Annual Report
2023
Strategy Statement
We will be the trusted global partner for
driving improved patient outcomes using
our innovative 3base® technology to provide
configurable, clinically relevant molecular
diagnostic solutions for infectious diseases.
Contents
Chairman’s Letter .......................... 4
Annual Review – CEO Report ....... 6
Full Year Results Highlights ....... 12
Strategic Global Presence ......... 14
Marketing & Events .................... 16
Product Pipeline .......................... 20
Upcoming Milestones ................. 21
Our People ................................... 22
Financial Report 2023 ................ 24
Analysis of Holdings ................... 86
Shareholder Information ............ 87
Company Directory ...................... 88
2
Genetic Signatures Limited – Annual Report 2023 3
Chairman’s Letter
Dear Shareholders, it is a pleasure
to present Genetic Signatures’ annual
report for the financial year ending
30 June 2023.
Since its inception 22 years ago, Genetic
Signatures has experienced substantial growth,
transitioning from a modest Australian start-up
to a well-respected global player in the field of
molecular diagnostics for infectious diseases.
Our patented 3base® technology offers distinct
advantages for multiplex PCR testing, now a
fundamental workflow in diagnostic laboratories.
During the COVID-19 pandemic, Genetic Signatures
saw robust demand for the EasyScreen™
SARS-CoV-2 Detection Kit, leading to heightened
awareness of the Genetic Signatures brand and
the unique advantages of 3base® technology in
key markets. Subsequently, following a decrease
in public health molecular SARS-CoV-2 testing,
the 2023 fiscal year saw revenue contract to
$16.9 million. However, this decline had been
anticipated by the Company, with a planned
strategic focus to transition both existing and
newly acquired customers to our well-established
syndromic testing solutions. This syndromic
methodology employs multiplex PCR testing to
identify an array of pathogens causing similar
symptoms in patients, within a single test.
Indeed, the Company experienced subsequent
revenue expansion from these established non-
COVID testing solutions, serving as a testament to
our sustainable growth trajectory and showcased
4
Genetic Signatures’ advantageous position to
capitalise on the escalated global demand for
syndromic testing.
The revenue generated during the COVID-19
pandemic was invested into product development,
with at least five new product groupings now
in various stages of development. In addition,
the Company continues to work towards
future registration of key syndromic solutions
in Australia, Europe and North America. We
have also progressed development of our
next generation, fully automated sample-to-
answer instrument for high-volume testing. This
instrument is expected to further drive demand
for EasyScreen™ kits in targeted markets, and
further embed 3base® technology in the workflow
of our existing customer base. This demonstrates
Genetic Signatures' steadfast dedication to
meet our customers' diagnostic requirements,
and underscores our enduring dedication to
long-term growth, ultimately delivering lasting
value to our shareholders.
This year, we continued to deliver high-
impact sales and marketing initiatives
to further increase awareness and
positioning of Genetic Signatures as a
leading competitor in global molecular
diagnostics in the lucrative United
States (US) and European markets.
Genetic Signatures Limited – Annual Report 2023 In the US, Genetic Signatures remains focused
on the commercial launch of the EasyScreen™
Gastrointestinal Parasite Detection Kit. With
the goal of capturing 40% of the estimated
addressable market of 5.5 million tests per
annum, this innovative diagnostic solution
offers faster and more accurate detection of a
comprehensive range of gastrointestinal parasites
in a single test. This advanced approach not only
facilitates early patient management but also
presents substantial cost efficiencies within the
healthcare system.
Despite facing challenges along the way, I'm
excited about the Company's first 510(k) FDA
submission, planned for Q1 FY2024. This will mark
a very significant step forward as we anticipate
clearance of the first EasyScreen™ 3base®
detection kit for sale in the US.
Bolstered by an established and highly experienced
team in North America, we have secured a select
group of pre-qualified sites poised to commence
validating the EasyScreen™ Gastrointestinal
Parasite Detection Kit. These sites will also have
the potential to adopt the kit for routine use upon
FDA clearance. To support sales in the North
American region, this product was also cleared for
sale in Canada, further extending our reach and
sales potential in this market.
In order to maintain a continuous flow of
FDA-registered products within the US, we
have also commenced a clinical trial for the
EasyScreen™ Essentials Respiratory Detection
Kit. This product is a syndromic test designed
to detect the most common, clinically relevant
respiratory infections, including SARS-CoV-2.
3base® technology is particularly well-suited
for the detection of seasonal viral respiratory
pathogens, as the tests are more resilient to
genetic changes that occur with the emergence of
new strains. This trial has progressed quickly with
510(k) FDA submission for this detection kit and
workflow targeted in 2024.
In Europe, Genetic Signatures is well-positioned
to further lift sales across the existing portfolio
of registered detection kits and automated
systems. This year has seen further expansion
of Genetic Signatures’ laboratory facility at the
BioHub in Birmingham, United Kingdom, and the
establishment of the German subsidiary. This
will provide further support for European sales
and marketing activities, as well as technical
support for our European customers and Channel
partners.
Genetic Signatures is actively broadening its
presence in international markets, as evidenced
by the appointment of two additional channel
partners to drive the promotion of the 3base®
product portfolio in the Middle East.
These selected channel partners possess
specialised knowledge in marketing molecular
diagnostic products, along with strong
established networks within crucial diagnostic
laboratories across the region.
Managing the transition of the Company after
the global pandemic, and prioritisation of the
ongoing product development and registration
pipeline has required focused governance.
The Board of Directors and Management have
risen to these challenges during the year.
I would like to express my thanks to my fellow
directors including; Director and Chief Executive,
Dr John Melki; Executive Director, Michael Aicher,
who heads US operations; and my fellow
Non-Executive Directors, Dr Tony Radford,
Dr Neil Gunn and Caroline Waldron.
I would like to express my sincere
appreciation for the dedicated efforts
of our employees. Genetic Signatures'
corporate strategy finds its foundation
in the skills of our global team, whose
unwavering commitment to our core
values propels the Company forward.
I am proud of the lived values that resonate in our
daily working environment, and the celebration
of individual differences and diversity that fuels
Genetic Signatures’ innovation and success.
Equally, I thank Genetic Signatures’ principal
advisors, our growing team of global partners,
and our long-standing and new shareholders.
You enable us to realise our vision: To reduce
infectious disease burden and improve patient
health by using novel 3base® technology to
enable configurable solutions that simplify
molecular diagnostics.
Our collective drive has empowered us to
embrace new opportunities and leverage our
expertise to deliver a uniquely configurable and
diversified product portfolio, underpinned by our
patented 3base® technology. With an unwavering
enthusiasm for the future, and a robust strategic
plan to support long term growth, we look
forward to continuing to shape the landscape of
molecular diagnostics and making lasting positive
contributions to the field.
Dr Nick Samaras
Chair
5
Building The Foundations
for Long Term Growth
In FY2023, Genetic Signatures achieved a
robust year of sales performance, driven by its
diverse array of 3base® assays and automated
instruments, resulting in revenue of $16.9 million.
Notably, this achievement was attained despite
the decline and eventual cessation of public
health molecular SARS-CoV-2 (COVID-19) testing
during the year. The prior strong commercial
demand for the EasyScreen™ SARS-CoV-2
Detection Kit over the preceding two fiscal years
significantly bolstered the Company's financial
standing, enabling investments in long-term
growth initiatives – a central priority for Genetic
Signatures throughout FY2023.
The key pillars of Genetic Signatures’ long-term
growth strategy include:
•
Increasing brand presence and sales in
key European and US markets
• Supporting Genetic Signatures’ existing
customer base and driving additional
uptake of EasyScreen™ syndromic
testing solutions
• Continued expansion of the EasyScreen™
syndromic testing portfolio to other key
disease areas impacting health
• Embedding 3base® technology in high-
volume customer sites by developing
a fully automated, sample-to-answer
Next Generation Instrument
Preparing for Market
entry into the US
A key focus for Genetic Signatures during
FY2023 was the completion of clinical testing
and data validation for a 510(k) submission to
the US FDA in Q1 2024, for regulatory clearance
of the EasyScreen™ Gastrointestinal Parasite
Detection Kit.
The US is a significant commercial opportunity for
Genetic Signatures’ EasyScreen™ Gastrointestinal
Parasite Detection Kit with an estimated Total
Addressable Market (TAM) of 5.5 million tests
per annum. Currently in the US, the diagnosis
of gastrointestinal (GI) protozoan infections
2023 Annual
Review
CEO Report
Sales of $16.9 million in FY2023
Completion of clinical testing and
data validation to support a 510(k)
submission to the US FDA for regulatory
clearance of the EasyScreen™
Gastrointestinal Parasite Detection Kit
Established European subsidiary and
expanded Australian coverage to include
key customers in Western Australia
Completed first stage of development
of new, sample-to-answer instrument
which has now progressed to building
of a prototype
6
Genetic Signatures Limited – Annual Report 2023 primarily relies on sample culture and microscopy,
supported by antigen detection and pathogen-
specific molecular tests. This approach is well
recognised as being time-consuming, of variable
reliability, labour-intensive, and can take several
days to provide a result. By comparison, Genetic
Signatures’ EasyScreen™ Gastrointestinal
Parasite Detection Kit offers a simple and rapid
molecular test for the eight most common,
clinically relevant GI parasites, providing results
within 2-4 hours.
The EasyScreen™ Gastrointestinal Parasite
Detection Kit includes a number of GI pathogen
targets that are currently unavailable in other
existing commercial products. This underscores
the distinctive and competitive advantages this
product offers in the market. The absence of
available predicate tests for specific pathogen
targets also necessitated Genetic Signatures to
develop new validation methodologies for the FDA
510(k) submission. While this led to a delay in the
timeline, with submission now planned for Q1
FY2024, the additional testing data is projected to
fortify the submission's strength. This will mark
a noteworthy milestone for the Company, with
carefully selected User Experience Sites in the
US ready to initiate the evaluation of this unique
syndromic testing solution and workflow.
During FY2023, Genetic Signatures also
commenced clinical testing of its second 3base®
product for the US market. The EasyScreen™
Essentials Respiratory Detection Kit is a
syndromic test designed to detect the most
common and clinically important respiratory
infections, including the SARS-CoV-2 virus.
Clinical testing has already commenced, with
completion expected during H2 CY2023, and
subsequent FDA 510(k) submission in H1 CY2024.
Genetic Signatures patented 3base® technology
is particularly well-suited for the detection of
seasonal respiratory viral pathogens as the
tests are more resilient than traditional PCR
to genetic mutation and the emergence of new
strains. There is significant market opportunity
for this syndromic solution with the diagnostic
advantages well understood. A recent publication
reporting a meta-analysis of over 17,000 subjects
across 27 different studies demonstrated that
use of syndromic PCR tests for respiratory viruses
can reduce the time to result by 24 hours, leading
to shorter hospital stays and improvements in
infection control management1.
1 https://doi.org/10.1016/j.jinf.2023.03.005
7
7
Gaining Momentum in
Established Markets
Strategic Partnerships for
Entry into New Markets
During FY2023, Genetic Signatures expanded
its Australian footprint to include two pathology
laboratories in Western Australia. These
customers are intending to adopt a range of
EasyScreen™ detection kits into their diagnostic
workflow and have already installed Genetic
Signatures’ automated instruments to improve the
throughput and efficiency of testing.
Genetic Signatures has Australian TGA
registrations in place for 3base® EasyScreen™
detection kits for the syndromic testing of
respiratory and gastrointestinal infections, as
well as antimicrobial drug resistance (AMR).
While the Company has generated material sales
of these products in Australia over the past four
years, these have primarily been to high volume
customers in New South Wales, Victoria and
Queensland.
In line with Genetic Signatures' drive to enhance
its presence in key European markets, the
Company formally established a subsidiary in
Germany, solidifying its commitment to offer
direct sales and technical assistance to its
European customers. This German arm bolsters
the existing EMEA subsidiary, which is already
well established. Local support was further
enhanced by expansion of Genetic Signatures’
laboratory space at the BioHub in Birmingham,
United Kingdom.
Notably, several European sites embraced
3base® technology for SARS-CoV-2 testing during
the pandemic. Building on this experience, a
number of these customers have integrated,
or are evaluating or preparing to integrate, the
3base® syndromic solutions into their laboratory
workflow.
In the first half of FY2023 Genetic Signatures
lodged a submission for registration of the
EasyScreen™ Gastrointestinal Parasite
Detection with Health Canada. This registration
was confirmed in October 2022 and is the 3rd
EasyScreen™ Detection Kit to be registered for
the Canadian market. Genetic Signatures is
supported by a channel partner in the region.
8
Genetic Signatures recently signed an exclusive
agreement with two channel partners, securing
rights to promote its 3base® technology and
syndromic testing solutions in the United Arab
Emirates, the Kingdom of Saudi Arabia, Bahrain,
Qatar, and Israel. These strategic partnerships will
support Genetic Signatures' expansion into the
Middle East by increased brand recognition and
market penetration through the channel partners'
existing networks, and customer base. Moreover,
these collaborations provide invaluable local
insights and support in the region.
Expanding the Syndromic
Testing Portfolio
In line with Genetic Signatures’ long-term growth
strategy, during FY2023 the Company continued
to diversify and expand its product offering and
range of EasyScreen™ detection kits available in
priority international markets. Genetic Signatures
has established assays for the detection of over
100 clinically relevant pathogens, across a broad
range of infectious diseases.
The simplified multiplexing process, enabled
by Genetic Signatures' 3base® technology, has
allowed the detection of multiple pathogens that
may be responsible for an infection in a single
test. Syndromic testing's clinical advantage
lies in pinpointing the cause of infection among
numerous potential pathogens, determined by
patient symptoms. Genetic Signatures has a
number of established syndromic tests developed
for a range of infectious diseases with regulatory
clearance for sale in Australia and Europe.
These include EasyScreen™ detection kits for
gastrointestinal and respiratory infections, and
key gene targets associated with antimicrobial
resistance. A range of research use only (RUO)
syndromic solutions are also available.
Genetic Signatures also has CE-IVD registration
in Europe for syndromic testing for 10 of the
most prevalent sexually transmitted diseases.
The Company continues to work towards future
registration of key syndromic solutions in
Australia and North America, and is currently
transitioning key EasyScreen™ detection kits
through the new European IVDR regulatory
pipeline, as new compliance requirements for in
vitro diagnostics progressively come into effect
over the coming years.
Genetic Signatures Limited – Annual Report 2023 In addition, the Company’s
research and development
program continues to progress,
with a range of syndromic tests
for 5 other disease areas in
varying stages of development.
These forthcoming products will expand
the Company’s product portfolio, enabling
laboratories to offer a diverse array of tests to
cater to their diagnostic needs.
Answering Customer
Need for a Fully Automated
Syndromic Workflow
Genetic Signatures' existing automated workflow
seamlessly integrates with EasyScreen™
detection kits, empowering diagnostic
laboratories to efficiently test for a wide spectrum
of infectious disease targets. Three instruments
offer flexible, automated medium and high-
throughput nucleic acid extraction and PCR
set up on a single system. Additionally, a fourth
instrument caters for simple, rapid extraction for
lower throughput requirements.
In FY2022, Genetic Signatures initiated a strategic
project aimed at addressing a distinct market
requirement: the creation of a fully automated
sample-to-answer instrument tailored for
high-throughput testing within diagnostic
laboratories. This Next Generation Instrument’s
design and specifications were developed
through extensive market analysis and customer
insight to meet the demands of high-volume
customers. Encompassing the entire diagnostic
testing workflow – from sample extraction to
result reporting – the system minimises operator
intervention, streamlines the laboratory workflow,
and provides laboratories with the flexibility to
run multiple EasyScreen™ detection kits in a
single run.
By facilitating seamless adoption of 3base®
technology, this fully automated solution will
embed our technology into the daily laboratory
workflow to foster lasting commercial
partnerships with our customers.
9
During FY2023, the first of the four phased-
development program for the Next Generation
Instrument was completed, with a working
prototype successfully demonstrating the
sample-to-answer workflow, a significant
milestone in the instruments’ development. A full
prototype is expected to be delivered to carefully
selected customer sites for beta testing in the
near future.
Conclusion
I take great pride in the accomplishments of the
Genetic Signatures team during FY2023, as we
lay the groundwork for our sustained long-term
growth and remain steadfast in pursuing our
strategic goals. A pivotal milestone has been
the preparation of a solid FDA submission for
clearance of the EasyScreen™ Gastrointestinal
Parasite Detection Kit and its diagnostic workflow.
Submission is expected in Q1 2024 and will be
our first product for regulatory clearance in the
US market. This achievement bears substantial
commercial promise, given the sizable market
potential in the US and the unmet need for this
diagnostic solution. In parallel, we have made
significant progress towards submission of our
second syndromic product in the US for the
detection of leading respiratory infections, the
EasyScreen™ Essentials Respiratory Detection
Kit. Our North American team have been
instrumental in the ongoing success of the clinical
trials and preparing the market for the future
launch of these products.
We continue to expand our global presence in
Europe with the establishment of the German
subsidiary, two new channel partners in the
Middle East, and the unwavering commitment
of our EMEA team to drive brand awareness and
sales in the broader region.
Our research and development, validation and
production team's commendable efforts have
propelled the ongoing development, enhancement
and commercial delivery of our EasyScreen™
detection kits, and workflow to the global market.
Moving into FY2024, the Genetic Signatures
Board of Directors and our global team maintain a
resolute commitment to executing our long-term
growth strategies to deliver promising commercial
outcomes for the Company, and its Shareholders.
We are excited about the future as we strengthen
our value proposition and expand our global reach.
We sincerely thank our valued Shareholders for
their ongoing support and unwavering belief in
our mission to advance innovation and excellence
in molecular diagnostics through our unique
3base® technology.
Dr John Melki
Managing Director and CEO
10
Genetic Signatures Limited – Annual Report 2023 11
Full Year Results
Highlights
Revenue from operations ($m)
FY23 financial highlights ($m)
35.4
28.3
16.9
5.1
(8.0)
11.3
16.9
(14.1)
(28.1)
FY20
FY21
FY22
FY23
In the year ended 30 June 2023, Genetic
Signatures’ revenue was $16.9 million. During
the year the Company increased revenue from
the sale of non-COVID detection kits after the
cessation of public health SARS-CoV-2 testing,
reducing demand of this type of testing.
12
Sales
revenue
Cost of
materials
& freight
Other
income
Net loss
Other
expenses
(incl
overhead)
The net loss for the year ended 30 June 2023 was $14.1
million compared to a net profit of $3.1 million in FY2022.
Gross profit on materials reduced to 60% compared to
70% in the prior year. This reduction was primarily
attributable to lower sales volumes during the year.
Freight costs continue to be significant due to global
logistics challenges and inflation. Overall, other expenses
have grown 40% year on year as investments in people,
R&D, clinical trials, and marketing have been made to
take advantage of future opportunities, particularly in the
US and European target markets. Fundamental investment
in building and testing upgraded products also continues
to support the Company's product pipeline.
Genetic Signatures Limited – Annual Report 2023 Cash movements ($m)
19.1
36.9
0.6
(32.1)
(1.9)
0.0
(6.2)
(0.0)
16.3
n t s
e
m
y
a
c
e i p t s
p li e r p
a l
g b
e r r e
m
p
u
S
n i n
s t o
O
e
u
p
C
e r
a
s
h
a
O t h
h
u r c
u r c
P
P
E
&
e o f P
e o f I n t a
s
n
s
g i b l e
p ti o
O
n e
x
L
e
e p ri n
e r c i s
s
a
e
c i p
a l
C I o
s i n
a l
g b
The cash balance at 30 June 2023 was $16.3
million. Net operating cash outflows for the
year was $12.5 million and included collections
from customers of $19.1 million. During the
year, investments in instrumentation for use at
customer sites, production and manufacturing
facilities, and research facilities were $1.9m.
In addition, $6.2 million was invested in
capitalised intangible assets, which was
primarily related to the Next Generation
Instrument development.
13
Strategic Global Presence
Genetic Signatures is expanding its global presence
to accommodate future growth in key markets
With direct presence in Australia, the UK, Germany, and the US, the Company has strategically positioned
laboratory and warehousing facilities to ensure swift product delivery. These facilities also serve as hubs
for comprehensive training and technical assistance for both channel partners and customers.
Australia Headquarters
Headquartered in Sydney, Australia, Genetic Signatures occupies a large,
three-story building with commercial office space and a core laboratory
for research and development, validation, and quality assurance testing.
The production facility is located on a separate site in Sydney, where
the EasyScreen™ detection kits are manufactured and stored before
shipping to global warehousing facilities.
Europe Operations
In Europe, the Company maintains multiple warehousing facilities
to support its operations, including a partnership with The BioHub
Birmingham in the UK for access to their outstanding laboratory
and business facilities. This year, Genetic Signatures expanded
its laboratory space at The BioHub to accommodate growth, with
enhanced instrumentation for technical support and training. The
Company's commitment to the European market is further solidified
by the establishment of a subsidiary in Germany.
North America Operations
In North America, multiple warehousing facilities also ensure timely
product supply, and laboratory space at BioLabs at the Lundquist in
Los Angeles, supports research and development, and training for
the North American region.
14
Genetic Signatures Limited – Annual Report 2023 BioLabs
Los Angeles
United States
The BioHub
Birmingham
United Kingdom
6
4
5
3
2
1
3
Headquarters
Sydney
Australia
1
2
UAE, Kingdom of Saudi Arabia,
Bahrain, Qatar
Israel
3
Greece
4
5
6
Ireland
Netherlands
Canada
An Expanding Global Distributor Network
Genetic Signatures’ has a strong global network of dedicated channel partners in Europe, North
America and more recently, the Middle East. These partners each possess unique market insight
and strong local presence to amplify Genetic Signatures’ brand visibility, stimulate sales growth,
and provide local customer support.
Genetic Signatures recently announced two new strategic channel partnerships in the Middle East;
with Integrated Gulf Biosystems (IGB) and Almog Diagnostic. This marks a significant milestone
in the Company's expansion into the region, presenting exciting opportunities and advantages for
stakeholders involved.
Integrated Gulf Biosystems (IGB) is a long-established
partner for the distribution of life science and clinical
solutions in the Middle East. This exclusive partnership
allows Genetic Signatures to tap into the promising
market of United Arab Emirates, Kingdom of Saudi
Arabia, Bahrain and Qatar. Leveraging IGB’s extensive
expertise with Genetic Signatures' current OEM
partners, and bolstered by IGB’s in-house technical
assistance and training capabilities, IGB is poised
to seamlessly introduce the Company’s proprietary
3base® syndromic workflow to their established
customer networks.
“Our association with Genetic Signatures, is aligned
with their mission to deliver the most advanced
applications for molecular diagnostic screening
assays. IGB, being an end-to-end solution provider for
automated workflows in the region, the association
with Genetic Signatures… will be a great asset, for
our foray into serving the clinical diagnostics area,
thereby helping to deliver faster and accurate patient
results,” said Prabhu Sampath, Co-Founder and CEO,
Integrated Gulf Biosystems LLC.
Almog Diagnostic, based in Tel Aviv, was founded
in 1987, brings extensive expertise in distributing
innovative and high-quality products for research,
diagnostics, and clinical use. Their focused approach
in introducing new innovative and niche technologies
to the Israeli market aligns well with Genetic
Signatures' patented 3base® syndromic solutions
for infectious diseases. Bolstered by an in-house
applications laboratory and skilled engineers to
support Genetic Signatures' automated systems,
Almog Diagnostic is aptly positioned to provide
robust sales and service support.
“In our continuous growth we always seek for the
next ‘big thing’, cutting-edge technologies, that we
can bring to the Israeli market. We strongly believe
that our new collaboration with Genetic Signatures,
the 3base® syndromic multiplex testing solutions,
and the coming sample-to-result automation, can
make a change in the diagnostic market,” said
Nitsan Levi, VP New Technologies
and Implementation, Almog Diagnostics.
15
Marketing
& Events
Elevating brand recognition:
Genetic Signatures' prominent
event sponsorship
2023 saw significant investment to represent a strong brand presence at prominent
international conferences, positioning Genetic Signatures as a leading global brand
in syndromic testing for infectious diseases.
These events were very successful, notably elevating the Company's brand visibility
and fostering valuable engagements with prospective customers and channel
partners who were keen to understand the benefits of Genetic Signatures' patented
3base® technology and flexible syndromic workflow.
Key events sponsored for FY2023 included:
The 97th Annual Meeting of the American Society of Parasitologists (ASP), Texas,
United States, 9th - 12th July 2022
74th Annual Meeting of the German Society for Hygiene and Microbiology (DGHM),
Berlin, Germany, 5th - 7th September 2022
European Society for Clinical Virology (ESCV), Manchester, United Kingdom,
7th - 10th September 2022
Institute for Biomedical Science Congress, Birmingham, United Kingdom,
25th - 28th September 2022
38th NRL Workshop on Infectious Disease Testing 2023, Melbourne, Australia,
10th - 12th October, 2022
12th European Meeting on Molecular Diagnostics (EMMD), Noordwijk, Netherlands,
12th - 14th October 2022
32nd Annual Meeting of the Society for Virology (gFV)- Ulm, Germany, 28th - 31st March 2023
33rd European Congress of Clinical Microbiology and Infectious Diseases (ECCMID),
Copenhagen, Denmark, 15th - 18th April 2023
Berufsverband der Ärzte für Mikrobiologie, Virologie und Infektionsepidemiologie (BÄMI),
Göttingen, Germany, 11th - 13th May 2023
American Society of Microbiology (ASM) Microbe, Texas, United States, 16th - 18th June 2023
16
Genetic Signatures Limited – Annual Report 2023 The European Congress of
Clinical Microbiology and
Infectious Diseases (ECCMID)
The 33rd ECCMID conference was held from
15-18 April 2023 in Copenhagen. This premier global
event in clinical microbiology and infectious diseases,
showcased cutting-edge research and diagnostics,
and emerging trends in this field. Attended by over
16,000 delegates from 146 countries, Genetic
Signatures had a solid presence with a 50m2 booth
and high impact advertising at the event. This
successfully positioned the Company as a prominent
global supplier of innovative, flexible syndromic
testing for infectious disease.
NRL Workshop on Infectious
Disease Testing
Australia's National Reference Laboratory (NRL)
run the NRL Workshop on Infectious Disease
Testing to unite professionals including scientists,
IVD manufacturers, regulators, clinicians, and
laboratory staff. This event facilitates discussions
on current opportunities and challenges in
the field, along with showcasing technological
advancements and diagnostic tests for infectious
diseases. Genetic Signatures has long sponsored
and presented at this event, exhibiting their latest
product innovations and enhancements.
Australian Investor
Roadshows
Genetic Signatures regularly presents at leading
investment events in Australia, such as the
TechKnow Invest Roadshows. These events provide
opportunities to connect directly with investors,
brokers, and shareholders, facilitating insightful
discussions about the Company’s unique diagnostic
solutions, competitive strengths, and strategic
advancements to support long-term growth and
deliver shareholder value.
Visit www.geneticsignatures.com/au/investors
to access the latest presentations and reports.
17
Ron's ability to translate scientific concepts into
tangible solutions for diagnostic laboratories is a
hallmark of his expertise. His talent in anticipating
and addressing customer needs has led to the
establishment of enduring relationships, both with
clients and industry partners. He attributes much of
his success to the support of colleagues and senior
managers who championed individual growth and
development, fostering a culture of collaboration
and shared success.
“My relationships in the market with both
companies and clients have created
great support for my growth and the
partnerships needed for success. No one
is successful alone,” Ron said.
This collaborative leadership style remains at the
core of Ron's approach, characterised by a growth
mindset, unwavering enthusiasm, and confidence
in taking on challenges. Ron’s commitment to a
positive company culture aligns seamlessly with
Genetic Signatures' values, as he believes that
culture is the heart of any successful business.
Ron's decision to join Genetic Signatures was
driven by the Company's "all in" culture, coupled
with its cutting-edge proprietary 3base® technology
and supportive leadership.
Over the past 2 years, Ron has formed a North
American team comprised of experts in Sales,
Marketing, Technical Support, Clinical and
Commercial Operations. “We have built a cohesive
and motivated team in North America who are well
equipped to overcome challenges and launch Genetic
Signatures into the US market. A group of highly
experienced individuals who now bring their expertise
and knowledge to Genetic Signatures.”
“We have a fantastic strategy for growth in the short
and longer term with unique, customer-centric
solutions that will place Genetic Signatures on the
world stage,” Ron said. “Combine this with our local
and global team's collective spirit and expertise,
we are well positioned for a resounding success in
North America.”
North America
A team
prepared for
success
Ron Gonzales leads Genetic
Signatures' North American
endeavours
Genetic Signatures local North American team
has grown rapidly over the past year, driven by
the Company’s strategic efforts to establish a
robust brand identity in the region, in preparation
for the future launch of the EasyScreen™
Gastrointestinal Parasite Detection Kit and
automated workflow.
At the helm of this highly experienced and
diversely skilled team is Ron Gonzales. After
joining the Company in 2021, Ron’s leadership has
been pivotal in generating momentum, energy,
and interest amongst highly targeted customers
in the region.
Ron Gonzales is a seasoned veteran in the
diagnostic and medical device industry with
an impressive career spanning various senior
leadership roles at Abbott Laboratories, Merrill
Lynch, and QIAGEN. Ron's extensive background
equips him with a solid understanding of the
healthcare and diagnostic sector. His passion
for the diagnostics industry was ignited during
his tenure at Abbott Laboratories, where he
embarked on a journey of professional growth and
knowledge acquisition. His fearless approach to
tackling challenges and his mantra of remaining
“green and growing” allowed him to gain exposure
across diverse product areas and business units.
18
Genetic Signatures Limited – Annual Report 2023 Elevating Market Presence
in the US
The Company has recently initiated a series
of impactful sales and marketing initiatives to
establish brand recognition in the US. These
endeavours encompass strong representation at
prominent events, the delivery of a comprehensive
three-part educational webinar series featuring
eminent thought leaders in the parasitology field,
the additional promotion of an aligned white
paper, and the impactful delivery of a focus group
with key opinion leaders in clinical diagnostics.
Sponsorship of Leading
Industry Events
Genetic Signatures recently exhibited at
leading events in the US including the
American Society for Microbiology (ASM
Microbe) and the Association for Diagnostics
and Laboratory Medicine (formerly AACC). These
prominent events in the field of microbiology,
clinical chemistry, and diagnostics served as a
platform for Genetic Signatures to demonstrate
the Company's strong local presence.
3base® technology, the attractiveness of uniform
PCR test conditions, and suggestions on future
product development and diagnostic workflow.
This research initiative enabled a deeper
understanding of diagnostic laboratory needs in
the US, aiding informed decision-making, refined
strategic direction, and the shaping of effective
communication strategies.
Educational Webinar Series:
‘Advances in Gastrointestinal
Parasite Testing’
In June 2023, Genetic Signatures delivered an
educational webinar, the third in a 3-part series
featuring molecular solutions for detecting
gastrointestinal parasites. Experts in parasitology
highlighted the advantages of a syndromic
workflow that identifies multiple pathogens in one
test, delivering results within hours, compared
to weeks seen with conventional methods. The
speakers also emphasised the unique pathogen
targets in Genetic Signatures' EasyScreen™
Gastrointestinal Parasite Detection Kit.
Hosted by 360Dx, a leading clinical diagnostics
platform, this virtual event generated robust
participation and an expanding opportunity
pipeline for Genetic Signatures. This webinar
series, together with an aligned white paper,
are now available on-demand and will support
future marketing efforts as the Company prepares
to launch the EasyScreen™ Gastrointestinal
Parasite Detection Kit.
Shaping Diagnostic
Excellence: Insights
from Leaders in Clinical
Diagnostics
In March 2023, the Company held a focus group
with influential Key Opinion Leaders (KOLs) from
leading diagnostic laboratories in the US. The
focus group provided a forum to discuss the key
challenges facing clinical diagnostics and future
requirements for infectious disease testing.
The KOLs also provided valuable feedback on
19
A Robust Pipeline with Multiple
Products Cleared for Sale
Genetic Signatures has an extensive range of
regulatory cleared EasyScreen™ detection kits for
syndromic testing for respiratory, gastrointestinal,
sexually transmitted diseases, and antimicrobial
resistance. Diagnostic solutions for five other
disease areas are also at various stages of the
development pipeline, supporting future growth
opportunities for the Company.
Genetic Signatures is currently transitioning key
EasyScreen™ Detection Kits through the recently
established European IVDR regulatory pipeline.
This is to ensure the EasyScreen™ detection kits
meet the new European compliance criteria for
in vitro diagnostics, which will be progressively
implemented in the years ahead.
Additionally, the Company is dedicated to securing
IVD registration for the existing research use
only (RUO) products to expand the availability of
syndromic testing solutions and integrate 3base®
technology into laboratory workflows.
Regulatory approval is being pursued for two
syndromic solutions targeting gastrointestinal
parasite infections and leading respiratory
infections in the US. The Company's product
pipeline envisions the introduction of more
solutions in the future.
Genetic Signatures remains committed to
continuous improvement of the diagnostic
workflow to meet their customer needs, with a
range of initiatives in development. This includes
the development of a fully automated sample-to-
answer instrument tailored for high-throughput
testing. This Next Generation Instrument
minimises operator intervention, streamlines the
laboratory workflow, and provides the flexibility
to run multiple EasyScreen™ detection kits in a
single run.
CONCEPT
IN DEVELOPMENT
RUO
IVD REGISTRATION
TGA
CE MARK
FDA
In progress:
In clinical testing
In progress:
Submission in Q1 2024
Planned
Planned
Converting to
new protocol
In development
20
Genetic Signatures Limited – Annual Report 2023 Upcoming
Milestones
US: EasyScreen™ Gastrointestinal Parasite Detection Kit
Planned 510(k) FDA submission in Q1 2024
Customer Experience Sites initiated with select diagnostic laboratories in the US
Receive FDA approval
Launch product once clearance is granted
Contracts with new customers
Completion of US clinical trial for second FDA submission
EasyScreen™ Essentials Respiratory Detection Kit
R&D initiatives for new products
New tests for EasyScreen™ detection kits
Continued technology and workflow improvements
Further progression for the development of the Next Generation Instrument
Quarterly sales updated and progress reports
21
Our People
One of Genetic Signatures’ great strengths is its people.
All team members live a set of core values that guide their
approach to work, problem solving, and communication,
and form the cornerstones of Genetic Signatures’ culture.
All in
We are passionate about making a real and positive difference to
patient health outcomes and we give every day our all, supporting
each other and our customers to achieve our collective goals.
Recent employee
engagement survey
97% of staff are motivated to
see Genetic Signatures succeed
100% of staff understand how
their role contributes to what
we are trying to achieve as
a company
91.5% agree that Genetic
Signatures is an open and
accepting workplace
Truth
We conduct ourselves with honesty and integrity and seek and
speak the truth.
Empowerment
We are clear on our responsibilities and see the road to our
success, and we are given ownership to achieve this.
Evolution
We are passionate about continuously evolving our professional
capability and molecular diagnostic solutions.
Diversity
We understand that each individual is unique, and we recognise
our individual differences and unique perspectives fuel the
innovation of our solutions.
Staff allocation by function
Staff gender profile
ADMIN &
SUPPORT
16%
SALES &
MARKETING
32%
PRODUCTION
QUALITY
CONTROL
23%
22
R&D/VALIDATION
30%
MALE
43%
FEMALE
57%
Genetic Signatures Limited – Annual Report 2023 Introducing
Karl Pechmann
Chief Financial and Operating Officer (CFO & COO)
and Company Secretary
In the brief time since assuming his role at Genetic
Signatures in June 2023, Karl Pechmann has made
an indelible impact as Chief Financial and Operating
Officer (CFO & COO) and Company Secretary. With
extensive experience as a Chartered Accountant and
governance expert within ASX and NASDAQ listed
companies, his proficiency in financial management,
strategic planning, and capital raising within
medical technology, biotechnology, and healthcare
sectors positions Genetic Signatures for successful
global expansion under his adept leadership.
Karl's early interest in finance and business strategy
was ignited during his cadetship program at KPMG,
starting at just 18 years old. Karl was immediately
exposed to diverse industries and high-net worth
businesses at various stages of development.
This rapidly accelerated Karl’s career to senior
management roles at multi-national companies
including OncoSil Medical Limited, Kyckr Limited
and Immutep Limited. Throughout this journey,
Karl assumed responsibilities spanning finance,
investor relations, treasury, operations, and
information technology.
An advocate for adaptability and market
responsiveness, Karl's transformative mindset
has streamlined operations, enhanced efficiency,
and strategically driven organisational growth.
“Regardless of the type of industry you are working
in, the biggest learning has been that teams need to
be adaptable and responsive to changes in market
dynamics, or to know when to pivot to meet market
demand,” Karl said.
His affinity for companies driving positive
societal impact led him to Genetic Signatures,
where innovation in molecular diagnostics for
infectious diseases resonated deeply. “The Board,
management and staff are dedicated to excellence
in molecular diagnostics to improve patient health.
Genetic Signatures has deep roots in research
and development and product development, and
continuous improvement to our product offering
brings confidence for the future growth of the
company, globally,” Karl explained.
Karl's extensive expertise in driving organisational
change and enhancing operations will fortify
Genetic Signatures' expansion into targeted
international markets. "In my role, I closely
collaborate with the business to not only interpret
financial data but also make data-driven decisions
to enhance operational performance. I foster the
understanding among team members about their
collective impact on operational excellence, and
how this can translate to enhanced company
performance to further invest in improving patient
outcomes, as well as supporting improved financial
results for shareholders," said Karl.
With a career marked by astute financial acumen,
business planning and strategic leadership, Karl
has already emerged as a driving force to support
Genetic Signatures' financial stability and future
growth objectives.
“My main goal for the Company is to
be the trusted business partner to the
Board, management and the Genetic
Signatures team to facilitate the
growth of the business and continued
improvements to the Company’s product
offering, which will ultimately improve
treatment decisions for patients."
Welcome to the team!
23
For the financial year
ended 30 June 2023
Contents
Directors’ Report ..............................................................26
Auditors Declaration ........................................................45
Financial Report
Consolidated Statement of Profit or Loss
and other Comprehensive Income ..........................46
Consolidated Statement of
Financial Position ....................................................47
Consolidated Statement of Changes in Equity .....48
Consolidated Statement of Cash Flows ................49
Notes to the Financial Statements ........................50
Directors’ Declaration ......................................................80
Independent Audit Report ...............................................81
Analysis of Holdings ........................................................86
Shareholder Information .................................................87
24
Genetic Signatures Limited – Annual Report 2023
Financial Report 2023
25
25
Directors’ Report
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
The directors present their report, together with the financial statements, on the company and its
controlled entities for the year ended 30 June 2023. This will hereafter be referred to as company,
consolidated entity or group.
DIRECTORS
The following persons were directors of the group during the whole of the financial year and up to the
date of this report, unless otherwise stated:
Nickolaos Samaras
Michael A Aicher
Neil Gunn
PRINCIPAL ACTIVITIES
John R Melki
Anthony J Radford
Caroline C Waldron
The principal activities of the group during the financial year were the research into identifying and
commercialisation of individual genetic signatures to aid in the diagnosis of infectious diseases and
the sale of associated products into the diagnostic and research marketplaces. There have been no
significant changes in these activities during the year.
REVIEW OF OPERATIONS
Genetic Signatures has generated solid sales of 3base® EasyScreen™ for the year ended 30 June
2023. During the year the group was successful in opening new customer sites in both Australia and
Europe and continuing to expand the range of tests undertaken using 3base® EasyScreen™ beyond
SARS-CoV-2.
In the financial year ending 30
June 2023, Genetic Signatures’
revenue was $16.939 million
representing a 52% decrease
over
the previous year. This
reduction in revenue was due to
the reduction of public health
molecular testing for SARS-CoV-
the year, Genetic
2. During
Signatures
revenue
increased
from non-COVID kits to partially
offset the reduction in SARS-
CoV-2 revenue.
11.3
1.1
10.2
Genetic Signatures posted a full
year net loss of $14.052 million,
compared
prior
the
corresponding period profit of $3.063 million.
to
FY20
Revenue from operations ($m)
35.4
3.8
31.6
16.9
1.6
15.4
FY22
FY23
International
28.3
6.0
22.2
FY21
APAC
Gross margins on materials were 60%, compared to 70% in the prior year. The reduction in gross margin
is attributable to the reduction in production volumes during the year. Freight and warehousing
continues to be a significant expense due to increased logistics costs that have been widely reported in
the media. Margins are expected to be maintained or improved as the proportion of international sales
rises.
26
2
Genetic Signatures Limited – Annual Report 2023
for the financial year ended
30 June 2023
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Significant investments have been made over the year to prepare to take advantage of future growth
opportunities, and this has been shown in the increase in expenses from the previous year. Employee
benefits expense were up 31% vs. prior corresponding period to $15.037 million due to growth in
headcount globally, primarily in Research & Development. This also includes share-based payments
expense of $1.972 million, a non-cash item. Scientific consumables increased 63% over prior year,
reflecting the work on continuing and new R&D projects and clinical trial costs for the US FDA Enteric
Parasite submission. Costs for the development phase of the Next Generation project is now being
capitalised. Marketing & travel expenses increased over the prior year as restrictions on travel ease and
markets, particularly the US, are being prepared for the launch of new products.
Cash on hand was $16.349 million at 30 June 2023 and the group remains debt free. Genetic Signatures
has reported net operating cash outflows for the year of $12.451 million which includes collections from
customers of $19.093 million. During the year, the group made $1.932 million in investments in
instrumentation for use at customer sites and machinery for production or research work, and $6.162
million in capitalised intangible assets, mostly related to development of the Next Generation instrument
referred to above. Inventory balances reduced through the year to reflect the reduction in sales and
supply chains eased.
Commercialisation Progress by Market
Australia
During the year, Genetic Signatures expanded its Australian footprint to include two pathology
laboratories in Western Australia. Genetic Signatures has Australian TGA registrations in place for
3base® EasyScreen™ syndromic test kits for the evaluation of respiratory infections, enteric
gastrointestinal pathogens and antimicrobial drug resistance (AMR).
During the year, Genetic Signatures completed the first of four phases of its program to develop a fully-
automated, high-throughput, sample-to-answer instrument specifically designed for 3base® technology.
This program has now progressed into the development of a working prototype prior to building the
commercial instrument. The design, requirements, and specifications for this instrument has been
informed by extensive customer research which highlighted the attractiveness of a fully-automated,
high-throughput, sample-to-answer instrument for high-volume sites wanting to routinely adopt 3base®
technology as part of their molecular testing offering.
EMEA
During the year Genetic Signatures registered a subsidiary in Germany to provide sales, marketing and
technical support for its European customer base. A number of European sites initially adopted the
3base® technology to assist with testing for SARS-CoV-2 during the pandemic. Following this
experience, many of these customers are now either evaluating or have started to purchase 3base®
syndromic kits for other indications.
The region contributed 9.4% of total sales revenue in FY2023. As with Australia, SARS-CoV-2 testing
has reduced as governments withdraw support for population-wide screening. The Genetic Signatures’
sales & support teams, based in UK and Germany, are using the opportunity to sell the benefits of the
other CE-IVD marked diagnostic kits in the portfolio.
3
27
Directors’ Report
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
A key focus for Genetic Signatures during FY2023 was the completion of clinical testing, data validation,
and the preparation of the submission of a 510(k) application for regulatory clearance for our
EasyScreen™ Gastrointestinal Parasite Detection Kit in the United States. This is the first product using
our 3base® technology to go in front of the US Food and Drug Administration.
The US is a significant commercial opportunity for Genetic Signatures’ EasyScreen™ Gastrointestinal
Parasite Detection Kit with an estimated Total Addressable Market (TAM) of 5.5 million tests per annum.
During the financial year, Genetic Signatures also commenced clinical testing of its second 3base®
product for the US market. This product is a syndromic test designed to detect the most common
respiratory infections, including the SARS-CoV-2 virus.
In the first half of FY2023 Genetic Signatures lodged an application for registration of this its Enteric
testing kit with Health Canada. This registration was confirmed in October and is the 3rd EasyScreen™
Detection Kit to be registered for the Canadian market.
Looking Forward
Genetic Signatures has an exciting year ahead as it manages the transition from SARS-CoV-2 to
expanding the range of EasyScreen™ tests that current and new customers use day to day.
The group is focused on its goal of being a solution of choice for pathology laboratories. Key goals over
the next 12 months include:
• Anticipating US FDA clearance and successfully launching the product once clearance is granted.
• Completing regulatory clinical trials for the next product to be put through the US FDA.
• Progressing the Next Generation instrument through its development phases with early-stage
prototypes available for comprehensive testing.
• Expanding the European customer base and the range of tests adopted by customers. This includes
establishing distributor-based sales teams in markets not currently served.
• Continuing R&D activity and moving new products from the development phase towards
commercialisation.
The above milestones will again broaden Genetic Signatures’ applicability to pathology testing
laboratories and will secure further growth, particularly in the target regions of Europe and the US.
STATE OF AFFAIRS
There have been no significant changes in the state of affairs of the group during the year.
DIVIDENDS
No dividends were paid or were payable during the year (2022: NIL).
EVENTS SUBSEQUENT TO THE REPORTING DATE
Subsequent to the reporting date the group received a report of inconsistencies in the detection of the
influenza B virus when employing the EasyScreen™ Respiratory Pathogen Detection Kit. The group
has undertaken an investigation and found that this season’s influenza B virus is not being consistently
detected in a small proportion of low viral concentration samples. The group is well-advanced in
28
4
Genetic Signatures Limited – Annual Report 2023
for the financial year ended
30 June 2023
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
resolving this issue, which is specific to the influenza B virus. Genetic Signatures has advised the
regulatory authorities of the reported detection inconsistencies, and the group’s ability to implement a
solution in a relatively short timeframe. As a result, revenue from the sale of the EasyScreen™
Respiratory Pathogen Detection Kit has impacted Q1 FY2024 revenue with no expected impact in
following quarterly revenue periods.
Other than the above, there has not arisen, in the interval between the end of the financial year and the
date of this report, any other item, transaction or event of a material and unusual nature likely in the
opinion of the directors of the group to affect significantly the operations of the group, the results of
those operations or the state of affairs of the group in future financial years.
LIKELY FUTURE DEVELOPMENTS
Likely developments in the operations of the group and the expected results of those operations in future
financial years are:
• A submission for US FDA clearance for its EasyScreen™ Enteric Parasite Detection Kit is
expected to be lodged in Q1 FY2024. If clearance is granted the group will be able to sell a fully
cleared product in the USA for the first time. The group cannot forecast the potential positive
financial impact at this stage.
• Work is underway on development of a new instrument. This project has been estimated to cost
between $10-12 million, including external consultancy, prototyping and other internal costs.
BUSINESS RISKS
The following is a summary of material business risks that could adversely affect our financial
performance and growth potential in future years and how we propose to mitigate such risks.
Product Pipeline
The group’s long-term sustainable viability will be determined in part by its ability to continue to identify
and successfully develop and fund a pipeline of products capable of commercialisation and will need to
be successful in this in the context of a dynamic and changing competitive landscape. The group will
also need to protect and enhance the intellectual property position surrounding its portfolio. The
commercial team remains alert to scientific and market developments and dedicates resources to
intellectual property protection strategy and implementation.
Competitive Risk
The molecular diagnostic industries are highly competitive, and includes companies with significantly
greater financial, technical, human, research and development, and marketing resources than the
group. There are companies that compete with the group’s efforts to discover, validate and
commercialise molecular diagnostic products or product candidates. The group’s competitors may
discover and develop products in advance of the group and/or products that are more effective than
those developed by the group. As a consequence, the group’s current and future technologies and
products may become obsolete or uncompetitive, resulting in adverse effects on revenue, margins and
profitability.
5
29
Directors’ Report
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Regulatory Risk
The group operates under a broad range of legal, regulatory, tax and political systems. The continued
viability of the group, including its ability to have products successfully approved or commercialised in
its operating regions, as well as maintaining a competitive advantage, may be adversely impacted by
regional specific regulatory regimes (which may result in delays or rejections of applications or
regulatory sanctions if not appropriately managed), changes in regulatory or fiscal regimes, difficulties
in interpreting or complying with local laws and reversal of current political, judicial or administrative
policies, including as a result of geopolitical tensions. Regulatory risk includes changes in
reimbursement regulation. The group has developed and seeks to continuously improve its regulatory
compliance frameworks, including those for risk area identification and management, training,
monitoring, reporting and remediation.
Reliance on key personnel
The group currently employs a number of key management and scientific personnel, and the group’s
future depends on retaining and attracting suitably qualified personnel. The group has included in its
employment with key personnel provisions aimed at providing incentives and assisting in the recruitment
and retention of such personnel. It has also, as far as legally possible, established contractual
mechanisms through employment and consultancy contracts to limit the ability of key personnel to join
a competitor or compete directly with the group. Despite these measures, however, there is no
guarantee that the group will be able to attract and retain suitably qualified personnel, and a failure to
do so could materially and adversely affect the value of the group's technologies.
ENVIRONMENTAL COMPLIANCE
The group’s operations are not regulated by any significant environmental regulation under a law of the
Commonwealth or of a State or Territory.
Climate risk
The Board is considering on an ongoing basis the potential response to climate risk and considering
potential implementation of a formal review and policy response in future years.
30
6
Genetic Signatures Limited – Annual Report 2023
for the financial year ended
30 June 2023
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
DIRECTORS
Name:
Qualifications:
Experience:
Special responsibilities:
Nickolaos Samaras
BSc (Hons), PhD, MBA, FAIM, FAICD
Dr. Samaras has had over 30 years’ business experience in the
global Life Sciences industry and is a recognised and respected
industry expert. He has held a number of senior executive level
positions in management, marketing, sales, and research and
development. His roles have included appointments as Managing
Director of Applied Biosystems Pty Ltd (now part of Thermo
Fisher), and senior roles with Perkin Elmer and AMRAD
Corporation (now part of CSL).
Dr. Samaras is an experienced executive, non-executive and
Board Chairman, having served on the boards of several
biotechnology companies.
Dr. Samaras holds a BSc with Honours in Pathology and
Immunology from Monash University and a PhD from the
Department of Medicine at The University of Melbourne. He also
holds postgraduate business qualifications which include an MBA
from the School of Management at RMIT University and is a
Fellow of the Australian Institute of Company Directors.
Non-Executive Chairman; Chairman Nomination and Remuneration
Committee; Member Audit & Risk Committee
Directorships of other listed
companies:
Nil
Interests in shares and
options:
2,024,016 ordinary shares
7
31
Directors’ Report
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Name:
Qualifications:
Experience:
Special responsibilities:
John R Melki
BSc (Hons), PhD
Dr. Melki has led the commercialisation efforts of Genetic Signatures
as Chief Executive Officer since 2011. Dr. Melki originally joined
Genetic Signatures in 2003 where he was responsible for leading the
commercialisation of two research products (worldwide) and five
diagnostic products (locally and Europe) in the role of Senior Principal
Research Scientist. He has authored over 20 peer-reviewed articles
and is listed as an inventor on eight patent applications. Dr. Melki
received his BSc from the University of New South Wales and his PhD
from the University of Sydney, where his thesis was awarded the
Peter Bancroft Prize from the Medical School. His primary research
focus was in the sodium bisulphite conversion of DNA which is at the
core of Genetic Signatures’ 3base® technology.
Managing Director and Chief Executive Officer
Directorships of other listed
companies:
Interests in shares and options: 1,096,000 ordinary shares,
Nil
800,000 options over ordinary shares
Name:
Qualifications:
Experience:
Special responsibilities:
Anthony J Radford AO FTSE
BSc (Hons), PhD, DipCorpMan
Dr. Anthony Radford has a PhD from La Trobe University and was a
member of the CSIRO team that invented the QuantiFERON method
for Cellular Immune based diagnostics. He later joined AMRAD in
pharmaceutical research and was Head of Development in 2000 when
he left to co-found the diagnostic company Cellestis Limited, which
listed on the ASX in 2001. Establishing offices and operations in the
USA, Europe and Japan, Cellestis developed QuantiFERON –TB Gold,
the worldwide benchmark for diagnosis of tuberculosis infection. Dr.
Radford was CEO of Cellestis from founding until its acquisition by
QIAGEN NV in 2011. He is a Fellow of the Australian Academy of
Technology and Engineering, and a recipient of their Clunies Ross
Prize.
Non-Executive Director; Member of Audit & Risk Committee and
Nomination & Remuneration Committee
Directorships of other listed
companies:
Nil
Interests in shares and options: 240,000 ordinary shares
32
8
Genetic Signatures Limited – Annual Report 2023
for the financial year ended
30 June 2023
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Name:
Qualifications:
Experience:
Special responsibilities:
Neil Gunn
BSc, Msc, PhD
Dr Gunn holds a PhD and Master of Science from Portsmouth
Polytechnic, UK. He has over 30 years’ experience in medical devices
and diagnostics. Most recently Dr Gunn was CEO of IDbyDNA, a
metagenomics company based in the US that was acquired by Illumina
in 2022. Prior to this he was the President of Roche Sequencing
Solutions where he oversaw all aspects of the business and managed
a team of approximately 900 people. His team developed and launched
more than 20 products per year. Dr Gunn was also previously Vice
President of Roche’s Molecular Diagnostics business and was
responsible for over 120 diagnostic product launches principally into
the IVD clinical market.
Dr Gunn is based in San Francisco, USA.
Non-Executive Director
Directorships of other listed
companies:
Nil
Interests in shares and options: 250,000 options over ordinary shares
Name:
Qualifications:
Experience:
Special responsibilities:
Michael A Aicher
BSc, MBA
Mr. Aicher has over 30 years of industry experience and was CEO and
founder of National Genetics Institute (NGI) which was acquired
by Laboratory Corporation of America, Inc. (LabCorp) in 2000. Mr.
Aicher led LabCorp’s Esoteric Business Units, which generated more
than $1 billion in annual revenue. Prior to NGI, Mr. Aicher served in a
number of executive leadership roles at Central Diagnostics
Laboratory. He currently serves as a director on boards of Roswell
Biotechnologies, Techcyte and CytoBay. He is certified by the
University of California at Berkeley as a Global Biotechnology
Executive and is a recipient of Ernst & Young’s “Entrepreneur of the
Year” award for emerging technologies. Mr. Aicher received a BS in
Business Administration from the University of Redlands.
Executive Director – US Operations
Directorships of other listed
companies:
Interests in shares and options: 645,785 ordinary shares
Nil
9
33
Directors’ Report
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Name:
Qualifications:
Experience:
Special responsibilities:
Caroline C Waldron
LLB (Hons), GAICD, FGIA
Ms Waldron is a cross-border advisor and director with over 30 years
expertise in governance, marketing, human resources, and digital
transformation across a range of sectors. Her formal training is in law
and she has been admitted to the Bar of England and Wales and the
courts of other jurisdictions including Australia and New
Zealand. Ms Waldron holds an LLB (Hons) from the University of
London, is a Graduate of the AICD, and a Fellow of the Governance
Institute of Australia.
Non-Executive Director; Chair - Audit & Risk Committee
Directorships of other listed
companies:
Non-executive Director – Resimac Group Ltd
Non-executive Director – AMA Group Ltd
Interests in shares and options: 16,700 ordinary shares
Company Secretary
Name:
Qualifications:
Experience:
Karl Pechmann
B Bus, CA, AGIA
Mr Pechmann is a senior executive with extensive experience in ASX-
listed companies and multi-national organisations. In these roles, Mr
Pechmann has been responsible for numerous operational areas
including finance, investor relations, treasury, operations, and
information technology. He is a qualified Chartered Accountant and
Chartered Secretary.
Mr Peter Manley was the group’s former Company Secretary, resigning from this role on 27 March
2023. Mr Anthony Rule was appointed interim Company Secretary from this date until the
appointment of Mr Karl Pechmann as Company Secretary on 28 June 2023.
34
10
Genetic Signatures Limited – Annual Report 2023
for the financial year ended
30 June 2023
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
DIRECTORS’ MEETINGS
The number of meetings of the board of directors (including board committees) held during the year
ended 30 June 2023, and the numbers of meetings attended by each director are set out below:
Board
Audit & Risk
Committee
Nomination &
Remuneration Committee
Name
Nickolaos Samaras
John R Melki
Anthony J Radford
Michael A Aicher
Neil Gunn
Caroline C Waldron
Held
8
8
8
8
8
8
Attended
8
8
8
8
8
8
Held
2
-
2
-
-
2
Attended
2
-
2
-
-
2
Held
1
-
1
-
-
-
Attended
1
-
1
-
-
-
REMUNERATION REPORT - AUDITED
The remuneration report is set out under the following main headings:
1. Remuneration principles and key management personnel
2. Non-executive director remuneration
3. Executive remuneration
4. Equity disclosures
5. Employment agreements
1 REMUNERATION PRINCIPLES AND KEY MANAGEMENT PERSONNEL
1.1 Policy for determining the nature and amount of key management personnel
remuneration
The Board’s remuneration policy determines the nature and amount of remuneration for Board
members and senior executives of the group. The policy, setting the terms and conditions for the
Executive Directors and other senior executives, was developed by the Remuneration & Nomination
Committee and approved by the Board. The Board ensures that the group’s remuneration levels are
appropriate in the markets in which it operates and are applied, and seen to be applied, fairly.
Non-executive directors
Fees and payments to non-executive directors reflect the demands which are made on, and the
responsibilities of, the directors. Non-executive directors’ fees and payments are reviewed with
reference to market rates for comparable companies. The chairman’s fees are determined
independently to the fees of non-executive directors. The Chairman is not present at any discussions
relating to determination of his own remuneration. Non-executive directors are entitled to receive
share options, following approval by the shareholders of Genetic Signatures Limited.
Non-executive directors’ fees are captured within an aggregate directors’ pool limit, which is
periodically recommended for approval by shareholders. The pool stands at $450,000 excluding
share-based payments which are subject to separate shareholder approval.
11
35
Directors’ Report
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Executive directors and senior executives
The objective of the group’s executive reward framework is to ensure reward for performance is
competitive and appropriate for the results delivered. The framework aligns executive reward with
achievement of strategic objectives, and the creation of value for shareholders. The Board ensures
that executive reward satisfies the following key criteria.
Alignment to company and shareholders’ interests:
• Has company growth as a core component of plan design
• Focuses on sustained long-term growth in shareholder wealth
• Attracts and retains high calibre executives
• Total remuneration is comparable to market standards.
Alignment to program participants’ interests:
• Rewards capability and experience
• Reflects competitive reward for contribution to growth in company value
• Provides a clear structure for earning rewards
• Provides recognition for contribution
The framework provides a mix of fixed and variable pay, and a blend of short and long-term
incentives.
1.2 Key management personnel
The following persons were key management personnel of Genetic Signatures Limited during the
financial year:
Non-executive directors
Dr Nickolaos Samaras - Chairman
Dr Anthony J Radford AO
Dr Neil Gunn
Ms Caroline C Waldron
Executive directors
Dr John R Melki - Managing Director & Chief Executive Officer
Michael A Aicher - Executive Director, US Operations
Other executives
Peter Manley - Chief Financial Officer/Company Secretary until his resignation on 27 March 2023
where he ceased to be Key Management Personnel.
36
12
Genetic Signatures Limited – Annual Report 2023
for the financial year ended
30 June 2023
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
2 NON-EXECUTIVE DIRECTOR REMUNERATION
2.1 Directors’ Fees
The current remuneration was increased for Directors in recognition of business growth and resulting
extra time and commitment from Non-executive Directors. Fees are inclusive of committee fees.
Board fees per annum
Chairman
Non-executive director (Australian based)
Non-executive director (overseas)
$117,500
$65,542
60,000 (USD, EUR or GBP depending on location)
Superannuation
Superannuation contributions for Australian-based non-executive directors are in addition to the Board
fees and are calculated at a rate of 10.5% of the base fee, having increased from 10% in FY 2022 as
required under the statutory superannuation guarantee. Directors may elect to salary sacrifice
additional payments to their fund.
Share-based payments
Non-executive directors are not entitled to any performance-related remuneration but may receive
option or equity grants if approved by shareholders. A non-executive director, Dr Neil Gunn received
options as approved by shareholders at the 2021 Annual General Meeting.
2.2 Non-executive director remuneration
Non-executive directors
Nickolaos Samaras
Anthony J Radford
Neil Gunn1
Caroline C Waldron
Total
Year
2023
2022
2023
2022
2023
2022
2023
2022
2023
2022
Cash salary
and fees
$
117,500
108,000
65,542
60,000
89,206
82,426
65,542
7,955
337,790
Super-
annuation
$
12,337
10,800
6,882
6,000
-
-
6,882
795
Share-based
payments
$
-
-
-
-
100,557
86,937
-
-
Total
$
129,837
118,800
72,424
66,000
189,763
169,363
72,424
8,750
26,101
100,557
464,448
258,381
17,595
86,937
362,913
1
N Gunn is paid in USD. Changes in base pay are attributable to the stronger AUD against the USD
through FY23 (Average rate FY23: 0.6726, FY22: 0.7283).
13
37
Directors’ Report
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
EXECUTIVE REMUNERATION
3
The executive pay and reward framework has four components:
Base pay and benefits
Other remuneration such as superannuation
Short-term performance incentives, and
Long-term incentives through participation in the Genetic Signatures Employee Incentive Plan
The combination of these comprises the executive’s total remuneration.
Base pay
Structured as a total employment cost package which may be delivered as a combination of cash and
prescribed non-financial benefits at the executive’s discretion.
Executives are offered a market competitive base pay that comprises the fixed component of pay and
rewards. Base pay for executive directors and senior executives is reviewed annually to ensure the
executive’s pay is aligned with the market.
There are no guaranteed base pay increases included in any executives’ contracts.
Benefits
Executives may receive benefits including parking, car allowances or health insurance.
Retirement Benefits
Statutory superannuation payments are made to a fund selected by Australian based executives.
Executives may also elect to salary sacrifice additional payments to their fund. No other retirement
benefits are offered.
Short term incentives
Each executive may have a target short-term incentive (STI) opportunity depending on the
accountabilities of the role and impact on the organisation or business unit performance.
Each year the remuneration committee considers the appropriate financial targets and KPI’s to link the
STI plan and the level of payout if targets are met. This includes setting any maximum payout under
the STI plan, and minimum levels of performance to trigger payment of STI.
For the year ended 30 June 2023, the KPI’s linked to STI plans were based on group, individual and
personal objectives. The KPI’s required performance growing sales revenue, with particular emphasis
on advancement in overseas markets, securing US FDA clearance for the group’s first product and
progress on the next generation instrument development.
The remuneration committee is responsible for assessing whether KPI’s are met. To help make this
assessment, the committee receives detailed reports on performance from management.
The short-term bonus payments may be adjusted up or down in line with under or over achievement
against the target performance levels. This is at the discretion of the remuneration committee.
Long term incentives
Genetic Signatures Equity Incentive Plan (EIP)
Options are issued to executives (including the CEO) with the aim of aligning executive interests with
those of shareholders. The proportion of long-term incentives increases with the level of seniority of
the executive.
14
38
Genetic Signatures Limited – Annual Report 2023
for the financial year ended
30 June 2023
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Options are granted under the EIP. The Plan is open to those employees and Directors whom the
Directors believe have a significant role to play in the continued development of the group’s activities.
Options are granted under the Plan for no consideration. They are granted for a 15-year period, and
25% of each new tranche vests and is exercisable after each of the first four anniversaries of the date
of the grant. 300,000 options were issued in 2023 to key management personnel as at the date of this
report.
Relationship between Remuneration Policy and Company Performance
The remuneration policy has been tailored to align shareholders, directors and executives’ goals. Two
methods have been applied to achieve this aim, the first being a performance-based bonus based on
KPIs, and the second being the issue of options to directors, executives and staff to encourage the
alignment of personal and shareholder interests.
The following table shows the gross revenue, profits and dividends for the last five years for the
consolidated entity, as well as the share prices at the end of the respective financial years. Analysis of
the actual figures show significant growth by the consolidated entity and a transition from a loss maker
to a profitable group that continues to develop new products, commercialise its existing products and
develop new markets and customers.
The Board is of the opinion that these results can be attributed, in part, to the previously described
remuneration policy and is satisfied with the results over the past five years.
Revenue
Net (Loss)/Profit attributable to
owners of the parent entity
Share price at year end
Dividends paid (cents per
share)
2023
$’000
16,939
(14,052)
2022
$’000
35,421
3,062
2021
$’000
28,284
1,756
2020
$’000
11,263
(2,086)
2019
$’000
4,866
(3,492)
0.525
-
1.16
-
1.10
-
2.15
-
1.35
-
Voting and Comments made at the Company’s 2022 Annual General Meeting (‘AGM’)
The Company received 86.6% of “for” votes in relation to its remuneration report for the year ended
30 June 2022. No issues were raised with Directors concerning the Report.
15
39
Directors’ Report
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
3.1 Executive director remuneration
Fixed
remuneration
Variable
remuneration
Remuneration
proportions
Cash
salary and
fees
$
Non-
monetary
benefits
$
Year
John R Melki
CEO
Michael A Aicher1
Executive Director
Peter L Manley4
Former CFO
Total
2023 391,087
2022 366,906
2023 178,416
2022 178,907
2023 184,688
2022 233,273
2023 754,191
2022 779,086
-
-
-
-
-
-
-
-
Super-
annuation
$
25,292
25,384
-
-
18,685
27,373
43,977
52,757
Long-term
benefits:
Annual and
long service
leave
$
Subtotal
Short term
incentive2
$
Share-based
payments3
$
Total
$
15,514
431,894
29,683
421,973
38,749
39,535
126,297
596,940
151,379
612,887
Fixed
72%
69%
-
-
-
178,416
178,907
203,372
-
-
-
19,181
279,827
15,514
813,682
48,864
880,707
26,000
38,749
65,535
-
-
178,416
100%
178,907
100%
98,588
301,960
139,248
445,075
67%
63%
224,885 1,077,316
290,627 1,236,869
At risk
STI
At risk
LTI
7%
6%
0%
0%
0%
6%
21%
25%
0%
0%
33%
31%
1
2
3
4
M Aicher is paid in USD. Changes in base pay are attributable to the weaker AUD against the USD through FY23 (Ave rate FY23: 0.6726, FY22: 0.7283).
The short term incentive represents a cash bonus which is the amount paid or payable for the respective financial year.
This represents the proportional fair value of options on issue not yet vested or vested during the reporting period. Options are valued using a Black-Scholes
model as described in Note 18 to the accounts.
P Manley resigned as CFO on 21 March 2023 and ceased as Key Management Personnel of the group as at this date. The remuneration above includes his
remuneration until the date of ceasing to be a KMP.
16
40
Genetic Signatures Limited – Annual Report 2023
for the financial year ended
30 June 2023
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Short term incentives
STI potential
Percentage of base
Paid
Forfeited
J.R. Melki
M.A. Aicher
P.L. Manley
$
156,435
-
-
40%
-
-
24.8%
-
-
75.2%
-
-
EQUITY DISCLOSURES
Key Management Personnel Share Movements
4
4.1
Details of equity instruments (other than employee share ownership plan restricted shares) held
directly, indirectly or beneficially by key management personnel are as follows:
Name
Balance at
1 July 2022
Granted as
compensation
N. Samaras
J.R Melki
M.A Aicher
A.J Radford
N Gunn
C. Waldron
P.L Manley
Total
2,024,016
1,096,000
645,785
240,000
-
-
70,408
4,076,209
-
-
-
-
-
-
-
-
Employee Incentive Plan - Options
Received on
conversion of
restricted shares
-
-
-
-
-
-
-
-
Other
changes
-
-
-
-
-
16,700
(70,408)
(53,708)
Balance at
30 June
2023
2,024,016
1,096,000
645,785
240,000
-
16,700
-
4,022,501
Balance
held
nominally
1,393,000
1,096,000
645,785
240,000
-
16,700
-
3,391,485
KMP
Name
Balance
at 1 July
2022
Granted during the
year
Exercised
during the
year
Other
changes
Balance at
30 June
2023
Unvested
at 30 June
2023
No.
550,000
No.
250,000
Value1
$
151,110
350,000
50,000
36,598
250,000
-
-
Value2
$
-
-
-
No.
-
-
-
J.R Melki
P.L
Manley
N Gunn
No.
-
No.
800,000
No.
375,000
(400,000)3
-
-
-
250,000
187,500
1
2
3
This represents the total value of the options over the life of the options from grant date using a
Black-Scholes valuation method. The amount is allocated against remuneration over the vesting
period (total allocation vests in 4 equal tranches from the 1st anniversary of the issue date).
Value equals the difference between the exercise price and the closing share price per the ASX on
the date of exercise/forfeiture multiplied by the number of options.
P.L Manley ceased to be Key Management Personnel as at 27 March 2023 due to resignation.
17
41
Directors’ Report
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
EMPLOYMENT AGREEMENTS
5
Service contracts have been entered into by the group with key management personnel, describing
the components and amounts of remuneration applicable on their initial appointment, including terms
and performance criteria for performance-related cash bonuses. These contracts do not fix the
amount of remuneration increases from year to year. Remuneration levels are reviewed generally
each year by the Remuneration Committee to align with changes in job responsibilities and market
salary expectations. All contracts are for an ongoing period.
All contracts can be terminated by either party with 3 months’ notice (or one month in the case of
Michael Aicher), subject to termination payments as described below:
John Melki
Director & Chief Executive Officer
Contract term:
Base salary:
Termination payments:
Ongoing, commenced November 2014
$391,087, exclusive of superannuation, to be reviewed annually by
the Remuneration Committee.
Payment on early termination by the group, other than for gross
misconduct, equal to the base salary plus superannuation
entitlements for three months.
Michael Aicher
Executive Director – US Operations
Contract term:
Base salary:
Termination payments:
Ongoing, commenced April 2014
$US120,000, to be reviewed annually by the Remuneration
Committee.
No payment on early termination. Contract is terminable by either
party on one months’ notice.
This concludes the remuneration report which has been audited.
42
18
Genetic Signatures Limited – Annual Report 2023
for the financial year ended
30 June 2023
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
OPTIONS
There were 8,164,750 unissued ordinary shares of the group under option outstanding at the date of this
report. During the financial year 2,735,000 new options were issued, 20,000 were exercised, and 240,000
were forfeited.
INDEMNIFICATION OF OFFICERS AND AUDITORS
Genetic Signatures Ltd has indemnified the directors and executives of the group for costs incurred, in their
capacity as a director or executive, for which they may be held personally liable, except where there is a
lack of good faith.
During the financial year, the group paid a premium in respect of a contract to insure the directors and
executives of the group against a liability to the extent permitted by the Corporations Act 2001. The
contract of insurance prohibits disclosure of the nature of the liability and the amount of the premium.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations 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.
NON-AUDIT SERVICES
During the financial year, the following fees for non-audit services were paid or payable to the auditor,
BDO or their related practices:
Tax compliance services
Other non-audit services
Total fees for non-audit services
2023
$
33,735
-
2022
$
43,180
-
33,735
43,180
On the advice of the Audit and Risk Committee, the directors are satisfied that the provision of non-audit
services by the auditor, as set out above, did not compromise the auditor independence requirements of
the Corporations Act 2001 for the following reasons:
• All non-audit services have been reviewed by the Audit and Risk Committee to ensure that they
do not impact the integrity and objectivity of the auditor; and
• None of the non-audit services undermine the general principles relating to auditor independence
as set out in APES 110 Code of Ethics for Professional Accountants.
19
43
Directors’ Report
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
DIRECTORS’ REPORT
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
AUDITOR’S INDEPENDENCE DECLARATION
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act
2001 is set out on page 45.
Rounding of Amounts
The company is of a kind referred to in ASIC Legislative Instrument 2016/191, relating to the ‘rounding
off’ of amounts. Amounts in this report have been rounded off in accordance with the instrument to the
nearest thousand dollars, or in certain cases, to the nearest dollar.
This report is made in accordance with a resolution of directors.
John Melki
Director
Sydney
31 August 2023
44
20
Genetic Signatures Limited – Annual Report 2023 Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret Street
Sydney NSW 2000
Australia
Auditor’s Declaration
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret Street
Sydney NSW 2000
Australia
DECLARATION OF INDEPENDENCE BY GARETH FEW TO THE DIRECTORS OF GENETIC SIGNATURES
LIMITED
Level 11, 1 Margaret St
Sydney NSW 2000
Australia
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
As lead auditor of Genetic Signatures Limited for the year ended 30 June 2023, I declare that, to the
best of my knowledge and belief, there have been:
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
DECLARATION OF INDEPENDENCE BY GARETH FEW TO THE DIRECTORS OF GENETIC SIGNATURES
2. No contraventions of any applicable code of professional conduct in relation to the audit.
LIMITED
DECLARATION OF INDEPENDENCE BY MARTIN COYLE TO THE DIRECTORS OF GENETIC SIGNATURES
This declaration is in respect of Genetic Signatures Limited and the entities it controlled during the
LIMITED
period.
As lead auditor of Genetic Signatures Limited for the year ended 30 June 2023, I declare that, to the
best of my knowledge and belief, there have been:
As lead auditor of Genetic Signatures Limited for the year ended 30 June 2020, I declare that, to the
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
best of my knowledge and belief, there have been:
relation to the audit; and
relation to the audit; and
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
2. No contraventions of any applicable code of professional conduct in relation to the audit.
Gareth Few
2. No contraventions of any applicable code of professional conduct in relation to the audit.
Director
This declaration is in respect of Genetic Signatures Limited and the entities it controlled during the
This declaration is in respect of Genetic Signatures Limited and the entities it controlled during the
period.
period.
BDO Audit Pty Ltd
Sydney, 31 August 2023
Martin Coyle
Gareth Few
Director
Director
BDO Audit Pty Ltd
BDO Audit Pty Ltd
Sydney, 28 August 2020
Sydney, 31 August 2023
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
45
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Financial Report
GENETIC SIGNATURES LIMITED
Consolidated Statement
of Profit or Loss and Other
Comprehensive Income
ABN: 30 095 913 205
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER
COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Revenue
Other income
Cost of materials used
Freight on materials & finished goods
Employee benefits expense
Directors’ and consultancy fees
Depreciation and amortisation expenses
Finance costs
Scientific consumables & clinical trials
Software expenses
Travel and marketing
Other expenses
(Loss)/profit before income tax
Income tax
2
4
5
6
Note
Consolidated
2023
$’000s
2022
$’000s
35,421
217
(10,465)
(1,524)
(11,471)
(477)
(1,616)
(19)
(3,133)
(87)
(849)
(2,934)
16,939
5,116
(6,712)
(1,284)
(15,037)
(983)
(1,526)
(1)
(5,119)
(507)
(1,633)
(3,305)
(14,052)
3,063
-
-
(Loss)/profit attributable to members of the entity
(14,052)
3,063
Other comprehensive (loss)/income
Items that maybe reclassified subsequently to
profit or loss:
Foreign Currency translation of foreign operations
Total comprehensive (loss)/income for the year,
net of tax
Earnings (loss) per share
Basic (Loss)/earnings per share to ordinary equity
holders of the group
Diluted (Loss)/earnings per share to ordinary
equity holders of the group
30
30
181
(13,871)
2023
cents
(9.80)
(9.80)
220
3,283
2022
cents
2.14
2.11
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income
should be read in conjunction with the accompanying notes
23
46
Genetic Signatures Limited – Annual Report 2023
Financial Report
Consolidated Statement
of Financial Position
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 30 JUNE 2023
Note
Consolidated
2023
$’000s
2022
$’000s
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventory
Government Grant receivable
Total Current Assets
Non-Current Assets
Property, plant and equipment
Intangible assets
Right of use assets
Total Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Trade and other payables
Lease liabilities
Provisions
Total Current Liabilities
Non-Current Liabilities
Lease liabilities
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
7
8
9
10
11
12
13
14
13
15
13
15
16
17
16,349
4,386
8,753
6,877
36,365
7,224
5,489
-
12,713
49,078
4,803
-
1,266
6,069
-
95
95
36,897
4,133
10,202
-
51,232
6,733
1,646
43
8,422
59,654
3,665
33
1,107
4,805
1
46
47
6,164
4,852
42,914
54,802
84,438
7,623
(49,147)
84,428
5,469
(35,095)
42,914
54,802
The above Consolidated statement of financial position should be read in conjunction with the
accompanying notes
24
47
Financial Report
Consolidated Statement of
Changes in Equity
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Consolidated
Share based
payments
reserve
Foreign
currency
translation
reserve
Accumulated
losses
$’000s
$’000s
$’000s
Issued
Capital
$’000s
Total
$’000s
Balance at 1 July 2021
84,164
3,469
(135)
(38,158)
49,340
Profit attributable to members of
the entity
Other comprehensive income
Total comprehensive income for
the year
Transactions with owners in
their capacity as owners:
Share issues on conversion of
options, net of costs (note 16)
Forfeiture of share-based
payments (note 17)
Share-based payments
(note 17)
-
-
-
264
-
-
Balance at 30 June 2022
84,428
(Loss)/Profit attributable to
members of the entity
Other comprehensive income
Total comprehensive income for
the year
Transactions with owners in
their capacity as owners:
Share issues on conversion of
options, net of costs (note 16)
Forfeiture of share-based
payments (note 17)
Share-based payments
(note 17)
-
-
-
10
-
-
Balance at 30 June 2023
84,438
-
-
-
-
(245)
2,160
5,384
-
-
-
-
(137)
2,110
7,357
-
220
220
-
-
-
3,063
-
3,063
220
3,063
3,283
-
-
-
264
(245)
2,160
85
(35,095)
54,802
-
181
181
(14,052)
(14,052)
-
181
(14,052)
(13,871)
-
-
-
-
-
-
10
(137)
2,110
266
(49,147)
42,914
The above consolidated statement of changes in equity should be read in conjunction with the
accompanying notes
48
25
Genetic Signatures Limited – Annual Report 2023
Financial Report
Consolidated Statement
of Cash Flows
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note
Consolidated
2023
$’000s
2022
$’000s
Cash flows from operating activities
Receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive
of GST)
Interest and other income received
Interest paid
Net cash provided by/(used in) operating
activities
19,093
(32,108)
565
(1)
13
26(b)
(12,451)
Cash flows from investing activities
Purchase of plant and equipment
Purchase of intangible assets
Net cash (used in) investing activities
Cash flows from financing activities
Proceeds from exercise of options
Share issue costs
Lease costs (principal)
Net cash (used in) financing activities
12
16
16
(1,932)
(6,162)
(8,094)
11
(1)
(33)
(23)
39,405
(29,706)
126
(19)
9,806
(1,714)
(1,275)
(2,989)
273
(9)
(365)
(101)
Net increase/(decrease) in cash and cash
equivalents
Cash and cash equivalents at beginning of
financial year
Exchange differences on cash and cash
equivalents
(20,568)
6,716
36,897
30,121
20
60
36,897
Cash and equivalents at end of financial year 26(a)
16,349
The above consolidated statement of cash flows should be read in conjunction with the
accompanying notes
26
49
Financial Report
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 1: Statement of Significant Accounting policies
The principal accounting policies adopted in the preparation of the financial statements are set out
below. These policies have been consistently applied to all the years presented, unless otherwise
stated.
Basis of preparation
These general-purpose financial statements have been prepared in accordance with Australian
Accounting Standards and Interpretations issued by the Australian Accounting Standards Board
('AASB') and the Corporations Act 2001, as appropriate for for-profit oriented entities. These
financial statements also comply with International Financial Reporting Standards as issued by
the International Accounting Standards Board ('IASB'). The group has adopted all the
amendments to Australian Accounting Standards issued by the Australian Accounting Standards
Board, which are relevant to and effective for the group’s financial statements for the financial year
beginning 1 July 2022. There was no material impact on the financial statements from the
adoption of these new accounting standards.
The financial report has been prepared on an accrual basis and is based on historical costs,
modified, where applicable by the measurement at fair value of selected non-current assets,
financial assets and financial liabilities.
The preparation of the financial statements requires the use of certain critical accounting estimates.
It also requires management to exercise its judgement in the process of applying the group's
accounting policies. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements are disclosed in note 1(v).
Going concern
During the financial year ended 30 June 2023 the group has reported a loss after tax of $14.052
million (2022: profit of $3.28 million) and a decline in cash flows from operative activities of $12.45
million. As at 30 June 2023, the group holds cash and cash equivalents of $16.349 million.
The directors have assessed the financial and operating implications of the above matters,
including the expected net cash outflows over the next 12 months. Should forecasted revenue not
be achieved, the group can flexibly manage cash outflows by reducing discretionary expenditure.
Based on this consideration, the directors are of the view that the group will be able to pay its
debts as and when they fall due for at least 12 months following the date of these financial
statements and that it is appropriate for the financial statements to be prepared on the going
concern basis.
(a) Basis of Consolidation
The consolidated financial statements comprise the financial statements of Genetic
Signatures Limited and its subsidiaries, Genetic Signatures US Ltd, Genetic Signatures UK
Ltd and Genetic Signatures GmbH. Subsidiaries are entities (including structured entities)
over which the group has control. The group has control over 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 use its power to affect those returns. Subsidiaries are consolidated from the
date on which control is transferred to the group and are deconsolidated from the date that
control ceases.
All intercompany balances and transactions, including unrealised profits arising from
intragroup transactions have been eliminated. Unrealised losses are also eliminated unless
the transaction provides evidence of the impairment of the asset transferred.
50
27
Genetic Signatures Limited – Annual Report 2023
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 1: Statement of Significant Accounting Policies (continued)
(b)
Income tax
income
The
tax expenses/(benefit)
expense/(benefit) and deferred tax expenses/(benefit).
for
the year comprise current
income
tax
Current income tax expenses charged to the profit or loss is the tax payable on taxable
income calculated using applicable income tax rates enacted, or substantially enacted, as
at the end of the reporting period. Current tax liabilities/assets are therefore measured at
the amounts expected to be paid to /recovered from the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax
liability balances during the year as well as unused tax losses.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply
to the period when the asset is realised or the liability settled, based on tax rates enacted
or substantively enacted at reporting date. Their measurement also reflects the manner in
which management expects to recover or settle the carrying amount of the related asset or
liability.
Deferred tax assets relating to temporary differences and unused tax losses are recognised
only to the extent that it is probable that future taxable profit will be available against which
the benefits of the deferred tax asset can be utilised.
Where temporary differences exist in relation to investment in subsidiaries, branches,
associates, and joint ventures, deferred tax assets and liabilities are not recognised where
the timing of the reversal of the temporary difference can be controlled and it is not probable
that the reversal will occur in the foreseeable future
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists
and it is intended that net settlement or simultaneous realisation and settlement of the
respective asset and liability will occur. Deferred tax assets and liabilities are offset where
a legally enforceable right of set-off exists, the deferred tax assets and liabilities relate to
income taxes levied by the same taxation authority on either the same taxable entity or
different taxable entities where it is intended that net settlement or simultaneous realisation
and settlement of the respective asset and liability will occur in future periods in which
significant amounts of deferred tax assets or liabilities are expected to be recovered or
settled.
(c)
Property, plant and equipment
Each class of plant and equipment is carried at cost or fair value as indicated less, where
applicable, any accumulated depreciation and impairment losses.
Plant and equipment are measured on the cost basis less depreciation and impairment
losses.
The carrying amount of plant and equipment is reviewed annually by directors of the group
to ensure it is not in excess of the recoverable amount from those assets. The recoverable
amount is assessed on the basis of the expected net cash flows which will be received from
the assets employed and subsequent to disposal. The expected net cash flows have been
discounted to their present values in determining recoverable amounts.
28
51
Financial Report
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 1: Statement of Significant Accounting Policies (continued)
Subsequent costs are included in the asset’s carrying amount or recognised as a separate
asset, as appropriate, only when it is probable that future economic benefits associated with
the item will flow to the group and the cost of the item can be measured reliably. All other
repairs and maintenance expenses are charged to the income statements during the
financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets is depreciated on a straight-line basis over their
estimated useful lives to the group commencing from the time the asset is held ready for
use.
The depreciation rates used for each class of depreciable asset are:
Class of fixed asset
Plant and equipment
Depreciation rate
5 years
The assets residual values and useful lives are reviewed and adjusted if appropriate at each
reporting date.
Gains and losses on disposal are determined by comparing the net proceeds with the
carrying amount prior to disposal. Any gains or losses are included in the statement of profit
or loss and comprehensive income.
(d) Goods and Services Tax
Revenues, expenses and assets are recognised net of GST, except where the amount of
GST incurred is not recoverable from the Australian Taxation Office (ATO).
Receivables and payables are stated inclusive of the amount of GST receivable or payable.
The net amount of GST recoverable from, or payable to, the ATO is included within other
receivables or payables in the statements of financial position.
Cash flows are presented on a gross basis, except for the GST component of investing and
financing activities which are recoverable from, or payable to ATO and are disclosed as
operating cash flows.
(e)
Financial instruments
Classification
The group classifies financial assets as either:
• Those to be measured subsequently at fair value; or
• Those to be measured at amortised cost.
The classification depends on the entity’s business model for managing the financial assets
and the contractual terms of the cash flows. For assets measured at fair value, gains and
losses will be either recorded in profit & loss or other comprehensive income.
52
29
Genetic Signatures Limited – Annual Report 2023
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 1: Statement of Significant Accounting Policies (continued)
Recognition and derecognition
Purchases and sales of financial assets are recognised on the date the group commits to
purchase or sell the asset. Financial assets are derecognised when the rights to receive
cash flows from the financial assets have expired or have been transferred and the group
has transferred substantially all the risks and rewards of ownership.
Measurement
At initial recognition, the group measures a financial asset at its fair value plus, in the case
of a financial asset not at fair value through profit or loss (FVPL), transaction costs that are
directly attributable to the acquisition of the financial asset. Transaction costs of financial
assets carried at FVPL are expensed in profit or loss.
(i)
Loans and receivables
Loans and receivables are assets held for collection of contractual cashflows where those
cashflows represent payment of principal and interest measured at amortised cost.
Loans and receivables are included in current assets, except for those which are not
expected to mature within 12 months after the end of the reporting period, which will be
classified as non-current assets.
Any interest income from these financial assets is included in finance income using the
effective interest rate method.
(ii)
Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently
measured at amortised cost.
(iii) Equity instruments
The group subsequently measures all equity investments at fair value. Changes in the fair
value of financial assets are recognised in other gains/(losses) in the statement of profit or
loss as applicable. Impairment losses (and reversal of impairment losses) on equity
investments are not reported separately from other changes in fair value.
The group does not currently hold any equity investments.
Fair Value
Fair value is determined based on current bid prices for all quoted investments. Valuation
techniques are applied to determine the fair value for all unlisted securities, including recent
arm’s length transactions, reference to similar instruments and option pricing models.
Impairment
At the end of each reporting period, the group assesses whether there is objective evidence
that a financial instrument has been impaired. The impairment methodology applied
depends on whether there has been a significant increase in credit risk.
The group applies the AASB9 simplified approach to measuring expected credit losses
which uses a lifetime expected loss allowance for all trade receivables and contract assets.
These assumptions include recent sales, historical collection rates and forward-looking
information.
30
53
Financial Report
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 1: Statement of Significant Accounting Policies (continued)
(f)
Revenue recognition
Revenue from the sale of goods is recognised when control of the goods has passed to the
buyer which usually occurs on delivery. This revenue is classified into 3 categories, being:
Sale of Goods – Reagents and Consumables
The group manufactures and sells test kits for use in pathology laboratories. It also
purchases disposable items for resale that are used by the pathology laboratories in
conjunction with the test kits. Sales are recognised when control of the products has
transferred, being the point in time when the products are delivered to the customer’s
specified location, the amount of revenue can be measured reliably, and it is probable that
payment will be received by the group.
Sale of Goods – Equipment and rental
The consolidated entity provides equipment to customers if required which may be as an
outright sale or be a placement under a lease arrangement. Where the equipment is sold
the sale is recognised when control of the products has transferred, being the point in time
when the products are delivered to the customer’s specified location, the amount of revenue
can be measured reliably, and it is probable that payment will be received by the group. In
the event the group enters a lease, an assessment will be made as to the classification of
that lease. A lease will be classified as a finance lease if it transfers substantially all of the
risks and rewards associated with the underlying asset. Otherwise, the lease will be
classified as an operating lease. Where the lease meets the definition of a finance lease
revenue is recognised by applying the interest rate within the lease arrangement to the
future lease payments and the estimated value of any unguaranteed end of term earnings
or secondary income. Operating lease income will be recognised as income over time per
the terms of the agreement with the customer, which may be as a cost per test or a periodic
rental value.
Sale of Goods – Service
If a customer has purchased or is using group owned equipment there may be a service
charge levied to maintain the equipment. Revenue is recognised over time in the period that
the service is rendered.
Interest revenue is recognised on a proportional basis taking into account the interest rates
applicable to the financial assets.
All revenue is stated net of the amount of goods and services tax (GST).
Grant revenue is recognised when it is received or when the right to receive payment is
established.
(g)
Trade and other payables
Accounts payable represent the principal amounts outstanding at the reporting date plus,
where applicable, any accrued interest.
54
31
Genetic Signatures Limited – Annual Report 2023
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 1: Statement of Significant Accounting Policies (continued)
(h)
Impairment
At each reporting date, the group assesses whether there is any indication that an asset
may be impaired. The assessment will include the consideration of external and internal
sources of information including dividends from subsidiaries, associates or jointly controlled
entities deemed to be out of pre-acquisition profits. If such an indication exists, an
impairment test is carried out on the asset by comparing the recoverable amount of the
asset, being the higher of the asset's fair value less costs to sell and value in use, to the
asset's carrying value. Any excess of the asset's carrying value over its recoverable amount
is expensed to the statement of profit or loss and other comprehensive income.
Where it is not possible to estimate the recoverable amount of an individual asset, the group
estimates the recoverable amount of the cash-generating unit to which the asset belongs.
(i)
Cash and cash equivalents
For the purposes of the statement of cash flows, cash includes cash on hand and at call
deposits with banks or financial institutions and net of bank overdrafts.
(j)
Inventories
Inventories include raw materials, work in progress and all items available for resale,
including equipment (defined in 1(f)) and goods in transit.
Inventories are measured at the lower of cost and net realisable value. Cost comprises
direct materials, direct labour and an appropriate portion of variable and fixed overheads,
the latter being allocated on the basis of normal operation capacity.
Net realisable value is the estimated selling price in the ordinary course of business less
the estimated costs of completion and the estimated costs necessary to make the sale.
(k)
Trade and other receivables
Trade receivables are initially recognized at fair value and subsequently measured at
amortised cost using the effective interest method, less any provision for impairment. Trade
receivables are generally due for settlement within 30-60 days.
The group applies the AASB9 simplified approach to measuring expected credit losses
which uses a lifetime expected loss allowance for all trade receivables and contract assets.
Trade receivables and contract assets have shared credit risk characteristics and, as such,
the expected loss rates for trade receivables are a reasonable approximation of loss rates
for contract assets. Losses incurred in the last 3 years represent less than 1% of receivables
and are immaterial. The group has made a provision for impairment against an invoice that
is in dispute and is considered to be at reasonable risk.
Other receivables are recognized at amortised cost, less any provision for impairment.
(l)
Finance costs
Finance costs attributable to qualifying assets are capitalised as part of the asset. All other
finance costs are expensed in the period in which they are incurred, including interest in
respect of lease liabilities.
32
55
Financial Report
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 1: Statement of Significant Accounting Policies (continued)
(m) Employee benefits
Provision is made for the group’s liability for employee benefits arising from services
rendered by employees to the reporting date. Employee benefits that are expected to be
settled within one year have been measured at the amounts expected to be paid when the
liability is settled, plus related on-costs. Employee benefits payable later than one year have
been measured at the present value of the estimated future cash outflows to be made for
those benefits.
(n) Provisions
Provisions are recognised when the entity has a legal or constructive obligation, as a result
of past events, for which it is probable that an outflow of economic benefits will result, and
that outflow can be reliably measured.
(o)
Leases
The group leases business premises (offices and laboratories) and office equipment. Rental
contracts are typically for a fixed period of 12 months to 60 months and may include
extension options. From 1 July 2019 leases are recognised as a right of use asset and a
corresponding liability at the date at which the lease is available for use by the group. Assets
and liabilities are measured on a present value basis.
Lease payments are discounted using the interest rate implicit in the lease. Where a rate
cannot be readily determined from the lease (generally the case) then the lessee’s
incremental borrowing rate will be used, being the rate the lessee would have to pay to
borrow the funds to obtain the equivalent asset. As the group does not have any borrowings
the incremental borrowing rate has been determined using a build-up approach whereby
the risk-free rate is adjusted for credit risk, considering factors such as term, country, and
currency.
The group has no variable lease payments in its leases, nor do any of the leases have an
option to extend the term.
Right of use assets are depreciated on a straight-line basis over the term of the lease.
Lease payments for operating leases of low value items or for a period of less than 12
months, where substantially all the risks and benefits remain with the lessor, are charged
as expense in the period in which they are incurred. Refer to note 13 for further information
pertaining to the group’s right of use assets and liabilities.
(p) Share-based payments
Equity-settled share-based payments with employees and others providing similar services
are measured at fair value of the equity instrument at the grant date. Further details on how
the fair value of equity-settled share-based transactions has been determined can be found
in note 19.
The fair value determined at the grant date of the equity-settled share-based payments is
expensed on a straight-line basis over the vesting period, based on the group’s estimate of
equity instruments that will eventually vest.
(q) Parent entity financial information
The financial information for the parent entity, Genetic Signatures Limited, disclosed in note
27, has been prepared on the same basis as the consolidated financial statements.
56
33
Genetic Signatures Limited – Annual Report 2023
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 1: Statement of Significant Accounting Policies (continued)
(r)
Earnings per share
Basic earnings per share are calculated by dividing:
•
•
the profit attributable to owners of the group, excluding any costs of servicing equity
other than ordinary shares; and
by the weighted average number of ordinary shares outstanding during the financial
year.
Diluted earnings per share adjusts the figures used in the determination of basic earnings
per share to take into account dilutive potential ordinary shares.
(s)
Foreign currency translation
The financial statements are presented in Australian dollars, which is Genetic Signatures
Limited's functional and presentation currency.
Foreign currency transactions
Foreign currency transactions are translated into Australian dollars using the exchange
rates prevailing at the dates of the transactions. Foreign exchange gains and losses
resulting from the settlement of such transactions and from the translation at financial
year-end exchange rates of monetary assets and liabilities denominated in foreign
currencies are recognised in profit or loss.
Foreign operations
The assets and liabilities of foreign operations are translated into Australian dollars using
the exchange rates at the reporting date. The revenues and expenses of foreign
operations are translated into Australian dollars using the average exchange rates, which
approximate the rates at the dates of the transactions, for the period. All resulting foreign
exchange differences are recognised in other comprehensive income through the foreign
currency reserve in equity.
(t)
Intangibles
Intangibles comprise costs incurred in developing or acquiring new knowledge that will
contribute future financial benefits and are therefore capitalised. This currently comprises
software development for the GS-Call software, which can be in the form of software,
licences or systems; and costs associated with development of a new Instrument
Development that will be unique to the PCR testing market. They include external direct
costs of materials and service. Development costs include only those costs directly
attributable to the development phase and are only recognised following completion of
technical feasibility, where the group has the intention and ability to use the asset.
No amortisation of intangibles is recorded until the development work is in a form from
which future economic benefit may be derived. As the software and instrument
development is not yet advanced to this stage, no amortisation has been recorded to date.
34
57
Financial Report
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 1: Statement of Significant Accounting Policies (continued)
(u) Research and development
Research costs are expensed in the period in which they are incurred. Development costs
are capitalised when it is probable that the project will be a success considering its
commercial and technical feasibility; the consolidated entity is able to use or sell the asset;
the consolidated entity has sufficient resources and intent to complete the development;
and its costs can be measured reliably. Once the development phase is completed,
capitalised development costs will be amortised on a straight-line basis over the period of
their expected benefit, being their finite life of 10 years.
(v) New Accounting Standards and Interpretations not yet mandatory or early adopted
Australian Accounting Standards and Interpretations that have recently been issued or
amended but are not yet mandatory, have not been early adopted by the consolidated
entity for the annual reporting period ended 30 June 2023. The consolidated entity has
not yet assessed the impact of these new or amended Accounting Standards and
Interpretations.
(w) Critical Accounting Estimates and Judgments
The Directors evaluate estimates and judgements incorporated into the financial report
based on historical knowledge and best available current information. Estimates assume
a reasonable expectation of future events and are based on current trends and economic
data, obtained both externally and within the group.
Key estimates – valuation of employee share option plan shares
At each reporting date, the entity revises its estimate of the number of rights that are
expected to become exercisable. The employee benefit expense recognised each period
takes into account the most recent estimate. The impact of the revision to the original
estimates, is recognised in profit or loss with a corresponding adjustment to equity. The
fair value is measured at grant date and recognised over the period during which the
employee becomes unconditionally entitled to the restricted shares or options.
Key judgements capitalisation of development costs
Development costs are capitalised when it is probable that the project will be a success
considering its commercial and technical feasibility, the group is able to use or sell the
assets, the group has sufficient resources, and intent to complete the development and
its costs can be measured reliably.
Judgements - research and development claim
Judgement is required in determining the value of the research and development claim.
There are certain transactions and calculations undertaken during the ordinary course of
business for which the ultimate tax determination may be subject to change. The group
calculates its research and development claim based on the group’s understanding of the
tax law. Where the final outcome of these matters is different from the amounts that were
initially recorded, such differences will impact the tax payable in the year in which such
determination is made.
58
35
Genetic Signatures Limited – Annual Report 2023
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 1: Statement of Significant Accounting Policies (continued)
Judgements – provisioning for inventory
Inventories generally have expiry dates and the group provides for product that have
expired or are close to expiry. Expiry dates for raw material are no longer relevant once
the materials are used in production. At this stage the relevant expiry date is that
applicable to the resultant intermediate or finished product.
Various factors affect the assessment of recoverability of the carrying value of inventory,
including regulatory approvals and future demand for the group’s products. These factors
are taken into consideration in determining the appropriate level of provisioning for
inventory.
Judgements – availability of prior tax losses
Judgement has been exercised with regards to the availability of carry forward tax losses.
The group must apply the Same Business Test which examines the business that was
carried on during the year in which losses are being applied compared to the business
which was carried on immediately before the failure of the Continuity of Ownership Test
(“COT”), requiring the same business to be carried on between both times.
Consideration by independent experts assessed that, upon a review of the historic
business of Genetic Signatures, the identity of its core technology, strategic direction and
essential characteristics of the business activities remain similar during the whole test
period.
36
59
Financial Report
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 2: Revenue
Disaggregation of revenue
The group derives revenue from the transfer of goods and services over time and at a point in
time in the following major product and geographical regions:
Consolidated - 2023
Revenue lines
Reagents & consumables
Equipment sales & rental
Service contracts
Timing of revenue recognition
Goods transferred at a point in time
Services transferred over time
Consolidated - 2022
Revenue lines
Reagents & consumables
Equipment sales & rental
Service contracts
Timing of revenue recognition
Goods transferred at a point in time
Services transferred over time
Asia
Pacific
$’000s
EMEA
$’000s $’000s
Americas
Total
$’000s
14,989
362
-
15,351
1,507
81
-
1,588
15,351
-
1,588
-
15,351
1,588
-
-
-
-
-
-
-
16,496
443
-
16,939
16,939
-
16,939
Asia
Pacific
$’000s
EMEA
$’000s
Americas
$’000s
Total
$’000s
30,714
742
127
31,583
31,092
491
31,583
3,319
420
99
3,838
3,646
192
3,838
-
-
-
-
-
-
-
34,033
1,162
226
35,421
34,738
683
35,421
Note 3: Financial Reporting Segments
The group is operated under one business segment which was the research and
commercialisation of identifying individual genetic signatures to diagnose diseases and
disabilities.
Major customers
During the year ended 30 June 2023 there were two customers (2022: two) that each
contributed over 10% of the consolidated entity’s external revenue.
Geographic locations
Asia Pacific
The group’s head office and manufacturing operation is based in Sydney, Australia. 91% of the
revenue was generated within the Australian entity.
37
60
Genetic Signatures Limited – Annual Report 2023
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 3: Financial Reporting Segments (continued)
EMEA
This business comprises Eastern and Western Europe, Middle East including Israel, and Africa.
The group is represented by employees in UK and Germany.
Americas
The group’s North American business includes the United States and Canada. The group
proposes to sell products in this region and is currently having its products evaluated by the
US FDA. Operations are currently based in California, USA.
Consolidated - 2023
Asia
Pacific
$’000s
EMEA
$’000s
Americas
Total
$’000s
Segment revenue
Intersegment sales
Total sales from external customers
Other revenue
Segment revenue from external customers
16,231
(880)
15,351
-
15,351
1,621
(33)
1,588
-
1,588
393
(393)
-
-
-
18,245
(1,306)
16,939
-
16,939
Segment result from external customers
(11,577)
(2,204)
(3,692)
(17,473)
Unallocated revenue less unallocated expenses
Loss before income tax
Income tax
Net loss after tax
Consolidated - 2022
3,421
(14,052)
-
(14,052)
Segment revenue
Intersegment sales
Total sales from external customers
Other revenue
Segment revenue from external customers
34,798
(3,215)
31,583
-
31,583
4,194
(356)
3,838
-
3,838
135
(135)
-
-
-
39,127
(3,706)
35,421
-
35,421
Segment result from external customers
7,434
375
(2,788)
5,021
Unallocated revenue less unallocated expenses
Profit before income tax
Income tax
Net profit after tax
Consolidated – 2023
Segment assets
Segment liabilities
Consolidated – 2022
Segment assets
Segment liabilities
(1,958)
3,063
-
3,063
Total
$’000
49,078
(6,164)
Asia
Pacific
$’000
67,177
(5,911)
EMEA
$’000s
Americas
Inter
company
$’000s
$’000s
3,347
(9,381)
2,800
(16,202)
(24,246)
25,330
70,952
(5,383)
4,374
(5,882)
2,265
(10,796)
(17,937)
17,209
59,654
(4,852)
38
61
Financial Report
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Consolidated
2023
$’000s
2022
$’000s
Note 4: Other income
Interest income
Export Market Development Grant
Research & Development Tax Incentive
Other income
Total other income
543
-
4,421
152
5,116
132
75
-
10
217
Note 5: Expenses
Finance costs
Interest charges
Superannuation expense
Defined contribution superannuation expense (including non-
executive Directors)
Consolidated
2023
$’000s
2022
$’000s
1
19
878
580
Write-down of inventory to net realisable value*
644
-
Items included in other expenses include:
Patents – lodgement and maintenance
Foreign exchange loss
187
124
196
92
* Write-down of inventory to net realisable value: included in Cost of materials used in the
statement of profit or loss and other comprehensive income. Refer to Note 9 for details of
inventories.
62
39
Genetic Signatures Limited – Annual Report 2023
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 6: Income tax
Consolidated
2023
$’000s
2022
$’000s
Numerical reconciliation of income tax benefit to prima facie
tax payable
Prima facie income tax (benefit) on profit/(loss) from ordinary
activities (2023: AU 26% US 21% UK 19% Germany 23%; 2022:
26% US 21% UK 19%)
(3,102)
1,229
Add/(less)tax effect of:
- non-deductible items
- tax losses not brought to account
- tax losses applied
- research and development tax credit
- temporary differences not brought to account
Income tax
3,243
1,653
(320)
(1,105)
(369)
2,946
946
(673)
(3,781)
(667)
-
-
The consolidated entity has recorded a loss during the year ended 30 June 2023. The consolidated
entity currently has carried forward losses of $5,312,273 from prior years in respect to its Australian
operations, approximately US$6,247,347 in respect to its North American operations, and GBP
1,427,113 from its UK operations. The utilisation of these carried forward losses is conditional on the
consolidated entity meeting the conditions for deductibility imposed by the law in the period in which
the consolidated entity derives sufficient taxable income in order to utilise these losses. For the year
ended 30 June 2023, management has reviewed the deductibility of these losses in comparison to
the estimated taxable income derived by the consolidated entity and are confident that sufficient
losses are available to offset the taxable income for the financial year ended 30 June 2023. It is
currently not known with sufficient certainty how the consolidated entity’s trade will transpire for the
FY24 period and beyond. As a consequence, the consolidated entity has elected not to recognise
any deferred tax assets or carried forward income tax losses until the probability of recoupment is
sufficiently certain.
Note 7: Cash and cash equivalents
Cash at bank and on hand
Cash on deposit (maturity < 12 months)
Consolidated
2023
$’000s
6,349
10,000
16,349
2022
$’000s
11,897
25,000
36,897
Cash at bank and on hand bears floating interest rates. The interest rate relating to cash and cash
equivalents for the year was between nil% and 1.35% (2022: between nil% and 0.4%).
Genetics Signatures Limited has an unused credit card facility with the bank at the year-end of
$57,000 (2022: $57,000).
40
63
Financial Report
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 8: Trade and other receivables
Consolidated
Current
Trade debtors (a)
Provision for expected credit losses
Other receivables (b)
2023
$’000s
3,194
-
3,194
1,192
4,386
2022
$’000s
3,900
(258)
3,642
491
4,133
a.
Past due but not impaired and impairment of receivables
Customers with balances past due amount to $88,686 at 30 June 2023 ($1,112,200 as at 30
June 2022). Among which the group has recognised a provision for expected credit losses of
$Nil (2022: $258,000) in profit or loss in respect of impairment of receivables for the year ended
30 June 2023.
b. Other receivables
These amounts relate to prepayments and accrued interest. None of these receivables are
impaired or past due but not impaired.
c.
Fair value and credit risk
Due to the short-term nature of these receivables, their carrying value is assumed to
approximate their fair value. Information about the group’s exposure to fair value and credit risk
in relation to trade and other receivables is provided in note 28.
Note 9: Inventory
Consolidated
Raw materials
Work in progress
Finished goods
Stock in transit
Provision for obsolescence
2023
$’000s
5,536
600
3,347
4
(734)
8,753
Note 10: Government grant receivable
Consolidated
Research & Development tax concession
2023
$’000s
6,877
2022
$’000s
6,245
305
3,865
94
(307)
10,202
2022
$’000s
-
During the year, the group qualified for Research & Development tax concessions to be a refundable
tax offset, compared to the prior year where this concession was non-refundable.
64
41
Genetic Signatures Limited – Annual Report 2023
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 11: Property, plant and equipment
Consolidated
Plant and equipment:
At cost
Less: accumulated depreciation
Movement in plant and equipment is as follows:
Cost at 1 July 2021
Additions
Disposals
FX difference
Cost at 30 June 2022
Accumulated depreciation 1 July 2021
Depreciation expense
Disposal of assets
Accumulated depreciation 30 June 2022
2023
$’000s
12,688
(5,464)
7,224
Plant &
equipment
$’000s
9,540
2,310
(967)
59
10,942
(3,880)
(1,289)
960
(4,209)
2022
$’000s
10,942
(4,209)
6,733
Total
$’000s
9,540
2,310
(967)
59
10,942
(3,880)
(1,289)
960
(4,209)
Carrying amount 30 June 2022
6,733
6,733
Cost at 1 July 2022
Additions
Disposals
FX difference
Cost at 30 June 2023
Accumulated depreciation 1 July 2022
Depreciation expense
Disposal of assets
FX difference
Accumulated depreciation 30 June 2023
10,942
1,932
(357)
171
12,688
(4,209)
(1,509)
279
(25)
5,464
10,942
1,932
(357)
171
12,688
(4,209)
(1,509)
279
(25)
5,464
Carrying amount 30 June 2023
7,224
7,224
42
65
Financial Report
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 12: Intangibles
Consolidated
At cost
Less: accumulated amortisation
Movement in intangibles is as follows:
Cost at 1 July 2021
Additions
Disposals
Cost at 30 June 2022
Accumulated amortisation 1 July 2021
Amortisation expense
Accumulated amortisation 30 June 2022
Carrying amount 30 June 2022
Cost at 1 July 2022
Additions
R&D tax incentive
Disposals
Cost at 30 June 2023
Accumulated amortisation 1 July 2022
Amortisation expense
Accumulated amortisation 30 June 2023
2023
$’000s
5,701
(212)
5,489
Instrument
Development
$’000s
-
978
-
978
-
-
-
978
978
5,055
(1,924)
-
4,109
-
-
-
Software
$’000s
583
297
-
880
(212)
-
(212)
668
880
1,244
(532)
-
1,592
(212)
-
(212)
Carrying amount 30 June 2023
1,380
4,109
The software relates to the development of improvements to GS-Call software which will be
incorporated in the instrument currently being developed. No amortisation of software is
recorded until the development work is in a form from which future economic benefit may be
derived.
Capitalised R&D tax incentives are directly attributable to capitalised development costs during
the year.
2022
$’000s
1,858
(212)
1,646
Total
$’000s
583
1,275
-
1,858
(212)
-
(212)
1,646
1,858
6,299
(2,456)
-
5,701
(212)
-
(212)
5,489
66
43
Genetic Signatures Limited – Annual Report 2023
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 13: Right of use assets
Consolidated
2023
$’000s
2022
$’000s
(i)
Amounts recognised in the statement of financial position
Right of use assets
Buildings
Equipment
Lease liabilities
Current
Non-current
(ii)
Amounts recognised in the statement of profit or loss
Amortisation charge of right of use assets
Buildings
Equipment
Interest expense (included in finance costs)
Expenses related to short-term leases (included in other
expenses)
-
-
-
-
-
-
41
1
42
1
730
41
2
43
33
1
34
344
2
346
19
264
Note 14: Trade and other payables
Consolidated
Current – unsecured
Trade creditors
Other creditors
2023
$’000s
2022
$’000s
3,770
1,033
4,803
3,417
248
3,665
44
67
Financial Report
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
Notes to the Consolidated
Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 15: Provisions
Current
Employee benefits
Non-Current
Employee benefits
Note 16: Issued capital
Opening balance at 1 July 2021:
Movement in ordinary share capital
Exercise of employee share options
Less: Share issue costs
Consolidated
2023
$’000s
2022
$’000s
1,266
1,107
95
46
Number
$’000s
142,907,246
84,164
478,750
273
(9)
Closing balance at 30 June 2022
143,385,996
84,428
Movement in ordinary share capital
Exercise of employee share options
Less: Share issue costs
20,000
11
(1)
Closing balance as at 30 June 2023
143,405,996
84,438
All fully paid ordinary shares and founder shares have equal voting rights, of one vote per share,
and subject to the prior rights of preference shares, have equal rights to receive dividends in
proportion to the number of ordinary shares held.
45
68
Genetic Signatures Limited – Annual Report 2023
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 17: Reserves
Share based payments reserve
Balance 1 July
Transferred to accumulated losses upon forfeiture
Share-based payment expenses
Consolidated
2023
$’000s
5,384
(137)
2,110
2022
$’000s
3,469
(245)
2,160
Balance 30 June
7,357
5,384
The share-based payments reserve is used to recognise the fair value of equity benefits
provided to employees and Directors as part of their compensation.
Foreign currency translation reserve
Balance 1 July
Arising from translation of foreign subsidiaries
Balance 30 June
Consolidated
2023
$’000s
85
181
266
2022
$’000s
(135)
220
85
The foreign currency translation reserve is used to recognise the exchange difference on the
translation of the US, UK and German subsidiaries into Australian Dollars.
Note 18: Related party transactions
Related parties
(a) The company's main related parties are as follows:
Key management personnel:
Any persons having authority and responsibility for planning, directing and controlling the
activities of the entity, directly or indirectly, including any director (whether executive or
otherwise) of that entity, are considered key management personnel.
Key Management personnel include:
Nickolaos Samaras – Director
John R Melki – Director and Chief Executive Officer
Michael A Aicher – Director
Anthony J Radford – Director
Neil Gunn – Director
Caroline C Waldron – Director
Peter Manley – Chief Financial Officer/Company Secretary (ceased to be a KMP upon his
resignation on 27 March 2023)
For details of disclosures relating to key management personnel, refer to Note 19.
46
69
Financial Report
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
(b) Transactions with related parties:
There were no related party transactions during the year other than transactions with key
management personnel as part of their remuneration.
Note 19: Share-based payments
Options were issued during the year, pursuant to the Equity Incentive Plan. Fair values at grant
date are determined using a Black-Scholes Option Pricing Model that takes into account the
exercise price, the term of the option, the share price at the grant date, the expected volatility of
the underlying share, and risk-free interest rate for the term of the option. The model inputs for
options granted during the year ended 30 June 2023 are noted below:
Grant
date
Expiry
date
Vesting
period
(mths)
Exercise
price
Est.
volatility
Expected
dividend
yield
Average
risk-free
rate
Share
price at
issue
date
$0.89
Fair
value at
issue
date
$0.73
Sep 22
Sep 37
Nov 22
Nov 37
48
48
$0.93
61.73%
$0.93
$0.75
$0.60
61.73%
-
-
3.68%
3.73%
Historical 12-month volatility has been the basis for determining expected share price volatility as
it is assumed that this is indicative of future movements.
70
47
Genetic Signatures Limited – Annual Report 2023
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Employee Share Ownership Plan Shares
Set out below are the summaries of restricted shares and options granted under the plan:
2023
Grant date
Options
October 2016
November 2016
October 2017
August 2018
November 2018
February 2019
May 2019
November 2019
March 2020
September 2020
November 2020
September 2021
November 2021
November 2021
June 2022
September 2022
November 2022
Exercise
price
Balance at
beginning of the
year
Granted during the
year
Converted during
the year
Expired/
Forfeited during
the year
Balance at the end
of the year
Vested and
convertible at
year end
$0.52
$0.52
$0.34
$0.53
$0.53
$0.84
$1.10
$0.98
$1.13
$2.30
$2.30
$1.44
$1.44
$1.39
$1.51
$0.93
$0.93
181,000
100,000
272,500
492,500
200,000
150,000
150,000
737,750
50,000
1,200,000
250,000
1,520,000
250,000
100,000
36,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2,485,000
-
-
-
(20,000)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(80,000)
-
(70,000)
-
-
-
(90,000)
-
(240,000)
181,000
100,000
272,500
472,500
200,000
150,000
150,000
737,750
50,000
1,120,000
250,000
1,450,000
250,000
100,000
36,000
2,395,000
250,000
8,164,750
$1.21
12.5
181,000
100,000
272,500
472,500
200,000
150,000
150,000
541,500
37,500
560,000
125,000
362,500
62,500
25,000
36,000
-
-
3,276,000
$1.14
Total
Weighted average option exercise
price
Weighted average remaining contractual life of options (years)
-
GENETIC SIGNATURES LIMITED
2,735,000
5,689,750
ABN: 30 095 913 205
(20,000)
250,000
$1.36
$0.93
$0.53
$1.54
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
2022
Grant date
Options
October 2016
November 2016
October 2017
October 2017
August 2018
November 2018
February 2019
May 2019
November 2019
March 2020
September 2020
November 2020
April 2021
September 2021
November 2021
November 2021
June 2022
Total
Weighted average option exercise price
48
Exercise
price
Balance at
beginning of the
year
Granted during the
year
Converted during
the year
Expired/
Forfeited during
the year
Balance at the end
of the year
Vested and
convertible at
year end
$0.52
$0.52
$0.34
$0.38
$0.53
$0.53
$0.84
$1.10
$0.98
$1.13
$2.30
$2.30
$1.56
$1.44
$1.44
$1.39
$1.51
181,000
100,000
325,000
250,000
550,000
200,000
150,000
200,000
809,000
100,000
1,230,000
250,000
15,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
1,565,000
250,000
100,000
36,000
-
-
(52,500)
(250,000)
(50,000)
-
-
(50,000)
(51,250)
(25,000)
-
-
-
-
-
-
-
-
-
-
-
(7,500)
-
-
-
(20,000)
(25,000)
(30,000)
-
(15,000)
(45,000)
-
-
-
181,000
100,000
272,500
-
492,500
200,000
150,000
150,000
737,750
50,000
1,200,000
250,000
-
1,520,000
250,000
100,000
36,000
181,000
100,000
272,500
-
340,000
150,000
112,500
100,000
345,250
25,000
300,000
62,500
-
-
-
-
-
4,360,000
1,951,000
(478,750)
(142,500)
5,689,750
1,988,750
Weighted average remaining contractual life of options (years)
$1.25
$1.44
$0.57
$1.47
$1.36
12.7
$0.96
49
71
Financial Report
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 20: Key management personnel disclosures
Short-term employee benefits
Non-monetary benefits
Short term incentive
Post-employment benefits
Long-term benefits
Termination benefits
Share based payments
2023
$
1,091,980
-
38,749
70,078
15,514
-
325,442
1,541,763
2022
$
1,037,467
-
65,535
70,352
48,864
-
377,564
1,599,782
Key management personnel remuneration has been included in the Remuneration Report section
of the Directors’ Report.
Note 21: Commitments
There were no material capital commitments at the reporting date (2022: Nil).
Note 22: Events Subsequent to Reporting Date
There has not arisen in the interval between the end of the financial year and the date of this
report any other item, transaction, or event of a material and unusual nature likely in the opinion
of the directors of the Company to affect significantly the operations of the Company, the results
of those operations or the state of affairs of the Company in future financial years.
Note 23: Subsidiaries
Country
of incorporation
Equity holding in
subsidiaries
2023
%
2022
%
a) Parent entity
Genetic Signatures Limited
Australia
b) Controlled entities
Genetic Signatures USA Ltd
Genetic Signatures UK Ltd
Genetic Signatures GmbH
USA
UK
Germany
100%
100%
100%
100%
100%
-
Note 24: Auditors’ remuneration
Consolidated
BDO
Audit and review of financial statements
Other non-audit services
Tax compliance services
Total non-audit services
Total audit and non-audit services
2023
$
114,500
33,735
33,735
148,235
2022
$
100,637
43,180
43,180
143,817
72
50
Genetic Signatures Limited – Annual Report 2023
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 25: Contingent liabilities
The group does not have any material contingent liabilities at year-end (2022: nil).
Note 26: Cash Flow Information
(a) Reconciliation of Cash
Consolidated
2023
$’000s
2022
$’000s
Cash at the end of the financial year as shown in the
statement of cash flows is reconciled to the related items
in the statement of financial position as follows:
Cash on hand and at bank
16,349
36,897
(b) Reconciliation of Profit after Income Tax to net
Cash inflows/(outflows) from Operations
(Loss)/Profit after income tax
(14,052)
3,063
Non cash flow items included in profit/(loss)
Depreciation
Share based payments expenses
Loss/(profit) on disposal of assets
Inventory provision for obsolescence
Bad debts provision
Amortisation of leases
Transfers between inventory and fixed assets
Changes in operating assets and liabilities:
Decrease in trade and other receivables
(Increase) in government grant receivable
Decrease in inventories
Increase in provisions
Increase in payables
1,484
1,973
-
426
(258)
42
119
496
(4,421)
1,027
207
506
Net cash (outflow)/inflow from operating activities
(12,451)
1,270
1,915
60
37
115
346
(683)
1,240
-
1,932
198
313
9,806
51
73
Financial Report
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 27: Parent Entity Financial Information
(a) Summary financial information:
Assets
Current Assets
Cash and cash equivalents
Trade and other receivables
Inventory
Government grant receivable
Total Current Assets
Non-Current Assets
Plant and equipment
Intangible assets
Right of use assets
Total Non-Current Assets
Total Assets
Liabilities
Current Liabilities
Trade and other payables
Provisions
Leases
Total Current Liabilities
Non-Current Liabilities
Leases
Provisions
Total Non-Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
(Loss)/Profit for the year
Other comprehensive income/(loss)
Total comprehensive income/(loss) for the year
74
52
2023
$’000s
15,987
5,080
7,715
6,877
35,659
3,446
5,489
-
8,935
2022
$’000s
36,348
10,163
9,424
-
55,935
4,207
-
43
4,250
44,594
60,185
4,108
1,099
-
5,207
-
95
95
4,284
1,019
33
5,336
1
46
47
5,302
5,383
39,292
54,802
84,438
7,355
(52,501)
39,292
(17,492)
-
(17,492)
84,428
5,383
(35,009)
54,802
3,284
-
3,284
Genetic Signatures Limited – Annual Report 2023
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
(b) Summary financial information:
The Parent entity did not have any contingent liabilities as at 30 June 2023 or 30 June 2022.
(c) Significant accounting policies:
The accounting policies of the parent entity are consistent with those of the consolidated entity,
as disclosed in note 1, except for the following:
•
Investments in subsidiaries are accounted for at cost, less any impairment, in the parent
entity.
Note 28: Financial risk management
The group's financial instruments consist mainly of deposits with banks, accounts receivable and
payable, and lease liabilities. The totals for each category of financial instruments, measured in
accordance with AASB 9 as detailed in the accounting policies to these financial statements, are
shown at their net fair value.
Net Fair Value
The fair values of financial assets and financial liabilities are presented in the following table and
can be compared to their carrying values as presented in the statement of financial position. Fair
values are those amounts at which an asset could be exchanged, or a liability settled, between
knowledgeable, willing parties at arm's length transaction.
Fair values derived may be based on information that is estimated or subject to judgment, where
changes in assumptions may have material impact on the amounts estimated.
Financial assets
Cash and cash equivalents
Trade and other receivables
Total Financial Assets
Net Carrying
Value 2023
Net Fair
Value 2023
Net Carrying
Value 2022
$’000s
16,349
4,386
20,735
$’000s
16,349
4,386
20,735
$’000s
36,897
4,133
41,030
Net Fair
Value 2022
$’000s
36,897
4,133
41,030
Financial Liabilities
Trade creditors
Other creditors
Lease liabilities
Total Financial Liabilities
3,770
1,033
-
4,803
3,770
1,033
-
4,803
3,031
633
34
3,698
3,031
633
34
3,698
The values disclosed in the above table have been determined based on the following
methodologies:
Cash and cash equivalents, trade and other receivables and trade and other payables are short-
term instruments in nature whose carrying value is equivalent to fair value. The fair value of lease
liabilities is estimated by discounting the remaining contractual maturities at the current market
interest rate that is available for similar financial liabilities.
53
75
Financial Report
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Interest Rate Risk
The group's main interest rate risk arises from the cash balance which is invested at variable
rates.
Sensitivity
Significant changes in market interest rates may have an effect on the group's income and
operating cash flows. The group manages its cash flow interest rate risk by placing excess funds
in term deposits.
Based on the cash held at reporting date, the sensitivity to a 1% increase or decrease in interest
rates would increase/(decrease) after tax loss by $163,000 (2022 profit: $369,000).
Credit risk
Credit risk arises from cash and cash equivalents and deposits with banks and financial
institutions, as well as credit exposure to domestic and international customers, including
outstanding receivables and committed transactions. The group has policies in place to ensure
that sales of products and services are made to customers with an appropriate credit history.
The majority of customers have long term relationships with the group and sales are secured
with supply contracts. Sales are secured by letters of credit when deemed appropriate. The
group has policies that limit the maximum amount of credit exposure to any one financial
institution.
The credit quality of financial assets that are neither past due nor impaired can be assessed by
reference to historical information about counterparty default ratesThe table below summarises
the assets which are subject to credit risk.
Financial assets
Cash and cash equivalents
Trade and other receivables
Total Financial Assets
Consolidated
2023
$’000s
16,349
4,386
20,735
2022
$’000s
36,897
4,133
41,030
The group applies the AASB 9 simplified approach to measuring expected credit losses which
uses a lifetime expected loss allowance for trade receivables. Further detail is explained in
Note 1(k).
54
76
Genetic Signatures Limited – Annual Report 2023
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Liquidity Risk
Liquidity Risk arises from the possibility that the group might encounter difficulty in settling its
debts or otherwise meeting its obligations related to financial liabilities. The group manages this
risk through the following mechanisms:
-
preparing forward-looking cash flow analysis in relation to its operational, development
and financing activities;
obtaining funding from a variety of sources including equity issues;
only investing surplus cash with major financial institutions.
-
-
Financial liability maturity analysis (undiscounted payments)
Weighted
average
interest rate
%
Within 1
Year
$’000s
1 to 5
Years
$’000s
Total
contractual
cash flows
Total
Carrying
amount
$’000s
$’000s
2023
Financial liabilities due for payment
Trade and other payables
-
Lease liabilities
4.5%
Total expected outflows
4,803
-
4,803
-
-
-
4,803
-
4,803
4,803
-
4,803
Weighted
average
interest rate
%
Within 1
Year
$’000s
1 to 5
Years
$’000s
Total
contractual
cash flows
$’000s
Total
Carrying
amount
$’000s
2022
Financial liabilities due for payment
Trade and other payables
-
Lease liabilities
4.5%
Total expected outflows
3,665
33
3,698
-
1
1
3,665
34
3,699
3,665
34
3,699
Note 29: Capital Risk Management
The group’s objective when managing capital is to safeguard the ability to continue as a going
concern so that they can fund future growth and provide returns to shareholders and benefits to
other stakeholders and to maintain an optimal capital structure.
Management effectively manages the group’s capital by assessing the group’s financial risks
and adjusting its capital structure in response to changes in these risks and the market.
There were no externally imposed capital requirements during the year.
55
77
Financial Report
Notes to the Consolidated
Financial Statements
GENETIC SIGNATURES LIMITED
ABN: 30 095 913 205
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 30 JUNE 2023
Note 30. Earnings per share
(Loss)/Profit after income tax
Consolidated
2023
$’000s
2022
$’000s
(14,052)
3,063
(Loss)/Profit after income tax attributable to the owners of
Genetic Signatures Limited
(14,052)
3,063
Weighted average number of ordinary shares used in calculating
basic earnings per share
Adjustments for calculation of diluted earnings per share:
Number
Number
143,399,640
143,102,251
Options over ordinary shares
553,500
2,333,750
Weighted average number of ordinary shares used in calculating
diluted earnings per share
143,953,140
145,436,001
Basic (Loss)/Profit per share
Diluted (Loss)/Profit per share
Cents
Cents
(9.80)
(9.80)
2.14
2.11
78
56
Genetic Signatures Limited – Annual Report 2023
79
Directors’ Declaration
DIRECTORS' DECLARATION
In the directors' opinion:
●
●
●
●
the attached financial statements and notes thereto comply with the Corporations Act 2001, the Australian
Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting
requirements;
the attached financial statements and notes thereto comply with International Financial Reporting Standards
as issued by the International Accounting Standards Board as described in note 1 to the financial statements;
the attached financial statements and notes thereto give a true and fair view of the consolidated entity’s
financial position as at 30 June 2023 and of its performance for the financial year ended on that date; and
there are reasonable grounds to believe that the group will be able to pay its debts as and when they become
due and payable.
The directors have been given the declaration required by section 295A of the Corporation Act 2001.
Signed in accordance with a resolution of directors made pursuant to section 295(5)(a) of the Corporations Act
2001.
On behalf of the directors
John Melki
Director
Sydney, 31 August 2023
80
Genetic Signatures Limited – Annual Report 2023
Independent Auditor’s Report
Level 11, 1 Margaret Street
Sydney NSW 2000
Australia
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret St
Sydney NSW 2000
Australia
INDEPENDENT AUDITOR'S REPORT
To the members of Genetic Signatures Limited
Report on the Audit of the Financial Report
Opinion
DECLARATION OF INDEPENDENCE BY MARTIN COYLE TO THE DIRECTORS OF GENETIC SIGNATURES
We have audited the financial report of Genetic Signatures Limited (the Company) and its subsidiaries
LIMITED
(the Group), which comprises the consolidated statement of financial position as at 30 June 2023, the
consolidated statement of profit or loss and other comprehensive income, the consolidated statement
of changes in equity and the consolidated statement of cash flows for the year then ended, and notes
As lead auditor of Genetic Signatures Limited for the year ended 30 June 2020, I declare that, to the
to the financial report, including a summary of significant accounting policies and the directors’
best of my knowledge and belief, there have been:
declaration.
relation to the audit; and
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
In our opinion the accompanying financial report of the Group, is in accordance with the Corporations
Act 2001, including:
2. No contraventions of any applicable code of professional conduct in relation to the audit.
Giving a true and fair view of the Group’s financial position as at 30 June 2023 and of its
(i)
financial performance for the year ended on that date; and
Complying with Australian Accounting Standards and the Corporations Regulations 2001.
This declaration is in respect of Genetic Signatures Limited and the entities it controlled during the
(ii)
period.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the Financial
Report section of our report. We are independent of the Group in accordance with the Corporations
Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s
Martin Coyle
APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code)
Director
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
BDO Audit Pty Ltd
given to the directors of the Company, would be in the same terms if given to the directors as at the
Sydney, 28 August 2020
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.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members of
BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent member
firms. Liability limited by a scheme approved under Professional Standards Legislation.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
81
Independent Auditor’s Report
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret St
Sydney NSW 2000
Australia
Key audit matters
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
a separate opinion on these matters.
Inventory valuation
Inventory valuation
Key audit matter
DECLARATION OF INDEPENDENCE BY MARTIN COYLE TO THE DIRECTORS OF GENETIC SIGNATURES
Key audit matter
LIMITED
How the matter was addressed in our audit
How the matter was addressed in our audit
•
•
As disclosed in Note 9, the Group held
As disclosed in Note 9, the Group held
inventory with a carrying value of
inventory with a carrying value of
As lead auditor of Genetic Signatures Limited for the year ended 30 June 2020, I declare that, to the
$8,753,000 as at 30 June 2023.
$8,753,000 as at 30 June 2023.
best of my knowledge and belief, there have been:
Our audit procedures for addressing this key audit matter included, but
Our audit procedures for addressing this key audit matter included, but
were not limited to, the following:
were not limited to, the following:
Inventory valuation was considered a
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
Inventory valuation was considered a
key audit matter due to the significant
relation to the audit; and
key audit matter due to the significant
value of these assets in the
2. No contraventions of any applicable code of professional conduct in relation to the audit.
value of these assets in the
Consolidated Statement of Financial
Consolidated Statement of Financial
Position, the various locations that
Position, the various locations that
This declaration is in respect of Genetic Signatures Limited and the entities it controlled during the
inventory was held, and the key
inventory was held, and the key
period.
estimates and judgements applied by
estimates and judgements applied by
management in assessing the net
management in assessing the net
realisable value (‘NRV’) of inventory.
realisable value (‘NRV’) of inventory.
•
•
•
•
•
•
Observed the inventory count procedures at key locations
Observed the inventory count procedures at key locations
around the year-end and performed detailed test counts and
around the year-end and performed detailed test counts and
compared these to the underlying inventory records.
compared these to the underlying inventory records.
Evaluated the assumptions applied by management in assessing
Evaluated the assumptions applied by management in assessing
potential obsolescence for near-expiry and slow-moving
potential obsolescence for near-expiry and slow-moving
inventory.
inventory.
Analysed inventory turnover by product group in comparison to
Analysed inventory turnover by product group in comparison to
prior periods and to expectations.
prior periods and to expectations.
Reviewed management’s processes and estimates for
Reviewed management’s processes and estimates for
calculating the overhead and labour costs included within
calculating the overhead and labour costs included within
manufactured finished goods inventory.
manufactured finished goods inventory.
Performed various analytical procedures in relation to
Performed various analytical procedures in relation to
inventory including an analysis of monthly gross margins and
inventory including an analysis of monthly gross margins and
inventory turnover, comparing to prior years and expectations.
inventory turnover, comparing to prior years and expectations.
Tested a sample of inventory items on hand to initial supplier
Tested a sample of inventory items on hand to initial supplier
invoices and subsequent sales invoices to ascertain whether
invoices and subsequent sales invoices to ascertain whether
inventory was being correctly recognised at the lower of cost
inventory was being correctly recognised at the lower of cost
and NRV.
and NRV.
Martin Coyle
Director
BDO Audit Pty Ltd
Sydney, 28 August 2020
•
•
•
•
Revenue recognition
Revenue recognition
Key audit matter
Key audit matter
As disclosed in Note 2, the Group
As disclosed in Note 2, the Group
recognised revenue of $16,939,000
recognised revenue of $16,939,000
during the financial year ended 30
during the financial year ended 30
June 2023 (2022: $35,421,000).
June 2023 (2022: $35,421,000).
Given the overall significance of
Given the overall significance of
revenue to the Group as a key
revenue to the Group as a key
performance indicator, we considered
performance indicator, we considered
this area to be a key audit matter.
this area to be a key audit matter.
How the matter was addressed in our audit
How the matter was addressed in our audit
To determine whether revenue was appropriately accounted for and
To determine whether revenue was appropriately accounted for and
disclosed within the financial statements, we performed, amongst
disclosed within the financial statements, we performed, amongst
others, the following audit procedures:
others, the following audit procedures:
•
•
Critically evaluated the revenue recognition policies for all
Critically evaluated the revenue recognition policies for all
material revenue sources including reviewing any new sales
material revenue sources including reviewing any new sales
agreements entered during the year to identify any variable
agreements entered during the year to identify any variable
consideration / multiple performance obligation arrangements
consideration / multiple performance obligation arrangements
to ensure revenue was recognised in accordance with
to ensure revenue was recognised in accordance with
82
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Genetic Signatures Limited – Annual Report 2023
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret St
Sydney NSW 2000
Australia
Key audit matter
How the matter was addressed in our audit
accounting standard AASB 15 Revenue from Contracts with
Customers.
•
Tested the operating effectiveness of key internal controls
surrounding the existence and occurrence of revenues.
DECLARATION OF INDEPENDENCE BY MARTIN COYLE TO THE DIRECTORS OF GENETIC SIGNATURES
LIMITED
Performed substantive analytical procedures over the key
revenue streams, comparing against expectations developed
•
As lead auditor of Genetic Signatures Limited for the year ended 30 June 2020, I declare that, to the
best of my knowledge and belief, there have been:
Substantively testing a sample of revenue transactions
•
from discussions with management and supporting
information.
throughout the financial year by tracing sales invoices to
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
supporting sales documentation, shipping documentation and
relation to the audit; and
cash receipts.
2. No contraventions of any applicable code of professional conduct in relation to the audit.
•
Performed detailed cut-off testing to ensure that revenue
transactions around the year-end had been recorded in the
This declaration is in respect of Genetic Signatures Limited and the entities it controlled during the
period.
correct period.
Capitalisation of software and development costs
Key audit matter
Martin Coyle
Director
As disclosed in Note 12, the Group has
How the matter was addressed in our audit
To determine whether costs were appropriately capitalised and
capitalised software and development
disclosed within the financial statements, we performed, amongst
costs of $5,489,000 for the year ended
BDO Audit Pty Ltd
30 June 2023 (2023: $1,646,000).
Sydney, 28 August 2020
Given the judgements involved in the
recognition criteria and the financial
significance to the group, we
considered this area to be a key audit
matter.
others, the following audit procedures:
•
•
•
Reviewed if the internally generated intangible assets arising
from the development have met the recognition criteria under
AASB 138 Intangible Assets;
Agreed a sample of development costs and software to
supporting documentation, ensuring any research expenditure
was recognised as an expense when incurred; and
Reviewed for any indicators of impairment of the intangible
assets.
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
83
Independent Auditor’s Report
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret St
Sydney NSW 2000
Australia
Other information
The directors are responsible for the other information. The other information comprises the
information in the Group’s annual report for the year ended 30 June 2023, but does not include the
financial report and the auditor’s report thereon.
Our opinion on the financial report does not cover the other information and we do not express any
form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
DECLARATION OF INDEPENDENCE BY MARTIN COYLE TO THE DIRECTORS OF GENETIC SIGNATURES
and, in doing so, consider whether the other information is materially inconsistent with the financial
LIMITED
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
As lead auditor of Genetic Signatures Limited for the year ended 30 June 2020, I declare that, to the
best of my knowledge and belief, there have been:
Responsibilities of the directors for the Financial Report
relation to the audit; and
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
2. No contraventions of any applicable code of professional conduct in relation to the audit.
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
This declaration is in respect of Genetic Signatures Limited and the entities it controlled during the
period.
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 has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Martin Coyle
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
Director
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
BDO Audit Pty Ltd
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
Sydney, 28 August 2020
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
A further description of our responsibilities for the audit of the financial report is located at the
Auditing and Assurance Standards Board website (http://www.auasb.gov.au/Home.aspx) at:
https://www.auasb.gov.au/admin/file/content102/c3/ar1_2020.pdf
This description forms part of our auditor’s report.
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2023.
In our opinion, the Remuneration Report of Genetic Signatures Limited, for the year ended 30 June
2023, complies with section 300A of the Corporations Act 2001.
84
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
Genetic Signatures Limited – Annual Report 2023
Tel: +61 2 9251 4100
Fax: +61 2 9240 9821
www.bdo.com.au
Level 11, 1 Margaret St
Sydney NSW 2000
Australia
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility
is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with
Australian Auditing Standards.
BDO Audit Pty Ltd
DECLARATION OF INDEPENDENCE BY MARTIN COYLE TO THE DIRECTORS OF GENETIC SIGNATURES
LIMITED
As lead auditor of Genetic Signatures Limited for the year ended 30 June 2020, I declare that, to the
best of my knowledge and belief, there have been:
Gareth Few
Engagement Partner
1. No contraventions of the auditor independence requirements of the Corporations Act 2001 in
relation to the audit; and
2. No contraventions of any applicable code of professional conduct in relation to the audit.
Sydney, 31 August 2023
This declaration is in respect of Genetic Signatures Limited and the entities it controlled during the
period.
Martin Coyle
Director
BDO Audit Pty Ltd
Sydney, 28 August 2020
BDO Audit Pty Ltd ABN 33 134 022 870 is a member of a national association of independent entities which are all members of BDO
Australia Ltd ABN 77 050 110 275, an Australian company limited by guarantee. BDO Audit Pty Ltd and BDO Australia Ltd are members
of BDO International Ltd, a UK company limited by guarantee, and form part of the international BDO network of independent
member firms. Liability limited by a scheme approved under Professional Standards Legislation.
85
Analysis of Holdings
Genetic Signatures Limited
Analysis of Holdings as at 28 August 2023
Additional Information Required Under ASX Listing Rules
The additional information required by the Australian Securities Exchange (ASX) and not shown
elsewhere is set out below. The information is current at 28 August 2023.
Issued Capital
As at 28 August 2023 the Company had 143,405,996 fully paid ordinary shares on issue.
Distribution of Equity Securities
Analysis of numbers of equity security holders for GSS fully paid ordinary shares by size of holding:
Holdings Ranges
Holders
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Totals
524
570
239
451
119
1,903
Total Units
258,406
1,604,942
1,915,654
16,446,540
123,180,454
143,405,996
%
0.180
1.120
1.340
11.470
85.900
100.000
Unmarketable parcel of shares
The number of individual shareholders holding less than a marketable parcel of shares
was 534 (a total of 268,611 shares held by 534 shareholders).
1,042 fully paid ordinary shares comprise a marketable parcel at GSS' closing share
price of $0.48 on 28 August 2023.
86
Genetic Signatures Limited – Annual Report 2023 Shareholder Information
Equity Security Holders
The names of the twenty largest shareholders of quoted securities are listed below:
Shareholder
ASIA UNION INVESTMENTS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
NATIONAL NOMINEES LIMITED
CITICORP NOMINEES PTY LIMITED
UBS NOMINEES PTY LTD
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
CAPITAL CONCERNS PTY LIMITED
BNP PARIBAS NOMS PTY LTD
BRAHAM CONSOLIDATED PTY LTD
BUTTONWOOD NOMINEES PTY LTD
BNP PARIBAS NOMINEES PTY LTD ACF CLEARSTREAM
MR JOHN ROBERT MELKI
RIDDLER FAMILY INVESTMENTS PTY LTD
IDOLLINK PTY LTD
QUICKINVEST PTY LTD
EIGHTEEN HOLDINGS PTY LTD
NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
BRAHAM INVESTMENTS PTY LTD
JULEYU PTY LTD
Total Securities of Top 20 Holdings
Total of Securities
Substantial Holders
Shareholder
ASIA UNION INVESTMENTS PTY LTD
PERENNIAL VALUE MANAGEMENT LIMITED
FIL LIMITED
Balance as at
28 August 2023
%
37,500,000
17,395,196
26.150
12.130
9,855,824
8,267,504
3,775,944
3,470,046
3,200,000
2,107,405
1,828,463
1,662,607
1,575,614
1,096,000
1,053,846
1,029,890
1,020,000
976,403
916,659
883,314
871,517
863,213
6.873
5.765
2.633
2.420
2.231
1.470
1.275
1.159
1.099
0.764
0.735
0.718
0.711
0.681
0.639
0.616
0.608
0.602
99,349,445
143,405,996
69.278
100.00
Balance as at
28 August 2023
37,500,000
21,462,703
9,876,864
%
0.2615
0.1497
0.0689
87
Company Directory
Directors
Nickolaos Samaras – Non-Executive Chairman
John R Melki – CEO & Managing Director
Anthony J Radford
Michael A Aicher
Neil Gunn
Caroline Waldron
Company Secretary
Karl Pechmann
Annual General Meeting 2023
The 2023 Annual General Meeting will be held on 29 November 2023. Further details
about the AGM will be released with the Notice of Meeting.
Registered office and
principal place of business
Share register
Auditor
7 Eliza Street
Newtown NSW 2042
Phone: +61 2 9870 7580
Boardroom Pty Limited
Level 8
210 George Street
Sydney NSW 2000
Phone: +61 2 9290 9600
BDO Audit Pty Ltd
Level 11
1 Margaret Street
Sydney NSW 2000
Stock exchange listing
Genetic Signatures shares are listed on the Australian Securities Exchange
(ASX code: GSS)
Website
www.geneticsignatures.com
Corporate Governance
Statement
Genetic Signatures Ltd and the Board of Directors are committed to achieving and
demonstrating the highest standards of corporate governance. Genetic Signatures
Ltd has reviewed its corporate governance practices against the Corporate
Governance Principles and Recommendations (4th Edition) published by the ASX
Corporate Governance Council.
Details of the corporate governance report is available on the Group website at:
https://geneticsignatures.com/au/investors/corporate-governance/
88
Genetic Signatures Limited – Annual Report 2023 89
Contact Us
www.geneticsignatures.com
Australasia and Asia Pacific (Head Office)
A: 7 Eliza Street Newtown, NSW, 2042 Australia
E: apac@geneticsignatures.com
P: +61 2 9870 7580
Europe, Middle East and Africa
E: EMEA@geneticsignatures.com
P +44 330 828 0813 (English)
P +49 32 22109 2834 (German)
Americas
E: americas@geneticsignatures.com
P: +1 800 687 4118