half-year consolidated financial report obj limited for ... · february 2020 for personal use only....

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Appendix 4D

Half-Year Consolidated Financial Report

Name of Entity OBJ LIMITED ABN 72 056 482 636 Financial Period Ended 31 DECEMBER 2019 Previous Corresponding Reporting Period 31 DECEMBER 2018

Results for Announcement to the Market

$’000 Percentage increase /(decrease) over previous corresponding period

Revenue 348 Down (70%) Loss for the period (1,180) Up 50% Loss attributable to members of the parent entity (1,180) Up 50% Dividends (distributions) Amount per security Franked amount per security Final Dividend Nil Nil Interim Dividend Nil Nil Previous corresponding period Nil Nil Record date for determining entitlements to the dividends (if any) N/A Brief explanation of any of the figures reported above necessary to enable the figures to be understood: Refer to the Review of Operations section of the Directors’ Report included.

The half-year consolidated financial report is to be read in conjunction with the most recent annual financial report.

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Dividends Date the dividend is payable N/A Record date to determine entitlement to the dividend

N/A

Amount per security N/A Total dividend N/A Amount per security of foreign sourced dividend or distribution N/A Details of any dividend reinvestment plans in operation N/A The last date for receipt of an election notice for participation in any dividend reinvestment plans N/A NTA Backing Current Period Previous corresponding

period Net tangible asset backing per ordinary security $0.0005 $0.002 Other Significant Information Needed by an Investor to Make an Informed Assessment of the Entity’s Financial Performance and Financial Position Refer to the Review of Operations section of the Directors’ Report included.

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Commentary on the Results for the Period The earnings per security and the nature of any dilution aspects: Refer to the Statement of Profit or Loss and Other Comprehensive Income included. Returns to shareholders including distributions and buy backs: N/A Significant features of operating performance: Refer to the Review of Operations section of the Directors’ Report included. The results of segments that are significant to an understanding of the business as a whole: N/A Discussion of trends in performance: Refer to the Review of Operations section of the Directors’ Report included. Any other factor which has affected the results in the period or which are likely to affect results in the future, including those where the effect could not be quantified: N/A

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Control Gained Over Entities Having Material Effect Name of entity (or group of entities) - Wellfully SA

- Wellfully d.o.o. - Wellfully Ltd - Peros (Dongguan) Technology & Trading

Co, Ltd Date control gained 5 November 2019 Consolidated profit / (loss) from ordinary activities since the date in the current period on which control was acquired

$(305,289)

Profit / (loss) from ordinary activities of the controlled entity (or group of entities) for the whole of the previous corresponding period

NIL

Loss of Control Gained Over Entities Having Material Effect Name of entity (or group of entities) N/A Date control lost N/A Consolidated profit / (loss) from ordinary activities for the current period to the date of loss of control (‘$000)

N/A

Profit / (loss) from ordinary activities of the controlled entity (or group of entities) while controlled for the whole of the previous corresponding period (‘$000)

N/A

Details of Associates and Joint Venture Entities

Name of Entity Percentage Held Share of Net Profit Current Period Previous Period Current Period Previous Period

N/A

Aggregate Share of Net Profits

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Audit/Review Status This half-year consolidated financial report is based on accounts to which one of the following applies: (Tick one) The accounts have been audited The accounts have been subject to review X The accounts are in the process of being audited or subject to review

The accounts have not yet been audited or reviewed

If the accounts have not yet been audited or subject to review and are likely to be subject to dispute or qualification, a description of the likely dispute or qualification:

N/A

If the accounts have been audited or subject to review and are subject to dispute or qualification, a description of the dispute or qualification:

N/A

Attachments Forming Part of Appendix 4D Attachment # Details 1 Interim Consolidated Financial Report Signed By (Director)

Print Name Jeffrey Edwards Date 28th February 2020

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Attachment 1 Appendix 4D Interim Consolidated Financial Report for the period ended 31 December 2019

OBJ LIMITED

A.B.N. 72 056 482 636

6

DIRECTOR’S REPORT The directors present their consolidated financial statements on the results of OBJ Limited and its controlled entities for the financial half-year ended 31 December 2019. Directors The names of directors in office at any time during or since the end of the period are:

Mr Antonio Varano Della Vergiliana Mr Steven Lorn Schapera Mr Jeffrey David Edwards Dr Christopher John Quirk Mr Cameron Reynolds

Operating Result The net consolidated loss of the Consolidated Entity after providing for income tax amounted to $1,180,406 (31 December 2018: loss of $788,400). Review of Operations Proposed Acquisition of Nutrition Systems On 7 November 2019, OBJ announced it had signed a share sale agreement under the terms of which the Company conditionally agreed to acquire the share capital of Export Corporation (Australia) Pty Ltd, the owner and operator of Nutrition Systems, including Nutrition Systems NZ Pty Limited and Nutrition Zone WA Pty Ltd. There is a proposed 20-to-1 consolidation of OBJ shares also contemplated.

Nutrition Systems is a highly profitable distributor and wholesaler of nutritional wellness products in Australia and New Zealand – focused on the highest quality sports nutrition products from the USA.

The acquisition of Nutrition Systems represents an opportunity for the Company to strengthen its growth in identified target markets and the end consumer through Nutrition Systems’ extensive distribution network of specialty stores, supermarkets and pharmacies across Australia and New Zealand. Nutrition Systems will also have the advantage of access to OBJ’s platforms and manufacturing expertise.

The acquisition of Nutrition Systems includes the purchase of its associated NSW distribution centre ($12m) plus stock and debtors (approximately $23m) as part of the total purchase consideration.

Upon settlement, OBJ plans to change the Company’s name to Wellfully Limited.

The Company is progressing preparation of a prospectus for a capital raising, which is a key condition to completion.

A General Meeting of Shareholders to approve the acquisition was held on 18 February 2020 at RSM Perth, Sir Cyril Boardroom, Level 32, Exchange Tower, 2 The Esplanade, Perth WA 6000.

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OBJ LIMITED

A.B.N. 72 056 482 636

7

DIRECTOR’S REPORT (continued)

Review of Operations (continued) Procter & Gamble Partnership In November 2019, OBJ announced it had executed two new licensing agreements with existing partner Procter and Gamble (P&G), a Third Addendum and Release under the Product Development Agreement of April 2016, and a First Amendment to five Licensing Term Sheets under the Master Licensing Agreement of August 2016.

The agreements between OBJ and P&G are designed to harmonise other agreements already in place between the two companies, as well as build upon existing areas of cooperation.

Highlights of the agreements for OBJ are:

• Improvements in royalty rates; • Payment schedules; • Defined exclusivity provisions; and • Revised distribution routes for existing OBJ products & technologies.

The new agreements also provide a clearer definition of each Company’s ability to operate across a diversity of Beauty and Grooming product sub-categories.

Under the agreements, addenda and amendments, P&G will hold a worldwide exclusive license for certain existing OBJ technology platforms, enabling research, development and commercialisation of products within defined fields of use. The OBJ technology platforms covered by the license are Permanent Magnetic Technology, Electromagnetic Technology, Pre-programmed Electromagnetic Technology, and Programmable Electromagnetic Technologies.

Moreover, the terms of royalty rates renegotiated and affirmed by both companies as part of these Agreements will remain confidential for commercial reasons.

Bodyguard During the reporting period, OBJ received a Notice of Acceptance from the Australian Patent Office for Bodyguard Patent No. 2015274237, covering the range of Bodyguard products developed by the Company.

The Company was notified of the patent being accepted on 14 November 2019 with an expiry date of 10 June 2035.

The patent titled “Device and Method to Treat or Prevent Joint Degeneration” covers the combination of actives driven by magnetic array, encased in proprioceptive bandage. The patent was developed with Kneeguard in mind, however other joints including lower back, neck, elbow, shoulder and ankle can all be accommodated by simple shape refinements.

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OBJ LIMITED

A.B.N. 72 056 482 636

8


Review of Operations (continued)

The formulation ingredients cited in the patent provides OBJ more opportunities to create injury recovery, performance enhancement, endurance and treatment formulations for all of the major joints of the body. The granting of this patent was significant as it protects a number of key intellectual property assets of the Company and is the first patent to be accepted in a growth sector of consumer healthcare and wellness. This builds a platform for a wide range of specialist products.

The Company awaits responses to the same patent application filed in USA, Europe, China and Hong Kong.

Establishment of Subsidiaries In September 2019, OBJ announced the formation of subsidiaries specialising in the commercialisation of various products developed by the Company.

The new subsidiaries will enable OBJ to pursue new opportunities in the beauty technology and consumer device sector under its own brand while retaining full control over commercialisation of its technology and capturing a higher proportion of sales revenue.

Wellfully SA, a beauty and technology/consumer products holding Company for the device business, has been established in Switzerland, given the country’s status as a global hub of innovation and excellence in skin science technology.

Within Wellfully SA are three subsidiaries:

• Wellfully d.o.o. – a sales and marketing support, back-office and service Company which has been established in Croatia;

• Wellfully Ltd – a Hong Kong holding, Asia trading Company which has been established in Hong Kong; and

• Peros (Dongguan) Technology & Trading Co, Ltd – an operations and trading base which has been established in China (this name will be changed to Wellfully in due course).

OBJ also expects to establish UK and US trading companies within the Wellfully SA business in the future.

Launch of RÉDUIT The newly founded consumer division launched RÉDUIT, a luxury beauty brand, at the beginning of the December 2019 quarter. Through December, product development and CES launch preparation activities for its first product, the RÉDUIT One, a novel haircare treatment system, were successfully completed by the organisation.

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OBJ LIMITED

A.B.N. 72 056 482 636

9


Review of Operations (continued) Technology Developments The Perth based Science Laboratory has been developing the quality assurance and testing systems for the recently developed Ultrasonic Misting and Magneto-wetting technologies that make possible the Réduit precision Beauty range of Products. These systems will be used to generate and support product claims of superior performance with far lower carbon footprint and environmental impacts.

During the period, international patents were filed over Magneto-wetting, in Haircare, Skincare and Surface-care applications. Magneto-wetting is the modification of the wetting properties of a liquid to solid interface using an applied magnetic field.

The Science Laboratory is also working closely with P&G in the establishment of a new Work Plan and Licensing Term Sheet for a new Skincare innovation utilising the Company’s 2nd Technology, which was Licensed to P&G during 2018, and first introduced to the world at CES 2019 by P&G’s Olay brand.

Principal Activities The principal activities of the Consolidated Entity during the financial half-year ended 31 December 2019 were research and development for its Dermaportation and ETP transdermal drug delivery technologies. There were no significant changes in the nature of the Consolidated Entity’s principal activities during the financial half-year other than those referred to in the Review of Operations. Auditor’s Independence Declaration In accordance with the Auditor’s Independence requirements of the Corporations Act 2001, the directors have received and are satisfied with the “Auditor’s Independence Declaration” provided by OBJ Limited’s auditor, RSM Australia Partners. The Auditor’s Independence Declaration is included within this consolidated financial report. Signed in accordance with a resolution of the board of directors pursuant to section 306(3)(a) of the Corporations Act 2001.

__________________ Jeffrey Edwards Director Dated this 28th day of February 2020

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AUDITOR’S INDEPENDENCE DECLARATION

As lead auditor for the review of the financial report of OBJ Limited for the half-year ended 31 December 2019, I declare that, to the best of my knowledge and belief, there have been no contraventions of: (i) the auditor independence requirements of the Corporations Act 2001 in relation to the review; and (ii) any applicable code of professional conduct in relation to the review. RSM AUSTRALIA PARTNERS Perth, WA TUTU PHONG Dated: 28 February 2020 Partner

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CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME FOR THE HALF-YEAR ENDED 31 DECEMBER 2019

31 Dec. 31 Dec. 2019

$ 2018

$ Revenue and royalties 347,573 1,116,344 Government grants 776,675 -- Interest revenue 6,445 30,046 Net foreign exchange gains 31,884 746 Bad debt written off (52,781) -- Borrowing costs (7,003) (7,011) Depreciation expenses (27,209) (36,042) Administration fees (296,874) (288,473) Auditor’s remuneration (18,250) (15,376) Consultants and consultants benefits expenses (361,388) (21,868) Directors and employees benefits expenses (888,484) (940,342) Legal costs (122,886) (48,638) Marketing and operations services (25,609) -- Materials and requisites (96,996) (29,051) Occupancy expenses (86,548) (65,689) Patent and trademark service fees (99,966) (96,667) Product design and trial testing expenses (7,954) (104,350) Travel and accommodation (96,956) (87,379) Other expenses (154,079) (194,650) Loss before income tax (1,180,406) (788,400)

Income tax expense -- --

Loss for the period (1,180,406) (788,400)

Other comprehensive income (122,322) -- Total comprehensive loss for the period (1,302,728) (788,400)

Loss attributable to: Members of the parent entity (1,180,406) (788,400)

Total comprehensive loss attributable to: Members of the parent entity (1,302,728) (788,400) Cents Cents Basic and diluted losses per share (cents per share) (0.07) (0.04)

The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.

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CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2019

Note 31 Dec. 30 Jun. 2019

$ 2019

$ CURRENT ASSETS Cash and cash equivalents 1,598,895 2,251,910 Trade and other receivables 336,374 560,813 TOTAL CURRENT ASSETS 1,935,269 2,812,723 NON CURRENT ASSETS Plant and equipment 296,637 323,846 Intangible assets 5 369,314 -- TOTAL NON CURRENT ASSETS 665,951 323,846 TOTAL ASSETS 2,601,220 3,136,569 CURRENT LIABILITIES Trade and other payables 641,718 255,157 Contract liabilities 358,741 -- Borrowings 259,000 252,000 Employee benefits provision 99,081 84,004 TOTAL CURRENT LIABILITIES 1,358,540 591,161 TOTAL LIABILITIES 1,358,540 591,161 NET ASSETS 1,242,680 2,545,408 EQUITY Issued capital 2 33,043,514 33,043,514 Reserves 3 110,012 232,334 Accumulated losses (31,910,846) (30,730,440) TOTAL EQUITY 1,242,680 2,545,408

The above consolidated statement of financial position should be read in conjunction with the accompanying notes.

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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE HALF-YEAR ENDED 31 DECEMBER 2019

Issued Capital

$

Share Based

Payments Reserve

$

Foreign Currency

Translation Reserve

$

Accumulated Losses

$

Total Equity

$

Balance at 1 July 2018 33,043,514 232,334 -- (29,020,439) 4,255,409 Loss after income tax expense for the period

--

--

--

(788,400)

(788,400)

Total comprehensive loss for the period

--

--

--

(788,400)

(788,400)

Balance at 31 December 2018 33,043,514 232,334 -- (29,808,839) 3,467,009

Balance at 1 July 2019 33,043,514 232,334 -- (30,730,440) 2,545,408 Loss after income tax expense for the period

--

--

-- (1,180,406) (1,180,406)

Exchange differences on translation of foreign operations -- --

(122,322) -- (122,322)

Total comprehensive loss for the period -- --

(122,322) (1,180,406) (1,302,728)

Balance at 31 December 2019 33,043,514 232,334 (122,322) (31,910,846) 1,242,680

The above consolidated statement of changes in equity

should be read in conjunction with the accompanying notes.

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CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE HALF-YEAR ENDED 31 DECEMBER 2019

31 Dec. 31 Dec. 2019

$ 2018

$ Cash flows from operating activities Receipts from customers 939,457 641,257 Receipts from research and development tax incentives 776,675 -- Payments to suppliers and employees (2,748,767) (1,849,007) Interest received 11,493 35,305 Borrowing costs (3) (11) Net cash used in operating activities (1,021,145) (1,172,456) Cash flows from investing activities

Payments for plant and equipment -- (14,488) Cash obtained from acquisition of subsidiaries 336,246 -- Other -- (88,930) Net cash provided by/(used in) investing activities 336,246 (103,418) Cash flows from financing activities Proceeds from issue of shares and options -- -- Transaction costs from issue of shares and options -- -- Net cash provided by financing activities -- -- Net decrease in cash and cash equivalents held (684,899) (1,275,874) Cash and cash equivalents at the beginning of the financial period

2,251,910

4,176,062

Effect of exchange rate changes on cash holdings 31,884 746 Cash and cash equivalents at the end of the financial period

1,598,895

2,900,934

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: BASIS OF PREPARATION The half-year consolidated financial report is a general purpose financial report prepared in accordance with the requirements of the Corporations Act 2001 and Accounting Standard AASB 134: Interim Financial Reporting. Compliance with AASB 134 ensures that the financial report and notes also comply with International Financial Reporting Standard IAS 34: Interim Financial Reporting. It is recommended that this consolidated financial report be read in conjunction with the annual financial report for the year ended 30 June 2019 and any public announcements made by OBJ Limited and its controlled entities during the half-year in accordance with the continuous disclosure requirements arising under the Corporations Act 2001. The half-year consolidated financial report does not include full disclosures of the type normally included in annual financial reports.

Except for cash flow information, the half-year consolidated financial report has been prepared on an accruals basis and is based on historical costs. The accounting policies have been consistently applied by the Consolidated Entity and are consistent with those in the 30 June 2019 annual financial report, unless otherwise stated below. 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 Company assesses the financial assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic conditions, the Company’s operating or accounting policies and other pertinent conditions in existence at the acquisition-date. Where the business combination is achieved in stages, the Company 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.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 1: BASIS OF PREPARATION (continued)

Business combinations (continued) 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. 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. 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. The following Accounting Standard and Interpretations are most relevant to the Consolidated Entity: AASB 16 Leases The Consolidated Entity has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and for lessees eliminates the classifications of operating leases and finance leases. Except for short-term leases and leases of low-value assets, right-of-use assets and corresponding lease liabilities are recognised in the statement of financial position. Straight-line operating lease expense recognition is replaced with a depreciation charge for the right-of-use assets (included in operating costs) and an interest expense on the recognised lease liabilities (included in finance costs). In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when compared to lease expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation and Amortisation) results improve as the operating expense is now replaced by interest expense and depreciation in profit or loss. For classification within the statement of cash flows, the interest portion is disclosed in operating activities and the principal portion of the lease payments are separately disclosed in financing activities. For lessor accounting, the standard does not substantially change how a lessor accounts for leases. Impact of adoption AASB 16 was adopted using the modified retrospective approach and as such the comparatives have not been restated. During the half-year ended 31 December 2019, the Consolidated Entity has adopted the practical expedient for short-term leases. As such, there was no impact to the half-year consolidated financial report.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued)

NOTE 2: ISSUED CAPITAL

Consolidated

(a) Issued capital 31 Dec.

2019 $

30 Jun. 2019

$ 1,809,462,635 Ordinary shares fully paid (30/06/19: 1,809,462,635)

33,043,514

33,043,514

(b) Movements in ordinary share capital

Number of

Shares

$

01/07/2019 Opening balance 1,809,462,635 33,043,514 Less: costs associated with the issue of shares -- -- 31/12/2019 Closing balance 1,809,462,635 33,043,514

NOTE 3: RESERVES Consolidated

31 Dec. 2019

$

30 Jun. 2019

$ Composition

Foreign currency translation reserve (122,322) -- Share based payments reserve 232,334 232,334

110,012

232,334

The share based payments reserve records items recognised as expenses on valuation of consultant share options from prior years.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 4: SEGMENT INFORMATION The Consolidated Entity has considered the requirements of AASB 8 – 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. Consolidated – 31 December 2019 The Consolidated Entity operates in two segments which are development of the dermaportation drug delivery technology and devices segments.

Dermaportation drug delivery technology

Devices Total

$ $ $ Revenue Revenue and Royalties 347,573 -- 347,573 Interest revenue 6,440 5 6,445 Government grants 776,675 -- 776,675 Net foreign exchange losses 31,884 -- 31,884 Total revenue 1,162,572 5 1,162,577 EBITDA (847,345) (305,294) (1,152,639) Depreciation and amortisation (27,209) -- (27,209) Interest revenue 6,440 5 6,445 Finance costs (7,003) -- (7,003) Intersegment eliminations -- -- --

(Loss)/ profit before income tax (875,117) (305,289) (1,180,406) Income tax expense -- -- -- (Loss)/ profit after income tax (875,117) (305,289) (1,180,406) Assets Segment assets 3,002,230 706,945 3,709,175 Intersegment eliminations (1,107,955) Total assets 3,002,230 706,945 2,601,220

Liabilities Segment liabilities 7,435,301 1,014,556 8,449,857 Intersegment eliminations (7,091,317) Total liabilities 7,435,301 1,014,556 1,358,540 Segment revenues are allocated based on the country in which the customer is located. Operating revenues of $347,573 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 CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 4: SEGMENT INFORMATION (continued) Consolidated – 31 December 2018 The Consolidated Entity operates as a single segment which is development of the dermaportation drug delivery technology within Australia. The Consolidated Entity is domiciled in Australia. All revenue from external parties is generated from Australia only. Segment revenues are allocated based on the country in which the party is located. Operating revenues of approximately $1,047,102 or 91% are derived from a single external party. All the assets are located in Australia only. Segment assets are allocated to countries based on where the assets are located. NOTE 5: BUSINESS COMBINATIONS On 5 November 2019, OBJ Limited acquired 100% of the ordinary shares of Wellfully SA for $120,000 payable with ordinary shares of OBJ Limited. The acquisition is deemed to be a business combination and the details of the acquisition are as follows. At the time these financial statements were authorised for issue, the Company had not yet completed the accounting for the acquisition of the business of Wellfully SA. In particular, the fair value of assets and liabilities disclosed below had only been determined provisionally. Details of the acquisition are as follows:

Fair

value $ Cash and cash equivalents 336,246 Other assets 88,175 Related party loan (579,166) Trade and other payables (94,569)

Net liabilities acquired (249,314)

Representing: Shares payable to vendor 120,000 Intangibles recognised 369,314 From the date of acquisition to 31 December 2019, Wellfully SA incurred a loss of $305,289. F

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (continued) NOTE 6: DIVIDENDS There have been no dividends declared or recommended and no distributions made to shareholders or other persons during the period. NOTE 7: 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 previously announced to the market. The Company has retained legal representation for the active defence of the matter, to which mediation continues. NOTE 8: EVENTS SUBSEQUENT TO REPORTING DATE On 18 February 2020, the Company held a General Meeting of Shareholders where OBJ shareholders voted on a range of resolutions related to the proposed acquisition of Export Corporation (Australia) Pty Ltd (Export Corporation or Nutrition Systems), the owner and operator of Nutrition Systems, a leading distributor of nutrition products (Acquisition). The approval of OBJ shareholders to the Acquisition was a key condition precedent to the proposed transaction. With this condition precedent now met, the Company will move rapidly to complete the remaining condition precedents, most notably the raising of the required consideration funds. There are no other subsequent events as the date of this report.

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OBJ LIMITED

A.B.N. 72 056 482 636

21

DIRECTORS’ DECLARATION

In the opinion of the directors: a) The financial statements and notes are in accordance with the Corporations Act 2001,

including:

i) giving a true and fair view of the Consolidated Entity’s financial position as at 31 December 2019 and of its performance for the half-year ended on that date; and

ii) complying with Australian Accounting Standards AASB 134: Interim Financial

Reporting, the Corporations Regulations 2001 and other mandatory professional reporting requirements;

b) there are reasonable grounds to believe that the Company will be able to pay its debts as

and when they become due and payable. This declaration is made in accordance with a resolution of the board of directors pursuant to section 303(5)(a) of the Corporations Act 2001.

__________________ Jeffrey Edwards Director Dated this 28th day of February 2020

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INDEPENDENT AUDITOR’S REVIEW REPORT TO THE MEMBERS OF

OBJ LIMITED Report on the Half-Year Financial Report We have reviewed the accompanying half-year financial report of OBJ Limited, which comprises the statement of financial position as at 31 December 2019, the statement of profit or loss and other comprehensive income, statement of changes in equity and statement of cash flows for the half-year ended on that date, notes comprising a summary of significant accounting policies and other explanatory information, and the directors’ declaration of the consolidated entity comprising the company and the entities it controlled at the half-year end or from time to time during the half-year. Directors’ Responsibility for the Half-Year Financial Report The directors of the company are responsible for the preparation of the half-year financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the directors determine is necessary to enable the preparation of the half-year financial report that is free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express a conclusion on the half-year financial report based on our review. We conducted our review in accordance with Auditing Standard on Review Engagements ASRE 2410 Review of a Financial Report Performed by the Independent Auditor of the Entity, in order to state whether, on the basis of the procedures described, we have become aware of any matter that makes us believe that the half-year financial report is not in accordance with the Corporations Act 2001 including: giving a true and fair view of the consolidated entity’s financial position as at 31 December 2019 and its performance for the half-year ended on that date; and complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001. As the auditor of OBJ Limited, ASRE 2410 requires that we comply with the ethical requirements relevant to the audit of the annual financial report. A review of a half-year financial report consists of making enquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Australian Auditing Standards and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

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Independence In conducting our review, we have complied with the independence requirements of the Corporations Act 2001. We confirm that the independence declaration required by the Corporations Act 2001, which has been given to the directors of OBJ Limited, would be in the same terms if given to the directors as at the time of this auditor's review report. Conclusion Based on our review, which is not an audit, we have not become aware of any matter that makes us believe that the half-year financial report of OBJ Limited is not in accordance with the Corporations Act 2001, including: (a) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2019 and of its

performance for the half-year ended on that date; and

(b) complying with Accounting Standard AASB 134 Interim Financial Reporting and the Corporations Regulations 2001.

RSM AUSTRALIA PARTNERS Perth, WA TUTU PHONG Dated: 28 February 2020 Partner

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half-year consolidated financial report obj limited for ... · february 2020 for personal use only....

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