ANNUAL
REPORT
FOR THE YEAR ENDED
30 JUNE 2022
ACN 608 363 604
EZZ Life Science Holdings Limited
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Registered office
104 Derby Street
Silverwater, NSW 2128
www.ezzlife.com.au
EZZ Life Science ANNUAL REPORT 2022 [ 3 ]
CONTENTS
Letter from the Chair ............................................................................................ 4
Chief Executive Officer’s Letter .......................................................................... 6
Operating and Financial Review ......................................................................... 8
Corporate Governance ......................................................................................... 13
Director’s Report ................................................................................................... 14
Director’s Report ..................................................................................................................... 15
Remuneration Report ............................................................................................................ 19
Auditor’s Statement of Independence ............................................................... 27
Financial Statements ............................................................................................ 28
Statement of Profit or Loss and Other Comprehensive Income ..................... 30
Statement of Financial Position .......................................................................................31
Statement of Changes in Equity .....................................................................................32
Statement of Cash Flows ....................................................................................................33
Notes to the Financial Statements ................................................................................. 34
Director’s Declaration ........................................................................................... 53
Independent Auditor’s Report ............................................................................ 54
Shareholder Information ...................................................................................... 60
Corporate Directory .............................................................................................. 63
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“
LETTER FROM
THE CHAIR
Dear fellow shareholder,
On behalf of the directors of EZZ Life Science Holdings Limited (“EZZ” or “Company”), it is my pleasure to present
the annual report for the year ended 30 June 2022.
In 2022, we continued to operate in uncertain times with the COVID-19 pandemic providing many challenges to the
macroeconomic outlook. I am very proud of the approach the EZZ team has taken to sustain the Company’s perfor-
mance despite the social, health, and economic volatilities over the past year to deliver another solid financial result.
Over the last twelve months, there have been a number of positive changes at EZZ and we remain committed to
building a life sciences company for the future.
Financial Highlights
• In the first half of FY22, a strategic decision was made to reduce marketing and advertising expenditure in
response to continued market uncertainties, which led to a decline in revenue by approximately 50% from
$13 million in 1H FY21 to $6 million in 1H FY22.
• The Company’s financial performance rebounded strongly in the second half of FY22 generating revenue of
$9 million.
• The EZZ team delivered a successful turnaround by diversifying key distribution channels, increasing revenue
by 42% from 1H FY22 and bringing total revenue for FY22 to over $15 million.
In a challenging macro environment EZZ has maintained profitability and balance sheet strength with $10.5 million
cash at bank at period end, placing the Company in a strong position to pursue growth initiatives.
CEO Search
The search for a new Chief Executive Officer is underway following the resignation of Mr Luis F. Rodriguez Bravo.
The Board is focused on strengthening the mix of skills, experience, and market knowledge to support the Company’s
long-term sustainable competitive advantage and growth.
Board Changes
I would like to take this opportunity to sincerely thank Ms Phillipa Lewis who
resigned from the Board. Ms Lewis has served as a non-executive Chair since
27 October 2020 and has made a significant contribution to the success
of the Company including its listing on the Australian Securities Exchange
(ASX). The Board wishes her all the best in the future.
The Board is pleased with the Company’s performance and recognises the
Company’s results in an environment with multiple challenges are truly
impressive.
On behalf of the Board, I would like to congratulate the EZZ team on the
strong financial results for FY22. I would also like to thank my fellow directors
for their support and continued contribution.
Finally, thank you to our shareholders and all our stakeholders who have
recognised the achievements of EZZ, invested in its future success and
continue to support us. We look forward to delivering continued value for all
stakeholders as the company pursues its plans for further strategic growth.
Glenn Cross
Non-Executive Chair
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[ 4 ] EZZ Life Science ANNUAL REPORT 2022
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EZZ is well positioned
to emerge in both
domestic and
international markets
with improved channel
diversification, market
driven product
development, and a
deeply knowledgeable
leadership team as
it drives sustainable
growth.
EZZ Life Science ANNUAL REPORT 2022 [ 5 ]
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CHIEF EXECUTIVE OFFICER’S
LETTER
[ 6 ] EZZ Life Science ANNUAL REPORT 2022
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Dear shareholders,
It is my pleasure to provide this update on the performance of EZZ Life Science Holdings Limited in FY22.
EZZ develops, produces and markets a range of health and wellbeing products under the EZZ brand both
domestically and internationally. It also distributes a series of skincare products under the EAORON brand in
both Australia and New Zealand.
This year EZZ has achieved another year of solid progress by capitalising on the team’s ability to capture
emerging opportunities in an unpredictable and often challenging external market environment. Our omni-
channel direct-to-consumer strategy has been optimised to deliver improved results with a focus on high growth
markets and product categories. Momentum continues to build on top of market-driven product development,
diversified distribution channels and digitally-focused marketing strategies.
FY22 started with a developmental growth opportunity for EZZ. Instead of relying on one key distribution
channel for the EZZ branded products, the EZZ team successfully expanded to multiple channels to build
a future-proof distribution network. In addition to Tmall Global, the Company commenced a cross-border
e-commerce store on Douyin, mainland China’s version of TikTok, and delivered revenue growth exceeding
management’s expectations in the first month of operation. Despite revenue declining by 33% during FY22
compared to the prior financial year, which mainly occurred in 1H FY22, there was a significant rebound by
42% in 2H FY22 which led to total revenue for the period exceeding $15 million.
In addition to pivoting the distribution channel landscape, last year marks another year of success in product
innovation by adapting to rapid shifts in consumer behaviour. The Company introduced seven new products
under the EZZ brand in FY22. Our L-Lysine Growth Capsule became another flagship product contributing
27% to the revenue derived from EZZ branded products. Our market-driven product development approach
continues to differentiate EZZ from its competitors.
EZZ’s own e-commerce platform has also commenced operation, which will unlock data backed analytical
capability to enable data driven decision making and improve efficiency of scale. The investment in our in-house
e-commerce capability is expected to significantly reduce marketing expenses and generate strong incremental
EBITDA growth over the next three years. It will also provide opportunities to upgrade the skills of EZZ’s
experienced operations team and improve the way EZZ’s customers are served. This platform will also enable
new technology-backed services, strengthening our sustainable long-term competitive advantage and fuel our
next phrase of organic growth.
Guided by our vision of ‘improving quality of life and human health’ and clear strategies to transform to a fully
integrated genomic life science company, our highly capable team has navigated through a series of challenging
contexts in domestic and international markets. I would like to recognise our customers, channel partners,
suppliers, and employees who have remained resilient and determined despite the challenges presented over the
past year. I am also thankful to all shareholders who have confidence in EZZ and continue to support our vision.
I am excited for what FY23 holds for EZZ. Our team continues to build strong cross-functional support including
genomic research, in-house manufacturing, omni-channel sales and marketing, and in-house data analytics
technology. We look forward to achieving our immediate and long-term targets and deliver value to our
shareholders.
Qizhou Qin
Interim Chief Executive Officer
EZZ Life Science ANNUAL REPORT 2022 [ 7 ]
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[ 8 ] EZZ Life Science ANNUAL REPORT 2022
OPERATING
AND FINANCIAL
REVIEW
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EZZ Life Science ANNUAL REPORT 2022 [ 9 ]
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Overview
Despite the significant market uncertainties bought on by the pandemic related lockdowns
in the first half of the financial year, the Company remained disciplined and continued to
work towards its long-run growth objectives, which delivered a successful conclusion to
FY22. The Company’s diversification of its distribution channels led to a substantial im-
provement in revenue and cash flow from operations in 2H FY22 and when combined with
the strong cash balance, the Company is in a robust financial position for future growth.
Highlights
• Rapid revenue recovery in 2H FY22 from 1H FY22, with FY22 revenue totalling $15,022,026
• Strong upturn in normalised EBITDA in 2H FY22 leading to total normalised EBITDA of $1,760,741 in FY22
• Substantial improvement in cashflow from operating activities by 7.5 times, to $1,901,730 in FY22 compared to
FY21
• Significant optimisation of cashflow conversion rate from 0.1 in FY21 to 1.4 in FY22
• Strong cash position of $10.5 million as at 30 June 2022, representing an 18% increase from 30 June 2021
• Nil external interest-bearing debt other than lease liabilities
Financial Performance
(a) Revenue drivers
The Company’s revenue declined by 33% from $22,287,078 in FY21 to $15,022,026 in FY22 largely due to the
continuing impacts of the COVID-19 pandemic. However, the second half of FY22 saw a strong rebound in sales
revenue for EZZ products, with a 24% increase compared to the previous corresponding period, as well as a 96%
increase when compared to the first half of FY22.
(i) Segment performance
The revenue contribution from EZZ branded products reduced by 28% from $11,369,044 in FY21 to $8,138,851
in FY22, representing 54% of the total revenue in FY22. This was mainly driven by a combination of the
following events:
• The revenue generated through Tmall Global as a key distribution channel, which contributed 43% of the
total revenue in 2021, dropped by 76% to $2,324,652 in FY22, representing only 15% of total revenue. The
decrease in revenue through Tmall Global in 1H FY22 was progressively recovered in 2H FY22.
• On 8 June 2022, the Company commenced a cross-border e-commerce store on Douyin, mainland China’s
version of TikTok, as an alternate direct-to-customer channel to Tmall Global. Revenue growth from this
new channel exceeded management’s expectations in the first month of operation. Douyin is expected to
become another key e-commerce platform along with Tmall Global and reduce the level of concentration
on single e-commerce platforms in China’s market.
• The Company expanded the EZZ branded product range by introducing seven new products with three
products contributing 16% of total revenue in FY22 and four products launched at the end of FY22. L-Lysine
Growth Capsule was introduced in July 2021 and represents another successful high margin product which
contributed 27% to the revenue from EZZ branded products.
• Revenue generated from sales of EAORON branded products also reduced by 37% from $10,918,034 in
FY21 to $6,883,175 in FY22, contributing 46% of total revenue in FY22. This was largely due to COVID-
19’s adverse impact on the trading footfall of retail outlets, which is the primary distribution channel of
EAORON branded products across Australia and New Zealand.
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[ 10 ] EZZ Life Science ANNUAL REPORT 2022
(ii) Geographical performance
Revenue from Australia and New Zealand represented 63% of the total revenue in FY22 as compared to
54% in FY21.
The revenue from international markets represented 37% of the total revenue in FY22 as compared to 46%
in FY21. Revenue from international markets was primarily attributable to sales from China.
(b) Profitability
Gross margin decreased from 56% in FY21 to 50% in FY22.
• The average gross margin for EZZ branded products was 67% in FY22, compared to 82% in FY21, with the
decrease resulting from a change in the revenue mix towards lower margin products. The increase in sales of lower
margin products was part of the strategy to boost penetration into the grocery retailer market and create brand
awareness. During the period advertising expenses were reduced significantly.
• The average gross margin on the EAORON branded products increased from 29% to 30% due to Australian United
Pharmaceuticals Pty Ltd’s promotional pricing on selected products and the focus on distributing higher margin
products of the EAORON brand.
Although EBITDA (excluding other income) decreased by 35% from $2,698,438 in FY21 to $1,760,741 in FY22, the
EBITDA margin remained largely in line with the previous year at 11%. Disciplined cost control and capital allocation
remained a focus throughout the year, while advertising and marketing expenses were managed at approximately
20% of revenue in FY22.
OPERATING AND FINANCIAL REVIEW CONTINUED
EBITDA is a non-IFRS measure and is presented to enable understanding of the underlying performance without the impact on
non-operating items. Non-IFRS measures have not been subject to audit or external review.
Management fees and other expenses increased in FY22 to support the development of eCommerce capabilities,
maintain the Company’s ASX listing and explore opportunities for future growth.
2022 2021
$ $
Profit for the year 1,312,418 2,030,606
Other income (141,853) (174,589)
Depreciation and amortisation expense 118,341 125,518
Finance expense 4,436 10,752
Income tax expense 467,399 706,151
EBITDA (excluding other income) 1,760,741 2,698,438
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EZZ Life Science ANNUAL REPORT 2022 [ 11 ]
(c) COVID-19 Impact
The COVID-19 pandemic has been difficult for EZZ in terms of both sales and supply of product, but the Company has
been agile in its response to these challenges and has been able to return a pleasing NPAT of $1,312,418 in FY22. The
Board would like to commend the Company on how it dealt with the following challenges:
• Both Federal and State Governments in Australia imposed lockdowns, encouraged workers to work-from-home,
provided free vaccination against COVID-19, resulting in people restricting their movements and interaction
wherever possible. In-person shopping sales of EAORON products predominately through pharmacies and
specialist retailers was impacted with sales of $6,883,175 being recorded this financial year. The Company’s sales
team remained proactive in its communication with suppliers and shipped product as soon as openings permitted.
Pleasingly a large portion of the Australian population has now been vaccinated and, Australians are learning to
live with COVID-19. Shops have reopened and shoppers are returning, and so EZZ believes the pandemic is coming
to a natural end, and so its Australian sales are expected to continue to rebound moving forward.
o China’s similarly imposed lockdowns, encouraged work-from-home, offered free vaccinations, but unlike
Australia movement in some districts in China remains restricted, but even this is the exception now rather than
the norm as it was throughout most of FY22. EZZ believes sales into China have returned with sales reaching
$400,000 of EZZ’s Bone Growth Capsules during the mid-year 618 E-Commerce Shopping Festival. EZZ’s
market reach has also been bolstered in May 2022 when EZZ established its international store on Douyin
(mainland China’s version of TikTok) and with planned new product launches in FY23, sales into China are
expected to continue to improve.
o Key to sales in China is advertising on the e-commerce platforms, but with areas within China under severe
lockdowns during periods of FY22, the company anticipated lower sales volumes and reduced its advertising
spend until China eased the lockdown measures. This cost-reduction strategy was a key factor in maintaining
EZZ’s profitability in FY22.
o EZZ has managed to launch seven new products this financial year, but with COVID-19 lockdowns in place and
supply chain issues around the world, gaining access to a readily available supply of products and distributing
them has been an issue. EZZ raised $2.46m as part of its IPO in March 2021, with the intent of bringing the
manufacturing process in-house within the intermediate term (two to five years) but given the supply chain
issues highlighted, the company has decided to fast track this in-house manufacturing capability.
EZZ is now in a post-COVID-19 recovery period.
Financial Position
The Company recorded a strong cash position of $10,464,841 as at 30 June 2022, representing an increase of 18%
from $8,853,644 on 30 June 2021. The Company also maintained balance sheet strength with no debt, other than
lease liabilities to allow for the flexibility to act when opportunities arise.
Cash flow
Notwithstanding the decrease in revenue and profits, operating cash flow increased by 7.5 times from $253,533 in
FY21 to $1,901,731 in FY22. This was mainly attributable to the Company’s strategic decision to reduce advertising and
marketing expenditure on the Tmall platform, as well as the reduction of payments to suppliers associated with the
decrease in the sales of the EAORON branded products.
General Risks
The Company was listed based on its January 2021 Prospectus which did identify a number of specific risks
associated with investing in the Company. The Company is addressing the main risks as follows:
(a) Reliance on customer demand for the EAORON products
- The Company has the exclusive distribution rights of EAORON products to pharmacies, supermarkets and
specialist retailers in Australia and New Zealand, and this brand continues to sell well in this market. In FY
20 EAORON branded products represented 96% of the Company’s revenue and this sales concentration has
changed and in FY 22 represented 46% of total revenue, de-risking this risk.
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(b) Reliance on Distribution Agreement with Australian United Pharmaceuticals Pty Ltd for the EAORON branded
products
- Australian United Pharmaceuticals Pty Ltd is a related party of the Company and the current distribution
agreement will expire on 30 June 2023. This agreement is expected to be renewed for a consecutive
3-year term, subject to requisite Shareholder’s approval.
(c) New product risk for the EZZ branded products
- The Company has launched 7 new products in FY 22 which have been well received by the market.
(d) Loss of key customers
- The Company used to rely on several main customers in the past. During FY22, by commencing its
operation of official online stores and other e-commerce platforms, the Company develops more direct-to-
customer channels and demonstrates a lower portion of revenue attributed from main distributors.
(e) Reliance on manufacturers
- The Company raised $2.46 m as part of the IPO with the intent of bringing the manufacturing process
in-house within the intermediate term (two to five years) but the Company has decided to fast track this
objective.
OPERATING AND FINANCIAL REVIEW CONTINUED
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EZZ Life Science ANNUAL REPORT 2022 [ 13 ]
CORPORATE
GOVERNANCE
The Company and the Board are committed to achieving and demonstrating the highest standards
of corporate governance to protect shareholder interests. The Board continues to refine and
improve the governance framework and practices. The Company has adopted and complies with the
Australian Securities Exchange Corporate Governance Council’s Corporate Governance Principles and
Recommendations 4th Edition. The Company has published its Corporate Governance Statement on
its website in accordance with ASX Listing Rule 4.10.3. A copy of the statement along with any related
disclosures is available at www.ezzlife.com.au.
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EZZ Life Science ANNUAL REPORT 2022 [ 15 ]
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DIRECTOR’S
REPORT
Directors
The following persons were directors of the Company during the whole of the financial year and up to the
date of this report, unless otherwise stated:
Company secretary
The directors present their report on EZZ Life Science Holdings
Limited (referred to hereafter as the ‘Company’) for the financial
year ended 30 June 2022.
Glenn Cross (appointed 30 November 2021)
Qizhou Qin (appointed 1 September 2019)
Ivan Oshry (appointed 27 October 2020)
Hao Huang (appointed 27 October 2020)
Luis Rodrigues-Bravo (appointed 8 July 2020, resigned 8 October 2021)
Philippa Lewis (appointed 27 October 2020, resigned 23 November 2021)
Ms Natalie Climo (appointed 8 July 2020)
Principal activities
During the financial year the principal activities of the Company included
• formulation, production, marketing and sale of the EZZ branded health and wellbeing products to retailers and
consumers domestically and internationally, and
• wholesale distribution of the EAORON branded skin care products to retailers in Australia and New Zealand.
Dividends
The following dividends have been paid by the company or resolved to be paid by the directors since the
commencement of the financial year ended 30 June 2022:
Financial year ended 30 June 2021 ($) 2022 ($)
Out of the profits for the year ended 30 June 2021 and retained earnings on the fully-paid ordinary shares:
Fully-franked final ordinary dividend of 0.45 cents per share paid on 16 December 2021 - 189,000
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DIRECTOR’S REPORT CONTINUED
[
16 ] EZZ Life Science ANNUAL REPORT 2022
Significant changes in the state of affairs
There have been no significant changes in the state of affairs of the Company during the year.
Matters subsequent to the end of the financial year
There have been no matters that have arisen subsequent to the end of the financial year to report on.
Likely developments and expected results of operations
Likely developments in the operations of the Company and the expected results of those operations in future financial
years have not been included in this report as the inclusion of such information is likely to result in unreasonable
prejudice to the Company.
Environmental regulation
The Company’s operations are not regulated by any significant environmental regulations under a law of the
Commonwealth or of a state or territory of Australia.
Information on directors
Glenn Cross
Independent Non-executive
Chair and Director
Qizhou Qin
Chief Operating Officer and
Executive Director
Experience
Mr. Cross has 40 years’ experience in life science sector domestically and
internationally, including over 20 years in senior executive capacity. He was
formerly CEO and COO of AusBiotech over 13 years.
Qualification
Diploma Applied Science
Member of the Australian Institute of Company Directors
Board committee membership
• Member of the Audit & Risk Committee
• Member of the Nomination, Remuneration and Human Resources Committee
Directorship of listed entities within the past three years
• Nil
Experience
Mr. Qin is a co-founder of the Company with a track record of success in the
skin care and health supplements industries. He has a strong background in
management consulting and extensive experience in sales and marketing. Prior
to co-founding the Company in 2018, he co-founded a multi award winning
marketing consulting firm, CE International, which was rated as one of the “Top
10 Consulting Firms in China” in 2010. Prior to that, he was personally awarded as
the “Top Research Analyst” by the Sales and Marketing Magazine in 2006. Mr. Qin
also authored five books in sales and marketing for the consumer health industry
between 2003 and 2008.
Qualification
Mr. Qin holds a Bachelor of Human Resource Management from the Beijing
Wuzi University.
Board committee membership
• Nil
Directorship of listed entities within the past three years
• Nil
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Information on directors
Information on Company Secretary
Ivan Oshry
Independent Non-executive
Director
Natalie Climo
Company Secretary
Hao Huang
Independent Non-executive
Director
Experience
Mr. Oshry has more than 30 years of experience of legal practice in Australia
and internationally, specialising in commercial and corporate law. Mr. Oshry was
formerly a senior partner at Fluxmans Attorneys in Johannesburg and headed
up the corporate department at Kemp Strang (which was merged with Thomson
Geer) in Sydney.
Qualification
Mr. Oshry holds a Bachelor of Arts and LLB degree from the University of Natal.
Board committee membership
• Chair of Audit and Risk Committee
• Member of Nomination, Remuneration and Human Resources Committee
Directorship of listed entities within the past three years
• Non-executive director of Success Global Media Limited (delisted on 3 February
2020) from 2015 to current
• Non-executive chair of Halo Technologies Holdings Limited (ASX: HAL) from
2021 to current
Experience
Ms. Climo is an experienced company secretary and lawyer. She has acted as
company secretary to a range of listed and unlisted Australian and foreign
companies and has experience in governance and board management.
Qualification
Ms. Climo and holds both a Bachelor of Laws from QUT and a Certificate in
Governance Practice from GIA.
Experience
Ms. Huang has over 20 years of experience in the wealth management and banking
industry. She has been working with Citi Group Australia since 2017 as Vice
President of the APAC Desk of the Investment Partnerships Division.
Qualification
Ms. Huang holds a bachelor degree in business management from the University of
Technology Sydney.
Board committee membership
• Chair of Nomination, Remuneration and Human Resources Committee
• Member of Audit and Risk Committee
Directorship of listed entities within the past three years
• Nil
EZZ Life Science ANNUAL REPORT 2022 [ 17 ]
DIRECTOR’S REPORT CONTINUED
[
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Meetings of directors
The number of meetings of the Company’s Board of directors and of each Board committee held during the financial
year ended 30 June 2022, and the number of meetings attended by each director were:
Board Audit and Risk
Committee
Nomination, Remuneration and Human
Resource Committee
A B A B A B
Glenn Cross 5 5 3 3 1 1
Qizhou Qin 15 15 - - - -
Ivan Oshry 15 15 4 4 1 1
Hao Huang 15 15 4 4 1 1
Phillipa Mary Lewis 10 10 - - - -
Luis F Rodriguez Bravo 2 2 - - - -
A. Number of meetings held during the time the director held office or was a member of the committee during the
financial year.
B. Number of meetings attended.
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EZZ Life Science ANNUAL REPORT 2022 [ 19 ]
REMUNERATION
REPORT
(AUDITED)
Section 1: Details of KMP .................................................................................................................................................. 20
Section 2: Remuneration Governance ............................................................................................................................ 21
Section 3: Remuneration Framework ............................................................................................................................. 21
Section 4: Executive KMP Remuneration ...................................................................................................................... 22
Section 5: Non-executive Directors’ Remuneration ..................................................................................................... 23
Section 6: Further Information on Remuneration ........................................................................................................ 25
TABLE OF CONTENTS
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The Directors are pleased to present the FY22 Remuneration Report,
outlining the Board’s approach to the remuneration for its Key Management
Personnel (referred to hereafter as the ‘KMP’).
1 Details of KMP
KMP include the directors and the executive officers of the Company who have authority and responsibility for
planning, directing and controlling the activity of the Company. Figure 1 summarises all the KMP and their titles as at
30 June 2022.
Figure 1: KMP
Current KMP Position Time in Role
1
Non-executive directors
Glenn Cross • Non-executive Chair
• Member of Audit and Risk Committee
• Member of Nomination, Remuneration
and Human Resources Committee
Appointed on 30 November 2021
Ivan Oshry • Non-Executive Director
• Chair of Audit and Risk Committee
• Member of Nomination, Remuneration
and Human Resources Committee
Full financial year
Hao Huang • Non-Executive Director
• Chair of Nomination, Remuneration
and Human Resources Committee
• Member of Audit and Risk Committee
Full financial year
Executive directors
Qizhou Qin • Executive Director and Chief Operating Officer
• Interim CEO
Full financial year
Since 8 October 2021
Executive officers
Anthony Guarna Chief Financial Officer Appointed on 29 October 2021
Former KMP
Luis Rodrigues-Bravo Executive Director and Chief Executive Officer Resigned on 8 October 2021
Philippa Lewis • Non-executive Chair
• Member of Audit and Risk Committee
• Member of Nomination, Remuneration and Human
Resources Committee
Resigned 23 November 2021
Brent Goldman Chief Financial Officer Resigned 29 October 2021
1 Appoint of non-executive directors is subject to shareholder approval by 2022 Annual General Meeting to be valid.
REMUNERATION REPORT (AUDITED)
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EZZ Life Science ANNUAL REPORT 2022 [ 21 ]
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2 Remuneration Governance
Role of the Board
The Board is responsible for setting remuneration policy and determining non-executive director and executive KMP
remuneration.
Executive KMP’s remuneration is reviewed annually to ensure that the remuneration level remain competitive and
appropriate. The Board is responsible for approving all targets and performance conditions set under the executive
KMP’s performance-based remuneration framework.
Each year the non-executive director fees including committee chair and member fees, as applicable, are approved by
the Board.
The Board delegates responsibility to the Nomination, Remuneration and Human Resource Committee for review
and making recommendations to the Board. The Board retains full discretion to change outcomes as it considers
appropriate to ensure they are fair and appropriate.
Role of the Nomination, Remuneration and Human Resource Committee
The Nomination, Remuneration and Human Resource Committee makes recommendations to the Board in relation
to executive KMP’s remuneration. It is made up of independent non-executive directors. The responsibilities of the
Nomination, Remuneration and Human Resource Committee are set out in the Committee’s charter, which is available
on the Company’s website at www.ezzlife.com.au.
The Chief Executive Officer provides updates and makes recommendations to the Nomination, Remuneration
and Human Resource Committee on matters included in the Chief Executive Officer’s report throughout the year.
Additional information is sought from the Company’s management team and advisers, as required, to assist with the
decision-making process.
The Chair of the Audit and Risk Committee attends the relevant Nomination, Remuneration and Human Resource
Committee meetings and is formally involved in the remuneration outcome recommendations, ensuring that there is a
tight linkage between behaviour, risk management and remuneration outcomes.
Use of Advisers
The Nomination, Remuneration and Human Resource Committee obtains specialist external advice about
remuneration strategies from time to time. The advice is used to support its assessment of the market to ensure that
KMP are being rewarded appropriately.
No remuneration recommendations as defined in section 9B of the Corporations Act 2001 were obtained during the
financial year ended 30 June 2022.
3 Remuneration Framework
The remuneration for KMP comprises fixed remuneration, including superannuation and benefits, and other benefits.
Figure 2: Remuneration Framework
Component Rational Form Instrument Conditions
Fixed
remuneration
Attraction, motivation
and retention of the
best talent to carry
out strategies
Cash and non-
monetary benefits
Salary and
superannuation
guarantee contribution
Market rate taking into
account responsibilities,
qualification, skills and
experience
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REMUNERATION REPORT (AUDITED) CONTINUED
4 Executive KMP Remuneration
Fixed remuneration
Fixed remuneration comprises salary, superannuation guarantee contribution, leave entitlements and other benefits.
Fixed remuneration of executive management personnel is based on the executive KMP’s qualifications, skills,
experience and role responsibility. Its levels vary between the executive KMP.
Fixed remuneration is reviewed annually or on promotion. It is not varied by reference to inflation or indexation as a
matter of course. There were no changes to the executive KMP’s fixed remuneration during the period.
Statutory Executive KMP Remuneration
Figure 3 details remuneration received by the executive KMP during the financial year ended 30 June 2022 based
on the requirements of the Corporations Act 2001 an accounting standards, which includes fixed remuneration and
performance-based remuneration.
Figure 3: Statutory executive KMP remuneration
[ 22 ] EZZ Life Science ANNUAL REPORT 2022
Fixed Remuneration Performance Based
Remuneration
Total Perfor-
mance
related
Salary /
Fees
1
Non-
monetary
benefits
Annual &
long-
service
leave
Other Super-
annuation
Other
post-
employ-
ment
benefits
Termi-
nation /
sign-up
benefits
Cash
bonus
Share
based
payments
($) ($) ($) ($) ($) ($) ($) ($) ($) ($) (%)
Current executive KMP
Qizhou Qin
2022 115,000 - - - 11,500 - - - - 126,500 -
2021 120,000 - - - 11,400 - - - - 131,400 -
Anthony Guarna - Remunerated via consulting arrangement
2022 73,512 - - - - - - - - 73,512 -
2021 - - - - - - - - - - -
Former executive KMP
Luis Rodrigues-Bravo
2022 39,870 - - - 3,987 - - - - 43,857 -
2021 115,385 - - - 10,962 - - - - 126,347 -
Brent Goldman – Remunerated via consulting arrangement
2022 31,000 - - - - - - - - 31,000 -
2021 22,612 - - - - - - - - 22,612 -
1 Salary and fees includes movement in the annual leave provision relating to the KMP.
Equity instruments held by Executive KMP
Figure 4 summaries the number of ordinary shares held directly, indirectly or beneficially by current and former
executive KMP including related parties
EZZ Life Science ANNUAL REPORT 2022 [ 23 ]
For personal use only
Figure 4: Executive KMP ordinary share ownership
Opening
balance
Exercise
of
option /
rights
Shares
issued
Appointment
/cessation
Purchased
on-market
Share
Disposals
Other
movements
Ending
balance
Ending
balance,
nominally
held
Current executive KMP
Qizhou Qin 11,344,000 - - - - - - 11,344,000 -
Anthony Guarna - - - - 9,794 - - 9,794
Former executive KMP
Luis Rodrigues-Bravo 3,600 - - - - - - 3,600
1
-
1 Shareholding at the date of resignation being 8 October 2021.
Contractual Arrangement with Executive KMP
Remuneration and other terms of employment for the executive KMP are included in employment agreements. Each
agreement sets out details of base salary, superannuation, benefits and performance-based incentives. Key provisions
of the employment agreements relevant to remuneration for the executive KMP are set out as follows.
Figure 5: Executive KMP employment agreement
Executive
Management
Personnel
Fixed Remuneration ($)
1
Term Notice period by the individual /
Company
Chief Operation
Officer and Interim
CEO
126,500 Ongoing 3 months
Chief Financial Officer 98,016 excluding GST 12 months, automatically
renewed at the end of each
term unless terminated
3 months
1 Fixed remuneration includes salary and superannuation.
5 Non-executive Director Remuneration
Non-executive director arrangement
Non-executive directors may receive fixed annual fees comprising a board Fee, committee chair fee and committee
fee as applicable. Non-executive directors may direct the Company to make superannuation guarantee contributions,
or additional superannuation contributions allocated from their non-executive director’s or committee member fees,
to any complying nominated superannuation fund.
Fees payable to non-executive directors is determined by the Board within an aggregate non-executive directors’
fee pool limit which is periodically recommended for approval by the shareholders. The aggregate non-executive
director’s fee pool was last considered by shareholders at a shareholder meeting in 2021. An aggregate fee pool of
$249,000 was approved by shareholders and remained unchanged.
Non-executive directors are not entitled to participate in any short-term incentive scheme, nor are they eligible to
long-term incentive scheme.
The Chair and other non-executive directors do not receive additional fees for their membership of the Board’s Audit
and Risk Management Committee or Nomination, Remuneration and Human Resource Committee.
For personal use only
REMUNERATION REPORT (AUDITED) CONTINUED
1 Non-executive directors fees paid to Chair and members includes superannuation
2 Non-executive directors fees paid to members includes superannuation
Non-executive director remuneration
Figure 7 summarise the remuneration of non-executive directors for the financial year ended 30 June 2022.
Figure 7: Statutory non-executive director remuneration
Figure 6: Non-executive director fees and other benefits
Fees Description FY21($) FY22($)
Board fees Chair
1
Member
2
98,000
68,000
98,000
68,000
Committee fees Audit and risk committee
Chair
Member
-
-
-
-
Nomination, Remuneration and
Human Resource Committee
Chair
Member
-
-
-
-
Fixed Remuneration Performance
Based
Remuneration
Total
($) ($) ($) ($) ($) ($) ($) ($) ($) ($) ($)
Current non-executive directors
Glenn Cross
2022 57,167 - - - - - - -
57,167
2021 - - - - - - - -
-
Ivan Oshry
2022 68,000 - - - - 12,120 - -
80,120
2021 27,818 - - - - - - -
27,818
Hao Huang
2022 68,000 - - - - 2,621 - -
70,621
2021 28,282 - - - - - - - 28,282
Former non-executive directors
Philippa Lewis
2022 40,833 - - - 24,500 - - - - 65,333
2021 59,503 - - 5,163 - - - - - 59,503
1 Non-executive directors fees paid to members includes superannuation
Salary / Fees
Committee
chair Fee
Committee
member fee
Non-monetary
benefits
Super-annuation
Termination
/ sign-up
benefits
Other Post-
employ-ment
benefits
Other benefits
Cash bonus
Share based
payments
[ 24 ] EZZ Life Science ANNUAL REPORT 2022
EZZ Life Science ANNUAL REPORT 2022 [ 25 ]
For personal use only
Equity instruments held by non-executive director share ownership
Figure 8 summarise the number of shares held directly, indirectly or beneficially by non-executive directors and
former directors including their related parties.
Figure 8: Non-executive director ordinary share ownership
Opening balance Appointment /
Cessation
Purchased on-
market
Share Disposals Ending balance
Current non-executive directors
Ivan Oshry 10,000 - - - 10,000
Hao Huang - - - - -
Former non-executive directors
Philippa Lewis
1
40,000 - - - 40,000
2
1 Ms. Lewis indirectly holds shares through Dumer Superannuation Fund.
2 Shareholdings at the date of resignation being 23 November 2021.
6 Further Information on Remuneration
Other transactions with KMP
The Company entered into an agreement with Due Books Pty Ltd during the financial year ended 30 June 2021
for legal services. A director, Mr. Ivan Oshry, is a director and a controlling shareholder of Due Books Pty Ltd. The
agreement was based on normal commercial terms and conditions. The aggregate amount of the transaction with
KMP is $12,120.
The Company entered into an agreement with Capstone Advisory Pty Ltd during the financial year ended 30 June
2022 for investor engagement services. The Chief Financial Officer, Mr. Anthony Guarna, provides Chief Financial
Officer services through Capstone Advisory Pty Ltd. The agreement was based on normal commercial terms and
conditions. The arrangement is on a one-off basis and is not expected recur in the future. The aggregate amount of
the transaction was $6,000.
There were no loans made during the financial year, or remain unsettled at 30 June 2022, between the Company and
its KMP and/or their related parties.
Indemnity and insurance of officers
The Company has indemnified the directors and executive officers of the Company for costs incurred, in their
capacity as a director or executive officer, for which they may be held personally liable, except where there is a lack of
good faith.
During the financial year, the Company paid a premium in respect of a contract to insure the directors and executive
officers of the Company against a liability to the extent permitted by the Corporations Act 2001.
End of remuneration report
For personal use only
Qizhou Qin
Executive Director
Glenn Cross
Non-executive Chair
Sydney, 30 September 2022
DIRECTORS’
REPORT
Indemnity and insurance of auditor
The Company has not, during or since the end of the financial year, indemnified or agreed to indemnify the auditor of
the company or any related entity against a liability incurred by the auditor.
During the financial year, the Company has not paid a premium in respect of a contract to insure the auditor of the
company or any related entity.
Proceedings on behalf of the company
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party for the purpose of taking
responsibility on behalf of the company for all or part of those proceedings.
Non-audit services
No non-assurance services were provided by Rothsay Audit & Assurance Pty Ltd.
Officers of the company who are former partners of the auditor
There are no officers of the company who are former partners of the auditor.
Rounding of amounts
The company is of a kind referred to in Corporations Instrument 2016/191 dated 24 March 2016 issued by the
Australian Securities and Investments Commission, relating to ‘rounding-off’. Amounts in this report have been
rounded off in accordance with that Corporations Instrument to the nearest dollar.
Auditor’s independence declaration
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act 2001 is set
out immediately after this directors’ report.
Auditor
The remuneration report has been audited by Rothsay Audit & Assurance Pty Ltd in accordance with section 327 of
the Corporations Act 2001.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations
Act 2001.
[ 26 ] EZZ Life Science ANNUAL REPORT 2022
EZZ Life Science ANNUAL REPORT 2022 [ 27 ]
15
EZZ LIFE SCIENCE HOLDINGS LIMITED
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
As lead auditor for the audit of EZZ Life Science Holdings Limited for the year ended 30 June 2022, I
declare that, to the best of my knowledge and belief, there have been:
no contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
no contraventions of any applicable code of professional conduct in relation to the audit.
Rothsay Audit & Assurance Pty Ltd
Daniel Dalla
Director
Sydney, 30 September 2022
For personal use only
[ 28 ] EZZ Life Science ANNUAL REPORT 2022
For personal use only
EZZ Life Science ANNUAL REPORT 2022 [ 29 ]
AUDITED
FINANCIAL
STATEMENTS
Financial Statements
Statement of Profit or Loss and Other Comprehensive Income .......................... 30
Statement of Financial Position ................................................................................ 31
Statement of Changes in Equity ............................................................................... 32
Statement of Cash Flows............................................................................................ 33
Notes to the Financial Statements ........................................................................... 34
For the year ended 30 June 2022
For personal use only
[ 30 ] EZZ Life Science ANNUAL REPORT 2022
AUDITED FINANCIAL STATEMENTS
STATEMENT OF PROFIT OR LOSS AND
OTHER COMPREHENSIVE INCOME
As at 30 June 2022
2022 2021
Note $ $
Revenue 4 15,022,026 22,287,078
Other income 4 141,853 174,589
Cost of sales (7,513,521) (9,828,267)
Advertising and marketing expense (2,968,794) (7,843,387)
Depreciation and amortisation expense (118,342) (125,518)
Employee benefits expense (895,933) (682,118)
Finance expenses (4,436) (10,752)
Management fees (278,454) (156,429)
Other expenses (1,604,582) (1,078,439)
Profit before income tax 1,779,817 2,736,757
Income tax expense 5 (467,399) (706,151)
Profit for the year 1,312,418 2,030,606
Other comprehensive income
Other comprehensive income
Total comprehensive income for the year - -
1,312,418 2,030,606
Earnings per share Cents Cents
Basic earnings per share 7 3.09 5.98
Diluted earnings per share 7 3.09 5.98
The above Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with the
accompanying notes.
For personal use only
EZZ Life Science ANNUAL REPORT 2022 [ 31 ]
STATEMENT OF FINANCIAL POSITION
As at 30 June 2022
2022 2021
Note $ $
ASSETS
CURRENT ASSETS
Cash and cash equivalents 8 10,464,841 8,853,644
Trade and other receivables 9 2,293,815 2,188,788
Inventories 312,399 271,611
Other assets 901,710 419,996
TOTAL CURRENT ASSETS 13,972,765 11,734,039
NON CURRENT ASSETS
Plant and equipment 10 148,682 131,598
Intangible assets 18,848 11,348
Deferred tax assets 11 125,102 161,687
TOTAL NON CURRENT ASSETS 292,632 304,633
TOTAL ASSETS 14,265,397 12,038,672
LIABILITIES
CURRENT LIABILITIES
Trade and other payables 12 2,432,654 1,638,200
Current tax liabilities 11 242,891 180,102
Lease liabilities 13 104,571 79,012
Employee entitlements 14 36,694 32,262
TOTAL CURRENT LIABILITIES 2,816,810 1,929,576
NON-CURRENT LIABILITIES
Deferred tax liabilities 11 61,128 1,330
TOTAL NON-CURRENT LIABILITIES 61,128 1,330
TOTAL LIABILITIES 2,877,938 1,930,906
NET ASSETS 11,387,459 10,107,766
EQUITY
Issued capital 15 5,823,494 5,667,219
Retained earnings 5,563,965 4,440,547
TOTAL EQUITY 11,387,459 10,107,766
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
For personal use only
[ 32 ] EZZ Life Science ANNUAL REPORT 2022
AUDITED FINANCIAL STATEMENTS CONTINUED
STATEMENT OF CHANGES IN EQUITY
As at 30 June 2022
2022
Issued Capital Retained Earnings Total
$ $ $
Balance at 1 July 2021 5,667,219 4,440,547 10,107,766
Profit for the year - 1,312,418 1,312,418
Other comprehensive gain/(loss) for the year - - -
Transactions with owners in their capacity as owners:
Share based payments 156,275 - 156,275
Dividend paid - (189,000) (189,000)
Balance at 30 June 2022 5,823,494 5,563,965 11,387,459
2021
Issued Capital Retained Earnings Total
$ $ $
Balance at 1 July 2020 100 2,409,941 2,410,041
Profit for the year - 2,030,606 2,030,606
Other comprehensive gain/(loss) for the year - - -
Transactions with owners in their capacity as owners:
Capital contribution from IPO, net of transaction costs 5,667,119 - 5,667,119
Balance at 30 June 2021 5,667,219 4,440,547 10,107,766
The above Statements of Changes in Equity should be read in conjunction with the accompanying notes.
For personal use only
EZZ Life Science ANNUAL REPORT 2022 [ 33 ]
STATEMENT OF CASH FLOWS
For the Year Ended 30 June 2022
2022 2021
Note $ $
CASH FLOWS FROM OPERATING ACTIVITIES:
Receipts from customers 15,877,602 23,846,355
Receipts from Government incentives 141,484 1 74,589
Payments to suppliers and employees (13,804,695) (22,662,725)
Interest paid (4,436) (10,752)
Income tax paid (308,225) (1,093,934)
Net cash provided by/(used in) operating activities 22 1,901,730 253,533
CASH FLOWS FROM INVESTING ACTIVITIES:
Payment for intangible assets (7,500) (10,150)
Purchase of plant and equipment (5,676) (5,967)
Net cash provided by/(used in) investing activities (13,176) (16,117)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payment of lease liabilities (104,190) (107,265)
Proceeds from issuing shares - 6,000,000
Dividend Paid (173,167) -
Share issue transaction costs - (449,839)
Net cash provided by/(used in) financing activities (277,357) 5,442,896
Net increase/(decrease) in cash and cash equivalents held 1,611,197 5,680,312
Effects of movements in forex - (1,494)
Cash and cash equivalents at the beginning of financial year 8,853,644 3,174,826
Cash and cash equivalents at the end of financial year 8 10,464,841 8,853,644
The above Statement of Cash Flows should be read in conjunction with the accompanying notes.
For personal use only
AUDITED FINANCIAL STATEMENTS CONTINUED
For personal use only
[ 34 ] EZZ Life Science ANNUAL REPORT 2022
The financial report covers EZZ Life Science Holdings Limited (‘the Company) as an individual entity. EZZ Life Science
Holdings Limited is a for-profit Company limited by shares, incorporated and domiciled in Australia.
The functional and presentation currency of EZZ Life Science Holdings Limited is Australian dollars.
The financial report was authorised for issue by the Directors on 30 September 2022.
Comparatives are consistent with prior years, unless otherwise stated.
1 Basis of Preparation
The financial statements are general purpose financial statements that have been prepared in accordance with the
Australian Accounting Standards issued by the Australian Accounting Standards Board (‘AASB’) and the Corporations
Act 2001, as appropriate for for-profit orientated entities. These financial statements also comply with International
Financial Reporting Standards as issued by the International Accounting Standards Board.
2 Summary of Significant Accounting Policies
(a) Revenue and other income
Revenue from contracts with customers
Revenue is recognised on a basis that reflects the transfer of promised goods or services to customers at an
amount that reflects the consideration the Company expects to receive in exchange for those goods or services.
Revenue is recognised by applying a five-step model as follows:
1. Identify the contract with the customer
2. Identify the performance obligations
3. Determine the transaction price
4. Allocate the transaction price to the performance obligations
5. Recognise revenue as and when control of the performance obligations is transferred
Generally, the timing of the payment for sale of goods and rendering of services corresponds closely to the
timing of satisfaction of the performance obligations, however where there is a difference, it will result in the
recognition of a receivable, contract asset or contract liability.
None of the revenue streams of the Company have any significant financing terms as there is less than 12 months
between receipt of funds and satisfaction of performance obligations.
The revenue recognition policies for the principal revenue stream related to sales of goods are that revenue is
recognised on acceptance of the goods by the customer.
Government grants
The Company received various government grants during the period related to state and federal COVID-19 relief
programs. These are recorded as revenue once the terms and conditions relating to the grant have been satisfied.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 30 June 2022
For personal use only
EZZ Life Science ANNUAL REPORT 2022 [ 35 ]
(b) Income Tax
The tax expense recognised in profit or loss comprises current income tax expense plus deferred tax expense.
Current tax is the amount of income taxes payable (recoverable) in respect of the taxable profit (loss) for the
year and is measured at the amount expected to be paid to (recovered from) the taxation authorities, using the
tax rates and laws that have been enacted or substantively enacted by the end of the reporting period. Current
tax liabilities (assets) are measured at the amounts expected to be paid to (recovered from) the relevant taxation
authority.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the period when
the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or
substantively enacted by the end of the reporting period.
Deferred tax assets are recognised for all deductible temporary differences and unused tax losses to the extent
that it is probable that taxable profit will be available against which the deductible temporary differences and
losses can be utilised.
Current and deferred tax is recognised as income or an expense and included in profit or loss for the period
except where the tax arises from a transaction which is recognised in other comprehensive income or equity, in
which case the tax is recognised in other comprehensive income or equity respectively.
(c) Goods and services tax (GST)
Revenue, expenses and assets are recognised net of the amount of goods and services tax (GST), except where
the amount of GST incurred is not recoverable from the Australian Taxation Office (ATO).
Receivables and payable are stated inclusive of GST.
Cash flows in the statement of cash flows are included on a gross basis and the GST component of cash flows
arising from investing and financing activities which is recoverable from, or payable to, the taxation authority is
classified as operating cash flows.
(d) Cash and cash equivalents
Cash and cash equivalents comprises cash on hand, demand deposits and short-term investments which are
readily convertible to known amounts of cash and which are subject to an insignificant risk of change in value.
(e) Financial instruments
Financial instruments are recognised initially on the date that the Company becomes party to the contractual
provisions of the instrument.
On initial recognition, all financial instruments are measured at fair value plus transaction costs.
Financial assets
On initial recognition, the Company classifies its financial assets at amortised cost.
Financial assets are not reclassified subsequent to their initial recognition unless the Company changes its
business model for managing financial assets.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 30 June 2022
For personal use only
AUDITED FINANCIAL STATEMENTS CONTINUED
Amortised cost
Assets measured at amortised cost are financial assets where:
• the business model is to hold assets to collect contractual cash flows; and
• the contractual terms give rise on specified dates to cash flows are solely payments of principal and interest on
the principal amount outstanding.
The Company’s financial assets measured at amortised cost comprise trade and other receivables and cash and
cash equivalents in the statement of financial position.
Subsequent to initial recognition, these assets are carried at amortised cost using the effective interest rate
method less allowance for impairment.
Interest income, foreign exchange gains or losses and impairment are recognised in profit or loss. Gain or loss on
derecognition is recognised in profit or loss.
Impairment of financial assets
Impairment of financial assets is recognised on an expected credit loss (“ECL”) basis.
When determining whether the credit risk of a financial assets has increased significantly since initial recognition
and when estimating ECL, the Company considers reasonable and supportable information that is relevant and
available without undue cost or effort. This includes both quantitative and qualitative information and analysis
based on the Company’s historical experience and informed credit assessment and including forward looking
information.
The Company uses the presumption that an asset which is more than 30 days past due has seen a significant
increase in credit risk.
The Company uses the presumption that a financial asset is in default when:
• the other party is unlikely to pay its credit obligations to the Company in full, without recourse to the Company
to actions such as realising security (if any is held); or
• the financial asset is more than 90 days past due.
Credit losses are measured as the present value of the difference between the cash flows due to the Company
in accordance with the contract and the cash flows expected to be received. This is applied using a probability
weighted approach.
Trade receivables and contract assets
Impairment of trade receivables and contract assets have been determined using the simplified approach in
AASB 9 which uses an estimation of lifetime expected credit losses. The Company has determined the probability
of non-payment of the receivable and contract asset and multiplied this by the amount of the expected loss
arising from default.
The amount of the impairment is recorded in a separate allowance account. Once the receivable is determined to
be uncollectable then the gross carrying amount is written off against the associated allowance.
Where the Company renegotiates the terms of trade receivables due from certain customers, the new expected
cash flows are discounted at the original effective interest rate and any resulting difference to the carrying value
is recognised in profit or loss.
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 30 June 2022
[ 36 ] EZZ Life Science ANNUAL REPORT 2022
EZZ Life Science ANNUAL REPORT 2022 [ 37 ]
For personal use only
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 30 June 2022
Other financial assets measured at amortised cost
Impairment of other financial assets measured at amortised cost are determined using the expected credit loss
model in AASB 9. On initial recognition of the asset, an estimate of the expected credit losses for the next 12
months is recognised. Where the asset has experienced a significant increase in credit risk then the lifetime losses
are estimated and recognised.
Financial liabilities
The Company measures all financial liabilities initially at fair value less transaction costs, subsequently financial
liabilities are measured at amortised cost using the effective interest rate method.
The financial liabilities of the Company comprise trade and other payables.
(f) Plant and equipment
Each class of plant and equipment is carried at cost or fair value less, where applicable, any accumulated
depreciation and impairment.
Plant and equipment
Plant and equipment are measured using the cost model.
Depreciation
Plant and equipment is depreciated on a reducing balance basis over the assets useful life to the Company,
commencing when the asset is ready for use.
The depreciation rates used for each class of depreciable asset are shown below:
At the end of each annual reporting period, the depreciation method, useful life and residual value of each asset
is reviewed. Any revisions are accounted for prospectively as a change in estimate.
(g) Impairment of non-financial assets
At the end of each reporting period the Company determines whether there is any evidence of an impairment
indicator for non-financial assets.
Where an indicator exists and regardless for indefinite life intangible assets and intangible assets not yet available
for use, the recoverable amount of the asset is estimated.
Where assets do not operate independently of other assets, the recoverable amount of the relevant cash-
generating unit (“CGU”) is estimated.
The recoverable amount of an asset or CGU is the higher of the fair value less costs of disposal and the value
in use. Value in use is the present value of the future cash flows expected to be derived from an asset or cash-
generating unit.
Where the recoverable amount is less than the carrying amount, an impairment loss is recognised in profit or loss.
Reversal indicators are considered in subsequent periods for all assets which have suffered an impairment loss.
Fixed asset class Depreciation rate
Motor Vehicles 25%
Computer Equipment 33%
Office Equipment 33%
AUDITED FINANCIAL STATEMENTS CONTINUED
For personal use only
(h) Leases
At the lease commencement, the Company recognises a right-of-use asset and associated lease liability for the
lease term. The lease term includes extension periods where the Company believes it is reasonably certain that
the option will be exercised.
The right-of-use asset is measured using the cost model where cost on initial recognition comprises of the lease
liability, initial direct costs, prepaid lease payments, estimated cost of removal and restoration less any lease
incentives received.
The right-of-use asset is depreciated over the lease term on a straight line basis and assessed for impairment in
accordance with the impairment of assets accounting policy.
The lease liability is initially measured at the present value of the remaining lease payments at the
commencement of the lease. The discount rate is the rate implicit in the lease, however where this cannot be
readily determined then the Company’s incremental borrowing rate is used.
Subsequent to initial recognition, the lease liability is measured at amortised cost using the effective interest rate
method. The lease liability is remeasured whether there is a lease modification, change in estimate of the lease
term or index upon which the lease payments are based (e.g. CPI) or a change in the Company’s assessment of
lease term.
Where the lease liability is remeasured, the right-of-use asset is adjusted to reflect the remeasurement or is
recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
(i) Employee entitlements
A liability is recognised for the Company’s liability for employee entitlements arising from services rendered by
employees to the end of the reporting period.
Where the Company does not have the right to defer settlement of the liability it has been recorded as a current
liability. Where settlement is able to be deferred for a period of greater than one year, the liability is recorded as
non-current.
Defined contribution superannuation schemes
Obligations for contributions to defined contribution superannuation plans are recognised as an employee
benefit expense in profit or loss in the periods in which services are provided by employees.
(j) Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are
recognised as a deduction from equity, net of any tax effects.
(k) Foreign currency transactions and balances
Transaction and balances
Foreign currency transactions are recorded at the spot rate on the date of the transaction.
At the end of the reporting period:
• Foreign currency monetary items are translated using the closing rate;
• Non-monetary items that are measured at historical cost are translated using the exchange rate at the date of
the transaction; and
• Non-monetary items that are measured at fair value are translated using the rate at the date when fair value
was determined.
[ 38 ] EZZ Life Science ANNUAL REPORT 2022
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 30 June 2022
EZZ Life Science ANNUAL REPORT 2022 [ 39 ]
For personal use only
Exchange differences arising on the settlement of monetary items or on translating monetary items at rates
different from those at which they were translated on initial recognition or in prior reporting periods are
recognised through profit or loss, except where they relate to an item of other comprehensive income.
(l) Inventories
Inventories are measured at the lower of cost and net realisable value. Cost of inventory is determined using the
weighted average costs basis and is net of any rebates and discounts received.
Net realisable value is the estimated selling price in the ordinary course of business, less the estimate costs of
completion and the costs necessary to make the sale. Net realisable value is estimated using the most reliable
evidence available at the reporting date and inventory is written down through an obsolescence allowance if
necessary.
3 Critical Accounting Estimates and Judgments
The directors make estimates and judgements during the preparation of these financial statements regarding
assumptions about current and future events affecting transactions and balances.
These estimates and judgements are based on the best information available at the time of preparing the financial
statements, however as additional information is known then the actual results may differ from the estimates.
The significant estimates and judgements made have been described below.
Key estimates - receivables
The receivables at reporting date have been reviewed to determine whether there is any objective evidence that any
of the receivables are impaired. An impairment allowance is included for any receivable where the balance is not
considered collectible. The impairment allowance is based on the best information at the reporting date.
4 Revenue and Other Income
2022 2021
$ $
Revenue
- sale of goods – recognised at a point in time 15,022,026 22,287,078
15,022,026 22,287,078
2022 2021
$ $
Other Income 369 -
- Interest income 141,484 174,589
- Government subsidy 141,853 174,589
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 30 June 2022
[ 40 ] EZZ Life Science ANNUAL REPORT 2022
For personal use only
AUDITED FINANCIAL STATEMENTS CONTINUED
[
40 ] EZZ Life Science ANNUAL REPORT 2022
2022 2021
$ $
Current tax expense 371,016 749,820
Deferred tax expense relating to temporary differences 96,383 (162,920)
Deferred tax expense resulting from reduction in tax rate - 6,732
Income tax expense relating to IPO costs directly in equity - 116,958
Over provision for income tax in prior year - (4,439)
Total income tax expense 467,399 706,151
2022 2021
$ $
Prima facie tax payable on profit from ordinary activities before income tax at 25%
(2021: 26%) 444,954 711,557
Tax effect of:
- non-deductible depreciation and amortisation 1,097 1,520
- share based payments 39,069 -
- other non-deductible expenses 1,274 699
- non-assessable income (18,995) (9,918)
- over provision for income tax in prior year - (4,439)
- rise in opening deferred taxes resulting from reduction in tax rate - 6,732
Income tax expense 467,399 706,151
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 30 June 2022
5 Income Tax Expense
(a) The major components of tax expense (income) comprise:
6 Operating Segments
(a) Identification of reportable segments
The Company has identified its operating segments based on the internal reports that are reviewed and used by
the Board of Directors (chief operating decision maker) in assessing performance and determining the allocation
of resources.
Operating segments are determined on the basis of financial information reported to the Directors which is
revenue and gross profit for Brought in Lines and Company Owned products.
Therefore, management identified the Company as having two reportable segments. The financial results from
these reportable segments are equivalent to the financial statements of the Company as a whole. Geographical
sales information is disclosed below to assist in the understanding of the Company.
(b) Accounting policies adopted
All amounts reported to the Directors are determined in accordance with accounting policies that are consistent
with those adopted in the annual financial statements of the Company.
(b) Reconciliation of income tax to accounting profit:
EZZ Life Science ANNUAL REPORT 2022 [ 41 ]
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EZZ Life Science ANNUAL REPORT 2022 [ 41 ]
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 30 June 2022
7 Earnings Per Share
2022 2021
$ $
Basic earnings per share (cents) 3.09 5.98
Diluted earnings per share (cents) 3.09 5.98
The calculation of the basic and diluted earnings per share
is based on the following data:
Earnings
Earnings for the purpose of basic earnings per share
being net loss attributable to owners of the Company 1,312,418 2,030,606
Earnings for the purpose of diluted earnings per share 1,312,418 2,030,606
Number of shares
Weighted average number of shares used in calculating
basic earnings per share 42,510,137 33,945,205
Weighted average number of shares used in calculating
diluted earnings per share 42,510,137 33,945,205
(c) Segment assets
Assets of the Company are maintained in Australia.
(d) Segment liabilities
Liabilities are generally considered to relate to the Company as a whole and are not allocated.
(e) Segment Revenues
Revenue is segmented between brought in lines and Company owned products as follows:
Brought in Lines Company Owned Total
2022 2021 2022 2021 2022 2021
$ $ $ $ $ $
Revenue 6,883,175 10,918,034 8,138,851 11,369,044 15,022,026 22,287,078
Cost of Sales (4,816,277) (7,798,812) (2,697,244) (2,029,455) (7,513,521) (9,828,267)
Total 2,066,898 3,119,222 5,441,607 9,339,589 7,508,505 12,458,811
(f) Geographical information
2022 2021
$ $
Australia and New Zealand 9,433,936 12,006,707
Mainland China 4,349,374 10,130,032
Other countries/regions 1,238,716 150,339
Total 15,022,026 22,287,078
[ 42 ] EZZ Life Science ANNUAL REPORT 2022
AUDITED FINANCIAL STATEMENTS CONTINUED
8 Cash and Cash Equivalents
2022 2021
$ $
Cash at bank and in hand 10,464,841 8,853,644
10,464,841 8,853,644
9 Trade and Other Receivables
2022 2021
$ $
CURRENT
Trade receivables 2,282,916 2,047,618
Other receivables 10,899 141,170
2,293,815 2,188,788
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 30 June 2022
The carrying value of trade receivables is considered a reasonable approximation of fair value due to
the short-term nature of the balances.
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable
in the financial statements.
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EZZ Life Science ANNUAL REPORT 2022 [ 43 ]
10 Plant and Equipment
2022 2021
$ $
Motor vehicles
At cost 90,000 90,000
Accumulated depreciation (53,462) (41,282)
Total motor vehicles 36,538 48,718
Office equipment
At cost 3,679 -
Accumulated depreciation (591) -
Total office equipment 3,088 -
Computer equipment
At cost 10,507 8,510
Accumulated depreciation (5,251) (2,909)
Total computer equipment 5,256 5,601
Right-of-Use
At cost 129,750 154,555
Accumulated depreciation (25,950) (77,276)
Total right-of-use 103,800 77,279
148,682 131,598
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 30 June 2022
Movement in the carrying amounts for each class of plant and equipment between the
beginning and the end of the current financial year:
Motor
Vehicles
Office
Equipment
Computer
Equipment Right-of-Use Total
$ $ $ $ $
Year ended 30 June 2022
Balance at the beginning
of the year
48,718 - 5,601 77,279 131,598
Additions - 3,679 1,997 129,750 135,426
Depreciation (12,180) (591) (2,342) (103,229) (118,342)
Balance at the end of the year 36,538 3,088 5,256 103,800 148,682
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[ 44 ] EZZ Life Science ANNUAL REPORT 2022
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AUDITED FINANCIAL STATEMENTS CONTINUED
11 Tax Assets and Liabilities
12 Trade and Other Payables
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 30 June 2022
2022 2021
$ $
Income tax payable 242,891 180,102
242,891 180,102
Closing
Balance
$
Opening
Balance
$
Credited
/ (charged)
to Income
$
Deferred tax assets
Components of deferred tax assets are:
Provision for annual leave 4,065 1,084 5,149
IPO transaction costs 149,065 (37,268) 111,797
Accrued audit fee 3,750 188 3,938
Unrealised foreign exchange loss 373 (373) -
Superannuation payable 4,001 24 4,025
Net impact of accounting for operating lease 433 (240) 193
161,687 (36,585) 125,102
Deferred tax liabilities
Components of deferred tax liabilities are:
Depreciation 1,330 732 2,062
Unrealised foreign exchange gain - 1,900 1,900
Prepayment - 57,166 57,166
1,330 59,798 61,128
2022 2021
$ $
CURRENT
Trade payables - non-related parties 529,141 473,359
Trade payable to related entity - Australian United Pharmaceuticals Pty Ltd 1,859,713 1,116,121
Other payables 43,800 48,720
2,432,654 1,638,200
Trade and other payables are unsecured, non-interest bearing and are normally settled within 30 days.
The carrying value of trade and other payables is considered a reasonable approximation of fair value
due to the short-term nature of the balances.
EZZ Life Science ANNUAL REPORT 2022 [ 45 ]
For personal use only
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 30 June 2022
13 Leases
Statement of Profit or Loss and Other Comprehensive Income
The amounts recognised in the statement of profit or loss and other comprehensive income relating to leases where
the Company is a lessee are shown below:
Lease liabilities
The maturity analysis of lease liabilities based on contractual undiscounted cash flows is shown in the table below:
2022 2021
$ $
Interest expense on lease liabilities (3,809) (5,774)
Depreciation of right-of-use assets (103,229) (108,070)
(107,038) (113,844)
2022
Lease liabilities 108,000 - - 108,000 104,571
2021
Lease liabilities 81,000 - - 81,000 79,012
Statement of Cash Flows
2022 2021
$ $
Total cash outflow for leases (108,000) (113,040)
< 1 year
$
1 - 5 years
$
1 - 5 years
$
Total
undiscounted
lease liabilities
$
Lease liabilities
included in this
Statement Of
Financial Position
$
[ 46 ] EZZ Life Science ANNUAL REPORT 2022
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[ 46 ] EZZ Life Science ANNUAL REPORT 2022
AUDITED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 30 June 2022
14 Employee Entitlements
15 Issued Capital
2022 2021
$ $
Current liabilities
Provision for annual leave 20,596 16,259
Superannuation payable 16,098 16,003
36,694 32,262
Ordinary shares fully paid
At the beginning of the year 42,000,000 5,667,219 100 100
ESP 2021 760,000 156,275
100 ordinary shares split to 30,000,000
ordinary shares - - 29,999,900 -
Shares issued through IPO, net of transaction costs - - 12,000,000 5,667,119
Total ordinary shares fully paid 42,760,000 5,823,494 42,000,000 5,667,219
2022
Number of
shares
2022
$
2021
Number of
shares
2021
$
(a) Ordinary shares
The holders of ordinary shares are entitled to participate in dividends and the proceeds on winding up of the
Company. On a show of hands at meetings of the Company, each holder of ordinary shares has one vote in person
or by proxy, and upon a poll each share is entitled to one vote.
The Company does not have authorised capital or par value in respect of its shares.
(b) Capital Management
The key objectives of the Company when managing capital is to safeguard its ability to continue as a going concern
and maintain optimal benefits to stakeholders. The Company defines capital as its equity and net debt.
The Company manages its capital structure and makes funding decisions based on the prevailing economic
environment and has a number of tools available to manage capital risk. These include the ability to adjust the size
and timing of dividends paid to shareholders and the issue of new shares.
EZZ Life Science ANNUAL REPORT 2022 [ 47 ]
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EZZ Life Science ANNUAL REPORT 2022 [ 47 ]
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 30 June 2022
16 Financial Risk Management
The Company is exposed to a variety of financial risks through its use of financial instruments.
The Company‘s overall risk management plan seeks to minimise potential adverse effects due to the
unpredictability of financial markets.
The most significant financial risks to which the Company is exposed to are described below:
Specific risks
• Liquidity risk
• Credit risk
• Market risk – currency risk, interest rate risk and price risk
Financial instruments used
The principal categories of financial instrument used by the Company are:
• Cash and cash equivalents
• Trade and other receivables
• Trade and other payables
Objectives, policies and processes
The Directors have overall responsibility for the establishment of the Company’s financial risk management
framework. This includes the development of policies covering specific areas such as foreign exchange risk,
interest rate risk, liquidity risk and credit risk.
Risk management policies and systems are reviewed regularly to reflect changes in market conditions and
the Company’s activities.
The day-to-day risk management is carried out by the Company’s finance function under policies and
objectives which have been approved by the Directors.
The Directors receive monthly reports which provide details of the effectiveness of the processes and
policies in place.
Mitigation strategies for specific risks faced are described below:
Liquidity risk
Liquidity risk arises from the Company’s management of working capital and the finance charges and
principal repayments on its debt instruments. It is the risk that the Company will encounter difficulty in
meeting its financial obligations as they fall due.
The Company’s policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities
as and when they fall due. The Company maintains cash and marketable securities to meet its liquidity
requirements for up to 30-day periods.
The Company manages its liquidity needs by monitoring cash-outflows due in day-to-day business.
Liquidity needs are monitored in various time bands, on a day-to-day and week-to-week basis, as well as on
the basis of a rolling 30-day projection. Long-term liquidity needs for a 180-day and a 360-day period are
identified monthly.
[ 48 ] EZZ Life Science ANNUAL REPORT 2022[ 48 ] EZZ Life Science ANNUAL REPORT 2022
AUDITED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 30 June 2022
At the reporting date, these reports indicate that the Company expected to have sufficient liquid resources
to meet its obligations under all reasonably expected circumstances and will not need to draw down any of
the financing facilities.
Amounts recorded as trade and other payables are expected to be settled in their commercial terms, which
is within 3 months.
Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in a
financial loss to the Company.
Credit risk arises from cash and cash equivalents and credit exposure to its customers.
The credit risk for liquid funds and other short-term financial assets is considered negligible, since the
counterparties are reputable banks with high quality external credit ratings.
Trade receivables and contract assets
Trade receivables consist of a number of customers. Ongoing credit evaluation is performed on the
financial condition of accounts receivable.
The Company’s exposure to credit risk is influenced mainly by the individual characteristics of its
customers. This is monitored by management and the Directors on a continual basis.
Management considers that all financial assets at 30 June 2022 are of good credit quality.
On a geographical basis, the Company has significant credit risk exposures in Australia and China given the
location of its operations in those regions.
Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because
of changes in market prices, primarily,
• Foreign exchange risk;
• Interest rate risk; and
• Price risk.
The Company does not have any material exposure to the above risks at year end, though the Company
makes purchases in currencies other than Australian dollars.
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EZZ Life Science ANNUAL REPORT 2022 [ 49 ] EZZ Life Science ANNUAL REPORT 2022 [ 49 ]
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 30 June 2022
17 Dividends
A fully franked final dividend of 0.45 cents per ordinary share was declared on 24 September 2021 and paid
on 16 December 2021, resulting in a total dividend payment of $189,000 based on the number of ordinary
shares on issue.
Franking account
2022 2021
$ $
The franking credits available for subsequent financial years
at a tax rate of 25% (2021: 26%) 1,981,891 1,666,957
The above available balance is based on the dividend franking account at year-end adjusted for:
(a) Franking credits that will arise from the payment of the current tax liabilities;
(b) Franking debits that will arise from the payment of dividends recognised as a liability at the year end;
(c) Franking credits that will arise from the receipt of dividends recognised as receivables at the end of the year.
The ability to use the franking credits is dependent upon the Company’s future ability to declare dividends.
18 Key Management Personnel Remuneration
The totals of remuneration paid to the key management personnel of EZZ Life Science Holdings Limited during the
year are as follows.
2022 2021
$ $
Short-term employee benefits 532,623 347,885
Post-employment benefits 15,487 22,361
428,857 370,246
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[ 50 ] EZZ Life Science ANNUAL REPORT 2022
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[ 50 ] EZZ Life Science ANNUAL REPORT 2022
AUDITED FINANCIAL STATEMENTS CONTINUED
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 30 June 2022
19 Related Parties
(a) The Company’s main related parties are as follows:
Key management personnel - refer to Note 18.
Other related parties include close family members of key management personnel and entities that are controlled
or significantly influenced by those key management personnel or their close family members.
(b) Transactions with related parties
The Company purchases inventory from related entities, Australian United Pharmaceuticals Pty Ltd.
The Company has entered into a lease agreement for its current property from a related party, Parramatta Asset
Management Pty Ltd.
Amounts payable to related parties are disclosed in Note 12 and details of transactions with related parties are
summarised below:
2022 2021
$ $
Australian United Pharmaceuticals Pty Ltd
Inventory purchases 4,816,278 8,424,358
Australian Health Industry Co. Pty Ltd
Premises rent - 32,040
Parramatta Asset Management Pty Ltd
Premises rent 108,000 81,000
Due Books Pty Ltd
Legal services 12,120 8,840
20 Auditors’ Remuneration
2022 2021
$ $
Remuneration of the auditor Rothsay Audit & Assurance Pty Ltd, for:
- auditing or reviewing the financial statements 25,750 25,000
- other assurance services 5,000 10,000
Total 30,750 35,000
EZZ Life Science ANNUAL REPORT 2022 [ 51 ]
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EZZ Life Science ANNUAL REPORT 2021 [ 51 ] EZZ Life Science ANNUAL REPORT 2022 [ 51 ]
NOTES TO THE FINANCIAL STATEMENTS CONTINUED
For the year ended 30 June 2022
21 Contingencies
In the opinion of the Directors, the Company did not have any contingencies at 30 June 2022 (30 June 2021: None).
22 Cash Flow Information
Reconciliation of result for the year to cashflows from operating activities
Reconciliation of net income to net cash provided by operating activities:
23 Events Occurring After the Reporting Date
No matters or circumstances have arisen since the end of the financial year which significantly affected or could
significantly affect the operations of the Company, the results of those operations or the state of affairs of the
Company in future financial year.
24 Statutory Information
The registered office and principal place of business of the Company is:
EZZ Life Science Holdings Limited
104 Derby Street
Silverwater NSW 2074
2022 2021
$ $
Profit after income tax 1,312,418 2,030,606
Non-cash flows in profit:
- depreciation 118,341 125,518
- effects of foreign exchange - 1,494
- share based payments 156,275 -
Changes in assets and liabilities:
- (increase)/decrease in trade and other receivables (105,027) 346,080
- (increase)/decrease in inventories (40,788) (238,801)
- (increase)/decrease in other assets (481,714) (79,451)
- (increase)/decrease in deferred tax assets 36,585 (157,518)
- increase/(decrease) in trade and other payables 778,715 (1,562,504)
- increase/(decrease) in income taxes 62,789 (231,596)
- increase/(decrease) in employee entitlements 4,338 18,375
- increase/(decrease) in deferred tax liabilities 59,798 1,330
Cashflows from operations 1,901,730 253,533
[ 52 ] EZZ Life Science ANNUAL REPORT 2022
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DIRECTORS’
DECLARATION
The directors of the Company declare that:
1. the financial statements and notes for the year ended 30 June 2022 are in accordance with the
Corporations Act 2001 and:
a. comply with Accounting Standards, which, as stated in basis of preparation Note 1 to the financial
statements, constitutes explicit and unreserved compliance with International Financial Reporting
Standards (IFRS); and
b. give a true and fair view of the financial position and performance of the Company;
2. in the directors’ opinion, there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable.
3. the Chief Executive Officer and Chief Finance Officer have given the declarations required by Section
295A of the Corporations Act 2001 that:
a. the financial records of the Company for the financial year have been properly maintained in
accordance with section 286 of the Corporations Act 2001;
b. the financial statements and notes for the financial year comply with the Accounting Standards; and
c. the financial statements and notes for the financial year give a true and fair view.
This declaration is made in accordance with a resolution of the Directors.
Dated 30 September 2022
EZZ Life Science ANNUAL REPORT 2022 [ 53 ]
Qizhou Qin
Executive Director
Glenn Cross
Non-executive Chair
[ 54 ] EZZ Life Science ANNUAL REPORT 2022
APPENDIX 2 – THE COMPANY’S DRAFT AUDITOR’S REPORT
EZZ LIFE SCIENCE HOLDINGS LIMITED
INDEPENDENT AUDITOR’S REPORT
To the members of EZZ Life Science Holdings Limited
Opinion
We have audited the financial report of EZZ Life Science Holdings Limited (“the Company”), which
comprises the statement of financial position as at 30 June 2022, the statement of profit or loss and
other comprehensive income, the statement of changes in equity and the statement of cash flows for
the year then ended, and notes to the financial statements, including a summary of significant
accounting policies, and the directors’ declaration.
In our opinion the financial report of the Company is in accordance with the Corporations Act 2001,
including:
a) giving a true and fair view of the Company’s financial position as at 30 June 2022 and of its
performance for the year ended on that date; and
b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report.
We are independent of the Company in accordance with the auditor independence requirements of
the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence
Standards) (“the Code”) that are relevant to our audit of the financial report in Australia. We have
also fulfilled our other ethical responsibilities in accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has
been given to the directors of the Company, would be in the same terms if given to the directors as
at the time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
42
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EZZ Life Science ANNUAL REPORT 2022 [ 55 ]
APPENDIX 2 – THE COMPANY’S DRAFT AUDITOR’S REPORT (continued)
EZZ LIFE SCIENCE HOLDINGS LIMITED
INDEPENDENT AUDITOR’S REPORT (continued)
Other Information
The directors are responsible for the other information. The other information comprises the
information included in the Company’s annual report for the year ended 30 June 2022, but does not
include the financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the financial report or our knowledge obtained in the audit or otherwise appears to be materially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Directors’ Responsibility for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due
to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Company or to
cease operations, or have no realistic alternative but to do so.
43
Share Based Payments
How our Audit Addressed the Key Audit
Matter
The Group recorded share-based payments in the
current year of $156,275.
Share based payments are considered to be a key
audit matter due to the complexities involved in
the recognition and measurement of these
instruments; and the judgement involved in
determining the inputs used in the valuations.
Our procedures related to the Company’s
share-based payments included but were not
limited to:
• Assessing the amount recognised during the
year in accordance with the vesting
conditions of the agreements;
• Reviewing management’s valuation of
share-based payments; and
• Reviewing the compliance of accounting
treatment of the share-based payments
with AASB 2 Share-based Payment.
We have also assessed the appropriateness of
the disclosures included in the financial
report.
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[ 56 ] EZZ Life Science ANNUAL REPORT 2022
APPENDIX 2 – THE COMPANY’S DRAFT AUDITOR’S REPORT (continued)
EZZ LIFE SCIENCE HOLDINGS LIMITED
INDEPENDENT AUDITOR’S REPORT (continued)
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with Australian Auditing Standards will always detect a material
misstatement when it exists.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Company’s ability to continue as a
going concern. If we conclude that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in the financial report or, if such
disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions
may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in
a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing
of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
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EZZ Life Science ANNUAL REPORT 2022 [ 57 ]
APPENDIX 2 – THE COMPANY’S DRAFT AUDITOR’S REPORT (continued)
EZZ LIFE SCIENCE HOLDINGS LIMITED
INDEPENDENT AUDITOR’S REPORT (continued)
Report on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30
June 2022. The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Opinion
In our opinion the Remuneration Report of EZZ Life Science Holdings Limited, for the year ended 30
June 2022, complies with section 300A of the Corporations Act 2001.
Rothsay Audit & Assurance Pty Ltd
Daniel Dalla
Director
Sydney, 30 September 2022
45
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[ 58 ] EZZ Life Science ANNUAL REPORT 2022
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[ 60 ] EZZ Life Science ANNUAL REPORT 2022
SHAREHOLDER
INFORMATION
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EZZ Life Science ANNUAL REPORT 2022 [ 61 ]
For personal use only
As at 16 September 2022, the Company had 42,760,000 fully-paid ordinary shares on issue. Further details
of the Company’s equity securities are as follows:
Substantial shareholders
As at the date of this report, the following shareholders are substantial shareholders for the purposes of
Part 6C.1 of the Corporations Act 2001:
Disclosed shareholder Number of shares Percentage of issued share capital
Macquarie Holdings Pty Ltd 17,016,000 39.79%
JNJ Mok Pty Ltd 11,344,000 26.53%
Size of holdings Number of shareholders Percentage of issued share capital
1-1,000 166 0.26
1,001-5,000 344 2.28
5,001-10,000 129 2.52
10,001-100,000 193 13.91
100,001-9,999,999,999 21 81.03
Total 853 100
Name Number of shares Percentage of issued share capital
Macquarie Holdings Pty Ltd 17,016,000 39.79
JNJ Mok Pty Ltd 11,344,000 26.53
MR YONG CAO 1,760,000 4.12
Haitao Zheng 480,000 1.12
Jing Chen 480,000 1.12
Zhaoying Wang 480,000 1.12
MARS FAMILY INVESTMENT PTY LTD
<THE MARS FAMILY A/C>
480,000 1.12
BNP PARIBAS NOMINEES PTY LTD
<IB AU NOMS RETAILCLIENT DRP>
347,556 0.81
MR OREN DANZIGER 286,606 0.67
MRS INDRAWATY MEI HUA ONG 239,038 0.56
MR YING CHUANG WANG 201,848 0.47
MRS LI ZHU <KNIGHT HOLDING FUND A/C> 200,000 0.47
Distribution of members and their holdings
Twenty largest shareholders
The 20 largest shareholders of ordinary shares on the company’s register as at 16 September 2022 were:
[ 62 ] EZZ Life Science ANNUAL REPORT 2022
For personal use only
Name Number of shares Percentage of issued share capital
Australia Capital Finance Investment Pty Ltd 195,000 0.46
MS SILVIA FEI CING JIAN 189,748 0.44
MR NICHOLAS GALATIS & MRS EFFIE GALATIS 180,000 0.42
MISS EMMA MICHELLE SIEVWRIGHT 150,000 0.35
DR MOHAMMED NABIL MOHAMMED ELTOKHY 150,000 0.35
DR MOHAMMED NABIL MOHAMMED ELTOKHY
& MRS RANA FAROUK MOHAMED
<MNT SUPER A/C>
134,915 0.32
MR ANDREW JOHN SNEDDON & MRS JUDITH
ANNE SNEDDON <A J SNEDDON FAMILY A/C>
120,000 0.28
MR JASON LEE DUNN & MR ERIC LAWRENCE
DUNN <DUNN SUPER FUND A/C>
112,500 0.26
Number of securities subject to escrow Date escrow ends
30,760,000 2 March 2023
Twenty largest shareholders
Continued
Voting rights
The voting rights attached to each class of equity securities are set out below:
Ordinary Shares
Each fully-paid ordinary share carries voting rights of one vote per share.
Unmarketable Parcels
There were 34 shareholders that held less than a marketable parcel of the Company’s ordinary shares.
Restricted securities
SHAREHOLDER INFORMATION
EZZ Life Science ANNUAL REPORT 2022 [ 63 ]
CORPORATE
DIRECTORY
Directors
Glenn Cross, Non-Executive Chair
Qizhou Qin, Chief Operating Officer and Interim Chief Executive Officer
Ivan Oshry, LLB, Non-Executive Director
Hao Huang, Non-Executive Director
Company secretary
Natalie Climo, LLB
Registered office
104 Derby Street, Silverwater, NSW 2128, Australia
02 9160 2305
Principle place of business
104 Derby Street, Silverwater, NSW 2128, Australia
Share register
Boardroom Pty Limited
Level 12, 225 George Street, Sydney, NSW 2000
1300 737 760
Auditor
Rothsay Audit & Assurance Pty Ltd
Level 1, 12-14 O’Connell Street, Sydney, NSW 2000
Stock exchange listing
EZZ Life Science Holdings Limited shares are listed on the Australian Securities Exchange
(ASX code: EZZ)
Website
www.ezzlife.com.au
For personal use only
www.ezzlife.com.au
EZZ Life Science Holdings Limited
104 Derby Street, Silverwater,
NSW 2128, Australia
02 9160 2305
For personal use only
