.
Non-slippery.
Beautiful to touch.
Smart Swiss Design
Intelligent, waterproof,
one-touch innovation.
Long Lasting Battery
Travel friendly.
3-month charge.
Premium touch & feel of the
application surface. easy to clean,
tear resistant.
Multi-LED Indicators
Charge cycle indication
Battery status and operation
QR Code Serial Number
Unique serial number.
Easy to scan for registration
and warranty.
Micro-USB Charging
Ease of charge anywhere
in the world
Small and compact
Waterproof
Worry-free use and handling
in all situations
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The RÉDUIT system is composed out of the
applicator device and the topical formulations
contained in the Hairpods and Skinpods, small
but smart 5 ml containers with concentrated
actives good for 20-30 uses by the consumer.
The RÉDUIT system in universal: one applicator
device can be used with multiple skin- and
haircare products.
The effectiveness of treatment is tested for
Enhanced Delivery across all formulations, both
in laboratory conditions, as well as in field trials
consumer.
With the 5 ml Hair- and Skinpods being
equivalent to 100 ml of traditional products,
RÉDUIT is also performing on the sustainability
dimension both in terms of product, as well as
packaging materials and logistics.
In addition,
RÉDUIT also offers the global Return and
Renew program to receive and refurbish, or
Smart Skinpods™ / Hairpods™
Automatic electronic formula
recognition
Highly concentrated actives in
formulas
Limited non-actives and
secondary ingredients
Bi-directional cap seal
Prevent leakage and product
drying
Ultrasonic Diffusion Ceramic
transducer for mist creation
Only 5 ml volume,
equivalent to 100- 200 ml of
traditional product
Return & Renew program
sustainability cycle completed
Swiss Made
Developed & produced in
RÉDUITs Lugano lab
recycle used pods in return for attractive
rewards in the form of coupons.
Last, but not least, the ergonomics of the
system are respected in every single design
dimension, making sure that the applicators
and pods are intuitive and simple to use: one-
button operation, automatic pod formulation
recognition and a product that is always ready
to use, are just some of the criteria that were
applied in the creation of the RÉDUIT system.
The Company has taken utmost care in order
selected materials and great attention to detail
in the execution of a product that is both
performing and easy to use, as well as
attractive to engage with in order to ensure
both initiation adoption of the innovation, as
well
as
continuous
engagement
and
exploration of new products for users that
have started using Hair- and Skinpods in their
beauty routines.
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to ensure superior performance for
the
to provide a high-quality product with carefully
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by
Ultrasonic diffusion allows for the creation of
Magnetic misting helps create a super-fine film
smaller
droplets
and more
effective
and by reducing the surface tension.
In
application: the droplets, 50x smaller than a
traditional spray allow the perfect amount of
formula to reach and evenly distribute in order
to get better coverage on the surface of the
skin or hair
addition,
the RÉDUIT
devices
generate
diamagnetic forces to give energy to the
diffusion, enhancing the absorption of active
ingredients, and placing active ingredients
deeper in hair and skin.
ENGINEERED FOR EFFECTIVE DELIVERY ….
50x SMALLER
BETTER
COVERAGE
DIAMAGNETIC
WAVEFORM
BETTER
ABSORPTION
DEEPER
PENETRATION
NO RESIDUE
By using concentrated actives,
the total
At the same time, the lightweight formulas
product and material for packaging is reduced
reduce
the
total
number of
non-active
20x
for
unparalleled
sustainability
ingredients for better performance and less
performance.
residue.
… AND A NEW SUSTAIBILITY PARADIGM
Traditional
Topicals
80-95%
water
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Thickeners
Binders
Fixatives
“Marketing
Claims’”
Ingredients
RÉDUIT
Hairpods™
Skinpods™
100 ml product
30-35 ingredients
80 g primary
5 ml product
10-12 ingredients
12 g primary
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The RÉDUIT
brand
has
been
building
Given, the significant innovation of the RÉDUIT
communication
channels,
both
on
own
system itself, owned channel communications
platforms, as well as through engagement with
traditional PR. The novelty factor has greatly
are focused on top-of-the-funnel activities such
as general awareness and education.
In this,
contributed to a
number of prominent
multiple touchpoint strategies and content-
placements achieved in the course of the first
year of operation.
oriented formats such as YouTube videos with
influencers, or blogs and newsletter were key.
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SOCIAL MEDIA
Powerful advertising
campaigns
Influencers & KOLs
NEWSLETTER
RÉDUIT newsletters
deliver quality content to
a growing number
subscribers
Valuable data & cheap
conversions
EARNED MEDIA
Content generation for
unpaid coverage in the
world's largest
publications.
RÉDUIT BLOG
RÉDUIT blog provides
comprehensive, but
tailored information to
engage users
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On the B2B communications
front,
the
The first retail placements have also allowed
Company continues to leverage and cultivate
for opportunities in joint marketing campaigns
extensive
industry
network
of
the
that are being undertaken with the new retail
leadership and senior management teams.
In addition, RÉDUIT is engaging in the first
partners of the brand.
Across RÉDUIT’s many commercial channels,
trade
and industry
fairs
and exhibition
consumer-focused campaigns will be executed
following the initial presentation at CES in Las
for the key promotional periods such as the
Vegas and the subsequent outbreak of COVID-
Singles Day, or Black Friday across interested
19.
markets.
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Direct engagement with consumers through
optimizing messaging and communications,
the first year of operation has also allowed for
but also engaging in possible product and
valuable insights in the purchasing behavior of
supporting materials improvements.
consumers.
Given the level of novelty of
system, understanding consumers is key in
The key performance dimensions
in this
the RÉDUIT
development phase were repurchase and
Purchase Type
NEW (with device) vs REPLENISHMENT
(topical-only) PURCHASE
Pipeline Evolution
Replenish
34%
1st
Purchase
66%
Repurchase Frequency
PERCENTAGE OF ORDERS AS
PURCHASES BY THE SAME
CONSUMERS
Customer Retention
78%
cross-category sales patterns.
Selling in new devices and increasing the
overall base
is
important.
Still, with
commercial sales at <12 months since start,
and new applicator devices launches as late
as April, the mix is already significant in terms
of the presence of replenishment sales, that is,
sales of Hairpods and Skinpods-only by
consumers that have already purchased the
device.
While most of the marketing activities are
focused on top-of-the-funnel, we’ve also
started to follow and support, primarily via
CRM, the repeat sales of Skin- and Hairpods
actively.
Being able to act on the CLV parameter
(customer lifetime value), we can successfully
gauge and plan customer acquisition costs in
order
to continue to expand RÉDUIT’s
16%
customer base.
1
2
5%
3
3%
4+
Application Purchases
PERCENTAGE OF ORDERS BY
APPLICATION (skin, hair, or both)
Offer Versatility
Hair
35%
Both
19%
Skin
46%
Another
key
indicator
in monitoring
purchasing behavior is the mix and the cross-
selling between application categories, a
direct link to the universality value proposition
of the RÉDUIT system.
Seeing both a health balance between hair
and skin applications, as well as a health
development of a customer pool engaged
across both categories represents a validation
of the initial approach to the topicals range
spanning hair- and skincare, as well as a good
initial signal for the recently launched UNI
(universal) applicator device range,
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Be more than a device brand,
be a wellbeing movement.
SWISSWELL is a modern biotechnology brand
Born from the desire to create a better way to
guided by creating wellness products
that
treat
joint pain and help to reduce people’s
technology to address some of society's most
Harnessing the power of Lubricen’s® patented
address the challenges of millions of people
around the globe who are looking for more
sustainable approach to health and wellness.
We
are
reimagining therapeutic
technology
because we want to improve and extend overall
quality of people's lives.
We use innovative approaches and breakthrough
challenging and evolving needs.
Backed by technology,
informed by science,
SWISSWELL is transforming active lifestyles with
the world’s first
technology enhanced joint
management system - the Lubricen® knee patch.
Lubricen®, is an adhesive knee patch worn on
the knee to lubricate the joint before, during and
after physical activity.
reliance on painkillers, the Lubricen® Knee Patch
is a direct-to-consumer, drug-free remedy for
knee joint inflammation that works directly at the
site of injury and helps empower people to take
control of their condition and continue to live an
active and fulfilling life.
transdermal delivery system,
this little power
patch starts working immediately after application
and continues to work for up to 24 hours. The
formulation
incorporates
key
aggrecan
compounds (known to stimulate the body’s
production of
joint
lubrication)
into a hydrogel
structure that makes for easy application to the
skin with minimal residue.
14
Lubricen® knee patch provides hope to
l
millions of people around the world with a
safe,
long-term remedy to knee pain by
The key feature of the patch is the patent
protected
diamagnetic
micro-array
technology. It assists the transporting of key
ingredients across the skin and into tissue
around the knee. The technology helps push
these large sized molecules through skin,
which have difficulty penetrating the skin
relying on absorption alone.
The key ingredients are contained in a drug-
free
formulation
(Glucosamine
Sulfate,
Chondroitin Sulfate, and Menthol, acting as a
sensory agent). These ingredients are known
to be precursor aggrecans required by the
body to produce synovial fluid - the body's
natural joint lubricant.
addressing
inflammation,
the
underlying
cause
of
letting people maintain their
healthy lifestyles.
The SWISSWELL Lubricen knee patch is the
ongoing solution for knee pain without any
fear of side effects.
With a drug-free formula, the Lubricen® knee
patch
harnesses Wellfully’s
diamagnetic
micro-array technology that is embedded in
the knee patch, which helps push the active
molecules contained in the formula deep
through the skin barrier and into the tissue
around the knee.
The SWISSWELL
Lubricen, a product
innovation
start with
that provides a new
meaningful
solution
poised
to
change
consumers’ lives for the better, and all within
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MAGNETIC
MICRO– ARRAY
Achieves deeper
penetration of active
ingredients.
Starts pushing molecules
as soon as applied to skin
DIAMAGNETIC
REPULSION
Pushes molecules of
different sizes and
properties out of
formulation
CLINICALLY
VALIDATED
Clinically proven to
improve mobility and
function
DRUG-FREE
PAIN RELIEF
A synthetic blend of key
ingredients known to
improve cartilage function.
Safe for regular and ongoing
use.
STARTS WORKING
IMMEDIATELY
Highly effective delivery of
SWISSWELL’s drug free
actives, provides
immediate results
a blockbuster market of pain relief patches of
over US$ 9 B.
1. https://www.marketwatch.com/press-release/pain-relief-patches-market-size-in-2021-78-cagr-with-top-countries-data-research-high-demand-share-industry-analysis-
by-top-manufactures-growth-insights-and-forecasts-to-2026-2021-08-09
15
Lubricen uses proven compounds that are delivered effectively.
NSAID’s (e.g.
Glucosamine Sulphate, Menthol, delivered via diamagnetic repulsion to enhance transdermal penetration.
It is a validated and safe alternative to
SWISSWELL Lubricen is a formulation containing Chondroitin Sulphate,
ibuprofen).
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FORMULATION
RATIONALE
Glucosamine-sulphate & Chondroitin Sulphate
Extensively used to treat OA (bioavailability variable for different
formulations)
Evidence of anti-inflammatory, antioxidant and anti-catabolic effects3
Pharmacoeconomic analysis shows reduced need for NSAID medications
and reduced need for total joint replacement at 5 years4
GLUCOSAMINE
PENETRATION
COMPARED
OVER TIME
200
160
120
80
40
2
m
c
/
g
µ
,
d
e
r
e
v
i
l
e
d
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o
i
t
a
r
t
n
e
c
n
o
C
0
0
6
13
19
25
Time, hours
Ex isting Glucosamine Cream
Lubr ic en (Passive)
Magnetic Micr o-arr ay
DELIVERY
RATIONALE
As demonstrated in the Chart (right), Wellfully’s magnetic micro-array can
deliver compounds deep into the epidermis, providing advantages over:
Oral Delivery – where bioavailability can be poor
Intra-articular
compliance
injection – significant hurdle for administration and
1. (Balazs 2004) .2. Systematic review of meta-analyses (Campbell et al 2015) and Expert Consensus statement (Henrotin et al 2015) 3. (Henroitin and
Lambert 2013). 4. (Bruyere et al 2016)
16
CLINICAL VALIDATION OF
SWISSWELL LUBRICEN
CLINICALLY PROVEN TO IMPROVE
MOBILITY AND FUNCTION
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Successful
results with
equivalent or
even superior
outcomes across
all parameters of the trial
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Trial Summary
Evaluation of transdermal delivery of key ground substance components in
comparison to an established non-steroidal anti-inflammatory formulation in
subjects with prior knee injury1
Trial Type
Randomised, Controlled, Equivalence Trial
Trial Comparison
Compared SWISSWELL Lubricen Knee Patch and a topical NSAID formulation
(Diclofenac sodium gel 1%2) administered X2 daily over a 2 week period
Participants
114 Male subjects aged 40 - 55 years
Good general health
Currently participating in regular physical activity (>2 hours per week)
Prior history of knee injury requiring arthroscopy surgery, and/or prolonged
history of recurrent knee pain (>2/10 on pain numerical rating scale)
At increased risk of developing knee OA
Outcome Measures
Aggregated Function Score
Timed 10m shuttle run
Timed Balsom agility run
Timed Stair climb
Timed step test
Total time to complete all tests
Knee injury and Osteoarthritis Outcome Score (KOOS) (Roos et al 1998)
3 Subscales: Pain, Function, Sports Function (normalized)
Pain numerical rating scale
11 point scale – 0=no pain, 10=worst pain (Two Strata =
Average pain, Worst pain)
Analysis – Intention to treat – Linear mixed effects modelling
17
CLINICAL VALIDATION OF
SWISSWELL LUBRICEN
CLINICALLY PROVEN TO IMPROVE
MOBILITY AND FUNCTION
**A. WRIGHT1, B. VICENZINO2, J. EDWARDS1, G. TSADILAS1, P. LAWRENSON2,
A. KHAN2, A. STEPHENSON2, L. HEALES2, B. ANDRIANI1, OBJ LTD1,
UNIVERSITY OF QUEENSLAND2
PHYSICAL FUNCTION
PAIN: WORST PAIN STRATUM
Pre
74.4
76.4
Post
67.4
68.6
(%)
(9.4%)
(10.2%)
Equivalent Results
0.8% NSAID Outperformance
=
Lubr ice n
NS AID
Pre
5.8
5.7
Post
3.9
4.7
(%)
(32.7%)
(17.5%)
Superior Results
15.2% Lubricen Outperformance
✓
Lubr ice n
NS AID
PAIN: AVERAGE PAIN STRATUM
Product
Lubricen
NSAID
Pre
3.5
3.4
Post
2.1
2.4
(%)
(40.0%)
(29.4%)
Superior Results
10.6% Lubricen Outperformance
✓
Product
Lubricen
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NSAID
8 7.5
8 0.
65 .
57 .5
72 .5
)
c
e
S
(
e
m
i
T
e
s
u
50.
Product
l
Lubricen
7.
3.5
5.2 5
0
1
/
S
R
N
P
NSAID
a
n
o
s
r
e
p
1 .7 5
0.
r
o
F
0
1
/
S
R
N
P
3.75
2.5
5.
1 .2 5
0.
KOOS FUNCTION
Product
Lubricen
NSAID
Pre
76.7
77.8
Post
82.2
80.1
(%)
7.2%
2.9%
Equivalent Results
4.2% Lubricen Outperformance
=
0
0
1
/
e
r
o
c
S
S
O
O
K
8 5.
8 0.
75 .
70.
Lubr ice n
NS AID
KOOS SPORT
Product
Lubricen
NSAID
Pre
54.0
48.2
Post
62.8
55.9
(%)
16.3%
16.0%
Equivalent Results
0.3% Lubricen Outperformance
0
0
1
/
e
r
o
c
S
S
O
O
K
70.
65 .
60.
55 .
50.
45 .
40.
Lubr ice n
NS AID
KOOS PAIN
Product
Pre
Post
(%)
Lubricen
66.5
72.2
8.6%
NSAID
66.4
69.9
5.3%
Equivalent Results
3.3% Lubricen Outperformance
75 .
0
0
1
/
e
r
o
c
S
S
O
O
K
70.
65 .
60.
=
=
18
Lubr ice n
NS AID
Lubr ice n
NS AID
The SWISSWELL launch represents the initiation of a clearly defined sales strategy:
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Stage 1 Initiated – Direct to Consumer Campaign
Wellfully launched the SWISSWELL Lubricen patch in August 2021 via an exclusive Direct to Consumer
(DTC) campaign
Consumers accessed the introductory offers by invitation or pre-registration and can choose from three
different product packs
The DTC Campaign is an effective, low-cost strategy to initiate sales
Next Steps – Replicate RÉDUIT Marketing and Sales Strategy
Advance the marketing and sales initiatives via the engagement of key opinion leaders, influencers, notable
publications and third-party distributors, both online platforms and brick & mortar
The Company looks forward to updating the market on the progression of SWISSWELL as these initiatives
materialise
Significant Commercial Opportunity
The Global Pain Relief Patches market size is projected to reach US$9.4bn by 2026, from US$6.0bn in
2020, at a CAGR of 7.8%1
1. https://www.marketwatch.com/press-release/pain-relief-patches-market-size-in-2021-78-cagr-with-top-countries-data-research-high-demand-share-industry-analysis-by-top-
manufactures-growth-insights-and-forecasts-to-2026-2021-08-09
19
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DIRECTORS' REPORT
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The directors present their report on the results of Wellfully Limited and its controlled entities (the
“Consolidated Entity”) for the year ended 30 June 2021.
DIRECTORS
The names of directors in office at any time during or since the end of the financial year are:
Mr Antonio Varano Della Vergiliana
Mr Jeffrey David Edwards
Mr Steven Lorn Schapera
Mr Cameron Reynolds
Mr Anthony David Wright
(appointed: 14 April 2021)
PRINCIPAL ACTIVITIES
The principal activities of the Consolidated Entity during the financial year ended 30 June 2021 were
research and development for its Dermaportation and ETP transdermal drug delivery technologies, as well
as sales and marketing activities detailed in the Chief Executive Officer’s report.
There were no significant changes in the nature of the Consolidated Entity’s principal activities during the
financial year other than those referred to in the Chief Executive Officer’s report.
OPERATING RESULT AND FINANCIAL POSITION
The net consolidated loss of the Consolidated Entity after providing for income tax amounted to
$6,397,257 (2020: loss of $3,713,117).
The net assets of the Consolidated Entity at 30 June 2021 were $2,308,611 (2020: net liabilities
$1,219,031). At that date, there was cash and cash equivalents of $2,725,636 (2020: $612,172).
DIVIDENDS PAID OR RECOMMENDED
No dividends were paid during the year ended 30 June 2021.
The Board has not made a recommendation to pay dividends for the period to 30 June 2021.
20
DIRECTORS' REPORT (continued)
REVIEW OF OPERATIONS
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The Consolidated Entity continues to pursue development of its Dermaportation and Enhanced
Transdermal Polymer (ETP) technologies, review its intellectual property assets and evaluate new
business opportunities to strengthen its technology and/or product portfolio with the objective of
enhancing shareholder value, as well as sales and marketing activities relating to the Company’s brands
RÉDUIT and Swisswell. Further details are noted in the Chief Executive Officer’s report section of the
Annual Report.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There have been no significant changes in the state of affairs of the Consolidated Entity other than those
referred to in the Chief Executive Officer’s report.
LIKELY FUTURE DEVELOPMENTS AND EXPECTED RESULTS
Certain information regarding future developments has been disclosed in the Chief Executive Officer’s
report. The disclosure of expected results of likely future developments is likely, in the opinion of the
directors, to result in unreasonable prejudice to the interests of the Consolidated Entity and accordingly,
this information has not been disclosed in this report.
ENVIRONMENTAL REGULATION
The Consolidated Entity is not affected by any specific environmental legislation.
INFORMATION ON DIRECTORS
Mr Antonio Varano Della Vergiliana
Mr Varano has more than 30 years experience across Australia, Europe and the USA, operating and
managing successful entrepreneurial, corporate and investment pursuits. This experience has covered
start up, funding and growth, corporate operations, executive management and business exits. His
expertise spans retail, cosmetics, skincare, real estate, agriculture, publishing, construction,
entertainment and the arts. Many of these businesses have achieved a dominant position in the markets
in which they operate. New York-based, Mr Varano holds Board and investment positions in several
companies he has either founded or invested in at an early stage. Mr Varano studied business at the
Western Australian Institute of Technology, and an MBA at the University of Western Australia. During
the past three years, Mr Varano has not held a directorship in any other listed companies.
21
DIRECTORS' REPORT (continued)
Interest in shares at 30 June 2021: 3,393,997
Interest in listed options at 30 June 2021: 477,778
Mr Jeffrey Edwards
Mr Edwards is the founder and Managing Director of the Company and has led the Science, Technology
and Innovation activities from the Company’s inception. Mr Edwards is responsible for Licensing and
Partnering programs with Procter & Gamble and other partners, Intellectual Property and Technology
Innovations. He is the recipient of an Australia Design award, and Product Innovation and Partnering
awards from Procter & Gamble Consumer Products Divisions. During the past three years, Mr Edwards
has not held a directorship in any other listed companies.
Interest in shares at 30 June 2021: 2,021,550
Interest in listed options at 30 June 2021: 1,347,701
Mr Steven Schapera
Mr Schapera founded the successful BECCA Cosmetic brand (www.beccacosmetics.com) and
commercialised it into a range of cosmetic products that were distributed throughout Europe, Asia and
North America. Mr Schapera guided BECCA from its infancy through to being a global player in the luxury
cosmetic space. In 2016, BECCA was sold to Estee Lauder for more than US$230 million. Mr Schapera is
Chairman of BECCA Holdings Pty. Ltd.; he serves as a non-executive Director on the Board of Invincible
Brands GmbH., arguably Europe’s most successful influencer-marketing business, and recently assisted
with their partial sale to Henkel. He is also Founder and Managing Director of London-based Lab Brands
Limited and is a non-executive Director of Wild Nutrition Ltd, a fast-growing player in the vitamin and
mineral supplement space. Mr Schapera is Chairman of ASX-listed Crowd Media Holdings Ltd,
headquartered in the Netherlands. During the past three years, Mr Schapera has not held a directorship
in any other listed companies other than those detailed above.
Interest in shares at 30 June 2021: 4,359,504
Interest in listed options at 30 June 2021: None
Mr Cameron Reynolds
Mr Reynolds is the President, Chief Executive Officer (CEO) and Director of VolitionRX, a biotech company
which listed on the New York Stock Exchange (NYSE) in February 2015 after being founded by Mr Reynolds
in 2010. He has extensive experience in the management, structuring, and strategic planning of start-up
companies and has held positions including CEO, Chief Financial Officer and Non-Executive Director of
public and private enterprises. During the past three years, Mr Reynolds has not held a directorship in
any other listed companies.
Interest in shares at 30 June 2021: 829,166
Interest in listed options at 30 June 2021: 133,333
22
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DIRECTORS' REPORT (continued)
Mr Anthony Wright
Mr Wright is an experienced senior executive with more than 20 years of experience across leadership,
commercial, legal, governance, strategy, sales and marketing roles in leading global and Australian
organisations including Transpacific Industries Group Ltd (now Cleanaway Ltd) and the PGA Tour. Until
recently, Mr Wright was an Executive Director of LOD, a global leader in the legal, risk and compliance
services market. He leads its consulting, services and innovation divisions. Prior to this, he founded and
was Chief Executive Officer of Lexvoco, an award-winning legal, risk and compliance services and tech
business commenced in 2014 which employed 100+ staff and operated in Australia, New Zealand and
Japan. Lexvoco was acquired by LOD/Bowmark Capital in 2019. He held multiple senior executive roles
at Transpacific Industries including Group General Counsel and General Manager, Strategy and Systems,
and he was a Director for the PGA Tour, commercialising and promoting professional golf tournaments in
Asia Pacific, after earlier legal and accountancy-related positions. His qualifications include Bachelor of
Laws, Bachelor of Business (Accounting), Master of Laws, MBA, and he is Lean Six Sigma (Green Belt)
qualified and a Graduate of the Australian Institute of Company Directors. Anthony is admitted as a
solicitor in Australia and New Zealand. In addition to his directorship with the Company, Anthony is also
a director with Ausroad Blast Technologies, a joint venture with Ausroad Systems and the University of
Queensland focused on the automation of drilling and blasting at mine and infrastructure sites. During
the past three years, Mr Wright has not held a directorship in any other listed companies other than those
detailed above.
Interest in shares at 30 June 2021: 833,333
Interest in listed options at 30 June 2021: None
COMPANY SECRETARY
Mr John J Palermo B.Bus, FCA, AGIA
Mr Palermo is a Chartered Accountant with over 20 years experience in Public Practice. His areas of
expertise are in corporate advisory, strategic business management and business structuring. Currently
a Director of Palermo Chartered Accountants, he has experience in public company accounting and
administration. Mr Palermo is a Director and Chairman of Chartered Accountants Australia and New
Zealand and Deputy Chairman of the Royal Perth Hospital Medical Research Foundation. He is also a
Director of ASX listed Alterra Ltd.
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DIRECTORS' REPORT (continued)
CEO
Mr Paul Peros
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For over 25 years, Paul has been working on growth-orientated performance strategies and disruptive
innovation, developing brands and businesses for challenges in an ever-changing world and the ‘new
normal’. Prior to Wellfully, Paul led a number of successful engagements in luxury consumer products
and beauty-tech. Paul was the CEO of Swedish brand FOREO, from its 2013 inception, to what was
effectively global market leadership with over USD 1 billion in revenues and a presence in over 80
countries achieved in a short period of five years. In addition to his zeal for innovation across all activities
of an organisation, Paul’s drive is also rooted in his extensive experience in management consulting. He
was part of the Milan-based GEA for over 10 years, engaging with global leaders on product and brand
development. Paul holds an MBA from IMD, Lausanne and a BS in Physics from UCLA.
CFO
Mr Sergej Dolezil
Sergej Dolezil took the role of Wellfully’s CFO effective 1 May 2021. Mr Dolezil began his career with one
of the Big Four global accounting firms working in audits, international business consulting and M&A, as
well as tax advisory. In addition to more than eight years leading the Auditing Departments of the largest
regional energy and insurance companies, he held a series of C-level and Board positions with
responsibilities spanning M&A, fundraising, and general financial planning and administration
management roles. Mr Dolezil is based in Wellfully’s Zagreb office.
DIRECTORS’ MEETINGS
During the financial year ended 30 June 2021, the Company held directors’ meetings, including directors’
resolutions. The total number of meetings attended and circular resolutions executed by each director
were:
Board Meetings
Number Eligible
to Attend
Number
Attended
Resolutions
Number
Executed
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Mr A Varano Della Vergiliana
Mr J D Edwards
Mr S L Schapera
Mr C Reynolds
Mr A D Wright (appointed: 14/04/2021)
5
5
5
5
1
5
5
5
5
1
24
24
23
24
3
24
DIRECTORS' REPORT (continued)
EVENTS SUBSEQUENT TO REPORTING PERIOD
On 5 July 2021, the Company announced the Unmarketable Parcel Sale Facility had closed. The total
number of shares sold under the Facility was 4,205,518 shares at a price of $0.0502 per share.
On 14 July 2021, the Company announced that it had been granted a trademark for SWISSWELL by the
Swiss Federal Institute of Intellectual Property.
The impact of the Coronavirus (COVID-19) pandemic is ongoing, it is not practicable to estimate the
potential impact, positive or negative, after the reporting date. The situation is rapidly developing and is
dependent on measures imposed by the Australian Government and other countries, such as maintaining
social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be
provided.
There has been no other matter or circumstance that has arisen since the end of the financial year that
has significantly affected, or may significantly affect, the operations of the Consolidated Entity, the results
of those operations, or the state of affairs of the Consolidated Entity, which has not been announced to
the market.
SHARE OPTIONS
As at 30 June 2021, there existed the following options:
Unlisted Options
6,150,000 unlisted options, exercisable at $0.10 on or before 19 August 2023.
Listed Options
154,986,434 listed options, exercisable at $0.15 on or before 31 March 2023.
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DIRECTORS' REPORT (continued)
CORPORATE STRUCTURE
Wellfully Limited is a company limited by shares that is incorporated and domiciled in Australia with its
principal place of business at Ground Floor, 284 Oxford Street, Leederville, Western Australia.
Wellfully Limited has prepared this consolidated financial report incorporating the entities that it
controlled during the financial year, which are outlined in the following illustration of the Consolidated
Entity’s corporate structure:
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DIRECTORS' REPORT (continued)
REMUNERATION REPORT (AUDITED)
This report outlines the remuneration arrangements in place for directors and executives of the
Consolidated Entity.
Remuneration policy
The Board receives independent advice on remuneration policies and practices generally, and also
receives specific recommendations on remuneration packages and other terms of employment for senior
executives. There is no use of external remuneration consultants during the year ended 30 June 2021.
Executive remuneration and other terms of employment are reviewed annually by the Nomination and
Remuneration Committee and the Board having regard to performance against goals set at the start of
the year, relevant comparative information and independent expert advice. As well as a base salary,
remuneration packages include superannuation. Remuneration packages are set at levels that are
intended to attract and retain executives capable of managing the Consolidated Entity’s operations.
Remuneration of non-executive directors is determined by the Board (following recommendations from
the Nomination and Remuneration Committee) within the maximum amount approved by the
shareholders from time to time.
The Board undertakes an annual review of its performance against goals set at the start of the year.
At the 2020 AGM, 43% of the votes received supported the adoption of the remuneration report for the
year ended 30 June 2020.
Directors and Executives Remuneration:
The Board is responsible for making recommendations on remuneration packages and policies applicable
to board members and senior executives of the Consolidated Entity. The remuneration policy is to ensure
the remuneration package properly reflects the person’s duties and responsibilities and that
remuneration is competitive in attracting, retaining and motivating people of the highest quality.
Directors’ remuneration is arrived at after consideration of the level of expertise each director brings to
the Consolidated Entity and the time and commitment required to efficiently and effectively perform the
required tasks.
Remuneration of Executive Director
Jeffrey Edwards is paid a salary of $208,050 per annum inclusive of compulsory superannuation
contributions.
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DIRECTORS' REPORT (continued)
Remuneration of Non-Executive Directors
Antonio Varano is paid $40,000 per annum plus the USD equivalent of £6,300 per month, paid quarterly
in arrears for consulting fees.
Steven Schapera is paid $40,000 per annum plus £6,300 per month, paid quarterly in arrears for consulting
fees.
Cameron Reynolds is paid $75,000 per annum, paid quarterly in arrears for director fees.
Anthony Wright is paid $40,000 per annum, paid quarterly in arrears for director fees.
Remuneration of CEO
Paul Peros’ remuneration is EURO 30,000 per month, paid by a combination of cash and ordinary shares
with EURO 24,000 in cash and EURO 6,000 in ordinary shares.
Remuneration of Directors and Executives
Primary
Cash
Non-
Post Employment
Equity
Other
TOTAL
Salary &
Bonus
Monetary
Superann-
Retirement
Benefits
Fees ($)
($)
($)
uation ($)
Benefits ($)
($)
($)
($)
Parent Entity Directors and Executives
Varano Della Vergiliana, A: Director (non-executive)
2021
2020
177,599
140,233
--
--
Edwards, J D: Director (executive)
2021
2020
190,000
24,658
271,263
--
--
--
--
--
--
--
20,392
20,207
--
--
--
--
--
--
--
--
--
--
177,599
140,233
--
235,050
16,000
307,470
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DIRECTORS' REPORT (continued)
Schapera, S L: Director (non-executive)
2021
2020
178,6502
173,301
Reynolds, C: Director (non-executive)
2021
2020
75,0003
56,250
--
--
--
--
Wright, A: Director (non-executive) (appointed: 14/04/2021)
2021
2020
8,571
--
--
--
Quirk, C J: Director (non-executive) (resigned: 30/04/2020)
2021
2020
--
33,333
Peros, P: CEO
903,4614
470,982
--
--
--
--
2021
2020
Total
2021
2020
1,533,281
24,658
1,145,362
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
20,392
20,207
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
178,650
173,301
75,000
56,250
8,571
--
--
33,333
903,461
470,982
--
1,578,331
16,000
1,181,569
1 Shares were issued in lieu of remuneration on 19 August 2020 and 9 April 2021 - $103,644.
2 Shares were issued in lieu of remuneration on 19 August 2020 - $45,988.
3 Shares were issued in lieu of remuneration on 19 August 2020 and 9 April 2021 - $38,750.
4 Shares were issued in lieu of remuneration on 19 August 2020, 22 February 2021 and 9 April 2021 - $422,683.
There are no other specified executives in positions of control or exercising management authority.
29
DIRECTORS' REPORT (continued)
Interests in Shares and Options of the Company
As at 30 June 2021, the directors’ interests in shares of Wellfully Limited were:
Shares
Balance
01/07/20
(No. of Shares)
Received
Remuneration
(No. of Shares)
No. of
Performance
Rights/Options
Exercised
Net Other
Change
(No. of Shares)
Balance
30/06/21
(No. of Shares)
A Varano Della Vergiliana
200,000
J D Edwards
S L Schapera
C Reynolds
A D Wright
2,021,550
461,200
--
--
Total
2,682,750
--
--
--
--
--
--
1 Shares were issued in lieu of remuneration on 19 August 2020 and 9 April 2021 – 2,002,330.
2 Shares were issued in lieu of remuneration on 19 August 2020 – 3,983,013.
3 Shares were issued in lieu of remuneration on 19 August 2020 and 9 April 2021 – 829,166.
Options
--
--
--
--
--
--
3,193,9971
3,393,997
--
2,021,550
3,898,3042
4,359,504
829,1663
833,333
829,166
833,333
8,754,800
11,437,550
Balance
01/07/20
(No. of
Options)
Granted as
Remuneration
(No. of Options)
No. of
Options
Exercised
Net Change
Other
(No. of
Options)
Balance
30/06/21
(No. of
Options)
Total Vested
30/06/21
(No. of
Options)
Total
Exercisable
(No. of
Options)
A Varano Della Vergiliana
J D Edwards
S L Schapera
C Reynolds
A D Wright
Total
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
--
477,778
477,778
477,778
477,778
1,347,701
1,347,701
1,347,701
1,347,701
--
--
--
--
133,333
133,333
133,333
133,333
--
--
--
--
1,958,812
1,958,812
1,958,812
1,958,812
Other Transactions with Key Management Personnel and their Related Parties
As of 30 June 2021, the following remuneration amounts remained payable:
• PB Commodities Pte Ltd, an entity related to the director, Cameron Reynolds - $8,750
• The Brand Laboratories FZ LLC, an entity related to the director, Steven Schapera - $44,854
• Antonio Varano Della Vergiliana and Anthony Varano Inc., an entity related to the director, Antonio
Varano Della Vergiliana - $44,854
• The Wright Family Trust, a trust related to the director, Anthony Wright - $8,571
• Paul Peros - $58,861
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DIRECTORS' REPORT (continued)
As of 30 June 2020, the following remuneration amounts remained payable:
• PB Commodities Pte Ltd, an entity related to the director, Cameron Reynolds - $37,500*
• Steven Schapera and The Brand Laboratories FZ LLC, an entity related to the director, Steven Schapera
- $127,313*
• Antonio Varano Della Vergiliana and Anthony Varano Inc., an entity related to the director, Antonio
Varano Della Vergiliana - $81,589*
Jeffrey Edwards - $46,158
•
• Paul Peros - $120,000*
* Shares were issued in lieu of remuneration on 19 August 2020.
Additional Information
The earnings of the Consolidated Entity for the five years to 30 June 2021 are summarised below:
2021
$
2020
$
2019
$
2018
$
2017
$
Revenue and other income
1,203,343
1,484,218
2,744,781
2,039,994
1,966,224
EBITDA
EBIT
(6,288,694)
(3,729,866)
(1,623,108)
(1,587,933)
(2,883,975)
(6,374,256)
(3,802,918)
(1,695,990)
(1,684,779)
(3,030,203)
Loss after income tax
(6,397,257)
(3,713,117)
(1,710,001)
(1,698,783)
(3,044,208)
Share price at financial year end ($)
Total dividends declared (cents per share)
2021
0.05
--
2020
--*
--
Basic and diluted loss per share (cents per share)
(4.10)
(4.10)
*Company was suspended on 30 June 2020.
2019
0.015
--
(1.89)
2018
0.028
--
(0.09)
2017
0.048
--
(0.17)
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of the Court to bring proceedings on behalf of the Company or 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 any part of those proceedings. The Company was not a party to any such
proceedings during the year.
CORPORATE GOVERNANCE
In recognising the need for the highest standards of corporate behaviour and accountability, the directors
of Wellfully Limited support and have substantially adhered to the best practice recommendations set by
the ASX Corporate Governance Council. The Company’s Corporate Governance Statement is available on
the Company’s website at www.wellfully.net.
31
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DIRECTORS' REPORT (continued)
INDEMNITY AND INSURANCE OF OFFICERS
The Company has indemnified the directors and executives of the Company for costs incurred, in their
capacity as a director or executive, for which they may be held personally liable, except where there is a
lack of good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and
executives of the Company against a liability to the extent permitted by the Corporations Act 2001.
The contract of insurance prohibits disclosure of the nature of the liability and the amount of the
premium.
INDEMNITY AND INSURANCE OF AUDITOR
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify
the auditor of the Company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the
auditor of the Company or any related entity.
OFFICERS OF THE COMPANY WHO ARE FORMER PARTNERS OF RSM AUSTRALIA
There are no officers of the Company who are former partners of RSM Australia.
NON-AUDIT SERVICES
Any non-audit services that may have been provided by the entity’s auditor, RSM Australia Partners, is
shown at Note 13. The directors are satisfied that the provision of non-audit services is compatible with
the general standard of independence for auditors imposed by the Corporations Act and the general
principles relating to auditor independence set out in APES 110 Code of Ethics for Professional
Accountants. The nature and scope of each type of non-audit service provided means that auditor
independence was not compromised.
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DIRECTORS' REPORT (continued)
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the Auditor's Independence Declaration as required under Section 307C of the Corporations Act
2001 is set out on the following page.
AUDITOR
RSM Australia Partners continues in office in accordance with section 327 of the Corporations Act 2001.
Signed in accordance with a resolution of the board of directors, pursuant to section 298(2)(a) of the
Corporations Act 2001.
________________
Jeffrey Edwards
Director
Perth, Western Australia
30th September 2021
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(i)
(ii)
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Wellfully Limited for the year ended 30 June 2021, I declare
that, to the best of my knowledge and belief, there have been no contraventions of:
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
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Perth, WA
Dated: 30 September 2021
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RSM AUSTRALIA PARTNERS
JAMES KOMNINOS
Partner
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE YEAR
ENDED 30 JUNE 2021
Revenue and other income
2
1,203,343
1,484,218
Note
Consolidated
30 June
2021
$
30 June
2020
$
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Net foreign exchange (losses)/gains
Borrowing costs (expensed)/written off
Bad debt written off
Depreciation expenses
Administration fees
Auditor’s remuneration
Consultants and consultants benefits expenses
Directors and employees benefits expenses
Freight and courier
Intangible assets written off
Legal costs
Marketing and operations services
Materials and requisites
Occupancy expenses
Patent and trademark service fees
Product design and trial testing expenses
Travel and accommodation
Other expenses
Loss before income tax
Income tax expense
Loss for the year
Other comprehensive income/(loss)
Total comprehensive loss for the year
Loss attributable to:
Members of the parent entity
Total comprehensive loss attributable to:
Members of the parent entity
Basic and diluted losses per share (cents per share)
16
(384,253)
(23,062)
--
(85,562)
(397,425)
(80,437)
(281,950)
(3,400,612)
(143,364)
--
(98,142)
(988,016)
(883,701)
(230,223)
(121,808)
(18,209)
(122,309)
(341,527)
75,105
83,310
(52,781)
(73,052)
(505,681)
(61,249)
(501,446)
(2,273,156)
--
(372,982)
(215,345)
(165,644)
(271,699)
(146,780)
(189,579)
(35,938)
(132,738)
(357,680)
(6,397,257)
(3,713,117)
3
--
--
(6,397,257)
(3,713,117)
292,939
(51,322)
(6,104,318)
(3,764,439)
(6,397,257)
(3,713,117)
(6,104,318)
(3,764,439)
Cents
(4.10)
Cents
(4.10)
35
STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2021
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total Current Assets
Non Current Assets
Plant and equipment
Total Non Current Assets
Total Assets
Current Liabilities
Trade and other payables
Contract liabilities
Lease liabilities
Borrowings
Employee benefits provision
Total Current Liabilities
Non Current Liabilities
Lease liabilities
Total Non Current Liabilities
Total Liabilities
Net Assets/(Liabilities)
Equity
Issued capital
Reserves
Accumulated losses
Note
4
5
Consolidated
30 June
2021
$
2,725,636
163,365
96,754
30 June
2020
$
612,172
271,193
--
2,985,755
883,365
6
406,303
308,181
7
8
406,303
308,181
3,392,058
1,191,546
449,814
276,763
47,513
154,000
93,702
1,072,068
203,358
28,635
1,007,053
90,234
1,021,792
2,401,348
61,655
9,229
61,655
9,229
1,083,447
2,410,577
2,308,611
(1,219,031)
14
15
42,552,152
597,273
(40,840,814)
33,043,514
181,012
(34,443,557)
Total Equity/(Deficiency)
2,308,611
(1,219,031)
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STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 30 JUNE 2021
Issued
Capital
$
Share
Based
Payments
Reserves
$
Foreign
Currency
Translation
Reserve
$
Accumulated
Losses
Total
Equity
$
$
33,043,514
232,334
--
(30,730,440)
2,545,408
--
--
--
--
--
--
--
(3,713,117)
(3,713,117)
(51,322)
(51,322)
--
(3,713,117)
(51,322)
(3,764,439)
33,043,514
232,334
(51,322)
(34,443,557)
(1,219,031)
33,043,514
232,334
(51,322)
(34,443,557)
(1,219,031)
--
--
--
--
--
--
--
(6,397,257)
(6,397,257)
292,939
292,939
--
(6,397,257)
292,939
(6,104,318)
10,351,319
--
(842,681)
--
123,322
--
--
--
--
--
--
--
10,351,319
123,322
(842,681)
42,552,152
355,656
241,617
(40,840,814)
2,308,611
Consolidated
Balance at 1 July 2019
Loss after income tax expense for the
year
Exchange differences on translation of
foreign operations
Total comprehensive loss for the year
Balance at 30 June 2020
Balance at 1 July 2020
Loss after income tax expense for the
year
Exchange differences on translation of
foreign operations
Total comprehensive income for the
year
Shares issued during the year
Options issued during the year
Transaction costs
Balance at 30 June 2021
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STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 30 JUNE 2021
Cash flows from operating activities
Receipts from customers
Receipts from research and development tax incentives
Receipts from government subsidies
Payments to suppliers and employees
Interest received
Borrowing costs
Note
Consolidated
30 June
2021
$
30 June
2020
$
631,716
524,409
215,900
(6,534,209)
61
(39,759)
1,099,419
776,675
118,000
(4,680,562)
11,539
(1,637)
Net cash used in operating activities
10
(5,201,882)
(2,676,566)
Cash flows from investing activities
Payments for plant and equipment
Cash obtained from acquisition of subsidiaries
Net cash (used in)/provided by investing activities
Cash flows from financing activities
Proceeds from issue of shares and options
Transaction costs from issue of shares and options
Proceeds from borrowings
Repayment of lease liabilities
Net cash provided by financing activities
(64,740)
--
--
336,246
(64,740)
336,246
8,362,857
(842,681)
--
(33,517)
--
--
645,000
(19,523)
7,486,659
625,477
Net increase/(decrease) in cash and cash equivalents held
2,220,037
(1,714,843)
Cash and cash equivalents at the beginning of the financial year
612,172
2,251,910
Effect of exchange rate changes on cash holdings
(106,573)
75,105
Cash and cash equivalents at the end of the financial year
4
2,725,636
612,172
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
These consolidated financial statements and notes represent those of Wellfully Limited and its controlled
entities (the “Consolidated Entity”). In accordance with the Corporations Act 2001, these financial
statements present the results of the Consolidated Entity only. Supplementary information about the
Parent Entity is disclosed in Note 24.
Basis of Preparation
The financial report is a general purpose financial report which has been prepared in accordance with
Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Act 2001. Wellfully Limited is a for-profit entity for financial reporting purposes under
Australian Accounting Standards.
The financial report was authorised for issue by the Board on 30 September 2021.
Except for cash flow information, the financial report has been prepared on an accruals basis and is based
on historical costs. Cost is based on the fair values of the consideration given in exchange for assets.
The preparation of the financial statements requires the use of certain critical accounting estimates. It
also requires management to exercise its judgement in the process of applying the Consolidated Entity's
accounting policies. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements, are disclosed in Note 1(ac).
Going concern
These financial statements have been prepared on the going concern basis, which contemplates the
continuity of normal business activities and the realisation of assets and settlement of liabilities in the
normal course of business.
As disclosed in the financial statements, the Consolidated Entity incurred a loss of $6,397,257 and had net
cash outflows from operating activities of $5,201,882 for the year ended 30 June 2021. The ability of the
Consolidated Entity to continue as a going concern is principally dependent upon the ability of the
Consolidated Entity to secure funds by raising capital from equity markets and managing cash flows in line
with available funds.
The Directors believe that it is reasonably foreseeable that the Consolidated Entity will continue as a going
concern and that it is appropriate to adopt the going concern basis in the preparation of the financial
report after consideration of the following factors:
• The Company has the ability to issue additional equity securities under the Corporations Act 2001
to raise further working capital; and
• The Consolidated Entity has the ability to curtail administrative, discretionary research and
development and overhead cash outflows as and when required.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
The significant policies, which have been adopted in the preparation of this financial report, are:
(a)
Statement of Compliance
The financial report complies with Australian Accounting Standards, which include Australian equivalents
to International Financial Reporting Standards (“IFRS”). Compliance with IFRS ensures that the financial
statements and notes comply with International Financial Reporting Standards.
(b)
New and Revised Accounting Standards and Interpretations
The Consolidated Entity has adopted all of the new and revised Accounting Standards and Interpretations
issued by the Australian Accounting Standards Board that are mandatory for the current reporting period.
Any new or amended Accounting Standards or Interpretations that are not yet mandatory have not been
early adopted.
The following Accounting Standards and Interpretations are most relevant to the Consolidated Entity:
Conceptual Framework for Financial Reporting (Conceptual Framework)
The Consolidated Entity has adopted the revised Conceptual Framework from 1 July 2020. The Conceptual
Framework contains new definition and recognition criteria as well as new guidance on measurement that
affects several Accounting Standards, but it has not had a material impact on the Consolidated Entity's
financial statements.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(c)
Principles of Consolidation
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Wellfully
Limited as at 30 June 2021 and the results of all subsidiaries for the year then ended. Wellfully Limited
and its subsidiaries together are referred to in these financial statements as the “Consolidated Entity”.
Subsidiaries are all those entities over which the Consolidated Entity has control. The Consolidated Entity
controls an entity when the Consolidated Entity is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power to direct the
activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to
the Consolidated Entity. They are de-consolidated from the date that control ceases.
Intercompany transactions, balances and unrealised gains on transactions between entities in the
Consolidated Entity are eliminated. Unrealised losses are also eliminated unless the transaction provides
evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the policies adopted by the Consolidated Entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in
ownership interest, without the loss of control, is accounted for as an equity transaction, where the
difference between the consideration transferred and the book value of the share of the non-controlling
interest acquired is recognised directly in equity attributable to the parent.
Non-controlling interest in the results and equity of subsidiaries are shown separately in the statement of
profit or loss and other comprehensive income, statement of financial position and statement of changes
in equity of the Consolidated Entity. Losses incurred by the Consolidated Entity are attributed to the non-
controlling interest in full, even if that results in a deficit balance.
Where the Consolidated Entity loses control over a subsidiary, it derecognises the assets including
goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation
differences recognised in equity. The Consolidated Entity recognises the fair value of the consideration
received and the fair value of any investment retained together with any gain or loss in profit or loss.
(d)
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 current when: it is expected to be realised or intended to be sold or consumed in normal
operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within twelve
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 twelve months after the reporting period. All other
assets are classified as non-current.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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(d)
Current and Non-Current Classification (continued)
A liability is current when: it is expected to be settled in normal operating cycle; it is held primarily for the
purpose of trading; it is due to be settled within twelve months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period.
All other liabilities are classified as non-current.
Deferred tax assets and liabilities are always classified as non-current.
(e)
Income Tax
The charge for current income tax expense is based on the profit for the year adjusted for any non-
assessable or disallowed items. It is calculated using the rates that have been enacted or are substantively
enacted by the reporting date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences
arising between the tax base of assets and liabilities and their carrying amounts in the financial
statements. No deferred income tax will be recognised from the initial recognition of an asset or liability,
excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is
realised or liability is settled. Deferred tax is credited to profit or loss except where it relates to items that
may be credited directly to equity, in which case the deferred tax is adjusted directly against equity.
Deferred income tax assets are recognised to the extent that it is probable that future profit will be
available against which deductible temporary differences can be utilised.
The amount of benefits brought to account or which may be realised in the future is based on the
assumption that no adverse change will occur in income taxation legislation and the anticipation that the
Consolidated Entity will derive sufficient future assessable income to enable the benefit to be realised and
comply with the conditions of deductibility imposed by the law.
(f)
Plant and Equipment
Each class of plant and equipment is carried at cost or fair value less, where applicable, any accumulated
depreciation and impairment losses.
Plant and Equipment
Plant and equipment is measured on the cost basis less depreciation and impairment losses.
The carrying amount of 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 assets employment and subsequent disposal. The
expected net cash flows have been discounted to their present values in determining recoverable
amounts.
42
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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(f)
Plant and Equipment (continued)
Depreciation
The depreciable amount of all fixed assets is depreciated on either a diminishing value method or a
straight-line method commencing from the time the asset is held ready for use.
The depreciation rates used for each class of depreciable assets are:
Plant and equipment
2.5-100%
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.
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.
Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These
gains and losses are included in profit or loss.
(g)
Impairment of Assets
At each reporting date, the Consolidated Entity reviews the carrying values of its tangible and intangible
assets to determine whether there is any indication that those assets have been impaired. If such an
indication exists, the recoverable amount of the asset, being the higher of the asset’s fair value less costs
to sell and value in use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value
over its recoverable amount is expensed to the statement of comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the Consolidated Entity
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
(h)
Financial Assets
Financial assets are initially measured at fair value. Transaction costs are included as part of the initial
measurement, except for financial assets at fair value through profit or loss. Such assets are subsequently
measured at either amortised cost or fair value depending on their classification. Classification is
determined based on both the business model within which such assets are held and the contractual cash
flow characteristics of the financial asset unless, an accounting mismatch is being avoided.
Financial assets are derecognised when the rights to receive cash flows have expired or have been
transferred and the Consolidated Entity has transferred substantially all the risks and rewards of
ownership. When there is no reasonable expectation of recovering part or all of a financial asset, its
carrying value is written off.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(h)
Financial Assets (continued)
Financial assets at fair value through profit or loss
Financial assets not measured at amortised cost or at fair value through other comprehensive income are
classified as financial assets at fair value through profit or loss. Typically, such financial assets will be
either: (i) held for trading, where they are acquired for the purpose of selling in the short-term with an
intention of making a profit, or a derivative; or (ii) designated as such upon initial recognition where
permitted. Fair value movements are recognised in profit or loss.
Financial assets at fair value through other comprehensive income
Financial assets at fair value through other comprehensive income include equity investments which the
Consolidated Entity intends to hold for the foreseeable future and has irrevocably elected to classify them
as such upon initial recognition.
Impairment of financial assets
The Consolidated Entity recognises a loss allowance for expected credit losses on financial assets which
are either measured at amortised cost or fair value through other comprehensive income. The
measurement of the loss allowance depends upon the Consolidated Entity's assessment at the end of
each reporting period as to whether the financial instrument's credit risk has increased significantly since
initial recognition, based on reasonable and supportable information that is available, without undue cost
or effort to obtain.
Where there has not been a significant increase in exposure to credit risk since initial recognition, a 12-
month expected credit loss allowance is estimated. This represents a portion of the asset's lifetime
expected credit losses that is attributable to a default event that is possible within the next 12 months.
Where a financial asset has become credit impaired or where it is determined that credit risk has increased
significantly, the loss allowance is based on the asset's lifetime expected credit losses. The amount of
expected credit loss recognised is measured on the basis of the probability weighted present value of
anticipated cash shortfalls over the life of the instrument discounted at the original effective interest rate.
For financial assets measured at fair value through other comprehensive income, the loss allowance is
recognised within other comprehensive income. In all other cases, the loss allowance is recognised in
profit or loss.
(i)
Intangibles
Research and Development
Expenditure during the research phase of a project is recognised as an expense when incurred.
Development costs are capitalised only when feasibility studies identify that the project will deliver future
economic benefits and these benefits can be measured reliably. Development costs have a finite life and
are amortised on a systematic basis matched to the future economic benefits over the useful life of the
project.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(j)
Cash and Cash Equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with banks and other short-term
highly liquid investments with original maturities of three months or less, net of outstanding bank
overdrafts.
(k)
Trade and Other Receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method, less any allowance for expected credit losses. Trade receivables are
generally due for settlement within 30 days.
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be
uncollectable are written off by reducing the carrying amount directly. An allowance for expected credit
losses of trade receivables is raised when there is objective evidence that the Consolidated Entity will not
be able to collect all amounts due according to the original terms of the receivables. Significant financial
difficulties of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation and
default or delinquency in payments (more than 60 days overdue) are considered indicators that the trade
receivable may be impaired. The amount of the allowance is the difference between the asset’s carrying
amount and the present value of estimated future cash flows, discounted at the original effective interest
rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is
immaterial. The Consolidated Entity has applied the simplified approach to measuring expected credit
losses, which uses a lifetime expected loss allowance. To measure the expected credit losses, trade
receivables have been grouped based on days overdue.
Other receivables are recognised at amortised cost, less any allowance for expected credit losses.
(l)
Trade and Other Payables
These amounts represent liabilities for goods and services provided to the Consolidated Entity 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.
(m)
Employee Benefits
Short-Term Employee Benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and long service leave
expected to be settled within 12 months of the reporting date are recognised in current liabilities in
respect of employees' services up to the reporting date and are measured at the amounts expected to be
paid when the liabilities are settled.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(m)
Employee Benefits (continued)
Other Long-Term Employee Benefits
The liability for annual leave and long service leave not expected to be settled within 12 months of the
reporting date are recognised in non-current liabilities, provided there is an unconditional right to defer
settlement of the liability.
Defined Contribution Superannuation Expense
Contributions to defined contribution superannuation plans are expensed in the period in which they are
incurred.
(n)
Revenue
The Consolidated Entity recognises revenue as follows:
Revenue from contracts with customers
Revenue is recognised at an amount that reflects the consideration to which the Consolidated Entity is
expected to be entitled in exchange for transferring goods or services to a customer. For each contract
with a customer, the Consolidated Entity: identifies the contract with a customer; identifies the
performance obligations in the contract; determines the transaction price which takes into account
estimates of variable consideration and the time value of money; allocates the transaction price to the
separate performance obligations on the basis of the relative stand-alone selling price of each distinct
good or service to be delivered; and recognises revenue when or as each performance obligation is
satisfied in a manner that depicts the transfer to the customer of the goods or services promised.
Variable consideration within the transaction price, if any, reflects concessions provided to the customer
such as discounts, rebates and refunds, any potential bonuses receivable from the customer and any other
contingent events. Such estimates are determined using either the 'expected value' or 'most likely
amount' method. The measurement of variable consideration is subject to a constraining principle
whereby revenue will only be recognised to the extent that it is highly probable that a significant reversal
in the amount of cumulative revenue recognised will not occur. The measurement constraint continues
until the uncertainty associated with the variable consideration is subsequently resolved. Amounts
received that are subject to the constraining principle are recognised as a refund liability.
Sale of goods
Revenue from the sale of goods is recognised at the point in time when the customer obtains control of
the goods, which is generally at the time of delivery.
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.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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(n)
Revenue (continued)
Rendering of services
Revenue from licence and research fees are recognised over time as derived from work plan agreements
with customers.
Royalties are recognised at a point in time in accordance with the terms of the agreements.
Other revenue
Research and development tax incentive revenue is recognised at a point in time when it is received or
when the right to receive payment is established.
All revenue is stated net of the amount of goods and service tax.
(o)
Goods and Services Tax (“GST”)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of
GST incurred is not recoverable from the Australian Tax Office (“ATO”). In these circumstances, the GST
is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables
and payables in the statement of financial position are shown inclusive of GST.
Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component
of investing and financing activities which are disclosed as operating cash flows.
Commitments and contingencies are disclosed net of the amounts of GST recoverable from or payable to
the ATO.
(p)
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.
The component of the convertible notes that exhibits characteristics of a liability is recognised as a
liability in the statement of financial position, net of transaction costs.
On the issue of the convertible notes the fair value of the liability component is determined using a
market rate for an equivalent non-convertible bond and this amount is carried as a non-current liability
on the amortised cost basis until extinguished on conversion or redemption. The increase in the liability
due to the passage of time is recognised as a finance cost. The remainder of the proceeds are allocated
to the conversion option that is recognised and included in shareholders equity as a convertible note
reserve, net of transaction costs. The carrying amount of the conversion option is not remeasured in the
subsequent years. The corresponding interest on convertible notes is expensed to profit or loss.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(q)
Borrowing Costs
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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.
(r)
Share-Based Payment Transactions
Wellfully Limited provides benefits to employees (including directors) in the form of share-based payment
transactions, whereby employees render services in exchange for shares or rights over shares (“equity-
settled transactions”).
There is currently one plan in place to provide these benefits:
(i)
the Employee Share Option Plan, which provides benefits to full-time or part-time employees
and consultants of the Company.
The cost of these equity-settled transactions with employees is measured by reference to the fair value
at the date at which they are granted. The fair value is determined using the Black-Scholes option
valuation model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity,
over the period in which the performance conditions are fulfilled, ending on the date on which the
relevant employees become fully entitled to the award (“vesting date”).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting
date reflects; (i) the extent to which the vesting period has expired, and (ii) the number of awards that,
in the opinion of the directors of the Company, will ultimately vest. This opinion is formed based on
the best available information at reporting date. No adjustment is made for the likelihood of market
performance conditions being met as the effect of these conditions is included in the determination of
fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is
conditional upon a market condition.
Where the terms of an equity-settled award are modified, as a minimum, an expense is recognised as
if the terms had not been modified. In addition, an expense is recognised for any increase in the value
of the transaction as a result of the modification, as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation,
and any expense not yet recognised for the award is recognised immediately. However, if a new award
is substituted for the cancelled award, and designated as a replacement award on the date that it is
granted, the cancelled and new award are treated as if they were a modification of the original award,
as described in the previous paragraph.
48
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(r)
Share-Based Payment Transactions (continued)
Goods or services received or acquired in a share-based payment transaction are recognised as an
increase in equity if the goods or services were received in an equity-settled share-based payment
transaction or as a liability if the goods and services were acquired in a cash settled share-based
payment transaction.
For equity-settled share-based transactions, goods or services received are measured directly at the fair
value of the goods or services received provided this can be estimated reliably. If a reliable estimate
cannot be made, the value of the goods or services is determined indirectly by reference to the fair value
of the equity instrument granted.
The dilutive effect, if any, of outstanding options is reflected as additional share dilution in the
computation of earnings per share.
(s)
Loss per share
Basic Loss per share
Basic loss per share is determined by dividing the operating profit/(loss) after income tax attributable to
members of Wellfully Limited by the weighted average number of ordinary shares outstanding during the
financial year.
Diluted Loss per share
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.
(t)
Issued Capital
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.
(u)
Right-of-use Assets
A right-of-use asset is recognised at the commencement date of a lease. The right-of-use asset is
measured at cost, which comprises the initial amount of the lease liability, adjusted for, as applicable, any
lease payments made at or before the commencement date net of any lease incentives received, any
initial direct costs incurred, and, except where included in the cost of inventories, an estimate of costs
expected to be incurred for dismantling and removing the underlying asset, and restoring the site or asset.
Right-of-use assets are depreciated on a straight-line basis over the unexpired period of the lease or the
estimated useful life of the asset, whichever is the shorter. Where the Consolidated Entity expects to
obtain ownership of the leased asset at the end of the lease term, the depreciation is over its estimated
useful life. Right-of use assets are subject to impairment or adjusted for any remeasurement of lease
liabilities.
49
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
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(u)
Right-of-use Assets (continued)
The Consolidated Entity has elected not to recognise a right-of-use asset and corresponding lease liability
for short-term leases with terms of 12 months or less and leases of low-value assets. Lease payments on
these assets are expensed to profit or loss as incurred.
(v)
Contract Liabilities
Contract liabilities represent the Consolidated Entity's obligation to transfer goods or services to a
customer and are recognised when a customer pays consideration, or when the Consolidated Entity
recognises a receivable to reflect its unconditional right to consideration (whichever is earlier) before the
Consolidated Entity has transferred the goods or services to the customer.
(w)
Business Combinations
The acquisition method of accounting is used to account for business combinations regardless of whether
equity instruments or other assets are acquired.
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred,
equity instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and the
amount of any non-controlling interest in the acquiree. For each business combination, the non-
controlling interest in the acquiree is measured at either fair value or at the proportionate share of the
acquiree's identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the Consolidated Entity assesses the financial assets acquired and
liabilities assumed for appropriate classification and designation in accordance with the contractual terms,
economic conditions, the Consolidated Entity's operating or accounting policies and other pertinent
conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the Consolidated Entity remeasures its previously
held equity interest in the acquiree at the acquisition-date fair value and the difference between the fair
value and the previous carrying amount is recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value.
Subsequent changes in the fair value of the contingent consideration classified as an asset or liability is
recognised in profit or loss. Contingent consideration classified as equity is not remeasured and its
subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any non-
controlling interest in the acquiree and the fair value of the consideration transferred and the fair value
of any pre-existing investment in the acquiree is recognised as goodwill. If the consideration transferred
and the pre-existing fair value is less than the fair value of the identifiable net assets acquired, being a
bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by the
acquirer on the acquisition-date, but only after a reassessment of the identification and measurement of
the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration transferred
and the acquirer's previously held equity interest in the acquirer.
50
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(w)
Business Combinations (continued)
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively
adjusts the provisional amounts recognised and also recognises additional assets or liabilities during the
measurement period, based on new information obtained about the facts and circumstances that existed
at the acquisition-date. The measurement period ends on either the earlier of (i) 12 months from the date
of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value.
(x)
Foreign Currency Transactions and Balances
Functional and Presentation Currency
The functional currency of each of the Company’s controlled entities is measured using the currency of
the primary economic environment in which that entity operates. The consolidated financial statements
are presented in Australian dollars which is the Consolidated Entity’s functional and presentation
currency.
Transaction and Balances
Foreign currency transactions are translated into functional currency using the exchange rates prevailing
at the date of the transaction. Foreign currency monetary items are translated at the year-end exchange
rate. Non-monetary items measured at historical cost continue to be carried at the exchange rate at the
date of the transaction. Non-monetary items measured at fair value are reported at the exchange rate at
the date when fair values were determined.
Exchange differences arising on the translation of non-monetary items are recognised in profit or loss.
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 or loss and other comprehensive income.
Controlled Entities
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
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(y)
Inventories
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Raw materials, work in progress and finished goods are stated at the lower of cost and net realisable value
on a 'first in first out' basis. Cost comprises of direct materials and delivery costs, direct labour, import
duties and other taxes, an appropriate proportion of variable and fixed overhead expenditure based on
normal operating capacity, and, where applicable, transfers from cash flow hedging reserves in equity.
Costs of purchased inventory are determined after deducting rebates and discounts received or
receivable.
Stock in transit is stated at the lower of cost and net realisable value. Cost comprises of purchase and
delivery costs, net of rebates and discounts received or receivable.
Net realisable value is the estimated selling price in the ordinary course of business less the estimated
costs of completion and the estimated costs necessary to make the sale.
(z) Lease Liabilities
A lease liability is recognised at the commencement date of a lease. The lease liability is initially recognised
at the present value of the lease payments to be made over the term of the lease, discounted using the
interest rate implicit in the lease or, if that rate cannot be readily determined, the consolidated entity's
incremental borrowing rate. Lease payments comprise of fixed payments less any lease incentives
receivable, variable lease payments that depend on an index or a rate, amounts expected to be paid under
residual value guarantees, exercise price of a purchase option when the exercise of the option is
reasonably certain to occur, and any anticipated termination penalties. The variable lease payments that
do not depend on an index or a rate are expensed in the period in which they are incurred.
Lease liabilities are measured at amortised cost using the effective interest method. The carrying amounts
are remeasured if there is a change in the following: future lease payments arising from a change in an
index or a rate used; residual guarantee; lease term; certainty of a purchase option and termination
penalties. When a lease liability is remeasured, an adjustment is made to the corresponding right-of use
asset, or to profit or loss if the carrying amount of the right-of-use asset is fully written down.
(aa) Finance Costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other finance costs
are expensed in the period in which they are incurred.
(ab) New Accounting Standards and Interpretations not yet mandatory or early adopted
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Australian Accounting Standards and Interpretations that have recently been issued or amended but are
not yet mandatory, have not been early adopted by the consolidated entity for the annual reporting
period ended 30 June 2021. The consolidated entity has not yet assessed the impact of these new or
amended Accounting Standards and Interpretations.
52
NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
(ac)
Critical Accounting Estimates and Judgments
Estimates and judgments are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the
circumstances.
Coronavirus (COVID-19) pandemic
Judgement has been exercised in considering the impacts that the Coronavirus (COVID-19) pandemic has
had, or may have, on the Consolidated Entity based on known information. This consideration extends to
the nature of the products and services offered, customers, supply chain, staffing and geographic regions
in which the Consolidated Entity operates. Other than as addressed in specific notes, there does not
currently appear to be either any significant impact upon the financial statements or any significant
uncertainties with respect to events or conditions which may impact the Consolidated Entity unfavourably
as at the reporting date or subsequently as a result of the Coronavirus (COVID-19) pandemic.
There are no 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.
NOTE 2: REVENUE AND OTHER INCOME
Consolidated
30 June
2021
$
30 June
2020
$
Revenue from contracts with customers
Research and development collaboration and product revenue
Royalties
Other income
Government grants and subsidies
Interest received
Revenue and other income
Disaggregation of Revenue
The disaggregation of revenue from contracts with customers is as follows:
Geographical region
Singapore
Europe
Timing of revenue recognition
Services transferred at a point in time
Services transferred over time
397,895
65,078
462,973
740,309
61
740,370
66,756
503,796
570,552
907,175
6,491
913,666
1,203,343
1,484,218
222,966
240,007
462,973
65,078
397,895
462,973
570,552
--
570,552
503,796
66,756
570,552
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 3: INCOME TAX
The prima facie tax on loss before income tax is
reconciled to the income tax as follows:
Loss before income tax
Income tax calculated at 26% (2020: 27.5%)
Non-allowable expenditure
Deferred tax assets not recognised
Over provision for tax for prior periods
Income tax expenses
The following deferred tax assets have not been
brought to account as assets:
Tax losses available at 26% (2020: 27.5%) tax rate
Tax losses available
Consolidated
30 June
2021
$
30 June
2021
$
(6,397,257)
(3,713,117)
(1,663,287)
(1,021,107)
22,827
1,308,936
331,524
--
115,237
905,870
--
--
11,129,888
4,204,968
16,673,548
13,597,855
Deferred tax assets in relation to tax losses are not brought to account unless it is probable that future
taxable amounts within the entity will be available against which the unused tax losses can be utilised.
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 Consolidated Entity will derive sufficient future assessable income
to enable the benefit to be realised and comply with the conditions of deductibility imposed by law.
NOTE 4: CASH AND CASH EQUIVALENTS
Cash on hand
Cash at bank
NOTE 5: TRADE AND OTHER RECEIVABLES
Trade debtors
Prepayments
Accrued income
GST refundable
Loans
Leasehold deposit
6,797
2,718,839
12,132
600,040
2,725,636
612,172
376
44,961
--
55,939
54,565
7,524
60,521
73,583
35,203
51,664
43,995
6,227
163,365
271,193
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 5: TRADE AND OTHER RECEIVABLES (continued)
Allowance for expected credit losses
The Consolidated Entity recognised $52,781 in profit or loss in respect of the expected credit losses for
the year ended 30 June 2020.
Past due but not impaired
Customers with balances past due but without provision for impairment:
0 to 6 months overdue
6 to 12 months overdue
12 to 18 months overdue
NOTE 6: PLANT AND EQUIPMENT
Plant and equipment at cost
Accumulated depreciation
Total plant and equipment (a)
Office building
Accumulated depreciation
Total right-of-use assets
Consolidated
30 June
2021
$
30 June
2020
$
376
--
--
60,521
--
--
376
60,521
769,086
(470,171)
800,609
(529,681)
298,915
270,928
191,922
(84,534)
56,740
(19,487)
107,388
406,303
37,253
308,181
Additions to the right-of-use assets during the year were $122,654.
(a) Reconciliation of the carrying amount of plant and equipment is set out below:
Carrying amount at the beginning of year
Additions
Disposals
Depreciation expense
Carrying amount at the end of year
270,928
64,524
(4,780)
(31,757)
323,846
20,134
--
(73,052)
298,915
270,928
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 7: TRADE AND OTHER PAYABLES
Consolidated
30 June
2021
$
449,814
30 June
2020
$
1,072,068
140,000
140,000
--
840,000
14,000
27,053
154,000
1,007,053
Other creditors and accruals
NOTE 8: BORROWINGS
Convertible notes – unsecured
Convertible notes – secured
Convertible notes – unpaid interest
Unsecured convertible note terms:
Issue
Date
Amount
Interest
Convertible On
$
Rate
or Before
4 June 2009
140,000
10% per annum
4 June 2012 (i)
If the convertible notes which are convertible at $0.003 have not been converted in their entirety into
shares on the date which is 11 months after the date of issue, the Company may convert the amount of
the convertible notes which has not been repaid (together with any accrued interest), into shares, upon
giving 5 business days notice to the convertible note holder.
(i)
140,000 convertible notes issued on 4 June 2009 were not converted by the due date being 4
June 2012. The terms of the agreement have not since that date been extended.
Correspondingly, the principal amount outstanding including any interest outstanding has
been classified as current.
Secured convertible note terms:
Issue
Date
Amount
$
Interest
Rate
Convertible On
or Before
15 April 2020
840,000
12.5% per annum
15 October 2021 (ii)
(ii)
$840,000 convertible notes issued on 15 April 2020 were converted to shares on 19 August
2020.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 9: COMMITMENTS
(a) Capital expenditure commitments
There were no capital expenditure commitments as at 30 June 2021 (30 June 2020: Nil).
(b) Lease commitments
30 June 2020: Due to the adoption of AASB 16 the lease commitments shown in this Note 9 reduced to
nil and are now recognised as a right of use asset and lease liability, see Note 6.
There are no other material commitments as at 30 June 2021 (2020: Nil).
NOTE 10: CASH FLOW INFORMATION
Reconciliation of net cash and cash
equivalents used in operating activities to loss
for the year:
Loss for the year
Bad debt written off
Borrowing costs expensed/(written off)
Depreciation
Employee benefits provisions
Foreign exchange movements
Intangible asset written off
Administration fee, directors fee and salary paid
via shares
Movements in assets and liabilities:
Trade and other receivables
Inventories
Trade and other payables
Contract liabilities
Consolidated
30 June
2021
$
30 June
2020
$
(6,397,257)
(3,713,117)
--
23,062
85,562
3,468
242,327
--
1,108,605
52,781
(84,944)
73,052
6,230
(75,105)
372,982
--
119,695
(96,754)
(363,995)
73,405
289,620
--
198,577
203,358
Net cash used in operating activities
(5,201,882)
(2,676,566)
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 11: KEY MANAGEMENT PERSONNEL
Names and positions of directors and specified executives in office at any time during the financial year
are:
Mr Antonio Varano Della Vergiliana
Mr Jeffrey David Edwards
Mr Steven Lorn Schapera
Mr Cameron Reynolds
Mr Anthony David Wright
Mr Paul Peros
Director – Non-Executive
Director – Executive
Director – Non-Executive
Director – Non-Executive
Director – Non-Executive
CEO
(appointed: 14/04/2021)
Refer to the Remuneration Report contained in the Director’s Report for details of the remuneration paid
or payable to the Company’s key management personnel for the year ended 30 June 2021.
The totals of remuneration paid to key management personnel
during the year are as follows:
Short term employee benefits
Post-employment benefits
Other benefits
Consolidated
30 June
2021
$
30 June
2020
$
1,557,939
20,392
--
1,578,331
1,145,362
20,207
16,000
1,181,569
Transactions with Key Management Personnel
There were no transactions with related parties other than directors’ fees and consultants’ fees which
have been disclosed in the Remuneration Report.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 12: CONTROLLED ENTITIES
The consolidated financial statements include the financial statements of Wellfully Limited and the
subsidiaries listed in the following table.
International Scientific Pty Ltd
Bodyguard Lifesciences Pty Ltd
Wellfully SA
Wellfully d.o.o.
Wellfully Ltd
Peros Dongguan Technology &
Trading Co. Ltd
Wellfully Limited
Swisswell Sagl
Country
of
Incorporation
%
Equity Interest
2020
2021
$
$
Australia
Australia
Switzerland
Croatia
China
China
100%
100%
100%
100%
100%
100%
United Kingdom
Switzerland
100%
100%
100%
100%
100%
100%
100%
100%
--
--
NOTE 13: AUDITOR’S REMUNERATION
Amounts paid or due and payable to the auditor for:
Audit and review services
R&D tax refund services
Information technology consulting services
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Consolidated
30 June
2021
$
30 June
2020
$
75,000
39,330
32,074
146,404
60,750
40,000
23,753
124,503
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 14: ISSUED CAPITAL
(a) Issued Capital
209,820,466 fully paid ordinary shares
(2020: 90,473,939)
Consolidated
30 June
2021
$
30 June
2021
$
42,552,152 33,043,514
(b) Movements in ordinary share capital of the Company during the year were as follows:
Date
Details
Number of
Shares
Issue Price
$
01/07/20 Opening balance
19/08/20 Rights issue
19/08/20 Capital raising
19/08/20 Oversubscription of share issue
19/08/20 Convertible notes
19/08/20 Shares issued in lieu of fees
22/02/21 Capital raising
22/02/21 Shares issued in lieu of fees
09/04/21 Capital raising
09/04/21 Shares issued in lieu of fees
Less: transaction costs arising on share
issues
90,473,939
11,220,018
25,539,982
635,351
8,400,000
10,217,843
20,122,707
1,850,363
39,877,293
1,482,970
$0.10
$0.10
$0.10
$0.10
$0.10
$0.075
$0.075
$0.075
$0.075
33,043,514
1,122,002
2,553,998
63,535
840,000
1,021,784
1,509,203
138,777
2,990,797
111,223
(842,681)
30/06/21 Closing balance
209,820,466
42,552,152
(c)
Capital Ordinary Shares
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.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 14: ISSUED CAPITAL (continued)
(d)
Capital Risk Management
When managing capital, management’s objective is to ensure the Company continues as a going concern
as well as to maintain optimal returns to shareholders and benefits for other stakeholders. Management
also aims to maintain a capital structure that ensures the lowest cost of capital available to the Company.
In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid
to shareholders, return capital to shareholders, issue new shares, enter into joint ventures or sell assets.
The Company does not have a defined share buy-back plan.
No dividends were paid in 2021 and no dividends are expected to be paid in 2022.
There is no current intention to incur debt funding on behalf of the Company as on-going expenditure will
be funded via cash reserves or equity.
The Company is not subject to any externally imposed capital requirements.
The capital risk management policy remains unchanged from the prior year.
NOTE 15: RESERVES
Foreign currency translation reserve
Share based payments reserve
Consolidated
30 June
2021
$
30 June
2020
$
241,617
355,656
597,273
(51,322)
232,334
181,012
The share based payments reserve records items recognised as expenses on valuation of consultant
share options from prior years.
Movements in options were as follows:
Date
Details
Number of Options
Unlisted
Listed
Fair Value
of Options
Issued
$
Exercise
Price
Expiry
Date
01/07/20 Opening Balance
19/08/20 Free attaching unlisted options
09/04/21 Free attaching listed options
09/04/21 Broker listed options
09/04/21 Loyalty offer listed options
--
--
-- 6,150,000
--
--
--
31,666,564
19,500,000
103,819,870
232,334
--
--
19,500
103,822
--
$0.10
$0.15
$0.15
$0.15
--
19/08/23
31/03/23
31/03/23
31/03/23
30/06/21 Closing Balance
154,986,434 6,150,000
355,656
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 16: LOSS PER SHARE
Diluted loss per share is the same as basic loss per share.
The following reflects the income and data used in the calculations of basic and diluted loss per share:
Loss for the year
Consolidated
30 June
2021
$
(6,397,257)
30 June
2020
$
(3,713,117)
Loss used in calculating basic and diluted loss per share
(6,397,257)
(3,713,117)
Weighted average number of ordinary shares used in calculating
basic loss per share:
Weighted average number of ordinary shares used in calculating
diluted loss per share:
156,138,589
90,473,939
156,138,589
90,473,939
Basic and diluted losses per share (cents per share)
(4.10)
(4.10)
Options outstanding are considered non-dilutive and therefore are excluded from the calculation of
diluted loss per share.
NOTE 17: RISK MANAGEMENT OBJECTIVES AND POLICIES
The Consolidated Entity’s principal financial instruments comprise cash and short-term deposits.
The main purpose of these financial instruments is to finance the Consolidated Entity’s operations. The
Consolidated Entity has various other financial assets and liabilities such as other receivables and trade
payables, which arise directly from its operations. It is, and has been throughout the entire period under
audit, the Consolidated Entity’s policy that no trading in financial instruments shall be undertaken.
The main risk arising from the Consolidated Entity’s financial instruments is cash flow interest rate risk.
Other minor risks are either summarised below or disclosed at Note 14 in the case of capital risk
management. The Board reviews and agrees policies for managing each of these risks.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 17: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Cash Flow Interest Rate Risk
The Consolidated Entity’s exposure to the risks of changes in market interest rates relates primarily to the
Consolidated Entity’s short-term deposits with a floating interest rate. These financial assets with variable
rates expose the Consolidated Entity to cash flow interest rate risk. All other financial assets and liabilities
in the form of receivables and payables are non-interest bearing. The Consolidated Entity does not engage
in any hedging or derivative transactions to manage interest rate risk.
The following tables set out the carrying amount by maturity of the Consolidated Entity’s exposure to
interest rate risk and the effective weighted average interest rate for each class of these financial
instruments. The Consolidated Entity has not entered into any hedging activities to cover interest rate
risk. In regard to its interest rate risk, the Consolidated Entity does not have a formal policy in place to
mitigate such risks.
Consolidated
2021
Financial assets:
Cash and cash equivalents
Trade and other receivables
Financial liabilities:
Trade and other payables
Borrowings
Non-
Interest
Bearing
($)
6,797
163,365
170,162
449,814
14,000
463,814
--
--
--
--
140,000
140,000
Net financial instruments
(293,652)
(140,000)
1 Year or
Less
Fixed Interest Rate Maturing
More
than
5 years
($)
Over 1 to
5 Years
($)
($)
Floating
Interest
Rate
($)
Total
($)
Weighted
average
interest
rate
--
--
--
--
--
--
--
-- 2,718,839
--
--
-- 2,718,839
2,725,636
163,365
2,889,001
--
--
--
--
--
--
449,814
154,000
603,814
--
--
--
10%
--
2,718,839
2,285,187
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 17: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Consolidated
2020
Financial assets:
Cash and cash equivalents
Trade and other receivables
Financial liabilities:
Trade and other payables
Borrowings
Non-
Interest
Bearing
($)
5,036
271,193
276,229
--
--
--
1,072,068
27,053
1,099,121
--
980,000
980,000
Net financial instruments
(822,892)
(980,000)
Interest Rate Sensitivity
1 Year or
Less
Fixed Interest Rate Maturing
More
than
5 years
($)
Over 1 to
5 Years
($)
($)
Floating
Interest
Rate
($)
Total
($)
Weighted
average
interest
rate
--
--
--
--
--
--
--
--
--
--
--
--
--
--
607,136
--
607,136
612,172
271,193
883,365
--
--
--
1,072,068
1,007,053
2,079,121
607,136
(1,195,756)
1.07%
--
--
11.25%
At 30 June 2021, if interest rates had changed by 10% during the entire year with all other variables held
constant, loss for the year and equity would have been $6 (2020: $649) lower/higher, mainly as a result
of lower/higher interest income from cash and cash equivalents.
A sensitivity of 10% has been selected as this is considered reasonable given the current level of both
short-term and long-term Australian dollar interest rates.
Based on the sensitivity analysis only interest revenue from variable rate deposits and cash balances are
impacted resulting in a decrease or increase in overall income.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 17: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Credit Risk Exposure
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in
financial loss to the Consolidated Entity. The Consolidated Entity has a strict code of credit, including
obtaining agency credit information, confirming references and setting appropriate credit limits. The
Consolidated Entity obtains guarantees where appropriate to mitigate credit risk. The maximum exposure
to credit risk at the reporting date to recognised financial assets is the carrying amount, net of any
provisions for impairment of those assets, as disclosed in the statement of financial position and notes to
the financial statements. The Consolidated Entity does not hold any collateral.
The Consolidated Entity has adopted a lifetime expected loss allowance in estimating expected credit
losses to trade receivables through the use of a provisions matrix using fixed rates of credit loss
provisioning. These provisions are considered representative across all customers of the Consolidated
Entity based on recent sales experience, historical collection rates and forward-looking information that
is available.
The Consolidated Entity has no significant concentrations of credit risk with any single counterparty or
group of counterparties.
Commodity Price Risk
The Consolidated Entity is not exposed to commodity price risk.
Liquidity Risk
The Consolidated Entity manages liquidity risk by maintaining sufficient cash reserves and marketable
securities and through the continuous monitoring of budgeted and actual cash flows.
Contracted maturities of liabilities
at 30 June
Payables
- less than 6 months
Borrowings
- less than 6 months
Consolidated
30 June
2021
$
30 June
2020
$
449,814
1,072,068
154,000
603,814
1,007,053
2,079,121
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 17: RISK MANAGEMENT OBJECTIVES AND POLICIES (continued)
Foreign Exchange Risk
The Consolidated Entity is not exposed to significant foreign exchange risk at reporting date. Although
foreign exchange transactions in numerous currencies were entered into during the year, resulting in a
foreign exchange loss of $384,253 (2020: exchange gain of $75,105), the Consolidated Entity is unlikely to
enter into any material foreign exchange transactions in the next reporting period.
Reconciliation of Net Financial Assets to Net Assets
Net financial assets/(liabilities)
Inventories
Plant and equipment
Contract liabilities
Lease liabilities
Employee benefits provision
Net assets/(liabilities)
Net Fair Values
Consolidated
30 June
2021
$
30 June
2020
$
2,285,187
96,754
406,303
(276,763)
(109,168)
(93,702)
2,308,611
(1,195,756)
--
308,181
(203,358)
(37,864)
(90,234)
(1,219,031)
For other assets and liabilities, the net fair value approximates their carrying value. The Consolidated
Entity 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.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 18: EVENTS SUBSEQUENT TO REPORTING PERIOD
• On 5 July 2021, the Company announced the Unmarketable Parcel Sale Facility had closed. The total
number of shares sold under the Facility was 4,205,518 shares at a price of $0.0502 per share.
• On 14 July 2021, the Company announced that it had been granted a trademark for SWISSWELL by
the Swiss Federal Institute of Intellectual Property.
The impact of the Coronavirus (COVID-19) pandemic is ongoing, it is not practicable to estimate the
potential impact, positive or negative, after the reporting date. The situation is rapidly developing and is
dependent on measures imposed by the Australian Government and other countries, such as maintaining
social distancing requirements, quarantine, travel restrictions and any economic stimulus that may be
provided.
There has been no other matter or circumstance that has arisen since the end of the financial year that
has significantly affected, or may significantly affect, the operations of the Consolidated Entity, the results
of those operations, or the state of affairs of the Consolidated Entity, which has not been announced to
the market.
NOTE 19: ECONOMIC DEPENDENCY
The Consolidated Entity is not economically dependent upon any third parties.
NOTE 20: SEGMENT INFORMATION
The Consolidated Entity has considered the requirements of AASB8 – Operating Segments and has
identified its operating segments based on the internal reports that are reviewed and used by the board
of directors (chief operating decision makers) in assessing performance and determining the allocation of
resources.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 20: SEGMENT INFORMATION (continued)
Consolidated – 30 June 2021
The Consolidated Entity operates in two segments which are development of the dermaportation drug
delivery technology and devices segments.
Revenue
Revenue and royalties
Interest revenue
Government grants and subsidies
Net foreign exchange losses
Total revenue
EBITDA
Depreciation and amortisation
Interest revenue
Finance costs written off
Intersegment eliminations
(Loss)/ profit before income tax
Income tax expense
(Loss)/ profit after income tax
Assets
Segment assets
Intersegment eliminations
Total assets
Liabilities
Segment liabilities
Intersegment eliminations
Total liabilities
Dermaportation
drug delivery
technology
$
Devices
$
Total
$
222,976
--
740,309
(388,431)
574,854
(2,700,844)
(31,757)
--
(10,531)
--
(2,743,132)
--
(2,743,132)
239,997
61
--
4,178
244,236
(3,587,850)
(53,805)
61
(12,531)
--
(3,654,125)
--
(3,654,125)
9,312,343
600,722
7,214,243
5,956,782
462,973
61
740,309
(384,253)
819,090
(6,288,694)
(85,562)
61
(23,062)
--
(6,397,257)
--
(6,397,257)
9,913,065
(6,521,007)
3,392,058
13,171,025
(12,087,578)
1,083,447
Segment revenues are allocated based on the country in which the customer is located. Operating
revenues of $191,495 or 41% are derived from a single external party. Segment assets are allocated to
countries based on where the assets are located.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 20: SEGMENT INFORMATION (continued)
Consolidated – 30 June 2020
The Consolidated Entity operates in two segments which are development of the dermaportation drug
delivery technology and devices segments.
Revenue
Revenue and royalties
Interest revenue
Government grants and subsidies
Net foreign exchange gains
Total revenue
EBITDA
Depreciation and amortisation
Interest revenue
Finance costs written off
Intersegment eliminations
(Loss)/ profit before income tax
Income tax expense
(Loss)/ profit after income tax
Assets
Segment assets
Intersegment eliminations
Total assets
Liabilities
Segment liabilities
Intersegment eliminations
Total liabilities
Dermaportation
drug delivery
technology
$
Devices
$
Total
$
570,552
6,440
907,175
75,105
1,559,272
(2,169,079)
(52,918)
6,440
83,310
--
(2,132,247)
--
(2,132,247)
--
51
--
--
51
(1,560,787)
(20,134)
51
--
--
(1,580,870)
--
(1,580,870)
3,016,932
460,763
8,385,886
2,205,803
570,552
6,491
907,175
75,105
1,559,323
(3,729,866)
(73,052)
6,491
83,310
--
(3,713,117)
--
(3,713,117)
3,477,695
(2,286,149)
1,191,546
10,591,689
(8,181,112)
2,410,577
Segment revenues are allocated based on the country in which the customer is located. Operating
revenues of $570,552 or 100% are derived from a single external party. Segment assets are allocated to
countries based on where the assets are located.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 21: BUSINESS COMBINATIONS
On 5 November 2019, Wellfully Limited acquired 100% of the ordinary shares of Wellfully SA for $120,000
payable with ordinary shares of Wellfully Limited. The acquisition is deemed to be a business combination
and the details of the acquisition are as follows.
Details of the acquisition are as follows:
Cash and cash equivalents
Other assets
Related party loan
Trade and other payables
Net liabilities acquired
Representing:
Shares payable to vendor
Intangibles recognised at acquisition date
Fair value
$
336,246
88,175
(582,834)
(94,569)
(252,982)
120,000
372,982
From the date of acquisition to 30 June 2020, Wellfully SA incurred a loss of $1,506,736.
At 30 June 2020, intangibles of $372,982 has been written off.
NOTE 22: CONTINGENT ASSETS AND LIABILITIES
The directors of the Company are unaware of any existing contingent assets and liabilities, other than the
contingent liability matter regarding the Company being served with a writ over a Convertible Note, as
announced to the market. The Company has retained legal representation for the active defence of the
matter, to which mediation still continues.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 23: RELATED PARTY TRANSACTIONS
Parent Entity
Wellfully Limited is the Parent Entity.
Subsidiaries
Interests in subsidiaries are set out in Note 12.
Key Management Personnel
Disclosures relating to key management personnel are set out in Note 11 and the remuneration report in
the Directors' Report.
Transactions with Related Parties
As set out in Note 11 and the remuneration report in the Directors’ Report.
Receivables from and Payables to Related Parties
As of 30 June 2021, the following remuneration amounts remained payable:
• PB Commodities Pte Ltd, an entity related to the director, Cameron Reynolds - $8,750
• The Brand Laboratories FZ LLC, an entity related to the director, Steven Schapera - $44,854
• Antonio Varano Della Vergiliana and Anthony Varano Inc., an entity related to the director, Antonio
Varano Della Vergiliana - $44,854
• The Wright Family Trust, a trust related to the director, Anthony Wright - $8,571
• Paul Peros - $58,861
As of 30 June 2020, the following remuneration amounts remained payable:
• PB Commodities Pte Ltd, an entity related to the director, Cameron Reynolds - $37,500*
• Steven Schapera and The Brand Laboratories FZ LLC, an entity related to the director, Steven Schapera
- $127,313*
• Antonio Varano Della Vergiliana and Anthony Varano Inc., an entity related to the director, Antonio
Varano Della Vergiliana - $81,589*
Jeffrey Edwards - $46,158
•
• Paul Peros - $120,000*
* Shares were issued in lieu of remuneration on 19 August 2020.
There were no receivables from related parties at the current and previous reporting date.
Loans to/from Related Parties
There were no loans to or from related parties at the current and previous reporting date.
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 24: PARENT ENTITY DISCLOSURES
(a) 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
(b) Financial Performance
Loss for the year
Other comprehensive loss
Total Comprehensive Loss
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2021
$
2020
$
2,527,813
443,333
236,590
2,538,772
2,764,403
2,982,105
617,838
2,096,816
617,838
2,096,816
2,146,565
885,289
42,552,152
597,273
(41,002,860)
33,043,514
232,334
(32,390,559)
2,146,565
885,289
2021
$
2020
$
(8,612,301)
--
(1,658,871)
--
(8,612,301)
(1,658,871)
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NOTES TO THE FINANCIAL STATEMENTS FOR THE YEAR ENDED 30 JUNE 2021
NOTE 24: PARENT ENTITY DISCLOSURES (continued)
(c) Guarantees
Wellfully Limited has not entered into any guarantees in relation to the debts of its subsidiaries.
(d) Other Commitments and Contingencies
Wellfully Limited are unaware of any existing contingent assets and liabilities, other than the contingent
liability matter regarding the Company being served with a writ over a Convertible Note, as announced to
the market. The Company has retained legal representation for the active defence of the matter, to which
mediation still continues.
(e) Plant and Equipment Commitments
Wellfully Limited has no commitments to acquire property, plant and equipment.
(f) Significant Accounting Policies
Wellfully Limited accounting policies do not differ from the Consolidated Entity disclosed in Note 1.
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DIRECTORS’ DECLARATION
In the opinion of the directors:
a)
The financial statements, notes and additional disclosures included in the directors’ report
designated as audited, are in accordance with the Corporations Act 2001, including:
giving a true and fair view of the Consolidated Entity’s financial position as at 30 June
i)
2021 and of its performance for the year ended on that date; and
ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001;
the financial statements and notes thereto are in accordance with International Financial
Reporting Standards issued by the International Accounting Standards Board, as disclosed in Note
1(a); and
there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
b)
c)
This declaration has been made after receiving the declarations required to be made to the directors in
accordance with Section 295A of the Corporations Act 2001 for the financial year ended 30 June 2021.
Signed in accordance with a resolution of the Directors made pursuant to section 295(5)(a) of the
Corporations Act 2001.
__________________
Jeffrey Edwards
Director
Perth, Western Australia
30th September 2021
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CORPORATE DIRECTORY
AUSTRALIAN COMPANY NUMBER:
056 482 636
DIRECTORS:
Antonio Varano Della Vergiliana
Jeffrey David Edwards
Steven Lorn Schapera
Cameron Reynolds
Anthony David Wright
SECRETARY:
John Joseph Palermo
CEO:
Paul Peros
CFO:
Sergej Dolezil
REGISTERED OFFICE:
Level 1
284 Oxford Street
LEEDERVILLE WESTERN AUSTRALIA 6007
Telephone: +61 8 9443 3011
AUDITORS:
RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade
PERTH WESTERN AUSTRALIA 6000
Telephone: +61 8 9261 9100
Facsimile: +61 8 9261 9101
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HOME EXCHANGE:
Australian Securities Exchange Limited
Central Park, 152-158 St Georges Terrace
PERTH WESTERN AUSTRALIA 6000
ASX CODE:
WFL
SHARE REGISTER:
Automic Registry Services
Level 2, 267 St Georges Terrace
PERTH WESTERN AUSTRALIA 6000
Telephone: 1300 288 664 (Local)
Telephone: +61 2 9698 5414 (International)
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RSM Australia Partners
Level 32, Exchange Tower
2 The Esplanade Perth WA 6000
GPO Box R1253 Perth WA 6844
T +61 (0) 8 9261 9100
F +61 (0) 8 9261 9111
www.rsm.com.au
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
WELLFULLY LIMITED
Opinion
We have audited the financial report of Wellfully Limited (the Company) and its subsidiaries (the Group), which
comprises the statement of financial position as at 30 June 2021, the statement of profit or loss and other
comprehensive income, the statement of changes in equity and the statement of cash flows for the year then
ended, and notes to the financial statements, including a summary of significant accounting policies, and the
directors' declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001,
including:
(i)
(ii)
Giving a true and fair view of the Group's financial position as at 30 June 2021 and of its financial
performance for the year then ended; and
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor's Responsibilities for the Audit of the Financial Report section of
our report. We are independent of the Group in accordance with the auditor independence requirements of the
Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board's
APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the financial
report in Australia. We have also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of the Company, would be in the same terms if given to the directors as at the time of this auditor's
report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
THE POWER OF BEING UNDERSTOOD
AUDIT | TAX | CONSULTING
RSM Australia Partners is a member of the RSM network and trades as RSM. RSM is the trading name used by the members of the RSM network. Each member of the RSM network is an independent
accounting and consulting firm which practices in its own right. The RSM network is not itself a separate legal entity in any jurisdiction.
RSM Australia Partners ABN 36 965 185 036
Liability limited by a scheme approved under Professional Standards Legislation
Key Audit Matters
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Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of
the financial report of the current period. These matters were addressed in the context of our audit of the financial
report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key Audit Matter
How our audit addressed this matter
Revenue Recognition
Refer to Note 2 in the financial statements
As reported in the statement of profit or loss and
other comprehensive income for the year ended 30
June 2021, the Group has recognised revenue from
contracts with customers of $462,973. We
determined revenue recognition to be a key audit
matter due to the following:
The balance is material to the Group and there
are
risks associated with management
judgements for recognising revenue including
identification of contracts and performance
obligations, determination of the transaction
price and its timing; and
Revenue recognition is a presumed fraud risk
under the Australian Auditing Standards.
Our audit procedures included:
Ensuring
the Group’s
recognition
accounting policy is in accordance with Australian
Accounting Standards;
revenue
Reviewing contracts with customers to obtain an
understanding of the contractual arrangements;
On a sample basis, vouching revenue recognised to
appropriate supporting documentation;
Reviewing revenue transactions before and after
the reporting date to ensure that revenue is
recognised in the correct financial period; and
Assessing the appropriateness of the disclosures in
the financial report.
Other Information
The directors are responsible for the other information. The other information comprises the information included
in the Group's annual report for the year ended 30 June 2021, but does not include the financial report and the
auditor's report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not express any
form of assurance 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 Corporation Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the Group or to cease operations, or have no realistic
alternative but to do so.
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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: https://www.auasb.gov.au/auditors_responsibilities/ar2.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 within the directors' report for the year ended 30 June 2021.
In our opinion, the Remuneration Report of Wellfully Limited, for the year ended 30 June 2021, complies with
section 300A of the Corporations Act 2001.
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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.
RSM AUSTRALIA PARTNERS
JAMES KOMNINOS
Partner
Perth, WA
Dated: 30 September 2021
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ASX ADDITIONAL INFORMATION
1. QUOTED SECURITIES
(a)
ORDINARY FULLY PAID SHARES AS AT 23 SEPTEMBER 2021
(i)
DISTRIBUTION OF SHAREHOLDERS:
SPREAD
OF HOLDINGS
NO. OF
HOLDERS
NO. OF
SHARES
PERCENTAGE OF
ISSUED CAPITAL %
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001+
208
130
340
865
300
30,570
415,033
2,854,605
29,272,881
177,248,377
0.01
0.20
1.36
13.95
84.48
1,843
209,821,466
100.00
(ii)
TOP 20 HOLDERS OF ORDINARY FULLY PAID SHARES:
The names of the twenty largest shareholders of ordinary fully paid shares are listed below:
HOLDER NAME
ROKAMAHO PTY LTD
CITICORP NOMINEES PTY LIMITED
RFID SYSTEMS PTY LTD
1. GAKS INVESTMENT HOLDINGS PTY LTD
2. VIA PASTURA LIMITED
3.
4.
5.
6. MR DANNY ALLEN PAVLOVICH
7. OTIS DEVELOPMENTS PTY LTD
8. MR VICTOR KULIVEOVSKI
9. MR NEVILLE HINRICHSEN & MRS ANNETTE HINRICHSEN
10. NEAVERSON SUPER FUND PTY LIMITED
11.
12.
13. DR ALOK JHAMB
14.
15. MULLOWAY PTY LTD
16.
17. VIRTUS CAPITAL PTY LTD
18. MR ALLAN KEITH CLARKE
19. HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
20. MR MICHAEL LEONG & DR DEBBIE LEONG
THE BRAND LABORATORIES FZ LLC
SABINA PTY LTD
SUNSET CAPITAL MANAGEMENT PTY LTD
BNP PARIBAS NOMINEES PTY LTD SIX SIS LTD
NO. OF
ORDINARY
SHARES
HELD
PERCENTAGE
OF ISSUED
SHARES
%
22,928,481
10,800,000
8,413,334
5,471,032
4,283,333
3,761,407
3,500,000
3,400,000
3,225,000
2,900,000
2,858,013
2,827,330
2,750,000
2,000,000
1,814,729
1,789,958
1,685,613
1,510,000
1,418,741
1,374,783
88,711,754
10.93
5.15
4.01
2.61
2.04
1.79
1.67
1.62
1.54
1.38
1.36
1.35
1.31
0.95
0.86
0.85
0.80
0.72
0.68
0.66
42.28
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ASX ADDITIONAL INFORMATION (continued)
1.
QUOTED SECURITIES (continued)
(iii)
VOTING RIGHTS
No restrictions - on a show of hands every member present in person or by proxy shall
have one vote and upon a poll, each fully paid share shall have one vote.
(iv)
SUBSTANTIAL SHAREHOLDERS
The Substantial Shareholders as recorded in the Register of Members as at 23 September
2021 are as follows:
NAME
NO. OF SHARES
%
GAKS INVESTMENT HOLDINGS PTY LTD
VIA PASTURA LIMITED
22,928,481
10,800,000
10.93
5.15
(b)
OPTIONS
As at 23 September 2021, there existed the following quoted options:
154,985,434 OPTIONS EXERCISABLE AT $0.15 EACH ON OR BEFORE 31 MARCH 2023
(i)
DISTRIBUTION OF OPTIONHOLDERS:
SPREAD
OF HOLDINGS
NO. OF
HOLDERS
NO. OF
OPTIONS
PERCENTAGE OF
QUOTED OPTIONS %
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001+
43
118
67
271
205
704
17,796
335,182
478,217
11,746,608
142,407,631
0.01
0.22
0.31
7.58
91.88
154,985,434
100.00
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ASX ADDITIONAL INFORMATION (continued)
1.
QUOTED SECURITIES (continued)
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(ii)
TOP 20 HOLDERS OF QUOTED OPTIONS:
The names of the twenty largest optionholders are listed below:
HOLDER NAME
RFID SYSTEMS PTY LTD
BLACK WIND PTY LTD
RFID SYSTEMS PTY LTD
ROKAMAHO PTY LTD
SUNSET CAPITAL MANAGEMENT PTY LTD
1. HAPPY FELIX PTY LTD
2. MR NEVILLE HINRICHSEN & MRS ANNETTE HINRICHSEN
3.
4.
5. OTIS DEVELOPMENTS PTY LTD
6.
7. MR ALLAN KEITH CLARKE
8.
9.
10. NAH SUPERANNUATION PTY LTD
11. MR DANNY ALLEN PAVLOVICH
12.
13. DR ALOK JHAMB
14. VIA PASTURA LIMITED
14. MR VICTOR KULIVEOVSKI
15.
JRAR PTY LTD
16. VIRTUS CAPITAL PTY LTD
17. NORRIS SMSF PTY LTD
18. MRS JULIET CAMPBELL
19. MR CLARK VAINS
20.
BNP PARIBAS NOMINEES PTY LTD
IRWIN BIOTECH NOMINEES P/L
NO. OF
OPTIONS
HELD
PERCENTAGE
OF QUOTED
OPTIONS
%
13,400,000
10,512,684
10,386,666
10,000,000
7,000,000
5,000,000
3,150,000
2,880,000
2,855,556
2,550,134
2,507,605
1,842,666
1,666,667
1,500,000
1,500,000
1,481,567
1,457,076
1,204,232
1,193,000
1,100,000
1,050,000
84,237,853
8.65
6.78
6.70
6.45
4.52
3.23
2.03
1.86
1.84
1.65
1.62
1.19
1.08
0.97
0.97
0.96
0.94
0.78
0.77
0.71
0.68
54.38
(iii)
VOTING RIGHTS
Holders of options are not entitled to vote at a General Meeting of Members in person, by
proxy or upon a poll, in respect of their option shareholding.
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ASX ADDITIONAL INFORMATION (continued)
2.
UNQUOTED SECURITIES
(a)
OPTIONS
As at 23 September 2021, there existed the following unquoted options:
(i)
6,150,000 OPTIONS EXERCISABLE AT $0.10 EACH ON OR BEFORE 19 AUGUST 2023
NAME
VALE CAPITAL PTY LTD
VIA PASTURA LIMITED
NO. OF
OPTIONS
%
4,950,000
1,200,000
6,150,000
80.49
19.51
100.00
(ii)
VOTING RIGHTS
Holders of options are not entitled to vote at a General Meeting of Members in person, by
proxy or upon a poll, in respect of their option holding.
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CORPORATE GOVERNANCE STATEMENT
Wellfully Limited’s Corporate Governance Statement is structured with reference to the Corporate
Governance Council’s principles and recommendations as set out by the ASX Corporate Governance
Principles and Recommendations (4th Edition).
The Company’s Corporate Governance Statement has been reviewed and approved by the Board and is
current as at 30 September 2021.
A copy of the Company’s current Corporate Governance Statement is available on the Company’s website
at www.wellfully.net.
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