annual report 2017 - farmaforce · george elias, chair dr george syrmalis con tsigounis harry...

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Annual Report 2017

FARMAFORCE LIMITED ACN 167 748 843

CONTENTS

CorporateDirectory 2

Chair’sReport 3

OperatingandFinancialReview 4

Directors’Report 6

RemunerationReport 10

CorporateGovernanceStatement 16

LeadAuditor’sIndependenceDeclaration 28

FinancialStatements 29

NotestotheFinancialStatements 34

Directors’Declaration 53

IndependentAuditor’sReport 54

ASXAdditionalInformation 57

2

CORPORATE DIRECTORY

ACN

167748843

Directors

GeorgeElias,ChairDrGeorgeSyrmalisConTsigounisHarrySimeonidis,GeneralManager

CompanySecretary

GerardoIncollingo

GeneralManager

HarrySimeonidis

Registeredoffice

Level3,222ClarenceStreet

Sydney,NSW2000

Principalplaceofbusiness

Level3,222ClarenceStreet

Sydney,NSW2000

Shareregister

BoardroomPtyLimited

Level12,225GeorgeStreet

SydneyNSW2000

Auditors

RSMAustraliaPartners

Level13,60CastlereaghStreet

SydneyNSW2000

Stockexchangelistings

FarmaForceLimitedsharesarelistedontheAustralianSecuritiesExchange(ASX:FFC).

Websiteaddress

www.farmaforce.com.au

2017 ANNUAL REPORT

FARMAFORCELIMITED

CHAIR’SREPORT

2017 ANNUAL REPORT 3

CHAIR’S REPORT

This yearhas seenFarmaForceachieveyetmoremilestones.Our sales teamshave successfullywonnewcontractsandenhancedourreputationinourmarket.Thishastranslatedintoverypleasingrevenuegrowthover the last 12 months, now that we have entered into many more contracts with new and existingcustomers.

Revenueforthe12monthstoJune2017was$3.967Mup103%from$1.951Mforthecomparativeperiodlast year. This increase from the prior year is a result of the continued implementation of our businessdevelopmentstrategies.Thepre-tax lossfortheperiodwas$2.307Magainstapre-tax lossof$3.799Minthepriorcorrespondingperiod.

Netassetsasof30June2017were$(0.467M)comparedto$1.840Mat30June2016andcashbalanceswere$0.254Mcomparedwith$1.541Matthesametimelastyear.Thisisinlinewithourbudgetsandreflectsthesignificant initial costs incurred in establishing our presence in themarket and the building of our highlyrespectedsalesforce.

Ourleadershipteam,ledbyanaspirationalandcommittedgroupofexecutivemanagementandboardmembers,iscommittedtobuildingtheFarmaForcebusinessandconsistentlyaddingvaluetoourclients,shareholdersandemployees.

GeorgeElias

Chair

jacqueline

Pencil

FARMAFORCELIMITED

OPERATINGANDFINANCIALREVIEW


OPERATING AND FINANCIAL REVIEW

TheOperatingandFinancialReview(“OFR”)isprovidedtoassistshareholders’understandingoftheperformanceofFarmaForceLimited(“FarmaForce”orthe“Company”)andthefactorsunderlyingtheCompany’sresultsandfinancialpositionfortheperiod1July2016to30June2017.

DetailthatcouldgiverisetolikelymaterialdetrimenttotheCompany(forexample,informationthatiscommerciallysensitive,isconfidentialorcouldgiveathirdpartycommercialadvantage)hasnotbeenincluded.

SUMMARYOFFINANCIALRESULTS

• Increasedmarketshare• Revenueincreaseof103%• Netlossaftertaxdecreasedby65%($1.5

million)

$Amillions FY17 FY16 Change

Revenue 4.0 2.0 2.0

Grossprofit 0.2 (0.7) 0.9

Lossaftertax (2.3) (3.8) 1.5

Cashusedinoperations (1.1) (3.6) 2.5

Duringtheyear,FarmaForceachieveditstargetincreaseinmarketsharebyactivelyseekingoutnewbusiness,andexecutingsalescontractsthatenableexistingsynergieswithcurrentteamsandmarketsegmentsitalreadyowns.ThiswaytheCompanyhasalsorealisedeconomiesofscale.

TheIncreaseinmarketsharehasresultedina103%increaseinrevenueinthepastyear,andacumulativerevenueincreaseof900%overthepasttwo-yearperiod.

Strongrevenuegrowthteamedwithattentiontomarginenhancementandcostcontainment,hasresultedinastrengtheninggrossprofitabilityandoperatingcashflowposition,withnetlossaftertaxreducingby$1.5million(65%)inFY17,andhaving$2.5millionlesscashbeingusedinoperations.

Accordingtorecentmarketresearchanalysis,Australia’spharmaceuticalmarketissettorisefromjustover$22.8billionin2016to$25.2billionby2020,registeringacompoundannualgrowthrate(CAGR)of2%.AtthesametimeFarmaForceisexpectedtobegrowingatdoubledigitrates.

Asthepharmaceuticalindustryisfundamentallychangingandreinventingthebusinessithasbeenfoundedon,FarmaForcecontinuestoevaluatethemarketgaptoensurewearemodifyingoursolutionsandprovidingthemosteffectiveoutcomestoourclients.

OPERATINGHIGHLIGHTS

• Wonthe2016‘SalesTeamAward’atthe12thAnnualPRIMEAwards;

• Nominatedforthe2017‘SalesTeamAward’forthe13thAnnualPRIMEAwards;

• NominatedbyHealthCarePractitioners(HCP)asthe#1CSOinAustralia;

• GrantedISOCertificationbecomingthefirstandonlyAustralianCSOwhichholdsISO9001:2008QualityManagementSystemscertification;

• Exceededtargetfornumberofnewactivationsofstrategicglobalpartnerships;

• NewGeneralManager,MrHarrySimeonidis,appointedinMarch2017.Harryhasover25years’experienceinthehealthcareindustryinAustraliaandAsia,andhasdemonstratedsuccessindrivingstrategyandtransformationtodelivervalueforstakeholders.

FARMAFORCEANDTHECHANGING

PHARMACEUTIALECOSYSTEM

Thepharmaceuticalindustryisevolvingtowardsarisksharing-risktransfermodelbeginningfromrisksharingagreementsbetweenreimbursementfrompayertopharmaceuticalcompany,andextending

FARMAFORCELIMITED

OPERATINGANDFINANCIALREVIEW(CONTINUED)


torisktransferenceofresearchanddevelopmentfromthepharmaceuticalcompanytobusinesspartners.

Thehighcostofnewdrugsandthepressurebeingappliedtopharmaceuticalcompaniesbypayersand/orGovernmentischangingthepharmaceuticalindustrybusinessmodel.

Beginningwiththepayerandultimatelypermeatingtheentiredrugdevelopmentecosystem,pharmaceuticalcompaniesareforcedtoforgerisksharing-profitsharingagreementswithnewfeeforservicebusinesspartners.

ThisisanentirelynewbusinessrealityandFarmaForceisoneofthefirstCSO’sgloballytobeproactivelybuildingtheselong-termpartnershipsofriskorprofitsharingwithitslargepharmaceuticalclients.

AdrugmayreceiveapprovalbyGovernmentauthorities,butthisdoesnotalwaysmeanthatthedrugwillbeeligibleforreimbursement.Payersareonthehuntforvalue,however,thereremainsgreatdisparityastowhatvalueisandhowitisrepresented.Whatisthedefinitionofvalue?Whodefinesit?Howisitbeingmeasured?Istheconceptofvaluethesamefromthepoint-of-viewofpharmaceuticalcompanyandfromthatofpayers?

Thesequestionshaveforcedtheindustrytostartconsideringvalue-basedpricingandpaymentschemes,real-worldevidenceutilisation,andpayer-pharmacollaboration.Thesenewdirectionsareripewithopportunitiesandchallengesthatwillshapethefuturepharmaindustrybusinessmodelaroundresearch,commercialisation,pricing,marketaccessandreimbursement.

ThisisnotanissueonlyinAustralia.Pricingandreimbursementpressuresinpharmaceuticalschemesareglobalandseemtobeinevitable.Trendstowardscostcuttingandvaluebasedassessmentscanalsobeseeninotherareasofhealthcare(e.g.outcomesbasedreimbursement)andinothercountrieswithpublichealthcarefunding.Theoverarchingdriverforchangeinpharmaceuticalistheshiftfromvolumetovalue.Inpricingterms,thisisashiftfromapay-for-pilltoapay-for-performancemodel.Essentially,paymentwillbegrantedtoproductsthatdemonstratevalueintermsofimprovedhealthoutcomesorloweredhealthcarecostwhencomparedtocompetitors.Apaymentmodel,

whichissometimesusedinterchangeablywiththepay-for-performanceconcept,iscalledconditionalreimbursement,whichgrantsreimbursementprovidedthatcertainconditionsaremet.Thisreimbursementmodelisnotaboutgettinga‘yes’ora‘no’fromtheregulatorsandpayers,ratheritisaboutgettinga‘maybe,’whichcanlaterbecomea‘yes’grantedthattherightamountandtypeofevidenceisproduced.

TheFarmaForcebusinessmodelandcorporatetheoryisbasedonthepremiseofriskandprofitsharingwithourclients.OurfinancialinvestmentintotheFarmaForcebusinessandoursubsequentgrowthratearereflectiveofthemarket’sneedsandexpectations.

AboutFarmaForce

FarmaForceisaspecialistContractSalesOrganisation(CSO)offeringinnovativesalessolutionstotheAustralianpharmaceuticalindustry,throughtheprovisionofabroadanduniquerangeofsalesforcesolutions.

FarmaForceprovidesabespokeresults-basedsolutiontoeveryclient,andistheonlypharmaceuticalCSOtoinvestinthirdpartydatasetswhichprovideobjectiveandactionableinsights,ensuringthatthesolutionprovidedisyieldingagreedresults.

AboutTheiQGroupGlobal

TheiQGroupGlobalprovidesaturnkeysolutionforlifesciencecompanies,spanningcorporateadvisoryandinvestmentbanking,throughtoresearch,development,commercialisationandsales.TheGroupfacilitatesanendtoendsolutionalongthedruglifecyclecreatingthemedicinesoftomorrow.

FARMAFORCELIMITED

DIRECTORS’REPORT


DIRECTORS’ REPORT

TheDirectorspresenttheirreporttogetherwiththefinancialstatementsofFarmaForceLimited(“FarmaForce”orthe“Company”)asatandfortheyearended30June2017.

DIRECTORS

ThenamesofDirectorswhoheldofficeoftheCompanyatanytimeduringthefinancialyearandatthedateofthisreport,togetherwithinformationontheirqualifications,experience,specialresponsibilities,otherlistedcompanydirectorshipsandotherdetails,aresetoutbelow.

GeorgeElias

IndependentNon-ExecutiveChairAppointed:2April2015

BachelorofCommerce(UniversityofNewSouthWales),DiplomaofFinancialPlanning(Dip.FP),MemberCPAAustralia,ASICRG146Compliant(Securities),CertifiedFinancialPlanner®memberoftheFinancialPlanningAssociationofAustralia.

Georgehasover30years’experienceinprovidingaccountingandbusinessadvisoryservices.Duringthisperiod,hehasbeeninvolvedinprovidingtaxationandbusinessadvicetosmallandmediumsizedenterprises,includingbusinessstructuring,cashflowforecasting,taxationandsuperannuationstructuresupportandadvice.

GeorgeiscurrentlytheprincipalatEliasFinancialServicesandhasbeenprovidingfinancialandaccountingadviceasprincipalsinceJuly1991.Hisbusinessandfinancialacumen,coupledwithhisexperienceindealingwithnecessaryskillstochairtheBoardandprovidestrategicleadershiptofaceanychallengesthatmayarise.

GeorgeservesasamemberoftheAuditandRiskCommitteeandtheRemunerationandNominationCommitteeofFarmaForceLimited.

DrGeorgeSyrmalis

Non-ExecutiveDirectorAppointed:24November2015

TrainedinNuclearMedicine-RadiationImmunology.

DrSyrmalisfoundedandledasCEOandChairofTheBionuclearGroupSA,(1995-2005)incorporatingAntisomaSA,BionuclearInstituteof

DiagnosisandTherapySA,BionuclearResearchandDevelopmentSA,andVitalcheckSA.

DrSyrmalisiscurrentlytheChairandExecutiveDirectorofiQnovateLtd,andExecutiveDirectorofiQXLimited.BothcompaniesarelistedontheNationalStockExchangeofAustralia.

ConTsigounis

Non-ExecutiveDirectorAppointed:22June2015

MemberoftheAustralianInstituteofCompanyDirectors.

Conhasover20years’experienceinbusinessandinvestorrelations,specificallyinthewholesaleandretailsectors.AsamemberoftheBoardofiQnovateLtdsinceitsinception,Conhasbeenresponsibleforexecutingthatcompany’sinvestorrelationsandcapitalraisingstrategy.HisexperienceinShareholderrelationshipmanagementgiveshimthenecessaryskillsettoassisttheCompanyattainitscorporateobjectives.

ConservesasamemberoftheAuditandRiskCommitteeandtheRemunerationandNominationCommitteeofFarmaForceLimited.

StamatiaTolias

IndependentNon-ExecutiveDirector

Appointed:2April2015Resigned:14August2017

BachelorofScience(Nursing),MastersDegree(MentalHealth),MemberNursesAssociation(Greece).

Stamatiacurrentlyworksasaresearchnurseinamentalhealthorganisationwhereshehasbeenemployedforthetwoandahalfyears.SheiscurrentlyundertakingstudiesforherPhDatthenationalKapodistrianUniversityofAthensandisexpectedtofurtherdevelopexpertiseinQualityUseofMedicines(QUM)principles.

TheCompanyderivesmanybenefitsfromStamatia’sunderstandingofinternationalstandardsofQUMprinciples.

FARMAFORCELIMITED

DIRECTORS’REPORT(CONTINUED)


DIRECTORS(CONTINUED)

HarrySimeonidis

ExecutiveDirectorandGeneralManagerAppointed:14August2017

Harryhasmorethan25years’experienceinthehealthcareindustryinAustraliaandAsia.PriortojoiningFarmaForce,hewastheChiefExecutiveOfficerofGEHealthcareAustraliaforovernineyearsandDirectorofGEHealthcarePtyLtdandotherrelatedGEHealthcarelegalentities.

Harryhasdemonstratedsuccessindrivingstrategyandtransformationtodelivervalueforstakeholders.

COMPANYSECRETARY

GerardoIncollingo

GerardowasappointedCompanySecretaryon22August2016.GerardoisManagingDirectorofLCIPartner’s,afirmofaccountants.

KelvinBoateng

KelvinBoatengwasFarmaForceLimited’sCompanySecretaryandHead,Legal&CommercialAffairsuntilhisresignationon12August2016.

PRINCIPALACTIVITIES

DuringtheyeartheprincipalactivityofFarmaForceLimitedwastheprovisionofservicesasacontractsalesorganisation.

DIVIDENDS

Nodividendshavebeenpaidordeclaredsincetheendofthepreviousfinancialyear,nordothedirectorsrecommendthedeclarationofadividend.

REVIEWOFOPERATIONS

InformationontheoperationsandfinancialpositionofFarmaForceanditsbusinessstrategiesandprospectsissetoutintheoperatingandfinancialreview(“OFR”)onpages4to5.

InformationintheOFRisprovidedtoenableshareholderstomakeaninformedassessmentabouttheCompany’sstrategiesandprospectsforfuturefinancialyears.DetailthatcouldgiverisetolikelymaterialdetrimenttotheCompany(forexample,informationthatiscommerciallysensitive,isconfidentialorcouldgiveathirdpartycommercialadvantage)hasnotbeenincluded.

SIGNIFICANTCHANGESINTHESTATEOFAFFAIRS

TherehavebeennosignificantchangesinthestateofaffairsoftheCompanyduringtheyear.

SIGNIFICANTEVENTSAFTERTHEBALANCEDATE

TherehavebeennosignificanteventsoccurringafterthebalancedatewhichmayaffecttheCompany’soperationsorresultsofthoseoperationsortheCompany’sstateofaffairs.

LIKELYDEVELOPMENTSANDEXPECTEDRESULTS

OFOPERATIONS

LikelydevelopmentsintheoperationsoftheCompanyandtheexpectedresultsofthoseoperationsinfuturefinancialyearshavenotbeenincludedinthisreportastheinclusionofsuchinformationislikelytoresultinunreasonableprejudicetotheCompany.

ENVIRONMENTALREGULATION

TheDirectorsrecognisetheimportanceofenvironmentalandworkplacehealthandsafetyissues.TheDirectorsarecommittedtocompliancewithallrelevantlawsandregulationstoensuretheprotectionoftheenvironment,thecommunityandthehealthandsafetyofemployees.

TheoperationsoftheCompanyarenotsubjecttoanyparticularandsignificantenvironmentalregulationunderthelawsoftheCommonwealthofAustraliaoranyofitsstatesorterritories.

Basedonresultsofenquiriesmade,theBoardisnotawareofanysignificantbreachesofenvironmentalregulationsduringtheperiodcoveredbythisreport.

USEOFFUNDS

InaccordancewithASXListingRule4.10.19,theCompanystatesthatforthewholeofthereportingperiodithasusedthecashandassetsinaformreadilyconvertibletocashthatithadatthetimeofadmissioninawayconsistentwithitsbusinessobjectives.

TheCompanybelievesithasuseditscashinaconsistentmannertowhichwasdisclosedundertheReplacementProspectusdated10August2015.

FARMAFORCELIMITED

DIRECTORS’REPORT


MEETINGSOFDIRECTORS

ThenumberofDirectors’meetingsheld(includingmeetingsofcommitteesoftheBoard)andnumberofmeetingsattendedbyeachoftheDirectorsoftheCompanyduringthefinancialyeararesetoutinthetablebelow.HarrySimeonidiswasappointedsince30June2017andhisattendanceatBoardandCommitteemeetingswillbedisclosedinthe2018AnnualReport.

Director Fullmeetings

ofdirectors

Meetingsofcommittees

Audit&Risk

Management1

Remuneration

&Nomination2

A B A B A B

GeorgeElias 8 7 1 1 1 1

DrGeorgeSyrmalis 8 8 - - - -

ConTsigounis 8 8 - - 1 1

StamatiaTolias 8 4 1 1 1 1

A–Eligibletoattend B–Attended

1TheAudit&RiskManagementCommitteeiscomprisedofthreemembers,beingtwodirectorsandoneexternalconsultant,MrSpiroSakiris.MrSakirisattendedallAudit&RiskManagementCommitteemeetingsfortheperiod.ThecompositionoftheAudit&RiskManagementCommitteechangedon14August2017withthecessationofSpiroSakirisandtheappointmentofHarrySimeonidis.

2ThecompositionoftheRemuneration&NominationCommitteechangedonthe14August2017withtheresignationofStamatiaToliasandtheappointmentofHarrySimeonidis.

REMUNERATIONREPORT

TheRemunerationReportissetoutonpages10to15andformspartoftheDirectors’Reportfortheyearended30June2017.

DIRECTORSINTERESTS

TherelevantinterestsofeachDirectorintheequityoftheCompanyatthedateofthisreportaresetoutinthefollowingtable.

Director Numberof

OrdinaryShares

Numberof

Optionsover

OrdinaryShares

Numberofadditional

OrdinaryShares

subjecttoescrow

GeorgeElias 342,534 125,000 -

DrGeorgeSyrmalis 10,000 - -

ConTsigounis 39,500 - -

HarrySimeonidis - - -

StamatiaTolias - - -

INDEMNIFICATIONANDINSURANCEOFDIRECTORSANDOFFICERS

TheCompanyhas,duringthefinancialyear,paidaninsurancepremiuminrespectofaninsurancepolicyforthebenefitoftheCompanyandthosenamedandreferredtoaboveincludingtheDirectors,companysecretaries,officersandcertainemployeesoftheCompanyandrelatedbodiescorporateasdefinedintheinsurancepolicy.Theinsuranceisappropriatepursuanttosection199BoftheCorporatesAct2001.

Inaccordancewithcommercialpractice,theinsurancepolicyprohibitsdisclosureofthetermsofthepolicy,includingthenatureoftheliabilityinsuredagainstandtheamountofthepremium.

FARMAFORCELIMITED

DIRECTORS’REPORT(CONTINUED)


INDEMNIFICATIONOFAUDITORS

TheCompanyhasnot,duringorsincetheendofthefinancialyearended30June2017,indemnifiedoragreedtoindemnifytheauditoroftheCompanyoranyrelatedentityagainstaliabilityincurredbytheauditor.Duringthefinancialyear,theCompanyhasnotpaidapremiuminrespectofacontracttoinsuretheauditoroftheCompanyoranyrelatedentity.

PROCEEDINGSONBEHALFOFTHECOMPANY

NopersonhasappliedtotheCourtundersection237oftheCorporationsAct2001forleavetobringproceedingsonbehalfoftheCompany,ortointerveneinanyproceedingstowhichtheCompanyisaparty,forthepurposeoftakingresponsibilityonbehalfoftheCompanyforallorpartofthoseproceedings.

NoproceedingshavebeenbroughtorintervenedinonbehalfoftheCompanywithleaveoftheCourtundersection237oftheCorporationsAct2001.

NON-AUDITSERVICES

DuringtheyearRSMAustraliaPartners(“RSM”),theCompany’sauditor,hasperformedcertainotherservicesinadditiontotheauditandreviewofthefinancialstatementsandnotes.

TheBoardhasconsideredthenon-auditservicesprovidedduringtheyearbytheauditor,andissatisfiedthattheprovisionofthosenon-auditservicesduringtheyearbytheauditoriscompatiblewith,anddidnotcompromise,theauditorindependencerequirementoftheCorporationsAct2001(Cth).

DetailsoftheamountspaidtotheauditoroftheCompany,RSManditsnetworkfirmsforauditservicesprovidedduringtheyearended30June2017aredisclosedinnote22oftheconsolidatedfinancialstatements.

AUDITORINDEPENDENCE

Theauditor’sindependencedeclarationissetoutonpage28andformspartoftheDirectors’Reportfortheyearended30June2017.

ROUNDINGOFAMOUNTS

TheamountsintheconsolidatedfinancialstatementshavebeenroundedofftothenearestdollarinaccordancewithASICCorporationInstrument2016/191.

TheDirectors’ReportissignedinaccordancewitharesolutionoftheDirectors.

GeorgeEliasChair

Sydney

29September2017.

jacqueline

Pencil

FARMAFORCELIMITED

REMUNERATIONREPORT(CONTINUED)


REMUNERATION REPORT (AUDITED)

ThisremunerationreportoutlinestheremunerationarrangementsforNon-ExecutiveDirectors,ExecutiveDirectorsandotherKeyManagementPersonnel(“KMP”)oftheCompanyforthefinancialyearended30June2017.

Theinformationinthisreporthasbeenauditedasrequiredbysection308(3C)oftheCorporationsAct2001.

Thereportispresentedunderthefollowingsections:

1. Keymanagementpersonnel(KMP)coveredinthisreport2. Remunerationgovernance3. ExecutiveKMPremunerationarrangements

A. RemunerationprinciplesandstrategyB. Detailofincentiveplans

4. ExecutiveKMPremunerationoutcomes(includinglinktoperformance)5. ExecutiveKMPcontractualarrangements6. Non-executivedirectorarrangements7. Additionaldisclosuresrelatingtooptionsandshares

1.KEYMANAGEMENTPERSONNEL

ThetablebelowoutlinestheKMPatanytimeduringthefinancialyear,andunlessotherwiseindicated,theywereKMPfortheentireyear.

Name Position TermasKMP

Non-ExecutiveDirectors

GeorgeElias Non-ExecutiveDirectorandChair Entireyear

ConTsigounis Non-ExecutiveDirector Entireyear

DrGeorgeSyrmalis Non-ExecutiveDirector Entireyear

StamatiaTolias Non-ExecutiveDirector Until14August2017

ExecutiveDirectors

HarrySimeonidis ExecutiveDirectorandGM Effective14August2017

GeneralManager Appointed27March2017to13August2017

StamatiaToliaswasamemberoftheKMPforthefullfinancialyearandceasedtobeaDirectoron14August2017.

2.REMUNERATIONGOVERNANCE

TheBoardhasestablishedaremunerationandnominationcommittee(“RNC”)whichiscurrentlycomprisedofthefollowingmembers:

Committeemember

GeorgeElias ChairofRNC

ConTsigounis Member

StamatiaTolias MemberuntilresignedasaDirectoron14August2017

FARMAFORCELIMITED



2.REMUNERATIONGOVERNANCE(CONTINUED)

ThekeyresponsibilityoftheRNCistoassisttheBoardinitsoversightof:

• theremunerationframeworkandpolicyforExecutiveandemployeereward;

• thedeterminationofappropriateExecutivereward,includingadviceonstructure,quantumandmix;

• thedeterminationofachievementofperformancemeasuresincludedinanyvariableremunerationplan;

• compliancewithapplicablelegalandregulatoryrequirements;and

• boardsize,compositionandsuccessionplanning.

AfullcharteroutliningtheRNC’sresponsibilitiesisavailableat:www.farmaforce.com.au/corporate-governance/.

3.EXECUTIVEKMPREMUNERATIONARRANGEMENTS

3ARemunerationprinciplesandstrategy

TheremunerationpolicyofFarmaForcehasbeendesignedtoalignKMPobjectiveswithshareholderandbusinessobjectivesbyprovidingafixedremunerationcomponentandofferingspecificlong-termincentivesbasedonkeyperformanceareasaffectingthefinancialresults.

InFY17theexecutiveremunerationframeworkconsistedoffixedremunerationandshortandlong-termincentivesasoutlinedbelow.TheCompanyaimstorewardexecutiveswithalevelandmixofremunerationappropriatetotheirposition,responsibilitiesandperformancewithintheCompanyandalignedwithmarketpractice.RemunerationlevelsareconsideredannuallythrougharemunerationreviewwhichconsidersmarketdataandtheperformanceoftheCompanyandindividual.

3BDetailofincentiveplans

Short-termincentive(STI)

TheCompanyoperatesanannualSTIprogramavailabletoexecutivesandawardsacashincentivesubjecttotheattainmentofclearlydefinedkeyperformancemeasures.

AsummaryoftheExecutiveSTIplanineffectduringFY17isprovidedbelow:

Whoparticipates? HarrySimeonidis

HowisSTIdelivered? Cash

WhatistheSTIopportunity? Upto20%ofbasesalary

WhataretheperformanceconditionsforFY17?

Individualperformancegoalsagainstannualplans.

Howisperformanceassessed? Onanannualbasis,afterconsiderationofperformanceagainstkeyperformanceindicators(KPI).

NoSTIwasduefortestinginFY17asnoserviceperiodshadyetbeenmet.

Employeebenefitplan(EBP)

EBPgrantsaremadeannuallytoexecutivesinordertoalignremunerationwiththecreationofshareholdervalueoverthelong-term.

ThefollowingtableexplainsthekeyfeaturesoftheEBPawardsofferedtoExecutivesduringFY17.

FARMAFORCELIMITED



3.EXECUTIVEKMPREMUNERATIONARRANGEMENTS(CONTINUED)

Employeebenefitplan(EBP)(continued)

Whoparticipates? AllemployeesoftheCompany.

HowisLongTermIncentive(LTI)delivered? Entitlementtosharesandperformancerights.

WhataretheperformanceconditionsfortheFY17grant?

Individualperformancegoalsagainstannualplans.

Howisperformanceassessed? Attheendoftherelevantperformanceperiod,theCompanywilldeterminewhetherandtowhatextenttheparticipanthassatisfiedtheapplicableperformancecriteria.

Whendoestheawardvest? Awardsvestafteratotalofthreeyears'continualservicefollowingachievementoftheapplicableperformancecriteria.

Howaregrantstreatedontermination? Theparticipantmustbeacurrentemployeeatvestingdateinordertobeentitledtoshares.

Howaregrantstreatedifachangeofcontroloccurs?

IfatakeoverbidorotherofferismadetoacquiresomeoralloftheissuedsharesoftheCompany,participantswillgenerallybeentitledtorequestthatallperformancerightsvestimmediately,regardlessofwhethertherelevantperformanceconditionshavebeensatisfied.

DoparticipantsreceivedistributionsordividendsonunvestedEBPgrants?

ParticipantsdonotreceivedistributionsordividendsonunvestedEBPgrants.

NoLTIwasduefortestinginFY17asnoserviceperiodshadyetbeenmet.

4.EXECUTIVEKMPREMUNERATIONOUTCOMESFOR2017

GroupperformanceanditslinktoSTI

KeyPerformanceIndicators(KPIs)aresetannually,withacertainlevelofconsultationwithKMP.Themeasuresarespecificallytailoredtotheareaeachindividualisinvolvedinandhasalevelofcontrolover.TheKPI’stargetareastheCompanybelievesholdgreaterpotentialforgroupexpansionandprofit,coveringfinancialandnon-financialaswellasshort-termandlong-termgoals.ThelevelsetforeachKPIisbasedonbudgetedfiguresfortheCompanyandrespectiveindustrystandards.

ThetablebelowprovidesasummaryoftheCompany’sperformanceinFY17.TheinformationbelowistakenintoaccountbytheBoardwhensettinganddeterminingshort-termandlong-termremunerationforKMP.

Noshort-termincentivepaymentsorEBPawardsweremadeintheperiodto30June2017or30June2016.

Shareperformance EarningsperformanceA$millions

Period Closingshare

priceat30June

Dividendper

share

EPS Revenue Lossaftertax

FY2017 $0.10 NIL ($1.81) $4.0 ($2.3)

FY2016 $0.14 NIL ($4.34) $2.0 ($3.8)

FY2015 NA^ NIL NA $0.0 ($2.0)

^FarmaForcelistedon27October2015at$0.31pershare.

FARMAFORCELIMITED



4. EXECUTIVEKMPREMUNERATIONOUTCOMESFOR2017(CONTINUED)

ExecutiveKMPremunerationdisclosurefortheyearended30June2017

ThefollowingtableofexecutiveKMPremunerationhasbeenpreparedinaccordancewithaccountingstandardsandtheCorporationsAct2001requirements,fortheperiod1July2016to30June2017.

KMP ShortTerm Post

employ-

ment

Sharebased

payments

Total

Name Year Base

salary

Cash

bonus

Non-

cash

benefit

Other Super-

annuation

Options Shares Total Perfor-

mance

related

%

HarrySimeonidis

2017 65,423 - 1,464 - 6,055 - - 72,942 -

2016 - - - - - - - - -

Total

executive

KMP

2017 65,423 - 1,464 - 6,055 - - 72,942 -

2016 - - - - - - - - -

5. EXECUTIVEKMPCONTRACTUALARRANGEMENTS

RemunerationarrangementsforexecutiveKMPareformalisedinemploymentagreements.Thekeytermsandconditionsofexecutiveemploymentagreementsfortheyearended30June2017areoutlinedinthetablebelow.

DrGeorgeSyrmalisistheGroupChiefExecutiveOfficerandisemployedbythegroupparententityiQnovateLtd.DrGeorgeSyrmalisdoesnothaveanemploymentagreementwithFarmaForceLimitedinhiscapacityasiQNGroupCEO.

Executive Position Effective

date

Fixedannual

remuner-

ation1

Term Executive

notice

period

Company

notice

period2

Termination

payment

HarrySimeonidis

GeneralManager

27March2017

$267,950 Ongoing 3months 3months SubjecttotheterminationbenefitscapundertheCorporationsAct

1FixedAnnualRemunerationincludesbasesalaryof$243,950grosssalary,plus$24,000carallowance.2The

Companymayterminateemploymentimmediatelyandwithoutnoticeincertaincircumstances,including

wheretheexecutivehascommittedaseriousorpersistentbreachoftheiremploymentagreementorwheretheexecutivehasbeendishonestorfraudulentinthecourseofperformingtheirduties.

6. NON-EXECUTIVEDIRECTORARRANGEMENTS

DeterminationoffeesandmaximumaggregateNEDfeepool

TheConstitutionoftheCompanyprovidesthatnon-executivedirectors,otherthanaManagingDirectororanExecutiveDirector,areentitledtoDirector’sfeesasdeterminedbytheDirectors,butnotexceedinginaggregateforanyfinancialyear,themaximumsumthatisfromtimetotimeapprovedbytheCompanyinGeneralMeeting.Atthedateofthisreportthismaximumsumis$300,000(inclusiveofsuperannuation).

FARMAFORCELIMITED



6. NON-EXECUTIVEARRANGEMENTS(CONTINUED)

Feepolicy

NEDfeesconsistofbasefeesandcommitteefees.ThepaymentofcommitteefeesrecognisestheadditionaltimecommitmentrequiredbyNEDswhoserveonboardcommittees.DirectorswhoalsochairtheAuditandRiskManagementCommitteeshallbeentitledtoanadditionalfeeof$5,000(includingsuperannuation)perannum.Thechairoftheboardattendsallcommitteemeetingsbutdoesnotreceiveanyadditionalcommitteefeesinadditiontobasefees.

NEDsmaybereimbursedforexpensesreasonablyincurredinattendingtotheCompany’saffairs.NEDsdonotreceiveretirementbenefits,nordotheyparticipateinanyincentiveprograms.

StatutoryremunerationtableforFY17

ThetablebelowsetsouttheelementsofNEDfeesandotherbenefitsprovidedduring2017.

Feesapplicablefor2017 Chair Member

Board $35,000 $35,000

AuditandRiskManagementCommittee $5,000 Nil

RemunerationandNominationCommittee Nil Nil

Superannuation Includedinaboveamounts.

Other Reimbursementoftravelandotherexpensesnecessarilyincurredinexercisingtheirduties.

Non-executiveremunerationdisclosurefortheyearended30June2017

Thefollowingtableofnon-executiveremunerationhasbeenpreparedinaccordancewithaccountingstandardsandtheCorporationsAct2001requirements,fortheperiod1July2016to30June2017.AllamountsareinAUD.

NED Year Boardand

Committeefees

Non-cash

benefits

Super-

annuation

Total Performance

Related%

GeorgeElias 2017 31,964 - 3,036 35,000 -

2016 29,669 - 2,818 32,487 -

StamatiaTolias 2017 35,000 - - 35,000 -

2016 32,487 - - 32,487 -

TotalNED 2017 66,964 - 3,036 70,000 -

2016 62,156 - 2,818 64,974 -

DrGeorgeSyrmalisisemployedbytheparententityofFarmaForce,iQnovateLtd(“iQN”),inthecapacityofGroupCEO.DrGeorgeSyrmalisdoesnotreceiveremunerationofanykindfromFarmaForceLimitedinhiscapacityastheiQNGroupCEO.

ConTsigounisisemployedbytheparententityofFarmaForce,iQnovateLtd,anddoesnotreceiveremunerationofanykindfromFarmaForceLimitedinhiscapacityasaNon-ExecutiveDirectorofFarmaForce.

FARMAFORCELIMITED



7.ADDITIONALDISCLOSURESRELATINGTOOPTIONSANDSHARES

MovementsinEquityHoldingsofKMP

ThefollowingtablesetsoutthemovementduringthereportingperiodinthenumberofordinarysharesinFarmaForceLimitedhelddirectly,indirectly,orbeneficiallybyKMPincludingtheirrelatedparties.

KMP Heldat1

July2016

Grantedas

remuneration

Received

onvesting

ofrights

Netchange

other^

Forfeited Heldat30

June2017

Non-executiveDirectors

GeorgeElias 275,000 - - 67,534 - 342,534

ConTsigounis - - - 39,500 - 39,500

DrGeorgeSyrmalis 10,000 - - - - 10,000

StamatiaTolias - - - - - -

ExecutiveDirectors

HarrySimeonidis - - - - - -

TotalKMP 285,000 - - 107,034 - 392,034

^On-marketpurchaseoffullypaidordinaryshares.

MovementsinOptionsHoldingsofKMP

Thefollowingtablesetsoutthemovementduringthereportingperiodinthenumberofpre-IPOOptionsinFarmaForceLimitedhelddirectly,indirectly,orbeneficiallybyKMPincludingtheirrelatedparties.

KMP Heldat1

July2016

No.granted

asremun-

eration

No.

vested

No.

cancelled

No.

forfeited

Heldat30

June2017

Non-executiveDirectors

GeorgeElias 125,000 - - - - 125,000

ConTsigounis - - - - - -

DrGeorgeSyrmalis - - - - - -

StamatiaTolias - - - - - -

ExecutiveDirectors

HarrySimeonidis - - - - - -

TotalKMP 125,000 - - - - 125,000

FARMAFORCELIMITEDCORPORATEGOVERNANCESTATEMENT


CORPORATE GOVERNANCE STATEMENT

TheBoardofDirectorsofFarmaForceLimited(“FarmaForce”or“theCompany”)isresponsibleforthecorporategovernanceoftheCompany.TheBoardguidesandmonitorsthebusinessofFarmaForceonbehalfofitsshareholders.

FarmaForceanditsBoardcontinuetobefullycommittedtoachievinganddemonstratingthehigheststandardsofaccountabilityandtransparencyintheirreportingandseethecontinueddevelopmentoftheCompany’scorporategovernancepoliciesandpracticesasfundamentaltoFarmaForce’ssuccessfulgrowth.

TheBoardhasincludedinitscorporategovernancepoliciesthosematterscontainedintheAustralianSecuritiesExchangeCorporateGovernanceCouncil’sCorporateGovernancePrinciplesandRecommendations3rdEdition(“ASXRecommendations”)whereapplicable.However,theBoardalsorecognisesthatfulladoptionoftheASXRecommendationsmaynotbepracticalorprovidetheoptimalresultgiventheparticularcircumstancesoftheCompany.

Thiscorporategovernancestatementiseffectiveasat30September2017.IthasbeenapprovedbytheBoardofDirectorsandoutlinesFarmaForce’scorporategovernancepoliciesandpracticesthatithasadopted.

ASXCorporateGovernanceCouncilPrinciplesandRecommendations

RecommendationFollowed CommentbyFarmaForce

Principle1:LaysolidfoundationsformanagementandoversightAlistedentityshouldestablishanddisclosetherespectiverolesandresponsibilitiesofitsboardandmanagementandhowtheirperformanceismonitoredandevaluated.

Recommendation1.1Alistedentityshoulddisclose:

a) Therespectiverolesandresponsibilitiesofitsboardandmanagement;and

b) Thosemattersexpresslyreservedtotheboardandthosedelegatedtomanagement.

Yes TheBoardhasadoptedaBoardCharterwhichclearlysetsoutthewayFarmaForceisgovernedandarticulatesthedivisionofresponsibilitiesbetweentheBoardandtheExecutiveTeam.TheBoardisresponsiblefortheoveralloperationandstewardshipoftheCompanyand,inparticular,isresponsibleforthelong-termgrowthandprofitabilityoftheCompany.TheCharterwasmostrecentlyreviewedandamendedinJuly2015andmaybereviewedbytheBoardasrequired.AcopyoftheBoardCharterisavailableathttp://www.farmaforce.com.au/corporate-governance/.TheBoardhasestablishedtwoCommittees.Theyare:

• AuditandRiskCommittee;and• RemunerationandNominationCommittee

FARMAFORCELIMITEDCORPORATEGOVERNANCESTATEMENT(CONTINUED)




DelegationtotheExecutiveTeamTheBoardhasdelegatedtotheExecutiveTeamresponsibilityforimplementingFarmaForce’sstrategicdirectionandforthegeneralandoverallmanagementoftheCompany.

Recommendation1.2Alistedentityshould:a) Undertakeappropriatechecksbeforeappointinga

person,orputtingforwardtosecurityholdersacandidateforelection,asaDirector;and

b) Providesecurityholderswithallmaterialinformationinitspossessionrelevanttoadecisiononwhetherornottoelectorre-electaDirector.

Yes PriortoappointingaDirectororputtingforwardanewcandidateforelection,appropriatescreeningchecksareundertakenastotheperson’scriminalhistoryandbankruptcyhistory.WhenpresentingaDirectorforre-election,theCompanyprovidesshareholderswithallmaterialinformationintheCompany’spossessionrelevanttoadecisionwhetherornottoelectorre-electaDirector.

Recommendation1.3A listed entity shouldhave awritten agreementwitheach Director and Senior Executive setting out thetermsoftheirappointment.

Yes NewDirectorsconsenttoactasaDirectorandreceiveaformalletterofappointmentwhichsetsouttheirdutiesandresponsibilities,rights,remuneration,entitlementsandothertermsoftheirappointment.EachExecutiveisemployedunderaserviceagreementwhichsetsoutthetermsuponwhichtheyareemployedincludingdetailssuchasdutiesandresponsibilities,rights,termofemploymentandremuneration.TheServiceAgreementalsosetsoutthecircumstancesinwhichtheemploymentoftheExecutivemaybeterminatedbyeitherFarmaForceortheExecutive,includingdetailsofthenoticeperiodsrequiredtobegivenbyeitherparty,andtheamountspayabletotheExecutiveinlieuofnoticewhereapplicable.

Recommendation1.4The Company Secretary of a listed entity should beaccountable directly to theBoard, through theChair,onallmatterstodowiththeproperfunctioningoftheBoard.

Yes TheCompanySecretaryisresponsiblefortheoperationandmanagementoftheCompany’ssecretariatfunction.TheCompanySecretaryreportstotheChairman(onbehalfoftheBoard)withrespecttotheproperfunctioningoftheBoard.EachmemberoftheBoardhasaccesstotheCompanySecretary.TheappointmentandremovaloftheCompanySecretaryisdeterminedbytheBoard.

Recommendation1.5Alistedentityshould:a) Haveadiversitypolicywhichincludes

requirementsfortheBoardorarelevantcommitteeoftheBoardtosetmeasurableobjectivesforachievinggenderdiversityandto

No–ReferComments

FarmaForce’sDiversityPolicydescribesFarmaForce’sapproachtodiversityandinclusionandhowtheseattributesaretobeembeddedinFarmaForce’sculture.FarmaForceisanequalopportunityemployer,whichemploysandpromotesonthebasisofmerit.TheCompany’sDiversityPolicyextendsbeyondgenderandrecognizesthevaluecontributedtotheorganisationbyemployingpeoplewithvaryingskills,culturalbackgrounds,gender,ethnicityandexperience.FarmaForcebelievesitsdiverseworkforceis





assessannuallyboththeobjectivesandtheentity’sprogressinachievingthem;b) Disclosethatpolicyorasummaryofitc) Discloseattheendofeachreportingperiod

themeasurableobjectivesforachievinggenderdiversitysetbytheBoardorarelevantcommitteeoftheBoardinaccordancewiththeentity’sdiversitypolicyanditsprogresstowardsachievingthem,andeither:(i) Therespectiveproportionsofmenand

womenontheBoard,inseniorexecutivepositionsandacrossthewholeorganisation(includinghowtheentityhasdefined‘seniorexecutive’forthesepurposes);or

(ii) Iftheentityisa‘relevantemployer’undertheWorkplaceGenderEqualityAct,theentity’smostrecent“GenderEqualityIndicators”,asdefinedinandpublishedunderthatAct.

thekeytoitscontinuedgrowth,improvedproductivityandperformance.ThecompanydoesnothavemeasurableobjectivesinplaceanddoesnotcomplywithRecommendation1.5.However,theBoardfeelsthatthroughbeinganequalopportunityemployer,whichemploysandpromotesonthebasisofmerit,theCompanyisalreadyachievinggenderdiversitywithintheorganisationasreflectedinthefollowingtable:

TheCompany’sDiversityPolicyispublishedontheCompany’swebsiteat:http://www.farmaforce.com.au/corporate-governance/

Recommendation1.6Alistedentityshould:

a) HaveanddiscloseaprocessforperiodicallyevaluatingtheperformanceoftheBoard,itscommitteesandindividualDirectors;and

b) Disclose,inrelationtoeachreportingperiod,whetheraperformanceevaluationwasundertakeninthereportingperiodinaccordancewiththatprocess.

Yes EvaluationofBoardandIndividualDirectorsAsstatedintheBoardCharterandtheRemunerationandNominationCommitteeCharter,theCommitteehasdevelopedaprocessforperiodicallyevaluatingtheperformanceoftheBoardanditsCommittees.TheCompany’spoliciesprovidefortheBoardtoregularlyreviewitsownperformanceandtheperformanceofindividualDirectors.AnindependentreviewoftheperformanceoftheBoardmaybeconductedfromtimetotime.Asattheendofthereportingperiod,theCompanyhasnotconductedaperformanceevaluationinrelationtothereportingperiod.TheBoardintendstoconductaperformanceevaluationperiodically.





Recommendation1.7Alistedentityshould:a) Haveanddiscloseaprocessforperiodically

evaluatingtheperformanceofitsseniorexecutives;and

b) Disclose,inrelationtoeachreportingperiod,whetheraperformanceevaluationwasundertakeninthereportingperiodinaccordancewiththatprocess.

Yes Theperformanceofseniorexecutivesisreviewedagainstspecificmeasurableandqualitativeindicatorssetoutintherelevantexecutive’sServiceAgreement,whichmayinclude:

Ø FinancialmeasureoftheCompany’sperformanceØ Achievementofstrategicobjectives;andØ Achievementofkeyoperationaltargets

DuringthereportingperiodperformanceevaluationsoftheseniorexecutiveswereundertakenbytheCompanyinaccordancewiththeseprocesses.

Principle2:StructuretheBoardtoaddvalueAlistedentityshouldhaveaBoardofanappropriatesize,composition,skillsandcommitmenttoenableittodischargeitsdutieseffectively

Recommendation2.1TheBoardofalistedentityshould:a) HaveaNominationCommitteewhich:(i) Hasatleastthreemembers,amajorityof

whomareindependentdirectors;and(ii) Ischairedbyanindependentdirector,anddisclose:(iii) ThecharteroftheCommittee;(iv) ThemembersoftheCommittee;(v) Asattheendofeachreportingperiod,the

numberoftimestheCommitteemetthroughouttheperiodandtheindividualattendancesofthemembersatthosemeetings;or

b) IfitdoesnothaveaNominationCommittee,disclosethatfactandtheprocessesitemploystoaddressBoardsuccessionissuesandtoensurethattheBoardhastheappropriatebalanceofskills,knowledge,experience,independenceanddiversitytoenableittodischargeitsdutiesandresponsibilitieseffectively.

No–ReferComments

TheBoardhasestablishedaRemunerationandNominationsCommittee.TheCommitteeiscurrentlycomprisedofMrGeorgeElias,MrConTsigounis(non-executiveDirectors)andMrHarrySimeonidis(executiveDirector).MsStamatiaToliawasanindependentmemberoftheCommitteeforthemajorityofthereportingperiod,resigningonthe14thAugust2017.MrSimeonidiswasappointedtotheCommitteeonthatdate.MrEliasistheChairmanoftheCommitteeandisconsideredbytheBoardtobeanindependentDirector.ForthemajorityofthereportingperiodtheCommitteecomprisedthreemembers,ofwhichtwowereindependent.Accordingly,fromthe14thAugust2017,theCommitteedoesnotcurrentlyhaveamajorityofindependentDirectorsanddoesnotcomplywithRecommendation2.1.GiventhesizeoftheCompany,theBoardisconfidentthattheCommitteehasthebreadthofexperiencenecessarytoeffectivelymeetalltherequirementsundertheCharter.TheCommitteehasadoptedaformalCharterthatisavailableonFarmaForce’swebsite.





Recommendation2.2AlistedentityshouldhaveanddiscloseaBoardSkillsMatrixsettingoutthemixofskillsanddiversitythattheBoardcurrentlyhasorislookingtoachieveinitsmembership.

No–ReferComments

FarmaForceseekstomaintainaBoardofDirectorswithabroadrangeofcommercialandotherskills,experiencesandknowledgerelevanttooverseeingthebusinessofacontractsalesorganisation.WhilsttheBoarddoesnothaveaformalBoardSkillsMatrix,andthereforedoesnotcomplywithRecommendation2.2,theBoarddoeshaveregardtotheexistingskillsetsofDirectorswhenconsideringnewappointments.

Recommendation2.3Alistedentityshoulddisclose:a) ThenamesoftheDirectorsconsideredbythe

BoardtobeindependentDirectors;b) IfaDirectorhasaninterest,position,association

orrelationshipofthetypedescribedinbox2.3buttheBoardisoftheopinionthatitdoesnotcompromisetheindependenceoftheDirector,thenatureoftheinterest,position,associationorrelationshipinquestionandanexplanationofwhytheBoardisofthatopinion;and

c) ThelengthofserviceofeachDirector.

Yes FarmaForceconsidersaDirectortobeindependentiftheDirectorisindependentofmanagementandfreeofanybusinessorotherrelationshipthatcouldmateriallyinterfere,orbeperceivedasinterfering,withtheexerciseofanunfetteredandindependentjudgementinrelationtomattersconcerningFarmaForce’sbusiness.MrGeorgeEliasisconsideredbytheBoardtobeanindependentmemberoftheBoard.ThelengthofserviceofeachDirectorisasfollows:

Ø MrGeorgeElias,2yearsand5months;Ø DrGeorgeSyrmalis,1yearand10months;Ø MrConTsigounis,2yearsand2months;Ø MrHarrySimeonidis,lessthan1month.

Recommendation2.4A majority of the Board of a listed entity should beindependentDirectors.

No–ReferComments

TheBoardiscomprisedoffourmembers(MrGeorgeElias,MrConTsigounis,DrGeorgeSyrmalis,andMrHarrySimeonidis)andhasamajorityofnon-executiveDirectors.MrEliasisconsideredbytheBoardtobeindependent.MrTsigounisandDrSyrmalisarenomineeDirectorsoftheCompany’smajorityshareholder,iQnovateLtd,andarenotconsideredindependent.Thefourthmember,MrSimeonidis,istheCompany’sonlyexecutiveDirector.Accordingly,theCompanydoesnothaveamajorityofindependentDirectorsanddoesnotcomplywithRecommendation2.4.TheBoardconsidersthistobeanappropriatealternativetotherequirementsforamajorityofindependentDirectorsconsideringthesizeandcomplexityofthebusiness.

Recommendation2.5TheChairoftheBoardofalistedentityshouldbeanindependentDirectorand,inparticular,shouldnotbethesamepersonastheCEOoftheentity.

Yes TheChairmanoftheBoardisMrGeorgeElias,anindependent,Non-executiveDirector.





Recommendation2.6AlistedentityshouldhaveaprogramforinductingnewDirectorsandprovideappropriateprofessionaldevelopmentopportunitiesforDirectorstodevelopandmaintaintheskillsandknowledgeneededtoperformtheirroleasDirectorseffectively.

Yes AnewDirectorisofferedaninductionandtrainingprogramabouttheCompany,itspoliciesandchartersandtheDirector’srolesandresponsibilities.NewDirectorsalsohavetheopportunitytomeetwithkeymanagementstaff.Aspartofitsongoingreviewofitsownperformanceandskillset,theBoardprovidedprofessionaldevelopmentopportunitiesbyupdatingDirectorsonskillsetsrequiredspecifictotheorganisation.

Principle3:ActEthicallyandresponsiblyAlistedentityshouldactethicallyandresponsibly


a) HaveacodeofconductforitsDirectors,seniorexecutivesandemployees;and

b) Disclosethatcodeorasummaryofit

Yes TheBoardinsistsonthehighestethicalstandardsfromallofficersandemployeesofFarmaForceandisconscioustoensureappropriatecorporateprofessionalconductatalltimes.Assuch,theBoardhasadoptedaCodeofConducttoprovideasetofguidingprincipleswhichmustbeobservedbyallDirectors,seniorexecutivesandemployeesofFarmaForce.AcopyoftheCodeofConductisavailableontheFarmaForcewebsite.

Principle4:SafeguardintegrityincorporatereportingAlistedentityshouldhaveformalandrigorousprocessesthatindependentlyverifyandsafeguardtheintegrityofitscorporatereporting

Recommendation4.1TheBoardofalistedentityshould:

a) HaveanAuditCommitteewhich:(i) Hasatleastthreemembers,allofwhom

areNon-executiveDirectorsandamajorityofwhomareindependentDirectors;and

(ii) IschairedbyanindependentDirector,whoisnotthechairoftheBoard,

anddisclose:(iii) TheCharteroftheCommittee;(iv) Therelevantqualificationsand

experienceofthemembersoftheCommittee;and

No–ReferComments

TheBoardhasestablishedanAuditandRiskCommitteetoprovideassistancetotheBoardandhasadoptedaformalCharterfortheCommittee.AcopyoftheCommittee’sCharterisavailableontheFarmaForcewebsite.Forthemajorityofthereportingperiod,theCommitteecomprisedthreemembers,ofwhichtwowereindependentDirectors,MrGeorgeEliasandMsStamatiaTolia.MsToliaresignedasaDirectoron14August2017.Therewasalsoanadditionalmemberbyinvitation,MrSpiroSakiris.TheCommitteemeton28August2017,followingthismeeting,MrSakirisceasedtobeanadditionalmemberbyinvitation.Consequently,from28August2017,theCommitteecomprisedonly2members,MrElias,(anindependentmember)andMrHarrySimeonidis(anon-independentExecutiveDirector).TheCompanydoesnotcomplywithRecommendation4.1.TheBoardconsidersthatthesizeoftheCommitteeisgenerallyappropriatewithregardstothesizeandcomplexityofthebusiness.Duringthesubsequentreportingperiod,theBoardwillconsiderwhetheritisnecessaryorappropriatetomakeafurtherappointmenttotheCommittee.ThequalificationsandexperienceofthemembersoftheCommittee,thenumberoftimes





(v) Inrelationtoeachreportingperiod,thenumberoftimesthecommitteemetthroughouttheperiodandtheindividualattendancesofthemembersatthosemeetings;or

b) IfitdoesnothaveanAuditCommittee,disclosethatfactandtheprocessesitemploysthatindependentlyverifyandsafeguardtheintegrityofitscorporatereporting,includingtheprocessesfortheappointmentandremovaloftheexternalauditorandtherotationoftheauditengagementpartner.

theCommitteehasmetandtherespectivememberattendeesduringthereportingperiodaredisclosedintheAnnualReport.

Recommendation4.2TheBoardofalistedentityshould,beforeitapprovestheentity’sfinancialstatementsforafinancialperiod,receivefromitsCEOandCFOadeclarationthat,intheiropinion,thefinancialrecordsoftheentityhavebeenproperlymaintainedandthatthefinancialstatementscomplywiththeappropriateaccountingstandardsandgiveatrueandfairviewofthefinancialpositionandperformanceoftheentityandthattheopinionhasbeenformedonthebasisofasoundsystemofriskmanagementandinternalcontrolwhichisoperatingeffectively.

Yes InadditiontotheroleoftheAuditandRiskCommitteeinreviewingandreportingonthefinancialstatements,priortothefinancialstatementsforafinancialyearbeingpresentedtotheBoardfortheirapproval,theCEOandCFOprovidetheBoardwithadeclarationthat,intheiropinion,thefinancialrecordsoftheCompanyhavebeenproperlymaintainedinaccordancewiththeCorporationsActandthatthefinancialstatementscomplywiththeappropriateaccountingstandardsandgiveatrueandfairviewofthefinancialpositionandperformanceoftheCompanyandtheiropinionhasbeenformedonthebasisofasoundsystemofriskmanagementandinternalcontrolwhichisoperatingeffectively.

Recommendation4.3AlistedentitythathasanAGMshouldensurethatitsexternalauditorattendsitsAGMandisavailabletoanswerquestionsfromsecurityholdersrelevanttotheaudit.

Yes TheAuditorisinvitedtoattendeachAnnualGeneralMeetingoftheCompany,andtobeavailabletoanswershareholderquestionsabouttheconductoftheauditandpreparationandcontentoftheAuditor’sReport.





Principle5:MaketimelyandbalanceddisclosureAlistedentityshouldmaketimelyandbalanceddisclosureofallmattersconcerningitthatareasonablepersonwouldexpecttohaveamaterialeffectonthepriceorvalueofitssecurities.


a) HaveawrittenpolicyforcomplyingwithitscontinuousdisclosureobligationsundertheListingRules;and

b) Disclosethatpolicyorasummaryofit.

Yes FarmaForcehasadoptedaContinuousDisclosurePolicytoensurethattheCompanyeffectivelydischargesitsdisclosureobligationsincompliancewiththeListingRulesinordertokeepthemarketinformedofeventsanddevelopmentsrelatingtotheCompanyanditsaffairs.TheFarmaForceContinuousDisclosurePolicyisavailableontheCompany’swebsite.

Principle6:RespecttherightsofsecurityholdersAlistedentityshouldrespecttherightsofitssecurityholdersbyprovidingthemwithappropriateinformationandfacilitiestoallowthemtoexercisethoserightseffectively.

Recommendation6.1Alistedentityshouldprovideinformationabout itselfanditsgovernancetoinvestorsviaitswebsite.

Yes TheFarmaForcewebsitecontainsinformationabouttheCompanywhichmayassistaninvestorinmakinganinformeddecisionabouttheCompany.TheCompany’swebsiteincludesinformationregardingitsgovernanceandrelevantpolicies:http://www.farmaforce.com.au/corporate-governance/

Recommendation6.2A listed entity should design and implement aninvestor relations program to facilitate effective two-waycommunicationwithinvestors.

Yes FarmaForcehasestablishedaformalShareholderCommunicationsStrategyandtakesappropriatemeasurestokeepshareholdersinformedaboutitsactivities.TheCompanycommunicateswithitsshareholdersthroughitsannualreport,disclosurestotheASX,attheAnnualGeneralMeeting(AGM)andviatheCompany’swebsite.Inaddition,shareholdershavetheopportunitytoelecttoreceiverelevantdocumentationelectronicallyfromtheCompany,viatheCompany’sRegistryandcancommunicatewiththeCompanyviaemail.Throughvariousmeansofcommunication,theCompanyaimstoprovideshareholderswithaclearandbalancedunderstandingoftheaimsandobjectivesoftheCompany.CopiesofallrelevantcorporategovernancedocumentsrelatingtotheCompanycanbefoundinthecorporategovernancesectionoftheCompany’swebsite.AllshareholdershavetheopportunitytoattendtheAnnualGeneralMeetingandsubmitquestions.





Recommendation6.3Alistedentityshoulddisclosethepoliciesandprocessesithasinplacetofacilitateandencourageparticipationatmeetingsofsecurityholders.

Yes ShareholdersareencouragedtoattendandparticipateatGeneralMeetings.Accordingly,theBoardwillensurethatmeetingsareheldduringnormalbusinesshoursandatalocationconsideredtobemostconvenientforthegreatestpossiblenumberofshareholderstoattend.ThefulltextofnoticesandaccompanyingmaterialswillbeincludedonFarmaForce’swebsite.Informationwillbepresentedinaclearandconcisemanneranddesignedtoprovideshareholdersandthemarketwithfullandaccurateinformation.AttheAnnualGeneralMeeting,theChairmanfollowedtheprocessofaddressinganyrelevantquestionsfromshareholders.Inaddition,theCompanyensuredthattheCompany’sauditorattendedtheAGMorothermeetingsoftheCompanyandshareholderswereaffordedtheopportunityofaskingtheCompany’sAuditorquestionsregardingtheconductandcontentoftheaudit.

Recommendation6.4Alistedentityshouldgivesecurityholderstheoptiontoreceivecommunicationsfrom,andsendcommunicationsto,theentityanditssecurityregistryelectronically.

Yes FarmaForce encourages its shareholders to receive communications from it and its shareregistryelectronically.

Principle7:RecogniseandmanageriskAlistedentityshouldestablishasoundriskmanagementframeworkandperiodicallyreviewtheeffectivenessofthatframework.

Recommendation7.1TheBoardofalistedentityshould:a) HaveaCommitteeorCommitteestooversee

risk,eachofwhich:(i) Hasatleastthreemembers,amajorityof

whomareindependentdirectors;and(ii) Ischairedbyanindependentdirector,anddisclose(iii) TheCharteroftheCommittee(iv) ThemembersoftheCommittee;and(v) Asattheendofeachreportingperiod,the

numberoftimestheCommitteemetthroughouttheperiodandtheindividualattendancesofthemembersatthosemeetings;or

No–ReferComments

The Board has overall responsibility to ensure that there is a sound system of riskmanagementandinternalcontrolsacrossthebusiness.DuetothesizeoftheCompanyandscaleofoperationsof itsbusiness,theCompanydoesnothaveaseparateRiskCommittee,butratheracombinedAuditandRiskCommittee.TheBoardhasdelegatedresponsibility for the identification,assessmentandmanagementof risks relatingofbothFarmaForce’s internal andexternal controls to FarmaForce’sAuditandRiskCommittee.Seeitem4.1fordetailsofthecompositionoftheAuditandRiskCommittee.The number of times the Committee has met and attendance by members during thereportingperiodisdisclosedintheCompanyAnnualReport.TheBoardconsidersthistobeanappropriatealternativetotherequirementsforamajorityof independent Directors on the Audit and Risk Committee considering the size andcomplexityofthebusiness.





b) IfitdoesnothaveaRiskCommitteeorCommitteesthatsatisfy(a)above,disclosethatfactandtheprocessesitemploysforoverseeingtheentity’sriskmanagementframework

Recommendation7.2TheBoardoraCommitteeoftheBoardshould:

a) Reviewtheentity’sriskmanagementframeworkatleastannuallytosatisfyitselfthatitcontinuestobesound;and

b) Disclose,inrelationtoeachreportingperiod,whethersuchareviewhastakenplace.

Yes TheBoardofFarmaForceretainsoverallresponsibilityoftheCompany’sRiskManagementframeworkwiththeassistanceoftheAudit&RiskCommittee.Itunderstandsthatthemanagementofriskisacontinuousprocessandanintegralpartofgoodbusinessmanagementandcorporategovernance.TheCompanyoperateswithintheservicessector,andisthereforeexposedtoarangeofrisks,whichinclude(butarenotlimitedto)market,operational,regulatoryandreputationalrisks.TheAudit&RiskCommitteeisresponsiblefortheco-ordinationandcontinuedimprovementoftheRiskManagementFramework.TheRiskManagementFrameworkhasbeendesignedtoallowtheBoardtooverseetheriskmanagementprocesswithassistancefromtheAudit&RiskCommitteeandmanagement.TheBoardisresponsibleforsettingtheCompany’sriskappetiteandensuresthatitregularlyreviewstheriskprofileforthebusiness.DuringthereportingperiodtheAudit&RiskCommitteehasconsideredandreportedtotheBoardonareviewoftheCompany’sRiskManagementFramework.BoththeAudit&RiskCommitteeandtheBoardissatisfiedthattheRiskManagementFrameworkinplaceinrespectoftheCompanyissound.

Recommendation7.3Alistedentityshoulddisclose:

a) Ifithasaninternalauditfunction,howthefunctionisstructuredandwhatroleitperforms;or

b) Ifitdoesnothaveaninternalauditfunction,thatfactandtheprocessesitemploysforevaluatingandcontinuallyimprovingtheeffectivenessofitsriskmanagementandinternalcontrolprocesses.

Yes FarmaForcedoesnotatthistimehaveaninternalauditfunction.AtpresenttheCompanyhasinplacecomprehensiveprocessesforevaluatingandcontinuallyimprovingtheeffectivenessofitsRiskManagementFrameworkanditsinternalFinancialControlProcess.SeeRecommendation7.2aboveforfurtherdetails.TheBoardhasoverallresponsibilityfortheRiskManagementFrameworkincludingreceivingregularreportsfromtheAudit&RiskCommitteeontheriskprofileoftheCompany.TheAudit&RiskCommitteeprovidesassistancetotheBoardtofulfilitsoversightresponsibilityforriskmanagement.TheRiskManagementFrameworkhasbeendesignedtoallowtheBoardtooverseetheriskmanagementprocesswithassistancefromtheAudit&RiskCommitteeandmanagement.TheBoardisresponsibleforsettingtheCompany’sriskappetiteandensuresthatitreviewstheriskprofileforthebusiness.





Duringthereportingperiod,theAudit&RiskCommitteehasconsideredandreportedtotheBoardonareviewoftheCompany’sRiskManagementFramework.BoththeAudit&RiskCommitteeandtheBoardaresatisfiedthattheRiskManagementFrameworkinplaceinrespectoftheCompanyissound.TheBoardreceivesanannualassurancefromtheChiefExecutiveOfficerandtheChiefFinancialOfficerthatthedeclarationprovidedinaccordancewithsection295AoftheCorporationsActisfoundedonasoundsystemofriskmanagementandinternalcontrolandthatthesystemisoperatingeffectivelyinallmaterialrespectsinrelationtofinancialreportingrisks.

Recommendation7.4A listed entity should disclose whether it has anymaterial exposure to economic, environmental andsocial sustainability risks and, if it does, how itmanagesorintendstomanagethoserisks.

Yes TheBoarddoesnotbelievethattheCompanyhasanymaterialexposuretoeconomic,environmentalandsocialsustainabilityriskthatithasnotmitigatedtotheextentreasonablypracticable.TheBoardisresponsibleformanagingtheriskstheCompanyissubjectto.SeeRecommendations7.2and7.3forfurtherdetailsongeneralriskmanagement.TheCompanyisexposedtoordinarybusinessandeconomicrisksintheordinarycourseofbusiness.

Principle8:RemuneratefairlyandresponsiblyAlistedentityshouldpaydirectorremunerationsufficienttoattractandretainhighqualityDirectorsanddesignitsexecutiveremunerationtoattract,retainandmotivatehighqualityseniorexecutivesandtoaligntheirinterestswiththecreationofvalueforsecurityholders.

Recommendation8.1TheBoardofalistedentityshould:

a) Havearemunerationcommitteewhich:(i) Hasatleastthreemembers,amajorityof

whomareindependentDirectors;and(ii) IschairedbyanindependentDirector,Anddisclose,(iii) TheCharteroftheCommittee(iv) ThemembersoftheCommittee;and(v) Asattheendofeachreportingperiod,

thenumberoftimestheCommitteemetthroughouttheperiodandtheindividualattendancesofthemembersatthosemeetings;or

No–ReferComments

TheBoardhasestablishedacombinedRemunerationandNominationCommitteetoassistandadviseitonremunerationandrecruitmentpoliciesandpractices(refertoRecommendation2.1).TheCommitteeiscomprisedofMrGeorgeElias,MrConTsigounis(Non-executiveDirectors)andMrHarrySimeonidis(ExecutiveDirector).MsStamatiaToliawasanindependentmemberoftheCommitteeforthemajorityofthereportingperiodresigningonthe14thAugust2017.MrSimeonidiswasappointedtotheCommitteeonthatdate.MrEliasistheChairoftheCommitteeandisconsideredbytheBoardtobeanindependentDirector.Forthemajorityofthereportingperiod,theCommitteecomprisedthreemembersofwhichtwowereindependent.Accordingly,theCommitteedoesnotcurrentlyhaveamajorityofindependentDirectorsandthereforedoesnotcomplywithRecommendation8.1.TheCommitteehasadoptedaformalCharterthatisavailableonFarmaForce’swebsite.





b) IfitdoesnothaveaRemunerationCommittee,disclosethatfactandtheprocessesitemploysforsettingthelevelandcompositionofremunerationfordirectorsandseniorexecutivesandensuringthatsuchremunerationisappropriateandnotexcessive.

ThenumberoftimestheCommitteehasmetandrespectiveattendancesbymembersduringthereportingperiodisdisclosedintheCompany’sannualreport.TheBoardconsidersthistobeanappropriatealternativetotherequirementsforamajorityofindependentDirectorsontheAuditandRiskCommitteeconsideringthesizeandcomplexityofthebusiness.

Recommendation8.2A listed entity should separately disclose its policiesand practices regarding the remuneration of non-executiveDirectorsandtheremunerationofexecutiveDirectorsandotherseniorexecutives.

Yes DetailsoftheremunerationpracticesandthelevelofremunerationpaidtoDirectorsandKeyManagementPersonnelissetoutintheRemunerationReportfoundintheCompany’sAnnualReport.

Recommendation8.3A listed entity which has an equity-basedremunerationschemeshould:

a) Haveapolicyonwhetherparticipantsarepermittedtoenterintotransactions(whetherthroughtheuseofderivativesorotherwise)whichlimittheeconomicriskofparticipatinginthescheme;and

b) Disclosethatpolicyorasummaryofit.

Yes TheCompanyhasinplaceanequitybasedEmployeeSharePlan,acopyofwhichwaslodgedwiththeASXon23October2015.Inaddition,asummaryofthetermsofthePlanweredetailedintheCompany’sprospectusdated10August2015.PursuanttotheCompany’sSecurityTradingPolicy(acopyofwhichwaslodgedwiththeASXon23October2015),DirectorsandkeymanagementpersonnelholdingsharesundertheEmployeeSharePlanmaynotdeal(includingsell,createasecurityinterestinorotherwisedisposeof)withthosesecuritieswithoutthepriorwrittenconsentoftheCompany.OtherwisetheCompanyhasnopolicyonwhetherparticipantsarepermittedtoenterintotransactions(whetherthroughtheuseofderivativesorotherwise)whichlimittheeconomicriskofparticipatinginthescheme.

28

AUDITOR’S INDEPENDENCE DECLARATION As lead auditor for the audit of the financial report of FarmaForce Limited for the year ended 30 June 2017, I declare that, to the best of my knowledge and belief, there have been no contraventions of:

(i) the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and

(ii) any applicable code of professional conduct in relation to the audit. RSM AUSTRALIA PARTNERS David Talbot Partner Sydney, NSW Dated: 29 September 2017

FARMAFORCELIMITEDSTATEMENTOFPROFITORLOSSFORTHEYEARENDED30JUNE2017


Indollars Note 2017 2016

Revenue 6 3,967,513 1,950,840

Costofsales (3,735,950) (2,670,861)

Grossprofit 231,563 (720,021)

Otherincome 7(a) 4,882 41,145

Expenses

Employeebenefitsexpense 7(c) (1,079,247) (1,008,639)

Overheadsharingcost (313,192) (691,820)

Depreciationexpense (48,515) (38,538)

Otherexpenses 7(d) (1,042,412) (1,379,206)

Financecosts 7(b) (2,553) (1,939)

Shareoflossofassociatedcompaniesnetoftax 19 (57,959) -

Lossbeforeincometax (2,307,433) (3,799,018)

Incometaxexpense 8 - -

Netlossfortheperiod (2,307,433) (3,799,018)

LosspersharefortheperiodattributabletotheordinaryequityholdersoftheCompany:

Note 2017 2016

Basiclosspershare(centspershare) 17 (1.81) (4.34)

Dilutedlosspershare(centspershare) 17 (1.81) (4.34)

The above statement of profit or loss should be read in conjunction with the accompanying notes to thefinancialstatements.

FARMAFORCELIMITEDSTATEMENTOFOTHERCOMPREHENSIVEINCOMEFORTHEYEARENDED30JUNE2017



Netlossfortheperiod (2,307,433) (3,799,018)

Othercomprehensiveincome

Othercomprehensiveincomefortheyear - -

Othercomprehensiveincome/(loss)fortheperiod,netoftax - -

Totalcomprehensivelossfortheperiod (2,307,433) (3,799,018)

Theabovestatementofcomprehensiveincomeshouldbereadinconjunctionwiththeaccompanyingnotestothefinancialstatements.

FARMAFORCELIMITEDSTATEMENTOFFINANCIALPOSITIONFORTHEYEARENDED30JUNE2017


Indollars Note 2017 2016^

Assets

Currentassets

Cashandcashequivalents 9 254,321 1,541,546

Tradeandotherreceivables 10 396,953 155,918

Othercurrentassets 11 37,506 99,550

Totalcurrentassets 688,780 1,797,014

Non-currentassets

Tradeandotherreceivables - 380

Property,plantandequipment 12 220,516 240,259

Intangibleassets 13 151,995 -

InvestmentinAssociates 19 220,113 269,000

Deferredtaxassets 8 - -

Totalnon-currentassets 592,624 509,639

TotalAssets 1,281,404 2,306,653

Liabilities

Currentliabilities

Tradeandotherpayables 14 1,274,445 336,203

Deferredrevenue 233,003 54,980

Employeebenefitliabilities 15 241,263 75,344

Totalcurrentliabilities 1,748,711 466,527

Non-currentliabilities

Deferredtaxliabilities - -

Totalnon-currentliabilities - -

Totalliabilities 1,748,711 466,527

Netassets/(deficiency) (467,307) 1,840,126

EQUITY

Issuedcapital 16 8,068,859 8,068,859

Accumulatedlosses (8,536,166) (6,228,733)

Totalequity (467,307) 1,840,126

^Theabovecomparativeinformationhasbeenrestatedtoreflectachangeinclassificationof:(a)employeebenefitliabilities,furtherdetailsofwhichareincludedinnote15;(b)provisionsforcustomerbaddebt,furtherdetailsofwhichareincludedinnote10;and(c)deferredrevenue,furtherdetailsofwhichareincludedinnote14.

Theabovestatementoffinancialpositionshouldbereadinconjunctionwiththeaccompanyingnotestothefinancialstatements.

FARMAFORCELIMITEDSTATEMENTOFCHANGESINEQUITYFORTHEYEARENDED30JUNE2017


IndollarsSharecapital

Accumulatedlosses

Total

Balanceat1July2016 8,068,859 (6,228,733) 1,840,126

Totalcomprehensivelossfortheperiod Lossfortheperiod - (2,307,433) (2,307,433)Othercomprehensivelossfortheperiod - - -

Totalcomprehensivelossfortheperiod - (2,307,433) (2,307,433)

Transactionswithownersrecordeddirectlyinequity

Transactionsfortheperiod - - -

Balanceat30June2017 8,068,859 (8,536,166) (467,307)

Balanceat1July2015 763,690 (2,429,715) (1,666,025)

Totalcomprehensivelossfortheperiod

Lossfortheperiod - (3,799,018) (3,799,018)Othercomprehensiveincomefortheperiod - - -

Totalcomprehensivelossfortheperiod - (3,799,018) (3,799,018)

Transactionwithownersrecordeddirectlyinequity

Issueofordinaryshares 5,459,545 - 5,459,545Issueofconvertiblenotes 2,903,961 - 2,903,961Capitalraisingcosts (1,058,337) - (1,058,337)

Balanceat30June2016 8,068,859 (6,228,733) 1,840,126

Theabovestatementofchanges inequityshouldberead inconjunctionwiththeaccompanyingnotes tothefinancialstatements.

FARMAFORCELIMITEDSTATEMENTOFCASHFLOWSFORTHEYEARENDED30JUNE2017



Cashflowsfromoperatingactivities

Receiptsfromcustomers 4,306,514 1,921,504

Paymentstosuppliersandemployees (5,399,499) (5,549,008)

Interestreceived 2,882 41,145

Interestpaid (7,283) (1,939)

Netcashusedinoperatingactivities 21 (1,097,386) (3,588,298)

Cashflowsfrominvestingactivities

Investmentinassociates (9,072) (269,000)

Purchaseofproperty,plantandequipment (28,772) (125,618)

Paymentforintangibleassetworkinprogress (151,995) -

Netcashusedininvestingactivities (189,839) (394,618)

Cashflowsfromfinancingactivities

Proceedsfromissueofsharecapital - 5,459,545

Transactioncostsrelatedtoissueofsharecapital - (82,754)

Transactioncostsrelatedtoissueofconvertiblenotes - (1,058,337)

Netcashgeneratedfrom/(usedin)financingactivities - 4,318,454

Netdecreaseincashandcashequivalents (1,287,225) 335,538

Cashandcashequivalentsatthebeginningoftheperiod 1,541,546 1,206,008

Cashandcashequivalentsattheendoftheperiod 9 254,321 1,541,546

Theabovestatementofcashflowsshouldbereadinconjunctionwiththeaccompanyingnotestothefinancialstatements.

FARMAFORCELIMITEDNOTESTOTHEFINANCIALSTATEMENTSFORTHEYEARENDED30JUNE2017


1. REPORTINGENTITY

FarmaForceLimited(“FarmaForce”orthe“Company”)isafor-profitcompanylimitedbyshareswhichisincorporatedanddomiciledinAustralia.

Thesefinancialstatementsasatandfortheyearended30June2017compriseoftheCompanyasanindividualentity,andwereauthorisedforissuebytheBoardofDirectorson28August2017.

2. STATEMENTOFCOMPLIANCE

ThefinancialstatementsaregeneralpurposefinancialstatementswhichhavebeenpreparedinaccordancewithAustralianAccountingStandards(“AASBs”)adoptedbytheAustralianAccountingStandardsBoard(“AASB”)andtheCorporationsAct2001.ThefinancialstatementscomplywithInternationalFinancialReportingStandards(“IFRS”)adoptedbytheInternationalAccountingStandardsBoard(“IASB”).

3. GOINGCONCERN

Thefinancialstatementshavebeenpreparedonthegoingconcernbasis,whichcontemplatescontinuityofnormalbusinessactivitiesandtherealisationofassetsanddischargeofliabilitiesinthenormalcourseofbusiness.

Asdisclosedinthefinancialstatements,thecompanyincurredalossof$2,307,433andhadnetcashoutflowsfromoperatingactivitiesof$1,097,386fortheyearended30June2017.AsatthatdatetheCompanyhadnetcurrentliabilitiesof$1,059,931andnetliabilitiesof$467,307.

ThesefactorsmayprimafacieindicateamaterialuncertaintywhichmaycastsignificantdoubtastowhethertheCompanywillcontinueasagoingconcernandthereforewhetheritwillrealiseitsassetsandextinguishitsliabilitiesinthenormalcourseofbusinessandattheamountsstatedinthefinancialreport.However,theDirectorsbelievethattherearereasonablegroundstobelievethattheCompanywillbeabletocontinueasagoingconcern,afterconsiderationofthefollowingfactors:

• The continued trend of increasingmarket share as indicated in the financial statements is resulting inadditionalcustomercontractsonhandimprovingnetoperatingcashflow;

• Thecurrentliabilitiesinclude:

o anamountpayabletotheparentcompanyof$620,718.Theparentcompanywillallowthesefundstocontinuetobeutilisedbythecompanyasrequiredandwillprovideongoingsupport;

o $233,004deferredrevenuerepresentingdepositsreceivedinadvance;

• FromOctober2017,optionholderswillbeabletoexerciseupto19,302,500loyaltyoptionsreferredtoinNote16overtheensuing12monthsandasaresultthedirectorsbelieveadditionalcapitalwillberaised.

Accordingly,theDirectorsbelievethattheCompanywillbeabletocontinueasagoingconcernandthatitisappropriatetoadoptthegoingconcernbasisinthepreparationofthefinancialreport.

ThefinancialreportdoesnotincludeanyadjustmentsrelatingtotheamountsorclassificationofrecordedassetsorliabilitiesthatmightbenecessaryiftheCompanywerenottooperateasagoingconcern.

4. SIGNIFICANTACCOUNTINGPOLICIES

Thissectionsetsoutthesignificantaccountingpoliciesuponwhichthefinancialstatementsarepreparedasawhole.Specificaccountingpoliciesaredescribedintheirrespectivenotestothefinancialstatements.Thissectionalsoshowsinformationonnewaccountingstandards,amendmentsandinterpretations,andwhethertheyareeffectiveinthecurrentorlateryears.

FARMAFORCELIMITEDNOTESTOTHEFINANCIALSTATEMENTS(CONTINUED)FORTHEYEARENDED30JUNE2017


4.SIGNIFICANTACCOUNTINGPOLICIES(CONTINUED)

Basisofpreparation

ThesefinancialstatementsarepresentedinAustraliandollars,whichistheCompany’sfunctionalcurrency.

TheCompanyisofakindreferredtoinASICCorporationsInstrument2016/191dated1April2016andinaccordancewiththatinstrument,allfinancialinformationpresentedinAustraliandollarshasbeenroundedtothenearestdollarunlessotherwisestated.

Thefinancialstatementshavebeenpreparedonthehistoricalcostbasis.

Theaccountingpolicieshavebeenconsistentlyappliedtoallperiodspresentedinthesefinancialstatements,unlessotherwisestated.

GoodsandServicesTax(“GST”)andValueAddedTax(“VAT”)

Revenues,expensesandassetsarerecognisednetoftheamountofrespectiveGSTorVAT,exceptwheretheamountofGSTorVATincurredisnotrecoverablefromtherelevanttaxationauthority.Inthesecircumstances,theGSTorVATisrecognisedaspartofthecostofacquisitionoftheassetoraspartoftheexpense.

ReceivablesandpayablesarestatedinclusiveoftheamountofGSTorVATreceivableorpayable.ThenetamountofGSTorVATrecoverablefrom,orpayableto,thetaxationauthorityisincludedwithotherpayablesinthestatementoffinancialposition.

Cashflowsarepresentedonagrossbasis.TheGSTorVATcomponentsofcashflowsarisingfrominvestingorfinancingactivitieswhicharerecoverablefrom,orpayabletotherelevanttaxationauthority,arepresentedasoperatingcashflowsinthestatementofcashflows.

Usesofjudgementsandestimates

Inpreparingthesefinancialstatements,managementhasmadejudgements,estimatesandassumptionsthataffecttheapplicationoftheCompany’saccountingpoliciesandthereportedamountsofassets,liabilities,incomeandexpenses.Actualresultsmaydifferfromtheseestimates.

Estimatesandunderlyingassumptionsarereviewedonanongoingbasis.Revisionstoaccountingestimatesarerecognisedprospectively.

(i) Judgements

Thejudgementswhichinvolveahigherdegreeofcomplexityorthathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthenextperiodasfollows:

Investmentinassociates

TheDirectorshaveassessedwhethertheirequityinvestmentsbetween20%and50%representasignificantinfluenceoverthosecompanies.InassessingsignificantinfluencetheDirectorshaveconsideredthepercentageownershipinterest,representationontheBoardofDirectors,theinterchangeofmanagementpersonnel,andmaterialtransactionsbetweentheentities.PrimarilyonownershipinteresttheDirectorshaveconcludedthatallinvestmentsinwhichtheCompanyowns20%interestareregardedashavingsignificantinfluenceandhavethereforebeenequityaccountedanddisclosuresmadeinnote19.

Recoverabilityofinternallydevelopedintangibleassets

TheCompanycapitalisesdevelopmentcostswhentheymeetthecriteriasetoutinAASB138IntangibleAssets.ThedevelopmentcostscapitalisedrelatetoassetsthatwillbeutilisedbytheCompanyandnotexpectedtoresultinindividualrevenuestreams.TheDirectorsthereforeassesstherecoverabilityoftheinternallydevelopedintangibleassetsbyassessingtheirvalueinuse.BasedonthisassessmenttheDirectorshaveconcludedthatnoimpairmentisrequiredagainstthecarryingvalueoftheintangibleassetsincludedinnote13.



4.SIGNIFICANTACCOUNTINGPOLICIES(CONTINUED)

Useofjudgementsandestimates(continued)

(ii) Estimates

Informationaboutassumptionsandestimationuncertaintiesthathaveasignificantriskofresultinginamaterialadjustmentwithintheyearending30June2017areincludedinthenote15–Employeebenefitliabilities.

Newstandardsandinterpretationsnotyetadopted

Anumberofnewstandards,amendmentstostandardsandinterpretationsareeffectiveforannualperiodsbeginningafter1July2017,andhavenotbeenappliedinpreparingthesefinancialstatements.ThosewhichmayberelevanttotheCompanyaresetoutbelow.TheCompanydoesnotplantoadoptthesestandardsearly.

(i) AASB9FinancialInstruments

AASB9FinancialInstrumentsbecomesmandatoryfortheCompany’s2019financialstatementsandincludeschangestotheclassificationandmeasurementoffinancialassets,includinganewexpectedcreditlossmodelforcalculatingimpairment.Italsoincludesanewhedgeaccountingmodeltosimplifyhedgeaccountingrequirementsandmorecloselyalignhedgeaccountingwithriskmanagementactivities.

(ii) AASB15Revenuefromcontractswithcustomers

AASB15RevenuefromContractsbecomesmandatoryfortheCompany’s2019financialstatementsandoutlinesasinglecomprehensivemodelforentitiestouseinaccountingforrevenuearisingfromcontractswithcustomers;andreplacesAASB111ConstructionContract,AASB118Revenue,Interpretation13CustomerLoyaltyPrograms,Interpretation15AgreementsforConstructionofRealEstate,Interpretation18TransferofAssetsfromCustomersandInterpretation131Revenue-BarterTransactionsinvolvingAdvertisingServices.Thecoreprincipleisthatanentityrecognisesrevenuetodepictthetransferofpromisedgoodsorservicestocustomersinanamountthatreflectstheconsiderationtowhichtheentityexpectstobeentitledinexchangeforthosegoodsorservices.

(iii) AASB16Leases

AASB16LeasesbecomesmandatoryfortheCompany’s2020financialstatementsandremovestheclassificationofleasesbetweenfinanceandoperatingleases,effectivelytreatingallleasesasfinanceleasesforthelessee.Thepurposeistoprovidegreatertransparencyofalessee’sfinancialleverageandcapitalemployed.

TheCompanyhasnotyetdeterminedthepotentialeffectofthesestandardsontheCompany’sfuturefinancialstatements.



5. OPERATINGSEGMENTS

TheCompanyhasidentifiedoperatingsegmentsbasedoninternalreportingthatisreviewedandusedbythechiefoperatingdecisionmakers(theGroupCEOandtheGeneralManager)inassessingtheperformanceoftherespectivesegments.Theoperatingsegmentsareidentifiedbymanagementbasedonthenatureofservicesprovided,witheachoperatingsegmentrepresentingastrategicbusinessthatservesadifferentsegmentofthemarket.

InFY17FarmaForceprovidedtwotypesofservicesbeing:(1)contractsalesandmarketingservicestoexternalcustomers;and(2)sharedservicestorelatedparties.Segmentanalysisofrevenueandgrossprofitisprovidedbelow.Informationonnetassetsbysegmentisnotprovidedtothechiefoperatingdecisionmakers.

Indollars 2017 2016

Revenue Contractsalesandmarketingservices 3,867,873 1,914,476Relatedpartyservices 99,640 36,364Totalrevenue 3,967,513 1,950,840

Grossprofit Contractsalesandmarketingservices 131,923 (756,385)Relatedpartyservices 99,640 36,364Totalgrossprofit 231,563 (720,021)

Informationongeographicalsegments

OnehundredpercentofFarmaForcerevenue,expensesandprofitarederivedinAustralia.

Relianceonmajorcustomers

Fourcustomersrepresentmorethan10%oftheconsolidatedrevenue.Totalrevenuefromthesemajorcustomersamountsto$3,341,365(84.2%)oftotalrevenue(2016:$1,757,238;90.1%).

6. REVENUE

Indollars 2017 2016

Provisionofcontractrevenue 3,867,873 1,914,476

Relatedpartyservicesrevenue 99,640 36,364

Totalrevenue 3,967,513 1,950,840

Significantaccountingpolicies

Revenueismeasuredatthefairvalueoftheconsiderationreceivedorreceivableaftertakingintoaccountanytradediscountsandvolumerebatesallowed.

TheCompanyrecognisesrevenuewhentheamountofrevenuecanbereliablymeasured,itisprobablethatfutureeconomicbenefitsassociatedwiththetransactionwillflowtotheCompanyandspecificcriteriarelatingtothetypeofrevenueasnotedbelow,hasbeensatisfied.

Anyconsiderationdeferredistreatedastheprovisionoffinanceandisdiscountedatarateofinterestthatisgenerallyacceptedinthemarketforsimilararrangements.Thedifferencebetweentheamountinitiallyrecognisedandtheamountultimatelyreceivedisinterestrevenue.

Allrevenueisstatednetoftheamountofgoodsandservicestax.

Renderingofservices

Revenueinrelationtorenderingofservicesisrecogniseddependingonwhethertheoutcomeoftheservicescanbeestimatedreliably.Iftheoutcomecanbeestimatedreliablythenthestageofcompletionoftheservicesisusedtodeterminetheappropriatelevelofrevenuetoberecognisedintheperiod.Iftheoutcomecannotbereliablyestimatedthenrevenueisrecognisedtotheextentofexpensesrecognisedthatarerecoverable.



7. INCOMEANDEXPENSES

(a) Otherincome

Indollars 2017 2016

Interestincome 2,882 41,145

Rebatesandoffsets 2,000 -

Totalotherincome 4,882 41,145

(b) Financecosts

Indollars 2017 2016

Bankfees 2,519 1,512

Interestexpense 34 427

Totalfinancecosts 2,553 1,939

(c) Employeebenefitexpenses

Indollars 2017 2016

Wagesandsalaries 992,205 917,732

Compulsorysuperannuationcontributions 95,730 84,976

Increase/(decrease)inliabilityforannualleave (8,688) 5,931

Totalemployeebenefitsexpense 1,079,247 1,008,639

(d) Otherexpenses

Indollars 2017 2016

Accountingfees 41,105 22,230

Advertisingandmarketing 152,043 310,970

Insurance 46,336 40,642

Legalandconsultancyfees 115,646 89,120

Occupancycosts 23,498 25,616

Recruitmentfees 103,141 246,144

Softwarelicensingandsubscription 149,654 122,125

Travelandaccommodation 46,119 49,260

Other 364,870 473,099

Totalotherexpenses 1,042,412 1,379,206


Financecostincludesallinterest-relatedexpenses,otherthanthosearisingfromfinancialassetsatfairvaluethroughprofitorloss.



8. INCOMETAXES

Reconciliationofincometaxtoaccountingprofit

Indollars 2017 2016

Lossfortheperiod (2,307,433) (3,799,018)Taxrate 27.5% 30%Taxbenefit (634,544) (1,139,706)

Addtaxeffectof: Expenditurenotallowableforincometaxpurposes 1,447 22,092Fixedassettimingdifferences 4,186 3,289Othertimingdifferences 695 55,177Adjustmentstodeferredtaxliability 24,784 19,022Deferredtaxassetsnotbroughttoaccount 603,432 1,040,126Incometaxexpense - -

Unrecogniseddeferredtaxassets

Deferredtaxassetswerenotrecognisedsinceutilisationofthetaxlossesagainstfuturetaxableprofitsisnotdeemedprobableintheforeseeablefuture(FY17:$2,319,693;FY16$1,904,984).


Currenttax

Theincometaxexpenseorbenefitfortheyearisthetaxpayableonthecurrentyear’staxableincomebasedontheapplicableincometaxrateforeachjurisdictionadjustedbychangesindeferredtaxassetsandliabilitiesattributabletotemporarydifferencesandtounusedtaxlosses.

ThecurrentincometaxchargeiscalculatedonthebasisofthetaxlawsenactedorsubstantivelyenactedattheendofthereportingperiodinthecountrieswheretheCompany’ssubsidiariesandassociatesoperateandgeneratetaxableincome.Managementperiodicallyevaluatespositionstakenintaxreturnswithrespecttosituationsinwhichapplicabletaxregulationissubjecttointerpretation.Itestablishesprovisionswhereappropriateonthebasisofamountsexpectedtobepaidtothetaxauthorities.

Currenttaxisrecognisedinprofitorlossexcepttotheextentthatitrelatestoitemsrecognisedinothercomprehensiveincomeordirectlyinequity.Inthiscase,thetaxisalsorecognisedinothercomprehensiveincomeordirectlyinequityrespectively.

Deferredtax

Deferredincometaxisprovidedinfull,usingtheliabilitymethod,ontemporarydifferencesarisingbetweenthetaxbasesofassetsandliabilitiesandtheircarryingamountsintheconsolidatedfinancialstatements.Deferredincometaxisdeterminedusingtaxrates(andlaws)thathavebeenenactedorsubstantivelyenactedbytheendofthereportingperiodandareexpectedtoapplywhentherelateddeferredincometaxassetisrealisedorthedeferredincometaxliabilityissettled.Deferredtaxassetsarerecognisedfordeductibletemporarydifferencesandunusedtaxlossesonlyifitisprobablethatfuturetaxableamountswillbeavailabletoutilisethosetemporarydifferencesandlosses.

DeferredtaxliabilitiesandassetsarenotrecognisedfortemporarydifferencesbetweenthecarryingamountandtaxbasesofinvestmentsinforeignoperationswhentheCompanyisabletocontrolthetimingofthereversalofthetemporarydifferencesanditisprobablethatthedifferenceswillnotreverseintheforeseeablefuture.

Deferredtaxassetsandliabilitiesareoffsetwhenthereisalegallyenforceablerighttooffsetcurrenttaxassetsandliabilitiesandwhenthedeferredtaxbalancesrelatetothesametaxationauthority.Currenttaxassetsandtaxliabilitiesareoffsetwheretheentityhasalegallyenforceablerighttotheoffsetandintendseithertosettleonanetbasis,ortorealisetheassetandsettletheliabilitysimultaneously.Deferredtaxisrecognisedinprofitorloss,excepttotheextentthatitrelatestoitemsrecognisedinothercomprehensiveincomeordirectlyinequity.Inthiscase,thetaxisalsorecognisedinothercomprehensiveincomeordirectlyinequityrespectively.



9. CASH

Indollars 2017 2016

Bankbalances 254,321 1,541,546

10. TRADEANDOTHERRECEIVABLES

Indollars 2017 2016^

Tradereceivables 327,229 103,277

Otherreceivables 27,505 23,638

Relatedpartyreceivables 42,219 29,383

Totaltradeandotherreceivables 396,953 156,298

Current 396,953 155,918

Non-current - 380

Totaltradeandotherreceivables 396,953 156,298

^ Thecomparativeinformationhasbeenrestatedtoreflectachangeinclassificationof:(a)customerdoubtfuldebtprovisionfromtradeandotherpayablestotradereceivables(FY16$113,138);and(b)prepaymentsfromtradeandotherreceivablestoothercurrentassets(FY16$99,550).

11. OTHERCURRENTASSETS


Prepayments 37,506 99,550

Totalothercurrentassets 37,506 99,550

^ Thecomparativeinformationhasbeenrestatedtoreflectachangeinclassificationofprepayments,fromtradeandotherreceivablestoothercurrentassets(FY16$99,550).


Tradereceivablesarerecognisedinitiallyatfairvalueandsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod,lessprovisionforimpairment.Tradereceivablesaregenerallydueforsettlementwithin30-60days.Theyarepresentedascurrentassetsunlesscollectionisnotexpectedformorethan12monthsafterthereportingdate.

Collectabilityoftradereceivablesisreviewedonanongoingbasis.Debtswhichareknowntobeuncollectablearewrittenoffbyreducingthecarryingamountdirectly.Thelossisrecognisedinprofitorlosswithinotherexpenses.Subsequentrecoveriesofamountspreviouslywrittenoffarecreditedagainstotherexpensesintheprofitorloss.


Cashandcashequivalentsincludescashonhand,depositsheldatcallwithfinancialinstitutions,othershort-term,highlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorlessthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangesinvalue.Forthestatementofcashflowspresentationpurposes,cashandcashequivalentsalsoincludesbankoverdrafts,whichareshownwithinborrowingsincurrentliabilitiesonthestatementoffinancialposition.



12. PROPERTY,PLANTANDEQUIPMENT

Reconciliationofcarryingamounts

Cost

Indollars

Furniture,fixturesand

fittings

Leaseholdimprovements

Plantandequipment

Total

Costat1July2015 13,588 73,977 85,407 172,972

Additions 21,728 84,034 19,855 125,617

Balanceat30June2016 35,316 158,011 105,262 298,589

Additions 1,498 - 27,274 28,772

Balanceat30June2017 36,814 158,011 132,536 327,361

Accumulateddepreciation

Indollars


fittings


Plantandequipment

Total

Balanceat1July2015 1,844 7,306 10,643 19,793

Depreciationexpense 3,000 12,522 23,015 38,537

Balanceat30June2016 4,844 19,828 33,658 58,330

Depreciationexpense 4,032 15,801 28,681 48,514

Balanceat30June2017 8,876 35,629 62,339 106,844

Carryingamounts

Indollars


fittings


Plantandequipment

Total

Balanceat30June2016 30,472 138,183 71,604 240,259

Balanceat30June2017 27,938 122,382 70,197 220,516



12.PROPERTY,PLANTANDEQUIPMENT(CONTINUED)


Carryingvalue

Allproperty,plantandequipmentisstatedathistoricalcostlessdepreciationandimpairment.Historicalcostincludesexpenditurethatisdirectlyattributabletotheacquisitionoftheitems.

Subsequentcostsareincludedintheasset’scarryingamountorrecognisedasaseparateasset,asappropriate,onlywhenitisprobablethatfutureeconomicbenefitsassociatedwiththeitemwillflowtothebusinessandthecostoftheitemcanbemeasuredreliably.Thecarryingamountofanycomponentaccountedforasaseparateassetisderecognisedwhenreplaced.Allotherrepairsandmaintenancearechargedtotheprofitorlossduringthereportingperiod.

Depreciation

Depreciationofassetsiscalculatedusingthestraight-linemethodtoallocatetheircost,netoftheirresidualvalues,overtheirestimatedusefullivesor,inthecaseofleaseholdimprovements,theshorterleasetermasfollows:

• Leaseholdimprovements–5to10years• Plantandequipment–5to10years• Furniture,fittingsandequipment–10to20years

Impairment

Anasset’scarryingamountiswrittendownimmediatelytoitsrecoverableamountiftheasset’scarryingamountisgreaterthanitsestimatedrecoverableamount.

Gainsandlossesondisposal

Gainsandlossesondisposalsaredeterminedbycomparingproceedswiththecarryingamount.Theseareincludedinprofitorloss.



13. INTANGIBLEASSETS

Indollars

Websiteandsoftware

Total

Balanceat30June2016 - -

Additions 151,995 151,995

Balanceat30June2017 151,995 151,995


Intangibleassetsacquiredseparatelyaremeasuredoninitialrecognitionatcost.Thecostofintangibleassetsacquiredinabusinesscombinationistheirfairvalueatthedateofacquisition.

Followinginitialrecognition,intangibleassetsarecarriedatcostlessanyaccumulatedamortisationandaccumulatedimpairmentlosses.Internallygeneratedintangibles,excludingcapitaliseddevelopmentcosts,arenotcapitalisedandtherelatedexpenditureisreflectedinprofitorlossintheperiodinwhichtheexpenditureisincurred.

Gainsorlossesarisingfromde-recognitionofanintangibleassetaremeasuredasthedifferencebetweenthenetdisposalproceedsandthecarryingamountoftheassetandarerecognisedinthestatementofprofitorlossandothercomprehensiveincomewhentheassetisderecognised.

Amortisation

Intangibleassetswithfinitelivesareamortisedovertheusefuleconomiclife.Theamortisationperiodandtheamortisationmethodforanintangibleassetwithafiniteusefullifearereviewedatleastattheendofeachreportingperiod.Changesintheexpectedusefullifeortheexpectedpatternofconsumptionoffutureeconomicbenefitsembodiedintheassetareconsideredtomodifytheamortisationperiodormethod,asappropriate,andaretreatedaschangesinaccountingestimatesandadjustedonaprospectivebasis.Theamortisationexpenseonintangibleassetswithfinitelivesisrecognisedinthestatementofprofitorlossandothercomprehensiveincomeastheexpensecategorythatisconsistentwiththefunctionoftheintangibleassets.

Intangibleassetswithindefiniteusefullivesarenotamortised,butaretestedforimpairmentannually,eitherindividuallyoratthecash-generatingunitlevel.Theassessmentofindefinitelifeisreviewedannuallytodeterminewhethertheindefinitelifecontinuestobesupportable.Ifnot,thechangeinusefullifefromindefinitetofiniteismadeonaprospectivebasis.

Impairment

Intangibleassetsthathaveanindefiniteusefullifearenotsubjecttoamortisationandaretestedannuallyforimpairment,ormorefrequentlyifeventsorchangesincircumstancesindicatethattheymightbeimpaired.Otherassetsaretestedforimpairmentwhenevereventsorchangesincircumstancesindicatethatthecarryingamountmaynotberecoverable.Animpairmentlossisrecognisedfortheamountbywhichtheasset’scarryingamountexceedsitsrecoverableamount.Therecoverableamountisthehigherofanasset’sfairvaluelesscoststosellandvalueinuse.

Websiteandsoftware

Costsincurredinacquiringwebsitesoftwareandlicensesthatwillcontributetofuturefinancialbenefitsthroughrevenuegenerationand/orcostreductionarecapitalisedtosoftwareandsystems.Costscapitalisedincludeexternaldirectcostsofmaterialsandserviceanddirectpayrollandpayrollrelatedcostsofemployees’timespentontheproject.Amortisationiscalculatedonastraight-linebasisoverperiodsgenerallyrangingfromthreetofiveyears

Websitedevelopmentcostsincludeonlythosedirectlyattributabletothedevelopmentphaseandareonlyrecognisedfollowingcompletionoftechnicalfeasibilityandwherethebusinesshasanintentionandabilitytousetheasset.



14. TRADEANDOTHERPAYABLES


Tradepayables 676,925 151,918

Sundrypayablesandaccruedexpenses 241,833 137,388

Relatedpartypayables 355,687 46,897

Totaltradeandotherpayables 1,274,445 336,203

Current 1,274,445 336,203

Non-current - -

Totaltradeandotherpayables 1,274,445 336,203

^ Thecomparativeinformationhasbeenrestatedtoreflectachangeinclassificationof(a)prepaidincomefromsundrypayablestodeferredrevenue(FY16$54,980);and(b)doubtfuldebtprovisionfromsundrypayablestotradereceivables(FY16$113,138).

15. EMPLOYEEBENEFITLIABILITIES


Liabilityforannualleave 115,766 75,344

Liabilityforsuperannuation 125,497 -

Totalemployeebenefitliabilities 241,263 75,344

Current 241,263 75,344Non-current - -

Totalemployeebenefitliabilities 241,263 75,344

^ Thecomparativeinformationhasbeenrestatedtoreflectachangeinclassificationofliabilityforannualleave,fromtradeandotherpayablestoemployeebenefitliabilities(FY16$75,344).


Tradeandotherpayablesrepresentliabilitiesforgoodsandservicesprovidedtothebusinesspriortotheendofthefinancialyearwhichareunpaid.Theamountsareunsecuredandareusuallypaidwithin30daysofrecognition.Tradeandotherpayablesarepresentedascurrentliabilitiesunlesspaymentisnotduewithin12monthsfromthereportingdate.Theyarerecognisedinitiallyattheirfairvalueandsubsequentlymeasuredatamortisedcostusingtheeffectiveinterestmethod.


Employeebenefitsrepresentsamountsaccruedforannualleaveandsuperannuation.Thecurrentportionforthisprovisionincludesthetotalamountaccruedforannualleaveentitlementsandtheamountsaccruedforlongserviceleaveentitlementsthathavevestedduetoemployeeshavingcompletedtherequiredperiodofservice.BasedonpastexperiencetheCompanydoesnotexpectthefullamountofannualleaveorlongserviceleavebalancesclassifiedascurrentliabilitiestobesettledinthenext12months.However,theseamountsmustbeclassifiedascurrentliabilitiessincetheCompanydoesnothaveanunconditionalrighttodeferthesettlementoftheseamountsintheeventemployeeswishtousetheirleaveentitlement.

TheCompanyrecognisesaliabilityforlongserviceleaveandannualleavemeasuredasthepresentvalueofexpectedfuturepaymentstobemadeinrespectofservicesprovidedbyemployeesuptothereportingdateusingtheprojectedunitcreditmethod.Considerationisgiventoexpectedfuturewageandsalarylevels,experienceofemployeedepartures,andperiodstoservice.Expectedfuturepaymentsarediscountedusingmarketyieldsatthereportingdateonnationalgovernmentbondswithtermstomaturityandcurrenciesthatmatch,ascloselyaspossible,theestimatedfuturecashoutflows.



16. ISSUEDCAPITAL

Numberofshares

$

Inissueat1July2015 1 1

Conversionofnotespreviouslyclassifiedasequity - 763,689

Conversionofnotespreviouslyclassifiedasliability 19,302,500 2,903,961

Issueofshares 108,198,479 5,459,545

Transactioncosts - (1,058,337)

Inissueat30June2016 127,500,980 8,068,859

Movementsthroughouttheperiod - -

Inissueat30June2017 127,500,980 8,068,859

AllordinarysharesrankequallywithregardtotheCompany’sresidualassets.Theholdersofthesesharesareentitledtoreceivedividendsasdeclaredfromtimetotime,andareentitledtoonevotepershareatgeneralmeetingsoftheCompany.

TheCompanydoesnothaveauthorisedcapitalorparvalueinrespectofitsshares.Allissuedsharesarefullypaid.

Dividends

NodividendsweredeclaredorpaidbytheCompanyfortheyear(2016:nil).

Loyaltyoptions

TheCompanyhas19,302,500Loyaltyoptionsonissueexercisableat20centseachbetween24to36monthsafterthedateofadmissionoftheCompany’ssharestotheOfficialListoftheASX,being23October2015.Theoptionholdersmustbeholdingtheunderlyingshares,beingoneshareforoneoption,tobeabletoexercisetheoption.

Capitalmanagement

ManagementcontrolthecapitaloftheCompanyinordertomaintainagooddebttoequityratio,providetheshareholderswithadequatereturnsandtoensurethattheCompanycanfunditsoperationsandcontinueasagoingconcern.

TheCompany’sdebtandcapitalincludeordinarysharecapitalandfinancialliabilities,supportedbyfinancialassets.Therearenoexternallyimposedcapitalrequirements.


Ordinarysharesareclassifiedasequity.Incrementalcostsdirectlyattributabletotheissueofnewsharesoroptionsareshowninequityasadeduction,netoftax,fromtheproceeds.Transactioncostsarethecoststhatareincurreddirectlyinconnectionwiththeissueofthoseequityinstrumentsandwhichwouldnothavebeenincurredhadthoseinstrumentsnotbeenissued.



17. EARNINGSPERSHARE(EPS)

The calculation of basic earnings per share has been based on the following loss attributable to ordinaryshareholdersandweighted-averagenumberofordinarysharesoutstanding.

Lossattributabletoordinaryshareholders

Indollars 2017 2016

LossfortheperiodattributabletoownersofFarmaForceLimited (2,307,433) (3,799,018)

Weighted-averagenumberofordinaryshares

Innumberofshares 2017 2016

Weighted-averagenumberofordinarysharesatendoftheperiod 127,500,980 87,439,197

Earningspershare

Incentspershare 2017 2016

Basiclosspershare (1.81) (4.34)

Dilutedlosspershare (1.81) (4.34)

BasicearningspershareiscalculatedasearningsfortheperiodattributabletotheCompanyovertheweightedaveragenumberofshares.

DilutedearningspershareiscalculatedasearningsfortheperiodattributabletotheCompanyovertheweightedaveragenumberofshareswhichhasbeenadjustedtoreflectthenumberofshareswhichwouldbeissuedifoutstandingoptionsandperformancerightsweretobeexercised.HoweverduetothestatutorylossattributabletotheCompanyforboththefinancialyearended30June2017andthecomparativeperiodended30June2016,theeffectoftheseinstrumentshasbeenexcludedfromthecalculationsofdilutedearningspershareforbothperiodsastheywouldreducethelosspershare.

18. FINANCIALINSTRUMENTS–FAIRVALUEANDRISKMANAGEMENT

Accountingclassificationsandfairvalues

TheCompanyhasfinancialassetsofcashandcashequivalents,tradeandotherreceivables.Allfinancialassetsarecarriedatamortisedcost,andnotmeasuredatfairvalue.Thecarryingamountisareasonableapproximationoffairvalueat30June2017.

TheCompanyhasfinancialliabilitiesoftradeandotherpayables.Thesefinancialliabilitiesarenotmeasuredatfairvalue,andthecarryingamountisareasonableapproximationoffairvalueat30June2017.

Financialriskmanagement

TherehavebeennosubstantivechangesinthetypesofrisktheCompanyisexposedto,howtheserisksarise,ortheBoard’sobjectives,policiesandprocessesformanagingormeasuringtheriskfromthepreviousperiod.TheCompanyhasexposuretothefollowingriskarisingfromfinancialinstruments:

• creditrisk–refer(ii)• liquidityrisk–refer(iii)

• marketrisk–refer(iv)



18.FINANCIALINSTRUMENTS–FAIRVALUEANDRISKMANAGEMENT(CONTINUED)

(i) Riskmanagementframework

TheCompany’sBoardofDirectorshasoverallresponsibilityfortheestablishmentandoversightoftheCompany’sriskmanagementframework.TheBoardofDirectorshasestablishedtheAuditandRiskManagementCommittee,whichisresponsiblefordevelopingandmonitoringtheCompany’sriskmanagementpolicies.ThecommitteereportsregularlytotheBoardofDirectorsonitsactivities.

TheCompany’sriskmanagementpoliciesareestablishedtoidentifyandanalysetheriskfacedbytheCompany,tosetappropriaterisklimitsandcontrolsandtomonitorrisksandadherencetolimits.RiskmanagementpoliciesandsystemsarereviewedregularlytoreflectchangesinmarketconditionsandtheCompany’sactivities.TheCompany,throughitstrainingandmanagementstandardsandprocedures,aimstomaintainadisciplinedandconstructivecontrolenvironmentinwhichallworkplaceparticipantsunderstandtheirrolesandobligations.

TheBoardofDirectorshasalsoestablishedaFinanceCommittee,consistingofseniorexecutivesoftheCompany,whichmeetsonaregularbasistoanalysefinancialriskexposureandtoevaluatetreasurymanagementstrategiesinthecontextofthemostrecenteconomicconditionsandforecasts.Thefinancecommittee’soverallriskmanagementstrategyseekstoassisttheCompanyinmeetingitsfinancialtargets,whilstminimisingpotentialadverseeffectsonfinancialperformance.ThefinancecommitteeoperatesunderpoliciesapprovedbytheBoardofDirectors.

(ii) Creditrisk

Exposuretocreditriskrelatingtofinancialassetsarisesfromthepotentialnon-performancebycounterpartiesofcontractobligationsthatcouldleadtoafinanciallosstotheCompany.

TheCompanyhasnosignificantconcentrationofcreditriskwithrespecttoanysinglecounterpartyorgroupofcounterpartiesotherthanthosereceivablesspecificallyprovidedforandmentionedwithinnote10.

Tradeandotherreceivables

ThemainsourceofcreditrisktotheCompanyisconsideredtorelatetotheclassofassetsdescribedastradeandotherreceivables.Tradeandotherreceivablesthatareneitherpastdueorimpairedareconsideredtobeofhighcreditquality.Nocollateralisheldoverotherreceivables.

Impairment

Thebalanceoftradeandotherreceivablesthatwereagedover90daysandimpairedat30June2017is$113,138(2016:$124,452).Noincrease,reversaloramountshavebeenwrittenoffinrelationtothebalanceheldat30June2016.

Theagingofthetradeandotherreceivablesthatwerenotimpairedasat30June2017aresetoutinthefollowingtable.

Indollars 2017 2016

Neitherpastduenorimpaired 385,639 144,604

30to90dayspastduebutnotimpaired - -

Over90dayspastduebutnotimpaired 11,314 11,314

Totaltradeandotherreceivablesnotimpaired 396,953 155,918

Cashandcashequivalents

TheCompanyheldcashandcashequivalentsof$254,321at30June2017.Thecashandcashequivalentsareheldwithbankandfinancialinstitutioncounterparties,whichareratedAA-toAA+,basedonratingagencyStandardandPoor’sratings.



18.FINANCIALINSTRUMENTS–FAIRVALUEANDRISKMANAGEMENT(CONTINUED)

(iii) Liquidityrisk

LiquidityriskistheriskthattheCompanywillencounterdifficultyinmeetingtheobligationsassociatedwithitsfinancialliabilitiesthataresettledbydeliveringcashoranotherfinancialasset.TheCompany’sapproachtomanagingliquidityistoensure,asfaraspossible,thatitwillhavesufficientliquiditytomeetitsliabilitieswhentheyaredue,underbothnormalandstressedconditions,withoutincurringunacceptablelossesorriskingdamagetotheCompany’sreputation.

TheCompanyhasaninterestfree,$2millionworkingcapitalloanfacilityinplacewithitsparententityiQnovateLtd.Thebalanceofthisfacilityasat30June2017wasnil(2016:nil).

TheCompanyaimstomaintaincashatalevelappropriatetofundoperations.At30June2017,theexpectedcashflowsfromtradeandotherreceivablesmaturingwithintwomonthswere$369,448.

IndollarsWithin1year 1to5years Over5years Total

2017 2016 2017 2016 2017 2016 2017 2016

Non-derivativefinancialliabilities

Tradeandotherpayables 1,274,445 391,183 - - - - 1,274,445 391,183

(iv) Marketrisk

Marketriskistheriskthatchangesinmarketprices–suchasforeignexchangerates,interestratesandequityprices–willaffecttheCompany’sincomeorthevalueofitsholdingsoffinancialinstruments.Theobjectiveofmarketriskmanagementistomanageandcontrolmarketriskexposureswithinacceptableparameters,whileoptimisingthereturn.

Currencyrisk

TheCompany’sexposuretoforeigncurrencyriskislimitedduetothenaturalhedgeaffordedtotheCompanybypurchasingandsellinginAUD.

TheCompanydoesnotholdanyforeigncurrencycontracts.



19. INVESTMENTINASSOCIATES

Thepercentageownershipinterestisequivalenttothepercentagevotingrightsforallinvestments.

Entityname Countryofincorporation

Ownershipinterest2017

Ownershipinterest2016

Associates

NewFrontierHoldingsLLC(“NewFrontier”) USA 20% 20%

NereidEnterprisesPtyLtd AUS 20% 20%

NereidEnterprisesLLC USA 20% 20%

NereidEnterprisesPtyLtdprovidescorporateeventsandpromotionalservicestothehealthcareindustryandrelatedpartiesofFarmaForceLimited.

Summaryfinancialinformation

Noneoftheassociatesarelistedonastockexchange.Theinvestmentsinassociatesisequityaccountedusingauditedfinancialinformation.

InAUD 2017 2016

(i) Summarisedstatementofcomprehensiveincome

Revenue - -

Lossaftertax (152,778) (134,096)Othercomprehensiveincome/(loss) (2,921) 32,373Totalcomprehensiveloss (155,699) (101,723)Dividendsreceivedfromassociate - -

(ii) Summarisedbalancesheet

Totalassets 1,205,807 1,246,927

Totalliabilities 105,242 3,650

Netassetsasatreportingdate 1,100,565 1,243,277

Company’sownershipinterest 20% 20%

Carryingvalueat30June220,113248,655^

^TheFY2016movementincarryingvalueof$20,335wasimmaterial,andrecognisedinthecurrentyearstatementofprofitorloss.


AssociatesareallentitiesoverwhichtheCompanyhassignificantinfluencebutnotcontrol,generallyaccompanyingashareholdingbetween20%and50%ofthevotingrights.InvestmentsinassociatesareaccountedforintheCompany’sfinancialstatementsusingtheequitymethodofaccounting,afterinitiallybeingrecognisedatcost.

TheCompany’sshareoftheassociatespost-acquisitionprofitsorlossesarerecognisedinthestatementofprofitorloss,anditsshareofpost-acquisitionmovementsinreservesisrecognisedinreserves.Thecumulativepostacquisitionmovementsareadjustedagainstthecarryingamountoftheinvestment.Dividendsreceivablefromassociatesreducethecarryingamountoftheinvestment.WhentheCompany’sshareoflossesinanequalorexceedsitsinterestintheassociate,includingsecuredandunsecuredreceivables,theCompanydoesnotrecognisefurtherlosses,unlessithasincurredobligationsormadepaymentsonbehalfoftheassociate.



20. TRANSACTIONSWITHRELATEDPARTIES

(i) EntitiesexercisingcontrolovertheCompany

Theultimateparententity,whichexercisescontrolovertheCompany,isiQnovateLtd(“iQN”)whichisincorporatedinAustraliaandowns70.59%ofFarmaForceLimited.

DrGeorgeSyrmalisisCEO,Chair,ExecutiveDirectorandasubstantialshareholderofiQN.MrConTsigounisisExecutiveDirectorandasubstantialshareholderofiQN.

(ii) Parententitytransactions

Transactionswiththeparententityareonnormalcommercialtermsandconditionsnomorefavorablethanthoseavailabletootherpartiesunlessotherwisestated.

Theaggregatevalueoftransactionsandoutstandingbalancesrelatingtotheparententity,iQnovateLtd,aresetoutinthefollowingtable.

Indollars 2017 2016

Consultingfees 99,640 18,182

Totalrevenuereceivedfromparententity 99,640 36,364

Officeandsharedservicescosts 220,775 802,556

Totalexpenditurepaidtoparententity 220,775 802,556

Tradepayableamountsowingtoparententity 303,599 -

Loanfacility^amountsowningtoparententity - -

Totalamountsowingtotheparententity 303,599 -

^TheCompanyhasaninterestfree,$2millionworkingcapitalloanfacilityinplacewithitsparententityiQnovateLtd.Thebalanceowingunderthisfacilityasat30June2017wasnil(2016:nil).

(iii) Keymanagementpersonnelcompensation

Thekeymanagementpersonnelcompensationissetoutinthetablebelow.

Indollars 2017 2016

Short-termemployeebenefits 133,851 139,003

Post-employmentbenefits 9,091 10,118

Totalkeymanagementpersonnelcompensation 142,942 149,121

CompensationoftheCompany’skeymanagementpersonnelincludessalariesandnon-cashbenefits.ExecutiveofficersalsoparticipateintheCompany’semployeeincentiveplan.

FurtherdetailsofkeymanagementpersonnelcompensationareincludedintheRemunerationReportwithintheDirectors’Report.



20.TRANSACTIONSWITHRELATEDPARTIES(CONTINUED)

(iv) Transactionswithotherrelatedparties

FarmaForcetransactedwiththefollowingrelatedcompanies.Transactionswithotherrelatedpartiesareonnormalcommercialtermsandconditionsnomorefavourablethanthoseavailabletootherpartiesunlessotherwisestated.

Entityname Relationship

ClinicalResearchCorporationPtyLtd Subsidiariesofcommonultimateparententity

iQXLimited Commondirectorshipand/keymanagementpersonnel

iQ3CorpLtd Commondirectorshipand/keymanagementpersonnel

Theaggregatevalueoftransactionsandoutstandingbalancesrelatingtootherrelatedpartiesaresetoutinthefollowingtable.

Indollars 2017 2016

Consultingfees - 18,182

Totalrevenuereceivedfromotherrelatedparties - 18,182

Officeandsharedservicescosts 92,417 118,588

Consultancyfees 8,842 30,811

Companysecretarialservices - 36,000

Totalexpenditurepaidtoparententity 101,259 185,399

Tradereceivableamountsowingfromotherrelatedparties 42,219 29,383

Tradepayableamountsowingtootherrelatedparties 52,018 46,897

Netamountsowingtootherrelatedparties 9,799 17,514



21. RECONCILIATIONOFCASHFLOWSFROMOPERATINGACTIVITIES

Indollars 2017 2016

Cashflowsfromoperatingactivities

Lossfortheperiod (2,307,433) (3,799,018)Adjustmentsfor: IPOlistingcosts - 82,754Depreciation 48,515 38,538Shareoflossofassociatedcompanies 57,959 - (2,200,959) (3,677,726)

Changesin: Tradeandotherreceivables (240,655) (74,841)Otherassets 62,044 -Tradeandotherpayables 1,063,738 313,848

Incomeinadvance 178,024 (149,579)Employeebenefits 40,422 -

1,103,573 89,428

Netcashusedinoperatingactivities (1,097,386) (3,588,298)

22. AUDITORS’REMUNERATION

Indollars 2017 2016

Auditandreviewservices

AuditorsoftheCompanyatJune2017-RSM 25,000 -

AuditorsoftheCompanyatDecember2016-FortunityOtherauditors

4,000 15,000

Otherservices

AuditorsoftheCompanyatJune2017–RSM 2,500 -

AuditorsoftheCompanyatDecember2016–Fortunity - -

Otherauditors - -

23. SUBSEQUENTEVENTS

Therehasnotarisenintheintervalbetweentheendofthefinancialyearandthedateofthisreportanyitem,transactionoreventofamaterialandunusualnaturelikely,intheopinionoftheDirectorstoaffectsignificantlytheoperationsorstateofaffairsoftheCompanyinfuturefinancialyears.

FARMAFORCELIMITEDDIRECTORS’DECLARATIONFORTHEYEARENDED30JUNE2017


1. IntheopinionoftheBoardofDirectorsofFarmaForceLimited(“theCompany”):

a. theconsolidatedfinancialstatementsandnotesthataresetoutonpages29to52areinaccordancewiththeCorporationsAct2001,including:

I. givingatrueandfairviewofthefinancialpositionasat30June2017oftheCompanyperformanceforthefinancialyearendedonthatdate;and

II. complyingwithAustralianAccountingStandardsandtheCorporationsRegulations2001;and

b. therearereasonablegroundstobelievethattheCompanywillbeabletopayitsdebtsasandwhentheybecomedueandpayable.

2. TheDirectorshavebeengiventhedeclarationsrequiredbySection295AoftheCorporationsAct2001fromthechiefexecutiveofficerandchieffinancialofficerforthefinancialyearended30June2017.

3. TheDirectorsdrawattentiontonote2totheconsolidatedfinancialstatements,whichincludesastatementofcompliancewithInternationalFinancialReportingStandards.

SignedinaccordancewitharesolutionofDirectors.

GeorgeEliasChair

Sydney

29September2017

jacqueline

Pencil

54

INDEPENDENT AUDITOR’S REPORT To the Members of FarmaForce Limited

Opinion

We have audited the financial report of FarmaForce Limited. (the Company), which comprises the statement of financial position as at 30 June 2017, the statement of comprehensive income, the statement of changes in equity and the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the directors' declaration.

In our opinion the accompanying financial report of the Company is in accordance with the Corporations Act 2001, including:

(i) giving a true and fair view of the Company's financial position as at 30 June 2017 and of its financial performance for the year then ended; and

(ii) 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 (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.

55

Key Audit Matter How our audit addressed this matter

Recognition of Revenue

Refer to Note 6 in the financial statements

Revenue recognition was considered a key audit

matter, as it material and important to the company’s

profitability.

In addition we focused on revenue recognition as the

company’s business involves entering into fixed

price contracts for the provision of contract sales and

marketing. Revenue on these contracts are

recognised over time as the service is provided and

this may differ from payments received from the

customer, resulting in deferred revenue. There may

also be significant management judgment in

determining the extent to which services have been

delivered, and in identifying potentially onerous

contracts.

Our audit procedures in relation to the recognition of

revenue included:

Assessing whether the Company’s revenue recognition policies were in compliance with Australian Accounting Standards

Evaluating, and testing the operating effectiveness, of management’s controls related to revenue recognition

Inspection of sales contracts and agreeing terms of the contract, the stage of completion, and recalculating revenue recognised.

Carrying value of internally developed intangible assets

Refer to note 13 in the financial statements

The closing net book value of all internally developed

assets was $151,995. The costs of building

applications and web-site platforms are capitalised

as intangible assets, where the expenditure

demonstrable value and the technical and

commercial feasibility is assured.

Management has to exercise judgment in

determining which costs can be capitalised and

when performing an impairment review. The

materiality of judgments involved has caused us to

identify these as key audit risks.

Our audit procedures in relation to the carrying value

of internally developed intangible assets included:

Reviewing management’s identification of the

development projects being undertaken, and their

assessment of whether they meet the criteria for

recognition as intangible assets in accordance with

AASB 138 Intangible Assets

Testing amounts capitalised in the period to

assess whether expenses incurred were directly

attributable to the projects identified, and therefore

eligible for capitalisation.

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 2017, but does not include the financial report and

the auditor's report thereon.

Our opinion on the financial report does not cover the other information and accordingly we do not express any

form of assurance conclusion thereon.

In connection with our audit of the financial report, our responsibility is to read the other information and, in doing

so, consider whether the other information is materially inconsistent with the financial report or our knowledge

obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other

information, we are required to report that fact. We have nothing to report in this regard.

56

Responsibilities of the Directors for the Financial Report

The directors of the Company are responsible for the preparation of the financial report that gives a true and fair

view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal

control as the directors determine is necessary to enable the preparation of the financial report that gives a true

and fair view and is free from material misstatement, whether due to fraud or error.

In preparing the financial report, the directors are responsible for assessing the ability of the Company 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.

Auditor's Responsibilities for the Audit of the Financial Report

Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from

material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance

with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements

can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably

be expected to influence the economic decisions of users taken on the basis of this financial report.

A further description of our responsibilities for the audit of the financial report is located at the Auditing and

Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf. This

description forms part of our auditor's report.

Report on the Remuneration Report

Opinion on the Remuneration Report

We have audited the Remuneration Report included in pages 10 to 15 of the directors' report for the year ended

30 June 2017.

In our opinion, the Remuneration Report of FarmaForce Limited., for the year ended 30 June 2017, complies with

section 300A of the Corporations Act 2001.

Responsibilities

The directors of the Company are responsible for the preparation and presentation of the Remuneration Report

in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the

Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards.

David Talbot

Partner

RSM Australia Partners

Sydney, 29 September 2017

http://www.auasb.gov.au/auditors_responsibilities/ar2.pdf

FARMAFORCELIMITEDASXADDITIONALINFORMATIONFORTHEYEARENDED30JUNE2017


ASX ADDITIONAL INFORMATION

AdditionalinformationrequiredbytheASXLimitedRulesandnotdisclosedelsewhereinthisreportissetoutbelow.Theinformationiscurrentasat11August2017.

SHAREHOLDINGS

Substantialshareholders

Thenumberofsharesheldbysubstantialshareholdersandtheirassociatesaresetoutbelow:

Shareholder Numberofordinary

sharesheld

Percentageofcapitalheld

iQnovateLtd 90,000,000 70.59%

Totalsubstantialshareholders 90,000,000 70.59%

Distributionofequitysecurityholders

Category Numberofholders


1–1,000 4 0.0%

1,001–5,000 12 0.0%

5,001–10,000 142 0.8%

10,001–100,000 190 6.4%

100,001andover 87 92.8%

Total 435 100.0%

Shareholderswithlessthanmarketableparcel

Thereare11shareholderseachwithanunmarketableparcelofsharesbeingaholdingof3,846orless,foracombinedtotalof17,940shares.Thisisbasedonaclosingpriceof13centspershareat11August2017andrepresents0.0141%ofthefullypaidordinarysharesonissue.

Sharessubjecttoescrow

Thearenosecuritiessubjecttoescrow.

Unquotedequitysecurities

Thearenounquotedredeemablepreferencesharesorredeemableconvertiblenotesonissue.

SECURITIESEXCHANGE

TheCompanyislistedontheAustralianSecuritiesExchange.TheHomeexchangeisSydney.

FARMAFORCELIMITEDASXADDITIONALINFORMATION(CONTINUED)FORTHEYEARENDED30JUNE2017


OTHERINFORMATION

FarmaForceLimitedisdomiciledinincorporatedanddomiciledinAustralia,isapubliclylistedcompanylimitedbyshares.

ON-MARKETBUY-BACK

Thereisnocurrenton-marketbuy-back.

TWENTYLARGESTSHAREHOLDERS

Shareholder Numberofordinary

sharesheld


iQnovateLtd 90,000,000 70.59%

PriorityOneGroupPtyLtd 2,775,000 2.18%

BasimFinancePtyLtd 1,333,333 1.05%

iQ3CorpLtd 1,275,009 1.00%

ColinJOdamsPtyLtd 1,000,000 0.78%

AchellesNomineesPtyLtd 930,000 0.73%

MrYWang 844,333 0.66%

MsJStapleton 750,000 0.59%

BartelmPtyLtd 675,000 0.53%

AsgardCapitalManagementLtd 667,000 0.52%

PharmlouPtyLtd 603,920 0.47%

LienPtyLtd 600,000 0.47%

SimosSuperFund 535,890 0.42%

FranzeHoldingsPtyLtd 500,000 0.39%

MrIMacewenStevenson&MsKHynes 500,000 0.39%

SiJiaCorpPtyLtd 500,000 0.39%

MrWBurns&MsRBurns 500,000 0.39%

MrDMorato&MsSMorato 500,000 0.39%

MrMin-ChungYu 457,499 0.36%

KarantziasInvestmentsPtyLtd 451,000 0.35%

Totaltwentylargestshareholders 105,397,984 82.65%

Level 3 222 Clarence St, Sydney NSW Australia 2000

Tel: +61 2 8239 5400 Fax: +61 2 8362 9547 [email protected] farmaforce.com.au

annual report 2017 - farmaforce · george elias, chair dr george syrmalis con tsigounis harry...

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