Promisia Integrative Limited Annual Report

Promisia Integrative Limited

Annual Report
31 December 2018

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THE COMPANY
Promisia Integrative Limited is a company focused on developing and marketing unique natural
products based on robust research. Our goal is to add scientific methodology and validity to a sector
that is often perceived to be unscientific.

FINANCIAL SUMMARY
31 December
2018
$ 000
31 December
2017
$ 000
Change
%
Revenue 727 2,332 (69)
Total comprehensive income attributable to
shareholders
(2,407) (876) 152
Total Assets 1,851 2,295 (11)
Earnings per share (0.004) (0.002) -
Net Tangible Asset Backing ($ per share) $0.001 $0.004 -

SIGNIFICANT EVENTS
January 2018 Successful placement of 47.75 million shares at a price of $0.02 per
share to raise $955,000.
February 2018 Medsafe, a division of the Ministry of Health, issues an Alert warning
of the potential for liver damage from taking Arthrem.
December 2018 A 3 for 1 rights issue at a price of $0.001 per share raises $1,345,063
and results in the issue of 545,088,480 shares. This sum includes
conversion of debt advances from Brankin Trust of $800,000.
Brankin Trust now owns 44.89% of the issued capital of the
company.
December 2018 Medsafe issues an updated Alert.

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TABLE OF CONTENTS
THE COMPANY .................................................................................................. 3
FINANCIAL SUMMARY ..................................................................................... 3
SIGNIFICANT EVENTS ...................................................................................... 3
REPORT OF THE CHAIRMAN ............................................................................ 5
PEOPLE – BOARD OF DIRECTORS .................................................................... 8
GOVERNANCE ................................................................................................... 9
INDEPENDENT AUDITOR’S REPORT.............................................................. 12
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ..................... 15
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .............................. 16
CONSOLIDATED STATEMENT OF FINANCIAL POSITION .............................. 17
CONSOLIDATED STATEMENT OF CASH FLOWS ............................................ 18
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ......................... 19
EVENTS SUBSEQUENT TO BALANCE DATE ................................................... 36
SHAREHOLDER AND STATUTORY INFORMATION ....................................... 38
CORPORATE AND OTHER INFORMATION ..................................................... 42

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REPORT OF THE CHAIRMAN

On behalf of your directors I present the Annual Report of the directors for Promisia Integrative Limited
and its subsidiaries (”the group”) for the year ended 31 December 2018.
Group Results
The loss for the year was significant at $2,407,000 compared with a loss of $876,000 in the previous
year, due largely to the Medsafe Alert which:
• caused an immediate collapse of Arthrem sales in New Zealand,
• overshadowed and reduced significantly the impact of the launch of Arthrem in Australia
• had a very negative impact on the launch of Artevite in New Zealand

Total sales for the year were $727,000 compared with $2,332,000 in the previous year. This was a
reduction of 69%.
Significant expenditure had been incurred, especially television advertising, for the launch of both
Arthrem in Australia and Artevite in New Zealand. It had been the Company’s expectation that this
expenditure would be recovered from product sales over the course of the year, but that outcome did
not eventuate. Take up of both products was affected by adverse publicity surrounding the Medsafe
Alert.
A provision of $150,000 for a reduction in the value of stock has been included in the result for the year,
along with an impairment of $105,000 to Intangibles to reduce the value of trademarks and the US
website to nil.
The directors were unsure about the effect of the Medsafe Alert and adopted a policy of reducing
expenditure to save cash. This proved to be the correct course as the level of committed expenditure
did not allow sufficient leeway for error.
Medsafe Alert
As noted in the 2017 Annual Report and subsequent communications with shareholders, the Medsafe
Alert of February 2018 had a dramatic negative effect on the sale of Arthrem in New Zealand. Initially
sales fell by 90% and, while some recovery has been noted, the rise in sales has been limited.
The directors have noted previously their concerns about the accuracy of the reports of adverse reactions
as reported to the Centre for Adverse Reaction Monitoring (CARM) and the lack of investigation by both
CARM and Medsafe to confirm the accuracy of the information reported to CARM. It is clear that in a
number of the reported adverse reactions the offending product was unlikely to have been Arthrem due
to the dose size and number of capsules taken daily. These are likely to have been competing products
that have subsequently been withdrawn from sale in pharmacies.
We have pointed out these anomalies to Medsafe but there has been little interest in ensuring that the
reports are accurate. This is, in our view, a major failing of the CARM reporting system and its use as a
basis for Medsafe to issue Alerts.
In December 2018 Medsafe issued an updated Alert. It is the company’s view that at least 15 of the total
25 adverse reactions reported to date relate to competitors’ products.
It is worth repeating that the recommended dose for Arthrem is one 150mg capsule twice daily, usually
morning and night. All competing products had a recommended dose of a single 300mg capsule daily.
It is the company’s view that the double dose in a single capsule is responsible for most of the reported
adverse reactions.

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Medsafe Prosecution
In late January 2019 Medsafe commenced a prosecution of the company in the District Court alleging
9 breaches of the Medicines Act 1981.
Two of the charges relate to the alleged sale of an unlicensed medicine, being Arthrem. The company
has always maintained that Arthrem is a dietary supplement, not a medicine. The remaining charges
relate to the promotion of Arthrem on the company’s websites and are based on the assumption that
Arthrem is an unlicensed medicine. The company notes that all its marketing and advertising material
was submitted for review to the Therapeutic Goods Advertising Pre-Vetting Service (TAPS) before being
published and it received a TAPS Approval Number that is displayed on every item.
The directors are unable to comment in more detail as this matter is now before the Courts. The
directors have retained senior counsel and will defend the charges. The outcome of this action is likely
to have a significant impact on the natural products sector in New Zealand.
New Zealand
Arthrem has retained the support of most pharmacies and continues to sell, however consumer
confidence has been shaken by the Medsafe Alerts. Very little advertising and marketing support for
Arthrem was undertaken post the Medsafe Alert and sales have suffered accordingly.
In view of the Medsafe prosecution no additional expenditure will be incurred in New Zealand until the
matter has been resolved. In the meantime, Arthrem remains available in pharmacies and online.
The release of two new products has been deferred until the Medsafe issues have been resolved.
Australia
The launch of Arthrem in New South Wales in February 2018 coincided with the Medsafe Alert. Sales
were affected as pharmacies were reluctant to recommend Arthrem. The combination of a lack of
revenue from the New Zealand market and the need to conserve cash meant that there was little
additional marketing expenditure following the launch publicity.
Nevertheless, Arthrem is now stocked throughout Australia in approximately 600 pharmacies, mainly
in most of the major pharmacy groups, and is also available online. Sales have been lower than expected
due to the lack of marketing and advertising support. The situation will be reviewed in 2019.
The company has ensured that pharmacy staff in Australia are aware of the need to question potential
Arthrem customers prior to selling them Arthrem to ensure that those customers do not have any liver
related conditions or are not taking medicines that may have an adverse impact on the liver. Arthrem
has a different legal status in Australia that is not available in New Zealand and allows more definite
advertising claims to be used. Medsafe has the view that Promisia may be in breach of the Medicines
Act to refer to this status by name in New Zealand.
Artevite
The launch of Artevite in New Zealand in early 2018 was also affected by the Medsafe Alert. Sales have
been considerably lower than expected and have suffered from the lack of advertising after the initial
launch.
The product has a shelf life and creative measures are being taken to get the product into the hands of
dog owners to build market share without incurring significant expenditure.
Capital Raising
The capital raising in January 2018 provided the cash to fund the launch of Arthrem in Australia and
Artevite in New Zealand and enabled the company to survive following the Medsafe Alert. Despite a
severe reduction in expenditure, particularly in marketing and advertising costs, the company required
financial support in order to remain in business.

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The company was fortunate to receive significant financial support from Brankin Trust, an entity
associated with Tom Brankin, one of the company’s directors. Total advances from Brankin Trust were
$800,000 by year end and these advances were converted into equity in the rights issue held in
December 2018. On behalf of the directors and all shareholders I wish to thank Brankin Trust and Mr
Tom Brankin for their ongoing support of the company. Without this support the company would have
had to stop trading.
The December rights issue was supported by a number of shareholders and the directors thank them
for their support.
The compliance requirements, and associated costs, for smaller capital raisings are high and make
raising capital an expensive exercise for smaller companies.

Current Priorities
The outcome of the Medsafe prosecution will have a significant influence on the direction of the
company in 2019 and beyond. The future of Arthrem and the proposed new products, particularly in
New Zealand, is dependent on an acceptable outcome to the prosecution. As noted previously, it will
also have a significant effect on the non-medicine sector of the health market, particularly natural
products. The directors are not prepared to commit any significant expenditure in New Zealand until
the position is clarified.
A revised strategy is being developed for Australia. Other markets for Artemisia products are also being
investigated.
The company will not need to grow an Artemisia crop in Tanzania this year as it has sufficient extract
and dried leaf on hand to satisfy foreseeable requirements.
The last year has been one of the most trying in the company’s recent history. Directors and
shareholders look forward to a more productive 2019. Shareholders will be kept informed of progress
as it occurs over the next few months.



Stephen Underwood
Chairman
29 March 2019

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PEOPLE – BOARD OF DIRECTORS

Mr S. Underwood BCA LLB (VUW) Chairman
Stephen Underwood is a business and management consultant with an extensive background in venture
capital investment. He is a director of a number of private companies.

Mr M.D. Priest
Duncan Priest has a long association with the New Zealand capital markets, equity financing and
investment banking. He has considerable experience in raising capital from both the retail and
wholesale markets.

Mr T.D. Brankin Dip Agriculture & Dip Farm Management (Lincoln)
Thomas Brankin is a New Plymouth based businessman with significant interests in rest homes,
hospitals and retirement villages. His other interests include commercial and residential property and
farm management software.

Ms H. Down BCA (VUW) FCIM

Helen Down is a well known Wellington-based subject matter expert in both marketing and governance.
Helen is recognised for being instrumental in the growth of innovative and exciting small and medium
sized businesses, especially across the STEMM sectors.

MANAGEMENT
Mr Rene de Wit MSc Chem/MBA (Otago) CEO
Rene de Wit is an accomplished CEO and Change Manager with 25 years’ experience in FMCG, Food
Manufacturing, Printing, Packaging, Import/Export, Financial Services and Logistics. He has worked
in corporate, privately owned and own business, specialising in turnarounds and change management.

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GOVERNANCE
The overall responsibility for ensuring that the Company is governed appropriately rests with the Board
of Directors, ensuring that they enhance investor confidence through good corporate governance
practice and accountability in accordance with the Promisia Group Corporate Governance Code – refer
to www.promisia.com for the full document.
THE BOARD OF DIRECTORS
A key responsibility of the Board is to formulate the Company’s strategic direction. In addition, the
Board must have oversight of the financial and operational controls of the business including its risk
management policies and strategies.
The Board also has responsibility for fostering corporate culture, the appointment and remuneration of
its senior executives, the adoption of corporate policies and plans and the approval of major
transactions.

Selection and Role of Chairman
The Chairman is selected by the Board from the non-executive directors. The Chairman’s role is to
manage the Board in an effective manner and provide leadership in the conduct of the Board’s business
and to facilitate the Board’s interaction with the Company’s CEO.

Board Membership
The Board consists currently of three independent directors and one non-independent director as
defined under NZX Rules. All four directors are non-executive directors and were appointed by the
Board and have been confirmed in the role by shareholders at a duly constituted meeting. Their
selection has been based on the value they bring to the Board table including their skills, commercial
experience, strategic thinking and general business acumen.
As at 31 December 2018 the Board was as follows:
Stephen Underwood Chairman and Non-Executive Director
Duncan Priest Non-executive Director
Thomas Brankin Non-executive Director
Helen Down Non-executive Director
Brief profiles of the current board members are detailed on page 8 of this report.
Director Independence
In order for a director to be independent, the Board has determined that he or she must not be an
executive of Promisia Integrative Limited and must have no disqualifying relationship. The Board
follows the guidelines of the NZX Listing Rules.
The Board has determined that Helen Down, Duncan Priest, and Stephen Underwood are independent
directors.
Thomas Brankin and associated interests hold a 44.89% shareholding in Promisia Integrative Limited
Nomination and Appointment of Directors
The Board is responsible for identifying suitable director candidates for consideration by the Board.
Directors may also be nominated by shareholders under Listing Rule 3.2.2.
A director may be appointed by an ordinary resolution of shareholders and all directors are subject to
removal by ordinary resolution. The Board may, at any time, appoint additional directors. However, a
director shall only hold office until the next annual meeting of the Company, but shall be eligible for
election at that meeting. One third of directors shall retire from office at the annual meeting each year.
The directors to retire shall be those who have been longest in office since they were last elected or
deemed to be elected.

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Directors’ Meetings
The number of meetings attended by directors during the year is detailed in the table below.
Board Meeting Audit Committee
Director Held Attended Held Attended
Stephen Underwood 11 9 - -
Duncan Priest 11 8 - -
Thomas Brankin 11 11 - -
Helen Down 11 11 - -
Disclosure of Interests by Directors
The Company maintains an Interests Register in which particulars of certain transactions and matters
involving directors must be recorded. The Interests Register for Promisia Integrative Limited and
subsidiaries is available for inspection at its registered office.
Details of matters entered into the register by individual directors are outlined on pages 39 and 40 of
this report.
Directors’ Share Dealings
As part of its corporate governance code of practice and charter development the Company has adopted
a formal share dealing policy which sets out the procedure to be followed by directors and staff in the
event of trading in Promisia Integrative Limited shares to ensure that no trades are affected while that
person is in possession of price sensitive information. Details of director and staff share transactions
are outlined on page 40.
Indemnification and Insurance of Directors and Officers
The Company holds Directors and Officers liability insurance.

BOARD COMMITTEES
Presently the Board operates only one committee, being the Audit Committee. Matters concerning
nominations to the Board of Directors and remuneration are dealt with by the full Board in keeping
with the size of the Company.
Audit Committee
The role of the Audit Committee is to assist the Board in carrying out its responsibilities under the
Companies Act 1993 as it concerns accounting practices, policies and controls relative to the Company’s
financial position and to make appropriate enquiry into any audit of the Company’s financial
statements. This responsibility includes providing the Board with additional assurance about the quality
and reliability of any financial information issued publicly by the Company from time to time.
Ultimately the Board as a whole is responsible for the accuracy and relevance of the Company’s financial
statements. The Audit Committee provides additional and more specialised oversight. The Audit
Committee also reviews the operation of internal controls together with the quality and cost of the
external audit undertaken by the Company’s auditors.
The Audit Committee comprises two non-executive directors one whom which has special expertise in
financial matters. The Audit Committee members are Stephen Underwood (Chair) and Duncan Priest.
The Audit Committee did not meet during the financial year, attending to all matters through the full
board meetings.

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Remuneration Committee
During the 2018 financial year the full Board dealt with the functions of the Remuneration Committee.
Matters considered related to the remuneration, benefits and terms of employment of senior executives
of the Company, including the staff unpaid share scheme.
Nominations Committee
During the 2018 financial year the full Board dealt with the functions of the Nominations Committee.
Its function is to identify and recommend candidates for the position of director of the Company taking
into account the skills, experience and qualifications necessary to ensure that the Board works as an
effective unit.

REMUNERATION
Remuneration of both directors and Company executives is a responsibility of the Remuneration
Committee, being the full board. Details of director and executive remuneration, including
entitlements, are set out on page 40.
Remuneration of Directors
The amount paid currently to all non-executive directors is $17,000 per annum (other than the
Chairman). The Chairman is paid $49,000 per annum. Under NZX Listing Rule 3.5.2, the Board may
only make a payment to a director upon cessation or retirement from office with shareholder approval.
The Company’s policy is in line with best practice guidelines from the New Zealand Institute of Directors
and no directors are entitled to retirement payments.
Remuneration of Executives and Employees
Executive remuneration consists of a salary with the ability to participate in share options being granted
from time to time as an additional incentive.
Market Disclosure
The Board is committed to the promotion of investor confidence by ensuring that trading of its shares
takes place in an efficient, competitive and informed market.
The Company has in place procedures designed to ensure compliance with the NZX Listing Rules so
that:
• All investors have equal and timely access to material information concerning the Company,
including its financial situation, performance, ownership and governance.
• Company announcements are factual and presented in a clear and balanced form.
Accountability for compliance with disclosure obligations is with the Chairman and the Chief Executive
Officer. Significant market announcements, including the preliminary announcement of the half year
and full year results, the accounts for those periods and any advice of a change in earnings forecast are
approved by the Board.

Diversity
As at 31 December 2018 the gender balance of the Company’s directors and senior management was as
follows:
Directors Management
Male 3 1
Female 1 1
Total 4 2

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13

14

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FINANCIAL STATEMENTS
PROMISIA INTEGRATIVE LIMITED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
For the year ended 31 December 2018
GROUP
Note
2018
$000
2017
$000








Revenue 3 727 2,332
Cost of goods sold 4 (531) (642)
196 1,690
Other income 14 76
Expenses
Administration 5 (800) (923)
Operating 5 (1,637) (1,379)
Research 5 (116) (258)
Amortisation and depreciation 5 (28) (23)
Total Expenses (2,581) (2,583)

OPERATING LOSS (2,371) (817)
Finance costs – interest paid (42) (64)
Finance income – interest received 1 22
LOSS BEFORE INCOME TAX 8 (2,412) (859)
Income tax expense 6 - -
NET LOSS FOR YEAR (2,412) (859)
OTHER COMPREHENSIVE INCOME
Items that may be subsequently reclassified to profit
or loss
- -
Currency translation differences 10 5 (17)
TOTAL COMPREHENSIVE LOSS FOR YEAR
ATTRIBUTABLE TO SHAREHOLDERS


(2,407)

(876)

EARNINGS PER SHARE

Basic earnings per share 12 $(0.004) $(0.002)

Diluted earnings per share 12 $(0.004) $(0.002)

All revenue, expenses and the net loss relate to the continuing operations of the Group. The net loss and
comprehensive loss were all allocated to company shareholders.


This statement should be read in conjunction with the notes to the financial statements

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PROMISIA INTEGRATIVE LIMITED
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 31 December 2018
GROUP SHARE
CAPITAL
FOREIGN
CURRENCY
RESERVE
SHARE
OPTION
RESERVE
ACCUM
LOSSES
TOTAL

$000 $000 $000 $000 $000

Equity at 31 December 2016 55,799 194 83 (54,391) 1,685
Net loss for the year - - - (859) (859)
Other comprehensive income - (17) - - (17)
Share Issue 167 - - - 167
Share based payment - - 43 - 43
Expired/Retired share options 75 - (75) - -
Equity at 31 December 2017 56,041 177 51 (55,250) 1,019
Net loss for the year - - - (2,412) (2,412)
Other comprehensive income - 5 - - 5
Share Issue 2,169 - - - 2,169
Share based payment - - 17 - 17
Expired/Retired share options 68 - (68) -
Equity at 31 December 2018 58,278 182 - (57,662) 798












This statement should be read in conjunction with the notes to the financial statements.

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PROMISIA INTEGRATIVE LIMITED
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 31 December 2018
GROUP Note 2018
$000
2017
$000
Equity
Share Capital
7
58,278 56,041
Accumulated Losses
8
(57,662) (55,250)
Other Equity Reserves
9
182 228
TOTAL EQUITY

798 1,019



Represented By :


Current Assets


Bank

512 324
Receivables
13
53 238
Inventory
15
1,156 1,383
Prepayments
14
4 137
Tax Receivable

5 6
TOTAL CURRENT ASSETS

1,730 2,088



Non-Current Assets


Other Assets
18
75 75
Intangible Assets
17
11 125
Property, Plant & Equipment
16
35 7
TOTAL NON CURRENT ASSETS 121 207

TOTAL ASSETS 1,851 2,295

Current Liabilities
Payables and Accruals
19
261 316
Employee benefits

8 41
Loan
20
188 480
TOTAL CURRENT LIABILITIES 457 837

NON CURRENT LIABILITIES
Loan
20
596 439
TOTAL LIABILITIES 1,053 1,276

NET ASSETS 798 1,019
Authorised for issue on behalf of the Board



Stephen Underwood Tom Brankin Wellington
Chairman Director 29 March 2019
This statement should be read in conjunction with the notes to the financial statements.

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PROMISIA INTEGRATIVE LIMITED
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 31 December 2018
GROUP Note 2018
$000
2017
$000

OPERATING ACTIVITIES
Cash was provided by (applied to):
Receipts from customers 741 2,926
Payments to suppliers and employees (2,500) (4,410)
Net interest paid (40) (42)
NET CASH USED IN OPERATING ACTIVITIES 25 (1,799) (1,526)



INVESTING ACTIVITIES
Cash was provided from (applied to):
Purchase property, plant & equipment (39) (5)
Purchase intangible assets (8) (19)
NET CASH USED IN INVESTING ACTIVITIES (47) (24)

FINANCING ACTIVITIES
Cash was provided from (applied to):
New share capital 2,169 167
Repayment of loan 26 (135) (120)
NET CASH FROM FINANCING ACTIVITIES 2,034 47



NET CHANGE IN CASH HELD 188 (1,503)
Bank at beginning of year 324 1,827
BANK AT END OF YEAR 512 324










This statement should be read in conjunction with the notes to the financial statements.

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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 31 December 2018
1. General Information
The financial statements presented are those of Promisia Integrative Limited (the company) and its
subsidiaries (the group). The Group’s principal activities are focused on developing and marketing
unique therapeutic natural products with proven safety and efficacy based on robust scientific research.
The company is registered under the Companies Act 1993 and is a Financial Markets Conduct 2013
reporting entity in terms of the Financial Markets Conduct Act 2013. The group is profit-oriented.
Promisia Integrative Limited is a company domiciled and incorporated in New Zealand. The registered
office of the company is Level 4, 22 Panama Street, Wellington.
2. Statement of Accounting Policies
(a) Basis of Preparation
The financial statements have been prepared under the historical cost convention.
These financial statements have been prepared in accordance with generally accepted accounting
practice in New Zealand, which is the New Zealand equivalent to International Financial Reporting
Standards (NZIFRS). They also comply with International Financial Reporting Standards.
The financial statements are presented in New Zealand dollars which is the group’s functional and
presentation currency and rounded to the nearest thousand dollars unless stated otherwise.
(b) Going concern
The Promisia Group has generated sales of $727,000 (2017: $2,332,000) and net losses of $2,407,000
(2017: $876,000) during the year ended 31 December 2018. At year end the consolidated statement of
financial position records a position of positive working capital and equity.
It is the continuing opinion of the board of directors that there are reasonable grounds to believe that
operational and financial plans in place are achievable and accordingly the group is able to continue as
a going concern and meet its debts as and when they fall due. Accordingly, use of the going concern
assumption remains appropriate in these circumstances.
In arriving at this position the directors have considered the following pertinent matters:
1. The group raised additional capital $955,000 in January 2018 by a private placement and
$1,345,063 in December 2018 by a renounceable rights issue which also included debt
conversion. note
2. A further $250,000 of new capital will be received in 2019 – see Note 32(i). The additional capital
raised is being used to support the launch of Arthrem into the Australian market.
3. The Group has put in place a restructuring programme which includes increasing revenue in
Australia and achieving a reduction in operating costs and cashflows.
4. Refinanced the loan from Wells Investments Ltd with a change in terms – see Note 32(ii). The
loan does not require payment within the next twelve months.
5. 5. Considered the impact of the Ministry of Health prosecution - see Note 32(iii).

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(c) Significant accounting estimates and judgements
The preparation of the financial statements in conformity with NZIFRS requires the use of certain
critical accounting estimates. It also requires management to exercise judgment in the process of
applying the Group’s accounting policies. Estimates and judgments are continually evaluated and are
based on historical experience and other factors, including expectations of future events that are
believed to be reasonable under the circumstances. The Group makes estimates and assumptions about
the future. The resulting accounting estimates will by definition seldom equal related actual results. The
estimates and assumptions that have a risk of causing a material adjustment to the carrying value of
assets and liabilities within the next financial year are discussed below:
Share based payments
The significant estimates and assumptions involved in measuring the cost of equity settled transactions
with directors and management (Note 7.4).
Impairment of intangible assets
Intangible assets are amortised and are tested for impairment when events or changes in circumstances
indicate the carrying value may not be recoverable (Note 16).
Inventory
Inventory has been reviewed for obsolescence and all old inventories have been fully written off in
accordance with the group’s inventory policy.
(d) Specific accounting policies
The following specific accounting policies which materially affect the measurement of profit and the
financial position have been applied.
(i) Basis of consolidation — purchase method
The consolidated financial statements include the company and its subsidiaries accounted for using the
purchase method. All significant inter-company transactions are eliminated on consolidation.
(ii) Statement of Cash flows
For the purpose of the cash flow statement, cash includes cash on hand, deposits held at call with banks,
and investments in money market instruments, net of bank overdrafts.
Cash flows are presented in the statement of cash flows on a GST inclusive basis, except for the GST
components of investing and financing activities, which are disclosed as operating cash flows.
(iii) Foreign currencies
Transactions in foreign currencies are initially recognised in the functional currency of the relevant
operating unit. At balance date, foreign monetary assets and liabilities are translated at the closing rate,
and exchange variations arising from these translations are recognised in the income statement. The
assets and liabilities of foreign operations, whose functional currency is not the New Zealand dollar, are
translated at the closing rate. Revenue and expense items are translated at the spot rate at the transaction
date or a rate approximating that rate. Foreign currency exchange differences are recognised in the
foreign currency translation reserve.
(iv) Goods and Services Tax (GST)
The statement of comprehensive income has been prepared exclusive of GST. All items in the statement
of financial position are stated net of GST with the exception of receivables and payables which include
GST invoiced. Operating cash flows are presented on a GST inclusive basis.
(v) Revenue
Revenue on sales of goods is recognized when they are delivered and ready for use by the customer and
recorded at net of discounts allowed. The group’s revenue is categorized as retail, on-line and other
sales.

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(vi) Government Grants
Government and other grants are recognised where there is reasonable assurance that the grant will be
received and all attached conditions will be complied with. When the grant relates to an expense item, it
is recognised as income on a systematic basis over the periods that the related costs, for which it is
intended to compensate, are expensed. When the grant relates to an asset, it is recognised as income in
equal amounts over the expected useful life of the related asset.
(vii) Taxation
The income tax expense charged to the statement of comprehensive income includes both the current
year’s provision and the income tax effect of (i) Taxable temporary differences, except those arising from
initial recognition of goodwill and other assets that are not depreciated; and (ii) Deductible temporary
differences to the extent that it is probable that they will be utilised. Temporary differences arising from
transactions, other than business combinations, affecting neither accounting profit nor taxable profit are
ignored.
Tax effect accounting is applied on a comprehensive basis to all timing differences. A deferred tax asset
is only recognised to the extent that it is probable there will be future taxable profit to utilise the
temporary differences.
(viii) Share capital
Ordinary shares are classified as equity. Direct costs of issuing shares are shown as a deduction from the
proceeds of the issue. Where share options issued have expired then share capital includes an
adjustment for the expired share option cost as transferred from the option reserve.
(ix) Share based payments
The Group measures the cost of equity-settled transactions with directors and management by reference
to the fair value of the equity instruments at the date at which they are granted. Estimating fair value
for share-based payment transactions requires determination of the most appropriate valuation model,
which is dependent on the terms and conditions of the grant. This estimate also requires determination
of the most appropriate inputs to the valuation model including the expected life of the share option,
volatility and dividend yield and making assumptions about them. The assumptions and models used
for estimating fair value for share-based payment transactions are disclosed in Note 7.4.
All share-based remuneration is ultimately recognised as an expense in profit or loss with a
corresponding credit to share option reserve. If vesting periods or other vesting conditions apply, the
expense is allocated over the vesting period, based on the best available estimate of the number of share
options expected to vest.
Upon exercise of share options, the proceeds received net of any directly attributable transaction costs
are allocated to share capital.
(x) Financial instruments
Non-derivative financial instruments comprise trade and other receivables, cash and cash equivalents,
other assets (being the NZX listing bond), loans and advances to others, trade and other payables and
term borrowings. They are all recognised initially at fair value plus any directly attributable transaction
costs.
Subsequent to initial recognition, these financial instruments are measured at amortised cost using the
effective interest method, less any impairment losses. Due to their short-term nature, the carrying value
of cash and cash equivalents, trade and other receivables, trade and other payables approximates their
fair value.
A financial instrument is recognised if the Group becomes a party to the contractual provisions of the
instrument. Financial assets are derecognised if the Group’s contractual rights to the cash flows from
the financial assets expire or if the Group transfers the financial asset to another party without retaining

22
control or substantively all risks and rewards of the asset. Financial liabilities are derecognised if the
Group’s obligations specified in the contract expire or are discharged or cancelled.
Cash and cash equivalents comprise cash balances and deposits. Bank overdrafts that are repayable on
demand and form an integral part of the Group’s cash management are included as a component of cash
and cash equivalents for the purpose of the Consolidated Statement of Cash Flows.
The Group does not have any derivative financial instruments or any other financial assets or liabilities
that are classified as instruments at fair value through profit and loss under NZ IFRS.
(xi) Receivables and payables
Receivables and payables are initially recorded at fair value and subsequently carried at amortised cost
using the effective interest method. Due allowance is made for impaired receivables (doubtful debts).
(xii) Employee benefits
A liability for short-term employee benefits accruing to employees in respect of salaries and annual leave
other than termination benefits, that are expected to be settled wholly within 12 months after the end of
the reporting period are accrued and recognised in the consolidated statement of financial position.
Short-term employee benefits as a result of employee services are measured at the undiscounted
amounts expected to be paid when the liabilities are settled.
The group has no long term benefits.
(xiii) Inventories
Inventories are stated at the lower of cost, determined on a first-in first-out basis, and net realisable
value after making any allowance for obsolescence or degradation. In particular, certain inventory which
is older than 6 years is discounted by 30%. The cost of finished goods includes the cost to purchase the
inventory and transport it to its current location.
(xiv) Intangible Assets
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and
install the specific software. Costs that are associated directly with the development of software are
recognised as intangible assets where the following criteria are met:
For external developed software - expenditure on the research phase of a project to develop new
customised software for e-commerce platforms is recognised as an expense as incurred. Costs that are
directly attributable to a project’s development phase are recognised as intangible assets, provided they
meet the following recognition requirements: (i) the development costs can be measured reliably (ii)
the project is technically and commercially feasible (iii) the Group intends to and has sufficient
resources to complete the project (iv) the Group has the ability to use or sell the software (v) the software
will generate probable future economic benefits.
Development costs not meeting these criteria for capitalisation are expensed as incurred.
The useful lives of the Group’s intangible assets excluding trademarks are assessed to be finite. Assets
with finite lives are amortised over their useful lives and tested for impairment whenever there are
indications that the assets may be impaired. Trademarks are not amortised and are reviewed annually
to ensure they are still applicable and registered.
Amortisation is recognised in the statement of comprehensive income on a straight-line basis over the
estimated useful life of the intangible asset of 3 to 5 years, from the date it is available for use.
(xv) Plant and equipment
Plant and equipment is initially recorded at cost. When an item of property, plant and equipment is
disposed of any gain or loss is recognised in the Consolidated Statement of Comprehensive Income
and calculated as the difference between the sale price and the carrying value of the item.

23
Depreciation is provided for on a diminishing value basis on all plant and equipment at depreciation
rates calculated to allocate the assets’ cost or valuation less estimated residual value over their
estimated useful lives.
Major depreciation periods are plant and equipment 5 to 15 years.
Assets are fully written off when no longer in use by the Group.
(xvi) Impairment
At each reporting date, the group reviews the carrying amounts of its tangible and intangible assets to
determine whether there is any indication that those assets have suffered an impairment loss. If any such
indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the
impairment loss (if any).
Recoverable amount is the higher of the fair value less costs to sell and value in use.
If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying
amount of the asset is reduced to its recoverable amount. An impairment loss is recognised in profit or
loss immediately, unless the relevant asset is carried at fair value, in which case the impairment loss is
treated as a revaluation decrease.
Where an impairment loss subsequently reverses, other than for goodwill, the carrying amount of the
asset is increased to the revised estimate of its recoverable amount, but only to the extent that the
increased carrying amount does not exceed the carrying amount that would have been determined had
no impairment loss been recognised for the asset in prior years. A reversal of an impairment loss is
recognised in the statement of comprehensive income immediately, unless the relevant asset is carried
at fair value, in which case the reversal of the impairment loss is treated as a revaluation increase.
(xvii) Changes in accounting policies
There have been no changes to the accounting policies for the year ended 31 December 2018.
Adoption status of relevant new financial reporting standards and interpretations:
(i) The following standards - NZ IFRS 9 Financial Instruments and NZ IFRS 15 Revenue from
Contracts with Customers became effective for the first time for periods beginning on or after 1
January 2018. They were adopted and had no significant effect on the Group’s financial statements
as at 31 December 2018.
(ii) The following new standard - NZ IFRS 16: Leases, became effective for early adoption or is
effective for periods beginning on or after 1 January 2019. The group’s assessment of the impact
of adopting this standard is expected to be minimal The standard will be adopted at the
appropriate date required.

3. Revenue
GROUP
2018
$000
2017
$000
Retail 493 2,069
On– line 82 226
Other 152 37
Total Revenue 727 2,332

24
4. Cost of Goods Sold
GROUP 2018
$000
2017
$000
At 1 January –inventory 1,383 811
Purchases 303 1,214
At 31 December - inventory (1,156) (1,383)
Cost of goods sold
531 642

5. Analysis of Expenses
GROUP 2018
$000
2017
$000
Administration

Auditor’s remuneration 28 26
Directors’ fees 100 93
Foreign exchange (gain) loss 7 (16)
NZX listing & registry 48 97
Rental 48 43
Share based payment 17 43
Staff & employment costs 344 388
Other 208 249
Total Administration 800 923
Operating
Distribution 411 248
Marketing 1,057 1,131
Impairment of intangible assets 105 -
Other operating costs 64 -
Total Operating 1,637 1,379
Research 2018
$000
2017
$000
Employment costs 93 195
Other research 23 63
Total Research Expenses 116 258
Amortisation and depreciation 28 23
TOTAL EXPENSES 2,581 2,583

25
6. Taxation
GROUP 2018
$000
2017
$000
Net (Loss) for year - (note 8)

(2,412) (859)
Taxation @ 28 cents

- -
The Group has $5,734,887 (2017: $4,372,082 ) of New Zealand domiciled entity tax losses accumulated
from previous years. The net losses available for tax purposes as at 31 December 2018 have been
reduced by $30,000 (2017: $48,000) to account for temporary differences and non- deductible
overseas income and expenses.
The current tax losses and 49% shareholder continuity are subject to IRD approval. To offset these tax
losses against future taxable income, a 49% continuity of ultimate shareholders must own the
Company’s shares from beginning of the year of the loss to the end of the year of offset. The company
has not met this condition at 31 December 2018 and lost the ability to offset these losses against future
taxable income.
There are no imputation credits available to shareholders (2017: $nil).
Deferred tax
No deferred tax asset has been recognised. Any future tax losses will be recognised as an asset at the
time that it is considered probable that future taxable profits are available to offset these tax losses.
7. Share Capital
The Group’s share capital includes fully paid and subscribed ordinary shares 0f 1,901,797,451 and
unpaid ordinary shares of 16,595,856 (2017: 16,595,856) totalling 1,918,393,307
(2017: 525,554,827). All fully paid ordinary shares carry full and equal voting rights, share equally
in distributions and have no par value. Movements in the issued and unissued ordinary shares are
set out below:
7.1 Fully paid ordinary shares
There were 1,901,797,451 (2017: 508,958,971) fully paid ordinary shares on issue at balance date. The
ordinary shares do not have a par value.
2018
Number of
shares
(000)
2017
Number of
shares
(000)
2018
$000
2017
$000
At 1 January
508,959 498,511 56,041 55,799
New subscribed and paid capital 1,392,838 10,448 2,300 167
Expired/Retired options
- -
68 75
Issue costs - - (130) -
At 31 December 1,901,797 508,959 58,278 56,041
During 2018, no ordinary shares were issued and purchased by staff as part of the Staff Unpaid Share
Scheme (2017 - 10,488,130 ordinary shares were issued (see note 7.2) and purchased by staff as part of
the Staff Unpaid Share Scheme for a total of $167,000 ($0.16 per share). See Note 22.2 (e).

26
7.2 Unpaid ordinary shares – Treasury shares
There were 0f 16,595,856 (2017: 16,595,856) available for issue at balance date as part of the Staff
Unpaid Share Scheme for eligible staff, being employees or contractors, to purchase.


2018
Number of
shares
2017
Number of
shares
2018
$000

2017
$000

At 1 January 16,595,856 27,043,986 - -
Unpaid subscribed shares
(transferred)/ acquired to fully paid
shares
- (10,448,130) - -
At 31 December 16,595,856 16,595,856 - -

During the year no (2017:10,448,130) unpaid ordinary shares were allocated and purchased by staff
as part of this scheme.
The unallocated and unpaid ordinary shares are held by a nominee company, Promisia Trustee
Limited - see Note 22.2 (e).
7.3 Option Scheme
On 1 September 2014 the company granted further options totalling 17.08 million to the directors and
management of the company. See note 22.2 (c) for other details.
Movements in the number of share options outstanding and their related weighted average exercise
prices are as follows:


2018
Number of
options
2018
Weighted
average of
exercise price
2017
Number of
options
2017
Weighted
average of
exercise price
Outstanding at 1 January
7,310,000 $0.06 15,310,000 $0.06
Expired/Retired (7,310,000) $0.06
( (8,000,000)
$0.06
Outstanding at 31 December - - 7,310,000 $0.06
The terms of issue of the options were -
The options (i) may be converted to ordinary shares by payment of $0.08 per share up to the expiry
date of 29 May 2018. (ii) may be transferred at any time provided the board approves the transfer. (iii)
will not give any right to participate in dividends or any new pro rata entitlement issues of securities of
the company until shares are allotted pursuant to the exercise of the options. (iv) shall vest annually
based on a prorated calculation over the life of the option from grant to expiry date.
The option scheme expired on 29 May 2018 and none of the terms occurred.
7.4 Share based payments & options granted
During the year the share based payment expense recognised for options granted by the company
amounted to $17,434 (2017 $42,707.) See Note 11 for further details.

27
The fair value of the services rendered in exchange for the grant of the options are recognised as an
expense and the amount expensed is determined by reference to the fair value of the options granted.
There are no market or non-market performance conditions attached to the options granted.
When the options are exercised the company issues new shares and the proceeds received, net of any
directly attributable transaction costs are credited to the share capital and share premium accounts.
The fair value of the share options are estimated at the grant date using the Black - Scholes option
pricing model taking into account the terms and conditions upon which the share options were granted.
The volatility was measured based on a statistical analysis of share prices over the 2018/17 year and a
comparison of volatilities to other similar operating companies.
The inputs into the share option pricing model are as follows:
Options granted Issue
Grant date 1 Sept 2014
Vesting period ends 29 May 2018
Share price at date of grant 0.o42 cents
Volatility 50%
Option life 3.7 years
Risk free investment rate 3.61%
Fair value at grant date 0.0094 cents
Exercise price at date of grant 0.08 cents
Weighted average remaining
contractual life
3.4 years
The option scheme expired on 29 May 2018.

8. Accumulated Losses
GROUP 2018
$000

2017
$000
At 1 January (55,250) (54,391)
Net loss for the year (2,412) (859)
At 31 December (57,662) (55,250)

9. Other Equity Reserves
GROUP 2018
$000
2017
$000
Foreign currency – Note 10 182 177
Share option – Note 11 - 51
182 228

28
10. Foreign Currency Reserve
GROUP 2018
$000
2017
$000
At 1 January 177 194
Movement in foreign currency translation 5 (17)
At 31 December – Note 9 182 177

This reserve comprises the foreign currency translation differences arising from the translation of the
financial statements of the Group’s foreign entities into New Zealand dollars.

11. Share Option Reserve
GROUP
2018
$000
2017
$000
At 1 January 51 83
Share options granted to CEO/Directors 17 43
Expired and transferred to share capital (68) (75)
At 31 December – Note 9 - 51

All share based remuneration is ultimately recognised as an expense in the statement of comprehensive
income with a corresponding credit to the share option reserve. At the time of any expiry or exercise of
options, the amount of the reserve relating to the expiry or exercise of options is transferred to share
capital.
12. Earnings per share
GROUP

2018
$000
2017
$000
Net Loss for year

(2,412) (859)
Basic earnings per share $(0.004) $(0.002)
Diluted earnings per share $(0.004) $(0.002)

2018
2017

Number of
shares
Number of
shares
Weighted average number of shares for basic EPS 668,800 505,871
Weighted average number of shares for diluted EPS 640,082 514,515
The calculation of basic earnings per share is based on the loss from continuing operations attributable
to ordinary shareholders and the weighted average of total ordinary shares on issue during the year.
The calculation of diluted earnings per share is based on the loss from continuing operations
attributable to ordinary shareholders and the weighted average number of ordinary shares assuming
that the share options were exercised in full as at 31 December 2018 - see Note 7.3 for further details.

29
13. Receivables
GROUP

2018
$000
2017
$000
Current Receivables

Trade receivables 26 189
Sundry receivables - 5
Other taxes 27 44
Total other receivables 27 49
Total current receivables 53 238
No provision for impairment over receivables was required during 2018 (2017:Nil).

14. Prepayments
GROUP

2018
$000
2017
$000
Overseas contractors - 137
Other 4 -
Total Prepayments 4 137
15. Inventory
GROUP 2018
$000
2017
$000
Raw materials and extract 887 736
Finished product 269 647
Total Inventory 1,156 1,383
Inventory was impaired by $313,000 during 2018 and written off in the cost statement of income as part of
cost of sales. (2017 $nil) .
16. Property Plant & Equipment
GROUP
2018
$000
2017
$000
Plant & Equipment Gross carrying amount
At 1 January 9 5
Additions 39 4
At 31 December 48 9
Accumulated depreciation
At 1 January (2) -
Depreciation (11) (2)
At 31 December (13) (2)
Carrying amount at 31 December

35
7

30
17. Intangible Assets
GROUP 2018
$000
Website
2018
$000
Trademarks
2018
$000
Total
Gross carrying amount
At 1 January 142 41 183
Additions - 8 8
At 31 December 142 49 191

Accumulated amortisation
At 1 January (58) - (58)
Amortisation (17) - (17)
Provision for impairment (56) (49) (105)
At 31 December (131) (49) (130)
Carrying Amount at 31 December 11 - 11

GROUP 2017
$000
Website
2017
$000
Trademarks
2017
$000
Total
Gross carrying amount
At 1 January 142 22 164
Additions - 19 19
At 31 December 142 41 183

Accumulated amortisation
At 1 January (37) - (37)
Amortisation (21) - (21)
At 31 December (58) - (58)
Carrying Amount at 31 December 84 41 125

18. Other Assets
GROUP
2018
$000
2017
$000
NZX Listing Bond 75 75

31



19. Payables and Accruals
GROUP 2018
$000
2017
$000
Current
Trade payables 127 267
Other payables 23 -
Accruals 110 49
Total Payables and Accruals 261 316

20. Loan
2018
$000
2017
$000
Current liability
Loan 188 480
Non-current liability
Loan 596 439
Total 784 919
At 31 December 2018 the balance of the loan was $783,710.
On 14 March 2018, the Group entered into a further updated loan agreement with Wells Investments
Limited. The loan is to be repaid according to a fixed monthly repayment schedule and by December
2021 or earlier, with monthly payments in the range of $12,500 to $30,000 commencing in April 2018.
Interest is charged at a rate of 6.5% p.a. However interest was no longer charged from 1 October 2018.
Details of the security granted over the loan are set out in Note 21.
Refer to note 32 (ii) - subsequent events for an update on the terms of the loan where the loan was
assigned to the Brankin Family Interest Trust on 1 October 2018. The trust is related to one of the
directors.

21. Securities Granted
Wells Investments Limited holds security over the assets of the Group in priority to all or any other
lender until such time the loan is repaid. Refer also to note 32(ii).

22. Related Party Information
The Group has related party relationships with its controlled entities, and key management as follows:

32
22.1 Investments in Subsidiaries
The subsidiaries (controlled entities) held by the parent company were as follows:
PRINCIPAL
ACTIVITIES
COUNTRY
OF
INCORPORATION
COST

$
INTEREST
HELD BY
GROUP
%
Promisia Limited
Distribution &
Manufacture
New Zealand - 100
Benefit Arthritis Limited Distribution New Zealand - 100
Promisia Trustee Limited Trustee New Zealand - 100
Promisia Australia Pty Limited Distribution Australia 113 100
Promisia LLC Distribution USA - 100

22.2 Related Party Transactions and Balances
(a) As at 31 December 2018, directors’ fees and expenses are owed to:
GROUP 2018
$
2017
$
H.Down 1,898 -
S. Underwood - 57,150
Total 1,898 57,150

During the year the company entered into the following related party transaction:
Consulting fees of $60,250 (2017 $31,422) were paid to Helen Down, a director and
shareholder of the company. All transactions were conducted on normal trading terms.

(b) No debts with related parties have been written off or forgiven during the year. The loan and
advance balances by the directors are not secured and interest is not charged.
Refer to note 20 and 32 (ii) - subsequent events for an update on the terms of the loan where
the refinancing of the Wells Investment loan of $783,810 occurred on 1 October 2018 and was
assigned to the Brankin Family Interest Trust. It went unconditional on 30 January 2019. The
loan has no fixed repayment terms, and interest will be charged on the loan. The trust is related
to one of the directors – T D Brankin.

(c) As at 31 December 2018, there were no outstanding options granted to directors and
management and outstanding:
Position Granted Outstanding Granted Outstanding
2018
000
2018
000
2017
000
2017
000
S. Underwood Director - - - 1,770
M.D. Priest Director - - - 1,770
T.D. Brankin Director - - - 1,770
Management - - - 2,000
Total - - - 7,310

33
(d) Transactions with key management
GROUP 2018
$000
2017
$000
Key management remuneration
200 177
Share based payment 17 43

(e) Staff Unpaid Share Scheme (“scheme”)
The company has established a Staff Unpaid Share Scheme which offers eligible employed and
contracted staff (‘‘staff”) an entitlement to purchase unpaid shares in the company at a specified
price on a one-off basis, with no assurance being given that any entitlement will arise in future
years. The continued operation of the scheme and any further entitlements will be at the sole
discretion of the company directors. Terms and conditions of the offer are as follows:
Details of the unpaid shares and available to be offered to eligible staff are set out in note 7.2.
The company has also set up a bonus scheme for staff with bonuses being paid to staff net of tax
based on achieving agreed sales and other targets as set by the board on an annual basis for the
financial years ending 31 December 2017. No bonus scheme was set up for the year ending 31
December 2018.
During 2017, 10,488,130 of the unpaid ordinary shares were purchased and paid up in full by staff
as part of the Staff Unpaid Share and Bonus Scheme for $167,000. (See note 7.1). If staff do not
make payment on the call dates for the unpaid shares allocated to them, then the shares will revert
to the nominee company.
23. Financial Instruments
The following financial assets and liabilities by categories are as follows:
GROUP 2018
Carrying
Amount
$000
2018
Fair
Value
$000
2017
Carrying
Amount
$000
2017
Fair
Value
$000
Cash 512 512 324 324
Receivables 53 53 238 238
Investments 75 75 75 75
Payables (269) (269) (357) (357)
Loan (784) (784) (919) (919)
All carrying amounts of all financial assets are classified under the category of loans and receivables.
All financial liabilities are categorised at amortised cost.
Fair value measurement
The Group does not have any derivative financial instruments or any other financial assets or
liabilities that are classified as instruments at fair value through profit and loss under NZ IFRS.
The fair value of the financial assets and liabilities approximates their carrying value.
Interest Rate Risk
Interest rate risk is the risk that interest rates will change, increasing or decreasing the cost of borrowing
or lending. The interest payable on loans to 31 December 2018 was fixed at 6.5% per annum. However
interest was no longer charged from 1 October 2018. (2017: 6.5% per annum) . Also refer to note 32(ii)
where interest will be charged in the period beginning sometime after 30 January 2019.

34
Credit Risk
Credit risk is the risk that an outside party will not be able to meet its obligations to the holding company
or group. Financial assets which will potentially subject the Group to concentrations of credit risk
consist principally of cash and receivables. The cash is placed with high credit quality financial
institutions with a minimum short term Standard and Poor’s credit rating of A-1. In the normal course
of its business, the Group incurs credit risk from receivables and transactions with financial institutions.
The maximum credit risk is the carrying amounts of trade receivables of $26,000 which $24,000 have
an ageing duration of less than 6 months and no defaults - (2017 $189,000) – see Note 13.
The Group does not require any collateral or security to support financial instruments as it only deposits
with, or loans to, banks and other financial institutions with high credit ratings. The Group does not
expect the non-performance of any obligations at balance date.
Currency Risk
Exposure to currency risk arises in the normal course of the Group’s business. The Group monitors
exchange rate movements in foreign currencies and will take any action necessary to reduce currency
risks where possible.
Liquidity Risk
The Group manages its liquidity risk by maintaining availability of sufficient cash and funding via
adequate credit and bank facilities. Owing to the nature of the underlying business, the Group aims to
maintain funding flexibility through committed credit lines. The Group manages liquidity risk by
monitoring actual and forecast cash flows on a regular basis and rearranging banking and credit
facilities where appropriate.
The table below analyses the Group’s non derivative financial liabilities into maturity groupings based
on the remaining period from balance date to the contractual maturity date if applicable. The amounts
disclosed are the contractual undiscounted cash flows.
GROUP Current Current Non-
Current
Total
Within 6
months
6-12
months
1 to 5
years

$000 $000 $000 $000
Interest bearing loans - 188 596 784
Payables and accruals 261 - - 261
Total 261 188 596 1,045
24. Segmental Reporting
The Group primarily derives its revenue from the sale of two products, with all revenue and assets
accounted for in New Zealand. The Group has a wide range of customers with no single customer
contributing more than 10% of the Group’s revenue. It only has one operating segment which has
been determined and based on financial information that is regularly reviewed by senior
management.
NZ IFRS 8 Operating Segments: permits the aggregation of operating segments into reportable
segments. This has been adopted as the Group has only one operating segment with similar economic
characteristics being the production processes, customers and distribution channels for its product.
Based on this analysis, no additional disclosure is required in the annual financial statements as the
Group has one reportable segment.

35
25. Reconciliation of Cash Flows from Operating Activities

GROUP 2018
$000
2017
$000
NET (LOSS) for the year (2,412) (859)
Adjustments for non-cash items:
-Amortisation 17 21
-Depreciation 11 2
-Foreign exchange differences 5 (17)
- Impairment intangible assets 104 -
-Share based payment benefits 17 43
Net changes in working capital:
Change in inventories 360 (572)
Change in payables and accruals (68) (154)
Change in receivables, GST and prepayments 167 11
NET CASH FROM OPERATING ACTIVITIES (1,799) (1,526)
26. Reconciliation of Cash Flows from Financing Activities
The movement in loan liabilities to 31 December 2018 and the effect of non-cash transactions arising
from financing these cash flow activities is shown below.
GROUP
Loan
2018
$000
2017
$000
At 1 January 919 1,039
Loan repayments (135) (120)
Non cash flows

At 31 December 784 919

27. Capital Management
For the purpose of the Group’s capital management, capital includes issued capital and all other equity
reserves attributable to the equity holders of the parent. Net debt includes borrowings less bank funds.
The group’s capital management objectives are to safeguard the group's ability to continue as a going
concern in order to provide returns for shareholders and benefits for other stakeholders and to maintain
an optimal capital structure to reduce the cost of capital.
The Group is maintaining its capital base by prudent spending on operations, research and development
in order to generate new revenue streams and sales activity. The directors anticipate being able to raise
additional equity funds as and when required - see Note 32(i).

The amount of capital, cash and net debt that the Group has for the year is summarised as follows:
2018
$000
2017
$000

36
Total Equity 997 1,019
Borrowings (784) (919)
Bank 512 324
Net (debt) cash (272) (595)

28. Contingent Liabilities
There were no contingent liabilities at year end (2017: $nil).

29. Operating Commitments
The group has the following operating commitments:
(i) Operating lease - the group leases office space under an operating lease. Operating lease
payments, where the lessors effectively retain substantially all of the risks and benefits of
ownership of the leased items, are recognised in the determination of the operating result in equal
instalments over the lease term.

2018
$000
2017
$000
Less than 1 year 48 48
Between 1 and 3 years 23 71
Total 71 119

30. Capital Commitments
There are no capital commitments at 31 December 2018 (2017: $nil).

31. Auditor’s Remuneration
Audit fees of $27,000 (2017 $26,000) were provided for the audit of the financial statements only. No
other services were provided.
32. Events subsequent to balance date
(i) New share capital
On 22 January 2019 the company’s major shareholder, Brankin Family Interest Trust, advised
that it wishes to exercise its right to subscribe for an additional 250 million shares at a price of
$0.001 per share. This issue of additional shares was approved by a special meeting of
shareholders on 4 December 2018. The 250 million shares represent shortfall shares not taken
up by eligible shareholders in the rights issue that closed on 24 December 2018.

(ii) Change of loan terms
The refinancing of the Wells Investment loan of $783,810 on 1 October 2018 went
unconditional on 30 January 2019. The loan has no fixed repayment terms, and interest will be
charged on the loan.
The loan was assigned to the Brankin Family Interest Trust on 1 October 2018. The trust is
related to one of the directors, T.D Brankin. The Trust has confirmed it does not require
repayment of this loan within a year of approval of these financial statements.

37

(iii) Ministry of Health Prosecution
On 7 February 2019 the company was served with a notice of prosecution by the New Zealand
Ministry of Health for alleged breaches of the Medicines Act 1981. In these charges the Ministry
alleges that the company has sold an unlicensed medicine and that certain advertising by the
company is in breach of the Medicines Act.
The company appeared in the District Court on 8 March 2019 and intends to defend these
charges.

There have been no other matters or circumstances since the end of the financial year, not
otherwise dealt with in these financial statements that have significantly or may significantly
affect the Group’s operations.

38
SHAREHOLDER AND STATUTORY INFORMATION
Stock Exchange Listing
The Company’s fully paid ordinary shares are listed on the main board equity security market
operated by NZX Limited under the call sign (PIL).
Principal Ordinary Shareholders as at 19 March 2019
The following table lists the names and holdings of the 20 largest holding parcels of quoted ordinary
shares of the Company as at 19 March 2019.
Holder Number Held % Held
T.D. Brankin & M.J. Kirwin Lay
S.P Ward & J.P. Ward & J.M. Ward
J.M. O’Brien
S. Underwood
E.M.M. Johnson
E.M.M Johnson & K. Johnson & E. Wright
G.C. Royal
Tirol Nominees Limited
P. McVeigh
M.D. Priest
D.J. Robinson
ASB Nominees Limited
Bank Of America Merril Lynch International Dac
B.W.J Anderson
J.P. Ward
G.R. Wells
R.D. Angus
Central Nominees Limited
S. A. Armstrong
Templar Investments Limited
C.K. Mooi
853,804,210
74,391,081
73,929,066
60,775,560
48,818,720
44,570,320
43,508,830
29,083,413
28,589,017
26,836,315
24,626,281
18,000,000
12,854,532
12,750,000
12,351,498
11,915,613
11,847,545
11,314,238
10,020,779
8,400,000
8,400,000
44.89
3.91
3.89
3.2
2.57
2.34
2.29
1.53
1.5
1.41
1.29
0.95
0.68
0.67
0.65
0.63
0.62
0.59
0.53
0.44
0.44
Top Twenty shareholders

1,426,787,018 75.02

39
Total Shares on Issue
No Holders Shares Held % Held
Top 20
20 1,426,787,018 75.02
Other Investors 1,434 475,010,433 24.98
Total 1,454 1,901,797,451 100.00

Spread of Ordinary Shareholders as at 19 March 2019
Holding Range No of Holders Total Shares %

1-1,000
9 3,732 0.63
1,001-5000
348 1,084,578 23.93
5001-10,000
162 1,267,875 11.14
10,001 -50,000
340 8,814,513 23.38
50,001-100,000
141 10,695,636 9.70
100,001 or more
454 1,879,931,117 31.22
Total
1,454 1,901,797,451
100.00

Substantial Security Holders as at 19 March 2019
The Company’s register of substantial security holders, prepared in accordance with section 35F of the
Securities Markets Act 1988 disclosed the following information.
Name Class of Shares No Shares % Held
T.D. Brankin & M.J. Kirwin Lay Ordinary 853,804,210 44.89


Directors’ Security Holdings including beneficial interests as at 19 March 2019
Name No Shares % Held
T.D. Brankin Director 853,804,210 44.89
S. Underwood Director 72,089,798 3.79
M.D. Priest Director 26,836,315 1.41
H. Down Director 500,000 0.00
The directors did not hold any shares in the capacity of non-beneficiaries or associates.

40

Particulars of Directors’ Share Transactions in Promisia Integrative Limited
Dealing in Securities
The following table shows transactions recorded in respect of those securities during the year 1
January 2018 to 31 December 2018.
Director Date of transaction No of shares
purchased/(sold)
Cost $
T.D. Brankin – Placement 16 January 2018 5,000,000 $100,000
T.D. Brankin – Renounceable rights issue 31 December 2018 800,000,000 $800,000
H. Down - Placement 16 January 2018 500,000 $10,000
M. D. Priest – Placement 16 January 2018 1,000,000 $20,000
M. D. Priest – Renounceable rights issue 31 December 2018 20,000,000 $20,000
S. Underwood – Placement 16 January 2018 1,500,000 $30,000
S. Underwood – Renounceable rights issue 31 December 2018 51,870,000 $51,870


Share Transactions and Holdings
The share transactions effected by various directors are recorded in the Interests Register as set out
above and their holdings are shown on page 41.
Directors’ Remuneration and Other Benefits
The names of the directors of the Company at 31 December 2018 and the details of their remuneration
and the value of other benefits received for services to Promisia Integrative Limited for the year ended
on that date are:
Director Nature of Remuneration
S. Underwood $49,000 Director’s fee
M.D. Priest $17,000 Director’s fee
T.D. Brankin $17,000 Director’s fee
H. Down $17,000 Director’s fee
Share options have been provided to the Directors as set out in note 21 2(c).
Employee Remuneration
There was only one employee, or former employee, who received remuneration and other benefits
valued at or exceeding $100,000 during the year to 31 December 2018, that being in the range of
$240,000 to $250,000.
Entries in the Interests Register
The Company has an Interests Register which records various disclosures as required by the Companies
Act 1993 and in accordance with good governance practice.
Other Directorships or Trusteeships

41
The following represents the interests of directors in other companies or trustees of organisations as
disclosed to the Company and entered into the Interests Register. The designation ** indicates the
director also holds an equity interest in the company.
Stephen Underwood
Promisia Integrative Limited – Group, Central Nominees Limited**, Central Securities Limited**,
Decisive Securities Limited**, Insolvency Associates Limited, Normandy Holdings Limited**, Nalokua
Holdings Limited**, Panama Direct Limited**, Renouf Corporation Limited**, The Renouf Quay
Company Limited**, Tuff Lite Limited, Benefit Arthritis Limited.
Duncan Priest
Promisia Integrative Limited - Group, Trans- Tasman Resources Limited**.
Thomas Brankin
Promisia Integrative Limited – Group, Eileen Mary Age Care Limited**, Eileen Mary Age Care Property
Limited**, i.Agri Limited**, OTB Property Limited**, Ranfurly Manor Limited**, Ranfurly Manor No.1
Limited**, Design Care Group Limited**, Benefit Arthritis Limited.*
Helen Down
Promisia Integrative Limited - Group, Advisory Boards New Zealand Limited**, Synthesis Marketing
Limited**.
Auditors’ Remuneration
Audit fees of $26,000 (2017: $26,000) are payable to the auditors for the audit of the statutory financial
statements only.
Donations
There were no donations made during the year ended 31 December 2018 (2017: $nil) by the Company
or any if its subsidiaries.
Information Used by Directors
There were no notices from Directors of the Group or any of its subsidiaries requesting to use company
information received in their capacity as a director which would not otherwise have been available to
them.

42
CORPORATE DIRECTORY AND OTHER INFORMATION

Registered office and address for service
Level 4, 22 Panama Street
Wellington 6011
P O Box 25-396
Wellington 6146

Telephone: +64 4 4995563
Mobile: +64 22 0430634
Facsimile: +64 4 8318688

Email: accounts@promisia.com

Website: http://arthrem.co.nz/ or
http://promisia.com/

Directors
Stephen Underwood, Chairman
Duncan Priest
Thomas Brankin
Helen Down

Auditor
William Buck
Level 4, 21 Queens Street
Auckland 1010

Share Registrar
Link Market Services
Level 7, Zurich House
21 Queen St Street
P O Box 91976
Auckland 1142

Telephone: +64 9 375 5998
Facsimile: +64 9 375 5990
Email: enquiries@linkmarketservices.co.nz

Bankers
Kiwibank

Solicitors
Duncan Cotterill
Chartered Accountants House
Level2, 50 Customhouse Quay
Wellington 6011







Company publications
The Company seeks to inform investors regarding
its business operations through issuing an Annual
Report, an Interim Report and Newsletters as is
appropriate.

Financial Calendar
Half year results announced August
Half year report September
End of financial year 31 December
Annual results announced February
Annual report March

Enquiries
Shareholders with enquiries about transactions,
change of address or dividend payments should
contact Link Market Services on +64 9 375 5998
or by email on
enquiries@linkmarketservices.co.nz .
Other questions may be directed to the Company
at its registered address.

Stock Exchange
The Company’s shares trade on the New Zealand
Exchange under the code PIL. The minimum
parcel on the NZX is 50 shares.