Cryosite Limited
ABN 86 090 919 476
Appendix 4E
Full year report
Results for announcement to the market
1. Details of Reporting Period
The financial information contained in this report is for the year ended 30 June 2020. Comparative
amounts (unless otherwise indicated) relate to the year ended 30 June 2019.
2. Results for Announcement to the Market
2.1 Revenue from ordinary activities:
2.2 Profit(loss) from ordinary activities after tax
attributable to members:
2.3 Net profit (loss)for the period attributable to
members:
Up
Up
$1,041k
$2,045k
to
to
$A'000
9,014k
1,480k
Up
$3,202k
to
1,480k
3. Dividends
The Board of Cryosite has recommended that no dividends be paid.
4. Commentary on the results to the market
The audited annual accounts are attached. Please refer to these for full results and commentary.
1B5. NTA backing
Current period
Previous
corresponding
Period
Net tangible asset backing per ordinary security
(0.7) cents
(3.7) cents
8
CRYOSITE LIMITED
ABN 86 090 919 476
Annual Report
for the year ended 30 June 2020
CRYOSITE LIMITED ANNUAL REPORT
Table of Contents
Page
Corporate Information
Director’s Report
Corporate Governance
Auditor’s Independence Declaration
Directors Declaration
Consolidated Statement Of Profit And Loss And Other Comprehensive Income
Consolidated Statement Of Financial Position
Consolidated Statement Of Changes In Equity
Consolidated Statement Of Cashflows
Notes To The Financial Statements
Corporate Information
1
Summary Of Significant Accounting Policies
2
Significant Accounting Judgements, Estimates And Assumptions
3
Transition To AASB 16
4
Segment Information
5
Revenue
6
Expenses
7
Income Tax
8
Earnings Per Share
9
Cash And Cash Equivalents
10
Statement Of Cash Flow Reconciliation
11
Current Assets - Trade and Other Receivables
12
Current Assets - Inventories
13
Prepayments
14
Other Assets
15
Non-Current Trade and Other Receivables
16
Non-Current Assets - Investment in Subsidaries
17
Non-Current Assets - Plant And Equipment
18
Non-Current Assets - Intangible Assets
19
Deferred Costs
20
Current Liabilties - Trade And Other Payables
21
Unearned Income
22
Deferred Revenue
23
Provisions
24
Contributed Equity and Accumulated Losses
25
Reserves
26
Commitments And Contigencies
27
Auditors Remuneration
28
Related Party Disclosures
29
Share-Based Payments Expense
30
Key Management Personnel
31
Financial Instruments
32
Parent Entity Financial Information
33
34
Legal Claim
Legal Settlement
35
Independent Auditor’s Report
ASX Additional Shareholder Information
1
2
11
13
14
15
16
17
18
19
19
19
28
30
31
32
32
33
35
36
36
37
38
38
38
38
39
39
40
40
40
41
41
42
42
43
44
44
45
45
46
47
51
52
52
53
56
CRYOSITE LIMITED ANNUAL REPORT
Corporate Information
DIRECTORS
Mr. Bryan Dulhunty (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:
Email:
+61 2 8865 2000
corporate@cryosite.com
SHARE REGISTER
Link Market Services Limited
Level 8, 580 George Street
Sydney NSW, 2000
Telephone:
+61 1300 554 474
AUDITORS
Mazars Risk & Assurance Pty Limited
Level 12, 90 Arthur Street
North Sydney NSW, 2060
Telephone:
+61 2 9922 1166
WEBSITE
www.cryosite.com
Cryosite Limited Annual Report 30 June 2020
1
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 2020.
DIRECTORS
The following persons were directors of Cryosite Limited during the whole of the financial year and up to date
of this report unless otherwise stated:
Mr. Bryan Dulhunty (appointed 2 March 2018)
Mr. Andrew Kroger (appointed 21 November 2011) Non-executive
Non-executive
Mrs. Nicola Swift (appointed 31 October 2016)
Executive chairman
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 and Executive Chairman on the 27th June 2019.
Interest in shares and options at date of report
Shares
Options
Special responsibilities
30,000
1,300,000
Executive Chairman
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
18,889,612
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 the CEO of Heads Over Heels Connections Pty Ltd and 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
Cryosite Limited Annual Report 30 June 2020
2
Directors’ Report (continued)
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 (cents)
Diluted earnings per share (cents)
2020
3.16
3.03
2019
(3.68)
(3.62)
DIVIDENDS
No dividends were paid during the financial year. The total dividends declared were $nil (2019: nil).
PRINCIPAL ACTIVITIES
The company’s principal activities are the provision of supply chain logistics, management of pharmaceutical
products used in clinical trials, management of biological materials and long-term storage of cord blood and
tissue samples.
Cryosite operates through two operating segments:
Clinical Trials & Biological Storage and Logistics
This business provides specialist temperature-controlled storage, sourcing, labelling, status management,
secondary packaging, schedule drug distribution, destruction, returns and biological storage to the clinical trial
and research industry.
Cord Blood and Tissues Storage
This business provides long term storage for cord blood and tissue samples.
REVIEW OF OPERATIONS
Overview
The year ended 30 June 2020 has been a financially successful year. Net comprehensive profit after tax was up
$3.2m to $1.5m (2019 loss of $1.7m) and Operating cash inflow was $1.4m (2019 cash outflow of $648k).
More importantly, the year has been a transformational one in terms of positioning the Company for long term
growth. As foreshadowed in the half year report, the company in the past 6 months has spent approximately
$1m on infrastructure and operating system improvements. This has positioned Cryosite to take on a far larger
market by expanding our services into adjoining markets and customers.
The $1m investment has raised the Company’s physical, technical and human resources standards, to meet the
requirements of this expanded market. We have upgraded:
the standard of our facilities
temperature controlled storage capacity
new world class IT and compliance systems
human resources with significant management changes being made during the year
government licenses allowing us to provide a broader range of services a wider range of high values,
registered and unregistered drugs.
Cryosite currently operates predominately in the clinical trial logistics market. This is subject to very stringent
international standards and Australian government mandated compliance and licensing requirements. This
Cryosite Limited Annual Report 30 June 2020
3
Directors’ Report (continued)
creates very high barriers to entry. These same standards and barriers to entry apply to products listed on the
Register of Therapeutic Goods. These products represent a much larger market than clinical trial logistics. This
is a natural market for the Company to expand into. Our focus will be on attracting low volume, high value,
temperature controlled, highly regulated drugs, Cryosite’s specialty.
Profit
For the 12 months ended 30 June 2020 the Company recorded a net comprehensive profit of $1.5m after tax
(2019 loss of $1.7m). This was comprised of a legal settlement of $1.0m and an operating profit of $0.5m
The $3.2m turnaround in profit of was driven by 2 factors.
$2.1m of the turnaround came from the receipt during the year of a legal settlement of $1m, versus
the previous corresponding period where a legal settlement generated a loss of $1m. Details of these
legal matters is set out in notes 34 and 35 of these accounts.
$1.1m of the turnaround came from improvements in the underlying business. The underlying business
returned to a profit after tax of $0.48m versus the previous corresponding periods loss of $0.55m. The
turnaround in the operating performance was driven by
i.
ii.
a growth in gross sales of 13% ($1m) from the previous corresponding period and
a reduction in expenses of ($100k) from the previous corresponding period. It should be noted
the second half of the year incurred significant one-off redundancy costs and costs that
associated with implementation of the changes necessary to reposition the Company.
Cash
While placing an emphasis on change management we have also kept a prudent eye on cash management.
Total cash on hand increased by $142k, Operating cash inflow was $1.3m, including $1.0m legal settlement
inflow (2019 cash outflow of $648k including legal settlement outflow of $250k). The company then invested
$1m of this in capital and operational expenditure and $254k was a rent costs classified as a financing charge.
The net result was a $142k increase in cash to bring cash on hand as at 30 June 2020 to $4.1m. The company
has no debt.
Outlook
The Company starts the coming year in a positive tone. The first half will see the recently upgraded infrastructure
drive higher standards, greater efficiencies and provide real time data for analysis so the business can be better
managed.
The pandemic will of course be a significant influence on the Company. The effect on clinical trials is a lagged
effect. While the impact in the current year has been limited, we did see a reduction in clinical trial activity in
May, June and July. We expect this reduction in clinical trial activity will continue into the first quarter, as a result
of the 6 weeks shutdown in Victoria. Victoria is a major site of clinical trials.
Cord Blood revenue is expected to remain flat. The cord blood business continues to securely store cord blood
and tissue for existing clients under a variety of contracts, the longest of which is 25 years. The majority of these
contracts had upfront or short-term payments terms covering the storage of the samples for the life of the
contract. We are now in the run-out period of the remaining payment term contracts. As these amounts are
received, future cash flows will be reduced. The Company continues to hold substantial cord blood and tissue
assets and is looking to provide additional ongoing services to our individual storage clients, to generate further
long-term cash and profitability.
There is much to be done at Cryosite to ensure shareholders receive an appropriate return on their investment,
however as stated, we are starting the coming year with a positive tone and are excited by the opportunities.
The Board and Management are grateful for the continuing support of the Company by employees and
shareholders.
Cryosite Limited Annual Report 30 June 2020
4
Directors’ Report (continued)
EMPLOYEES AND DIVERSITY
The Company employed 18 full-time equivalent employees as at 30 June 2020 (2019: 21 employees).
The company has no set diversity objectives for achieving gender diversity, due to the company’s small size.
The Company recognises the value of diversity in the workplace and is committed to providing equal opportunity
for all its staff with 50% of current employees being female. There are numerous religions, 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.
EMPLOYEE INCENTIVE PLANS
In February 2017, the Cryosite Employee Incentive Plan (CEIP) was introduced to attract, retain and motivate
management to strengthen their alignment with shareholder interests. This plan was ratified at the 2017 AGM.
As at the date of this report there are 1,950,000 (2019: 3,314,946) unissued ordinary shares under the CEIP :
Options
Performance rights
Total
2020
$
1,950,000
-
1,950,000
2019
$
2,600,000
714,946
3,314,946
Please refer to the remuneration report for further details. The circumstances under which Personnel is entitled
to retain these options and performance rights if they 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
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
As at the date of this report there are no significant events that have occurred since the 30th June 2020.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
The Board expects to focus on a growing clinical trial and biological services logistics 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
regulations, including the Therapeutic Goods Administration (TGA), the Office of Drug Control, the Department
of Agriculture and Water Resources and the NSW Department of Health. 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.
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.
Cryosite Limited Annual Report 30 June 2020
5
Directors’ Report (continued)
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.
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 an executive 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 8-13.
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
Mr. Andrew Kroger
Mrs. Nicola Swift
Mr. Mark Byrne
Executive Chairman
Non-Executive Director
Non-Executive Director
Chief Executive Officer (resigned 30/09/2019)
On the 27th June 2019 it was announced that Mark Byrne had decided to step down as CEO and on the 30th
September 2019, he left the company.
Due to the relatively small number of employees, 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.
Cryosite Limited Annual Report 30 June 2020
6
Directors’ Report (continued)
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, and on the
design and award of all executive incentive plans.
The members of the committee are the independent non-executive director, Mrs. Nicola Swift (Chair) and
executive chairman Mr. Bryan Dulhunty.
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.
Board and Non-Executive Directors
As set out in our corporate governance policies, directors renumeration is set to attract a requisite skill set
required to govern the company. The board has annual internal process to evaluate the performance of the
board and its committees.
Cryosite has two non-executive directors and an Executive Chairman. During the reporting period two of the
three directors were deemed not to be-independent. The chairman, Mr. Dulhunty was not deemed to be
independent due to his executive role and Mr. Andrew Kroger was not deemed to be independent, due to his
substantial shareholding of the company with a relevant interest at the date of this report of 40.3%. Ms. Nicola
Swift is considered to be independent.
Due to the small size of the company a board skill matrix has not been developed.
The board carries out an annual internal performance review of board, committees and individual directors. The
last performance appraisal was carried out in July 2020.
The remuneration of directors including the Chairman consists of fixed annual fees. Apart from reimbursement
of expenses incurred on the Company’s behalf, non-executive directors are not eligible for any additional
payments, unless directors take on additional or executive roles then they are entitled to additional fees. These
additional fees are set out later in this report.
Chairman of the Board: $75,000 maximum per annum, plus superannuation
Non-Executive Directors: $60,000 maximum per annum, plus superannuation
Performance based compensation is not part of the remuneration structure offered to non-executive directors.
No options or performance rights 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 2020 total aggregate remuneration
paid to non- executive directors was $142,200 (2019; $261,774).
Executive Remuneration
Executive total remuneration consists of the following components:
Cryosite Limited Annual Report 30 June 2020
7
Directors’ Report (continued)
Fixed Remuneration
This comprised of a fixed base salary and statutory superannuation. This is reviewed annually although there is
no guaranteed increase.
Short Term Incentive Plans
2020
Due to the significant challenges facing the Company in 2020, 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. Payments to
directors under this plan are set out in the remuneration table below.
2019
Due to the on-going challenges facing the Company, no formal STIP plan was put in place for 2019.
Long Term Incentive Plan: Cryosite Employee Incentive Plan (CEIP)
On 23 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 in each
financial year and is governed by the CEIP Plan Rules.
Performance Rights
Since the establishment of the CEIP, the company has granted a number of performance rights. Nil performance
rights were issued in 2020 (2019: nil). As at 30 June 2019, 714,946 performance rights were on issue. No
performance rights had vested. On Mark Byrne’s resignation on 30 September 2020, these 714,946 performance
rights lapsed.
Options
On the 27 June 2019, the board granted options to the following key management personnel:
Options granted 27 June 2019
Total options issued as at 30 June 2019
Bryan Dulhunty*
No
1,300,000
1,300,000
The following components of the CEIP for options are as follows:
Vesting date
Option price
Vesting conditions
Performance conditions
Service conditions
Expiry date
Exercise of Options
Conditions
Grant date
Vesting date
Expiry date
Period
Exercise price
Up to 25 months from date of grant.
6 cents
Options will only vest after certain performance and conditions are met.
Earnings per Share (EPS), Operating cashflow
Continuous employment with Cryosite from the date of the options are
granted until the vesting date.
Options will expire 36 months after the vesting date.
Any options which meet the Vesting conditions will be available for
exercise up until the Expiry date.
27 June 2019
1 September 2021
1 September 2024
27/6/2019 to 1/9/2021
6 cents
Cryosite Limited Annual Report 30 June 2020
8
Directors’ Report (continued)
Targets
Conditions of Vesting
Positive Earnings per share (EPS)*
Positive Cashflow from Operations*
Continuous service
* Based on the 2021 audited accounts
Target date
30 June 2021
30 June 2021
30 June 2021
Percentage of Performance
Rights that vest
33.3%
33.3%
33.3%
COMPENSATION FOR KEY MANAGEMENT PERSONNEL 2020
Year Ended 30
June 2020
Short term benefits
Post
employment
benefits
Share
based
payments
Total
Share
based
payments
Performance
based
Salary &
Fees
$
Other
Cash
benefits
$
33,333
-
75,000 150,012
40,000
60,000
168,333 190,012
62,042
62,042
-
-
230,375 190,012
Directors
Andrew Kroger
Bryan Dulhunty*(1)
Nicola Swift (2)
Total directors
Executives
Mark Byrne (3)
Total Executive
Total
Super
$
(4)
$
$
%
%
3,167
7,125
5,700
15,992
5,506
5,506
21,498
-
5,017
-
5,017
-
-
5,017
36,500
237,154
105,700
379,354
67,548
67,548
446,902
0.0%
2.1%
0.0%
1.3%
0.0%
0.0%
1.1%
0.0%
2.1%
0.0%
1.3%
0.0%
0.0%
1.1%
*Executive Chairman
(1) Bryan Dulhunty. Director fees paid to Bryan Dulhunty $75,000. Other Cash benefits are comprised of payments
to CoSA Pty Ltd a related party of Bryan Dulhunty of Company secretarial Fees of $25,000, executive contract fees
of $50,000 and an incentive bonus of $75,000k.
(2) This includes payments to MGW Capital Pty Ltd which is a related party of Nicola Swift. During the year the
MGW Capital Pty Ltd charged the Company $40,000 for consulting services performed by Nicola Swift.
(3) Resigned on 30 September 2019.
(4) This relates to the fair value of performance rights and options granted under the Cryosite Employee Incentive
Plan CEIP).
COMPENSATION FOR KEY MANAGEMENT PERSONNEL 2019
Year Ended 30 June
2019
Short term
benefits
Post-
employment
benefits
Share
based
payments
Total
Share
based
payments
Performan
ce based
Salary &
Fees
$
Other
Cash
benefits
$
Super
$
(2)
$
$
%
%
Non-Executive
Directors
Andrew Kroger
Bryan Dulhunty* (1)
Nicola Swift
Total directors
60,000
-
60,000
120,000
-
130,264
-
130,364
5,700
-
5,700
11,400
-
110
-
110
65,700
130,374
65,700
261,774
0.0% 0.0%
0.1%
0.0%
0.0%
0.1%
0.0%
0.0%
Cryosite Limited Annual Report 30 June 2020
9
Directors’ Report (continued)
Executives
Mark Byrne
Total Executive
Total
228,310
28,310
348,310
-
-
130,264
21,619
21,689
33,089
37,571
37,571
37,681
287,570
287,570
549,344
13.1%
13.1%
6.9%
13.1%
13.1%
6.8%
* Bryan Dulhunty was appointed Executive Chairman on the 27 June 2019.
(1) This includes payments made to CoSA Pty Limited, a related party of Bryan Dulhunty. During the year the
company charged the Company $48,502 for consulting services and $81,762 in respect to services provided by
Bryan Dulhunty, as a director and company secretary of the Company. Bryan Dulhunty became executive chairman
on the 27 June2019.
(2) This relates to the fair value of performance rights and options granted under the Cryosite Employee Incentive
Plan CEIP).
SHAREHOLDINGS OF KEY MANAGEMENT PERSONNEL
Ordinary Shares held in
Cryosite Limited
Bryan Dulhunty
Andrew Kroger
Ordinary Shares held in
Cryosite Limited
Bryan Dulhunty
Andrew Kroger
Balance on
appointment /
(resignation)
-
-
-
Balance on
appointment /
(resignation)
-
-
-
1 July 2019
30,000
17,315,291
17,345,291
1 July 2018
30,000
17,315,291
17,345,291
Share purchases
-
1,574,321
1,574,321
30 June 2020
30,000
18,889,612
18,919,612
Share purchases
-
-
-
30 June 2019
30,000
17,315,291
17,345,291
Senior executive performance is renewed annually, a review was carried out in the current year.
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 options 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.
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
Mark Byrne resigned on 30 September 2019 and as result 714,946 performance rights were cancelled.
There were no other transactions during the year with key management personnel or with any key management
personnel related entities.
Cryosite Limited Annual Report 30 June 2020
10
Directors’ Report (continued)
DIRECTORS’ AND COMMITTEE MEETINGS
During the financial year, the following meetings incurred and were attended by directors:
Directors
Bryan Dulhunty
Andrew Kroger
Nicola Swift
Directors Meetings
Eligible to
attend
12
12
12
Eligible
attended
12
12
12
Audit Risk Committee
Meetings
Eligible to
attend
6
-
6
Eligible
attended
6
-
6
Remuneration and
Nomination Meetings
Eligible
attended
3
-
3
Eligible to
attend
3
-
3
DIRECTORS, EXECUTIVES AND COMMITTEE AND PERFORMANCE REVIEW STRUCTURE
Directors and Executives
The board carries out an annual internal performance review of board members and board structure and makes
appropriate changes to facilitate the business and minimize risk. The last performance appraisal was carried out
in July 2020. Executives are evaluated by formalized performance review structure on and annual basis. The last
performance appraisal was January 2020.
Committees
The board carries out an annual internal performance review of both the audit and risk and the renumeration
and nomination committee committees. The last performance appraisal was carried out in July 2020. The board
continually monitors the framework of the risk committee to ensure that it is responsive to the company’s
working environment.
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.
CORPORATE GOVERNANCE REPORT
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 2020 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.
Cryosite Limited Annual Report 30 June 2020
11
AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE
CORPORATIONS ACT 2001 TO THE DIRECTORS OF CRYOSITE LIMITED AND
CONTROLLED ENTITY
I declare that, to the best of my knowledge and belief during the year ended 30 June 2020, 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 & ASSURANCE PTY LIMITED
Rose Megale
Director
Sydney, on the 28th of August 2020
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 – www.mazars.com.au
EMAIL: audit@mazars.com.au
13
MAZARS RISK & ASSURANCE PTY LIMITED – ABN: 39 151 805 275
Liability limited by a scheme approved under Professional Standards Legislation
Consolidated Statement of Profit and Loss and Other
Comprehensive Income
FOR THE YEAR ENDED 30 JUNE 2020
Sale of goods and rendering of services
Other revenue
Revenue
Cost of providing services
Depreciation and amortisation
Impairment losses
Marketing expenses
Occupancy expenses
Administration expenses
Legal claim
Total expenses
Profit (loss) before tax
Income tax (expense) benefit
Profit (Loss) after tax
Other items
Legal settlement, net of tax
Net comprehensive Profit (loss) for the year
Earnings per share
Basic, profit/(loss) for the year attributable to ordinary
equity holders of the parent
Diluted, profit/(loss) for the year attributable to ordinary
equity holders of the parent
Notes
6
6
7(d,f,g)
7(c)
34
8
35
9
9
2020
$
2019
$
8,919,846
94,338
9,014,184
7,911,693
61,500
7,973,193
(4,971,717)
(437,554)
-
(57,604)
(329,831)
(2,410,954)
958,983
(7,248,677)
(4,603,392)
(271,018)
(330,873)
(403,862)
(615,342)
(2,036,979)
-
(8,261,466)
1,765,507
(285,328)
1,480,179
(288,273)
(276,884)
(565,157)
-
1,480,179
(1,157,386)
(1,722,543)
Cents
Cents
3.16
(3.68)
3.03
(3.62)
The above consolidated statement of profit and loss and other comprehensive income should be read in
conjunction with the accompanying notes.
Cryosite Limited Annual Report 30 June 2020
15
Consolidated Statement of Financial Position
AS AT 30 JUNE 2020
ASSETS
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Income tax receivable
Other assets
Deferred costs
Total Current Assets
Non-Current Assets
Trade and other receivables
Deferred tax asset, net
Right of use asset
Plant and equipment
Intangible assets
Deferred costs
Total Non-Current Assets
TOTAL ASSETS
LIABILITIES
Current Liabilities
Trade and other payables
Unearned income
Provisions
Other liabilities
Lease Liability
Deferred revenue
Total Current Liabilities
Non-Current Liabilities
Trade and other payables
Provisions
Other liabilities
Lease Liability
Deferred revenue
Total Non-Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Contributed equity
Share rights reserves
Accumulated losses
TOTAL EQUITY
Notes
2020
$
2019
$
10
12
13
14
15
20
16
8(c)
4
18
19
20
4,061,832
962,717
47,880
353,672
-
167,937
1,332,574
6,926,612
138,253
2,135,141
1,213,340
1,168,465
20,217
11,899,778
16,575,294
3,919,897
838,100
22,859
279,369
29,081
476,262
1,381,183
6,381,838
186,502
2,412,234
-
387,181
6,978
13,232,356
16,225,251
23,501,906
23,172,002
731,963
78,692
178,263
50,311
197,301
876,942
23,066
155,804
47,464
-
2,129,237
3,365,767
2,250,487
3,353,763
441,682
240,963
527,833
1,065,018
441,682
237,799
578,144
-
18,147,450
20,276,684
20,422,946
21,534,309
23,788,713
24,888,072
(286,807)
(1,716,070)
5,861,788
18,616
(6,167,211)
5,861,788
69,532
(7,647,390)
(286,807)
(1,716,070)
21
22
24
35
4
23
21
24
35
4
23
25
26
25
The above consolidated statement of financial position should be read in conjunction with the accompanying
note
Cryosite Limited Annual Report 30 June 2020
16
Consolidated Statement of Changes in Equity
FOR THE YEAR ENDED 30 JUNE 2020
CONSOLIDATED
Attributable to equity holders of the company
Contributed
capital
Accumulated
losses
Share Rights
reserve
Total equity
At 1 July 2019
5,861,788
(7,647,390)
69,532
(1,716,070)
Total comprehensive income (loss)
for the year
Transactions with owners in their
capacity as owners
Performance rights / options
granted
Performance rights cancelled
-
-
-
1,480,179
-
1,480,179
-
-
29,198
(80,114)
29,198
(80,114)
At 30 June 2020
5,861,788
(6,167,211)
18,616
(286,807)
At 1 July 2018
5,861,788
(3,958,712)
40,339
1,943,415
Total comprehensive income (loss)
for the year
AASB 15 adjustment
Transactions with owners in their
capacity as owners
Performance rights granted
Performance rights cancelled
-
-
-
-
(1,722,543)
(1,966,135)
-
-
(1,240,439)
(1,966,135)
-
-
52,121
(22,928)
52,121
(22,928)
At 30 June 2019
5,861,788
(7,647,390)
69,532
(1,716,070)
The above consolidated statement of changes in equity should be read in conjunction with the accompanying
notes.
Cryosite Limited Annual Report 30 June 2020
17
Consolidated Statement of Cashflows
FOR THE YEAR ENDED 30 JUNE 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers inclusive of GST
Payments to suppliers and employees inclusive of GST*
Legal Claim, net
Income Tax Refund
Government Incentive - Cash Boost
Interest Received
Net cash flows from operating activities
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of plant and equipment
Software development costs
Interest received
Net cash flows (used in) investing activities
Notes
2020
$
2019
$
6,869,903
6,941,491
(6,621,284)
(7,594,578)
958,983
21,035
50,000
-
-
-
-
5,551
11
1,278,637
(647,536)
18
19
(889,530)
(26,155)
(20,317)
27,745
(882,102)
-
57,761
31,606
CASH FLOWS FROM FINANCING ACTIVITIES
Operating Lease Payments (including notional interest)
Net cash flows (used in) financing activities
(254,600)
(254,600)
-
-
Net (decrease)/ increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
141,935
(615,930)
3,919,897
4,535,827
Cash and cash equivalents at end of year
10
4,061,832
3,919,897
The above consolidated statement of financial position should be read in conjunction with the accompanying
notes.
Cryosite Limited Annual Report 30 June 2020
18
Notes to the Financial Statements
For the Year Ended 30 June 2020
1 CORPORATE INFORMATION
The financial report of Cryosite Limited and the controlled entity (the Group) for the year ended 30 June 2020
was authorised for issue in accordance with a resolution of the directors on 28 August 2020.
Cryosite Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on
the Australian Securities 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
AASB 1023 Interpretation 23 – Uncertainty over Income Tax Treatment
AASB 16 - Leases
The relevant standards for the Group follow:
AASB 16 Leases
The consolidated entity has adopted AASB 16 from 1 July 2019. The standard replaces AASB 117 'Leases' and
for lessees eliminates the classifications of operating leases and finance leases. Except for short-term leases
and leases of low-value assets, right-of-use assets and corresponding lease liabilities are recognised in the
statement of financial position. Straight-line operating lease expense recognition is replaced with a
depreciation charge for the right-of-use assets (included in operating costs) and an interest expense on the
recognised lease liabilities (included in finance costs).
In the earlier periods of the lease, the expenses associated with the lease under AASB 16 will be higher when
compared to lease expenses under AASB 117. However, EBITDA (Earnings Before Interest, Tax, Depreciation
and Amortisation) results improve as the operating expense is now replaced by interest expense and
depreciation in profit or loss. For classification within the statement of cash flows, the lease payments will
aggregate both principal and interest components into financing activities.
The impact of adopting AASB 16 on the year ended 30 June 2020 financial report, is presented in Note 4.
Cryosite Limited Annual Report 30 June 2020
19
Notes to the Financial Statements
For the Year Ended 30 June 2020
(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 intercompany 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.
(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 are 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.
Major Depreciation rates are:
2020
2019
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.
Cryosite Limited Annual Report 30 June 2020
20
Notes to the Financial Statements
For the Year Ended 30 June 2020
(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.
(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.
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.
(h) Prepayments
Payments made in advance of services are recognised 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.
(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.
Cryosite Limited Annual Report 30 June 2020
21
Notes to the Financial Statements
For the Year Ended 30 June 2020
(j) Trade and other receivables
Trade receivables (current), which generally have 30-day terms, are recognised initially at fair value less
expected credit loss and any allowance for impairment.
The adoption of AASB 9 has fundamentally changed the Group’s accounting for impairment losses for financial
assets by replacing AASB 39’s incurred loss approach with a forward-looking expected credit loss (ECL)
approach.
AASB 9 requires the Group to record an allowance for ECL’s for all loans and other debt financial assets not
held at FVPL.
The Group’s ECL is based on an estimated percentage of past due receivables that are expected to default
based on historical experience.
(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
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.
Cryosite Limited Annual Report 30 June 2020
22
Notes to the Financial Statements
For the Year Ended 30 June 2020
(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.
(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 Black Scholes 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)
(ii) the number of awards that, in the opinion of directors of the Group, will ultimately vest. This opinion is
the extent to which the vesting period has expired and
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.
Cryosite Limited Annual Report 30 June 2020
23
Notes to the Financial Statements
For the Year Ended 30 June 2020
(p) Leases
AASB 16 has been applied as of 1 July 2019 and the Group will use what is known as the “modified
retrospective” transition method, under which a liability is recognised at the transition date for an amount
equal to the present value of the residual lease payments alone, offset against a right-of-use asset adjusted for
the amount of prepaid lease payments or within accrued expenses; all the impacts of the transition will be
deducted from equity.
The standard provides for various simplification measures during the transition phase; in particular, the Group
has opted to apply the measures allowing it to exclude leases with a residual term of less than twelve months,
exclude leases of low- value assets, continue applying the same treatment to leases that qualify as finance
leases under AASB 17, and not capitalise costs directly related to signing leases.
Finance leases, which transfer to the Group substantially all the risks and benefits incidental to ownership of
the leased item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower,
at the present value of the minimum lease payments
Lease payments are apportioned between the finance charges and reduction of the lease liability so as to
achieve a constant rate of interest on the remaining balance of the liability. Finance charges are charged
directly against income. Capitalised leased assets are depreciated over the shorter of the estimated useful life
of the asset or the lease term.
(q) Revenue from contracts with customers
Rendering of services
The Group provides the following services:
a.
b.
specialist temperature-controlled storage, sourcing, labelling, status management, secondary packaging,
schedule drug distribution, destruction, returns and biological services and;
long term storage for cord blood and tissue samples.
The Group identified that the above services are distinct and have assessed the revenue recognition in
accordance with AASB 15 separately.
Revenue from clinical trials and biological services logistics services
Revenue from clinical trials pertain to processing and distribution of samples for clinical testing. The Group has
assessed that each sample processed is distinct from each other and that asset is transferred to the customer
at the completion of the service. Accordingly, the Group assessed that the performance obligation is satisfied
at that point in time and revenue is recognised as and when the customer obtains control of the asset.
The revenue recognition policy for clinical trials under AASB 15 is consistent with the provisions of the old
standard, AASB 118 – Revenue.
Revenue from cord blood and cord tissue storage
Under AASB 15, the Group assessed that the collection, processing and storage services for cord blood and
tissue samples constitute a single performance obligation because none of the services are distinct and
marketed independently of the others. In addition, it was determined that the performance obligation is
performed over time (i.e. throughout the storage contract period of 18 or 25 years). This resulted in the
recognition of "Deferred revenue" and "Deferred costs" in the statement of financial position that are
unwound to revenue and costs for the remaining contract period.
Cryosite Limited Annual Report 30 June 2020
24
Notes to the Financial Statements
For the Year Ended 30 June 2020
Interest revenue
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.
Dividend income
Dividends: revenue is recognised when the Company’s right to receive the payment is established.
(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.
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.
Cryosite Limited Annual Report 30 June 2020
25
Notes to the Financial Statements
For the Year Ended 30 June 2020
Income taxes relating to items recognised directly in equity are recognised in equity and not in the statement
of comprehensive income.
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 are 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.
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
Cryosite Limited Annual Report 30 June 2020
26
Notes to the Financial Statements
For the Year Ended 30 June 2020
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 are calculated as above based on net profit after tax.
(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 32.
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.
(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:
-
-
-
-
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
There is no unconditional right to defer the settlement of the liability for at least 12 months after the
reporting period.
The Group classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
Cryosite Limited Annual Report 30 June 2020
27
Notes to the Financial Statements
For the Year Ended 30 June 2020
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:
Revenue from contracts with customers
The Group applied the following judgements that significantly affect the determination of the amount and
timing of revenue from contracts with customers:
Determining the timing of satisfaction of performance obligations
The Group concluded that the revenue from collection, processing and storage of cord blood and tissue should
be recognised over time because the customer simultaneously receives and consumes the benefits provided
by the Group. The Group determined that the contract term of 18 or 25 years is the best method to determine
the timing of satisfaction of performance obligations.
Consideration of significant financing component in a contract
The storage contract for cord blood and cord tissue is either 18 or 25 years and the payment options available
to the customers follow:
i.
ii.
iii.
Upfront payment of the full contract price at inception of the contract;
Instalment payment of either 12 or 24 months; and,
Partial upfront settlement with the remaining balance paid in instalment throughout the life of the
contract (referred to by the Group as “Annual plans”).
Management determined that there is a significant financing component included in the annual plans because
the total amount paid under this plan is significantly higher than the upfront cash payment. The amount of
financing component attributed to the contract is determined as the difference between the total Annual plan
payments and the upfront cash payment.
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. 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 unrecouped 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 $2,015,010 unconfirmed (2019: $2,418,851) tax losses carried forward of which $231,429 have
been brought to account as deferred tax asset, that are available for offset against future taxable profits of
the company. 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
Cryosite Limited Annual Report 30 June 2020
28
Notes to the Financial Statements
For the Year Ended 30 June 2020
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.
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.
Make Good Provisions
includes
A provision has been made for the present value of anticipated costs for future restoration of leased
premises. This provision
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 for expected credit losses on trade receivables
In accordance with AASB 9, the Group uses a provision matrix to calculate ECLs (expected credit losses) for
trade receivables and contract assets. The provision rates are based on days past due for groupings of various
customer segments that have similar loss patterns (i.e., by geography, product type, customer type and rating,
and coverage by letters of credit and other forms of credit insurance).
The provision matrix is initially based on the Group’s historical observed default rates. The Group will calibrate
the matrix to adjust the historical credit loss experience with forward-looking information. At every reporting
Cryosite Limited Annual Report 30 June 2020
29
Notes to the Financial Statements
For the Year Ended 30 June 2020
date, the historical observed default rates are updated and changes in the forward-looking estimates are
analysed. The amount of ECLs is sensitive to changes in circumstances and of forecast economic conditions.
The Group’s historical credit loss experience and forecast of economic conditions may also not be
representative of customer’s actual default in the future
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.
4
TRANSITION TO AASB 16
The entity has adopted AASB 16 with effect from 1 July 2019 but has not restated comparatives for the 2019
reporting period, as permitted under the specific transitional provisions in the standard. The entity leases the
premises housing its principle place of business. Until the 2019 financial year, such leases were classified as
operating leases with payments being charged to the profit and loss. From 1 July 2019, in line with AASB 16,
leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset
is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The
right-of-use asset is amortised over the lease term on a straight-line basis.
The reclassifications and the adjustments arising from the new leasing rules have been recognised in the
opening balance sheet on 1 July 2019.
a.
b.
Recognition of right-of-use assets amounting to $1,440,841
Recognition of current lease liability of $178,522 and non-current lease liability of $1,262,319
Lease liabilities have been measured at the present value of the remaining lease payments, discounted using
the RBA June 2019 Lending Rate - Small business variable rate as of 1 July 2019.
The movement from lease commitments to lease liabilities is reconciled as follows:
Operating lease commitments disclosed as at 30 June 2019
Option of the lease extension of 3 years recognized as at 1 July 2019
Discounted using the RBA June 2019 Lending Rate - Small business variable
rate of 5.45%
Lease liability recognised as at 1 July 2019
Lease payments made from 1 July 2019 to 30 June 2020
Lease liability as at 30 June 2020
The recognised right-of-use assets relates to property and is comprised as follows:
Property right of use recognised as at 1 July 2019
Accumulated Amortisation for year ended 30 June 2020
Lease Asset as at 30 June 2020
30 June 2020
$
870,603
835,768
(265,530)
1,440,841
(178,522)
1,262,319
1,440,841
(227,501)
1,213,340
The consolidated entity has elected to adopt a modified retrospective application of the standard as permitted
by AASB 16.
Cryosite Limited Annual Report 30 June 2020
30
Notes to the Financial Statements
For the Year Ended 30 June 2020
4
TRANSITION TO AASB 16 (continued)
The balance at 30 June 2020 is made up of:
Lease asset – non-current
Total Assets
Lease liability – current
Leases liability – non-current
Total Liabilities
5
SEGMENT INFORMATION
Identification of Reportable Segments
2020
$
1,213,340
1,213,340
197,301
1,065,018
1,262,319
2019
$
-
-
-
-
-
The Company has identified its operating segments based on the internal reports that are reviewed and used
by the Board of Directors (the chief operating decision makers) 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:
Clinical Trials and Biological Services Logistics Specialist temperature-controlled storage, sourcing, labelling,
status management, secondary packaging, schedule drug
distribution, destruction, returns and biological services.
Storage of cord blood and tissue samples.
Cord Blood and Tissue Storage
The accounting policies used by the Company in reporting segments internally are the same as those contained
in note 1 to the accounts.
Operating Segments
2020
Operating Segment
Clinical Trials
and Biological
Storage and
Logistics
$
Cord Blood
and Tissue
$
Unallocated
$
Total
$
Revenue
6,234,092
2,685,754
94,338
9,014,184
Net operating profit
Legal claim
Government incentive - cash boost
Net profit before tax
Tax
Net profit after tax
Total Comprehensive Income net of tax
2,900,935
-
-
2,900,935
-
2,900,935
2,900,935
894,717
-
-
894,717
(238,572)
656,145
656,145
(3,039,129)
958,984
50,000
(2,030,145
(46,756)
(2,076,901)
(2,076,901)
756,523
958,984
50,000
1,765,507
(285,328)
1,480,179
1,480,179
Segment Assets 30 June 2020
Segment Liabilities 30 June 2020
Depreciation and Amortisation
1,680,568
459,760
(60,499)
13,860,462
20,744,170
(98,284)
7,960,876
2,584,783
(278,771)
23,501,905
23,788,713
(437,554)
Cryosite Limited Annual Report 30 June 2020
31
Notes to the Financial Statements
For the Year Ended 30 June 2020
5 SEGMENT INFORMATION (continued)
2019
Clinical Trials
and
Biological
Storage and
Logistics
$
Cord Blood
and Tissue
$
Unallocated
$
Total
$
Operating Segment
Revenue
5,189,717
2,721,978
61,498
7,973,193
Net profit before tax
Tax
Net profit after tax
Legal settlement, net of tax
Total Comprehensive Income net of tax
992,951
-
992,951
-
992,951
872,450
(238,592)
633,858
-
633,858
(2,153,674)
(38,292)
(2,191,966)
(1,157,386)
(3,349,352)
(288,273)
(276,884)
(565,157)
(1,157,386)
(1,722,543)
Segment Assets 30th June 2019
Segment Liabilities 30th June 2019
Depreciation and Amortisation
563,320
498,158
(104,767)
17,277,866
23,170,103
(117,183)
5,330,816
1,219,811
(49,068))
23,172,002
24,888,072
(271,018)
6
REVENUE
Customer contract revenues
Revenue from clinical trials, logistics and biorepository services
Revenue from cord blood and cord tissue storage
Other revenue
Bank interest
Government incentive – cash boost
7
EXPENSES
(a) Legal costs
Continuing operations
Legal settlement
Legal Claim
Total
(b) Lease payments
Lease payments-operating leases
Consolidated
2020
$
6,234,092
2,685,754
8,919,846
44,318
50,000
94,318
9,014,164
2019
$
5,189,717
2,721,978
7,911,695
61,498
-
61,498
7,973,193
Consolidated
2020
$
57,816
-
41,017
98,833
2019
$
101,573
407,626
-
509,199
-
363,704
35
34
Cryosite Limited Annual Report 30 June 2020
32
Notes to the Financial Statements
For the Year Ended 30 June 2020
7
EXPENSES (continued)
(c) Employee benefits expense
s and salaries
Superannuation costs
Consolidated
2020
$
2020
$
1,965,815
182,769
2,148,584
2,126,477
208,507
2,334,984
(d) Depreciation – plant & equipment
18 and 19
203,075
260,996
(e) Impairment loss
(f) Amortisation of Intangibles
(g) Amortisation of Leases
(h) Finance Costs
8
INCOME TAX
18
19
4
4
-
330,873
6,978
10,022
227,501
114,314
-
-
(a) Income tax expense
The major components of income tax are:
Statement of comprehensive income
Current income tax (expense)/benefit
Income tax expense reported in the statement of comprehensive
income
Income tax (expense)/benefit is attributable to the following:
Continuing operations
Legal settlement
Under provision prior year
Consolidated
2020
$
(285,328)
2019
$
(151,037)
(285,328)
(151,037)
(277,735)
-
(277,735)
(7,593)
(285,328)
(276,884)
125,847
(151,037)
-
(151,037)
(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
Income tax calculated at 27.5% (2019:27.5%)
Tax losses not recognised
Other items
Under provision prior year
Income tax (expense) benefit
1,715,508
(471,765)
111,056
82,974
(7,593)
(285,328)
(1,571,503)
432,163
(370,571)
(212,629)
-
(151,037)
Cryosite Limited Annual Report 30 June 2020
33
Notes to the Financial Statements
For the Year Ended 30 June 2020
INCOME TAX (continued)
8
(c) Deferred tax assets, net
Deferred income tax at 30 June relates to the following:
Deferred taxes arising from AASB 15 adoption
Deferred tax asset on deferred revenue
Deferred tax liability on deferred costs
Net deferred tax asset – AASB 15
Deferred taxes arising from normal business operations
Post-employment benefits
Provision for tax and audit fees
Provision for doubtful debts
Superannuation Payable
Accruals
Lease Liability
Tax Losses carried forward
Impairment and depreciation of plant & equipment
Prepayments
Consumables
Net deferred tax asset – normal operations
Consolidated
2020
2019
$
$
5,576,089
(3,638,897)
1,937,192
6,194,971
(4,018,719)
2,176,252
60,287
17,582
46,494
2,750
5,363
13,661
63,643
1,336
-
(13,167)
197,949
56,492
16,225
20,206
-
6,322
-
75,663
67,787
(875)
(6,286)
235,982
Net deferred tax assets
2,135,141
2,412,234
(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 $2,015,919 (2019: $2,418,851), of which
$231,429 (2019: $231,429) have been brought to account as a deferred tax asset that are available for offset
against future taxable profits of the company. The unrecognized deferred income tax asset of $490,735 (2019:
$665,184) arising from these losses has not been brought to account at reporting date, as realisation of the
benefit is not probable 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
Cryosite Limited Annual Report 30 June 2020
34
Notes to the Financial Statements
For the Year Ended 30 June 2020
8 INCOME TAX (continued)
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.
9
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
2020
$
2019
$
3.16
3.03
(3.68)
(3.62)
1,480,179
(1,722,543)
No.No. of shares
46,859,563
46,859,563
1,480,179
(1,722,543)
No. of shares
46,859,563
46,859,563
1,950,000
727,234
48,809,563
47,586,797
There have been no other transactions involving ordinary shares or potential ordinary shares since the
reporting date and before completion of these financial statements.
Cryosite Limited Annual Report 30 June 2020
35
Notes to the Financial Statements
For the Year Ended 30 June 2020
10
CASH AND CASH EQUIVALENTS
Cash at bank and on hand
Short-term deposit
Total Cash and Cash Equivalents
Consolidated
2020
$
60,076
4,001,756
4,061,832
2019
$
329,275
3,590,622
3,919,897
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 $4,061,832 (2019:
$3,919,897).
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
Adjustments for non-cash items
Depreciation and amortisation of non-current assets
Impairment loss for intangibles
Impairment loss for prepayments
Provision for dividend
Other Equity
Changes in assets and liabilities
(Increase) Decrease in trade and other receivables
Decrease (Increase) in deferred tax asset – AASB 15
Decrease (Increase) in deferred costs – AASB 15
Increase (Decrease) in deferred tax liability -AASB 15
Increase (Decrease) in deferred revenue -AASB 15
Decrease (Increase) in inventory
Decrease (Increase) in prepayments
Decrease (Increase) in other current assets
Decrease in deferred tax asset
Decrease (Increase) in other assets
Increase (Decrease) in trade and other creditors
Increase (Decrease) in current other liabilities
Increase (Decrease) in non- current other liabilities
Decrease (Increase) in unearned income
Increase (Decrease) in income tax provision
Increase (Decrease) in bonus provision
Increase in employee benefits
Net cash flow from operating activities
Consolidated
2020
$
2019
$
1,480,179
-
(1,722,543)
(56,157)
437,554
-
-
1,402
(50,916)
(446,935)
618,884
1,381,185
(379,823)
(2,250,133)
(25,021)
(74,303)
(12,571)
38,033
308,325
190,656
-
(47,463)
55,626
29,759
-
27,004
1,278,637
271,650
39,780
291,093
-
(29,880)
574,702
621,294
1,393,500
(2,259,250)
(383,216)
986
8,822
-
(87,044)
(323,985)
421,896
80,189
545,418
(777)
(8,079)
(41,501)
(44,194)
(647,536)
Cryosite Limited Annual Report 30 June 2020
36
Notes to the Financial Statements
For the Year Ended 30 June 2020
12
TRADE AND OTHER RECEIVABLES – CURRENT
Trade receivables
Allowance for impairment loss
(a)
Other receivables
Carrying amount of trade and other receivables
(a) Allowance for impairment loss
Consolidated
2020
$
913,350
(169,068)
744,282
218,435
962,717
2019
$
652,545
(73,475)
579,070
259,030
838,100
Trade receivables (current), which generally have 30-day terms, are recognised initially at fair value less an
allowance for impairment as per AASB 9 requirements.
As per AASB 9, the Group’s accounting for impairment losses for financial assets is based on a forward-looking
expected credit loss (ECL) approach. The Group’s ECL is based on an estimated percentage of past due
receivables that are expected to default based on historical experience.
Movements in the provision for impairment loss were as follows:
Balance at the beginning of the period
Increase (reduction) in impairment
Balance at end of period
Consolidated
2020
$
73,475
95,593
169,068
2019
$
45,590
27,885)
73,475
(b) Analysis of trade receivables aging and allowance for expected credit losses.
2020
Current
Non-Current 16
Total Consolidated
Expected Credit Loss Rate
Total Provision Calculated
2019
Current
Non-Current
Total Consolidated
Expected Credit Loss Rate
Total Provision Calculated
Total
$
Not
yet
Due
$
0-30
Days
$
31-60
Days
$
61-90
Days
$
+91
Days
$
913,350 643,684
138,253 138,253
161,150
-
1,051,603 782,367
8.8%
70,801
15.7%
169,593
161,150
2.1%
3,395
13,207
-
13,207
19.8%
2,620
8,257
-
8,257
60.1%
3,805
87,052
-
87,052
100.0%
88,972
652,545 460,673
186,502 186,502
839,047 647,175
-
11.3%
73,475
54,522
-
54,552
-
22,657
-
22,657
-
41,659
-
41,659
-
73,034
-
73,034
-
Cryosite Limited Annual Report 30 June 2020
37
Notes to the Financial Statements
For the Year Ended 30 June 2020
12
TRADE AND OTHER RECEIVABLES – CURRENT (continued)
The impairment loss is based on ECL and not specific to certain debtors.
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.
(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
Inventories at cost
Total Inventories at cost
14
PREPAYMENTS
Current
Balance at beginning of period
Additions (reductions) during the year
Impairment loss
Balance at end of period
15
OTHER ASSETS
Bank guarantee security deposit
Term Deposit
Total
16
TRADE AND OTHER RECEIVABLES – NON-CURRENT
Trade receivables
Trade receivables due under term payment plans
Consolidated
2020
$
2019
$
47,880
47,880
22,859
22,859
Consolidated
2020
2019
$
$
279,369
74,303
-
353,672
289,078
(9,721)
(888)
279,369
Consolidated
2020
$
167,937
-
167,937
2019
$
152,277
323,985
476,262
Consolidated
2020
$
2019
$
138,252
186,502
For analysis of maximum exposure to credit risk at the time of reporting refer to Note 12(b)
Cryosite Limited Annual Report 30 June 2020
38
Notes to the Financial Statements
For the Year Ended 30 June 2020
17
INVESTMENT IN CONTROLLED ENTITY
Name – Cryosite Distribution Pty Limited
Equity interest held by the
consolidated entity
Investment
2020
%
2019
%
2020
$
2019
$
Country of incorporation – Australia
100
100
20
20
18
PLANT AND EQUIPMENT
Leasehold
Improvements
Fixtures
and fittings
Information
Technology
Warehouse
Equipment
Office
furniture &
equipment
$
$
$
$
$
Total
$
211,613
133,829
263,378
4,313,674
31,254
4,953,748
-
-
-
-
-
-
26,155
(632)
26,155
(632)
Cost
At 1 July 2018
Additions
Disposals
At 30 June 2019
211,613
133,829
263,378
4,339,197
31,254
4,979,271
Additions
Disposals
19,854
(200,000)
-
-
87,967
866,155
10,382
984,358
(160,515)
(1,006,968)
-
(1,367,484)
At 30 June 2020
31,467
133,829
190,829
4,198,384
41,636
4,596,145
Depreciation and Impairment
At 1 July 2018
Depreciation charge
Disposals
At 30 June 2019
Depreciation charge
Disposals
At 30 June 2020
(200,734)
(78,986)
(229,253)
(3,805,997)
(16,124)
(4,331,094)
(2,212)
(6,994)
(19,992)
(227,715)
(4,715)
(261,628)
-
-
-
632
-
(632)
(202,946)
(85,890)
(249,245)
(4,033,080)
(20,839)
(4,592,090)
(2,223)
200,000
(6,994)
(12,630)
(169,339)
(11,890)
(203,076)
-
160,516
1,006,968
-
1,367,484
(5,169)
(92,974)
(101,359)
(3,195,451)
(32,729)
(3,427,682)
Net Book Value - 30 June 2019
Net Book Value - 30 June 2020
8,667
26,298
47,849
40,856
14,133
306,117
10,415
387,181
89,470
1,002,933
8,907
1,168,465
Cryosite Limited Annual Report 30 June 2020
39
Notes to the Financial Statements
For the Year Ended 30 June 2020
19 INTANGIBLE ASSETS
Cost
At 30 June 2019
Additions
Impairment loss
At 30 June 2020
Amortisation and impairment
At 30 June 2019
Amortisation
Impairment loss
At 30 June 2020
Net book value – 30 June 2019
Net book value – 30 June 2020
Software Development
Software
$
131,232
20,317
(131,232)
20,317
(124,254)
(6,978)
131,232
-
6,978
20,317
Total
$
131,232
20,317
(131,232)
20,317
(124,254)
(6,978)
131,232
-
6,978
20,317
During the year the company developed, validated and constructed a new Cord Blood database, the costs
have been capitalised, to reflect the future value of the database as contracts expire and are extended. The
costs will be amortised over a 5-year period.
20 DEFERRED COSTS
Current
Non-current
Consolidated
2020
$
2019
$
1,332,574
11,899,778
1,381,183
13,232,356
13,232,352
14,613,539
Deferred costs represent upfront costs, such as laboratory fees, attributable for the collection and processing
of cord blood and tissue samples. These are capitalised and amortised over the remaining life of the storage
contracts as required under AASB 15.
21 TRADE AND OTHER PAYABLES
CURRENT LIABILTIES
Trade payables
Other payables
Total current payables
NON-CURRENT LIABILTIES
Client deposits
Total non-current payables
Consolidated
2020
$
2019
$
389,339
342,624
731,963
239,694
637,248
876,942
441,682
441,682
441,682
441,682
Cryosite Limited Annual Report 30 June 2020
40
Notes to the Financial Statements
For the Year Ended 30 June 2020
21 TRADE AND OTHER PAYABLES (continued)
Fair value
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
$
2020
Consolidated
2019
Consolidated
389,339
239,694
-
-
260,306
129,428
-
172,279
57,719
9,696
-
-
Other balances within trade and other payables are not past due. It is expected that these other balances will
be paid.
22 UNEARNED INCOME
Current
23 DEFERRED REVENUE
Current
Non-current
24 PROVISIONS
Current
Annual leave
Long service leave
Dividend payable
Consolidated
2020
$
78,692
78,692
2019
$
23,066
23,066
Consolidated
2020
$
2019
$
2,129,237
18,147,450
20,276,687
2,250,487
20,276,684
22,527,171
Consolidated
2020
$
2019
$
124,941
53,322
-
178,263
130,403
24,019
1,382
155,804
Cryosite Limited Annual Report 30 June 2020
41
Notes to the Financial Statements
For the Year Ended 30 June 2020
24 PROVISIONS (continued)
Non-current
Long service leave
Lease make good
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
2020
$
2019
$
40,963
200,000
240,963
37,799
200,000
237,799
130,403
(5,462)
124,941
61,818
32,467
94,285
177,895
(47,492)
130,403
40,358
21,460
61,818
Nature and timing of long service leave provision is based on the accounting policy and the significant
estimations and assumptions applied in the measurement of this provision as in Note 3.
Nature and timing of lease make-good provision
In June 2019 the current lease agreement with Allsup Pty Limited for the premises in Granville, was extended
until 31 October 2025. The make good provision remains at $200,000 in respect of the Group’s obligation to
reflect this arrangement regarding the leased premises. 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.
25 CONTRIBUTED EQUITY AND ACCUMULATED LOSSES
Ordinary shares
Movement in ordinary shares on issue
Consolidated
2020
$
5,861,788
2019
$
5,861,788
Beginning of the financial year
End of the financial year
2020
2019
Shares No.
46,859,563
46,859,563
$
5,861,788
5,861,788
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.
Cryosite Limited Annual Report 30 June 2020
42
Notes to the Financial Statements
For the Year Ended 30 June 2020
25 CONTRIBUTED EQUITY AND ACCUMULATED LOSSES (continued)
Movement in accumulated losses
Balance at the beginning of the year
AASB 15 adjustment
Net profit for the year
Balance at the end of the year
26 RESERVES
Share options reserve
Share rights reserve
Balance at the end of year
Movement in share options/rights reserve
Balance at the beginning of the year
Performance rights/options granted
Performance rights/options cancelled
Balance at the end of the year
Consolidated
2020
$
(7,647,390)
-
1,480,179
(6,167,211)
2019
$
(3,958,712)
(1,966,135)
(1,722,543)
(7,647,390)
Consolidated
2020
$
18,616
-
18,616
2019
$
1,001
68,531
69,532
Consolidated
2020
$
69,532
29,198
(80,114)
18,616
2019
$
40,339
52,121
(22,928)
69,532
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 30 for further details of these plans.
Cryosite Limited Annual Report 30 June 2020
43
Notes to the Financial Statements
For the Year Ended 30 June 2020
27 COMMITMENTS AND CONTINGENCIES
(a) Operating lease commitments – Group as lessee
Group as lessee
Commercial Property Security deposits
The security deposit for the lease at Granville is covered by a bank guarantee for $167,937 issued by the
Commonwealth Bank of Australia. Cash deposit is held as security as per note 15.
Plant and equipment
The Group had a number of operating leases on items of plant and equipment used in day to day operations
of the business, these finished in November 2019.
There are no restrictions placed upon the lessee by entering into these leases.
Future minimum rentals payable under non-cancellable operating leases as at 30 June are as follows:
Within one year
After one year but not more than five years
(b) Plant and equipment commitments
There are no capital expenditure commitments at reporting date.
(c) Contingent Liabilities
The Group is not aware of any contingent liabilities at reporting date.
28 AUDITORS 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
2020
$
2019
$
-
-
-
4,880
-
4,880
Consolidated
2020
$
2019
$
71,002
70,717
5,300
76,302
5,750
76,467
Cryosite Limited Annual Report 30 June 2020
44
Notes to the Financial Statements
For the Year Ended 30 June 2020
29 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 17.
This included payments to made to CoSA Pty which is a party related to Bryan Dulhunty. During the year the
company charged the Company $150,012 (2019 $130,264) for consulting service in respect to services provided
by Bryan Dulhunty as a director and company secretary of the company.
During the year total payments of $40,000 were made to MGW Pty Ltd a related party of Nicola Swift, a director
of the Company.
Cryosite Limited is the ultimate parent entity.
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 8.
Cryosite Limited has received a dividend from Cryosite Distribution Pty Limited for $36,992 (2019: $3,708,145).
30 SHARE-BASED PAYMENTS EXPENSE
Total Expense (income) recognized in the profit and loss
relating to share based payments:
Options
Performance rights
Consolidated
2020
$
2019
$
18,615
(69,312)
(49,920)
1,001
52,121
52,121
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 in each
financial year and is governed by the CEIP Plan Rules.
Full details of the performance rights and options issued to executives are noted in the remuneration report
which forms part of the Directors’ Report.
Options
There were no options granted during the 2020
year.
Options granted 27th June 2019
Balance granted as at 30th June 2019
Options cancelled in June 2020
Balance as at 30th June 2020
Key management
personnel
No
1,300,000
1,300,000
-
1,300,000
Staff
No
1,300,000
1,300,000
(650,000)
650,000
Total
No
2,600,000
2,600,000
(650,000)
1,950,000
Cryosite Limited Annual Report 30 June 2020
45
Notes to the Financial Statements
For the Year Ended 30 June 2020
30 SHARE-BASED PAYMENTS EXPENSE (continued)
The following components of the CEIP for options are as follows;
Vesting date
Option price
Vesting conditions
Performance conditions
Service conditions
Expiry date
Exercise of Options
Conditions of options
Grant date
Vesting date
Expiry date
Period
Exercise price
Targets for options
Up to 25 months from date of grant.
6 cents
Options will only vest after certain performance and conditions are met.
Earnings per Share (EPS), Positive operating cashflow
Continuous employment with Cryosite from the date of the options
are granted until the vesting date.
Options will expire 36 months after the vesting date.
Any options which meet the Vesting conditions will be available for
exercise up until the Expiry date.
27 June 2019
1 September 2021
1 September 2024
27/6/2019 to 1/9/2021
6 cents
Target date
30 June 2021
30 June 2021
30 June 2021
Percentage of Performance
Rights that vest
33.3%
33.3%
33.3%
Conditions of Vesting
Positive Earnings per share (EPS)*
Positive Cashflow from Operations*
Continuous service
* Based on the 2021 audited accounts
As at 30 June 2020, no options had vested.
31
KEY MANAGEMENT PERSONNEL
(a) Key Management Personnel
Directors
Mr. Bryan Dulhunty
Mr. Andrew Kroger
Mrs. Nicola Swift
Executive Chairman
Director
Director
Executive
Mr. Mark Byrne (resigned 30 September 2019)
Chief Executive Officer
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.
Cryosite Limited Annual Report 30 June 2020
46
Notes to the Financial Statements
For the Year Ended 30 June 2020
31 KEY MANAGEMENT PERSONNEL (Continued)
(b) Compensation for key management personnel
Directors
Short-term employee benefits*(1)
Post-employment benefits
Share base payments
Sub-total directors
Key Management Personnel
Short-term employee benefits
Post-employment benefits
Share base payments
Sub-total key management personnel
Total compensation
2020
$
Consolidated
2019
$
358,345
15,992
5,017
379,354
62,042
5,506
-
67,548
446,902
250,265
11,400
110
261,775
228,310
21,689
37,571
387,571
549,345
*This includes payments to made to CoSA Pty which is a party related to Bryan Dulhunty. During the year the
company charged the Company $150,012 (2019 $130,264) for consulting service in respect to services provided
by Bryan Dulhunty as a director and company secretary of the company.
(1) In addition, included payment to MGW Capital Pty Ltd which is a party related to Nicola Swift for $40,000
for consulting services performed by Nicola Swift.
32
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:
Cryosite Limited Annual Report 30 June 2020
47
Notes to the Financial Statements
For the Year Ended 30 June 2020
32 FINANCIAL INSTRUMENTS (Continued)
Financial assets
Interest bearing deposits
Cash and equivalents
Other assets
Current receivables
Non-Current receivables
Total
Financial Labilities
Trade creditors and accruals
Note
10
10
15
12
16
21
2019
Note
Financial assets
Interest bearing deposits
Cash and equivalents
Other assets
Current receivables
Non-Current receivables
Total
Financial Labilities
Weighted
average
effective
interest
%
1.05%
0.01%
1.80%
-
-
Weighted
average
effective
interest
%
Floating Interest
$
Non-Interest
bearing
$
Total
$
4,001,756
60,076
167,937
-
-
4,229,769
-
-
-
962,717
138,253
1,100,970
4,001,756
60,076
167,937
962,717
138,253
5,330,739
-
389,339
389,339
Floating Interest
$
Non-Interest
bearing
$
Total
$
10
10
15
12
16
2.13%
0.46%
2.13%
-
-
3,590,622
329,275
476,262
-
-
-
-
-
838,100
186,502
3,590,622
329,275
476,262
838,100
186,502
4,396,159
1,024,602
5,420,761
Trade creditors and accruals
21
-
239,693
239,693
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.
Cryosite Limited Annual Report 30 June 2020
48
Notes to the Financial Statements
For the Year Ended 30 June 2020
32 FINANCIAL INSTRUMENTS (Continued)
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) 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 2019. 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.
(d) 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.
Cryosite Limited Annual Report 30 June 2020
49
Notes to the Financial Statements
For the Year Ended 30 June 2020
32 FINANCIAL INSTRUMENTS (Continued)
(e) 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 $6,926,612 (2019: $6,622,766) at balance date less current
liabilities of $3,270,939 (2019: $3,029,778) an excess of current assets over current liabilities amounting to
$3,685,673 (2019: $3,592,988). The Group generated a positive cashflow of $141,935 (2019: negative cash flow
of $647,536) from operations during the current year. Liquidity risks are managed by matching the payment
and receipt cycle.
Maturity analysis of financial assets and liabilities based on management’s expectation.
Year ended
30 June 2020
Consolidated Financial Assets
Cash and cash equivalents
Trade and other receivables
Other assets
Consolidated Financial liabilities
Trade and other payables
Net maturity
Year ended
30 June 2019
Consolidated Financial Assets
Cash and cash equivalents
Trade and other receivables
Other Assets
Consolidated Financial liabilities
Trade and other payables
Net maturity
Less than 6
months
$
6-12
months
$
1-5 years
$
Greater
than 5
$
Total
$
4,061,832
937,847
-
4,999,679
-
24,870
-
24,870
-
131,077
167,937
299,014
731,963
4,208,384
-
24,870
-
178,794
-
7,176
-
7,708
-
7,708
4,061,832
1,100,970
167,937
5,330,739
731,963
4,693,604
Less than 6
months
$
6-12
months
$
1-5 years
$
Greater
than 5
$
3,919,897
841,444
323,985
5,085,326
-
25,737
-
25,737
-
178,794
-
178,794
876,942
4,208,384
-
113,823
-
178,794
-
7,708
-
7,708
-
7,708
Total
$
3,919,897
1,053,683
323,985
5,297,765
876,942
4,420,623
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
The Group has assessed liquidity risk to be low at balance date and at the date of this report based on total
(f) Currency Risk
The group undertakes certain transactions denominated in foreign currency and is exposed to foreign currency
risk through foreign exchange rate fluctuations. Foreign exchange risk arises from future
Cryosite Limited Annual Report 30 June 2020
50
Notes to the Financial Statements
For the Year Ended 30 June 2020
32 FINANCIAL INSTRUMENTS (Continued
commercial transactions and recognised financial assets and financial liabilities denominated in a currency that
is not the entity's functional currency.
The risk is measured using sensitivity analysis and cash flow forecasting. In order to protect against exchange
rate movements, the consolidated entity has established a foreign currency bank account, however minimal
balances are maintained in foreign currency. Funds received in foreign currency are converted to local currency
within 7 days of receipt.
33 PARENT ENTITY FINANCIAL INFORMATION
The individual financial statements for the parent entity show the following aggregate amounts:
ASSETS
Total Current Assets
Total Non-Current Assets
TOTAL ASSETS
(LIABILITIES
Total Current Liabilities
Total Non-Current Liabilities
TOTAL LIABILITIES
EQUITY
Contributed equity
Share option reserves
Accumulated losses
TOTAL EQUITY
TOTAL COMPREHENSIVE INCOME
Net Profit of the parent entity for the year net of income tax
TOTAL COMPREHENSIVE INCOME FOR THE YEAR
GUARANTEES ENTERED INTO BY THE PARENT ENTITY
2020
$
2019
$
7,492,162
19,553,832
7,333,042
19,625,106
27,045,994
26,958,148
3,430,747
23,902,034
3,592,160
25,140,477
27,332,781
28,732,637
5,861,788
18,616
(6,167,191)
5,861,788
69,532
(7,705,809)
(286,787)
(1,774,489)
1,536,027
1,536,027
(1,159,117)
(1,159,117)
No guarantees have been entered into by the parent entity in relation to the debts of its subsidiaries.
COMMITMENTS AND CONTINGENCIES OF THE PARENT ENTITY
Commitments and contingencies for the parent entity are the same as those disclosed in Note 27.
Cryosite Limited Annual Report 30 June 2020
51
Notes to the Financial Statements
For the Year Ended 30 June 2020
34 LEGAL CLAIM
Cryosite receive $1M in settlement of legal claim
Arising from the ACCC settlement as outlined in Note 35, Cryosite entered into a deed of settlement under
which the company was paid $1,000,000 on 30 September 2019, in settlement of the claim for loss and damage
relating to legal services received by Cryosite in connection with the proposed 2017 transaction.
The settlement sum is in full and final settlement of all claims by Cryosite relating to this matter.
Legal claim received
Legal fees incurred
Net legal settlement before tax
35 LEGAL SETTLEMENT
Penalty from ACCC
Less discount factor due to payment plan
Discounted penalty from ACCC
Legal fees paid to ACCC
Final ACCC settlement
Final settlement
Legal expenses incurred
Pre-tax profit/(loss) for the financial year
Income tax credit/(expense)
Post-tax profit/(loss) for the financial year from
legal settlement
2020
$
2019
$
1,000,000
(41,017)
958,983
-
-
-
2020
$
2019
$
(1,050,000)
224,393
(825,607)
(50,000)
(875,607)
(407,626)
(1,283,233)
125,847
(1,157,386)
-
-
-
-
-
-
-
-
On the 13th February 2019, the Company settled with the Australian Competition and Consumer Commission
(ACCC) in relation to the proceeding against Cryosite in the Federal Court of Australia.
Under the terms of the settlement, the Company agreed to pay a pecuniary penalty of $1.1m (including costs)
to the ACCC, with Cryosite being allowed to pay the penalty in instalments with $250,000 (including $50,000
in legal costs) to be paid within 30 days of the Court's order and the balance to be paid in 10 equal annual
instalments from 2020 to 2029.
Other Liabilities – current
Other Liabilities – non-current
Total
2020
$
50,311
527,833
2019
$
47,464
578,144
578,144
625,608
Cryosite Limited Annual Report 30 June 2020
52
INDEPENDENT AUDITOR’S REPORT TO THE DIRECTORS OF CRYOSITE LIMITED
AND CONTROLLED ENTITY
Report on the Financial Report
Opinion
We have audited the accompanying financial report of Cryosite Limited and controlled entity (the
“Group”), which comprises the statement of financial position as at 30 June 2020 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 14 to 52.
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 2020 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
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities
under those standards are further described in the Auditor’s Responsibilities for the Audit of the
Financial Report section of our report. We are independent of the 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.
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. We have determined that there are no key
audit matters to communicate in our report.
Other Information
The directors of the group are responsible for the other information. The other information
comprises the information included in the “Annual Report”, but does not include the financial
statements and our auditor’s report thereon.
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 – www.mazars.com.au
EMAIL: audit@mazars.com.au
MAZARS RISK & ASSURANCE PTY LIMITED – ABN: 39 151 805 275
Liability limited by a scheme approved under Professional Standards Legislation
53
Our opinion on the financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information, and in doing so, consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the audit or otherwise appears to be
materially misstated. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
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.
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.
54
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.
Obtain sufficient appropriate audit evidence regarding the financial information of the
entities or business activities within the Group to express an opinion on the consolidated
financial statements. We are responsible for the direction, supervision and performance
of the group audit. We remain solely responsible for our audit opinion.
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 2020 as outlined on
pages 6 to 10 of the financial report. The directors of the company are responsible for the
preparation and presentation of the Remuneration Report in accordance with section
the Corporations Act 2001. Our responsibility is to express an opinion on the
300A of
Remuneration Report, based on our audit conducted in accordance with Australian Auditing
Standards.
Auditor’s Opinion
In our opinion, the Remuneration Report of Cryosite Limited for the year ended 30 June 2020,
complies with section 300A of the Corporations Act 2001.
Yours sincerely,
MAZARS RISK AND ASSURANCE PTY LTD
Rose Megale
Director
Sydney, on the 28th of August 2020
55
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 July 2020.
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
2020
No of shares % of issued capital
2019
No of shares % of issued capital
18,889,612
9,129,995
40.31
19.48
17,315,291
9,229,995
36.95
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
BNP Paribas Nominees Pty Ltd
Mr. Alistair David Strong
Bell Potter Nominees Ltd
Mrs. Jane Susan Milliken
Mr. Stephen Roberts
Sunnyit Pty Ltd
H F A Administration Pty Limited
CVF Australia Pty Ltd
Paradyce Pty Ltd
Mr. Gary Griffith Robins
Castlereagh Equity Pty Ltd
Wifam Investments Pty Ltd
Integument Pty Ltd
Wheen Finance Pty Limited
Mr. Peter Howells
MNJ Holdings
Naron Nominees Pty Ltd
Mantou Republic Pty Ltd
18,889,612
9,129,995
2,087,384
2,000,000
1,758,236
1,302,917
967,662
851,000
480,000
459,085
379,000
325,000
300,000
300,000
262,013
228,454
215,730
214,931
213,007
200,000
39,638,833
40.31
19.48
4.45
4.27
3.75
2.78
2.07
1.82
1.02
0.98
0.81
0.69
0.64
0.64
0.56
0.49
0.46
0.46
0.45
0.43
86.57
Cryosite Limited Annual Report 30 June 2020
56
ASX Additional Shareholder Information
DISTRIBUTION OF EQUITY SECURITIES
Number of Shareholders by Size of Holding
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
No of
Holders
No of ordinary
shares
38
217
61
100
41
4,572
13,831
822,506
480,359
2,848,994
42,693,873
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 124 and they hold
196,387 shares.
Cryosite Limited Annual Report 30 June 2020
57