HOLISTA COLLTECH LIMITED — Proxy Solicitation & Information Statement 2009

Jun 1, 2009

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CollTech Australia Limited ABN 24 094 515 992

NOTICE OF GENERAL MEETING AND EXPLANATORY MEMORANDUM TO APPROVE THE TRANSACTION WITH HOLISTA BIOTECH SDN BHD ON THE TERMS SET OUT IN THE EXPLANATORY MEMORANDUM

The Directors UNANIMOUSLY RECOMMEND that you VOTE IN FAVOUR of the Resolutions.

The Independent Expert has concluded that the Transaction is fair and reasonable.

THIS IS AN IMPORTANT DOCUMENT AND REQUIRES YOUR IMMEDIATE ATTENTION.

If you are in doubt as to its contents, please contact your professional adviser.

If you have any queries in relation to the Resolutions, this Notice or the Explanatory Memorandum, please contact Alan Boys, the Company Secretary, on +61 8 9386 4003 between 9.00am and 5.00pm (Perth time) Monday to Friday.

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IMPORTANT INFORMATION

This is an important document that should be read in its entirety.

If you do not understand it, or any part of it, you should consult with your professional advisers without delay.

This Notice of Meeting is accompanied with an Explanatory Memorandum. Also annexed to the Explanatory Memorandum is an Independent Expert’s Report. The Explanatory Memorandum and its annexures have been prepared to assist Shareholders in determining whether or not to vote in favour of the Resolutions set out in this Notice of Meeting.

The Explanatory Memorandum and its annexures are intended to be read in conjunction with this Notice of Meeting.

You are encouraged to attend the Meeting, but if you cannot, you are requested to complete and return the enclosed Proxy Form without delay to the Company Secretary at Suite 7, 41 Walters Drive, Osborne Park, WA, Australia 6017, by post to PO Box 1661, Osborne Park, WA, Australia 6916 or by facsimile on + 61 8 9426 3909.

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NOTICE OF GENERAL MEETING

A General Meeting of CollTech Australia Ltd (" Company " or “ CollTech ”) will be held on the date and location and time specified below:

DATE: 10 July 2009 LOCATION: Claremont Yacht Club 4 Victoria Avne. Claremont W.A. 6010 TIME: 10.30 am

Terms used in this Notice and Explanatory Memorandum are defined in section 15 of the Explanatory Memorandum which accompanies and forms part of this Notice of Meeting.

RESOLUTION 1: Approval of the Transactions contemplated by the Share Sale Agreement

To consider and, if thought fit, to pass the following resolution, with or without amendment, as an ordinary resolution:

“That, for the purposes of Listing Rule 11.1.2 and item 7 of section 611 of the Corporations Act and for all other purposes, Shareholders approve and authorise the Transactions contemplated by the Share Sale Agreement including:

• (a) the Company allotting and issuing to the Vendor, and the Vendor acquiring a relevant interest in, 770,000,000 fully paid ordinary shares in the capital of the Company ( Shares ) in consideration for 100% of the fully paid ordinary shares in Holista Biotech Sdn Bhd; and

• (b) the change in scale of the Company's activities as a result of the acquisition of 100% of the issued share capital in Holista Biotech Sdn Bhd,

on the terms set out in the Explanatory Memorandum accompanying this Notice of Meeting.”

RESOLUTION 2: Election of Director

To consider and, if thought fit, to pass the following resolution, with or without amendment, as an ordinary resolution:

"That, subject to Resolution 1 being passed, with effect from Settlement under the Share Sale Agreement, Dato’ Dr Rajen being eligible for election, be elected a director of the Company."

RESOLUTION 3: Change of Company Name

To consider and, if thought fit, to pass the following resolution as a special resolution:

“That, subject to Resolution 1 being passed and Settlement under the Share Sale Agreement, for the purposes of section 157(1) of the Corporations Act and for all other purposes, the name of the Company be changed to “Holista CollTech Limited”.

RESOLUTION 4: Consolidation of Shares and Options

To consider and, if thought fit, to pass the following resolution, with or without amendment as an ordinary resolution:

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“That, subject to Resolution 1 being passed and Settlement under the Share Sale Agreement, for the purposes of section 254H(1) of the Corporations Act, Listing Rule 7.22, the Constitution and for all other purposes, the Shares of the Company be consolidated on the basis that every ten existing Shares will be consolidated into one new Share, and the Options be adjusted in accordance with the Listing Rules, on the terms set out in the Explanatory Memorandum accompanying this Notice of Meeting.”

RESOLUTION 5: RATIFICATION OF SHARE ISSUE

To consider and, if thought fit, pass the following resolution, with or without amendment, as an ordinary resolution:

“That, for the purposes of Listing Rule 7.4 and for all other purposes, Shareholders approve and ratify the allotment and issue of 20,000,000 Shares to the persons, for the purposes and on the terms set out in the Explanatory Memorandum accompanying this Notice of Meeting.”

EXPLANATORY MEMORANDUM

Shareholders are referred to the Explanatory Memorandum accompanying and forming part of this Notice of Extraordinary General Meeting.

NOTES:

These notes form part of the Notice of General Meeting.

Voting Exclusion Statement

The Company will disregard any votes cast on Resolution 1 by:

• the Vendor and his associates; and

• a person who may participate in the proposed issue of Shares and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the resolution is passed, and any associate of those persons.

The Company will disregard any votes cast on Resolution 5 by any person who participated in the issue and any of their associates.

However, the Company need not disregard a vote if:

• it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or

• it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

Entitlement to Vote

The Directors have determined that, for the purpose of voting at the Meeting, members eligible to vote at the Meeting are those persons who are the registered holders of shares at 5.00 pm (Perth time) on 8 July 2009.

How to Vote

You may vote by attending the Meeting in person, by proxy, or by an authorised representative.

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Voting in Person

To vote in person, attend the Meeting on the date and at the place set out above. Members are asked to arrive at the venue 30 minutes prior to the time designated for the Meeting, if possible, so that the Company may check their shareholding against the Company’s share register and note attendances.

Voting by Proxy

A shareholder has the right to appoint a proxy, who need not be a shareholder of the Company. A proxy can be an individual or a body corporate. A body corporate appointed as a shareholder's proxy may appoint a representative to exercise any of the powers the body may exercise as a proxy at the Meeting. The representative should bring to the Meeting evidence of his or her appointment, including any authority under which the appointment is signed, unless it has previously been given to the Company.

If a shareholder is entitled to cast two or more votes they may appoint two proxies and may specify the percentage of votes each proxy is appointed to exercise.

To vote by proxy, the Proxy Form (together with the original of any power of attorney or other authority, if any, or certified copy of that power of attorney or other authority under which the proxy is signed) must be received by the Company no later than 10.30am (Perth time) on 8 July 2009 (Proxy Forms received after that time will be invalid). Proxy Forms must be received via any of the following methods:

In Person: Suite 7, 41 Walters Drive, Osborne Park, WA, Australia 6017 By Post: PO Box 1661, Osborne Park, WA, Australia 6916 By Facsimile: + 61 8 9426 3909

Corporate Representatives

A body corporate may elect to appoint an individual to act as its representative in accordance with Section 250D of the Corporations Act, in which case the Company will require a certificate of appointment of the corporate representative executed in accordance with the Corporations Act. The certificate of appointment must be lodged with the Company and/or the Company's Share Registrar, Computershare Investor Services, before the Meeting or at the registration desk on the day of the Meeting. Certificates of appointment of corporate representatives are available from Computershare Investor Services on request by contacting telephoning +61 8 9323 2000.

Enquiries

Shareholders are invited to contact the Company Secretary, Alan Boys, on +61 8 9386 4003 between 9.00am and 5.00pm (Perth time) Monday to Friday, if they have any queries in respect of the matters set out in these documents.

By order of the Board

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Alan Boys Company Secretary Dated 29 May 2009

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EXPLANATORY MEMORANDUM

The Notice of General Meeting, Explanatory Memorandum, Independent Expert’s Report and Proxy Form are all important documents. They should be read carefully in their entirety before you make a decision on how to vote at the Meeting.

If you have any questions regarding the matters set out in the documents, please contact the Company or your stockbroker or other professional adviser.

KEY DATES

Date of this Explanatory Memorandum 29 May 2009

Proxy Form to be received by no later than 8 July 2009

Shareholders Meeting 10 July 2009

Expected date of issue of New Shares 15 July 2009

IMPORTANT INFORMATION

Purpose of this Explanatory Memorandum

This Explanatory Memorandum has been prepared for the shareholders of the Company in connection with the General Meeting of the Company to be held on 10 July 2009. The purpose of this Explanatory Memorandum is to provide Shareholders with information that the Board believes to be material to Shareholders in deciding whether or not to approve the Resolutions detailed in the Notice.

This Explanatory Memorandum does not take into account the individual investment objectives, financial situation and needs of individual Shareholders or any other person. Accordingly, it should not be relied on solely in determining how to vote on the Resolutions.

Forward looking statements

Certain statements made in the Explanatory Memorandum may relate to the future. These statements reflect views only as of the date of the Explanatory Memorandum. While the Company believes that the expectations reflected in the forward looking statements are reasonable, neither the Company nor any other person gives any representation, assurance or guarantee that the occurrence of an event expressed or implied in any forward looking statement in the Explanatory Memorandum will actually occur.

Notice to persons outside Australia

The Explanatory Memorandum has been prepared in accordance with Australian laws, disclosure requirements and accounting standards. These laws, disclosure requirements and accounting standards may be different to those in other countries.

Disclaimer

No person is authorised to give any information or make any representation in connection with the Transaction which is not contained in the Explanatory Memorandum. Any information or representation not contained in the Explanatory Memorandum may not be relied on as having been authorised by the Company or the Board in connection with the Transaction.

Privacy

To assist the Company to conduct the General Meeting, the Company may collect personal information including names, contact details and shareholding of Shareholders and the names of persons appointed by Shareholders to act as proxy at the General Meeting. Personal information of this nature may be disclosed by the Company to its share registry, print and mail service providers, and the Company’s agents for the purposes of implementing the Transaction. Shareholders have certain rights to access their personal information that has been collected and should contact the Company Secretary, Alan Boys, on +61 8 9426 3900 if they wish to access their personal information.

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Responsibility for information

The information contained in this Explanatory Memorandum (except for the Independent Expert’s Report and information regarding Holista and the intentions of the Vendor) has been prepared by the Company and is the responsibility of the Company. Neither Holista nor the Vendor assumes any responsibility for the accuracy or completeness of that information. Information concerning Holista (in section 3) and the Vendor’s intentions (in section 9) has been provided by Holista and the Vendor respectively. None of Company, its associates or its advisers assumes any responsibility for the accuracy or completeness of that information.

Grant Thornton has prepared the Independent Expert’s Report and has consented to the inclusion of the report in the Explanatory Memorandum. Grant Thornton takes responsibility for that report but is not responsible for any other information contained within the Explanatory Memorandum.

Shareholders are urged to read the Independent Expert’s Report carefully to understand the scope of the report, the methodology of the assessment, the sources of information and the assumptions made.

ASX involvement

A copy of the Notice of Meeting and Explanatory Memorandum has been lodged with ASX pursuant to the Listing Rules. Neither ASX nor any of its officers take any responsibility for the contents of the Notice of Meeting and Explanatory Memorandum.

Definitions

Capitalised terms used in the Notice of Meeting and Explanatory Memorandum are defined in section 15.

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TABLE OF CONTENTS

TABLE OF CONTENTS
Chairman’s Letter	9
Section 1 ‐ Overview of the Transaction	10
Section 2 ‐ Rationale for the Transaction	13
Section 3 ‐ Overview of Holista Group	14
Section 4 ‐ Overview of the Company	19
Section 5 ‐ Impact on the Company’s financial position	23
Section 6 ‐ Impact on the Company’s capital structure and level of control	27
Section 7 ‐ Directors and management	29
Section 8 ‐ Corporate governance	30
Section 9 ‐ Intentions of Holista	31
Section 10 ‐ Risks	32
Section 11 ‐ Key implications and risks of the Transaction	38
Section 12 ‐ Independent Expert’s Report	40
Section 13 – Directors Recommendation	41
Section 14 ‐ Additional Information relating to the Resolutions	42
Section 15 ‐ Glossary	49
Annexure A – Summary of Share Sale Agreement	51
Annexure B – Summary of terms of Shares	55
Annexure C – Summary of terms of Redeemable Preference Shares	57
Annexure D – Independent Expert’s Report	59
Annexure E – Appointment of Proxy

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CHAIRMAN’S LETTER

Dear Shareholder,

I urge you to read the attached documents thoroughly as the decisions that you are being asked to make are very important and will have a far reaching effect on the future of your investment in CollTech.

At the general meeting on 10 July 2009, you will be asked to vote on (amongst other things) the purchase of Holista Biotech Sdn Bhd (Holista) by CollTech. The acquisition of Holista will provide Colltech with the ability to secure an established and profitable group with extensive experience in the manufacture, marketing and distribution of health care products

In this time of global financial uncertainty, the CollTech Board has worked hard to identify a path forward for the company. Whilst we acknowledge that some shareholders may be concerned at the short‐term impacts, I am sure that on the whole the majority of our shareholders will recognise the long term benefits of this proposed transaction.

This purchase will result in a significant dilution of the existing shareholders and will result in Dato’ Dr Rajen becoming the major shareholder of the new company. These are two significant events and the board would not be asking you to vote on them unless we were satisfied that it was the right decision for CollTech today. The board commissioned Grant Thornton (WA) Financial Services Pty Ltd to prepare an Independent Expert’s Report on the transaction and this is attached for your review.

In the attached documentation you will receive a lot of information on Holista and its businesses. But as successful businesses are run by successful businessmen, I would like to give you further background on Holista’s founder and the proposed new CEO of CollTech. Dato’Dr Rajen has built Holista over the past 13 years to the stage it is today and its role as a leading natural healthcare company in Malaysia. He holds a Pharmacy degree from the University of Science in Malaysia, and received his Doctorate in Holistic Medicine in 2000. Dato’ Dr Rajen lectures at the University of Malaysia, writes a number of columns and sits on the Malaysian Ministry of Health’s committee for Traditional Medicine.

I have personally spent some time with Dato’ Dr Rajen and find him to be a man of vision, commitment, ethics and intelligence. I believe that Dato’ Dr Rajen will bring to CollTech a set of skills and vision that we have not been able to gain in a single place elsewhere. The board has listened to Dato’ Dr Rajen’s vision for the Holista Group of companies and have great faith in his ability to achieve his ideas. We are excited at the prospect of becoming a part of this future and strongly recommend that you vote in favour of all the resolutions contained in the notice of meeting.

I thank you for the support that you have shown the company in the past and look forward to your ongoing support in the future.

Yours sincerely

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Stephen Carter

Chairman

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1 Overview of the Transaction

1.1 The Transaction

Further to the Company’s announcement of 17 March 2009, and as announced on 21 May 2009, the Company has entered into a share sale agreement with the Vendor (“ Share Sale Agreement ”) pursuant to which the Company has agreed to acquire all of the issued fully paid ordinary shares in Holista Biotech Sdn Bhd (“ Holista ”) and to issue 770,000,000 Shares to the Vendor (“ New Shares ”) (subject to Shareholder approval).

Information about Holista is set out in section 3. A summary of the Share Sale Agreement is set out in Annexure A.

The Board believes the acquisition of the fully paid ordinary shares in Holista will provide the Company with the ability to secure an established and profitable group with substantial experience in the manufacture and distribution of health care products. This experience will be invaluable in further developing the Company’s ovine collagen manufacturing and product development capabilities, as well as providing it with a substantial sales and marketing platform within Asia. It will also provide the Company with the ability to significantly grow its business and expand its scope of activities within the health‐care market to provide much needed critical mass to achieve its long term corporate objectives.

The acquisition of the fully paid ordinary shares in Holista and the issue of New Shares (“ Transaction ”) are subject to a number of approvals and conditions including Shareholder approval as set out in this Explanatory Memorandum.

In accordance with the Share Sale Agreement (and subject to Shareholder approval), upon Settlement the Board will be restructured to comprise the existing Directors, the existing Chairman and the Vendor. The Company’s name will also be changed to “Holista CollTech Limited” (subject to Shareholder approval).

In addition, it is a condition of the Share Sale Agreement that the Company undertake a consolidation of its Shares on a 1:10 basis after completion of the Transaction.

The key dates in relation to the Transaction are set out below:

Date of this Explanatory Memorandum	29 May 2009
Proxy form to be received no later than	8 July 2009
The Shareholder meeting to be held at Claremont Yacht Club, 4 Victoria Avenue, Claremont WA 6010	10.30 am on 10 July 2009
Expected date of issue of New Shares to the Vendor	15 July 2009

Resolution 1 seeks approval for the Transaction.

Resolutions 2 seeks approval to appoint the Vendor as a Director, conditional upon and with effect from Settlement. Information on the Vendor is set out in section 3.6.

Resolution 3 seeks approval for the change of Company name.

Resolution 4 seeks approval for the Company to consolidate its Shares on a 1:10 basis after completion of the Transaction.

Resolution 5 seeks approval and ratification by Shareholders of the Company’s previous Share issue.

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Further details on the Transaction are set out elsewhere in this Explanatory Memorandum. The reasons why Shareholder approval is required are set out in section 14.

1.2 Implications if the Transaction is approved

If Resolutions 1 to 4 are passed and the Transaction proceeds, the Company will acquire 100% of the issued ordinary share capital of Holista and will issue 770,000,000 New Shares to the Vendor.

The Company is undertaking a capital raising prior to Settlement which will raise up to $554,504 (before costs) through the issue of up to 55,504,667 Shares at $0.01 per Share and otherwise on the terms set out in the Prospectus (“ Capital Raising ”). The Capital Raising is partially underwritten to 30,000,000 shares or an amount of $300,000 (before costs). Immediately following Settlement there will be a minimum of 1,077,252,333 and a maximum of 1,102,702,800 shares on issue.

If the Capital Raising is fully subscribed for, the Vendor will own 69.83% of the Shares immediately after Settlement of the Transaction (assuming no Options are exercised and the Vendor does not participate in the Capital Raising). If only the minimum 30,000,000 Shares are subscribed for, the Vendor will own 71.48% of the issued share capital of the Company immediately after Settlement (assuming no Options are exercised and the Vendor does not participate in the Capital Raising).

Upon Settlement, the Board will be restructured. The new Board will comprise the existing Directors, the existing Chairman and the Vendor. Mr Michael Pixley, Dr Fathil Bin Mohamed and Mr Ravindran Govindan will continue as non‐executive Directors and Mr Stephen Carter will continue as non‐executive chairman after Settlement. The Vendor will be appointed as Managing Director from Settlement.

In addition, the Company’s name will be changed to “Holista CollTech Limited” and the Shares will be consolidated on a 1:10 basis after completion of the Transaction and the Capital Raising.

1.3 Implications if the Transaction is not approved

If Resolutions 1 to 4 are not passed or the Transaction does not complete the Company will continue to operate as it did prior to the Transaction. However, the Directors believe the Transaction represents the best option for Shareholders given the company’s current financial position, the current global economic uncertainties and the difficulties that exist for emerging companies in securing debt and equity at this time

Further details on the risks associated with the Transaction not proceeding, including financial risks are set out in sections 10 and 11.

1.4 Independent Expert’s Report

To assist Shareholders to assess the proposed Transaction, Grant Thornton (“ the Independent Expert ”) has been appointed to prepare an Independent Expert’s Report, the purpose of which is to state whether or not, in their opinion, the proposed issue of New Shares to the Vendor is ‘fair’ and ‘reasonable’ to Shareholders not associated with the proposed Transaction.

The issue of New Shares will be deemed by the Independent Expert to be ‘fair’ if the offer price or consideration for their issue is equal to or higher than the assessed fair value of CollTech Shares.

The issue of New Shares is deemed to be ‘reasonable’ if it is assessed by the Independent Expert to be fair or, if the Independent Expert has assessed the issue of New Shares as ‘not

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fair’, if there are other significant factors, which justify the acceptance and approval by the Shareholders.

The Independent Expert’s view is that the issue of New Shares to the Vendor is fair and reasonable the shareholders of CollTech. A copy of the Independent Expert’s Report is set out in Annexure D.

1.5 Director recommendations

The Directors unanimously recommend that Shareholders vote in favour of Resolutions 1 to 4 (and intend to do so in respect of their own Shares) for the reasons outlined in section 2.

The Directors unanimously recommend that Shareholders vote in favour of Resolution 5 (and intend to do so in respect of their own Shares) for the reasons outlined in section 14.5.

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2 Rationale for the Transaction

1.1 Development of the Company’s capabilities

The Transaction will provide the Company with the ability to secure an established and profitable group with substantial experience in the manufacture and distribution of health care products. This experience will be invaluable in further developing the Company’s ovine collagen manufacturing and product development capabilities, as well as providing it with a substantial sales and marketing platform within Asia. It will also provide the Company with the ability to significantly grow its business and expand its scope of activities within the health‐care market to provide much needed critical mass to achieve its long term corporate objectives.

1.2 Synergies

Under the Transaction, the Company would continue to conduct its existing operations, which are complementary to the operations of Holista. The Transaction will provide the Company with a profitable business that will provide for its ongoing economic survival and the opportunity to successfully maximise the commercialisation of its intellectual property.

The Transaction will enable the Company to use its ovine products in the manufacture of natural and herbal based products. Holista are vendors of collagen based products and intend to switch from current suppliers to CollTech’s ovine based food grade collagen, once developed, thereby providing the Company with a ready‐made customer base. This will support the reactivation of the Collie production facility. It is intended that as part of the reactivation of the Collie plant the development of production facilities for commercial quantities of food grade collagen will be undertaken.

It is likely that the management of Colltech’s development activities will be retained in Australia and will work closely with Holista’s existing R&D facilities and staff with a view to securing financial support under the various Malaysian government initiatives.

Given Holista’s extensive and existing sales and marketing network, the high level of marketing costs incurred by CollTech as a standalone operation will be mitigated. With Holista’s strong position in the predominantly Muslim Malaysian market, it is anticipated that CollTech’s Halal certified products should achieve strong acceptance and that this will pave the way for successful introduction to similar such markets in Asia and the middle east together with Hindu markets such as India.

It is expected that the Holista management team will considerably strengthen CollTech’s overall operations and that most administration functions can be incorporated within Holista’s current structure.

Other significant synergies that would flow from the Transaction and which the Company will explore further if the Transaction proceeds include the following:

• through the acquisition of the fully paid ordinary shares in Holista, the Company will benefit from the significant Malaysian government grants for biotechnology research and development;

• the acquisition of an operating business based in the predominantly Islamic country of Malaysia will be of significant assistance in the sales and marketing of the Company’s Halal approved ovine collagen products;

• Holista has a well established direct marketing and retail sales channel for its products in Malaysia and elsewhere in South East Asia which would be available to the Company’s existing products; and

• Holista is profitable and would sustain CAU’s future operations.

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3 Overview of Holista Group

3.1 Group structure

The Holista Group is a privately held group established in Malaysia in 1995.

Holista is the holding company of the Group and was incorporated in Malaysia in January 2004. Holista is principally engaged in research and development activities related to biotechnology and investment holdings. It is a private company limited by shares, incorporated and domiciled in Malaysia.

Holista is a recognised biotechnology company, having been awarded a Bionexus status by the Malaysian government in 2007 and being granted research and development seed funding by the Malaysian Biotechnology Corporation Sdn Bhd in 2008.

Holista has three active wholly‐owned subsidiaries with their respective principal activities as healthcare supplement distribution, single level supplements marketing, supplements marketing for prescription and doctor’s markets, development and marketing of technologies for environmental applications publishing. The Holista Group currently has some 58 employees.

Information on each of the wholly owned subsidiaries is set out below:

Total Health Concept Sdn Bhd (“ Total Health Concept ”)

Total Health Concept was established in 1995 and is involved in the marketing of health supplements through pharmacies nationwide. It was the first to sell Malaysian herbs and Malaysian derived probiotic in Malaysia. It was also the first to have all products packed locally.

Total Health Concept is principally engaged in importing, exporting, trading, marketing, retailing, manufacturing and wholesale of health care products and investments. It is a private company limited by shares, incorporated and domiciled in Malaysia.

Among Total Health Concept’s successful brands are PRISTINTM, LACTO‐5TM, BITREEN™, SPIRULINAR™, TRIFALON™ and INTELI‐GEN™.

Alterni (M) Sdn Bhd (“ Alterni ”)

Alterni was established in 2001 and is a single level direct marketer of health supplement directly to the customer, which eliminates distribution costs. Alterni is a private company limited by shares and domiciled in Malaysia.

Alterni’s range of products comprise a nutritious eye supplement, general health maintenance, calcium for bone building, relief for ailments such as osteoarthritis, rheumatoid arthritis and a natural sugar blocker for diabetics.

Alterni recently opened a retail outlet in Petaling Jaya, Malaysia.

Tropical Botanics Sdn Bhd (“ Tropical Botanics ”)

Tropical Botanics was established in 2000 and undertakes research and development. It is a private company limited by shares, incorporated and domiciled in Malaysia.

Tropical Botanics has an exclusive arrangement with the Regional Research Laboratory of India (“ RRL ”) to provide technological expertise and support. RRL is the oldest and largest research institute in India and is the only Indian institute approved by the FDA of USA for conducting clinical research on herbs. The company is also involved in the publication of the world first and only international peer reviewed scientific journal on tropical medicinal plants.

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3.2 Financial information

The Holista Group’s audited group turnover for the year ending 31 December 2008 was RM 14.59m (AUD 6.08m) and audited EBITDA for the year ending 31 December 2008 was RM 3.89m (AUD 1.62m). Its current assets exceeded its current liabilities by RM2.33m (AUD 0.97m) and its total assets exceeded its total liabilities by RM5.87m (AUD 2.45m) (exchange rate based on AUD1=MYR2.4)

For the financial year which ended on 31 December 2007, the Holista Group’s audited group turnover for the year was RM 14.2m (AUD 5.92m) and audited EBITDA for the year ending 31 December 2007 was RM 1.32m (AUD 0.53m). Its current assets exceeded its current liabilities by RM 0.26m (AUD 0.11m) and its total liabilities exceeded its total assets by RM 3.34m (AUD 1.39m) (exchange rate based on AUD1=MYR2.4)

During the 2008 financial year, Holista issued 3,000 Redeemable Preference Shares at an issue price of RM1 plus a premium of RM999, being a total issue price per share of RM1,000 in exchange for the cancellation of loan stock held by a third party. These Redeemable Preference Shares are being acquired by the Vendor prior to the Settlement but will be retained by the Vendor and will not be acquired by the Company.

Under the terms of issue of the Redeemable Preference Shares, these securities must be redeemed by Holista by 30 June 2011 or earlier if required by the holder or in the event of certain events of default by Holista. The Redeemable Preference Shares attract a preferential cumulative dividend of 8% per annum (based on the issuance price of each share (RM 1,000)), are preferential as to the return of capital on liquidation, are non voting except upon resolutions for the winding up Holista and any reduction of capital in Holista or in any resolution that directly or indirectly varies the rights or restrictions attaching to the Redeemable Preference Shares. Redemption of the Redeemable Preference Shares is to be RM1,000 per share and the shares may not be converted into ordinary shares in Holista. A more fulsome summary of the terms of the Redeemable Preference Shares is set out in Annexure C.

3.3 Ownership

It is a condition of the Share Sale Agreement that immediately prior to Settlement all of the fully paid ordinary shares in Holista will be legally and beneficially held by the Vendor and that Holista will be the legal and beneficial owner of all the issued securities in Total Health Concept, Alterni, and Tropical Botanics.

It is also a condition of the Share Sale Agreement that the Vendor will be the legal and beneficial holder of the Redeemable Preference Shares which are not being acquired by the Company as part of the Transaction and will continue to be held by the Vendor after Settlement.

3.4 Main business operations

The Holista Group aspires to be a one‐stop organisation devoted to the development and commercialisation of natural products, backed by research. The Group specialises in the research, development, contract manufacture and distribution of natural and herbal based products.

Research and development

The Holista Group is dedicated toward developing novel ingredients and formulations, derived from local medicinal plants, and patenting the discoveries, in order to ensure the income stream for the organization through licensing of the patents in addition to the development and commercialization of new products.

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The research and development activities are funded by Holista through collaborations with organisations including the Indian Institute of Integrative Medicine, University of Science, Malaysia, the National Centre for Natural Products Research at the University of Mississippi’s School of Pharmacy and the Forest Research Institute of Malaysia.

The Holista Group has filed several patents arising from its work with the kacip fatima plant and has also filed patents arising from its work with herbal water (tongkat ali), misai kuching extract, guava leaf extract, senduduk plant extract and centella extract (pegaga plant). Further patent applications are pending.

Manufacturing

Tropical Botanics has acquired equipment and placed a deposit on a site in order to develop and operate a co‐solvent phyto‐chemical extraction plant that will apply advanced technology for the production of high quality standardised extracts of herbal and medicinal plants. The plant is intended to serve as a basis for the development of the herbal extracts market locally, regionally and internationally. The Holista Group’s plan is to operate a “contract herbal extraction” business at the plant for Malaysian herbal companies. It will also facilitate significant import substitution of standardised plant extracts for the local herbal, food and formulation product manufacturers.

The set up of the plant will enable the Holista Group to supply extracts to various industries including cosmetic formulations, food products, food supplements, pharmaceutical bulk ingredients and aromatics.

Distribution

The Holista Group markets developed products through its subsidiaries directly to the customer and through pharmacies, the medical fraternity and online sales.

3.5 Directors

The directors of Holista, Alterni, Total Health Concept and Tropical Botanics are:

• Dato’ Dr. M.Rajen;

• Tg Mohd Fahmi Bin Tengku Hamzah;

• Muhammad Zauqi Bin Abdullah (alternate director to Tg Mohd Fahmi Bin Tengku Hamzah);

• Nora Hassan Mohamed; and

• David Stanton Evans @ Shahrizal Abdullah.

Sumita A/P Kesavan is also a director of Alterni, Total Health Concept and Tropical Botanics.

3.6 Key personnel

Dato’ Dr M Rajen Chief Executive Officer

Dato’ Dr Rajen holds a Bachelor of Pharmacy (Hons.) from the University of Science, Malaysia which he was awarded in 1986. In 1994, he commenced a Masters in Business Administration at the University of Strathclyde, Glasgow. He was awarded a doctorate in Holistic medicine in March 2000.

Dato’ Dr Rajen began his career as an intern pharmacist at the Kuala Lumpur General Hospital from 1986 – 1987. In 1987 he joined Lee Pharmacy as a community Pharmacist. Over a period of 9 years, Dr Rajen worked for several reputable pharmaceutical companies including Roche to CIBA Pharmaceuticals in various capacities including medical representative, product manager and marketing manager. In 1995, he incorporated Total Health Concept.

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Dato’ Dr Rajen is a guest lecturer in alternative medicine at the University of Malaysia, the National University of Malaysia and the International Medical University in Malaysia. He is also a guest health columnist for the Sunday Star, News Straits Times and the Edge Daily’s CEO Laptop column.

Dato’ Dr Rajen is a member of the Malaysian Ministry of Health Standing Committee for Traditional Medicine and he sits on the board of Malaysian Herbal Corporation Sdn Bhd, a wholly owned subsidiary of the Malaysian Industry ‐ Government Group for High Technology.

Chandra Sekaran, Group Financial Consultant

Mr Sekaran is the group financial consultant. He is a Chartered Accountant by profession and is responsible for the financial management, corporate planning, and treasury functions of the Holista Group.

Professor Rao, Scientific Advisor

Professor Rao is the Scientific Advisor for Holista Group. He specialises in plant growth, differentiation, physiology and genetics. He holds a Bachelor and Masters degree in Science from the University of Mysore, India and a Doctorate from Iowa State University.

He joined the University of Malaysia in 1960 as lecturer and in 1962 was appointed the head of the Botany Department, University of Malaysia in Singapore. He was a Professor of Botany at the National University of Singapore between 1967 and 1992 and chairman of the School of Biology for 15 years. Professor Rao also held the positions of Dean and Vice Dean for 6 years, and sat on a number of other academic boards and committees. He retired in 1992 and joined the International Plant Genetic Resources Institute as a consultant and Honorary Fellow.

Professor Rao has been awarded research fellowships in England (Royal Society fellowship), France (CNRS Research fellowship) and Japan (JSPS fellowship).

Steven Koh, Chief Financial Officer

Steven Koh is an accounting graduate from Australia and a member of Malaysian Institute of Accountants. He started his working career as an internal auditor with a local bank and since then has moved on in various capacities ranging from the head of internal audit function to group financial controller with other public listed companies, including SAAG Corporation Berhad, BSA International Berhad and Goh Ban Huat Berhad. Prior to joining Holista, he was working with Guocera Tiles Industries, a subsidiary of the Hong Leong group.

Foo Yoke Mun, General Manager – Sales & Marketing (Total Health Concept)

Foo Yoke Mun is a marketing graduate from the University of Strathclyde, Glasgow. He has more than 16 years work experience in various capacities at a number of multi‐national FMCG (fast moving consumer goods) companies such as SmithKline Beecham International, Bausch & Lomb and Colgate Palmolive. Prior to joining Total Health Concept, he was the marketing manager of Reckitt Benckiser for Malaysia & Singapore.

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4 Overview of the Company

4.1 Business overview

The Company is an ASX listed bio‐industrial company based in Perth, Western Australia.

The Company specialises in the development and commercialisation of collagen products derived from sheep skin (ovine) and has been focused on establishing itself as a leading global supplier of premium ovine collagen products.

4.2 Main business operations

The Company remains the only company in the world to have commercially produced ovine collagen. Its unique extraction technology and process is patented in four countries (including Australia) and is awaiting patents in a further seven.

The Company’s collagen products form key ingredients in cosmetics and medical devices and are also used in research activities.

The Company has manufactured three core products at its purpose built production facility in Collie, WA:

• OVICOLL®|C – a cosmetic grade collagen for use in the manufacture of skincare, haircare and toiletries;

• OVICOLL®|Clear – a high grade cosmetic collagen used in the production of premium cosmetics and cosmeceuticals such as anti‐aging creams; and

• OVICOLL®|R – a research grade collagen for tissue culture and other research purposes.

Collagen is a natural protein used in the food industry, cosmetics and medical products. Ovine collagen is recognised by key regulatory authorities as free from Transmissible Spongiform Encepalathy (TSE) diseases and there is no known cultural group that objects to the use of ovine products. CollTech’s ovine collagen carries certified halal status. Its premium qualities are promoted by its intact soluble protein structure, high purity and thermal stability. These factors are considered to provide significant advantage over bovine, porcine, marine and “plant” competitors.

Notwithstanding the significant technical achievements by the Company and a high level of interest by potential customers, the products are yet to achieve commercial success. Given the Company’s need to continue funding research and the considerable cost of marketing to an international market‐place, the lack of sales revenue, the sudden withdrawal of federal government support and the collapse in equity markets, has placed considerable financial pressure on the Company.

Given this position, the Company has placed its manufacturing facility on a care and maintenance basis, reduced all overheads including reducing its workforce to three full‐time employees. The board has been actively pursuing opportunities that will enable the Company to retain and continue to develop its intellectual property and provide a sustainable future for the Company.

The proposed acquisition of the fully paid ordinary shares in Holista has emerged from the board’s review of such opportunities.

4.3 Directors

The Directors of the Company as at the date of this Explanatory Memorandum are as follows:

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Mr Stephen Carter FAIM MAICD MRACI ‐ Non‐executive Chairman ‐ Appointed 1 January 2006

Mr Carter has significant international pharmaceutical experience with strengths in commissioning Good Manufacturing Practice (GMP) facilities, managing clinical, regulatory and IP programs and the funding and promotion of public listed pharmaceutical companies.

Mr Carter has previously held senior management positions with pharmaceutical companies Delta West, Upjohn, Pharmacia and Solbec Pharmaceuticals. Mr Carter is currently involved in a number of public and private companies and brings to CollTech the ability to operate at the interface of technology and commerce in rapidly growing companies.

Mr. Carter has been involved with the international pharmaceutical industry for over 20 years holding senior management positions with international pharmaceutical companies Upjohn and Pharmacia providing him with extensive experience in development and comercialisation of new products as well as strengths in commissioning Good Manufacturing Practice (GMP) facilities, managing clinical, regulatory and IP programs .

In the past 3 years Mr Stephen Carter also served as a director of Freedom Eye Limited (Solbec Pharmaceuticals Ltd), a public listed company.

Mr Michael Pixley BBus ‐ Non‐executive Director ‐ Appointed 28 September, 2006

Mr Pixley has more than 20 years international management experience with strengths in strategic corporate development, entrepreneurial leadership and business and product development across a broad range of industries. As a merchant banker, Mr Pixley successfully completed numerous joint ventures and acquisitions, and in other leadership positions managed and commissioned several greenfield construction projects and led start‐ up companies to IPO.

Mr Pixley is currently Deputy CEO of Natural Fuel Ltd and has previously held overseas directorships with Transocean Securities, Co‐don Asia Pacific, CPI Inc and Imagine Interactive Pte Ltd. Mr Pixley was CollTech’s Chief Executive from February 2004 to September 2006.

In the past 3 years Mr Michael Pixley also served as a director of Natural Fuel Ltd and Sam’s Seafood Holdings Limited, each a public listed company.

Mr Ravindran Govindan ‐ Non‐executive Director ‐ Appointed 30 May 2008

Mr Govindan is a very experienced businessman having co‐founded companies in retail, biotech, medical devices, information technology, emerging technologies, real estate and manufacturing. He provides strategic advice on Asia Pacific Region for Latona Associates Inc, a private investment and financial advisory firm based in New York, USA and was the group President of the Fisher Scientific group of companies in the Asia Pacific Region. His current portfolio encapsulates several chairmanships, board memberships and entrepreneurial ventures that have launched into successful public company listings such as Time Medical Inc in USA and ProcureChina Pte Ltd, I–Flapp Technolgies Pte Ltd and I Nuovi Cosmetics in Singapore. Mr Govindan also provides business consultancy to private and public enterprises, financial institutions and highly influential individuals in this region.

In the past 3 years Mr Ravindran Govindan also served as a director of Costarella Design Limited, MedTech Global Limited, Agenix Limited and Magnus Energy Group Limited (* denotes current directorship).

Dr Fathil Bin Mohamed ‐ Non‐executive Director ‐ Appointed 15 May 2008

Dr Fathil has a PhD in Microbiology and Genetic Engineering, and has over 25 years as an entrepreneur. Dr Fathil is a former lecturer at the National University of Malaysia in the areas of microbiology, molecular biology and food science. He has first hand and in‐depth experience in food manufacturing and global marketing, as the first person to introduce domestic Malaysian savoury products onto the shelves of supermarkets across the globe.

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Dr Fathil was instrumental in the development of the Halal Certification and Standards in Malaysia, and worked closely with Jabatan Kemajuan Islam Malaysia (“JAKIM”) during this time. Dr. Fathil is one of the pioneers and the key promoter of the concept of Quality and Traceability of Halal products for the Muslim market. During the period he was constantly engaged on lecture tours propagating the concept to parts of Europe, Middle East countries, the United States, Thailand and the Philippines.

Currently Dr Fathil has substantial interests in various companies in Malaysia and is the Chairman and shareholder of Proven Niche Sdn Bhd, the holding company for businesses involved in the distribution and retailing of cosmoceutical and pharmaceutical products in Malaysia, Director and shareholder of Stop N Shop Hyperretail (M) Sdn Bhd, the company involved in the distribution and retailing of Meat and Meat Products in Malaysia.

4.4 Company’s current capital structure

Details on the Company’s current capital structure are set out in section 6.1.

4.5 Substantial Shareholders

As at the date of this Explanatory Memorandum and based on substantial shareholder notices filed with the Company, the following persons have identified themselves as substantial shareholders of the Company (within the meaning of the Corporations Act):

Shareholder	Number of Shares	Voting power
	held	(%)
Dr Fathil Bin Mohamed	30,718,955	11.08
Mr Ravindran Govindan	13,667,286	4.93
Mr Kok Wah Ong	13,411,769	4.84

4.6 Top 20 Shareholders

As at the date of this Explanatory Memorandum, the top 20 largest shareholders in the Company are listed below:

Company are listed below:
Shareholder	Number of	Voting power
	Shares held	(%)
Dr Fathil Bin Mohamed	30,718,955	11.08
Mr.Lim Ho Kee	14,000,000	5.05
Mr Ravindran Govindan	13,667,286	4.93
Mr Kok Wah Ong	13,411,769	4.84
Mr Chris Cuffe & Mrs Natasha Cuffe	12,450,195	4.49
Ms Kian Bee Kuok	11,282,000	4.07
Bakersfield Holdings Pty Ltd	7,866,667	2.84
Tristesse Pty Ltd	6,750,000	2.43
IRSS Nominees (21) Limited	6,600,000	2.38
Lifescience Securities Limited	6,000,000	2.16
Millepede International Limited	5,882,353	2.12
Dr John Snowden & Mrs Pauline Snowden	5,716,892	2.06
Mr. David & Mrs. Fay Kennedy	4,000,000	1.44
UOB Kay Hian Pte Ltd	3,733,333	1.35
Cramm Nominees Pty Ltd	3,500,000	1.26
Fairview Holdings Pty Ltd	3,233,562	1.17
WSF Pty Ltd	2,470,000	0.89
Mr John Bulich	2,415,263	0.87
Mr Michael Trethowan	2,104,738	0.76
Mr Mohd Fadzli Fathil	2,000,000	0.72
TOTAL	157,803,013	56.91

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As at the date of this Explanatory Memorandum, the top 20 largest Optionholders (listed options) in the Company are listed below.

Optionholder	Number of	% of issued
	Options	Options
Dr Fathil Bin Mohamed	27,777,778	43.19
Mr Ravindran Govindan	7,433,490	11.56
Lim Ho Kee	6,000,000	9.33
Mr Chris Cuffe & Mrs Natasha Cuffe	5,833,334	9.07
Mr Kok Wah Ong	5,004,708	7.78
Bakersfield Holdings Pty Ltd	1,966,667	3.06
Mr Terence Stott & Mrs Cherrie Stott	495,947	0.77
Major Robert Hawkins	433,334	0.67
Mr Peter Stawski	397,444	0.62
AJJC Pty Ltd	370,000	0.58
Jayem Pty Ltd	345,613	0.54
Dr David Brinsmead Southwell	343,334	0.53
Avanteos Investments Limited	333,334	0.52
Ms Neoh Siew Lian	294,118	0.46
Bakersfield Holding Pty Ltd	277,778	0.43
Distinctive Holdings Pty Ltd	251,755	0.39
Mr John Bullich	238,646	0.37
Enniswood Investments Pty Ltd	233,334	0.36
Mr Graham Matheson	179,334	0.28
Mr John Bright	178,500	0.28
TOTAL	58,388,448	90.79

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5 Impact on Company’s financial position

5.1 Introduction

The financial information in this section has been prepared in accordance with the recognition and measurement principles of Australian Accounting Standards, which include Australian equivalents to International Financial Reporting Standards (A‐IFRS).

The financial information in this section is presented in an abbreviated form. Shareholders should refer to the Company’s audited annual financial statements for the 2008 financial year for more detailed disclosures in relation to the historical performance and position of the Company. The financial statements are set out in the Company’s 2008 Annual Report for the 2008 financial year, which is available at www.colltech.com.au or www.asx.com.au.

Shareholders should also refer to the financial information in the Independent Expert’s Report, which is set out in Annexure D to this Explanatory Memorandum.

5.2 Financial summary

CollTech Australia Ltd Abbreviated Income Statement	6 Months to 31 Dec. 2008 (audit reviewed) $’000	FY 2008 (audited) $’000	FY 2007 (audited) $’000
Revenue from ordinary activities	12	265	135
Earnings Before Interest and Tax	(1,071)	(2,279)	(2,879)
(EBIT)
Netprofit/ (loss)after tax	(1,134)	(1,855)	(2,788)

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CollTech Australia Ltd Abbreviated Balance Sheet	As at 31Dec. 2008 (audit reviewed $’000	As at 30 June 2008 (audited) $’000	As at 30 June 2007 (audited) $’000
CURRENT ASSETS
Cash and cash equivalents	504	1,080	1,272
Trade and other receivables	34	353	45
Inventories	187	202	126
Other	16	61	44
Total Current Assets	741	1,695	1,487
NON‐CURRENT ASSETS
Property, plant & equipment	2,220	2,324	2,503
Other financial assets	240	240	380
Total Non‐Current Assets	2,460	2,564	2,883
CURRENT LIABILITIES
Trade and other payables	184	325	394
Borrowings	363	197	182
Total Current Liabilities	547	521	576
NON‐CURRENT LIABILITIES
Borrowings	‐	273	451
Total Non‐current liabilities	‐	273	451
NET ASSETS	2,654	3,466	3,342
EQUITY
Issued Capital	12,768	12,568	10,670
Reserves	911	789	679
Accumulated losses	(11,026)	(9,928)	(8,007)
Total Equity	2,654	3,466	3,342

The Company has recorded in its reviewed accounts for the six months ending 31 December 2008 a net after tax loss of $1,162,000.

For the twelve months ending 30 June 2008 the Company reported a net loss after income tax of $1,884,598, down 32.4% on the previous year (2007: $2,788,392). Revenues from ordinary activities were $265,251, up 96.0% on the previous year (2007:$135,358).

Further information on the Company’s financial performance is set in section 4 of the Independent Expert’s Report in Annexure D.

(c) Matters subsequent to 31 December 2008

Other than the Capital Raising detailed in section 1.2, no matters or circumstances have arisen since 31 December 2008 which significantly affected or may significantly affect the operations of the Company, the results of those operations or the state of the Company in future financial periods.

5.3 Impact of Transaction on financial position

Set out below is a pro forma consolidated balance sheet of the Company (audit reviewed) taking into account the Transaction and the Capital Raising. The pro‐forma balance sheet

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illustrates the effect of the Transaction and Capital Raising as if they had occurred on 31 December 2008.

CURRENT ASSETS Cash and cash equivalents Trade and other receivables Inventories Other Total Current Assets NON‐CURRENT ASSETS Cash and cash equivalents Property, plant and equipment Intangibles Fair value uplift Total Non‐Current Assets TOTAL ASSETS CURRENT LIABILITIES Trade and other payables Interest bearing liabilities Provisions Other Total Current Liabilities NON‐CURRENT LIABILITIES Interest bearing liabilities Total Non‐Current Liabilities TOTAL LIABILITIES NET ASSETS EQUITY Issued capital Reserves Accumulated losses TOTAL EQUITY	CollTech $’000 766 34 187 16 1,003 240 2,220 ‐ ‐ 2,460 3,463 184 363 ‐ ‐ 547 ‐ ‐ 547 2,916 13031 911 (11,026) 2,916	Holista $’000 CollTech Post Transaction $’000 2,914 3,680 935 969 1,092 1,279 1,598 1,614 6,539 7,542 ‐ 240 2,462 4,682 22 22 ‐ 411 2,484 5,355 9,023 12,897 1,403 1,587 4,677 5,040 72 72 666 666 6,818 7,365 1,010 1,010 1,010 1,010 7,828 8,375 1,195 4,522 49 3,376 1,763 1,763 (617) (617) 1,195 4,522

Note 1: The pro‐forma consolidation above is based on the audit/audit reviewed accounts as at 31 December 2008 Note 2: Assumed market capitalisation of CollTech Australia adopted based on 1.2 cents per share Note 3: Assumed minimum underwritten take‐up in Capital raising by CollTech Australia being $300,000 less issue costs of $37,500

Note 4: Assumes no material change in operations of both companies post 31 December 2008

Note 5: Holista has outstanding Redeemable Preference Shares that may be redeemed at any time until 30 June 2011 for an amount of RM 3,000,000 ($AUD $1,250,000) referred to in section 3.2. Under Australian Accounting Standards, such securities must be recorded as a debt instrument not equity and have been reflected as current liabilities in the above Balance Sheet for Holista and the proforma Balance Sheet. Note 6: Exchange rate based on $AUD1:RM 2.40

An abbreviated financial summary of the Company’s income statement and balance sheet for the six months ending 31 December 2008 (audited reviewed) and the years ended 30 June 2008 (audited) and 30 June 2007 (audited) has been disclosed in section 5.2 above.

Risks relating to the Company’s future prospects are disclosed in section 10.

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5.4 Key risks relating to Company’s financial prospects

Shareholders should be aware of the key risks that may affect the future operating and financial performance of the Company and the value of Shares. These risks include general risks associated with any form of business and specific risks associated with the Company’s business. Details on these risks including the risks associated with the proposed Transaction not proceeding are set out in section 11.

Shareholders should also be aware that if Resolutions 1 to 4 are not passed the Company will continue to operate as it did prior to the Transaction, exploring all available alternatives to optimise its assets and remain financially viable. However, the Directors believe the Transaction represents the best option for Shareholders, given the potential for a sustainable and profitable future through the Transaction and the uncertainties otherwise faced by the Company in an extremely challenging economic environment.

5.5 Costs of Transaction

A summary of the costs of the Transaction, including legal, Independent Expert, ASX listing fees and printing costs is as follows:

fees and printing costs is as follows:
Cost	$
Legal fees	35,000
Independent Expert’s Report	36,000
Printing / EGM	6,500
ASX Fees	16,150
Malaysian Stampduty	23,100
Total Transaction Costs	$106,750

No other fee or commission is payable in connection with the Transaction.

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6 Impact on Company’s capital structure and level of control

6.1 Current capital structure

As at the date of this Explanatory Memorandum the Company’s ordinary fully paid Shares on issue total 277,252,333. The voting power of the Company’s substantial shareholders (based on substantial shareholder notices filed with the Company) are set out below:

Shareholder	Number of Shares	Voting power
	held	(%)
Dr Fathil Bin Mohamed	30,718,955	11.08
Mr Ravindran Govindan	13,667,286	4.93
Mr Kok Wah Ong	13,411,769	4.84

As at the date of this Explanatory Memorandum there are also 64,313,083 listed Options (expiring 31/10/2009) and 16,620,000 unquoted Options issued pursuant to the ESOP (with various expiry dates).

Further details in relation to these Options (and the associated implications of the Transaction in this regard) are set out in sections 6.3 and 11.1.

6.2 Capital structure post completion

As at the date of this Explanatory Memorandum, the Vendor and its associates held no Shares and accordingly had no voting power in the Company.

If Resolution 1 is approved by Shareholders and the Transaction proceeds, 770,000,000 New Shares will be issued by the Company to the Vendor. The company currently has 277,252,333 shares on issue. Subject to the completion of the Capital Raising, the Company will have a minimum of 307,252,333 and a maximum of 332,702,800 shares on issue (assuming no Options are exercised and before the Consolidation) immediately prior to Settlement of the Transaction. Pursuant to the underwriting agreement for the Capital Raising, the Underwriter may be issued with Shares in lieu of cash for its fees. If Shares are issued to the Underwriter in lieu of fees, there will be an additional 15,000,000 Shares issued resulting in a minimum of 322,252,222 and a maximum of 347,702,800 shares on issue.

The capital structure and voting power of the Vendor and the Existing Shareholders after completion of the Transaction and Capital Raising (assuming no Options are exercised and excluding the effect of the Consolidation) will be as set out below:

Shareholder	Minimum Capital Raising	Minimum Capital Raising	Maximum Capital Raising	Maximum Capital Raising
	Number	**%age **	Number	**%age **
Underwriting fees in cash Existing Vendor Total	307,252,333 770,000,000 1,077,252,333	28.52 71.48 100	332,702,800 770,000,000 1,102,702,800	30.17 69.83 100
Underwriting fees in shares
Existing	322,252,333	29.5	347,702,800	31.1
Vendor	770,000,000	70.5	770,000,000	68.9
Total	1,092,252,333	100	1,117,702,800	100

Note: The Underwriter holds a number of Shares in its capacity as an Existing Shareholder.

ASX has advised that the New Shares issued to the Vendor will be subject to a 12 month escrow period during which time they may not be transferred or sold.

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If the Consolidation proceeds, then following completion of the Transaction and the Capital Raising (on the assumptions set out above), the capital structure and voting power of the Vendor and the Existing Shareholders (which includes the Underwriter of the Capital Raising) is as set out below:

Shareholder	Minimum Capital Raising	Minimum Capital Raising	Maximum Capital Raising	Maximum Capital Raising
	Number	%age	Number	%age
Underwriting fees in
cash
Existing	30,725,233	28.52	33,270,280	30.17
Vendor	77,000,000	71.48	77,000,000	69.83
Total	107,725,233	100	110,270,280	100
Underwriting fees in
shares
Existing	32,225,233	29.5	34,770,280	31.1
Vendor	77,000,000	70.5	77,000,000	68.9
Total	109,225,233	100	111,770,280	100

The Consolidation will affect the number of Shares held by Shareholders but not the Shareholders’ voting power.

6.3 Impact on Options

As at the date of this Explanatory Memorandum there are 64,313,083 listed Options on issue expiring on 31/10/2009 and exercisable at $0.04.

There are also 16,620,000 unquoted Options on issue pursuant to the ESOP. The table below sets out the expiry date and exercise price of the unquoted Options:

ASX Code	Number	Exercise Price($)	Expiry
CAUAK	350,000	0.10	02/08/2009
CAUAY	1,040,000	0.10	09/02/2010
CAUAM	130,000	0.10	30/07/2010
CAUAI	6,600,000	0.04	30/06/2011
CAUAO	500,000	0.04	22/08/2011
CAUAZ	8,000,000	0.04	23/10/2011

All of the Options are currently exercisable and accordingly, approval of the Transaction will not affect the exercise of the Options.

However, if the Consolidation proceeds, then in accordance with the Listing Rules, the Options will be consolidated in the same ratio as the Shares and the exercise price of the Options will be amended in inverse proportion to that ratio.

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7 Directors and Management

7.1 Current Directors

The Board is currently comprised of the following Directors:

• Mr Stephen Carter (non‐executive Chairman);

• Mr Michael Pixley (non‐executive Director);

• Dr Fathil Bin Mohamed (non‐executive Director); and

• Mr Ravindran Govindan (non‐executive Director).

Further information on each Director is set out in section 4.4.

7.2 Proposed new Directors

Under the Share Sale Agreement, from Settlement the Vendor will be entitled to nominate three persons to be appointed as Directors.

As at the date of this Notice, the Vendor has nominated himself to be appointed as a Director. Accordingly, Resolution 2 seeks approval for the Vendor’s appointment, conditional on and with effect from Settlement.

In addition, it is intended that a further nominee of the Vendor will be appointed as a Director in due course.

Information on the Vendor is set out in section 3.6.

7.3 Composition of the Board after completion of the Transaction

Upon Settlement, the Board will comprise the existing Directors, the existing Chairman and the Vendor. Mr Michael Pixley, Dr Fathil Bin Mohamed and Mr Ravindran Govindan will continue as non‐executive Directors and Mr Stephen Carter will continue as non‐executive Chairman. Subject to Shareholders approving Resolution 2, the Vendor will be appointed Managing Director from Settlement.

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8 Corporate Governance

8.1 Director protocols

Clause 5 of the Board Charter states that it is a priority of the Board to achieve an appropriate balance between independent and non‐independent representation on the Board. In making this determination, the Board takes into account the required skills and experience required, in the context of the Company's operations and activities from time to time.

Where the chairperson is not an independent Director, the Company will appoint a lead independent Director to take over the role of the chairperson when the chairperson is unable to act in that capacity as a result of his or her lack of independence.

Clause 4 of the Company’s Code of Conduct states that Directors, management and staff must not involve themselves in situations where there is a real or apparent conflict of interest between them as individuals and the interest of the Company. In the case of any Director, where a real or apparent conflict of interest arises, the matter should be brought to the attention of the chairperson so that it may be considered and dealt with in an appropriate manner for all concerned.

Where a Director has a material personal interest in a matter which relates to the affairs of the Company, clause 15.15 of the Company’s Constitution states that the Director must:

• (a) where required by the Corporations Act give notice to the other Directors of the nature and extent of the personal interest and the relation of the interest to the affairs of the Company at a Directors meeting as soon as practicable after the Director becomes aware of the material personal interest; and

• (b) unless otherwise permitted by the Corporations Act, not be present when the matter is being considered at a Directors’ meeting and not vote on the matter.

8.2 Board independence post completion of the Transaction

The Vendor and the Vendor’s nominee Directors will be required to comply with the Company’s Board Charter, Constitution and Code of Conduct and all applicable laws (including the Listing Rules) in relation to any dealings between the Company and any Director or Shareholder including:

• seeking Shareholder approval for transactions between the Company and the Vendor or any nominee Director (or any associates) where required by any applicable law or the Listing Rules;

• complying with applicable laws relating to conflicts of interest for Directors and Directors’ exclusion from voting in relation to matters considered by the Board; and

• complying with their legal obligations to act in good faith, in the best interests of the Company and for proper purposes, and to have regard to the interests of the Shareholders and the Company as a whole.

Any transactions in which the Vendor or a nominee Director (or any associate) has an interest will be on arm's length commercial terms or will be approved by Shareholders, where required by legislation or the ASX Listing Rules.

The transactions will also be approved by the independent Directors of the Company not associated with the Vendor in accordance with any applicable laws relating to conflicts of interest and exclusion of directors from voting.

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9 Intentions of the Vendor

This section sets out the intentions of the Vendor in relation to the Company after the New Shares are issued, based on information known to the Vendor as at the date of this document.

Final decisions regarding these matters will only be made by the Vendor at a time after consideration of all of the relevant material and information at the time of making the decision. Accordingly, the statements set out in this section are statements of current intention only, which may change as new information becomes available or as circumstances change.

9.1 Continued operations and strategic direction

Based on information available to the Vendor, the Vendor currently intends that the Company's operations will continue substantially in their current form and in a manner consistent with the Company's strategy and operating plan set out in section 4 and otherwise announced by it prior to the date of this Explanatory Memorandum.

On the basis of information currently known to it, the Vendor’s current intentions are:

• to be a strategic shareholder in the Company and to use its expertise to assist the future development of the Company's business;

• not to change the business of the Company;

• to inject further capital into the Company on a pro rata basis with other Shareholders and, in any other circumstance, to give consideration to injecting capital into the Company on terms and conditions to be agreed with the Company;

• not to change the employment of any present employee of the Company;

• not to redeploy fixed assets of the Company or change significantly the Company's existing policies in relation to financial matters or dividends; and

• not to transfer to or acquire from the Company any property other than shares.

9.2 Management

The Vendor is supportive of the Company, its current management team and operating plan. It is intended that the existing Directors and the existing Chairman will continue in their positions after Settlement. The parties also intend that the Vendor will be appointed as Managing Director after completion of the Transaction and that an additional Vendor nominee Director will be appointed in due course.

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10. Key Risks

Investors should be aware of the key risks that may affect the future operating and financial performance of the Company and the value of Shares. These risks include general risks associated with any form of business and specific risks associated with the Company’s business.

The following summary, which is not exhaustive, represents some of the major risk factors which investors need to be aware of.

1.1 General Risks

Factors such as inflation, interest rates, levels of tax, taxation law and accounting practices, government legislation or intervention, natural disasters, social upheaval and war may have an impact on prices, operating costs and market conditions generally. Accordingly, the Company’s future possible revenue and operations can be affected by these factors which are beyond the control of the Company.

General movements in local and international stock markets, and economic conditions could all affect the market price of the Company’s securities.

(a) Economic Factors

Factors such as inflation, currency fluctuation, interest rates, supply and demand and industrial distribution have an impact on operating costs, commodity prices and stock market processes. The Company’s future possible revenues and security price can be affected by these factors, which are beyond the control of the Company and its Directors.

(b) Government Policies

Government policies are subject to review and changes from time to time. Such changes are likely to be beyond the control of the Company and may affect industry profitability.

At present, CollTech is not aware of any reviews or changes that would affect its business. However, changes in community attitudes on matters such as taxation and competitive policy may bring about reviews and possibly changes in government policies. There is a risk that such changes may affect the Company’s business plans or its rights and obligations in respect of its technology. Any such government action may also require increased capital or operating expenditures and could impact the Company's business.

(c) Exchange Rate Risks

If CollTech achieves success leading to significant sales, a large proportion of the revenue will be derived from overseas markets and thus will expose potential income of the Company to exchange rate risks. Some sales will be transacted in Malaysian Ringgit, United States dollars or other foreign currencies, whereas the income and expenditure of the Company is and will be taken into account in Australian currency, exposing the Company to the fluctuations and volatility of the rate of exchange between the Malaysian Ringgit, the United States dollar and the Australian dollar as determined by international markets.

1.2 CollTech specific risks

In addition to the general risks outlined above, there is a range of specific risks associated with the Company’s business operations and its involvement in the production and sale of collagen. Potential investors in the Company should note the following additional risks prior to investing.

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(a) History

CollTech was established in September 2000 and listed on the ASX in February 2004. The Company’s core product and business has a limited performance history with related financial information having been established in February 2003. Since listing the Company has completed construction and commissioning of its manufacturing facility, scaled up to production level its cosmetic grade collagen, produced research grade collagen at an external facility and commenced selling product. The Company’s prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stages of development, particularly companies in new and rapidly evolving industries. In the event that revenues do not grow there can be no assurance that CollTech will be profitable.

(b) Technology

Competition from alternative sources of collagen and future technologies replacing collagen has the potential to negatively impact market share, product prices, profit margins and the financial value of products. Further, it may render the Company’s research projects and the high costs associated with such research and development obsolete.

(c) Intellectual Property

CollTech regards its patent application, copyrights, trademarks, trade secrets and similar intellectual property as critical to its success. CollTech relies on patent, trademark and copyright law, trade secret protection and duties of confidence with third parties to protect its intellectual property rights. While the Company will use all reasonable endeavours to protect these rights, the steps that the Company takes to protect its intellectual property rights may be inadequate. The unauthorised use or disclosure of its proprietary technology and systems may have adverse effects on the operation and financial performance of CollTech.

(d) Product Defects

Although the Company and its customers sample test the collagen produced prior to use, there is still the potential for the products to contain defects which may result from system failures. These defects or problems could result in the loss of or delay in generating revenue, loss of market share, failure to achieve market acceptance, diversion of development resources, injury to the Company’s reputation or increased insurance costs.

If the Company fails to meet its clients’ expectations, the Company’s reputation could suffer and it could be liable for damages.

The Company may not be able to maintain product liability insurance or other insurance on reasonable terms in the future and, in addition, the Company's insurance may not be sufficient to cover large claims, or the insurer could disclaim coverage on claims.

(e) Production Risks

The Company produces the product at its plant in Collie and also uses external facilities. There is a risk the plant will not be able to achieve the required throughput to meet sales projections and that without appropriate management supervision, manufacturing could lead to delivery and quality control difficulties, which may result in material adverse effects on the Company. The Company intends to minimise these risks by employing suitably qualified personnel to ensure production is maintained at a high standard.

(f) Expansion

The Company will be actively seeking opportunities for growth in its core business areas. While the efforts of the Company have the potential to generate substantial returns in the longer term, there can be no certainty that these returns will be forthcoming. Should

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anticipated sales not reach the levels anticipated, then this could materially impact upon the Company’s profitability.

(g) Key Personnel

The Company relies on a number of key employees and consultants. There is a risk that the Company may fail to attract, retain or develop key employees or consultants and this would have a negative effect upon the development of the Company. The loss of any of these individuals could have an adverse impact on the business of CollTech.

(h) Strategic Alliance Risk

The Company, where considered appropriate, intends to enter into strategic alliances and/or licence arrangements for the marketing and distribution of its product range. While great care will be taken in partner selection, there is a risk that partner selections and performance may not be adequate, resulting in lost time, money and opportunities.

(i) Marketing Risks

The Company intends to review the potential of its product in the markets of China, India, South East Asia, Australia, Europe and the United States. There can be no assurance that these markets will be established successfully and the failure to do so could have a material adverse effect on the Company’s business, financial condition and results of operations. Further, there is no guarantee that the targeted markets will accept the product at the Company’s projected pricing, use the products developed by the Company or enter into agreements.

(j) Legal Risks

The introduction of new legislation or amendments to existing legislation by governments, developments in existing common law, or respective interpretation of the legal requirements in any of the legal jurisdictions which govern the Company’s operations and contractual obligations, could impact adversely on the assets, operations and, ultimately, the financial performance of the Company and its securities. In addition there is a commercial risk that legal action may be taken against the Company in relation to commercial matters.

(k) Additional Working Capital Requirements

The Company may be required to raise further working capital within the next 12 months in the event that proceeds from sales are not achieved or are not achieved within anticipated timeframes, or costs are not as anticipated. The working capital needs of the Company may also be adversely affected in the event that certain grants are not received by the Company to the extent and within the timeframes anticipated. Additional funds may also be required in order to develop medical devices.

There can be no assurance on the timing or the amount of any future working capital requirements nor indeed whether the Company will be able to raise any required amount and if so, at what price.

(l) Certainty of Agreement

The Company has signed distribution agreements with prospective distributors. Even though these are binding agreements the Company may not be able to enforce the distributor to meet their obligations under the agreement. The letters of intent entered into by the Company are not binding.

(m) Current Competition

The Company will be operating in a market where collagen supply is produced from other sources. Although the Board believes that the Company’s product has a number of

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significant advantages over collagen sourced from other animals, other competitive products unknown to the Company may emerge from time to time. The introduction of new competitors or a more aggressive competitive response from existing participants may affect the operating performance of the Company.

(n) Raw Material Risks

The production of collagen by CollTech is dependent on CollTech being able to source an adequate disease free supply of sheepskins at competitive prices. The Company has entered into a supply agreement with an abattoir for the supply of sheepskins through to September 2012. The availability of sheepskins is dependent on the number of sheep sent to abattoirs and the Company being able to successfully compete with other consumers of sheepskins in order to acquire the quantity of sheepskins required for processing purposes.

(o) Testing of Medical Grade Collagen

In order to sell soluble collagen into the high value medical market it will be necessary for the Company to undertake the testing of its product to obtain international certification. The Company will incur significant costs in seeking to obtain the certification and there can be no certainty that such certification will be obtained.

(p) Unforeseen Expenditure Risk

Expenditure may need to be incurred that has not been taken into account by the Company. Although the Company is not aware of any such additional expenditure requirements, if such expenditure is subsequently incurred, this may adversely affect the expenditure proposals of the Company. The Company’s plant is presently used to produce the finished product of an ingredient for use in cosmetic products. Costs will need to be incurred for the production facility to meet regulatory body (e.g. TGA) requirements for the facility to produce product to be used in a medical grade product.

(q) Disease Free Issue

Production of collagen must be from a disease free source of sheep. Whilst Australia has been designated free from disease for sheep, there is no guarantee that the position will be maintained. In the event that there is an outbreak of disease affecting sheep, in the area where CollTech sources its sheepskins, then there is a risk the plant could be shut down for a period under the Exotic Disease of Animals Act 1993 and not reopen unless and until the disease was brought under control or CollTech obtained alternative sources for its sheepskins.

(r) Approvals

The Company requires approvals from regulatory bodies prior to the facility being able to produce product for use in medical purposes. There is a risk that an authority from which an approval is required could reject the Company's application for approval or require the Company to undertake further studies, the consequence of which could be to either delay or increase the costs of the project.

10.3 Holista specific risks

In addition to the general risks set out in section 10.1, there is a range of specific risks associated with the Holista’s business operations and its involvement in the production, distribution and sale of its natural and herbal based products. Shareholders should note the following additional risks that may apply in respect of the proposed acquisition of Holista

(a) Sector Risks

Holista’s prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in new and rapidly evolving industries, such as the - 34 -

biotechnology sector. In the event that revenues do not continue to grow there can be no assurance that Holista will continue to be profitable.

(b) Technology

Competition from alternative products, both natural and man‐made and from future technologies has the potential to negatively impact market share, product prices, profit margins and the financial value of products. Further, it may render the Company’s research projects and the high costs associated with such research and development obsolete.

(c) Intellectual Property

Holista relies on patent, trademark and copyright law, trade secret protection and duties of confidence with third parties to protect its intellectual property rights. Whilst it will use all reasonable endeavours to protect these rights, the steps that it takes to protect its intellectual property rights may be inadequate. The unauthorised use or disclosure of its proprietary technology and systems may have adverse effects on the operation and financial performance of Holista.

(d) Product Defects

As Holista is involved in the production and distribution of products, there is potential for the products to contain defects which may result in the loss of or delay in generating revenue, loss of market share, failure to achieve market acceptance, diversion of development resources, injury to its reputation or increased insurance costs.

If Holista fails to meet its clients’ expectations, its reputation could suffer and it could be liable for damages.

Holista may not be able to maintain product liability insurance or other insurance on reasonable terms in the future and, in addition, its insurance may not be sufficient to cover large claims, or the insurer could disclaim coverage on claims.

(e) Production Risks

Holista produces some products via external parties. There is a risk that such parties may not be able to achieve the required throughput to meet sales projections and that without appropriate management supervision, manufacturing could lead to delivery and quality control difficulties, which may result in material adverse effects on it.

(f) Expansion

Holista will be actively seeking opportunities for growth in its core business areas. Whilst its efforts have the potential to generate substantial returns in the longer term, there can be no certainty that these returns will be forthcoming. Should anticipated sales not reach the levels anticipated, then this could materially impact upon Holista’s profitability.

(g) Key Personnel

Holista relies on a number of key employees and consultants. There is a risk that it may fail to attract, retain or develop key employees or consultants and this would have a negative effect upon its development. The loss of any of these individuals could have an adverse impact on the business of Holista.

(h) Strategic Alliance Risk

Holista has in the past and intends in the future to enter into distribution agreements, strategic alliances and/or licence arrangements for the marketing and distribution of its product range. While great care will be taken in partner selection, there is a risk that partner

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selections and performance may not be adequate, resulting in lost time, money and opportunities.

(i) Marketing Risks

Holista intends to exploit opportunities to expand its activities within South East Asia and elsewhere. There can be no assurance that expansion into these markets will be established successfully and the failure to do so could have a material adverse effect on the its business, financial condition and results of operations.

(j) Legal Risks

The introduction of new legislation or amendments to existing legislation by governments, developments in existing common law, or respective interpretation of the legal requirements in any of the legal jurisdictions which govern Holista’s operations and contractual obligations, could impact adversely on the assets, operations and, ultimately its financial performance. In addition there is a commercial risk that legal action may be taken against Holista in relation to commercial matters.

(k) Additional Working Capital Requirements

Holista may be required to raise further working capital within the next 12 months in the event that proceeds from sales are not achieved or are not achieved within anticipated timeframes, or costs are not as anticipated. Its working capital needs may also be adversely affected in the event that certain grants are not received by it to the extent and within the timeframes anticipated. Additional funds may also be required in order to meet research and development needs.

(l) Current Competition

Whilst Holista distributes a broad range of products, the introduction of new products or new competitors or a more aggressive competitive response from existing participants may affect its operating performance.

(m) Unforeseen Expenditure Risk

Expenditure may need to be incurred that has not been taken into account by Holista that may adversely affect its financial position, its current and future business operations.

(n) Approvals

Holista may require approvals from regulatory bodies for the production and sale of its various products. There is a risk that an authority from which an approval is required could reject Holista's application for approval or require it to undertake further studies, the consequence of which could be to either delay revenue or increase production costs associated with new products.

1.0 Risks associated with the Transaction

There a number of risks associated with the Transaction which Shareholders should be aware of.

Risks and implications associated with the approval of Resolutions 1 to 4 include amongst other things, changes in corporate governance and control and regulation under the Foreign Acquisitions and takeovers Act 1975 (Cth). Details on these risks and implications are set out in section 11.1.

If on the other hand the Transaction is not approved or does not complete, then there are additional risks over and above those set in sections 10.1 and 10.2. Details on these risks and implications are set out in section 11.2.

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• 11 Key implications and risks of the Transaction

• 11.1 Key implications and risks if Resolutions 1 to 4 are approved

• (a) Impact on control and governance

If the Transaction proceeds, the Company will issue 770,000,000 New Shares to the Vendor. As set out in detail in section 6.2, subject to the extent of the Capital Raising and the terms of the Underwriting, the Existing Shareholders will hold between 28.52% and 31.1% and the Vendor 68.9% and 71.48% of the issued capital of the Company immediately post settlement.

In addition, if the Transaction proceeds, (and subject to Resolution 2 being approved), the Vendor will be appointed to the Board. It is also intended that a nominee of the Vendor will be appointed as a Director in due course.

There is a risk that the Vendor could use its voting power on the Board and as a Shareholder to pursue interests which are different to the interests of current Shareholders.

However, the Vendor and the nominee Directors must comply with all applicable laws and the Listing Rules in relation to any dealings with the Company (see sections 8 and 9 of this Explanatory Memorandum for further information). Accordingly, any transactions in which a Vendor and/or any nominee Director (or any associate) has an interest will be on arm's length commercial terms or will be approved by independent Shareholders, where required by legislation or the ASX Listing Rules. In addition the Vendor and any other nominee Director who has a material interest in any proposed contract must not be present at any Board meeting to consider the matter and must not vote on the matter. Accordingly, only the independent Directors (under the proposed new Board structure) will be eligible to vote on future matters which the Vendor or the nominee Directors have a material interest in.

The Vendor’s intentions with respect to the Company are set out in section 9.

(b) Impact on the status of Company under the Foreign Acquisitions and Takeovers Act 1975 (Cth)

Under the Foreign Acquisitions and Takeovers Act 1975 (Cth) (“ FATA” ), the Federal Treasurer has the power to block transactions subject to the FATA which would result in a foreign person acquiring control of an Australian corporation or business or an interest in real estate, where this is determined to be contrary to the national interest.

The Federal Treasurer’s powers include prohibiting a person proposing to acquire shares or assets of an Australian corporation or business from doing so, if as a result of the acquisition, one or more foreign persons would gain control of the Australian corporation or business and the result would be contrary to the national interest. The prohibition applies to corporations with total assets of more than $100 million or where the proposal values the business at more than $100 million. If the person has already acquired the shares or assets, the Federal Treasurer may order that the shares or assets be disposed of to an approved person.

A “foreign person” under the FATA includes a corporation in which a foreign person holds more than a 15% interest. Accordingly, if the Transaction proceeds and the New Shares are issued to the Vendor, the Company would be considered a “foreign person” for the purposes of the FATA because the Vendor would hold more than a 15% interest in the Shares. The Company would be required to give notice under the FATA as a pre‐condition to it, or any of its subsidiaries acquiring more than 15% of the shares in an Australian corporation with total assets of more than $100 million.

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(c) Effect on other possible takeover offers

If the Transaction proceeds, it may influence a decision by any other third party to bid for Company. Other third parties may be reluctant to make a takeover offer because they would not be confident that they could acquire a 90%, or at least 50% interest in the Shares. In other words, the Vendor’s interest may be seen as a “blocking stake”.

(d) Effect on Company’s business

If Resolutions 1 to 4 are approved and the Transaction proceeds, it will provide the Company with the ability to secure an established and profitable group with substantial experience in the manufacture and distribution of health care products. This experience will be invaluable in further developing the Company’s ovine collagen manufacturing and product development capabilities, as well as providing it with a substantial sales and marketing platform within Asia. It will also provide the Company with the ability to significantly grow its business and expand its scope of activities within the health‐care market to provide much needed critical mass to achieve its long term corporate objectives.

(e) Impact on Options

As at the date of this Explanatory Memorandum there are 64,313,083 listed Options on issue expiring on 31/10/2009 and exercisable at $0.04. There are also 16,620,000 unquoted Options on issue pursuant to the ESOP. All of the Options are currently exercisable and would remain exercisable after Completion of the Transaction and Capital Raising. Accordingly, approval of the Transaction and the Capital Raising will not affect the exercise of the Options. However, if the Consolidation proceeds, then in accordance with the Listing Rules, the Options will be consolidated in the same ratio as the Shares and the exercise price of the Options will be amended in inverse proportion to that ratio.

(f) Transaction may not proceed even if Shareholders approve Resolutions 1 to 4

Even if Resolutions 1 to 4 are approved, the Transaction will only be implemented if the other conditions precedent set out in the Share Sale Agreement are satisfied or waived. These conditions precedent are summarised in Annexure A.

The Company is not currently aware of any information which may cause the conditions precedent to be breached or unfulfilled. However, there is a risk that these conditions precedent will be unfulfilled due to circumstances outside its control.

If the Transaction is not implemented because one or more conditions precedent is not satisfied or waived, the Company will be otherwise affected in the manner set out in section 11.2 of this Explanatory Memorandum.

11.2 Key implications and risks if Resolutions 1 to 4 are not approved

(a) Company’s financial position

Shareholders should also be aware that, if Resolutions 1 to 4 are not passed the Company will continue to operate as it did prior to the Transaction. However, the Directors believe the Transaction represents the best option for Shareholders given represents the best option for Shareholders given the company’s current financial position, the current global economic uncertainties and the difficulties that exist for emerging companies in securing debt and equity at this time.

If the Resolutions 1 to 4 are not passed, given the company’s current position, it may prove difficult for the company to retain title to its intellectual property and to retain its staff, which in turn may diminish the company’s ability to secure future capital or alternative business opportunities. In these circumstances, risks of the company being unable to continue would be heightened.

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12 Independent Expert’s Report

The Independent Expert’s Report assesses whether the Transaction is fair and reasonable to Shareholders who are not associated with the Transaction. This assessment is designed to assist all Shareholders in reaching a decision to vote on Resolutions 1 to 4.

The Independent Expert’s Report has been provided by Grant Thornton. It provides the opinion that the Transaction is fair and reasonable to the shareholders of CollTech.

It is recommended that Shareholders read the Independent Expert’s Report in full, as set out in Annexure D.

Fair

The issue of New Shares will be deemed by the Independent Expert to be ‘fair’ if the offer price or consideration for the New Shares is equal to or higher than the assessed fair value of CollTech Shares.

The Independent Expert has assessed the Transaction as fair to Shareholders not associated with the Transaction.

Reasonable

The issue of New Shares is deemed to be ‘reasonable’ if it is assessed by the Independent Expert to be fair or, if the Independent Expert has assessed the issue of New Shares as ‘not fair’, if there are other significant factors, which justify the acceptance and approval by the Shareholders.

The independent Expert has concluded that the Transaction is reasonable to Shareholders not associated with the Transaction.

It is recommended that Shareholders read the Independent Expert’s Report in full, as set out in Annexure D.

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13 Directors Recommendation

13.1 Recommendations

The Directors unanimously recommend that Shareholders vote in favour of each Resolution.

13.2 Directors’ Voting Intentions

The Directors who each hold shares intend to vote their Shares in favour of Resolutions 1 to 4 for the reasons outlined in section 2 and in favour of Resolution 5 for the reasons outlined in section 14.5.

13.3 Directors’ Interests in Shares and Options

As at the date of this Explanatory Memorandum, the Directors had the following direct and indirect interests in Shares and Options:

Director	Number of Shares	Number of listed	Number of
		Options	unlisted Options
Mr Stephen Carter	679,000	257,481	2,000,000
Mr Michael Pixley	7,933,334	333,334	2,000,000
Mr Ravindran Govindan	13,667,286	7,433,490	2,000,000
Dr Fathil Bin Mohamed	30,718,955	27,777,778	2,000,000

The Directors do not have any material personal interest in the outcome of the Resolutions other than their interests arising solely in their capacity as Shareholders or as set out elsewhere in this prospectus.

The Company issued 2,000,000 unlisted Options (exercisable at $0.04 and expiring on 23/10/2011) to each Director on 7 November 2008 with Shareholder approval given at the Company’s annual general meeting on 23 October 2008. Aside from this issue of unlisted Options, there have been no acquisitions or disposals of Shares or Options by any Director in the four months ending on the date of this Explanatory Memorandum.

The listed Options held by the Directors are exercisable at $0.10 each and expire on 31/10/2009.

Any subsequent acquisitions or disposals by Directors will be announced to the ASX in accordance with legal requirements.

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14. Additional Information relating to the Resolutions

14.1 Resolution 1 – Approval of the Transaction

(a) Regulatory Requirements

Listing Rule 11.1

The acquisition of the fully paid ordinary shares in Holista by the Company will have the effect of increasing the scale of the Company's activities, but will not change the nature of the Company’s activities.

Under Listing Rule 11.1, if a Company seeks to change the scale of its activities, it must notify ASX of the proposed change and, if required by ASX, must obtain shareholder approval to undertake the change and meet the requirements of Chapters 1 and 2 of the Listing Rules as if the Company was applying for admission to the official list of ASX.

ASX has confirmed that the Company must obtain Shareholder approval to undertake the change in the scale of its activities that will result from the acquisition of the fully paid ordinary shares in Holista. Accordingly, Resolution 1 seeks this approval. Information on the Transaction and its likely effect on the Company is set out in sections 1, 2, 5, 6 and 9.

ASX has also advised that the Vendor will be subject to an escrow period of 12 months, during which time the Vendor may not sell or transfer the New Shares. The Vendor will also be required to enter into a restriction agreement in a form prescribed by ASX.

Section 606 and 611 Corporations Act

Section 606(1) of the Corporations Act provides that a person must not acquire a relevant interest in issued voting shares of a listed company if the person acquiring the interest does so through a transaction in relation to the securities entered into by or on behalf of the person and, because of the transaction, that person’s or someone else’s voting power in the listed company increases:

• from 20% or below to more than 20%; or

• from a starting point that is above 20% and below 90%.

Under section 608(1) of the Corporations Act, a person has a relevant interest in securities if they are the holder of the securities, have power to exercise, or control the exercise of, a right to vote attached to the securities or have power to dispose of, or control the exercise of a power to dispose of, the securities.

The Company proposes to issue 770,000,000 New Shares to the Vendor under the Transaction. Accordingly, immediately after Settlement, the Vendor’s voting power in the Company will increase from nil to 71.48% (assuming no Options are exercised and minimum subscription under the Capital Raising) and the Vendor would fall within the prohibition in section 606(1).

Section 606(1A) of the Corporations Act provides that a person may acquire a relevant interest under one of the exceptions set out in section 611 of the Corporations Act without contravening section 606(1). Under item 7 of section 611, an acquisition that was approved previously by a resolution passed at a general meeting of the company in which the acquisition is made is exempt from section 606(1).

Accordingly, Resolution 1 seeks Shareholder approval of the Transaction for the purposes of item 7 of section 611 of the Corporations Act for the Vendor to acquire a relevant interest in the New Shares, the effect of which is that his voting power in the Company will increase

• 41 -

from nil to 71.48% (assuming no Options are exercised and minimum subscription under Capital Raising).

Item 7 of section 611 requires the following information to be provided to Shareholders:

• (a) The identity of the person proposing to make the acquisition and their associates

The New Shares will be issued to the Vendor only and no associates will be involved in the Transaction.

• (i) The maximum extent of the increase in that person’s voting power in the company that would result from the acquisition

The Vendor does not currently hold any shares in Company (and therefore has no voting power in Company). Accordingly, the maximum extent to which the voting power of the Vendor may increase is 71.48% (assuming no Options are exercised and minimum subscription under Capital Raising).

• (ii) The voting power that person would have as a result of the acquisition

If the New Shares are issued to the Vendor, his voting power will be 71.48% (assuming no Options are exercised and minimum subscription under Capital Raising).

• (iii) The maximum extent of the increase in the voting power of each of that person’s associates that would result from the acquisition

The Vendor’s associates do not have a relevant interest in Shares other than from securities to be acquired by the Vendor under the Transaction.

• (iv) The voting power that each of that person’s associates would have as a result of the acquisition.

The Vendor’s associates do not have a relevant interest in Shares other than from securities to be acquired by the Vendor under the Transaction.

(b) Additional Information for Shareholders

ASIC Regulatory Guide 74: Acquisitions agreed to by shareholders requires that the following information be provided to Shareholders to enable Shareholders to make an informed decision on the Resolutions:

• (a) The identity of the allottee or purchaser and any person who will have a relevant interest in the shares to be allotted or purchased.

The New Shares will be acquired by the Vendor, who will have a relevant interest in the New Shares issued to them.

• (ii) full particulars (including the number and the percentage) of the shares in the company to which the allottee or purchaser is or will be entitled immediately before and after the proposed acquisition.

The Vendor does not currently hold any shares in Company (and therefore has no voting power in Company).

Immediately after the Transaction, the Vendor will hold 770,000,000 New Shares, representing 71.48% of the enlarged issued share capital of the Company (assuming no Options are exercised and excluding the Capital Raising). The New Shares will rank pari passu with the existing Shares, however the New Shares will be subject to a 12 month escrow period during which time they may not be transferred or sold.

• 42 -

• (iii) the identity, associations (with the allottee, purchaser or vendor and with any of their associates) and qualifications of any person who it is intended will become a director if the Shareholders agree to the allotment or purchase.

The identity, associations and qualifications of the persons nominated by the Vendor to be appointed as directors are set out in section 7.2 of this Explanatory Memorandum.

• (iv) a statement of the allottee’s or purchaser’s intentions regarding the future of the company if Shareholders agree to the allotment or purchase, and in particular, any intention to change the business of the company; any intention to inject further capital into the company and if so, how, the future employment of the present employees of the company; any proposal whereby any property will be transferred between the company and the allottee, vendor or purchaser or any person associated with any of them; and any intention to otherwise redeploy the fixed assets of the company.

The intentions of the Vendor are set out in section 9 of this Explanatory Memorandum.

• (v) particulars of the terms of the proposed allotment or purchase and any other contract or proposed contract between the allottee and the company or vendor or any of their associates which is conditional upon, or directly or indirectly dependent on, Shareholders’ agreement to the allotment or purchase.

The particulars of the Transaction are set out in section 1 of this Explanatory Memorandum. A summary of the Share Sale Agreement is set out in Annexure A to this Explanatory Memorandum.

• (vi) when the allotment is to be made or the purchase is to be completed

If Shareholders approve Resolution 1, and assuming all other conditions precedent under the Share Sale Agreement are satisfied or waived, the issue of the New Shares to the Vendor will take place on Settlement of the Share Sale Agreement which is expected to occur on or about 15 July 2009.

• (vii) an explanation of the reasons for any proposed allotment

An explanation of the rationale for the Transaction is set out in section 2 of this Explanatory Memorandum.

• (viii) the interests of the directors in the Resolution

The Directors do not have a material personal interest in the outcome of the Resolutions other than in their capacity as Shareholders. The Directors interests in Shares and Options are set out in section 13.2 of this Explanatory Memorandum.

• (ix) the identity of the directors who approved or voted against the proposal to put the Resolution to Shareholders and the relevant information memorandum

All of the Directors voted to put this Resolution and the information contained in the Notice of Meeting and this Explanatory Memorandum to Shareholders.

• (x) the recommendation or otherwise of each director as to whether the non‐associated Shareholders should agree to the acquisition, and the reasons for that recommendation or otherwise

The Directors’ recommendations are set out in section 13 of this Explanatory Memorandum.

• (xi) any intention of the acquirer to change significantly the financial or dividend policies of the company

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The intentions of the Vendor are set out in section 9 of this Explanatory Memorandum.

• (xii) an analysis of whether the proposal is fair and reasonable when considered in the context of the interests of the Shareholders other than those involved in the proposed allotment or purchase or associated with such persons

In accordance with ASIC Regulatory Guide 74, the Directors commissioned Grant Thornton Australia to prepare an Independent Expert’s Report which assesses whether the Transaction is fair and reasonable to Shareholders who are not associated with the Transaction. The report is set out in Annexure D. The Independent Expert's Report has concluded that the Transaction is fair and reasonable to Shareholders who are not associated with the Transaction.

Neither the Company nor the Directors are aware of any additional information not set out in this Explanatory Memorandum that would be relevant to Shareholders in deciding how to vote on the Resolutions.

Application of Listing Rule 7.1

Listing Rule 7.1 imposes a limit on the number of equity securities (eg shares or options to subscribe for shares) which a company can issue without shareholder approval. In general terms, a company may not, without prior shareholder approval, issue equity securities if the equity securities will in themselves or when aggregated with the securities issued by the company during the previous 12 months, exceed 15% of the number of fully paid ordinary shares on issue at the commencement of that 12 month period.

Listing Rule 7.2, exception 16 states that Listing Rule 7.1 does not apply to an issue of securities approved by shareholders for the purposes of item 7 of section 611 of the Corporations Act.

Accordingly, Resolution 1 does not seek approval for the issue of New Shares to the Vendor for the purposes of Listing Rule 7.1.

14.2 Resolution 2 – Appointment of new Director

Under the Share Sale Agreement, the Vendor is entitled from Settlement to nominate three persons to be appointed as Directors.

In accordance with this right, the Vendor has nominated himself to be appointed as a Director of the Company.

Resolution 2 seeks approval to appoint the Vendor as a Director, conditional upon and with effect from Settlement. Information on the Vendor is set out in section 3.6.

14.3 Resolution 3 – Change of Company Name

Under the Share Sale Agreement, the Company is required (subject to Shareholder approval) to change its name to “Holista CollTech Limited” with effect from Settlement.

Section 157(1) of the Corporations Act states that if a Company wants to change its name, it must pass a special resolution adopting that name.

Accordingly, Resolution 3 seeks this approval, effective from Settlement.

Section 9 of the Corporations Act states that a special resolution is a resolution which is passed by at least 75% of the votes that are cast by Shareholders entitled to vote on the resolution (in person or by proxy).

.

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14.4 Resolution 4 – Consolidation of Shares and Options

Section 254H of the Corporations Act enables a company to convert all or any of its shares into a smaller number of shares by a resolution passed at a general meeting.

Accordingly, Resolution 4 seeks Shareholder approval for the purposes of Section 254H of the Corporations Act for the Company to consolidate its shares on a 1 for 10 basis.

Listing Rule 7.22 also requires that the number of options on issue be consolidated in the same ratio as the ordinary share capital and the exercise price be amended in inverse proportion to that ratio.

Effect of the Consolidation

For the purposes of Listing Rule 7.20, if Resolution 4 is approved, the effect of the Consolidation is that every 10 existing Shares will be consolidated into 1 Share and every 10 existing Options will be consolidated into 1 Option. In addition, the exercise price of each Option will be multiplied by a factor of 10.

Immediately after the Consolidation, each Shareholder will still hold the same proportion of the Company’s share capital and net assets as before the Consolidation. The current rights attaching to the Shares and Options (other than the exercise price of Options) will not be affected.

If through the Consolidation any Shareholder whose existing holding of Shares or Options is not a whole multiple of 10 receiving a fraction of a security, these fractional entitlements will be rounded down to the nearest whole number.

Proposed Capital Structure Post Consolidation

The effect of the Consolidation (assuming completion of the Transaction, that 30,000,000 Shares are issued under the Capital Raising, the Underwriting fee is not taken by way of securities and that no Options are exercised) on the capital structure of the Company is set out below:

out below:
Security	Pre‐Consolidation		Post Consolidation
	Number	Ex Price ($)	Number	Ex Price ($)
Shares Listed Options expiring 31/10/2009 Options expiring 02/08/2009 Options expiring 09/02/2010 Options expiring 30/07/2010 Options expiring 30/06/2011 Options expiring22/08/2011	1,077,252,333 64,313,083 350,000 1,040,000 130,000 6,600,000 500,000	‐ $0.04 $0.10 $0.10 $0.04 $0.04 $0.04	107,725,233 6,431,308 35,000 104,000 13,000 660,000 50,000	$0.40 $1.00 $1.00 $0.40 $0.40 $0.40

Holding Statements and Taxation

After the Consolidation:

1. all holding statements for Shares and option certificates for Options will cease to have any effect, except as evidence of an entitlement to a certain number of post Consolidation Shares and Options;

2. the Company will despatch a notice to Shareholders and holders of Options advising them of the number of Shares and Options held by each Shareholder and holder of Options (as the case may be) both before and after the Consolidation; and

3. 45 -

4. the Company will also arrange for new holding statements to be issued to Shareholders and new option certificates to holders of Options.

It is not considered that there will be any taxation consequences for Shareholders arising from the Consolidation. However, Shareholders are advised to seek their own tax advice on the effect of the Consolidation and none of the Company, the Directors or the Company’s advisors accept any responsibility for any individual Shareholder’s taxation consequences of the Consolidation.

Timetable

The timetable (which is indicative and, subject to the Listing Rules, may be varied) for the Consolidation is as follows:

Consolidation is as follows:
General meetingto approve Consolidation	10 July2009
Last dayof tradingofpre‐Consolidation Shares	13 July2009
Shares trade on a deferred settlement basis	14 July2009
Last day for the Company to register transfers on a pre‐ reorganisation basis	20 July 2009
A notice and holding statements or certificates (as applicable) will be sent to all Shareholders and holders of Options. The Company will reject transfers accompanied by a certificate that was issued prior to Consolidation.	21 July 2009
Deferred tradingends.	24 July2009

14.5 Resolution 5 – Ratification of Share issue

Listing Rule 7.1 provides that prior approval of shareholders is required for an issue of securities if the securities will, when aggregated with the securities issued by a company during the previous 12 months, exceed 15% of the number of securities on issue.

ASX Listing Rule 7.4 states that an issue by a company of securities made without approval under Rule 7.1 is treated as having been made with approval for the purpose of Rule 7.1 if the issue did not breach Rule 7.1 and the company’s members subsequently approve it.

Under Resolution 5, the Company seeks from Shareholders approval for, and ratification of, the issues of 20,000,000 Shares to the shareholders listed in the table below at $0.01 each so as to limit the restrictive effect of ASX Listing Rule 7.1 on any further issues of securities in the next 12 months.

Details of the Shares issued are set out in the table below. They comprise 7.21% of the Company’s fully undiluted issued capital (based on the number of Shares on issue as at the date of the Notice of Meeting).

ASX Listing Rule 7.5 requires the following information to be given to Shareholders:

Date of Issue		Issue	Number of	Purpose of Issue
	Allottee	Price	Shares
18/12/2008	KB Kuok*	$0.01	10,000,000	Working capital
18/12/2008	HK Lim*	$0.01	5,000,000	Working capital
18/12/2008	DK & FE Kennedy*	$0.01	4,000,000	Working capital
18/12/2008	DK Kennedy*	$0.01	1,000,000	Working capital

Note: *The above are not related parties of the Company.

The issued Shares are fully paid ordinary shares in the Company and rank equally with the existing ordinary fully paid Shares in the Company. They were issued on terms and conditions contained in the Constitution which are summarised in Annexure B.

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The Board believes that the ratification of this issue is beneficial for the Company. The Board recommends Shareholders vote in favour of Resolution 5 as it allows the Company to ratify the above issue of Shares and retain the flexibility to issue further securities representing up to 15% of the Company’s share capital during the next 12 months.

• 47 -

15 GLOSSARY

$

Alterni

ASIC

associate

ASX

ASX Listing Rules or Listing Rules

Board

Capital Raising

Company or CollTech

Constitution Consolidation

Corporations Act

Director Existing Shareholders

FIRB

General Meeting or Meeting

Grant Thornton

Holista

Holista Group or Group

Independent Expert

Independent Expert’s Report

Listing Rules

New Shares

Notice of Meeting or Notice

Option

Optionholder

Prospectus

Redeemable Preference Shares

means Australian dollars.

means Alterni (M) Sdn Bhd

means Australian Securities and Investments Commission.

means an “associate” as defined in section 9 of the Corporations Act.

means ASX Limited (ABN 98 008 624 691), or as the context requires, the financial market operated by it.

means the Listing Rules of ASX.

means the board of Directors of the Company.

means the issue of 55,504,667 Shares by the Company by way of a non‐renounceable rights issue at $0.01 per Share and otherwise on the terms set out in the Prospectus.

means CollTech Australia Limited (ABN 24 094 515 992).

means the Company’s constitution.

means the consolidation of Shares and Options on a 1 for 10 basis as contemplated by Resolution 4.

means the Corporations Act 2001 (Cth).

means a director of the Company.

means the Shareholders of the Company immediately prior to the Transaction.

means Foreign Investments Review Board.

means the General Meeting of Shareholders of the Company to be held at Claremont Yacht Club, 4 Victoria Avenue Claremont, WA on 10 July 2009 at 10.30 am (Perth time) and any adjournment thereof.

means Grant Thornton (WA) Financial Services Pty Ltd ABN 92 064 260 260.

means Holista Biotech Sdn Bhd.

means Holista, Tropical Botanics, Total Health Concept, and Alterni.

means Grant Thornton.

means the report prepared by Grant Thornton set out in Annexure D.

means the listing rules of the ASX and any other rules of the ASX which are applicable to Company while it is admitted to the official list of the ASX.

means 770,000,000 Shares to be issued pursuant to the Share Sale Agreement.

means the notice of meeting accompanying this Explanatory Memorandum.

means an option to acquire a Share.

means the holder of an Option.

means the Company’s prospectus dated 4 May 2009.

means the 3,000 redeemable preference shares in Holista issued to Inflexion Pef Sdn Bhd pursuant to an agreement titled “Share Issuance

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Cum Shareholders’ Agreement” dated 28 April 2008, entered into by Holista, the Vendor, Inflexion Pef Sdn Bhd, Nora Hassan Mohamed and Sumita A/P Kesavan.

has the meaning given in the Corporations Act.

Related Body Corporate has the meaning given in the Corporations Act. Resolutions means the resolutions set out in the Notice of General Meeting. Settlement means completion of the acquisition by the Company of all of the issued fully paid ordinary shares in Holista and the allotment and the issue to the Vendor of the New Shares under the Share Sale Agreement.

Share means a fully paid ordinary Share in the capital of the Company. Shareholder means the holder of a Share. Share Sale Agreement means the share sales agreement dated 21 May 2009 between the Company and the Vendor, a summary of which is set out in Annexure A to this Explanatory Memorandum.

Total Health Concept means Total Health Concept Sdn Bhd. Tropical Botanics means Tropical Botanics Sdn Bhd. Transaction means the proposed issue of 770,000,000 New Shares to the Vendor in consideration for the Company acquiring all of the issued shares in Holista, as described in section 1 of this Explanatory Memorandum. Underwriter Means Mercatus Capital Pte Ltd. Vendor Dato’ Dr M Rajen.

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Annexure A ‐ Summary of the Share Sale Agreement

Under the Share Sale Agreement, the Vendor agrees to transfer all of the issued fully paid ordinary share capital in Holista (“ Holista Shares ”) to CollTech and CollTech agrees to allot and issue 770,000,000 New Shares to the Vendor.

The following is a summary of the key terms of the agreement.

Conditions Precedent

The Vendor’s obligation to transfer the Holista Shares to CollTech, and CollTech’s obligation to allot and issue the New Shares to the Vendor are not binding until each of the following Conditions Precedent is satisfied or waived:

• (c) CollTech conducting its own due diligence enquiries regarding Holista and Alterni, Tropical Botanics and Total Health Concept ( Subsidiaries ) and in its absolute discretion, being satisfied with the results of those enquiries;

• (d) the Vendor conducting its own due diligence enquiries regarding CollTech and in its absolute discretion, being satisfied with the results of those enquiries;

• (e) the board of directors of CollTech approving the Transaction;

• (f) the board of directors of Holista approving the Transaction;

• (g) execution of a Restriction Agreement by the Vendor in accordance with any requirement of ASX;

• (h) the shareholders of CollTech approving in general meeting:

• (i) the issue of the New Shares to the Vendor, in accordance with and for the purposes of Listing Rule 7.1;

• (ii) the change in the scale of CollTech’s activities that will result from its acquisition of Holista Shares, in accordance with and for the purposes of Listing Rule 11.1.2;

• (iii) the acquisition by the Vendor of voting power of more than 20% in CollTech under the Transaction, in accordance with and for the purposes of item 7 of section 611 of the Corporations Act;

• (iv) the appointment of any person nominated by the Vendor as a director of CollTech, with effect from Settlement;

• (v) the change of CollTech’s name to “Holista CollTech Limited”, with effect from Settlement; and

• (vi) the Consolidation;

• (i) the independent expert engaged by CollTech to assess the Transaction for the purposes of item 7 of section 611 of the Corporations Act concluding that the Transaction is “fair and reasonable”;

• (j) the Subsidiaries being wholly owned (at least beneficially) by Holista at Settlement;

• (k) the Vendor acquiring the 3000 redeemable preference shares in Holista on issue; and

• (l) consent to the Transaction being given on terms reasonably acceptable to CollTech and Holista by any third party whose consent is required under the terms of any contract, agreement or arrangement with CollTech or Holista (as the case may be).

Conditions Precedent (a), (b), (b), (b), (b) and (b) may be waived by CollTech. Conditions Precedent (b) and (d) may be waived by the Vendor. Conditions Precedent (f), and (b) may only be waived by written agreement of CollTech and the Vendor.

The parties must use their reasonable endeavours to ensure each Condition Precedent is satisfied by 30 June 2009 or later date as the parties agree (“ End Date ”). The agreement will terminate if any Condition Precedent is not satisfied or validly waived on or before the End Date.

Settlement

Completion of the transfer of Holista Shares to CollTech and the issue of New Shares to the Vendor (“ Settlement ”) will occur on the date which is 5 Business Days after satisfaction or valid waiver of all of the Conditions Precedent or such other date as the parties agree (“ Settlement Date ”).

At Settlement, the Vendor must deliver to CollTech a share transfer in favour of CollTech relating to the Holista Shares and a share certificate for those shares. The Vendor must also delivery the written resignations of any

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director or secretary of Holista or any Subsidiary required by CollTech and all records reasonably required by CollTech, and must do all other things necessary to put CollTech in effective control of Holista.

At Settlement, CollTech must allot and issue the New Shares to the Vendor and issue a holding statement in relation to the New Shares. CollTech must also take all steps required under the Constitution, the ASTC Settlement Rules and the Corporations Act to constitute and evidence the Vendor as the holder of the New Shares.

Conduct before Settlement

Until the Settlement Date, CollTech and Holista agree not to do any of the following, except as contemplated by the agreement or with the other party’s prior written consent:

(b) issue any shares (other than in the case of CollTech on the exercise of any options on issue at the date of the agreement), options, units or securities which are convertible into shares or units in itself or otherwise alter its capital structure in anyway;

(c) do anything outside the activities which are in the ordinary course of its trading activities and which would not be considered unusual for a company operating a business similar in kind to the business operated by it at the relevant time;

(d) alter its constitution or other constituent documents;

(e) conduct any investment discussions or negotiations with other parties regarding its capital structure;

(f) declare or pay a dividend or make any distribution of assets, capital or profits;

(g) reduce its share capital in any way or buy back any share;

• (h) give any financial assistance for the acquisition of its own shares;

(i) enter into or vary any contract with a director, shareholder or any party that is related to or associated with a director or shareholder, or any secretary or member of its senior management team;

(j) cancel or do anything or omit to do anything which may cause the cancellation of any policy of insurance held by it; and

(k) other than in the ordinary course of ordinary business, dispose of, or create a security interest over any of its assets.

Conduct after Settlement

CollTech agrees to do everything required of it to ensure that the New Shares are quoted on ASX as soon as reasonably practicable after they are issued and in any case, within 5 Business Days of the Settlement Date and to lodge with ASX a notice under section 708A(5)(e) of the Corporations Act. As soon as reasonably practicable after Settlement, CollTech agrees to procure that the persons nominated by the Vendor be appointed as directors of CollTech, procure that its name be changed to “CollTech Holista Limited” and undertake the Consolidation.

Directors

From the Settlement Date, the Vendor will have the right to nominate three persons to be appointed as directors of CollTech.

Warranties

CollTech and the Vendor have given standard warranties in relation to their (and in the case of the Vendor, Holista’s) solvency, authority and capacity to enter into the agreement.

CollTech has also given warranties regarding the existence of the licences, consents and authorisations required to conduct its business, compliance with all applicable laws and agreements, the status of all agreements to which it is a party, the accuracy of its accounts and records, the non‐existence of any loans, guarantees, indemnities or other security interests that have not been disclosed in its accounts, the non‐existence of any loans to its directors, the ownership of and title to its assets, the non‐existence of any actual or threatened litigation against it and the accuracy of information which it has provided to the Vendor. The Vendor has given the same warranties with respect to Holista and the Subsidiaries and has also given warranties with respect to their liability for taxes and duties, their engagement of employees, Holista’s ownership of intellectual property rights and the status of contracts to which Holista or a Subsidiary is a party.

In addition, CollTech warrants that:

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(b) the New Shares will when issued be fully paid ordinary shares in the capital of CollTech ranking equally in all respects with all other shares in its capital;

(c) except for the listed and unlisted options on issue as at the date of the agreement, there are no agreements, arrangements or understandings in force or securities issued which call for the present or future issue of, or grant to any person the right to require the issue of, any shares or other securities in CollTech;

(d) the New Shares will when issued be in a class of securities that were quoted at all times on the official list of the ASX in the 3 months before the date on which they were issued and for which trading on the official list of the ASX was not suspended for more than a total of 5 days in the 12 months before the date on which they were issued (the “ Relevant Period ”);

(e) no exemption under section 111AS or 111AT of the Corporations Act or order under section 340 or 341 of the Corporations Act covered CollTech, or any person as director or auditor of CollTech, at any time in the Relevant Period;

(f) ASIC has not made any determination under section 708A(2) of the Corporations Act that remains in force in relation to CollTech as at the date of issue of the New Shares;

(g) subject to CollTech issuing a notice under section 708(5)(e) of the Corporations Act and the terms of any Restriction Agreement which CollTech and any Vendor are required by ASX to enter into, CollTech is not aware of any reason why the Vendor will not be able to rely on section 708A(5) of the Corporations Act in selling the New Shares to a third party without the need for disclosure to that third party under Part 6D of the Corporations Act;

(h) CollTech is in full compliance with its continuous disclosure obligations under the Corporations Act and the Listing Rules and is not withholding any information from disclosure by reason of ASX Listing Rule 3.1A; and

(i) no order prohibiting the sale of CollTech securities has been issued and is currently effective and no proceedings for this purpose have been instituted or are pending, contemplated or threatened,

and the Vendor warrants that:

(b) it has no “voting power” (as defined in section 610 of the Corporations Act) in CollTech and neither it nor any of its associates is a party to any agreement, arrangement or understanding the economic effect of which is to confer rights equivalent to, or substantially equivalent to, the acquisition, holding or disposal of securities in CollTech other than under this agreement;

(c) notwithstanding the terms of the Restriction Agreement, it acknowledges that CollTech is not issuing the New Shares for the purposes of the Vendor selling or transferring them, or granting, issuing or transferring interests in, or options or warrants over them;

(d) notwithstanding the terms of the Restriction Agreement, it confirms its present intention is to be an investor in the New Shares and to remain so for at least 12 months, which confirmation is understood to be a statement of its present intention only and not an undertaking not to sell; and

(e) it agrees to be bound by the constitution of CollTech.

Indemnity

The Vendor and Holista have agreed to hold CollTech harmless against any claim, action, damage, loss, liability, expense or outgoing which CollTech pays, suffers, incurs or is liable for in respect of any breach of warranty or breach of the agreement by the Vendor or Holista. CollTech has agreed to indemnify and hold harmless the Vendor against any claim, action, damage, loss, liability, expense or outgoing which the Vendor pays, suffers, incurs or is liable for in respect of any breach of warranty or breach of the agreement by CollTech.

No party is liable for any claim arising out of or in connection with a breach of warranty unless the amount finally agreed or adjudicated to be payable in respect of that claim exceeds $100,000.00 alone or together with other claims. No party may bring a claim for any breach of warranty unless it gives written notice of the claim to the other parties on or before 24 months after Settlement.

Exclusivity

CollTech and Holista each agree they will not and will procure that their representatives (and in the case of Holista, the Subsidiaries) do not directly or indirectly:

• (e) solicit, invite, initiate, facilitate or encourage any expression of interest, proposal, or offer to invest in the company through an issue of its securities; or

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(f) enter into or participate in negotiations or discussions with, or provide any information to any other party seeking to invest in the company through an issue of its securities.

The Vendor covenants and agrees that from the date of the agreement, it will not and will procure that its representatives do not directly or indirectly:

(b) solicit, invite, initiate, facilitate or encourage any expression of interest, proposal, or offer to acquire the Holista Shares; or

(c) enter into or participate in negotiations or discussions with, or provide any information to any other party seeking to acquire the Holista Shares.

Termination

CollTech may terminate the agreement forthwith by giving written notice to the Vendor if, before Settlement, there is:

(d) a material adverse change in the financial position or condition of Holista;

(e) a material breach of any of Holista’s or the Vendor’s obligations under the agreement which is not remedied to CollTech’s reasonable satisfaction; or

(f) a material breach of any warranty given by the Vendor.

The Vendors may terminate the agreement forthwith by giving written notice to CollTech if, before Settlement, there is:

(g) a material adverse change in the financial position or condition of CollTech;

(h) a material breach of any of CollTech’s obligations under the agreement which is not remedied to the Vendor’s reasonable satisfaction; or

• (i) a material breach of any warranty given by CollTech.

Dispute resolution

Disputes arising from or in connection with the agreement may be referred to an independent expert appointed by the President of the Council of the Law Society of Singapore in the event that the parties cannot resolve the dispute themselves. The expert determination will be conducted in Singapore. Each party shall bear their own costs of the expert determination and shall share equally the costs of the expert.

Costs

CollTech and Holista must share equally all costs and expenses associated with obtaining legal, accounting and taxation advice regarding the appropriate structure of the Transaction, the negotiation and preparation of the agreement and the preparation and distribution to Shareholders of the notice of meeting and independent expert report.

CollTech must pay all duty assessed on or in relation to the Transaction or the agreement and any fine, penalty or other cost in respect of a failure to pay any duty, except to the extent that the fine, penalty or other cost is caused by an act or default on the part of Holista or the Vendor.

Except as set out above, each party must pay its own costs and expenses in relation to or arising out of this agreement, including the costs of any due diligence.

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Annexure B ‐ Summary of terms of Shares

The following is a broad summary (though not necessarily an exhaustive or definitive statement) of the rights and liabilities attaching to the Shares. Full details of the rights and liabilities attaching to the Shares are contained in the Constitution of the Company and in certain circumstances, are regulated by the Corporations Act, the ASX Listing Rules, the ASTC Settlement Rules and the common law. The Company’s Constitution is available for inspection free of charge at the Company’s registered office.

Voting

Subject to any restriction on voting imposed due to a breach of the Listing Rules relating to restricted shares or any escrow agreement entered into by the Company and a member, every holder of Shares present in person or by proxy, attorney or representative at a meeting of Shareholders has one vote on a vote taken by a show of hands and on a poll every holder of Shares who is present in person or by proxy, attorney or representative has one vote for every Share held by him or her but in respect of partly paid shares, shall have a fraction of a vote for each partly paid share.

A poll may be demanded before a vote is taken, or before or immediately after the declaration of the result of the show of hands by the chairperson of the meeting, by at least five Shareholders present in person or by proxy, attorney or representative, or by any one or more Shareholders who are together entitled to not less than five percent of the total voting rights of all those Shareholders having the right to vote on the resolution.

Dividends

Dividends are payable out of the Company’s profits and are declared by the Directors. Dividends declared will (subject to the rights of any preference shareholders and to the right of the holders of any shares created or raised under any special arrangement as to dividend) be payable on the Shares in accordance with the Corporations Act.

Transfer of Shares

A Shareholder may transfer Shares by a market transfer in accordance with any computerised or electronic system established or recognised by ASX or the Corporations Act for the purpose of facilitating transfers in shares or by an instrument in writing in a form approved by ASX or in any other usual form or in any form approved by Directors.

The Directors may refuse to register any transfer of Shares, other than a market transfer, where permitted by the Listing Rules or the ASTC Settlement Rules. The Company must comply with such obligations as may be imposed on it by the Listing Rules and where appropriate the ASTC Settlement Rules in connection with any market transfer and may not prevent, delay or in any way interfere with registration of a market transfer where to do so would be contrary to the provisions of any of the Listing Rules or the ASTC Settlement Rules.

Meeting and Notice

Each Shareholder is entitled to receive notice of and to attend general meetings for the Company and to receive all notices, accounts and other documents required to be sent to Shareholders under the constitution of the Company, the Corporations Act or the Listing Rules.

Winding Up

The Company has only issued one class of Shares, which all rank equally in the event of liquidation. A liquidator may, with the authority of a special resolution of Shareholders divide among the Shareholders in kind the whole or any part of the property of the Company, and may for that purpose set such value as he considers fair upon any property to be so divided, and may determine how the division is to be carried out as between the Shareholders. The liquidator can with the sanction of a special resolution of the Company’s Shareholders vest the whole or any part of the assets in trust for the benefit of Shareholders as the liquidator thinks fit, but no Shareholder of the Company can be compelled to accept any Shares or other shares in respect of which there is any liability.

Shareholder Liability

As the New Shares are fully paid shares, they are not subject to any calls for money by the Directors and will therefore not become liable for forfeiture.

Alteration to the Constitution

The Company’s constitution can only be amended by a special resolution passed by at least three quarters of the Shareholders present and voting at the general meeting. At least 28 days written notice specifying the intention to propose the resolution as a special resolution must be given.

ASX Listing Rules

If the Company is admitted to the official list of ASX, notwithstanding anything in the constitution of the Company, if the Listing Rules prohibit an act being done, the act must not be done. Nothing in the constitution prevents an act being done that the Listing Rules require to be done. If the Listing Rules require an act to be done or not to be done, authority is given for that act to be done

• 54 -

or not to be done (as the case may be). If the Listing Rules require the constitution to contain a provision or not to contain a provision the constitution is deemed to contain that provision or not to contain that provision (as the case may be). If a provision of the constitution is or becomes inconsistent with the Listing Rules, the constitution is deemed not to contain that provision to the extent of the inconsistency.

• 55 -

Annexure C ‐ Summary of terms of Holista Redeemable Preference Shares

The following is a summary of the terms of the Redeemable Preference Shares which were issued pursuant to an agreement entitled “Share Issuance Cum Shareholders’ Agreement” dated 28 April 2008 and entered into by the original shareholders in Holista including the Vendor ( Original Shareholders ), Holista and Inflexion Pef Sdn Bhd ( Investor ).

It is a condition of the Share Sale Agreement that immediately prior to Settlement all of the fully paid ordinary shares and the Redeemable Preference Shares in Holista will be legally and beneficially held by the Vendor.

Issue Price

The Redeemable Preference Shares were issued to the Investor pursuant to the Share Issuance Cum Shareholders’ Agreement at a par value of RM1.00 and a premium of RM 999.00.

Conversion

The Redeemable Preference Shares may not be converted into ordinary shares.

Dividend

The Investor is entitled to preferential cumulative dividends at the rate of 8% per annum.

Maturity Date

Unless redeemed by Holista at an earlier date in accordance with the Agreement, the maturity date of the Redeemable Preference Shares is 30 June 2011 ( Maturity Date ).

Voting rights

There are no voting rights in relation to the Redeemable Preference Share except upon a resolution for winding up of Holista, a resolution for a reduction in the share capital of Holista or a resolution which directly or indirectly varies, modifies, alters or abrogates any of the rights, privileges, limitations or restrictions attaching to the Redeemable Preference Shares.

Early redemption

The Investor shall have the sole and absolute discretion to require Holista to redeem the Redeemable Preference Shares (in whole or in part) on or before the Maturity Date or upon the occurrence of any of the following events ( Trigger Events ):

• (a) a material breach by Holista or the Original Shareholders of any of their respective representations, warranties and undertakings under the Share Issuance Cum Shareholders’ Agreement which continue unrectified for 30 days after being notified;

• (b) Dato’ Dr M Rajendran being prevented or otherwise unable to perform, discharge or fulfil his respective obligations, duties or responsibilities under an agreement titled “Key Personnel Agreement” entered into by Holista and Dato’ Dr M Rajendran on or about 5 April 2004;

• (c) Holista becoming subject to a credible petition to be wound up or a receiver, manager or similar officer is appointed in respect of the Company;

• (d) Holista qualifying to be listed on an official stock exchange as confirmed by a merchant banker acceptable to the Investor before the Maturity date, but the Company or the Original Shareholders elect against such listing; or

• (e) any Original Shareholder knowingly permitting to be done or omitting or knowingly permitting to be omitted, or undertakes or proposes to undertake anything which, in the reasonable and objective opinion of the Investor, prejudices the ability of the Company to obtain listing on the official stock exchange.

Redemption amount

In the event of redemption upon the occurrence of a Trigger Event or upon Holista or a subsidiary being approved for listing on any stock exchange, the amount payable by Holista is RM1,000.00 for each Redeemable Preference Share plus dividends accrued and payable in respect of each Redeemable Preference Shares ( Redemption Sum ).

Holista must pay the Redemption Sum within 45 days of being served with a notice of redemption. If Holista does not pay the Redemption Sum within that timeframe, Holista will be liable to pay interest at the rate of 8% per annum, calculated daily on all sums due and payable until the date of payment.

If Holista fails to redeem the Redeemable Preference Shares on the Maturity Date, the Investor shall have the option to require Dato’ Dr M Rajendran to purchase the Redeemable Preference Shares at RM1,000.00 each plus any unpaid

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preferential dividends. Dato’ Dr M Rajendran must pay the purchase price within 14 days of receipt of notice from the Investor.

Rights on winding up

On a return of assets on the liquidation or winding up of Holista (whether voluntary or otherwise), the assets of Holista available for distribution after payment of all liabilities will be applied in paying the holders of Redeemable Preference Shares an amount of RM1,000.00 per Redeemable Preference Share and any unpaid preferential dividends in priority to the holders of the ordinary shares.

• 57 -

Annexure D ‐ Independent Expert’s Report

• 58 -

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The Directors CollTech Australia Limited Suite 7, 41 Walters Drive OSBORNE PARK WA 6017

28 May 2009

Grant Thornton (WA) Financial Services Pty Ltd ABN: 92 064 260 260 AFSL: 259864 Level 1, 10 Kings Park Road West Perth WA 6005 PO BOX 570 West Perth WA 6872

T +61 8 9480 2000 F +61 8 9322 7787 E admin@gtwa.com.au W www.grantthornton.com.au

Dear Sirs,

Independent Expert’s Report and Financial Services Guide

Introduction

On 3 December 2008, CollTech Australia Limited (“CollTech” or the “Company”) announced that it had entered into a non-binding and conditional heads of agreement (the “Agreement”) with the shareholders of Holista Biotech Sdn Bhd (“Holista”) to acquire 100% of the ordinary share capital of Holista by way of issue of 770 million ordinary shares in CollTech (the “Proposed Transaction”).

CollTech is an ASX-listed bio-industrial company based in Perth. CollTech specialises in the development and commercialisation of ovine collagen and collagen-based healthcare products.

Holista is a private company incorporated in Malaysia in 2004. Holista and its wholly owned subsidiaries are engaged in the development, manufacture, marketing and distribution of health related products.

Purpose of the report

If the Proposed Transaction is implemented, the current shareholders of Holista, namely Dato’ Dr Rajendran Marnickavasagar (“Dato’ Dr Rajen”) will hold up to approximately 71.5% of the expanded issued capital of CollTech.

Section 606 of the Corporations Act prohibits the acquisition of a relevant interest in issued voting shares of a company if the acquisition results in the person’s voting power in the company increasing from either below 20% to more than 20%, or from a starting point between 20% and 90%, without making an offer to all shareholders of the company.

Section 611(7) of the Corporations Act allows the non-associated shareholders to waive this prohibition by passing a resolution at a general meeting. Regulatory Guide 74: Acquisitions agreed to by shareholders (“RG 74”) issued by the Australian Securities and Investments Commission (“ASIC”) sets out the view of ASIC on the operation of Section 611(7) of the Corporations Act.

RG 74 requires that shareholders approving a resolution pursuant to Section 623 of the Corporations Act (the predecessor to Section 611(7) of the Corporations Act) be provided with a comprehensive analysis of the proposal, including whether or not the proposal is fair and reasonable to the non-

Holder of Australian Financial Services Licence No. 259 864

Grant Thornton (WA) Financial Services Pty Ltd is an independent business entitled to trade under the international name Grant Thornton. Grant Thornton is a trademark owned by Grant Thornton International and used under licence by independent firms and entities throughout the world.

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associated shareholders. The Independent Directors (directors not associated with the proposal) may satisfy their obligations to provide such an analysis by commissioning an Independent Expert’s Report.

Scope of this report

Based on the above requirement, the Independent Directors of CollTech have engaged Grant Thornton (WA) Financial Services Pty Ltd (“Grant Thornton Corporate Finance”) to prepare an Independent Expert’s Report (“Report”) for the purposes of Section 611(7) of the Corporations Act.

Specifically the Directors of CollTech have requested Grant Thornton Corporate Finance to prepare the Report as to whether the Proposed Transaction is fair and reasonable to the non-associated shareholders of CollTech.

To arrive at our opinion, we have assessed the merits or otherwise of the Proposed Transaction to the non-associated shareholders as a whole and our Report is provided on this basis.

Our Report is to be read in conjunction with the Notice of General Meeting and Explanatory Memorandum (“Notice of Meeting”) dated 29 May 2009 in which this report is included, and is prepared for the exclusive purpose of assisting the non-associated shareholders of CollTech in their consideration of the Proposed Transaction referred to above.

Summary of Opinion

Grant Thornton Corporate Finance has concluded that the Proposed Transaction is fair and reasonable to the shareholders of CollTech.

In this regard, we note that:

• In determining the fairness and reasonableness of the Proposed Transaction, we have had regard for the definitions set out by ASIC under its Regulatory Guide 111: Content of experts report (“RG 111”). RG 111 states that an opinion as to whether an offer is fair and/or reasonable shall entail a comparison between the offer price or consideration and the value of the securities subject to the offer (fairness) and an examination to determine whether there is justification for the offer price on objective grounds after reference to that value (reasonableness).

• RG 111 states that in all cases, where an acquisition of shares by way of an allotment is to be approved by shareholders, a report by an independent expert should be presented stating whether or not the Proposed Transaction is fair and reasonable having regard to the interest of shareholders other than the proposed allottees (namely Dato’ Dr Rajen and his associates, collectively the “Associated Parties”).

• Accordingly, our report relating to Resolution 1 is concerned with the fairness and reasonableness of the Proposed Transaction with respect to the existing shareholders of CollTech who are not Associated Parties (the “Non-Associated Shareholders”).

• The opinion expressed above is based on information available as at the date of this Report and is to be read in conjunction with the more detailed analysis and comments made in this Report.

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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Fairness of the Proposed Transaction

We set out below a comparison between our assessment of the value of a CollTech share and the value of the consideration offered, being the shares in Holista, in order to assess whether the Proposed Transaction is fair to the non-associated shareholders of the Company:

		Low	High	Midpoint
Assessment of fairness	Reference	cents	cents	cents
Value of a CollTech share	Section 8	0.46	0.71	0.58
Value of the Consideration Offered	Section 9	0.62	0.95	0.78
Difference		0.16	0.25	0.20
Source: Grant Thornton calculations

Based on our calculations, the midpoint value of the Consideration Offered is higher than the midpoint value of a CollTech share.

Accordingly, we conclude that the Proposed Transaction is fair to the non-associated shareholders of CollTech.

Reasonableness of the Proposed Transaction

As the Proposed Transaction is fair to the non-associated shareholders of CollTech, the Proposed Transaction is also reasonable in accordance with RG 111. Nonetheless, we have summarised some of the relevant likely advantages and disadvantages associated with the Proposed Transaction

Funding for continued operations

We have been advised by CollTech that further research and development is required prior to commercialisation of the collagen based products. The acquisition of Holista is intended to provide CollTech with a profitable business that will support the Company’s survival and commercialisation of its intellectual property. In addition, following the Proposed Transaction, the expanded operations may provide CollTech with an enhanced ability to attract new funding.

Likelihood of a superior offer

We are advised by the directors of the Company that there are no other known superior offers at the date of this report. If the Proposed Transaction is not passed and consummated the opportunities and advantages as described in this report to the CollTech shareholders are unlikely to become available and CollTech has advised that there is unlikely to be an alternative transaction.

BioNexus status

Holista received BioNexus status in 2006 which results in the receipt of grants and also relief from Malaysian income tax until 2016. We have been advised by CollTech that Holista:

• has received advice from Malaysian Biotech Corporation that as long as the operations of Holista remain in Malaysia, Holista will retain BioNexus status; and

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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• believes that they will retain the BioNexus status post completion of the Proposed Transaction.

Should Holista lose the BioNexus status, this will have a significant impact on the value of Holista and, as such, the value of the consideration offered.

Expansion of research fields

We have been advised by CollTech that, should the Proposed Transaction proceed, CollTech’s intention is to expand its research to include food grade collagen products as well as for cosmetic, research and medical applications.

Potential ovine collagen use in Holista’s product

It is the intention of CollTech to develop a food grade collagen for use within Holista’s current product range. This would provide CollTech’s ovine collagen product with access to an existing customer base and supply network.

Access to the Intellectual Capital of Holista

As a result of the Proposed Transaction, the intellectual assets of CollTech may be increased by combining with the skills and expertise of Holista in developing and marketing health related products. This may enhance the ability of the expanded entity to achieve commercialisation of its products.

Access to Holista’s sales and marketing networks in Malaysia

Should the Proposed Transaction be completed, CollTech will have access to Holista’s direct marketing and wholesale networks in Malaysia. CollTech management anticipate that CollTech’s halal collagen products should be well received in the predominately Muslim Malaysian market.

Economies of scale

CollTech expects that the Holista management team will considerably strengthen CollTech’s overall operations and that many of the administration functions of CollTech will be able to be incorporated within Holista’s current structure.

Conditions precedent

The Proposed Transaction is subject to a number of conditions precedent, some of which have not been satisfied at the date of this report.

Australian franking credits

CollTech dividends to its shareholders that have been derived from the Malaysian operations of Holista are unlikely to be accompanied by franking credits. The individual tax consequences of this to each of the shareholders of CollTech have not been considered as part of this Report.

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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Dilution of Control of Non-Associated Shareholders

Should the Proposed Transaction be completed the shareholders of CollTech will effectively have their voting powers reduced from 100% to 25.7% as they will be diluted by the issue of new CollTech shares to the shareholders of Holista. In addition, Dato’ Dr Rajen will hold up to 71.5% of CollTech shares and have effective control of CollTech. As such, the ability of the existing nonassociated shareholders of CollTech to influence decisions, including with regard to the composition of the board, will be reduced accordingly. Further, recognising that Dato’ Dr Rajen would be the single largest shareholder with up to 71.5% of CollTech, a subsequent offer by an alternative acquirer would only emerge with the support of Dato’ Dr Rajen.

Foreign exchange exposure

Following the Proposed Transaction, CollTech will have a significant portion of its operations denominated in Malaysian Ringgit (“RM”). Accordingly, CollTech is likely to be exposed to risks associated with AUD:RM exchange rate fluctuations.

Other matters

Grant Thornton Corporate Finance has prepared a Financial Services Guide in accordance with the Corporations Act. The Financial Services Guide is included in Appendix C of this report.

The decision as to whether or not to approve the Proposed Transaction is a matter for each shareholder of CollTech based on their own views of value of CollTech and expectations about future market conditions, CollTech’s performance, risk profile and investment strategy. If the shareholders are in doubt about the action they should take in relation to the Proposed Transaction, they should seek their own professional advice.

Yours faithfully

GRANT THORNTON (WA) FINANCIAL SERVICES PTY LTD

(Australian Financial Services Licence No. 259864)

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CHRIS PARKINSON Director

PATRICK WARR Director

Enclosure

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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CONTENTS

1.	OUTLINE OF THE PROPOSED TRANSACTION....................................................... 8	OUTLINE OF THE PROPOSED TRANSACTION....................................................... 8
	1.1	The Proposed Transaction......................................................................................................................8
	1.2	Implications of the Proposed Transaction.........................................................................................9
2.	SCOPE OF THE REPORT............................................................................................... 12
	2.1	Purpose.......................................................................................................................................................12
	2.2	Basis of assessment.................................................................................................................................13
3.	INDUSTRY OVERVIEW.................................................................................................. 14
	3.1	Overview of biotechnology industry...................................................................................................14
	3.2	Biotechnology industry in Malaysia...................................................................................................16
4.	PROFILE OF COLLTECH.............................................................................................. 18
	4.1	Overview.....................................................................................................................................................18
	4.2	CollTech key products............................................................................................................................18
	4.3	Financial information.............................................................................................................................19
	4.4	Capital structure.......................................................................................................................................22
	4.5	Share price performance........................................................................................................................23
5.	PROFILE OF HOLISTA................................................................................................... 25
	5.1	Overview.....................................................................................................................................................25
	5.2	Subsidiaries of Holista...........................................................................................................................25
	5.3	BioNexus Status.......................................................................................................................................27
	5.4	Financial information.............................................................................................................................28
	5.5	Capital structure.......................................................................................................................................31
6.	PROFILE OF COLLTECH POST PROPOSED TRANSACTION............................. 32
	6.1	CollTech’s intentions..............................................................................................................................32
	6.2	Pro forma balance sheet.........................................................................................................................33
	6.3	Capital structure.......................................................................................................................................34
7.	VALUATION METHODOLOGY.................................................................................... 35
	7.1	Available methodologies........................................................................................................................35
	7.2	Selected methodology - CollTech.......................................................................................................35
	7.3	Selected methodology - Value of the consideration offered.........................................................36
8.	VALUATION OF COLLTECH........................................................................................ 37
	8.1	Fair market value of assets....................................................................................................................37
	8.2	Asset realisation costs.............................................................................................................................38
	8.3	Fair market value of liabilities..............................................................................................................39
	8.4	Wind-up costs...........................................................................................................................................39
	8.5	Cash expenditure since 31 December 2008.......................................................................................39
	8.6	Tax benefit / expense.............................................................................................................................39
	8.7	Listed corporate structure.....................................................................................................................40
	8.8	Valuation of CollTech.............................................................................................................................40
	8.9	Cross check to market price of listed securities..............................................................................42
	8.10	Cross check to recent placements.......................................................................................................42
9.	VALUATION OF THE CONSIDERATION OFFERED............................................. 43
	9.1	Future maintainable earnings..............................................................................................................43
	9.2	Determination of earnings multiples..................................................................................................45
	9.3	Calculation of net debt...........................................................................................................................46

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	9.4	Discount for size......................................................................................................................................46
	9.5	Premium for control................................................................................................................................46
	9.6	Surplus assets - BioNexus income tax exemption.........................................................................46
	9.7	Surplus assets – Property, plant and equipment.............................................................................47
	9.8	Redeemable Preference Shares............................................................................................................47
	9.9	Minority interest.......................................................................................................................................47
	9.10	Equity valuation of Holista...................................................................................................................47
	9.11	Cross check to Dato’ Dr Rajen’s Acquisitions.................................................................................48
	9.12	Summary of valuation – Consideration offered...............................................................................49
10.	EVALUATION OF THE PROPOSED TRANSACTION............................................. 50
	10.1	Fairness of the Proposed Transaction...............................................................................................50
	10.2	Reasonableness of the Proposed Transaction.................................................................................50
11.	SOURCES OF INFORMATION, DISCLAIMER AND CONSENTS......................... 53
	11.1	Sources of Information...........................................................................................................................53
	11.2	Qualifications and independence........................................................................................................54
	11.3	Limitations and reliance on information...........................................................................................54
	11.4	Consents.....................................................................................................................................................55

APPENDIX A – COMPARABLE COMPANY DESCRIPTIONS APPENDIX B – VALUATION METHODOLOGIES APPENDIX C – FINANCIAL SERVICES GUIDE APPENDIX D – GLOSSARY

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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1. OUTLINE OF THE PROPOSED TRANSACTION

1.1 The Proposed Transaction

On 3 December 2008, CollTech announced that it had entered into a non-binding and conditional heads of agreement with the shareholders of Holista to acquire 100% of the ordinary share capital of Holista by way of issue of 770 million ordinary shares in CollTech. As a result, Holista will become a wholly-owned subsidiary of CollTech.

The Agreement provides that the Proposed Transaction is subject to the following key conditions:

1. execution of a formal agreement between the parties;

2. completion of all necessary due diligence by CollTech to be satisfactory to CollTech in its absolute discretion;

3. completion of all necessary due diligence by Holista to be satisfactory to Holista in its absolute discretion;

4. respective board, ASIC, ASX and other regulatory approvals be given in respect of the Proposed Transaction;

5. CollTech shareholders vote in favour of the Proposed Transaction with the majorities required under the Corporations Act;

6. there being no material adverse change in the financial position or condition of CollTech and Holista;

7. the new CollTech shares to be issued pursuant to the Proposed Transaction being approved for official quotation by ASX; and

8. completion of a 1 for 5 rights issue at $0.01 per share to raise a minimum of $300,000 and up to $544,505, (underwritten up to $300,000) (the “Proposed Rights Issue”).

CollTech will undertake a consolidation of its ordinary shares on a 1:10 basis (post issue of the 770 million ordinary shares under the Proposed Transaction).

Further and independent of the Proposed Transaction, CollTech has completed a capital raising of $200,000 by way of issue 20 million ordinary shares in the Company at $0.01 in December 2008.

Further information is contained in the Notice of Meeting.

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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1.2 Implications of the Proposed Transaction

As at the date of this Report, there were 277,252,333 fully paid ordinary shares on issue in CollTech and the top 20 shareholders held approximately 56.01% of the issued capital.

CollTech has proposed to issue 770 million ordinary shares in CollTech to the shareholders of Holista as the consideration to acquire 100% of the ordinary share capital of Holista. Accordingly, if the Proposed Transaction proceeds, CollTech will issue to the shareholders of Holista 770 million ordinary shares in the Company.

As part of the Proposed Transaction, CollTech is required to complete the Proposed Rights Issue. This has been underwritten for 30,000,000 shares and if all shareholders participate could result in the issue of a total of 55,450,466 shares to existing CollTech shareholders.

Assuming all the conditions of the Proposed Transaction are satisfied, only the minimum 30,000,000 shares are taken up under the Proposed Rights Issue and the Proposed Transaction is implemented, the share structure of the enlarged CollTech would be as follows:

	Pre Proposed	%	Post Proposed	%
	Transaction		Transaction
	share structure		share structure
Shareholders Group	number		number
Existing CollTech shareholders	277,252,333	100.0%	277,252,333	25.7%
Dato' Dr Rajen	-	-	770,000,000	71.5%
Proposed Rights Issue	-	-	30,000,000	2.8%
	277,252,333	100.0%	1,077,252,333	100.0%
Source: Calculations

At the conclusion of the Proposed Transaction, Dato’ Dr Rajen will own 770,000,000 ordinary shares in the Company, which is equivalent to approximately 71.5% of the total issued capital in CollTech on an undiluted basis.

As at the date of this Report, CollTech has 64,313,083 Listed Options and 16,620,000 Unlisted Options on issue as follows:

Classes of options	Exerise price ($)	Expiry date	Number of options
Listed options	0.04	31 October 2009	64,313,083
Unlisted options	0.10	2 August 2009	350,000
Unlisted options	0.10	9 February 2010	390,000
Unlisted options	0.10	9 February 2010	650,000
Unlisted options	0.10	30 July 2010	130,000
Unlisted options	0.04	30 June 2011	6,600,000
Unlisted options	0.04	22 August 2011	500,000
Unlisted options	0.04	23 October 2011	8,000,000
			80,933,083
Source: Management of CollTech

As at the date of this report, we are advised that Holista does not hold any options in the Company. The share price of CollTech last traded at $0.012 prior to 22 May 2009. At this level of share price, none of the options are “in the money”.

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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We note that the underwriting fee of 5% of the underwritten element of the Proposed Rights Issue may be satisfied by way of cash or issue of 1,500,000 shares in CollTech.

Assuming all of the options, regardless of whether they are “in the money” or not “in the money” are exercised, the Proposed Rights Issue is fully subscribed and the underwriter’s fees are satisfied by way of CollTech shares, and the Proposed Transaction proceeds, the total issued capital of the Company would be as follows and Dato’ Dr Rajen will own approximately 64.8% of the total issued capital in CollTech on a fully diluted basis:

	Pre Proposed	%	Post Proposed	%
	Transaction		Transaction
	share structure		share structure
Shareholders Group	number		number
Existing CollTech shareholders	277,252,333	100.0%	277,252,333	23.3%
Dato' Dr Rajen	-	-	770,000,000	64.8%
Exercise of Listed Options	-	-	64,313,083	5.4%
Exercise of Unlisted Options	-	-	19,860,000	1.7%
Proposed Rights Issue	-	-	56,950,467	4.8%
	277,252,333	100.0%	1,188,375,883	100.0%

Source: Calculations

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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Assuming the Proposed Transaction had been implemented and Holista became a wholly owned subsidiary of CollTech, the unaudited Consolidated Pro Forma Balance Sheet of CollTech, Holista and the enlarged entity as at 31 December 2008 are set out below:

	CollTech	Holista	CollTech
			Post Proposed
			Transaction
	$ '000	$ '000	$ '000
Current assets
Cash and cash equivalents	766	2,914	3,680
Trade and other receivables	34	935	969
Inventories	187	1,092	1,279
Other	16	1,598	1,614
Total current assets	1,003	6,539	7,542
Non-current assets
Cash and cash equivalents	240	-	240
Property, plant and equipment	2,220	2,462	4,682
Intangibles	-	22	22
Fair value uplift	-	-	411
Total non-current assets	2,460	2,484	5,355
Total assets	3,463	9,023	12,897
Current liabilities
Trade and other payables	184	1,403	1,587
Interest bearing liabilities	363	4,677	5,040
Provisions	-	72	72
Other	-	666	666
Total current liabilities	547	6,818	7,365
Non-current liabilities
Interest bearingliabilities	-	1,010	1,010
Total non-current liabilities	-	1,010	1,010
Total liabilities	547	7,828	8,375
Net assets	2,916	1,195	4,522
Equity
Issued capital	13,031	49	3,376
Reserves	911	1,763	1,763
Accumulated losses	(11,026)	(617)	(617)
Total Equity	2,916	1,195	4,522

Source: CollTech

Note 1: The pro forma consolidation above is for illustrative purposes only and has been provided by CollTech. Note 2: The pro forma consolidation above is based on audited / audit reviewed accounts as at 31 December 2008. Note 3: Assumed market capitalisation of CollTech Australia Limited adopted based on 1.2 cents per share. Note 4: Exchange rate of AUD$1:RM2.40 Note 5: Assume minimum underwritten taken up of CollTech Australia Limited rights issue of $300,000 less estimated costs of issue. Note 6: Holista's Redeemable Preference Shares have been reclassified as current liabilities for the purposes of the above.

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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2. SCOPE OF THE REPORT

2.1 Purpose

Under Section 606 of Corporations Act, a person must not acquire a relevant interest in issued voting shares in a company if because of the transaction, that person’s or someone else’s voting power in the company increases:

a) from 20% or below to more than 20%; or

b) from a starting point that is above 20% and below 90%.

Under Section 611 of Corporations Act, section 606 does not apply in relation to any acquisition of shares in a company approved by resolution passed at a general meeting at which no votes were cast in favour of the resolution by the acquirer or the disposer or their respective associates. In addition to the information which section 611 requires the Company to give to the shareholders, RG 74 requires inclusion in the notice of meeting of an independent expert’s report on the fairness and reasonableness of the transaction.

As set out above, the Proposed Transaction therefore requires shareholder approval for the purpose of Corporations Act. The Independent Directors of CollTech have requested Grant Thornton Corporate Finance to prepare this Report as to whether the Proposed Transaction is fair and reasonable to the non-associated shareholders of CollTech.

Our report is to be read in conjunction with the Notice of Meeting in which this report is included, and is prepared for the exclusive purpose of assisting the non-associated shareholders of CollTech in their consideration of the Proposed Transaction referred to in Section 1.1.

This report should not be used for any other purpose.

Grant Thornton Corporate Finance consents to the issue of this Report and consents to its inclusion in the Notice of Meeting. Neither the whole nor part of this Report nor any reference thereto may be included in or with or attached to any other document, resolution, letter or statement without the prior written consent of Grant Thornton Corporate Finance as to the form and content in which it appears.

Prior to accepting this engagement, Grant Thornton Corporate Finance considered its independence with respect to the Proposed Transaction with reference to Regulatory Guide 112: Independence of expert’s reports (“RG112”) issued by ASIC. In our opinion, Grant Thornton Corporate Finance is independent of CollTech, its Directors and all other parties involved in the Proposed Transaction.

Grant Thornton Corporate Finance has no involvement with, or interest in, the outcome of the Proposed Transaction other than the preparation of this report. Grant Thornton Corporate Finance is entitled to receive a fee based on commercial rates and including reimbursement of out-of-pocket expenses for the preparation of this Report.

Except for these fees, Grant Thornton Corporate Finance will not be entitled to any other pecuniary or other benefit, whether direct or indirect, in connection with the issuing of this Report. The payment of this fee is in no way contingent upon the outcome of the Proposed Transaction.

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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This Report constitutes general financial product advice only and in undertaking our assessment, we have considered the likely impact to the non-associated shareholders of CollTech as a whole. We have not considered the potential impact of the Proposed Transaction on individual shareholders. Individual shareholders have different financial circumstances and it is neither practicable nor possible to consider the implications of the Proposed Transaction on individuals.

The decision as to whether or not to approve the Proposed Transaction is a matter for each shareholder of CollTech based on their own views of the value of CollTech and expectations about future market conditions, CollTech’s performance, risk profile and investment strategy. If shareholders are in doubt about the action they should take in relation to the Proposed Transaction, they should seek their own professional advice.

2.2 Basis of assessment

In preparing our report, Grant Thornton Corporate Finance has had regard to the Regulatory Guides issued by the ASIC, particularly RG 74 and RG 111.

RG 74 sets out ASIC’s view on the principles and matters, including the definition of “fair and reasonable”, that it expects a person preparing an independent expert’s report to consider. The term “fair and reasonable” has no legal definition. RG 74 states that in determining whether a transaction is “fair and reasonable”, the transaction’s likely advantages and disadvantages to non-associated shareholders must be compared in the independent expert’s report with the advantages and disadvantages to the same non-associated shareholders if the transaction does not proceed.

Accordingly, assessing the value impact of the Proposed Transaction on the non-associated shareholders (i.e. fairness) is an important element of this analysis although it is not the only determinant of our final opinion.

In considering whether the Proposed Transaction is reasonable to the non-associated shareholders, we have considered factors such as:

• the terms of the share sale agreement; and

• other strategic issues associated with the Proposed Transaction and the extent to which they may advantage or disadvantage the non-associated shareholders if the Proposed Transaction proceed or is rejected.

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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3. INDUSTRY OVERVIEW

3.1 Overview of biotechnology industry

Biotechnology is the process of applying biological knowledge and techniques to develop products or services with any technique that uses living organisms to make or modify products, improve plants or animals or develop micro-organisms for a specific use.

Key sectors of the biotechnology industry include:

• biopharmaceuticals;

• molecular diagnostics;

• agriculture and nutraceutical;

• biofuels;

• environment; and

• biosecurity.

The United States’ Food and Drug Administration approved the first biotechnology drug in 1982. Since then biopharmaceutical industry has had 254 drugs approved for 385 indications with over $70 billion in sales in 2007. There are approximately 300 drugs targeting over 200 diseases in clinical development, representing over US$20 billion in annual research and development. In addition, the biotechnology industry is an important source of new venture creation with over 700 publicly listed firms posting double-digit growth in North America, Europe and Asia Pacific. As fully integrated biotechnology giants such as Genentech, Amgen and Biogen-Idec have emerged, the market valuation of the biotechnology industry has recently surpassed pharmaceutical firms despite comprising only a minority of current sales.

While human therapeutics (for example “blockbuster” cancer drugs like Herceptin and Rituxan by Genentech) have been the largest segment of the biotechnology industry, significant technology spillover effects are translating into the ability to address heretofore intractable areas of need which have created several large, high growth markets in molecular diagnostics (US$3.5 billion), nutraceuticals and functional foods (US$50 billion), environment (US$30 billion), biosecurity (US$7 billion) and biofuels (US$6 billion).

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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We have set out below the revenues and growth rates of selected sectors in 2007 in the global biotechnology industry:

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----- Start of picture text -----

Global Biotechnology Industry:
Revenues and Grow th Rates of Selected Sectors 2007
$90.0
$80.0
$70.0 Biopharmaceuticals
$60.0
Nutraceuticals &
$50.0 Functional Foods
$40.0
$30.0 Environment
$20.0
$10.0
Biosecurity Biofuels
Diagnostics
$0.0
0% 5% 10% 15% 20% 25%
Grow th %
Revenues US$ Billions
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Source: Holista’s management Note: Bubble size denotes revenues (US$ billion)

An overarching feature of the biotechnology industry is that all firms are effectively global from inception due to their reliance on intellectual property exclusivity. Thus, alliance with research institutes and small biotechnology companies represent another way of flexibly organising a larger firm’s value chain and may be preferred to vertical integration. Business models in biotechnology industry are actively evolving but they seem to have more in common with the process of project management in movie production than their historical pharmaceutical parentage.

It is considered that globalisation and the ability to operate virtually makes access to the biotechnology ecosystem (contract manufacturers for process development, research organisations with unique testing capabilities, patent lawyers, venture capitalists and other who enable start up formation and development) increasingly accessible.

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3.2 Biotechnology industry in Malaysia

3.2.1 Overview

The Malaysian government has targeted biotechnology as a national priority in order to enhance productivity and sustainability, to build wealth and economic growth. The Malaysian Biotech Corporation was established by the government to coordinate all biotechnology industry activity and to enhance alliances between domestic and foreign companies.

The BioNexus status has also been established by the Malaysian government to provide special government support including government grants and tax incentives. Currently, approximately 80 firms have been granted BioNexus status and they represent a diverse group of biopharmaceutical, nutraceutical, biofuels, diagnostics and agbiotechnology companies.

Researchers have focused on applications of great significance to Malaysia and Southeast Asian region including rice, palm oil and other natural products for the traditional medicine industry. Following a regional trend, for example Singapore’s Biopolis, the Malaysian government has strengthened research facilities, established biotechnology parks and encouraged foreign investment in Malaysia to bolster bioeconomy growth. In addition, Malaysian Life Sciences Fund (“MLSF”) was established to anchor venture capital activity in biotechnology.

3.2.2 Market Participants

The competition in the Malaysian biotechnology and healthcare markets is very strong.

We have set out below selected key industry participants, other than Holista, in the biotechnology and healthcare markets in Malaysia:

• Pharmaniaga Berhad – is the largest integrated local healthcare company in Malaysia. It is a public listed company on the main board of the Bursa Malaysia Securities.

• Blackmores – is an Australian listed company providing products, information, advice and knowledge on natural health, vitamins, minerals, herbs and supplements.

• Kordels – is a Singaporean company and one of the leading health food suppliers in Malaysia for a wide range of food and nutritional supplements.

• BiO-LiFE – is a private company in Malaysia and distributes natural health care products in Malaysia.

• Thompson’s – is a New Zealand company established in 1951. Thompson’s markets and distributes health supplements, vitamins and minerals globally. The Thompson Group was recently established and now includes Life-Span (Australasia’s largest distributor of complementary health care products), Eagle Pharmaceuticals, T P Health Ltd (Thursday Plantation), Red 8 Limited and Mediherb.

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• Phytes BioTek Sdn Bhd – is a private company in Malaysia that develops and manufactures herbal products. Phytes BioTek’s main product is the Malaysian-owned ‘Tongkat Ali’, a herbal remedy that addresses sexual dysfunction.

• Chakra Biotech Pte Ltd – was established in Singapore in 2001. Chakra Biotech Pte Ltd has inlicensed several intellectual properties that permit the discovery of novel chemical entities and a technology platform as its discovery engine. In 2007, Chakra Biotech Pte Ltd spun out its discovery engine to establish a neuro-behavioural screening laboratory in Malaysia.

• KL Biotech Manufacturing Sdn Bhd – is a private company in Malaysia and a fully integrated pharmaceutical and nutraceutical company that develops, manufactures and distributes nutritional and pharmaceutical products.

• Stellagen Sdn Bhd – is a private biotechnology company in Malaysia with the primary objective of identifying, developing and commercialising technologies related to animal health, consumer health, microbiology and biochemical industries. Currently, Stellagen Sdn Bhd is in the process of commercialising its first product, stellarlac[TM] , after 12 years of research at the University Putra Malaysia.

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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4. PROFILE OF COLLTECH

4.1 Overview

CollTech is a bio-industrial company listed on ASX in February 2004. CollTech specialises in the development and commercialisation of ovine collagen[1] and collagen-based healthcare products.

4.2 CollTech key products

The Company manufactured the following three core products at its purpose built production facility in Collie, Western Australia:

• OVICOLL[® ] C – a cosmetic grade collagen for use in the manufacture of skincare, hair care and toiletries, opaque cosmetics grade ovine soluble collagen at 0.5% and 1% protein content and have minimum purity of 95% with Halal certification;

• OVICOLL[®] Clear – a high grade cosmetic collagen used in the production of premium cosmetics and cosmeceuticals such as anti-aging creams, opaque cosmetics grade ovine soluble collagen at 0.5% and 1% protein content and have minimum purity of 98% with Halal certification; and

• OVICOLL[®] R – a research grade collagen for tissue culture and other research purposes.

CollTech’s Australian-produced OVICOLL[®] ovine collagen is a disease free and culturally acceptable collagen source that is fully traceable and unaffected by Mad Cow Disease.

CollTech placed the Collie facility on care and maintenance at the end of 2008 due to limited funding.

1 Collagen is a natural protein used for a wide range of commercial purposes. Collagen is a significant ingredient for the manufacture of cosmetics, skincare products and cosmeceuticals. Collagens are a primary material used in medical products such as advanced wound dressings, haemostatics and sealants.

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4.3 Financial information

4.3.1 Statement of financial performance

The historical financial performance of CollTech for the years ended 30 June 2006, 2007 and 2008 and six month period ended 31 December 2008 is set out in the table below:

				Period ended
	FY06	FY07	FY08	31 Dec 2008
	Audited	Audited	Audited	Reviewed
	$'000	$'000	$'000	$'000
Revenue	171	135	265	12
Depreciation expense	(260)	(218)	(205)	(91)
Borrowing costs expense	(70)	(64)	(46)	(17)
Share based payments	(134)	(29)	(119)	(122)
Operating expenses- Collie facility	(689)	(687)	(568)	(249)
Auditors' remuneration	(23)	(26)	(31)	-
Office rent and variables	(51)	(62)	(72)	(62)
Public company administration	(230)	(360)	(346)	(58)
Travel and accomodation	(81)	(208)	(191)	(29)
Payroll (excl Collie facility)	(596)	(1,081)	(750)	(393)
Consultancy and professional services	(317)	(462)	(338)	(24)
Loss on disposal of assets	-	(10)	(1)	-
Other expenses	(104)	(90)	(129)	(146)
Loss before income tax benefit	(2,385)	(3,161)	(2,530)	(1,179)
Income tax benefit	297	373	646	45
Net loss attributable to members	(2,088)	(2,788)	(1,885)	(1,134)

Source: CollTech financial reports for FY2006, FY2007, FY2008, and six month period ended 31 December 2008.

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4.3.2 Statement of financial position

The financial position of CollTech as at 30 June 2006, 2007, 2008 and 31 December 2008 is set out in the table below:

	As at	As at	As at	As at
	30 Jun 2006	30 Jun 2007	30 Jun 2008	31 Dec 2008
	Audited	Audited	Audited	Reviewed
	$'000	$'000	$'000	$'000
Current assets
Cash and cash equivalents	1,454	1,272	1,080	504
Trade and other receivables	24	45	353	34
Inventories	16	126	202	187
Other	26	44	61	16
Total current assets	1,520	1,487	1,695	741
Non-current assets
Property, plant and equipment	2,578	2,503	2,324	2,220
Other financial assets	275	380	240	240
Total non-current assets	2,852	2,883	2,564	2,460
Total assets	4,372	4,369	4,259	3,201
Current liabilities
Trade and other payables	312	394	325	184
Borrowings	153	182	197	363
Total current liabilities	465	576	521	547
Non-current liabilities
Borrowings	619	451	273	-
Total non-current liabilities	619	451	273	-
Total liabilities	1,084	1,027	794	547
Net assets	3,289	3,342	3,466	2,654
Equity
Issued capital	7,857	10,670	12,568	12,768
Reserves	651	679	789	911
Accumulated losses	(5,219)	(8,007)	(9,892)	(11,026)
Total Equity	3,289	3,342	3,466	2,654

Source: CollTech financial reports for FY2006, FY2007, FY2008, and six month period ended 31 December 2008.

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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4.3.3 Statement of cash flow

The historical cash flows of CollTech for the years ended 30 June 2006, 2007, 2008 and six month period ended 31 December 2008 are set out in the table below:

				Period ended
	FY06	FY07	FY08	31 Dec 2008
	Audited	Audited	Audited	Reviewed
	$'000	$'000	$'000	$'000
Cash flows from operating activities
Receipts from customers	45	28	37	6
Payment to suppliers and employees	(2,237)	(3,042)	(2,573)	(1,022)
Interest received	126	96	65	25
Finance costs	(70)	(64)	(46)	(17)
Government grant	-	11	90	339
Income tax received	297	373	396
Net cash used in operating activities	(1,839)	(2,597)	(2,031)	(668)
Cash flows from investing activities
Purchase of property, plant and equipment	(157)	(162)	(27)	(6)
Net cash used in investing activities	(157)	(162)	(27)	(6)
Cash flows from financing activities
Proceeds from issue of shares	2,436	3,058	2,015	200
Proceeds from sale of plant and equipment	-	9	-	6
Costs of share issue	(166)	(245)	(126)	-
Funds held as security deposit	(275)	(105)	140	-
Proceeds from borrowing	-	27	45	-
Repayment of borrowings	(154)	(167)	(209)	(108)
Net cash provided by financing activities	1,840	2,577	1,866	98
Net decrease in cash held	(155)	(182)	(192)	(576)
Cash at the beginning of the financial year	1,609	1,454	1,272	1,080
Cash at the end of the financial year	1,454	1,272	1,080	504

Source: CollTech financial reports for FY2006, FY2007, FY2008, and six month period ended 31 December 2008.

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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4.4 Capital structure

As at the date of this Report, there were 277,252,333 fully paid ordinary shares on issue in CollTech.

We set out below the top 20 shareholders of CollTech as at 5 March 2009:

		Number of	% of issued
Rank	Name of shareholder	shares	shares
1	Dr Fathil Bin Mohamed	30,718,955	11.08%
2	Mr Lim Ho Kee	14,000,000	5.05%
3	Ravindran Govindan	13,667,286	4.93%
4	Mr Kok Wah Ong	13,411,769	4.84%
5	Mr Chris Cuffe & Mrs Natasha Cuffe	12,450,195	4.49%
6	Bakersfield Holdings Pty Ltd	7,866,667	2.84%
7	Tristesse Pty Ltd	6,650,000	2.40%
8	IRSS Nominees (21) Limited	6,600,000	2.38%
9	Lifescience Securities Limited	6,000,000	2.16%
10	Millepede International Limited	5,882,353	2.12%
11	Dr John Snowden & Mrs Pauline Snowden	5,716,892	2.06%
12	David Kay Kennedy and Fay Eva Kennedy	4,000,000	1.44%
13	UOB Kay Hian Pte Ltd	3,733,333	1.35%
14	Fairview Holdings Pty Ltd	3,233,562	1.17%
15	Cramm Nominees Pty Ltd	3,100,000	1.12%
16	WSF Pty Ltd	2,470,000	0.89%
17	Mr John Bulich	2,415,263	0.87%
18	Mr Michael Trethowan	2,104,738	0.76%
19	Mr Mohd Fadzli Fathil	2,000,000	0.72%
20	Jayem Pty Ltd	1,882,454	0.68%
	Top 20 sharheolders	147,903,467	53.35%
	Other investors	129,348,866	46.65%
	Total equity	277,252,333	100.00%
Source:	CollTech

Based on the Company’s share register, we note that there is a moderate concentration of shareholders, with the largest shareholding holding 11.08% and the top twenty registered shareholders holding approximately 53% of the shares on issue as at 5 March 2009.

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As at the date of this Report, CollTech has 64,313,083 Listed Options and 16,620,000 Unlisted Options on issue.

Classes of options	Exerise price ($)	Expiry date	Number of options
Listed options	0.04	31 October 2009	64,313,083
Unlisted options	0.10	2 August 2009	350,000
Unlisted options	0.10	9 February 2010	390,000
Unlisted options	0.10	9 February 2010	650,000
Unlisted options	0.10	30 July 2010	130,000
Unlisted options	0.04	30 June 2011	6,600,000
Unlisted options	0.04	22 August 2011	500,000
Unlisted options	0.04	23 October 2011	8,000,000
			80,933,083

Source: Management of CollTech

4.5 Share price performance

Set out below is the share price history of CollTech and volume. The history is set out for the period 3 December 2007 to 12 May 2009:

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----- Start of picture text -----

Proposed
Transaction
Volume (millions) announced on Price $
3 December 2008
4.0 0.040
3.5 0.035
3.0 0.030
2.5 0.025
2.0 0.020
1.5 0.015
1.0 0.010
0.5 0.005
- 0.000
PX_VOLUME PX_LAST
3/12/2007 17/12/2007 31/12/2007 14/1/2008 28/1/2008 11/2/2008 25/2/2008 10/3/2008 24/3/2008 7/4/2008 21/4/2008 5/5/2008 19/5/2008 2/6/2008 16/6/2008 30/6/2008 14/7/2008 28/7/2008 11/8/2008 25/8/2008 8/9/2008 22/9/2008 6/10/2008 20/10/2008 3/11/2008 17/11/2008 1/12/2008 15/12/2008 29/12/2008 12/1/2009 26/1/2009 9/2/2009 23/2/2009 9/3/2009 23/3/2009 6/4/2009 20/4/2009 4/5/2009
----- End of picture text -----

Source: Reuters

During the 52 weeks from 3 December 2007 to 2 December 2008 (the last trading day prior to the announcement of the Proposed Transaction) the highest share price was $0.036 and lowest share price was $0.005.

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We have conducted an analysis of the liquidity of CollTech shares over the 18 month period prior to CollTech’s announcement of the Proposed Transaction on 3 December 2008 in order to understand whether the level of liquidity is sufficient to support an assessment of the market value of CollTech prior to the Proposed Transaction announcement. As at the date of this Report, there were 277,252,333 shares on issue.

We set out below share price and volume traded analysis of CollTech over the 18 month period to 2 December 2008:

	Shareprice	Shareprice	Shareprice	Cumulative volume (shares)	% of shares on issue
	High	Low	Weighted Average
1 week 1 month 3 months 6 months 12 months 18 months	0.007 0.015 0.016 0.036 0.036 0.060	0.005 0.005 0.005 0.005 0.005 0.005	0.007 0.009 0.011 0.021 0.020 0.032	150,000 2,913,769 4,686,817 16,082,964 52,253,154 90,415,813	0.05% 1.05% 1.69% 5.80% 18.85% 32.61%

Source: Reuters and calculations

Based on our analysis of the share price and volume of CollTech as set out above, we note the following:

• the transaction volumes over the period prior to CollTech’s announcement of the Proposed Transaction on 3 December 2008 were low. We note that only 1.69% of the total number of shares were traded in the 3 months prior to the announcement; and

• the top 20 shareholders owned approximately 56.01% of the issued capital of CollTech as at 5 March 2009.

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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5. PROFILE OF HOLISTA

5.1 Overview

Holista is a private company limited by shares and incorporated in Malaysia in 2004. Holista is the holding company of Holista Group of Companies (“Holista Group”), which engaged in the development, manufacture, marketing and distributing health related products.

Holista is the sole owner of all patents of Holista Group and will spearhead the development and commercialisation of results of research and development of Holista Group.

Holista Group currently has 57 employees and Holista Group plans to increase to 64 employees by the end of 2009.

5.2 Subsidiaries of Holista

Holista has four wholly-owned subsidiaries as follow:

• Total Health Concept Sdn Bhd (“Total Health Concept”);

• Alterni Sdn Bhd (“Alterni”);

• Tropical Botanics Sdn Bhd (“Tropical Botanics”); and

• Holista US Inc (“Holista US”).

We have set out below the group structure of Holista:

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----- Start of picture text -----

Holista Biotech Sdn Bhd
Total Health Concept Sdn Bhd Alterni Sdn Bhd Tropical Botanics Sdn Bhd Holista US Inc
----- End of picture text -----

Source: Holista’s management

At 31 December 2008, Holista held 90% of interest in Total Health Concept, 95% of interest in Alterni and 85% of interest in Tropical Botanics. We have been advised by CollTech and Holista that all minority interests in these subsidiaries will be fully acquired by Holista, prior to the Proposed Transaction.

5.2.1 Total Health Concept

Total Health Concept was incorporated in Malaysia in 1995. Total Health Concept promotes healthy concepts based on the traditional concepts of Indian medicine Ayurveda, Chinese practices of traditional medicine and the Malay traditional medicine.

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Total Health Concept distributes more than 30 products to approximately 150 pharmacies in Malaysia. These products range from toxin-free fish oil, detox, Malaysian herbs, hair and skin care, digestives, multivitamins and minerals, and food supplements.

We have set out below the leading brands and the product details of Total Health Concept:

• PRISTIN[TM ] – is a molecularly distilled, toxin-free fish oil approved by Ministry of Health in Malaysia, which is supplied from Norway;

• BITREEN[TM ] – is the first and only standardised Neem extract in Malaysia produced by India’s largest and oldest Ayurvedic company. It is mainly used for blood purification and detoxification; and

• LACTO-5[TM ] – is the first locally cultured beneficial bacteria ensuring better adaptation to gastrointestinal tract, local diet (chilly and spicy) and water. It was developed by Melaka Biotechnology Corporation.

5.2.2 Alterni

Alterni was incorporated in Malaysia in 2001. Its principal activity is direct selling of health supplements. Alterni’s products can be purchased directly by consumers from Alterni’s retail outlet and Holista’s website. Alterni’s retail outlet is located in Petaling Jaya, Malaysia.

We have set out below the leading brands and the products details of Alterni:

• BONEX[TM] – collagen hydrolysate derived from bovine hide (skin) broken down by hydrolysis to facilitate easy absorption into the blood stream. It contains high concentrations of glycine and proline and is produced by Degussa, one of the largest collagen manufacturers in the world, using material obtained from Germany;

• MOO[TM] – is a premium calcium supplement. Unwanted proteins, fats and sugars of MOO[ TM] are removed using a patented ultra-filtered technology pioneered by DMV International of Netherlands;

• TURMERIN[TM] – is a standardised extract of turmeric for pain relief, consisting of up to 90% pure curcumin;

• IRISTAL[TM] – is a doctor tested supplement formulation containing key nutrients that has been scientifically proven to help reduce risk of central vision loss, strengthen night vision, improve cloudy or blurred vision, block harmful UV rays and free-radical damage, maintain youthful eyesight for senior citizens and prevent eye diseases like macular degeneration and cataract;

• ADEBTIN[ TM] – is an all-natural blood sugar regulator. It contains six clinically proven ingredients that are used to regulate blood sugar naturally; and

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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5.2.3 Tropical Botanic

Tropical Botanics is a company incorporated in Malaysia in 2000. Its principal activity is undertaking research and development and patent registration for Holista.

Tropical Botanics has an exclusive arrangement with the Regional Research Laboratory of India for technological expertise and support. The Regional Research Laboratory of India is the largest research institute in India and is the only Indian institute approved by Food and Drug Administration of United States for conducting clinical research on herbs. Tropical Botanics does not have its own staff in India and all research is contracted out to the Regional Research Laboratory of India.

Tropical Botanics also produces an international peer reviewed journal called the Journal of Tropical Medicinal Plants which focuses on tropical medicinal plants and organises Women’s Health and Asian Traditional Medicine Conferences.

Tropical Botanics also participates in research on local herbs in collaboration with University of Mississippi, Universiti Sains Malaysia and Indian Institute of Integrative Medicine.

5.2.4 Holista US

Holista US is a company incorporated in United Stated in April 2008 with a paid up capital of US$10. Holista US is a dormant company.

5.3 BioNexus Status

The Company was awarded BioNexus Status by the Malaysian Biotechnology Corporation of the Malaysian Government in July 2007. As a result, Holista will qualify for tax incentives available to BioNexus Status companies including a 100% income tax exemption for 10 years commencing from the first year Holista derives profit and double deduction on expenditure incurred for Research and Development. Holista will also be eligible for government grants and other assistance.

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5.4 Financial information

5.4.1 Income statement

The historical consolidated financial performance of Holista Group for the years ended 31 December 2006, 2007 and 2008, and the budgeted consolidated financial performance of Holista for the year ending 31 December 2009 are set out in the table below:

31 Dec 2006 31 Dec 2007 31 Dec 2008 31 Dec 2009 Audited Audited Audited Budget RM '000 RM '000 RM '000 RM '000	31 Dec 2009 Budget AUD '000
Revenue 13,506 14,187 14,589 19,841 Cost of sales (5,921) (4,534) (4,948) (7,461)	8,313 (3,126)
Gross profit 7,585 9,653 9,641 12,379 Gross profit % 56% 68% 66% 62% Other income 2,233 159 2,731 2,232	5,187 62% 935
Staff costs (2,610) (2,768) (3,162)
Operating costs (5,911) (5,719) (5,314) (9,597)	(4,021)
EBITDA 1,296 1,325 3,895 5,014 EBITDA % 10% 9% 27% 25% Depreciation and amortisation (260) (324) (364) (360)	2,101 25% (151)
EBIT 1,035 1,001 3,531 4,654 EBIT % 8% 7% 24% 23% Finance costs (2,274) (508) (559) (871)	1,950 23% (365)
Profit before tax (1,239) 493 2,972 3,783	1,585
Less: Taxation (217) (21) (7)
NPAT (1,455) 472 2,965 3,783	1,585

Source: Holista annual reports for the years ended 31 December 2006, 2007, and 2008, and budget for the year ended 31 December 2009 Note 1: Staff costs for the year ended 31 December 2009 are included in operating costs. Note 2: Income tax expense has not been provided for the year ended 31 December 2009. Given the BioNexus status, this is assumed to be nil. Note 3: The summary financial performance is the consolidated financial performance of Holista and its subsidiary companies. Note 4: The 2009 Budget numbers have been restated in AUD for illustrative purposes only (based on an exchange rate of 0.419 RM:AUD)

We have been advised by Holista that the consolidated financial performance of Holista Group has improved significantly from FY2006 to FY2008 due to the following:

• reduction in finance costs due to the conversion of loan stock from Inflexion PEF Sdn Bhd to ordinary shares and redeemable preference shares in Holista in FY2008;

• reduction in operating expenses due to improvement in cost management and efficiency; and

• increased interest income from Holista’s fixed deposits during the year ended 31 December 2008.

The 2008 result included a once-off cost of approximately RM600k for relocation of the office. We have been advised by Holista that there were no other once-off revenues or costs in Holista’s results as set out above.

We have been advised by Holista that there are no non-arm’s length transactions in Holista’s results as set out above.

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We have been advised by Holista that ‘other income’ is comprised of gains on disposal of fixed assets (2008 only) and government and research grants received (RM1.3 million in 2008 and over RM2 million in 2009). We have been advised by Holista management that grants are expected to be received in future years consistent with the level budgeted for the year ending 31 December 2009.

5.4.2 Balance sheet

The consolidated balance sheet of Holista Group as at 31 December 2006, 2007, 2008 and 2009 is set out in the table below:

	As at As at As at As at 31 Dec 2006 31 Dec 2007 31 Dec 2008 31 Dec 2009 Audited Audited Audited Budget RM '000 RM '000 RM '000 RM '000
Current assets Cash and cash equivalents Trade and other receivables Inventories Other	5,944 6,018 6,993 8,267 3,479 3,832 3,248 3,650 1,565 1,585 2,621 3,276 2,467 2,367 2,832 2,747
Total current assets	13,455 13,801 15,693 17,941
Non-current assets Property, plant and equipment Intangibles	3,854 5,486 5,908 7,140 927 507 53 53
Total non-current assets	4,781 5,993 5,961 7,193
Total assets	18,236 19,795 21,654 25,134
Current liabilities Trade and other payables Borrowings Provisions	3,919 5,598 4,965 6,430 8,216 7,648 8,224 6,171 273 294 174 146
Total current liabilities	12,408 13,541 13,363 12,747
Non-current liabilities Borrowings Loan stock	943 898 2,424 2,555 8,702 8,702 - -
Total non-current liabilities	9,645 9,599 2,424 2,555
Total liabilities	22,053 23,140 15,787 15,302
Net assets	(3,818) (3,345) 5,867 9,831
Equity Issued capital Reserves Accumulated losses	100 100 120 3,117 1,001 1,001 7,229 4,232 (4,919) (4,446) (1,482) 2,483
Total Equity	(3,818) (3,345) 5,867 9,831

Source: Holista annual reports for the years ended 31 December 2006, 2007, and 2008, and budget for the year ending 31 December 2009

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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We have been advised by Holista that Tropical Botanics paid a 10% deposit (approximately RM153,069) to acquire 6 plots of industrial land with a total size of 3.514 acres located at Enstek Industrial Estate in Nilai, near to Kuala Lumpur International Airport on 17 March 2005 for an amount of RM1,530,698 (the “Industrial Land”). The original sale and purchase agreement has expired and the acquisition is currently pending for completion. We are advised by the management of Holista that it is their intention to dispose of the Industrial land and they have been actively seeking potential acquirer. We note that Holista management’s best estimate of the market value of the Industrial Land is approximately RM2.3 million. However, an independent valuation has not been obtained.

Holista acquired an extraction machine from India on 17 March 2005 for approximately RM2.3 million (the “Extraction Machine”). We are advised by the management of Holista that the Extraction Machine is not currently in use and is stored in Holista’s warehouse. No depreciation has been charged in relation to this machine as at the date of this report. Holista’s management have advised us that it is their intention to dispose of the Extraction Machine and they are currently negotiating with a potential purchaser. We have been advised by Holista that their management’s best estimate of the market value of this extraction plant is RM1.5 million.

5.4.3 Cash flow statement

The historical consolidated cash flow statement of Holista for the years ended 31 December 2006, 31 December 2007 and 31 December 2008 is set out in the table below:

	31 Dec 2006	31 Dec 2007	31 Dec 2008
	Audited	Audited	Audited
	RM '000	RM '000	RM '000
Cash flowsfromoperating activities
Net cashusedinoperating activities	(1,566)	2,478	850
Cash flows from investing activities
Purchase of property, plant and equipment	(2,260)	(1,858)	(3,734)
Proceeds from disposal of property	-	37	2,066
Reversal of property, plant and equipment	-	-	1,598
Trademark	-	(43)	(10)
Interestreceived	56	74	556
Net cashusedin investing activities	(2,204)	(1,790)	476
Cash flows from financing activities
Proceeds from issue of shares	90	-	20
Proceeds from share premium	1,001	-	6,228
Proceeds from hire purchase creditors	-	76	225
Repayment of hire purchase creditors	(12)	(63)	(134)
Repayment of bank borrowings	-	75	(14)
Proceed from term loan	-	-	2,500
Repayment from term loan	591	(61)	(952)
Loanstock	1,774	-	(8,702)
Netcashprovided byfinancing activities	3,445	27	(829)
Net decrease in cash held	(325)	715	498
Cashat the beginning ofthefinancialyear	4,174	3,849	4,564
Cashat the end ofthefinancialyear	3,849	4,564	5,062

Source: Holista annual reports for the years ended 31 December 2006, 2007, and 2008.

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We note that a budgeted cash flow statement was not available for Holista for the year ending 31 December 2009.

5.5 Capital structure

As at the date of this Report, there were 117,142 fully paid ordinary shares on issue in Holista.

We set out below the shareholders of Holista as at the date of this Report:

		Number of	% of issued
Rank	Name of shareholder	shares	shares
1	Dato' Dr Rajen	57,000	48.7%
2	Inflexion PEF Sdn Bhd	35,142	30.0%
3	Nora Hassan Mohamed	24,600	21.0%
4	Sumita Kesavan	400	0.3%
	Total	117,142	100.0%

Source: Management of Holista

In 2004, Holista raised RM5 million from Inflexion in the form of loan stock. In 2008, Holista and Inflexion reached an agreement to convert the loan stock to 17,142 ordinary shares and 3000 redeemable preference shares (the “RPS”) in Holista.

We have been advised by CollTech that Dato’ Dr Rajen will acquire all of the RPS from Inflexion for the face value of RM 3.0 million prior to the Proposed Transaction and that the terms of the RPS are as follows:

• Dividend: 8% of the redemption value per annum;

• Voting rights: nil;

• Redemption value: RM 3.0; and

• Maturity: on or before April 2011 (the RPS can be redeemed at the RPS holder’s election at any time up to maturity).

We have also been advised by CollTech that Dato’ Dr Rajen will have acquired all outstanding ordinary shares in Holista prior to completion of the Proposed Transaction (“Dato’ Dr Rajen’s Acquisitions”).

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6. PROFILE OF COLLTECH POST PROPOSED TRANSACTION

6.1 CollTech’s intentions

If CollTech acquires 100% of the ordinary issued capital of Holista, CollTech intends to:

• restructure the board of CollTech (the “Board”) so that the Board is represented by three nominees of CollTech, three nominees of Holista and an independent chairman;

• further develop CollTech’s ovine collagen manufacturing and product development capabilities;

• expand its scope of activities within the health-care market; and

• undertake a consolidation of its ordinary shares on a 1:10 basis.

The extent to which CollTech will be able to implement the above intentions will be subject to:

• execution of a formal agreement between the parties;

• completion of all necessary due diligence by CollTech to be satisfactory to CollTech in its absolute discretion;

• completion of all necessary due diligence by Holista to be satisfactory to Holista in its absolute discretion;

• respective board, ASIC, ASX and other regulatory approvals be given in respect of the Proposed Transaction;

• CollTech shareholders vote in favour of the Proposed Transaction with the majorities required under the Corporations Act;

• there being no material adverse change in the financial position or condition of CollTech and Holista;

• the new CollTech shares to be issued pursuant to the Proposed Transaction being approved for official quotation by ASX; and

• completion of a 1 for 5 rights issue at $0.01 per share to raise a minimum of $300,000 and up to $544,505, (underwritten up to $300,000) (the “Proposed Rights Issue”).

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6.2 Pro forma balance sheet

Assuming the Proposed Transaction proceeds, the unaudited Consolidated Pro Forma Balance Sheet of CollTech, Holista and the enlarged entity as at 31 December 2008 are set out below:

	CollTech	Holista	CollTech
			Post Proposed
			Transaction
	$ '000	$ '000	$ '000
Current assets
Cash and cash equivalents	766	2,914	3,680
Trade and other receivables	34	935	969
Inventories	187	1,092	1,279
Other	16	1,598	1,614
Total current assets	1,003	6,539	7,542
Non-current assets
Cash and cash equivalents	240	-	240
Property, plant and equipment	2,220	2,462	4,682
Intangibles	-	22	22
Fair value uplift	-	-	411
Total non-current assets	2,460	2,484	5,355
Total assets	3,463	9,023	12,897
Current liabilities
Trade and other payables	184	1,403	1,587
Interest bearing liabilities	363	4,677	5,040
Provisions	-	72	72
Other	-	666	666
Total current liabilities	547	6,818	7,365
Non-current liabilities
Interest bearingliabilities	-	1,010	1,010
Total non-current liabilities	-	1,010	1,010
Total liabilities	547	7,828	8,375
Net assets	2,916	1,195	4,522
Equity
Issued capital	13,031	49	3,376
Reserves	911	1,763	1,763
Accumulated losses	(11,026)	(617)	(617)
Total Equity	2,916	1,195	4,522
Source: CollTech

Note 1: The pro forma consolidation above is for illustrative purposes only and has been provided by CollTech. Note 2: The pro forma consolidation above is based on audited / audit reviewed accounts as at 31 December 2008. Note 3: Assumed market capitalisation of CollTech Australia Limited adopted based on 1.2 cents per share. Note 4: Exchange rate of AUD$1:RM2.40 Note 5: Assume minimum underwritten taken up of CollTech Australia Limited rights issue of $300,000 less estimated costs of issue. Note 6: Holista's Redeemable Preference Shares have been reclassified as current liabilities for the purposes of the above.

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6.3 Capital structure

Assuming all the conditions of the Proposed Transaction are satisfied and the Proposed Rights Issue and the Proposed Transaction are implemented, the share structure of the enlarged CollTech would be as follows:

	Pre Proposed	%	Post Proposed	%
	Transaction		Transaction
	share structure		share structure
Shareholders Group	number		number
Existing CollTech shareholders	277,252,333	100.0%	277,252,333	25.7%
Dato' Dr Rajen	-	-	770,000,000	71.5%
Proposed Rights Issue	-	-	30,000,000	2.8%
	277,252,333	100.0%	1,077,252,333	100.0%
Source: Calculations

Following the completion of the Proposed Transaction the existing CollTech shareholders may effectively have their voting powers reduced to as little as 25.7%.

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7. VALUATION METHODOLOGY

The underlying value of 100% of the ordinary issued capital of CollTech and the Consideration Offered has been assessed based on a fair market value basis, which is typically defined as:

“The price that would be negotiated in an open and unrestricted market between a knowledgeable, willing but not anxious buyer and a knowledgeable, willing but not anxious seller, acting at arm’s length.”

Fair market value does not incorporate any special value. Special value is the additional value that may accrue to a particular purchaser. In a competitive bidding situation, potential purchasers may be prepared to pay part, or all, of the special value that they expect to realise from the acquisition to the seller.

7.1 Available methodologies

ASIC Regulatory Guide 111 provides guidance on the methodologies that an independent expert should consider when valuing a company, assets or securities for the purposes of forming an opinion as to the fairness of the Proposed Transaction pursuant to the Corporations Act. These include:

• the discounted cash flow (“DCF”) method;

• the capitalisation of future maintainable earnings (“FME”) method;

• comparable market transactions;

• orderly realisation of assets; and

• the market value of listed securities.

We have outlined these methodologies in Appendix B to this report.

7.2 Selected methodology - CollTech

In considering the appropriate methodologies for valuing CollTech, we note that:

• we have been advised by CollTech that a forecast cash flow for CollTech is not available. Accordingly, we have not utilised a DCF approach for the purposes of our report;

• CollTech’s operations were loss making for the past three years and are not forecast to generate a profit for FY2009. Accordingly, we have not utilised a capitalisation of FME approach for the purposes of our report;

• we have been advised by CollTech that they have not received any recent offers for CollTech or any of its key assets or operations. We are not aware of any recent transactions for businesses comparable to CollTech. Accordingly, we have not utilised a comparable market transactions approach for the purposes of our report;

• CollTech is a listed Australian company and is quoted on the ASX. However, we note the liquidity of CollTech’s shares for the 3 months prior to the announcement date of 3 December 2008 was 1.6%. Whilst we consider this as low, and as such not utilised this approach as our primary valuation, we have utilised the market value of listed securities approach to cross check our values under the orderly realisation of assets approach; and

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• we have been advised by CollTech that further funding is required for the company to continue its operations.

Accordingly, for the purpose of this report, we consider the orderly realisation of assets as the most appropriate approach for the valuation of CollTech.

As set out above, we have utilised the market value of listed securities approach and the recent placements to cross check our values under the orderly realisation of assets approach.

7.3 Selected methodology - Value of the consideration offered

We note that the consideration offered for the 770 million of ordinary shares in CollTech is 100% of the ordinary issued capital of Holista.

We note that:

• we have been advised by Holista that a long term forecast cash flow for Holista is not available. Accordingly, we have not utilised a DCF approach for the purposes of our report;

• we have been advised by Holista that they have not received any recent offers for Holista or any of its key assets or operations. We are not aware of any recent transactions for businesses comparable to Holista other than the Holista shares to be acquired by Dato’ Dr Rajen. We have considered Dato’ Dr Rajen’s Acquisitions to cross check our values; and

• Holista is an unlisted private company and is not quoted on a stock exchange. Accordingly, we have not utilised the market value of listed securities approach for the purposes of our report.

Holista has profitable historical operations and has budgeted profitable operations for the year ending 31 December 2009. Accordingly, for the purpose of this report, we consider the capitalisation of FME as the most appropriate approach for the valuation of Holista.

We have considered EBITDA and NPAT as appropriate for the purposes of our report. We consider EBITDA to be a good measure of Holista’s underlying earnings and note that EBITDA is readily comparable with other similar businesses across Malaysia and Australia and minimises the impact of different capital structures and the accounting and tax treatment of items such as amortisation and depreciation. We consider NPAT relevant as it reflects the net (post tax and all other adjustments) return to investors.

We have cross checked our assessed values under the capitalisation of future maintainable earnings approach to the values implied by Dato Dr Rajen’s Acquisitions.

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8. VALUATION OF COLLTECH

For the purpose of this report, we consider the orderly realisation of assets as the most appropriate approach for the valuation of CollTech. Under this approach, the fair market value of CollTech has been assessed by aggregating:

• the fair market value of assets;

• deducting asset realisation costs;

• deducting liabilities;

• deducting wind-up costs of the business; and

• adding the value of the listed corporate structure.

For the purposes of our report we have utilised the statement of financial position of CollTech as at 31 December 2008 (audit reviewed), being the most recent statement of financial position made available to us.

Under an orderly realisation of assets approach, the value of net assets determined implicitly assumes 100% control of those assets. As such, there is no requirement for a premium for control to be added to the assessed values.

8.1 Fair market value of assets

We have considered the fair market value of the assets using the 31 December 2008 financial position as set out below.

• Cash and cash equivalents (book value of $504k) – For the purposes of our report we have adopted a fair market value of the cash and cash equivalents equal to their book value.

• Trade receivables and accrued income (book value of $34k) – We have been advised by CollTech that $5k of the trade receivables have been received since 31 December 2008 and the balance is comprised of accrued income ($14k) and GST receivable ($15k). For the purposes of our report we have adopted a fair market value, reflecting potential non-recovery, of the trade receivables and accrued income in the range of $20k to $34k.

• Inventory (book value of $187k) – Inventory relates wholly to raw materials and finished collagen product stocks held as at 31 December 2008 carried at $23k and $164k respectively. We have set out below CollTech’s estimate of wholesale price values of the finished good inventory as at 31 December 2008:

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	Book value	Wholesale value
	$'000	$'000
Raw Materials	23	-
Work in progress	46	-
Finishedgoods	118	336
Total	187	336

Source: CollTech Management

Notes: It is assumed there is no wholesale market for resale of the raw materials or the work in progress.

We understand that there is no market for the raw materials or work in progress and further work would be required in the Collie facility (which is currently closed) to bring these items to a ‘finished good’ / saleable state. For the purposes of our report we have adopted a fair market value of the inventory in the order of $336k.

• Other current assets (book value of $16k) – Other current assets relate to prepayments for ASX fees, general and directors & officers insurance, product insurance and prepaid rent / hygiene services. We have been advised that by CollTech that these have minimal or $nil current realisable value. For the purposes of our report we have adopted a fair market value for other current assets of $nil.

• Property, plant & equipment (book value of $2,218k) – The Collie building improvements represent approximately 55% of property, plant and equipment with the balance relating to other plant and equipment. For the purposes of our report we have adopted a fair market value of the property, plant & equipment in the order of $2,218k.

• Non-current cash and cash equivalents (book value of $240k) – Non-current cash and cash equivalents represent term deposits held as security in relation to hire purchase liabilities entered into with National Australia Bank. We have been advised by CollTech that these deposits would be recoverable once the hire purchase debt has been settled. For the purposes of our report we have adopted a fair market value of $240k.

We note that CollTech has performed research and development in relation to the ovine collagen products which is not reflected in the book value of assets above. We have been advised by CollTech that, given the stage of the technology and the lack of success to date in developing a commercially viable product, the realisable value of the historical research and development to be minimal or $nil.

We have been advised by CollTech that there are no additional assets of the Company which are not reflected on the statement of financial position as at 31 December 2008.

8.2 Asset realisation costs

We have made an adjustment to the fair market values to reflect the costs associated with the notional realisation of assets. We have set out below the realisation costs we have adopted for the purposes of our report and their basis.

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• Cash and cash equivalents – We have assumed nil realisation costs for cash and cash equivalents.

• Trade debtors – We have assumed nil realisation costs for the trade debtors, net of the adjustments to fair market value to reflect non-recovery as per above.

• Inventory – We have adopted estimated realisation costs in the range of 30% to 40% of fair market value, reflecting the highly specialised nature of the inventory, the limited market, costs relating to identification of purchasers and other transaction costs.

• Other current assets – We have assumed nil realisation costs for other current assets.

• Property, plant & equipment – We have adopted realisation costs of 30% to 50% of the fair market value to reflect the likely inability to realise the property improvements and selling costs associated with disposing of the property, plant and equipment.

• Non-current cash assets ($240k) – We have assumed nil realisation costs for the non-current cash assets.

8.3 Fair market value of liabilities

For the purposes of our report we consider it reasonable to assume the book value of recorded liabilities reflects their fair market value.

We have been advised by CollTech that there are no contingent liabilities or claims against CollTech.

8.4 Wind-up costs

For the purposes of our report, we have adjusted the net assets assessed above for costs associated with the wind-up of the Company, including administrative overheads during a reasonable realisation period.

We have been advised by CollTech that:

• operations have ceased at the plant in Collie; and

• there are minimal number of staff remaining and no ongoing business operations.

For the purposes of our report we have been adopted estimated wind-up costs for CollTech in the order of $200k pre tax, reflecting the overhead costs required during the wind-up period, costs relating to redundancy of remaining employees and break costs in relation to rental agreements.

8.5 Cash expenditure since 31 December 2008

On 29 April 2009 CollTech released their Quarterly report for the 3 months ending 31 March 2009 showing a net cash outflow of $364k for the quarter. For the purposes of our report, we have deducted this amount as a cash outflow since the reported 31 December 2008 financial position.

8.6 Tax benefit / expense

CollTech will incur / receive a company tax liability / shield in relation to the difference between realised values and book values of assets and liabilities. Some items will be assessed as income and some (such as property, plant & equipment) on capital account. We consider an assumption of tax

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expense / benefit calculated as 30% of the total difference between book value and realised values as reasonable, to the extent that there is no net tax benefit, for income account taxable gains / losses for the purpose of our report. We have adopted a tax benefit for capital account items only to the extent that they can be offset against any capital gains calculated.

8.7 Listed corporate structure

For the purposes of our report, we have assessed the potential value of the corporate structure of CollTech. The corporate structure of CollTech may be able to be used to quickly facilitate a business seeking listing on the ASX as a ‘listed shell’. We have adopted an estimated current value of a ‘listed shell’ on the ASX in the range of $300k to $500k. We have not adjusted this value for tax as it would be taxed in the hands of the shareholders, and not the company.

8.8 Valuation of CollTech

Low Scenario

The following table summarises our assessed low value of CollTech:

	Reviewed		Realisation	Realisation	Realisation
	31 Dec 2008	Market Value	costs	costs	tax impact	Adjusted
	$000	$000	%	$000	$000	$000
Current assets
Cash and cash equivalents	504	504	0%	-	-	504
Trade and other receivables	34	20	0%	-	4	24
Inventory	187	336	40%	(134)	(4)	197
Other	16	-	0%	-	0	0
Total current assets	741	860		(134)	-	726
Non- current assets
Cash and cash equivalents	240	240	0%	-	-	240
Property, plant and equipment	2,220	2,220	50%	(1,110)	-	1,110
Total non-current assets	2,460	2,460		(1,110)	-	1,350
Total assets	3,201	3,320		(1,244)	-	2,076
Current liabilities
Trade and other payables	184	184	-	-	-	184
Interest bearingdebt	363	363	-	-	-	363
Total current liabilities	547	547		-	-	547
Net assets	2,654	2,773		(1,244)	-	1,529
Wind-up costs (post tax)				(200)	-	(200)
Operatingcash outflow since 31	December 2008			(364)		(364)
Adjusted net asset value						965

Source: Grant Thornton calculations Notes: Tax benefits have been reduced / removed if they are expected to not be realisable as per above.

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High Scenario

The following table summarises our assessed high value of CollTech:

	Reviewed		Realisation	Realisation	Realisation
	31 Dec 2008	Market Value	costs	costs	tax impact	Adjusted
	$000	$000	%	$000	$000	$000
Current assets
Cash and cash equivalents	504	504	0%	-	-	504
Trade and other receivables	34	34	0%	-	-	34
Inventory	186	336	30%	(101)	(15)	220
Other	16	-	0%	-	5	5
Total current assets	740	874		(101)	(10)	763
Non- current assets
Cash and cash equivalents	240	240	0%	-	-	240
Property, plant and equipment	2,220	2,220	30%	(666)	-	1,554
Total non-current assets	2,460	2,460		(666)	-	1,794
Total assets	3,200	3,334		(767)	(10)	2,557
Current liabilities
Trade and other payables	184	184	-	-	-	184
Interest bearingdebt	363	363	-	-	-	363
Total current liabilities	547	547		-	-	547
Net assets	2,653	2,787		(767)	(10)	2,010
Wind-up costs (post tax)				(200)	10	(190)
Operatingcash outflow since 31	December 2008			(364)		(364)
Adjusted net asset value						1,456

Source: Grant Thornton calculations Notes: Tax benefits have been reduced / removed if they are expected to not be realisable as per above.

Valuation conclusion

The following table summarises our assessed values of CollTech:

	Low	High
CollTech - adjusted net asset value ($ m)	1.0	1.5
Add: value of 'listed shell'($ m)	0.3	0.5
CollTech equity value - orderly realisation of assets ($ m)	1.3	2.0
Number of CollTech shares on issue (million)	277	277
CollTech equity value - orderly realisation of assets (cents)	0.46	0.71

Source: Grant Thornton calculations

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8.9 Cross check to market price of listed securities

We have considered the reasonableness of our valuation by comparing our assessment of the value of CollTech shares to the share market prices of CollTech prior to the announced transaction on 3 December 2008.

Set out below is an analysis of share market prices and volume of trading in CollTech in the 18 month period prior to the announcement of the Proposed Transaction on 3 December 2008:

	Shareprice	Shareprice	Shareprice	Cumulative volume (shares)	% of shares on issue
	High	Low	Weighted Average
1 week 1 month 3 months 6 months 12 months 18 months	0.007 0.015 0.016 0.036 0.036 0.060	0.005 0.005 0.005 0.005 0.005 0.005	0.007 0.009 0.011 0.021 0.020 0.032	150,000 2,913,769 4,686,817 16,082,964 52,253,154 90,415,813	0.05% 1.05% 1.69% 5.80% 18.85% 32.61%

Source: Reuters and calculations

Based on the above, we consider that our assessed value of CollTech is consistent with recent prices. We note however that CollTech shares have experienced very low liquidity with only 1.7% and 5.8% of total shares being sold in 3 months and 6 months, respectively, leading up to the announcement.

8.10Cross check to recent placements

We note that in December 2008, CollTech completed a capital raising by way of placement for $200,000 at $0.01 per share. This was a premium to assessed values for a CollTech share as set out above. We have been advised by CollTech that it is considered unlikely that further significant equity funding via placements will be available in the near future.

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9. VALUATION OF THE CONSIDERATION OFFERED

For the purpose of this report, we consider the capitalisation of FME as the most appropriate approach for the valuation of Holista.

We have considered EBITDA and NPAT for the purposes of our report.

Earnings based valuations involve capitalising the earnings of a business at an appropriate multiple and require consideration of the following factors:

• Estimation of FME having regard to historical and projected operating results, including sensitivity to key industry risk factors, future growth prospects and the general economic outlook;

• Determination of an appropriate capitalisation rate which will reflect a purchaser’s required rate of return, risk inherent in the business, future growth possibilities and alternative investment opportunities; and

• Separate assessment of surplus or unrelated assets and liabilities, being those items that are not utilised in producing the estimated future earnings.

In assessing the fair value of Holista using the FME methodology, we have adopted the following procedures:

• conducted research of companies to identify and select companies within the health products industry or companies with similar operations and an active public market for their shares;

• compared the operations and financial performance of Holista to that of the selected guideline companies;

• reviewed the valuation multiples of the selected guideline companies and concluded as to the appropriate multiples to value Holista;

• applied a valuation multiple to the assessed FME to arrive at an enterprise valuation (for the EBITDA approach) and equity valuation (for the NPAT approach) after considering applicable discounts;

• deducted net debt from the enterprise value to arrive at an equity valuation (EBITDA approach only); and

• adjusted for surplus assets as appropriate.

9.1 Future maintainable earnings

We have set out below the historical and forecast EBITDA and NPAT for Holista:

	31	Dec 2006	31 Dec 2007	31 Dec 2008	31 Dec 2009
		Audited	Audited	Audited	Budget
		RM '000	RM '000	RM '000	RM '000
Revenue		13,506	14,187	14,589	19,841
EBITDA		1,296	1,325	5,014	2,101
NPAT		(1,455)	472	3,783	1,585

Source: Holista annual reports for the years ended 31 December 2006, 2007, and 2008, and budget for the year ended 31 December 2009

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We note the following:

• Holista has achieved profits historically;

• EBITDA has grown significantly as set out in section 4 of this report;

• NPAT has grown accordingly with the EBITDA growth; and

• Budgeted EBITDA and NPAT for FY09 were RM5.0 million and RM3.8 million respectively

Based on our analysis, we have adopted a FME for EBITDA and NPAT for Holista of RM5.0 million and RM3.8 million respectively.

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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9.2 Determination of earnings multiples

We have conducted research into comparable companies regarding Holista, in the health related and pharmaceutical industry in Malaysia. Summarised below are the FY07, FY08 and FY09 (where available) EBITDA multiples and NPAT multiples of selected comparable companies on a portfolio basis:

					EV / EBITDA(times)	EV / EBITDA(times)	EV / EBITDA(times)			MC /	NPAT(times)	NPAT(times)
Company	Currency	Market Capitalisation	Adjusted EV		Historic		Forecast			Historic		Forecast
		(m)	(m)	2006	2007	2008	2009	2010	2006	2007	2008	2009	2010
Tier 1
Blackmores Ltd	AUD	253	279	12.2x	10.7x	9.6x	9.0x	8.5x	17.5x	15.2x	13.3x	13.3x	13.3x
Pharmaniaga Bhd	RM	460	614	10.2x	2.9x	5.4x	N/a	N/a	32.7x	8.9x	7.7x	N/a	N/a
Tier 2
Amway Malaysia	RM	1,208	1,007	9.3x	8.7x	7.0x	8.5x	8.0x	15.0x	13.7x	12.1x	13.1x	12.9x
CNI Hldgs	RM	216	201	6.5x	6.2x	6.7x	N/a	N/a	8.5x	10.4x	11.1x	N/a	N/a
Johan Holdings	RM	170	665	13.6x	11.0x	8.7x	N/a	N/a	14.9x	8.2x	6.5x	N/a	N/a
DXN Holdings	RM	99	188	5.3x	4.9x	5.0x	N/a	N/a	4.1x	5.1x	5.3x	N/a	N/a
Hovid Bhd	RM	168	453	12.3x	9.1x	12.5x	8.6x	8.0x	7.4x	5.8x	38.4x	9.9x	8.8x
Tier 3
Apex Healthcare	RM	103	136	5.7x	5.5x	5.5x	N/a	N/a	7.7x	6.1x	6.5x	N/a	N/a
CCM Duopharma	RM	318	315	7.6x	6.9x	6.6x	8.1x	7.0x	11.0x	9.9x	9.7x	12.2x	10.6x
Y S P Southeast	RM	66	61	3.4x	3.0x	2.7x	N/a	N/a	6.2x	5.7x	5.5x	N/a	N/a
All comparable companies
Low		66	61	3.4x	2.9x	2.7x	8.1x	7.0x	4.1x	5.1x	5.3x	9.9x	8.8x
Mean		306	392	8.6x	6.9x	7.0x	8.5x	7.8x	12.5x	8.9x	11.6x	12.1x	11.4x
Median		193	297	8.4x	6.5x	6.6x	8.5x	8.0x	9.7x	8.6x	8.7x	12.7x	11.7x
High		1,208	1,007	13.6x	11.0x	12.5x	9.0x	8.5x	32.7x	15.2x	38.4x	13.3x	13.3x
Tier 1
Low		253	279	10.2x	2.9x	5.4x	9.0x	8.5x	17.5x	8.9x	7.7x	13.3x	13.3x
Mean		357	447	11.2x	6.8x	7.5x	9.0x	8.5x	25.1x	12.0x	10.5x	13.3x	13.3x
Median		357	447	11.2x	6.8x	7.5x	9.0x	8.5x	25.1x	12.0x	10.5x	13.3x	13.3x
High		460	614	12.2x	10.7x	9.6x	9.0x	8.5x	32.7x	15.2x	13.3x	13.3x	13.3x
Tier 2
Low		99	188	5.3x	4.9x	5.0x	8.5x	8.0x	4.1x	5.1x	5.3x	9.9x	8.8x
Mean		372	503	9.4x	8.0x	8.0x	8.5x	8.0x	10.0x	8.6x	14.7x	11.5x	10.8x
Median		170	453	9.3x	8.7x	7.0x	8.5x	8.0x	8.5x	8.2x	11.1x	11.5x	10.8x
High		1,208	1,007	13.6x	11.0x	12.5x	8.6x	8.0x	15.0x	13.7x	38.4x	13.1x	12.9x
Tier 3
Low		66	61	3.4x	3.0x	2.7x	8.1x	0.0x	6.2x	5.7x	5.5x	12.2x	0.0x
Mean		163	171	5.6x	5.1x	4.9x	8.1x	0.0x	8.3x	7.2x	7.2x	12.2x	0.0x
Median		103	136	5.7x	5.5x	5.5x	8.1x	0.0x	7.7x	6.1x	6.5x	12.2x	0.0x
High		318	315	7.6x	6.9x	6.6x	8.1x	0.0x	11.0x	9.9x	9.7x	12.2x	0.0x

Source: Reuters as at 22 May 2009, Company Accounts and Grant Thornton calculations Notes: For Blackmores Ltd and Hovid Bhd, FY2008 is comprised of the 12 month period ended 30 June 2008. For Johan Holdings Bhd, FY2008 is comprised of the 12 month period ended 31 October 2008. For DXN Holdings Bhd, FY2008 is comprised of the 12 month period ended 30 November 2008. For all other Malaysian listed companies, FY2008 is comprised of the 12 month period ended 30 September 2008.

Set out in Appendix A is a description of the activities of the companies set out above.

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Based on our analysis we have assessed earnings multiples for Holista’s 2009 forecast earnings of 4 to 6 times for EBITDA and 5 to 7 times for NPAT as appropriate.

In our assessment of appropriate earnings multiples, we have considered the following:

• Holista is most comparable to Pharmaniaga Bhd;

• the uncertainty in relation to the grants expected to be received by Holista;

• many of the companies are highly diversified in operations other than solely health related products; and

• generally, observed multiples of forecast EBITDA and NPAT are lower than historical earnings multiples.

9.3 Calculation of net debt

We have adopted a net debt for Holista in the order of RM5.1 million. The net debt is comprised of cash and cash equivalents, interest bearing liabilities and amounts due to directors as at 31 December 2008 as set out below:

Short term debt		9,822
Long term debt		2,267
Less: Cash		(6,993)
Net debt		5,096.6
Source: 2008 Annual Report and Grant Thornton calculations

9.4 Discount for size

We have applied a discount to reflect the small size of Holista relative to the comparable listed companies. For the purpose of our report we consider a discount for size in the order of 40% to be reasonable.

9.5 Premium for control

We have applied a premium for control as required under RG 111. For the purposes of our report we consider a control premium in the order of 30% to be reasonable.

9.6 Surplus assets - BioNexus income tax exemption

Holista received BioNexus Status in 2006 which has resulted in the receipt of grants for research and exemption from income tax for Holista and its subsidiaries. We have been advised by Holista and CollTech that Holista is not expected to lose its income tax exempt status as a result of the Proposed Transaction.

We have estimated the income tax exemption benefit for the year ending 31 December 2009 in the order of RM1.0 million based on 25% of RM3.8 million on profit before tax.

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We have capitalised this benefit using a multiple of 4 times. The selected multiple reflects:

• a risk profile similar to Holista NPAT; and

• the 10 year life of the income tax exemption.

The capitalised benefit has been estimated in the order of RM4.0 million.

9.7 Surplus assets – Property, plant and equipment

We note that Holista also held the following surplus assets at the date of our report:

• The Industrial Land contract – potential value of RM0.9 million prior to realisation costs (RM2.3 million current value less RM1.5 million contract value add RM0.15 million deposit). We have not ascribed any value to this due to the speculative and uncertain nature of this asset; and

• The Extraction Plant – estimated net realisable value of RM0.9 million to RM1.2 million based on Holista’s estimate of market value of RM1.5 million and realisation costs of 20% to 40%.

9.8 Redeemable Preference Shares

We have adopted the redemption value of RM3.0 million for the RPS for the purpose of our report. We note that Dato’ Dr Rajen has agreed to acquire the RPS from Inflexion for RM 3.0 million prior to the Proposed Transaction.

9.9 Minority interest

We have been advised by Holista and CollTech that all minority interests in the Holista Group will be acquired by Holista prior to the Proposed Transaction. As such, we understand there will be no minority interests in Holista in relation to the Proposed Transaction.

9.10Equity valuation of Holista

We have set out below a summary of the calculated values of Holista having regard to a capitalisation of FME approach using EBITDA and NPAT and based on comparable companies:

Low (m) High (m) EBITDA	Low (m) High (m) NPAT
Assessed FME 5.0 5.0 Assessed multiples 4 6 Premium for control 30% 30% Discount for size 40% 40%	3.8 3.8 5 7 30% 30% 40% 40%
Enterprise value 15.6 23.4 Less: Net debt (5.1) (5.1)
Indicative Equity Value 10.5 18.3	14.8 20.7
Add surplus asset : income tax exemption 4.0 4.0 Add surplus asset : the Extraction Plant 0.9 1.2 Less Preference Equity: the RPS (3.0) (3.0)	0.9 1.2 (3.0) (3.0)
Ordinary Shares Equity Value 12.4 20.5	12.7 18.9
Source: Grant Thornton calculations

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Based upon the above, we have assessed the ordinary equity value of Holista in the order of RM13 million to RM20 million.

9.11 Cross check to Dato’ Dr Rajen’s Acquisitions

We have been advised by CollTech that the Dato’ Dr Rajen Acquisitions will occur prior to completion of the Proposed Transaction. The Dato’ DR Rajen Acquisitions include the acquisition of shares held by Inflexion, Nora Hassan Mohamed and Sumita Kesavan.

We have been advised by CollTech that Nora Hassan Mohamed and Sumita Kesavan are ‘related parties’ to Dato’ Dr Rajen. We have not considered these transactions for the purposes of our cross check as they are between related parties.

We have been advised by CollTech that Inflexion and Dato’ Dr Rajen are not related parties and any price agreed between them for Holista shares will be on an arm’s length basis. We have set out below a summary of the Holista equity price implied by the acquisition of Inflexion shares by Dato’ Dr Rajen:

RM millions unless otherwise stated
Percentage acquired	30.0%
Price paid	4.03
Implied Equity Value - portfolio holding	13.4
Premium for control	30.0%
Implied Equity Value - 100% control holding	17.5
Source: Grant Thornton calculations

We have assumed a control premium of 30%, and note that:

• The 30% parcel to be acquired is a minority holding as Dato’ Dr Rajen effectively controls 70% of Holista shareholding;

• We consider it unlikely that there would be other potential acquirers given Holista’s unlisted status and the shareholding controlled by Dato’ Dr Rajen; and

• We understand Inflexion was seeking to realise their investment rather than participate in the Proposed Transaction.

We note that the implied value of RM17.5 million is consistent with our assessed value range using the capitalisation of FME approach. Accordingly, we consider our assessed values of Holista above to be reasonable.

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9.12 Summary of valuation – Consideration offered

We have assessed the equity value of Holista in the order of RM13 million to RM20 million as set out above. This corresponds to a value of the consideration offered per CollTech share as set out below:

	Low	High
Assessed Equity Value (RM millions)	13.0	20.0
Number of CollTech shares issued to be issued(millions)	770	770
Value per share (RM sen)	1.69	2.60
RM : AUD exchange rate as at 25 May2009	0.366	0.366
Valueper share(AUD cents)	0.62	0.95
Source: Reuters and Grant Thornton calculations

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10. EVALUATION OF THE PROPOSED TRANSACTION

10.1 Fairness of the Proposed Transaction

We set out below a comparison between our assessment of the value of a CollTech share and the value of the consideration offered, being the shares in Holista, in order to assess whether the Proposed Transaction is fair to the non-associated shareholders of the Company:

		Low	High	Midpoint
Assessment of fairness	Reference	cents	cents	cents
Value of a CollTech share	Section 8	0.46	0.71	0.58
Value of the Consideration Offered	Section 9	0.62	0.95	0.78
Difference		0.16	0.25	0.20
Source: Grant Thornton calculations

Based on our calculations, the midpoint value of the Consideration Offered is higher than the midpoint value of a CollTech share.

Accordingly, we conclude that the Proposed Transaction is fair to the non-associated shareholders of CollTech.

10.2 Reasonableness of the Proposed Transaction

As the Proposed Transaction is fair to the non-associated shareholders of CollTech, the Proposed Transaction is also reasonable in accordance with RG 111. Nonetheless, we have summarised some of the relevant likely advantages and disadvantages associated with the Proposed Transaction

Funding for continued operations

We have been advised by CollTech that further research and development is required prior to commercialisation of the collagen based products. The acquisition of Holista is intended to provide CollTech with a profitable business that will support the Company’s survival and commercialisation of its intellectual property.

Likelihood of a superior offer

We are advised by the directors of the Company that there are no other known superior offers at the date of this report. If the Proposed Transaction is not passed and consummated the opportunities and advantages as described in this report to the CollTech shareholders are unlikely to become available and CollTech has advised that there is unlikely to be an alternative transaction.

BioNexus status

Holista received BioNexus status in 2006 which results in the receipt of grants and also relief from Malaysian income tax until 2016. We have been advised by CollTech that Holista:

• has received advice from Malaysian Biotech Corporation that as long as the operations of Holista remain in Malaysia, Holista will retain BioNexus status; and

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• believes that they will retain the BioNexus status post completion of the Proposed Transaction.

Should Holista lose the BioNexus status, this will have a significant impact on the value of Holista and, as such, the value of the consideration offered.

Expansion of research fields

We have been advised by CollTech that, should the Proposed Transaction proceed, CollTech’s intention is to expand its research to include food grade collagen products as well as for cosmetic, research and medical applications.

Potential ovine collagen use in Holista’s product

It is the intention of CollTech to develop a food grade collagen for use within Holista’s current product range. This would provide CollTech’s ovine collagen product with access to an existing customer base and supply network.

Access to the Intellectual Capital of Holista

As a result of the Proposed Transaction, the intellectual assets of CollTech may be increased by combining with the skills and expertise of Holista in developing and marketing health related products. This may enhance the ability of the expanded entity to achieve commercialisation of its products.

Access to Holista’s sales and marketing networks in Malaysia

Should the Proposed Transaction be completed, CollTech will have access to Holista’s direct marketing and wholesale networks in Malaysia. CollTech management anticipate that CollTech’s halal collagen products should be well received in the predominately Muslim Malaysian market.

Economies of scale

CollTech expects that the Holista management team will considerably strengthen CollTech’s overall operations and that many of the administration functions of CollTech will be able to be incorporated within Holista’s current structure.

Surplus assets

Should the Proposed Transaction proceeds, CollTech shareholders will be able to participate in any benefit arising from the surplus assets of the Industrial Land, which has not been included in our assessed values of the consideration offered.

Conditions precedent

The Proposed Transaction is subject to a number of conditions precedent, some of which have not been satisfied at the date of this report.

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Australian franking credits

CollTech dividends to its shareholders that have been derived from the Malaysian operations of Holista are unlikely to be accompanied by franking credits. The individual tax consequences of this to each of the shareholders of CollTech have not been considered as part of this Report.

Dilution of Control of Non-Associated Shareholders

Should the Proposed Transaction be completed the shareholders of CollTech will effectively have their voting powers reduced from 100% to 25.7% as they will be diluted by the issue of new CollTech shares to the shareholders of Holista. In addition, Dato’ Dr Rajen will hold up to 71.5% of CollTech shares and have effective control of CollTech. As such, the ability of the existing nonassociated shareholders of CollTech to influence decisions will be reduced accordingly. Further, recognising that Dato’ Dr Rajen would be the single largest shareholder with up to 71.5% of CollTech, a subsequent offer by an alternative acquirer would only emerge with the support of Dato’ Dr Rajen.

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11. SOURCES OF INFORMATION, DISCLAIMER AND CONSENTS

11.1 Sources of Information

In preparing this report Grant Thornton Corporate Finance has used various sources of information, including:

1. Draft Notice of General Meeting and Explanatory Memorandum dated 29 May 2009;

2. Non-binding and conditional Heads of Agreements and other relevant agreements;

3. Discussions with management and directors of CollTech;

4. CollTech’s audited consolidated financial report for the years ended 30 June 2008, 30 June 2007 and 30 June 2006;

5. CollTech’s audit reviewed consolidated half year report for the 6 month period ended 31 December 2008;

6. Holista’s audited consolidated financial report for the years ended 31 December 2006, 31 December 2007 and 31 December 2008;

7. Pro-forma balance sheet for the merged entity for the year ended 31 December 2008;

8. CollTech’s and Holista’s internet website;

9. CollTech’s and Holista’s marketing brochures;

10. CollTech share prices and other information sourced from Reuters;

11. Listings of the top 20 shareholders of CollTech and Holista as at 22 May 2009;

12. Financial, accounting and legal due diligence reports provided by CollTech;

13. Industry information provided by Holista’s management;

14. Releases and announcements by CollTech on the ASX; and

15. Other publicly available information.

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11.2 Qualifications and independence

Grant Thornton (WA) Financial Services Pty Ltd holds Australian Financial Service Licence number 259864 under the Corporations Act 2001 and its authorised representatives are qualified to provide this Report

Grant Thornton Corporate Finance provides a full range of corporate finance services and has advised on takeovers, corporate valuations, acquisitions, and restructures. Prior to accepting this engagement, Grant Thornton Corporate Finance considered its independence with respect to CollTech and all other parties involved in the Proposed Transaction with reference to the RG 112. We concluded that there are no conflicts of interest with respect to CollTech, its shareholders and other parties involved in the Proposed Transaction.

Grant Thornton Corporate Finance and its related entities do not have at the date of this report, and have not had within the previous two years, any shareholding in or other relationship with CollTech (and associated entities) or Holista (and associated entities) that could reasonably be regarded as capable of affecting its ability to provide an unbiased opinion in relation to the Proposed Transaction.

Grant Thornton Corporate Finance has no involvement with, or interest in the outcome of the Proposed Transaction, other than the preparation of this Report.

Grant Thornton Corporate Finance will receive a fee based on commercial rates for the preparation of this Report. This fee is not contingent on the outcome of the Proposed Transaction. Grant Thornton’s out of pocket expenses in relation to the preparation of the report will be reimbursed. Grant Thornton will receive no other benefit for the preparation of this report.

11.3 Limitations and reliance on information

This report and opinion is based on economic, market and other conditions prevailing at the date of this report. Such conditions can change significantly over relatively short periods of time.

Grant Thornton Corporate Finance has prepared this report on the basis of financial and other information provided by CollTech and publicly available information. Grant Thornton Corporate Finance has considered and relied upon this information. Grant Thornton Corporate Finance has no reason to believe that any information supplied was false or that any material information has been withheld. Grant Thornton has evaluated the information provided to it by CollTech and other experts through inquiry, analysis and review, and nothing has come to our attention to indicate the information provided was materially misstated or would not afford reasonable grounds upon which to base our report. Nothing in this report should be taken to imply that Grant Thornton Corporate Finance has audited any information supplied to us, or has in any way carried out an audit on the books of accounts or other records of CollTech.

This report has been prepared to assist the independent directors of CollTech in advising CollTech’s shareholders in relation to the Proposed Transaction. This Report should not be used for any other purpose. In particular, it is not intended that this report should be used for any purpose other than as an expression of Grant Thornton Corporate Finance’s opinion as to whether the Proposed Transaction is fair and reasonable to the non-associated shareholders of CollTech.

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CollTech has indemnified Grant Thornton Corporate Finance, its affiliated companies and their respective officers and employees, who may be involved in or in any way associated with the performance of services contemplated by CollTech’s engagement letter, against any and all losses, claims, damages and liabilities arising out of or related to the performance of those services whether by reason of their negligence or otherwise, excepting gross negligence and wilful misconduct, and which arise from reliance on information provided by CollTech, which CollTech knew or should have known to be false and/or reliance on information, which was material information CollTech had in its possession and which CollTech knew or should have known to be material and which CollTech did not provide to Grant Thornton Corporate Finance. CollTech will reimburse any indemnified party for all expenses (including without limitation, legal expenses) on a full indemnity basis as they are incurred.

11.4 Consents

Grant Thornton Corporate Finance consents to the issuing of this report in the form and context in which it is included in the Notice of Meeting to be sent to the shareholders of CollTech. Neither the whole nor part of this Report nor any reference thereto may be included in or with or attached to any other document, resolution, letter or statement without the prior written consent of Grant Thornton Corporate Finance as to the form and content in which it appears.

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APPENDIX A

COMPARABLE COMPANY DESCRIPTIONS

Company	Description
Tier 1
Blackmores Ltd	Blackmores Limited is engaged in the development and marketing of health products, including vitamins, herbal and mineral nutritional
	supplements in Australia. The Company also has operations in Malaysia and Thailand, and sells through independent distributors in
	other parts of Asia and in New Zealand.
Liqua Health	Liqua Health Corporation Berhad is principally engaged in the direct selling of health food and related products through its principal
	subsidiary company, Liqua Health Marketing (M) Sdn Bhd.
Pharmaniaga Bhd	Pharmaniaga Berhad is an integrated local healthcare company, focused on pharmaceutical industry and its principal activities include
	research and development and manufacturing of generic pharmaceuticals; logistics and distribution; sales and marketing; supply of
	medical products and services, and hospital equipping to the public and private sectors. It operates in four business segments:
	pharmaceutical manufacturing, pharmaceutical trading, marketing and distribution, medical products and services, and other operations.
Tier 2
Amway Malaysia	Amway (Malaysia) Holdings Berhad is principally engaged in the distribution of consumer products under the Amway trademark. Amway
	offers a range of brands from nutritional supplements to water treatment, cosmetics to cleaning products. Amway's major brand is the
	NUTRILITE. NUTRILITE is a global vitamin and mineral brand, which grows, harvests and processes plants on their own certified
	organic farms.
CNI Hldgs	CNI Holdings Berhad is an investment holding company. Through its subsidiaries, the Company operates in four business segments:
	investment in shares and rental properties; manufacturing, trading and packaging of consumer, health and personal care products;
	multilevel marketing of healthcare and consumer products; and the operation of food and beverage outlets.
Johan Holdings	Johan Holdings Berhad is engaged in manufacturing and marketing of ceramic tiles, trading of engineering equipment, water meters,
	health foods and supplements, investment trading, management and secretarial services, provision of charge card and credit card
	services, travel and resort related business, property development, property investment and investment holding.
DXN Holdings	DXN Holdings Berhad operates in five business segments: multi-level marketing, which is engaged in the manufacture and sale of
	health supplements, and other products on a multi-level marketing basis; property development, which is engaged in housing
	developing and contracting; energy, which is engaged in the manufacture and sale of biodiesel, and other incidental products;
	investment holding, which is engaged in investment holding and provision of management services, and others, which is engaged in
	travel agency and tour operation, information technology consultancy and advisory wholesale and retail of stationeries, household items,
	gifts and accessories.
Hovid Bhd	Hovid Berhad is a Malaysia-based company engaged in the manufacturing of pharmaceutical and herbal products. The business
	segments of the Company include pharmaceutical, which includes manufacturing and selling of pharmaceutical products, and
	phytonutrient, which includes extraction and processing of nutrients from palm oil for the purpose of manufacturing and producing of
	pharmaceutical, phytonutrient and oleochemicals/biodiesel products.
Tier 3
Apex Healthcare	Apex Healthcare Berhad is a Malaysia-based company engaged in manufacturing, distribution, marketing and retailing of
	pharmaceutical products.
CCM Duopharma	CCM Duopharma Biotech Berhad is a Malaysia-based company engaged in manufacturing, distributing, importing and exporting
	pharmaceutical products and medicines. The Company exports to countries, such as Vietnam, Ethiopia, Sudan, South East Asia, Papua
	New Guinea, Pakistan, Bangladesh, Sri Lanka, Republic of Yemen, Singapore and Hong Kong. Its range of products includes tablets,
	capsules, syrup, oral antibiotic, creams, haemodialysis solution, sterile irrigation solution, sterile powder injectables, small volume
	injectables, dental cartridges and eye drop preparations.
Y S P Southeast	Y.S.P. Southeast Asia Holdings Berhad operates in three segments: pharmaceutical trading, which is engaged in import, export and
	trading in various kinds of pharmaceutical products; pharmaceutical manufacturing, which is engaged in manufacturing of
	pharmaceutical products, and other operations, which includes investment holding.

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APPENDIX B

VALUATION METHODOLOGIES

ASIC Regulatory Guide 111 provides guidance on the methodologies that an independent expert should consider when valuing a company, assets or securities for the purposes of forming an opinion as to the fairness of the Proposed Transaction pursuant to the Corporations Act.

The valuation methods are:

1. the DCF method;

2. the capitalisation of FME method;

3. comparable market transactions;

4. orderly realisation of assets; and

5. the market value of listed securities.

1. Discounted cash flow method

An analysis of the net present value of projected cash flows or DCF is a valuation technique based on the premise that the value of the business is the present value of its future cash flows. This technique is particularly suited to a business with a finite life. In applying this method, the expected level of future cash flows are discounted by an appropriate discount rate based on the weighted average cost of capital. The cost of equity capital, being a component of the WACC, is estimated using the Capital Asset Pricing Model.

Predicting future cash flows is a complex exercise requiring assumptions as to the future direction of the company, growth rates, operating and capital expenditure and numerous other factors. An application of this method generally requires cash flow forecasts for a minimum of five years.

2. Capitalisation of future maintainable earnings

The capitalisation of future maintainable earnings multiplied by appropriate earnings multiple is a suitable valuation method for businesses that are expected to trade profitably into the foreseeable future. Maintainable earnings are the assessed sustainable profits that can be derived by a company’s business and excludes any abnormal or “one off” profits or losses.

This approach involves a review of the multiples at which shares in listed companies in the same industry sector trade on the share market. These multiples give an indication of the price payable by portfolio investors for the acquisition of a parcel shareholding in the company.

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3. Comparable market transactions

The comparable transactions method is the value of similar assets established through comparative transactions to which is added the realisable value of surplus assets. The comparable transactions method uses similar or comparative transactions to establish a value for the current transaction.

Comparable transactions methodology involves applying multiples extracted from the market transaction price of similar assets to the equivalent assets and earnings of the company.

The risk attached to this valuation methodology is that in many cases, the relevant transactions contain features that are unique to that transaction and it is often difficult to establish sufficient detail of all the material factors that contributed to the transaction price.

4. Orderly realisation of assets / Net asset backing

The amount that would be distributed to shareholders on an orderly realisation of assets is based on the assumption that a company is liquidated with the funds realised from the sale of its assets, after payment of all liabilities, including realisation costs and taxation charges that arise, being distributed to shareholders.

5. Market value of listed securities

Market value is the price per issued share as quoted on the ASX or other recognised securities exchange. The share market price would, prima facie, constitute the market value of the shares of a publicly traded company, although such market price usually reflects the price paid for a minority holding or small parcel of shares, and does not reflect the market value offering control to the acquirer.

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APPENDIX C

FINANCIAL SERVICES GUIDE

1. Grant Thornton (WA) Financial Services Pty Ltd

Grant Thornton (WA) Financial Services Pty Ltd (“Grant Thornton Corporate Finance”) carries on a business at Level 1, 10 Kings Park Road, West Perth WA 6005. Grant Thornton Corporate Finance holds Australian Financial Services Licence No 259864 authorising it to provide financial product advice in relation to securities and superannuation funds to wholesale and retail clients.

Grant Thornton Corporate Finance has been engaged by CollTech Australia Limited (“CollTech” or the “Company”) to provide general financial product advice in the form of an independent expert’s report (“Report”) in relation to the proposed acquisition of 100% of the ordinary share capital of Holista Biotech Sdn Bhd (“Holista”). The Report is included in the Company’s Notice of Meeting and Explanatory Memorandum dated 29 May 2009.

2. Financial Services Guide

This Financial Services Guide (“FSG”) has been prepared in accordance with the Corporations Act 2001 and provides important information to help retail clients make a decision as to their use of general financial product advice in a report, the services we offer, information about us, our dispute resolution process and how we are remunerated.

3. General Financial Product Advice

In our Report we provide general financial product advice. The advice in our Report does not take into account your personal objectives, financial situation or needs.

Grant Thornton Corporate Finance does not accept instructions in relation to securities from retail clients. Grant Thornton Corporate Finance provides no financial services in relation to securities directly to retail clients and receives no remuneration from retail clients for financial services in relation to securities. Grant Thornton Corporate Finance does not provide any personal retail financial product advice directly to retail investors in relation to securities nor does it provide market-related advice directly to retail investors in relation to securities.

4. Remuneration

When providing the Report, Grant Thornton Corporate Finance’s client is the Company. Grant Thornton Corporate Finance receives its remuneration from the Company. In respect of the Report, Grant Thornton Corporate Finance will receive from the Company a fee based on commercial rate plus reimbursement of out-of-pocket expenses for the preparation of the Report. Our directors and employees providing financial services receive an annual salary, a performance bonus or profit share depending on their level of seniority.

Except for the fees referred to above, no related body corporate of Grant Thornton Corporate Finance, or any of the directors or employees of Grant Thornton Corporate Finance or any of those related bodies or any associate receives any other remuneration or other benefit attributable to the preparation of and provision of the Report.

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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5. Independence

Grant Thornton Corporate Finance is required to be independent of the Company in order to provide the Report. The guidelines for independence in the preparation of independent expert’s reports are set out in Regulatory Guide 112 “Independence of experts” issued by the Australian Securities and Investments Commission (“ASIC”). The following information in relation to the independence of Grant Thornton Corporate Finance is stated below.

“Grant Thornton Corporate Finance and its related entities do not have at the date of this report, and have not had within the previous two years, any shareholding in or other relationship with CollTech (and associated entities) or Holista (and associated entities) that could reasonably be regarded as capable of affecting its ability to provide an unbiased opinion in relation the Proposed Transaction.”

Grant Thornton Corporate Finance has no involvement with, or interest in the outcome of the Proposed Transaction, other than the preparation of this report.

Grant Thornton Corporate Finance will receive a fee based on commercial rates for the preparation of this report. This fee is not contingent on the outcome of the Proposed Transaction. Grant Thornton Corporate Finance’s out of pocket expenses in relation to the preparation of the report will be reimbursed. Grant Thornton Corporate Finance will receive no other benefit for the preparation of this report.

Grant Thornton Corporate Finance considers itself to be independent in terms of Regulatory Guide 112 “Independence of experts” issued by the ASIC.

6. Complaints Process

Grant Thornton Corporate Finance has an internal complaint handling mechanisms and is a member of the Financial Industry Complaints Services’ Complaints Handling Tribunal, No F-4036. All complaints must be in writing and addressed to the Chief Executive Officer at Grant Thornton Corporate Finance. We will endeavour to resolve all complaints within 30 days of receiving the complaint. If the complaint has not been satisfactorily dealt with the complaint can be referred to the Financial Industry Complaints Service who can be contacted at:

FICS PO Box 579 Collins Street West Melbourne Vic 8007 Email: fics@fics.asn.au Website: www.fics.asn.au

Grant Thornton Corporate Finance is only responsible for the Report and this FSG. Complaints or questions about the Notice of General Meeting and Explanatory Memorandum should not be directed to Grant Thornton Corporate Finance, which is not responsible for that document. Grant Thornton Corporate Finance will not respond in any way that might involve any provision of financial product advice to any retail investor.

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

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APPENDIX D

GLOSSARY

$ or A$	Australian Dollar
AASB	Australian Accounting Standard Board
Alterni	Alterni Sendirian Berhad
ASIC	Australian Securities and Investments Commission
ASX	Australian Securities Exchange
Cents	Australian Cents
CollTech	CollTech Australia Limited
Corporations Act	Corporations Act 2001
COT	Continuity of Ownership Test
DCF	Discounted Cash Flow
EBIT	Earnings before interest and tax
EBITDA	Earnings before interest, tax, depreciation and amortisation
FY	Financial year
Grant Thornton	Grant Thornton (WA) Financial Services Pty Ltd
Corporate Finance
Holista	Holista Biotech Sendirian Berhad
k	Thousands
RM	Ringgit Malaysia
NPAT	Net profit after tax
NPV	Net Present Value
NTA	Net Tangible Asset
PE	Period Ended
RG 74	ASIC Regulatory Guide 74 “Acquisitions agreed to by shareholders”
RG 111	ASIC Regulatory Guide 111 “Content of expert reports”
RG 112	ASIC Regulatory Guide 112 “Independence of expert’s reports”
sen	Malaysian Sen
SBT	Same Business Test
Total Health Concept	Total Health Concept Sendirian Berhad
Tropical Botanics	Tropical Botanics Sendirian Berhad
VWAP	Volume Weighted Average share Price
WACC	Weighted Average Cost of Capital

© 2009 Grant Thornton Australia Ltd | CollTech International Limited Independent Expert’s Report | 28 May 2009

Annexure E –Appointment of Proxy

APPOINTMENT OF PROXY

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The Company Secretary CollTech Australia Limited PO Box 1661 OSBORNE PARK WA 6916 Facsimile: (08) 9426 3909

Your details

I / We ………………………………………………………………………………………………………………………………………………................................................................... (name in full) of ..………………………………………………………………………………………………………………………………………………. ...................................................................(address in full)

Appointment of proxy

Being a member/members of CollTech Australia Limited and entitled to attend and vote hereby appoint:

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The Chairman of the meeting OR (mark with an ‘X’)

Write here the name of the person you are appointing if this person is someone other than the Chairman of the Meeting.

or failing the person named, or if no person is named, the Chairman of the Meeting, as my/our proxy to attend and act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, as the proxy sees fit) at the General Meeting of CollTech Australia Limited to be held at Claremont Yacht Club, 4 Victoria Avenue, Claremont WA 6010 on Tuesday 7 July 2009 at 10.30 am (Perth time) and at any adjournment of that meeting.

IMPORTANT

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If the Chairman of the Meeting is your nominated proxy, or may be appointed by default, and you have not directed your proxy how to vote, please place a mark in this box with an ‘X’. By marking this box you acknowledge that the Chairman of the Meeting may exercise your proxy even if he has an interest in the outcome of the resolutions and that votes cast by him, other than as a proxy holder, would be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chairman of the Meeting will not cast your votes on the resolutions and your votes will not be counted in computing the required majority if a poll is called. The Chairman of the Meeting intends to vote undirected proxies in favour of each resolution.

Voting directions to your proxy

X please mark to indicate your directions.

For Against Abstain

Resolution 1 Approval of the Transactions contemplated by the Share Sale Agreement Resolution 2 Election of Dato’ Dr M Rajen as a director Resolution 3 Change of company name Resolution 4 Consolidation of Shares and Options Resolution 5 Ratification of Share Issue

• If you mark the Abstain box for a particular item, you are directing your proxy not to vote on your behalf on a show of hands or on a poll and your votes will not be counted in computing the required majority on a poll.

Appointment of a second proxy (see instructions overleaf)

If you wish to appoint a second proxy, state the % of your voting rights applicable to the proxy appointed by this form.

PLEASE SIGN HERE

This section must be signed in accordance with the instructions overleaf to enable your directions to be implemented.

Individual or Shareholder 1 Shareholder 2 Shareholder 3 Sole Director and Sole Company Secretary Director Director/Company Secretary

_____________

SIGNATURE OF SHAREHOLDER

CollTech Australia Limited APPOINTMENT OF PROXY PAGE 2

INSTRUCTIONS FOR APPOINTMENT OF PROXY

Your details

Please insert your name and address in full.

Appointment of a proxy

If you wish to appoint the Chairman of the Meeting as your proxy, mark the box. If the person you wish to appoint as your proxy is someone other than the Chairman of the Meeting please write the name of that person. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a shareholder of the company.

Voting directions to your proxy

You may direct your proxy how to vote by placing a mark in one of the boxes opposite each Resolution. All your shareholding will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any Resolution by inserting the percentage or number of shares you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given Resolution, your proxy may vote as he or she chooses. If you mark more than one box on a Resolution your vote on that Resolution will be invalid.

Appointment of a second proxy

You are entitled to appoint up to two persons as proxies to attend the meeting and vote on a poll. If you wish to appoint a second proxy, an additional Proxy Form may be obtained by telephoning the Company Secretary on 9426 3900 or you may photocopy this form.

To appoint a second proxy you must on each Proxy Form state (in the appropriate box) the percentage of your voting rights which are the subject of the relevant proxy. If both Proxy Forms do not specify that percentage, each proxy may exercise half your votes. Fractions of votes will be disregarded. Signing instructions

You must sign this form as follows in the spaces provided:

Individual Where the holding is in one name, the holder must sign. Joint Holding Where the holding is in more than one name, all of the shareholders should sign.

Power of To sign under Power of Attorney, you must have already lodged this document with the company’s share registry. If you have not Attorney previously lodged this document for notation, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please indicate the office held by signing in the appropriate place.

If a representative of the corporation is to attend the meeting a “Certificate of Appointment of Corporate Representative” should be produced prior to admission. A form of the certificate is either attached to the Notice of Meeting or may be obtained from the company’s share registry.

Lodgement of proxy

This Proxy Form (and any Power of Attorney under which it is signed) must be received at the address given below not later than 48 hours before the commencement of the meeting. ie. no later than 10.30 am (Perth time) on 5 July 2009. Any Proxy Form received after that time will not be valid for the scheduled meeting.

This Proxy Form (and any Power of Attorney and/or second Proxy Form) may be sent or delivered to the company’s registered office at Suite 7, 41 Walters Drive, Osborne Park, Western Australia 6017, PO Box 1661 Osborne Park, Western Australia 6916 or sent by facsimile to the registered office on 08 9426 3909.

APPOINTMENT OF CORPORATE REPRESENTATIVE

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Shareholder Details

This is to certify that by a resolution of the Directors of:

………………………………………………………………………….…….….………... ( Company ), Insert name of shareholder company

the Company has appointed:

……………………..……………………………………………………………………….……….…, Insert name of corporate representative

in accordance with the provisions of section 250D of the Corporations Act 2001, to act as the body corporate representative of that company at [the meeting of the members of CollTech Australia Limited to be held at Claremont Yacht Club, 4 Victoria Avenue, Claremont WA 6010 on Tuesday 7 July 2009 at 10.30 am (Perth time) and at any adjournments of that meeting/all meetings of the members of CollTech Australia Limited.

DATED ………………………………………………………. 2009

DATED ………………………………………………………. 2009
Please sign here
Executed by the Company	)
in accordance with its constituent documents	)
	)

............................................................….………….….…..	............................................................….……………………....
Signed by authorised representative	Signed by authorised representative
............................................................………………...…..	............................................................….………………….…...
Name of authorised representative (print)	Name of authorised representative (print)
............................................................…………….…..…..	............................................................….………………..……..
Position of authorised representative (print)	Position of authorised representative (print)

Instructions for Completion

1. Insert name of appointor Company and the name or position of the appointee (eg “John Smith” or “each director of the Company”).

2. Execute the Certificate following the procedure required by your Constitution or other constituent documents.

3. Print the name and position (eg director) of each company officer who signs this Certificate on behalf of the company.

4. Insert the date of execution where indicated.

5. Send or deliver the Certificate to CollTech Australia Limited’s registered office at Suite 7, 41 Walters Drive, Osborne Park, Western Australia 6017, PO Box 1661 Osborne Park or fax the Certificate to the registered office at 08 9426 3909.