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Annual Report
2018
Table of Contents
Corporate Information
Chairman’s Letter to Shareholders
Directors’ Report
Auditor’s Independence Declaration
Corporate Governance Statement
Directors’ Declaration
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flow
Notes to the Financial Statements
Corporate Information
Summary of Significant Accounting Policies
Significant Accounting Judgements, Estimates and Assumptions
Segment Information
Revenue
Expenses
Income Tax
Earnings Per Share
Dividends Paid and Proposed
Cash and Cash Equivalents
Cash Flow Statement Reconciliation
Current Assets - Trade and Other Receivables
Current Assets – Inventories
Prepayments
Non-Current - Trade and Other Receivables
Non-Current Assets – Investments in Subsidiaries
Non-Current Assets - Plant and Equipment
Non-Current Assets - Intangible Assets
Trade and Other Payables
Current Liabilities – Unearned Income
Non-Current Liabilities - Unearned Income
Non-Current Liabilities – Provisions
Contributed Equity and Accumulated Losses
Reserves
Commitments and Contingencies
Events After Balance Date
Auditors’ Remuneration
Related Party Disclosures
Shared-Based Payments Expense
Key Management Personnel
Financial Instruments
Parent Entity Financial Information
Discontinued Operations
Legal Settlement
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Independent Audit Report
ASX Additional Shareholder Information
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CRYOSITE LIMITED – ANNUAL REPORT
Corporate Information
ABN 86 090 919 476
DIRECTORS
Mr. Bryan Dulhunty (Non-Executive Chairman)
Mr. Andrew Kroger (Non-Executive Director)
Mrs Nicola Swift (Non-Executive Director)
COMPANY SECRETARY
Mr. Bryan Dulhunty (CoSA Life Science - Corporate)
REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS
13a Ferndell Street
SOUTH GRANVILLE NSW 2142
Telephone:
Fax:
+61 2 8865 2000
+61 2 8865 2090
Email:
corporate@cryosite.com
SHARE REGISTER
Link Market Services Limited
Level 8, 580 George Street
SYDNEY NSW, 2000
Telephone:
+61 2 8260 7111
AUDITORS
Mazars Risk & Assurance Pty Limited
Level 12, 90 Arthur Street
NORTH SYDNEY NSW, 2060
Telephone:
+61 2 9922 1166
INTERNET ADDRESS
www.cryosite.com
1.
Chairman’s Letter to Shareholders
Dear Shareholders,
Cryosite Group’s financial year has been disappointing, incurring a loss before tax of $1,240,439. This loss largely
reflects the impact of the closure of part of the Company’s Cord Blood and Tissue business, the future collection,
processing and storage of cord blood and tissue, following declining demand for these services.
In June 2017, the company announced that it had entered into a binding agreement to license, under the Cryosite
brand, the future collection, processing and storage of cord blood and tissue and to sell certain cord blood and tissue
banking assets to Cell Care Australia Pty Ltd. The company received an upfront cash payment in June 2017 and the
deal was subject to shareholder and regulatory approval.
In August 2017, the company was notified by the Australian Competition and Consumer Commission (ACCC) that it
would publicly review the proposed transaction to license the future collection, processing and storage of cord blood
and tissue and to sell certain assets of its business.
In December 2017, the ACCC informed the company it had discontinued its review of the proposed transaction
between Cryosite and Cell Care without making a decision. The company noted that the ACCC was to continue to
investigate the circumstances surrounding the entry into the agreement and the closing of the Cryosite cord blood
and tissue collection operations.
The ACCC did not however confirm in writing to Cryosite that it would not oppose the transaction. This was a
condition precedent of the sale contract and therefore meant that the transaction could not proceed as the
condition was not fulfilled. The parties however had the right to waive the condition precedent under the sale
agreement.
In January 2018, Cryosite was informed by Cell Care that it was unwilling to waive its rights. Cryosite had already
indicated that it was willing to waive its rights under the sale agreement. As a direct consequence, Cryosite was
unable to complete the transaction with Cell Care.
On the 11th July 2018, the Company was notified by the ACCC that it would commence civil proceedings against
Cryosite in the Federal Court of Australia. As a result, the Company expects it will incur substantial legal costs with
the potential to incur financial penalties in the 2019 financial year.
The decision to cease the future collection and processing of cord blood and tissue required a board review of all
non-financial assets associated with that business. In October 2017, the company completed the closure of the
laboratory and departure of staff associated with the collection and processing of cord blood and tissue. As a
consequence of the business closure, subsequent write downs and legal costs related to the ACCC action, the
residual business result was a post-tax loss from discontinued operations of $995,743.
Following the closure of the future collection, processing and banking of cord blood and tissue samples in financial
year 2018, the Company now has two operating segments.
•
•
Cord Blood and Tissue Storage for existing clients under long term contracts; and
Logistics management of pharmaceutical products used in clinical trials and biological materials
Cord Blood and Tissue Storage
Cord Blood and Tissue Storage under long term contracts: The Company continues to provide long term storage for
existing clients of their Cord Blood and Tissue samples under both long- term contracts and annual contracts.
2.
2
Chairman’s Letter to Shareholders
Chairman’s Letter to Shareholders
This segment will be significantly impacted by the introduction on 1st July 2018 of a new accounting standard AASB
This segment will be significantly impacted by the introduction on 1st July 2018 of a new accounting standard AASB
15 relating to the recognition of revenue.
15 relating to the recognition of revenue.
A requirement of this standard requires the balance sheet of the company to be restated as if this accounting
A requirement of this standard requires the balance sheet of the company to be restated as if this accounting
standard was always in effect. Full details of the effect of this standard and a proforma balance sheet are set out in
standard was always in effect. Full details of the effect of this standard and a proforma balance sheet are set out in
Note 2 to the accounts. All adjustments are non-cash and all adjustments are expected to reverse over the period
Note 2 to the accounts. All adjustments are non-cash and all adjustments are expected to reverse over the period
of the contracts.
of the contracts.
The initial effect of the introduction of this standard will be to reduce the Net Assets of the Company by
The initial effect of the introduction of this standard will be to reduce the Net Assets of the Company by
approximately $2million on the 1st July 2018. In the 12 months ending 30 June 2019, it will result in the Company
approximately $2million on the 1st July 2018. In the 12 months ending 30 June 2019, it will result in the Company
booking an accounting (non- cash) net profit from the storage of Cord Blood and Tissue under long term contracts
booking an accounting (non- cash) net profit from the storage of Cord Blood and Tissue under long term contracts
of approximately $600,000 after tax.
of approximately $600,000 after tax.
Logistics management of pharmaceutical products used in clinical trials and biological materials
Logistics management of pharmaceutical products used in clinical trials and biological materials
The company sees and has identified significant opportunities to further build on its expertise in long term cold,
The company sees and has identified significant opportunities to further build on its expertise in long term cold,
frozen and cryogenic storage, logistics and distribution.
frozen and cryogenic storage, logistics and distribution.
The company executed the infrastructure investments foreshadowed in the 2017 annual report by acquiring new
The company executed the infrastructure investments foreshadowed in the 2017 annual report by acquiring new
alarm and monitoring systems and upgrading the air conditioning systems for our storage facilities and by acquiring
alarm and monitoring systems and upgrading the air conditioning systems for our storage facilities and by acquiring
and commencing the implementation of new technology platform.
and commencing the implementation of new technology platform.
The company further continued to execute on a strategy of expansion and investment. There has been capital
The company further continued to execute on a strategy of expansion and investment. There has been capital
investment in a refurbishment at our South Granville headquarters to add additional processing capacity for
investment in a refurbishment at our South Granville headquarters to add additional processing capacity for
individual client specific solutions. The company has developed and launched a “green” reusable packaging solution
individual client specific solutions. The company has developed and launched a “green” reusable packaging solution
for its clients. The “Credo Shipper” is a reusable passive thermal container which has allowed the company to offer
for its clients. The “Credo Shipper” is a reusable passive thermal container which has allowed the company to offer
a sustainable reusable cold chain packaging solution that lessens their carbon footprint and reduces waste.
a sustainable reusable cold chain packaging solution that lessens their carbon footprint and reduces waste.
At the start of the 2019 financial year, as a result of a client consolidating their warehousing and logistics
At the start of the 2019 financial year, as a result of a client consolidating their warehousing and logistics
management of a commercial scale product with an international distribution business, we expect to see a significant
management of a commercial scale product with an international distribution business, we expect to see a significant
negative impact in revenue and profits in the first half of the year. However, as a result of the Company’s investment
negative impact in revenue and profits in the first half of the year. However, as a result of the Company’s investment
in 2018 in additional staff, marketing and infrastructure we expect the Company will replace these lost sales by the
in 2018 in additional staff, marketing and infrastructure we expect the Company will replace these lost sales by the
end of the financial year.
end of the financial year.
Clearly 2019 will be a challenging year for the Company, however the Company expects to end the year with a clear
Clearly 2019 will be a challenging year for the Company, however the Company expects to end the year with a clear
focus and a profitable and growing clinical trial logistic business supported by the long-term storage Cord Blood and
focus and a profitable and growing clinical trial logistic business supported by the long-term storage Cord Blood and
Tissue contracts.
Tissue contracts.
Your faithfully
Yours faithfully
Bryan Dulhunty
Bryan Dulhunty
Chairman
Chairman
3
3
3.
Directors’ Report
The directors present their report together with the financial statements on the consolidated entity (the Group)
consisting of Cryosite Limited (the Company) and the entity it controlled for the year ended 30 June 2018.
DIRECTORS
The following persons were non-executive directors of Cryosite Limited during the whole of the financial year
and up to date of this report unless otherwise stated:
Mr. Bryan Dulhunty (Chairman) - appointed 2/3/2018
Mr. Andrew Kroger
Mrs. Nicola Swift
Mr. Stephen Roberts – resigned 2/3/2018
Names, qualifications, experience, interests and special responsibilities
Bryan Dulhunty, BEc, CA
Mr. Dulhunty brings a wealth of life science experience to the position having been involved in the industry for the
past 20 years. Mr. Dulhunty provides a range of consulting services to the life science industry. Mr. Dulhunty has
served as a director of a number of listed ASX and non-listed life science companies, including holding the positions
of Executive Chairman and Managing Director of Viralytics Ltd from 2005 to 2012. Mr. Dulhunty is a Chartered
Accountant and holds an Economics Degree from Sydney University. Mr. Dulhunty was appointed to the Board on
2nd March 2018.
Interest in shares at date of report
30,0000
Special responsibilities
Chairman of the Company
Chair of the Audit and Risk Committee
Company Secretary
Mr. Andrew Kroger, BEc. LLB, Non-Executive Director
Mr. Kroger has had a career in stockbroking, law and general management including two years running Forsayth
Group in 1990 which was Australia’s ninth largest gold producer at that time. Mr. Kroger is the owner of Process
Wastewater Technologies LLC, a company with its major business being in wastewater in the United States. Mr.
Kroger has a Bachelor of Economics and a Bachelor of Laws from Monash University. Mr. Kroger was appointed to
the Cryosite Limited board in November 2011.
Interest in shares at date of report
17,315,291
Special responsibilities
None
4.
4
Directors’ Report continued
Mrs. Nicola Swift, BA (Mod) Legal Science, MA, CFA, GAICD, Non-Executive Director
Mrs. Swift has an extensive background in the international investment management and securities industry as a
research director, portfolio manager and equity analyst. She has over 16 years of experience gained in London,
Sydney and Boston with various global institutional investors. Mrs Swift is a Chartered Financial Analyst, a graduate
of the Australian Institute of Corporate Directors and holds an Honours Law degree and a Masters of Arts from Trinity
College Dublin. She is also a Director of Ascham Foundation Ltd and Ascham School Ltd. Mrs. Swift was appointed to
the Board on 3 November 2016.
Interest in shares at date of report
Nil
Special responsibilities
Chair of the Remuneration and Nominations committee
COMPANY SECRETARY
Bryan Dulhunty, BEc, CA
Company Secretarial Services for Cryosite Limited are provided by CoSA Life Science - Corporate, a Company
Secretarial firm specialising in the Life science industries.
EARNINGS PER SHARE
Basic earnings per share
Diluted earnings per share
DIVIDENDS
(2.65) cents
(2.61) cents
(2017: 0.48 cents)
(2017: 0.48 cents)
No dividends were paid during the financial year.
The total dividends declared were $nil (2017: $468,567).
PRINCIPAL ACTIVITIES
The company’s principal activities are the provision of long term storage, supply chain logistics management of
pharmaceutical products used in clinical trials and biological materials.
Cryosite operates through two operating segments:
Cord Blood and Tissues Storage (formerly Individualised Consumer Biologics)
This business provides long term storage for cord blood and tissue samples.
Clinical Trials Logistics & Biorepository (formerly Scientific Processing and Logistics)
This business includes biorepository services, clinical trials logistics, commercial drug distribution and the other
storage and distribution based services including the importation and distribution of laboratory diagnostic
products.
It should be noted that previously biorepository services where include in Individualised Consumer Biologics
and has been moved to this segment as is more aligned to this part of the business.
5
5.
Directors’ Report continued
REVIEW OF OPERATIONS
Operating profit from both our operating segments decreased during the year and were offset by reductions in
overheads resulting in total net operating profit for continuing operations before interest and tax (NPBIT) increasing
to $259,441 (2017: $(89,986)). During the year the Group incurred a number of one off costs being:
-
-
-
Discontinued operations loss after tax of $995,743 driven by costs associated with the closure of the
laboratory
Costs of $169,416 (post tax) associated with the settlement of a legal matter
Income tax expense was impacted by an additional $269,866 due to decision not to recognize losses
After taking this all into account the Group posted an overall profit (loss) after tax of $(1,240,439). (2017:225,100).
Financial Performance
2018
2017
% Change
Cord Blood and Tissue Storage
Revenue
Operating expenses*
Net operating profit (NOP) before overheads
% NOP/ Revenue
Clinical Trials & Biorepository
Revenue
Operating expenses*
Net operating profit (NOP) before overheads
% NOP/ Revenue
Total Revenue from continuing operations
Total Net operating profit (NOP) before overheads
Overheads*
Total Net operating profit (loss) for continuing operations
before interest and tax (NPBIT)
% NPBIT/Total Revenue
Interest revenue
Income tax expense (excluding tax losses not recognised)
Net Profit (loss) after tax for continuing operations before
non-recurring items
Non-recurring
Legal Settlement net of tax
Discontinued Operations net of tax**
Income tax expense attributable to tax losses not recognised
Statutory profit (loss) after tax
* includes depreciation and amortisation
**2017 results included an upfront non-refundable amount of $500,000 in respect
to the sale agreement with Cell Care Australia Pty Ltd.
553,313
423,815
129,498
23%
5,310,826
2,918,120
2,392,706
45%
5,864,139
2,522,204
2,262,763
259,441
4%
58,926
123,781
194,586
(169,416)
(995,743)
(269,866)
(1,240,439)
626,668
489,823
136,845
22%
5,187,453
2,571,244
2,616,209
50%
5,814,121
2,753,054
2,843,041
(89,986)
-2%
69,232
2,699
-12%
-13%
-5%
2%
13%
-9%
1%
-8%
-20%
-388%
-15%
4487%
(23,453)
-930%
(118,656)
367,209
0
225,100
43%
-371%
100%
-651%
Please note: Financial results have been presented to show separately the impact of discontinued operations and
settlement of a legal matter. Prior year numbers have been restated to reflect this disclosure.
6.
6
Directors’ Report continued
Cord Blood and Tissue Storage
During the year, this segment has undergone significant changes which will continue to evolve into the future.
Operational Changes
As previously disclosed in the 2017 Annual Report, the Company ceased the future collection and processing of cord
blood and tissue as the demand for these services had declined and this segment of our Cord Blood and Tissue
business had experienced downward pressure on profitability. Final closure of the laboratories and the departure of
associated staff occurred during the 2018 financial year. Operationally this resulted in the termination of operations
associated with collection and processing of cord blood and tissue samples. (“Discontinued Operations”). The
remaining business (“Cord Blood and Tissue Storage”) now operates solely as a long-term storage facility for cord
blood and tissues samples previously deposited by past customers. Financial performance of these operations are
noted below.
Cord Blood and Tissue Storage
This business provides long term storage for cord blood and tissue samples.
It comprises of two revenue streams being:
-revenue from previous annual plans which are still being invoiced annually until the end of their contracts and
-revenue brought to account from unearned income. In prior years customers paid upfront for the entire contract
which gave rise to unearned income. Each year the company brings to account a portion of this unearned income as
revenue.
Revenue decreased by 12% during the year due to no new annual plans being written in 2018. The majority of
operating expenses relate to the maintenance of the tanks where the samples are stored. These expenses are lower
in line with revenue changes resulting in stable 23% Net operating profit before overheads (2017:22%). Given there
will be no new samples stored in the future, over time we would expect these costs to remain relatively stable.
Discontinued Operations
In October 2017, the Company completed the closure of the laboratory and departure of staff associated with the
future collection and processing of cord blood and tissue.
As a consequence of the business closure, subsequent write downs and legal costs, the residual business result was
a post-tax loss from discontinued operations of $ (995,743). (2017:367,209). Costs included an impairment loss
($555,586), redundancies ($182,527) and related legal costs ($220,673). It should be noted that the positive result
of 2017 included an upfront non-refundable amount of $500,000 in respect to the sale agreement with Cell Care
Australia Pty Ltd.
Financial details are outlined in note 32.
Adoption of Accounting Standard AASB 1015
On the 1st July 2018, the Company will adopt Accounting Standard AASB 15 – Recognition of Revenue. While this
will not impact the 2018 results, there will be some significant impact on future results of the Cord Blood and Tissue
Storage, as the standard changes the timing and recognition of revenue and associated costs of long-term contracts.
Due to this change we expect to book an accounting (non-cash) net profit from the storage of Cord Blood and Tissue
under long term contracts of approximately $600,000 after tax for the year ended 30th June 2019. We will
continue to book accounting (non-cash) net profits in the future as the contracts expire over time.
7
7.
Directors’ Report continued
There is no impact on cash and all adjustments are expected to reverse over the period of the contracts.
It should be noted that at a Group level the initial effect of the introduction of this standard will be to reduce the
net assets of the Company by $2 million on the 1st July 2018
Full details of this adoption are outlined in the Note 2 – Summary of Significant Accounting Policies.
Clinical Trials Logistics & Biorepository
The Board re-affirms its decision to provide investment to grow the clinical trial logistics and biorepository services
segment. This segment posted a net operating profit (NOP) before overheads of $2,392,706 (2017: $2,616,209).
This segment’s revenue grew marginally by 2% over the last 12 months due to change in mix and volume of across
our customer base. As outlined in the 31 December 2017 half year report, the Company continues to execute a
strategy of expansion and investment in this segment which has resulted in operating expenses growing 13% over
the year. Investments include:
-the launching of “green” reusable packaging solution called the “Credo Shipper”. This has allowed the Company to
offer a sustainable reusable cold chain packaging solution that lessens our and our clients' carbon footprint and
reduces waste. This offering has been received positively by our clients
-establishment of a marketing and business development function to focus on growing this segment. Investment
included attending the global Biotech conference in the US for the first time to help build our brand and network
acquisition and implementation of a new technology platform to improve customer service and operational
efficiencies.
At the start of the 2019 financial year a large contract was not renewed due to the customer’s global strategy to
consolidate its warehousing within Australia. This is expected to result in a significant decrease in revenue and profits
in the first half of the year. However long term we believe that there are significant opportunities to further build
on our expertise in long term cold, frozen and cryogenic storage, logistics and distribution growth. As such the Board
is confident that these lost sales will be recovered through the ongoing investment in sales and marketing which is
focused on attracting new customers, new clinical trials and expanding product offerings. Further we expect to see
increased efficiencies on the back of our investment into a new technology platform.
Overheads
There is a high focus on streamlining the overheads of the business. In 2018, these were reduced by 20% reflecting
the smaller business as a result of the discontinued operations. The Board will continue to monitor these costs
closely to ensure that business is appropriately leveraged with the right amount of overheads in respect to
revenue.
Income tax expense
During the year the Board decided not to recognize any tax losses going forward. While the Board remains positive
about the future of the business, it felt that at this stage of its development it was more prudent not to recognize
these tax losses. The Board will reassess this position periodically.
Legal Settlement
As noted in 2017, a former Director and former employee made a claim for an additional payment of statutory
entitlements and a separate claim for an additional termination entitlement. During the year this matter was
settled which resulted in settlement, net of tax of $169,416 (2017: $118,656). Details are outlined in note 33.
8
8.
Directors’ Report continued
Cash Position
Cash on hand decreased by $401,007 during the year resulting in a year end balance of $4,688,104 (2017:
$5,089,110). The key cashflows movements were:
Net cashflow from operating activities
Net cashflow from operating activities decreased by $(261,906) (2017: $1,626,789) driven by number of different
factors as outlined below:
Net cashflow from operating activities
Net cashflows from continuing operations
Receipts from customers inclusive GST
Payments to suppliers and employees inclusive of GST
Interest received
Net cashflows from continuing operations
2018
2017
6,491,913
(6,278,320)
7,193
220,786
6,751,204
(5,346,807)
5,180
1,409,577
Net cashflows from discontinued operations
Receipts from customers inclusive GST*
Payments to suppliers and employees inclusive of GST
Net cashflows from discontinued operations
1,227,112
(877,255)
349,857
4,078,691
(3,691,971)
386,720
Other cashflows
Investment in new technology platform
Legal Settlement
(438,873)
(393,676)
0
(169,508)
Net cashflows from operating activities
*2017 includes an upfront non-refundable amount of $500,000 in respect to the sale agreement with
Cell Care Australia Pty Ltd
(261,906)
1,626,789
Cashflow from operating activities within continuing operations was positive $220,786 but lower than 2017 as result
of timing associated with supplier payments and investment in business development and marketing. Cashflows
from operating activities within discontinued operations in 2018 remained positive.
Net Cash from investing activities
During the year the Company invested capital $180,781 into a number of initiatives to upgrade our operations
facilities and equipment including:
-refurbishment at our South Granville operations to add additional processing capacity
-new alarm and monitoring systems to improve monitoring of facilities
-upgrading the air conditioning systems for our storage facilities
It is expected that these initiatives will enhance our quality of services and increase efficiency within operations.
9
9.
Directors’ Report continued
Australian Competition and Consumer Commission (“ACCC”) & Proposed Sale
In June 2017, the Company announced that it had entered into an agreement to license, under Cryosite brand, the
collection, processing and storage of umbilical cord blood and tissue and to sell certain cord blood and tissue
banking assets (“Transaction”) to Cell Care Australia Pty Ltd (“Cell Care”). The Company received an upfront cash
payment in June 2017 and the deal was subject to shareholder and regulatory approval.
In August 2017, the Company was notified by the ACCC that it would publicly review the proposed transaction. In
December 2017, the ACCC informed the Company it had discontinued its review of the proposed transaction
between Cryosite and Cell Care without a decision.
The ACCC did not however confirm in writing to Cryosite that it would not oppose the transaction. This was a
condition precedent of the sale contract and therefore meant that the transaction could not proceed as the
condition was not fulfilled. The parties however had the right to waive this condition precedent under the sale
agreement.
In January 2018, Cryosite was informed by Cell Care that it was unwilling to waive their rights. Cryosite had, already,
indicted that it was willing to waive its rights under the sale agreement. As a direct consequence, Cryosite was
unable to complete the transaction with Cell Care.
On the 11th July 2018, the Company was notified by the ACCC that it would commence civil proceedings against
Cryosite in the Federal Court of Australia.
As a result of the action by the ACCC, the Company expects it will incur substantial legal costs with the potential to
incur financial penalties in the 2019 financial year.
EMPLOYEES
The Company employed 23 full-time equivalent employees as at 30 June 2018 (2017: 37 employees).
The Company recognises the value of diversity in the workplace and is committed to providing equal opportunity for
all its staff with 62% of current employees being female. There are numerous religions and cultures and where
possible offer flexible work practices and work life balance as a key retention tool. Cryosite is committed to providing
a workplace free from any form of harassment, bullying and discrimination.
In January 2018, the board appointed Mark Byrne as CEO. Mark had previously held the position of Company CFO
since June 2016 and interim CEO since June 2017.
PERFORMANCE RIGHTS PLAN
In February 2017, the Cryosite Employee Incentive Plan (CEIP) was introduced to assist with the attraction, retention
and motivation of Key Management Personnel to strengthen their alignment with shareholder interests. This plan
was ratified at the 2017 AGM.
As at the date of this report, there were 1,009,249 (2017: 211,002) unissued ordinary shares under the CEIP. Please
refer to the remuneration report for further details. The circumstances under which a Key Management Personnel
is entitled to retain these performance rights if he or she should leave the Company before the vesting date is
controlled by the terms of the CEIP and is at the discretion of the Board.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
As previously disclosed in the 2017 Annual Report, the Company ceased the future collection and processing of cord
blood and tissue as the demand for these services had declined and this segment of our Cord Blood and Tissue
10
10.
Directors’ Report continued
business had experienced downward pressure on profitability. Final closure of the laboratories and the departure of
associated staff occurred during the 2018 financial year.
Other than detailed in the above there were no significant changes in the state of affairs of the Group during the
year.
SIGNIFICANT EVENTS AFTER THE BALANCE DATE
On the 11th July 2018, the Company was notified by the ACCC that it would commence civil proceedings against
Cryosite in the Federal Court of Australia.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
As noted above the ACCC has commenced proceedings against Cryosite. As a result, the Company will incur
substantial legal costs in the 2019 financial year. However, the Board expects to end the 2019 financial year with a
clear focus on a growing clinical trial logistics and biorepository business supported by the long-term storage of cord
blood and tissue for existing clients.
ENVIRONMENTAL REGULATIONS
The Company provides a range of services that require compliance to a variety of regulatory and statutory bodies,
including the Therapeutic Goods Administration (TGA), the Department of Agriculture, Fisheries and Forestry (DAFF),
the NSW Department of Health, and the Office of the Gene Technology Regulator (OGTR). Additionally, the Company
must comply with the quality system requirements of many of its customers. The Company has implemented a
Company-wide quality management system to ensure that it meets or exceeds the requirements of all these
interests. During 2018 Cryosite held accreditation for ISO 15189 (Medical Laboratories) from the Australian National
Association of Testing Authorities (NATA) which was not renewed in August 2018.
There have been no significant known breaches of the consolidated entity’s licence conditions or any regulations to
which it is subject. The Company, to the best of its knowledge, is not subject to any specific environmental
regulations.
BUSINESS RISKS
Most of the services that Cryosite provide to generate income require some form of statutory licensing or compliance
authority. The failure by Cryosite to attain and maintain such licences and approvals would have a significant negative
effect on the Company’s ability to continue to provide such services and to maintain its viability. As referred to in
other parts of this report, Cryosite is committed to mitigating risks in this area by the implementation and
maintenance of a Company-wide Quality Management System.
INSURANCE OF DIRECTORS AND OFFICERS
The Company has paid a premium in respect of a contract insuring all the Directors and Officers against liability,
except willful breach of duty, of a nature that is required to be disclosed under section 300(8) of the Corporations
Act 2001. In accordance with commercial practice, further details of the nature of the liabilities insured against and
the amount of the premium have not been disclosed.
In addition to the above, the Directors and certain Officers of the Company have entered into a Deed of Indemnity
and Access confirming the Company’s obligation to maintain an adequate Director and Officer Liability insurance
policy and confirming the individual Directors’ and Officers’ right to access board papers and other Company
documents. In return, the individual Directors and Officers have agreed to allow the Company to conduct the defence
should the event arise.
11
11.
Directors’ Report continued
The Company has not otherwise, during or since the end of the financial year, indemnified or agreed to indemnify
an Officer or Auditor of the Company or of any related body corporate against a liability incurred as such an Officer
or Auditor.
REMUNERATION REPORT (Audited)
This remuneration report outlines the director and executive remuneration arrangements of the Company and the
Group in accordance with the requirements of the Corporations Act 2001 and Regulations. For the purposes of this
report, key management personnel (KMP) of the Group are defined as those persons having authority and
responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or
indirectly, including any director (whether executive or otherwise) of the parent Company, and includes the two
executives in the Parent and the Group receiving the highest remuneration.
This has been audited by Mazars Risk & Assurance Pty Limited and is included within the scope of the audit report
on pages 75 to 80.
Key Management Personnel
Details of the nature and amount of each element of remuneration for key management personnel of the Company
which includes those key management personnel receiving the highest compensation for the financial year are as
follows: -
Mr. Bryan Dulhunty
2/3/2018)
Mr. Andrew Kroger
Mrs. Nicola Swift
Mr. Mark Byrne
Mr. Stephen Roberts
Non-Executive
Chairman
(appointed
Non-Executive Director
Non-Executive Director
Chief Executive Officer
Non-Executive Director (resigned 2/3/2018)
On 17th January 2018, the board appointed as the Company’s CEO, Mark Byrne. Mark had previously held the position
of Company CFO since June 2016 and interim CEO since June 2017 on the resignation of former CEO Andrew Shine.
Due to the relatively small number of employees, apart from Mark Byrne, there were or are no other executives
having authority and responsibility for planning, directing and controlling the activities of the entity either directly
or indirectly during the current year.
The role of the Nominations and Remuneration Committee
While the Board maintains the authority and responsibility for the oversight of the Company’s remuneration policy
and the principles and processes which underpins the policy, on 9 December 2016, the Board established a
Nominations and Remuneration committee to provide advice and recommendations to the Board
•
•
on the structure and level of remuneration for the directors, senior executives and Company secretary
on the design and award of all executive incentive plans
The members of the committee are independent non-executive directors, Mrs. Nicola Swift (Chair) and Mr. Bryan
Dulhunty.
Use of external remuneration consultants
As necessary the Nominations and Remuneration Committee obtained independent external recommendations and
advice from Crichton and Associates Pty Ltd on matters including the design of a long-term incentive plan for
employees, its implementation and management. No remuneration recommendations as defined in section 9B of
12
12.
Directors’ Report continued
the Corporations Act 2001 were received from Crichton and Associates Pty Ltd during this time period.
Crichton and Associates Pty Ltd were paid $4,451.17 for services including the management of the Cryosite Employee
Incentive Plan (CEIP).
Remuneration philosophy
The Company recognises the importance of structuring remuneration packages of its key management personnel so
as to attract and retain people with the qualifications, skills and experience to help the Company achieve the required
objectives. However, the Company understands that a prudent position must be observed in the total remuneration
expense.
Non-Executive Directors
Cryosite has two non-executive directors and a non-executive Chairman. The remuneration of non-executive
directors including the non-executive Chairman consists of fixed annual fees exclusive of statutory superannuation
as below. Apart from reimbursement of expenses incurred on the Company’s behalf, non-executive directors are not
eligible for any additional payments.
Chairman of the Board: $75,000 per annum
Non-Executive Directors: $60,000 per annum
Performance based compensation is not part of the remuneration structure offered to non-executive directors. No
performance rights or options are held by any non-executive director.
Total remuneration paid to non-executive directors is determined by the Board from time to time for presentation
to and resolution by shareholders at the Annual General Meeting. The current maximum aggregate remuneration
paid to non-executive directors is $350,000 per year. During 2018 total aggregate remuneration paid to non-
executive directors was $238,114.
Executive Remuneration
Key management personnel (other than non-executive directors) are employed on standard contracts which include
a three month notice.
The Company may terminate the employee's contract without notice if serious misconduct has occurred. Where
termination with cause occurs, the executive is only entitled to that portion of remuneration that is fixed, and only
up to the date of termination. On termination with cause, any performance rights that have granted but not vested
will be forfeited.
The Company does compare remuneration paid to key management personnel with other similar companies to
ensure consistency.
Executive total remuneration consists of the following components:
Fixed Remuneration
This comprised of a fixed base salary and statutory superannuation. This is reviewed annually although there is no
guaranteed increase.
13
13.
Directors’ Report continued
Performance Based Compensation
Short Term Incentive Plan (STIP)-2017
During 2017, the Company established a short-term incentive plan for its key executives. This plan provides the
opportunity for executives to earn a short-term incentive inclusive of superannuation as an annual bonus if certain
individual and Company-wide key performance indicators (KPIs) are met within the financial year.
The following Key Management Personnel were entitled to the following % of their total fixed remuneration as a
short-term incentive opportunity for 2017:
Andrew Shine
Mark Byrne
30%
20%
Each year the Board will determine the KPIs to be set. At the end of the year, upon receipt of audited financials,
the board will review the results against these KPIs and approve bonuses that are appropriate. Bonuses will be paid
within 1 month of the announcement to the result to the Australian Stock Exchange.
Executives need to be employees at the time of payment.
In 2017, EBITDA was set as the KPI for calculation of these bonuses. It was scaled up to a maximum 100% payout if
EBITDA achieved a certain target. In 2017, no bonuses under the Short Term Incentive Plan were paid for the 2017
year.
2018 Bonus
Due to the significant challenges facing the Company in 2018, no formal STIP plan was put in place. However, the
Board has awarded limited discretionary bonuses to executives on a reasonable basis, taking into account the
Company’s financial performance, in recognition of the efforts undertaken by the individuals.
Long Term Incentive Plan : Cryosite Employee Incentive Plan (CEIP)
On the 23rd February 2017, the Cryosite Employee Incentive Plan (CEIP) was established by the Company. On
invitation, the CEIP provides executives the opportunity to receive a long-term equity based incentive, currently a
grant of performance rights, in each financial year. The issue and granting of these performance rights is governed
by the CEIP Plan Rules.
The annual grant value, subject to shareholder approvals, is defined as a % of fixed remuneration or as otherwise
agreed. The following %’s of fixed remuneration were used in determining the grant value for each executive. The
grant value was converted into the number of performance rights to be issued using the WVAP of Cryosite shares in
the 30 trading days following the release of the Annual Report.:
Andrew Shine
Mark Byrne
2018 2017
30%
-
30% 20%
The following components of the CEIP are as follows;
Vesting date
Vesting conditions
Performance conditions
Up to 36 months from date of grant.
Performance rights will only vest after certain performance and conditions are
met.
Compound Annual Growth Rates (CAGR) of the Earnings per Share (EPS)
over measurement period need to be achieved from a base year.
14
14.
Directors’ Report continued
Service conditions
Expiry date
Exercise of Rights
Continuous employment with Cryosite from the date of the performance
rights are granted until the vesting date.
Performance rights will expire 1 month after the vesting date
Any Performance rights which meet the Vesting conditions will be available
for exercise up until the Expiry date.
Summary of Performance Rights granted
The board has granted performance rights to the following key management personnel:
Andrew Shine
Mark Byrne
No of Performance Rights
2018
0
503,944
503,944
2017
359,663
211,002
570,665
Balance granted as at 1st July 2016
Performance Rights granted 27/2/2017
Performance Rights cancelled*
Balance granted as at 30th June 2017
Performance Rights granted 27/11/2017
Performance Rights granted 7/2/2018
Balance granted as at 30th June 2018
*cancelled when Andrew Shine resigned on 30 June 2017
Conditions of Performance Rights
Andrew Shine Mark Byrne
No
0
359,663
(359,663)
0
0
0
0
No
0
211,002
0
211,002
295,647
208,297
714,946
Total
No
0
570,665
(359,663)
211,002
295,647
208,297
714,946
Grant date
Vesting date
Expiry date
Period
Base Year
Basic EPS
Measure
Targets
CAGR of EPS over
measurement
Period relative to
base year
Grant Date
< 20%
20% to 25%
>25%
27 February 2017
1 September 2019
30 September 2019
7th February 2018
27 November 2017
1 September 2020
1 September 2020
30 September 2020
30 September 2020
1/7/2017 to
1/7/2017 to
1/7/2016 to 30/6/2019
30/6/2020
30/6/2020
2016
2017
2017
0.64 cents
0.48 cents
0.48 cents
Earnings per Share (EPS) Compound Annual Growth Rate (CAGR)
27-Feb-17
< 1.10592
1.105592 to 1.25
>1.25
EPS (cents)Target per
plan
27-Nov-17
<0.83
0.83 to 0.94
>0.94
7-Feb-18
<0.83
0.83 to 0.94
>0.94
Percentage of
Performance
Rights that vest
0%
50-100% (pro-rata)
100%
15
15.
Directors’ Report continued
As at 30 June 2018, no performance rights had vested. Assumptions used to determine fair value of performance
rights are outlined in Note 29.
COMPENSATION FOR KEY MANAGEMENT PERSONNEL 2018
Short
Term
Benefits
Salary &
Fees
$
Other
Cash
benefits
$
Post
employment
benefits
Super-
annuation
$
Other
long
term
benefits
Long
service
Share
based
payments
Total
% share
based
payments
%
performance
based
leave Rights (3)
$
$
$
%
%
Year Ended 30 June 2018
Non-Executive Directors
Andrew Kroger
60,000
-
5,700
-
-
65,700
Brian Dulhunty (1),(2)
-
51,375
-
-
-
51,375
Nicola Swift
Stephen Roberts (1)
Subtotal: Non-Executive
Directors
Other Key management
personnel
60,000
50,538
-
-
5,700
4,801
170,538
51,375
16,201
Mark Byrne (4)
226,026
20,000
21,472
Subtotal Executive KMP
226,026
20,000
21,472
Total
396,564
71,375
37,674
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
65,700
-
55,339
- 238,114
31,740
299,239
31,740
299,239
11%
11%
17%
17%
31,740
537,353
6%
10%
(1) Where directors or key personnel resigned or were appointed during the year payments shown above are for the period
served
(2) This includes payments made to COSA Pty which is owned by Bryan Dulhunty. During the year the company charged
the Company $24,000 for company secretarial services and $27,375 in respect to services provided by Bryan Dulhunty
as a director of the company from 2nd March 2018.
(3) This relates to the fair value of performance rights granted under the Cryosite Employee Incentive Plan (CEIP)
(4) Other cash benefits relates to a discretionary bonus accrued by the Board to be paid in 2019 as recognition of the efforts undertaken
by the individual in 2018
16.
16
Directors’ Report continued
COMPENSATION FOR KEY MANAGEMENT PERSONNEL 2017
Year Ended 30 June 2017
Non-Executive Directors
Andrew Kroger
Nicola Swift (1)
Stephen Roberts
Subtotal: Non-Executive
Directors
Executive directors
Graeme Moore (1)
Other Key management
personnel
Andrew Shine (4)
Mark Byrne
Short
Term
Benefits
Salary
& Fees
$
60,000
40,000
73,653
173,653
142,649
224,657
193,185
Subtotal Executive KMP
417,842
Total
734,144
Post
employment
benefits
Super-
annuation
$
Other
Cash
benefits
(2)
$
Share
based
payments
Total
% share
based
payments
%
performance
based
Other
long
term
benefits
Long
service
leave Rights (3)
$
$
$
%
%
-
-
-
-
-
-
-
-
-
5,700
3,800
6,997
16,497
-
-
-
-
- 65,700
- 43,800
- 80,650
- 190,150
15,767
23,316
- 181,732
22,297
18,353
40,649
-
-
-
8,677
255,631
5,091
216,629
13,768
472,259
72,913
23,316
13,768 844,141
-
-
-
-
-
3%
2%
3%
2%
-
-
-
-
-
3%
2%
3%
2%
(1) Where directors or key personnel resigned or were appointed during the year payments shown above are
the period served.
(2) This includes payments made under the Short Term Incentive Plan (STIP) which was established on the 23rd February 2017
(3) This relates to the fair value of performance rights granted under the Cryosite Employee Incentive Plan (CEIP)
(4) Andrew Shine resigned on the 30th June 2017 and his performance rights were cancelled on that date.
17
17.
Directors’ Report continued
SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL
Shares held in
Cryosite Limited
Bryan Dulhunty
Andrew Kroger
Stephen Roberts *
Shares held in
Cryosite Limited
Andrew Kroger
Stephen Roberts*
*resigned 2/3/2018
Balance 1st July 2017
Ord
Balance on
appointment /
(resignation)
Ord
Share purchases
Ord
Balance 30 June
2018
Ord
30,000
16,016,906
669,519
16,716,425
-
30,000
0
(967,662)
937,662
-
1,298,385
298,143
1,596,528
30,000
17,315,291
-
17,345,291
Balance 1st July 2016
Ord
13,316,906
644,873
13,961,779
Balance on
appointment /
(resignation)
Ord
share purchases
Ord
Balance 30 June
2017
Ord
-
-
-
2,700,000
24,646
2,724,646
16,016,906
669,519
16,686,425
LOANS TO KEY MANAGEMENT PERSONNEL
There were no loans to key management personnel at the beginning of the year, at any time during the year, or at
the end of the year.
OTHER TRANSACTIONS AND BALANCES WITH KEY MANAGEMENT PERSONNEL
During the year the Company settled a legal matter with a former Director and former employee for an amount of
$276,818. Details of this are outlined in note 33. There were no other transactions during the year with key
management personnel or with any key management personnel related entities.
DIRECTORS’ MEETINGS
During the financial year, the following meetings incurred and were attended by directors:
Directors Meetings
Audit Risk Committee
Meetings
Remuneration and
Nomination Meetings
Eligible to
attend
Eligible
attended
Eligible to
attend
Eligible
attended
Eligible to
attend
Eligible
attended
14
3
14
10
14
3
14
10
0
1
3
2
0
1
3
2
0
1
2
1
0
1
2
1
Directors
Andrew Kroger
Bryan Dulhunty
Nicola Swift
Stephen Roberts
18.
18
Directors’ Report continued
PROCEEDING ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporate Act 2001 for leave to bring proceedings on
behalf of the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking
responsibility on behalf of the Company for all or part of those proceedings.
AUDITOR’s INDEPENDENCE DECLARATION AND NON-AUDIT SERVICES
The directors have received the auditor’s independence declaration which is included on Page 17 of this report. No
director of Cryosite Limited is currently or was formerly a partner of Mazars Risk and Assurance Pty Ltd.
Non-audit services were provided by the entity’s auditor, Mazars Risk and Assurance Pty Ltd, during the financial
year. Details of the services provided are disclosed in Note 27 of the Financial Statements. The directors are satisfied
that the provision of non-audit services is compatible with the general standard of independence for auditors
imposed by the Corporations Act 2001.
The directors are of the opinion that the services disclosed in Note 27 to the financial statements do not compromise
the external auditor’s independence requirements of the Corporations Act 2001 for the following reasons:
- All non-audit services have been reviewed and approved to ensure that they do not impact the integrity or
objectivity of the auditor;
None of the services undermine the general principles relating to auditor independence as set out in APES 110 Code
of Ethics for Professional Accountants issued by the Accounting Professional and Ethical Standards Board, including
reviewing or auditing the auditor’s own work, acting in a management or decisionmaking capacity for the Company,
acting as an advocate for the Company or jointly sharing economic risks and rewards.
This report is made in accordance with a resolution of directors, pursuant to section 298(2)(a) of the Corporations
Act 2001.
On behalf of the directors
Bryan Dulhunty
Chairman
Date: 30th August 2018
19
19.
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF
THE CORPORATIONS ACT 2001 TO THE DIRECTORS OF CRYOSITE
LIMITED AND CONTROLLED ENTITIES
I declare that, to the best of my knowledge and belief during the year ended 30 June 2018,
there have been:
— no contraventions of the auditor independence requirements as set out in the Corporations
Act 2001 in relation to the audit; and
— no contraventions of any applicable code of professional conduct in relation to the audit.
MAZARS RISK AND ASSURANCE PTY LTD
Paul Collins
Director
Sydney, on this 30th day of August 2018
MAZARS RISK & ASSURANCE PTY LIMITED
ABN: 39 151 805 275
LEVEL 12, 90 ARTHUR STREET, NORTH SYDNEY NSW 2060 PO BOX 1994, NORTH SYDNEY NSW 2059
TEL: +61 2 9922 1166 - FAX: +61 2 9922 2044
EMAIL: audit@mazars.com.au
LIABILITY LIMITED BY A SCHEME, APPROVED UNDER THE PROFESSIONAL STANDARDS LEGISLATION
20.
Corporate Governance
Cryosite is committed to implementing the highest possible standards of corporate governance. In determining what
those high standards should involve, Cryosite has turned to the ASX Corporate Governance Council’s Corporate
Governance Principles and Recommendations (ASX Principles) and has a corporate governance framework that
reflects those recommendations within the structure of the Company.
The Board of Cryosite approved an updated series of policies and charters in line with the amendments to the ASX
Principles. The Company’s policies and charters together form the basis of the Company’s governance framework
were in place for the financial year ended 30 June 2018 and to the date of signing of the directors’ report.
Within this framework:
-
-
-
-
the Board of Directors is accountable to shareholders for the performance of the Company;
the Company’s goals to achieve milestones are set and promulgated;
the risks of the business are identified and managed, and
the Company’s established values and principles underpin the way in which it undertakes its operations.
The Company has in place an entrenched, well developed governance culture which has its foundations in the ethical
values that the Board, management and staff bring to the Company and their commitment to positioning the
Company as a leader in its field.
In certain instances, due to the size and stage of development of Cryosite and its operations, it may not be practicable
or necessary to implement the ASX Principles in their entirety. In these instances, Cryosite has identified the areas
of divergence.
In accordance with its Shareholder Communications Policy, Cryosite has made its corporate governance policies and
charters publicly available on its website (www.cryosite.com).
21
21.
Directors Declaration
(1)
In the opinion of the directors:
(a)the financial statements and notes of the consolidated entity are in accordance with the
Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the consolidated entity’s financial position as at 30 June
2018 and of its performance for the year ended on that date; and
complying with Accounting Standards, Corporations Regulations 2001 and other
mandatory professional reporting requirements; and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and
when they become due and payable.
(2)
(3)
Note 2(a) confirms that the financial statements also comply with International Financial
Reporting Standards as issued by the International Accounting Standards Board.
This declaration has been made after receiving the declarations required to be made to directors in
accordance with section 295A of the Corporations Act 2001 for the financial year ended 30 June
2018.
On behalf of the Board
Bryan Dulhunty
Chairman
Date: 30th August 2018
22.
22
Consolidated Statement of Profit and Loss and Other
Comprehensive Income
FOR THE YEAR ENDED 30 June 2018
Sale of goods and rendering of services
Other revenue
Revenue
Cost of providing services
Marketing expenses
Occupancy expenses
Administration expenses
Total expenses
Notes
5
5
2018
$
2017
$
5,864,139
58,926
5,814,121
69,232
5,923,065
5,883,353
(2,873,786)
(152,297)
(615,769)
(1,962,848)
(5,604,700)
(2,868,167)
(6,962)
(585,761)
(2,443,217)
(5,904,107)
Profit (loss)from continuing operations before tax
318,365
(20,754)
Income tax (expense) benefit
7
(393,645)
(2,699)
Loss after tax from continuing operations
(75,280)
(23,453)
Legal settlement, net of tax
34
(169,416)
(118,656)
Loss after tax from continuing operations and legal settlement
Discontinued operations
Profit/(loss) after tax from discontinued operations
Net profit (loss)attributable to members of the Company
Other comprehensive income
Performance rights cancelled
Other comprehensive income for the year, net of tax
(244,696)
(142,109)
33
(995,743)
(1,240,439)
367,209
225,100
-
-
8,677
8,677
Total comprehensive income for the year
(1,240,439)
233,777
Earnings per share
Basic, profit for the year attributable to ordinary equity holders
of the parent
Diluted, profit for the year attributable to ordinary equity
holders of the parent
Earnings per share for continuing operations
Basic, profit for the year attributable to ordinary equity holders
of the parent
Diluted, profit for the year attributable to ordinary equity
holders of the parent
8
8
8
8
Cents
(2.65)
(2.61)
Cents
0.48
0.48
(0.002)
(0.001)
(0.002)
(0.001)
The above consolidated statement of profit and loss and other comprehensive income should be read in
conjunction with the accompanying notes.
23
23.
Consolidated Statement of Financial Position
AS AT 30 June 2018
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Income Tax Receivable
Total Current Assets
Non-Current Assets
Trade and other receivables
Deferred tax asset
Prepayments
Plant and equipment
Intangible assets
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Unearned income
Provisions
Total Current Liabilities
Non-Current Liabilities
Trade and other payables
Unearned income
Provisions
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Share rights reserves
Accumulated losses
TOTAL EQUITY
Notes
2018
$
2017
$
10
12
13
14
15
7 (c)
14
17
18
19
20
22
19
21
22
23
24
23
4,688,104
1,359,131
23,845
289,078
21,680
5,089,110
2,310,287
81,569
132,433
-
6,381,838
7,613,399
243,264
148,938
290,205
622,654
56,780
1,361,841
7,743,679
455,046
425,414
261,156
1,141,616
441,682
3,998,804
218,162
4,658,648
5,800,264
1,943,415
531,661
203,755
-
919,017
559,235
2,213,668
9,827,067
1,085,754
393,565
432,131
1,911,450
441,682
4,090,114
235,215
4,767,011
6,678,461
3,148,606
5,861,788
40,339
(3,958,712)
1,943,415
5,861,788
5,091
(2,718,273)
3,148,606
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes.
24
24.
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 June 2018
CONSOLIDATED
Attributable to equity holders of the company
Contributed
capital
Accumulated
losses
Share Rights
reserve
Total equity
At 1 July 2017
5,861,788
(2,718,273)
5,091
3,148,606
Total comprehensive income (loss)
for the year
Transactions with owners in their
capacity as owners
Performance rights granted
-
-
At 30 June 2018
5,861,788
(3,958,712)
At 1 July 2016
5,861,788
(2,483,483)
Total comprehensive income for the
year
Transactions with owners in their
capacity as owners
Performance rights granted
Performance rights cancelled
-
-
(1,240,439)
-
(1,240,439)
-
233,777
35,248
40,339
35,248
1,943,415
-
-
3,378,305
233,777
-
13,768
(8,677)
13,768
(8,677)
At 30 June 2017
5,861,788
(2,718,273)
5,091
3,148,606
The above consolidated statement of changes in equity should be read in conjunction with the
accompanying notes.
25
25.
Consolidated Statement of Cash Flows
FOR THE YEAR ENDED 30 June 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers inclusive of GST
Payments to suppliers and employees inclusive of GST*
Interest received
Net cash flows from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of plant and equipment
Software development costs
Interest received - term deposits
Net cash flows (used in) investing activities
CASH FLOWS FROM FINANCING ACTIVITIES
Equity dividend paid
Non- refundable receipt
Net cash flows (used in) financing activities
Notes
2018
$
2017
$
7,719,025
10,829,895
(7,988,124)
(9,208,286)
7,193
(216,906)
5,180
1,626,789
(180,781)
(196,072)
(125)
41,806
(100,073)
75,452
(139,100)
(220,693)
11
17
18
-
-
-
(468,567)
500,000
31,433
Net (decrease)/ increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
(401,006)
5,089,110
1,437,529
3,651,581
Cash and cash equivalents at end of year
10
4,688,104
5,089,110
*This includes an amount of $438,873 relating to investment in a new technology platform.
The above consolidated statement of cash flows should be read in conjunction with the accompanying no
26.
26
Notes to the Financial Statements
For the Year Ended 30 June 2018
1
CORPORATE INFORMATION
The financial report of Cryosite Limited and the controlled entity (the Group) for the year ended 30 June 2018
was authorised for issue in accordance with a resolution of the directors on 30th August 2018.
Cryosite Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on
the Australian Stock Exchange.
The nature of the operations and principal activities of the Group are described in the Directors’ Report.
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of preparation
The financial report is a general purpose financial report, which has been prepared in accordance with the
requirements of the Corporations Act 2001, and Australian Accounting Standards and other authoritative
pronouncements of the Australian Accounting Standards Board.
The financial report has been prepared on a historical cost basis, except when otherwise stated.
(a)
Compliance with IFRS
The financial report complies with International Financial Reporting Standards (IFRS) as issued by the
International Accounting Standards Board (IASB).
(b) Changes in accounting policy, accounting standards and interpretations.
(i) Amendments to AASBs and the new Interpretation that are mandatorily effective for the current period
The accounting policies adopted are consistent with those of the previous financial years except the following
which the Group adopted from 1 July 2017:
•
AASB 2017-2 Amendments to Australian Accounting Standards – Further Annual Improvements 2014-
2016 Cycle
The adoption of these standard did not have any impact on the current period or any prior period and is not
likely to affect future periods.
27
27.
Notes to the Financial Statements
For the Year Ended 30 June 2018
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
(ii) Standards and Interpretations in issue not yet adopted
At the date of authorisation of the financial statements, the Standards and Interpretations that were issued
but not yet effective are listed below:
Standard/Interpretation
AASB 9 Financial Instruments and the relevant amending standards
AASB 15 Revenue from Contracts with Customers, AASB 2014-5,
Amendments to Australian Accounting Standards arising from AASB
15 and AASB 2016-8 Amendments to Australian Accounting Standards
– Effective date of AASB 15
AASB 16 Leases
AASB 2016-5 Amendments to Australian Accounting Standards –
Classification and Measurement of Share-based Payment
Transactions
Effective date
(annual
periods
beginning
on or after)
1 January 2018
Expected to be
initially applied
in the financial
year ending
30 June 2019
1 January 2018
30 June 2019
1 January 2019
30 June 2020
1 January 2018
30 June 2019
AASB 2017-4 Amendments to Australian Accounting Standards –
Uncertainty over Income Tax Treatments
1 January 2019
30 June 2019
AASB 2018-1 Amendments to Australian Accounting Standards –
Annual Improvements 2015-2017
1 January 2019
30 June 2019
Interpretation 22 Foreign Currency Transactions and Advance
Consideration
1 January 2018
30 June 2019
The adoption of these standard did not have any impact on the current period or any prior period.
The relevant standards for the Group follow:
AASB 9 Financial Instruments. Revised principles for accounting for financial assets and liabilities: recognition
and derecognition, classification, measurement, hedge accounting and impairment. The standard will be
effective from 1 July 2018 and is available for early adoption.
The Company has determined not to early adopt this standard and will assess the impact of the standard within
the required time frame. However, this standard may result in potential increase in provision for impairment
losses on receivables for the year ending 30 June 2019.
28
28.
Notes to the Financial Statements
For the Year Ended 30 June 2018
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
IFRS 15 Revenue from Contracts with Customers. (‘AASB 15’) Introduces a single revenue recognition model based
on the transfer of goods and services and the consideration expected to be received for that transfer. The
standard will be effective from 1 July 2018.
In 2017 the Company elected to apply the modified retrospective transition method with respect to
implementation of AASB 15. In this case AASB 15 is applied retrospectively to only the current period presented
in the financial statements with no restatement of the comparative period. As such, the cumulative effect of
initially applying AASB 15 will be recognised as an adjustment to retained earnings as at 1 July 2018 (the date of
initial application). On this basis, there is no impact to retained earnings as at the 30th June 2018. The financial
statements for the year ending 30 June 2019 will fully reflect AASB 15 with the comparative results for the year
ending 30 June 2018 restated.
During 2017, the Company undertook a review, which included obtaining independent third party advice, aimed
to assess the potential effects on the financial statements and verify the need to adjust internal control system
over financial reporting. The first step in this process was to assess which customer contracts would be accounted
for differently under the new standard which included reviewing performance obligations, pricing and costing.
This analysis confirmed that only the Cord Blood and Tissue Storage segment is impacted by AASB 15.
The introduction of AASB 15 is expected to have a significant impact on the reported revenue and costs and
balance sheet of Cryosite. There is no change to the profit on each contract over the life of the contract. The new
standard simply recognises profit over a different reporting period from the existing accounting standard. It is
important to note there is no change to the expected timing or amount of cash impact collected from the cord
blood and tissue contracts.
Currently Cryosite recognises the majority of revenue and all costs associated with the storage of cord blood and
tissue at the time of completion of collection and processing of samples. A small amount of revenue is then
recognised over the life of the contract representing storage income. AASB 15 requires all revenue and costs to
be recognised over the life of the contract.
AASB 15 requires the accounting effects to be made retrospectively. This means that the Company is required to
restate the results from 1 July 2018 as if this standard have applied from the date of the contract. Therefore,
revenue and costs which have previously been reported in the annual profit and loss will, to an extent, be
reversed and will be recognised again post 1 July 2018. The effect is to materially reduce the amount of revenue
and costs that have been recognised on these contracts in prior years with amounts recognised as deferred
revenue and costs on the balance sheet to be recognised through the income statement over the expected life
of the related contract.
As at the 30 June 2018, Cryosite has completed extensive work on the financial impact of AASB 15. Based on this
work, the quantitative effect on the balance sheet at the date of adoption of this standard (1st July 2018 for the
financial year ended 30 June 2019) is expected to be:
29
29.
Notes to the Financial Statements
For the Year Ended 30 June 2018
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
AASB 1015 Opening Adjustment 1st July 2018
30th June 2018
Deferred Revenue*
Deferred Costs*
1st July 2018
Total Assets
Total Liabilities
Total Net Assets
7,935,368
5,991,953
1,943,415
Share Capital
Retained Earnings
5,902,127
(3,958,712)
Total Equity
* these adjustments are net of tax
1,943,415
-
24,787,981
(24,787,981)
-
(24,787,981)
(24,787,981)
22,823,306
-
22,823,306
30,758,674
30,779,934
(21,260)
-
22,823,306
22,823,306
5,902,127
(5,923,387)
(21,260)
These deferred balance sheet assets and liabilities will then be taken to revenue and expense over the life of
each individual contract which ranges from18 years to 25 years.
The Company has obtained legal advice which confirms that due to the impact from AASB 15 adoption which has
resulted in negative net assets, the ability for the Company to declare dividends in the future will be restricted
until the business returns to positive net assets.
AASB 16 Leases. Recognise right of use assets and liabilities arising from all leases, with exceptions for low value
and short term leases. The standard will be effective from 1 January 2019.
The Group has determined not to early adopt this standard and will assess the impact of the standard within
the required time frame.
(c) Basis of consolidation
The consolidated financial statements comprise the financial statements of Cryosite Limited (the Company) and
its subsidiary (‘the Group’) as at 30 June each year.
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls
an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity
and has the ability to affect those returns through its power to direct the activities of the entity. Subsidiaries
are fully consolidated from the date on which control is transferred to the group. They are deconsolidated from
the date that control ceases.
The financial statements of the subsidiary are prepared for the same reporting year as the parent company,
using consistent accounting policies.
Adjustments are made to bring into line any dissimilar accounting policies that may exist.
All inter-company balances and transactions have been eliminated in full. Subsidiaries are consolidated from
the date on which control is transferred to the Group and cease to be consolidated from the date on which
control is transferred out of the Group. Investments in subsidiaries held by the Company are accounted for at
cost in the separate financial statements of the parent entity, less any impairment charges.
30
30.
Notes to the Financial Statements
For the Year Ended 30 June 2018
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
(d) Foreign currency translation
Both the functional and presentation currency of the Company and its Australian subsidiary is Australian dollars
(A$). Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates
ruling at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are
retranslated at the rate of exchange ruling at the balance sheet date.
(e) Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and any accumulated impairment losses.
Such cost includes the cost of replacing parts that are eligible for capitalisation when the cost of replacing the
parts is incurred. Similarly, when each major inspection is performed, its cost is recognised in the carrying
amount of the plant and equipment as a replacement only if it is eligible for capitalisation. All other repairs and
maintenance are recognised in the statement of comprehensive income as incurred.
Depreciation is calculated on a straight line basis over the estimated useful life of the asset as follows:
Major Depreciation rates are:
2018
2017
Leasehold improvements
Plant and equipment:
-Fixture and fittings
-Information technology
-Warehouse equipment
-Office furniture and equipment
-Plant and equipment under lease
Lease term
Lease term
5-10 years
2-3 years
4-10 years
2.5-8 years
5 years
5-10 years
2-3 years
4-10 years
2.5-8 years
5 years
The assets’ residual values, useful lives and amortisation methods are reviewed and adjusted if appropriate.
An item of plant and equipment is derecognised upon disposal or when no future economic benefits are
expected from its use or disposal.
(f) Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief
operating decision maker. The chief operating decision maker, who is responsible for allocating resources and
assessing performance of the operating segments, has been identified as the Board.
31
31.
Notes to the Financial Statements
For the Year Ended 30 June 2018
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
(g) Intangible assets
The useful lives of intangible assets are assessed as either finite or indefinite.
Intangible assets with finite lives are amortised over the useful economic life and assessed for impairment
whenever there is an indication that the intangible asset may be impaired. The amortisation period and the
amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each
reporting period. Changes in the expected useful life or the expected pattern of consumption of future
economic benefits embodied in the asset are considered to modify the amortisation period or method, as
appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets
with finite lives is recognised in the statement of profit or loss as the expense category that is consistent with
the function of the intangible assets.
Intangible assets with indefinite useful lives are not amortised, but are tested for impairment annually, either
individually or at the cash-generating unit level. The assessment of indefinite life is reviewed annually to
determine whether the indefinite life continues to be supportable. If not, the change in useful life from
indefinite to finite is made on a prospective basis.
Licence fees
Where licences are acquired for the purposes of assisting in research and development or for the entity’s use
of patented techniques or processes in conducting operations, the costs are capitalised. Licenses acquired
during the financial year have been assessed as having a useful life in line with that of the underlying patent
and associated methodologies.
Software development
Software development costs are capitalised at the direct costs and amortised on a straight line basis over the
period of their expected benefit being their finite life of 3 years. Amortisation starts at the time that the
technology is activated and is used by both internal and external customers. The capitalised costs of platform
technology include the direct costs of external consultants and any supporting software acquired from a third
party.
Intellectual Property
The costs of the Stemlife assets are capitalised and amortised on a straight line basis over the period of their
expected benefit being their finite life of 9 years. Amortisation starts at the time of the acquisition. These costs
include the direct costs paid to Stemlife for the assets and the legal fees incurred in the transaction.
The assessment of useful life is reviewed annually by the Board to determine whether the assumptions made
continue to be appropriate and supportable. If not, the useful life assessment is changed on a prospective
basis.
32
32.
Notes to the Financial Statements
For the Year Ended 30 June 2018
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
(h) Prepayments
Payments made in advance of services are recognized at the time of payment and classed as prepayments on
the balance sheet. As the services are incurred, the relevant amounts are recognized as an expense in the profit
and loss statement.
Costs incurred in relation to the implementation & development of applications are capitalised as a prepayment
reflecting the economic benefits to be consumed over the contract service period. Any costs in relation to
training & data conversion are expensed as incurred.
An assessment confirmed that these costs do not meet the recognition criteria as capitalized costs under AASB
138, specifically the control criteria. This is on the basis the hardware and applications are controlled by the
contracted service provider and cannot be transferred to another party or host under the agreement. In
absence of specific guidance under AASB, the accounting hierarchy under AASB 108 para 12 has been applied
which allows the use of recent pronouncements of other standard setting bodies.
(i) Inventories
Inventories consist of consumables used in the provision of services. Inventories are valued at the lower of cost
and net realisable value. Cost is determined by actual purchase price. Net realisable value is the estimated
selling price in the ordinary course of business, less estimated costs of completion and the estimated costs
necessary to make the sale.
(j) Trade and other receivables
Trade receivables (current), which generally have 30 day terms, are recognised initially at fair value less an
allowance for impairment.
Collectability of trade receivables is reviewed on an ongoing basis and individual debts that are known to be
uncollectible are written off when identified. An impairment provision is recognised when there is objective
evidence that the group may not be able to collect the receivable.
Trade receivables (non-current), which generally have terms in excess of 24 months, are carried at their net
present value. The expected net cash flows have been discounted to their present value using a market
determined risk adjusted discount rate of 13.9% (2017: 13.9%).
(k) Cash and cash equivalents
Cash and cash equivalents in the statement of financial position comprise cash at bank, in hand and short-term
deposits with an original maturity of three months or less that are readily convertible to known amounts of
cash and which are subject to an insignificant risk of changes in value.
For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents
as defined above, net of outstanding bank overdrafts.
(l) Trade and other payables
Trade and other payables are carried at amortised costs and due to their short term nature, they are not
discounted. They represent liabilities for goods and services provided to the Group prior to the end of the
33
33.
Notes to the Financial Statements
For the Year Ended 30 June 2018
2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
(l) Trade and other payables continued
financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect
of the purchase of these goods and services. The amounts are unsecured and are usually paid within 30 days of
recognition.
(m) Employee leave benefits
Wages, Salaries and Annual Leave
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be settled
within 12 months of the reporting date are recognised in provisions in respect of employees’ services up to the
reporting date. They are measured at the amounts expected to be paid when the liabilities are settled. Expenses
for non- accumulating sick leave are recognised when the leave is taken and are measured at the rates paid or
payable. Unused sick leave on termination of employment is forfeited.
Long Service Leave
The liability for long service leave is recognised and measured as the present value of expected future payments
to be made in respect of services provided by employees up to the reporting date using the projected unit
credit method. Consideration is given to the expected future wage and salary levels, experience of employee
departures, and periods of service. Expected future payments are discounted using market yields at the
reporting date on national government bonds with terms to maturity and currencies that match, as closely as
possible, the estimated future cash outflows.
(n) Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources embodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the amount of the obligation.
Where the Group expects some or all of a provision to be reimbursed, the reimbursement is recognised as a
separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is
presented in the statement of comprehensive income net of any reimbursement.
If the effect of the time value of money is material, provisions are determined by discounting the expected
future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and,
where appropriate, the risks specific to the liability.
34
34.
Notes to the Financial Statements
For the Year Ended 30 June 2018
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
(o) Share-based payment transactions
The group provides benefits to employees including executive directors of the Group in the form of share based
payment transactions, whereby the employees render services in exchange for rights over shares (‘equity-
settled transactions’) under the Cryosite Employee Incentive Plan (CEIP) or individually negotiated share based
payment arrangements.
The cost of these equity-settled transactions with employees is measured by reference to the fair value at the
date at which they are granted. The fair value is determined using a binomial model.
In valuing equity-settled transactions, no account is taken of any performance conditions, other than conditions
linked to the price of the shares of the Company (‘market conditions’).
The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the
period in which the performance conditions are fulfilled, ending on the date on which the relevant employees
become fully entitled to the award (‘vesting date’).
The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date
reflects:
(i) the extent to which the vesting period has expired and
(ii) the number of awards that, in the opinion of directors of the Group, will ultimately vest. This opinion
is formed based on the best available information at balance date.
No adjustment is made for the likelihood of market performance conditions being met as the effect of these
conditions is included in the determination of fair value at grant date.
No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional
upon a market condition.
Where the terms of an equity-settled award are modified, as a minimum, an expense is recognised as if the
terms had not been modified. In addition, an expense is recognised for any increase in the value of the
transaction as a result of the modification, as measured at the date of modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation, and
any expense not yet recognised for the award is recognised immediately. However, if a new award is
substituted for the cancelled award, and designated as a replacement award on the date that it was granted,
the cancelled and new award are treated as if they were a modification of the original award, as described in
the previous paragraph.
In the case where outstanding equity-settled awards have expired, the relevant amounts in respect to these
awards in the share reserves are transferred to retained earnings.
35
35.
Notes to the Financial Statements
For the Year Ended 30 June 2018
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
(p) Leases
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified
as operating leases. Initial direct costs incurred in negotiating an operating lease are added to the carrying
amount of the leased asset and recognised over the lease term on the same bases as the lease income.
Operating lease payments are recognised as an expense in the statement of comprehensive income on a
straight-line basis over the lease term. Operating lease incentives are recognised as a liability when received
and subsequently reduced by allocating lease payments between rental expense and reduction of the liability.
(q) Revenue
Revenue is recognised and measured at the fair value of the consideration received or receivable to the extent
that it is probable that the economic benefits will flow to the Group and the revenue can be reliably measured.
The following specific recognition criteria must also be met before revenue is recognised:
- Revenue from the archival storage of biological samples is recognised over the period that storage occurs.
- Revenue from the rendering of non-storage services, such as collection or distribution of biological samples,
is recognised upon the delivery of the service to the customers.
-
- Revenue from cord blood and tissue services is recognised in the accounting period in which the services are
rendered. Where the Group has a longterm contract with its customers to provide cord blood services, a
receivable is recognised at its net present value with a corresponding amount recognised as unearned
income in the statement of financial position (Refer Note 19 and 20).
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating the interest income over the relevant period
using the effective interest rate, which is the rate that exactly discounts estimated future cash receipts
through the expected life of the financial asset to the net carrying amount of the financial asset.
- Dividends: revenue is recognised when the Company’s right to receive the payment is established.
Please note that on the 23rd June 2017, the company entered into a binding agreement (subject to certain
conditions being met which included shareholder and regulatory approval) to license, under the Cryosite brand,
the collection, processing and storage of umbilical cord blood and tissue and to sell certain of its Cord Blood and
Tissue Banking assets to Cell Care Australia Pty Ltd. As part of this agreement the company received an upfront
non-refundable payment $500,000 prior to the 30 June 2017. This amount was recognized as revenue as non-
refundable income in the Cord Blood and Tissue storage in 2017. This income is part of the discontinued
operations for 2017 comparisons.
(r) Income tax and other taxes
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be
recovered from or paid to the taxation authorities based on the current period’s taxable income. The tax rates
and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance
date.
36
36.
Notes to the Financial Statements
For the Year Ended 30 June 2018
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Deferred income tax is provided on all temporary differences at the balance date between the tax bases of
assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred income tax liabilities are recognised for all taxable temporary differences:
-
-
Except where the deferred income tax liability arises from the initial recognition of an asset or liability in a
transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; and
In respect of taxable temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, except where the timing of the reversal of the temporary differences can be
controlled and it is probable that the temporary differences will not reverse in the foreseeable future.
Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused
tax assets and unused tax losses, to the extent that it is probable that the taxable profit will be available against
which the deductible temporary differences, and the carry-forward of unused tax assets and unused tax losses
can be utilised:
-
Except where the deferred income tax asset relating to the deductible temporary difference arises from the
initial recognition of an asset or liability in a transaction that is not a business combination and, at the time
of the transaction, affects neither the accounting profit nor taxable profit or loss; or
In respect of deductible temporary differences associated with investments in subsidiaries, associates and
interests in joint ventures, deferred tax assets are only recognised to the extent that it is probable that the
temporary differences will reverse in the foreseeable future and taxable profit will be available against which
the temporary differences can be utilised. The carrying amount of deferred income tax assets is reviewed at
each balance date and reduced to the extent that it is no longer probable that sufficient taxable profit will be
available to allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent
that it has become probable that future tax profit will allow the deferred tax asset to be recovered.
Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year
when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted
or substantively enacted at the balance date.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off
current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same
taxable entity and the same taxation authority.
Income taxes relating to items recognised directly in equity are recognised in equity and not in the statement
of comprehensive income.
37
37.
Notes to the Financial Statements
For the Year Ended 30 June 2018
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Revenues, expenses and assets are recognised net of the amount of GST except:
- where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority,
in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense
item as applicable; and
receivables and payables are stated with the amount of GST included the net amount of GST recoverable
from, or payable to, the taxation authority is included as part of receivables or payables in the statement of
financial position.
-
Cash flows are included in the Statement of Cash Flows on a gross basis and the GST component of cash flows
arising from investing and financing activities, which is recoverable from, or payable to, the taxation authority,
are classified as operating cash flows.
Commitments and contingencies are disclosed net of the amount of GST recoverable from, or payable to, the
taxation authority.
(s) Contributed equity
Contributed capital bares no special terms or conditions affecting income or capital entitlements of the
shareholders. Ordinary share capital is recognised at the fair value of the consideration received by the
company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a
reduction of the share proceeds received.
(t) Share options reserve
The share options reserve captures the equity component of the company’s equity settled transactions of the
share based payments schemes.
(u) Impairment of assets
Assets are tested for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset's carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset's fair value less costs to sell
and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which
there a separately identifiable cash inflows which are largely independent of the cash inflows from other assets
or groups of assets (cash-generating units). Non-financial assets other than goodwill that suffered impairment
are reviewed for possible reversal of the impairment at the end of each reporting period.
(v) Earnings per share
Basic EPS is calculated as net profit attributable to members of the parent, adjusted to exclude costs of servicing
equity (other than dividends) and preference share dividends, divided by the weighted average number of
ordinary shares, adjusted for any bonus element.
38
38.
Notes to the Financial Statements
For the Year Ended 30 June 2018
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
Diluted EPS is calculated as net profit attributable to members of the parent, adjusted for:
- Costs of servicing equity (other than dividends) and preference share dividends;
- The after tax effect of dividends and interest associated with dilutive potential ordinary shares that have
been recognised as expenses; and
- Other non-discretionary changes in revenues or expenses during the year that would result from the
dilution of potential ordinary shares
Divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for
any bonus element.
The basic EPS and diluted EPS for continuing operations are calculated as above based on net profit after tax
from continuing operations rather than net profit attributable to members of the parent.
(w) Fair value measurement
The Group measures financial instruments at fair value at each balance sheet date. Fair values of financial
instruments measured at amortised cost are disclosed at Note 31.
Fair value is the price that would be received to sell an asset or pair to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the
presumption that the transaction to sell the asset or transfer the liability takes place either:
-
-
In the principle market for the asset or liability; or
In the absence of a principal market, in the most advantageous market for the asset or liability accessible
to the Group.
A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate
economic benefits by using the asset in its highest and best use or by selling it to another market participant
that would use the asset in the highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data
are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of
unobservable inputs.
For the purpose of fair value disclosure, the Group has determined classes of assets and liabilities on the basis
of the nature, characteristics and risks of the asset or liability and the level of the fair value hierarchy.
39
39.
Notes to the Financial Statements
For the Year Ended 30 June 2018
2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES CONTINUED
(x) Current versus non-current classification
The Group presents assets and liabilities in statement of financial position based on current/non-current
classification.
An asset as current when it is:
- Expected to be realised or intended to sold or consumed in normal operating cycle;
- Held primarily for the purpose of trading;
- Expected to be realised within 12 months after the reporting period, or
- Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve
months after the reporting period.
All other assets are classified as noncurrent.
A liability is current when:
-
-
-
- There is no unconditional right to defer the settlement of the liability for at least 12 months after the
It is expected to be settled in normal operating cycle;
It is held primarily for the purpose of trading;
It is due to be settled within 12 months after the reporting period, or
reporting period
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
(y) Current versus non-current classification
A discontinued operation is a component of an entity that either has been disposed of, discontinued or is
classified as held for sale, and
(i)
(ii)
(iii)
represents a separate major line of business or geographical area of operations;
is part of a single co-ordinated plan to dispose of a separate major line or geographical area of
operations; or,
is a subsidiary acquired exclusively with a view to resale.
Discontinued operations are excluded from the results of continuing operations and are presented as a single
amount as profit or loss after tax from discontinued operations in the statement of profit or loss.
Additional disclosures are provided in Note 32. All other notes to the financial statements include amounts for
continuing operations, unless indicated otherwise.
40
40.
Notes to the Financial Statements
For the Year Ended 30 June 2018
3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS
The preparation of the financial statements requires management to make judgements, estimates that affect the
reported amounts in the financial statements. Management continually evaluates its judgements and estimates
in relation to assets, liabilities, contingent liabilities, revenue and expenses. Management bases its judgements
and estimates on historical experience and on other various factors it believes to be reasonable under the
circumstances, the result of which form the basis of the carrying values of assets and liabilities that are not readily
apparent from the source. Actual results may differ from these estimates and estimates under different
assumptions and conditions.
Management has identified the following critical accounting estimates and judgements:
Capitalised Development Costs
Initial capitalisation of development costs is based on management’s judgement that technological and economic
feasibility is confirmed, usually when a product development project has reached a defined milestone. In
determining the amounts to be capitalised, management makes assumptions regarding the expected future cash
generation of the project, discount rates to be applied and the expected period of benefit. At 30 June 2018, the
carrying amount of capitalised development costs was $nil. (2017: $163,383).
Revenue Recognition - Long Term Cord Blood and Tissue Storage Contracts
Long term cord blood storage contracts involve the calculation of an estimate of the costs of providing the storage
service over the term of the contract. As these contracts are long term in nature, estimates are required in respect
of the following:
- Cost of provision of up front service;
- Cost of provision of ongoing long- term storage service; and
-
Interest component in relation to deferred payment.
These calculations impact the overall balance of revenue, unearned revenue and debtors at year end. In
determining these amounts, a present value calculation is performed in respect of the deferred components of
the contract, which involves the determination of an appropriate discount rate. The estimate of the discount rate
is reviewed on an annual basis by the directors to ensure that it is reasonable and reflective of current risks and
returns.
Further, in determining the costs of providing these services, the incremental costs incurred in the storage of
cord blood is assessed and reviewed annually and forms the basis upon which the amount of revenue and profit
is recognised.
As noted in accounting policy note 2 (b), the revenue recognition associated with long-term cord blood and tissue
storage contracts will change from 1st July 2018 with the adoption of AASB 1015.
Taxation
Uncertainties exist with respect to the interpretation of complex tax regulations, changes in tax laws and the
amount and timing of future taxable income. The group’s accounting policy for taxation requires management’s
judgement as to the types of arrangements considered to be a tax on income in contrast to an operating cost.
41
41.
Notes to the Financial Statements
For the Year Ended 30 June 2018
3. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS CONTINUED
Taxation continued
Judgement is also required in assessing whether deferred tax assets and certain deferred tax liabilities are
recognised in the statement of financial position. Deferred tax assets, including those arising from un recouped
tax losses, capital losses and temporary differences, are recognised only where it is considered more likely than
not that they will be recovered, which is dependent on the generation of sufficient future taxable profits.
The Group has $981,322 unconfirmed (2017: $44,958) tax losses carried forward which have not been
recognised on the statement of financial position. Assumptions about the generation of future taxable profits
and repatriation of retained earnings depend on management’s estimates of future cash flows. Judgements are
also required about the application of income tax legislation. These judgements and assumptions are subject
to risk and uncertainty, hence there is a possibility that changes in circumstances will alter expectations, which
may impact on the amount of deferred tax liabilities or assets recognised on the statement of financial position
and the amount of other tax losses and temporary differences not yet recognised. In such circumstances, some
or all of the carrying amounts of recognised deferred tax assets and liabilities may require adjustment, resulting
in a corresponding credit or charge to the statement of comprehensive income.
Share Based Payment Transactions
The group measures the cost of equity-settled transactions with employees by reference to the fair value of the
equity instruments at the date at which they are granted. The fair value is determined using a binomial model.
The accounting estimates and assumptions relating to equity-settled share based payments would have no
impact on the carrying amounts of assets and liabilities within the next annual reporting period but may impact
on expenses and equity.
Estimated Useful Lives of Assets
The estimation of the useful lives of assets and their residual values has been based on historical experience as
well as manufacturers’ warranties. In addition, the condition of assets is assessed at least once per year and
considered against the remaining useful life. Adjustments to useful lives are made when considered necessary.
The estimated useful life of licenses acquired has been based upon the useful life of the patents and associated
methodologies underpinning the license. The assessment of useful life is reviewed annually by the Board to
determine whether the assumptions made continue to be appropriate and supportable given the license
conditions and underlying patents. If the useful life assessment is assessed as inappropriate, either due to a
change in license conditions or patents, it is changed on a prospective basis.
As result of the decision to cease the collection and processing of cord blood and tissue samples, the board
reviewed and concluded that these licences were impaired. Refer Note 17 for the details of the impairment loss
recognized.
Long Service Leave Provision
The liability for long service leave is recognised and measured at the present value of the estimated future cash
flows to be made in respect of all employees at the reporting date. In determining the present value of the
liability, estimates of attrition rates and pay increases through promotion and inflation have been taken into
account.
42
42.
Notes to the Financial Statements
For the Year Ended 30 June 2018
3
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS CONTINUED
Make Good Provisions
A provision has been made for the present value of anticipated costs for future restoration of leased premises.
This provision includes future cost estimates associated with dismantling, closure, decontamination and
permanent storage of historical residues. The calculation of any provision requires assumptions such as
application of environmental legislation, plant closure dates, available technologies and engineering cost
estimates. These uncertainties may result in future actual expenditure differing from amounts provided. Any
provision recognised will be periodically reviewed and updated based on the facts and circumstances available
at the time. Changes to the estimated future costs are recognised in the statement of financial position by
adjusting both the expense or asset and provision. The appropriateness of the make good provision is assessed
annually.
Impairment of Receivable Balances
Included in the receivable balance at year end is an allowance for impairment loss of $45,590 (2017: $40,515).
A provision is recognised when there is objective evidence that an individual receivable is impaired. The
provision for impairment if receivable requires a degree of estimation and judgement. The level of the provision
is regularly assessed and considers client activity with the group, ageing of receivables, historical collections and
other specific knowledge of the individual debtor.
Impairment of Non-Financial Assets other than Indefinite Life Intangible Assets
The Company assesses impairment of non-financial assets other than indefinite life intangible assets at each
reporting date by evaluating conditions specific to the Company and to the particular asset that may lead to
impairment. If an impairment trigger exists, the recoverable amount of the asset is determined. This involves
fair value less costs of disposal or value-in-use calculations, which incorporate a number of key estimates and
assumptions.
During the year, following management’s decision to cease the collection and processing of cord blood and
cord tissue samples, board reviewed all non-financial assets associated with these operations and, as a result
of this review, concluded that these assets were impaired. Refer to Note 33 for the impairment loss recognized.
Prepayments
During the year the Company incurred costs in the implementation & development of a new technology
applications. The board reviewed these costs and determine that these costs should be expensed over a period
of time to reflect the economic benefits that will be consumed as a result of using this technology over this
period.
Costs incurred in relation to the implementation & development of applications are capitalised as a prepayment
reflecting the economic benefits to be consumed over the contract service period. Any costs in relation to
training & data conversion are expensed as incurred.
43
43.
Notes to the Financial Statements
For the Year Ended 30 June 2018
3
SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS CONTINUED
Discontinued Operations
In October 2017, the Company completed the closure of the laboratory operations and the departure of staff
associated with the collection and processing of cord blood and tissue samples. This resulted in the termination
of operations associated with collection and processing of cord blood and tissue samples which has been
disclosed separately in the accounts as discontinued operations.
Discontinued operations result for 2018 includes revenue from a small number of contracts collected and
processed in 2018. It also includes normal operating and employment costs associated with the activities of
collection and processing which were separately identified up to the time of closure. Additional costs, such as
redundancies and legal fees, associated with the actual closure have also been included.
Further, as result of the decision to cease the collection and processing of cord blood and tissue samples, the
board reviewed all non-financial assets associated with these operations and, as a result of this review,
concluded that these assets were impaired. Consequently they have resolved to write down these assets by
$555,586 in 2018.
Comparatives for discontinued operations were calculated on the same basis as 2018. Costs also included
marketing expenses but excluded costs associated with the actual closure.
4
SEGMENT INFORMATION
Identification of Reportable Segments
The Company has identified its operating segments within it’s continuing operations based on the internal
reports that are reviewed and used by the Board of Directors (the chief operating decision makers(”CODM”))
in assessing performance and in determining the allocation of resources. The segment information provided is
consistent with the internal management reporting.
Two reportable segments have been identified as follows:
Cord Blood and Tissue Storage
Long term storage of cord blood and tissue samples.
Clinical Trials Logistics and Biorepository
These services include biorepository services, clinical trials logistics, commercial drug distribution and the other
storage and distribution based services including the importation and distribution of laboratory diagnostic
products.
It should be noted that previously biorepository services where include in Individualised Consumer Biologics
and has been moved to this segment as is more aligned to this part of the business.
The CODM reviews each segment’s net operating profit (loss) before tax and interest (NPBIT) after the allocation
of overheads. The accounting policies adopted for internal reporting to the CODM are consistent with those
adopted in the financial statements.
44
44.
Notes to the Financial Statements
For the Year Ended 30 June 2018
4 SEGMENT INFORMATION CONTINUED
A reconciliation of operating EBITDA is provided as follows:
The information reported to the CODM is at least on a monthly basis.
30 June 2018 - Consolidated
Total segment revenue
Segment profit before ITDA
30 June 2017 - Consolidated
Total segment revenue
Segment profit before ITDA
Total Segment assets
30 June 2018
30 June 2017
Operating EBITDA
Interest revenue
Depreciation and amortisation
Profit before tax from continuing
operations
Cord Blood and
Tissue Storage
$
Clinical Trials
Logistics and
Biorepository
$
Total
$
558,873
5,630
5,364,193
592,257
5,923,065
597,887
641,005
(552,491)
5,242,348
987,036
5,883,353
434,545
1,504,245
6,068,701
6,239,434
3,758,366
7,743,679
9.827,067
Consolidated
30-Jun-18
$
597,887
58,926
(338,448)
30-Jun-17
$
434,545
69,232
(524,531)
318,365
(20,754)
45
45.
Notes to the Financial Statements
For the Year Ended 30 June 2018
5
REVENUE
Revenue
Sale of goods and rendering of services
Storage Revenue
Total Revenue
Other Revenue
Interest income
Total Revenue
6
EXPENSES
(a) Legal costs
Legal costs
(b) Lease payments
Lease payments-operating leases
(c) Employee benefits expense
Wages and salaries
Superannuation costs
(d) Depreciation- Plant & Equipment
Depreciation – plant & equipment
(e) Impairment loss
Impairment loss
(f) Amortisation of Intangibles
Amortisation of Intangibles
Consolidated
30-Jun-18
$
30-Jun-17
$
5,310,826
553,313
5,864,139
58,926
5,923,065
5,187,453
626,668
5,814,121
69,232
5,883,353
370,990
281,227
318,753
312,093
2,481,166
243,017
2,724,183
3,310,380
363,224
3,673,604
362,866
483,140
555,586
-
61,882
104,511
16
16
17
Legal costs incurred in 2017 include $169,508 (pre -tax) relating to the legal settlement outlined in Note 33.
These costs were disclosed as Administration expenses in 2017 accounts.
46
46.
Notes to the Financial Statements
For the Year Ended 30 June 2018
7
INCOME TAX
(a) Income tax expense
The major components of income tax are:
Statement of comprehensive income
Consolidated
30-Jun-18
$
Current income tax (expense)/benefit
Income tax expense reported in the statement of comprehensive income
(46,095)
(46,095)
30-Jun-17
$
(109,222)
(109,222)
Income tax (expense)/benefit is attributable to the following:
Continuing operations
Legal settlement
Discontinued operations
(393,645)
64,261
283,289
(46,095)
(2,699)
50,852
(157,375)
(109,222)
(b) Numerical reconciliation between aggregate tax expense recognised in the statement of comprehensive
income and tax expense calculated per the statutory income tax rate
A reconciliation between tax expense and the product of accounting profit before income tax multiplied by the
Group's applicable income tax rate follows:
Accounting profit(loss) before tax
(1,194,344)
334,322
Income tax calculated at 27.5% (2017:30%)
Tax losses not recognised
Capital losses on impairment loss of intangible assets
Other items (net)
Income tax (expense) benefit
(c) Recognised deferred tax assets and liabilities
Deferred income tax at 30 June relates to the following:
Deferred income tax assets
Post-employment benefits
Provision for tax and audit fees
Provision for doubtful debts
Impairment and depreciation of plant & equipment for book
purposes
Losses available for offset against future taxable income
Amortisation of intangibles( Intellectual Property)
Deferred income tax liabilities
Prepayments
Consumerables
Net deferred tax assets
328,444
(269,863)
(88,927)
(15,749)
(46,095)
(100,297)
0
0
(8,925)
(109,222)
70,340
15,753
12,537
58,628
0
157,258
(1,763)
(6,557)
(8,320)
148,938
109,789
17,370
12,155
58,326
13,380
17,062
228,082
0
(24,327)
(24,327)
203,755
47
47.
Notes to the Financial Statements
For the Year Ended 30 June 2018
7
INCOME TAX CONTINUED
(d) Tax (expense) benefit related to items of other comprehensive income.
There were no items of comprehensive income during the year giving rise to any income expense (benefit).
(e) Tax losses
The Group has unconfirmed tax losses arising in Australia of $981,322 (2017: $43,289) that are available for
offset against future taxable profits of the company. The deferred income tax asset of $269,863 (2017: $13,380)
arising from these losses has not been brought to account at reporting date, as realisation of the benefit is
unprobable at this point in time. The Group will continue to review this regularly to determine whether to
recognize these tax losses as deferred tax asset in the future.
Tax consolidation
Effective from 1 July 2002, Cryosite Limited and its 100% owned subsidiary formed a tax consolidated group.
On formation of the tax consolidated group, the entities in the tax consolidated group agreed to enter into a
tax sharing deed which will, in the opinion of the directors, limit the joint and several liabilities of the wholly-
owned entities in the case of default by the head entity Cryosite Limited. The tax sharing deed was signed on
12 May 2011.
The entities have also agreed to enter into a tax funding agreement under which the wholly-owned entities
fully compensate the Company for any current tax payable assumed and are compensated by the Company for
any current tax loss, deferred tax assets and tax credits that are transferred to the Company under the tax
consolidation legislation. The tax consolidated current tax liability or current year tax loss and other deferred
tax assets are required to be allocated to the members of the tax consolidated group in accordance with UIG
1052. The group uses a group allocation method for this purpose where the allocated current tax payable,
current tax loss, deferred tax assets and other tax credits for each member of the tax consolidated group is
determined as if the company is a stand-alone taxpayer but modified as necessary to recognise membership of
a tax consolidated group. The funding amounts are determined by reference to the amounts recognised in the
wholly-owned entities’ financial statements which is determined having regard to membership of the tax
consolidated group.
The amounts receivable/payable under the tax funding agreement are due upon receipt of the funding advice
from the head entity, which is issued as soon as practicable after the end of each financial year. The head entity
may also require payment of interim funding amounts to assist with its obligations to pay tax instalments. The
funding amounts are recognised as current inter-company receivables or payables.
48
48.
Notes to the Financial Statements
For the Year Ended 30 June 2018
8
EARNINGS PER SHARE
The following reflects the income used in the basic and diluted
earnings per share computations:
Basic earnings per share
Diluted earnings per share
Basic EPS disclosure
Earnings used in EPS calculation
Net profit attributable to ordinary equity holders of
the parent
Weighted average number of ordinary shares for
basic earnings per share
Diluted EPS disclosure
Earnings used in diluted EPS calculation
Net profit attributable to ordinary equity holders
of the parent
Weighted average number of ordinary shares for
basic earnings per share
Shares deemed to be used for no consideration –
performance rights & options
Weighted average number of ordinary shares used in the
calculation of diluted EPS
Consolidated
30-Jun-18
$
30-Jun-17
$
(2.65)
(2.61)
0.48
0.48
(1,240,439)
(1,240,439)
225,100
225,100
No. of shares
46,859,563
46,859,563
(1,240,439)
225,100
(1,240,439)
225,100
No. of shares
46,859,563
46,859,563
640,114
71,105
47,499,677
46,930,668
There have been no other transactions involving ordinary shares or potential ordinary shares since the
reporting date and before completion of these financial statements
49
49.
Notes to the Financial Statements
For the Year Ended 30 June 2018
8
EARNINGS PER SHARE CONTINUED
Consolidated
30-Jun-18
$
30-Jun-17
$
The following reflects the income used in the basic and diluted
earnings per share for continuing operations computations:
Basic earnings per share
Diluted earnings per share
(0.002)
(0.002)
(0.001)
(0.001)
Basic EPS for continuing operations disclosure
Earnings used in EPS for continuing operations
calculation
Net profit attributable to ordinary equity holders of
the parent
Weighted average number of ordinary shares for
basic earnings per share for continuing operations
Diluted EPS for continuing operations disclosure
Earnings used in diluted EPS for continuing
operations calculation
Net profit attributable to ordinary equity holders
of the parent
Weighted average number of ordinary shares for
basic earnings per share
Shares deemed to be used for no consideration –
performance rights & options
Weighted average number of ordinary shares used in the
calculation of diluted EPS
(75,280)
(23,453)
(75,280)
(23,453)
No. of shares
46,859,563
46,859,563
(75,280)
(23,453)
(75,280)
(23,453)
No. of shares
46,859,563
46,859,563
640,114
71,105
47,499,677
46,930,668
There have been no other transactions involving ordinary shares or potential ordinary shares since the
reporting date and before completion of these financial statements
50
50.
Notes to the Financial Statements
For the Year Ended 30 June 2018
9 DIVIDENDS PAID OR PROPOSED ON ORDINARY SHARES
Declared and paid during the year:
Declared
Final unfranked dividend
nil cents per share for 2018 (0.5 cents per share for
2017)
Interim unfranked dividend
nil cents per share for 2018 (0.5 cents per share for
2017)
Total Declared
Total Dividends Paid
Consolidated
2018
$
2017
$
-
-
-
-
234,298
234,269
468,567
468,597
No further dividends have been declared or recommended at the date of this report.
10 CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short-term deposits
534,181
4,153,923
4,688,104
591,056
4,498,054
5,089,110
Cash at bank and on hand earns interest at floating rates based on daily bank deposit rates. Short-term deposits
are made for varying periods of between one day and six months depending on the immediate cash
requirements of the group and earn interest at the respective short-term deposit rates.
The fair value of cash and cash equivalents for the consolidated group and parent entity is $4,688,104 (2017:
$5,089,110).
Reconciliation of cash
For purposes of the Statement of Cash Flow, cash and cash equivalents as at 30 June 2018 and the prior year
are as shown above.
51
51.
Notes to the Financial Statements
For the Year Ended 30 June 2018
11 STATEMENT OF CASH FLOW RECONCILIATION
Reconciliation of the net profit after tax to the net
cash flows from operations
Net profit
Less: Transfer to investing activities
Less: Transfer to financing activities
Adjustments for non-cash items
Depreciation and amortisation of non-current assets
Impairment loss for discontinued operations
Increase (Decrease) in employee benefits – LSL
Grant of Performance rights
Changes in assets and liabilities
(Increase) Decrease in trade and other receivables
Decrease (Increase) in inventory
Decrease (Increase) in other assets*
Decrease in deferred tax asset
Increase (Decrease) in trade and other creditors
Decrease (Increase) in unearned income
Increase (Decrease) in income tax provision
Decrease in employee claims provision
Increase (Decrease) in bonus provision
Increase (Decrease) in dividend provision
Increase in employee benefits – annual leave
Consolidated
2018
$
2017
$
(1,240,439)
(42,680)
-
424,138
555,586
(49,145)
35,248
1,214,737
57,240
(446,850)
54,817
(626,214)
(59,461)
-
(130,000)
41,501
22
(50,406)
225,100
(75,452)
(500,000)
587,651
-
(49,347)
13,768
722,182
38,902
158,018
109,222
(24,308)
502,191
(52,088)
130,000
-
-
(159,050)
Net cash flow from operating activities
(261,906)
1,626,789
*Includes prepayment of $362,756 relating to new technology platform
12 TRADE AND OTHER RECEIVABLES - CURRENT
Trade receivables
Allowance for impairment loss (a)
Other receivables
Carrying amount of trade and other receivables
1,319,588
(45,590)
1,273,998
85,133
1,359,131
2,220,279
(40,515)
2,179,764
130,523
2,310,287
52
52.
Notes to the Financial Statements
For the Year Ended 30 June 2018
12 TRADE AND OTHER RECEIVABLES - CURRENT CONTINUED
(a)
Allowance for impairment loss
Trade receivables are non-interest bearing. Term payment plans are offered to customers under cord blood
collection contracts. Customers have an option of payment in full, over 12 to 24 months or annually. A provision
for impairment loss is recognised when there is objective evidence that an individual trade receivable is impaired,
or trade receivables collectively. When there is an impairment loss, it has been included in the administration
expense item. No individual debtor amount within the impairment allowance at year end is material.
Movements in the provision for impairment loss were as follows:
Consolidated
2018
At the beginning of the year
Increase/(reduction) in impairment loss during the
year
At the end of the year
(b)
Analysis of trade receivables
At 30 June, the ageing analysis of trade receivables is as follows:
2017
$
40,515
5,075
45,590
$
92,603
(52,088)
40,515
Total
Not yet
due
0-30
Days
31-60
Days
$
$
$
$
61-90
Days
PDNI*
$
+91
Days
PDNI*
$
+91
Days
CI**
$
1,319,588
2018
Current
Non-Current
cURRENTDDD
Total
Consolidated 1,562,852 1,043,093
DDDDcUCurre
nt
2017
799,829
243,264
243,264
197,058
-
42,163
-
41,682
-
192,661
-
45,590
-
197,058
42,163
41,682
192,661
45,590
Current
Non-Current
Total
Consolidated
2,220,279 1,821,490
531,661
531,661
237,394
-
51,752
-
3,003
-
80,685
-
25,955
-
2,751,940 2,353,151
237,394
51,752
3,003
80,685
25,955
* Past due not impaired (“PDNI”) ** Past due considered impaired (“CI”)
Receivables past due but not considered impaired have been reviewed and it is believed that payment will be
received in full.
Other balances within trade and other receivables do not contain impaired assets and are not past due. It is
expected that these other balances will be received when due.
53
53.
Notes to the Financial Statements
For the Year Ended 30 June 2018
12 TRADE AND OTHER RECEIVABLES - CURRENT CONTINUED
(c) Fair value and credit risk
Due to the nature of these receivables, their carrying value is assumed to approximate their fair value. The
maximum exposure to credit risk is the fair value of receivables. Collateral is not held as security, nor is it the
Group’s policy to transfer (on-sell) receivables to special purpose entities.
13 INVENTORIES
Consumables at cost
Total Inventories at cost
14 PREPAYMENTS
Current
Non-Current
Total Prepayments*
Consolidated
2018
$
23,845
23,845
2017
$
81,569
81,569
Consolidated
2018
$
2017
$
289,078
290,205
579,283
132,433
-
-
*Prepayments includes a payment for a new technology platform which will be expensed over the next 5 years.
This has been split into current of $72,551 and non-current of $290,205.
15 TRADE AND OTHER RECEIVABLES – NON CURRENT
Trade receivables
Carrying amount of non-current trade and other
receivables
Trade receivables
Consolidated
2018
$
2017
$
243,264
531,661
243,264
531,661
Trade receivables due under term payment plans
243,264
531,661
The maximum exposure to credit risk at the time of reporting is the carrying value of the receivables.
54
54.
Notes to the Financial Statements
For the Year Ended 30 June 2018
16
INVESTMENT IN CONTROLLED ENTITY
Equity interest held by the
consolidated entity
Investment
Name – Cryosite Distribution Pty Limited
2018
%
2017
%
2018
$
2017
$
Country of incorporation – Australia
100
100
20
20
17
PLANT AND EQUIPMENT
Leasehold
Improvements
$
Fixtures
and
fittings
$
Information
Technology
Warehouse
Equipment
Office
furniture
&
equipment Total
$
$
$
$
200,000
-
72,521
36,114
217,284
4,072,361
13,995
4,576,161
17,271
142,324
363
196,072
- -
-
-
-
-
200,000
108,635
234,555
4,214,685
14,358
4,772,233
11,612.73
25,194
28,823
98,989
16,896
181,515
211,613
133,829
263,378
4,313,674
31,254
4,953,748
(200,000)
(72,521)
(135,808)
(2,953,202)
(8,581)
(3,370,112)
Cost
At 1 July 2016
Additions
Disposals
At 30 June 2017
Additions
Disposals
At 30 June 2018
Depreciation and
Impairment
At 1 July 2016
Depreciation charge
-
(554)
(63,364)
(416,260)
(2,926)
(483,104)
Disposals
- -
-
-
-
-
At 30 June 2017
Depreciation charge
Disposals
Impairment loss*
At 30 June 2018
Net Book Value - 30 June
2017
Net Book Value - 30 June
2018
(200,000)
(73,075)
(199,172)
(3,369,462)
(11,507)
(3,853,216)
(734)
(5,911)
(30,081)
(321,523)
(4,617)
(362,866)
-
-
-
-
-
-
-
(115,012)
-
-
-
(115,012)
(200,734)
(78,986)
(229,253)
(3,805,997)
(16,124)
(4,331,094)
-
35,560
35,383
845,223
2,851
919,017
10,879
54,843
34,125
507,677
15,130
622,654
*As result of the decision to cease the collection and processing of cord blood and tissue samples, the board
reviewed the assets associated with these operations and, as a result of this review, concluded that these assets
were impaired and consequently they have resolved to write down these assets by $115,012.
55
55.
Notes to the Financial Statements
For the Year Ended 30 June 2018
18
INTANGIBLE ASSETS
Licenses
Licence fee - at cost
less Accumulated amortisation and impairment expense
Net Carrying Amount
Software development
Software development -at cost
less Accumulated amortisation and impairment expense
Net Carrying Amount
Intellectual property
Stemlife storage contracts - at cost
less Accumulated amortisation and impairment expense
Net Carrying Amount
Total Net Carrying Amount
Consolidated
2018
$
255,310
(255,310)
-
294,615
(237,835)
56,780
152,763
(152,763)
-
56,780
2017
$
255,310
(20,700)
234,610
294,615
(69,990)
224,625
152,763
(52,763)
100,000
559,235
Reconciliations of the written down values at the beginning and end of the current and previous financial
year are set out below:
Licences
$
Software
development
$
Intellectual
property
$
Total
$
Balance at 1 July 2016
241,510
172,189
149,973
563,672
Additions
-
100,074
-
100,074
Amortisation expense
(6,900)
(47,638)
(49,973)
(104,511)
Balance at 30 June 2017
234,610
224,625
100,000
559,235
Additions
-
-
-
-
Amortisation for the year
(2,750)
(50,641)
(8,490)
(61,881)
Impairment loss
Balance at 30 June 2018
(231,860)
(117,204)
(91,510)
(440,574)
-
56,780
-
56,780
56
56.
Notes to the Financial Statements
For the Year Ended 30 June 2018
18
INTANGIBLE ASSETS CONTINUED
Licence Fee
During the 2014 financial year, the Company entered into an exclusive licensing agreement within Australia and
New Zealand to assist with the in-house development of new technologies to develop the range of stem cell service
offerings. The Directors have assessed a finite life to the licence in line with the underlying patents and associated
methodologies. Amortisation of $2,750 (2017: $6,900) has been charged for this year. The assessment of useful
life is reviewed annually by the Directors to determine whether the assumptions made continue to be appropriate
and supportable. If not, the useful life assessment is changed on a prospective basis.
In 2018, the Company has ceased the collection and processing of new cord blood and cord tissue samples. As a
result, the remaining net book value of the licence fee is fully impaired during the year. Refer to Note 33.
Software Development
During the 2016 and 2017 financial years, the Company has invested in the development of in-house software to
enhance its operating capability. These costs include the direct costs of external consultants and any supporting
software acquired from a third party. The assessment of useful life is reviewed annually by the Board to determine
whether the assumptions made continue to be appropriate and supportable. If not, the useful life assessment is
changed on a prospective basis.
In 2018, the Company has ceased the collection and processing of new cord blood and cord tissue samples. As a
result, software associated with this segment is considered fully impaired during the year. Refer to Note 33.
Intellectual Property
In 2017, the Company acquired the storage contracts from a liquidated company called Stemlife. The cost reflects
the direct costs paid to Stemlife and the legal fees incurred in the transaction. The assessment of useful life is
reviewed annually by the Directors to determine whether the assumptions made continue to be appropriate and
supportable. If not, the useful life assessment is changed on a prospective basis.
In 2018, the Company has ceased the collection and processing of new cord blood and cord tissue samples. As a
result, the remaining net book value of intellectual property is fully impaired during the year. Refer to Note 33.
57
57.
Notes to the Financial Statements
For the Year Ended 30 June 2018
19
TRADE AND OTHER PAYABLES
CURRENT LIABILTIES
Trade payables
Other payables
Total current payables
NON-CURRENT LIABILTIES
Client deposits
Total non-current payables
Fair value
Consolidated
2018
$
163,486
291,560
455,046
2017
$
387,440
698,314
1,085,754
441,682
441,682
441,682
441,682
Trade payables are non-interest bearing and are normally settled on 30 to 90 day terms. Therefore, their
carrying value is assumed to be their fair value.
Other payables are non-interest bearing and are on ranging from 30 days to 12 month terms. Their carrying
value is assumed to be fair value.
At 30 June, the ageing analysis of trade payables is as follows:
Total
$
Not Yet due
$
0-30
Days
$
31-60
Days
$
61-90
Days
$
+91
Days
$
2018
Consolidated
2017
Consolidated
163,486
114,149
43,379
-
5,958
387,440
378,503
270
(354)
9,021
-
-
Other balances within trade and other payables are not past due. It is expected that these other
balances will be paid.
58
58.
Notes to the Financial Statements
For the Year Ended 30 June 2018
Consolidated
2018
$
2017
$
20
UNEARNED INCOME - CURRENT
Unearned service revenue
425,414 393,565
Represents cord blood and tissue revenues received in advance for services to be rendered under long-term
storage contracts.
21
UNEARNED INCOME – NON CURRENT
Unearned service revenue
3,998,804
4,090,114
Represents cord blood and tissue revenues received in advance for services to be rendered under long-term
storage contract.
22
PROVISIONS
Current
Annual leave
Long service leave
Provision for Bonuses
Dividend payable
Provision for Employee Claims
Non-current
Long service leave
Lease make good
(a) Movements in provisions
Annual leave
Balance at beginning of the year
Arising /(taken) during the year
Long Service Leave
Balance at beginning of the year
Arising / (taken) during the year
Consolidated
2018
$
2017
$
177,895
40,358
41,501
1,382
-
261,156
18,162
200,000
218,162
228,300
72,449
-
1,382
130,000
432,131
35,215
200,000
235,215
228,301
(50,406)
177,895
72,449
(32,091)
40,358
387,350
(159,050)
228,301
157,011
(84,562)
72,449
Nature and timing of long service leave provision is based on the accounting policy and the significant
59
59.
Notes to the Financial Statements
For the Year Ended 30 June 2018
22 PROVISIONS CONTINUED
estimations and assumptions applied in the measurement of this provision as in Note 3.
Provision for Bonuses
Balance at beginning of the year
Raised during the year
Dividends Payable
Balance at beginning of the year
Declared during the year
Final 2017 plus 2018 Interim dividends paid during the
year
Lease make-good provision
Consolidated
2018
2017
$
$
-
41,501
41,501
1,382
-
-
1,382
-
-
-
1,382
468,567
(468,567)
1,382
Balance at beginning of the year
200,000
200,000
Arising during the year
Nature and timing of lease make-good provision
200,000
-
200,000
In accordance with the current lease agreement with Allsup Pty Limited for the premises in Granville, at the end
of the lease term in October 2019, the Group may either restore the leased premises in Granville to its original
condition or alternatively remove unfixed chattels and equipment and pay an amount of $150,000 (excluding
GST). The current lease agreement provides for an extension and the current provision is considered adequate
based on the Company’s current renewal negotiation with Allsup Pty Limited and the understanding reached to
date.
The provision of $200,000 has been raised in respect of the Group’s obligation to reflect this arrangement
regarding the leased premises and is included in the carrying amount of plant and equipment. Because of the
long-term nature of the liability, the greatest uncertainty in estimating the provision is the actual cost that may
ultimately be renegotiated and finalised with Allsup Pty Limited covering either a renewal of the existing or
negotiating a new lease with them though $200,000 is considered fairly stated in either circumstance.
For the relevant accounting policy and the significant estimations and assumptions applied in the measurement
of this provision refer to Note 3.
60
60.
Notes to the Financial Statements
For the Year Ended 30 June 2018
22 PROVISIONS CONTINUED
Provision for Employee Claims
Balance at beginning of the year
Raised during the year
Consolidated
2018
$
2017
$
130,000
(130,000)
-
-
130,000
130,000
In 2017 a former Director and former employee made a claim for an additional payment of statutory
entitlements and a separate claim for an additional termination entitlement. At the time the Board had the
view that both of these claims are without merit but made a provision for a portion of the claims and legal fees
out of prudence. The matter was settled in 2018 with details outlined in note 34.
23
CONTRIBUTED EQUITY
Consolidated
Ordinary shares
Movement in ordinary shares on issue
2018
$
5,861,788
2017
$
5,861,788
Beginning of the financial year
Issuance of capital
Return of capital
End of the financial year
2018
Shares No.
46,859,563
-
46,859,563
$
5,861,788
-
5,861,788
2017
Shares No.
46,859,563
-
-
46,859,563
$
5,861,788
-
-
5,861,788
Terms of conditions of contributed equity
Ordinary shares carry the right to receive dividends and entitle their holder to one vote, either in person or by
proxy, at a meeting of the Company.
Movement in accumulated losses
Balance at the beginning of the year
Share option reserve adjustment for expiry of
options
Share rights reserve adjustment for cancellation of
rights
Net profit for the year
Equity dividends declared
Balance at the end of the year
Consolidated
2018
$
2017
$
(2,718,273)
(2,483,483)
-
(1,240,439)
-
(3,958,712)
-
8,677
225,100
(468,567)
(2,718,273)
61
61.
Notes to the Financial Statements
For the Year Ended 30 June 2018
24
RESERVES
Share rights reserve
Movements in share options reserve
Balance at the beginning of the year
Performance rights granted
Performance rights cancelled
Balance at the end of the year
Consolidated
2018 2017
$ $
5,091
5,091
5,091
-
35,248 13,768
40,339
(8,677) - - - -
5,091
During the year performance rights valued at $35,248 were granted to employees. The purpose of the share
rights reserve is to record the value of share-based payments provided to employees as part of their
remuneration. Refer to Note 28 for further details of these plans.
-
25
COMMITMENTS AND CONTINGENCIES
(a) Operating lease commitments – Group as lessee
Commercial property
On 1 November 2016, the company entered into a four-year lease over a commercial property at South
Granville in Sydney.
Future minimum rentals payable under commercial property leases as at 30 June are as follows:
Within one year
After one year but not more than five years
Consolidated
2018
$
247,490
83,040
330,530
2017
$
242,637
330,530
573,167
Commercial Property Security deposits
The security deposit for the lease at Granville is covered by a bank guarantee for $152,227 issued by the
Commonwealth Bank of Australia. No collateral is held as security.
Plant and equipment
The Group currently has a number of operating leases on items of plant and equipment used in day to day
operations of the business.
Leases have an average life of five years with renewal terms included in the contracts. Renewals are at the
option of the specific entity that holds the lease.
There are no restrictions placed upon the lessee by entering into these leases.
62
62.
Notes to the Financial Statements
For the Year Ended 30 June 2018
25 COMMITMENTS AND CONTINGENCIES CONTINUED
Future minimum rentals payable under non-cancellable operating leases as at 30 June are as follows:
Consolidated
2018
$
14,640
4,880
19,520
2017
$
14,640
19,520
34,160
Within one year
After one year but not more than five years
(a)
Plant and equipment commitments
There are no capital expenditure commitments at reporting date.
(b)
Contingent Liabilities
The Group is not aware of any contingent liabilities at reporting date.
26 EVENTS OCCURRING AFTER THE REPORTING PERIOD
On the 11th July 2018, the Company was notified by the ACCC that it would commence civil proceedings against
Cryosite in the Federal Court of Australia. As a result of this and other action by the ACCC, the Company expects it
will incur substantial legal costs with the potential to incur financial penalties in the 2019 financial year.
27
AUDITOR’S REMUNERATION
Amounts received or due and receivable by Mazars for:
- Audit or review of the financial report of the entity and any other entity in
the consolidated group
- Other services in relation to the entity and any other entity in the
consolidated group
Consolidated
2018
$
2017
$
75,104
77,333
4,300
79,404
5,500
82,833
28
RELATED PARTY DISCLOSURES
The consolidated financial statements include the financial statements of Cryosite Limited and its wholly owned
subsidiary Cryosite Distribution Pty Limited. For details, refer to Note 15.
During the year total payments of $51,375 were made to COSA Pty Ltd which is owned by Bryan Dulhunty, a
director of the Company. COSA Pty Ltd charged the Company $24,000 for company secretarial services and
$27,375 in respect to services provided by Bryan Dulhunty as a director of the company from 2nd March 2018.
Cryosite Limited is the ultimate parent entity.
63
63.
Notes to the Financial Statements
For the Year Ended 30 June 2018
Cryosite Distribution Pty Limited neither has a bank account nor does it hold any cash in its own right. All receipts
and payments for this entity are made by Cryosite Limited, with the amounts charged against an inter-company
loan account. No interest is payable on this balance and no amounts are due and payable.
Cryosite Limited and Cryosite Distribution Pty Limited are part of a tax consolidation group and has entered into a
tax funding agreement. Under this agreement, payments are to be made for tax losses transferred between entities
in the group. Refer to Note 7.
Cryosite Limited has received a dividend from Cryosite Distribution Pty Limited for $3,500,000 in 2018 (2017:
$6,700,000).
29
SHARE-BASED PAYMENTS EXPENSE
Total Expense recognized in the profit and loss relating
to share based payments
Performance rights granted
Consolidated
2018
$
35,248
35,248
2017
$
13,678
13,678
Long Term Incentive Plan : Cryosite Employee Incentive Plan (CEIP)
On the 23rd February 2017, the Cryosite Employee Incentive Plan (CEIP) was established by the Company. On
invitation, the CEIP provides executives the opportunity to receive a long-term equity based incentive, currently
a grant of performance rights, in each financial year. The issue and granting of these performance rights is
governed by the CEIP Plan Rules.
The annual grant value, subject to shareholder approvals, is defined as a % of fixed remuneration or as
otherwise agreed. A %’s of fixed remuneration were used in determining the grant value for each executive.
The grant value was converted into the number of performance rights to be issued using the WVAP of Cryosite
shares in the 30 trading days following the release of the Annual Report.
Full details of the performance rights issued to executive are noted in the remuneration report which forms
part of the Directors’ Report.
The following components of the CEIP are as follows;
Vesting date
Vesting conditions
Performance conditions
Service conditions
Expiry date
Exercise of Rights
Up to 36 months from date of grant.
Performance rights will only vest after certain performance and conditions are met.
Compound Annual Growth Rates (CAGR) of the Earnings per Share (EPS) over
measurement period need to be achieved from a base year.
Continuous employment with Cryosite from the date of the performance rights
are granted until the vesting date.
Performance rights will expire 1 month after the vesting date
Any Performance rights which meet the Vesting conditions will be available for
exercise up until the Expiry date.
64
64.
Notes to the Financial Statements
For the Year Ended 30 June 2018
29
SHARE-BASED PAYMENT EXPENSE CONTINUED
Summary of Performance Rights granted
The board has granted following number of performance rights to employees:
Key management personnel
Staff
No of Performance Rights
2018
503,944
294,303
798,247
2017
570,665
0
570,665
Balance granted as at 1st July 2016
Performance Rights granted 27/2/2017
Performance Rights cancelled*
Balance granted as at 30th June 2017
Performance Rights granted 27/11/2017
Performance Rights granted 7/2/2018
Balance granted as at 30th June 2018
Key management
personnel
No
Staff**
No
0
570,665
(359,663)
211,002
295,647
208,297
714,946
0
0
0
0
294,303
0
294,303
Total
No
0
570,665
(359,663)
211,002
589,950
208,297
1,009,249
*cancelled when Andrew Shine resigned on 30 June 2017
**performance rights were issued to other staff not considered key management personnel in 2018
Conditions of Performance Rights
Grant date
Vesting date
Expiry date
Period
Base Year
Basic EPS
Measure
Targets
CAGR of EPS over
measurement Period
relative to base year
Grant Date
< 20%
20% to 25%
>25%
7th February 2018
1 September 2020
27 February 2017
1 September 2019
30 September 2019
1/7/2016 to
30/6/2019
2016
0.64 cents
Earning per Share (EPS) Compound Annual Growth Rate (CAGR)
27 November 2017
1 September 2020
30 September 2020 30 September 2020
1/7/2017 to
30/6/2020
2017
0.48 cents
1/7/2017 to
30/6/2020
2017
0.48 cents
EPS (cents)Target
per plan
27-Nov-17
<0.83
27-Feb-17
< 1.10592
7-Feb-18
<0.83
1.105592 to 1.25
>1.25
0.83 to 0.94
>0.94
0.83 to 0.94
>0.94
Percentage of
Performance
Rights that vest
0%
50-100% (pro-
rata)
100%
As at 30 June 2018, no performance rights had vested.
65
65.
Notes to the Financial Statements
For the Year Ended 30 June 2018
29
SHARE-BASED PAYMENT EXPENSE CONTINUED
Assumptions used to determine fair value of performance rights
The fair value of the performance rights granted was calculated using a Black Scholes model
using the following assumptions:
Date of effective valuation:
Fair value at valuation date
Risk-free rate:
Standard deviation (annualised):
Closing share price at Effective
Date:
Exercise price:
Expected life of right (years)
Annualised Dividend Rate:
27-Feb-17
$0.178
1.93%
45%
$0.200
$0.000
2.51
4.6%
27-Nov-17
$0.135
1.90%
50%
$0.135
$0.000
2.77
0.0%
7-Feb-18
$0.100
2.11%
50%
$0.100
$0.000
2.54
0.0%
30
KEY MANAGEMENT PERSONNEL
(a)
Key management Personnel
Non- Executive Directors
Mr Bryan Dulhunty
Mr Andrew Kroger
Mrs Nicola Swift
Chairman (Non-executive) (appointed 2/3/2018)
Director (Non-executive)
Director (Non-executive) (appointed 3/11/2016)
Key management personnel
Mr Andrew Shine
Mr Mark Byrne
Chief Executive Officer (resigned 30/6/2017)
Chief Executive Officer
In January 2018, the board appointed as the company’s CEO, Mark Byrne. Mark had previously held the position
of company CFO since June 2016 and interim CEO since June 2017.
Due to the relatively small number of employees, there is only one key management personnel having
authority and responsibility for planning, directing and controlling the activities of the entity either directly
or indirectly.
66
66.
Notes to the Financial Statements
For the Year Ended 30 June 2018
30
KEY MANAGEMENT PERSONNEL CONTINUED
(b)
Compensation for key management personnel
Non-executive directors
Short-term employee benefits
Post-employment benefits
Sub-total non-executive directors
Key Management Personnel
Short-term employee benefits
Post-employment benefits
Other long-term benefits
Share base payments
Sub-total key management personnel
Total compensation
Consolidated
2018
$
221,913
16,201
238,114
246,026
21,472
-
31,740
299,238
537,352
2017
$
173,653
16,497
190,150
560,491
56,416
23,316
13,768
653,991
844,141
* This includes payments to made to COSA Pty which is owned by Bryan Dulhunty. During the year the company
charged the Company $24,000 for company secretarial services and $27,375 in respect to services provided by
Bryan Dulhunty as a director of the company from 2nd March 2018.
31
FINANCIAL INSTRUMENTS
The Group’s principal financial liabilities comprise of trade payables. The Group has various financial assets such
as trade receivables, cash and short-term deposits, which arise directly from its operations.
The Group does not enter into any derivative transactions. The main risks arising from the Group’s financial
instruments are cash flow interest rate risk and credit risk. The Board of Directors reviews and monitors each of
these risks.
(a)
Interest rate risk
The Group’s exposure to the risk of changes in market interest rates relates primarily to:
-
-
cash and cash deposits with floating interest rates; and
assessments of appropriate discount rates for deferred arrangements.
The consolidated entity's exposure to interest rate risk and the effective weighted average interest rate for
classes of financial assets is set out below:
67
67.
Notes to the Financial Statements
For the Year Ended 30 June 2018
31 FINANCIAL INSTRUMENTS CONTINUED
2018
CONSOLIDATED
Note
Weighted
average
effective
interest
rate
%
Financial assets
Interest bearing deposits –
maturing at various dates
during year ending
30 June 2018
Cash and cash equivalents
1.85
4,153,923
10
10
0.59
534,181
Current receivables – maturing at
various dates
12
Non-current receivables 15
-
-
Financial liabilities
Trade creditors and accruals –
maturing at various dates
during the year ended 30 June
2018.
Floating
interest
rate
Fixed
interest
rates
Non-
interest
bearing
Total
$
$
-
-
$
$
-
4,153,923
-
534,181
-
-
- 1,380,811
1,380,811
- 243,264 243,264
4,688,104 - 1,624,075 6,312,179
19
2.2
114,149
-
340,897
455,046
2017
CONSOLIDATED
Note
Weighted
average
effective
interest
rate
%
Floating
interest
rate
Fixed
interest
rates
Non-
interest
bearing
$
$
Total
$
Financial assets
Interest bearing deposits –
maturing at various dates
during year ended
30 June 2017
Cash and cash equivalents
2.27
4,498,054
10
10
0.78
591,056
Current receivables – maturing at
various dates
Non-current receivables
12
15
-
-
$
-
-
-
4,498,054
-
591,056
-
- 2,310,287 2,310,287
-
5,089,110
- 531,661
-
531,661
2,841,948 7,931,058
Financial liabilities
Trade creditors and accruals –
maturing at various dates
during the year ended 30 June
2017.
68.
19
2.2
378,503
-
707,251
1,085,754
68
Notes to the Financial Statements
For the Year Ended 30 June 2018
31 FINANCIAL INSTRUMENTS CONTINUED
Interest rate sensitivity analysis
The Group has no material exposure to any probable interest volatility.
(b)
Credit risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents, trade and
other receivables. The Group's exposure to credit risk arises from potential default of the counter party, with a
maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is addressed
in each applicable note.
The Group trades with a number of types of customers, the main ones being:
-
Incorporated companies
- Research institutes both private and academic
-
Individuals.
Incorporated Companies:
The Group trades with recognised, publicly listed companies and large unlisted proprietary companies and as
such collateral is not requested nor is it the Group's policy to securitise its trade and other receivables.
Research institutes both private and academic
The Group also trades with research institutes that are either publicly, privately or government owned along
with recognised universities. Such customers are subject to credit search and collateral is not requested nor is
it the Group’s policy to securitise its trade and other receivables.
Individuals:
The Group ensures that credit card information is obtained for all individual customers.It is the Group's policy
that all customers who wish to trade on credit terms are subject to credit verification procedures including an
assessment of their independent credit rating, financial position, past experience and industry reputation. Risk
limits are set for each individual customer in accordance with parameters set by the
Board. These risk limits are regularly monitored.
There are no significant concentrations of credit risk within the Group. There are no transactions that are not
denominated in the functional currency of the Group.
(c)
Liquidity risk
The Group has assessed liquidity risk to be low at balance date and at the date of this report based on total
current assets, including cash and equivalents, of $6,381,838 at balance date less current liabilities of
$1,141,616 an excess of current assets over current liabilities amounting to $4,967,222. The Group generated
a negative ($261,906) cash flow from operations during the current year. Liquidity risks are managed by
matching the payment and receipt cycle.
69
69.
Notes to the Financial Statements
For the Year Ended 30 June 2018
31
FINANCIAL INSTRUMENTS CONTINUED
Maturity analysis of financial assets and liabilities based on management’s expectation.
Year ended
30 June 2018
Less than
6 months
$
6-12
months
$
1-5 years
$
Greater
than 5
$
years
Total
$
Consolidated Financial Assets
Cash and cash equivalents
4,688,104
-
-
-
4,688,104
Trade and other receivables
1,266,988
113,823
233,098
10,166
1,624,075
Consolidated Financial liabilities
Trade and other payables
455,046
-
-
-
455,046
5,955,092
113,823
233,098
10,166
6,312,179
Net maturity
5,500,046
113,823
233,098
10,166
5,857,133
Year ended
30 June 2017
Less than 6
months
$
6-12
months
$
1-5 years
$
Greater
than 5
$
years
Total
$
Consolidated Financial Assets
Cash and cash equivalents
5,089,110
-
-
-
5,089,110
Trade and other receivables
1,817,201
406,081
487,790
40,868
2,751,940
Consolidated Financial liabilities
Trade and other payables
1,085,754
-
-
-
1,085,754
6,906,311
406,081
487,790
40,868
7,841,050
Net maturity
5,820,557
406,081
487,790
40,868
6,755,296
The risk implied from the values shown in the table above, reflects a balanced view of cash inflows and outflows.
Trade payables and other financial liabilities mainly originate from investment in working capital such as
inventories and trade receivables. These assets are considered in the Group’s overall liquidity risk. To monitor
existing financial assets and liabilities as well as enable an effective controlling of future risks the Directors
monitor the expected settlement of financial assets and liabilities.
70
70.
Notes to the Financial Statements
For the Year Ended 30 June 2018
31 FINANCIAL INSTRUMENTS CONTINUED
(d)
Capital management
When managing capital, the boards’ objective is to ensure the entity continues as a going concern as well as to
maintain returns to shareholders. The board also aims to maintain a capital structure that ensures the lowest
cost of capital available to the entity. As part of regular reviews, management considers the cost of capital and
the risks associated with each class of capital. Upon review, the Group will balance its overall capital structure
through the payment of dividends, new share issues as well as the issue of new debt or the redemption of
existing debt. The Group's overall strategy remains unchanged from 2017.
The Board of Directors is responsible for assessing financial risks, related controls and other financial risk
management strategies. The Company deploys its assets and liabilities so as to manage risk at commercially
appropriate levels, bearing in mind the constraints imposed by the consolidated entity’s size, results and other
financial circumstances. The Company aims to balance opportunities to improve profitability against related
risks of losses of assets or the incurrence of additional liabilities.
(e)
Fair value
All financial assets and liabilities have been disclosed in the financial statements and notes thereto at their
carrying value, which approximates their net fair values.
The fair value of the assets and liabilities is included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale.
Fair values of balances related to long term revenue contracts are determined using a discounted cash flow
method using discount rates that reflect the appropriate level of risk over the life of the long term revenue
stream.
71
71.
Notes to the Financial Statements
For the Year Ended 30 June 2018
32
PARENT ENTITY FINANCIAL INFORMATION
30 June 2018
(a) ASSETS
Total Current Assets
Total Non-Current Assets
TOTAL ASSETS
(b) LIABILITIES
Total Current Liabilities
Total Non-Current Liabilities
TOTAL LIABILITIES
(c) EQUITY
Contributed equity
Share option reserves
Accumulated losses
TOTAL EQUITY
(d) TOTAL COMPREHENSIVE INCOME
Net Profit of the parent entity for the year net of income tax
Performance rights cancelled
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
2018
$
2017
$
5,777,743
1,361,861
7,139,603
1,161,023
4,658,649
5,819,672
5,861,788
40,339
6,946,861
2,213,689
9,160,550
1,745,365
4,767,012
6,512,377
5,861,788
5,091
(4,582,196)
(3,218,706)
1,319,931
2,648,173
(1,363,490)
-
(1,363,490)
2,898,278
8,677
2,906,955
The individual financial statements for the parent entity show the following aggregate amounts:
(e) GUARANTEES ENTERED INTO BY THE PARENT ENTITY
No guarantees have been entered into by the parent entity in relation to the debts of its subsidiaries.
(f) COMMITMENTS AND CONTINGENCIES OF THE PARENT ENTITY
Commitments and contingencies for the parent entity are the same as those disclosed in Note 24.
72
72.
Notes to the Financial Statements
For the Year Ended 30 June 2018
33 DISCONTINUED OPERATIONS
In October 2017, the Company completed the closure of the laboratory operations and the departure of staff
associated with the collection and processing of cord blood and tissue samples. The Company will continue to
service its existing storage contracts until the full contract terms of either 18 or 25 years.
As result of the decision to cease the collection and processing of cord blood and tissue samples, the board
reviewed all non-financial assets associated with these operations and, as a result of this review, concluded that
these assets were impaired. Consequently they have resolved to write down these assets by the following
amounts:
Property, plant and equipment
Licence fees
Intellectual property
Software
Total impairment loss
2018
$
115,012
231,860
91,510
117,204
555,586
No impairment was deemed necessary for the assets related to the storage and maintenance of cord blood and
tissue samples.
The results of operations related to collection and processing of cord blood and tissue samples are presented
below:
Revenue
Expenses
Impairment loss
Pre-tax profit/(loss) for the financial year
Income tax credit/(expense)
Post-tax profit/(loss) for the financial year from
discontinued operations
2018
$
2017
$
240,108
(963,554)
(555,586)
(1,279,032)
283,289
4,279,675
(3,755,091)
-
524,584
(157,375)
(995,743)
367,209
The storage revenue from existing cord blood and storage contracts are presented as part of continuing
operations from Individualised Consumer Biologics segment (see Note 4 and Note 5).
73
73.
Notes to the Financial Statements
For the Year Ended 30 June 2018
34 LEGAL SETTLEMENT
As noted in the 30 June 2017 annual report, a former Director and former employee made a claim against the
company in respect to statutory entitlements and an additional termination entitlement. Subsequently the
company has settled the claim with the net profit and loss impact after tax being:
Final settlement
Legal expenses incurred
Provision for employee claims reversed
Accruals reversed
Pre-tax profit/(loss) for the financial year
Income tax credit/(expense)
Post-tax profit/(loss) for the financial year from
legal settlement
2018
$
(195,000)
(198,677)
130,000
30,000
(233,677)
64,261
2017
$
-
(169,508)
-
-
(169,508)
50,852
(169,416)
(118,656)
Total amount paid in the settlement was $276,818 made up of $195,000 final settlement plus legal fees of
$81,818.
74
74.
INDEPENDENT AUDITOR’S REPORT TO THE DIRECTORS OF CRYOSITE
LIMITED AND CONTROLLED ENTITIES
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Cryosite Limited and controlled entities
(the “Group”), which comprises the statement of financial position as at 30 June 2018 and
statement of profit or loss and other comprehensive income, statement of changes in equity
and statement of cash flows for the year ended on that date, other selected explanatory notes
and the directors’ declaration as set out on pages 23 to 74.
In our opinion, the accompanying financial report of the Group is in accordance with the
Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the Group’s financial position as at 30 June 2018 and
of its financial performance for the year then ended; and
complying with Australian Accounting Standards to the extent described in Note 2
and the Corporations Regulations 2001.
Basis of Opinion
in accordance with Australian Auditing Standards. Our
We conducted our audit
responsibilities under those standards are further described in the Auditor’s Responsibilities
for the Audit of the Financial Report section of our report. We are independent of the Group
in accordance with the auditor independence requirements of the Corporations Act 2001 and
the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES
110 Code of Ethics for Professional Accounts (the Code) that are relevant to our audit of the
financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which
has been given to the directors of the Group, would be in the same terms if given to the
directors as at the time of this auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
MAZARS RISK & ASSURANCE PTY LIMITED
ABN: 39 151 805 275
LEVEL 12, 90 ARTHUR STREET, NORTH SYDNEY NSW 2060 PO BOX 1994, NORTH SYDNEY NSW 2059
TEL: +61 2 9922 1166 - FAX: +61 2 9922 2044
EMAIL: audit@mazars.com.au
LIABILITY LIMITED BY A SCHEME, APPROVED UNDER THE PROFESSIONAL STANDARDS LEGISLATION
75.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial report for the current year. These matters were
addressed in the context of our audit of the financial report as a whole, and in forming our
opinion thereon, but we do not provide a separate opinion on these matters. For each matter
below, our description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s Responsibility section of our
report, including in relation to these matters. Accordingly, our audit included the performance
of procedures designed to respond to our assessment of the risks of material misstatement of
the financial statements. The results of our audit procedures, including the procedures
performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
Key Audit Matter
Capitalised Software Costs
During the 30 June 2018 financial year, the
Group capitalised material costs as an
the
in
intangible asset
development
of
NetSuite, a cloud based Enterprise Resource
Platform. Intangible assets can require
in
significant estimates and
determining if capitalised costs meet the
recognition
applicable
criteria under
Australian Accounting Standards.
to
implementation
judgement
relation
and
Consequently, current year Profit and Loss
the
could be materially misstated
if
recognition criteria under AASB
138
Intangible Assets, have not been met.
How our audit addressed the matter
We considered the appropriateness of the
judgments and estimates applied by the
directors as to whether or not the capitalised
costs meet the definition of an intangible
asset per AASB 138 Intangible Assets.
We determined that the capitalised costs did
not meet the recognition requirements of
AASB 138 Intangible Assets, specifically the
identifiability criteria as the directors were
unable to prove they control the Enterprise
Resource Platform.
in
further
analysed
the director’s
We
assessment
that certain costs can be
recognised as a prepayment when applying
the accounting hierocracy under AASB 108,
with reference to other Generally Accepted
Accounting Practice in absence of specific
guidance under Australian Accounting
for Cloud
Standards
Enterprise Resource
Platforms. We
evaluated the assumptions applied and
performed tests of detail over the proposed
prepaid costs. Further, we reviewed the
Generally Accepted Accounting Practice in
accounting for Cloud Enterprise Resource
Platforms and compared the prepayment
to management workings and
criteria
detailed expenditure listings.
accounting
MAZARS RISK & ASSURANCE PTY LIMITED
ABN: 39 151 805 275
LEVEL 12, 90 ARTHUR STREET, NORTH SYDNEY NSW 2060 PO BOX 1994, NORTH SYDNEY NSW 2059
TEL: +61 2 9922 1166 - FAX: +61 2 9922 2044
EMAIL: audit@mazars.com.au
LIABILITY LIMITED BY A SCHEME, APPROVED UNDER THE PROFESSIONAL STANDARDS LEGISLATION
76.
Key Audit Matter
AASB 15 Disclosure
The Group will be effected by the adoption of
new accounting standard AASB 15 Revenue
from Contracts with Customers. The
adoption of this standard required the
directors to make a number of critical
judgements and estimates in determining
the
is
anticipated to have on the Group for
disclosure in the 30 June 2018 financial
report.
this standard
financial
impact
How our audit addressed the matter
supporting
We assessed the director’s application of
AASB 15 in accordance with the provisions of
the standard. We analysed the calculations
documentation
and
underpinning the director’s assessment of
the financial impact on the Group.
We reviewed contracts on a test basis and
performed recalculations of the anticipated
financial impact.
Responsibilities of the Directors for the Financial Report
The directors of the Group are responsible for the preparation of the financial report that gives
a true and fair view and have determined that the basis of preparation described in Note 2 to
the financial report is appropriate to meet the requirements of the Corporations Act 2001 and
is appropriate to meet the needs of the members. The directors’ responsibility also includes
such internal control as the directors determine is necessary to enable the preparation of a
financial report that gives a true and fair view and is free from material misstatement, whether
due to fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the
Group to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless the directors either intend to
liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a
whole is free from material misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance,
but is not a guarantee that an audit conducted in accordance with the Australian Auditing
Standards will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of the
financial report.
MAZARS RISK & ASSURANCE PTY LIMITED
ABN: 39 151 805 275
LEVEL 12, 90 ARTHUR STREET, NORTH SYDNEY NSW 2060 PO BOX 1994, NORTH SYDNEY NSW 2059
TEL: +61 2 9922 1166 - FAX: +61 2 9922 2044
EMAIL: audit@mazars.com.au
LIABILITY LIMITED BY A SCHEME, APPROVED UNDER THE PROFESSIONAL STANDARDS LEGISLATION
77.
As part of an audit in accordance with the Australian Auditing Standards, we exercise
professional judgement and maintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial report, whether
due to fraud or error, designs and performs audit procedures responsive to those risks,
and obtains audit evidence that is sufficient and appropriate to provide a basis for the
auditor’s opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
Conclude on the appropriateness of the director’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Group’s
ability to continue as a going concern. If the auditor concludes that a material
uncertainty exists, we are required to draw attention in the auditor’s report to the
related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of the auditor’s report. However, future events or conditions may cause the
Group to cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the financial report,
including the disclosures, and whether the financial report represents the underlying
transactions and events in a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in
internal control that the auditor identifies during the audit.
We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and
other matters that may reasonably be thought to bear on our independence, and where
applicable related safeguards.
Report on the Remuneration Report
We have audited the Remuneration Report for the year ended 30 June 2018 as outlined on
pages 12 to 17 of the financial report. The directors of the company are responsible for the
preparation and presentation of the Remuneration Report in accordance with section 300A of
the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration
Report, based on our audit conducted in accordance with Australian Auditing Standards.
MAZARS RISK & ASSURANCE PTY LIMITED
ABN: 39 151 805 275
LEVEL 12, 90 ARTHUR STREET, NORTH SYDNEY NSW 2060 PO BOX 1994, NORTH SYDNEY NSW 2059
TEL: +61 2 9922 1166 - FAX: +61 2 9922 2044
EMAIL: audit@mazars.com.au
LIABILITY LIMITED BY A SCHEME, APPROVED UNDER THE PROFESSIONAL STANDARDS LEGISLATION
78.
Auditor’s Opinion
In our opinion, the Remuneration Report of Cryosite Limited for the year ended 30 June
2018, complies with section 300A of the Corporations Act 2001.
MAZARS RISK AND ASSURANCE PTY LTD
Paul Collins
Director
Sydney, on this 30th day of August 2018
MAZARS RISK & ASSURANCE PTY LIMITED
ABN: 39 151 805 275
LEVEL 12, 90 ARTHUR STREET, NORTH SYDNEY NSW 2060 PO BOX 1994, NORTH SYDNEY NSW 2059
TEL: +61 2 9922 1166 - FAX: +61 2 9922 2044
EMAIL: audit@mazars.com.au
LIABILITY LIMITED BY A SCHEME, APPROVED UNDER THE PROFESSIONAL STANDARDS LEGISLATION
79.
ASX Additional Shareholder Information
Additional information required by the Australian Stock Exchange Ltd and not shown elsewhere in this report
is as follows. The information is current as at 17 August 2018.
SUBSTANTIAL SHAREHOLDERS
The names of any substantial shareholders who have notified the Company in accordance with section 671B
of the Corporations Act 2001 are:
Shareholder
Andrew Kroger and related
entities
Cell Care Australia Pty Ltd
2018
No of shares % of issued capital
2017
No of shares % of issued capital
17,315,291
9,229,995
36.95
19.70
16,016,906
9,229,995
34.18
19.70
TWENTY LARGEST SHAREHOLDERS
The names of the twenty largest holders of quoted shares are:
SHAREHOLDERS
LISTED ORDINARY SHARES
No of
shares
% of ordinary
shares
ANDREW KROGER AND RELATED ENTITIES
CELL CARE AUSTRALIA PTY LTD
MR ALISTAIR DAVID STRONG
BELL POTTER NOMINEES LTD
BNP PARIBAS NOMINEES PTY LTD
MRS JANE SUSAN MILLIKEN
TOOTCAN SUPERANNUATION SERVICES PTY
LTD
MR STEPHEN ROBERTS
SUNNYIT PTY LTD
TALSTON PTY LTD
H F A ADMINISTRATION PTY LIMITED
MR PETER HOWELLS
CVF AUSTRALIA PTY LTD
WIFAM INVESTMENTS PTY LTD
CASTLEREAGH EQUITY PTY LTD
INTEGUMENT PTY LTD
WHEEN FINANCE PTY LIMITED
NATIONAL NOMINEES LIMITED
DR ANTHONY FRANCIS CHAN
M N J HOLDINGS PTY LTD
17,315,291
9,229,995
2,000,000
1,758,236
1,521,465
1,302,917
1,008,753
967,662
851,000
500,000
480,000
465,730
361,450
300,000
300,000
262,013
257,917
257,496
215,000
214,931
39,569,856
36.95
19.70
4.27
3.75
3.25
2.78
2.15
2.07
1.82
1.07
1.02
0.99
0.77
0.64
0.64
0.56
0.55
0.55
0.46
0.46
84.44
80.
ASX Additional Shareholder Information
DISTRIBUTION OF EQUITY SECURITIES
Number of Shareholders by Size of Holding
Ordinary Shares
Range
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and Over
Total
Voting Rights
Number of
holders
38
216
62
112
42
470
Number of
Shares
13,448
824,018
496,550
3,527,570
41,997,977
46,859,563
All ordinary shares carry one vote per share without restriction.
Number of shareholders holding less than a marketable parcel
The number of shareholders holding less than a marketable parcel of shares is 283 and they hold
1,019,881 shares.
81.
C
r
y
o
s
i
t
e
A
n
n
u
a
l
R
e
p
o
r
t
2
0
1
8
Cryosite’s specialist services include:
• Family Cord Blood and Tissue Storage
• Adult Stem Cell Storage
• Biobanking Services
• Biorepository Services
• Contract GMP Manufacturing
• Clinical Trial Logistics
• Storage, Importation and Distribution of Biologicals
• Commercial Therapeutics Distribution
www.cryosite.com