Annual Report • Mar 30, 2023
Annual Report
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Annual report
www.gentian.com
| Contents | 2 |
|---|---|
| Gentian Diagnostics in 2022 | 3 |
| Letter from the CEO |
5 |
| Gentian Diagnostics in brief | 7 |
| Market outlook and product pipeline | 9 |
| Products market 11 |
|
| Board of Directors report 15 |
|
| Corporate governance report22 | |
| ESG report 30 |
|
| Financial statements 202235 | |
Achieved IVDR certification for all relevant products.
| NOK million, if not otherwise specified | 2022 | 2021 | 2020 |
|---|---|---|---|
| Revenue from contracts with customers | 101.6 | 83.1 | 63.3 |
| Sales growth | 22% | 31% | 32% |
| Total revenue | 111.9 | 100.0 | 78.9 |
| Total revenue growth | 12% | 27% | 42% |
| EBITDA | -12.9 | -15.5 | -11.2 |
| EBITDA margin* | -12% | -15% | -14% |
| Profit for the year | -23.6 | -24.8 | -17.5 |
| Profit margin | -21% | -25% | -22% |
| Net cash flow from investing activities | -14.7 | -12.8 | -6.5 |
| Cash and cash equivalents | 81.6 | 114.9 | 158.0 |
| Equity ratio | 82% | 83% | 83% |
*EBITDA margin: EBITDA divided by total revenue
Gentian Diagnostics (OSE: GENT), founded in 2001, develops and manufactures high-quality, in vitro diagnostic reagents. Gentian's expertise and focus lies within immunochemistry, specifically infections, inflammations, kidney failures and congestive heart failures. By converting existing and clinically relevant biomarkers to the most efficient automated, high-throughput analysers, the company contributes to saving costs and protecting life. Gentian is based in Moss, Norway, serving the global human and veterinary diagnostics markets through sales and representative offices in Sweden, USA and China. For more information, please visit www.gentian.com.
"2022 marked our fifth consecutive year with sales revenue growth of more than 20%. I think delivering such growth levels over time is a testament to our team's unique capabilities. We continue to bring new and relevant products to the market, and also secure growth through our ability to foster successful commercial partnerships."
Hilja Ibert CEO, Gentian Diagnostics ASA
Dear shareholder,
At Gentian we deliver efficient diagnostics for better treatment decisions by addressing some of the critical health challenges of our time.
An ageing global population is resulting in an increasing need for diagnostic tests that can detect diseases earlier. At the same time, there is continued pressure on clinical laboratories to deliver more with scarce resources. Many of the existing biomarkers, however, are only available on slow and inefficient platforms. Our solution is to convert existing biomarkers to the most efficient automated, highthroughput analysers. This contributes to both saving costs and protecting life, which is of tremendous value both on an individual level and for society at large.
In times of uncertainty, with an ongoing geopolitical crisis and inflationary pressure, we are fortunate to be in a business where the global demand continues to be robust. Importantly, we focus on high-growth segments of diagnostics where our technical expertise gives us a competitive advantage. With our portfolio of seven diagnostic tests of which one is in product development, we are currently looking at a total serviceable market of USD 1.8 billion expected to grow by a solid 5-10% annually the next 4-6 years.
A key contributor to our expanding market opportunity is GCAL, a calprotectin-based product addressing severe inflammations and infections. This includes the cause of sepsis, which kills more than 10 million people per year. Following the recent publication of a study done in collaboration with Karolinska University Hospital, there is an ever-growing body of scientific evidence confirming that calprotectin is superior to established biomarkers like Procalcitonin (PCT), C-reactive protein (CRP) and the neutrophil to lymphocyte ratio (NLR) in detecting patients with the need for direct transfer to intensive care. Even though we know from experience that it takes time to establish a new diagnostic test in the market, this makes us rather excited about the long-term potential for GCAL.
Evaluating other key milestones for our company, Gentian secured four distribution agreements with major IVD companies in 2022. Two of these were for GCAL, one with Siemens Healthineers and one currently undisclosed. The other two were for our established product Cystatin C with distribution in the US, a market where this product is experiencing strong growth. It is also worth mentioning that we achieved IVDR certification for all relevant products during the year, demonstrating Gentian's commitment to delivering safe and effective products.
For 2022, Gentian's total revenue was NOK 112 million. While the company is now EBITDA positive pre-R&D, we continue to invest in growth while maintaining a healthy cash position and a solid balance sheet.
Going forward, we expect our established products to continue to deliver annual sales revenue growth of more than 20% enabled by their strong value propositions. Further upside lies in our high-impact diagnostic tests in market development (GCAL) and product development (NT-proBNP). In addition, we are constantly working on our pipeline of promising yet-to-be-disclosed R&D projects to ensure that we bring a steady stream of relevant products to the market.
Being part of a team, which is fully aligned on our mission to innovate diagnostic efficiency truly makes me proud. As we scale our company in the coming years, a key strategic priority for us is to further develop the unique capabilities of our team while continuing to foster a culture with high employee satisfaction and engagement. Attracting the best people and enabling them to perform at their best is a prerequisite for delivering growth, operational efficiency, and attractive long-term shareholder returns.
Hilja Ibert
Gentian Diagnostics ASA is a medical diagnostics company listed on Euronext Oslo Børs involved in R&D and the development, production, marketing and distribution of immunoassays. Its headquarters and production facilities are located in Moss, Norway, with distribution subsidiaries in Sweden and the US, and a representative office in China.
Gentian serves the immunochemistry segment of the in vitro diagnostics (IVD) market by making assays available on fully automated, high throughput platforms, utilising the Particle-Enhanced Turbidimetric Immunoassay (PETIA) technology. Through in-depth research into PETIA, and its development of proprietary antibody and nano-particle technology, Gentian can offer immunoassays that enable clinical laboratories to move from low volume immunology platforms to fully automated, high throughput instruments with shorter turnaround times, better workflow, faster time-to-result and improved cost efficiency. This supports clinicians in their constant objective for better treatment decision.
The current portfolio and pipeline of efficient and accurate reagents span areas of inflammations, severe infections, kidney failures and congestive heart failures and veterinary healthcare. The value propositions of the Gentian's products are scientifically proven and promoted by investments into clinical studies, state-of-the art marketing, and selective commercial representation in key countries.
The company was started by the brothers Erling and Bård Sundrehagen in 2001. Having originally worked together during the founding of Axis (later Axis-Shield ltd, Alere inc. and now Abbott), they were eager to start a new, innovative venture together in the diagnostics field.
The Gentian Cystatin C Immunoassay was launched in 2006 and after fast uptake in Sweden, a FDA-510(k) clearance was achieved in 2008. The Beijing representative office was opened in 2009 and Gentian USA Inc. was established in 2012 to further expand the global reach. Gentian expanded into veterinary medicine with its Canine CRP Immunoassay in 2012. In 2016, a Swedish subsidiary Gentian Diagnostics AB was established to take charge of the Swedish distribution. Gentian AB extended its commercial activities to Norway, Finland and Iceland, including the distribution of the BÜHLMANN product portfolio, by the end of 2021. In 2022, the company launched its SARS-Cov-2 total antibody immunoassay.
Gentian Diagnostics ASA was admitted to the Oslo Stock Exchange list 'Euronext Growth' in December 2016. In June 2021 the listing of the shares was successfully transferred to Euronext Oslo Børs. The company currently has more than 900 shareholders.
During the last years Gentian has extended its focus on market development for GCAL®, the plasma and serum calprotectin immunoassay launched in 2019. More and more clinical studies are showing the clinical value of calprotectin in risk assessment and evaluation of the disease severity in severe infections, inflammations and COVID-19.
55 employees globally convert knowledge and research into immunoassays that improve diagnostic efficiency. Gentian's international team continuously pursue scientific knowledge combined with business and product development skills that will contribute to improved solutions and diagnostic efficiency. Gentian's management team consists of members with leading expertise in production technology, regulatory affairs, quality assurance and commercial affairs with experience from industry leading companies including Becton Dickinson, GE Healthcare, Fresenius Kabi and Thermo Fisher Scientific.
Clinical diagnostics laboratories are the end-users of all Gentian's products. Laboratories can be part of hospitals and/or private-driven institutions which serve the outpatient segment and hospitals which outsource the laboratory work for efficiency/cost reasons. Gentian products are tested mainly within the clinical chemistry laboratories, which are departments of the overall clinical diagnostics laboratories.
In order to reach the end-user customer, Gentian serves the following three customer categories:
Gentian designs, develops, manufactures and commercialises highly sensitive in vitro diagnostic (IVD) reagents and materials for the global human and veterinary clinical laboratory market. Gentian's mission it to innovate diagnostic efficiency for better treatment decisions. Gentian's portfolio of current products and products under development encompasses clinically relevant assays for detection and quantification of biomarkers which support the diagnosis of inflammations, severe infections, kidney failures and congestive heart failures as well as veterinary healthcare.
The current portfolio includes Gentian Cystatin C Immunoassay (IVDR and FDA-510(k) cleared), plasma and serum calprotectin immunoassay GCAL® (IVDR), Gentian Canine CRP, and Gentian SARS-CoV-2 AB (CE-IVDD marked). Gentian is the sole reagent manufacturer for the faecal calprotectin immunoassay fCAL® turbo (IVDR and FDA-510(k) cleared) in addition to the pancreatic elastase immunoassay fPELA® turbo (IVDR, FDA Exempt). These immunoassays are sold through Gentian's partner BÜHLMANN Laboratories.
Gentian also coordinates several well-funded international R&D projects partnered by large clinical and commercial organisations. We have several new diagnostic products in the pipeline, expanding the product portfolio further in the coming years. Selection of products in development is based upon a diligent process to identify tests which have been identified as market requirement with significant business potential. This process includes market research, input from key opinion leaders as well as Gentian business partners. Some products are co-developed with partners.
The in vitro diagnostics (IVD) industry involves testing of human tissue or fluid samples outside of the body to screen and detect diseases, infections and medical conditions. IVD testing is a core component of routine health care check-ups for those who are presenting with symptoms or require procedures. It influences up to 70% of critical healthcare clinical decision-making.
The major factors that are expected to be driving the in vitro diagnostics market are the aging population and demographic development as well as the subsequent growth in the prevalence of chronic and infectious diseases. This drives the need for productivity and cost effectiveness gains such as fully automated instruments and automation in diagnostic laboratories.
The global IVD market represented approximately USD 95 billion in global end-user revenue in 2022 1 . The IVD market is divided among multiple testing disciplines, including immunoassay, clinical chemistry, molecular diagnostics, anatomical pathology, microbiology, haematology and coagulation, among others. Gentian competes in the largest market segment (excluding the impact of COVID-19), the combined clinical chemistry and immunoassay segments, which represented a USD 38 billion global market in 2022 1 .
The COVID-19 pandemic has added considerable testing volumes and revenues to the IVD market with an estimated market size of USD 32 billion in 2022 2 .
Based on the diseases addressed by Gentian's established products, products in market development and products in technical development, the group's total addressable market is USD 6.1 billion with a corresponding serviceable market of USD 1.8 billion, growing at an estimated 5-10% annually.
| Total Addressable Market, USDm |
Total Serviceable Market, USDm |
Target market share, unrisked |
Gentian's revenue take |
Serviceable Market annual growth rate, next 4- 6 years |
|
|---|---|---|---|---|---|
| Established products | 2,200 | 220 | ̴25% | 30-50% | 5-10% |
| GCAL infection (sepsis) | 1,000 | 440 | ̴15% | 30-50% | 7 % |
| GCAL inflammation | 1,250 | 250 | Under ev aluation | 30-50 | Under ev aluation |
| NT-proBNP | 1,700 | 900 | ̴15% | 30-50% | 5-10% |
| Total | 6,100 | 1,810 | >15% | 30-50% | 5-10% |
Based on the high-growth serviceable market, Gentian's ambition is a 15-20% market share with revenue take typically in the range of 30-50%.
The Gentian Calprotectin Immunoassay GCAL® is a biomarker for the detection of inflammation in plasma and serum. Indications for its use have been reported in different disease areas, including bacterial infection and sepsis, autoimmune conditions like rheumatoid arthritis, and in COVID-19 management. n s
Gentian, together with national and international research institutes and hospitals, continues to perform and publish new clinical studies to demonstrate the clinical utility of calprotectin. Focus areas for GCAL® clinical studies are severe infections including sepsis. The studies has resulted in promising results reporting calprotectin as a sensitive and early detection marker in sepsis diagnosis, prediction of disease severity and the differentiation between bacterial and viral infections. Furthermore, in viral sepsis caused by COVID-19, calprotectin has been reported as valuable risk marker for prediction of severe events, like the need for invasive ventilation, organ failure, ICU admission and mortality. p m e r k s o
Sepsis is reported to be one of the major health problems with around 1.7 million patients to develop sepsis in the US alone. Established biomarkers like Procalcitonin (PCT) and lactate have certain limitations. The global total addressable market for GCAL® is USD 2.25 billion with USD 1 billion for diagnostics of infections and USD 1.25 billion being related to diagnostics of inflammatory conditions. h e t m
GCAL® is available as an IVDR cleared product in Europe and plans are being evaluated to introduce the product in other markets. d
The faecal calprotectin immunoassay fCAL® turbo provides clinicians with fast results of calprotectin in stool supporting diagnosis of inflammatory bowel disease (IBD), while also reducing the need for costly and invasive colon endoscopic examinations.
fCAL® turbo is produced by Gentian and sold exclusively through the partner BÜHLMANN Laboratories to end users, distributors and as bulk to global diagnostics companies.
The assay was launched in 2015 and has since reached several milestones such as completed registrations in key markets, including the US with the FDA-510(k) clearance, IVDR certification in 2022, validations on all major clinical chemistry analysers, and a supply agreement with Roche Diagnostics through BÜHLMANN Laboratories.
The market for faecal calprotectin testing is continuously growing due to both increased demand as well as the adoption of faecal testing in automated routine laboratories, converting from manual or semiautomated procedures. fCAL® turbo sales grew by 30% in 2022, contributing the largest growth element to Gentian sales.
The Gentian SARS-CoV-2 total antibody immunoassay provides a powerful high-throughput tool for the long-term monitoring and community management of COVID-19. Gentian will take SARS-CoV-2 serology testing to clinical chemistry platforms increasing the testing capacity and improving laboratory efficiency. The assay detects total antibodies ensuring high sensitivity and target the S1-subunit of the spike protein of the virus providing high specificity and correlation to neutralising antibodies, as well as targets of vaccine programs.
The Gentian SARS-CoV-2 total antibody immunoassay aims to join the effort for future effective and reliable monitoring of the virus behaviour in the community and possible assessment of population immunity as well as determining the immune response to vaccination efforts in continued vaccination development.
Gentian is focusing its commercial activities on offering the product for vaccination studies as a unique platform independent assay for clinical chemistry instruments. The CE marked product is available to selected markets since March 2022.
The Gentian Canine CRP Immunoassay is an IVD test for the quantitative determination of Canine Creactive Protein (CRP) in dog serum and plasma. Gentian's Canine CRP has canine-specific antibodies to ensure consistent specificity to the canine CRP antigen. The Gentian Canine CRP Immunoassay is an easy, reproducible and cost-efficient test, which is essential for an efficient and uncomplicated inclusion of this inflammation marker into the veterinary routine test panel.
The Gentian Cystatin C Immunoassay (CE marked and FDA-510(k) cleared) is an in vitro diagnostic (IVD) test for quantitative determination of Cystatin C in human serum and plasma, supporting an early detection of reduced kidney function.
The Gentian Cystatin C Immunoassay had an overall growth of 10% in 2022 vs 2021 and was the number one growth driver for Gentian in the US, while demand in Asia (China) stagnated due to extended COVID related lockdown measures. The increased focus on Cystatin C is driven by Cystatin C's ability to provide a significant clinically relevant alternative to creatinine. In the US, the uncertainty of estimated glomerular filtration rate (eGFR) based on creatine measurements in context of patients' racial components has been recognised2,3 , with a recommendation to include Cystatin C in establishing the eGFR. The eGFR is a main measure for kidney function. Cystatin C is gaining momentum in Europe4 based upon these new recommendations. Gentian, together with its partners, including the longstanding collaboration with Beckman Coulter, is well positioned to gain further share in all target markets.
The faecal pancreatic elastase immunoassay fPELA® turbo allows fast analysis of pancreatic elastase in stool to aid in diagnosis of pancreatic exocrine insufficiency (PEI), often presented with the same symptoms as inflammatory bowel disease (IBD). fPELA® turbo can be analysed in the same sample as faecal calprotectin, thus expanding the portfolio of faecal testing, reducing both cost and time for clinicians and the clinical laboratories.
fPELA® turbo is exclusively sold through Gentian's sales and development-partner BÜHLMANN Laboratories.
fPELA® turbo was launched mid-2020, with current sales in Europe as well as in the US, where the assay was successfully launched as a FDA-exempt product. Registrations are ongoing in several key markets, and validations continue for use on newly introduced clinical chemistry analysers.
Gentian's NT-proBNP assay is currently in the optimization phase of development and aims to be the first turbidimetric in vitro diagnostic test for the quantitative measurement of NT-proBNP. The goal is to make NT-proBNP testing more accessible on high-volume clinical chemistry analysers, which should increase laboratory productivity and reduce overall costs. The growing cost burden in healthcare systems due to an aging population and lifestyle choices is driving the demand for NT-proBNP testing.
During the year a working prototype was developed. Extensive testing of this prototype confirmed the hypothesis that the glycosylation of the NT-proBNP molecule can lead to an underestimation of true NTproBNP concentrations in clinical samples, as seen with commercially available assays. Gentian's NTproBNP assay targets a non-glycosylated area of the molecule and does not suffer from this underestimation issue.
Gentian's calibration strategy aims to achieve cut-off levels that are equivalent to established market standards, which is crucial for the commercial launch. However, the company's assay will stand out from established assays by addressing the underestimation issue caused by glycosylation. The company believes that this differentiation will be clinically advantageous, given the growing awareness around the problem of underestimation. Nonetheless, this could require more clinical documentation.
The company has identified a simpler and more efficient calibration method that could potentially replace the independent calibration method described in previous reports. Going forward, we need to quantify the degree of underestimation by established assays to complete the calibration strategy, and we also need to improve the stability of the working prototype.
The company is pleased to note that it has received positive and continuous interest from IVD companies regarding the Gentian NT-proBNP assay, and has conducted initial technical reviews with selected potential commercial partners. At this point, a timeline for the remaining part of the optimization phase can not be provided. However, if the product successfully completes the optimization phase, subsequent phases are typically characterized by lower risk. It is estimated that the remaining development period for NT-proBNP, after completion of optimization, will be 6-9 months. Additionally, the product will now fall under the new IVDR regulatory regime, which will add another 6-9 months before commercial launch. As per established practice, if the current optimization efforts do not prove successful, we will consider returning the project to the exploration phase.
As announced on 5 December 2022, the company has been granted a patent in the US related to NTproBNP.
References: 1. Kalorama 2022, The Worldwide Market for In Vitro Diagnostic Tests 14th Edition, 2. El-Khoury JM et al. Is It Time to Move On? Re-examining Race in Glomerular Filtration Rate Equations. Clinical Chemistry. 2021;67(4):585-591, 3. Ebert N, Shlipak MG. Cystatin C is ready for clinical use. Curr Opin Nephrol Hypertens. Nov 2020;29(6):591-598, 4 Pottel H et al, Cystatin C–Based Equation to Estimate GFR without the Inclusion of Race and Sex. N Engl J Med 388;4 January 26, 2023.
Gentian Diagnostics' purpose is to deliver efficient diagnostics for better treatment decisions. The growing diagnostics market puts increasing pressure on clinical laboratory efficiency. However, many of the existing, clinically relevant biomarkers are available only on slow and inefficient platforms. Gentian's solution is to utilise PETIA (particle-enhanced turbidimetric immunoassays), based on proprietary nanoparticle technology and knowhow, to convert existing biomarkers to the most efficient automated, high-throughput analysers. Gentian is based in Moss, Norway, serving the global human and veterinary diagnostics markets through sales and representative offices in Sweden, USA and China.
Gentian's portfolio of high-impact diagnostic tests targets several large and growing disease areas such as infections and inflammation, kidney failure and congestive heart failure. The company has four established products – Cystatin C, fCAL® turbo, Canine CRP and fPELA® turbo – that contributed to 28% annual sales revenue growth in 2019-2022. In addition, SARS-CoV-2 Ab and GCAL® have been launched and are in market development while NT-proBNP is in the product development phase – with the two latter having potential to become blockbuster products. The company also has three undisclosed projects in exploration and 'proof of concept' phases.
In 2021, Gentian announced a long-term ambition to generate an estimated annual revenue of NOK 1.0 billion in 5-7 years, dependent on the timing of NT-proBNP launch yet to be concluded. In comparison, total revenue was NOK 112 million in 2022. The company's roadmap for long-term growth and value creation is founded on six strategic pillars:
Grow annual revenue from the company's four established products by 20%+ annually – by expanding market access through additional commercial partners and regulatory approvals
Demonstrate clinical relevance of GCAL® for the early detection of severe infections, which supports the avoidance of sepsis and the severity assessment of COVID-19 patients
Bring a steady stream of new high-impact diagnostic tests to market. NT-proBNP in optimisation with launch date TBD and three projects in exploration and 'proof of concept'.
Secure one new contract with a global commercial partner every year, building on already established partnerships with Beckman Coulter for Cystatin C, BÜHLMANN / Roche for fCAL® turbo through BÜHLMANN Laboratories and Siemens Healthineers for GCAL®
Grow gross margin from ~50% to 60%+ at volume production through economies of scale
Deliver long-term EBITDA margins of 40% through operational leverage and cost discipline
Total revenues in 2022 was NOK 111.9 million versus NOK 100.0 million in 2021. Net loss for 2022 was NOK 23.6 million, versus a net loss of NOK 24.8 million in 2021.
Total research and development spending in 2022 were NOK 28.8 million of which NOK 6.0 million is capitalised and the remaining NOK 22.8 million is treated as operating expenses in the profit and loss statement. In 2021 the total research and development spending were NOK 36.1 million of which NOK 11.7 million were capitalised and NOK 24.4 million was treated as operating expenses.
Cash flow from operations for the group was NOK -13,9 million in 2022 compared to NOK -27.6 million in 2021, while the operating loss for the group totalled NOK -23.2 million in 2022 versus NOK 24.4 million in 2021. The difference between operating cashflow and the operating loss is primarily due to depreciation, capitalisation and timing differences.
Cash and equivalents totalled NOK 81.6 million per 31 December 2022, which is satisfactory. Per December 2021 the cash and equivalents were NOK 114.9 million.
Total assets per 31 December 2022 was NOK 187.8 million versus NOK 211.8 million per 31 December 2021.
Net loss for 2022 was NOK 7.5 million, versus a net loss of NOK 12.8 million in 2021. The board of directors proposed that the loss is transferred to accumulated loss.
Total assets per 31 December 2022 was NOK 269.4 million compared to NOK 273.9 million per 31 December 2021. Equity ratio (equity over total assets) per 31 December 2022 was 98.9 % compared to 99.3 % per 31 December 2021. The liquidity situation is satisfactory.
The board of directors believes the annual accounts give a true and fair view of the assets, liabilities, financial position and result.
All new products that will be launched after May 2022 must comply with IVDR. During 2022, Gentian obtained IVDR certification by TüV SÜD as complying with the European In-Vitro Diagnostic Regulation (IVDR), EU 2017/746. This certification granted by notified bodies such as TüV SÜD is required for invitro diagnostics products to continue being sold in the European Union. The extensive requirements of IVDR were adopted by the European Parliament in 2017 with gradual implementation from 26 May 2022.
Gentian targets disease groups that represent a total addressable market of around USD 6.1 billion globally and an estimated growth rate of 5-10% annually over the next 4-6 years, according to leading market data provider Kalorama (2022). From a macro perspective, key growth drivers include a growing and ageing population contributing to an increase in chronic and infectious diseases globally.
The specific segments targeted by Gentian's products add up to a total serviceable market of USD 1.8 billion (2022), with an estimated annual growth rate in line with the addressable market.
Overall, Gentian targets a market share of 15-20% for its product portfolio which is offered through commercial partners. With a commercial strategy to serve the market through OEM and distribution agreements it is expected that the revenue take will vary across products but remain within the 30-50% range for the product portfolio as a whole.
The company's strategy for growing its market share is founded on innovative biomarkers based on PETIA technology and proprietary know-how offering high value benefits, supported by an effective goto-market strategy. The benefits include early diagnostic results that enable improved treatment decisions and a 3-10x increase in volume throughput that saves costs, making Gentian's offering an attractive solution to the increasing pressure on laboratory productivity.
The 5–7-year revenue ambition of NOK 1 billion Gentian announced in 2021, which is dependent on the timing of NT-proBNP launch, as well as its long-term EBITDA margin target of 40%, are set to be derisked through several key milestones for the company's product portfolio in 2022:
• Finalise proof-of-concept of two new pipeline projects
The board of Gentian Diagnostics ASA applies the principles for corporate governance as set out by NUES, and a separate section is provided in the annual report for a review of the group's corporate governance structure and procedures.
Gentian has signed a liability insurance which covers the board of directors. The insurance covers NOK 10,000,000 per claim and in total during the insurance period.
Gentian has a structured approach to identifying and mitigating risks. The board of directors acknowledge that the current geopolitical situation implies increased risks and uncertainties for Gentian's industry and its business. This includes increased risks related to cost inflation, potential supply chain issues, currency volatility and access to growth capital given the recently observed impact on general investor sentiment and investors' required rate of return.
Being in the development phase, Gentian is accumulating financial losses. Operating losses are expected to continue during this phase, and cash generating operations are not expected until existing and new products have reached a higher level of sales. General monitoring of risks related to the financial development is ensured through control of financial reporting. This is achieved through day-today follow-up by management, supervised by the board of directors, and through periodical reporting and evaluation. The group has identified the following primary financial risks:
In the ordinary course of business, the group enters into contractual relationships with various parties. As the customers are invoiced after the products have been delivered, the Company is exposed credit risk.
Future interest rate fluctuations may affect the group's business, financial condition, results of operations, cash flows, time to market and prospects. By year-end 2022, the group had no long-term debt other than lease liabilities.
Fluctuations in exchange rates could affect the group's cash flow and financial condition. The currency exposure includes both transaction risk and risk related to translation of operating expenses. Transaction risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity's functional currency. The group undertakes various transactions in foreign currencies and is consequently exposed to fluctuations in exchange rates. The exposure arises largely from sale of diagnostic products. The group currently does not hedge against foreign currency risk and is mainly exposed to fluctuations in EUR, USD and RMB. The group monitors movements in the main currencies which it is exposed to and may put in place hedges if deemed necessary. Translation risk in the group arises when amounts denominated in foreign currencies are
converted to NOK, the group's reporting and functional currency. One of the group's subsidiaries has SEK as its reporting and functional currency. Gentian has costs and payments in several currencies, EUR the most prominent but also USD and other.
Below is a condensed description of operational company specific key risks and mitigating actions. Please refer to the company's most recent prospectus available at www.gentian.com for an overview of identified risk factors.
Risk factor I: Losing top talent.
Mitigating actions: Continue to leverage and develop established talent retention programs.
Risk factor II: Not being able to attract top talent.
Mitigating actions: Established HQ in Norway, a market with good access to qualified candidates with biochemistry and bioengineering competence. Continuing to leverage and develop an established recruitment process which has proved successful in attracting talent historically.
Risk factor I: Failing to develop and launch new products.
Mitigating actions: Employing a de-risking model which rarely results in full failure. Terminating development of products early if metrics are not met.
Risk factor II: Product recalls and product liability.
Mitigating actions: Established state of the art quality system as confirmed by ISO 13485:2016 certification. The group has taken out extensive product liability insurance.
Risk factor III: Failing to acquire commercial partners.
Mitigating actions: Hired executives with significant network and experience with global distributors combined with a structural effort to further develop relations. Building capabilities for direct sales in parallel.
Risk factor I: Losing license to operate through failing to adhere to current and new regulations.
Mitigating actions: Hired executives with significant experience from regulatory processes. Established state of the art quality system as confirmed by ISO 13485:2016 certification.
Gentian Diagnostics ASA is an equal opportunity employer. The group had 55 employees by the end of 2022, of which 34 are women. The working environment is good. As of 31 December 2022, the board of directors has 8 members of which 5 are men and 3 are women.
The group has not experienced any lost-time injuries nor significant absence during the year. For further details on the working environment, refer to the ESG report of this document.
Gentian Diagnostics ASA has three employees. The group's operational activity is conducted through its subsidiaries.
Gentian's business has a limited impact on the external environment.
Moreover, the group's initiatives to reduce its impact on the environment is described in the ESG report section of this document.
The group has started the mapping and assessing the materiality and risk of our operations which potentially could have a negative impact on fundamental human rights and decent working conditions in the supply chain. For more details, see the ESG report section and the supplier code of conduct on www.gentian.com.
The board confirms, in accordance with the accounting act § 3-3a that the financial statements are prepared on the basis of a going concern.
There have not been any significant events since the balance sheet date.
Moss, 29 March 2023 For Gentian Diagnostics ASA
| Tomas Settevik | Kari E. Krogstad | Espen Tidemann Jørgensen |
|---|---|---|
| Chairperson | Board member | Board member |
| Sign. | Sign. | Sign. |
| Susanne Stuffers | Fredrik Thoresen | Monika Neuman |
| Board member | Board member | Board member |
| Sign. | Sign. | Sign. |
| Tomas Kramar | Frank Frantzen | Hilja Ibert |
| Board member | Board member | CEO |
| Sign. | Sign. | Sign. |
Gentian Diagnostics ASA and its subsidiaries seek to comply with the principles on corporate governance set out in the Norwegian Code of Practice for Corporate Governance (the "Code" or the "Code of Practice"). This report sets out Gentian's main corporate governance policies and practices. The application of the Code is based on the "comply or explain" principle.
Good corporate governance is imperative to Gentian, and the company continuously work on its corporate governance principles and documents in order to ensure alignment of its practices with the Code. Like most companies Gentian is dependent upon good relations with its stakeholders to succeed and this is a priority for the company. A good reputation and solid financial development over time are important in order to build and maintain trust and confidence towards key stakeholders like customers, investors, suppliers, employees, partners and public authorities. This requires good control of the business with an open and honest communication. Additionally, equal treatment of shareholders is also important to achieve investor confidence and fair valuation of the company's shares.
Gentian is aware of its responsibility in society towards anticorruption, working environment, discrimination, environment and human rights.
Gentian is a developer and manufacturer of IVD as defined in its articles of association. The articles are available at www.gentian.com.
The board of directors sets the direction for the company by determining the strategy, goals and risk profile of the business within the parameters of the articles of association such that the company creates value for shareholders in a sustainable manner and takes into account financial, social and environmental considerations. The strategy, goals and risk profile are evaluated on an annual basis by the board of directors through a designated strategy process. Information concerning the principal strategy and goals of the company and changes thereto as well as business risks aspects are disclosed to the market in the context of the company's annual report, its half-yearly and interim reporting, company presentations and on the company's website.
Gentian has prepared the Gentian Code of Conduct which include the group's commitments and principles for ethical behaviour, trade and anti-corruption. The code of conduct is available on www.gentian.com
Gentian strives for independency and neutrality in the relations between the board of directors, management, owners and others. The principle of independence and neutrality and arm's length principle applies towards all contacts and business associates like customers, suppliers, banks and other connections.
The board of directors consists of the following eight members:
Chair Tomas Settevik (born 1960), independent director, has experience in both life sciences and consumer goods and is currently an independent investor and non-executive director in several companies. He was the CEO of Stokke AS (2010-15), and CEO of Pronova BioPharma ASA after serving as Vice President Pharmaceuticals and Manufacturing (2004-2008). Mr. Settevik has also held several senior positions – VP Northern Europe, VP Marketing and R&D, and Managing Director UK/Nordic – at Tyco Healthcare EMEA (acquired by Medtronic) (1992-2003). Mr. Settevik holds a BS degree from Copenhagen Business School.
Espen Tidemann Jørgensen (born 1975), independent director, is currently Portfolio Manager of Holta Invest AS and Managing Director of Holta Life Sciences AS. He has 18 years of experience from financial markets, including positions as equity analyst at DNB Markets and portfolio manager at Holta Invest. Mr. Jørgensen has previously been a member of the board of directors at Weifa ASA and Cortendo (now Strongbridge BioPharma). He is currently a board member at Decisions AS in addition to Gentian Diagnostics. Mr. Jørgensen holds a Master's degree in Economics and has completed 3 years of medical studies at the University of Oslo.
Kari E. Krogstad (born 1964), independent director, has more than 25 years of experience from the biomedical industry, from commercial leadership roles within the pharma, biotech and medtech sectors. She has worked for Dynal Biotech, where she has led Invitrogen Dynal in the role as General Manager after the acquisition from Invitrogen in 2005. Ms. Krogstad has held her current role as President and CEO at Medistim ASA since 2009. Ms. Krogstad holds a Cand. Scient. degree in Molecular Biology from the University of Oslo as well as a Business degree from IHM Business School.
Susanne Stuffers (born 1981), independent director, is currently managing partner of P53 Invest AS. Previously she has worked with Arctic Securities as an equity analyst covering the healthcare sector (2015-2018). Ms. Stuffers has experience from management consultancy in health care and life sciences (EY, 2014 – 2015) and from both medical and commercial roles in the pharmaceutical industry (Novartis, 2011 – 2014). In addition, she also has clinical practice as a resident in oncology (OUS Ullevål, 2010-2011). Ms. Stuffers holds an M.D. degree from the Erasmus University Rotterdam and a Ph.D. degree in cancer biomedicine from the Norwegian Radium Hospital.
Tomas Kramar (born 1954), independent director, has more than 40 years of experience from the diagnostic industry including Siemens, Abbott and Roche Diagnostics. Mr. Kramar has held several senior positions like Global Business Manager, Business Director and CEO, as well as being a founding
partner in the Kramar Group. In addition, Mr. Kramar has held several board positions over the years. Mr. Kramar holds an MSc degree in Chemistry from the Faculty of Engineering at Lund University in Sweden.
Fredrik Thoresen (born 1980) is a partner in Andenaesgruppen, which currently holds 12.17% of the outstanding shares in Gentian Diagnostics ASA. Mr. Thoresen has previous buy and sell-side experience from Storebrand, SEB, DNB and Sector Asset Management. Mr. Thoresen has an MBA in International Business from Middlebury Institute of International Studies, Monterey, California and a bachelor's degree in Computer Science and Economics from Augustana University, Sioux Falls, South Dakota.
Monika Neuman (born 1965), independent director, has 20 years of experience from the diagnostics industry and is currently Managing Director for Sarstedt Group in the Nordics. During the past 4 years, Ms. Neuman has been working at Siemens Healthineers Laboratory Diagnostics HQ in Tarrytown, NY, to set a successful strategy for launch and implementation of a new product portfolio on the global IVD market. Ms. Neuman holds a MSc degree in Biochemistry and a PhD degree in Clinical Bacteriology from Medical Faculty at Göteborg University in Sweden.
Frank Frantzen (born 1957), independent director, has more than 35 years of experience from the diagnostic industry. He has served as principal scientist and has directed larger R&D units in international IVD companies AxisShield, Alere and Abbott. Mr. Frantzen left his Senior Director R&D position at Abbott in 2021 and is currently serving as Chief Technology Officer in CardiNor AS. Mr. Frantzen holds a master's degree in chemistry and a PhD, both from the Norwegian University of Science and Technology in Trondheim.
The remuneration of the board of directors reflects the board's responsibility, expertise, time commitment and the complexity of the company's activities. The remuneration of the board of directors is not linked to the company's performance. The group has not granted share options to members of its board. See note 9 to the financial statements for additional information.
Gentian strives to ensure that all shareholders shall be treated equally. There is one class of shares and one share has one vote at the shareholders' meeting. All shares are freely negotiable with no form of restriction. Shareholders are treated equally in relation to dividend. There is no restriction related to the ownership of shares and there are no shareholder agreements that the company is aware of. Sales and purchases of own shares are executed through Oslo Børs.
All existing shareholders have pre-emptive rights to subscribe for shares in the event of share capital increases. The general meeting may by a qualified majority set aside the pre-emptive rights of existing shareholders. Any deviations from such rights must be justified by the common interest of the company and the shareholders. Explanation of the justification by the board of directors shall be included in the agenda for the shareholders meeting. Where the board of directors has authorisation to increase the
company's share capital and waive the pre-emption rights of existing shareholders, a stock exchange notice will be issued containing the reasoning for the deviation.
Any transactions in the company's own shares are to be carried out either through the stock exchange or at prevailing stock exchange prices if carried out in any other way. If there is limited liquidity in the company's shares, the company will consider other ways to ensure equal treatment of all shareholders.
The company has established related party transaction procedures to ensure that all transactions with related parties are premised on commercial terms and structured in line with arm's length principles and further detail how the board and executive management should handle agreements with related parties. Such procedures supplement the procedures set out in applicable law and may amongst other things lead to arrangement of independent assessments of the related party transactions. It is the board members and key employees' responsibility to give notice to the board of directors, if they directly or indirectly have interests in any agreements the company is about to enter. Information on relevant related party transactions is included in the notes to the financial statements.
The General Assembly is open to all shareholders and the board of directors strives to ensure that as many as possible of the company's shareholders participate in the General Assembly. The company will send out a notice of the General Assembly in accordance with the applicable law. An agenda, documents and information about the matters to be resolved will be included in the notice so that the shareholders can be prepared on the issues treated at the General Assembly. Shareholders can vote in each individual matter, and shareholders who are unable to attend the meeting in person may vote by proxy. A proxy form is included in the notice convening the General Assembly.
Any deadline for shareholders to give notice of their intention to attend the meeting will be set as close to the date of the General Assembly as possible. The General Assembly will be able to elect an independent chairperson for the General Assembly.
A shareholder may be represented through power of attorney. The board of directors and the chairperson of the nomination committee will attend the meeting.
Gentian will strive to have a solid balance sheet. The board of directors and the executive management regularly monitor that the company's capital structure including the level of equity is appropriate for the company's overall objective, strategy, goals and risk profile.
Authorisations to the board of directors to increase the company's share capital are granted with a defined purpose and limited to no later than the date of the next annual general meeting the following year.
Gentian has ambitious goals for future growth and the overall objective is to create long-term value for its owners. To reach its goals, the company will endeavour to have an optimal capital structure. Given
that Gentian is in the development phase, the board of directors does not expect to propose any dividend in the short to medium term.
The articles of association stipulate that the board of directors shall consist of between 3 and 8 shareholder-elected board members, who are elected by the General Assembly for a period of one year. The composition of the board of directors aims to ensure that the interests of all shareholders are attended, and meet the company's need for expertise, capacity and diversity, and at the same time function effectively as a collegiate body. A majority of the shareholder-elected board members are independent of executive personnel, material business contacts and major shareholders. The Board of Directors does not include any executive personnel.
Members of the board of directors are encouraged to own shares in the company. The board of directors has a fixed yearly compensation decided by the General Assembly and reflecting the board's responsibilities, competence, workload and the complexity of the company. The remuneration of the board of directors is not dependent on results and no options have been issued to the board members. board members or companies they are affiliated with do not normally assume tasks for the company in addition to the board position. If such a commitment were to be established, the entire board would be informed and the fee for the engagement will be approved by the board. If remuneration is given to the members of the board beyond the board fee, this will be stated in the annual report. The shareholdings and remuneration of the board of directors are set out in the notes to the financial statements of the company.
The board of directors has overall responsibility for the administration of the company and for safeguarding the proper organisation of the business. The board of directors shall supervise the dayto-day management and the company's business in general. The board establishes an annual plan for its work with emphasis on goals, long-term strategy and implementation. Furthermore, the board evaluates its performance and expertise annually against the annual plan.
Procedures are made in order for members of the board and executive personnel to make the company aware of any material potential conflict of interests they might have in items to be treated by the board of directors. Matters of a material character in which the chairperson of the board is, or has been personally involved, will be chaired by some other member of the board.
The audit committee has the responsibility to provide oversight with all financial aspects of the group. The objectives of the committee are to ensure the integrity of the group's financial reporting, oversee the independence of the external auditors, ensure that controls are established and maintained to
safeguard the group's financial and physical resources, and to ensure that systems and procedures are in place so that the group complies with relevant statutory, regulatory and reporting requirements.
A remuneration committee is established to ensure that remuneration arrangements support the strategic goals of the business and enable the recruitment, motivation and retention of senior executives while also complying with the requirements of regulation. The remuneration committee is responsible for, amongst other, preparing the board's proposal to the guidelines for remuneration for key personnel and yearly remuneration report.
The role of the committee shall be to provide input and advise the board in matters relating to the company's research & development ("R&D") strategy, including reviewing the company's pre-clinical and clinical product pipeline and the ranking thereof in view of the company's overall strategy.
The board of directors has a yearly meeting to set the strategy for the company and identify important risk factors. The board of directors receives updated financial information at every board meeting. The financial position is analysed and compared against budget, long-term strategy, plans and last year's performance. The board of directors reviews the quarterly reports and risk factors for the company are discussed and evaluated. The board of directors has an annual review together with the auditor before approving the annual report. Risk factors are also reviewed.
The articles of association stipulate that the company shall have a nomination committee appointed by the General Assembly. The Nomination Committee proposes candidates to the board of directors, the Nomination Committee, as well as yearly compensation to the board members and committee. The majority of the Nomination Committee shall be independent from the board of directors and management. The Nomination Committee consists of 2-4 members who will normally serve for a term of one year. The chairperson of the committee is Andreas Berdal Lorentzen. Other members are Haakon Sæter, Runar Vatne and Erling Sundrehagen. Erling Sundrehagen was a member of the executive management until 31 December 2022 and this represents a deviation from the principles in the Code. From 1 January 2023, Erling Sundrehagen is a consultant to the group and his membership to the Nomination Committee does no longer represent a deviation to the Code.
It is important for Gentian to be an attractive employer. The company strives to attract competent employees with relevant experience and give the opportunity for further development. The compensation to management will at all times be at market terms.
The company has adopted guidelines for the remuneration of the executive management which are presented to the General Assembly. The principles presented in these guidelines provide the framework for the remuneration of key personnel in Gentian and aim to support the company's business strategy and long-term interests.
The company has established both short-term and long-term incentives for key personnel. The shortterm incentive includes a bonus arrangement, and the long-term incentive includes a performancebased share option program which both are based on defined measurable goals. Key personnel are included in the same pension and insurance plan as other employees.
The board of Directors set terms and conditions for the CEO. The CEO determines the remuneration of executive personnel on the basis of the guidelines laid down by the board of directors, reflecting the overall guidelines adopted by the General Assembly. Terms and conditions are set at market terms and are evaluated on a yearly basis. It is company policy to reflect the average level in the market.
The company wishes to maintain an open dialogue with shareholders and other participants in the securities market. The company has established principles for investor relations which includes guidelines for the company's contact with shareholders and the financial community. The company will give correct, accurate and adequate financial information every quarter and publish the information once approved by the board of directors.
Gentian is listed on Euronext Oslo Børs at the Oslo stock exchange and is obliged to follow applicable rules for handling information. All relevant information is published through Oslo stock exchange and the company's website www.gentian.com.
The responsibility for investor relations and sensitive information regarding Gentian shares is assigned to the Chief Executive Officer (CEO) and the group Chief Financial Officer (CFO).
The group uses the same auditor for all companies within the group. In addition to its audit assignment, the auditor is used as a consultant in accounting related matters. The auditor is not used when setting the company strategy or in other operational matters. The company has established guidelines for the management's use of the external auditor for services other than auditing.
The auditor is participating in the board meeting approving the annual report. In this meeting, the auditor is describing its views on accounting matters and principles, risk areas and internal control. The auditor
participates in other board meetings on request from the board when the board wants to get the auditors view on a specific matter.
Compensation to the auditor is set by the General Assembly and is described in the notes to the financial statement.
The board of directors has implemented guidelines for takeover situations and how it will act in the event of a take-over bid in accordance with applicable law and recommendations. In a potential offer where the effect of the transaction is a take-over, the board of directors will handle the matter in a professional manner and ensure equal information and treatment of all shareholders. The board will not hinder or obstruct take-over bids for the company's activities or shares. The board will consider to actively seek other offers upon the receipt of a take-over bid when it is considered to be in the best common interest of the company and its shareholders. Any agreements entered into between the company and a bidder, or significant terms and conditions thereof, that are material to the market's evaluation of a bid shall be publicly disclosed no later than at the same time as the announcement that the bid will be made is published. In the event of a take-over bid for the company's shares, the board should not exercise mandates or pass any resolutions with the intention or effect of a disposal of the company's activities, or material parts thereof, or otherwise obstructing the take-over bid unless this is approved by the general meeting following announcement of the bid. Furthermore, the board and management shall refrain from implementing any measures intended to protect their personal interests at the expense of the interests of shareholders following an intention to make a take-over bid or announcement of a bid.
If an offer is made for the company's shares, the board shall consider issuing a statement making a recommendation as to whether shareholders should or should not accept the offer in accordance with applicable law. Furthermore, the board shall consider arranging for a valuation of the company from an independent expert for publication together with its statement.
Stakeholder value creation is at the core of Gentian's long-term strategy, and the foundation for the group's environmental, social and governance (ESG) framework, goals and KPIs.
Gentian aims to protect life and improve health by improving diagnostic efficiency and decision making in the clinical setting enabling better treatment. The company develops and manufactures high quality, in vitro diagnostic (IVD) reagents for a wide range of clinical chemistry analysers. The product lines of laboratory tests, for various diagnostic targets, provide high accuracy and fast results for both human and veterinary healthcare.
Improving diagnostic efficiency creates value for Gentian's customers, the clinical laboratories, by reducing their costs. Through earlier detection of diseases, the company creates value for both its end users and society at large by contributing to better patient outcomes and reduced treatment costs.
Gentian performs R&D, development, production, marketing and distribution from its headquarters in Moss, Norway and representative offices. The group serves the global market for human and veterinary medical diagnostic tests via OEM partners and key distributors as well as directly through Gentian Diagnostics AB, a Swedish based distribution subsidiary. Gentian's approach is collaborative and adaptable, without compromising quality, to meet customers' needs.
Gentian's reagents are developed primarily using avian antibodies and proprietary nanosense technology. Using antibodies from chicken eggs instead of ear bleeds or cardiac punctures from mammals contributes to better animal welfare. Importantly, Gentian's reagents can be adapted for use on all major clinical chemistry analysers. The current portfolio and pipeline of efficient and accurate reagents span areas of inflammations, severe infections, kidney failures and congestive heart failures and veterinary healthcare. The value propositions of Gentian's products are scientifically proven and promoted by investments into clinical studies, state-of-the-art marketing, and selective commercial representation in key countries.
The group currently focuses its ESG efforts on the following four areas with associated KPIs to track performance and progress:
Safe and effective products
• KPI: Safety incidents
Care for our employees
• KPIs: Gender balance, sick leave, work related incidents
Conduct our business in an ethical manner
• KPIs: Code of conduct breaches, non-conformances with the anti-corruption policy, supplier audits
Minimise potential harm to the environment
• KPI: Initiatives to minimise any potential harm to the environment
Gentian designs, manufactures and distributes in vitro diagnostic devices to a global market with focus on patient safety, with the aim to positively impact patient outcomes and overall health sector efficiency. The company's products are subject to high quality and safety requirements and product certifications which require an extensive quality system and a highly competent staff.
The quality policy and the quality manual are the overarching documents in the quality management system (QMS) describing the quality goals and quality system. The QMS consists of a set of policies, procedures, forms and working instructions that shall ensure the company's products meet the required safety and quality standards. The QMS is certified according to ISO13485:2016 and complies with national and international standards, laws and regulations for design, manufacture, and distribution of in vitro diagnostic products. For the global distribution of Gentian's products, the company is part of an international program, MDSAP, Medical Device Single Audit Program, where the QMS is certified according to the Canada, Brazil and U.S. health Authorities' laws and regulations.
Regular reviews of the quality system and the product quality are executed with the management team. Employees are trained in the company's quality policy and procedures which are continuously evaluated and refined. Any reports for adverse events or product complaints are promptly investigated and assessed. Adverse events are reported to applicable health authorities and notified body according to procedures. Any complaints are investigated to identify if the root cause is linked to the manufacturing process and if there is a potential quality issue or defect with the product. This procedure applies to all of Gentian's products.
For the year 2022, Gentian had no quality or safety incidents that led to any market actions or need for reporting to health authorities or notified body e.g., product recall or healthcare information letter.
Gentian shall be a safe, collaborative and stimulating place to work. The company promotes an open and productive working environment where all employees are offered equal opportunities with regards to hiring, promotion and compensation regardless of personal background, beliefs, or cultural origin. The group had 55 employees per 31 December 2022. The employee gender balance is 62% women and 38% men. Sick leave for the year totalled 3.1% in 2022 (2.5% in 2021). No work-related incidents resulting in lost time, first injury treatment or other medical follow-up were recorded in 2022.
All employees receive training to maintain and develop their skills. The group has an extensive onboarding training program and individual training programs are agreed individually with each employee for further development.
Employees of Gentian perform work of great importance to health care providers, laboratories and patients. To succeed with the company's long-term strategy it is essential that work and behaviour is based on values that provide credibility, trust and respect among customers, employees and others that employees associate with through his/her work.
All employees are introduced to the Gentian Code of Conduct within the Gentian quality system as part of their onboarding.
The group has established a whistleblower procedure in which employees can report, anonymously if preferred, on matters relating to violation of the code of conduct. No reports regarding breach of the code of conduct was registered in 2022.
The Code of Conduct applies to all Gentian's employees at all levels including temporary employees and contractors.
It is incumbent upon all who are covered by the Code of Conduct to familiarise themselves with the guidelines and help to ensure that they are followed. Managers have a particular responsibility to follow the guidelines and be perceived as good role models.
The guidelines are an expression of Gentian's basic views on responsible and ethical behaviour. They are not exhaustive and do not cover all ethical issues that may arise. It takes good judgment to determine whether a particular action or decision is ethically justifiable. If in doubt, employees are encouraged to seek guidance from superiors.
Basic expectations for employees are:
The code of conduct is available on www.gentian.com.
Corruption stands in the way of economic development, is anti-competitive and undermine both the rule of law and the democratic process. Gentian's worldwide operations are subject to national and international law prohibiting Gentian and its employees to take part in corruption, such as bribery of public officials or employees in the private sector. The fact that many corruption rules also apply outside the territory of each country, implies that it is not sufficient to only follow the local national law when operating abroad.
Gentian has, in accordance with established principles as described in the company's Code of Conduct and Personnel Handbook, a strong commitment to operate according to ethical and sound business principles and comply with all laws and regulations. Gentian will not allow or tolerate involvement in any form of corruption.
There is a requirement for all Gentian's employees that they at all times fully comply with the company's anti-corruption policy. No Gentian employee can give another employee authorisation to deviate from this. Any violation of applicable anti-corruption legislation will be considered a serious violation of the employee's duties to Gentian and will most likely result in termination of employment or other appropriate sanctions.
Gentian has also taken necessary steps to the extent possible to ensure that the company's independent business partners, including suppliers, customers and joint venture partners, do not take part in corruption or other illegal or unethical activities in connection with its business with Gentian.
The group has not registered any non-conformances with the anti-corruption policy in 2022.
As part of Gentian's quality management system and the ISO 13485 certification, all suppliers are initially evaluated and classified based on the material or service provided. Secondly, the suppliers are qualified according to defined criteria for the respective classification of the supplier. Supplier audits and quality management certifications are items evaluated as part of the qualification process. For critical suppliers and also customers, a contract between the parties is required which contain a clause providing Gentian a right to perform quality audit of the supplier and customer. Audits are performed according to an annual
audit plan covering supplier audits, customers and distributors. During 2022 Gentian conducted three audits.
In accordance with the provisions on due diligence in the Transparency Act, the group has started mapping and assessing the materiality and risk of our operations which potentially could have a negative impact on fundamental human rights and decent working conditions in the supply chain. Suppliers are selected and categorised as high, medium or low risk based on risk criteria such as country, industry, and supply chain complexity. The group has initially prioritised the suppliers believed to have the highest inherent risk combined with business criticality and has started to follow-up these suppliers by investigating and requesting more information about their compliance with basic workers- and human rights. The group has released a separate supplier code of conduct and has initiated work to have suppliers sign on to this code. The supplier code of conduct is available on www.gentian.com.
Gentian acknowledges its responsibility to minimise any potential harm to the environment from its business. Although the industry has a limited environmental impact there is always something that can be done to reduce the environmental footprint. In 2021, the group undertook work related to issuing electronic documentation instead of paper-based documentation where possible, and the efforts has continued in 2022. The group generates biological and chemical waste. The liquid waste discharged to the public sewage is subject to permits issued by the municipality. Solid waste is treated as special waste if applicable and paper and cardboard is handled as recycling material. The group is serving customers globally and has employees based in several European countries and the United States. This results in travel activity which may contribute to environmental harm. The group has invested in videoconferencing equipment. All employees have access to video conference software on their computers, which is used frequently, reducing the need for travel to communicate with customers, suppliers and other partners.
(NOK 1000)
| 101 636 83 122 Revenue from contracts with customers 6 10 287 16 887 Other operating revenue 7 111 922 100 009 Total revenue -52 635 -43 176 Cost of goods sold 8 -40 910 -39 539 Employee benefit expenses 10/12 -10 243 -7 351 Depreciation and amortisation 15/18 -31 369 -32 790 Other operating expenses 11/12 -135 158 -122 856 Total operating expenses 9/25 -23 235 -22 847 Operating result 3 831 2 084 Finance income 13 -4 213 -4 031 Finance costs 13 -382 -1 947 Net financial items -23 618 -24 794 Profit before tax - - Income tax expense 14 -23 618 -24 794 Profit for the year Other comprehensive income Items that will or may be reclassified to profit or loss: -331 -222 Exchange differences on translation of foreign operations -331 -222 Total other comprehensive income -23 949 -25 016 Total comprehensive income for the year Earnings per share -1,53 -1,61 Basic EPS from net profit/loss 23 -1,53 -1,61 Diluted EPS from net profit/loss 23 |
Note | 2022 | 2021 |
|---|---|---|---|
| (NOK 1000) | |||
|---|---|---|---|
| Note | 2022 | 2021 | |
| Assets | |||
| Non-current assets | |||
| Intangible assets | 18 | 26 820 | 25 006 |
| Property, plant and equipment | 15 | 9 251 | 3 363 |
| Right-of-use assets | 15 | 12 386 | 16 125 |
| Total non-current assets | 48 458 | 44 495 | |
| Current assets | |||
| Inventory | 20 | 38 544 | 29 779 |
| Accounts receivables and other receivables | 21 | 19 188 | 22 580 |
| Cash and cash equivalents | 22 | 81 599 | 114 936 |
| Total current assets | 139 332 | 167 295 | |
| Total assets | 187 790 | 211 790 |
(NOK 1000)
| Note | 2022 | 2021 | |
|---|---|---|---|
| Equity and Liabilities | |||
| Paid-in equity | |||
| Share capital | 23 | 1 542 | 1 542 |
| Share premium | 23 | 293 810 | 293 810 |
| Other paid-in equity | 15 294 | 11 941 | |
| Retained earnings | -156 477 | -132 528 | |
| Total equity | 154 170 | 174 766 | |
| Non-current liabilities | |||
| Lease liabilities | 16/17/19 | 11 624 | 14 470 |
| Total non-current liabilities | 11 624 | 14 470 | |
| Current liabilities | |||
| Current lease liabilities | 16/17/19 | 3 699 | 4 114 |
| Account payables | 24 | 4 443 | 4 975 |
| Public taxes, duties etc. | 24 | 4 965 | 3 598 |
| Other short-term liabilities | 24 | 8 889 | 9 868 |
| Total current liabilities | 21 996 | 22 554 | |
| Total liabilities | 33 620 | 37 024 | |
| Total equity and liabilities | 187 790 | 211 790 |
Moss, 29 March 2023 For Gentian Diagnostics ASA
| Tomas Settevik | Kari E. Krogstad | Espen Tidemann Jørgensen |
|---|---|---|
| Chairperson | Board member | Board member |
| Sign. | Sign. | Sign. |
| Susanne Stuffers | Fredrik Thoresen | Monika Neumann |
|---|---|---|
| Board member | Board member | Board member |
| Sign. | Sign. | Sign. |
| Tomas Kramar | Frank Frantzen | Hilja Ibert |
|---|---|---|
| Board member | Board member | CEO |
| Sign. | Sign. | Sign. |
| (NOK 1000) | Share | Share | Translation | Other paid-in | Retained | Total | |
|---|---|---|---|---|---|---|---|
| Note | capital | premium | differences | capital | earnings | equity | |
| Equity at 01.01.2021 | 1 541 | 293 241 | 42 | 7 309 | -107 554 | 194 579 | |
| Net result for the year | - | - | - | - | -24 794 | -24 794 | |
| Proceeds from share issue | 23 | 1 | 569 | - | - | - | 570 |
| Cost of share issue | 23 | - | - | - | - | - | - |
| Share based payments | 10 | - | - | - | 4 633 | - | 4 633 |
| Other comprehensive income | - | - | -222 | - | - | -222 | |
| Equity at 31.12.2021 | 1 542 | 293 810 | -180 | 11 941 | -132 348 | 174 766 |
| Equity at 01.01.2022 | 1 542 | 293 810 | -180 | 11 941 | -132 348 | 174 766 | |
|---|---|---|---|---|---|---|---|
| Net result for the year | - | - | - | - | -23 618 | -23 618 | |
| Proceeds from share issue | 23 | - | - | - | - | - | - |
| Cost of share issue | 23 | - | - | - | - | - | - |
| Share based payments | 10 | - | - | - | 3 353 | - | 3 353 |
| Other comprehensive income | - | - | -331 | - | - | -331 | |
| Equity at 31.12.2022 | 1 542 | 293 810 | -511 | 15 294 | -155 966 | 154 170 |
| (NOK 1000) | Note | 2022 | 2021 |
|---|---|---|---|
| Operating activities | |||
| Net profit (loss) | -23 618 | -24 794 | |
| Depreciation and amortisation | 15/18 | 10 243 | 7 351 |
| Change in inventory | 20 | -8 765 | -8 904 |
| Change in accounts receivables | 21 | -3 550 | 1 120 |
| Change in accounts payables | 24 | -532 | -833 |
| Share-based payment expense | 10 | 3 353 | 4 633 |
| Change in other assets and liabilities | 8 917 | -5 626 | |
| Net cash flow from operating activities | -13 952 | -27 053 | |
| Investing activities | |||
| Payments of property, plant and equipment | 15 | -8 637 | -1 024 |
| Investment in intangible assets | 18 | -6 029 | -11 791 |
| Investment in other companies | - | - | |
| Net cash flow from investing activities | -14 666 | -12 815 | |
| Financing activities | |||
| New debt | - | - | |
| Lease payments | 16,17 | -4 325 | -3 691 |
| Proceeds from issue of share capital | 23 | - | 570 |
| Net cash flow from financing activities | -4 325 | -3 121 | |
| Net change in cash and cash equivalents | -32 943 | -42 989 | |
| Cash and cash equivalents at beginning of period | 114 936 | 157 985 | |
| Effect of currency translation of cash and cash | |||
| equivalents | -395 | -60 | |
| Net cash and cash equivalents at period end | 81 599 | 114 936 |
Gentian Diagnostics ASA is registered in Norway and listed on Euronext Oslo Børs. The company's headquarters are in Bjørnåsveien 5, 1596 Moss, Norway. The company is a research and developmentbased company that develops and manufactures biochemical reagents for use in medical diagnostics and research. The customers are medical laboratories and universities worldwide. The group consists of the parent company Gentian Diagnostics ASA and the subsidiary Gentian AS.
In addition, Gentian AS has a wholly owned subsidiary, registered in Florida, USA, named Gentian USA Inc, and a wholly owned subsidiary in Sweden, Gentian Diagnostics AB.
The consolidated financial statements were approved by the board on 29 March 2023.
The company issues the consolidated financial statements in accordance with IFRS, as adopted by the European Union and additional disclosure requirement in the Norwegian Accounting Act.
The consolidated financial statements are based on the historical cost principle. The financial statements are presented in Norwegian kroner (NOK). All amounts are in NOK thousands unless otherwise specified.
The preparation of accounts in accordance with IFRS requires the use of estimates. Furthermore, the use of the company's accounting principles requires that management must exercise judgment. Areas with a high degree of discretionary judgment, high complexity, or areas where assumptions and estimates are essential for the accounts are described in note 3.
The consolidated accounts have been prepared on the basis of going concern.
No changes in IFRS effective for the 2022 financial statements are relevant this financial year.
The group's consolidated financial statements comprise the parent company and its subsidiaries as of December 31 2022. A subsidiary is an entity controlled by the group. An entity has been assessed as being controlled by the group when the group is exposed for or have the rights to variable returns from its involvement with the entity and has the ability to use its power over the entity to affect the amount of the group's returns.
All intra-group assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the group are eliminated in full on consolidation.
The accounts of the individual entities in the group are measured in the currency used in which the entity mainly operates (functional currency). The consolidated financial statements are presented in Norwegian kroner (NOK) which is both the functional currency of the parent company and the presentation currency of the group. Transactions in foreign currency are recorded on initial recognition in the functional currency at the spot exchange rate at the transaction date. Monetary items in foreign currency are translated at the exchange rate on the balance sheet date. Exchange differences arising on the settlement of monetary items or on translating monetary items are recognised in profit or loss, with exception of exchange differences arising on a monetary item that is part of the net investment in a foreign operation.
Assets and liabilities in foreign entities / units are translated into the presentation currency using the current exchange rate at the balance sheet date. Profit and loss account related to these units is translated at the average exchange rate per month. Translation differences arising from the translation are recognised in other income and expenses. Upon disposal of foreign operations, the accumulated amount recognised in equity is attributable to the specific business.
For management purposes, the group is organized as one business unit and the internal reporting is structured in accordance with this. The group is currently organized in one operating segment.
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the group expects to be entitled in exchange for those goods or services.
The group recognises revenue from the sale of goods at the point in time when control of the goods is transferred to the customer. Control of an asset refers to the ability to direct the use of and obtain substantially all the remaining benefits from the asset, and the ability to prevent others from directing the use of and receiving the benefits from the asset. Revenue is generally recognised on delivery of the goods. The normal credit term is 30 to 60 days upon delivery.
Public grants are recognised at fair value when there is reasonable assurance that the grant will be received and that the company will fulfil the conditions attached to the grant. The grants are recognised in the statement of financial position and recognised as income in the period that best match the costs
they are intended to compensate. Public grants in connection with the purchase of tangible fixed assets are recognised as a reduction in the capitalised acquisition cost and are reflected in the result through lower annual depreciation over the expected useful life of the asset.
At the inception of a contract, The group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period in exchange for consideration.
At the lease commencement date, the group recognises a lease liability and corresponding right-of-use asset for all lease agreements in which it is the lessee, except for the following exemptions applied:
For these leases, the group recognises the lease payments as other operating expenses in the statement of profit or loss when they incur.
The lease liability is recognised at the commencement date of the lease. The group measures the lease liability at the present value of the lease payments for the right to use the underlying asset during the lease term that are not paid at the commencement date. The lease term represents the non-cancellable period of the lease, together with periods covered by an option either to extend or to terminate the lease when the group is reasonably certain to exercise this option.
The lease payments included in the measurement comprise of:
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications, or to reflect adjustments in lease payments due to an adjustment in an index or rate.
The group presents its lease liabilities as separate line items in the statement of financial position.
The group measures the right-of use asset at cost, less any accumulated depreciation and impairment losses, adjusted for any remeasurement of lease liabilities. The group applies the depreciation requirements in IAS 16 Property, Plant and Equipment in depreciating the right-of-use asset, except that the right-of-use asset is depreciated from the commencement date to the earlier of the lease term and the remaining useful life of the right-of-use asset.
The group applies IAS 36 Impairment of Assets to determine whether the right-of-use asset is impaired and to account for any impairment loss identified.
The group has a defined contribution plan for all employees in Norway. The scheme is based on a percentage of the members' salary. The group has no further payment obligations after the deposits have been paid. Prepaid deposits are recorded as an asset to the extent that the deposit can be refunded or reduce future payments. For employees in other countries the group follows local law regarding pension schemes and has put in place defined contribution plans for its employees outside of Norway.
The group accounts for an obligation and a cost of bonuses based on an assessment of key stakeholders' goal achievement. The group accounts for a provision in which there are contractual and probable obligations or where there is an earlier practice that creates a constructive obligation.
The group has a share-based program for key personnel. Equity-settled share-based payments are measured at the fair value of the equity instruments at the grant date.
The long-term incentives of Gentian («LTI») consist of a share price-related option program for key personnel. Under the share option program, options may be allocated to the key personnel. The options entitle the option holder to purchase a defined number of shares to a pre-defined value after a specific period. The company may decide settlement in cash. Settlement in shares is conditional upon an authorisation from the general meeting for a share issue.
The group's long-term assets consist mainly of production equipment and fixtures. The property, plant and equipment are recognised at acquisition cost less depreciation. Acquisition costs include costs directly related to the acquisition of the asset. Subsequent expenses are added to the carrying amount of the assets or are capitalised separately when it is probable that future economic benefits associated with the expense will flow to the group and the expense can be measured reliably. Other repair and maintenance costs are charged to the profit and loss account during the period incurred. The property, plant and equipment are depreciated using the straight-line method, so that the acquisition cost of the assets is depreciated at residual value over the expected useful life that is:
The useful life of the assets, as well as residual value, are reviewed on each balance sheet date and changed if necessary. When the carrying amount of an asset is higher than the estimated recoverable amount, the value is written down to the recoverable amount.
Gains and losses on disposal are recognised in the profit and loss account and make up the difference between the selling price and the book value.
Intangible assets are recognized in the balance sheet if it is probable that the future economic benefits will flow to the group, and the cost of the asset can be measured reliable. Intangible assets with finite economic life is measured at cost less accumulated amortization and write-downs. Amortization is done on å straight-line basis over expected lifetime. The amortization period and method are reviewed on a yearly basis. Intangible assets with indefinite useful life are not amortized, but tested for impairment at least annually.
Research costs are expensed as incurred. Cost to internal development of technology is capitalized as an intangible asset when the recognition criteria's are met:
Cost capitalized include materials, salary and social expenses and other expenses that can be allocated to the development of the asset.
Internally developed intangible assets are amortized on a straight-line basis over the expected useful life. Amortizations starts when the asset is available for use. Intangible assets not ready for use, are tested for impairment on a yearly basis. Internally developed intangible assets are tested for impairment on a regular basis by discounting expected cash flow generated from the asset. The impairment includes assessment of future sales, gross margin and discount rate (WACC) as well as remaining development costs and likelihood of approval from regulatory authorities. If the discounted value is lower than the carrying amount the asset is written down.
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
The group´s financial assets are trade receivables and cash and cash equivalents. These financial assets are measured at amortised cost.
The group's financial liabilities are accounts payables and lease liabilities. These financial liabilities are measured at amortised cost.
The group has not entered into any financial instruments as of 31.12.2022.
Current assets and short-term liabilities with maturity within 12 months and other items included in the company's normal operating cycle of goods or services. Strategic investments are classified as noncurrent assets. Short-term portion of long-term debt is presented as short-term.
Inventory is valued at the lower of cost and net realisable value. Cost of inventory is assigned using firstin, first-out method (FIFO). For finished goods and goods under construction, cost of production consists of product design, material consumption, direct labour costs, other direct costs and indirect production costs (based on normal capacity). Borrowing costs are not included. Net realisable value is estimated sales price less variable costs for completion and sale.
Accounts receivable arise from the sale of goods or services that are within the normal operating cycle. Accounts receivable arising as a normal part of the operating cycle are classified as current assets. Receivables not included in the ordinary operating cycle and maturing later than 12 months are classified as fixed assets.
Cash and cash equivalents consist of cash, bank deposits, other short-term liquid investments with a maximum of three months original maturity.
Ordinary shares are classified as equity. Costs directly related to the issue of new shares or options are shown as deductions in equity, net of tax, from proceeds. Own equity instruments that are repurchased (own shares) are recognised at cost and are presented as a reduction of equity. Gains or losses are not recognised in profit or loss as a consequence of the purchase, sale, issue or deletion of the group's own equity instruments. Any difference between the carrying amount and the consideration, if issued again, is recognised in other equity. Voting rights related to own shares are cancelled and no dividends are distributed to own shares.
The tax expense in the income statement includes both payable taxes for the period and changes in deferred tax. Deferred tax is calculated based on temporary differences between tax values of assets and carrying amount of assets.
Deferred tax assets are recognised when it is probable that the company will have a sufficient profit for tax purposes in subsequent periods to utilise the tax asset. The companies recognise previously
unrecognised deferred tax assets to the extent it has become probable that the company can utilise the deferred tax asset. Similarly, the company will reduce a deferred tax asset to the extent that the company no longer regards it as probable that it can utilise the deferred tax asset.
Deferred tax and deferred tax assets are measured using the expected future tax rate for the companies within the group that have temporarily differences between tax values and carrying values of assets or losses carry forward. Deferred tax and tax assets are recorded at nominal value and is classified as long-term financial asset in the balance sheet. Tax payable and deferred tax is recorded against equity if the transaction is an equity transaction.
A provision is recognised when the group has an obligation (legal or constructive) as a result of a previous event, it is probable (more likely than not) that a financial settlement will take place as a result of this obligation and the size of the amount can be measured reliably. If the effect is considerable, the provision is calculated by discounting estimated future cash flows using a discount rate before tax that reflects the market's pricing of the time value of money and, if relevant, risks specifically linked to the obligation.
A provision for warranty is included based upon the level of product and services sold. The provision is based upon historic information related to warranties and the possible outcome.
Payables are obligations to pay for goods or services that are delivered from the suppliers to ordinary operations. Payables are classified as short-term if it expires within one year or less. If this is not the case, it is classified as non-current.
Payables are measured at fair value at initial recognition. In subsequent measurement, supplier debt is assessed at amortised cost using the effective interest rate.
Dividend payments to the parent company's shareholders are classified as liabilities from the date the dividend is fixed by the general meeting.
Information after the reporting period that provide evidence of conditions that existed at the end of the reporting period ("adjusting events"), are reflected in the amounts recognized in the financial statements. Information after the reporting period that are indicative conditions that arose after the reporting period ("non-adjusting events") are not reflected int the amounts recognized in the financial statements but are disclosed in material.
The preparation of the consolidated financial statements requires management to make judgments, estimates and assumptions that effect the recognition and measurement of certain assets, liabilities, revenue and expense. The following area involves the most critical estimates and judgments for the group:
− Research and development cost related to internally developed technology
Development cost related to technology has been recognized as an intangible asset because Gentian can demonstrate technological feasibility for the assets to be available for sale for both existing products and new products. The revenue potential for the projects exceeds the investment. The balance sheet value as of 31.12.2022 was MNOK 26,8. The estimates that form the basis for the intangible asset are performed by the management of the company, and there will always be a level of uncertainty in relation to the assessments that are performed on future revenue for future products. Capitalized development costs are amortized over 10 years.
The group's financial assets and liabilities comprise cash at bank and cash equivalents, receivables and trade creditors that originate from its operations. Alle financial assets and liabilities are carried at amortised cost. All financial assets and liabilities, other than long-term leasing liabilities, are short-term and their carrying value approximates fair value.
The group does currently not use financial derivatives to manage financial risk such as interest rate risk and currency risk.
Credit risk is the risk that the counterparty will incur a loss on the group by failing to settle the group's receivables. Credit exposure is primarily related to accounts receivable and other receivables. There are also credit risks related to cash and cash equivalents.
| Accounts receivables and other receivables | 19 188 |
|---|---|
| Cash and cash equivalents | 81 599 |
| Total | 100 788 |
For further information on accounts receivable and credit risk, see Note 21.
The group undertakes various transactions in foreign currencies and is consequently exposed to fluctuations in exchange rates. The exposure to currency risk is mainly related to sale of diagnostic products in foreign currency (USD, EUR and RMB). Operating expenses are mainly in Norwegian kroner, as well as the funding.
As at 31 December 2022; the group has limited exposure to currency risks on assets and liabilities.
Translation risk in the group arises when amounts denominated in foreign currencies are converted to NOK, the group's reporting and functional currency.
The group has outstanding interest-bearing debt, including liabilities associated with leases (right-ofuse), of NOK 15.3 million as of 31 December 2022. The interest rate risk for the group is limited.
The group's goal of asset management is to ensure continued operations for the Group to ensure returns for the owners and other stakeholders and to maintain an optimal capital structure to reduce capital costs.
In order to improve the capital structure, the group can issue new shares or sell assets. No dividends are paid to the shareholders as the group is in the development phase.
See note 22 for the group's interest rate sensitivity analysis on cash and cash equivalents.
Liquidity risks are the risk that the group is unable to meet its maturity obligations and the risk that the group will not be able to meet its liquidity obligations without increasing the cost dramatically. From a broader perspective, liquidity risk also poses a risk that the group will not be able to finance increases in assets as refinancing needs increase.
The following table sets out the group's contractual maturities (representing undiscounted contractual cash-flows) of financial liabilities.
| Period left | ||||||
|---|---|---|---|---|---|---|
| 31.12.2022 | Less than 1 year |
1-2 years | 2-5 years | More than 5 years |
Total | |
| Financial liabilities (non-derivatives) |
||||||
| Trade and other payables | 18 297 | - | - | - | 18 297 | |
| Lease liabilities | 4 423 | 4 337 | 8 418 | - | 17 178 | |
| Interest lease liabilities | 1 108 | 784 | 324 | - | 2 216 | |
| Derivatives | ||||||
| Derivative financial liabilities | - | - | - | - | - | |
| Total | 23 828 | 5 121 | 8 742 | - | 37 690 |
| 31.12.2021 | Less than 1 year |
1-2 years | 2-5 years | More than 5 years |
Total |
|---|---|---|---|---|---|
| Financial liabilities (non-derivatives) |
|||||
| Trade and other payables | 18 440 | - | - | - | 18 440 |
| Lease liabilities | 4 114 | 3 959 | 9 280 | - | 17 353 |
| Interest lease liabilities | 1 181 | 908 | 1 190 | - | 3 279 |
| Derivatives | |||||
| Derivative financial liabilities | - | - | - | - | - |
| Total | 23 735 | 4 867 | 12 642 | - | 41 244 |
Period left
| Company | Office | Ownership | |
|---|---|---|---|
| Gentian Diagnostics ASA | Moss | Parent company | |
| Gentian AS | Moss | 100 % | Subsidiary |
| Gentian USA Inc | Orlando, FL USA | 100 % | Subsidiary of Gentian AS |
| Gentian Diagnostics AB | Stockholm, Sweden | 100 % | Subsidiary of Gentian AS |
| Revenue by classification | 2022 | 2021 |
|---|---|---|
| Revenue from contract with customers | 101 636 | 83 122 |
| Public grants | 10 287 | 16 887 |
| Other revenue | - | - |
| Total | 111 922 | 100 009 |
| Geographical split of revenue from contract with customers | 2022 | 2021 |
|---|---|---|
| Europe | 71 571 | 55 676 |
| Asia | 23 609 | 25 008 |
| USA | 6 456 | 2 438 |
| Total | 101 636 | 83 122 |
| Sales by product | 2022 | 2021 |
|---|---|---|
| Renal diagnostic products | 39 966 | 36 450 |
| Inflammation diagnostic products | 42 886 | 40 478 |
| Other diagnostic products | 18 784 | 6 194 |
| Total | 101 636 | 83 122 |
| Timing of revenue recognition | 2022 | 2021 |
|---|---|---|
| Goods transferred at a point in time | 101 636 | 83 122 |
| Goods and services transferred over time | - | - |
| Total | 101 636 | 83 122 |
The company Gentian AS receives public grants from the Norwegian Research Council, Innovation Norway and SkatteFUNN.
| 2022 | 2021 | |
|---|---|---|
| Norwegian Research Council | 6 298 | 10 943 |
| Innovation Norway | - | 1 194 |
| SkatteFUNN* | 3 989 | 4 750 |
| Total | 10 287 | 16 887 |
*The SkatteFUNN R&D tax incentive scheme is a government program where the incentive is a tax credit and comes in the form of a possible deduction from a company's payable corporate tax. If the tax credit for the R&D expenses is greater than the amount the company is liable to pay in tax, the remainder will be paid out in cash to the company.
R&D programs related to Norwegian Research Council includes EU programs like Eurostars and similar. The company complies with the different requirements and conditions related to the grants.
| 2022 | 2021 | |
|---|---|---|
| Change in inventory of goods under manufacture and finished goods | 1 368 | 3 727 |
| Cost of materials | 24 412 | 16 086 |
| Other production expense | 5 877 | 4 702 |
| Total cost of materials | 31 657 | 24 515 |
| Production salary | 20 978 | 18 662 |
| Total Cost of goods | ||
| sold | 52 635 | 43 176 |
| 2022 | 2021 | |
|---|---|---|
| Cost of goods sold | 56 948 | 45 923 |
| Sales and marketing expenses | 23 251 | 16 109 |
| Administration expenses | 30 267 | 34 854 |
| Research and development expenses * | 24 691 | 34 854 |
| Total | 135 158 | 122 856 |
*includes depreciation of capitalised development cost
| 2022 | 2021 | |
|---|---|---|
| Wages and salaries | 48 456 | 43 733 |
| Payroll tax | 5 876 | 6 888 |
| Pension costs (mandatory occupational pension) | 3 171 | 1 733 |
| Share based payments | 3 353 | 4 633 |
| Other expenses | 1 032 | 1 214 |
| Transfer to COGS | -20 978 | -18 662 |
| Total | 40 910 | 39 539 |
The group had 55 employees per 31 December 2022. The corresponding number per 31 December 2021 was 52 employees.
Part of the employee benefit expenses are directly related to production of goods sold and the group has presented these costs as part of cost of goods sold.
The company has a share option program covering certain key employees. As of 31 December 2022, fifteen employees were included in the option program.
The share option program for key personnel is settled in shares, however, the company may resolve settlement in cash. The fair value of the issued options is expensed over the vesting period:
For options issued from 2018 and up to 2021,1/3 of the options will vest 24 months after the day of grant, 1/3 will vest 36 months after the day of grant and 1/3 will vest 48 months. For options issued from 2022, 1/2 of the options will vest after 36 months and 1/2 of the options will vest after 48 months. Unvested options will be cancelled if the holder terminates its employment with the group.
The cost of the employee share-based transaction is expensed over the average vesting period. The value of the issued options of the transactions that are settled with equity instruments (settled with the company's own shares) is recognised as salary and personnel cost in profit and loss and in other paidin capital.
The value of the issued options of the programs that are settles in cash (cash-based programs) is recognised as salary and personnel cost in profit and loss and as a liability in the balance sheet. The liability is measured at fair value at each balance sheet date until settlement, and changes in the fair value are recognised in profit and loss.
Social security tax on options is recorded as a liability and is recognised over the estimated vesting period.
| 2022 | 2021 | |
|---|---|---|
| Outstanding options 01.01 | 740 590 | 594 916 |
| Options granted | 219 996 | 155 674 |
| Options forfeited | - | -10 000 |
| Options exercised | - | - |
| Options expired | - | - |
| Outstanding options 31.12 | 960 586 | 740 590 |
The outstanding options are subject to the following conditions:
| Expiry date | Average strike price | Number of share options |
|---|---|---|
| 2023-8 | 65.24 | 174 954 |
| 2024-11 | 47.51 | 259 962 |
| 2025-11 | 62.88 | 150 000 |
| 2026-11 | 72.60 | 155 674 |
| 2027-12 | 46.67 | 219 996 |
| 960 586 |
The fair value of the options has been calculated using Black - Scholes - Merton Option Pricing Model. The most important parameters are share price at grant date, exercise prices shown above, volatility (42.74 %), expected dividend yield (0 %), expected term of 5 years, annual risk-free interest rate (2.87 %). The volatility is based on other comparable companies' stock price volatility. Options granted in 2022 had a weighted average strike price of NOK 46.67 pr share.
In November 2021, Gentian Diagnostics ASA launched a share purchase program for the group's employees (ESPP). Under the terms of the ESPP, all employees have been given the opportunity to subscribe for shares up to a maximum amount of NOK 30 000. The company decided to award a 25 % discount to the volume weighted average price between 11 November and 24 November, resulting in a subscription price of NOK 54.49 per share. A total of 10 461 shares were subscribed for under the program. The discount amounted to NOK 178 131. No allocations under the ESPP were made in 2022 due to a change in tax regime for this type of programme.
| 2022 | |||||||
|---|---|---|---|---|---|---|---|
| Wages and |
Pension | Share based |
Other remuner |
||||
| salaries | Bonus | costs** | payments | ation | Total | ||
| Hilja Ibert | Chief Executive Officer |
2 906 | 404 | - | 741 | 153 | 4 203 |
| Group Chief | |||||||
| Njaal Kind Erling |
Financial Officer Chief Scientific |
2 054 | 248 | 60 | 992 | 9 | 3 362 |
| Sundrehagen | Officer Chief |
1 673 | 186 | 52 | 805 | 4 | 2 720 |
| Markus | Commercial | ||||||
| Jaquemar | Officer | 1 882 | 221 | - | 188 | - | 2 291 |
| Total management salary 8 514 1 058 112 2 726 166 12 576 |
| 2021 | |||||||
|---|---|---|---|---|---|---|---|
| Wages | Share | Other | |||||
| and | Pension | based | remuner | ||||
| salaries | Bonus | costs | payments | ation | Total | ||
| Chief Executive | |||||||
| Hilja Ibert | Officer | 2 787 | 388 | - | 1 478 | 158 | 4 810 |
| Group Chief | |||||||
| Njaal Kind | Financial Officer | 1 846 | 240 | 50 | 765 | 9 | 2 670 |
| Erling | Chief Scientific | ||||||
| Sundrehagen | Officer | 1 644 | 300 | 41 | 735 | 23 | 2 425 |
| Total management salary | 6 277 | 928 | 91 | 2 978 | 190 | 9 906 |
The CEO has an agreement which provides the right to a compensation equivalent to 6 months' basic salary (exclusive of any additional benefits) after termination of employment before retirement. Reference is made to the corporate governance report for guidelines regarding remuneration to management. The remuneration report is available on the company's homepage: www.gentian.com.
| 2022 | 2021 | ||
|---|---|---|---|
| Hilja Ibert | Chief Executive Officer | 359 925 | 279 925 |
| Njaal Kind | Group Chief Financial Officer | 175 661 | 155 665 |
| Erling Sundrehagen | Chief Scientific Officer | 120 000 | 120 000 |
| Markus Jaquemar | Chief Commercial Officer | 47 500 | - |
| Share options | 703 086 | 555 590 |
| Board remuneration* | 2022 | 2021 |
|---|---|---|
| Remuneration to the board | 1 100 | 1 021 |
*As of the Annual General Meeting of 2022 the board members receives NOK 150 000 each and the Chairperson NOK 300 000. No board members have any remuneration based on the performance of the company.
The company is obliged to have an occupational pension scheme in accordance with the Act on Compulsory Occupational Pensions.
Currently all eligible employees receive 4.5% of their fixed salary up to 12G as a contribution to the pension plan, which is in accordance with the Act on Compulsory Occupational Pensions.
| 2022 | 2021 | |
|---|---|---|
| Marketing | 2 390 | 1 703 |
| Purchase of external services | 20 042 | 24 663 |
| Patent, certification and license costs | 1 465 | 1 706 |
| Costs premises and office costs | 3 287 | 1 432 |
| Laboratory costs | 4 042 | 10 711 |
| Travel expenses | 1 473 | 775 |
| Meetings, courses and updates | 662 | 325 |
| Other | 345 | 55 |
| Capitalised other expenses* | -2 336 | -8 579 |
| Total | 31 369 | 32 790 |
*See Note 12.
| The remuneration to the auditor is distributed as follows: | 2022 | 2021 |
|---|---|---|
| Audit fee | 1 230 | 595 |
| Other attestation services | 64 | 34 |
| Tax advisory services | - | - |
| Other services non-audit related | 27 | 102 |
| Total (ex. VAT) | 1 321 | 732 |
The Gentian group had four ongoing R & D projects as per 31 December 2022. Costs related to the projects consist of salary, external procurement of services, and other operating expenses. One of the projects went over in the development phase in 2016 and one additional in 2021, and consequently the capitalisation of the costs in these projects was started.
| Recognised research and development expenses | 2022 | 2021 |
|---|---|---|
| Purchase of external services | 7 972 | 9 023 |
| Salary and other operating expenses | 20 873 | 27 050 |
| Capitalised salary expenses | -3 693 | -3 079 |
| Capitalised other expenses | -2 336 | -8 579 |
| Total | 22 817 | 24 416 |
| Finance income | ||
|---|---|---|
| 2022 | 2021 | |
| Interest income | 1 114 | 85 |
| Foreign exchange gains | 2 698 | 1 982 |
| Other finance income | 19 | 18 |
| Total finance income | 3 831 | 2 084 |
| Finance cost | 2022 | 2021 |
| Interest expenses from loans measured at amortised cost | - | - |
| Foreign exchange loss | -2 896 | -2 578 |
| Interest leasing liabilities | -1 255 | -1 381 |
| Other financial costs | -63 | -72 |
| Total finance cost | -4 213 | -4 031 |
| Net financial items | -382 | -1 947 |
| Reconciliation of effective tax rate | 2022 | 2021 |
|---|---|---|
| Net result before taxes | -23 618 | -24 794 |
| Calculated tax expense/(income) | -4 814 | -5 454 |
| Permanent differences | -3 499 | -4 737 |
| Tax depreciation on intangible assets | - | - |
| Change in temporary differences | 187 | -795 |
| Temporary differences not recognized | 8 125 | 10 987 |
| Calculated tax expense | - | - |
| Tax payable (USA) | - | - |
| Calculation of deferred tax/deferred tax asset | 2022 | 2021 |
| Property, plant and equipment | -3 010 | -5 762 |
| Right-of-use assets | -2 937 | - |
| Receivables | - | 2 |
| Inventories | -925 | -925 |
| Tax losses carried forward | -199 331 | -174 304 |
The group excluded from the financial position deferred tax asset of MNOK 45.4 related to temporary differences and tax loss carried forward, as the group did not meet the criteria for capitalisation under IAS 12. The group is in a growth phase and there is uncertainty when the group will be profitable. The tax losses can be carried forward indefinitely in Norway and Sweden.
Basis for deferred tax/deferred tax asset (gross) -206 203 -180 989 Unrecognised temporary differences 206 203 180 989 Basis for deferred tax/deferred tax asset (net) - - Deferred tax asset - -
| 2022 | |||
|---|---|---|---|
| Property & | Right-of-use | ||
| equipment | assets | Total | |
| Acquisition costs | |||
| Carrying amount at 01.01 | 12 536 | 24 706 | 37 242 |
| Additions during the year | 8 637 | 454 | 9 091 |
| Adjustments | -581 | -581 | |
| Grants received | - | - | - |
| Disposals during the year | - | - | - |
| Accumulated cost as at 31.12 | 21 172 | 24 579 | 45 752 |
| Depreciation and amortisation | |||
| Carrying amount at 01.01 | 9 172 | 8 581 | 17 753 |
| Depreciation during the year | 2 748 | 3 612 | 6 361 |
| Amortisation during the year | - | - | - |
| Accumulated depreciation as at 31.12 | 11 921 | 12 193 | 24 114 |
| Carrying amount in balance sheet as at 31.12 | 9 251 | 12 386 | 21 638 |
| 2021 | |||
|---|---|---|---|
| Property & | Right-of-use | ||
| equipment | assets | Total | |
| Acquisition costs | |||
| Carrying amount at 01.01 | 11 512 | 26 839 | 38 351 |
| Additions during the year | 1 024 | - | 1 024 |
| Grants received | - | - | - |
| Disposals during the year | - | -2 133 | -2 133 |
| Accumulated cost as at 31.12 | 12 536 | 24 706 | 37 242 |
| Depreciation and amortisation | |||
| Carrying amount at 01.01 | 7 647 | 5 151 | 12 797 |
| Depreciation during the year | 1 526 | 3 430 | 4 956 |
| Amortisation during the year | - | - | - |
| Accumulated depreciation as at 31.12 | 9 172 | 8 581 | 17 753 |
| Carrying amount in balance sheet as at 31.12 | 3 363 | 16 125 | 19 488 |
Right-of-use assets mainly consists of leased offices.
| Summary of lease liabilities | 2022 | 2021 |
|---|---|---|
| Lease liabilities at 01.01. | 18 584 | 22 275 |
| New lease liabilities recognised in the year | 454 | - |
| Lease payments | -4 325 | -3 469 |
| Adjustments | -645 | -1 603 |
| Interest expense on lease liabilities | 1 255 | 1 381 |
| Total lease liabilities at 31.12. | 15 323 | 18 584 |
| Current lease liabilities | 3 699 | 4 114 |
| Non-current lease liabilities | 11 624 | 14 470 |
The Company have rental agreements with CPI-adjustments which are included in the measurement of lease liabilities. The estimated lease liabilities related to these agreements is NOK 14.4 million at 31 December 2022 and NOK 17.7 million on 31 December 2021.
Reconciliation of changes in liabilities arising from financing activities is shown in the tables below:
| Non-cash changes | ||||||
|---|---|---|---|---|---|---|
| 01.01.2022 | Cash flows |
New leases |
Reclassi fication |
31.12.2022 | ||
| Lease liabilities non-current | 14 470 | 454 | -3 300 | 11 624 | ||
| Lease liabilities current | 4 114 | -4 325 | 3 910 | 3 699 | ||
| Total liabilities from financing activities |
18 584 | -4 325 | 454 | 610 | 15 323 |
| Non-cash changes | ||||||
|---|---|---|---|---|---|---|
| 01.01.2021 | Cash flows |
New leases |
Reclassi fication |
31.12.2021 | ||
| Lease liabilities non-current | 18 101 | - | -3 631 | 14 470 | ||
| Lease liabilities current | 4 174 | -3 691 | - | 3 631 | 4 114 | |
| Total liabilities from financing activities |
22 275 | -3 691 | - | - | 18 584 |
The table below shows the group's Interest rate sensitivity analysis:
| 2022 | 2021 | |
|---|---|---|
| Total debt | 15 323 | 18 584 |
| Change in interest rate | ||
| +0,5% | 77 | 93 |
| -0,5% | - 77 |
- 93 |
| Profit before tax | - 23 618 |
- 24 794 |
| Adjusted Profit before tax | ||
| for change in interest rate | ||
| +0,5% | - 23 541 |
- 24 701 |
| -0,5% | - 23 695 |
- 24 887 |
| 2022 | |||
|---|---|---|---|
| Completed product Development |
Projects under development |
Total | |
| Acquisition costs | |||
| Carrying amount at 01.01 | 18 017 | 9 384 | 27 401 |
| Additions during the year | - | 6 029 | 6 029 |
| Adjustments | - | -333 | -333 |
| Grants received | - | - | - |
| Impairment | - | - | - |
| Accumulated cost as at 31.12 | 18 017 | 15 080 | 33 097 |
| Depreciation and amortisation | |||
| Carrying amount at 01.01 | 2 395 | - | 2 395 |
| Depreciation during the year | 3 882 | - | 3 882 |
| Amortisation during the year | - | - | - |
| Accumulated depreciation as at 31.12 | 6 277 | - | 6 277 |
| Carrying amount in balance sheet as at 31.12 |
11 740 | 15 080 | 26 820 |
Intangible assets not ready for use, are tested for impairment on a yearly basis. Internally developed intangible assets are tested for impairment on a regular basis by discounting expected cash flow generated from the asset. The impairment includes assessment of future sales, gross margin and discount rate (WACC) as well as remaining development costs and likelihood of approval from regulatory authorities. If the discounted value is lower than the carrying amount the asset is written down.
| 2021 | |||
|---|---|---|---|
| Completed product development |
Projects under development |
Total | |
| Acquisition costs | |||
| Carrying amount at 01.01 | 15 610 | - | 15 610 |
| Additions during the year | 2 407 | 9 384 | 11 791 |
| Grants received | - | - | - |
| Impairment | - | - | - |
| Accumulated cost as at 31.12 | 18 017 | 9 384 | 27 401 |
| Depreciation and amortisation | |||
| Carrying amount at 01.01 | - | - | - |
| Depreciation during the year | 2 395 | 2 395 | |
| Amortisation during the year | - | - | - |
| Accumulated depreciation as at 31.12 | 2 395 | - | 2 395 |
| Carrying amount in balance sheet as | |||
| at 31.12 | 15 622 | 9 384 | 25 006 |
| 2022 | ||
|---|---|---|
| Accounted value | Fair value | |
| Receivables | 19 188 | 19 188 |
| Cash and cash equivalents | 81 599 | 81 599 |
| Total | 100 788 | 100 788 |
| Accounted value | Fair value | |
|---|---|---|
| Current lease liabilities | 3 699 | 3 699 |
| Non-current lease liabilities | 11 624 | 11 624 |
| Total | 15 323 | 15 323 |
| 2021 | ||
|---|---|---|
| Accounted value | Fair value | |
| Receivables | 22 580 | 22 580 |
| Cash and cash equivalents | 114 936 | 114 936 |
| Total | 137 516 | 137 516 |
| Accounted value | Fair value | |
|---|---|---|
| Current lease liabilities | 4 114 | 4 114 |
| Non-current lease liabilities | 14 470 | 14 470 |
| Total | 18 584 | 18 584 |
Inventory as at 31 December consists of the following:
| 2022 | 2021 | |
|---|---|---|
| Raw materials | 16 653 | 9 256 |
| Goods in process | 17 127 | 15 711 |
| Finished goods | 5 690 | 5 737 |
| Provision for obsolescence | -925 | -925 |
| Total | 38 544 | 29 779 |
| 2022 | 2021 | |
|---|---|---|
| Accounts receivables | 10 063 | 6 514 |
| Claims on government grants | 5 730 | 10 569 |
| Public receivables (VAT, etc.) | 2 711 | 4 463 |
| Other receivables / Prepayments | 684 | 1 034 |
| Total | 19 188 | 22 580 |
| 2022 | 2021 | |
| Provision for loss of claims at the beginning of the year | ||
| Provision for loss for the year | - | - |
| This year's recorded loss | - | - |
| Reversed deposition | - | - |
| Provision for loss at the end of the year | - | - |
| Due accounts receivables | 2022 | 2021 |
|---|---|---|
| Not due and within <30 days | 7 294 | 4 190 |
| 30-60d | 1 902 | 595 |
| 60-90d | 58 | 1 040 |
| >90d | 810 | 688 |
| Total | 10 063 | 6 514 |
The group has not incurred losses on its receivables and considers that its counterparties are able to settle all outstanding debt to the group. On this basis no provision for loss on receivables has been considered.
| 2022 | 2021 | |
|---|---|---|
| Cash and bank deposits | 79 258 | 112 849 |
| Withhold tax account | 2 077 | 1 823 |
| Deposit account | 265 | 265 |
| Total | 81 599 | 114 936 |
The table below shows the group's interest rate sensitivity analysis on cash and cash equivalents:
| 2022 | 2021 | |
|---|---|---|
| Total cash and cash equivalents | 81 599 | 114 936 |
| Change in interest rate | ||
| +0,5% | 408 | 575 |
| -0,5% | - 408 |
- 575 |
| Profit before tax | - 23 618 |
- 24 794 |
| Adjusted Profit before tax for change in interest rate |
||
| +0,5% | - 23 210 |
- 24 219 |
| -0,5% | - 24 026 |
- 25 369 |
| Number of shares | Nominal value | Share capital | |
|---|---|---|---|
| Ordinary shares | 15 422 350 | 0,10 | 1 542 |
Changes in share capital and share premium:
| Change in share capital | 2022 | 2021 |
|---|---|---|
| Share capital at period start | 1 542 | 1 541 |
| Share capital increase | 0 | 1 |
| Share capital at period end | 1 542 | 1 542 |
| Change in share premium | 2022 | 2021 |
|---|---|---|
| Share premium at period start | 293 810 | 293 241 |
| Share premium increase | 0 | 569 |
| Cost of share issue | - | - |
| Share premium at period end | 293 810 | 293 810 |
All shares in the company have equal voting rights and equal rights to dividends.
| Number | Ownership | |
|---|---|---|
| Overview of the parent company's shareholders as at 31.12.22: | of shares | share |
| Vatne Equity AS | 2 110 224 | 13.68 % |
| Kvantia AS | 1 623 368 | 10.53 % |
| Holta Life Sciences AS | 1 214 702 | 7.88 % |
| Verdipapirfondet Delphi Nordic | 973 999 | 6.32 % |
| Safrino AS | 800 000 | 5.19 % |
| Skandinaviska Enskilda Banken AB | 492 150 | 3.19 % |
| Salix AS | 363 235 | 2.36 % |
| Verdipapirfondet DNB SMB | 361 291 | 2.34 % |
| Verdipapirforndet Storebrand Vekst | 341 484 | 2.21 % |
| J.P. Morgan SE | 325 000 | 2.11 % |
| Portia AS | 300 000 | 1.95 % |
| Equinor Pensjon | 245 047 | 1.59 % |
| Krefting, Johan Henrik | 236 500 | 1.53 % |
| Cressida AS | 235 000 | 1.52 % |
| Verdipapirfondet Equinor Aksjer NO | 227 880 | 1.48 % |
| Carpe Diem Afseth AS | 221 797 | 1.44 % |
| Lioness AS | 220 000 | 1.43 % |
| Marstal AS | 212 407 | 1.38 % |
| Mutus AS | 210 465 | 1.36 % |
| Vingulmork Predictor AS | 184 083 | 1.19 % |
| Top 20 shareholders | 10 898 632 | 70.67 % |
| Total other shareholders | 4 523 718 | 29.33 % |
| Total number of shares | 15 422 350 | 100.00 % |
| Shares controlled by board members and the Management | ||
| Tomas Settevik (Mutus AS) | 210 465 | 1.36 % |
| Erling Sundrehagen (Vingulmork Predictor AS) | 184 083 | 1.19 % |
| Fredrik Thoresen (RWD AS) | 28 160 | 0.18 % |
| Njaal Kind | 21 125 | 0.14 % |
| Frank Frantzen | 20 000 | 0.13 % |
| Espen Tidemann Jørgensen | 17 000 | 0.11 % |
| Hilja Ibert | 6 525 | 0.04 % |
| Susanne Stuffers (Ubiquity AS) | 3 500 | 0.02 % |
| Kari E. Krogstad | 2 325 | 0.02 % |
| Monika Neuman | 800 | 0.01 % |
The company has not paid dividends over the last five years.
Earnings per share are calculated by dividing net income by the weighted average of shares during the year.
| 2022 | 2021 | |
|---|---|---|
| Profit from continued operations | -23 618 | -24 794 |
| Weighted average number of shares issued | 15 422 | 15 415 |
| Earnings per share | -1.53 | -1.61 |
| Weighted average number of shares issued incl. options | 16 383 | 16 155 |
| Diluted earnings pr share | -1.53 | -1.61 |
Share options issued have a potential dilutive effect on earnings per share. No dilutive effect has been recognized as potential ordinary shares only shall be treated as dilutive if their conversion to ordinary shares would decrease earnings per share or increase loss per share from continuing operations. As the group is currently loss-making, an increase in the average number of shares would have anti-dilutive effects.
The company has no significant provisions, or contingent liabilities or contingent assets.
The company uses Getica AB as a supplier for one of its production steps and has outsourced some R&D project elements to the same supplier. The supplier is owned by Erling Sundrehagen, who also is the sole owner of Vingulmork Predictor AS. The amount invoiced from Getica AB amounted to NOK 7.7 million in 2022 (NOK 9.8 million in 2021).
See note 10 for remuneration to the management and the board.
There have not been any significant events since the balance sheet date.
Non‐IFRS financial measures / alternative performance measures
In this annual report, the group presents certain alternative performance measures ("APMs"). An APM is defined as a financial measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specific in the applicable financial reporting framework (IFRS). The APMs presented herein are not measurements of financial performance or liquidity under IFRS or other generally accepted accounting principles, are not audited and investors should not consider any such measures to be an alternative to (a) operating revenues or operating profit (as determined in accordance with generally accepted accounting principles), (b) as a measure of the group's operating performance; or (c) any other measures of performance under generally accepted accounting principles. The APMs presented herein may not be indicative of the group's historical operating results, nor are such measures meant to be predictive of the group's future results.
The company uses APMs to measure operating performance and is of the view that the APMs provide investors with relevant and specific operating figures which may enhance their understanding of the group's performance. Because companies calculate APMs differently, the APMs presented herein may not be comparable to similarly titled measures used by other companies.
Below is an overview of APMs presented, including an overview of reconciliation and calculation of the relevant APMs.
Organic revenue growth is defined as revenue adjusted for currency effects and effects from M&A. Organic revenue growth measurement provides useful information to investors and other stakeholders on underlying growth of the business without the effect of certain factors unrelated to its operating performance.
| Reconciliation | 2022 | 2021 |
|---|---|---|
| (NOK 1000) | ||
| Revenue from contracts with customers | 101 636 | 83 122 |
| Revenue growth | 18 538 | 19 795 |
| Impact using exchange rates from last period | -1 750 | 4 399 |
| Impact M&A | - | 1 954 |
| Organic revenue growth | 16 788 | 26 148 |
| Organic revenue growth % | 20 % | 43 % |
Total other operating expenses is a key financial parameter for the group and consists of salaries and personnel costs and other operating expenses. Total other operating expenses before capitalisation of R&D expenses consists of Employee benefit expenses and other non-salary related operating expenses before capitalisation of R&D expenses. The performance indicator is provided for the purpose of monitoring the evolution of non-production related costs without the effect of capitalisation of costs.
| Reconciliation | 2022 | 2021 |
|---|---|---|
| (NOK 1000) | ||
| Employee benefit expenses | 40 910 | 39 539 |
| Other operating expenses | 31 369 | 32 790 |
| Total other operating expenses after capitalisation of R&D expenses |
72 279 | 72 330 |
| Capitalisation | 6 029 | 11 659 |
| Total other operating expenses before capitalisation of R&D expenses |
78 308 | 83 988 |
| Reconciliation | 2022 | 2021 |
|---|---|---|
| (NOK 1000) | ||
| Other non-salary related operating expenses after capitalisation of R&D expenses |
31 369 | 32 790 |
| Capitalisation | 2 336 | 8 579 |
| Other non-salary related operating expenses before capitalisation of R&D expenses |
33 705 | 41 370 |
EBITDA is a measurement of operating earnings before depreciation and amortisation of property, plant and equipment and intangible assets and impairment charges, and EBIT is the operating result. EBITDA and EBIT are used for providing information of operating performance which is relative to other companies and frequently used by other stakeholders.
| Reconciliation | 2022 | 2021 |
|---|---|---|
| (NOK 1000) | ||
| Total Revenue | 111 922 | 100 009 |
| Total Operating Expenses | -135 158 | -122 854 |
| EBIT | -23 235 | -22 845 |
| Depreciation and Amortisation | 10 243 | 7 349 |
| EBITDA | -12 992 | -15 496 |
Cost of goods sold (COGS) refers to the total cost of producing goods for product sales. The key figure COGS % is calculated in relation to revenue from contracts with customers. COGS % is used for providing consistent information of performance related to the production of goods which is relative to other companies and frequently used by other stakeholders.
| 2022 | 2021 | |
|---|---|---|
| (NOK 1000) | ||
| Revenue from contracts with customers | 101 636 | 83 122 |
| COGS | 52 635 | 43 176 |
| COGS % of Revenue from contracts with customers | 52 % | 52 % |
Non-cash share-based compensation expense is the share-based compensation recognised in the income statement (employee benefit expenses). Information on the non-cash share-based compensation expense is provided to give information on the no-cash components of the employee benefit expenses.
| 2022 | 2021 | |
|---|---|---|
| (NOK 1000) | ||
| Non-cash shared-based compensation | 3 353 | 4 633 |
We confirm that the financial statements for the period 1 January up to and including 31 December 2022, to be the best of our knowledge, have been prepared in accordance with applicable accounting standards and give a true and fair view of the assets, liabilities, financial positions and profit or loss of the Company and the group as a whole. The board of director's report includes a fair view of the development and performance of the business and the position of the Company and the group as a whole, together with a description of the principal risks and uncertainties that they face.
Moss, 29 March 2023
The board of directors of Gentian Diagnostics ASA
| Tomas Settevik | Kari E. Krogstad | Espen Tidemann Jørgensen |
|---|---|---|
| Chairperson | Board member | Board member |
| Sign. | Sign. | Sign. |
| Susanne Stuffers | Fredrik Thoresen | Monika Neuman |
| Board member | Board member | Board member |
| Sign. | Sign. | Sign. |
| Tomas Kramar | Frank Frantzen | Hilja Ibert |
| Board member | Board member | CEO |
| Sign. | Sign. | Sign. |
Org.no.: 983 860 516
| Operating income and operating expenses | Note | 2022 | 2021 |
|---|---|---|---|
| Other income | 4 040 | 2 456 | |
| Total income | 4 040 | 2 456 | |
| Employee benefits expense | 1, 6 | 11 782 | 9 947 |
| Other expenses | 1, 2 | 3 213 | 5 984 |
| Total expenses | 14 995 | 15 931 | |
| Operating profit | -10 955 | -13 475 | |
| Financial income and expenses | |||
| Interest income from group companies | 2 443 | 530 | |
| Other financial income | 1 054 | 116 | |
| Other interest expenses | 1 | 1 | |
| Other financial expenses | 31 | 14 | |
| Net financial items | 3 465 | 632 | |
| Net profit before tax | -7 490 | -12 843 | |
| Net profit or loss | 6 | -7 490 | -12 843 |
| Attributable to | |||
| Transferred from other equity | 7 490 | 12 843 | |
| Total | -7 490 | -12 843 |
| Note | 2022 | 2021 | |
|---|---|---|---|
| Assets | |||
| Non-current assets | |||
| Non-current financial assets | |||
| Investments in subsidiaries | 3 | 109 665 | 109 665 |
| Loan to group companies | 4 | 82 338 | 60 051 |
| Total non-current financial assets | 192 003 | 169 716 | |
| Total non-current assets | 192 003 | 169 716 | |
| Current assets | |||
| Debtors | |||
| Other short-term receivables | 4 | 5 061 | 130 |
| Total receivables | 5 061 | 130 | |
| Cash and bank deposits | |||
| Cash and cash equivalents | 5 | 72 306 | 104 031 |
| Total cash and bank deposits | 72 306 | 104 031 | |
| Total current assets | 77 367 | 104 161 | |
| Total assets | 269 370 | 273 877 |
| Note | 2022 | 2021 | |
|---|---|---|---|
| Equity and liabilities | |||
| Equity | |||
| Paid-in capital | |||
| Share capital | 7 | 1 542 | 1 542 |
| Share premium reserve | 302 244 | 302 244 | |
| Other paid-up equity | 119 | 119 | |
| Total paid-up equity | 303 905 | 303 905 | |
| Retained earnings | |||
| Other equity | -37 576 | -31 829 | |
| Total retained earnings | -37 576 | -31 829 | |
| Total equity | 6 | 266 329 | 272 076 |
| Liabilities | |||
| Current liabilities | |||
| Trade payables | 181 | 60 | |
| Public duties payable | 1 503 | 464 | |
| Other current liabilities | 1 356 | 1 276 | |
| Total current liabilities | 3 041 | 1 800 | |
| Total liabilities | 3 041 | 1 800 | |
| Total equity and liabilities | 269 370 | 273 877 | |
| Moss, 29 March 2023 | |||
| The board of Gentian Diagnostics ASA | |||
| Tomas Settevik | Espen Tidemann Jørgensen | Fredrik Thoresen | |
| Chairperson | Member of the board | Member of the board | |
| Kari Eian Krogstad | Susanne Stuffers | Monika Neuman | |
| Member of the board | Member of the board | Member of the board | |
| Hilja Ibert | Tomas Kramar | Frank Frantzen | |
| CEO | Member of the board | Member of the board |
| Note | 2022 | 2021 |
|---|---|---|
| Operating activities | ||
| Net profit (loss) | -7 490 | -12 843 |
| Depreciation and amortisation | - | - |
| Change in inventory | - | - |
| Change in account receivables | - | - |
| Change in account payables | 121 | 54 |
| Change in other assets and liabilities | -2 069 | 5 910 |
| Net cash flow from operating activities | -9 437 | -6 879 |
| Investing activities | ||
| Investment in subsidiaries | - | - |
| Investment in other companies | - | - |
| Net cash flow from investing activities | - | - |
| Financing activities | ||
| Proceeds from issue of share capital | - | 570 |
| Loan subsidiaries | -22 287 | -40 946 |
| Net cash flow from financing activities | -22 287 | -40 376 |
| Net cash in cash and cash equivalents | -31 724 | -47 255 |
| Cash and cash equivalents at beginning of period Effect of currency translations of cash and cash equivalents |
104 031 - |
151 286 - |
| Net cash and cash equivalents at period end | 72 306 | 104 031 |
The financial statements have been prepared in compliance with the Norwegian Accounting Act and generally accepted accounting principles in Norway.
The management has used estimates and assumptions that have affected assets, liabilities, incomes, expenses and information on potential liabilities in accordance with generally accepted accounting principles in Norway.
Income from services is recognised at fair value, net after deduction of VAT, returns, discounts and reductions.
Revenues from the sale of goods are recognised in the income statement once delivery has taken place and most of the risk and return has been transferred.
Current assets and current liabilities consist of receivables and payables due within one year, and items related to the inventory cycle. Other balance sheet items are classified as non-current assets / non-current liabilities.
Current assets are valued at the lower of cost and fair value. Non-current liabilities are recognized at nominal value.
Non-current assets are valued at cost, less depreciation and impairment losses. Non-current liabilities are recognized at nominal value.
Development costs are capitalized providing that a future economic benefit associated with development of the intangible asset can be established and costs can be measured reliably. Otherwise, the costs are expensed as incurred. Capitalized development costs are amortized linearly over its useful life. Research costs are expensed as incurred.
Intangible assets with indefinite useful lives and goodwill are not amortised but testet annually for impairment.
Property, plant and equipment and intangible assets depreciated are assessed for impairment when there are indicators that future earnings can't defend the asset's capitalised amount. The difference between the carrying amount and the recoverable amount is recognised as an impairment loss. The recoverable amount is the highest of fair value less sales costs and value in use. When assessing impairment, assets are grouped at the lowest level where it is possible to distinguish independent cash flows (cash-generating units). At each reporting date, the possibilities for reversal of previous write-downs on non-financial assets (except goodwill) are considered.
Impairment tests are carried out if there is indication that the carrying amount of an asset exceeds the estimated recoverable amount. The test is performed on the lowest level of fixed assets at which independent ingoing cashflows can be identified. If the carrying amount is higher than both the fair value less cost to sell and the value in use (net present value of future use/ownership), the asset is written downto the highest of fair value less cost to sell and the value in use.
Previous impairment charges, except write-down of goodwill, are reversed in later periods if the conditionscausing the write-down are no longer present.
Subsidiaries and investments in associates are valued at cost in the company accounts. The investment is valued as cost of the shares in the subsidiary, less any impairment losses an impairment loss is recognised if the impairment is not considered temporary, in accordance with generally accepted accounting principles. Impairment losses are reversed if the reason for the impairment loss disappears in a lather period.
Dividends, group contributions and other distributions from subsidiaries are recognised in the same year as they are recognised in the financial statement of the provider. If dividends / group contribution exceeds withheld profits after the acquisition date, the excess amount represents repayment of invested capital, and the distribution will be deducted from the recorded value of the acquisition in the balance sheet for the parent company.
Accounts receivable and other current receivables are recorded in the balance sheet at nominal value less provisions for doubtful accounts. Provisions for doubtful accounts are based on an individual assessment of the different receivables. For the remaining receivables, a general provision is estimated based on expected loss.
Gentian Diagnostics ASA has a defined contribution pension plan as required the Norwegian Law. For defined contribution pension plans, contributions are paid to pension insurance plans and charged to the statement of profit or loss in the period to which the contributions relate.
The tax expense consists of the tax payable and changes to deferred tax. Deferred tax/tax assets are calculated on all differences between the book value and tax value of assets and liabilities. Deferred tax is calculated as tax rate percent of temporary differences and the tax effect of tax losses carried forward. Deferred tax assets are recorded in the balance sheet when it is more likely than not that the tax assets will be utilized.
The cash flow statement is presented using the indirect method. Cash and cash equivalents include cash, bank deposits and other short term, highly liquid investments with maturities of three months or less.
| Payroll expenses | 2022 | 2021 |
|---|---|---|
| Salaries/wages | 8 786 | 5 689 |
| Social security fees | 959 | 508 |
| Option program | 1 742 | 3 674 |
| Other remuneration | 295 | 76 |
| Total | 11 782 | 9 947 |
| Number of employees at 31 December | 3 | 3 |
| Remuneration to the board of directors | 1 106 | 1 021 |
| Remuneration to the Chief executive officer | 3 347 | 1 736 |
The company has a share option programme covering certain key employees. As at 31 December 2022, fifteen employees in the Gentian group were included in the option programme. Of the fifteen employees, the option costs for management have been booked in the company and the rest in the subsidiary Gentian AS.
Expenses paid to the auditor for 2022 amounts to TNOK 615 of which TNOK 75 relates to other services.
| Ownership/ voting interest |
Office | Equity capital |
||
|---|---|---|---|---|
| location | Result 2022 | 31.12.2022 | ||
| Gentian AS | 100% | Moss | -14 056 | 7 412 |
| Receivables | 2022 | 2021 |
|---|---|---|
| Loans to companies in the same group | 82 338 | 60 051 |
| Customer receivables to companies in the same group | 5 050 | - |
| Liabilities Loans from companies in the same group |
- | - |
| Revenue Sale of services to companies in the same group |
4 040 | 2 456 |
| Pledge account | - |
|---|---|
| Deposit for office rent | 265 |
| Tax withheld | 382 |
| Other savings and checking accounts | 71 659 |
| Total bank deposits | 72 306 |
| Share capital |
Share premium |
Other paid-in equity capital |
Other equity capital |
Total equity capital |
|
|---|---|---|---|---|---|
| As at 31.12.2021 | 1 542 | 302 244 | 119 | -31 829 | 272 076 |
| Result for the year | -7 490 | -7 490 | |||
| Employee option program | 1 742 | 1 742 | |||
| As at 31.12.2022 | 1 542 | 302 244 | 119 | -37 576 | 266 329 |
| Number of | Nominal | Share | |
|---|---|---|---|
| shares | value | capital | |
| Ordinary shares | 15 422 350 | 0.10 | 1 542 235 |
All shares in the company have equal voting rights and equal rights to dividends.
| Number | Ownership | |
|---|---|---|
| Overview of the parent company's shareholders as at 31.12.22: | of shares | share |
| Vatne Equity AS | 2 110 224 | 13.68 % |
| Kvantia AS | 1 623 368 | 10.53 % |
| Holta Life Sciences AS | 1 214 702 | 7.88 % |
| Verdipapirfondet Delphi Nordic | 973 999 | 6.32 % |
| Safrino AS | 800 000 | 5.19 % |
| Skandinaviska Enskilda Banken AB | 492 150 | 3.19 % |
| Salix AS | 363 235 | 2.36 % |
| Verdipapirfondet DNB SMB | 361 291 | 2.34 % |
| Verdipapirforndet Storebrand Vekst | 341 484 | 2.21 % |
| J.P. Morgan SE | 325 000 | 2.11 % |
| Portia AS | 300 000 | 1.95 % |
| Equinor Pensjon | 245 047 | 1.59 % |
| Krefting, Johan Henrik | 236 500 | 1.53 % |
| Cressida AS | 235 000 | 1.52 % |
| Verdipapirfondet Equinor Aksjer NO | 227 880 | 1.48 % |
| Carpe Diem Afseth AS | 221 797 | 1.44 % |
| Lioness AS | 220 000 | 1.43 % |
| Marstal AS | 212 407 | 1.38 % |
| Mutus AS | 210 465 | 1.36 % |
| Vingulmork Predictor AS | 184 083 | 1.19 % |
| Top 20 shareholders | 10 898 632 | 70.67 % |
| Total other shareholders | 4 523 718 | 29.33 % |
| Total number of shares | 15 422 350 | 100.00 % |
| Shares controlled by board members and the Management | ||
| Tomas Settevik (Mutus AS) | 210 465 | 1.36 % |
| Fredrik Thoresen (RWD AS) | 28 160 | 0.18 % |
| Frank Frantzen | 20 000 | 0.13 % |
| Espen Tidemann Jørgensen | 17 000 | 0.11 % |
| Thomas Kramar | 5 802 | 0.04 % |
| Susanne Stuffers (Ubiquity AS) | 3 500 | 0.02 % |
| Kari E. Krogstad | 2 325 | 0.02 % |
| Monika Neuman | 800 | 0.01 % |
| Hilja Ibert | 6 525 | 0.04 % |
|---|---|---|
| Njaal Kind | 21 125 | 0.14 % |
| Erling Sundrehagen (Vingulmork Predictor AS) | 184 083 | 1.19 % |
The company has not paid dividends over the last five years.
| This year's tax expense | 2022 | 2021 |
|---|---|---|
| Entered tax on ordinary profit/loss:Payable tax | ||
| - | - | |
| Changes in deferred tax assets | - | - |
| Tax expense on ordinary profit/loss | ||
| - | - | |
| Taxable income: | ||
| Ordinary result before tax | -7 490 | -12 843 |
| Permanent differences | - | - |
| Changes in temporary differences | -13 | -16 |
| Taxable income | -7 502 | -12 859 |
| Payable tax in the balance: Payable tax on this | ||
| year's result | - | - |
| Total payable tax in the balance | - | - |
| Calculation of effective tax rate | ||
| -7 490 | -12 843 | |
| Profit before tax | -1 648 | -2 825 |
| Tax effect of permanent differences | - | - |
| Total | -1 648 | -2 825 |
| Effective tax rate | 22,0 % | 22,0 % |
The tax effect of temporary differences and loss for to be carried forward that has formed the basis for deferred tax and deferred tax asset, specified on type of temporary differences.
| 2022 | 2021 | Difference | |
|---|---|---|---|
| Property, plant and equipment | -51 | -63 | -13 |
| Total | -51 | -63 | -13 |
| Accumulated loss to be brought forward | -58 202 | -50 700 | 7 502 |
| Not included in the deferred tax calculation | 58 252 | 50 763 | -7 490 |
| Deferred tax asset (22 %) | - | - | - |
Deferred tax asset is not included in the balance sheet.
We have audited the financial statements of Gentian Diagnostics ASA.
| The financial statements comprise: | In our opinion: | ||
|---|---|---|---|
| The financial statements of the parent company, which comprise the balance sheet as at 31 December 2022, income statement and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and The financial statements of the group, which comprise the balance sheet as at 31 December 2022, and income statement, statement of comprehensive income, statement of changes in equity and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. |
The financial statements comply with applicable statutory requirements, The accompanying financial statements give a true and fair view of the financial position of the company as at 31 December 2022, and its financial performance and its cash flows for the year then ended in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway. The accompanying financial statements give a true and fair view of the financial position of the group as at 31 December 2022, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU. Our opinion is consistent with our additional report to the Audit Committee. |
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company and the Group as required by relevant laws and regulations in Norway and International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided.
We have been the auditor of Gentian Diagnostics ASA for 11 years from the election by the general meeting of the shareholders on 2 June 2012 for the accounting year 2012.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
| Description of the key audit matter | How the key audit matter was addressed in the audit |
|---|---|
| Impairment of intangible assets We refer to note 2.11 and note 18 where management explain recognition of intangible assets and impairment test. The value of the intangible assets in the Group is highly dependent on successful development of commercial biotech products. The carrying amount of intangible assets represents a significant portion of total assets of the Group. No impairment loss on intangible assets were recognized in the statement of profit and loss for 2022. Some of the intangible assets are still under development and do not yet generate revenue. The impairment test was based on a discounted cash flow method. Several of the assumptions, including discount rate (WACC), sales price, remaining development costs and likelihood of approval with the regulatory authorities were judgmental. We considered impairment of intangible assets for the Group to be a Key Audit Matter due to the significant amount the intangible assets represent in the consolidated statement of financial position and the level of management judgments related to assumptions in the impairment test. |
We obtained management's impairment test. The test includes documentation about how management assessed intangible assets and key assumptions applied by management. We satisfied ourselves that the impairment test contained the elements required by IFRS. We tested the mathematical accuracy of the impairment model. We challenged the assumptions applied by management related to calculation of revenues and compared the assumptions such as number of incidents, sales prices, and likelihood of approval with public available information. We assessed the assumptions for remaining development costs used in the calculation by comparing to internal budgets and forecasts. We evaluated the discount rate used by management by comparing its composition to empirical data for risk-free interest rate, relevant risk premium and debt ratio. Key assumptions used were benchmarked against external data. |
The Board of Directors and the Managing Director (management) is responsible for the other information. The other information comprises the Board of Directors' report and other information in the Annual Report, but does not include the financial statements and our auditor's report thereon. Our opinion on the financial statements does not cover the other information.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with
the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Opinion on the Board of Director's report
Based on our knowledge obtained in the audit, in our opinion the Board of Directors' report
Management is responsible for the preparation of financial statements that give a true and fair view, for in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and for the preparation and fair presentation of the financial statements of the group in accordance with International Financial Reporting Standards as adopted by the EU, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern. The financial statements of the Company use the going concern basis of accounting insofar as it is not likely that the enterprise will cease operations. The financial statements of the Group use the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
For further description of Auditor's Responsibilities for the Audit of the Financial Statements reference is made to:
https://revisorforeningen.no/revisjonsberetninger
As part of the audit of the financial statements of Gentian Diagnostics ASA we have performed an assurance engagement to obtain reasonable assurance about whether the financial statements included in the annual report, with the file name "5967007LIEEXZXHNM861-2022-12-31-en", have been prepared, in all material respects, in compliance with the requirements of the Commission
Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant to Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to the preparation of the annual report in XHTML format and iXBRL tagging of the consolidated financial statements.
In our opinion, the financial statements, included in the annual report, have been prepared, in all material respects, in compliance with the ESEF Regulation.
Management is responsible for the preparation of the annual report in compliance with the ESEF Regulation. This responsibility comprises an adequate process and such internal control as management determines is necessary.
For a description of the auditor's responsibilities when performing an assurance engagement of the ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger
Moss, 28 March 2023 BDO AS
Per Harald Eskedal State Authorised Public Accountant (This document is signed electronically)
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