We could not find any results for:
Make sure your spelling is correct or try broadening your search.
Register for Free to get streaming real-time quotes, interactive charts, live options flow, and more.
| Share Name | Share Symbol | Market | Type | Share ISIN | Share Description |
|---|---|---|---|---|---|
| Innovaderma Plc | LSE:IDP | London | Ordinary Share | GB00BT9PTW34 | ORD EUR0.10 |
| Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
|---|---|---|---|---|---|---|---|---|---|---|
| 0.00 | 0.00% | 29.00 | 0.00 | 01:00:00 |
| Industry Sector | Turnover | Profit | EPS - Basic | PE Ratio | Market Cap |
|---|---|---|---|---|---|
| 0 | 0 | N/A | 0 |
From Apr 2019 to Apr 2024
TIDMIDP
RNS Number : 8569N
InnovaDerma PLC
31 October 2016
InnovaDerma PLC
("InnovaDerma", the "Company" or the "Group")
Final results for the 12 months ended 30 June 2016
A Year of Transformational Growth
InnovaDerma (LSE: IDP), a UK developer of 'at-home' and clinically proven treatments for hair loss, hair care, self-tanning and skin rejuvenation, is pleased to announce its final results for the period ended 30 June 2016.
InnovaDerma PLC was incorporated on 19 September 2014 to become the holding company for InnovaDerma ANZ and the other companies in the InnovaDerma Group, in order to list them on a recognised stock exchange. The previous financial year therefore ran from 19 September 2014 to 30 June 2015 (FY2015).
Financial and Operational Highlights
-- Group revenue grew strongly to AUD$8.4m (FY2015: AUD$1.05m) reflecting underlying organic growth and transformation of the Skinny Tan business, which grew more than 10-fold in revenue since its acquisition in May 2015
-- Gross profit increased significantly to AUD$4.8m (FY2015: AUD$0.70m) -- Profit before tax of AUD$0.47m (FY2015: AUD$ loss of 0.90m)
-- Expansion of international distribution and retail network is key to growth and financial performance. As at 30 June 2016, the Company had 2,500 retail points (FY2015: 250) in seven countries
-- Skinny Tan, launched in Superdrug in February 2016, is now stocked in UK stores nationwide and since achieved being the No.1 selling tanning brand by revenue
-- Secured a distribution agreement with Olive Young, Korea's largest health and beauty store chain. Skinny Tan is currently sold in Olive Young's 550 stores nationwide and is distributed through PROS Korea, a distributor for InnovaDerma products for North East Asia
-- Secured a distribution with Chemist Warehouse for distribution of Skinny Tan across all of its 320 stores in Australia
-- Skinny Tan brand has grown from 14 to 25 products with a strong emphasis on product development to increase shelf space and cater for multiple international markets
-- Developed and launched Skinny Tan "Professional Range" of products aimed at beauty and tanning salons and skin rejuvenation clinics in Australia, UK and the US
-- Direct to consumer marketing through social media channels drove revenue growth and enabled Skinny Tan to grow in popularity
Post Period End and Outlook
-- Strong infrastructure, scalable business and resources now in place to support brand development across whole product range to drive future performance as a result of focus on growing Skinny Tan
-- As announced today, the Group has successfully entered in the United States and secured retail and e-tailer distribution deals with GNC Holdings, Inc. , Quidsi, Inc., a subsidiary of Amazon.com, Inc. and Jet.com, a subsidiary of Wal-Mart Stores, Inc
-- Established US subsidiary and appointed Joseph Panetta as Executive Vice President to accelerate growth in the American market, as announced this morning
-- Further Skinny Tan brand extensions expected to be rolled out soon
-- Focused on developing new and highly effective products in hair care, hair loss treatment and skin rejuvenation for release in 2017
-- Continue to focus on expanding distribution and retail network (both physical stores and e-tailers) in new and existing territories
-- Strategic decision to move production to the UK from Australia to improve supply chain and operating margins, as announced on October 24(th)
-- Trading since the period end continues strongly
Haris Chaudhry, Executive Chairman said:
"This has been a year of transformation growth for the Group with exceptional financial and operational results driven by a highly disciplined and agile approach. Our strategic decision to grow Skinny Tan, a premium self-tanner brand, has enabled us to expand our retail and distribution network and, importantly, provided us with a scalable business and a global supply chain which we can leverage to continue to grow our brands across the Group and drive future business performance.
The Group continues to go from strength to strength since the period end and we are delighted to announce this morning that we have successfully entered the US market and secured distribution deals with three blue-chip organisations. New product development remains a key focus for us and we will be rolling out brand extensions, together with new products, for international markets this year and next. We are trading profitably and the Board looks to the future with confidence and optimism."
Further enquiries:
InnovaDerma Haris Chaudhry/Joe Bayer +61 (0)3 9111 0071 --------------------------- ----------------------- Sole broker Hybridan LLP Claire Noyce +44 (0)203 764 2341 --------------------------- ----------------------- Cardew Group Shan Shan Willenbrock David Roach Emma Ruttle + 44 (0)20 7930 0777 --------------------------- -----------------------
About InnovaDerma:
InnovaDerma PLC (LSE: IDP) specializes in the research, manufacture and marketing of clinically proven products in hair loss, anti-ageing and beauty sectors. InnovaDerma has presence in the UK, US, Australia, New Zealand, Philippines, South Africa, Hong Kong and South Korea.
www.innovaderma.com
Chairman's Review of the business, performance & position
Introduction
I am pleased to present our maiden final results for year ended 30 June 2016. In September of this year, we were admitted to the Standard Listing segment of the UK Listing Authority and to trading on the Main Market of the London Stock Exchange. This, combined with a year of excellent progress is particularly pleasing as the Group has delivered a strong performance and solid growth on all key performance measures.
Financial and Operational Performance
Our revenue and profit performance has been consistently strong throughout the year, reflecting the rapid growth of Skinny Tan which the company has transformed and grown more than 10-fold in revenue since its acquisition in May 2015. Skinny Tan is a premium self-tanner brand that combines a natural tanning active, to tan and reduce the visible appearance of cellulite. The business, which we acquired in May 2015, was successfully integrated in Q2 of 2015. Due to the international appeal of the brand and strong performance, the Board decided to focus on growing Skinny Tan as a premium brand, expanding its retail distribution network globally to accelerate revenue and profit growth. Importantly our strategy to focus on Skinny Tan has enabled us to build a scalable business and a global supply chain from which we can leverage and continue to grow our brands across the Group.
This strategy has delivered impressive growth and the Group's revenue grew by 800% to AUD$8.4m (FY2015 AUD$1.5m) and profit before tax increased to AUD$0.473m, compared to a loss of AUD$0.90m in the previous year. As at 30 June 2016, InnovaDerma had 2,500 retail points in seven countries (FY2015: 250). In the period under review, the Board secured the following key retail distribution agreements:
In the period under review, the Board secured the following key retail distribution agreements:
-- In February 2016, Skinny Tan was launched as a new brand in 220 of Superdrug's stores and by July 2016, it was stocked in all 776 of its stores throughout the UK. In the same month Skinny Tan became the No.1 selling tanning brand in Superdrug by revenue. Post period end, Skinny Tan won Best Breakthrough Brand 2016 at the Superdrug Supplier Conference.
-- In Asia, the Company secured a distribution agreement with Olive Young, Korea's largest health and beauty store chain. Skinny Tan is currently sold in Olive Young's 550 stores nationwide and is distributed through PROS Korea, a distributor for InnovaDerma products for North East Asia.
-- InnovaDerma secured a distribution agreement with Chemist Warehouse for distribution of Skinny Tan across all of its 320 stores nationwide in Australia. Chemist Warehouse with annual revenues of more than AUD$2.7bn (GBP1.5bn) is one of the leading and fastest growing pharmacy chains in Australia.
We place strong emphasis on product development and in the period under review, we extended Skinny Tan from 14 to 25 products including the Skinny Tan Professional range of products. By extending the brand and creating complementary products it enables us to capitalise on the complete self-tanning cycle from the initial priming, to tanning as well as maintaining the tan.
We also launched Skinny Tan Professional Range of products aimed at beauty and tanning salons and skin rejuvenation clinics in Australia, UK and the US. To complement and extend our brand within the Professional Range, we developed the Skinny Tan Accredited Training Course which provides a manual together with a licensed training certificate upon completion of the Licensed Spray Tanner course.
Entry into the American Market
As announced earlier today, we have successfully entered the American market which we believe represents significant potential for future growth and proves our ability to enter new and complex geographies. We began marketing trials in the US for Skinny Tan in the spring of 2016 and, owing to their success, we have secured a retail distribution deal with GNC Holdings, Inc., a leading global speciality retailer of health and wellness products listed on the New York Stock Exchange. Skinny Tan will be initially rolled out to 655 of GNC's 6,000 stores nationwide. Additionally, we have secured the distribution of Skinny Tan with highly established e-tailers: Soap.com, a retail site owned by Quidsi Inc., its parent company, which is ultimately owned by Amazon.com, Inc, and Jet.com, a subsidiary of Wal-Mart Stores, Inc.
To support our growth plans in the American market, we have established Innova Science, Inc. ("Innova Science"), a wholly-owned subsidiary of the Group, and appointed Joseph Panetta as Executive Vice President and President of Skincare to lead the American business.
Production move to the UK
As announced on 24 October 2016, the Group will be moving a significant part of its production to the UK, from Australia which will significantly improve the Company's supply chain to its most important growth markets and key customers. We expect a notable improvement in the operating margins of the business because of lower freight and logistics costs and minimised currency exchange exposure. The cost benefits are expected to have a positive impact on the Company's financial performance from the second half of the financial year 2017.
People
On behalf of the Board, I would like to welcome Joseph Panetta to InnovaDerma who brings with him extensive experience in consumer brands, and we look forward to working with him to grow the business in the US. This has been a year of transformation for the business and our employees are the key to our success, so, on behalf of the Board, I would like to extend our appreciation and thanks for their commitment and hard work during this period of significant growth for the Group.
Strategy and Outlook
Our focus on growing Skinny Tan's revenue through an international retail and distribution network has opened access to a global supply chain for the whole Group. In the year under review we have re-organised the business, increased our resources and established a solid infrastructure to support our growing business. The Board believes there are significant opportunities for future expansion and our strategy is therefore focused on building on and leveraging our achievements to date. We will:
-- Continue to expand our distribution and e-tailer network in new and existing territories
-- Extend the Skinny Tan brand to leverage customer and brand loyalty. Further brand extensions are expected to be rolled out soon
-- Continue to focus on digital direct to consumer strategy which has supported revenue growth and enabled Skinny Tan to grow in popularity
-- Focus on the growth and product development of the Group's other brands including haircare, hair loss treatment and skin rejuvenation
-- Continue to seek value added acquisition targets to integrate into the business
Since the period end, the Company continues to trade strongly and is making excellent progress. This, together with our strong brands and positive market trends, means we are confident of the future and of delivering value to our shareholders.
Financial Review
Overview
The Group achieved excellent results for the year ended 30 June 2016, driven by underlying organic growth and the transformation of the Skinny Tan business which delivered very strong sales growth.
Group revenues grew to AUD$8.4m (FY2015: AUD$1.05m) largely as a result of the successful integration and restructuring of the Skinny Tan business acquired in May 2015. Profit before tax was AUD$0.47m (FY2015: loss of AUD $0.90m). Additional other income of AUD$64,671 was recorded as a result of export development grants for the UK brand launch.
Net asset value increased to AUD$3.15m as at 30 June 2016, representing a 16.6% increase from 30 June 2015 (AUD$2.69m).
Operating results
The Group's operating profit, excluding other income, was AUD$0.41m (2015: loss of AUD$0.90m). This reflected the significant investment in people resources and brand marketing to drive the turnaround in the Skinny Tan brand. Further investment was made in the US to create brand awareness and test market the direct to consumer channels. As a result of securing distribution deals in America and to capitalise on the identified retail distribution opportunities, the Group appointed Joseph Panetta as Executive Vice President of Innova Science Inc., a wholly owned subsidiary of InnovaDerma PLC.
The Group achieved gross margins of 57% (FY2015: 67%) reflecting the move towards a wider distribution network for Skinny Tan and a significant skew in revenue terms away from the higher margin Leimo (hair care) business. Gross margins are inclusive of delivery costs to our customers and therefore we have been reviewing the high freight cost (excluding Australia) to our growth market in the UK, and in the future, the US. The decision to move manufacturing to the UK will significantly reduce the supply chain timeline and the expensive overseas shipping costs.
The focus in the period under review was to grow and commercialise the Skinny Tan brand value whilst still maintaining a steady Leimo performance. Overheads grew to $4.38m, of which marketing was AUD$2.26m and salaries AUD$1.06m. Staff numbers were reduced in the lower cost Philippines service centre and replaced by a smaller number of higher value employees in marketing and supply chain roles in Australia and the UK.
Cash and net debt
The Group's cash and cash equivalents as at 30 June 2016 were AUD$0.21m (FY2015: $0.21m). The Group has no externally financed borrowing and loans but has related party loans of $1.078m which have been carried forward from prior to listing. The Group has largely self-funded the growth in assets by astute cash management and a strong focus on cost control.
The growth in trade receivables and inventory for 2016 over 2015 of AUD$2.62m has been partially funded by the increase in trade payables of AUD$2.01m over the same period with the balance coming from the increase in related party loan of AUD$0.39m and internally generated cash flow.
The Group is currently reviewing various funding options to support the planned significant growth in both geographical spread and new product development. It is recognised by the board that whilst we have successfully internally funded the growth over the last twelve months, the impetus for sustaining and expanding the scope of business operations will require further funding.
Taxation
The charge for taxation for the full year was AUD$0.13m with the Group carrying a deferred tax asset of AUD$0.18m. The Group has utilised carried forward tax losses where possible.
All corporate tax liabilities across the various geographical regimes have been accounted for.
Dividends
The board has elected not to declare a dividend at this time.
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEARED 30 JUNE 2016
Hot Features
Premium
Note Year ended Period from 19
September 2014
to 30 June 2015
30 June 2016 $
$
-------------------------------------- ----------------------------------------
Revenue 7 8,412,696 1,047,651
Cost of sales (3,580,405) (345,733)
-------------------------------------- ----------------------------------------
Gross profit 4,832,291 701,918
Other income 64,671 -
Marketing
expenses (2,257,847) (849,347)
Administrative
expenses (1,044,259) (431,862)
Wages and
salaries (1,056,315) (184,947)
Listing expenses (65,914) (136,056)
-------------------------------------- ----------------------------------------
Operating
profit/(loss) 472,627 (900,294)
Profit/(loss)
before
tax 472,627 (900,294)
Tax expense 6 (125,248) -
Net
profit/(loss)
for
the period 347,379 (900,294)
Other
comprehensive
income/(loss) 24,744 (7,707)
-------------------------------------- ----------------------------------------
Total
comprehensive
income/ (loss)
for the
period 372,123 (908,001)
Attributable to:
Owners of the
parent 246,434 (908,001)
Non-controlling
interests 125,689 -
-------------------------------------- ----------------------------------------
372,123 (908,001)
Basic & diluted
profit/(loss)
per share 28 0.04 (0.12)
-------------------------------------- ----------------------------------------
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2016
30 June 2016 30 June 2015
Note $ $
-------------- --------------
Current assets
Cash and cash equivalents 8 207,682 212,618
Trade and other receivables 9 1,970,619 112,142
Inventory 10 1,107,635 341,794
Prepayments and other
assets 11 75,006 69,411
-------------- --------------
Total current assets 3,360,942 735,965
Non-current assets
Property, Plant and
Equipment 14,362 16,509
Intangible assets 12 3,480,804 3,418,479
Other assets - 3,298
Deferred tax asset 13 176,782 -
-------------- --------------
Total non-current assets 3,671,948 3,438,286
Total assets 7,032,890 4,174,251
-------------- --------------
Current liabilities
Trade and other payables 14 2,799,695 788,322
-------------- --------------
Total current liabilities 2,799,695 788,322
Non-current liabilities
Borrowings 15 1,078,912 688,063
Deferred tax liability 16 7,264 -
-------------- --------------
Total non-current liabilities 1,086,176 688,063
-------------- --------------
Total liabilities 3,885,871 1,476,385
-------------- --------------
Net assets 3,147,019 2,697,866
-------------- --------------
Equity
Shares 17 2,496,023 2,479,468
Share premium 2,553,149 2,492,674
Merger reserve 18 (1,308,057) (1,308,057)
Foreign exchange reserve 17,037 (7,707)
Accumulated losses 19 (736,822) (958,512)
Non-controlling interests 125,689 -
-------------- --------------
Total equity and reserves 3,147,019 2,697,866
-------------- --------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR
1 JULY 2015 TO 30 JUNE 2016
Ordinary Share Merger Foreign Accumulated Non-controlling Total Equity
Share Premium Reserve Exchange Losses interests
Capital Reserve
$ $ $ $ $ $ $
Balance as at
1 July 2015 2,479,468 2,492,674 (1,308,057) (7,707) (958,512) - 2,697,866
Comprehensive
income
Profit/ (loss)
for the
period - - - - 221,690 125,689 347,379
Other
comprehensive
income - - - 24,744 - - 24,744
------------ ------------- ------------- ---------- ------------ ---------------- -------------
Total
comprehensive
income for
the period - - - 24,744 221,690 125,689 372,123
------------ ------------- ------------- ---------- ------------ ---------------- -------------
Transactions
with owners,
in their
capacity as
owners
Shares issued 16,555 60,475 - - - - 77,030
Cost of shares
issued - - - - - - -
------------ ------------- ------------- ---------- ------------ ---------------- -------------
Total
transactions
with owners,
in their
capacity as
owners 16,555 60,475 - - - - 77,030
------------ ------------- ------------- ---------- ------------ ---------------- -------------
Balance at 30
June 2016 2,496,023 2,553,149 (1,308,057) 17,037 (736,822) 125,689 3,147,019
------------ ------------- ------------- ---------- ------------ ---------------- -------------
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE PERIOD 1 JULY 2015 TO 30 JUNE
2016
Year ended Period
30 June from 19
2016 September
2014 to
30 June
$ 2015
Note $
------------- ------------
Cash flows from operating activities
Receipts from customers 6,554,219 1,000,968
Payments to suppliers and employees (7,040,706) (1,708,565)
Interest received 128 -
EMDG Grants received 64,543 -
Payments for corporate listing (non-repeating) - (136,056)
Net cash used by operating activities 25 (421,816) (843,653)
------------- ------------
Cash flows from investing activities
Purchase of property, plant and equipment - (18,343)
Payments for product development (62,325) (31,922)
Net cash received on acquisition of
subsidiaries - 32,771
Purchase of Skinny Tan Pty Ltd - (50,000)
------------- ------------
Net cash used by investing activities (62,325) (67,494)
------------- ------------
Cash flows from financing activities
Proceeds from borrowings 390,849 22,838
Repayments of borrowings - (106,527)
Proceeds from convertible notes - 127,510
Proceeds from shares issued 63,612 1,391,162
Transaction costs for shares issued 17 - (311,218)
------------- ------------
Net cash from financing activities 454,461 1,123,765
------------- ------------
Increase/(decrease)in cash and cash
equivalents (29,680) 212,618
Cash and cash equivalents at the beginning
of the period 212,618 -
Effect of movement in foreign exchange
rates 24,744 -
------------- ------------
Cash and cash equivalents at the end
of the period 8 207,682 212,618
------------- ------------
PARENT COMPANY STATEMENT OF
FINANCIAL POSITION
AS AT 30 JUNE 2016
Note 30 June 2016 30 June 2015
$
-------------- --------------
Non-current assets
Intercompany receivable 20 3,568,627 1,157,379
Investment in subsidiaries 45,180 50,175
Goodwill 12 1,399,424 3,892,098
-------------- --------------
Total non-current assets 5,013,231 5,099,652
-------------- --------------
Total assets 5,013,231 5,099,652
-------------- --------------
Current liabilities
Trade and other payables 36,680 14,363
Total current liabilities 36,680 14,363
-------------- --------------
Non-current liabilities
Convertible notes 127,510 127,510
-------------- --------------
Total non-current liabilities 127,510 127,510
Total liabilities 164,190 141,873
-------------- --------------
Net assets 4,849,041 4,957,779
-------------- --------------
Equity
Shares 14 2,496,023 2,479,468
Share premium 2,553,149 2,492,674
Retained earnings (200,131) (14,363)
-------------- --------------
Total equity and reserves 4,849,041 4,957,779
-------------- --------------
In accordance with section 408 of the UK Companies Act 2006, the company is availing itself of the exemption from presenting its individual statement of profit or loss and other comprehensive income. The company's loss for the financial period as determined in accordance with IFRS's is $185,768. The company had no cashflow in the period, and therefore no cashflow statement has been prepared.
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
Ordinary Share Premium Retained Total Equity
FOR THE YEARED 30 JUNE 2016 Share Capital Earnings
$ $ $ $
Balance brought forward from 30 June 2015 2,479,468 2,492,674 (14,363) 4,957,779
Comprehensive income
Loss for the period - - (185,768) (185,768)
Total comprehensive income for the period - - (185,768) (185,768)
---------------- ---------------- ----------- ---------------
Transactions with owners, in their capacity
as owners
Issue of shares 16,555 60,475 - 77,030
Total transactions with owners, in their
capacity as owners 16,555 60,475 - 77,030
---------------- ---------------- ----------- ---------------
Balance as at 30 June 2016 2,496,023 2,553,149 (200,131) 4,849,041
---------------- ---------------- ----------- ---------------
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEARED 30 JUNE 2016
1. Accounting Policies 1.1 Basis of Preparation
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with those parts of the Companies Act 2006 applicable to companies reporting under IFRS. The consolidated financial statements are drawn up under the historical cost convention, except for the revaluation of financial assets.
IFRS, issued by the International Accounting Standards Board (IASB) set out accounting policies that the IASB has concluded would result in financial statements containing relevant and reliable information about transactions, events and conditions. Material accounting policies adopted in the preparation of the consolidated financial statements are presented below and have been consistently applied unless otherwise stated.
1.2 Going Concern
This report has been prepared on the going concern basis, which contemplates the continuation of normal business activity and the realisation of assets and the settlement of liabilities in the normal course of business.
1.3 Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by InnovaDerma PLC at 30 June 2016. A controlled entity is any entity over which InnovaDerma PLC has the power to govern the financial and operating policies so as to obtain benefits from its activities.
In preparing the consolidated financial statements, all intragroup balances and transactions between entities in the consolidated group have been eliminated in full on consolidation.
Pooling of Interests on Incorporation of Parent Entity
On 28 November 2014, InnovaDerma PLC acquired 100% of the shares of InnovaDerma AUS & NZ Pty Ltd, InnovaDerma International Limited, InnovaDerma NZ Limited, and ID Philippines, Inc. As all parties were under common control before and after the transaction, the acquisitions were scoped out of IFRS 3, and thus accounted for using the pooling of interests method.
Under this method the assets and liabilities of the acquiree are recorded at book value and intangible assets are only recognised if they were previously recognised by the acquiree. No goodwill is recorded and expenses of the combination are written off immediately in profit or loss. The difference between the consideration paid/transferred and the nominal value of the share capital in the acquired companies has been reflected as a Merger Reserve within equity.
After the acquisition, the consolidation is processed as normal, on a line by line basis for revenue, expenses, assets and liabilities.
Subsequent Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a combination involving entities or businesses under common control. The business combination will be accounted for from the date that control is attained, whereby the fair value of the identifiable assets acquired and liabilities (including contingent liabilities) assumed is recognised (subject to certain limited exceptions).
When measuring the consideration transferred in the business combination, any asset or liability resulting from a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent consideration classified as equity is not remeasured and its subsequent settlement is accounted for within equity. Contingent consideration classified as an asset or liability is remeasured in each reporting period to fair value, recognising any change to fair value in profit or loss, unless the change in value can be identified as existing at acquisition date.
All transaction costs incurred in relation to business combinations are expensed to the statement of comprehensive income. The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.
Goodwill
Goodwill is carried at cost less any accumulated impairment losses. Goodwill is calculated as the excess of the sum of:
(i) the consideration transferred;
(ii) any non-controlling interest (determined under either the full goodwill or proportionate interest method); and
(iii) the acquisition date fair value of any previously held equity interest;
over the acquisition date fair value of net identifiable assets acquired.
Goodwill on acquisition of subsidiaries is included in intangible assets.
Goodwill is tested for impairment annually and is allocated to the Parent Company's cash-generating units or groups of cash-generating units, representing the lowest level at which goodwill is monitored being not larger than an operating segment. Gains and losses on the disposal of an entity include the carrying amount of goodwill related to the entity disposed of.
Changes in the ownership interests in a subsidiary that do not result in a loss of control are accounted for as equity transactions and do not affect the carrying amounts of goodwill.
Non-controlling interests
The interest of non-controlling shareholders in subsidiary companies (holdings of greater than 0%, but less than 50%), are initially recognised at fair value. Subsequent results of the subsidiary are apportioned to the non-controlling interests in proportion to their shareholding.
1.4 Revenue recognition
Revenue is measured at the fair value of the consideration received or receivable, and represents amounts receivable for goods supplied, stated net of discounts, returns and value added taxes. The group recognises revenue when the amount of revenue can be reliably measured; when it is probable that future economic benefits will flow to the entity; and when specific criteria have been met for each of the group's activities, as described below. The group bases its estimate of return on historical results, taking into consideration the type of customer, the type of transaction and the specifics of each arrangement.
Sales of goods - retail
The group manufactures and sells a range of health and beauty products for sale to the retail market. Sales of goods are recognised when an order is executed and stock is segregated from the Group's inventory, ready for collection in accordance with that customer's terms of trade.
The life science products are often sold with volume discounts; customers have a right to return faulty products in the wholesale market. Sales are recorded based on the price specified in the sales contracts, net of the estimated volume discounts and returns at the time of sale. Accumulated experience is used to estimate and provide for the discounts and returns. The volume discounts are assessed based on anticipated annual purchases.
Internet revenue
Revenue from the provision of the sale of goods on the internet is recognised as at the date that payment is received, because that is the point the buyer accepts legal responsibility for the good being sold. Transactions are settled by credit or payment card.
1.5 Finance income
Interest income is recognised on a time proportionate basis that takes into account the effective yield on the financial asset.
1.6 Intangible Assets
Brands
Externally acquired brands, where identifiable, are capitalised as assets of the group. Brands are initially capitalised at historical cost, or attributable value, when acquired as part of a business combination.
Brands have a limited legal life, however the Group monitors global expiry dates and renews registrations where required. Brands recorded in the financial statements are not currently associated with products which are likely to become commercially or technically obsolete. Accordingly, the Directors are of the view that brands have an indefinite life.
Brands are tested annually for impairment and carried at cost less accumulated impairment charges.
1.7 Impairment
At the end of each reporting period, the Group assesses whether there is any indication that an asset may be impaired. The assessment will include the consideration of external and internal sources of information. If such an indication exists, an impairment test is carried out on the asset by comparing the recoverable amount of the asset, being the higher of the asset's fair value less costs to sell and value in use, to the asset's carrying amount. Any excess of the asset's carrying amount over its recoverable amount is recognised immediately in profit or loss, unless the asset is carried at a revalued amount in accordance with another Standard. Any impairment loss of a revalued asset is treated as a revaluation decrease in accordance with that other Standard.
1.8 Research and Development
Expenditure during the research phase of a project is recognised as an expense when incurred. Development costs are capitalised only when technical feasibility studies identify that the project is expected to deliver future economic benefits and these benefits can be measured reliably.
Capitalised development costs have a finite useful life and are amortised on a systematic basis based on the future economic benefits over the useful life of the project. At this stage, the useful life of the project has not been determined as development is incomplete, hence amortization has not commenced.
1.9 Cash & Cash Equivalents
In the consolidated statement of cash flows, cash and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. In the consolidated balance sheet, bank overdrafts are shown within borrowings in current liabilities.
1.10 Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined using the first-in, first-out (FIFO) method. The cost of finished goods and work in progress comprises design costs, raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity). It excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less applicable variable selling expenses. Costs of inventories include the transfer from equity of any gains/losses on qualifying cash flow hedges for purchases of raw materials.
1.11 Trade Receivables
Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets. If not, they are presented as non-current assets.
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method, less provision for impairment.
1.12 Trade Payables
Trade and other payables are recognised when the Group becomes obliged to make future payments resulting from the purchase of goods and services. They are initially recognised at fair value and subsequently at amortised cost using the effective interest rate method. Current liabilities represent those amounts falling due within one year.
1.13 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 Taxation Office (ATO).
Receivables and payables are stated inclusive of the amount of GST receivable and payable. The net amount of GST recoverable from, or payable to, the ATO is included with the receivables or payables in the statement of financial position.
1.14 Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.
1.15 Income Tax
Income tax expense or benefit represents the sum of current corporation tax payable and provision for deferred income taxes.
Current income tax payable is based on taxable profit for the period. Taxable profit differs from net profit as reported in the statement of comprehensive income because it excludesitems of income or expense that are
taxable or deductible in other periods and it further excludes items that are never taxable or deductible.
The Group's liability for currentcorporation tax is calculated using tax rates and laws that have been enacted or
substantively enacted at the period-end date.
Deferred tax is recognised in respect of all timing differences that have originated but notreversed at the date of the
statement of financial position where transactions or eventshave occurred at that date that will result in an obligation to
pay more, or a right to pay less or to receive more tax, with the following exceptions:
Deferred tax assets are recognised only to the extent that the Directors consider that it is probable that there will be suitable taxable profits from which the future reversal of the underlying timing differences can be deducted.
Deferred tax is measured on an undiscounted basis at the tax rates that are expected to apply in the periods in which timing differences reverse, based on tax rates and laws enacted or substantively enacted at the period-end date.
1.16 Post Retirement Benefits
For salaries paid (all by the Australian subsidiary):
A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity. Superannuation - the Australian defined contribution pension scheme - is mandated by Australian law and presently set at 9.5% of gross salary payable to an employee.
The group pays contributions to publicly or privately administered pension insurance plans on a mandatory basis. The group has no further payment obligations once the contributions have been paid. The contributions are recognised as employee benefit expense when they are due.
1.17 Foreign Currencies
Functional and presentation currency
Items included in the consolidated financial statements of the Group are measured using the currency of the primary economic environment in which the Group operates ('the functional currency'). The consolidated financial statements are presented in Australian dollars, which is the Group's functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rate prevailing at the dates of the transactions.
Foreign currency monetary assets and liabilities at the reporting date are translated at the exchange rate existing at the reporting date. Exchange differences are recognised in the statement of comprehensive income in the period in which they arise.
1.18 Contributed Equity
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. Incremental costs directly attributable to the issue of new shares or options for the acquisition of a business are not included in the cost of the acquisition as part of the purchase consideration.
If the Company reacquires its own equity instruments, e.g. as the result of a share buy-back, those instruments are deducted from equity and the associated shares are cancelled. No gain or loss is recognised in the profit or loss and the consideration paid including any directly attributable incremental costs (net of income taxes) is recognised directly in equity.
1.19 Segment Reporting
The operating segment was reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segment, has been identified as the board of directors, which has overall control for strategic decisions.
1.20 Estimates and Judgements
The directors evaluate estimates and judgements incorporated into the financial statements based on historical knowledge and best available current information. Estimates assume a reasonable expectation or future events and are based on current trends and economic data, obtained both externally and within the Group.
Estimation of useful lives of assets
The Group determines the estimated useful lives and related depreciation and amortisation charges for its property, plant and equipment and finite life intangible assets. The useful lives could change significantly as a result of technical innovations or some other event. The depreciation and amortisation charge will increase where useful lives are less than previously estimated lives, or technically obsolete or non-strategic assets that have been abandoned or sold will be written off or written down.
Goodwill and other indefinite life intangible assets
The Group tests annually, or more frequently if events or changes in circumstances indicate impairment, whether goodwill and other indefinite life intangible assets have suffered any impairment, in accordance with the accounting policies described in Note 1.6 and Note 1.7. The recoverable amounts of cash-generating units (required to determine fair value less costs to sell) have been determined based on value-in-use calculations. These calculations require the use of assumptions, including estimated discount rates based on the current cost of capital and growth rates of the estimated future cash flows.
1.21 New accounting standards for application in future periods (a) New and amended standards adopted by the group
There are no IFRSs or IFRIC interpretations that are effective for the first time for the financial period beginning on 1 July 2015 that would be expected to have a material impact on the group.
(b) New standards and interpretations not yet adopted
A number of new standards and amendments to standards and interpretations are effective for annual periods beginning on or after 1 July 2015, and have not been applied in preparing these consolidated financial statements. None of these is expected to have a significant effect on the financial statements of the group, except the following set out below:
IFRS 9, 'Financial instruments', addresses the classification, measurement and recognition of financial assets and financial liabilities. IFRS 9 was issued in July 2014. It replaces the parts of IAS 39 that relate to the classification and measurement of financial instruments. IFRS 9 requires financial assets to be classified into two measurement categories:
1) those measured as at fair value and 2) those measured at amortised cost. The determination is made at initial recognition.
The classification depends on the entity's business model for managing its financial instruments and the contractual cash flow characteristics of the instrument. For financial liabilities, the standard retains most of the IAS 39 requirements. The main change is that, in cases where the fair value option is taken for financial liabilities, the part of a fair value change due to an entity's own credit risk is recorded in other comprehensive income rather than the income statement, unless this creates an accounting mismatch. The group is yet to assess IFRS 9's full impact. The group will also consider the impact of the remaining phases of IFRS 9 when completed by the Board.
2. Parent Information
Guarantees
InnovaDerma PLC has not entered into any guarantees, in the financial period, in relation of the debts of its subsidiary.
Contingent Liabilities
At 30 June 2016, InnovaDerma PLC did not have any contingent liabilities.
Contractual Commitments
At 30 June 2016, InnovaDerma PLC had not entered into any contractual commitments.
Consolidation of subsidiaries
In the prior year, following the incorporation of InnovaDerma PLC, the following subsidiaries: InnovaDerma AUS and NZ Pty Ltd, InnovaDerma International Limited, InnovaDerma NZ Limited, and ID Philippines, Inc were acquired through a share for share exchange. The subsidiaries have been consolidated using the pooling of interest method on the basis that the entities being combined were ultimately controlled by the same party, both before and after the combination. Under this method the assets and liabilities of the acquiree are recorded at book values and intangible assets and contingent liabilities are only recognised if they were previously recognised by the acquiree. No goodwill is recorded and expenses of the combination are immediately written off in the profit or loss.
Net Assets
Acquired
$
-----------
The carrying value of the subsidiaries' net
assets at the date of combination were as follows:
InnovaDerma AUS & NZ Pty Ltd (58,118)
InnovaDerma International Limited -
InnovaDerma NZ Limited -
ID Philippines Inc -
The shares in InnovaDerma AUS & NZ Pty Ltd, InnovaDerma International Limited, InnovaDerma NZ Limited, and ID Philippines, Inc were exchanged for 8,969,960 Ordinary Euro 0.10 shares in InnovaDerma PLC.
3. Operating segments
Operating segments must be identified on the basis of internal reports about components of the consolidated entity that are regularly reviewed by the chief operating decision maker in order to allocate resources to the segment and to assess its performance.
As a new group, currently in its growth phase, the Board (the group's chief operating decision maker) believe that, at 30 June 2016, there was only one business segment, the hair and beauty division.
The revenue and results of this segment are those of the consolidated entity as a whole and are set out in the statement of profit or loss and other comprehensive income. The segment assets and liabilities of this segment are those of the consolidated entity and are set out in the statement of financial position.
4. Operating profit/(loss)
The following items have been included in arriving at the operating profit/(loss):
Year ended Period from 19
September to
30 June 2015
30 June 2016 $
$
-------------- ---------------
Gains on foreign exchange - -
Expenses:
Directors' remuneration 321,498 47,475
Depreciation 3,180 1,834
Auditor's remuneration
* As auditors (for parent company and consolidation) 30,000 16,000
* Taxation compliance (for parent company and
subsidiaries) 10,000 5,000
All remuneration payable to the auditors has been disclosed above. No other non-audit services have been provided. No benefits in kind are payable to the auditors.
Contributions to superannuation (money purchase pension schemes) are made on behalf of four directors of the group.
5. Employees
Year ended Period from 19
September to
30 June 2015
30 June 2016
$
--------------- ---------------
Staff costs for the Group during
the period:
Wages and salaries 993,766 168,902
Social security costs - -
Pension costs (including superannuation) 62,549 16,045
--------------- ---------------
1,056,315 184,947
--------------- ---------------
The average monthly number of staff (including executive Directors) employed by the Group during the period amounted to:
Year ended Period from 19
30 June 2016 September to
30 June 2015
--------------- ---------------
Management staff 4 4
Other employees 14 21
--------------- ---------------
18 25
--------------- ---------------
6. Taxation
Year ended Period from 19
September to
30 June 2015
30 June 2016 $
$
-------------- ---------------
Current Tax
Current tax on profits in the
period 294,766 -
Deferred tax expense (169,518)
-------------- ---------------
Income Tax Expense 125,248 -
-------------- ---------------
Factors affecting current tax charge
The effective rate of tax for the period is higher than the standard rate of corporation tax in the UK of 20% due to tax on subsidiaries located in higher tax jurisdictions. The differences are explained below:
Year ended Period from 19
September 2014
to 30 June 2015
30 June 2016 $
$
--------------- ------------------
Profit/(Loss) before taxation 472,627 (900,294)
Profit on ordinary activities
multiplied by the standard rate
of tax in the UK of 20% 94,525 (180,059)
--------------- ------------------
Differences in tax rates in
subsidiary jurisdictions 82,005
Excluded (gain)/loss from foreign
jurisdictions (51,316) 177,186
Losses carried forward - 2,873
Permanent differences 34 -
--------------- ------------------
Total current tax 125,248 -
--------------- ------------------
7. Revenue
Year ended
30 June 2016 Period from 19
September 2014
to 30 June 2015
$ $
-------------- ------------------
Haircare Products 951,624 922,113
Skin & Beauty Products 7,461,072 125,538
-------------- ------------------
8,412,696 1,047,651
-------------- ------------------
8. Cash and cash equivalents
30 June 2016 30 June 2015
$ $
------------- -------------
Cash at bank 207,682 212,618
------------- -------------
Cash at bank is included as cash and cash equivalents in connection with the statement of cash flows.
When in overdraft, this balance is included in trade and other payables.
9. Trade and other receivables
30 June 2016 30 June 2015
$ $
------------- -------------
Trade Receivables 1,970,619 112,142
------------- -------------
10. Inventory
30 June 2016 30 June 2015
$ $
------------- -------------
Finished goods (Leimo) 310,219 248,532
Finished goods (Stop and Pose) - 10,886
Finished goods (Skinny Tan) 797,416 82,376
------------- -------------
1,107,635 341,794
------------- -------------
The costs of inventories recognised as an expense and included in cost of sales amounted to $2,539,817 for the year.
11. Prepayments and Sundry Assets
30 June 2016 30 June 2015
$ $
------------- -------------
Deposits held 9,690 24,570
Prepayments 35,844 -
Input tax 29,472 29,472
Sundry assets - 15,369
75,006 69,411
------------- -------------
12. Intangible Assets
Group:
30 June 2016 30 June 2015
$ $
------------- -------------
Brands (Skinny Tan) 444,202 444,202
Brands (Leimo) 2,794,024 2,794,024
Brands (Stop & Pose) 148,331 148,331
Development Costs 94,247 31,922
------------- -------------
3,480,804 3,418,479
------------- -------------
Movement in capitalised development costs:
30 June 2016 30 June 2015
$ $
------------- -------------
Balance brought forward 31,922 -
Development expenditure during
the year/period 62,325 31,922
94,247 31,922
------------- -------------
Parent Company
30 June 2016 30 June 2015
$ $
------------- -------------
Goodwill 1,399,424 1,399,424
Brands (Leimo) - 2,492,674
3,892,098 3,892,098
------------- -------------
In the prior period, the Parent Company acquired the Leimo brand by issuing shares to the seller. During this financial year, the brand was transferred to the subsidiary trading in those products - InnovaDerma AUS & NZ Pty Ltd.
13. Deferred tax asset
30 June 2016 30 June 2015
$ $
------------- -------------
Deferred tax items recognised
in income statement:
* Other timing differences 37,292 -
* Income tax losses 139,490 -
------------- -------------
176,782 -
------------- -------------
14. Trade and other payables
30 June 2016 30 June 2015
$ $
------------- -------------
Trade payables 1,814,709 687,608
Other payables 690,711 100,714
Current tax payable 294,482 -
2,799,695 788,322
------------- -------------
15. Borrowings
30 June 2016 30 June 2015
$ $
------------- -------------
General Borrowings 951,402 560,553
Convertible Notes 127,510 127,510
------------- -------------
1,078,912 688,063
------------- -------------
Convertibles
During the period to 30 June 2015, the Group issued convertible notes worth a total of $127,510. The bonds mature two years from the issue date (29 May 2015) at their nominal value, or can be converted into shares at the holder's option at any point between the date of the group's public listing and the maturity date. If exercised, the number of shares issued will be calculated based on the group's share price at the exercise date.
Given the number of shares issued is variable, depending on the share price at that time, governing accounting standards categorise the entire convertible note as a liability, with no equity component. Upon conversion, the borrowings balance will be cleared and a corresponding balance of the same value will be created in equity.
16. Deferred tax liability
30 June 2016 30 June 2015
$ $
------------- -------------
Deferred tax items recognised
in income statement: -
* Prepayments 7,264 -
------------- -------------
7,264 -
------------- -------------
17. Contributed equity
30 June 2016 30 June 2016
No. of shares $
--------------- -------------
Opening balance as at 1 July 2015 10,209,920 2,479,468
Shares issued during the year 108,615 16,555
--------------- -------------
Balance as at 30 June 2016 10,318,535 2,496,023
--------------- -------------
30 June 2015 30 June 2015
No. of shares $
--------------- -------------
Shares issued on incorporation 4 5
Share for share exchange to acquire
subsidiaries (1) 8,969,960 1,308,157
Shares issued to complete brand
acquisition 626,400 91,362
Share split (original incorporation
shares) 36 -
Shares issued on exercise of convertible
notes 613,520 1,391,162
Share issue costs - (311,218)
--------------- -------------
Balance as at 30 June 2015 10,209,920 2,479,468
--------------- -------------
(1) The subsidiaries acquired were InnovaDerma AUS & NZ Pty Ltd, InnovaDerma International Limited, InnovaDerma NZ Limited, and ID Philippines Inc.
The holder of the ordinary shares is entitled to one vote per share at any meeting of the Company whether in person or by proxy. The holder is entitled to receive dividends declared from available profits and to the surplus of assets on a winding up.
18. Merger reserve
InnovaDerma PLC acquired 100% of the share capital of InnovaDerma AUS & NZ Pty Ltd, InnovaDerma International Limited, InnovaDerma NZ Limited, and ID Philippines, Inc, on 28 November 2014.
These transactions are noted as being completed under common control - all companies involved in the deal were controlled by Mr Haris Chaudhry before and after the transaction was processed.
This condition falls under a scope exemption for IFRS 3. Per IAS 8.12, the company may, in this circumstance, utilise pronouncements of other standard-setting bodies that use a similar conceptual framework to develop accounting standards.
As a UK company, the directors decided to apply UK Generally Accepted Accounting Principles, which make provision for Pooling of Interests in a common control situation, also commonly referred to as Merger Accounting.
In this circumstance, the difference between the consideration transferred and the nominal value of share capital acquired is taken to equity, creating a Merger Reserve.
28 November 2014 Acquisitions:
$
----------
Consideration transferred (8,969,960
shares) 1,308,157
Value of share capital acquired (100)
----------
Value of Merger Reserve 1,308,057
----------
19. Accumulated losses
30 June 2016 30 June 2015
$ $
------------- -------------
Balance brought forward (958,512) -
Acquisition of subsidiaries
(pooling of interests) - (58,218)
Profit/(loss) for the period 221,690 (900,294)
------------- -------------
Balance carried forward (736,822) (958,512)
------------- -------------
20. Intercompany loan - parent company
30 June 2016 30 June 2015
$ $
------------- -------------
Balance brought forward 1,157,379 -
Leimo brand transfer (see Note
12) 2,492,674 -
Movement in funds (81,426) 1,157,379
------------- -------------
Balance carried forward 3,568,627 1,157,379
------------- -------------
21. Investment in subsidiaries
During the year, the Company held interests in the following subsidiaries:
Company Name Date of Acquisition Percentage Holding Percentage Holding
30 June 2016 30 June 2015
--------------------------- --------------------- ------------------- -------------------
InnovaDerma AUS & NZ 28 November
Pty Ltd (1) 2014 100% 100%
--------------------------- --------------------- ------------------- -------------------
InnovaDerma International 28 November
Limited (1) 2014 100% 100%
--------------------------- --------------------- ------------------- -------------------
InnovaDerma NZ Limited 28 November
(1) 2014 100% 100%
--------------------------- --------------------- ------------------- -------------------
28 November
ID Philippines Inc (1) 2014 100% 100%
--------------------------- --------------------- ------------------- -------------------
23 January
Bach Health Pty Ltd 2015 100% 100%
--------------------------- --------------------- ------------------- -------------------
InnovaScience Inc 31 March 2015 100% 100%
--------------------------- --------------------- ------------------- -------------------
Skinny Tan Pty Ltd 28 May 2015 80% 100%
--------------------------- --------------------- ------------------- -------------------
Skinny Tan UK Limited 28 May 2015 80% 100%
--------------------------- --------------------- ------------------- -------------------
(1) Please see notes 1.3 and 16 for further detail on the method of accounting applied for the acquisitions.
The results of these subsidiaries have been consolidated on a line by line basis into the consolidated financial statements.
22. Business Combination
In the prior year, the Group acquired 100% of the share capital of Skinny Tan Pty Ltd, in exchange for cash consideration of $50,075. The acquisition expands the range of products the Group can offer in the hair and beauty sector and is anticipated to facilitate scalability in the Group's offerings for the coming financial year, as expansion continues into new markets.
The following table shows the allocation of consideration paid for Skinny Tan Pty Ltd, the fair value of assets acquired, liabilities assumed, and the non-controlling interest at the acquisition date.
Consideration
Cash Consideration 50,075
----------
Total Consideration 50,075
Recognised fair value of assets acquired and liabilities
assumed
Accounts receivable 5,444
Inventory 72,023
Other assets 16,299
Brand 431,515
Intellectual property 12,687
Trade and other payables (240,373)
Borrowings (247,520)
----------
Total fair value of assets acquired and liabilities
assumed 50,075
----------
23. Related party transactions
Name Transaction Amount received from Amount due from/(to)
/ (paid to) in year related party
2016 2015 2016 2015
$ $ $ $
-------------------- ----------------- -------------- ------------- -------------- -------------
Farris Marketing
Concepts Pty
Ltd Loan payable(1) - 151,495 (151,495) (151,495)
Farris Marketing Acquisition - (200,000) - -
Concepts Pty of Stop
Ltd & Pose Brand
Cyngenta Capital Provision (27,237) - - -
& Advisory of services(2)
Zaymar Investments
Pty Ltd Loan payable(1) 736,007 60,000 (796,007) (796,007)
Mr Haris Chaudhry Loan payable(1) (173,757) 173,757 - (173,757)
-------------------- ----------------- -------------- ------------- -------------- -------------
(1) These loans are interest free and unsecured.
(2) These expenses were settled via the issue of equity instruments in InnovaDerma PLC.
Common control acquisition of subsidiaries
As more fully discussed in Note 18, InnovaDerma PLC acquired several subsidiaries via a share for share exchange. These subsidiaries were majority controlled by Mr Haris Chaudhry, a director of InnovaDerma PLC; hence, the majority of shares issued for the acquisition were issued to Mr Chaudhry.
Nature of related parties
Farris Marketing Concepts Pty Ltd and Zaymar Investments are related parties of Mr Haris Chaudhry, the Executive Chairman.
Key Management Personnel
All transactions with key management personnel (the directors) during the year ended 30 June 2016 are disclosed below:
Salary Superannuation Consultancy Total Total 2015
Fees
---------------- -------- --------------- ------------ -------- -----------
Haris Chaudhry 150,000 14,250 Nil 164,250 51,985
---------------- -------- --------------- ------------ -------- -----------
Geert Lemair 15,995 1,505 17,500 35,000 -
---------------- -------- --------------- ------------ -------- -----------
Joseph Bayer 96,002 10,078 Nil 106,080 -
---------------- -------- --------------- ------------ -------- -----------
Rodney Turner 27,150 2,850 Nil 30,000 -
---------------- -------- --------------- ------------ -------- -----------
Clifford Giles - - - - -
---------------- -------- --------------- ------------ -------- -----------
289,147 28,683 17,500 335,330 51,985
---------------- -------- --------------- ------------ -------- -----------
During the period, there were no advances, credits or guarantees subsisting on behalf of the directors.
Ultimate Controlling Party
As at the year-end date, the Group was controlled by Mr Haris Chaudhry, who is the majority shareholder of InnovaDerma PLC.
24. Commitments and contingencies
At 30 June 2016 the Group did not have any contingencies.
At 30 June 2016, the Group had an obligation to pay $71,000 in rent for the forthcoming 12 months, under a non-cancellable operating lease.
25. Reconciliation of operating profit to net cash outflow from operations
Year ended Period from
19 September
to 30 June 2015
30 June 2016 $
--------------- ------------------
Profit after income tax 347,379 (900,294)
Depreciation 2,147 1,834
Expenses settled in shares 13,418 -
(Increase) in trade and other
receivables (1,860,774) (117,765)
(Increase) in inventory (765,841) (203,891)
Increase in trade and other
payables 1,716,891 376,463
Increase in taxes payable 124,964 -
Net cash outflow from operations (421,816) (843,653)
--------------- ------------------
26. Financial risk management
The Group's financial instruments consist mainly of deposits with banks, accounts receivable and payable & loans from related parties.
The Group's financial instruments at 30 June 2016 were classified as follows:
Note 30 June 2016 30 June 2015
$
------------- -------------
Financial assets
Cash and cash equivalents 8 207,682 212,618
Trade and other receivables 9 1,970,619 112,412
------------- -------------
Total financial assets 2,178,301 325,030
------------- -------------
Financial liabilities
Trade and other payables 14 2,799,695 788,322
Borrowings 15 1,078,912 688,063
------------- -------------
3,878,607 1,476,385
------------- -------------
Fair value versus carrying amounts
All items shown in the preceding table as either financial assets or financial liabilities are short term instruments whose carrying value is equivalent to the fair value. There is not considered to be a material difference between the fair value and the carrying value.
Specific Financial Risk Exposures and Management
The Group's activities expose it to a number of financial risks that include market risk, credit risk and liquidity risk.
(a) Market Risk
i) Foreign exchange risk
The Group does not hold any material financial assets denominated in a foreign currency at the period end, hence it is not exposed to foreign exchange risk.
ii) Interest rate risk
The Group had interest-bearing liabilities during the period, but is not exposed to interest rate risk because the interest rates on their liabilities are set by private agreement, not by reference to market rates. The group does not have any liabilities to financial institutions as at 30 June 2016. As such, sensitivity analysis with regard to movements in interest rates would not be meaningful.
(b) Credit risk
Exposure to credit risk relating to financial assets arises from the potential non-performance of counter-parties of contract obligations that could lead to financial losses to the group.
Credit risk exposures
The Group had no significant concentrations of credit risk.
(c) Liquidity risk
Liquidity risk arises from the possibility that the group might encounter difficulty in settling its debts or otherwise meeting its obligations related to financial liabilities. The group manages this risk through careful cash management policies. In order to meet its short term obligations, the group has the support of several key shareholders who are willing to provide funds to the group on an as-needed basis.
For loans receivable and payable, please refer to Note 9 - Trade and Other Receivables, Note 14 - Trade and Other Payables & Note 15 - Borrowings. Loans are unsecured and have no fixed repayment date.
27. Share Based Payments
No share options have been granted to employees or directors.
28. Earnings per share
Basic earnings per share are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in issue during the period.
The following reflects earnings and share data used in the earnings per share calculation.
Year ended Period from 19
September to 30
June 2015
30 June 2016 $
-------------- ------------------
Profit/(loss) for the year 347,379 (900,294)
Weighted average number of
shares 10,301,983 7,449,281
-------------- ------------------
29. Subsequent Events
On 7 September, InnovaDerma PLC was admitted to the Official List and to trading on the Main Market of the London Stock Exchange. Trading on the Marche Libre Paris segment of Euronext was suspended on the same date.
On 20 September, 27,000 ordinary shares of EUR 0.10 were allotted.
Aside from the above items, the directors are not aware of any significant events since the end of the reporting period.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR WGGCPUUPQUBG
(END) Dow Jones Newswires
October 31, 2016 06:25 ET (10:25 GMT)
1 Year Innovaderma Chart |
1 Month Innovaderma Chart |
It looks like you are not logged in. Click the button below to log in and keep track of your recent history.
Support: +44 (0) 203 8794 460 | support@advfn.com
By accessing the services available at ADVFN you are agreeing to be bound by ADVFN's Terms & Conditions
