genedrive plc Annual Report 2016
Decentralising  
molecular diagnostics WHAT WE DO
Introduction and highlights
genedrive plc
commercialising  
Point of Need  
molecular diagnostics
Strategic Report
Highlights 1
Company overview 2
Chairman's Statement 4
Chief Executive's Q&A 5
Business model and strategy 6
Market overview 8
Product overview 10
Commercial roll-out in india 12
Operational performance 14
Financial review 17
Key performance indicators 18
Principal risks and uncertainties 19
Governance
Board of Directors 20
Directors’ report 22
Directors’ remuneration report 25
Corporate governance report 28
Financial Statements
Independent auditor's report  30
Consolidated statement of profit or  
loss and comprehensive income 32
Consolidated balance sheet 33
Consolidated statement of 
changes in equity 34
Consolidated statement of cash flows 35
Notes to the financial statements 36
Company balance sheet 65
Company statement of 
changes in equity 66
Company statement of cash flows 67
Notes to the company 
financial statements 68
Directors, secretary and advisers 71
$30bn
Estimated global Point of Need 
market Financial Highlights
 l Growth in turnover up 12% to £5.0m (2015: £4.5m) at the 
top end of previous guidance.
 l Strong growth in Genedrive
®
 development income of 
£1.9m (2015: £0.9m) principally driven by the US 
Department of Defense handheld biohazard 
identification programme. 
 l No distributor sales to India in the year (2015: £0.2m.) Our 
distributor continues to operate from their initial 
distributor stocking order of £0.2m. 
 l Reduced Service income of £3.1m (2015: £3.6m). Preclinical 
Service income of £2.0m (2015: £2.3m). 
Pharmacogenomics Service income of £1.1m (2015: £1.3m).
 l Operating loss of £5.4m (2015: £4.0m) following increased 
development and administrative costs to support the 
re-focusing of the Company.
 l £6.5m (£6.0m net) fundraising announced on 23 June 
2016 with proceeds received by the Company after the 
year end. 
 l Cash reserves at 30 June 2016 of £1.1m (30 June 2015: 
£4.9m). Cash reserves at 30 June 2016 plus net proceeds 
of placing amounted to £7.1m.
 l As part of the fundraising, the terms of $8m GHIF 
Convertible Bond were amended with the bond’s 
maturity date extended to 2021 from 2019, allowing for 
deferral and rolling up of interest due in the periods to 
July 2019.
 l Post-period end, Matthew Fowler appointed to succeed 
John Rylands as Chief Financial Officer following the 
Annual General Meeting.
£6.5m
New equity funding
Operational Highlights
 l The Indian launch of the Genedrive
®
 MTB/RIF test 
commenced in April 2016. Whilst end user sales are yet to 
engage, early interest is in line with expectations. We are 
pleased to report that positive post-market surveillance 
studies confirm that the Genedrive
®
 MTB test is 
performing in line with its product performance claims.
 l Development of the next Genedrive
®
 test for Hepatitis C 
(HCV) remains on track. The Company undertook 
successful initial validation studies of the HCV test at 
Institut Pasteur in February 2016, paving the way for 
performance testing of the assay. Initial CE-IVD approval 
of the HCV test is scheduled for March/April 2017.
 l Successful clinical trial results of Genedrive
®
 IL28B 
human-genotyping test in conjunction with Institut 
Pasteur at Hospital Cochin, Paris announced in May 2016. 
Announcement of adoption of the Genedrive
®
 IL28B test 
in clinical trials being conducted by STOP-HCV campaign.
 l Successful progress in the US Department of Defense 
Programme to develop Genedrive
®
 biohazard 
identification tests triggers commencement of next 
$2.9m phase.
 l Successful field validation of aquaculture test for 
detection of Whitespot disease in shrimps in 
collaboration with the Centre for Environment, Fisheries 
and Aquaculture Science (CEFAS). 
 l Detailed strategic review of the Company’s Preclinical 
and Pharmacogenomics Services operations 
commenced against a background of robust contract 
wins. 
 l David Budd joined as CEO in March 2016 bringing 20 
years of international commercial and operational 
experience in the diagnostics and medical devices field.
 l Review and redirection of Group management 
organisation focusing the Company on the Genedrive
®
 
molecular diagnostic product range. 
 l The Group was renamed genedrive plc on 22 July 2016. 
The Company’s Services operations will continue to trade 
under the Epistem brand.
£5.0m
Revenue
Financial Statements Strategic Report 
 genedrive plc Annual Report 2016
 1
Governance
Page Title at start: Content Section at start:
Strategic Report Highlights With the approval in India of our 
first Genedrive
®
 test for MTB, the 
Board realigned the Company’s 
Strategic Plan to focus the 
Company on our Genedrive
®
 
molecular testing platform, 
evidenced in the new 
management team and  
the Company’s new name, 
genedrive plc.
Rationale
The launch, during the year, of the Company's 
first test on our Genedrive
®
 platform marks 
a key stage in the Company's development. 
Since its listing on AIM in 2007, the Company 
adopted a dual business model with free 
standing Services operations, selling high 
margin niche services alongside corporate 
investment in research and development, 
targeting high value opportunities for 
collaboration with international life sciences 
companies. This strategy offered the dual 
benefit, generated by the Services operations, 
of positive cash flow to fund corporate 
structure and product development and high 
level understanding and interaction with 
international pharmaceutical companies 
providing a platform for the launch of new 
products and services. Under this strategy, 
the Company built up its molecular science, 
biomarker and assay development expertise 
as well as the adoption of a point of need 
molecular diagnostics expertise which 
underpins the Genedrive
®
 product trademark. 
As the market opportunity for Genedrive
®
 in 
the diagnostics segment of the life science 
industry has grown so the management and 
infrastructure requirements have diverged from 
the requirements of the Services operations. 
With shareholder expectations being 
directed at the superior returns offered by the 
Genedrive
®
 product range in point of need 
diagnostics, the Company recognised that 
it is cannot allocate sufficient investment in 
the Services operation to secure its continued 
long term growth. Accordingly, the Company 
announced in June that it is undertaking a 
strategic review of its Service operations with a 
view to focussing the point of need opportunity 
presented by the Genedrive
®
 platform.
We are excited in the future of 
Genedrive
®
 in bringing the power of 
hospital-based, central laboratory 
diagnostics closer to the point of 
need and the patient setting. These 
new funds put us in a strong 
position to deliver on Genedrive
®
’s 
potential and expand its testing 
capabilities.
David Budd
Chief Executive Officer
NEW DIRECTION
Company overview
genedrive plc Annual Report 2016
2
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Company overview New Name; New Focus
The adoption of the new name, genedrive plc, 
points to the new direction of the Company in 
targeting diagnostics requirements at the point 
of need.
This requires focused investment in 
commercial, regulatory, clinical and operational 
infrastructure aligned to the quality standards 
of the international diagnostics industry.
New Leadership
On 1 March 2016, the Board appointed David 
Budd as CEO. David has over 20 years of 
international commercial and operational 
experience in the diagnostics and medical 
devices field, launching multiple diagnostics 
products into international markets. He 
joined genedrive plc from Leica Biosystems 
(a Danaher company), a fast growing 
organisation where he served as General 
Manager of Leica Biosystems Amsterdam. 
David previously served as Commercial 
Director at Leica Biosystems Newcastle, with 
global responsibility for marketing, market 
research and product launches for diagnostic 
tests. Prior to joining Leica Biosystems, 
David’s previous roles included Point of Care, 
molecular and central laboratory marketing 
and commercialisation responsibilities as a 
Director of Marketing at Siemens Healthcare 
Diagnostics, Business Unit Leader at Bayer 
Diagnostics UK, and Sales Manager at Visible 
Genetics Inc.
Delivering at Point of Need
Genedrive
®
 is designed to bring the 
power of central laboratory molecular 
diagnostics to the Point of Need setting 
in a device that has a lower cost and 
faster time to result than molecular 
alternatives.
 For information on Genedrive
®
 See pages 8-13
Financial Statements Strategic Report 
 genedrive plc Annual Report 2016
 3
Governance
Page Title at start: Content Section at start: CHAIRMAN'S
Statement
I am very pleased to report on the progress which the Company has 
made since my last report.
Our key priorities during the period have been to continue the process 
of re-focusing the Company on the highly attractive opportunities 
which the Genedrive
®
 diagnostics platform offers in the market for 
decentralised, near patient diagnostic tests and ensuring the success 
of its commercial launch and continued development.
We have begun the launch of our MTB/RIF assay in India, our first 
commercial market. While we have encountered challenges not 
uncommon in the launch of new diagnostics products, early interest 
in the market has been encouraging and our post-market surveillance 
studies have confirmed that the Genedrive
®
 test offers an attractive, 
low cost and accessible alternative for MTB/RIF testing. 
We remain confident in the potential of the Genedrive
®
 MTB/RIF 
assay in what are significant market opportunities, and are working 
to develop further commercialisation efforts and improve certain 
technical aspects of the product based on our in-market experience.
We also report on the continued broader validation of the Genedrive
®
 
platform, with the development of our HCV test on track for CE 
marking in March/April 2017 and significant progress seen in our US 
Department of Defense project for the development of Genedrive
®
 as 
a handheld test for biohazard identification.
Last year, we announced the conclusion of our collaboration with 
University of Maryland, Baltimore (UMB) in Radiation Biodefense 
and this has impacted our Services income. However, significant 
progress towards replacing this income has been achieved. Also, as 
previously announced, we have appointed advisors to undertake a 
review of our Services operations and will update on the progress of 
the review in the coming months. 
The period has seen the appointment of David Budd as CEO, bringing 
over 20 years of international commercial and operational experience 
in the diagnostics and molecular devices field to the Company and 
strengthening our ability to exploit fully the opportunity which our 
Genedrive
®
 platform represents. David’s experience and focus is 
already making a significant impact across the Company.
Furthermore, the £6.5m (£6.0m net) fundraising approved in July 
2016 has strengthened our financial position.
On behalf of the Board, I would like to thank our staff, investors,  
and customers for their commitment and support over the past year 
and we look forward to updating investors on our progress over the 
coming year.
Dr. Ian Gilham
Chairman
1 November 2016
Ian Gilham, Ph.D.
Chairman
genedrive plc Annual Report 2016
4
Page Title at start: Content Section at start:
Chairman's Statement CHIEF EXECUTIVE'S
Q&A
What were your reasons for joining the Company?
The requirement for simple and affordable testing for patients at a 
clinic or point of need to enable early diagnosis and correct therapy 
is increasingly well understood in healthcare settings. I thought 
that Genedrive
®
 was a very compelling and interesting solution, 
and I was very impressed with the development team’s capabilities 
and enthusiasm. From a business perspective, the opportunities 
are large unfolding markets with a relatively small competitive 
footprint. While these markets can be complex, the rewards are 
great for those that are successful in navigating the development 
and commercial path.
 
What are your first impressions?
Now that I have had the opportunity to see the development 
programmes first hand, I have been very impressed by the team 
of professional staff at genedrive plc as well as encouraged by the 
robustness demonstrated in the Genedrive
®
 instrument and the 
wide variety of applications in which it can successfully perform. 
I think this bodes well as we look to menu and applications 
development, both in what we might do directly ourselves and 
where we might look to partners for co-development opportunities.
What are your immediate priorities?
My two priorities are to demonstrate Genedrive
®
’s adoption in the 
market place, and to give the organisation the focus and direction 
to execute on the commitments we have made. While it is very early 
days, we need to be vigilant on the commercial progress we have 
made in the launch of the MTB/RIF assay in India and any learning 
we can take from that. We will need to spend additional time on 
engaging with clinical opinion leaders. This understanding will help 
support our launch processes for our Genedrive
®
 HCV test in the 
EU next year, and the subsequent work needed to gain regulatory 
clearances in target countries.
 
What is your vision for the future?
Spearheading new diagnostics solutions in non-laboratory settings 
has the potential to position Genedrive
®
 as an internationally 
leading molecular diagnostic platform. We have staked our current 
development focus squarely on MTB and HCV, but I’m eager to 
explore the partnerships that can help us potentially not only 
to build further the Genedrive
®
 menu, but allow us to explore 
additional routes to market as we move beyond our initial focus  
in India.
David Budd
Chief Executive Officer
Financial Statements Strategic Report 
 genedrive plc Annual Report 2016
 5
Governance
Page Title at start: Content Section at start:
Chief Executive's Q&A Genedrive
®
 is positioned to offer lower cost, 
easy to use, point of need or clinic based 
tests via a ‘razor/razor blade’ business model 
across an increasing range of applications. 
The instrument’s development has been 
significantly de-risked through a range of 
varied applications and external independent 
validations. 
Validation of concept
Our new focus will strengthen our 
business model by allowing us to 
concentrate on opportunities 
where our technology will provide 
sustainable growth
HOW WE OPERATE
Business model and strategy
Validating Genedrive
®
Sputum testing. Limited resource settings
Tuberculosis (TB)
Blood-based, viral testing
Hepatitis C (HCV)
$7.8m programme. Multiplexing ruggedness
US DoD Biohazard ID
Buccal swab. Human genotyping
Pharmacogenomics
Non-healthcare applications
Aquaculture
genedrive plc Annual Report 2016
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Business model and 
strategy Development partnerships Commercialisation
Our development process has been well 
supported through capital efficient grants 
and project income. These programmes 
have progressed positively, strengthening our 
confidence in a growing number of application 
areas that Genedrive
®
 platform can be applied. 
Genedrive
®
 development has been supported 
by £4m in grants and revenues and a $8m 
(£4.7m) convertible bond from the Global Heath 
Investment Fund with a primary focus on the 
development of diagnostic solutions in low to 
middle income countries for diseases such as 
MTB and HCV.
Futher validation
 l April 2016 – successful initial validation 
studies of the HCV test at Institut Pasteur. 
Initial CE-IVD approval scheduled for H2 
2016/17.
 l May 2016 – successful clinical trial results 
of Genedrive
®
 IL28b genotype testing in 
conjunction with Institut Pasteur.
 l Successful independent testing of 
Genedrive
®
 biohazard identification tests in 
collaboration with the US DoD.
Genedrive
®
’s initial commercial introduction 
occurred in April 2016 with the launch of 
our MTB/RIF test in India. The benefits and 
opportunities for Genedrive
®
 are not restricted 
to India and the Company intends to expand its 
footprint with an increase in Genedrive
®
’s menu 
capability.
Today, an extensive list of companies provide a 
wide range of clinically relevant tests, primarily 
to hospital based laboratories. We intend to 
partner with existing successful developers and 
commercial partners that will benefit from an 
additional decentralised route to market that is 
offered by Genedrive
®
.
Priorities
 l TB Commercialization in India and 
engagement of appropriate advocates.
 l Attain CE marking for HCV qualitative test 
and use 2017 for market specific trials and 
target country registrations.
 l Establish global or regional distributor 
partners for Genedrive
®
 beyond India.
Financial Statements Strategic Report 
 genedrive plc Annual Report 2016
 7
Governance
Page Title at start: Content Section at start: The use of Point of Need 
diagnostics enables 
improved healthcare 
accessibility, reduced 
waiting times, immediate 
discussion of results and 
treatment and fewer  
follow-up visits. 
$30bn
The global market for Point of Need diagnostics 
expected sales in 2020
$1bn
Infectious diseases market
Target applications
Tuberculosis and RIF antibiotic resistance detection
 l TB is the largest single infectious cause of death among 
young people and adults. 
 l TB diagnosis in many countries is still reliant on older tools, 
but new diagnostics are changing the landscape.
 l Molecular testing is the fastest growing TB diagnostic test 
segment and is expected to erode market share in smear 
microscopy.
 l Highest priority is a rapid, low-cost, sputum-based, molecular 
test with drug resistance test capability for microscopy 
centres.
Hepatitis C detection
 l HCV is a blood-borne virus which primarily affects the liver - 
no vaccine currently available.
 l Chronic HCV infection is curable if diagnosed: opportunity 
to reduce costs of chronic infection and treatment (e.g. liver 
transplant).
 l Global HCV diagnostics market is estimated to be $500m.
 l Hepatitis C is a significant public health concern that affected 
approximately 100m patients globally in 2012. Even more 
alarming, only 0.4m were treated that year, showing the need 
for increased screening and timely diagnosis.
 l Low/middle income countries have <10% diagnosis rate.
 – Current diagnostic paradigm is too costly for  
low-income countries 
 – 84-96% of population live in areas where testing  
is not accessible 
 – Strong need for rapid, inexpensive and accessible  
molecular test
GLOBAL OPPORTUNITY
Market overview
genedrive plc Annual Report 2016
8
Page Title at start: Content Section at start:
Market overview China 29.8
India 18.2
Egypt 11.8
Pakistan 9.4
Indonesia 9.4
Russia 5.8
USA 5.4
D.R. Congo 4
Nigeria 3.3
Japan 3.1
Cameroon 2.8
Brazil 2.6
Uganda 2.2
Ukraine 1.9
Philippines 1.9
Italy 1.9
Uzbekistan 1.8
Turkey 1.5
Thailand 1.5
Ethiopia 1.5
Prevalence of HCV in Top 20 
countries (millions)
Current HCV Testing 
Market
Genedrive
®
 
potential to 
be market 
expansive
25%
35%
40%
 US
 EU
 High-Burden Developing
Bio hazard identification
The Company will progress its successful collaborative 
programme with US Department of Defense (DoD) for the 
development of biohazard identification tests. The next stage of 
the project has a budget of $2.9m and we will seek to work with 
US DoD to secure future funding in the coming financial years. 
Pathogen testing for aquaculture
There is a smaller scale opportunity to work with CEFAS to 
develop our test for the detection of Whitespot. The market for 
this test is likely to be driven by government budgeting but we 
retain the rights to market this globally and plan to investigate 
routes to key markets.
Eradicate TB by 2020
World Heath Organisation STOP-TB initiative
77m tests pa
In 22 high burden countries
9.6m
New cases of TB in 2014
Hepatitis C (HCV) – Disease and Market
In May 2016, The World Health Assembly adopted the first 
‘Global Health Sector Strategy on Viral Hepatitis, 2016-2021’. The 
strategy has a vision of eliminating viral hepatitis as a public 
health problem and this is encapsulated in the global targets 
of reducing new viral hepatitis infections by 90% and reducing 
deaths due to viral hepatitis by 65% by 2030**. 
**http://www.who.int/mediacentre/factsheets/fs164/en/
c.170m 
People infected globally with HCV
Financial Statements Strategic Report 
 genedrive plc Annual Report 2016
 9
Governance
Page Title at start: Content Section at start: POINT OF NEED DELIVERY
Product overview
The Genedrive
®
 molecular diagnostic 
system has been developed as a next 
generation low cost, rapid, versatile, 
simple to use and robust platform for 
the diagnosis of infectious diseases 
and for use in patient stratification, 
pathogen detection and other 
indications.
Application for Tuberculosis (MTB/RIF)
 l Genedrive
®
 tuberculosis test has been designed as 
an affordable, rapid PCR-based test for the detection 
of Mycobacterium tuberculosis (MTB) and rifampicin 
resistance in sputum samples
 l Early, near-patient detection of MTB/RIF enables rapid 
treatment and a reduction in transmission rates
 l Genedrive
®
 MTB/RIF is intended for use in 
decentralised facilities and has a fast turnaround  
of c.75 minutes
 l Commercially available in India under a licence from 
the Drug Controller General of India (DCGI)
Application for Hepatitis C (HCV) 
 l Genedrive
®
 HCV test has been developed on a blood-
based platform: either finger stick or phlebotomy.
 l Information gathered allows physician to:
 – Diagnose and make decision to treat
 – Guide treatment based on monitoring of viral status 
 l Development part funded by grants from European 
Commission.
 – Successful external clinical validation by France’s 
Institut Pasteur announced in February 2016
 – Clinical trials in progress with CE-mark and launch 
targeted for 2017 
 l Availability of new treatments for HCV (i.e. Sovaldi
TM
)  
in developing countries at sustainable prices driving  
need for decentralised diagnostics.
 l Significant global players could offer future 
opportunity for partnership, development and 
distribution opportunities.
 – Current diagnostic paradigm is too costly for  
low-income countries
Overview
Genedrive
®
 is rapidly reconfigurable for specific assays 
and is suitable for use in a ‘Point of Need’ setting. 
Genedrive
®
 analyses nucleic acids from fresh or stored 
samples in clinical and remote settings to provide near-
patient diagnostics. 
genedrive plc Annual Report 2016
10
Page Title at start: Content Section at start:
Product overview Rapid, point of need or 
clinic based results
Prompt treatment decisions - sample to result 
typically in 60-90 minutes
Ease of use
Single use disposable reagent cartridge (razor/ 
razor blade business model) 
No other extensive laboratory equipment required
Low cost
System and test costs are lower than alternatives 
Appropriate for target markets
Real world robustness
Battery pack permits use in resource limited 
settings 
Operates in hot and humid environments of target 
markets
Versatile
Diverse sample types can be tested including 
sputum, blood plasma and buccal cheek swabs
Genedrive
®
Financial Statements Strategic Report 
 genedrive plc Annual Report 2016
 11
Governance
Page Title at start: Content Section at start: The results are fully aligned to the 
Company's DCGI performance claims. 
These results show that Genedrive
®
 
offers an acceptable, low cost and 
accessible alternative for facilities 
without the sophisticated 
infrastructure and equipment which 
we have in our main laboratory.
Dr Bhavini Shah
Head of TB testing services at  
Supratech Inc, India
PROGRESS IN STRATEGY
Commercial roll-out in India
Our first commercial market for Genedrive
®
 
is in tuberculosis and antibiotic resistance 
testing in India with the aim of increasing the 
adoption and availability of sophisticated 
molecular diagnostic analysis.
This year saw the commercial launch of 
our Genedrive
®
 MTB/RIF assay in India 
under a licence from the Drug Controller 
General of India (DCGI). Currently molecular 
diagnostic testing is generally only available 
through selected large hospital central 
laboratory settings. We believe that providing 
decentralised laboratories with the cost 
effective ability to carry out molecular testing 
with Genedrive
®
 will be very attractive to them 
and impact positively on patient treatment.
Our commercial approach is to access the 
market through a distribution partner, Xcelris 
Laboratories Ltd. We are initially targeting 
small and medium laboratories in the private 
sector, which is presently the largest market by 
revenue and is where we believe our cost will 
be a competitive advantage.
In support of commercialisation, we have 
undertaken further post-market surveillance 
studies in India. These studies have confirmed 
the Genedrive
®
 MTB/RIF test is performing in 
line with our product performance claims and 
offers an acceptable, low cost and accessible 
alternative for MTB/RIF testing.
genedrive plc Annual Report 2016
12
Page Title at start: Content Section at start:
Commercial roll-out in 
india Tuberculosis – India Commercialisation Strategy
Small Out-Reach Labs
Small/Medium Labs 
Large Hospital Labs 
Predominantly public
 l Fully automated
 l Hospital KOLs
 l High throughput
 l Low PoN usage
Predominantly private
 l Manual
 l Low skill level
 l Medium PoN usage
Predominantly public
 l Semi-automated
 l Medium skill level
 l High PoN usage
Genedrive
®
500 
Labs
5,000 
Labs
50,000 
Labs
Financial Statements Strategic Report 
 genedrive plc Annual Report 2016
 13
Governance
Page Title at start: Content Section at start: OPERATIONAL PERFORMANCE
Diagnostics, The Genedrive
®
 platform
Tuberculosis
The period under review included the Indian launch of 
the Genedrive
®
 MTB assay in April 2016 under an import 
licence from the Drug Controller General of India (DCGI). 
This licence was obtained on the basis of external clinical 
studies approved by the DCGI. 
In support of commercialisation, we have undertaken 
further post-market surveillance studies in India. These 
studies have confirmed the Genedrive
®
 MTB test is 
performing in line with our product performance claims 
and offers an acceptable, low cost and accessible 
alternative for MTB/RIF testing. 
Early interest from Indian laboratories post-launch is 
in line with our assessment of the market but the sales 
cycle is proving longer than we had anticipated and user 
sales have yet to engage. We have identified the need 
to establish the right user training and address some 
variable performance in the sample preparation process. 
While we expected a gradual ramp up in sales in the 
early months post launch, we booked no new sales to our 
distributor, Xcelris Laboratories Ltd, following the £0.2m 
stocking order in 2015. 
We are working closely with Xcelris to address the 
commercial challenges. The product launch phase 
initiated a programme of product based training for 
Xcelris’ sales team, followed up with a programme of 
customer site demonstrations to establish initial reference 
sites. In response to slower than anticipated sales, we 
are taking steps to further align product training for 
the distributer and customers aligned to their level of 
experience. We now directly employ four in-country 
trainers (all Indian nationals) to support demonstration 
and post sale processes.
We will evaluate additional distribution arrangements, 
should we consider alternatives are necessary in order to 
drive sales of the Genedrive
®
 platform in India.
Alongside these near-term actions in support of 
commercialisation, we have commenced a non-capital 
intensive development programme to address certain 
product characteristics related to sample preparation to 
ensure the full expected market is ultimately available to it. 
Our initial focus continues to be on small and medium 
decentralised laboratories. These are predominantly in 
the private sector, which is presently the largest market 
by revenue and is where we believe our cost will be a 
competitive advantage. In connection with the sample 
refinements above, we are also exploring appropriate 
expanded public markets for which we will engage 
further Key Opinion Leaders (KOLs) and subsequently 
deploy commercial teams. We remain confident in the 
potential of the Genedrive
®
 MTB/RIF test in the Indian 
market. 
Hepatitis C (HCV)
Following continued positive progress, the Company’s 
research and development team is working to achieve 
CE marking for the HCV assay in anticipation of phase 1 
launch in the EU in 2017. With this approval, we will begin 
KOL engagement and apply for regulatory approval for 
product launch in resource limited settings, where access 
to laboratory equipment is less available. In February, 
we announced successful external assessment of the 
Genedrive
®
 HCV test at the Institut Pasteur, Paris, which 
allowed for the start of clinical trials required to achieve 
CE marking.
A programme of independent validation trials in 
Scotland, England, France and Spain is planned for the 
test which we anticipate will yield results around which 
we can conclude agreements for the distribution of the 
test. The Company is currently in discussion with both 
international and country specific partners for distribution 
opportunities.
The product development team is progressing new 
low-cost technology to develop a disposable plamsa 
separation unit that would deliver plasma from a 
minimally invasive finger stick collection of blood 
without the need for centrifuge and the more invasive 
vial of blood which centrifuge requires. The successful 
development of this technology will remove a major 
barrier to tests that require plasma at the point of care 
or point of need used outside of a laboratory. We are 
pleased with progress being made with the development 
of this minimally invasive disposable unit and are 
targeting to make this available to support phase 2 of the 
commercial launch.
genedrive plc Annual Report 2016
14
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Operational performance Pathogen detection
The Company can report excellent progress in our 
US DoD funded collaboration to develop biohazard 
tests for Genedrive
®
. We have booked revenues in the 
financial year of $2.2m for the first phase of the project 
and announced, in March 2016, the outline approval 
for the next $2.9m phase which, subject to continued 
technical progress, we expected to be largely undertaken 
during the current financial year. The project represents 
significant external validation for our development 
capability and processes as well as extensive 
enhancement of our development know-how and supply 
chain. The terms of reference for the programme have 
been set by US DoD and do not point to a specific level of 
future sales which may arise from continued successful 
development.
The Company is also collaborating with the Centre 
for Environment, Fisheries and Aquaculture Science 
(CEFAS) in a funded programme for the development 
of a diagnostic aquaculture test for Whitespot, a disease 
which is causing significant disruption of shrimp farms in 
Asia, in particular. The Genedrive
®
 test successfully passed 
its initial field trial conducted by CEFAS in August this 
year. We will now seek within the CEFAS collaboration 
to undertake on-site trials to gather data designed to 
establish the possible commercial potential for the test. 
Human genotyping assay (IL28B)
The division has completed successful trials of the IL28B 
human genotyping test and the test has been adopted 
by the STOP-HCV programme for inclusion in its clinical 
trials (http://www.stop-hcv.ox.ac.uk/stop-hcv-1-trial). The 
results from this field trial will allow us to market test 
our genotyping platform and to assess the extent to 
which it will complement our infectious disease product 
range. Genedrive
®
 is providing 20 Genedrive
®
 units and 
associated tests for use in the STOP-HCV programme.
New product development
The new management team plan to develop an 
increasing range of tests for the Genedrive
®
 platform.
Business development 
In addition to addressing our Genedrive
®
 proprietary 
pipeline, we are finalising a review of our commercial 
priorities. We will address opportunities with external 
parties to bring existing laboratory based tests onto the 
Genedrive
®
 system to exploit its unique characteristics 
and potential in near patient applications. Such 
development would more rapidly expand the range 
of tests available on the Genedrive
®
 platform and 
build validation in a capital efficient manner. We also 
see significant scope to pursue new client funded 
opportunities to develop new assays, along the model of 
our biohazard programmes.
Summary
During the year, Diagnostics grew income by 52% to 
£1.9m (2015: £0.9m). Growth in development expenditure 
increased Diagnostics loss to £2.9m (2015: £1.5m).
Financial Statements Strategic Report 
 genedrive plc Annual Report 2016
 15
Governance
Page Title at start: Content Section at start: Services Operations
As previously stated, while the Services business has 
been a very valuable component of the Company’s 
development since incorporation, it is clear that our 
resources do not allow the level of investment required to 
ensure the division’s continued progress and growth. In 
June 2016, we announced that we had appointed advisers 
to undertake a strategic review of our Services operations. 
We will keep shareholders updated with progress on this 
review over the coming months.
Preclinical Research Services
Preclinical Research Services delivers specialised 
testing services to biotechnology and international drug 
development companies. The division has developed a 
versatile range of models across high value therapeutic 
pathways covering oncology, oncology supportive 
care, gastrointestinal disease, inflammation, skin care 
and wound healing. We have also been international 
recognised as ‘Subject Matter Experts’ in radiation 
treatment. 
Each disease area is supported by specialist scientists 
with expertise covering imaging, FACS analysis, 
histopathology, immunohistochemistry and multiplexing. 
Over recent years, the division has achieved substantial 
progress in developing its models with particular 
emphasis on inflammatory bowel disease, oncology 
imaging leukaemia and rheumatoid arthritis models.
Last year, we reported that the US Government agencies, 
NIH/NIAID, would not be continuing its funding to 
University of Maryland, Baltimore (UMB) beyond 
September 2016. Running at £1m pa, our participation 
as a sub-contractor to UMB had historically generated 
a significant share of the division’s income. Last year, we 
also reported on weakness in our EU markets. The division 
has responded to these challenges with an in-depth 
programme of client presentations and has made great 
progress in replacing the capacity recently utilised by 
UMB. Sales of £2.0m were booked in the period (2015: 
£2.3m) with continuing improvement expected in the 
coming period.
Pharmacogenomics Services
The Pharmacogenomics Services team engages 
in the application of molecular expertise towards 
collaborative projects for pharmaceutical and 
biotechnology organisations engaged in the discovery 
and validation of new drug and biomarker targets. The 
pharmacogenomics platform builds on proprietary RNA 
and DNA amplification technology and highly sensitive 
amplification kits to offer multi system transcriptional 
profiling. 
We work with major pharmaceutical and biotech 
companies to develop preclinical and clinical biomarkers 
to measure the effect of a drug on targeted tissue. 
Our accumulated data allows us to offer a focussed 
understanding of differing patient group’s response 
to drug treatment, allowing treatment regimens to be 
personalised to patients’ need which, if successful, will 
enhance the chances of a successful outcome of the 
clinical trial.
During the year, the division has continued to build up its 
niche small tissue expertise and to enhance its offering 
using laser capture microscopy (LCM). 
The division portfolio includes its expertise in developing 
and running tests for blood based biomarkers. We offer 
a proprietary test for the JAK2 allele burden marker from 
our GcLP certified facility.
The current period saw a slight weakening of Service 
income to £1.1m (2015: £1.3m). This was accounted for 
by a change in activity by an international pharma 
client moving from committing to an agreed full time 
equivalent (fte) programme towards a service model. This 
change was followed by the Company being granted 
Preferred Supplier Status. Our fte programme delivered 
first class quality results for our client and we fully 
expect that income for the current period will show an 
improvement in the coming period.
OPERATIONAL PERFORMANCE CONTINUED
genedrive plc Annual Report 2016
16
Page Title at start: Content Section at start: FINANCIAL REVIEW
On June 23 we announced a proposed placing to raise 
£6.5m (£6.0m net) by means of conditional placing with 
new and existing investors of 8,125,000 shares. Calculus 
Capital acted as cornerstone investor, subscribing 
for 3,125,000 shares. The placing was approved by 
shareholders on 11 July 2016.
In addition to completing the Placing process, the 
Company has worked with the Global Health Investment 
Fund (the GHIF) to agree the amended terms of the 
Collaboration and Convertible $8m Bond agreement 
entered into in July 2014. These amendments, which 
came into effect on 25 July 2016 and which are detailed 
in this Annual Report, allow for a two year extension of 
the maturity date for the bonds as well as a deferral of 
interest payments otherwise due up to July 2019. The 
amendments also adjust to £1.50 per share (from £4.89) 
the fixed conversion price in respect of $2m out of the 
$8m bonds. 
Overall we report revenues and other income for the year 
of £5.0m (2015: £4.5m). 
Operating loss was £5.4m (2015: £4.0m) following 
increased investment in Genedrive
®
 development and 
administrative costs to support the refocusing of the 
Company’s activities which is highlighted in this report.
The reported loss per share was 56.2p (2015: 30.2p).
Cash reserves at 30 June 2016 were £1.1m (2015: £4.9m), 
prior to £6.0m (net) received from the Placing of shares 
approved on 25 July 2016.
The Company’s annual audit was completed 1 November 
2016 by PriceWaterhouseCoopers, Chartered Accountants, 
and their audit report is included in this Annual Report.
Outlook
Our report last year highlighted the Company’s 
achievements in developing the Genedrive
®
 platform 
on very modest resources by comparison with peer 
developments. In this subsequent period, we have 
continued the process of re-focusing on the significant 
and fast-growing global molecular diagnostics 
opportunity we see as available to us. The period of 
scrutiny which has accompanied the management 
changes has increased our confidence in the technical 
quality of the underlying Genedrive
®
 platform. We have 
strengthened our investment in delivering reliable and 
accurate tests for the MTB/RIF and HCV infectious disease 
markets. With regard to the roll out of our MTB/RIF test in 
India, we are early in our launch phase and cannot yet be 
clear about the timescale within which user acceptance 
in India will be demonstrated and when growth in sales 
will commence. 
With the increased funding now available to the 
Company, we are confident that we will deliver 
momentum in the roll out of our programmes during 
the coming financial year. We see positive performance 
in Genedrive
®
 across a wide range of applications and 
targets which gives us confidence that we can make 
progress in winning partnerships to develop assays for 
the Genedrive
®
 platform and win new and extended 
development programmes to fund new Genedrive
®
 
tests. We believe that these activities will generate 
enhanced income in the year ahead and demonstrate 
the position which the Genedrive
®
 platform can secure 
in the increasingly attractive near patient, decentralised 
molecular diagnostics market.
Financial Statements Governance Strategic Report 
 genedrive plc Annual Report 2016
 17
Page Title at start: Content Section at start:
Financial review KEY PERFORMANCE INDICATORS
Group revenue Preclinical Services 
revenue
Pharmacogenomic
Services revenue 
Preclinical Research
Services at £2.0m
revenue from £2.3m
Preclinical Research
Services at £1.1m
revenue from £1.3m
Signiﬁcant growth 
from Genedrive
®
Development income
£1.1m
2016
£1.3m
2015
£4.5m
2015
£5.0m
2016
£2.3m
2015
£2.0m
2016
Research and
Development costs 
Research and 
Development costs 
grew in 2016 
to £4.8m 
Results after tax
Loss after tax, 
development 
and admin costs 
exceeded contribution 
from sales to report 
operating loss of £5.4m
Cash reserves 
£2.9m
2015
£4.8m
2016
£4.9m
2015
(£4.0m)
2015
£1.1m
2016
(£5.4m)
2016
Cash reserves of 
£1.1m at year end 
supplemented 
by £6.0m net proceeds 
of Placing in July 2016
Diagnostics (Genedrive
®
) 
revenue
Genedrive development
collaboration delivered 
£1.9m income up from
£0.9m
£0.9m
2015 £1.9m
2016
Administration costs 
Administration costs 
amounted to  £2.4m
£1.7m
2015
£2.4m
2016
We report a significant growth in overall income, driven by Genedrive
®
 
development income. Services income was down in the period. We report 
continued increase in development expenditure and increased administration 
costs as the Company focuses on the launch of the Genedrive
®
 molecular 
diagnostics platform.
genedrive plc Annual Report 2016
18
Page Title at start: Content Section at start:
Key performance 
indicators PRINCIPAL RISKS AND UNCERTAINTIES
For the year ended 30 June 2016
The Board meets regularly to review operations and 
to discuss risk areas. Details of the financial risks are 
disclosed in Note 21 to the financial statements. The 
Directors regularly assess and monitor the business risks 
faced by the Group. Risk is an inherent feature of business 
and set out below are some key risks, together with 
associated mitigating factors. This list does not purport to 
be exhaustive.
Development risk
The Group undertakes significant development activity with 
the aim of commercialising new products and services. 
There can be no guarantee that the product development 
activity will enable the programmes to accurately match 
customer requirements or meet the technical and 
intellectual property hurdles required for a successful 
commercial launch. The Group seeks to mitigate this risk 
by ensuring, over time, that development programmes are 
planned and undertaken by staff with the requisite skills. 
The Group monitors industry trends and customer needs 
to ensure that its development targets remain relevant. The 
Group’s services to clients relate to projects which are also 
subject to development risk. The Board regularly monitors 
the client profile and seeks to broaden the client base 
where possible. Further information on significant clients is 
detailed in Note 2 to the financial statements.
Going Concern review
On 23 June 2016, the Company received approval for a 
£6.5m Placing which was completed after the year end on 
11 July 2016. The Board has undertaken a detailed review of 
the Company’s working capital requirements and is satisfied 
that it has sufficient resources to conduct its operations 
planned for the forthcoming 12 month period.
Quality Assurance and Regulatory risk
The Group operates in a regulated industry and maintains 
significant investment in its Quality Assurance systems. 
In respect of its services, the Group is accredited with 
GcLP Certification. In respect of its products, the Group is 
registered to ISO 13485 Certification and its tests require CE-
IVD certification. There can be no guarantee that the Group’s 
products or services will be able to obtain or maintain the 
necessary approval or certification for the orderly conduct 
of its business. Approvals can require evaluation of data 
relating to safety, quality and efficacy standards. The 
Group seeks to mitigate regulatory risk by conducting its 
operations within recognised quality assurance standards 
and by undergoing external assessment.
Manufacturing risk
On commencing the supply of products, (Genedrive
®
 
units and assays) the Group is dependent on two key 
suppliers for the timely delivery of product at appropriate 
quality and prices. One key supplier is based in the Far 
East and one key supplier is based in the UK. Whilst there 
is some scope for undertaking in-house manufacture (for 
low volume/R&D use) of some components of the supply 
chain, it is unlikely that dual sourcing of supply will be 
achievable in the short term, although the manufacturing 
risk is likely to ameliorate as volumes increase.
Management and Employees
The Group’s future success is dependent on its 
management team and staff. There is an on-going risk 
that staff will leave to join competitor companies. The 
Group seeks to mitigate this risk by establishing effective 
management organisation and leading staff incentive 
schemes.
Economic risk
Successful introduction of new products for the detection 
of infectious diseases is likely to require in-country 
approval and commitment by Government health 
systems or international aid organisations to fund new 
diagnostics strategies. There can be no guarantee that 
this funding will be available and, in the current economic 
climate, clients’ plans may be subject to changes which 
may adversely affect the financial performance of the 
Group. Changes in legislative requirements may impact 
on our ability to launch in new markets. The Group seeks 
to mitigate this risk by operating a diversified business 
model across various technologies and territories. This 
business model is currently under review.
On 23 June 2016, a referendum was held in the UK and 
the outcome of the vote determined that the UK would 
leave the EU. At the time of signing of the Annual Report 
the details of how and when the UK will leave the EU, and 
its effect on the financial markets, are unclear and as such 
it is not possible to estimate the impact of the event.
Approved by the Board
Dr. Ian Gilham
Chairman
1 November 2016
Financial Statements Governance Strategic Report 
 genedrive plc Annual Report 2016
 19
Page Title at start: Content Section at start:
Principal risks and 
uncertainties genedrive plc Annual Report 2016
20
BOARD OF DIRECTORS
Ian Gilham, Ph.D.
Chairman (56)
Ian was appointed a Director on 24 November 2014 
and as Non-executive Chairman on 11 May 2015. 
He is currently non-executive chairman of three 
life sciences companies, including AIM quoted 
Horizon Discovery Group Plc, which provides gene-
editing tools to support translational genomics 
and the development of personalised medicine, 
Multiplicom NV focussed on the development 
and commercialisation of next generation DNA 
sequencing products and Biosurfit SA, focused on 
development and commercialisation of point of 
care diagnostic products. Ian also serves as non-
executive director of Vernalis plc, a commercial 
stage pharmaceuticals business. Dr. Gilham was 
formerly Chief Executive Officer of Axis-Shield Plc.
David Budd
Chief Executive Officer (48)
David was appointed a Director and Chief 
Executive on March 1, 2016. He has over 20 years 
of international commercial and operational 
experience in the diagnostics and medical devices 
field. He previously served as General Manager of 
Leica Biosystems Amsterdam and Commercial 
Director at Leica Biosystems Newcastle, with global 
responsibility for marketing, product development 
and commercial launches for diagnostic tests. 
Prior to Leica, David’s roles included Point of Care, 
molecular, and central laboratory marketing and 
commercialisation responsibilities at Siemens 
Healthcare Diagnostics, Bayer Diagnostics and 
Visible Genetics.
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Governance Board of Directors Financial Statements Governance Strategic Report 
 genedrive plc Annual Report 2016
 21
3
 John Rylands
Finance Director (62)
John originally joined Epistem as an investor and 
Non-executive Director, and in 2005, he took 
over his current role. John provided corporate 
finance advice to private companies before joining 
Epistem. Prior to 1999 he was an investor in and 
consultant to the SDS group of companies. John 
holds a degree in Economics and Accountancy 
from Manchester University and is a Fellow of 
ICAEW. John will be standing down as a Director at 
the conclusion of the 2016 AGM.
4
 Catherine Booth, Ph.D.
Managing Director,  
Contract Research Services (51)
Catherine is a co-founder of Epistem and prior to 
starting Epistem she worked for ten years with 
Prof. Chris Potten at the Paterson Institute. Whilst 
at the Paterson Institute she developed many 
pre-clinical assays. This knowledge is at the core of 
the Epistem Contract Research Service. Catherine 
received her Ph.D. from Emmanuel College, 
University of Cambridge.
5
 Robert Nolan, Ph.D.
Non-executive Director (73)
Robert has been a Non-executive Director of the 
Company since 2004. Having gained US post 
doctoral experience at Dartmouth Medical School 
and MIT, he joined SANDOZ Forschungsinstitut in 
Vienna in 1972 to work on mechanism of antibiotic 
action and was also coopted on to Sandoz 
global strategic planning group. He joined ICI 
pharmaceuticals (which became AstreaZeneca) 
in 1979 to head up a natural products discovery 
programme and subsequently joined their 
product licensing group. He brings with him a 
wealth of expertise in partnering and licensing 
negotiations with both small biotechnology and 
large pharmaceutical companies. Prior to his 
retirement he was Director, Global Licensing, at 
AstraZeneca. He is also a non-executive director of 
Phico Therapeutics Ltd.
6
 Roger Lloyd, Ph.D.
Non-executive Director (68)
Roger joined the Board as a Non-executive 
Director on 1 July 2007. Trained as a biochemist, 
Roger has 37 years experience in the healthcare 
and biotechnology sector, particularly in the areas 
of strategic planning and business development. 
International business management with ICI Plc 
and AstraZeneca Plc included living and working 
in the United States and Germany, and having 
territorial responsibilities for EU, Japan, Korea, 
Mexico and the Middle East. As executive director 
of Global Licensing at AstraZeneca he personally 
completed 24 transactions. He operates as a Board 
Adviser in the Biotech sector.
7
 Allan Brown, Ph.D.
Chief Operating Officer (55) 
Diagnostics Division 
Allan has spent his career in the Life Sciences/
diagnostics industry. During a 17 year period with 
Tepnel Life Sciences plc, latterly as Divisional 
Managing Director, Allan’s technical management 
roles covered product development through 
to commercial product launch; his commercial 
management roles covered sales and business 
development and M&A. After leaving Tepnel/Gen-
Probe, Allan joined the leading Sample and Assay 
Technologies company, QIAGEN N.V., in Manchester 
and managed the final development and launch 
of the company’s first US FDA approved products, 
helping secure the site as QIAGEN’s Global Centre 
of Excellence for molecular diagnostic product 
development. Allan was appointed to the Board on 
1 February 2014.
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22
DIRECTORS’ REPORT
For the year ended 30 June 2016
The Directors present their report for genedrive plc (‘the Company’) and its subsidiaries (together ‘genedrive plc’ or ‘the 
Group’) for the year ended 30 June 2016. 
Results and dividends
The trading results for the year and the Group’s financial position at the end of the financial year are shown in the 
financial statements on pages 32 – 70 of this report.
Going concern
After due consideration, the Directors have a reasonable expectation that the Group will have access to adequate 
resources to continue in operational existence for the foreseeable future. Whilst mindful of the financing risk detailed 
above, the Directors continue to adopt the going concern basis in preparing the financial statements.
Directors and their interests in shares
The Directors of the Company who held office throughout the year, unless otherwise stated, and their interests in the 
share capital of the Company, including family and pension scheme trust interests, were as follows:
30 June 
2016
1 July 
2015
Ian Gilham 20,500 –
David Budd (appointed 1 March 2016) – –
Catherine Booth 988,126 987,568
Allan Brown 26,257 2,145
Roger Lloyd – –
Robert Nolan 5,065 5,065
John Rylands 221,569 197,466
Matthew Walls (resigned 23 October 2015) N/A 13,213
Significant shareholdings
In addition to the Directors’ holdings, at the date of this report and taking into account the recent Placing of ordinary 
shares, the Company has been advised of the following interests of over 3% of the issued ordinary shares:
Percentage 
holding
Calculus Capital 16%
ODEY Asset Management 13%
River and Mercantile Asset Management 6%
M&G Investments 5%
Amati Global 4%
Page Title at start: Content Section at start:
Directors’ report Financial Statements Governance Strategic Report 
 genedrive plc Annual Report 2016
 23
Directors’ and Officers’ liability insurance
Qualifying indemnity insurance cover has been arranged in respect of the personal liabilities which may be incurred by 
Directors and Officers of the Group during the course of their service with the Group. This insurance has been in place 
during the year and on the date of this report.
Research and development
During the year ended 30 June 2016 the Group has incurred research and development costs of £4,836k (2015: £2,942k).
Expenditure on Intangible Assets (relating to research and development activities) was £16k (2015: £550k) as detailed in 
Note 10 to the financial statements. 
A review of this expenditure is included within the Strategic Report on pages 2 to 19.
Post balance sheet events
Following the year end, on 11 July 2016, shareholders approved the £6.5m (£6.0m net of expenses) Placing of new 
ordinary shares in the Company which were admitted to AIM on 12 July 2016.
On 25 July 2016, the Company changed its name to genedrive plc.
Statement of Directors’ responsibilities
The Directors are responsible for preparing the Annual Report, and the financial statements in accordance with 
applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors 
have prepared the Group and Company financial statements in accordance with International Reporting Standards 
(IFRSs) as adopted by the EU. Under Company law, the Directors must not approve the financial statements unless they 
are satisfied that they give a true and fair view of the state of affairs of the Group and the Company and of the profit or 
loss of the Group for the period.
In preparing those financial statements, the Directors are required to:
 l select suitable accounting policies and then apply them consistently;
 l make judgements and accounting estimates that are reasonable and prudent;
 l state whether applicable IFRS’s as adopted by the EU have been followed, subject to any material departures 
disclosed and explained in the Financial Statements; and
 l prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company 
will continue in business.
The Directors confirm that they have complied with the above requirements in preparing the financial statements.
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24
DIRECTORS’ REPORT
For the year ended 30 June 2016
CONTINUED
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the 
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and 
the Group and enable them to ensure that the financial statements comply with the Companies Act 2006 and Article 4 
of the IAS Regulation. They are also responsible for safeguarding the assets of the Company and the Group and hence 
for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the corporate and financial information included on 
the Company’s website. Legislation in the UK governing the preparation and dissemination of financial statements may 
differ from legislation in other jurisdictions.
Other information included in the Report
Other information relevant to the Directors’ Report has been incorporated elsewhere in the 2016 Report as follows:
Directors remuneration (Directors’ Remuneration Report) – pages 25-27
Corporate governance disclosures (Corporate Governance Report) – pages 28-29
Future developments (Strategic Report) – pages 2-19
Financial Instruments and risk management (notes to the Accounts) – pages 36-70
Provision of information to auditors
The Directors who were members of the Board at the time of approving the Directors’ Report are listed on page 71. 
Having made enquiries of fellow Directors and of the Group’s auditors, each of these Directors confirms that:
 l to the best of each Director’s knowledge and belief, there is no information (that is, information needed by the 
Group’s auditors in connection with preparing their report) of which the Group’s auditors are unaware; and
 l each Director has taken all the steps that a Director might reasonably be expected to be taken to be aware of 
relevant audit information and to establish that the Group’s auditors are aware of that information.
Independent auditors
The auditors, PricewaterhouseCoopers LLP, have indicated their willingness to continue in office and a resolution that 
they be re-appointed will be proposed at the 2016 AGM.
Approved by the Board
H J J Rylands
Company Secretary
1 November 2016
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 25
DIRECTORS’ REMUNERATION REPORT
For the year ended 30 June 2016
Introduction
This report has been prepared in accordance with the requirements of Schedule 2 Pt1 to the Companies Act 2006 
(‘the Schedule’) and also meets the relevant requirements of the Listing Rules of the Financial Services Authority and 
describes how the Board has applied the Principles of Good Governance relating to Directors’ Remuneration. 
Section 497 of the Act requires the auditors to report to the Company’s members on the ‘auditable part’ of the 
Directors’ Remuneration Report and to state whether, in their opinion, that part of the report has been properly 
prepared in accordance with Part 3 of the Schedule. This report has therefore been divided into separate sections for 
audited and unaudited information.
Unaudited information
Remuneration policy
The Executive Directors have written terms of engagement with no fixed expiry date.
Executive remuneration packages are prudently designed to attract, motivate and retain Directors of the necessary 
calibre and to reward them for enhancing value to shareholders. The performance measurement of the Executive 
Directors and key members of senior management and the determination of their annual remuneration package is 
undertaken by the Remuneration Committee.
Executive Directors’ service contracts are subject to six months’ notice of termination.
Executive Directors are entitled to accept appointments outside the Company provided the Board’s permission is 
sought.
The remuneration of the Non-executive Directors is determined by the Board within limits set out in the Articles of 
Association. 
Non-executive Directors’ terms of engagement
The Non-executive Directors have specific terms of engagement. Their remuneration is determined by the Board. In the 
event that a Non-executive undertakes additional assignments for the Company, the Non-executive’s fee will be agreed 
by the Company in respect of each assignment.
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Directors’ remuneration 
report genedrive plc Annual Report 2016
26
DIRECTORS’ REMUNERATION REPORT
For the year ended 30 June 2016
CONTINUED
Audited information
Aggregate Directors’ remuneration
Salary
and fees
£
Bonus
£
Benefits
in kind
£
Pension
£
2016
total
£
2015
total
£
Executive
David Budd (appointed 1 March 2016) 71,050 25,000 382 4,065 100,497 –
Catherine Booth 107,847 7,500 425 32,105 147,877 143,561
Allan Brown 132,591 7,500 547 25,113 165,751 158,542
John Rylands 92,517 7,500 1,641 49,550 151,208 140,847
Matthew Walls (resigned 23 October 2015) 358,316 – 1,091 – 359,407 344,191
Non-executive
Ian Gilham 65,000 – – – 65,000 40,249
David Evans (resigned 11 May 2015) – – – – – 26,250
Roger Lloyd 24,000 – – – 24,000 24,000
Robert Nolan 24,000 – – – 24,000 24,000
875,321 47,500 4,086 110,833 1,037,740 901,640
Directors’ share options
The fair value of share options amortised in the year is detailed in Note 5 to the accounts.
Details of the options for Directors who served during the year are as follows:
As at
1 July 2015
Exercised/
Lapsed
Options
granted
As at
30 June 
2016
Exercise
price
Earliest
exercise date Expiry date
Executive –
Catherine Booth
(2)
15,528 (15,528) – – £1.20 Exit 09/01/2016
David Budd – – 244,444 244,444 £0.90 07/04/2019 06/04/2026
John Rylands
(3)
83,333 – – 83,333 £1.20 04/04/2007 09/01/2018
John Rylands
(1)
127,847 – – 127,847 £1.20 04/04/2007 09/01/2018
Matthew Walls
(4)
177,653 – – 177,653 £1.24 31/10/2010 27/03/2017
Matthew Walls
(5)
80,644 – – 80,644 £1.24 31/10/2010 27/03/2017
Matthew Walls
(6)
254,631 – – 254,631 £3.73 30/09/2013 29/03/2021
Matthew Walls
(6)
5,369 – – 5,369 £3.60 30/09/2013 10/05/2021
Matthew Walls
(7)
23,758 – – 23,758 £5.50 27/03/2016 25/03/2023
Allan Brown
(2)
200,000 – – 200,000 £3.25 25/03/2017 25/03/2024
Non-executive
Ian Gilham
(6)
100,000 – – 100,000 £2.78 17/12/2018 16/12/2025
Ian Gilham – – 50,000 50,000 £2.78 07/04/2019 06/04/2026
Roger Lloyd
(6)
30,000 – – 30,000 £2.78 17/12/2018 16/12/2025
Robert Nolan
(1a)
78,000 – – 78,000 £1.29 31/05/2005 30/03/2017
Robert Nolan
(1)
15,528 (15,528) – – £1.20 10/01/2006 –
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 genedrive plc Annual Report 2016
 27
1 Unapproved stand-alone agreement, no performance criteria.
1a Unapproved stand-alone agreement, no performance criteria, on 30 March 2015 expiry date extended by two years.
2 EMI Company scheme, no performance criteria. 
3 EMI stand-alone scheme, no performance criteria.
4 EMI and Unapproved stand-alone scheme exercisable prior to 4 February 2017.
5 EMI stand-alone scheme exercisable prior to 4 February 2017.
6 2007 Epistem Share Option Scheme exercisable prior to 4 February 2017.
Share Investment Plan 
The details of the Epistem Share Investment Plan are outlined in Note 19 (B) to the accounts. The cost of SIP matching 
shares arising in the year is detailed in Note 5 to the accounts. The Directors’ interests in the shares of the Company 
include shares acquired under the Share Investment Plan as follows:
Partnership
Shares
No
Cost of 
Matching 
Shares
£
Matching
Shares
No
Total
SIP Shares
30 June 
2016
No
SIP Shares
30 June 
2015
No
Catherine Booth 3,780 22,000 7,559 11,339 7,568
Allan Brown 1,975 7,250 3,950 5,925 2,154
John Rylands 3,780 22,000 7,559 11,339 7,568
Matthew Walls – – – – 7,568
Approved by the Board
Dr. Ian Gilham
Chairman
1 November 2016
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28
CORPORATE GOVERNANCE REPORT
For the year ended 30 June 2016
The Group is subject to the continuing requirements of the AIM Rules and is committed to adhering to corporate 
governance standards appropriate for a company of its size. Under the rules of the London Stock Exchange AIM Market, 
the Group is not required to comply with the UK Corporate Governance Code. This statement sets out below how the 
Board has applied the principles of good corporate governance in its management of the business in the year ended 30 
June 2016. 
The Group follows the Quoted Companies Alliance guidelines and has Remuneration, Audit and Nomination 
committees with written terms of reference and a schedule of matters reserved for the Board, which generally meets 
each month.
The Board has established an Audit Committee, a Remuneration Committee and a Nomination Committee. The 
membership of these committees and attendance at meetings is as follows:
Audit
Committee
Remuneration
Committee
Nominations
Committee
Ian Gilham (Non-executive Chairman) 2 3 1
Robert Nolan (Non-executive Director) 2 3 1
Roger Lloyd (Non-executive Director), Remuneration/Nominations Committees only N/A 3 1
Remuneration Committee
The Remuneration Committee reviews the scale and structure of the Executive Directors’ and senior management’s 
remuneration and the terms of their service contracts. The remuneration and terms of appointment of the Non-
executive Directors are set by the Board. The Remuneration Committee also approves the issue of share options under 
schemes approved by the Board.
None of the Committee members have any personal financial interest (other than as shareholders), conflicts of interest 
arising from cross-directorships or day-to-day involvement in the running of the business. No Director plays a part in any 
final decision about his or her own remuneration.
Audit Committee
The Audit Committee has responsibility for receiving accounts and reviewing reports from the management and 
the Company’s auditors, relating to Annual and Interim Accounts and the accounting and internal controls in place 
throughout the Group. At this stage of the Group’s size and development the Committee has decided that an internal 
audit function is not required as the Group’s internal controls system in place is appropriate for its size. The Audit 
Committee has met twice during the year.
Nomination Committee
The Nomination Committee has responsibility for reviewing the size, structure and composition of the Board, as well as 
retirements and appointments of replacement and additional Directors, and for making appropriate recommendations 
to the Board.
Relations with shareholders
The Group recognises the importance of communicating with its shareholders to ensure that its strategy and 
performance is understood and that it remains accountable to shareholders. The Board as a whole is responsible for 
ensuring that a satisfactory dialogue with shareholders takes place, while the Chairman and Chief Executive ensure that 
the views of the shareholders are communicated to the Board as a whole. The Board ensures that the Group’s strategic 
plans have been carefully reviewed in terms of their ability to deliver long-term shareholder value. 
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Internal controls
The Board acknowledges its responsibility for establishing and maintaining the Group’s system of internal controls 
and will continue to ensure that management keeps these processes under regular review and improves them where 
appropriate. The system of internal controls is designed to manage, rather than eliminate, the risk of failure to achieve 
business objectives and can provide only reasonable and not absolute assurance against material misstatement or loss. 
Social, environmental and ethical matters
The Board recognises the growing awareness of social, environmental and ethical matters and it endeavours to take 
into account the interests of the Group’s stakeholders, including its investors, employees, suppliers and business 
partners, when operating the business.
Employment
At a subsidiary level the individual company has established policies which address key corporate objectives in the 
management of employee relations, communications and employee involvement, training and personal development 
and equal opportunities.
Health, safety and environmental issues
The Board recognises its legal responsibilities to ensure the well-being, safety and welfare of its employees and to 
maintain a safe and healthy working environment for them and for its visitors and sub-contractors. Health and Safety is 
on the agenda for regularly scheduled Board meetings.
By their nature, the Group’s regular operations are judged to have a low environmental impact and are not expected to 
give rise to any significant, inherent environmental risks over the next 12 months.
The Group is committed to maintaining high standards in implementing appropriate health, safety and environmental 
protection policies. Waste materials are recycled where possible, and hazardous waste is catalogued and handled by 
licensed specialist disposal companies.
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30
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF GENEDRIVE PLC
Report on the group financial statements
Our opinion
In our opinion, genedrive plc’s group financial statements (the ‘financial statements’):
 l give a true and fair view of the state of the group’s affairs as at 30 June 2016 and of its loss and cash flows for the year 
then ended;
 l have been properly prepared in accordance with International Financial Reporting Standards (‘IFRSs’) as adopted by 
the EU; and
 l have been prepared in accordance with the requirements of the Companies Act 2006.
What we have audited
The financial statements, included within the Annual Report, comprise:
 l the consolidated balance sheet as at 30 June 2016;
 l the consolidated statement of profit or loss and comprehensive income for the year then ended;
 l the consolidated statement of cash flows for the year then ended;
 l the consolidated statement of changes in equity for the year then ended; and
 l the notes to the financial statements, which include a summary of significant accounting policies and other 
explanatory information.
Certain required disclosures have been presented elsewhere in the Annual Report, rather than in the notes to the 
financial statements. These are cross-referenced from the financial statements and are identified as audited.
The financial reporting framework that has been applied in the preparation of the financial statements is IFRSs as 
adopted by the EU, and applicable law.
In applying the financial reporting framework, the Directors have made a number of subjective judgements, for 
example, in respect of significant accounting estimates. In making such estimates, they have made assumptions and 
considered future events.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion, the information given in the Strategic Report and the Directors’ Report for the financial year for which 
the financial statements are prepared is consistent with the financial statements.
Other matters on which we are required to report by exception
Adequacy of information and explanations received
Under the Companies Act 2006 we are required to report to you if, in our opinion, we have not received all the 
information and explanations we require for our audit. We have no exceptions to report arising from this responsibility. 
Directors’ remuneration
Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures of Directors’ 
remuneration specified by law are not made. We have no exceptions to report arising from this responsibility. 
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Responsibilities for the financial statements and the audit
Our responsibilities and those of the Directors
As explained more fully in the Statement of Directors' responsibilities set out on pages 23 to 24, the directors are 
responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and 
International Standards on Auditing (UK and Ireland) (‘ISAs (UK and Ireland)’). Those standards require us to comply with 
the Auditing Practices Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the Company’s members as a body in 
accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose. We do not, in giving these 
opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or 
into whose hands it may come save where expressly agreed by our prior consent in writing.
What an audit of financial statements involves
We conducted our audit in accordance with ISAs (UK and Ireland). An audit involves obtaining evidence about 
the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial 
statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: 
 l whether the accounting policies are appropriate to the Group’s circumstances and have been consistently applied 
and adequately disclosed; 
 l the reasonableness of significant accounting estimates made by the Directors; and 
 l the overall presentation of the financial statements. 
We primarily focus our work in these areas by assessing the Directors’ judgements against available evidence, forming 
our own judgements, and evaluating the disclosures in the financial statements.
We test and examine information, using sampling and other auditing techniques, to the extent we consider necessary 
to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through testing the effectiveness of 
controls, substantive procedures or a combination of both. 
In addition, we read all the financial and non-financial information in the Annual Report to identify material 
inconsistencies with the audited financial statements and to identify any information that is apparently materially 
incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. 
If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our 
report.
Other matter
We have reported separately on the Company financial statements of genedrive plc for the year ended 30 June 2016.
Hazel Macnamara (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Manchester
1 November 2016
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32
CONSOLIDATED STATEMENT OF PROFIT OR LOSS  
AND COMPREHENSIVE INCOME
For the year ended 30 June 2016
Notes
2016
£’000
2015
£’000
Revenue 3,094 3,703
Other income – development grant funding 1,969 814
Revenue and other income 2 5,063 4,517
Contract costs (3,285) (3,933)
Research and development costs (4,836) (2,942)
Administrative costs (2,368) (1,682)
Operating loss 3 (5,426) (4,040)
Finance (costs)/income 6 (1,071) 616
Loss on ordinary activities before taxation (6,497) (3,424)
Taxation on ordinary activities 7 582 399
Loss for the financial year (5,915) (3,025)
Other Comprehensive Income for the year – –
Total Comprehensive Expense for the financial year (5,915) (3,025)
Loss per share (pence)
– Basic 9 (56.2)p (30.2)p
– Diluted 9 (56.2)p (30.2)p
All of the activities of the Group are classed as continuing.
The Company has taken advantage of section 408 of the Companies Act 2006 not to publish its own Income 
Statement.
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CONSOLIDATED BALANCE SHEET
As at 30 June 2016
Notes 
2016 
£’000 
2015
£’000
Assets
Non-current assets
Plant and equipment 11 713 805
Intangible assets 10 6,273 7,191
Deferred tax assets 12 – 30
6,986 8,026
Current assets
Inventories 13 202 163
Trade and other receivables 14 2,797 2,191
Current tax assets 757 685
Cash and cash equivalents 15 1,114 4,928
4,870 7,967
Liabilities
Current liabilities
Deferred revenue 16 88 50
Trade and other payables 17 1,774 1,123
Deferred consideration payable in shares 18 – 1,250
1,862 2,423
Net current assets 3,008 5,544
Total assets less current liabilities 9,994 13,570
Non-current liabilities
Deferred consideration payable in shares 18 1,250 –
Convertible Bond 19 4,991 4,025
6,241 4,025
Net assets 3,753 9,545
Capital and reserves
Called-up equity share capital 24 158 158
Share premium account 25 20,088 20,088
Employee share incentive plan reserve 25 (240) (196)
Share options reserve 25 1,281 1,197
Reverse acquisition reserve 25 (2,484) (2,484)
Retained earnings 25 (15,050) (9,218)
Total shareholders’ equity 3,753 9,545
The notes on page 36 to 70 form an integral part of these consolidated financial statements. These financial statements 
were approved by the Directors and authorised for issue on 1 November 2016 and are signed on their behalf by:
Dr. Ian Gilham   H J J Rylands genedrive plc
Chairman   Finance Director Company number: 06108621
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CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2016
Share
capital
£’000
Share
premium
account
£’000
Employee 
share
incentive
plan reserve
£’000
Share
options
reserve
£’000
Reverse 
acquisition 
reserve
£’000
Retained
earnings
£’000
Total
£’000
Balance at 1 July 2014 150 18,616 (228) 1,032 (2,484) (6,222) 10,864
Allotment of ordinary shares 7 1,393 – – – – 1,400
Purchase of own shares (SIP) – – 32 – – – 32
Exercise of share options 1 79 – (29) – 29 80
Forfeit of share options – – – (11) – – (11)
Recognition of equity-settled share-based 
payments – – – 205 – – 205
Total comprehensive expense for the year – – – – – (3,025) (3,025)
At 30 June 2015 158 20,088 (196) 1,197 (2,484) (9,218) 9,545
Balance at 1 July 2015 158 20,088 (196) 1,197 (2,484) (9,218) 9,545
Purchase of own shares (SIP) – – (44) – – – (44)
Lapsed share options – – – (83) – 83 –
Forfeit of share options – – – (6) – – (6)
Recognition of equity-settled share-based 
payments – – – 173 – – 173
Total comprehensive expense for the year – – – – – (5,915) (5,915)
At 30 June 2016 158 20,088 (240) 1,281 (2,484) (15,050) 3,753
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CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2016
2016
£’000
2015
£’000
Cash flows from operating activities
Operating loss for the year (5,426) (4,040)
Depreciation, amortisation and impairment 1,174 387
ATL Research credits (151) (202)
Share-based payment expense 167 194
Operating loss before changes in working capital and provisions (4,236) (3,661)
(Increase) in inventories (39) (163)
(Increase) in trade and other receivables (606) (1,066)
Increase/(decrease) in deferred revenue 38 (36)
Increase in trade and other payables 651 107
Net cash outflow from operations (4,192) (4,819)
Tax received 691 1,513
Net cash outflow from operating activities (3,501) (3,306)
Cash flows from investing activities 
Finance income 7 16
Acquisition of plant and equipment and intangible assets (164) (758)
Net cash outflow from investing activities (157) (742)
Cash flows from financing activities
Proceeds from issue of convertible bond – 4,700
Costs of issue of convertible bond – (100)
Finance costs – interest paid (304) (212)
Exercise of share options – 80
Share Investment Plan – purchase of own shares (44) (22)
Net (outflow)/inflow from financing activities (348) 4,446
Net (decrease)/increase in cash equivalents (4,006) 398
Effects of exchange rate changes on cash and cash equivalents 192 292
Cash and cash equivalents at beginning of year 4,928 4,238
Cash and cash equivalents at end of year 1,114 4,928
Analysis of net funds
Cash at bank and in hand 1,114 4,928
Net funds 1,114 4,928
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36
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
General information
genedrive plc (‘the Company’) is a company incorporated in the UK which changed its name from Epistem Holdings Plc 
on 22 July 2016. 
genedrive plc and its subsidiaries (together, ‘the Group’) is a molecular diagnostics business developing and 
commercialising a low cost, rapid, versatile, simple to use and robust point of need or point of need diagnostics 
platform for the diagnosis of infectious diseases and for use in patient stratification (genotyping), pathogen detection 
and other indications. The Genedrive® platform and MTB/RIF test have been launched in India and a Genedrive® HCV 
test has been successfully assessed by the Institut Pasteur, Paris. The Group also provides contract research services to 
drug development companies under the Epistem brand name.
genedrive plc is a public limited company, whose shares are listed on the London Stock Exchange Alternative 
Investment Market.
1. Significant accounting policies
This note provides a list of the principal accounting policies adopted in the preparation of these consolidated financial 
statements to the extent that they have not already been disclosed in the other notes below. The accounting policies 
set out below have, unless otherwise stated, been applied consistently to all periods represented in these consolidated 
financial statements.
Basis of accounting
The consolidated financial statements have been prepared in accordance with International Financial Reporting 
Standards (‘IFRS’) as adopted by the EU and therefore comply with Article 4 of the EU IAS Regulation, International 
Financial Reporting Interpretations Committee (‘IFRIC’) interpretations and with those parts of the Companies Act 2006 
applicable to companies reporting under IFRS.
The financial statements have been prepared on a historical cost basis as modified by the revaluation of financial assets 
and financial liabilities (including derivative instruments) at fair value through profit or loss.
The consolidated financial statements consolidate those of the Company and its subsidiaries (together referred to as 
the ‘Group’). They are presented in pounds sterling and all values are rounded to the nearest one thousand (£k) except 
where otherwise indicated. 
The Group funds its day-to-day working capital requirements through its bank resources. The Group’s forecasts and 
projections, which take into account the £6m net proceeds on the placing of ordinary shares completed on 11 July 2016 and 
taking account of reasonable alternative assumptions other than those upon which the forecast were based, show that the 
Group should be able to operate within the limit of the working capital resources available at the date of this report.
The preparation of financial statements in conformity with IFRS 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 consolidated financial statements are disclosed below:
 l Determining the value of Deferred Income and Expenditure requires an assessment of the duration of the contract 
to which the deferred income and expenditure relates, and inform decisions as to when to recognise revenue and 
whether to carry forward costs.
 l Determining the value of Intangible Assets requires a judgement about the extent to which the relevant asset will be 
brought into economic use by the Company. The filing of a Patent will generally lead to a judgement that the cost of 
filing the Patent will have future economic use. Research and Development expenditure will generally be expensed 
unless associated income can be identified.
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1. Significant accounting policies continued
 l Determining the fair value of share options requires a judgment as to the most appropriate valuation model to be 
used. In applying the model requires a judgement as to the most appropriate interest rate and volatility level of the 
market value of the Company’s shares.
 l Determining the market value of the Debt Component of the Convertible Bond requires the Board to make a 
judgement about the market rate of interest to apply to instrument of this nature.
 l Determining the value of a Derivative requires a judgement as to the most appropriate valuation model to be used. 
The Board seeks the opinion of experts in making this judgement.
 l Determining the fair value of share options requires a judgment as to the most appropriate valuation model to be 
used. In applying the model requires a judgement as to the most appropriate interest rate and volatility level of the 
market value of the Company’s shares.
Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing 
basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future 
periods affected.
Basis of consolidation
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or indirectly, to 
govern the financial and operating policies of an entity so as to obtain benefits from its activities. In assessing control, 
potential voting rights that are currently exercisable or convertible are taken into account. The financial statements 
of subsidiaries are included in the consolidated financial statements from the date that control commences until the 
date that control ceases. Inter-company transactions, balances and unrealised gains on transaction between Group 
companies are eliminated. Unrealised losses are also eliminated. Where necessary, amounts reported by subsidiaries 
have been adjusted to conform with the Group’s accounting policies.
On 16 March 2007, Epistem Holdings Plc merged with Epistem Limited, and on that date the shareholders of Epistem 
Limited exchanged their shares for equivalent shares in Epistem Holdings Plc. As Epistem Holdings Plc was newly 
incorporated at the time of the transaction under the terms of IFRS 3 ‘Business Combinations’, this transaction was 
accounted for as a reverse acquisition, on the basis that the shareholders of Epistem Limited gained a controlling 
interest in the Group. The financial statements therefore represent a continuation of the financial statements of Epistem 
Limited.
Revenue
Revenue is measured at the fair value of the consideration received or receivable and net of discounts and sales-related 
taxes.
Revenue recognition
a. Contract revenue
Contract revenue is recognised by reference to the stage of completion of the related transaction at the end of the 
reporting period. The Group recognises revenue when the amount of revenue can be reliably measured; when it is 
probable that future economic benefits will flow to the entity; and when specific criteria have been met for each of the 
group’s activities, as described in these accounting policies.
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NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
CONTINUED
1. Significant accounting policies continued
b. Collaboration and licensing revenue
Contractually agreed upfront payments and similar non-refundable payments in respect of collaboration or 
licence agreements which are not directly related to on-going research activity are recorded as deferred income 
and recognised as revenue over the anticipated duration of the agreement. Where the anticipated duration of the 
agreement is modified, the period over which revenue is recognised is also modified.
Non-refundable milestone and other payments that are linked to the achievement of significant and substantive 
technological or regulatory hurdles in the research and development process are recognised as revenue upon the 
achievement of the specified milestone.
Income which is related to on-going research activity is recognised as the research activity is undertaken, in accordance 
with the contract.
c. Other income – development grant funding
Income receivable in the form of Government grants to fund product development is recognised as development 
grant funding over the periods in which the Group recognises, as expenses, the related eligible costs which the grants 
are intended to compensate and when there is reasonable assurance that the Group will comply with the conditions 
attaching to them and that the income will be received. Government grants whose primary condition is that the Group 
should purchase or otherwise acquire non-current assets are recognised as deferred revenue in the Consolidated 
Balance Sheet and transferred to the Statement of Comprehensive Income on a systematic and rational basis over the 
useful lives of the related assets. 
Segment reporting
A segment is a group of assets, liabilities and operations engaged in providing products or services that are subject 
to risks and returns that are different from those of other parts of the business. Operating segments are reported in 
a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating 
decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has 
been identified as the Chief Executive Officer.
Research and development
Research expenditure is written off as it is incurred. Development expenditure is written off as it is incurred up to the 
point of technical and commercial validation. Thereafter, costs that are measurable and attributable to the project are 
carried forward as intangible assets, subject to having met the following criteria:
 l demonstration that the product will generate profitable future economic benefit and of an intention and ability to 
sell the product;
 l assessment of technical feasibility;
 l confirmation of the availability of technical, financial and other resources to complete the development;
 l management intends to complete the development so the product will be available for use; and
 l the expenditure attributable to the development can be reliably measured.
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1. Significant accounting policies continued
Intangible assets
Intangible assets are stated at cost less accumulated amortisation and any accumulated impairment losses. 
Amortisation is calculated so as to write off the cost of an intangible asset, less its estimated residual value, over the 
useful economic life of that asset, as follows:
 l Acquired intellectual property – the shorter of 5% straight line basis or their estimated useful life.
 l Developed intellectual property – the shorter of 10% straight line basis or their estimated useful life.
 l Patents – over the shorter of 17 years or their estimated useful lives on a straight line basis.
No amortisation is charged on those assets which are not yet available for use.
Plant and equipment
Plant and equipment are stated at cost less accumulated depreciation and any accumulated impairment losses. 
Depreciation is calculated so as to write off the cost of an asset, less its estimated residual value, over the useful 
economic life of that asset as follows:
Lab equipment – 25% reducing balance basis
Fixtures and fittings – 25% reducing balance basis
Other equipment – 25% reducing balance basis
Operating lease agreements
Rentals applicable to operating leases where substantially all of the benefits and risks of ownership remain with the 
lessor are charged against profits over the period of the lease. 
Impairment of non-financial assets
Intangible assets that have an indefinite useful life or intangible assets not ready to use are not subject to amortisation 
and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever 
events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss 
is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable 
amount is the higher of an asset’s fair value less costs of disposal and value in use. For the purposes of assessing 
impairment, assets are grouped at the lowest levels for which there are largely independent cash inflows (CGUs). Prior 
impairments of non-financial assets are reviewed for possible reversal at each reporting date.
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NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
CONTINUED
1. Significant accounting policies continued
Foreign currencies
Items included in the financial statements of each of the Group’s entities are measured using the currency of the 
primary economic environment in which each entity operates (‘the functional currency’). The consolidated financial 
statements are presented in ‘GBP’, which is the Group’s presentation currency. 
Transactions in foreign currencies are translated at the exchange rate ruling at the date of the transaction. Monetary 
assets and liabilities denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance 
sheet date. Non-monetary items carried at fair value and denominated in foreign currencies are retranslated at the 
rates prevailing on the date when fair value is determined. The foreign currency risks relating to assets and liabilities are 
detailed in Note 21.
Exchange differences arising on the settlement of monetary items and on the retranslation of monetary items are taken 
to the income statement within finance income or costs. Exchange differences arising on non-monetary items, carried 
at fair value, are included in the income statement within finance income or cost, except for such non-monetary items 
in respect of which gains and losses are recorded in equity.
Share-based payments
The Group issues equity-settled share-based payments to certain employees (including Directors). Equity-settled 
share-based payments are measured at fair value at the date of grant. 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, together with a 
corresponding increase in equity, based upon the Group’s estimate of the shares that will eventually vest.
Fair value is measured using the Black-Scholes pricing model. The expected life used in the model has been adjusted, 
based on management’s best estimate, for the effects of non-transferability, exercise restrictions and behavioural 
considerations.
Where the terms of an equity settled transaction are modified, as a minimum an expense is recognised as if the terms 
had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result 
of the modification, as measured at the date of modification.
Where an equity settled transaction is cancelled, it is treated as if it had vested on the date of the cancellation, and any 
expense not yet recognised for the transaction is recognised immediately. However, if a new transaction is substituted 
for the cancelled transaction, and designated as a replacement transaction on the date that it is granted, the cancelled 
and new transactions are treated as if they were a modification of the original transaction, as described in the previous 
paragraph.
The issuance by the Company of share options to employees of its subsidiary represents additional capital contributions 
and the fair value of such options and awards is therefore recognised as an increase in the Company’s investment in 
Group undertakings with a corresponding increase in total equity shareholders’ funds.
Share Incentive Plan
The Matching shares have vesting conditions which require participants to remain employed with the Company and 
retain their investment in Epistem shares for at least three years. The cost of the Matching shares is expensed on a 
straight line basis over the vesting period.
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1. Significant accounting policies continued
Pension contributions
Contributions to personal pension plans of employees on a defined contributions basis are charged to the income 
statement in the year in which they are payable.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is calculated on a first in and first out basis and 
includes bought in cost and, where appropriate, other direct costs and attributable overheads. Net realisable value 
represents the estimated selling price less applicable selling costs. Where applicable, provision is made for slow-moving 
and obsolete inventory.
Trade and other receivables
Trade and other debtors are recognised and carried forward at invoiced amounts less provisions for any doubtful debts. 
Bad debts are written off when identified. After initial recognition, these are carried forward at amortised cost using the 
effective interest method.
Cash and cash equivalents
Cash and cash equivalents are included in the balance sheet at cost. Cash and cash equivalents comprise cash at bank 
and in hand and short-term deposits with an original maturity of three months or less.
Interest-bearing loans and borrowings
All loans and borrowings are recognised initially at cost, which is the fair value of the consideration received, net of issue 
costs associated with the borrowing.
After initial recognition, interest-bearing loans and borrowings are measured at amortised cost using the effective 
interest method. Gains or losses are recognised in the consolidated income account when liabilities are derecognised 
or impaired, as well as through the amortisation process.
Investments
Investments in subsidiaries are stated at cost less any provisions for impairment. An impairment is recognised when the 
recoverable amount of the investment is less than the carrying amount.
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42
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
CONTINUED
1. Significant accounting policies continued
Taxation
Current tax is provided at amounts expected to be paid (or recovered) using the tax rates and laws that have been 
enacted, or substantively enacted, by the balance sheet date.
Taxation credits which fall under the category of Above the Line Research and Development credits (‘ATL Research 
Credit’) as detailed in the Finance Act 2013 are offset against the expenditure to which they relate and, in the Statement 
of Profit and loss, are disclosed within Contract and Discovery and development costs, as appropriate.
Deferred tax is recognised in respect of all temporary differences identified at the balance sheet date, except to the 
extent that the deferred tax arises from the initial recognition of goodwill (if amortisation of goodwill is not deductible 
for tax purposes) or the initial recognition of an asset or liability in a transaction which is not a business combination 
and at the time of the transaction affects neither accounting profit nor taxable profit and loss. Temporary differences 
are differences between the carrying amount of the Group’s assets and liabilities and their tax base.
Deferred tax liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and 
when the deferred tax balances relate to the same taxation authority. Current tax assets and liabilities are offset where 
an entity has a legally enforceable right to offset and either intends to settle on a net basis, or to realise the asset and 
settle the liability simultaneously.
Deferred tax is provided on temporary differences arising in subsidiaries, jointly controlled entities and associates, 
except where the timing of reversal of the temporary difference will not reverse in the foreseeable future. Deferred tax 
is measured at the average tax rates that are expected to apply in the periods in which the asset is realised or liability 
settled, based on tax rates and laws that have been enacted or substantially enacted by the balance sheet date. 
Measurement of deferred tax liabilities and assets reflects the tax consequence expected to fall from the manner in 
which the asset or liability is recovered or settled.
Financial instruments (including Convertible Bond)
Financial instruments are classified and accounted for, according to the substance of the contractual arrangement, as 
either financial assets, financial liabilities or equity instruments. An equity instrument is any contract that evidences a 
residual interest in the assets of the Company after deducting all of its liabilities. 
As disclosed in Note 19, the Company has in issue a convertible bond which is a compound instrument comprising a 
liability component, or debt host, and an equity derivative component. 
On initial recognition, convertible bonds are recorded at fair value net of issue costs. The initial fair value of the debt 
host is determined using the market interest rate applied by a market participant for an equivalent non-convertible 
debt instrument. Subsequent to initial recognition, the debt host is recorded using the effective interest method until 
extinguished on conversion or maturity of the bonds. The amortisation of the debt host and the interest payable in 
each accounting period is expensed as a finance cost.
Equity derivatives embedded in the convertible instruments which are required to be recorded as financial liabilities are 
initially recognised at fair value. At each reporting date, the fair values of the derivative are reassessed by management. 
Where there is no market for such derivatives, the Company uses option pricing models to measure the fair value.
The amortisation of the debt host, interest payable in the period and gains or losses on the fair value of the derivative 
are disclosed with finance income and costs detailed in Note 6.
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1. Significant accounting policies continued
Parent Company assets
The assets of the Parent Company are subject to impairment review in each financial period.
New standards and interpretations not applied
The International Accounting Standards Board (‘IASB’) and IFIRC have issued the following standards and 
interpretations that are not effective for the financial year beginning 1 July 2015 and have not been adopted early:
Annual improvements to IFRSs: 2012–2014 cycle
IFRS 9 amendments  Financial instruments
IFRS 15    Revenue recognition from contracts with customers
IFRS 16    Leases
IAS 7    Disclosure initiative
The Directors do not anticipate that the adoption of these standards and interpretations will have a material effect on 
the Group’s financial statements in the period of initial application.
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44
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
CONTINUED
2. Segment information
For internal reporting, the Group is organised into operating divisions – Preclinical Research Services, Pharmacogenomic 
Services and Diagnostics. Preclinical Research Services provides pre-clinical testing services. Pharmacogenomic 
Services specialises in molecular measures of biological effect. Diagnostics is commercialising the Genedrive
®
 Point of 
Need molecular testing platform.
Management have selected the segment classification by reference to the operating activities of the divisions. Preclinical 
Research Services activities relate to the testing of drugs for drug development companies. Personalised Medicine activities 
relate to gene expression analysis. Geographical factors have been reviewed and but substantially all operating activities are 
undertaken from the UK. Accordingly, only sales have been analysed into geographical statements.
The results of the operating divisions of the Group are detailed below.
Business segments
Preclinical
Research
Services
£’000
Pharmaco-
genomics 
Services
£’000
Diagnostics
Segment
£’000
Admin-
istrative 
costs 
£’000
Total
£’000
Twelve months ended 30 June 2016
Revenue 2,010 1,147 1,906 – 5,063
Segment trading result 49 (79) (1,918) (2,288) (4,236)
Add ATL Research Credit 83 68 – – 151
Less depreciation and amortisation (62) (141) (885) (86) (1,174)
Less equity-settled share-based payments (19) (27) (77) (44) (167)
Operating profit/(loss) 51 (179) (2,880) (2,418) (5,426) 
Twelve months ended 30 June 2015
Revenue 2,322 1,266 929 – 4,517
Segment trading result 135 62 (2,266) (1,593) (3,662)
Add ATL Research Credit 111 91 – – 202
Less depreciation and amortisation (163) (71) (102) (50) (386)
Less equity-settled share-based payments (15) (27) (113) (39) (194)
Operating profit/(loss) 68 55 (2,481) (1,682) (4,040)
Twelve months ended 30 June 2016
Segment assets 1,072 1,303 7,454 2,027 11,856
Segment liabilities 248 328 467 7,060 8,103
Twelve months ended 30 June 2015
Segment assets 1,308 1,418 7,349 5,918 15,993
Segment liabilities 257 208 248 5,735 6,448
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 45
2. Segment information continued
Geographical segments
The Group’s operations are located in the UK. The following table provides an analysis of the Group’s revenue by 
geographical market:
2016
£’000
2015
£’000
United Kingdom 1,035 912
Europe 365 1,061
United States of America 3,529 2,034
Asia 134 510
5,063 4,517
Revenues from customers accounting for more than 10% of total revenue in the current or prior years are detailed 
below:
(a) £1,739k revenue was derived from the US Department of Defense with revenue included within Diagnostics  
(2015: £209k);
(b) £149k revenue was derived from the University of Maryland on behalf of the US Government with revenue included 
within Preclinical Research Services (2015: £948k);
(c) £460k revenue was derived from international pharmaceutical company, Glaxo SmithKline, with revenue included 
within Preclinical Research Services (2015: £454k); and
(d) £nil revenue was received within Personalised Medicine for FP7 grants (2015: £513k).
3. Operating loss
The Group operating loss is stated after charging/(crediting):
2016
£’000
2015
£’000
Research and development expenditure 4,836 2,942
ATL Research Credit (Note 7) (151) (202)
Amortisation of intangible assets 934 144
Depreciation of owned tangible fixed assets 240 241
Cost of inventories consumed 248 61
Auditors’ remuneration
– as auditors 48 35
– for other services 5 –
Operating lease costs – property rent 398 320
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46
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
CONTINUED
4. Particulars of employees
The average number of staff employed by the Group during the financial year was:
2016
No
2015
No
Contract services 36 39
Research and development 28 18
Administration 15 14
79 71
The aggregate employee costs (including Directors) were:
2016
£’000
2015
£’000
Wages and salaries 3,818 3,647
Social security costs 396 374
Equity settled share-based payments 167 194
Pension cost – defined contribution plans 154 143
Cost of SIP matching shares 52 58
Aggregate employee costs 4,587 4,416
5. Directors’ remuneration (key management)
Group
2016
£’000
2015
£’000
Salaries and other short-term employee benefits 927 858
Pension contribution 111 44
Equity-settled share-based payments 122 103
Cost of SIP matching shares 9 12
1,169 1,017
The Directors are regarded as the key management of the Company. Full details of the Directors’ remuneration and 
Directors’ options are contained in the Directors’ Remuneration Report. 
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 47
6. Finance (costs)/income 
Group
2016
£’000
2015
£’000
Finance income and costs
– gain on issue of Convertible Bond – 1,004
– movement in fair value of derivative embedded in Convertible Bond 37 73
– finance cost of Convertible Bond (304) (212)
– accounting adjustment to Convertible Bond finance cost (272) (205)
– foreign exchange movement in Convertible Bond (731) (298)
– interest receivable 7 16
– foreign exchange gains 192 238
(1,071) 616
7. Taxation on ordinary activities
(a) Recognised in the income statement
Group
2016
£’000
2015
£’000
Current tax:
Research and development tax credits (763) (688) 
Less; recognised as ATL Research Credit 151 202
(612) (486)
Adjustments in respect of prior periods – (37) 
Total current tax (612) (523)
Deferred tax:
Current year tax losses 211 133
Current year capital allowances in excess of depreciation (152) (108)
Movement in provisions 4 (4)
In respect of current year share options charges (33) 32
Tax withheld from ATL Research Credit – 71
Total deferred tax 30 124
Total tax (credit) for the year (582) (399)
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48
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
CONTINUED
7. Taxation on ordinary activities continued
(b) Reconciliation of the total tax charge
The tax assessed on the profit on ordinary activities for the year is higher (2015: higher) that the weighted average 
applicable tax rate for the year ended 30 June 2016 of 20% (2015: 20.75%). The differences are explained below:
Group
2016
£’000
2015
£’000
Loss before taxation (6,497) (3,424)
Tax using the UK corporation tax rate of 20% (2015: 20.75%) (1,299) (711)
Recognised as ATL Research Credit 151 202
Tax withheld from ATL Research Credit – 71
Movement in share options 7 43
Rate differences – corporation tax v deferred tax 21 (102)
Rate differences – deferred tax (8) (4)
Item not deductible/chargeable for tax purposes 5 6
Adjustments in respect of research and development tax credits (397) (462)
Deferred tax not recognised 810 595
Change in recoverability of deferred tax assets 114 –
Adjustment relating to a previous year – (37)
Other differences 14 –
Total tax in income statement (582) (399)
The Group had trading losses, as computed for tax purposes, of approximately £9,959k (2015: £6,146k) available to carry 
forward to future periods.
A change to the UK corporation tax rate was announced in the Chancellor’s Budget on 16 March 2016. The change 
announced is to reduce the main tax rate to 17% from 1 April 2020. Changes to reduce the UK corporation tax rate to 
19% from 19% from 1 April 2017 and to 18% from 1 April 2020 had already been substantially enacted on 26 October 2015.
As the change to 17% had not been substantially enacted at the balance sheet date, its effects are not included in these 
financial statements. If the change had applied to the deferred tax balance at the balance sheet date, the overall effect 
on both the deferred tax balance and tax credit for the year is not material. 
In accordance with the provisions of the Finance Act 2000 in respect of research and development allowances, the 
Group is entitled to claim tax credits for certain research and development expenditure. These credits are disclosed 
partly as Above The Line Research and Development Credit (‘ATL Research Credit’) within Research and Development 
Costs and partly as Research and Development tax credits within Taxation on ordinary activities. The total amount 
included in the financial statements in respect of the year ended 30 June 2016 is £763k (2015: £688k) which includes 
£151k (2015: £202k) disclosed as ATL Research Credit deducted from Research and Development Costs with the balance 
of £612k (2015: £486k) disclosed within Taxation on ordinary activities as detailed above.
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 49
8. Profit attributable to members of the Parent Company
The loss dealt with in the accounts of the Parent Company was £1,378k (2015: profit £379k).
9. Earnings per share
The basic earnings per share is calculated by dividing the earnings attributable to ordinary shareholders for the year 
by the weighted average number of ordinary shares in issue during the year less the weighted average number of 
Matching Shares held by the Epistem Share Investment Plan which are not yet vested.
The diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding 
to assume conversion of all dilutive potential ordinary shares in relation to share options and share warrants and also 
the weighted average Matching Shares held by the Epistem SIP which are not yet vested. The number of share options 
has been adjusted to take into account the issue price and the fair value, consistent with IAS 33, ‘Earnings per share’.
Due to the Company being loss making during the year, the dilutive weighted average number of shares has not been 
used in the diluted earnings per share calculation.
Group
2016
£’000
2015
£’000
(Loss) for the year after taxation (5,915) (3,025)
Group
2016
Number
2015
Number
Weighted average number of ordinary shares in issue 10,564,546 10,047,756
Weighted average number of SIP matching shares not vested (32,931) (36,415)
Adjusted weighted average number of ordinary shares in issue 10,531,615 10,011,341
Dilutive ordinary shares from options and warrants in issue 3,385 303,103
Dilutive weighted average number of ordinary shares 10,544,541 10,314,444
(Loss) per share
– basic (56.2)p (30.2)p
– diluted (56.2)p (30.2)p
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50
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
CONTINUED
10. Intangible assets
Group
Patents
£’000
Acquired
intellectual
property
£’000
Developed
intellectual
property
£’000
 Total
£’000
Cost
At 1st July 2015 717 3,177 4,001 7,895
Additions – 16 – 16
At 30 June 2016 717 3,193 4,001 7,911
Amortisation
At 1 July 2015 362 85 257 704
Charge for the year 1 424 509 934
At 30 June 2016 363 509 766 1,638
Net book value
At 30 June 2015 355 3,092 3,744 7,191
At 30 June 2016 354 2,684 3,235 6,273
Cost
At 1st July 2014 552 3,177 3,616 7,345
Additions 165 – 385 550
At 30 June 2015 717 3,177 4,001 7,895
Amortisation
At 1 July 2014 361 46 153 560
Charge for the year 1 39 104 144
At 30 June 2015 362 85 257 704
Net book value
At 30 June 2014 191 3,131 3,463 6,785
At 30 June 2015 355 3,092 3,744 7,191
The net book value of Intangible assets principally relates to the Genedrive
®
 unit and assays which have a carrying value 
of £5,612k (2015: £6,384k).
The charges for amortisation are included in the Contract and Research and Development expense headings.
The Intangible assets have been assessed for impairment in accordance with the Company's Accounting Policies. There 
was no impairment charge during the year ended 30 June 2016 (2015: £nil).
During the year to 30 June 2016, the cost of the Company’s Patents assessed as not being available for economic use 
amounted to £nil (2015: £nil).
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11. Plant and equipment
Group
Lab
equipment
£’000
Fixtures
and fittings
£’000
Other
equipment
£’000
Total
£’000
Cost
At 1 July 2015 1,922 131 364 2,417
Additions 35 54 59 148
Disposals – – (5) (5)
At 30 June 2016 1,957 185 418 2,560
Depreciation
At 1 July 2015 1,325 50 237 1,612
Charge for the year 155 38 47 240
Depreciation on disposed assets – – (5) (5)
At 30 June 2016 1,480 88 279 1,847
Net book value
At 30 June 2015 597 81 127 805
At 30 June 2016 477 97 139 713
Group
Lab
equipment
£’000
Fixtures
and fittings
£’000
Other
equipment
£’000
Total
£’000
Cost
At 1 July 2014 1,908 58 253 2,219
Additions 24 73 111 208
Disposals (10) – – (10)
At 30 June 2015 1,922 131 364 2,417
Depreciation
At 1 July 2014 1,142 39 198 1,379
Charge for the year 191 11 39 241
Depreciation on disposed assets (8) – – (8)
At 30 June 2015 1,325 50 237 1,612
Net book value
At 30 June 2014 766 19 55 840
At 30 June 2015 597 81 127 805
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52
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
CONTINUED
12. Deferred taxation
Recognised
Group
2016
£’000
2015
£’000
Tax losses carried forward 516 727
Excess of tax allowances over depreciation and amortisation (529) (681)
Share-based payment transactions 13 (20)
Other timing differences – 4
– 30
Deferred tax assets are recognised to the extent that the Directors, having reviewed expectations of future profitability 
in the context of the trading losses carried forward, consider it is probable that there will be sufficient profit available 
against which the deferred tax asset may be utilised. No deferred tax assets are recognised at 30 June 2016 (2015: £30k). 
The movement in Deferred Taxation has been recognised in the Profit and Loss statement.
The Group did not recognise deferred tax assets £1,443k (2015: £1,272k) in respect of share-based payment transactions and 
trading losses carried forward. 
13. Inventories
Group
2016
£’000
2015
£’000
Finished goods 202 163
14. Trade and other receivables
Group
2016
£’000
2015
£’000
Trade receivables 2,290 1,725
Other receivables 217 100
Prepayments 290 366
2,797 2,191
Analysis of trade receivables
2016
£’000
2015
£’000
Neither impaired nor past due 1,338 1,384
Past due but not impaired 952 341
Trade receivables 2,290 1,725
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14. Trade and other receivables continued
Aging of past due but not impaired trade receivables
There is no other class of financial assets that is past due but not impaired except for trade receivables. The Group’s 
credit period generally ranges up to 60 days. The age analysis of the trade receivables have been considered from the 
date of the invoice and, net of £nil (2015: £nil) allowances which are past due, is given below:
2016
£’000
2015
£’000
Not later than one month 112 219
Later than one month but not later than three months 409 122
Later than three but not later than six months 218 –
Later than six months 213 –
15. Cash and cash equivalents
Group
2016
£’000
2015
£’000
Cash at bank and in hand 952 1,382
Short term bank deposits 162 3,546
1,114 4,928
Cash and cash equivalents comprise current accounts held by the Group with immediate access and short term bank 
deposits with a maturity of three months or less. Market rates of interest are earned on such deposits. The credit risk 
on such funds is limited because the counter parties are banks with high credit ratings assigned by international credit 
rating agencies.
16. Deferred revenue
The items recorded as deferred revenue are to be recognised over future periods as follows:
Group
2016
£’000
2015
£’000
Amounts to be recognised within 1 year 88 50
17. Trade and other payables
Group
2016
£’000
2015
£’000
Trade payables 914 696
Accruals 675 346
Other payables 185 81
1,774 1,123
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54
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
CONTINUED
18. Deferred consideration payable in shares
Group
2016
£’000
2015
£’000
Payable in shares 1,250 1,250
The deferred consideration relates to the provision of £1,250k in respect of the issue of shares in the Company which is 
anticipated to be due following the revaluation of the earn-out payable in respect of the acquisition of Visible Genomics 
Limited in 2010 which is detailed on page 68.
At 30 June 2016, the Directors reviewed the terms of the earn-out payable and consider that the criteria will be met 
during a period greater than 12 months but less than five years following the balance sheet date. The liability has 
therefore been re-classified as non-current. 
19. Convertible Bond
Group
2016
£’000
2015
£’000
Derivative – 37
Debt host 4,991 3,988
4,991 4,025
On 21 July 2014, the Company issued an $8m Convertible Bond. The terms of the Convertible Bond are detailed below. 
Has a principal of $8m and interest is payable half yearly at a coupon rate of 5% on the principal amount until the earlier 
of maturity (21 July 2021) or conversion. In order to align Company and shareholder requirements, the Company and 
GHIF have now entered into the GHIF Amendment Agreement, to amend and restate certain terms of the GHIF Bond 
and Collaboration Agreement.
Whilst the bond holder has the option to convert into a fixed number of ordinary shares, due to the Convertible Bond 
being denominated in a different currency to the Company’s functional currency, IFRS requires the Convertible Bond 
to be accounted for as a compound instrument, comprising a Debt Host (liability component) and a Derivative (equity 
component).
The Debt host is required to be recorded initially at fair value. Whilst the coupon is 5%, IFRS requires that the fair value is 
calculated based on the rate of interest which a market participant would lend to the Company. Given the nature of the 
Company’s activities, the Company has used a rate of 12% in calculating this liability. The fair value of the Debt host at 
the date of issue was £3,494k ($5,939k) which after taking into account value on issue of the Derivative detailed below of 
£102k ($173k) and transaction costs on £100k ($160k) gave rise to an initial gain of £1,004k ($1,727k) which IFRS requires is 
disclosed in the profit and loss account for the year ended 30 July 2015, as detailed in Note 6.
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 55
19. Convertible Bond continued
The Derivative has been valued using a Quanto Option Valuation model which takes account of the multicurrency 
aspects of the Convertible Bond. The variables used in running the model are as follows:
Volatility of the Company’s Share at 30 June 2015 21%
Volatility of the Company’s Share Price at 30 June 2016 28%
Expected life of the Derivative at 30 June 2015 3.88 years
Expected life of the Derivative at 30 June 2016 2.89 years
Risk free interest rate at 30 June 2015 1.53%
Risk free interest rate at 30 June 2016 1.42%
Dividend yield  0%
Debt
host
£’000
Derivative
£’000
Convertible
Bond
£’000
Fair value on issue 3,494 102 3,596
Increase/(decrease) in fair value 204 (73) 131
Increase in liability caused by foreign exchange movements 290 8 298
Balance at 30 June 2015 3,988 37 4,025
Increase/(decrease) in fair value 272 (37) 235
Increase in liability caused by foreign exchange movements 731 – 731
Balance at 30 June 2016 4,991 – 4,991
Outline of Convertible Bond Agreement
On 21 July 2014, the Company entered into a Collaboration and Convertible Bond Purchase Agreement (‘Agreement’) 
with the Global Health Investment Fund 1 LLC (‘GHIF’ or the ‘bond holder’). Under the terms of the Agreement, the 
Company has issued to GHIF a five-year Convertible Bond totalling $8.0m (£4.7m). Further, as part of the Agreement, 
GHIF and the Company entered into a Global Access Commitment. The purpose of the Agreement is to fund the 
Company’s development, production and commercialisation of Genedrive® to address Global Health Challenges and 
achieve Global Health Objectives. An outline (only) of the terms of the Agreement is detailed below:
Unless previously converted or redeemed, the Convertible Bond will mature on 21 July 2019 and interest will be
payable half yearly at the rate of 5% per annum.
During a Purchaser Optional Conversion Period which runs from 15 January 2015 to 15 May 2019 (or earlier in the event of 
a change of control of the Company) the bond holder has the option to convert all (but not part only) of the Convertible 
Bond at the Conversion Price, initially £4.89 per Epistem Ordinary Share at the Fixed Rate of Exchange of $1.6913:£1. (The 
Conversion Price may be adjusted to take account of changes by the Company of its capital structure or payment of 
dividends etc.)
The Company has an option conversion period running from 22 January 2015 to 08 July 2019, during which the 
Company may convert all (but not part only) of the Convertible Bond into Epistem Ordinary Shares at the Conversion 
Price, initially £4.89 per Epistem Ordinary Share at the Fixed Rate of Exchange of $1.6913:£1 if the current market prices 
equals or exceeds 1.2 times the Conversion Price. (The Conversion Price may be adjusted to take account of changes by 
the Company of its capital structure or payment of dividends etc.)
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56
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
CONTINUED
19. Convertible Bond continued
The Company may redeem the whole of the Convertible Bond on any interest payment date from 22 July 2016. In 
this event, the bond holder may elect to receive full payment in Epistem Ordinary Shares based on a conversion ratio 
calculated as a function of the market price at the time of notice of redemption. Without such an election, the bond will 
be redeemed at par in US dollars.
Deed of Amendment to Convertible Bond Agreement
On 23 June 2016, the Company and GHIF entered into a Deed of Amendment and Restatement of the Agreement, 
which came into effect on 11 July 2016. The amendment became effective on 11 July 2016 and, as a result has no impact 
on the results and balances for the current financial year. The effect of the changes on the financial statements for the 
forthcoming year will be outlined in the 2016 Annual Report and Accounts.
As summary of the principal effect of the Deed of Amendment are detailed below:
The maturity date of the GHIF Bond will be extended by two years to 21 July 2021 and the GHIF Bond will be split into 
two tranches, with the first tranche of $2m having a Conversion Price of £1.50 per Ordinary Share and the second 
tranche of $6m having a Conversion Price remaining at £4.89 per Ordinary Share. 
In respect of the Company conversion option, the Company will have the option to convert the first tranche of $2m into 
new Ordinary Shares in circumstances where the average closing price of the Company’s Ordinary Shares is greater 
than or equal to £2.50 per ordinary Share for a period of 20 consecutive days.
In addition, for interest periods ending on or before (but not after) 21 January 2019, the Company may elect to pay none 
or a portion of the 5% interest payable semi-annually on the accrued and outstanding principal amount of the GHIF 
Bond and instead capitalise and compound some or all of such outstanding interest due until the earlier of the date on 
which the GHIF Bond is repaid if converted into Ordinary Shares.
Debt
host
£’000
Derivative
£’000
Convertible 
Bond
£’000
Balance at 30 June 2016 as detailed above 4,991 – 4,991
Proforma (decrease)/increase in fair value caused by the Deed of Amendment (414) 34 (380)
Proforma balance at 30 June 2016 taking the Deed of Amendment into account 4,577 34 4,611
Global Access commitment
Under the Global Access Agreement, the Company will undertake appropriate regulatory strategic steps and 
registrations to secure access for Genedrive
®
 in developing countries in tuberculosis, malaria or other infectious diseases 
as agreed between the parties.
The Company will establish a tiered pricing framework that is commercially reasonable and reflects the needs of poor 
patients in developing countries. The Company will, taking into account its profitability and other commercial interests, 
allocate sufficient capacity and product distribution to make Genedrive
®
 and its assays accessible to people most in 
need in developing countries.
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 57
19. Convertible Bond continued
GHIF will use commercially reasonable efforts through its global access network to ensure support for the Company in 
placing Genedrive
®
 and its assays in global territories to reflect the needs and price sensitivity of poor patients in the 
developing world.
Notwithstanding any early Conversion, Redemption or Termination of the agreement, the Global Access Commitment 
shall endure for five years from 22 July 2014.
General undertakings
During the period of the Agreement, the Company has entered into undertakings commensurate with a Convertible 
Bond Agreement. These include:
 l Undertakings relating to incurring financial indebtedness and financial default;
 l Undertakings relating to maintenance of appropriate records; and
 l Undertakings relating to standards of social responsibility and ethical behaviour.
20. Share-based payments
(A) Share options outstanding at 30 June 2016
Prior to 28 November 2007, the Company operated a number of HMRC approved and unapproved share option 
schemes for employees (including Directors). The original options were granted by Epistem Limited but, following its 
acquisition in 2007 by Epistem Holdings Plc, these were released in exchange for equivalent options over the ordinary 
shares of Epistem Holdings Plc. On 28 November 2007, the Company established the 2007 Epistem Share Option 
Scheme.
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58
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
CONTINUED
20. Share-based payments continued
Share options
Award
Number of
awards
Exercise 
price
Period within which
options are exercisable
Fair value
per option
Fair value
£
EMI – Unapproved 78,000 £1.29 31 Mar 2005 to 30 Mar 2017 £0.45p 35,100
EMI – Unapproved 127,847 £1.20 10 Jan 2006 to 09 Jan 2018 £0.43p 54,974
EMI – Approved 83,333 £1.20 10 Jan 2006 to 09 Jan 2018 £0.43p 35,833
EMI – Approved 8,200 £1.20 29 Sep 2006 to 28 Sept 2016 £0.43p 3,526
EMI – Approved 80,644 £1.24 28 Mar 2007 to 27 Mar 2017 £0.42p 33,870
EMI – Unapproved 177,653 £1.24 28 Mar 2007 to 27 Mar 2017 £0.42p 74,615
EMI – Approved 23,103 £1.67 27 Jul 2007 to 26 Jul 2017 £0.39p 9,010
EMI – Unapproved 57,727 £1.60 15 Oct 2007 to 14 Oct 2017 £0.36p 20,782
2007 Epistem Share Option Scheme 14,550 £1.77 31 Jul 2011 to 30 Jul 2018 £0.37p 5,384
2007 Epistem Share Option Scheme 8,250 £4.03 10 Dec 2013 to 09 Dec 2020 £1.64p 13,530
2007 Epistem Share Option Scheme 30,000 £3.60 10 May 2014 to 09 May 2021 £1.46p 43,800
2007 Epistem Share Option Scheme 254,631 £3.73 29 Mar 2014 to 28 Mar 2021 £1.51p 384,492
2007 Epistem Share Option Scheme 5,369 £3.60 10 May 2013 to 09 May 2021 £1.51p 8,107
2007 Epistem Share Option Scheme 10,500 £3.60 10 Feb 2015 to 09 Feb 2022 £1.46p 15,330
2007 Epistem Share Option Scheme 23,758 £5.50 28 Mar 2016 to 27 Mar 2023 £2.23p 52,980
2007 Epistem Share Option Scheme 21,565 £5.50 26 Mar 2016 to 25 Mar 2023 £2.23p 48,090
2007 Epistem Share Option Scheme 81,450 £3.22 29 Jan 2017 to 28 Jan 2024 £1.21p 98,555
2007 Epistem Share Option Scheme 50,000 £3.20 27 Jan 2017 to 26 Jan 2024 £1.21p 60,500
2007 Epistem Share Option Scheme 200,000 £3.25 25 Mar 2017 to 24 Mar 2024 £1.21p 242,000
2007 Epistem Share Option Scheme 34,250 £3.25 12 Aug 2017 to 11 Aug 2024 £0.60p 20,550
2007 Epistem Share Option Scheme 20,000 £3.25 20 Sep 2017 to 19 Sep 2024 £0.60p 12,000
2014 Unapproved Share Options 130,000 £2.75 17 Dec 2017 to 16 Dec 2024 £0.52p 67,600
2007 Epistem Share Option Scheme 71,000 £1.20 11 Dec 2018 to 19 Sep 2025 £0.33p 23,430
2007 Epistem Share Option Scheme 244,444 £0.90 07 Apl 2019 to 06 Apl 2026 £0.29p 70,889
Epistem Unapproved Share Options 50,000 £2.78 07 Apl 2019 to 06 Apl 2026 £0.05p 2,500
2007 Epistem Share Option Scheme 22,000 £0.815 02 May 2019 to 01 May 2026 £0.27p 5,940
2007 Epistem Share Option Scheme 50,000 £0.90 01 Jun 2019 to 31 May 2026 £0.31p 15,550
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 59
20. Share-based payments continued
Option valuations
The options were valued using the Black-Scholes option-pricing model. The fair value per option granted and the 
assumptions used in the calculations are in the table below. The Group’s effective date for IFRS 2, (‘Share-based 
Payments’) implementation is 1 July 2006 and the IFRS has been applied to all options granted after 7 November 2002 
which have not been vested by this effective date.
Award Grant date
Expected
term
Expected
dividend
yield
%
(Note a)
Expected 
volatility
%
(Note c)
Risk
% rate
(Note d)
Performance
condition
EMI – Unapproved 31 Mar 2005 5 years 0 60 4.75 None
EMI – Unapproved 10 Jan 2006 5 years 0 60 4.50 Note
(e)
EMI – Approved 10 Jan 2006 5 years 0 60 4.50 None
EMI – Approved 29 Sep 2006 5 years 0 60 4.50 None
EMI – Approved 28 Mar 2007 5 years 0 60 5.25 Note
(f)
EMI – Unapproved 28 Mar 2007 5 years 0 60 5.25 Note
(f)
EMI – Approved 27 Jul 2007 5 years 0 45 5.50 None
EMI – Unapproved 15 Oct 2007 5 years 0 45 5.75 Note
(g)
2007 Epistem Share Option Scheme 31 Jul 2008 5 years 0 40 5.00 Note
(h)
2007 Epistem Share Option Scheme 10 Dec 2010 5 years 0 50 0.50 Note
(h)
2007 Epistem Share Option Scheme 10 May 2011 5 years 0 50 0.50 Note
(h)
2007 Epistem Share Option Scheme 29 Mar 2011 5 years 0 50 0.50 Note
(i)
2007 Epistem Share Option Scheme 10 May 2011 5 years 0 50 0.50 Note
(h)
2007 Epistem Share Option Scheme 10 Feb 2012 5 years 0 50 0.50 Note
(h)
2007 Epistem Share Option Scheme 28 Mar 2013 5 years 0 50 0.50 Note
(h)
2007 Epistem Share Option Scheme 26 Mar 2013 5 years 0 50 0.50 Note
(j)
2007 Epistem Share Option Scheme 29 Jan 2014 5 years 0 43 0.50 Note
(h)
2007 Epistem Share Option Scheme 27 Jan 2014 5 years 0 43 0.50 Note
(g)
2007 Epistem Share Option Scheme 25 Mar 2014 5 years 0 43 0.50 Note
(h)
2007 Epistem Share Option Scheme 12 Aug 2014 5 years 0 43 0.50 Note
(h)
2007 Epistem Share Option Scheme 20 Sep 2014 5 years 0 43 0.50 Note
(g)
2014 Unapproved Share Options 17 Dec 2014 5 years 0 43 0.50 Note
(h)
2007 Epistem Share Option Scheme 11 Dec 2015 5 years 0 30 0.50 Note
(g)
2007 Epistem Share Option Scheme 07 Apl 2016 5 years 0 36 0.50 Note
(g)
Epistem Unapproved Share Option Scheme 07 Apl 2016 5 years 0 36 0.50 Note
(g)
2007 Epistem Share Option Scheme 02 May 2016 5 years 0 37 0.50 Note
(g)
2007 Epistem Share Option Scheme 01 Jun 2016 5 years 0 39 0.50 Note
(g)
(a)  The expected term used in the model is five years and is based upon the Directors’ best estimates for the effects of exercise restrictions and 
behavioural considerations.
(b)  The dividend yield of 0% reflects the absence of a history of paying dividends and a clear dividend policy at the relevant grant dates.
(c)  Prior to 2011, the expected volatility was estimated by the Directors after inspection of the financial statements of comparable businesses in 
the same business sector as the Group. Thereafter, the expected volatility has been calculated by reference to the historic share price of the 
Company.
(d)  The risk free rate used is based upon the prevailing UK bank base rate at the date of the grant.
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60
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
CONTINUED
20. Share-based payments continued
(e)  These options vest on dates dependant on anniversaries of commencing employment with the Group which commenced 1 September 2005 
with the final tranche vesting on 1 September 2008.
(f)  The performance conditions for these options to vest were satisfied in 2010.
(g) These options are subject to performance criteria which are appropriate to the option holders’ role within the Company and which are 
assessed by the Remuneration Committee.
(h) These options may be exercised following the third anniversary of grant and are subject to performance criteria which are appropriate to the 
option holders’ role within the Company and which are assessed by the Remuneration Committee.
(i) These options may be exercised when the Remuneration Committee determine that the Company has achieved a compound annual growth 
in EBITDA of at least 15% for the three year period commencing 01 July 2010.
(j) These options may be exercised on achievement of performance criteria determined by the Remuneration Committee which correlate to 
shareholder value.
 
The number of options and their weighted average exercise prices are as follows:
Number
Weighted 
average 
exercise price
Weighted average 
remaining contracted 
life – Years
Group 2016 2015 2016 2015 2016 2015
Outstanding as at 1 July 1,821,252 1,707,377 £2.27 £2.04
Granted during the year 441,194 190,500 £1.16 £2.91
Exercised during the year – (68,312) – £1.18
Forfeited during the year (9,900) (8,313) £1.69 £3.86
Lapsed during the year (294,272) (8,313) £2.23 £3.86
Outstanding as at 30 June 1,958,274 1,821,252 £2.22 £2.27 5.54 4.41
Options exercisable at 30 June 1,005,130 1,251,491 £2.23 £1.18 2.47 2.00
The weighted average share price of options exercised at the exercise dates in the year ended 30 June 2015 was £3.18. 
There were no options exercised in the year ended 30 June 2016.
(B) Share Investment Plan
The Company operates a share investment plan, SIP (The Epistem Share Investment Plan), which is open to Directors 
and employees in accordance with Inland Revenue approved rules. Under the terms of the SIP, Directors and 
employees may invest up to £125 per month to be invested in ordinary shares (‘Partnership Shares’)in the Company at 
the prevailing market price. At the same time as each monthly subscription, a maximum of two Matching Shares for 
each Partnership Share will be acquired on behalf of the SIP’s participants. Both the Partnership and the Matching 
Shares are purchased on behalf of the scheme’s participants by Epistem SIP Trustee Limited, a wholly owned subsidiary 
of the Company. Participants, who must be employed by the Company may withdraw their Matching Shares once their 
associated Partnership Shares have been held for three years. The cost of the Matching Shares is expensed on a straight 
line basis over the vesting period. 
2016 2015
Partnership shares held at 30 June 45,832 33,858
Matching Shares held at 30 June 91,662 67,713
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 61
20. Share-based payments continued
Group
2016
£’000
2015
£’000
Unamortised cost of Matching shares 
(Comprising Employee SIP reserve) 240 196
21. Financial risk management objectives and policies
The Group holds or issues financial instruments in order to achieve two main objectives, being:
(a) to finance its operations;
(b) to manage its exposure to interest and currency risks arising from its operations and from its sources of finance.
In addition, various financial instruments (e.g. trade receivables, trade payables, accruals and prepayments) arise directly 
from the Group’s and the Company’s operations.
Transactions in financial instruments result in the Group assuming or transferring to another party one or more of the 
financial risks described below.
Interest rate risk
The Group currently finances its operations through reserves of cash and liquid resources. In addition to equity, the 
Group’s capital structure includes $8m Convertible Bond detailed at note 18. The coupon on the Convertible Bond is 
fixed at 5%. Surplus cash at bank is placed on deposits at variable rates. The Board monitors the financial markets and 
the Group’s own requirements to ensure that the policies are exercised in the Group’s best interests.
The following table demonstrates the sensitivity to a possible change in interest rates on the Group’s profit before tax 
through the impact of floating rate cash balances.
 
Decrease in
the basis
points
Effect on 
loss before 
tax and
equity
£’000 
2016
Cash and cash equivalents 25 3
2015
Cash and cash equivalents 25 5 
An increase in 25 basis points would have a similar opposite effect.
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62
21. Financial risk management objectives and policies continued
Capital Management
The Group’s objective in managing its capital is to ensure that the Group has adequate capital to fund is trading 
operations and ensure the Group’s ability to continue as a going concern. In achieving this objective, the Group seeks to 
maintain an optimal capital structure to reduce its cost of capital and provide returns for shareholders.
In managing its capital, the Group may from time to time issue new shares, sell assets or issue other capital instruments 
to optimise its capital structure.
Credit risk
The Group monitors credit risk closely and considers that its current policies of credit checks meet its objectives of 
managing exposure to credit risk.
Amounts shown in the balance sheet best represent the maximum credit risk exposure in the event that other parties 
fail to perform their obligations under financial instruments. The credit status of the Trade Receivables is detailed 
below:
2016
£’000
2015
£’000
Government related agencies 1,081 714
International drug companies 641 722
Biotechnology companies with no assigned credit rating 355 110
India distributor 213 179
2,290 1,725
Liquidity risk
The Board’s policy aims to ensure that sufficient funds are held on a short-term basis in order to meet operational needs. 
The age profile of the Group’s obligations are detailed below:
2016
£’000
2015
£’000
Payable within 1 year 1,862 2,423
Payable within 1 – 2 years 1,250 –
Payable within 3 – 5 year 4,991 6,448
8,103 8,871
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
CONTINUED
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 63
21. Financial risk management objectives and policies continued
Currency risk
The Group’s functional currency is sterling. The exposure to currency risk relates to licence income and those short-term 
trade receivables which are not invoiced in sterling. There are no significant costs incurred that involve payments in 
foreign currency.
The Group has no forward contracts at the year end (2015: £nil) to manage foreign currency risk.
Balances which are contracted in US dollars are presented in £ sterling below:
Group
2016
£’000
2015
£’000
Trade and other receivables 1,087 383
Cash and cash equivalents 172 462
Less: Convertible Bond (4,991) (4,065)
(3,732) (3,220)
The following table demonstrates the sensitivity to a possible change in currency rates on the Group’s loss before tax 
through the impact of sterling weakening against the US dollar.
Decrease  
in the  
currency
rate
Effect  
on loss
before  
tax and
equity
£’000 
2016
Trade and other receivables 5% 54
Cash and cash equivalents 5% 9 
Convertible Bond 5% (250) 
2015
Trade and other receivables 5% 19
Cash and cash equivalents 5% 23
Convertible Bond 5% (203) 
An increase in currency rate of 5% would have a similar opposite effect.
Fair values of financial assets and liabilities
There is no material difference between the book value and the fair value of the Group’s financial assets or liabilities.
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64
22. Commitments under operating leases
At 30 June 2016 the Group had annual commitments under non-cancellable operating leases as set out below.
 Land and buildings
Group
2016
£’000
2015
£’000
Operating leases which expire:
Within 1 year 390 –
1 year to 2 years – 232
The operating leases are in respect of the Company’s office and laboratories are held under short term leases.
23. Related party transactions
Other than items relating Director’s remuneration and employment, there were no related party transactions during 
the year (2015: £nil).
At the balance sheet date, in respect of Dr. I Gilham and Dr. R Nolan, Trade and Other payables included amounts of 
£5,964 (2015: £nil) and £1,700 (2015: £nil), respectively.
24. Share capital
Allotted and called up:
2016
No.
2016 
£’000
2015
No.
2015
£’000
Brought forward at 1 July 10,564,446 158 10,004,906 150
Deferred consideration shares – – 491,228 7
Exercise of options – – 68,312 1
Ordinary shares of £0.015 each 10,564,446 158 10,564,446 158
Note 19 details the terms of the Convertible Bond Agreement entered into on 21 July 2014. The Agreement was 
amended by a Deed of Amendment and Restatement on 23 June 2016 which came into force on 11 July 2016. 
Under the terms of this agreement in force at 30 June 2016, if a conversion occurs at the initial price of £4.89 per 
ordinary share at the fixed rate of exchange of $1.6913:£1, this would result in the issue of 967,298 shares (2015: 967,298).
Under the terms of the Agreement following the implementation of the Deed of Amendment, if a conversion occurs in 
respect of $2m at an initial conversion price of £1.50 per share at the fixed exchange rate of $1.6913:£1 together with $6m 
at an initial conversion price of £4.89 per share at the fixed exchange rate of $1.6913:£1, this would result in the issue of 
1,513,821 shares (2015: 967,298). 
25. Reserves
The reverse acquisition reserve arises as a difference on consolidation under merger accounting principles and is solely 
in respect of the merger of the Company and Epistem Limited, during the year ended 30 June 2007.
The employee share incentive plan reserve represents 91,662 shares in Epistem Holdings Plc (2015: 67,713 shares) all of 
which are held by Epistem SIP Trustee Limited. These shares are listed on the Alternative Investment Market and their 
market value at 30 June 2016 was £82k (2015: £186k). The nominal value held at 30 June 2016 was £1,375 (2015: £1,015).
NOTES TO THE FINANCIAL STATEMENTS
For the year ended 30 June 2016
CONTINUED
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 65
COMPANY BALANCE SHEET
As at 30 June 2016
Notes 
2016
£’000
2015
£’000
Assets
Non-current assets
Investment in subsidiaries a 6,615 6,398
Current assets
Amounts receivable from Group 
Undertakings and other receivables b 20,542 17,516
Cash and cash equivalents c 314 3,707
20,856 21,223
Liabilities
Current liabilities
Other payables 144 99
Deferred consideration payable in shares – 1,250
144 1,349
Net current assets 20,712 19,874
Total assets less current liabilities 27,327 26,272
Non-current liabilities
Deferred consideration payable in shares 1,250 –
Convertible Bond 19 4,991 4,025
Net assets 21,086 22,247
Capital and reserves
Called-up equity share capital 24 158 158
Share premium account 25 20,088 20,088
Share options reserve 25 1,582 1,365
Retained earnings (742) 636
Total shareholders’ equity 21,086 22,247
These financial statements were approved by the Directors and authorised for issue on 1 November 2016 and are signed 
on their behalf by:
Dr. Ian Gilham   H J J Rylands
Chairman   Finance Director
genedrive plc
Company number: 06108621
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66
COMPANY STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2016
Share
capital
£’000
Share
premium
account
£’000
Share
options
reserve
£’000
Retained
earnings
£’000
Total
£’000
At 1 July 2014 150 18,616 1,171 257 20,194
Allotment of ordinary shares 7 1,393 – – 1,400
Recognition of equity settled share-based payments – – 205 – 205
Exercise of share options 1 79 – – 80
Forfeit of share options – – (11) – (11)
Total comprehensive expense for the year – – – 379 379
At 30 June 2015 158 20,088 1,365 636 22,247
Balance as at 1 July 2015 158 20,088 1,365 636 22,247
Recognition of equity settled share-based payments – – 223 – 223
Forfeit of share options – – (6) – (6)
Total comprehensive expense for the year – – – (1,378) (1,378)
At 30 June 2016 158 20,088 1,582 (742) 21,086
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 67
COMPANY STATEMENT OF CASH FLOWS
For the year ended 30 June 2016
2016
£’000
2015
£’000
Cash flows from operating activities
Operating loss for the year (115) –
Operating profit before changes in working capital and provisions (115) –
(Increase) in amount receivable from Group companies (3,026) (2,889)
Increase in trade and other payables 45 46
Net cash outflow from operations (3,096) (2,843)
Cash flows from financing activities
Proceeds from issue of share capital – 80
Proceeds from issue of Convertible Bond – 4,700
Costs of convertible Bond – (76)
Interest received 7 16
Interest paid (304) (212)
Net cash (outflow)/inflow from financing activities (297) 4,508
Net (decrease)/increase in cash equivalents (3,393) 1,665
Cash and cash equivalents at beginning of year 3,707 2,042
Cash and cash equivalents at end of year 314 3,707
Analysis of net funds
Cash at bank and in hand 314 3,707
Net funds 314 3,707
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Company statement of 
cash flows genedrive plc Annual Report 2016
68
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 30 June 2016
Basis of accounting
The financial statements have been prepared in accordance with International Financial Reporting Standards (‘IFRS’) 
as adopted by the EU and therefore comply with Article 4 of the EU IAS Regulation, International Financial Reporting 
Interpretations Committee (‘IFRIC’) interpretations and with those parts of the Companies Act 2006 applicable to 
companies reporting under IFRS.
The financial statements have been prepared on a historical cost basis as modified by the revaluation of financial assets 
and financial liabilities (including derivative instruments) at fair value through profit or loss.
The principal accounting policies adopted in the preparation of these financial statements have been disclosed in the 
notes to the consolidated financial statements of the Group above.
a. Investments
Company
The Company is the holding company of the Group. 
The Company owns 100% of the issued share capital of Epistem Limited, Epistem SIP Trustees Limited and Epistem Inc. 
incorporated in the United States of America. The principal activities of the subsidiary companies are:
 l Epistem Limited and Epistem Inc. – the provision of services to the biotechnology and pharmaceutical industries; and
 l Epistem SIP Trustees Limited – to act as trustee to the Epistem Share Incentive Plan.
On 28 July 2010, Epistem Holdings Plc acquired 100% of the share capital of Visible Genomics Limited, whose principal 
activity had been the development of diagnostic assays and equipment. The assets of Visible Genomics Limited on 
27 July 2010 are summarised below:
£’000
Acquired intangible assets 100
Short term liabilities (25)
Long term liabilities (75)
 – 
On 28 July 2010, the above assets and liabilities were hived into Epistem Limited and Visible Genomics Limited ceased
to trade. Following a variation of Purchase and Sales agreement agreed with the vendor of Visible Genomics Limited 
on 5 March 2015, the following earnout deferred consideration payable to the vendors of Visible Genomics Limited 
remained outstanding:
Group
2016
£’000
2015
£’000
Deferred consideration payable in shares
 l Achievement of commercial milestones relating to Genedrive
®
 sales 1,250 1,250
The commercial milestones amounting to £1,250k referred to above and outstanding at 30 June 2016 (2015: £1,250k) 
relates to the recognition of £5m of Genedrive
®
 related income or contractual commitments from any of a list of 16 IVD 
companies which provide a minimum combined value of £5m.
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 69
a. Investments continued
The value at which Consideration shares are to be issued is to be calculated by reference to LSE daily share price over 
a five day period commencing 30 days after the date that the achievement of the milestone(s) is announced. The 
Consideration shares are subject to a ‘lock-in’ provision, under which the Vendor covenants not to sell Consideration 
shares for a period of up to 24 months without the consent of the Company, except in the event that an offer for the 
whole of the issued share capital of the Company is received and which is either recommended by the Board or 
becomes unconditional as to acceptances.
In the event that an offer for the whole of the issued share capital of the Company or for the Genedrive
®
 business is 
received and which is either recommended by the Board or is declared unconditional as to acceptances, then, the 
Vendor will become entitled to be allotted shares in the Company up to a maximum value of £2.65m, save to the extent 
that Consideration shares, as detailed above, have already been issued. The value at which these shares are issued will 
be the relevant offer price.
The Board is of the opinion that, as at 30 June 2016, the value of further consideration of £1.25m (2015: £1.25m) was 
capable of assessment and provision for this liability has been made in these accounts. Based on the share price of 90p 
at 30 June 2016, this would result in the issue of 1,388,889 shares.
Year ended 30 June 2016
Investment in 
subsidiaries 
£’000
Cost
At 1 July 2015 6,398
Additions 217
At 30 June 2016 6,615
Net book value
At 30 June 2016 6,615
At 30 June 2015 6,398
Year ended 30 June 2015
Investment in 
subsidiaries 
£’000
Cost
At 1 July 2014 6,228
Additions 170
At 30 June 2015 6,398
Net book value
At 30 June 2015 6,398
At 30 June 2014 6,228
Additions in the year ended 30 June 2016 comprised the fair value of the share options issued to employees of the 
subsidiary undertaking during the year of £158k (2015: £170k). Full details of the share options issued are set out in Note 
20 to the consolidated financial statements.
NOTES TO THE COMPANY FINANCIAL STATEMENTS
For the year ended 30 June 2016
CONTINUED
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70
b. Amounts receivable from Group undertaking and other receivables
Company
2016
£’000
2015
£’000
Amounts receivable from Group undertakings 20,542 17,516
20,542 17,516
Amounts receivable from Group undertakings are held in intercompany accounts with no security specified repayment 
terms.
c. Cash and cash equivalents
Company
2016
£’000
2015
£’000
Cash at bank and in hand 152 161
Short term bank deposits 162 3,546
314 3,707
Cash and cash equivalents comprise current accounts held by the Company with immediate access and short term 
bank deposits with a maturity of three months or less. Market rates of interest are earned on such deposits. The credit 
risk on such funds is limited because the counter parties are banks with high credit ratings assigned by international 
credit rating agencies.
d. Related party transactions
During the course of the year, Epistem SIP Trustee acquired 41,502 (2015: 6,178) shares in Epistem Holdings Plc on behalf 
of the Epistem Share Investment Plan at a cost of £60k (2015: £21k).
The Company has no controlling shareholder. Details of significant shareholders are listed in the Directors' report.
e. Impairment review
The carrying value of Investments and Amounts Receivable are subject to an annual impairment review. In the view of 
the Directors, no impairment provision has been required during the year (2015: £nil).
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 71
DIRECTORS, SECRETARY AND ADVISERS
Directors
Ian Gilham 
David Budd (appointed 1 March 2016)
Catherine Booth
Allan Brown
Roger Lloyd
Robert Nolan
John Rylands
Company Secretary
John Rylands
Registered Office
48 Grafton Street
Manchester M13 9XX
United Kingdom
Registrars
Neville Registrars Limited
18 Laurel Lane
Halesowen B63 3DA
Principal Banker
Natwest Commercial Banking
1 Spinningfields Square
Deansgate
Manchester M3 3AP
Nominated Adviser and Broker
Peel Hunt LLP
Moor House
120 London Wall
London EC2Y 5ET
Auditors
PriceWaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
101 Barbirolli Square
Lower Mosley Street
Manchester M2 3PW
Legal Advisers
Covington & Burling LLP
265 Strand
London WC2R 1BH
Page Title at start: Content Section at start:
Directors, secretary and 
advisers genedrive plc Annual Report 2016
72
NOTES
Page Title at start: Content Section at start:  genedrive plc  
48 Grafton Street
Manchester M13 9XX
United Kingdom
 
T +44 (0)161 606 7258
F +44 (0)161 606 7348
www.genedriveplc.com
genedrive plc Annual Report 2016