GENETIC TECHNOLOGIES LIMITED - AGM Information 2012

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ASX ANNOUNCEMENT October 18[th] , 2012

2012 Notice of Annual General Meeting, Sample Proxy and 2012 Annual Report

Genetic Technologies Limited (ASX: GTG; NASDAQ: GENE) is pleased to release its 2012 Notice of Annual General Meeting, a Sample Proxy for the Meeting and its 2012 Annual Report.

It is anticipated that copies of the Notice and personalised proxies will be mailed to all shareholders by no later than Friday, October 26[th] , 2012. The Company’s Annual Report is available for download from its website: www.gtglabs.com

As detailed in the attached Notice, the 2012 Annual General Meeting of shareholders will be held at 11.00 am on Tuesday, November 27[th] , 2012 at the following address:

“Treetops” Melbourne Museum 11 Nicholson Street Carlton, Victoria 3053 Australia

FOR FURTHER INFORMATION PLEASE CONTACT

Mr. Thomas G. Howitt Company Secretary

Genetic Technologies Limited Phone: +61 3 8412 7000

Genetic Technologies Limited • Website : www.gtglabs.com • Email : [email protected] ABN 17 009 212 328 Registered Office • 60-66 Hanover Street, Fitzroy Victoria 3065 Australia • Postal Address P.O. Box 115, Fitzroy Victoria 3065 Australia Phone +61 3 8412 7000 • Fax +61 3 8412 7040

Genetic Technologies Limited

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of the shareholders of Genetic Technologies Limited (ACN 009 212 328) will be held at:

11.00 am on Tuesday, 27 November 2012 at

“Treetops”, Melbourne Museum

11 Nicholson Street

Carlton, Victoria 3053 Australia

BUsINEss

1. CONsIDERATION OF FINANCIAL sTATEMENTs

To receive and consider the Financial Report, Directors’ Report and Auditor’s Report for the year ended 30 June 2012.

2. REsOLUTION 1 - ELECTION OF DR. MELVYN JOHN BRIDGEs

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

“ To elect Dr. Melvyn John Bridges who was appointed to the Board as an additional Director on 16 December 2011 and in accordance with Listing Rule 14.4 and clause 19.5 of the Company’s Constitution retires and being eligible offers himself for election as a Director.”

3. REsOLUTION 2 - ELECTION OF GREGORY WAYNE BROWN

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

“ To elect Gregory Wayne Brown who was appointed to the Board as an additional Director on 24 July 2012 and in accordance with Listing Rule 14.4 and clause 19.5 of the Company’s Constitution retires and being eligible offers himself for election as a Director.”

4. REsOLUTION 3 - RE-ELECTION OF DR. MALCOLM ROY BRANDON

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

“ To elect Dr. Malcolm Roy Brandon who retires by rotation in accordance with Listing Rule 14.4 and clause 20.1 of the Company’s Constitution and being eligible offers himself for re-election as a Director.”

5. REsOLUTION 4 - RE-ELECTION OF HUW DAVID JONEs

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

“ To elect Huw David Jones who retires by rotation in accordance with Listing Rule 14.4 and clause 20.1 of the Company’s Constitution and being eligible offers himself for re-election as a Director.”

6. REsOLUTION 5 - ADOPTION OF THE REMUNERATION REPORT

To consider and, if thought fit, to pass the following resolution as an ordinary resolution:

“ That the Remuneration Report section of the Directors’ Report for the Company for the year ended 30 June 2012 be adopted.”[*]

Please note that section 250R(3) of the Corporations Act 2001 (Cth) provides that the vote on this resolution is advisory only and does not bind the Directors or the Company.

7. REsOLUTION 6 - APPROVAL OF ADDITIONAL PLACEMENT CAPACITY

To consider and, if thought fit, to pass the following resolution as a special resolution:

“ That, for the purposes of ASX Listing Rule 7.1A and all other purposes, Members approve the issue of shares up to 10% of the Company’s issued share capital at the time of issue, calculated in accordance with the formula prescribed in ASX Listing Rule 7.1A.2 and as further described in the attached Explanatory Memorandum.”

Dated this 18th day of October 2012

By order of the Board

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THOMAS G. HOWITT Company Secretary

VOTING ENTITLEMENT NOTICE

For the purposes of the Meeting, the Company has determined that in accordance with regulation 7.11.37 of the Corporations Regulations, shares will be taken to be held by the persons registered as holders at 11.00 am on Sunday, 25 November 2012. Accordingly, transfers registered after that time will be disregarded in determining entitlements to vote at the Meeting.

DIRECT VOTE

A member entitled to vote may vote their shares directly by marking item “1” in Step 1 on the attached Proxy Form, completing Step 2 by marking a “for”, “against” or “abstain” for each resolution and returning the Proxy Form as indicated below. In this case, a member is not appointing a proxy. A vote of “abstain” for a direct vote will result in the shares represented by that vote not counting towards a majority vote. If no direction is given for a particular resolution and no proxy appointed, the vote (other than a vote with respect to Resolution 5) will be passed to the Chairman of the meeting to vote as that member’s undirected proxy.

PROXIEs

A shareholder entitled to attend and vote at the Meeting is entitled to appoint not more than two proxies. Where more than one proxy is appointed, each proxy form may specify the proportion or number of votes which the proxy may exercise. If it does not specify the proportion or number of votes the proxy may exercise, each proxy may exercise half of the votes. A proxy need not be a shareholder. Proxy Forms must be lodged in accordance with the directions set out on the Proxy Form not later than 48 hours prior to the Meeting.

APPOINTMENT OF PROXIEs

If you are entitled to vote at the Meeting you have the right to appoint a proxy to attend and vote in your place. To appoint a proxy you should complete item “2” in Step 1 on the attached Proxy Form. If you wish to appoint a person other than the Chairman, you should complete the second panel in item “2” of Step 1, and not mark the first panel of item “2”.

The proxy need not be a shareholder of the Company. If you are entitled to cast two or more votes you may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the proxy appointments do not specify the proportion or number of your votes that each proxy may exercise, each proxy may exercise half your votes. If there is more than one proxy appointed, on a show of hands only one of the proxies may vote, but on a poll, each proxy may exercise votes in respect of those shares the proxy represents.

The Chairman intends to vote all undirected proxies in favour of the resolutions put in the Notice of Meeting. In particular, if the Chairman of the Meeting is appointed as your proxy and you have not specified the way the Chairman is to vote on Resolution 5, by signing and returning the Proxy Form, you are considered to have provided the Chairman with an express authorisation for the Chairman to vote the proxy in accordance with the Chairman’s intention, namely in favour of each of the proposed resolutions set out in the Notice of Meeting.

If a member has not directed their proxy how to vote, the proxy may vote as the proxy determines. If a member (who is not an Excluded Voter) has appointed as their proxy an Excluded Voter (other than the Chairman), the member may only vote with respect to Resolution 5 by directing their proxy how to vote with respect to Resolution 5. To direct the Excluded Voter as proxy, the member must complete the “for” or “against” or “abstain” at Step 2 of the Proxy Form for Resolution 5.

An “Excluded Voter” for these purposes means collectively one of the Key Management Personnel (as set out on page 34 of the Company’s 2012 Annual Report, and is defined in the Corporations Act 2001 to include the Chairman) (“KMP”) or one of KMP’s closely related parties (which includes a spouse, dependent and certain other close family members and companies controlled by the KMP).

Proxy forms must be received at the Company’s offices (60-66 Hanover Street, Fitzroy, Victoria 3065 Australia) or by fax, within Australia on (03) 8412 7040 or outside Australia on +61 3 8412 7040, by no later than 11.00 am on Sunday, 25 November 2012.

BODIEs CORPORATE

A body corporate may appoint an individual as its representative to exercise any of the powers the body may exercise at meetings of the Company’s shareholders. The appointment may be a standing one. Unless the appointment states otherwise, the representative may exercise all of the powers that the appointing body could exercise at a meeting or in voting on a resolution. The representative should bring to the Meeting evidence of his or her appointment, including any authority under which the appointment is signed, unless it has previously been given to the Company.

EXPLANATORY MEMORANDUM

This Explanatory Memorandum has been prepared for the information of shareholders of the Company in connection with the business to be conducted at the Annual General Meeting of shareholders to be held on Tuesday, 27 November 2012. Each of the Directors supports each resolution and recommends that shareholders vote in favour of them.

1. CONsIDERATION OF FINANCIAL sTATEMENTs

Please refer to the Company’s 2012 Annual Report.

2. REsOLUTION 1 - ELECTION OF DR. MELVYN JOHN BRIDGEs

Dr. Bridges, 62, was appointed as an additional Director after the last annual general meeting and in accordance with Listing Rule 14.4 and clause 19.5 of the Company’s Constitution retires and being eligible offers himself for election.

Dr. Bridges was appointed to the Board as a non-executive Director on 16 December 2011 and currently also serves as its Chairman and as Chairman of the Company’s Audit and Corporate Governance Committees. Dr. Bridges has over 30 years’ experience in the diagnostic and healthcare industries. During this period, he has founded and managed successful diagnostics, therapeutics and medical device businesses, co-founding ASX listed Panbio Limited and ImpediMed Limited. During the past three years, he has also served a number of prominent roles as director and chairman of public healthcare companies, including chairman of Alchemia Limited, and director of ImpediMed Limited, Campbell Brothers Limited and Benitec Limited. Dr. Bridges also has deep experience with a number of healthcare / biotechnology companies, having served multiple board posts such as chairman of Peptech Limited and non-executive director of Domantis plc.

3. REsOLUTION 2 - ELECTION OF GREGORY WAYNE BROWN

Mr. Brown, 49, was appointed as an additional Director after the last annual general meeting and in accordance with Listing Rule 14.4 and clause 19.5 of the Company’s Constitution retires and being eligible offers himself for election.

Mr. Brown was appointed to the Board as a non-executive Director on 24 July 2012. He has over 25 years of international business experience in the healthcare industry including internationally based experience overseeing product development and global commercial launches based in Switzerland (Basel), England (London), Germany (Goettingen) and the United States (New York / New Jersey / Maryland). Mr. Brown has held the role of Sales and Marketing Director for Baxter Diagnostics in Australia and in the UK; Senior Global Marketing Manager for Roche Molecular Systems; Vice President, Global Strategic Marketing for Digene Corporation; and has led sales, device management, marketing and managed care teams in Europe and the US. Most recently Mr. Brown held the role of Managing Director and Chief Executive Officer of ASX-listed diagnostics device company ImpediMed, which has a primary breast cancer focus. He remains on the board of ImpediMed as an Executive Director.

4. REsOLUTION 3 - RE-ELECTION OF DR. MALCOLM ROY BRANDON

Dr. Brandon, 65, retires by rotation in accordance with the Company’s Constitution and being eligible offers himself for re-election.

Dr. Brandon was appointed to the Board as a non-executive Director on 5 October 2009 and also serves as a member of the Company’s Audit Committee. He has spent his career in the biotech and life sciences sector where he has over 35 years experience in commercially focused research and development and in building successful companies which have commercialised a wide range of technologies. As the founding director of the Centre for Animal Biotechnology, a research arm within the University of Melbourne Veterinary Science School, he was responsible for fund raising and the development of many agricultural technologies and products. Dr. Brandon was a co-founder and Director of Stem Cell Sciences Ltd. and Smart Drug Systems Inc. and is the Chairman of genetics and artificial animal breeding company Clone International which uses cloning technologies to breed elite cattle, sheep and horses and to preserve the genetics of elite animals.

5. REsOLUTION 4 - RE-ELECTION OF HUW DAVID JONEs

Mr. Jones, 49, retires by rotation in accordance with the Company’s Constitution and being eligible offers himself for re-election.

Mr. Jones was appointed to the Board as a non-executive Director on 19 November 2008. He also serves as a member of the Company’s Audit Committee and its Corporate Governance Committee. He has over 20 years’ experience in international sales and marketing in the health care industry and is a Director of Fresh Investments Pty. Ltd., a former Managing Director of Datex-Ohmeda (Australasia) and a former Executive Director and CEO of Aeris Environmental Ltd.

6. REsOLUTION 5 - ADOPTION OF THE REMUNERATION REPORT

Under the Corporations Act 2001 , listed entities are required to put to the vote a resolution that the Remuneration Report section of the Directors’ Report be adopted. This Remuneration Report can be found on pages 33 to 39 of the Company’s 2012 Annual Report. It sets out a range of matters relating to the remuneration of Directors, the Company Secretary and Senior Executives of the Company. A vote on this resolution is advisory only and does not bind the Directors or the Company. A copy of the Company’s 2012 Annual Report can be found on its website at www.gtglabs.com.

The Corporations Act 2001 provides that as from 1 July 2011:

(a) members of the Key Management Personnel whose remuneration details are included in the Remuneration Report (and any closely related party of those members) are not permitted to vote on a resolution to approve the Remuneration Report; and
(b) if the vote to approve the Remuneration Report receives a “no” vote by at least 25% of the votes cast, this will constitute a “first strike”.
A “first strike” did not occur at the 2011 Annual General Meeting. Where a “first strike” occurs at the 2012 Annual General Meeting:
(c) the Company’s subsequent Remuneration Report (in other words, the Company’s Remuneration Report to be included in the 2013 Annual Report) must include an explanation of the Board’s proposed action in response to the “no” vote or an explanation of why no action has been taken; and
(d) if the Company’s subsequent Remuneration Report also receives a “no” vote at the 2013 Annual General Meeting of at least 25% of the votes cast, then Shareholders at the 2013 Annual General Meeting will be asked (at that 2013 Annual General Meeting) to vote on whether or not the Company is to hold another general Shareholder’s meeting (within the following 90 days) to vote on a “spill resolution” under section 250V of the Corporations Act 2001 .

Accordingly, the Board abstains from making a recommendation in relation to Resolution 5.

The Chairman intends to exercise all undirected proxies in favour of Resolution 5.

As set out in the Notice of Annual General Meeting, any member of the Key Management Personnel whose remuneration details are included in the Remuneration Report, together with a closely related party of those members, are excluded from casting a vote on Resolution 5.

Voting Prohibition Statement

A vote on Resolution 5 must not be cast (in any capacity) by or on behalf of any of the following persons:

(a) A member of Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or
(b) A closely related party of such a member,

(collectively, an Excluded Voter ).

However, an Excluded Voter may cast a vote on Resolution 5 if:

(i) The Excluded Voter does so as a proxy appointed by writing that specifies how the proxy is to vote on the proposed resolution (as described in the “Notes” section of this Notice of Meeting); and
(ii) The vote is not cast on behalf of another Excluded Voter.

An Excluded Voter may also cast a vote on Resolution 5 if the Excluded Voter is the Chairman of the Meeting and the appointment of the Chairman as proxy:

does not specify the way the proxy is to vote on the Resolution; or
expressly authorises the Chairman to exercise the proxy even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel for the Company.

7. REsOLUTION 6 - APPROVAL OF ADDITIONAL PLACEMENT CAPACITY

7.1 Background

New ASX Listing Rule 7.1A enables eligible entities to seek shareholder approval to issue shares, options and other securities as defined in the ASX Listing Rules ( Equity Securities ) representing up to 10% of their issued capital through placements over a 12 month period after the Annual General Meeting ( 10% Placement Facility ). The 10% Placement Facility is in addition to the Company’s 15% placement capacity which is available under ASX Listing Rule 7.1.

An “eligible entity” for the purposes of Listing Rule 7.1A is an entity that is not included in the S&P/ASX 300 Index and has a market capitalisation of $300 million or less. The Company is an eligible entity.

The Company is now seeking shareholder approval by way of a special resolution to have the ability to issue Equity Securities under the 10% Placement Facility. A “special resolution” requires the approval of at least 75% of the votes cast by members entitled to vote on this Resolution.

The exact number of Equity Securities to be issued under the 10% Placement Facility will be determined in accordance with the formula prescribed in Listing Rule 7.1A.2 (as described in section 7.2(b) below).

7.2 Description of Listing Rule 7.1A

(a) Equity Securities

The ability to issue Equity Securities under the 10% Placement Facility is subject to member approval by way of a special resolution at an annual general meeting. Any Equity Securities issued under the 10% Placement Facility must be in the same class as an existing quoted class of Equity Securities in the Company.

The Company, as at the date of this Notice of Meeting, has on issue one class of Equity Securities, being ordinary shares. The number of ordinary shares currently on issue is 464,771,819.

(b) Formula for calculating 10% Placement Facility

Listing Rule 7.1A.2 provides that eligible entities which have obtained shareholder approval at an annual general meeting may issue or agree to issue, during a 12 month period after the date of the annual general meeting, a number of Equity Securities calculated in accordance with the following formula:

(A x D) – E

where:

A = the number of shares on issue 12 months before the date of issue or agreement:

plus the number of fully paid shares issued in the 12 months under an exception in Listing Rule 7.2;

plus the number of partly paid shares that became fully paid in the 12 months;

plus the number of fully paid shares issued in the 12 months with approval of holders of shares under Listing Rules 7.1 and 7.4. This does not include an issue of fully paid ordinary shares under the entity’s 15% placement capacity without shareholder approval; and

less the number of fully paid shares cancelled in the 12 months.

Note: “A” has the same meaning in Listing Rule 7.1 when calculating an entity’s 15% placement capacity.

D = 10%

E = the number of Equity Securities issued or agreed to be issued under Listing Rule 7.1A.2 in the 12 months before the date of the issue or agreement to issue that are not issued with the approval of Members under Listing Rules 7.1 or 7.4.

(c) Interaction of Listing Rule 7.1 and Listing Rule 7.1A

The ability of an entity to issue Equity Securities under Listing Rule 7.1A is in addition to the entity’s 15% placement capacity under Listing Rule 7.1.

As at the date of this Notice, the Company has on issue 464,771,819 fully paid ordinary shares and therefore has a capacity to issue:

(i) 69,715,773 Equity Securities under Listing Rule 7.1; and
(ii) 46,477,182 Equity Securities under Listing Rule 7.1A, subject to member approval being granted under this Resolution 6.

The actual number of Equity Securities that the Company will have capacity to issue under Listing Rule 7.1A will be calculated at the date of issue of the Equity Securities in accordance with the formula prescribed in Listing Rule 7.1A.2 (refer to section 7.2(b) above).

(d) Minimum Issue Price

The issue price of Equity Securities issued under Listing Rule 7.1A must not be less than 75% of the volume weighted average price ( VWAP ) of Equity Securities in the same class calculated over the 15 trading days immediately before:

(i) the date on which the price at which the Equity Securities are to be issued is agreed; or
(ii) if the Equity Securities are not issued within 5 trading days of the date specified in paragraph (i) above, the date on which the Equity Securities are issued.
(e) 10% Placement Period

Shareholder approval of the 10% Placement Facility under Listing Rule 7.1A is valid from the date of the annual general meeting at which the approval is obtained and expires on the earlier to occur of:

(i) the date that is 12 months after the date of the annual general meeting at which the approval is obtained; or
(ii) the date of the approval by shareholders of a transaction under Listing Rules 11.1.2 (a significant change to the nature or scale of activities) or 11.2 (disposal of main undertaking),

( 10% Placement Period ).

7.3 Listing Rule 7.1A

The effect of Resolution 6 will be to allow the Directors to issue the Equity Securities under Listing Rule 7.1A during the 10% Placement Period without using the Company’s 15% placement capacity under Listing Rule 7.1. In these circumstances where Resolution 6 is passed, the Company will be able to issue up to 25% of its share capital under the combined limits pursuant to Listing Rules 7.1 and 7.1A (subject to the limitations in those rules).

Resolution 6 is a special resolution and therefore requires approval of 75% of the votes cast by Members present and eligible to vote (in person, by proxy, by attorney or, in the case of a corporate shareholder, by a corporate representative).

7.4 Specific information required by Listing Rule 7.1A

Pursuant to and in accordance with Listing Rule 7.3A, information is provided in relation to the approval of the 10% Placement Facility as follows:

(a) Minimum issue price

The Equity Securities will be issued at an issue price of not less than 75% of the VWAP for the Company’s Equity Securities over the 15 trading days immediately before:

(i) the date on which the price at which the Equity Securities are to be issued is agreed; or
(ii) if the Equity Securities are not issued within 5 trading days of the date in paragraph (i), the date on which the Equity Securities are issued.

7. REsOLUTION 6 - APPROVAL OF ADDITIONAL PLACEMENT CAPACITY (cont.)

(b) Risk of dilution

If Resolution 6 is approved and the Company issues Equity Securities under the 10% Placement Facility, the existing Members’ voting power in the Company will be diluted as shown in the table below.

There is also a risk that:

(i) the market price for the Company’s shares may be significantly lower on the date of the issue of Equity Securities than on the date of the approval of Resolution 6; and
(ii) the Equity Securities may be issued at a price that is at a discount to the market price for Shares on the date that they are issued or that the Equity Securities are issued as part of the consideration for the acquisition of a new asset,

which may have an effect on the amount of funds raised by the issue of Equity Securities.

The following table below shows:

(i) Two examples where the variable “A” has increased by 50% and 100%. Variable “A” is based on the number of ordinary securities that the Company has on issue as at 12 October 2012. The number of ordinary securities on issue may increase as a result of issues of ordinary securities that do not require Member approval (e.g. a pro rata entitlements issue) or future specific placements under Listing Rule 7.1 that are approved at a future Shareholders’ meeting; and
(ii) Two examples where the issue price of ordinary shares has decreased by 50% and increased by 50% as against the current market price.

Variable “A” (in ListingRule 7.1A.2)		Dilution
		$0.055 50% decrease in Issue Price $0.110 Issue Price $0.165 50% increase in Issue Price
Current variable “A” – 464,771,819	10% votingdilution	46,477,182 46,477,182 46,477,182
	Funds raised	$2,556,245 $5,112,490 $7,668,735
50% increase in current variable “A” – 697,157,729	10% votingdilution	69,715,773 69,715,773 69,715,773
	Funds raised	$3,834,368 $7,668,735 $11,503,102
100% increase in current variable “A” – 929,543,638	10% votingdilution	92,954,364 92,954,364 92,954,364
	Funds raised	$5,112,490 $10,224,980 $15,337,470

The above table has been prepared using the following assumptions:

(i) The Company issues the maximum number of Equity Securities available under the 10% Placement Facility.
(ii) The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue. This is why the voting dilution is shown in each example as 10%.
(iii) The table does not show an example of dilution that may be caused to a particular Member by reason of placements under the issue of Equity Securities, based on that Member’s holding as at the date of the Meeting.
(iv) The table shows only the effect of issues of Equity Securities under Listing Rule 7.1A and not the issue of shares under the 15%
placement power under Listing Rule 7.1.
(v) The issue of Equity Securities under the 10% Placement Facility consists only of Shares. If the issue of Equity Securities includes options, it is assumed that those options are exercised into shares for the purpose of calculating the voting dilution effect on existing Members.
(vi) The issue price is $0.11, being the closing price of Shares on ASX on 12 October 2012.

(c) Timing of issue

The Company will only issue and allot the Equity Securities during the 10% Placement Period. The approval under Resolution 6 for the issue of Equity Securities will cease to be valid in the event that Shareholders approve a transaction under Listing Rule 11.1.2 (a significant change to the nature or scale of activities) or Listing Rule 11.2 (disposal of main undertaking).

(d) Purpose of issue

The Company may seek to issue the Equity Securities for the following purposes:

(i) non-cash consideration for the acquisition of new businesses and investments. In such circumstances, the Company will provide a valuation of the non-cash consideration as required by Listing Rule 7.1A.3; or
(ii) cash consideration. In such circumstances, the Company intends to use the funds raised to fund an acquisition of new businesses or investments (including any expenses associated with such an acquisition), to expand the Company’s US operations and to accelerate the roll-out of its BREVAGen[TM ] breast cancer risk assessment test and/or for general working capital purposes.

Once an issue of Equity Securities has occurred, the Company will make the appropriate disclosure to the market (see section 7.5 below).

(e) Allocation policy

The Company’s allocation policy is dependent on the prevailing market conditions at the time of any proposed issue pursuant to the 10% Placement Facility. The identity of the allottees of Equity Securities will be determined on a case-by-case basis having regard to factors including, but not limited to, the following:

(i) the methods of raising funds that are available to the Company, including but not limited to rights issues or other issues in which existing security holders can participate;
(ii) the effect of the issue of Equity Securities on the control of the Company;
(iii) the financial situation and solvency of the Company; and
(iv) advice from corporate, financial and broking advisors (if available).

The allottees under the 10% Placement Facility have not been determined as at the date of this Notice but may include existing substantial shareholders and/or new shareholders who are not related parties or associates of a related party of the Company.

Further, if the Company is successful in acquiring new businesses, assets or investments, it is possible that the allottees under the 10% Placement Facility may include vendors of the new businesses, assets or investments.

(f) Prior issues

The Company has not previously obtained Member approval under Listing Rule 7.1A.

(g) Voting exclusion

A voting exclusion statement is included in the Notice. At the date of the Notice, the Company has not approached any particular existing Member to participate in the issue of Equity Securities. Therefore, no existing Members’ votes will be excluded under the voting exclusion in this Notice.

7. REsOLUTION 6 - APPROVAL OF ADDITIONAL PLACEMENT CAPACITY (cont.)

7.5 Post-issue disclosure

In accordance with Listing Rule 3.10, if Equity Securities are issued under this approval, the Company will make an announcement to the ASX which will include the following additional information:

(i) details of the dilution to existing Members as a result of the issue;
(ii) where the Equity Securities were issued for cash consideration, an explanation of why the Company issued Equity Securities in this manner, as opposed to (or in addition to) a pro-rata offering;
(iii) details of any underwriting arrangements including the fees payable to the underwriter; and
(iv) details of any other fees incurred in connection with the issue.

Recommendation: The Board believes that Resolution 6 is in the best interests of the Company and unanimously recommends that Members vote in favour of this Resolution.

Voting exclusion

The Company will disregard any votes cast on Resolution 6 by:

(a) any person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in their capacity as a security holder; and
(b) an associate of that person (or those persons).

However, the Company need not disregard a vote if:

(c) it is cast by a person as proxy for a person who is entitled to vote in accordance with the direction on the proxy form; or
(d) it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with the direction on the proxy form to vote as the proxy decides.

NOTEs

Genetic Technologies Limited 60-66 Hanover Street Fitzroy, Victoria 3065 Australia

T: +61 3 8412 7000

F: +61 3 8412 7040

E: [email protected]

P.O. Box 115 Fitzroy, Victoria 3065 Australia

www.gtglabs.com

Genetic Technologies Limited ABN 17 009 212 328

Lodge your vote:

By Mail:

Genetic Technologies Limited 60-66 Hanover Street Fitzroy, Victoria 3065 Australia

T 000001 000 GTG

MR SAM SAMPLE FLAT 123 123 SAMPLE STREET THE SAMPLE HILL SAMPLE ESTATE SAMPLEVILLE VIC 3030

Alternatively you can fax your form to (within Australia) 03 8412 7040 (outside Australia) +61 3 8412 7040

For all enquiries call:

(within Australia) 1300 850 505 (outside Australia) +61 3 9415 4000

Voting Form

 For your vote to be effective it must be received by 11.00 am (Melbourne time) Sunday, 25 November 2012

How to Vote on Items of Business

All your securities will be voted in accordance with your directions.

Vote Directly

Voting 100% of your holding: Mark the first box in Step 1 and either the For, Against or Abstain box opposite each item of business in Step 2. Your vote will be invalid on an item if you do not mark any box OR you mark more than one box for that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting the number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement.

Appoint a Proxy to Vote on Your Behalf

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxes opposite each item of business. If you do not mark a box your proxy may vote as they choose. If you mark more than one box on an item your vote will be invalid on that item. Voting a portion of your holding: Indicate a portion of your voting rights by inserting the percentage or number of securities you wish to vote in the For, Against or Abstain box or boxes. The sum of the votes cast must not exceed your voting entitlement or 100%. Appointing a second proxy: You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. If you appoint two proxies you must specify the percentage of votes or number of securities for each proxy, otherwise each proxy may exercise half of the votes. When appointing a second proxy write both names and the percentage of votes or number of securities for each in Step 1 overleaf.

Signing Instructions

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders should sign.

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At the Annual General Meeting of Genetic Technologies Limited to be held at "Treetops", Melbourne Museum, 11 Nicholson Street, Carlton, Victoria, Australia on Tuesday, 27 November 2012 at 11.00 am (Melbourne time) and at any adjournment or postponement of that meeting, I/We being member/s of Genetic Technologies Limited direct the following:

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OR the Meeting

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Resolution 1 - Election of Dr. Melvyn John Bridges Resolution 2 - Election of Gregory Wayne Brown Resolution 3 - Re-election of Dr. Malcolm Roy Brandon Resolution 4 - Re-election of Huw David Jones Resolution 5 - Adoption of the Remuneration Report Resolution 6 - Approval of additional placement capacity

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Individual or Securityholder 1 Securityholder 2 Securityholder 3
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G T G

1 5 6 6 3 0 A

Genetic Technologies

Personalizing health

Annual Report 2012

02 Chairman anD CEO’s mEssaGE

04 BOarD Of DirECtOrs anD sEniOr manaGEmEnt

06 fivE-yEar summary
08 Our BusinEss
09 GEnEtiC tEstinG
10 CanCEr DiaGnOstiCs
11 COrPOratE GrOWth – m&a – PiPELinE

12 BrEvaGen™

19 LiCEnsinG
20 PatEnt EstatE

24 OthEr COmmErCiaL assEts

26 DirECtOrs’ rEPOrt
42 COrPOratE GOvErnanCE statEmEnt
50 COnsOLiDatED statEmEnt Of COmPrEhEnsivE inCOmE
51 COnsOLiDatED BaLanCE shEEt
52 COnsOLiDatED statEmEnt Of Cash fLOWs
53 COnsOLiDatED statEmEnt Of ChanGEs in EQuity
54 nOtEs tO thE finanCiaL statEmEnts
89 DirECtOrs’ DECLaratiOn
90 auDitOr’s rEPOrt
92 auDitOr’s inDEPEnDEnCE DECLaratiOn
93 COrPOratE infOrmatiOn
94 asX aDDitiOnaL infOrmatiOn

96 GLOssary

Genetic Technologies – positioned for growth

ABoUT GTG

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chAiRmAn AnD ceo’s messAGe

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2012 will be characterized as a year in which we started to consolidate the foundations for our medical strategy commenced in previous years. Having successfully launched the BREVAGen™ test in the USA and Australia, we are engaged in creating the necessary sales and marketing infrastructure. This, coupled with increased physician engagement, will underpin long term growth for the Company across a number of possible tests and services focused around women’s health and oncology.

Developing the market for a new test such as BrEvaGen™ requires coordinated activities on a number of fronts and progress needs to be planned and deliberate. By benchmarking against other successful companies in our sector such as myriad Genetics and Genomic health we can determine that our sales to-date are broadly on track in the early adoption phase of market acceptance compared to other, now highly successful products.

the BrEvaGen™ positioning has been refined through the course of the year, focusing on both suburban gynecological practices and also major integrated breast health centers. a new science communication program initiated in the later part of 2011/12 has been very well received by both physicians and nurse practitioners in our target markets. most notably, we have started to see cases where a BrEvaGen™ test result has lead to a physician requesting a patient undergo mri imaging that would not otherwise have been used; the mri has resulted in the detection of cancer, leading to early treatment in patients not otherwise thought to be at risk. this early detection is almost certainly saving the lives of a significant proportion of these patients.

Our continuing work on us reimbursement has over the course of the year produced faster and more consistent payment, with average reimbursed returns above internal projections. a continued Preferred Provider Organization credentialing program has increased total covered lives to approximately 13 million americans with health insurance.

Over this year, our CLia certification has been expanded to an additional seven states in the usa. this has allowed us to establish sales representation in these new geographic markets including the large markets of California and florida. Work is currently underway to secure new york state in 2012/13, with the Company’s dossier having been accepted by the ny state Department of health, Clinical Laboratory Evaluation Program (CLEP) in august 2012. as we have explained previously, now being certified in 49 us states for complex molecular testing, new products can be added to our portfolio and taken to market in the us with no further material regulatory steps.

Outside the usa, the calendar year began with a BrEvaGen™ pilot launch in australia and new Zealand culminating with national television coverage in may on network Channel 7. Despite a lack of government and private health insurer reimbursement, the test has been enthusiastically received amongst both breast surgeons and those general practitioners with high interest in women’s health. a small group of regular prescribers has now been established and is being expanded. in the European market, in august this year the Company was pleased to announce it had received European CE mark approval for the BrEvaGen™ test.

the Company continues to look for synergistic assets that can be deployed through our sales and marketing infrastructure. many potential projects were assessed through the course of 2011/12 with three progressing to detailed multi-function due diligence. none of these however met all of our criteria for acquisition. in order to support our growth strategy, a successful fund raising of auD 11.7 million from institutional and sophisticated investors in australia and the united states was completed in July 2011 such that when we do find the right project we can move forward to acquire and take it to market.

a number of Board appointments this year have increased the Company’s expertise in both women’s health and the management of medical diagnostic businesses. in October 2011, with over 28 years experience as a women’s health physician, Dr. mervyn Cass joined the Board. from industry, the new Chairman who joined the Board in December 2011, mel Bridges brings over 30 years of business success in the diagnostic field, whilst Greg Brown having joined the Board in July 2012 brings over 25 years experience in both large multi-national diagnostics as well as smaller successful start-ups, most noticeably impedimed. the Company wishes to extend special thanks to the retiring Chairman, sidney hack, whose professionalism and support over the years has been very much appreciated.

the Company’s intellectual property licensing program for its portfolio of foundational noncoding Dna patents continued, producing six licenses during the year, taking the total number of licensees to 59 with a total value in excess of auD 68 million. During the year, a suit in the Western District of texas was successfully settled, whilst a Colorado suit is ongoing with four settlements secured so far, being: navigenics inc., hologic inc., Eurofins sta Laboratories inc. and Geneseek inc. Changes to us law this year resulted in lengthening of the expected timeframes for settlement with some of the parties in this latter suit. as a result, the Company expanded its relationship with our us attorneys to encompass non-us jurisdictions; this increase in resources not only supports expanded efforts in Europe but also more vigorous work in the us that is expected to return licensing revenues to their previous levels.

in the australian businesses, the Queensland Legal aid agreement for the supply of paternity testing services was re-secured in addition to new contracts with other parties for local and European paternity testing distribution. from a communication perspective, GtG investors now have a dedicated website at www.gtgcorporate.com

in a positive move for both immunaid and GtG, a successful fundraising this year re-valued immunaid, delivering a significant gain for GtG investors and allowing immunaid to fund and advance its programs. Discussions regarding the rareCellect™ project continue with a high profile partner, supported by additional testing work that the parties have agreed to as a bridge to a possible transaction.

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strategically, the aim of becoming a global cancer diagnostics company continues, with us expansion now under way, entry into Europe with BrEvaGen™ planned and an active search for new products. Obtaining certification to market products in new york state this year will add a further large cancer related market. Our mission to acquire assets in the women’s health and related cancer areas is on track with several opportunities under investigation.

We would personally like to thank our australian and american staff and the Board for their work and resolve in what has been in some respects a challenging but productive year that continues to build capacity for growth. We expect this year will produce many of the fruits of that labour, with expanding sales, licensing revenues and new products and markets.

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DR. MEL J. BRIDGES non-Executive Chairman Genetic technologies Limited

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DR. PAUL D.R. MACLEMAN Chief Executive Officer Genetic technologies Limited

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Dr. melvyn J. Bridges Non-Executive Chairman

Tommaso Bonvino Non-Executive Director

Dr. malcolm R. Brandon Non-Executive Director

Gregory W. Brown Non-Executive Director

Dr. mervyn cass Non-Executive Director

huw D. Jones Non-Executive Director

~~Dr. Paul D.R. macLeman~~ ~~Chief Executive Offcer~~

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Thomas G. howitt Chief Financial Offcer and Company Secretary

Alison J. mew Chief Operating Offcer

Gregory J. mcPherson Vice President Sales and Marketing

Dr. David J. sparling Vice President Legal and Corporate Development

mark J. ostrowski Senior Vice President Sales and Marketing – Phenogen Sciences Inc.

ivan Jasenko Quality and Regulatory Manager

FiVe-YeAR sUmmARY

The graphs and charts below provide a current and five-year snapshot of a variety of key financial and other performance indicators, including those relating to the Company’s share price and shareholder base.

TOTAL OPERATING REVENUE AND INCOME $million TESTING REVENUE $thousands EXPENSES $thousands			*3.69* Testing *2.53* Licensing *1,145* Profiling *1,770* Medical *726* Animals 50 Other *4,384* Selling and marketing *1,268* Licensing, patent and legal *5,608* General and administrative *4,029* Laboratory, research and development *177* Other

	2008	2009	XJO ASX 20 2010	Genetic Technologie 0 2011	G A $0 s X ASX 4,40 2012	TG SX .105 JO 200 9.90

KeY FinAnciAL DATA 2008-2012

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oUR BUsiness

successfully implementing the five-year strategy

~~1. Genetic testing, focusing on cancer diagnosis and management~~

~~2. Out-licensing of intellectual property~~

3. Other commercial assets

GeneTic TesTinG

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For 22 years, Genetic Technologies has been the largest non-government genetic testing operation in the Asia Pacific region. With the launch of BREVAGen[TM] and the CLIA certification of the Company’s testing facility, alongside its Australian NATA accreditation, Genetic Technologies is fully accredited to accept test samples from many parts of the world, including the USA and Europe. The Company is well positioned to bring to the world what our local customers have been praising us for for many years; the ability to translate innovative science into tests that truly make a clinical difference.

MEDICAL

the Company sees its medical testing business as having a large opportunity for growth. traditionally, the business has focused on familial cancer testing. recently, more work has been centred on women’s health with the introduction of the non-familial risk assessment test, BrEvaGen[tm] , to complement the use of the BrCa1 and BrCa2 familial genetic tests. Business continues to be gained from both commercial and clinical trial sources in recognition of the Company’s superior turnaround times and effective scientific support. access to these tests provides clinicians with the information they need to make better informed clinical path choices for their patients.

PATERNITY

Beyond our dominant position in the local market, the Company has been expanding its paternity testing services into Europe and as a testing service provider to other competitors. this has been achieved through a well established industry reputation for testing proficiency, logistics and customer support. mainstream media also seeks Genetic technologies’ expert commentary regarding industry dynamics and latest trends. as a mark of our long-term expertise, a contract to provide services to the Queensland Government Legal aid service was recently renewed, with the ongoing relationship now entering its tenth year of business.

FORENSICS

as the only accredited private forensics laboratory operating in the asia Pacific region, Genetic technologies is in a unique position to conduct work for government organisations, defence lawyers and private investigators. recent activity has focused on educating and providing services to the private legal sector through a new website (www.gtgforensics.com). in the area of canine forensics, we have the only online canine forensic course (www.animalforensics.com.au) that is used by both veterinarians and Council rangers.

ANIMAL

With over 80% market share in australia/ new Zealand, Genetic technologies’ “animal network” division provides comprehensive assistance to breed clubs, breeders, animal welfare organisations and veterinarians, including a wide range of associated genetic tests.

across the asia Pacific region, agreements are in place with leading kennel clubs and breeders in China, Japan and southeast asia. this includes China’s largest kennel club with over 186,000 members. in conjunction with exclusive licensing arrangements with usabased Optigen LLC, over 30 genetic tests are being offered. in addition to disease based genetic testing, the Company’s “Bitsa” breed signature test, which reveals a dog’s ancestry though identifying genetic signatures of breeds within our specialised database, also represents a key product line in our animal health portfolio.

cAnceR DiAGnosTics

moLecULAR DiAGnosTics AnD cAnceR

The global molecular diagnostics market is estimated to reach $21 billion per annum by 2020. This figure represents more than 30% of the estimated $67 billion in-vitro diagnostics industry, as compared to 11% (less than $5 billion) of the $40 billion market today (Figure 1).

in the usa, the market for molecular diagnostic, prognostic and treatment decision tests for cancer is expected to expand significantly over the next five years, reaching $3 billion, with product offerings in almost every form of cancer (figure 2).

in women’s health, the number of breast cancer cases continues to rise, with a predicted increase of 20% by 2020. in the usa, it is estimated that more than 200,000 cases a year will occur.[1] Only 5-15% of these cases will have a family history of breast cancer, yet it is this subset where the majority of research and commercial testing takes place. new research and discoveries regarding the effect of non-familial risk factors, which account for the remaining 85-95% of breast cancer cases, enable physicians to better understand this non-familial risk and to put in place surveillance strategies to better manage these patients (figure 3).

approximately one in eight women will develop breast cancer over their lifetime. the key factor for surviving breast cancer is early detection. such cancers have a five-year survival rate of 95% when detected early, yet when diagnosed at later stages, the survival rate decreases to only 41%.

Genetic technologies is the only genetics company with testing products directed at both familial and non-familial breast cancer. this understanding enables the Company to successfully bring relevant tests to market by better articulating the need for each of the tests and the solutions they offer to physicians.

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Figure 1: Global molecular-based diagnostics (MDx) [2] Figure 2: Forecast potential MDx revenue
under different adoption scenarios [2]
Revenue Market penetration US$billions
US$billions %
160 90 8
Fast
128 72 6
96 54
4 Medium
64 36
32 2010 revenue:US$4.4 billion 18 2
Slow
0 0 0
2001 2007 2013E 2019E 2025E 2031E 2037E 2040E 2010 2012E 2014E 2016E 2018E 2020E
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Figure 3: The genetics of breast cancer risk

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Non-familial [(80%) BREVAGen™ market]
Hereditary [(5%) BRCA market]
Familial history [(15%)]
BRCA1
BRCA2
Unknown
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1 Cancer Statistics, National Cancer Institute. Accessed 15 October 2012 at: http://seer.cancer.gov/statfacts/html/breast.html
2 Raskin A, et. al. The Dawn of Molecular Medicine, Alliance Bernstein 2011
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coRPoRATe GRoWTh – m&A – PiPeLine

By creating a pipeline of related tests in women’s health/oncology, the Company will be able to offer a comprehensive suite of tests in this area.

PRODUCT PORTFOLIO AND PIPELINE

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Target Marker Clinical Clinical utility Regulatory Launch Launch Claim
discovery validation validation studies review planning and extension
and studies and or CLIA release studies
selection publication
BRCA / HNPCC / SCNIA (EU / PacRim)
BREVAGen [TM ] (global)
Theranostic Markers KRAS / BRAF / EGFR (FFPE)
Partnered Companion Theranostic
Theranostic Markers (circulating)
M&A - women’s health / oncology diagnostic assets
acquisition - near to, or on, market
filters - access to global rights (US essential)
- clearly defined addressable market >$100m p.a.
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in order to achieve this goal, the Company is actively pursuing a number of m&a targets with a view to building pipeline and commercial testing throughput to drive corporate growth. this strategy is viewed as superior to spending the time and money, not to mention the risk, in researching and developing such assets internally. the dramatic falls seen in recent times in asset and corporate valuations globally, makes this “buy” rather than “build” paradigm both possible and financially attractive. Genetic technologies’ acquisition of the Perlegen assets (which included the BrEvaGen[tm] test) in 2010 for cents in the dollar, is a good example of this strategy at work.

the Company has established strict filters and requirements for this m&a process which include: women’s health/oncology diagnostic assets which are on or near-to-market (typically less than one year to market) and which fit into the call patterns of our sales force (Gyn/Onc, Ob/Gyn). Breast, ovarian, endometrial cancer diagnostics are our preference. the Company will also evaluate women’s health diagnostic assets outside the area of oncology (e.g. preeclampsia) and oncology diagnostics outside of women’s health, if it fits with our sales call patterns. access to the us rights underlying the associated technology is essential, while global rights are preferable. the Company has a preference for expression/downstream assets, in a clearly defined and addressable market, with a defendable iP position and freedom to operate. We are open to any technology platform which would sensibly fit within our CLia certification.

as at the date of this annual report, Genetic technologies is reviewing a number of potential acquisition targets, each at various stages of due diligence. Commercial considerations for these targets range from collaborative “earn in” type arrangements to straight acquisition.

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BReVAGen™

iDenTiFies sPoRADic BReAsT cAnceR RisK, inTeGRATinG cLinicAL AnD GeneTic FAcToRs

a CLEarEr PiCturE Of BrEast CanCEr risk

BREVAGen[TM] is the first test of its kind

more than 80% of women who develop breast cancer have little or no family history of the disease. BrEvaGen[tm] is designed for these women and in particular those that have had increased estrogen exposure during their lifetime. unlike familial breast cancer, where the majority of patients develop estrogen-receptor negative breast cancer (Er-), sporadic or nonfamilial breast cancers tend to develop as estrogen-receptor positive (Er+) breast cancer.

the significance of this difference is that Er+ breast cancer is easier to treat and carries with it an appreciably higher survival rate. BrEvaGen[tm] ’s role in the earlier detection of breast cancer has the potential to positively impact survival rates. Earlier detection of the disease improves treatment outcomes and saves lives.

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Who shoULD consiDeR BReVAGen[Tm] ?

the core groups of defined patients are peri- and post-menopausal Caucasian women over 35 years of age. in particular, those having a history of atypical breast biopsies, or who have had their physician classify them as having dense breast tissue. several us states have now mandated that breast density be documented on mammogram reports, recognising there is a relationship between dense breast tissue and breast cancer risk.

the obesity issue in society also extends to breast cancer risk and, accordingly, women with a Body mass index (Bmi) of over 30 are also at increased risk of developing breast cancer; particularly when it involves post-menopausal weight gain.

Genetic technologies is actively collaborating with several high profile academic and commercial research groups as well as a number of well respected physicians and key opinion leaders in the usa, uk and australia to expand and reinforce the published data supporting the BrEvaGen[tm] test. Work is continuing on reproducing and expanding the founding scientific validation study which was initially generated from a Cancer research uk funded study at Cambridge university in the uk. this work will be used to further strengthen the validation and clinical utility data supporting the BrEvaGen[tm] test as well as potentially expanding the availability of the test to more sub-groups of women.

the Company has also commissioned an additional pharmacoeconomic study to explore the economic benefits of BrEvaGen[tm] , better directing the use of mri. the pharmacoeconomic modelling data will be used in securing reimbursement for the test as well as driving test adoption. in addition, several of the physicians actively utilising the BrEvaGen[tm] test in their practices are preparing case reports which will detail real life examples of patients who had their breast health surveillance and later treatment options dramatically improved following a BrEvaGen[tm] test. investing in and strengthening the publication strategy surrounding the BrEvaGen[tm] test will assist with test validation and market adoption, reimbursement and expanding BrEvaGen[tm] ’s available market.

The BReAsT heALTh PLAn

for the physician, BrEvaGen[tm] provides a more accurate tool for assessing a woman’s personal risk of developing breast cancer. in delivering a percentage score for the risk of developing breast cancer over the next five years and over her lifetime, the result can be used to create a personalized Breast health Plan.

the physicians can take into account care path recommendations from the american Cancer society (aCs) and the american society for Clinical Oncology (asCO) that are based on risk scores. they can also look at the patient’s clinical profile and suggest changes to lifestyle factors that will affect overall breast cancer risk.

the first part of the advice a physician gives a patient is matching their risk score to a surveillance plan. that is, what type and frequency of breast health surveillance will best to enable the early detection of breast cancer? the options can include more/earlier mammography, adding mri, the use of ultrasounds and a heightened awareness of the importance of breast self examinations.

the second part of physician advice involves changes to a patient’s lifestyle. scientists have demonstrated links between clinical risk factors, and breast cancer risk. Decreasing the effects of these risk factors is important for women with above average/high risk. such action could include cessation of smoking, decreasing alcohol consumption, reducing Body mass index, or whether or not they use hormone replacement therapy.

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the breast health plan component of the BrEvaGen[tm] report is a “roadmap” for the patient and forms a vital part of the outcome of the test. One of the principal attributes of the test lies in the practicality of the advice the physician can provide. it’s both personalized and actionable.

BReVAGen™ (cont.)

moVinG FRom PiLoT To FULL LAUnch in The UsA

With a pilot launch in June 2011, the first sales team entered eight identified markets in the united states to ensure fine tuning of messages and key sales activities. While the BrEvaGen[tm] sales team is spread widely across the country, the Company’s us headquarters were established in Charlotte, north Carolina. By the end of December, the sales team’s initial performance was evaluated. analysis of several other companies who have successfully launched molecular diagnostic products in the us market which are comparable to BrEvaGen[tm] has revealed that their first year sales volumes are in line with BrEvaGen[tm] ’s first year volumes. these comparable tests have since gone on to become highly successful products, securing hundreds of millions of dollars in sales revenue in the years following their launch.

PROGRESS TO DATE

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----- Start of picture text -----

2011 2012
APRIL JUNE FEBRUARY APRIL MAY JULY AUGUST SEPTEMBER
CLIA US CMS PacRim Secured California CE Mark Florida
registration launch Certificate of pilot credentialing approval secured approval
Compliance launch contracts
with 4 of
top 10
US PPOs
In the US, BREVAGen™
progressively available
for sale in ...
42 states 47 states 48 states 49 states
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By may 2012, the pilot phase had been completed. Over 400 physicians had agreed to receive test kits and the turnaround times achieved in the Company’s laboratory were quicker than established standards. in the critical area of health insurance reimbursement, contracts with Preferred Provider Organisations (PPOs) have assisted in the achievement of 82% of claims submitted by Phenogen sciences/GtG being adjudicated, ensuring timely receipt of revenue from the insurer.

having established the Company’s us subsidiary, Phenogen sciences inc., and the necessary administrative and financial frameworks, a stronger focus was given to maximising sales growth. as part of this process, mr. mark Ostrowski was appointed as senior vice President sales and marketing to strengthen the Company’s skills in this area and to take advantage of his extensive experience in the diagnostic market which was gained with companies such as myriad Genetics. additional regional business managers were also hired to enter current and new market territories and a full marketing launch is being conducted to support those commercial efforts. attendance at key national medical Conferences such as asCO and the north american menopause society were complemented by a program of local meetings involving physicians who are current users of the BrEvaGen[tm] test. these activities have generated important leads and contacts for promoting the awareness and use of the test across the country.

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U.S. SALES TERRITORIES
New England
North West
Alaska
Ohio Valley
Mid West North East
Northern California
Central West
Central East
South West Mid Atlantic
Southern California South Central
Hawaii
South East
South East Central
Territories occupied by sales force
Central West
Central East
Mid Atlantic
New England
North West
Territories not yet occupied by sales force Territories not currently available
Ohio Valley
South West Mid West New York State
South Central North East
South East Central Northern California
South East Southern California
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The BREVAGen[TM] test is only available when prescribed by a physician, however the www.brevagen.com website enables women to conduct the first component of the test, the ‘clinical factors’, and having the results on hand, use the ‘Find a Doctor’ locator in order to complete the test and be counseled on their own ‘breast health plan’.

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BReVAGen™ (cont.)

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media coverage of the BrEvaGen[tm] test has been encouraging with key target markets conducting tv interviews from seattle, to Dallas and st. Louis. national coverage in the us has been placed with the cable tv Channel, Lifetime, through its women-centric program “Balancing act” which reaches more than 800,000 viewers. the growth of social media has also been recognised with women being avid users. BrEvaGen[tm] has its own blog, facebook and twitter marketing programs which are attracting high value users and who are spreading the Company’s message “know your own risk, do something about it”. importantly, these social media campaigns are also targeting physicians with many actively involved in twitter discussions with women about breast cancer risk issues.

Contributing to the positive reception for the test is an emerging group of key Opinion Leaders who are practising Obstetrician/ Gynecologists and Breast specialists. as BrEvaGen[tm] is such a practical and useful test, it is these types of physicians that work well on tv and in the general media, showcasing to women the benefits of being proactive about their breast health.

ReGULAToRY During november 2011, inspectors from the us Centers for medicare and medicaid services visited the Company’s laboratory in victoria to conduct the first survey of the facility under the us Clinical Laboratories improvement amendments (“CLia”). the survey process was successfully completed prior to the end of December with the Company receiving the resulting Certificate of Compliance in february 2012. following this, the Company lodged procedural out of state licensure applications to an additional seven states, including the key healthcare markets of California and florida. approval from six of these seven us states (Pennsylvania, rhode island, nevada, tennessee, maryland and California) was subsequently received, bringing the total number of us states in which the BrEvaGen™ test could be sold to 48 of the 50 us states. approval from the authorities in florida was received in september 2012 and it is anticipated that approval from the last remaining state (new york) will be achieved by the end of calendar 2013.

ReimBURsemenT

Genetic technologies has contracted a specialist billing and reimbursement provider in the usa to manage its reimbursement and billing activities. Currently, claims for BrEvaGen[tm] reimbursement are submitted to private insurers in the united states as a “stack” of individual methodology codes for the Dna extraction, testing, analysis and reporting elements of the test. this is a common practice for molecular pathology tests that do not have specific test codes and is commonly used for novel molecular diagnostics products until such time as clinical adoption reaches a level of significance to warrant the application of a specific code. in february 2012, the CPt[®] Editorial Panel meeting of the american medical association resolved to delete the use of the “stacking codes” and the related guidelines.

the “stacked” codes will be replaced with tier 1 and tier 2 analyte-specific or resource codes, as well as a new category termed multi-analyte assay with algorithmic analysis (“maaa”). GtG and Phenogen are working with us-based specialist consultants to make an application to the regulators for a product specific code/s. the companies expect to present the required clinical utility data and publications in peer-reviewed journals to provide the level of evidence required by the ama to support the provision of a new code, with our application likely to be submitted in the fourth quarter of 2012. the pricing of all new codes will be determined and published in the fourth quarter of 2012.

as part of a longer term contracting and credentialing strategy, the Company also commenced the credentialing process with the top-10 PPOs in the us. these PPOs manage a network of healthcare providers and contract directly with insurers and together represent more than 60 percent of covered lives in the us and more than 80 percent of the covered lives in the markets currently serviced by Phenogen. in early October 2011, the first PPO contract was finalised, with an additional three contracts having been completed by the end of June 2012, with more in late stage negotiations. in total, these four organisations represent an estimated 13 million covered lives.

Credentialing with PPOs allows for expedited claim adjudication (as “in-network”) which provides improved cash flow, while obtaining an acceptable level of reimbursement, and reduces the costs incurred through appealing denials. Once BrEvaGen[tm] test volumes reach a significant level and Genetic technologies has gathered additional clinical utility data, the Company will approach insurers directly to contract. as the number of contracted PPOs continues to grow, the Company anticipates that the rate of reimbursement received from the respective insurance companies will further accelerate.

oUTsiDe The UsA in australia, a pilot launch of BrEvaGen[tm] began in may 2012 with national media coverage on the Channel 7 network and attendance at major medical conferences such as the australian society of Breast Disease. reception of the test has been positive, with a number of test kits having now been placed in specialised clinics. in august 2012, the Company announced that it had received European CE mark approval for BrEvaGen™, which allows BrEvaGen™ to be sold in the Eu and other countries that recognise the CE mark. the initial commercial focus for the test in Europe will be in the key markets of france and Germany.

BREAsT CANCER What is my chance?

kNOw yOuR RIsk Do something about it

Talk to your doctor if you answer ‘YES’ to any two of these

Age 35 years or older
Any family history of breast cancer
An inconclusive or negative breast biopsy result
Over 30 years of age when your first child was born or no children
Began your period before the age of 12
Negative BRCA1/BRCA2 test result
Considering the use of Hormone Replacement Therapy (HRT)
Dense breast tissue identified by mammography
Body Mass Index (BMI) over 30

1 in 8 women will develop breast cancer

www.brevagen.com

LicensinG

the out-licensing of the Company’s foundational “non-coding” Dna patents has, historically, formed an important part of its overall business and continues to generate valuable non-dilutive funding for the Company. to date, commercial licenses to the technology have been granted to 59 commercial licensees, including multi-nationals, biotechnology companies, genetic testing service providers and equipment manufacturers. these licenses have collectively generated more than $68.5 million in total revenues for the Company since the licensing program began.

in 2010, Genetic technologies moved to maximise the value of its intellectual property through the introduction of formal assertion suits, where alleged infringers would be grouped together and sued at the one time in the usa. this success fee based program was established in conjunction with sheridan ross P.C. (“sheridan ross”), a full service intellectual property law firm based in Denver, Colorado.

following on from the successful conclusion of the Company’s first assertion suit, the Company announced in January 2011 that it had filed a second patent infringement law suit in the usa, this time in the us District Court, Western District of texas. the counterparties to this action are each associated with sonic healthcare Limited (“sonic”). the suit followed the successful settlement between the Company and sunrise medical Laboratories, a counterparty in the first formal assertion suit, which is also an entity associated with sonic. On 21 february 2012, the Company announced the successful conclusion of this second assertion suit having executed a settlement with all counterparties.

On 26 may 2011, the Company announced that it had filed a third assertion suit in the usa, this time in the us District Court, Western District of Colorado. the counterparties to this suit are agilent technologies inc., Bristol-myers squibb Company, Eurofins sta Laboratories inc., Glaxosmithkline LLC, hologic inc., merial LLC, navigenics inc., Geneseek inc., Pfizer inc. and 454 Life sciences Corporation. settlement and License agreements have now been executed with navigenics inc., hologic inc., Eurofins sta Laboratories inc. and Geneseek inc. and discussions with the other parties are continuing.

in addition to the formal patent assertion program, the Company continues to independently pursue additional licenses external to these lawsuits, principally in Europe. During 2012, the Company executed Licenses with attomol Gmbh of Lipten, Germany, autoimmun Diagnostika Gmbh of strassberg, Germany and Conexio Genomics Pty. Ltd. of Western australia, under which those companies have been granted certain non-exclusive rights to a number of the Company’s non-coding patents.

On 9 July 2012, the Company announced that it had received formal notification from the united states Patent and trademark Office (“usPtO”) that it had received and granted a request for ex parte re-examination (the patent’s second re-examination) of claims 1-18 and 26-32 of the ‘179 patent brought by merial L.L.C. of Duluth, Georgia (“merial”). requesting re-examination is a common strategy employed by defendants in patent infringement proceedings and, as such, it is not unexpected from merial who is currently a Defendant in the assertion suit originally brought by the Company in the us District Court for the District of Colorado. the ‘179 patent is very robust, having successfully been through a re-examination with the usPtO in 2010 which resulted in the re-issuing of the patent in full with all claims upheld. the Company believes that the claims of the ‘179 patent will again be upheld in the current re-examination and, as was the case in previous challenges, it will actively defend this matter in order to have the patent upheld.

the 2012 financial year has presented some challenges for the Company’s licensing program, including the abovementioned re-examination proceeding for the `179 patent, certain changes to us legislation and developments in us case law, all of which have contributed to delays in reaching settlements. as stated, Genetic technologies will actively defend the re-examination and will continue to vigorously pursue entities which utilise the Company’s proprietary non-coding Dna technology. as a result, the Company expects to regain momentum in its us assertion program and that, coupled with the further expansion of the Company’s licensing activities in Europe, will be the catalyst for generating higher licensing revenues during the 2013 financial year.

On 9 July 2012, the Company announced that it had expanded the scope and jurisdictional reach of its original retention agreement with sheridan ross, pursuant to which the existing us based arrangement between the parties was extended to cover all of the Company’s non-coding patents in all relevant jurisdictions globally. under the expanded arrangement, sheridan ross has agreed to assist the Company in asserting all international equivalents of the Company’s us non-coding patents as well as the newer non-coding patents acquired by GtG along with the purchase of BrEvaGen™ from Perlegen sciences inc. in 2010. importantly, sheridan ross is now able to assist the Company with asserting its non-coding patents globally, effectively acting as lead counsel to GtG in these international efforts.

PATenT esTATe

inTRon seQUence AnALYsis

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----- Start of picture text -----

Country / region Numbers Granted Pending
Intron sequence analysis method australia au654111
for detection of adjacent and remote au672519
locus alleles as haplotypes austria at144797
Earliest priority 25 august 1989
Belgium EP414469
Canada Ca2023888
Denmark Dk414469
Europe EP414469
france EP414469
Germany DE69029018
DD299319
Great Britain EP414469
Greece Gr3022410
hong kong hk1008053
israel iL95467
italy EP414469
Japan JP3206812
Luxembourg EP414469
netherlands EP414469
new Zealand nZ235051
singapore sG47747
south africa Za9006765
spain Es2095859
sweden EP414469
switzerland EP414469
united states us5192659
us5612179
us5789568
Genomic mAPPinG
Country / region Numbers Granted Pending
Genomic mapping method by direct haplotyping australia au647806
using intron sequence analysis austria at185377
Earliest priority 11 July 1990 Belgium EP570371
Canada Ca2087042
Denmark Dk570371
Europe EP570371
france EP570371
Germany DE69131691
Great Britain EP570371
ireland iE912426
israel iL98793
italy EP570371
Japan JP3409796
Luxembourg EP570371
netherlands EP570371
new Zealand nZ238926
south africa Za9105422
sweden EP570371
switzerland EP570371
united states us5851762
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----- Start of picture text -----

PeRLeGen
Country / region Numbers Granted Pending
Methods for genomic analysis australia au785425
Earliest priority 30 march 2001 israel iL148783
united states us6969589
Canada Ca2380047
Europe EP1246114
united states us12/795361
Methods for identifying matched groups united states us7124033
Earliest priority 30 april 2003
Genetic analysis systems and methods australia au2003202919
Earliest priority 7 January 2002 united states us6897025
Canada Ca2472646
Europe EP03702032.8
Life sciences business systems and methods united states us6955883
Earliest priority 26 march 2003
Life science business systems united states us7427480
Earliest priority 26 march 2003
Pharmaceutical and diagnostic business united states us7135286
systems and methods
Earliest priority 26 march 2002
Haplotype structure of Chromosome 21 (LQTS) united states us7115726
Earliest priority 30 march 2001
BReVAGen™
Country / region Numbers Granted Pending
Methods for genetic analysis united states us7127355
Earliest priority 5 march 2004 13/094903
Japan JP2007502088
Methods for genetic analysis australia au2008304485
Earliest priority 27 september 2007 Canada Ca2704152
Markers for breast cancer australia au2006320559
Earliest priority 29 november 2006 au2012202265
Canada Ca2631621
China Cn20068005171.0
Europe EP06838661.4
12156416.5
12156418.1
12156417.3
12156415.7
hong kong hk09101235.4
israel iL191566
Japan JP2008543446
korea kr1020087015808
united states us12/890272
us12/370972
Methods for breast cancer risk assessment united states us12/920815
Earliest priority 1 June 2009 World PCt/au2010/000675
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PATenT esTATe (cont.)

LABoRAToRY TechniQUes

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----- Start of picture text -----

Country / region Numbers Granted Pending
Internal standards for electrophoretic austria at159589
separations Europe EP466479
Earliest priority 11 July 1990 france EP466479
Germany DE69127999
Great Britain EP466479
Japan JP4232850
sweden EP466479
united states us5096557
AncesTRAL hAPLoTYPes
Country / region Numbers Granted Pending
Genetic analysis Europe EP660877
Earliest priority 1 november 1991 france EP660877
Germany DE69232726
Great Britain EP660877
Method for determining ancestral haplotypes united states us6383747
using haplospecific geometric elements
within the major histocompatability
complex multigene cluster
Earliest priority 1 november 1991
Methods of genetic analysis involving the australia au2006214800
amplification of complementary duplicons Canada Ca2597947
Earliest priority 16 february 2005 Europe EP1848819
united states us2009150080
AThLeTic PeRFoRmAnce
Country / region Numbers Granted Pending
ACTN3 genotype screen for athletic performance australia au2003258390
Earliest priority 16 september 2002 india in216886
new Zealand nZ538890
russia ru2388829
united states us7615342
Europe EP1546403
Canada Ca2499084
Germany EP1546403
france EP1546403
Great Britain EP1546403
China Cn1732270
Japan JP2005538710
nemAToDe PRoJecT
Country / region Numbers Granted Pending
High resolution analysis of genetic variation within australia au2003250619
Cryptosporidium parvum
Earliest priority 21 august 2002
----- End of picture text -----

RAReceLLecT™ PRoJecT

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----- Start of picture text -----

Country / region Numbers Granted Pending
Fetal cell recovery method australia au649027
Earliest priority 27 march 1990 austria at194166
Belgium EP521909
Canada Ca2059554
Denmark Dk521909
Europe EP521909
france EP521909
Germany DE69132269
Great Britain EP521909
Greece Gr3034487
ireland iE910996
israel iL97677
italy EP521909
Japan JP2965699
Luxembourg EP521909
netherlands EP521909
new Zealand nZ237589
singapore sG79188
south africa Za9102317
spain Es2149760
sweden EP521909
switzerland EP521909
united states us5447842
Epigenetic DNA enrichment australia au2010306072
Earliest priority 14 October 2009 Europe 10822895.8
israel 219172
united states 13/501799
Maternal antibodies as fetal cell markers to identify new Zealand nZ537328
and enrich fetal cells from maternal blood singapore sG108133
Earliest priority 31 may 2002 australia au2003229397
Japan JP4589106
united states us7785898
Canada Ca2492631
Europe EP1532453
hong kong hk1075699
Identification of fetal DNA and fetal cell markers australia au2004217872
in maternal plasma or serum united states us10/547721
Earliest priority 5 march 2003
Methods of enriching fetal cells Europe EP06721493
Earliest priority 11 may 2005 Japan JP2008510361
Canada Ca2651367
united states 13/385775
Biological sampling device australia au2010207877
Earliest priority 27 January 2009 Canada to be advised
China 201080014151.2
Europe 10735423.5
hong kong 12105199.4
israel 514310
singapore 201105383.2
united states 13/146376
Cell processing and/or enrichment methods Europe EP09712569.4
Earliest priority 18 february 2008 united states us12/918015
Canada 2752838
Methods for obtaining fetal genetic material australia au2010239131
Earliest priority 21 april 2009 Europe 10766487.2
israel 215808
singapore 201107673.4
united states 13/265485
Methods of enriching and detecting fetal nucleic acids australia au2010336017
Earliest priority 23 December 2009 Europe 10838414.0
israel 220560
united states 13/518454
----- End of picture text -----

oTheR commeRciAL AsseTs

RAReceLLecT™

Safe and reliable pre-natal testing

Genetic technologies is continuing to advance its whollyowned, pre-natal testing platform technology rareCellect™. it is hoped the rareCellect™ technology will make significant advances in the identification of genetic disorders prior to birth.

Current pre-natal testing involves both non-invasive screening and invasive diagnostic testing. screening uses ultrasound of the foetus along with maternal serum testing and can be performed from 11 to 13 weeks of pregnancy. although safe, these tests are not reliable, with a generally accepted abnormality detection rate of approximately 80% (i.e. around 20% of abnormalities are not detected). Diagnostic testing requires the removal of foetal material using chorionic villus sampling (from 11 to 14 weeks) or amniocentesis (from 15 to 20 weeks). although accurate, these tests are invasive and as such carry a significant risk to both the foetus and the mother. miscarriage rates can be as high as 5%, depending on the skill of the operator and the gestation age.

the rareCellect™ technology sets out to address an unmet medical need in pre-natal testing for risk-free (for both mother and foetus) chromosomal/genetic testing for the foetus at as early as six weeks gestation.

rareCellect’s™ proprietary sampling device utilises materials and design features to ensure safe, non-traumatic sampling of the optimal region of the cervix to yield foetal genetic material. the Company believes that rareCellect™ offers an opportunity to successfully penetrate the $2 billion global prenatal testing market. By offering a safe sampling and processing methodology that provides sufficient foetal material for subsequent analysis, it has the potential to displace currently available invasive diagnostic procedures. amniocentesis and chorionic villus sampling represent an estimated $1 billion market per annum in the us alone. a non-invasive and safe alternative to amniocentesis / Cvs could replace and even expand (to lower risk pregnancies) this market.

a comprehensive memorandum detailing technical aspects of the technology and the commercial potential of the project has been compiled, as has a virtual data room containing a full data package on the project. During the 2012 financial year, the Company pursued collaboration / partnering discussions with international parties central to the field of foetal sampling and testing. the Company is currently progressing negotiations with one such international party with a view to securing a collaboration / out-licensing arrangement for the rareCellect™ technology in due course.

immUnAiD™

Advancing a new take on personalised cancer treatment

in april 2012, the Company announced that its former subsidiary, immunaid Pty. Ltd. (“immunaid”), had successfully raised $1 million in a private placement from sophisticated investors in the us, Europe and australia. this financing provides immunaid with resources to enable the company to advance its proprietary technology to improve treatment outcomes in chronic diseases, such as cancer. in return for their $1 million investment, the incoming investors secured a 10% interest in immunaid.

as a result of this share issue, the equity interest in immunaid held by Genetic technologies fell below 50% and, due to the resulting loss of control, immunaid was deconsolidated from the Group during the 2012 financial year. after allowing for certain capital restructuring, including the payment of capital raising expenses via the issue of shares, the pricing of this financing round, which was participated in by independent, arm’s-length parties, placed a value on GtG’s stake in immunaid of in excess of $4.5 million. as at 30 June 2012, GtG retained a 45.5% interest in immunaid. Plans to further expand immunaid’s patent estate and commercialise that company’s technology have been prepared and approved by its Board.

the immunaid™ research has discovered the phenomenon of the “immune cycle” which shows that the immune system switches itself “on and off” in a continuous and repetitive cycle in patients with chronic diseases such as cancer and hiv. immunaid™ researchers believe that chemotherapy may actually be having a greater effect on the immune system than on the cancer. in cancer, the “off” switch is controlled by a group of immune cells called t-regulatory cells. these cells can be manipulated by the accurate and skilful timing of chemotherapy. this is a paradigm shift in the fields of cancer treatment and immunology. in current chemotherapy regimens, where therapy is not timed, complete response rates (where chemotherapy is completely effective and cancer is eliminated) is relatively rare, accounting for only 7% of cases. utilising the immune cycle to personalise treatment by specifically targeting the patient’s “off” t-regulatory cells, the immunaid™ technology proposes that the timing of administration of traditional and new therapeutic agents may improve the patient’s response and survival.

this exciting project has delivered encouraging results in early clinical studies. immunaid is now actively pursuing collaborations with academic institutions and commercial parties to expedite the development and commercialisation of the immunaid™ technology.

GTech inTeRnATionAL ResoURces LimiTeD

Looking for new opportunities

Genetic technologies Limited holds a 75.8% direct equity interest in a Canadian public company called Gtech international resources Limited (“Gtech”). Gtech is listed on the nEX Board of the tsX venture Exchange under the symbol GCh.h and is based in vancouver, British Columbia. as at 30 June 2012, Gtech had net working capital in excess of $240,000 and the company is now actively seeking new business opportunities for it to pursue.

Statutory reportS for the year ended 30 june 2012

26 DIRECTORS’ REPORT

42 CORPORATE GOVERNANCE STATEMENT

50 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

51 CONSOLIDATED BALANCE SHEET

52 CONSOLIDATED STATEMENT OF CASH FLOWS

53 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

54 NOTES TO THE FINANCIAL STATEMENTS

89 DIRECTORS’ DECLARATION

90 AUDITOR’S REPORT

92 AUDITOR’S INDEPENDENCE DECLARATION

93 CORPORATE INFORMATION

94 ASX ADDITIONAL INFORMATION

96 GLOSSARY

dIreCtorS’ report

The Directors submit their Report for the year ended 30 June 2012.

dIreCtorS

The names and details of the Directors of Genetic Technologies Limited who held office during the 2012 financial year and until the date of this Report are stated below, as are the periods during which they served.

Directors in office as at the date of this Report

Dr. Melvyn J. Bridges BSc, Doctorate, FAICD (Non-Executive Chairman)

In office from 16 December 2011 up to the date of this Report

Dr. Bridges, 62, was appointed to the Board on 16 December 2011 and served as its Chairman from that date until the date of this Report. He also serves as Chairman of the Company’s Audit and Corporate Governance Committees. Dr. Bridges has over 30 years’ experience in the diagnostic and healthcare industries. During this period, he founded and managed successful diagnostics, therapeutics and medical device businesses, co-founding ASX listed Panbio Limited and ImpediMed Limited. During the past three years, he has also served in a number of prominent roles as director and chairman of public healthcare companies, including chairman of Alchemia Limited, and director of ImpediMed Limited, Campbell Brothers Limited and Benitec Limited. Dr. Bridges also has deep experience with a number of healthcare / biotechnology companies, having served multiple board posts such as chairman of Peptech Limited and non-executive director of Domantis plc.

Tommaso Bonvino FAICD (Non-Executive)

In office from 1 July 2011 up to the date of this Report

Mr. Bonvino, 51, was appointed to the Board on 25 November 2009 and also serves as a member of the Company’s Corporate Governance Committee. He has over 28 years experience in marketing and product development and has managed companies for various Italian, Spanish and French firms, distributing and marketing goods throughout South-East Asia. He has established bilateral trade relationships between Australian and European companies in the technology and consumer goods sectors. Mr. Bonvino is currently the Managing Director and CEO of Private Branded Beverages Limited, a non-executive Director of the Melbourne Recital Centre and a Fellow of the Australian Institute of Company Directors.

Dr. Malcolm R. Brandon BScAgr, PhD, MAICD (Non-Executive)

In office from 1 July 2011 up to the date of this Report

Dr. Brandon, 65, was appointed to the Board on 5 October 2009 and also serves as a member of the Company’s Audit Committee. He has spent his career in the biotech and life sciences sector where he has over 35 years experience in commercially focused research and development and in building successful companies which have commercialised a wide range of technologies. As the founding director of the Centre for Animal Biotechnology, a research arm within the University of Melbourne Veterinary Science School, he was responsible for fund raising and the development of many agricultural technologies and products. Dr. Brandon was a co-founder and Director of Stem Cell Sciences Ltd. and Smart Drug Systems Inc. and is the Chairman of genetics and artificial animal breeding company Clone International which uses cloning technologies to breed elite cattle, sheep and horses and to preserve the genetics of elite animals.

Gregory W. Brown BSc, MBA (Non-Executive)

In office from 24 July 2012 up to the date of this Report

Mr. Brown, 49, was appointed to the Board on 24 July 2012. He has over 25 years of international business experience in the healthcare industry including internationally based experience overseeing product development and global commercial launches based in Switzerland (Basel), England (London), Germany (Goettingen) and the United States (New York / New Jersey / Maryland). Mr. Brown has held the role of Sales and Marketing Director for Baxter Diagnostics in Australia and in the UK; Senior Global Marketing Manager for Roche Molecular Systems; Vice President, Global Strategic Marketing for Digene Corporation; and has led sales, device management, marketing and managed care teams in Europe and the US. Most recently Mr. Brown held the role of Managing Director and Chief Executive Officer of ASX-listed diagnostics device company ImpediMed Limited, which has a primary breast cancer focus. He remains on the board of ImpediMed as an Executive Director.

dIreCtorS (cont.)

Directors in office as at the date of this Report (cont.)

Dr. Mervyn Cass MBBS (Non-Executive)

In office from 30 September 2011 up to the date of this Report

Dr. Cass, 71, was appointed to the Board on 30 September 2011. He is a practising medical practitioner and, after 28 years as the senior partner in an occupational medical practice in Port Melbourne, accepted the appointment as Medical Director of a plastic surgery centre in 1996. He was the founding Chairman of the Australasian Occupational Medical Group and was a Director of Wolfe Research Pty. Ltd., a private medical biotech company associated with RMIT University. He has been an advisor to the Victorian Government on Workers’ Compensation and Radiological Standards in general practice and is a former member of the Jewish Community Council of Victoria, the roof body of the Victorian Jewish Community.

Huw D. Jones BEng (Hons), MBA, GAICD (Non-Executive)

In office from 1 July 2011 up to the date of this Report

Mr. Jones, 49, was appointed to the Board on 19 November 2008. He also serves as a member of the Company’s Audit Committee and its Corporate Governance Committee. He has over 20 years’ experience in international sales and marketing in the health care industry and is a Director of Fresh Investments Pty. Ltd., a former Managing Director of Datex-Ohmeda (Australasia) and a former Executive Director and CEO of Aeris Environmental Ltd.

Also during the financial year, Mr. Sidney C. Hack served as a Director of the Company and Chairman of the Board from the beginning of the year until his resignation on 16 December 2011.

Company Secretary

Thomas G. Howitt BCom, CA, CTA, ACIS, ACSA, AICPA (Company Secretary and Chief Financial Officer)

In office from 1 July 2011 up to the date of this Report

Mr. Howitt, 48, was appointed as the Group’s Chief Financial Officer on 1 June 2004 and as its Company Secretary on 30 June 2005. During his 20-plus year career, he has served as CFO and Company Secretary for a number of companies, listed on both the ASX and foreign stock exchanges. His wide experience covers all facets of financial management and control across various industries, having been instrumental in the successful development, patenting and commercialisation of several innovative technologies. He has played key roles in the raising of bank debt / equity capital and the management of complex due diligence programs, and has worked as a senior Taxation Consultant for Ernst & Young and in the investment banking industry. Mr. Howitt also serves as President of the Company’s Canadian-listed subsidiary, Gtech International Resources Limited, and is a current member of the Victorian Branch Committee of AusBiotech Ltd.

Interests in the shares and options of the Company and related bodies corporate

As at the date of this Report, the following Directors hold indirect beneficial interests in the shares of the Company:

Dr. Melvyn J. Bridges 500,000 shares
• Dr. Mervyn Cass 473,667 shares • Huw D. Jones 997,887 shares

Apart from the above, no Director holds any interest in the shares and options of the Company as at the date of this Report.

earnInGS / (loSS) per Share

Basic earnings / (loss) per share (cents per share) (1.15)
• Diluted earnings / (loss) per share (cents per share) (1.15)

dIVIdendS

No dividends have been paid since the end of the previous financial year, nor have the Directors recommended that any dividend be paid.

dIreCtorS’ report (cont.)

Corporate InforMatIon

Corporate structure

Genetic Technologies Limited is a public company limited by shares that is incorporated and domiciled in Australia. The Company has prepared a consolidated financial report incorporating the entities that it controlled during the financial year, which are outlined in the following illustration of the Group’s corporate structure as at the date of this Report:

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----- Start of picture text -----

Genetic
Technologies
Limited
Gtech GeneType RareCellect GeneType Genetic Phenogen GeneType
International Corporation Pty. Ltd. Pty. Ltd. Technologies Sciences Inc. AG
Resources Corporation
Limited Pty. Ltd.
75.8% 100% 100% 100% 100% 100% 100%
Genetic
Technologies
(Beijing) Limited
100%
----- End of picture text -----

On 12 April 2012, the Company’s equity interest in former subsidiary ImmunAid Pty. Ltd. fell below 50 percent. Due to the resulting loss of control, ImmunAid Pty. Ltd. was deconsolidated and left the Group on that date (refer Notes 33 and 35 of the attached financial statements for details). On 20 June 2012, another former subsidiary, AgGenomics Pty. Ltd., was deregistered.

Nature of operations and principal activities

The principal activity of the entities within the Group during the financial year was the provision of genetic testing services. The Company also conducted out-licensing of its intellectual property relating to “non-coding DNA” and research and development in the areas of genetics and related fields.

During the 2011 financial year, the Company’s US subsidiary, Phenogen Sciences Inc., established a sales and distribution operation based in Charlotte, North Carolina from which the Group’s BREVAGen[TM] breast cancer risk test was launched into the US marketplace.

Apart from the above, there have been no significant changes in the nature of the Group’s activities during the financial year.

Group overview

Genetic Technologies Limited was incorporated in Western Australia on 5 January 1987 as Concord Mining N.L. The Company undertook a series of mining projects and, following several intervening changes, changed its name to Duketon Goldfields N.L. on 15 March 1995. On 15 October 1999, the Company changed its status from a no liability company to a company limited by shares and, on 29 August 2000, it completed the acquisition of GeneType AG, a Swiss private company. GeneType AG had been formed in 1989 by Dr. Mervyn Jacobson and Dr. Malcolm Simons after they met and resolved to test the hypothesis that the non-coding or “junk” regions of DNA were in reality not “junk”, but a valuable and highly ordered reservoir of useful genetic information, a fact which had been overlooked by the scientific community up until that time. As a result of the acquisition of GeneType AG, the Company changed its business from mining to biotechnology and changed its name to Genetic Technologies Limited.

The Company has since established a fee-for-service genetic testing business that has become the largest non-government operation of its type in Australia. The business performs a wide variety of genetic tests on humans and animals which includes human diagnostics, forensics and animal pedigree tests. With the acquisition by the Company in April 2010 of the BREVAGen[TM] breast cancer risk test from the US, the Company launched its first test into a global market in June 2011.

The Company also conducts a successful out-licensing program in respect of its non-coding DNA technology and supports a latestage research project.

Corporate InforMatIon (cont.)

Operating results for the year

Overview

During the 2012 financial year, Genetic Technologies Limited and its subsidiaries generated consolidated gross revenues from continuing operations, together with other revenues and gains, of $11.3 million, representing a 38% decrease over the corresponding figure for the 2011 financial year of $18.3 million. The loss for the year of $5.3 million was principally attributable to an 82% fall in revenues from the Company’s out-licensing activities, offset by a $5.1 million gain on the deconsolidation of former-subsidiary, ImmunAid Pty. Ltd.

In July 2011, the Company completed a successful private placement of 60 million ordinary shares to sophisticated and institutional investors at an issue price of $0.195 per share. The total net funds generated from the placement, after the payment of associated costs, were $10.9 million which, together with the Company’s opening cash reserves of $5.1 million and the net cash flows used in operations during the year of $7.7 million, resulted in an overall increase in the Group’s total cash reserves to in excess of $8.9 million as at 30 June 2012.

BREVAGen™ breast cancer risk test

The 2012 financial year saw the Company launch its new, predictive risk test, BREVAGen™. BREVAGen™ is the first clinically validated breast cancer predictive risk assessment tool that combines a woman’s genetic information with clinical data to assist physicians in developing personalized risk management plans. The Company began its progressive roll-out of BREVAGen™ to breast surgeons, obstetricians and gynaecologists in eight territories accessing more than 20 metropolitan areas in the US during the third quarter of 2011, with expansion into further territories occurring later in the year. Further description of the BREVAGen™ test is provided elsewhere in this Annual Report.

During December 2011, inspectors from the US Centers for Medicare and Medicaid Services visited the Company’s laboratory in Victoria to conduct the first survey of the facility under the US Clinical Laboratories Improvement Amendments (“CLIA”). The survey process was successfully completed prior to the end of December with the Company receiving the resulting Certificate of Compliance in February 2012. Following this, the Company lodged procedural out of state licensure applications to an additional seven states, including the key healthcare markets of California and Florida. Approval from six of these seven US states (Pennsylvania, Rhode Island, Nevada, Tennessee, Maryland and California) has since been received, bringing the total number of US states in which the BREVAGen™ test can be sold to 48 of the 50 US states. Approval from the authorities in Florida is expected in within the next month and it is anticipated that approval from the last remaining state (New York) will be achieved by the end of calendar 2013. Finally, in August 2012, the Company announced that it had received European CE Mark approval for BREVAGen™, which will allow BREVAGen™ to be sold in the EU and other countries that recognise the CE Mark. The initial commercial focus will be in the key markets of France and Germany.

Early in the financial year, the Company commenced processing claims for reimbursement for initial BREVAGen™ sales. As part of a longer term contracting and credentialing strategy, the Company also commenced the credentialing process with the top ten preferred provider organisations (“PPOs”) in the US. These PPOs manage a network of healthcare providers and contract directly with Insurers and together represent more than 60 percent of covered lives in the US and more than 80 percent of the covered lives in the markets currently serviced by Phenogen. In early October 2011, the first PPO contract was finalised, with an additional three contracts having been completed by the end of June 2012, with more in late stage negotiations. In total, these four organisations represent an estimated 13 million covered lives.

Credentialing with PPOs allows for expedited claim adjudication (as “in-network”) which provides improved cash flow, while obtaining an acceptable level of reimbursement, and reduces the costs incurred through appealing denials. Once BREVAGen™ test volumes reach a significant level and Genetic Technologies has gathered additional clinical utility data, the Company will approach Insurers directly to contract. As the number of contracted PPOs continues to grow, the Company anticipates that the rate of reimbursement received from the respective insurance companies will further accelerate.

Currently, claims for BREVAGen™ reimbursement are submitted to private insurers in the United States as a “stack” of individual methodology codes for the DNA extraction, testing, analysis and reporting elements of the test. This is a common practice for molecular pathology tests that do not have specific test codes and is commonly used for novel molecular diagnostics products until such time as clinical adoption reaches a level of significance to warrant the application of a specific code. In February 2012, the CPT[®] Editorial Panel Meeting of the American Medical Association resolved to delete the use of the “stacking codes” and the related guidelines.

dIreCtorS’ report (cont.)

Corporate InforMatIon (cont.)

Operating results for the year (cont.)

The “stacked” codes will be replaced with Tier 1 and Tier 2 analyte-specific or resource codes, as well as a new category termed Multi-Analyte Assay with Algorithmic Analysis (“MAAA”). GTG and Phenogen are working with US-based specialist consultants to make an application to the regulators for a product specific code/s. The companies expect to present the required clinical utility data and publications in peer-reviewed journals to provide the level of evidence required by the AMA to support the provision of a new code, with our application likely to be submitted in the fourth quarter of 2012. The pricing of all new codes will be determined and published in the fourth quarter of 2012.

During the year, the number of full time Regional Business Managers employed in the Phenogen sales team was expanded to ten, several of whom having been appointed to service the seven new US states for which the Company has now received clearance to sell the BREVAGen™ test.

In the first year of launch, the total number of BREVAGen™ test samples received by the Company was 416. Using a cash, rather than accruals, basis for recording the revenue from the sales of the test, as explained in Note 2(a) of the attached financial statements, the Company generated total revenues of $41,693 during that period. Month-on-month figures continue to trend upwards, with a record month of activity having been recorded in July 2012. During that month, the total number of BREVAGen™ test samples received by the Company was 71 and, following improvements in the rates of reimbursement, the total revenues received from BREVAGen™ sales increased to $13,416. Importantly, the average amount received in respect of tests for which all associated insurance claims have been settled significantly exceeds original budget expectations and continues to steadily improve, as does the rate at which reimbursement is received from the respective insurance companies.

Analysis of several large peer group companies who have successfully launched comparable first-in-class molecular diagnostic products in the US market which are similar to BREVAGen™ has revealed that their first year volumes are in line with the first year BREVAGen™ test volumes that have been generated by the Company. These comparable tests have since gone on to become highly successful products, securing hundreds of millions of dollars in sales revenue in the years following their launch. In the 13 months since the launch of the BREVAGen™ test, kits have been provided to more than 2,200 US physicians and the Company remains confident that, as market penetration steadily increases, sales volumes and the associated revenues will also increase accordingly, moving the Company’s US operations towards profitability.

Australian heritage businesses

The 2012 financial results for the Company’s Australian genetic testing businesses were largely in line with budget expectations. These well-established “heritage” businesses, which comprise the provision of a wide range of medical, paternity, forensic and animal genetic tests, continued to maintain dominant positions in a number of their respective markets, despite some considerable price competition from several major competitors.

A range of marketing initiatives, including regular attendance at major local oncology conferences such as “M.O.G.A” and familial breast cancer at “kConFab’ are planned for the 2013 financial year, in addition to activities to promote the recently-launched BREVAGen™ test in the domestic market.

Licensing

In May 2011, the Company announced it had filed a further patent infringement law suit in the US, this time in the US District Court, Western District of Colorado, asserting infringement of its primary non-coding patent against ten different parties. Since then, Settlement and License Agreements have been executed with Navigenics Inc., Hologic Inc., Eurofins STA Laboratories Inc. and GeneSeek Inc., with settlement discussions now underway with other parties to the Colorado suit. This infringement suit is being prosecuted by the Company’s law firm Sheridan Ross P.C. (“Sheridan Ross”) of Denver, Colorado and, due to arrangements previously put into place, should not have a material adverse impact on Genetic Technologies’ finances.

The Colorado suit is in addition to a seven-party suit filed in January 2011 in the US District Court for the Western District of Texas for infringement of the same technology. In February 2012, the Company announced the successful conclusion of this second assertion suit having executed a Settlement with companies associated with Sonic Healthcare Limited.

In addition to the licenses granted as part of the Company’s formal assertion program as detailed above, aside from the US law suits, the Company itself is actively pursuing licenses in respect of its non-coding technology in the US and other jurisdictions, principally in Europe. During 2012, the Company executed Settlement and License Agreements with Attomol GmbH of Lipten, Germany and AutoImmun Diagnostika GmbH of Strassberg, Germany, under which those companies have been granted nonexclusive rights to a number of GTG patents, including non-coding analysis and gene mapping.

Corporate InforMatIon (cont.)

Operating results for the year (cont.)

The 2012 financial year presented some challenges for the Company’s licensing program, including an ex parte re-examination proceeding for the “179 patent” (the patent’s second re-examination), certain changes to US legislation and developments in US case law, all of which have contributed to delays in reaching settlements with infringing parties. The re-examination request is a common strategy employed by defendants in patent infringement proceedings and the Company is confident that, as in first re-examination, the179 patent will again be re-issued in full with all claims upheld. Genetic Technologies will actively defend the re-examination and will continue to vigorously pursue US entities which use the Company’s proprietary non-coding DNA technology. As a result, the Company expects to regain momentum in its US assertion program during the 2013 financial year.

Outside the United States, the Company has taken active steps to expand the reach of the off balance sheet funded assertion arrangement with Sheridan Ross. Originally limited to actions brought only in the US, and limited in scope to cover only the Company’s 5,612,179, 5,851,762, 5,192,659 and 5,789,568 US patents, the expanded assertion arrangement now covers all of GTG’s non-coding patents in all jurisdictions. Sheridan Ross is now able to assist Genetic Technologies with asserting its noncoding patents globally, effectively acting as lead counsel to GTG in these international efforts. Europe in particular is a jurisdiction where the Company has secured substantial licensing revenues in the past, but there remain numerous large infringers who have not as yet taken licenses. These efforts may include litigation, and the Company expects the global assertion program to begin to regularise the activities of selected European targets in the new financial year.

Other assets

As part of the Company’s strategy to place a stronger emphasis on the expansion of its cancer diagnostic franchise, its research programs are being progressed with a view to out-licensing, co-development or partnering the respective technologies.

The RareCellect™ project has been presented to a variety of industry players. Discussions with a large international company interested in pursuing potential commercial collaborations are continuing, with this party now undertaking advanced due diligence on the RareCellect™ data and samples.

In April 2012, the Company announced that its former subsidiary, ImmunAid Pty. Ltd. (“ImmunAid”), had successfully raised a total of $1 million in a private placement from US, European and Australian sophisticated investors. This financing provides ImmunAid with sufficient resources to enable the company to advance its novel approach to cancer therapy by the timely reversal of immune system suppression via its unique “on/off” technology. In return for their $1 million investment, the incoming investors secured a 10% interest in ImmunAid. As a result of this issue, the equity interest in ImmunAid held by the Company fell below 50% and, due to the resulting loss of control, ImmunAid was deconsolidated from the Genetic Technologies Group on 12 April 2012. After allowing for certain capital restructuring, including the payment of capital raising expenses via the issue of shares, the pricing of this financing round, which was participated in by independent, arm’s-length parties, placed a value on GTG’s stake in ImmunAid of in excess of $4.5 million. Plans to further expand ImmunAid’s patent estate and commercialise that company’s technology have been prepared and approved by its Board.

Review of financial condition

Capital structure

As at the date of this Report, the Company had a total of 464,771,819 fully paid ordinary shares on issue, all of which were listed on the Australian Securities Exchange, and on the NASDAQ Capital Market in the USA via the Company’s American Depositary Receipts. Also at that date, there were 20,125,000 unissued ordinary shares in the Company under option. On 27 July 2011, a total of 60,000,000 ordinary shares were issued by the Company by way of private placement at a price of $0.195 in cash (refer Note 23). As at the date of this Report, no ordinary shares were subject to escrow.

Treasury and related policies

The Company has in place a formal Cash Management Policy. The Company follows industry accepted leading practice by investing the Company’s cash assets in a range of short to medium term interest-bearing deposits with appropriately rated financial institutions.

Cash provided by operations

During the financial year, the consolidated net cash outflows used in operations were approximately $7.67 million. This result compared to the net cash inflows from operations from the prior financial year of $2.23 million. Overall, the Group’s consolidated cash assets increased by approximately $3.80 million during the 2012 financial year.

dIreCtorS’ report (cont.)

Corporate InforMatIon (cont.)

Review of financial condition (cont.)

Liquidity and funding

On 14 January 2005, the Company executed a Master Asset Finance Agreement with National Australia Bank Limited (“NAB”) in respect of a $2,500,000 asset finance facility (the “Facility”). As at 30 June 2012, the total outstanding liability in respect of this Facility was $17,748 (refer Note 31). As at 30 June 2012, the Company also had corporate credit card facilities with NAB and Bank of America, which had total credit limits of $150,000 and $49,208, respectively. As at that date, a total liability outstanding in respect of these credit card facilities was $15,861.

Risk management

The Group takes a proactive approach to risk management. The Board is responsible for ensuring that risks and opportunities are identified on a timely basis and that the Group’s objectives and activities are aligned with the risks and opportunities identified by the Board. The Board believes that it is important for all Board members to be a part of this process and the Board takes overall responsibility for the recognition and management of risk. The overview of the compliance and control mechanisms has been delegated to the Audit Committee through its Charter.

The Board believes that the Group is not yet sufficiently large to warrant the appointment of an internal auditor. During recent years, the Company has expanded its risk management activities with the establishment of a Risk Management Committee which meets to evaluate risks faced by the business and reports its findings back to the Audit Committee.

Statement of compliance

The statements provided to the Board by the Chief Executive Officer and the Chief Financial Officer on the integrity of the financial statements are founded on a sound system of risk management and internal compliance and control.

SIGnIfICant ChanGeS In the State of affaIrS

On 27 July 2011, Genetic Technologies Limited announced that it had issued by way of private placement to US and Australian institutional and sophisticated investors a total of 60,000,000 ordinary shares in the Company. The shares were issued in accordance with ASX Listing Rule 7.1 and, as such, shareholder approval was not required. The issue of the shares, which was made at a price of $0.195 each, raised a total of $11,700,000, before the payment of associated costs. Proceeds from the placement will be used to fund potential acquisition growth in the molecular diagnostics field focusing on woman’s cancer and management, and to accelerate the roll-out of the Company’s breast cancer risk test BREVAGen[TM] in the US.

On 30 September 2011, Dr. Mervyn Cass was appointed as a Director of the Company.

On 12 October 2010, the Company released its Notice for the 2011 Annual General Meeting of shareholders which was held at 10.00 am on Monday, 21 November 2011 in the “Treetops” Room at Melbourne Museum. All four resolutions that were put before the shareholders at the Annual General Meeting were passed on a show of hands.

On 16 December 2011, Mr. Sidney C. Hack resigned as a Director of the Company and as its Non-Executive Chairman. Also on that date, Dr. Melvyn J. Bridges was appointed as a Director of the Company and as its Non-Executive Chairman.

On 25 January 2012, a total of 166,667 options which had previously been issued to a former employee were exercised, generating a total of $7,500 in funds for the Company.

On 12 April 2012, former subsidiary ImmunAid Pty. Ltd. was deconsolidated (refer Note 28).

On 20 June 2012, former subsidiary AgGenomics Pty. Ltd. was deregistered (refer Note 28).

During the year ended 30 June 2012, the Company granted a total of 3,250,000 options to nine employees of the Group. Of these, a total of 2,250,000 options, which were granted at no cost, entitle the eight holders to acquire one ordinary share in the Company per option at a price of $0.12 each at any time up to, and including, 20 February 2017. The remaining 1,000,000 options, which were also granted at no cost, entitle the holder to acquire one ordinary share in the Company per option at a price of $0.20 each at any time up to, and including, 31 July 2016. Also during the 2012 financial year, a total of 2,608,333 options that had previously been issued to employees lapsed. Of this number, a total of 1,958,333 options were forfeited, whilst the remaining 650,000 options expired. As at the date of this Report, there was a total of 20,125,000 options over the Company’s ordinary shares on issue.

There were no other significant changes in the state of affairs that are not described elsewhere in this Annual Report.

SIGnIfICant eVentS after BalanCe date

On 24 July 2012, Mr. Gregory Brown was appointed as a Director of the Company.

On 7 August 2012, the Company sold a total of 46,951 ordinary shares in former subsidiary ImmunAid Pty. Ltd. for a total consideration of $46,951, prior to the payment of associated costs.

Apart from these events, there have been no other significant events which have occurred after balance date.

lIKely deVelopMentS and eXpeCted reSultS

During the 2013 financial year, the Group will focus on the expansion of its genetic testing business, with emphasis on the sale of oncology-related tests and, in particular, the sale and distribution of the BREVAGen[TM] breast cancer risk test in the US through its wholly-owned subsidiary, Phenogen Sciences Inc.

Further, the Company, in conjunction with its US partner, will pursue its patent assertion program in the United States in an effort to secure additional licenses to its proprietary non-coding technologies. Finally, the Company will continue its efforts to advance the commercialisation opportunities for its RareCellect[TM] project.

Share optIonS

Unissued shares under option

As at the reporting date, there were 20,125,000 unissued ordinary shares in the Company under option. During the year ended 30 June 2012, a total of 3,250,000 options to acquire ordinary shares in the Company were granted. All options were granted at nil cost to the holders. Refer Note 27 to the attached financial statements for further details regarding the outstanding options.

Shares issued as a result of the exercise of options

During the 2012 financial year, a total of 166,667 shares were issued as a result of the exercise of options. No options have been exercised since the end of the financial year. During the 2012 financial year, a total of 2,608,333 options that had previously been issued to employees lapsed. Of this number, a total of 1,958,333 options were forfeited, whilst the remaining 650,000 options expired. Option holders do not have any right, by virtue of their options, to participate in any share issue of the Company or any related body corporate.

IndeMnIfICatIon and InSuranCe of dIreCtorS and offICerS

During the financial year, the Company paid a premium in respect of a contract insuring the Directors and Officers of the Company and any related body corporate against a liability incurred in his or her capacity as a Director or Officer to the extent permitted by the Corporations Act 2001 . The contract of insurance prohibits disclosure of the nature of the insurance provided and the amount of the premium. The Company has agreed to indemnify the current and former Directors and Executive Officers against all liabilities to other persons that may arise from their position as Directors or Officers of the Company and its subsidiaries, except where to do so would be prohibited by law.

reMuneratIon report

Introduction

This Remuneration Report outlines the Director and Executive remuneration arrangements of Genetic Technologies Limited (the “Company”) and its subsidiaries (collectively, the “Group”) in accordance with the requirements of the Corporations Act 2001 and its Regulations. For the purposes of this Report, Key Management Personnel (“KMP”) of the Group are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Company and the Group, directly or indirectly, including any Director (whether executive or otherwise) of the parent company, and includes the six executives in the parent and the Group, as set out below, receiving the highest remuneration.

For the purposes of this Report, the term “Executive” encompasses the Group’s Chief Executive Officer, Chief Financial Officer / Company Secretary, Chief Operating Officer, General Manager US Operations, VP Sales and Marketing and VP Legal and Corporate Development. There were six Executive positions within the Group during the 2012 financial year.

dIreCtorS’ report (cont.)

reMuneratIon report (cont.)

Details of Directors and Key Management Personnel

Details of Directors and Key Management Personnel
Directors Dr. Melvyn J. Bridges_(Non-Executive Chairman) Tommaso Bonvino(Non-Executive) Dr. Malcolm R. Brandon(Non-Executive) Dr. Mervyn Cass(Non-Executive) Huw D. Jones(Non-Executive)_	Executives
	Dr. Paul D.R. MacLeman_(Chief Executive Offcer)_
	Thomas G. Howitt_(Chief Financial Offcer and Company Secretary)_
	Alison J. Mew_(Chief Operating Offcer)_
	Lewis J. Stuart_(General Manager US Operations)_
	GregoryJ. McPherson_(VP Sales and Marketing)_
	Dr. David J. Sparling (VP Legal and Corporate Development)

Notes:

1. Dr. Cass was appointed as a Director of the Company on 30 September 2011.

2. Dr. Bridges was appointed as a Director of the Company and Chairman of its Board on 16 December 2011.

3. Former Chairman of the Board, Sidney C. Hack, resigned as a Director of the Company on 16 December 2011.

4. Mr. Gregory Brown was appointed as a Director of the Company on 24 July 2012, i.e. after balance date, and is therefore not included in this Remuneration Report.

Corporate Governance Committee

The Corporate Governance Committee of the Board of Directors of the Company (formerly known as the Nomination and Remuneration Committee) was established on 21 April 2005 and is, amongst other things, responsible for determining and reviewing remuneration arrangements for the Directors, the Chief Executive Officer and the Senior Leadership Team. The Committee is chaired by Dr. Melvyn J. Bridges and has as its members Mr. Tommaso Bonvino and Mr. Huw Jones, both of whom are independent directors.

The Corporate Governance Committee has been established to assess the appropriateness of the nature and amount of remuneration paid to Directors and Executives on a periodic basis by reference to relevant employment market conditions, with the overall objective of ensuring maximum shareholder benefit from the retention of a high quality Board and Senior Leadership Team.

Remuneration strategy

The performance of the Company depends upon the quality of its Directors and Executives. To prosper, the Company must attract, motivate and retain appropriately skilled Directors and Executives.

To this end, the Company embodies the following principles in its remuneration framework:

provide competitive rewards to attract high calibre Executives;
wherever possible, link Executive rewards to shareholder value;
ensure that a portion of an Executive’s remuneration is “at risk”; and
establish appropriate, demanding performance hurdles for variable Executive remuneration.

The remuneration strategy is approved by the Corporate Governance Committee.

Remuneration structure

In accordance with best practice corporate governance, the structure of Non-Executive Director and Executive remuneration is separate and distinct.

During the 2012 financial year, the Company’s remuneration practices have been updated, enhanced and expanded to wherever possible provide a closer link between Executive performance-based remuneration and the overall strategic and financial performance of the Company.

The key performance indicators applicable for all Executives are now more quantifiable and the methods of measurement are better defined. Potential levels of remuneration are linked to each performance indicator based on the pretext that if the performance indicators as defined are met then the business will have more likely achieved certain key financial or strategic objectives. In addition to the various key performance indicators that are used to assess the performance of each Executive, the overall financial performance of the Company is also taken into consideration when determining both base levels of remuneration and short term incentive payments for those individuals.

reMuneratIon report (cont.)

Non-Executive Director remuneration

Objective

The Board seeks to set aggregate remuneration at a level which provides the Company with the ability to attract and retain Directors of the highest calibre, whilst incurring a cost which is acceptable to shareholders.

Structure

The Company’s Constitution and the Listing Rules of the Australian Securities Exchange specify that the aggregate remuneration of Non-Executive Directors shall be determined from time to time by a General Meeting of shareholders. An amount not exceeding the amount determined is then divided between the Directors as agreed. The most recent determination was made at the 2007 Annual General Meeting, when shareholders approved an aggregate remuneration not exceeding $500,000 per year.

The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned amongst Directors are reviewed annually.

Each Non-Executive Director receives a fee for serving as a Director of the Company. No additional fees are paid to any Director for serving on either of the two sub-committees of the Board.

Executive remuneration

Objective

The Group aims to reward Executives with a level and mix of remuneration which is commensurate with their positions and responsibilities within the Group and so as to:

reward Executives for Group and individual performance against targets set by reference to suitable benchmarks;
align the interests of Executives with those of the shareholders; and
ensure that the total remuneration paid is competitive by market standards.

Structure

The remuneration paid to Executives is set with reference to prevailing market levels and comprises a fixed remuneration comprising base salary and superannuation, various short-term incentives (which are linked to agreed Key Performance Indicators (“KPIs”), as described below under the heading of Variable remuneration), and a long-term option component.

Fixed remuneration

Objective

The Corporate Governance Committee oversees the setting of fixed remuneration on an annual basis. The process consists of a review of Company, divisional and individual performance, relevant comparative remuneration in the market and internally and, where appropriate, external advice on policies and practices. The members of the Committee have access to external advice independent of Management.

Structure

Fixed remuneration consists of some or all of the following components:

base salary;
non-monetary benefits which can include a motor vehicle allowance, costs associated with novated motor vehicle leases, vehicle parking (and associated fringe benefits tax, if applicable); and
superannuation benefits, which includes employer contributions.

With the exception of the employer contributions to superannuation, Executives are given some flexibility to decide the composition of their total fixed remuneration and the allocation between cash and other benefits. It is intended that the manner of payment chosen will be optimal for the recipient without creating any additional cost for the Group.

Fixed remuneration is reviewed annually with reference to individual performance, market benchmarks for individual roles and the overall financial performance of the Group. Any changes to the fixed remuneration of Executives are first approved by the Corporate Governance Committee.

dIreCtorS’ report (cont.)

reMuneratIon report (cont.)

Fixed remuneration (cont.)

All employee remuneration is evaluated on a regular basis using a set of variables and taking into account the addition of the statutory superannuation contribution. A detailed assessment of existing base salaries is made annually using comparisons against independent market data. This data provides information on salaries and other benefits paid for comparable roles within the biotech and pharmaceutical industries, using third party salary survey data. Annual performance reviews with each employee are based on a rating system which is then used to assess his or her eligibility for salary increases. Other qualitative factors, including the specialised knowledge and experience of the individual and the difficulty of replacing that person, are also taken into account when considering salary adjustments.

Variable remuneration

Objective

The objective of variable remuneration is to:

align the interests of Executives with those of shareholders;
link Executive rewards to the achievement of strategic goals and performance of the Company; and
ensure that the total remuneration paid by the Company is competitive by market standards.

Short Term Incentive (“STI”)

STI is an annual plan that applies to Executives and other senior employees and is based on both Company and individual performance during a given financial year. STI ranges vary depending on the role, responsibilities and deliverables achieved by each individual. Actual STI payments granted to the relevant employee will depend on the extent to which the pre-agreed specific targets are met within a financial year. Specific targets are quantifiable with the agreed method of measurement defined at the beginning of the financial year. The ongoing performance of the Executive or senior employee is evaluated regularly during the performance cycle.

Group objectives, and their relative weighting, vary depending on position and responsibility, but in respect of the year ending 30 June 2012 include, amongst other things, the achievement of:

earnings before interest, tax, depreciation and amortisation (“EBITDA”) and net profit targets where an individual has capacity to impact this result;
achieving or exceeding revenue targets;
achieving targets for cost reduction or efficiency gains;
contributing to business growth and expansion; and
performance or the delivery of results which exceed agreed targets.

These measures are chosen as they represent the key drivers for the short term success of the business and provide a framework for delivering long term value.

Personal and operating objectives vary according to the role and responsibility of the Executive and include objectives such as service delivery to customers, project delivery, compliance outcomes, intellectual property management and various staff management and leadership objectives.

Achievement of an individual’s targets or objectives is documented and assessed by both the individual and his or her direct manager. The individual will participate in an annual performance review and must provide evidence of the objectives that he or she has delivered during the period under review. Each objective is then rated on an achievement scale. Depending on the aggregate of the ratings, the individual may be eligible to receive an STI payment. STI payments are paid in August or September of each year subject to the completion of the performance review document and the receipt of a satisfactory rating. The Board conducts this process in the case of the CEO.

The Corporate Governance Committee continues to develop policies directed at achieving these objectives. Any such STI payments which may be made are delivered as a cash bonus during the following reporting period. During the year ended 30 June 2012, STI payments totalling $191,792 were made to members of the Senior Leadership Team in respect of the preceding year ended 30 June 2011 (2011: $51,000). During that year (being the year ended 30 June 2011), the Company generated its maiden profit after tax of $901,341 and the market price of the Company’s ordinary shares on the Australian Securities Exchange increased significantly from 3.5 cents on 1 July 2010 to 21.0 cents on 30 June 2011.

reMuneratIon report (cont.)

Variable remuneration (cont.)

Long Term Incentive (“LTI”)

The objective of the Group’s LTI arrangements is to reward Executives and senior employees in a manner that aligns their remuneration with the creation of shareholder wealth. As such, significant LTI grants are generally only made to Executives who are able to influence the generation of shareholder wealth and have an impact on the Group’s long term profitability. There are no specific performance hurdles, apart from vesting provisions, in respect of the LTI grants made to Executives. Options with a vesting period also serve as a retention tool and may reduce the likelihood of high performing Executives and senior employees being targeted by other companies.

LTI grants to Executives and senior employees are delivered in the form of options over unissued ordinary shares in the Company which are granted under the terms and conditions of the Company’s Employee Option Plan. Selected Executives who contribute significantly to the long term profitability of the Company are invited to participate in the Employee Option Plan. The remuneration value of these grants varies and is determined with reference to the nature of the individual’s role, as well as his or her individual potential and specific performance.

The options are granted at no cost, have a life of between four and five years and generally vest in three equal tranches after 12, 24 and 36 months from the date on which they are granted. However, during the year ended 30 June 2012, a total of 10,400,000 options over ordinary shares in the Company which had previously been granted to Executives vested fully. During the year ended 30 June 2012, a net share-based payments expense of $268,343 was incurred by the Company in respect of all options which had previously been granted to Executives and other senior employees.

In cases where an Executive ceases employment prior to the vesting of his or her options, the options are forfeited after a prescribed period if they have not been exercised. The prescribed period ranges from two to twelve months, depending on the circumstances under which they left the Company, e.g. resignation, retirement, termination or death. In the event of a change of control of the Company, the performance period end date will be brought forward to the date of the change of control and awards will vest over this shortened period.

eMployMent ContraCtS

The Chief Executive Officer, Dr. Paul MacLeman, is employed under an employment contract which took effect on 4 May 2009. The key terms and conditions of Dr. MacLeman’s employment arrangements are:

during the financial year ended 30 June 2012, Dr. MacLeman received a base salary of $300,000, together with statutory superannuation contributions as prescribed under the Superannuation Guarantee legislation;
Dr. MacLeman is entitled to receive an STI payment equivalent to a maximum of 30% of his base salary based on achievement of Key Performance Indicators, as agreed with the Board from time to time. During the 2012 financial year, he received an STI payment of $24,000 in respect of the preceding year ended 30 June 2011;
Dr. MacLeman may resign from his position, and thus terminate the contract, by giving up to five months written notice and the Company may terminate Dr. MacLeman’s contract by providing similar written notice or providing payment in lieu of the notice period; and
the Company may terminate Dr. MacLeman’s contract at any time without notice if serious misconduct has occurred. Where termination with cause occurs, he is only entitled to receive that portion of remuneration which is fixed and only up to the date of termination. In this instance, all entitlements to both STI and LTI are forfeited and would lapse.

The key provisions contained in the employment contracts for other Key Management Personnel in office at the date of this Report, being Mr. Thomas Howitt, Ms. Alison Mew, Mr. Lewis Stuart, Mr. Greg McPherson and Dr. David Sparling, are:

the Executive receives a base salary and statutory superannuation contributions, as prescribed under the Superannuation Guarantee legislation, together with certain STI payments based on achievement of Key Performance Indicators, as agreed with the Chief Executive Officer from time to time;
the Executive may resign from his / her position and terminate the contract by giving up to three months written notice;
the Company may terminate the contract by providing up to three months written notice or payment in lieu of notice; and
the Company may terminate the contract without notice in the event of serious misconduct. In this instance, entitlements to both STI and LTI payments are forfeited and will lapse.

There are no employment contracts in place with any Non-Executive Director of the Company.

dIreCtorS’ report (cont.)

reMuneratIon report (cont.)

Remuneration of Key Management Personnel

Name and title of Year	Short-term Salary/fees Other Post-employment Superannuation Long-term Longservice leave Share-based Options Totals
	$ $ $ $ $ $
Directors
Dr. Melvyn J. Bridges1 Non-Executive Chairman 2012 2011	43,333 - - - 12,756 - - - - - 56,089 -
Tommaso Bonvino Non-Executive Director 2012 2011	51,800 50,000 - - 4,662 4,500 - - - - 56,462 54,500
Dr. Malcolm R. Brandon Non-Executive Director 2012 2011	31,800 30,000 - - 24,662 24,500 - - - - 56,462 54,500
Dr. Mervyn Cass2 Non-Executive Director 2012 2011	38,850 - - - 3,496 - - - - - 42,346 -
Huw D. Jones Non-Executive Director 2012 2011	51,800 50,000 - - 4,662 4,500 - - - - 56,462 54,500
Sidney C. Hack3 Ex-Non-Executive Chairman 2012 2011	12,384 24,500 - - 23,845 51,800 - - - - 36,229 76,300
Sub-totals for Directors 2012 2011	229,967 154,500 - - 74,083 85,300 - - - - 304,050 239,800
Executives
Dr. Paul D.R. MacLeman Chief Executive Offcer 2012 2011	300,000 250,000 24,000 51,000 29,160 27,090 5,659 594 19,350 54,450 378,169 383,134
Thomas G. Howitt Chief Financial Offcer and Company Secretary 2012 2011	220,204 214,000 32,100 - 22,726 19,260 5,111 7,059 8,063 22,688 288,204 263,007
Alison J. Mew Chief Operating Offcer 2012 2011	176,335 171,200 34,240 - 18,951 15,408 2,843 356 8,063 22,688 240,432 209,652
Lewis J. Stuart General Manager US ops. 2012 2011	267,894 272,937 20,062 - - - - - 12,900 36,300 300,856 309,237
Gregory J. McPherson VP Sales and Marketing 2012 2011	177,646 175,100 35,040 - 19,385 15,759 2,984 376 8,063 22,688 243,118 213,923
Dr. David J. Sparling VP Legal and Corp. Develop. 2012 2011	194,670 185,400 46,350 - 21,691 16,686 3,078 368 8,063 22,688 273,852 225,142
Sub-totals for Executives 2012 2011	1,336,749 1,268,637 191,792 51,000 111,913 94,203 19,675 8,753 64,502 181,502 1,724,631 1,604,095
Total remuneration of KeyManagement Personnel 2012 2011	1,566,716 1,423,137 191,792 51,000 185,996 179,503 19,675 8,753 64,502 181,502 2,028,681 1,843,895

Notes:

1. Dr. Bridges was appointed as a Director of the Company and Chairman of its Board on 16 December 2011.

2. Dr. Cass was appointed as a Director of the Company on 30 September 2011.

3. Mr. Hack resigned as a Director of the Company and Chairman of its Board on 16 December 2011.

4. The Company and the Group had six Executives, as defined, during the year ended 30 June 2012.

5. The column above entitled “Other” of $191,792 (2011: $51,000) comprises STI payments.

The details of those Executives nominated as Key Management Personnel under section 300A of the Corporations Act 2001 have been disclosed in this Report. No other employees of the Company meet the definition of “Key Management Personnel” as defined in IAS 24 / (AASB 124) Related Party Disclosures , or “senior manager” as defined in the Corporations Act 2001 .

reMuneratIon report (cont.)

Options granted and vested as part of remuneration during the year ended 30 June 2012

During the 2012 financial year, no options were granted as equity compensation benefits to Executives, as disclosed below. Details of the options held by those Executives nominated as Key Management Personnel during the year ended 30 June 2012 are set out below.

Name of Executive	Number of options	Exercise price Number expired Fair value per option Final vestingdate
	Vested Granted
Dr. Paul D.R. MacLeman	3,600,000 -	$0.045 - $0.021 Not applicable
Thomas G. Howitt	1,500,000 -	$0.045 - $0.021 Not applicable
Alison J. Mew	1,500,000 -	$0.045 - $0.021 Not applicable
Lewis J. Stuart	800,000 -	$0.045 - $0.021 Not applicable
GregoryJ. McPherson	1,500,000 -	$0.045 - $0.021 Not applicable
Dr. David J. Sparling	1,500,000 -	$0.045 - $0.021 Not applicable
Totals	10,400,000 -	-

Options granted and vested as part of remuneration during the year ended 30 June 2011

During the 2011 financial year, certain options were granted as equity compensation benefits to Executives, as disclosed below. The options were issued at no charge and entitle the holder to acquire one fully paid ordinary share in the Company at the respective exercise price.

Name of Executive	Number of options	Exercise price Number expired Fair value per option Final vestingdate
	Vested Granted
Dr. Paul D.R. MacLeman	- 3,600,000	$0.045 - $0.021 8 July2013
Thomas G. Howitt	- 1,500,000	$0.045 - $0.021 8 July2013
Thomas G. Howitt	1,000,000 -	$0.220 - $0.084 23 October 2010
Thomas G. Howitt	- -	$0.480 750,000 $0.139 Not applicable
Alison J. Mew	- 1,500,000	$0.045 - $0.021 8 July2013
Lewis J. Stuart	- 2,400,000	$0.045 - $0.021 8 July2013
GregoryJ. McPherson	- 1,500,000	$0.045 - $0.021 8 July2013
Dr. David J. Sparling	- 1,500,000	$0.045 - $0.021 8 July2013
Totals	1,000,000 12,000,000	750,000

Fair values of options

During the year ended 30 June 2012, a total of 2,608,333 options that had previously been issued to employees lapsed. Of this number, a total of 1,958,333 options were forfeited, whilst the remaining 650,000 options expired. The lapsed options had no fair value on the date they lapsed as they were “out of the money”. During the year ended 30 June 2012, a total of 166,667 options were exercised (refer Note 27 for details).

During September 2011, a total of 1,000,000 options over ordinary shares in the Company were granted, at no cost, to a senior employee of the Company. Each option, which entitles the holder to acquire one ordinary share at a cost of $0.20, will expire on 31 July 2016, unless exercised before that date.

During April and May 2012, a total of 2,250,000 options over ordinary shares in the Company were granted, at no cost, to a number of employees of its US subsidiary, Phenogen Sciences Inc. Each option, which entitles the respective holder to acquire one ordinary share at a cost of $0.12, will expire no later than 20 February 2017, unless exercised before that date.

The above options granted during the 2012 financial year vest in three equal tranches after 12 months, 24 months and 36 months from the date of grant, respectively. As at 30 June 2012, there were 6 executives and 22 employees who held options that had previously been granted under the Company’s respective option plans.

The resulting weighted average fair values per option for options granted to those Executives who are nominated as Key Management Personnel vesting on or after 1 July 2012 are:

				Weighted average
Name of Executive	Options	Grant date	Expirydate	fair value
Lewis J. Stuart	1,600,000	8 July2010	8 May2015	$0.021

dIreCtorS’ report (cont.)

dIreCtorS’ MeetInGS

Meeting attendances

The number of meetings of Directors (including the meetings of the two Sub-Committees of the Board) held during the financial year, and the number of such meetings attended by each Director, were as follows:

Name of Director	Directors’ meetings	Sub-Committees of the Board
		Audit Corporate Governance
	Eligible Attended	Eligible Attended Eligible Attended
Dr. Melvyn J. Bridges1	7 7	1 1 1 1
Tommaso Bonvino	15 12	- - 1 1
Dr. Malcolm R. Brandon	15 13	2 2 - -
Dr. Mervyn Cass	11 11	- - - -
Huw D. Jones	15 15	2 2 1 1
SidneyC. Hack2	8 8	1 1 - -

Sub-committee membership

As at the date of this Report, the Company had two Sub-Committees of the Board of Directors: an Audit Committee and a Corporate Governance Committee.

The various individuals who served as members of the Sub-Committees during the 2012 financial year were:

	Audit Committee	Corporate Governance Committee
Name of Member	Period served	Period served
Dr. Melvyn J. Bridges1	16 December 2011 to 30 June 2012	16 December 2011 to 30 June 2012
Tommaso Bonvino	Not applicable	1 July2011 to 30 June 2012
Dr. Malcolm R. Brandon	1 July2011 to 30 June 2012	Not applicable
Dr. Mervyn Cass	Not applicable	Not applicable
Huw D. Jones	1 July2011 to 30 June 2012	1 July2011 to 30 June 2012
SidneyC. Hack2	1 July2011 to 16 December 2011	1 July2011 to 16 December 2011

Notes:

1. Dr. Bridges served as the Chairman of both Sub-Committees from 16 December 2011 to 30 June 2012.

2. Mr. Hack served as the Chairman of both Sub-Committees from 1 July 2011 to 16 December 2011.

3. Mr. Gregory Brown was not appointed as a Director of the Company until after the end of the financial year.

4. In accordance with the Charter, the auditor attended two meetings of the Audit Committee at the request of the Committee.

enVIronMental reGulatIon

The Company is not aware of any breaches of any environmental regulation during the 2012 financial year.

proCeedInGS on Behalf of the CoMpany

No proceedings have been brought or intervened in or on behalf of the Company with leave to the Court under section 237 of the Corporations Act 2001 .

roundInG of aMountS

The Company is of a kind referred to in Class Order 98/100, issued by the Australian and Securities and Investments Commission, relating to the “rounding off” of amounts in the Directors’ Report. Amounts in the Directors’ Report have been rounded off in accordance with that Class order to the nearest dollar.

audItor IndependenCe and non-audIt SerVICeS

Auditor independence

The Directors of Genetic Technologies Limited have received an independence declaration from PricewaterhouseCoopers, the Company’s auditor, as reproduced immediately following the Directors’ Declaration on page 92 of this Annual Report.

Non-audit services

During the financial year, the following fees were paid or payable to the auditors of Genetic Technologies Limited and its subsidiaries in respect of both audit and non-audit services:

	Consolidated	Consolidated
	2012	2011
	$	$
Audit services	267,880 16,360 284,240 18,390 18,390 302,630
PricewaterhouseCoopers in respect of:
Audit of the Company’s Financial Report under the_Corporations Act 2001_		250,812
Other audit frms in respect of:
Audit of the Financial Reports of subsidiaries		15,403
Total remuneration in respect of audit services		266,215
Non-audit services
Other audit frms in respect of:
Tax advice and compliance, accountingand other services		14,388
Total remuneration in respect of non-audit services		14,388
Total auditors’ remuneration		280,603

Signed in accordance with a resolution of the Directors.

==> picture [82 x 51] intentionally omitted <==

DR. MELVYN J. BRIDGES

Non-Executive Chairman

Melbourne, 27 August 2012

Corporate GoVernanCe StateMent

IntroduCtIon

Genetic Technologies Limited (the “Company”) and its Board are committed to achieving and demonstrating the highest standards of corporate governance. The Board continues to review its corporate governance framework and practices to ensure they meet the interests of shareholders. In this statement, the Company and its controlled entities together are referred to as the “Group”.

A description of the Group’s main corporate governance practices is set out below. Unless otherwise stated, all of these practices were in place for the entire 2012 financial year and on the whole comply with the Corporate Governance Principles and Recommendations (including all relevant amendments) of the Australian Securities Exchange. While in most respects, Genetic Technologies Limited complies with the Recommendations, in several areas, policies and practices are being further developed to bring them more closely into line. As new policies are produced, or as the existing ones are amended, they are published on the Company’s website.

As at the date of this Statement, the following twelve Corporate Governance documents had been adopted by the Board, in addition to the Company’s Constitution which was completely revised and subsequently approved by the Company’s shareholders in November 2005. All significant policies are published on the Company’s website (www.gtglabs.com).

Board Charter, which defines the role of the Board and that of Management;
Audit Committee Charter;
Corporate Governance Committee Charter;
Board Protocol, which clarifies the responsibilities of Directors and the Company’s expectations of them;
Code of Conduct, including a Document Retention Policy;
Board Performance Evaluation Policy;
Risk and Compliance Policy;
Continuous Disclosure Policy;
Securities Trading Policy;
Diversity Policy;
Shareholder Communications Policy; and
Whistleblower Policy.

aSX prInCIpleS and reCoMMendatIonS

Principle 1: Lay solid foundations for management and oversight

The relationship between the Board and Management is critical to the Group’s success. The Directors are responsible to the shareholders for the performance of the Group in both the short and longer terms and seek to balance sometimes competing objectives in the best interests of the Group as a whole. Their focus is to enhance the interests of shareholders and other key stakeholders and to ensure the Group is properly managed. The responsibilities of the Board include:

providing strategic guidance to the Group, including contributing to the development of and approving the Group’s corporate strategy;
reviewing and approving business plans, the annual budget and financial plans, including available resources and major capital expenditure initiatives;
overseeing and monitoring:
» organisational performance and the achievement of the Group’s strategic goals and objectives;
» compliance with the Company’s Code of Conduct; and
» progress of major capital expenditures and other significant projects, including any acquisitions or divestments;
monitoring the Group’s financial performance, including approval of the annual and half-year financial reports and regular liaison with the Company’s auditors;
appointment, performance assessment and, if necessary, removal of the Chief Executive Officer;
ratifying the appointment and/or removal and contributing to the performance assessment for the members of the Senior Leadership Team;

aSX prInCIpleS and reCoMMendatIonS (cont.)

Principle 1: Lay solid foundations for management and oversight (cont.)

ensuring there are effective management processes in place for approving major corporate initiatives;
enhancing and protecting the reputation of the organisation;
overseeing the operation of the Group’s system for compliance and risk management reporting to shareholders; and
ensuring appropriate resources are available to senior Management to enable them to implement the strategies approved by the Board.

Day-to-day management of the Group’s affairs and the implementation of the corporate strategy and policy initiatives are formally delegated by the Board to the Chief Executive Officer and the Senior Leadership Team as set out in the Group’s delegations policies. These delegations are reviewed by the Board on an annual basis.

A performance assessment for members of the Senior Leadership Team last took place in August 2012. The process for these assessments is described in the Remuneration Report on pages 33 to 39 of this Annual Report.

Principle 2: Structure the Board to add value

The Board operates in accordance with the broad principles set out in its Charter which is available from the corporate governance information section of the Company’s website (www.gtglabs.com). The Charter provides details of the Board’s composition and responsibilities.

Board composition

The Charter states that:

the Board is to be comprised of both executive and non-executive Directors with a majority of non-executive Directors. Non-executive Directors bring a fresh perspective to the Board’s consideration of strategic, risk and performance matters;
in recognition of the importance of independent views and the Board’s role in supervising the activities of Management, the Chairman must be an independent non-executive Director, the majority of the Board must be independent of Management and all Directors are required to exercise independent judgement and review and constructively challenge the performance of the Senior Leadership Team;
the Chairman is elected by the full Board and is required to meet regularly with the Chief Executive Officer;
the Company should, where possible, maintain a mix of Directors on the Board from different genders, age groups, ethnicity and cultural and professional backgrounds who have complementary skills and experience;
the Board is to establish measurable Board gender diversity objectives and assess annually the objectives and progress made in achieving them; and
the Board should undertake an annual Board performance review and consider the appropriate mix of skills required by the Board to maximise its effectiveness and its contribution to the Group.

The Board seeks to ensure that:

at any point in time, its membership represents an appropriate balance between directors with experience and knowledge of the Group and directors with an external or fresh perspective; and
the size of the Board is conducive to effective discussion and efficient decision-making.

Directors’ independence

The Board has adopted specific principles in relation to the independence of its Directors. These state that, when determining independence, a Director must be a non-executive and the Board should consider whether the Director:

is a substantial shareholder of the Company or an officer of, or otherwise associated directly with, a substantial shareholder of the Company;
is, or has been, employed in an executive capacity by the Company or any other Group member within three years before commencing his or her service on the Board;

Corporate GoVernanCe StateMent (cont.)

aSX prInCIpleS and reCoMMendatIonS (cont.)

Principle 2: Structure the Board to add value (cont.)

within the last three years has been a principal of a material professional adviser or a material consultant to the Company or any other Group member, or an employee materially associated with the service provided;
is a material supplier or customer of the Company or any other Group member, or an officer of or otherwise associated directly or indirectly with a material supplier or customer;
has a material contractual relationship with the Company or a controlled entity other than as a Director of the Group; and
is free from any business or other relationship which could, or could reasonably be perceived to, materially interfere with the Director’s independent exercise of his or her judgement.

Materiality for these purposes is determined on both quantitative and qualitative bases. An amount of over five percent of annual turnover of the Company or Group or five percent of the individual Directors’ net worth is considered material for these purposes. In addition, a transaction of any amount or a relationship is deemed material if knowledge of it may impact the shareholders’ understanding of the Director’s performance.

Recent thinking on corporate governance has introduced the view that a Director’s independence may be perceived to be impacted by lengthy service on the Board. To avoid any potential concerns, the Board has determined that a Director will not be deemed independent if he or she has served on the Board of the Company for more than ten years. The Board will continue to monitor developments on this issue as they arise.

The Board assesses independence each year. To enable this process, the Directors must provide all information that may be relevant to the assessment.

Board members

Details of the members of the Board, their experience, expertise, qualifications, term of office, relationships affecting their independence and their independent status are set out in the Directors’ Report. As at the date of signing the Directors’ Report, all six Directors served as non-executive Directors and none had any relationships which may adversely affect their independence and, as such, they are deemed independent under the principles set out above.

Term of office

The Company’s Constitution specifies that all non-executive Directors must retire from office no later than the third Annual General Meeting (“AGM”) following his or her last election. Where eligible, a Director may stand for re-election.

Chairman and Chief Executive Officer (“CEO”)

The Chairman is responsible for leading the Board, ensuring that Directors are properly briefed in all matters relevant to their role and responsibilities, facilitating Board discussions and managing the Board’s relationship with the Company’s Senior Leadership Team. In accepting the position, the Chairman had acknowledged that it will require a significant time commitment and has confirmed that other positions will not hinder his or her effective performance in that role.

The CEO is responsible for implementing Group strategies and policies. The Board Charter specifies that these are separate roles to be undertaken by separate people.

Induction

The induction provided to new Directors enables them to actively participate in Board decision-making as soon as possible. It ensures that they have a full understanding of the Company’s financial position, strategies, operations, culture, values and risk management policies. It also explains the respective rights, duties, responsibilities, interaction and roles of the Board and the Senior Leadership Team and the Company’s meeting arrangements.

Commitment

The Board held fifteen Board meetings during the 2012 financial year. Non-executive Directors are expected to spend adequate time preparing for and attending Board and Sub-Committee meetings and associated activities. The number of meetings of the Company’s Board of Directors and of each Board Sub-Committee held during the year ended 30 June 2012, and the number of such meetings attended by each Director, are disclosed on page 40.

aSX prInCIpleS and reCoMMendatIonS (cont.)

Principle 2: Structure the Board to add value (cont.)

The commitments of all non-executive Directors are considered by the Corporate Governance Committee prior to the Director’s appointment to the Board and are reviewed each year as part of the annual performance assessment.

Prior to appointment or being submitted for re-election, each non-executive Director is required to specifically acknowledge that they have, and will continue to have, the time available to discharge their responsibilities to the Company.

Conflict of interests

In accordance with the Board Charter, all Directors are required to declare all interests in dealings with the Company and are required to take no part in decisions relating to them. In addition, those Directors are not entitled to receive any papers from the Group pertaining to those dealings. No declarations were received from any Directors during the financial year.

Independent professional advice

All Directors and members of the Board’s two Sub-Committees have the right, in connection with their duties and responsibilities, to seek independent professional advice at the Company’s expense. Prior written approval of the Chairman is required, but such approval will not be unreasonably withheld.

Performance assessment

The Board undertakes an ongoing self-assessment of its collective performance, the performance of the Chairman and of its two Sub-Committees. The assessment also considers the adequacy of the Company’s induction and continuing education processes, access to information and the support provided by the Company Secretary.

Members of the Senior Leadership Team are invited to contribute to this appraisal process. The results and any action plans are documented together with specific performance goals which are agreed for the coming year. The Chairman undertakes an assessment of the performance of individual Directors and meets with each Director to discuss this assessment.

Board Sub-Committees

The Board has established two Sub-Committees to assist in the execution of its duties and to allow detailed consideration of complex issues. The current Sub-Committees of the Board are the Audit and Corporate Governance Committees. Each is comprised entirely of non-executive Directors. The Committee structure and membership is reviewed on an annual basis.

Each Sub-Committee has its own written Charter setting out its role and responsibilities and that of its members, its composition, structure, membership requirements and the manner in which the Sub-Committee is to operate. Both of these Charters are reviewed on an annual basis and are available on the Company’s website. All matters determined by the Sub-Committees are submitted to the full Board as recommendations for Board decisions.

Minutes of Sub-Committee meetings are tabled at the subsequent Board meeting. Additional requirements for specific reporting by the Sub-Committees to the Board are addressed in the Charter of the individual Sub-Committees.

Corporate Governance Committee

The Corporate Governance Committee consists of Dr. Melvyn Bridges (Chairman), Tommaso Bonvino and Huw Jones, all of whom are independent. Details of their attendance at meetings of the Committee are set out in the Directors’ Report on page 40. The Committee operates in accordance with its Charter which is available on the Company’s website. The main responsibilities of the Corporate Governance Committee are to:

conduct an annual review of the membership of the Board, having regard to present and future needs of the Company and to make recommendations on Board composition and appointments;
conduct an annual review of, and conclude on the independence of, each Director;
propose candidates for Board vacancies;
oversee the annual performance assessment program;
oversee Board succession, including the succession of the Chairman, and review whether succession plans are in place to maintain an appropriately balanced mix of skills, experience and diversity on the Board; and
assess the effectiveness of the induction process.

Corporate GoVernanCe StateMent (cont.)

aSX prInCIpleS and reCoMMendatIonS (cont.)

Principle 2: Structure the board to add value (cont.)

When a new Director is to be appointed, the Committee prepares a Board skills matrix to review the range of skills, experience and expertise on the Board, and to identify its needs. From this, the Committee prepares a short-list of candidates with appropriate skills and experience. A number of channels are used to source candidates to ensure the Company benefits from a diverse range of individuals in the selection process. Where necessary, advice is sought from independent search consultants.

The full Board then appoints the most suitable candidate who must stand for election at the Company’s next AGM. The Committee’s nomination of existing Directors for reappointment is not automatic and is partly contingent on their past performance, contribution to the effective operation of the Board and the current and future needs of both the Board and Company. The Board and the Committee are also aware of the advantages of Board renewal and succession planning.

Notices of meetings for the election of Directors comply with the ASX Corporate Governance Council’s best practice recommendations.

New Directors are provided with a letter of appointment setting out the Company’s expectations, their responsibilities, rights and the terms and conditions of their employment. All new Directors participate in a formal induction program which covers the operation of the Board and its Sub-Committees and financial, strategic, operations and risk management issues.

Principle 3: Promote ethical and responsible decision making

Code of conduct

The Company has developed a statement of values and a Code of Conduct (the “Code”) which has been fully endorsed by the Board and applies to all Directors. The Code is regularly reviewed and updated as necessary to ensure it reflects the highest standards of behaviour and professionalism and the practices necessary to maintain confidence in the Group’s integrity and to take into account legal obligations and reasonable expectations of the Company’s stakeholders.

In summary, the Code requires that at all times Directors and employees act with the utmost integrity, objectivity and in compliance with the letter and the spirit of the law and company policies.

The purchase and sale of Company securities by Directors and employees is governed by the Securities Trading Policy. Such trading is not permitted during the two-month periods immediately following the end of the Company’s two financial half-years, i.e. after 31 December and 30 June of each year. Any transactions undertaken by Directors outside of these periods must be notified to the Company Secretary in advance.

The Code requires employees who are aware of unethical practices within the Group or breaches of the Company’s Securities Trading Policy to report such breaches in compliance with the Company’s whistleblower program which can be done anonymously.

The Directors are satisfied that the Group has complied with its policies on ethical standards, including trading in the Company’s securities.

Copies of the Code and the Securities Trading Policy are available on the Company’s website.

Diversity policy

The Company values diversity and recognises the benefits it can bring to the organisation’s ability to achieve its goals. Accordingly, the Company has developed and introduced a diversity policy which outlines its diversity objectives in relation to gender, age, cultural background, ethnicity and other factors. It includes requirements for the Board to establish measurable objectives for achieving diversity, and for the Board to assess annually both the objectives, and the Company’s progress made in achieving them.

In accordance with the Company’s Diversity Policy and ASX Corporate Governance principles, the Board has established various objectives in relation to gender diversity. The aim is to achieve these objectives over the coming two to three years as relevant positions become vacant and appropriately-skilled candidates are available.

aSX prInCIpleS and reCoMMendatIonS (cont.)

Principle 3: Promote ethical and responsible decision making (cont.)

The objectives set by the Board in relation to gender diversity are set out in the following table.

Category	Objective Actual
	Number Percentage Number Percentage
Number of women in whole organisation	28 50% 35 61%
Number of women in senior executivepositions	2 34% 1 17%
Number of women on the Board	1 17% 0 0%

Responsibility for diversity has been included in the Board Charter and the Corporate Governance Committee Charter.

Principle 4: Safeguard integrity in financial reporting

Audit Committee

The Audit Committee consists of Dr. Melvyn Bridges (Chairman), Dr. Malcolm Brandon and Huw Jones, all of whom are independent. Details of their attendance at meetings of the Committee are set out in the Directors’ Report on page 40. All members of the Audit Committee are financially literate and have an appropriate understanding of the industry in which the Group operates. The Committee operates in accordance with a Charter which is available on the Company’s website. The main responsibilities of the Audit Committee are to:

review, assess and approve the annual full and concise reports, the half-year financial report and all other financial information published by the Company or released to the Market;
assist the Board in reviewing the effectiveness of the organisation’s internal control environment covering:
» effectiveness and efficiency of operations;
» reliability of financial reporting; and
» compliance with applicable laws and regulations;
oversee the effective operation of the Company’s risk management framework;
recommend to the Board the appointment, removal and remuneration of the external auditors, and review the terms of their engagement, the scope and quality of the audit and assess their performance;
consider the independence and competence of the external auditor on an ongoing basis;
review and approve the level of non-audit services provided by the Group’s external auditors and ensure that it does not adversely impact on the auditors’ independence;
review and monitor all related party transactions and assess their propriety; and
report to the Board on matters relevant to the Committee’s role and responsibilities.

In fulfilling its responsibilities, the Audit Committee:

receives regular reports from Management and the Company’s external auditors;
meets with the external auditors at least twice a year, or more frequently if necessary;
reviews the processes the CEO and CFO have in place to support their annual certifications to the Board;
reviews any significant disagreements between the auditors and Management, irrespective of whether they have been resolved; and
provides the external auditors with a clear line of direct communication at any time to either the Chairman of the Audit Committee or, if necessary, the Chairman of the Board.

The Audit Committee has authority, within the scope of its responsibilities, to seek any information it requires from any employee or external party.

Corporate GoVernanCe StateMent (cont.)

aSX prInCIpleS and reCoMMendatIonS (cont.)

Principle 4: Safeguard integrity in financial reporting (cont.)

External auditors

The Company and Audit Committee policy is to appoint external auditors who clearly demonstrate quality of service and independence. The performance of the external auditor is reviewed annually and applications for tender of external audit services are requested as deemed appropriate, taking into consideration assessment of performance, existing value and tender costs. PricewaterhouseCoopers (“PwC”) was appointed as the external auditor in 2009. It is PwC’s policy to rotate audit lead engagement partners on listed companies at least every five years.

An analysis of fees paid to the external auditors, including a break-down of fees for non-audit services, is provided in the Directors’ Report and in Note 32 to the financial statements. It is the policy of the external auditors to provide an annual declaration of their independence to the Audit Committee which is reproduced in the Company’s Annual Report.

The external auditor attends the Company’s AGM and is available to answer shareholder questions about the conduct of the audit and the preparation and content of the audit report.

Principles 5 and 6: Make timely and balanced disclosures and respect the rights of shareholders

Continuous disclosure and shareholder communication

The Company has written policies and procedures on information disclosure that focus on continuous disclosure of any information concerning the Group that a reasonable person would expect to have a material effect on the price of the Company’s securities. These policies and procedures also include the arrangements the Company has in place to promote communication with shareholders and encourage effective participation at general meetings. A summary of these policies and procedures is available on the Company’s website.

The Company Secretary has been nominated as the person responsible for communications with the Australian Securities Exchange (“ASX”). This role includes responsibility for ensuring compliance with the continuous disclosure requirements in the ASX Listing Rules and overseeing and co-ordinating information disclosure to the ASX, analysts, brokers, shareholders, the media and the public.

All information disclosed to the ASX is posted on the Company’s website as soon as it is disclosed to the ASX. When analysts are briefed on aspects of the Group’s operations, the material used in the presentation is released to the ASX and posted on the Company’s website. Procedures have also been established for reviewing whether any price sensitive information has been inadvertently disclosed and, if so, this information is also immediately released to the Market.

The Company’s website also enables users to provide feedback and has an option for shareholders to register their email address for direct email updates on Company matters.

All shareholders are entitled to receive a hard copy of the Company’s Annual and Half-Year Reports which are also available for download on its website.

Principle 7: Recognise and manage risk

The Board is responsible for satisfying itself annually, or more frequently as required, that Management has developed and implemented a sound system of risk management and internal control. Detailed work on this task is delegated to the Audit Committee and reviewed by the full Board.

The Audit Committee is responsible for ensuring there are adequate policies in relation to risk management, compliance and internal control systems. They monitor the Company’s risk management by overseeing Management’s actions in the evaluation, management, monitoring and reporting of material operational, financial, compliance and strategic risks. In providing this oversight, the Committee:

reviews the framework and methodology for risk identification, the degree of risk the Company is willing to accept, the management of risk and the processes for auditing and evaluating the Company’s risk management system;
reviews Group-wide objectives in the context of the abovementioned categories of corporate risk;
reviews and, where necessary, approves guidelines and policies governing the identification, assessment and management of the Company’s exposure to risk;

aSX prInCIpleS and reCoMMendatIonS (cont.)

Principle 7: Recognise and manage risk (cont.)

reviews and approves the delegations of financial authorities and addresses any need to update these authorities on an annual basis; and
reviews compliance with agreed policies.

The Committee recommends any actions it deems appropriate to the Board for its consideration.

Management is responsible for designing, implementing and reporting on the adequacy of the Company’s risk management and internal control system and has to report to the Audit Committee on the effectiveness of:

the risk management and internal control system during the year; and
the Company’s management of its material business risks.

Risk management group

The Company’s risk management policies and the operation of the risk management and compliance system are managed by the Company’s risk management group which consists of selected senior executives and is chaired by the CFO. The Board receives reports from this group as to the effectiveness of the Company’s management of material risks that may impede or impact on the Company’s ability to meet its business objectives.

Each of the Company’s business units report to the risk management group on the key business risks applicable to their respective areas. The review is undertaken by business unit management. The risk management group then consolidates the business unit reports and recommends any actions to the Board for its consideration.

Corporate reporting

In complying with recommendation 7.3, the CEO and CFO make the following annual certifications to the Board:

that the Company’s financial reports are complete and present a true and fair view, in all material respects, of the financial condition and operational results of the Company and the Group and are in accordance with relevant accounting standards; and
that the above statement is founded on a sound system of risk management and internal compliance and control which implements the policies adopted by the Board and that the Company’s risk management and internal compliance and control is operating efficiently and effectively in all material respects in relation to financial reporting risks.

Principle 8: Remunerate fairly and responsibly

All matters pertaining to remuneration of Company Directors and employees are overseen and managed by the Corporate Governance Committee (refer above). Committee members receive regular briefings from an external remuneration expert on recent developments on remuneration and related matters.

Each member of the Senior Leadership Team signs a formal employment contract at the time of their appointment covering a range of matters including their duties, rights, responsibilities and any entitlements on termination. The standard contract refers to a specific formal job description. This job description is reviewed by the Corporate Governance Committee on a regular basis and, where necessary, is revised in consultation with the relevant employee.

Further information on Directors’ and Executives’ remuneration, including principles used to determine remuneration, is set out in the Directors’ Report under the heading “Remuneration Report”. In accordance with Group policy, participants in equitybased remuneration plans are not permitted to enter into any transactions that would limit the economic risk of options or other unvested entitlements.

The Committee also assumes responsibility for overseeing management succession planning, including the implementation of appropriate executive development programs and ensuring adequate arrangements are in place, so that appropriate candidates are recruited for later promotion to senior positions.

ConSolIdated StateMent of CoMprehenSIVe InCoMe

For the year ended 30 June Notes	Consolidated	Consolidated
	2012	2011
	$	$
Revenue from continuing operations –genetic testing services	3,691,215 (1,948,625) 1,742,590 2,526,599 5,113,175 (4,384,184) (5,608,038) (1,267,838) (4,029,369) (45,217) (132,037) 787,491 (5,296,828) - (5,296,828) - (5,296,828) (6,818) (296) (7,114) (5,303,942)	4,594,960
Less: cost of sales 4		(2,034,916)
Grossproft from continuing operations –genetic testing services		2,560,044
Other revenue 5		13,680,741
Gain on deconsolidation of subsidiary 6		-
Sellingand marketingexpenses 7		(3,018,947)
General and administrative expenses 7		(3,696,165)
Licensing,patent and legal costs		(4,097,323)
Laboratoryand research and development costs 7		(4,380,866)
Finance costs		(81,934)
Share of net loss of associate accounted for usingthe equitymethod 35		-
Other income and expenses 8		(85,771)
Proft / (loss) from continuing operations before income tax expense		879,779
Netproft from discontinued operation 9		21,562
Proft / (loss) before income tax expense		901,341
Income tax expense 11		-
Proft / (loss) for theyear		901,341
Other comprehensive loss
Exchange losses on translation of controlled foreign operations 24		(85,079)
Exchange losses on translation of non-controlled foreign operations 26		(11,585)
Other comprehensive loss for theyear, net of tax		(96,664)
Total comprehensiveproft / (loss) for theyear		804,677
Proft / (loss) for theyear is attributable to:	(5,287,523) (9,305) (5,296,828)
Owners of Genetic Technologies Limited		910,002
Non-controllinginterests 26		(8,661)
Totalproft / (loss) for theyear		901,341
Total comprehensiveproft / (loss) for theyear is attributable to:	(5,294,341) (9,601) (5,303,942)
Owners of Genetic Technologies Limited		824,923
Non-controllinginterests 26		(20,246)
Total comprehensiveproft / (loss) for theyear		804,677
Earnings / (loss) per share attributable to owners of the Company and from continuing operations:	(1.15) (1.15)
Basic earnings / (loss)per share (centsper share) 10		0.22
Diluted earnings / (loss)per share (centsper share) 10		0.22

The above consolidated statement of comprehensive income should be read in conjunction with the accompanying notes.

ConSolIdated BalanCe Sheet

As at 30 June Notes	Consolidated	Consolidated
	2012	2011
	$	$
ASSETS	8,900,235 495,975 536,125 17,460 9,949,795 4,414,914 642,918 1,434,124 6,491,956 16,441,751 905,772 17,748 266,646 740,402 1,930,568 108,541 108,541 2,039,109 14,402,642
Current assets
Cash and cash equivalents 12		5,104,667
Trade and other receivables 13		674,369
Prepayments and other assets 14		473,659
Performance bond and deposits 15		2,649
Total current assets		6,255,344
Non-current assets
Investments accounted for usingthe equitymethod 16		-
Property,plant and equipment 17		947,500
Intangible assets andgoodwill 18		1,719,510
Total non-current assets		2,667,010
Total assets		8,922,354
LIABILITIES
Current liabilities
Trade and otherpayables 19		1,115,028
Interest-bearingliabilities 20		67,878
Deferred revenue 21		163,546
Provisions 22		679,177
Total current liabilities		2,025,629
Non-current liabilities
Provisions 22		82,730
Total non-current liabilities		82,730
Total liabilities		2,108,359
Net assets		6,813,995
EQUITY	83,280,142 3,719,419 (72,751,549) 14,248,012 154,630 14,402,642
Contributed equity 23		72,378,105
Reserves 24		1,697,914
Accumulated losses 25		(67,464,026)
Parent entityinterest		6,611,993
Non-controllinginterests 26		202,002
Total equity		6,813,995

The above consolidated balance sheet should be read in conjunction with the accompanying notes.

ConSolIdated StateMent of CaSh floWS

For the year ended 30 June Notes	Consolidated	Consolidated
	2012	2011
	$	$
Cash fows from / (used in) operating activities	6,300,410 (14,481,226) 551,859 (45,217) (7,674,174) - (7,674,174) 31,455 (76,314) 20 (10) 537,026 492,177 10,902,037 1,000,000 (1,000,837) (50,130) 10,851,070 3,669,073 5,104,667 126,495 8,900,235
Receipts from customers		18,009,739
Payments to suppliers and employees		(15,910,103)
Interest received		200,023
Interest and fnance chargespaid		(81,934)
Net cash fows from / (used in) operatingactivities in continuingoperations		2,217,725
Net cash fows from / (used in) operatingactivities in discontinued operations		15,554
Net cash fows from / (used in) operating activities 12		2,233,279
Cash fows from / (used in) investing activities
Proceeds from the sale ofplant and equipment		144,708
Purchases ofplant and equipment		(139,678)
Proceeds from the sale of shares in associate		-
Purchase of shares in subsidiary		-
Loans repaid byassociate		-
Net cash fows from / (used in) investing activities		5,030
Cash fows from / (used in) fnancing activities
Netproceeds from the issue of shares		-
Proceeds from borrowings		-
Repayment of borrowings		-
Repayment of hirepurchaseprincipal		(314,762)
Net cash fows from / (used in) fnancing activities		(314,762)
Net increase in cash and cash equivalents		1,923,547
Cash and cash equivalents at beginningofyear		3,306,311
Net foreign exchange difference		(125,191)
Cash and cash equivalents at end ofyear 12		5,104,667

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

ConSolIdated StateMent of ChanGeS In eQuIty

Consolidated	Attributable to Members of Genetic Technologies Limited Non- controlling interests Total equity Contributed equity Reserves Accumulated losses Parent interests
	$ $ $ $ $ $
Balance at 30 June 2010	72,378,105 1,529,142 (68,374,028) 5,533,219 184,477 5,717,696
Proft for theyear	- - 910,002 910,002 (20,246) 889,756
Other comprehensive loss	- (85,079) - (85,079) - (85,079)
Total comprehensive income / (loss)	- (85,079) 910,002 824,923 (20,246) 804,677
Transactions with owners in their capacity as owners
Share-basedpayments	- 253,851 - 253,851 - 253,851
Share of issued capital	- - - - 37,771 37,771
	- 253,851 - 253,851 37,771 291,622
Balance at 30 June 2011	72,378,105 1,697,914 (67,464,026) 6,611,993 202,002 6,813,995
Loss for theyear	- - (5,287,523) (5,287,523) (9,601) (5,297,124)
Other comprehensive loss	- (6,818) - (6,818) - (6,818)
Total comprehensive loss	- (6,818) (5,287,523) (5,294,341) (9,601) (5,303,942)
Transactions with owners in their capacity as owners
Contributions of equity	10,902,037 - - 10,902,037 - 10,902,037
Share-basedpayments	- 2,028,323 - 2,028,323 - 2,028,323
Reversal of share of issued capital	- - - - (37,771) (37,771)
	10,902,037 2,028,323 - 12,930,360 (37,771) 12,892,589
Balance at 30 June 2012	83,280,142 3,719,419 (72,751,549) 14,248,012 154,630 14,402,642

The above consolidated statement of changes in equity should be read in conjunction with the accompanying notes.

noteS to the fInanCIal StateMentS FOR THE YEAR ENDED 30 JUNE 2012

1. Corporate InforMatIon

The Financial Report of Genetic Technologies Limited (the “Company”) for the year ended 30 June 2012 was authorised for issue in accordance with a resolution of the Directors dated 27 August 2012. Genetic Technologies Limited is incorporated in Australia and is a company limited by shares. The Directors have the power to amend and reissue the financial statements.

The Company’s ordinary shares are publicly traded on the Australian Securities Exchange under the symbol GTG and, via Level II American Depositary Receipts, on the NASDAQ Capital Market under the ticker GENE. The nature of the Group’s activities and operations during the year ended 30 June 2012 are disclosed in the Directors’ Report and elsewhere in this Annual Report.

2. SuMMary of SIGnIfICant aCCountInG polICIeS

(a) Basis of preparation

This general purpose Financial Report has been prepared in accordance with Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act 2001 .

Compliance with IFRS

The Financial Report complies with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board.

Historical cost convention

These financial statements have been prepared under the historical cost convention.

Critical accounting estimates

The preparation of financial statements requires the use of certain critical accounting estimates. It also requires Management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are critical to the financial statements, are disclosed in Note 3.

Revenue from the sale of the BREVAGen™ test

During the financial year, the Company generated the first sales of its BREVAGen™ test. Whilst not material to the overall result, in accordance with revenue recognition principles, due to the relatively limited numbers of tests sold in the first year of launch, the income generated from these sales has been, and will continue to be, recorded on a cash basis until such time as sufficient numbers of tests have been sold for the Company to transition to full accruals based accounting. This is due to the BREVAGen™ sales not meeting the conditions necessary for a reliable estimate to be made in accordance with AASB 118 Revenue (IAS 18) . Notwithstanding this, the cost of sales associated with these tests is, and will continue to be, accounted for on an accruals basis.

Going concern

The Directors have undertaken an assessment of the Company’s ability to pay its debts as and when they fall due. As part of this assessment, the Directors have had regard to the Company’s cash flow forecasts for the twelve month period from the date of this Financial Report and the cash balance on hand as at that date.

The Directors recognise that there is uncertainty in the consolidated entity’s cash flow forecasts as they relate to the timing and quantum of licensing income received. However, the Directors believe that the consolidated entity will be able to maintain sufficient cash reserves beyond the twelve month period from the date of this Financial Report through a range of available options, which include:

generation of additional funds from the granting of further “non-coding” licenses as part of the Company’s out-licensing and assertion programs;
the sale of new genetic tests, including the BREVAGen[TM] test in the USA and Europe;
cost containment strategies which are currently in progress;
the possible raising of debt funds to be repaid from the Company’s existing future royalty and annuity streams; and
if necessary, fundraising from the issue of new shares in the Company and/or the sale of non-core or surplus assets.

2. SuMMary of SIGnIfICant aCCountInG polICIeS (cont.)

(b) New accounting standards and interpretations

In respect of the year ended 30 June 2012, the Group has assessed all new accounting standards mandatory for adoption during the current year, noting no new standards which would have a material affect on the disclosure in these financial statements. There has been no affect on the profit and loss or the financial position of the Group. Certain new accounting standards and interpretations have been published that are not mandatory for 30 June 2012 reporting periods.

The Group’s and the parent entity’s assessment of the impact of these new standards and interpretations is set out below.

AASB 9 Financial Instruments, AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9 and AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) (effective from 1 January 2013)

AASB 9 Financial Instruments addresses the classification, measurement and derecognition of financial assets and financial liabilities. The standard is not applicable until 1 January 2013 but is available for early adoption. When adopted, the standard will affect the Group’s accounting for its available-for-sale financial assets, since AASB 9 only permits the recognition of fair value gains and losses in other comprehensive income if they relate to equity investments that are not held for trading. Fair value gains and losses on available-for-sale debt investments will therefore have to be recognised directly in profit or loss. There will be no impact on the Group’s accounting for financial liabilities, as the new requirements only affect the accounting for financial liabilities that are designated at fair value through profit or loss and the group does not have any such liabilities. The derecognition rules have been transferred from AASB 139 Financial Instruments: Recognition and Measurement and have not been changed. The Group has not yet decided when to adopt AASB 9.

AASB 2010-8 Amendments to Australian Accounting Standards – Deferred Tax: Recovery of Underlying Assets (effective from 1 January 2012)

In December 2010, the AASB amended AASB 112 Income Taxes to provide a practical approach for measuring deferred tax liabilities and deferred tax assets when investment property is measured using the fair value model. AASB 112 requires the measurement of deferred tax assets or liabilities to reflect the tax consequences that would follow from the way management expects to recover or settle the carrying amount of the relevant assets or liabilities, that is through use or through sale. The amendment introduces a rebuttable presumption that investment property which is measured at fair value is recovered entirely by sale. The Group will apply the amendment from 1 July 2012 and is currently evaluating the impact of the amendment.

AASB 10 Consolidated Financial Statements, AASB 12 Disclosure of Interests in Other Entities, AASB 128 Investments in Associates and Joint Ventures and AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards (effective 1 January 2013)

In August 2011, the AASB issued a suite of new and amended standards which address the accounting for consolidated financial statements and associated disclosures.

AASB 10 replaces all of the guidance on control and consolidation in AASB 127 Consolidated and Separate Financial Statements, and Interpretation 12 Consolidation – Special Purpose Entities . The core principle that a consolidated entity presents a parent and its subsidiaries as if they are a single economic entity remains unchanged, as do the mechanics of consolidation. However, the standard introduces a single definition of control that applies to all entities. It focuses on the need to have both power and rights or exposure to variable returns before control is present. Power is the current ability to direct the activities that significantly influence returns. Returns must vary and can be positive, negative or both. There is also new guidance on participating and protective rights and on agent/principal relationships. While the Group does not expect the new standard to have a significant impact on its composition, it has yet to perform a detailed analysis of the new guidance in the context of its various investees that may or may not be controlled under the new rules.

AASB 12 sets out the required disclosures for entities reporting under the two new standards, AASB 10 and AASB 11, and replaces the disclosure requirements currently found in AASB 128. Application of this standard by the Group will not affect any of the amounts recognised in the financial statements, but may impact the type of information disclosed in relation to the Group’s investments.

The Group does not expect to adopt the new standards before their operative date. They would therefore be first applied in the financial statements for the annual reporting period ending 30 June 2014.

noteS to the fInanCIal StateMentS FOR THE YEAR ENDED 30 JUNE 2012 (cont.)

2. SuMMary of SIGnIfICant aCCountInG polICIeS (cont.)

(b) New accounting standards and interpretations (cont.)
AASB 13 Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13 (effective 1 January 2013)

AASB 13 was released in September 2011. It explains how to measure fair value and aims to enhance fair value disclosures. The Group does not use fair value measurements extensively. It is therefore unlikely that the new rules will have a significant impact on any of the amounts recognised in the financial statements. However, application of the new standard will impact the type of information disclosed in the notes to the financial statements. The Group does not intend to adopt the new standard before its operative date, which means that it would be first applied in the annual reporting period ending 30 June 2014.

AASB 2011-9 Amendments to Australian Accounting Standards – Presentation of Items of Other Comprehensive Income (effective 1 July 2012)

In September 2011, the AASB made an amendment to AASB 101 Presentation of Financial Statements which requires entities to separate items presented in other comprehensive income into two groups, based on whether they may be recycled to profit or loss in the future. This will not affect the measurement of any of the items recognised in the balance sheet or the profit or loss in the current period. The Group intends to adopt the new standard from 1 July 2012.

AASB 2011-4 Amendments to Australian Accounting Standards to Remove Individual Key Management Personnel Disclosure Requirements (effective 1 July 2013)

In July 2011, the AASB decided to remove the individual key management personnel (KMP) disclosure requirements from AASB 124 Related Party Disclosures , to achieve consistency with the international equivalent standard and remove a duplication of the requirements with the Corporations Act 2001 . While this will reduce the disclosures that are currently required in the notes to the financial statements, it will not affect any of the amounts recognised in the financial statements. The amendments apply from 1 July 2013 and cannot be adopted early. The Corporations Act requirements in relation to remuneration reports will remain unchanged for now, but these requirements are currently subject to review and may also be revised in the near future.

Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32) and Disclosures Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7) (effective 1 January 2014 and 1 January 2013, respectively)

In December 2011, the IASB made amendments to the application guidance in IAS 32 Financial Instruments: Presentation , to clarify some of the requirements for offsetting financial assets and financial liabilities in the balance sheet. These amendments are effective from 1 January 2014. They are unlikely to affect the accounting for any of the entity’s current offsetting arrangements. However, the IASB has also introduced more extensive disclosure requirements into IFRS 7 which will apply from 1 January 2013. The AASB is expected to make equivalent changes to IAS 32 and AASB 7 shortly. When they become applicable, the Group will have to provide a number of additional disclosures in relation to its offsetting arrangements. The Group intends to apply the new rules for the first time in the financial year commencing 1 July 2013.

(c) Principles of consolidation

Subsidiaries

The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of Genetic Technologies Limited (the “Company” or “Parent Entity”) as at 30 June 2012 and the results of all subsidiaries for the year then ended. Genetic Technologies Limited and its subsidiaries together are referred to in this Financial Report as the “Group” or the “Consolidated Entity”.

Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies, generally accompanying a shareholding of more than one-half of the voting rights. The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

Intercompany transactions, balances and unrealised gains / losses on transactions between Group companies are eliminated. Unrealised losses are also eliminated unless the transaction provides evidence of the impairment of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the Group’s policies. Noncontrolling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of comprehensive income, consolidated balance sheet and consolidated statement of changes in equity, respectively.

2. SuMMary of SIGnIfICant aCCountInG polICIeS (cont.)

(c) Principles of consolidation (cont.)

Associates

Associates are all entities over which the Group has significant influence but not control or joint control, generally accompanying a shareholding of between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting, after initially being recognised at fair market value. The Group’s investment in associates is detailed in Note 35.

The Group’s share of its associate’s post-acquisition profits or losses is recognised in profit or loss and its share of post-acquisition other comprehensive income is recognised in other comprehensive income. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. Dividends receivable from associates are recognised as a reduction in the carrying amount of the investment.

When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the associate.

Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the Group.

Changes in ownership interests

The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognised in a separate reserve within equity attributable to owners of Genetic Technologies Limited.

When the Group ceases to have control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, jointly controlled entity or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

If the ownership interest in a jointly-controlled entity or an associate is reduced but joint control or significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income are reclassified to profit or loss where appropriate.

(d) Foreign currency translation

The functional and presentation currency of Genetic Technologies Limited and its Australian subsidiaries is the Australian dollar (AUD). Transactions in foreign currencies are initially recorded in the functional currency at the exchange rates ruling at the date of the transaction. Monetary assets and liabilities which are denominated in foreign currencies are retranslated at the rate of exchange ruling at the balance sheet date. All differences are taken to the statement of comprehensive income.

Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate ruling at the date of the initial transaction. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates ruling at the date when the fair value was determined. The functional currencies of the Company’s five overseas subsidiaries are as follows:

Gtech International Resources Limited: Canadian dollars (CAD)
Genetic Technologies (Beijing) Limited: Chinese yuan (CNY)
GeneType AG: Swiss francs (CHF)
GeneType Corporation: United States dollars (USD)
Phenogen Sciences Inc.: United States dollars (USD)

As at the reporting date, the assets and liabilities of these subsidiaries are translated into the presentation currency of Genetic Technologies Limited at the rate of exchange ruling at the balance sheet date and the statement of comprehensive income is translated at the weighted average exchange rates for the period. The exchange differences arising on the retranslation are taken directly to a separate component of equity. On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation is recognised in the statement of comprehensive income.

noteS to the fInanCIal StateMentS FOR THE YEAR ENDED 30 JUNE 2012 (cont.)

2. SuMMary of SIGnIfICant aCCountInG polICIeS (cont.)

(e) Fair value estimation

The fair value of financial instruments that are not traded in an active market (for example, non-listed equity securities classified as available-for-sale investments) is determined using valuation techniques, including the last price at which shares were issued to third parties, where amounts are reliably measured. The Group uses various methods and makes assumptions that are based on market conditions existing at each balance date. Information including quoted market prices and details of recent capital raisings is used to determine fair value for these remaining financial instruments. In cases where fair value cannot be reliably determined, available-for-sale investments are measured at approximate market value. The carrying values less impairment provisions of trade receivables are assumed to approximate their fair values due to their short-term nature.

(f) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for allocating resources and assessing the performance of the operating segments, has been identified as the Chief Executive Officer.

(g) Earnings per share (“EPS”)

Basic EPS is calculated by dividing the profit attributable to owners of the Company, excluding any costs of servicing equity other than ordinary shares, by the weighted average number of ordinary shares outstanding during the financial year. Diluted EPS adjusts the figures used in the determination of basic EPS to take into account the after income tax effect of interest and other financing costs associated with dilutive potential ordinary shares and the weighted average number of ordinary shares that would have been outstanding assuming the conversion of all dilutive potential ordinary shares.

(h) Parent entity financial information

The financial information for the parent entity, Genetic Technologies Limited, as disclosed in Note 36, has been prepared on the same basis as the consolidated financial statements, except that investments in subsidiaries are accounted for at cost in the financial statements of Genetic Technologies Limited. Loans to subsidiaries are written down to their recoverable value as at balance date.

(i) Revenue recognition

Revenues are recognised to the extent that it is probable that the economic benefits will flow to the entity and the revenues can be reliably measured. Revenues are recognised at the fair value of the consideration received or receivable net of the amounts of Goods and Services Tax. The following recognition criteria must also be met before revenue is recognised:

Revenue from the sale of the BREVAGen™ test

Refer Note 2(a) for details of the policy being adopted by the Group in relation to the recognition of revenue from the sale of the Company’s BREVAGen™ test.

Rendering of services

Revenues from the rendering of services are recognised when the services are provided and the fee for the services provided is recoverable. Service arrangements are of short duration (in most cases less than three months).

License fees received

The Company licenses the use of its patented genetic technologies. License fee income is recorded on the execution of a binding agreement where the Group has no future obligations, it is probable that the economic benefits will flow to the entity and the revenue can be reliably measured. The Group does not grant refunds to its customers. Refer also to Note 2(z).

Royalties and annuities received

Royalties and annuities arising from the above licenses are recognised when earned in accordance with the substance of the agreement, in cases where no future performance is required by the Company and collection is reasonably assured.

Interest received

Revenue is recognised as the interest accrues using the effective interest method. Interest charged on loans to related parties is charged on commercial and arm’s-length terms and conditions.

(j) Finance costs

Finance costs are recognised as an expense when incurred.

2. SuMMary of SIGnIfICant aCCountInG polICIeS (cont.)

(k) Share-based payment transactions

The Group provides benefits to Group employees in the form of share-based payment transactions, whereby employees render services and receive rights over shares (“equity-settled transactions”). There is currently an Employee Option Plan in place to provide these benefits to executives and employees and the cost of these transactions is measured by reference to the fair value at the date they are granted.

The fair value of options granted is determined by Cape Leveque Securities Pty. Ltd., an independent valuer, using a Black-Scholes option pricing model. Cape Leveque Securities Pty. Ltd. has consented to having its name included in this Annual Report. In valuing equity-settled transactions, no account is taken of any non-market performance conditions. The cost of equity-settled transactions is recognised, together with a corresponding increase in equity, over the period in which the relevant vesting conditions are fulfilled, ending on the date the relevant employees become entitled to the award (“vesting date”). The cumulative expense recognised for equity-settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired; and (ii) the number of awards that, in the opinion of the Directors of the Group, will ultimately vest. This opinion is formed based on the best information available at balance date.

The Group uses non-market vesting conditions for its share-based payment transactions and no expense is recognised for any awards that do not ultimately vest. Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as at the date of modification. Where appropriate, the dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share. The Company’s policy is to treat the options of terminated employees as forfeitures.

(l) Income tax

The income tax expense or revenue for the period is the tax payable on the current period’s taxable income based on the national income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities attributable to temporary differences and unused tax losses.

Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the balance sheet date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled. Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses.

Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax liabilities and assets are not recognised for temporary differences between the carrying amount and tax bases of investments in controlled entities where the parent entity is able to control the timing of the reversal of the temporary differences and it is probable that the differences will not reverse in the foreseeable future. Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously. Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly in equity. Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively.

Tax consolidation legislation

Genetic Technologies Limited (“GTG”) and its wholly-owned Australian-resident subsidiaries have implemented the tax consolidation legislation. The head entity, GTG, and the subsidiaries in the tax consolidated group account for their own current and deferred tax amounts. These tax amounts are measured as if each entity in the tax consolidated group continues to be a stand alone taxpayer in its own right.

In addition to its own current and deferred tax amounts, GTG also recognises the current tax assets / liabilities and the deferred tax assets arising from unused tax losses and tax credits assumed from subsidiaries in the tax consolidated group. Assets or liabilities arising under tax funding agreements with the tax consolidated entities are recognised as amounts receivable from or payable to other entities in the Group. Details about the tax funding agreement are disclosed in Note 11. Any difference between the amounts assumed and amounts receivable or payable under the tax funding agreements are recognised as a contribution to (or distribution from) wholly-owned tax subsidiaries.

noteS to the fInanCIal StateMentS FOR THE YEAR ENDED 30 JUNE 2012 (cont.)

2. SuMMary of SIGnIfICant aCCountInG polICIeS (cont.)

(m) Withholding tax

The Group generates revenues from the granting of licenses to parties resident in overseas countries. Such revenues may, in certain circumstances, be subject to the deduction of local withholding tax.

(n) Other taxes

Revenues, expenses and assets are recognised net of the amount of Goods and Services Tax (GST) except where the GST incurred on a purchase of goods and services is not recoverable from the taxation authority, in which case the GST is recognised as part of the cost of acquisition of the asset or as part of the expense item as applicable; and receivables and payables are stated with the amount of GST included. The net amount of GST recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the balance sheet. Cash flows are included in the cash flow statement on a gross basis and the GST component arising from investing and financing activities, which is recoverable from / payable to the taxation authority, are classified as operating cash flows.

(o) Cash and cash equivalents

Cash and cash equivalents in the balance sheet comprise cash at bank and in hand and short-term deposits with an original maturity of three months or less. For the purposes of the cash flow statement, cash and cash equivalents consist of cash and cash equivalents as defined above. Cash at bank earns interest at floating rates based on daily bank deposit rates. Short-term deposits are made for varying periods of between one day and six months, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.

(p) Trade and other receivables

Trade receivables, which are non-interest bearing and generally have terms of between 30 to 90 days, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts. An allowance for doubtful debts is made when there is objective evidence that a receivable is impaired. Such evidence includes an assessment of the debtor’s ability and willingness to pay the amount due. The amount of the allowance/impairment loss is measured as the difference between the carrying amount of the trade receivables and the estimated future cash flows expected to be received from the relevant debtors. Details regarding interest rate and credit risk of current receivables are disclosed in Note 37.

(q) Inventories

Inventories principally comprise laboratory and other supplies and are valued at the lower of cost and net realisable value. Inventory costs are recognised as the purchase price of items from suppliers plus freight inwards and any applicable landing charges. Costs are assigned on the basis of weighted average cost.

(r) Restricted security deposits

Restricted security deposits include cash deposits held as security for the performance of certain contractual obligations.

(s) Investments and other financial assets

All investments are initially recognised at cost, being the fair value of the consideration given plus directly attributable transaction costs. After initial recognition, investments in subsidiaries are carried at cost, less any impairment disclosed in the separate financial statements of Genetic Technologies Limited. Other investments, which are classified as available-for-sale, are measured at fair value if this can reliably be determined or at cost where fair value cannot be reliably determined. Gains or losses on available-for-sale investments are recognised as a separate component of equity until the investment is sold, or otherwise disposed of, or until the investment is determined to be impaired, at which time the cumulative gain or loss previously reported in equity is included in the statement of comprehensive income.

(t) Property, plant and equipment

Plant and equipment is stated at cost less accumulated depreciation and any impairment in value. Depreciation is calculated on either a straight-line or diminishing value basis over the estimated useful life of the respective asset as follows:

Laboratory equipment: 3 to 5 years
Computer equipment: 2 to 5 years
Office equipment: 2 to 5 years
Equipment under hire purchase: 3 years
Leasehold improvements: lease term, being between 1 and 5 years

Costs relating to day-to-day servicing of any item of property, plant and equipment are recognised in profit or loss as incurred. The cost of replacing larger parts of some items of property, plant and equipment are capitalised when incurred and depreciated over the period until their next scheduled replacement.

2. SuMMary of SIGnIfICant aCCountInG polICIeS (cont.)

(u) Intangible assets

Patents

Patents held by the Group are used in the licensing, testing and research areas and are carried at cost and amortised on a straightline basis over their useful lives, being from 5 to 10 years. External costs incurred in filing and protecting patent applications, for which no future benefit is reasonably assured, are expensed as incurred.

Research and development costs

Costs relating to research and development activities are expensed as incurred. An intangible asset arising from development expenditure on an internal project is recognised only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the development and the ability to measure reliably the expenditure attributable to the intangible asset during its development. To date, all development costs have been expensed as incurred as their recoverability cannot be regarded as assured.

(v) Goodwill

Goodwill on acquisition is initially measured at cost, being the excess of the cost of the business combination over the acquirer’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities. Following its initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised.

Goodwill is reviewed for impairment at each reporting date, or more frequently if events or changes in circumstances indicate that the carrying value may be impaired. Impairment is determined by assessing the recoverable amount of the cash-generating unit to which the goodwill relates. Where the recoverable amount of the cash-generating unit is less than the carrying amount, an impairment loss is recognised.

Where goodwill forms part of a cash-generating unit and part of the operation within that unit is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured on the basis of the relative values of the operation disposed of and the portion of the cash-generating unit retained.

For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the Group’s cash-generating units, or groups of cash-generating units, that are expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the Group are assigned to those units or groups of units. Each unit or group of units to which the goodwill is so allocated represents the lowest level within the Group at which the goodwill is monitored for internal management purposes and is not larger than an operating segment in accordance with IFRS 8 (AASB 8) Operating Segments .

(w) Impairment of assets (other than goodwill)

The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, the Group makes an estimate of the asset’s recoverable amount. An asset’s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets and the asset’s value-in-use cannot be estimated to be close to its fair value. In such cases, the asset is tested for impairment as part of the cash-generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount.

In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to operations are recognised in those expense categories consistent with the function of the impaired asset unless the asset is carried at its revalued amount, in which case the impairment loss is treated as a revaluation decrease.

An assessment is made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognised. If so, the carrying amount of the asset is increased to its recoverable amount. The increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss unless it reverses a decrement previously charged to equity, in which case the reversal is treated as a revaluation increase. After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life.

noteS to the fInanCIal StateMentS FOR THE YEAR ENDED 30 JUNE 2012 (cont.)

2. SuMMary of SIGnIfICant aCCountInG polICIeS (cont.)

(x) Trade and other payables

Trade payables and other payables are carried at amortised cost and represent liabilities for goods and services provided to the Group prior to the end of the financial year that are unpaid and arise when the Group becomes obliged to make future payments in respect of the purchase of these goods and services. Trade payables and other payables generally have terms of between 30 and 60 days.

(y) Leases and hire purchase agreements

Finance leases and hire purchase agreements, which transfer to the Group substantially all the risks and benefits incidental to ownership of the financed item, are capitalised at the inception of the lease at the fair value of the leased property or, if lower, at the present value of the minimum lease payments.

Lease and hire purchase payments are apportioned between finance charges and a reduction of the associated liability so as to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are recognised as an expense in profit or loss. Capitalised leased assets and assets under hire purchase are depreciated over the shorter of the estimated useful life of the asset or the term of the agreement. Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases. Operating lease payments are recognised as an expense in the statement of comprehensive income on a straight-line basis over the lease term.

(z) Deferred revenue

License revenues and annuities

License revenues received in respect of future accounting periods are deferred until the Company has fulfilled its obligations under the terms of the agreement. Where deferred revenue relates to a license agreement with a specific term but the Company has no future performance obligations, the revenue is recognised on a straight-line accruals basis over the term in accordance with the substance of the agreements. Where revenue has been deferred because the Company has future performance obligations, revenue is recognised as the Company’s performance obligations are satisfied.

Where a licence agreement provides for the payment of regular annuities to the Company and the licensee has the right to terminate the agreement prior to the payment of those annuities with no penalty, the Company does not recognise revenue until such time as the associated cash payments are received, as it is not considered probable that the benefits of the transaction will flow to the Company until the cash collection is made. Where such annuities are paid in advance, the revenue is allocated on a pro-rata basis with the balance being reflected in the balance sheet as a deferred revenue liability.

Genetic testing revenues

The Company operates facilities which provide genetic testing services. The Company recognises revenue from the provision of these services when the services have been completed. Fees received in advance of the testing process are deferred until such time as the Company completes its performance obligations.

Grant revenues

Grants are recognised when there is reasonable assurance that the grant will be received and all attaching conditions will be complied with. When the grant relates to an expense item, it is recognised as income over the periods necessary to match the grant on a systematic basis to the costs that it is intended to compensate. When the grant relates to an asset, the fair value is credited to a deferred income account and is released to the statement of comprehensive income over the expected useful life of the relevant asset by equal annual instalments.

(aa) Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

(ab) Reclassifications

Certain reclassifications have been made in the financial statements to ensure that prior year comparatives conform to current year presentations.

2. SuMMary of SIGnIfICant aCCountInG polICIeS (cont.)

(ac) Employee benefits

Provision is made for employee benefits accumulated as a result of employees rendering services up to the reporting date. These benefits include wages and salaries, annual leave and long service leave. Liabilities arising in respect of wages and salaries, annual leave and any other employee benefits expected to be settled within twelve months of the reporting date are measured at their nominal amounts based on remuneration rates which are expected to be paid when the liability is settled. All other employee benefit liabilities are measured at the present value of the estimated future cash outflows to be made in respect of services provided by employees up to the reporting date using the projected unit credit method. Expenses for non-accumulating sick leave are recognised when the leave is taken during the year and are measured at rates paid or payable.

In determining the present value of future cash outflows, the market yield as at the reporting date on national government bonds, which have terms to maturity approximating the terms of the related liability, are used. Employee benefits expenses and revenues arising in respect of wages and salaries, non-monetary benefits, annual leave, long service leave and other leave benefits and other types of employee benefits are recognised against profits on a net basis in their respective categories.

(ad) Contributed equity

Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Any transaction costs arising on the issue of ordinary shares are recognised directly in equity as a deduction, net of tax, of the share proceeds received.

The Company has a share-based payment option plan under which options to subscribe for the Company’s shares have been granted to certain executives and other employees (refer Note 30).

(ae) Business combinations

The acquisition method of accounting is used to account for all business combinations, including business combinations involving entities or businesses under common control, regardless of whether equity instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the fair values of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred also includes the fair value of any contingent consideration arrangement and the fair value of any pre-existing equity interest in the subsidiary. All costs relating to acquisitions are expensed as incurred.

Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited exceptions, measured initially at their fair values at the acquisition date. On an acquisition-by-acquisition basis, the Group recognises any noncontrolling interest in the acquiree either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net identifiable assets.

The excess of the consideration transferred, the amount of any non-controlling interest in the acquiree and the acquisition-date fair value of any previous equity interest in the acquiree over the fair value of the Group’s share of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of the net identifiable assets of the subsidiary acquired and the measurement of all amounts has been reviewed, the difference is recognised directly in profit or loss as a bargain purchase.

Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.

3. CrItICal aCCountInG eStIMateS and judGeMentS

Estimates and judgements are evaluated and based on historical experience and other factors, including expectations of future events that may have a financial impact on the Company and that are believed to be reasonable under the circumstances.

(a) Critical accounting estimates and assumptions

The carrying amounts of certain assets and liabilities are often determined based on estimates and assumptions of future events. The key estimates and assumptions that have a significant risk of causing a material adjustment to the carrying value of certain assets and liabilities within the next annual reporting period are set out below.

Impairment of intangible assets and goodwill

The Group determines whether intangible assets with indefinite useful lives, including goodwill, are impaired on at least a bi-annual basis, in accordance with the accounting policies stated in Notes 2(v) and 2(w). This process requires an estimation to be made of the recoverable amount of the cash-generating units to which the respective assets are allocated.

noteS to the fInanCIal StateMentS FOR THE YEAR ENDED 30 JUNE 2012 (cont.)

3. CrItICal aCCountInG eStIMateS and judGeMentS (cont.)

(a) Critical accounting estimates and assumptions (cont.)

Fair value of investment in former subsidiary

During the year, the Group ceased to have control of a former subsidiary, ImmunAid Pty. Ltd. (refer Note 28), and the retained interest in the entity was remeasured to its fair value. The shares of this equity security are not traded in an active market. The Group determined the fair value based on the last price at which shares were issued to third parties.

Income and withholding taxes

The Group is subject to income and withholding taxes in both Australia and jurisdictions where it has foreign operations. There are many transactions and calculations undertaken during the ordinary course of business for which the ultimate tax determination is uncertain. Where the final outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current, deferred and withholding tax provisions in the period in which such determination is made (refer Notes 2(l), 2(m) and 2(n)). In addition, the Group has considered the recognition of deferred tax assets relating to carried forward tax losses to the extent there are sufficient taxable temporary differences (deferred tax liabilities) relating to the same taxation authority and the same subsidiary against which the unused tax losses can be utilised. However, utilisation of the tax losses also depends on the ability of the entity to satisfy certain tests at the time the losses are recouped (refer Note 11).

Share-based payments transactions

The Group measures the cost of equity-settled transactions with employees by reference to the value of the equity instruments at the date on which they are granted. The fair value is determined by an independent valuer using a Black-Scholes options pricing model.

Useful lives of assets

The estimation of the useful lives of assets has been based on historical experience as well as lease terms (for leased equipment) and patent terms (for patents). In addition, the condition of the assets is assessed at least annually and considered against the remaining useful life and adjustments to useful lives are made when considered necessary.

(b) Critical judgements in applying the entity’s accounting policies

Research and development costs

An intangible asset arising from development expenditure on an internal project is recognised only when the Group can demonstrate the technical feasibility of completing the intangible asset so that it will be available for use or sale, its intention to complete and its ability to use or sell the asset, how the asset will generate future economic benefits, the availability of resources to complete the development and the ability to measure reliably the expenditure attributable to the intangible asset during its development. To date, all development costs have been expensed as incurred as their recoverability cannot be regarded as assured. In addition to the costs incurred by the Company’s research and development group, costs of clinical and other trials are also included. The costs of research and development are expensed in full in the period in which they are incurred. The Group will only capitalise its development expenses when specific milestones are met and when the Group is able to demonstrate that future economic benefits are probable.

	Consolidated	Consolidated
	2012	2011
	$	$
4. CoSt of SaleS	859,206 864,286 230,349 (5,216) 1,948,625
Inventories used		860,078
Direct labour costs		782,875
Depreciation expense		252,090
Inventories written off / (back)		139,873
Total cost of sales		2,034,916

5. other reVenue

License fees received 752,058 Royalties and annuities received 1,774,541 Total other revenue 2,526,599	12,315,060
	1,365,681
	13,680,741

	Consolidated	Consolidated
	2012	2011
	$	$
6. GaIn on deConSolIdatIon of SuBSIdIary	4,546,951 528,433 37,771 20 5,113,175
Recognition of investment in associate (Note 35)		-
Removal of net assets of associate on loss of control of a subsidiary		-
Removal of non-controllinginterests (Note 26)		-
Proft received from sale of shares in associate		-
Totalgain on deconsolidation of subsidiary		-

Note: During the year, the Group deconsolidated its former subsidiary, ImmunAid Pty. Ltd. As a result, the net assets and non-controlling interest of the formerly-consolidated subsidiary were derecognised from the Group at the carrying amounts on the date that control was lost. The retained equity interest has been recorded as an investment in associate at its fair value, as described in Note 3(a).

7. eXpenSeS

7. eXpenSeS
Amortisation of intangible assets 181,048	77,575
Depreciation of fxed assets 150,547	287,205
Employee benefts expenses 8,194,251	5,435,053
Research and development costs 892,274	1,041,461
Payments for operatingleases 354,958	369,555
Net impairment of intangible assets 104,338	741
Net impairment ofplant and equipment -	268,264
8. other InCoMe and eXpenSeS Interest received 609,807 Net foreign exchangegains / (losses) 141,364 Netproft / (loss) on disposal ofplant and equipment 31,455 Management fees received 4,875 Loss on disposal of shares in subsidiary(Notes 28 and 33) (10) Total other income and expenses 787,491 9. net profIt froM dISContInued operatIon Revenue from reproductive services - Less: cost of sales - Total netproft from discontinued operation -
	200,023
	(68,057)
	(217,737)
	-
	-
	(85,771)

	66,054
	(44,492)
	21,562

Note: During the 2010 financial year, the Company’s reproductive services business was terminated following a decision to realign the business and to focus on the provision of animal genetic tests, rather than the services that were acquired as part of the acquisition of the Frozen Puppies business in 2008. As a result, Frozen Puppies Dot Com Pty. Ltd. was deregistered on 1 June 2011.

10. profIt / (loSS) per Share

The following reflects the income and share data used in the calculations of basic and diluted profit / (loss) per share:

	2012	2011
	$	$
Proft / (loss) for theyear attributable to the owners of Genetic Technologies Limited	(5,287,523) 460,402,869	910,002
Weighted average number of ordinaryshares used in calculatinglossper share		404,605,152

Note: None of the 20,125,000 (2011: 19,650,000) options over the Company’s ordinary shares that were outstanding as at the reporting date are considered to be dilutive for the purposes of calculating diluted earnings per share.

noteS to the fInanCIal StateMentS FOR THE YEAR ENDED 30 JUNE 2012 (cont.)

	Consolidated	Consolidated
	2012	2011
	$	$
11. InCoMe taX	(5,296,828) (1,589,048) 31,301 608,497 39,611 (48,328) (1,533,953) - 19,753 4,980 (2,467,187) 25,557 26,111 (131,134) 1,264,668 - 1,281,985 - 79,994 484,759 2,099,763 26,635 254,683 2,945,834 (2,945,834) - 35,964,273 10,789,282
Reconciliation of income tax expense toprima facie taxpayable
Proft / (loss) before income tax expense		901,341
Tax at the Australian tax rate of 30% (2011: 30%)		270,402
Tax effect amounts which are not deductible / (taxable) in calculating taxable income
Net impairment losses and other write-downs		81,229
Share-basedpayments expense		76,155
Share of net loss of associate accounted for usingthe equitymethod		-
Capital raisingexpenses		-
Gain on deconsolidation of subsidiary		-
Research and development expenses		(312,438)
Withholdingtax expense		18,000
Other non-deductible items		2,930
		136,278
Tax effect of adjustments relating to temporary differences
Amortisation and depreciation expenses		185,061
Net movements inprovisions		(8,164)
Settlementproceeds from Applera Corporation		(157,911)
Adjustment for amended tax returns ofpriorperiods		-
Tax losses utilised		(155,264)
Tax losses not recognised		-
Income tax expense		-
Deferred tax assets
Deferred revenue		49,064
Applera settlement		560,290
Intangible assets		515,853
Doubtful debts		17,010
Provisions		228,572
Total deferred tax assets		1,370,789
Deferred tax assets on temporarydifferences not brought to account		(1,370,789)
Total net deferred tax assets		-
Tax losses
Unused tax losses for which no deferred tax asset has been recognised		31,690,991
Potential tax beneft @ 30%		9,507,297

Subject to the Group continuing to meet the relevant statutory tests, the tax losses are available for offset against future taxable income.

As at balance date, there are unrecognised tax losses with a benefit of approximately $10,789,282 (2011: $9,507,297) that have not been recognised as a deferred tax asset to the Group. These unrecognised deferred tax assets will only be obtained if:

(a) The Group companies derive future assessable income of a nature and amount sufficient to enable the benefits to be realised;

(b) The Group companies continue to comply with the conditions for deductibility imposed by the law; and

11. InCoMe taX (cont.)

Tax consolidation legislation

Genetic Technologies Limited and its wholly-owned Australian subsidiaries implemented the tax consolidation legislation as from 1 July 2003. The accounting policy in relation to this legislation is set out in Note 2(l).

The entities in the tax consolidated group have entered into a Tax Sharing Agreement which, in the opinion of the Directors, limits the joint and several liabilities of the wholly-owned entities in the case of a default by the head entity, Genetic Technologies Limited.

The entities have also entered into a Tax Funding Agreement under which the wholly-owned entities fully compensate Genetic Technologies Limited for any current tax payable assumed and are compensated by Genetic Technologies Limited for any current tax receivable and deferred tax assets relating to unused tax losses or unused tax credits that are transferred to Genetic Technologies Limited under the tax consolidation legislation. The funding amounts are determined by reference to the amounts recognised in the respective subsidiaries’ financial statements.

The amounts receivable or payable under the Tax Funding Agreement are due upon receipt of the funding advice from the head entity, which is issued as soon as practicable after the end of each financial year.

As at 30 June 2012, there are no unrecognised temporary differences associated with the Group’s investments in subsidiaries, as the Group has no liability for additional taxation should unremitted earnings be remitted (2011: $nil).

	Consolidated	Consolidated
	2012	2011
	$	$
12. CaSh and CaSh eQuIValentS	2,380,114 6,520,121 8,900,235 (5,296,828) 561,944 2,028,323 104,338 132,037 10 (5,113,175) (31,455) (141,365) 178,394 (62,466) (14,811) (209,256) 103,100 87,036 (7,674,174)
Reconciliation of cash and cash equivalents
Cash at bank and on hand		1,985,257
Short-term deposits		3,119,410
Total cash and cash equivalents		5,104,667
Reconciliation ofproft / (loss) for theyear
Reconciliation of proft / (loss) for the year after income tax to net cash fows from / (used in) operatingactivities is as follows:
Proft / (loss) for theyear after income tax		901,341
Adjust for non-cash items
Amortisation and depreciation expenses		616,870
Share-basedpayments expense		253,851
Net impairment losses and other write-downs		269,005
Share of loss of associate		-
Loss on disposal of shares in subsidiary		-
Fair valuegain on deconsolidation of subsidiary		-
Net (proft) / loss on disposal ofplant and equipment		217,737
Net foreign exchange (gains) / losses		68,057
Adjust for changes in assets and liabilities
(Increase) / decrease in trade and other receivables		80,288
(Increase) / decrease inprepayments and other assets		(104,124)
(Increase) / decrease inperformance bonds and deposits		69,009
Increase / (decrease) in trade and otherpayables		(80,645)
Increase / (decrease) in deferred revenue		(30,895)
Increase / (decrease) inprovisions		(27,215)
Net cash fows from / (used in) operatingactivities		2,233,279

Non-cash activities

There were no non-cash activities during the 2012 financial year.

noteS to the fInanCIal StateMentS FOR THE YEAR ENDED 30 JUNE 2012 (cont.)

	Consolidated	Consolidated
	2012	2011
	$	$
12. CaSh and CaSh eQuIValentS(cont.)	2,500,000 199,208 (17,748) (15,861) 2,482,252 183,347 474,843 (88,783) 386,060 57,948 51,967 495,975
Financing facilities available
As at 30 June 2012, the following fnancing facilities had been negotiated and were available:
Total facilities
Hirepurchase facility		2,500,000
Credit cards		145,000
Facilities used as at reporting date
Hirepurchase facility		(67,878)
Credit cards		(18,786)
Facilities unused as at reporting date
Hirepurchase facility		2,432,122
Credit cards		126,214
13. trade and other reCeIVaBleS (Current)
Trade receivables		718,070
Less:provision for doubtful debts		(56,700)
Net trade receivables		661,370
Accrued interest		-
Other receivables		12,999
Total net current trade and other receivables		674,369

Note: Trade and other receivables for the Group include amounts due in US dollars of USD 61,336 (2011: USD 113,276) and European euros of EUR 90,000 (2011: EUR 90,105).

Refer Note 37 for details of aging, interest rate and credit risks applicable to trade and other receivables for which, due to their short-term nature, their carrying value approximates their fair value.

14. prepayMentS and other aSSetS (Current)

Prepayments 219,409 Inventories at the lower of cost and net realisable value 316,716 Total currentprepayments and other assets 536,125 15. perforManCe BondS and depoSItS (Current) Performance bonds 15,260 Deposits 2,200 Total currentperformance bonds and deposits 17,460 16. InVeStMentS aCCounted for uSInG the eQuIty Method (non-Current) Shares in associate (Note 35) 4,414,914 Total non-current investments accounted for usingthe equitymethod 4,414,914	191,047
	282,612
	473,659

	2,449
	200
	2,649

	-
	-

	Consolidated	Consolidated
	2012	2011
	$	$
17. property, plant and eQuIpMent	3,953,756 (2,706,111) (751,325) 496,320 657,337 (571,706) 85,631 219,500 (168,116) 51,384 1,282,389 (1,271,014) (10,000) 1,375 109,748 (101,540) 8,208 642,918 6,518,757 76,314 (372,341) 6,222,730 (5,571,257) 372,341 (380,896) - (5,579,812) 642,918
Laboratoryequipment, at cost		4,301,671
Less: accumulated depreciation		(2,822,791)
Less: impairment loss		(751,325)
Net laboratoryequipment		727,555
Computer equipment, at cost		615,420
Less: accumulated depreciation		(519,625)
Net computer equipment		95,795
Offce equipment, at cost		211,065
Less: accumulated depreciation		(145,205)
Net offce equipment		65,860
Equipment under hirepurchase, at cost		1,282,389
Less: accumulated depreciation		(1,228,071)
Less: impairment loss		(10,000)
Net equipment under hirepurchase		44,318
Leasehold improvements, at cost		108,212
Less: accumulated depreciation		(94,240)
Net leasehold improvements		13,972
Total netproperty,plant and equipment		947,500
Reconciliation ofproperty, plant and equipment
Opening gross carryingamount		8,829,331
Add: additionspurchased duringtheyear		369,809
Less: disposals made duringtheyear		(2,680,383)
Closing gross carryingamount		6,518,757
Openingaccumulated depreciation and impairment losses		(6,851,505)
Add: disposals made duringtheyear		2,087,807
Less: depreciation expense charged		(539,295)
Less: impairment losses		(268,264)
Closingaccumulated depreciation and impairment losses		(5,571,257)
Total netproperty,plant and equipment		947,500

Reconciliation of movements in property, plant and equipment by asset category

Asset category	Opening net carrying amount Additions during year Net disposals during year Depreciation expense and impairment loss Closing net carrying amount
	$ $ $ $ $
Laboratoryequipment	727,555 24,426 - (255,661) 496,320
Computer equipment	95,795 41,917 - (52,081) 85,631
Offce equipment	65,860 8,435 - (22,911) 51,384
Equipment under hirepurchase	44,318 - - (42,943) 1,375
Leasehold improvements	13,972 1,536 - (7,300) 8,208
Totals	947,500 76,314 - (380,896) 642,918

noteS to the fInanCIal StateMentS

FOR THE YEAR ENDED 30 JUNE 2012 (cont.)

	Consolidated	Consolidated
	2012	2011
	$	$
18. IntanGIBle aSSetS and GoodWIll	36,322,585 (32,501,457) (3,632,338) 188,790 1,033,273 (103,327) 929,946 358,012 (42,624) 315,388 1,434,124 36,538,523 (215,938) 36,322,585 (36,167,674) (77,721) (104,338) 215,938 (36,133,795) 188,790 1,033,273 (103,327) 929,946 358,012 - 358,012 (42,624) - (42,624) 315,388
Patents
Patents, at cost		36,538,523
Less: accumulated amortisation		(32,639,674)
Less: impairment losses		(3,528,000)
Total netpatents		370,849
Other intangible assets
Assets associated with BREVAGenTMbreast cancer risk test, at cost		1,033,273
Less: accumulated amortisation		-
Total net other intangible assets		1,033,273
Goodwill
Goodwill, at cost		358,012
Less: accumulated amortisation		(42,624)
Total netgoodwill		315,388
Total net intangible assets andgoodwill		1,719,510
Reconciliation ofpatents
Opening gross carryingamount		36,417,619
Adjust for exchange rate movements		120,904
Closing gross carryingamount		36,538,523
Openingaccumulated amortisation and impairment losses		(35,969,195)
Add: amortisation expense charged (refer below)		(77,575)
Add: impairment losses (refer below)		-
Adjust for exchange rate movements		(120,904)
Closingaccumulated amortisation and impairment losses		(36,167,674)
Total netpatents		370,849
Reconciliation of other intangible assets
Opening gross carryingamount		1,033,273
Add: amortisation expense charged (refer below)		-
Total net other intangible assets		1,033,273
Reconciliation ofgoodwill
Opening gross carryingamount		1,625,115
Less:goodwill written off		(1,267,103)
Closing gross carryingamount		358,012
Openingaccumulated amortisation and impairment losses		(1,307,227)
Add:goodwill written off		1,264,603
Closingaccumulated amortisation and impairment losses		(42,624)
Total netgoodwill		315,388

18. IntanGIBle aSSetS and GoodWIll (cont.)

Remaining useful lives

The assets associated with the BREVAGen[TM] breast cancer risk test have a remaining useful life of 9 years as at 30 June 2012.

Disclosure of expenses

The total amortisation expense charged during the year in respect of intangible assets of $181,048 is disclosed in the consolidated statement of comprehensive income under the headings of general and administrative ($103,327), laboratory and research and development costs ($53,483) and licensing, patent and legal costs ($24,238).

The total impairment loss charged during the year in respect of intangible assets of $104,338 is disclosed in the consolidated statement of comprehensive income under the heading of laboratory and research and development costs.

	Consolidated	Consolidated
	2012	2011
	$	$
19. trade and other payaBleS (Current)	332,636 342,539 230,597 905,772
Tradepayables		653,046
Otherpayables		301,018
Accrued expenses		160,964
Total current trade and otherpayables		1,115,028

Note: Trade payables and other payables for the Group include amounts due in US dollars of USD 210,304 (2011: USD 217,168), Chinese yuan of CNY 49,128 (2011: CNY 68,158), Canadian dollars of CAD 7,886 (2011: CAD 22,539), European euros of EUR 1,652 (2011: EUR 17,250), Swiss francs of CHF 3,090 (2011: CHF 3,290), New Zealand dollars of NZD 1,817 (2011: NZD 136) and Japanese yen of JPY 69,677 (2011: JPY nil).

Refer Note 37 for details of contractual maturity and management of interest rate, foreign exchange and liquidity risks applicable to trade and other payables for which, due to their short-term nature, their carrying value approximates their fair value.

20. IntereSt-BearInG lIaBIlItIeS (Current)

Hirepurchase liability(Notes 31 and 37) 17,748 Total current interest-bearingliabilities 17,748	67,878
	67,878

Note: The carrying values of the hire purchase liabilities approximate their fair values.

21. deferred reVenue (Current)

Genetic testingfees received in advance 266,646 Reproductive service fees received in advance - Total current deferred revenue 266,646 22. proVISIonS (Current and non-Current) Currentprovisions Annual leave 439,186 Longservice leave 301,216 Total currentprovisions 740,402 Non-currentprovisions Longservice leave 108,541 Total non-currentprovisions 108,541 Totalprovisions 848,943	159,001
	4,545
	163,546


	417,603
	261,574
	679,177

	82,730
	82,730
	761,907

noteS to the fInanCIal StateMentS

FOR THE YEAR ENDED 30 JUNE 2012 (cont.)

	Consolidated	Consolidated
	2012	2011
	$	$
22. proVISIonS (Current and non-Current)(cont.)	417,603 452,638 (431,055) 439,186 344,304 65,453 - 409,757
Reconciliation of annual leaveprovision
Balance at the beginningof the fnancialyear		442,108
Add: obligation accrued duringtheyear		403,929
Less: utilised duringtheyear		(428,434)
Balance at the end of the fnancialyear (refer note)		417,603
Reconciliation of long service leaveprovision
Balance at the beginningof the fnancialyear		347,014
Add: obligation accrued duringtheyear		60,342
Less: utilised duringtheyear		(63,052)
Balance at the end of the fnancialyear (refer note)		344,304

Note: The current provisions for annual leave and long service leave include a total amount of $439,186 (2011: $417,603) in respect of obligations which, based on historical evidence, the Company estimates will be settled more than 12 months from balance date.

23. ContrIButed eQuIty

23. ContrIButed eQuIty
Issued andpaid-up capital	83,280,142 83,280,142 Shares 404,605,152 60,000,000 166,667 464,771,819 404,605,152 - 404,605,152
Fully paid ordinaryshares		72,378,105
Total contributed equity		72,378,105

Movements in shares on issue		$

Year ended 30 June 2012
Balance at the beginningof the fnancialyear		72,378,105
Add: shares issued duringtheyear aspart ofprivateplacement		10,894,537
Add: shares issued duringtheyear from the exercise of options		7,500
Balance at the end of the fnancialyear
		83,280,142
Year ended 30 June 2011
Balance at the beginningof the fnancialyear		72,378,105
Add: shares issued duringtheyear		-
Balance at the end of the fnancialyear		72,378,105

Terms and conditions of contributed equity

Ordinary shares have the right to receive dividends as declared and, in the event of winding up the Company, to participate in the proceeds from the sale of all surplus assets in proportion to the number of and amounts paid up on shares held. Ordinary shares, which have no par value, entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.

Capital management

When managing capital, Management’s objective is to ensure that the Group continues as a going concern as well as to provide returns for shareholders and benefits for other stakeholders. Management also aims to maintain a capital structure to reduce the entity’s cost of capital.

	Consolidated	Consolidated
	2012	2011
	$	$
24. reSerVeS	(161,858) 3,881,277 3,719,419 (155,040) (6,818) (161,858) 1,852,954 2,028,323 3,881,277
Foreign currencytranslation		(155,040)
Share-basedpayments		1,852,954
Total reserves		1,697,914
Reconciliation of foreign currency translation reserve
Balance at the beginningof the fnancialyear		(69,961)
Add: net currencytranslation loss		(85,079)
Balance at the end of the fnancialyear		(155,040)
Reconciliation of share-basedpayments reserve
Balance at the beginningof the fnancialyear		1,599,103
Add: share-basedpayments expense		253,851
Balance at the end of the fnancialyear		1,852,954

Nature and purpose of reserves

Foreign currency translation reserve

This reserve is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.

Share-based payments reserve

This reserve is used to record the value of share-based payments provided to employees and others providing similar services as part of their remuneration.

	Consolidated	Consolidated
	2012	2011
	$	$
25. aCCuMulated loSSeS	(67,464,026) (5,287,523) (72,751,549) 202,002 (9,305) (296) (9,601) (37,771) 154,630
Balance at the beginningof the fnancialyear		(68,374,028)
Add: netproft / (loss) attributable to owners of Genetic Technologies Limited		910,002
Balance at the end of the fnancialyear		(67,464,026)
26. non-ControllInG IntereStS
Reconciliation of non-controlling interests in subsidiaries
Balance at the beginningof the fnancialyear		184,477
Add: movements duringtheyear
Less: share of operatinglosses		(8,661)
Less: share of movement in reserves		(11,585)
Net loss attributable to non-controllinginterests		(20,246)
Add / (less): share / (reversal) of issued capital		37,771
Balance at the end of the fnancialyear		202,002

noteS to the fInanCIal StateMentS FOR THE YEAR ENDED 30 JUNE 2012 (cont.)

27. optIonS

As at 30 June 2012, the following options over ordinary shares in the Company were outstanding.

2012	Weighted average exerciseprice	2011	Weighted average exerciseprice
Unlisted employee options (refer below) 20,125,000	$0.099	19,650,000	$0.109

On 30 November 2001, the Directors of the Company established a Staff Share Plan. On 19 November 2008, the shareholders of the Company approved the introduction of a new Employee Option Plan. Under the terms of the respective Plans, the Directors of the Company may grant options over ordinary shares in Genetic Technologies Limited to executives, consultants and employees of the Group. The options, which are granted at nil cost, are not transferable and are not quoted on ASX. As at 30 June 2012, there were 6 executives and 22 employees who held options that had been granted under the Plans. Options granted under the Plans carry no rights to dividends and no voting rights.

The movements in the number of options granted under the Plans are as follows:

2012	Weighted average exerciseprice	2011	Weighted average exerciseprice
Balance at the beginningof the fnancialyear 19,650,000 Add: optionsgranted duringtheyear 3,250,000 Less: options exercised duringtheyear (166,667) Less: options forfeited duringtheyear (1,958,333) Less: options expired duringtheyear (650,000) Balance at the end of the fnancialyear 20,125,000 Exercisable at the end of the fnancialyear 14,958,333	$0.109 $0.145 $0.045 $0.165 $0.462 $0.099 $0.077	3,300,000 17,300,000 - (200,000) (750,000) 19,650,000 2,650,000	$0.327 $0.085 - $0.220 $0.480 $0.109 $0.276

A total of $7,500 was raised from the exercise of 166,667 options granted under the Employee Option Plan during the year ended 30 June 2012 (2011: $nil).

The numbers of options outstanding as at 30 June 2012 by ASX code, including the respective dates of expiry and exercise prices, are tabled below (refer Note 30 for further information). The options tabled below are not listed on ASX.

Option description 2012	Weighted average exerciseprice	2011	Weighted average exerciseprice
GTGAI (expiring8 May2015) 12,000,000 GTGAK (expiring20 February2017) 2,250,000 GTGAM (expiring31 July2016) 1,000,000 GTGAW (expiring31 March 2016) 2,875,000 GTGAW (expiring31 May2013) 300,000 GTGAY (expiring23 October 2012) 1,700,000 GTGAD (expiring12 August 2011) - GTGAE (expiring12 August 2011) - GTGAH (expiring31 May2012) - GTGAK (expiring30 September 2015) - Balance at the end of the fnancialyear 20,125,000	$0.045 $0.120 $0.200 $0.190 $0.190 $0.220 - - - - $0.099	12,000,000 - - 4,500,000 300,000 1,700,000 250,000 250,000 150,000 500,000 19,650,000	$0.045
			-
			-
			$0.190
			$0.190
			$0.220
			$0.430
			$0.530
			$0.400
			$0.045
			$0.109

28. ChanGeS In the CoMpoSItIon of the entIty

Deconsolidation of ImmunAid Pty. Ltd.

On 12 April 2012, ImmunAid Pty. Ltd. (“ImmunAid”) raised $1,000,000 in new equity from the issue of 1,000,000 new shares at an issue price of $1.00 each. As a result of this issue, the equity interest in ImmunAid held by the Company fell below 50% and, due to the resulting loss of control, ImmunAid was deconsolidated from the Genetic Technologies Group on that date.

Deregistration of AgGenomics Pty. Ltd.

On 16 March 2012, GeneType Pty. Ltd. (“GeneType”), a subsidiary, acquired 499 ordinary shares in AgGenomics Pty. Ltd. (“AgGenomics”) for a total consideration of $10. As a result of this acquisition, AgGenomics became a wholly-owned subsidiary of GeneType on that date. On 20 June 2012, AgGenomics was deregistered.

29. SeGMent InforMatIon

Identification of reportable segments

The Group has identified three reportable segments based on the similarity of the products produced and sold and/or the services provided, as these represent the sources of the Group’s major risks and have the greatest effect on the rates of return. The separate groups of products and services are then divided into operating businesses, the performances of which are reported to the Chief Executive Officer, the Senior Leadership Team and the Board of Directors on a monthly basis. The segments are reported in a manner that is consistent with the internal reporting provided to the chief operating decision maker. The Group also separately reports the corporate headquarter function to clearly identify costs associated with that function. The corporate function is not considered to be an operating or reportable segment.

The Group’s three operating segments can be described as follows:

Operations: involves the provision of a range of genetic testing services.
Licensing: involves the out-licensing of the Group’s “non-coding” technology.
Research: involves the undertaking of a range of research and development projects in the field of genetics and related areas.

The Corporate disclosures below include all revenues, costs, assets and liabilities associated with the headquarter function.

Business segments

Business segments
Segment	Revenues and income Proft / (loss) Sales Other Totals $ $ $ $ 3,691,215 4,594,960 - - 3,691,215 4,594,960 (5,747,234) (4,017,757) - - 2,526,599 13,680,741 2,526,599 13,680,741 1,258,761 9,583,419 - - - - - - (892,274) (1,041,461) 3,691,215 4,594,960 2,526,599 13,680,741 6,217,814 18,275,701 (5,380,747) 4,524,201 - - 5,900,666 (85,771) 5,900,666 (85,771) 83,919 (3,644,422) 3,691,215 4,594,960 8,427,265 13,594,970 12,118,480 18,189,930 (5,296,828) 879,779
Operations 2012 2011
Licensing 2012 2011
Research 2012 2011
Sub-total 2012 2011
Corporate 2012 2011
Totals 2012 2011

Segment	Assets Liabilities Amortisation / depreciation Impairment losses/ write downs Purchases of equipment
	$ $ $ $ $
Operations 2012 2011	2,578,637 2,946,818 (1,210,360) (1,035,198) (433,124) (469,383) - (269,005) 66,162 341,549
Licensing 2012 2011	184,103 557,866 (100,458) (189,704) (28,195) (29,960) - - 1,050 1,545
Research 2012 2011	62,403 79,781 (48,865) (42,517) (79,707) (87,799) (104,338) - 2,443 -
Sub-total 2012 2011	2,825,143 3,584,465 (1,359,683) (1,267,419) (541,026) (587,142) (104,338) (269,005) 69,655 343,094
Corporate 2012 2011	13,616,608 5,337,889 (679,426) (840,940) (20,918) (29,728) - - 6,659 26,715
Totals 2012 2011	16,441,751 8,922,354 (2,039,109) (2,108,359) (561,944) (616,870) (104,338) (269,005) 76,314 369,809

noteS to the fInanCIal StateMentS FOR THE YEAR ENDED 30 JUNE 2012 (cont.)

29. SeGMent InforMatIon (cont.)

Geographic information

Australia: is the home country of the parent entity and the location of the Company’s genetic testing and licensing operations.
USA: is the home of Phenogen Sciences Inc. and GeneType Corporation.
China: is the home of Genetic Technologies (Beijing) Limited.
Canada: is the home of Gtech International Resources Limited.
Switzerland: is the home of GeneType AG.

Geographic segments

Segment	Revenues and income Proft / (loss) Sales Other Totals
	$ $ $ $
Australia 2012 2011	3,649,522 4,591,389 8,536,942 13,583,021 12,186,464 18,174,410 (2,055,144) 2,473,786
USA 2012 2011	41,693 - (109,678) 66,595 (67,985) 66,595 (3,161,898) (1,412,164)
China 2012 2011	- 3,571 1 (54,646) 1 (51,075) (29,384) (132,774)
Canada 2012 2011	- - - - - - (38,484) (35,819)
Switzerland 2012 2011	- - - - - - (11,918) (13,250)
Totals 2012 2011	3,691,215 4,594,960 8,427,265 13,594,970 12,118,480 18,189,930 (5,296,828) 879,779

Segment	Assets Liabilities Amortisation / depreciation Impairment losses / write downs Purchases of equipment
	$ $ $ $ $
Australia 2012 2011	15,768,900 8,420,967 3,842,342 352,832 (540,381) (596,416) (104,338) (263,099) 68,950 303,526
USA 2012 2011	413,203 187,807 (5,398,129) (2,005,722) (21,563) (10,575) - - 7,364 66,283
China 2012 2011	3 271 (352,357) (323,256) - (9,879) - (5,906) - -
Canada 2012 2011	249,056 302,968 (7,571) (21,775) - - - - - -
Switzerland 2012 2011	10,589 10,341 (123,394) (110,438) - - - - - -
Totals 2012 2011	16,441,751 8,922,354 (2,039,109) (2,108,359) (561,944) (616,870) (104,338) (269,005) 76,314 369,809

Additional segment disclosures

Other revenues and income - corporate includes interest received of $609,807 (2011: $200,023).

Expenses - corporate includes employee benefits expenses of $3,495,637 (2011: $1,808,821) and a share of loss in associate of $132,037 (2011: $nil).

Assets - corporate includes cash of $8,900,235 (2011: $5,104,667).

Liabilities - corporate includes trade and other payables of $449,034 (2011: $627,608) and provisions of $228,990 (2011: $213,334). The Corporate business segment and the Australian geographic segment include a share of loss in associate of $132,037 (2011: $nil). There were no intersegment sales.

29. SeGMent InforMatIon (cont.)

Additional segment disclosures (cont.)

Additional segment disclosures(cont.)
	Consolidated
	2012	2011
	$	$
Loanpayable (USA) and loan receivable (Australia)	5,223,612 633 120,210 344,074 109,678 11,572 - -	1,851,870
Loanpayable (China) and loan receivable (Australia)		633
Loanpayable (Switzerland) and loan receivable (Australia)		106,170
Accountspayable (China) and accounts receivable (Australia)		312,689
Foreign exchangegain (USA) and foreign exchange loss (Australia)		67,041
Cost of sales (USA) and sales (Australia)		-
Cost of sales (China) and sales (Australia)		389
Management feespaid (China) and management fees received (Australia)		19

Segment products and locations

The three principal business segments of the Group are operations, licensing and research. The principal geographic segment is Australia, with the Company’s headquarters being located in Melbourne in the State of Victoria.

Segment accounting policies

Segment information is prepared in conformity with the accounting policies of the entity and Accounting Standard IFRS 8 (AASB 8) Operating Segments which was adopted by the Company in 2009. As a result, the primary reporting segments now reflect more closely the information that Management uses to make decisions about operating matters. Interest received and finance costs are allocated under the heading Corporate as they are not part of the core operations of any other segment.

Major customers

The Group has a number of major customers to which it provides both products and services. During the year ended 30 June 2012, there was one customer from whom the Group generated revenues representing more than 10% of the total consolidated revenue from operations. During the year ended 30 June 2011, there were two such customers.

30. eMployee BenefItS

Employee options

During September 2011, a total of 1,000,000 options over ordinary shares in the Company (expiring 31 July 2016) were granted, at no cost, to a senior employee of the Company, while during April and May 2012, a total of 2,250,000 similar options (expiring 20 February 2017) were granted, at no cost, to a number of employees of its US subsidiary, Phenogen Sciences Inc. Each option entitles the holders to acquire one ordinary share at a cost of between $0.12 and $0.20 (refer Note 27).

Superannuation commitments

The Group does not have any defined benefit funds. The Group makes statutory contributions to various superannuation funds on behalf of all employees in Australia at a rate of 9% per annum, in addition to making other superannuation contributions as part of salary packaging arrangements with staff. All contributions are expensed when incurred. Contributions made by the Group of up to 9% per annum of employees’ wages and salaries are legally enforceable in Australia.

Other employee benefits

During the year, the Company disposed of shares in former subsidiary ImmunAid Pty. Ltd. to parties related to the Company at a price below their fair market value. As a result, a share-based payments expense of $1,759,980 was reflected in the consolidated statement of comprehensive income for the year ended 30 June 2012 (refer Note 33).

noteS to the fInanCIal StateMentS FOR THE YEAR ENDED 30 JUNE 2012 (cont.)

	Consolidated	Consolidated
	2012	2011
	$	$
31. CoMMItMentS and ContInGenCIeS	17,981 - - 17,981 (233) 17,748 370,837 790,087 - 1,160,924
Hirepurchase expenditure commitments
Minimum hirepurchasepayments
- not later than oneyear		53,008
- later than oneyear but not later than fveyears		17,981
- later than fveyears		-
Total minimum hirepurchasepayments		70,989
Less: future fnance charges		(3,111)
Present value of hirepurchasepayments (Note 20)		67,878
Operating lease expenditure commitments
Minimum operatingleasepayments
- not later than oneyear		354,192
- later than oneyear but not later than fveyears		432,051
- later than fveyears		-
Total minimum operatingleasepayments		786,243

As at 30 June 2012, the above operating leases related to the following premises that are currently occupied by the Group:

Location Landlord Use Date of expiry of lease	Minimum payments ($)
60-66 Hanover Street FitzroyVictoria 3065 Australia Crude Pty. Ltd. Offce / laboratory 31 August 2015 9115 Harris Corners Parkway, Suite 320 Charlotte North Carolina 28269 USA New Boston Harris Corners LLC Offce 31 October 2013 Total	1,117,404
	43,520
	1,160,924

Apart from the above, and the contingent liability associated with the Limited Recourse Loans described in Note 33, there were no other commitments or contingencies as at 30 June 2012.

	Consolidated	Consolidated
	2012	2011
	$	$
32. audItorS’ reMuneratIon	267,880 16,360 284,240 18,390 18,390 302,630
Audit services
PricewaterhouseCoopers in respect of:
Audit of the Company’s Financial Report under the_Corporations Act 2001_		250,812
Other audit frms in respect of:
Audit of the Financial Reports of subsidiaries		15,403
Total remuneration in respect of audit services		266,215
Non-audit services
Other audit frms in respect of:
Tax advice and compliance, accountingand other services		14,388
Total remuneration in respect of non-audit services		14,388
Total auditors’ remuneration		280,603

33. related party dISCloSureS

Ultimate parent

Genetic Technologies Limited is the ultimate Australian parent company. As at the date of this Report, no shareholder controls more than 50% of the issued capital of the Company.

Transactions within the Group and with other related parties

During the year ended 30 June 2012, various transactions between entities within the Group and other related parties occurred, as listed below. Except where noted, all amounts were charged on commercial, arm’s-length terms and at commercial rates.

ImmunAid Pty. Ltd.

During the 2012 financial year, various transactions were undertaken with former subsidiary ImmunAid Pty. Ltd. (“ImmunAid”) which resulted in the deconsolidation of that company on 12 April 2012. These transactions have been summarised as follows:

On 27 March 2012, in consideration for more than 10 years of service to ImmunAid, Genetic Technologies Limited (the “Company”) sold a total of 2,877 shares in ImmunAid to related parties. These parties were Transmedia Inc. (1,438 shares), a company associated with Dr. Mervyn Jacobson, a former Director and current substantial shareholder of the Company; and Ashdown Superannuation Nominees Pty. Ltd. (1,439 shares), an entity associated with Mrs. Luisa Ashdown, an employee of the Company, and Mr. Martin Ashdown, the husband of Mrs. Ashdown and the inventor of the ImmunAid technology. The cash consideration received by the Company from the sale of these shares was $20. A share-based payments expense of $1,759,980 was reflected in the 2012 consolidated statement of comprehensive income in relation to this transaction (Note 30).
On 29 March 2012, the issued capital of ImmunAid was expanded such that the number of ImmunAid shares held by the Company increased from 7,432 to 4,546,951. This expansion of issued capital came at no cost to the Company and had no accounting implications for the Group.
On 12 April 2012, ImmunAid raised $1,000,000 in new equity from the issue of 1,000,000 new shares to independent third parties at an issue price of $1.00 each. As a result of this issue, the equity interest in ImmunAid held by the Company fell below 50% and, due to the resulting loss of control, ImmunAid was deconsolidated from the Genetic Technologies Group on that date. Included in the 1,000,000 shares that were issued by ImmunAid was a total of 75,000 shares that were registered in the name of Lupetto Holdings Ltd., a company of which Dr. Mervyn Jacobson is a Director.
On 18 April 2012, the Company received an amount of $537,026 from ImmunAid in full repayment of an outstanding loan from the Company.
During February and March 2012, ImmunAid paid a total of $5,123 to Mr. Robert Jacobson, brother of Dr. Mervyn Jacobson, in respect of capital raising success fees associated with that company’s $1,000,000 capital raising.
During the 2012 financial year, ImmunAid paid management fees to the Company amounting to $22,500 (2011: $22,500).
Dr. Jacobson served as Chief Executive Officer of ImmunAid throughout the entire 2012 financial year. He received no further payments from ImmunAid during the year in respect of this role.

AgGenomics Pty. Ltd.

Also during the 2012 financial year, various transactions were undertaken with AgGenomics Pty. Ltd. (“AgGenomics”), a former subsidiary that was subsequently deregistered on 20 June 2012. These transactions have been summarised as follows:

On 1 March 2012, GeneType Pty. Ltd. (“GeneType”), a subsidiary, wrote-off a debtor owing by AgGenomics amounting to $181,304.
On 16 March 2012, GeneType acquired 499 ordinary shares in AgGenomics for a total consideration of $10. As a result of this acquisition, AgGenomics became a wholly-owned subsidiary of GeneType on that date.
On 13 April 2012, GeneType forgave a loan owing by AgGenomics amounting to $241,678.
On 27 April 2012, GeneType wrote-off its entire investment in AgGenomics resulting in a loss of $10 (refer Note 8).
On 20 June 2012, AgGenomics was deregistered.
During the 2012 financial year, AgGenomics paid interest to GeneType amounting to $7,729 (2011: $12,523).

Licensing services

During the year ended 30 June 2012, the Company paid a total of $50,000 (2011: $50,000) to Dr. Mervyn Jacobson in respect of an administrative allowance associated with his role as the Company’s Vice President Global Licensing and Intellectual Property. Also during the year, Genetic Technologies Limited paid a total of $59,813 (2011: $924,679) to Transmedia Inc. in respect of commissions paid in relation to licensing services provided to the Company by Dr. Jacobson, and payment / reimbursement of associated travel expenses amounting to $115,084 (2011: $152,033).

noteS to the fInanCIal StateMentS FOR THE YEAR ENDED 30 JUNE 2012 (cont.)

33. related party dISCloSureS (cont.)

Transactions within the Group and with other related parties (cont.)

Limited recourse loans to executives

On 21 June 2012, Genetic Technologies Limited, the parent entity, executed separate Limited Recourse Loan Agreements with certain members of the Company’s Senior Leadership Team. Pursuant to these Agreements, the Company will provide the respective executives with limited recourse loans to pay the tax associated with certain options that were granted to them by the Company. The Loans, if drawn down, are secured against the underlying options or resulting shares in the event that the options have been exercised before the tax is payable. Depending on the marginal tax rates of each executive, the maximum total amount due under the loans is approximately $410,000. At this level, the underlying security will be sufficient to cover the full potential liability if the Company’s share price is no less than 8.4 cents per share. Importantly, none of the relevant executives can receive any benefit from the options or resulting shares while there remains an amount owing under his or her Loan.

Genetic Technologies (Beijing) Limited

During the year ended 30 June 2012, Genetic Technologies (Beijing) Limited (“GTBL”), a subsidiary, paid management fees to Genetic Technologies Corporation Pty. Ltd. (“GTC”), another subsidiary, of $nil (2011: $19). GTBL also purchased testing services from GTC at a cost of $nil (2011: $389).

Rental of office premises

During the year ended 30 June 2011, the Company and GeneType, collectively paid a total of $84,583 to Bankberg Pty. Ltd. (“Bankberg”), a company associated with Dr. Jacobson, for rent and its share of body corporate expenses in respect of the office and laboratory premises in Fitzroy, Victoria that are leased by the Group. On 20 August 2010, Bankberg sold the Fitzroy premises to an unrelated third party.

Except as noted, all transactions with Key Management Personnel have been entered into under terms and conditions no more favourable than those which the entity would have adopted if dealing at arm’s length. Please refer below for a description of transactions with Key Management Personnel.

Details of Directors and Key Management Personnel

Directors Dr. Melvyn J. Bridges_(Non-Executive Chairman) Tommaso Bonvino(Non-Executive) Dr. Malcolm R. Brandon(Non-Executive) Dr. Mervyn Cass(Non-Executive) Huw D. Jones(Non-Executive)_	Executives
	Dr. Paul D.R. MacLeman_(Chief Executive Offcer)_
	Thomas G. Howitt_(Chief Financial Offcer and Company Secretary)_
	Alison J. Mew_(Chief Operating Offcer)_
	Lewis J. Stuart_(General Manager US Operations)_
	GregoryJ. McPherson_(VP Sales and Marketing)_
	Dr. David J. Sparling (VP Legal and Corporate Development)

Notes:

1. Dr. Cass was appointed as a Director of the Company on 30 September 2011.

2. Dr. Bridges was appointed as a Director of the Company and Chairman of its Board on 16 December 2011.

3. Former Chairman of the Board, Sidney C. Hack, resigned as a Director of the Company on 16 December 2011.

4. Mr. Gregory Brown was appointed as a Director of the Company on 24 July 2012, i.e. after balance date, and is therefore not included as a member of Key Management Personnel for the year ended 30 June 2012.

	Consolidated	Consolidated
	2012	2011
	$	$
Remuneration of Key Management Personnel	1,758,508 185,996 64,502 19,675 2,028,681
Short-term employee benefts		1,474,137
Post-employment benefts		179,503
Share-basedpayments		181,502
Long-term benefts		8,753
Total remuneration of KeyManagement Personnel		1,843,895

33. related party dISCloSureS (cont.)

Optionholdings of Key Management Personnel

30 June 2012

30 June 2012
Name of optionholder Opening balance	Number of options Closing balance Granted Exercised Lapsed/expired	Vestingas atyear end
		Exercisable Not exercisable
Executive
Dr. Paul D.R. MacLeman 3,600,000	- - - 3,600,000	3,600,000 -
Thomas G. Howitt 2,750,000	- - (250,000) 2,500,000	2,500,000 -
Alison J. Mew 1,500,000	- - - 1,500,000	1,500,000 -
Lewis J. Stuart 2,400,000	- - - 2,400,000	800,000 1,600,000
GregoryJ. McPherson 1,500,000	- - - 1,500,000	1,500,000 -
Dr. David J. Sparling 1,500,000	- - - 1,500,000	1,500,000 -
Totals 13,250,000	- - (250,000) 13,000,000	11,400,000 1,600,000
30 June 2011

30 June 2011
Name of optionholder Opening balance	Number of options Closing balance Granted Exercised Lapsed/expired	Vestingas atyear end
		Exercisable Not exercisable
Executive
Dr. Paul D.R. MacLeman -	3,600,000 - - 3,600,000	- 3,600,000
Thomas G. Howitt 2,000,000	1,500,000 - (750,000) 2,750,000	1,250,000 1,500,000
Alison J. Mew -	1,500,000 - - 1,500,000	- 1,500,000
Lewis J. Stuart -	2,400,000 - - 2,400,000	- 2,400,000
GregoryJ. McPherson -	1,500,000 - - 1,500,000	- 1,500,000
Dr. David J. Sparling -	1,500,000 - - 1,500,000	- 1,500,000
Totals 2,000,000	12,000,000 - (750,000) 13,250,000	1,250,000 12,000,000

Notes: Mr. Stuart became a member of Key Management Personnel during the year ended 30 June 2011.

Shareholdings of Key Management Personnel

30 June 2012

30 June 2012
Shares held in Genetic Technologies Limited Opening balance	Number of shares Acquired on exercise of options Closing balance Bought Sold
Director
Dr. Melvyn J. Bridges -	500,000 - - 500,000
Tommaso Bonvino -	- - - -
Dr. Malcolm R. Brandon -	- - - -
Dr. Mervyn Cass 473,667	- - - 473,667
Huw D. Jones 797,887	200,000 - - 997,887
Executive
Dr. Paul D.R. MacLeman -	- - - -
Thomas G. Howitt -	- - - -
Alison J. Mew -	- - - -
Lewis J. Stuart -	- - - -
GregoryJ. McPherson -	- - - -
Dr. David J. Sparling -	- - - -
Totals 1,271,554	700,000 - - 1,971,554

Notes: Dr. Bridges and Dr. Cass became members of Key Management Personnel during the year ended 30 June 2012.

All equity transactions with Key Management Personnel, other than those arising from the exercise of options, have been entered into under terms and conditions no more favourable than those which the entity would have adopted if dealing at arm’s length.

noteS to the fInanCIal StateMentS FOR THE YEAR ENDED 30 JUNE 2012 (cont.)

34. SuBSIdIarIeS

The following diagram is a depiction of the Group structure as at 30 June 2012.

==> picture [408 x 203] intentionally omitted <==

Name of Groupcompany Incorporation details	Groupinterest (%) Net carryingvalue ($)
	2012 2011 2012 2011
Entities held directly by parent
GeneType Pty. Ltd. 5 September 1990 Victoria, Australia	100% 100% - 1
Genetic Technologies Corporation Pty. Ltd. 11 October 1996 N.S.W., Australia	100% 100% 2 2
RareCellect Pty. Ltd. 7 March 2001 N.S.W., Australia	100% 100% 10 10
GeneType AG 13 February 1989 Zug, Switzerland	100% 100% 7,405 6,614
GeneType Corporation 18 December 1989 California, U.S.A.	100% 100% - -
Phenogen Sciences Inc. 28 June 2010 Delaware, U.S.A.	100% 100% 11,006 11,006
Gtech International Resources Limited 29 November 1968 Yukon Territory, Canada	75.8% 75.8% 241,485 281,193
ImmunAid Pty. Ltd. (refer note below) 21 March 2001 Victoria, Australia	45.5% 71.7% - 70
Total carryingvalue	259,908 298,896
Entities held by other subsidiaries
Genetic Technologies (Beijing) Limited 25 December 2008 BeijingMunicipality, China	100% 100% - -

Note:

On 12 April 2012, the Company’s equity interest in former subsidiary ImmunAid Pty. Ltd. (“ImmunAid”) fell below 50%. Due to the resulting loss of control, ImmunAid was deconsolidated from the Genetic Technologies Group on that date (refer Notes 33 and 35). As at 30 June 2012, the Company held a total of 4,546,951 shares in ImmunAid representing approximately 45.47% of that company’s total issued capital. Subsequent to balance date, the Company sold a total of 46,951 shares in ImmunAid, reducing the Company’s equity interest to 45.0% of that company’s total issued capital (refer Note 38).

On 20 June 2012, former subsidiary AgGenomics Pty. Ltd. was deregistered.

	Consolidated	Consolidated
	2012	2011
	$	$
35. InVeStMentS In aSSoCIateS	- 4,546,951 (132,037) 4,414,914 45.47% 161,429 (17,717) - (132,037)
Opening gross carryingamount		-
Add: recognition of investment in associate recorded at fair value in accordance with_AASB 127_due to loss of control (Notes 3 and 28)		-
Less: share of net loss of associate accounted for usingthe equitymethod		-
Closing gross carryingamount		-
Summarised fnancial information of associates
The Group’s share of the results of its associate, ImmunAid Pty. Ltd., and its share of the aggregate assets and liabilities as at 30 June 2012 are as follows:
Ownershipinterest (Note 38)		-
Assets		-
Liabilities		-
Revenues		-
Proft / (loss)		-

36. parent entIty fInanCIal InforMatIon

Summary financial information

The financial statements for the parent entity, Genetic Technologies Limited, disclose the following amounts:

	Consolidated	Consolidated
	2012	2011
	$	$
Balance sheet	8,479,614 16,408,747 10,921,769 11,030,310 83,280,142 2,066,600 (79,968,305) 5,378,437 (5,395,618)
Current assets		4,936,355
Total assets		8,878,935
Current liabilities		9,174,781
Total liabilities		9,275,259
Equity
Contributed equity		72,378,105
Reserves (share-basedpayments)		1,798,257
Accumulated losses		(74,572,686)
		(396,324)
Total comprehensive loss		(896,951)

Related party information

As at 30 June 2012, an amount of $36,604,690 (2011: $33,113,037) was receivable by the Company from its various subsidiaries. As at the same date, an amount of $9,510,575 (2011: $7,672,892) was payable by the Company to its wholly-owned subsidiaries. All such loans are unsecured, generally interest free and there are no fixed terms of repayment.

Financial risk management

In assessing the recoverability of intercompany receivables, Genetic Technologies Limited, the parent entity, raises a provision for diminution to ensure that the carrying amount of these receivables does not exceed the net tangible assets of the subsidiaries.

Contingent liabilities and commitments of the parent entity

As at the date of this Report, apart from the contingent liability associated with the Limited Recourse Loans described in Note 33, the parent entity had no contingent liabilities or other commitments.

noteS to the fInanCIal StateMentS FOR THE YEAR ENDED 30 JUNE 2012 (cont.)

37. fInanCIal rISK ManaGeMent

The Group’s activities expose it to a variety of financial risks such as credit risk, market risk (including foreign currency risk and interest rate risk) and liquidity risk. The Group’s overall risk management program focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the financial performance of the Group. The Group uses different methods to measure the different types of risk to which it is exposed. These methods include sensitivity analysis in the case of foreign exchange, interest rate and aging analysis for credit risk.

Risk management is managed by the Group’s Risk Management Committee under guidance provided by the Board of Directors. The Committee identifies and evaluates financial risks in close cooperation with the Group’s operating units. The Board, via its Audit Committee, provides guidance for overall risk management, as well as policies covering specific areas, such as credit risk, foreign exchange risk and interest rate risk.

The Group’s principal financial instruments comprise cash at bank and on hand, short-term deposits and hire purchase liabilities. The Group has other financial assets and liabilities, such as trade receivables and payables, which arise directly from its operations.

The Group does not typically enter into derivative transactions, such as interest rate swaps or forward currency contracts. It is, and has been throughout the period under review, the Group’s policy that no trading in financial instruments shall be undertaken. The main risks arising from the Group’s financial instruments are credit risk exposures, foreign currency risk, interest rate risk and liquidity risk. The policies for managing each of these risks are summarised below.

Details of the significant accounting policies and methods adopted, including the criteria for recognition, the basis of measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset, financial liability and equity instrument are disclosed in Note 2.

The Group holds the following financial instruments:

	Consolidated	Consolidated
	2012	2011
	$	$
Financial assets	2,380,114 6,520,121 495,975 17,460 9,413,670 905,772 17,748 923,520
Cash at bank / on hand		1,985,257
Short-term deposits		3,119,410
Trade and other receivables		674,369
Performance bond and deposits		2,649
Total fnancial assets		5,781,685
Financial liabilities
Trade and otherpayables		1,115,028
Hirepurchase liabilities		67,878
Total fnancial liabilities		1,182,906

Credit risk

The Group’s credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents and deposits with banks and financial institutions, as well as credit exposures to customers, including outstanding receivables and committed transactions. If there is no independent rating, the Group assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings. The compliance with credit limits by customers is regularly monitored by Management. Sales to retail customers are required to be settled in cash or using major credit cards, thereby mitigating credit risk. The maximum exposures to credit risk as at 30 June 2012 in relation to each class of recognised financial assets is the carrying amount of those assets, as indicated in the balance sheet.

Financial assets included on the balance sheet that potentially subject the Group to concentration of credit risk consist principally of cash and cash equivalents and trade receivables. In accordance with the guidelines of the Group’s Short Term Investment Policy, the Group minimises this concentration of risk by placing its cash and cash equivalents with financial institutions that maintain superior credit ratings in order to limit the degree of credit exposure. For banks and financial institutions, only independently-rated parties with a minimum rating of “A-1” are accepted. The Group has also established guidelines relative to credit ratings, diversification and maturities that seek to maintain safety and liquidity. The Group does not require collateral to provide credit to its customers, however, the majority of the Group’s customers to whom credit is provided are large, reputable organisations and, as such, the risk of credit exposure is limited. The Group has not entered into any transactions that qualify as a financial derivative instrument.

37. fInanCIal rISK ManaGeMent (cont.)

Credit risk (cont.)

In addition, receivable balances are monitored on an ongoing basis with the result that the Group’s exposure to bad debts is not significant. As at 30 June 2012, the balance of the Group’s provision for doubtful debts was $88,783 (2011: $56,700), out of a total net receivables balance as at that date of $495,975 (2011: $674,369) (refer Note 13). For some trade receivables, the Group may also obtain security in the form of guarantees, deeds of undertaking or letters of credit which can be called upon if the counterparty is in default under the terms of the agreement.

Credit risk further arises in relation to financial guarantees given by the Group to certain parties in respect of obligations of its subsidiaries. Such guarantees are only provided in exceptional circumstances.

An analysis of the aging of trade and other receivables and trade and other payables is provided below:

	Consolidated	Consolidated
	2012	2011
	$	$
Net trade and other receivables	489,893 2,152 3,435 495 495,975 894,817 703 9,397 855 905,772
Current (less than 30 days)		616,550
31 days to 60 days		21,337
61 days to 90 days (refer note)		2,148
Greater than 90 days (refer note)		34,334
Total net trade and other receivables (Note 13)		674,369
Net trade and otherpayables
Current (less than 30 days)		1,085,480
31 days to 60 days		28,866
61 days to 90 days		-
Greater than 90 days		682
Total net trade and otherpayables (Note 19)		1,115,028

Note: A total of $3,930 in net trade and other receivables greater than 60 days is past due, of which a total of $3,332 had been received prior to the date of this Financial Report. The Company considers that the remaining $598 is recoverable and not impaired.

Market risk

Foreign currency risk

The Group operates internationally and is exposed to foreign currency exchange risk, primarily with respect to the US dollar and Canadian dollar, through financial assets and liabilities. It is the Group’s policy not to hedge these transactions as the exposure is considered to be minimal from a consolidated operations perspective. Further, as the Group incurs expenses which are payable in US dollars, the financial assets that are held in US dollars provide a natural hedge for the Group.

Foreign exchange risk arises from planned future commercial transactions and recognised assets and liabilities denominated in a currency that is not the entity’s functional currency and net investments in foreign operations. The risk is measured using sensitivity analysis and cash flow forecasting.

The Group has a Foreign Exchange Management Policy which was developed to establish a formal framework and procedures for the efficient management of the financial risks that impact on Genetic Technologies Limited through its activities outside of Australia, predominantly in the United States. The policy governs the way in which the financial assets and liabilities of the Group that are denominated in foreign currencies are managed and any risks associated with that management are identified and addressed. Under the policy, which is updated on a regular basis as circumstances dictate, the Group generally retains in foreign currency only sufficient funds to meet the expected expenditures in that currency. Surplus funds, if any, are converted into Australian dollars as soon as practicable after receipt.

noteS to the fInanCIal StateMentS FOR THE YEAR ENDED 30 JUNE 2012 (cont.)

37. fInanCIal rISK ManaGeMent (cont.)

Market risk (cont.)

As at 30 June 2012, the Group held the following financial assets and liabilities that were denominated in foreign currencies:

Consolidated	Year	USD	CAD		EUR	GBP	CNY	NZD	CHF	JPY
Financial assets
Cash at bank / on hand	2012	396,454	259,451		4,670	-	19	154	7,776	123,175
	2011	437,717	313,637		34,191	1	1,854	1,240	6,626	-
Trade and other receivables	2012	61,336	-		90,000	-	-	-	-	-
	2011	113,276	-		90,105	-	-	-	-	-
Total fnancial assets	2012	457,790	259,451		94,670	-	19	154	7,776	123,175
	2011	550,993	313,637	124,296		1	1,854	1,240	6,626	-
Financial liabilities
Trade and other payables	2012	210,304	7,886		1,652	-	49,128	1,817	3,090	69,677
	2011	217,168	22,539		17,250	-	68,158	136	3,290	-
Total fnancial liabilities	2012	210,304	7,886		1,652	-	49,128	1,817	3,090	69,677
	2011	217,168	22,539		17,250	-	68,158	136	3,290	-
Notes:*USD*– United States dollars		*CAD*– Canadian dollars			*EUR*– European euros			*GBP*– Great	Britain pounds
*CNY*– Chinese yuan		*NZD*– New	Zealand dollars		*CHF*– Swiss francs			*JPY*– Japanese yen

During the year ended 30 June 2012, the Australian dollar / US dollar exchange rate fell by 4.1%, from 1.0597 at the beginning of the year to 1.0161 at the end of the year. During the same period, Australian dollar / Canadian dollar exchange rate increased by 0.6%, from 1.0351 at the beginning of the year to 1.0416 at the end of the year.

Based on the financial instruments held at 30 June 2012, had the Australian dollar weakened / strengthened by 10% against the US dollar with all other variables held constant, the Group’s loss for the year would have been $41,000 lower / $50,000 higher (2011: profit $47,000 lower / profit $58,000 higher), mainly as a result of changes in the values of cash and cash equivalents which are denominated in US dollars, as detailed in the above tables.

Based on the financial instruments held at 30 June 2012, had the Australian dollar weakened / strengthened by 10% against the Canadian dollar with all other variables held constant, the Group’s loss for the year would have been $23,000 lower / $28,000 higher (2011: profit $48,000 lower / profit $34,000 higher), due to changes in the values of cash and cash equivalents which are denominated in Canadian dollars, as detailed in the above tables.

Interest rate risk

The Group’s main interest rate risk arises in relation to its short-term deposits with various financial institutions. If rates were to decrease, the Group may generate less interest revenue from such deposits. However, given the relatively short duration of such deposits, the associate risk is relatively minimal. The Group also has various hire purchase liabilities with fixed interest rates. While these rates do not vary once the contract has been executed, the Group may be subject to interest rate movements if it were to acquire additional assets via similar contracts in the future.

The Group has a Short Term Investment Policy which was developed to manage the Group’s surplus cash and cash equivalents. In this context, the Group adopts a prudent approach that is tailored to cash forecasts rather than seeking high returns that may compromise access to funds as and when they are required. Under the policy, the Group deposits its surplus cash in a range of deposits / securities over different time frames and with different institutions in order to diversify its portfolio and minimise risk.

On a monthly basis, Management provides the Board with a detailed list of all cash and cash equivalents, showing the periods over which the cash has been deposited, the name and credit rating of the institution holding the deposit and the interest rate at which the funds have been deposited. A comparison of interest rate movements from month to month and a variance to an 11am deposit rate is also provided.

At 30 June 2012, if interest rates had changed by +/- 50 basis points from the year-end rates, with all other variables held constant, the Group’s loss for the year would have been $42,000 lower / higher (2011: profit $22,000 lower / higher), as a result of higher / lower interest income from cash and cash equivalents. Consolidated equity for the Group would have been $42,000 higher / lower (2011: $22,000 higher / lower) mainly as a result of an increase / decrease in the fair value of cash and cash equivalents.

37. fInanCIal rISK ManaGeMent (cont.)

Market risk (cont.)

The exposure to interest rate risks and the effective interest rates of financial assets and liabilities, both recognised and unrealised, for the Group is as follows:

Consolidated Year	Floatingrate Fixed rate Carrying amount	Weighted average effective rate Average maturity period
	$ $ $	% days
Financial assets	2,380,114 1,985,257 - - 2,380,114 1,985,257 - - 6,520,121 3,119,410 6,520,121 3,119,410 - - 17,460 2,649 17,460 2,649 2,380,114 1,985,257 6,537,581 3,122,059 8,917,695 5,107,316 - - 17,981 70,989 17,748 67,878 - - 17,981 70,989 17,748 67,878
Cash at bank / on hand 2012 2011		2.31% 1.56% At call At call
Short-term deposits 2012 2011		5.23% 5.92% 61 92
Performance bond / deposits 2012 2011		- - At call At call
Totals 2012 2011
Financial liabilities
Hire purchase liabilities (Note 31) 2012 2011		6.84% 6.30% 79 428
Totals 2012 2011

Notes: All periods in respect of financial assets are for less than one year.

In respect of the hire purchase liabilities attributable to the Group, the interest rates are fixed for the terms of the facility, which is less than one year ($17,748).

Liquidity risk

Prudent liquidity risk management implies maintaining sufficient cash and cash equivalents and the availability of funding through an adequate amount of committed credit facilities, such as its hire purchase and credit card facilities. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and, wherever possible, matching the maturity profiles of financial assets and liabilities. Due to the dynamic nature of the underlying businesses, Management aims to maintain flexibility in funding by keeping committed credit lines available. Surplus funds are generally only invested in instruments that are tradeable in highly liquid markets.

A balanced view of cash inflows and outflows affecting the Group is summarised in the table below:

Consolidated Year	< 6 months	6 to 12 months	1 to 5years	> 5years	Totals
	$	$	$	$	$
Financial assets	2,380,114 1,985,257 6,520,121 3,119,410 495,975 674,369 17,460 2,649 9,413,670 5,781,685	- - - - - - - - - -	- - - - - - - - - -	- - - - - - - - - -
Cash at bank / on hand 2012 2011					2,380,114 1,985,257
Short-term deposits 2012 2011					6,520,121 3,119,410
Trade and other receivables 2012 2011					495,975 674,369
Performance bond and deposits 2012 2011					17,460 2,649
Total fnancial assets 2012 2011					9,413,670 5,781,685

noteS to the fInanCIal StateMentS FOR THE YEAR ENDED 30 JUNE 2012 (cont.)

37. fInanCIal rISK ManaGeMent (cont.)

Liquidity risk (cont.)

Liquidity risk(cont.)
Consolidated Year	< 6 months 6 to 12 months 1 to 5years > 5years Totals
	$ $ $ $ $
Financial liabilities
Trade and other payables 2012 2011	905,772 1,115,028 - - - - - - 905,772 1,115,028
Hire purchase liabilities 2012 2011	17,981 26,306 - 26,702 - 17,981 - - 17,981 70,989
Total fnancial liabilities 2012 2011	923,753 1,141,334 - 26,702 - 17,981 - - 923,753 1,186,017
Net maturity 2012 2011	8,489,917 4,640,351 - (26,702) - (17,981) - - 8,489,917 4,595,668

The Group had access to the following undrawn borrowing facilities as at 30 June 2012:

Nature of facility	Facilitylimit Amount used Amount available
	$ $ $
Master Asset Finance Facility	2,500,000 (17,748) 2,482,252
Credit card facilities	199,208 (15,861) 183,347

Note: The Master Asset Finance Facility may be drawn at any time, subject to compliance with applicable banking covenants, and is subject to annual review.

Fair value measurements

The following methods and assumptions are used to determine the fair values of financial assets and liabilities:

Cash and cash equivalents: the carrying amount approximates fair value due to their short term to maturity.
Trade and other receivables: the carrying amount approximates fair value.
Inventories: the carrying amount approximates fair value.
Performance bond and deposits: the carrying amount approximates fair value due to its short term to maturity.
Unlisted shares: the carrying amount has been written down to recoverable amount which approximates fair value.
Trade and other payables: the carrying amount approximates fair value.
Accrued expenses: the carrying amount approximates fair value.
Hire purchase liabilities: the carrying amount approximates fair value.

38. SuBSeQuent eVentS

On 24 July 2012, Mr. Gregory Brown was appointed as a Director of the Company.

On 7 August 2012, the Company sold a total of 46,951 ordinary shares in former subsidiary ImmunAid Pty. Ltd. for a total consideration of $46,951, prior to the payment of associated costs.

Apart from these events, there have been no other significant events which have occurred after balance date.

dIreCtorS’ deClaratIon

In the opinion of the Directors:

(a) the Financial Statements and accompanying notes set out on pages 50 to 88 are in accordance with the Corporations Act 2001 , including:
(i) complying with Accounting Standards, the Corporations Regulations 2001 and other mandatory professional reporting requirements; and
(ii) giving a true and fair view of the consolidated entity’s financial position as at 30 June 2012 and of its performance for the financial year ended on that date; and
(b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; and

Note 2 confirms that the financial statements also comply with International Financial Reporting Standards as issued by the International Accounting Standards Board.

The Directors have been given the declarations by the Chief Executive Officer and Chief Financial Officer, as required by section 295A of the Corporations Act 2001 .

This Declaration is made in accordance with a resolution of the Directors.

==> picture [82 x 52] intentionally omitted <==

DR. MELVYN J. BRIDGES

Non-Executive Chairman

Melbourne, 27 August 2012

audItor’S report

==> picture [488 x 684] intentionally omitted <==

audItor’S IndependenCe deClaratIon

==> picture [488 x 684] intentionally omitted <==

Corporate InforMatIon

dIreCtorS

Dr. Melvyn J. Bridges (Non-Executive Chairman)

BanKerS

Australia

National Australia Bank Limited

Tommaso Bonvino (Non-Executive)

Dr. Malcolm R. Brandon (Non-Executive)

Gregory W. Brown (Non-Executive)

Dr. Mervyn Cass (Non-Executive)

Huw D. Jones (Non-Executive)

CoMpany SeCretary

Thomas G. Howitt

reGIStered offICe

60-66 Hanover Street Fitzroy Victoria 3065 Australia

T: +61 3 8412 7000 F: +61 3 8412 7040 E: [email protected]

Level 2, 151 Rathdowne Street Carlton Victoria 3053 Australia

USA

Bank of America, N.A. 155 Town Centre Drive Mooresville NC 28117 USA

Canada

Bank of Montreal 595 Burrard Street Vancouver BC V7X 1L7 Canada

audItor

PricewaterhouseCoopers Chartered Accountants Freshwater Place 2 Southbank Boulevard Southbank Victoria 3006 Australia

StoCK eXChanGeS

poStal addreSS

P.O. Box 115 Fitzroy Victoria 3065 Australia

auStralIan BuSIneSS nuMBer

Australian Securities Exchange Stock Exchange Centre 2 The Esplanade Perth Western Australia 6000 Australia

Code: GTG

17 009 212 328

CoMpany WeBSIte

www.gtglabs.com

NASDAQ Capital Market The NASDAQ Stock Market One Liberty Plaza, 165 Broadway New York NY 10006 USA

Share reGISter

Computershare Investor Services Pty. Ltd. Yarra Falls 452 Johnston Street Abbotsford Victoria 3067 Australia

Ticker: GENE

T: +61 3 9415 5000 F: +61 3 9473 2500

W: www.computershare.com

aSX addItIonal InforMatIon

Additional information required by the Listing Rules of the Australian Securities Exchange and not disclosed elsewhere in this Annual Report. The information provided is current as at 28 August 2012.

hoMe eXChanGe

The Company’s ordinary shares are quoted on the Australian Securities Exchange. The Home Exchange is Perth, Western Australia. The ASX code for the Company’s ordinary shares is GTG. The Company also has a Level II listing of American Depositary Receipts (ADRs) on the National Association of Securities Dealers Automated Quotation (“NASDAQ”) Capital Market in the USA. Each ADR comprises 30 fully paid ordinary shares and trades under the ticker symbol GENE.

dIStrIButIon of eQuIty SeCurItIeS

The numbers of shareholders as at 28 August 2012, ranked by size of holding, in each class of shares are as follows:

Range of shares Number of holders	Number of shares
1 – 1,000 278 1,001 – 5,000 863 5,001 – 10,000 525 10,001 – 100,000 1,113 100,001 and over 264 Totals 3,043	181,192
	2,624,882
	4,405,882
	41,046,686
	416,513,177
	464,771,819

The number of shareholders holding less than a “marketable parcel” of shares (being 5,155 shares) is 1,149. The total number of shares held by these shareholders on 28 August 2012 was 2,846,996.

tWenty larGeSt ShareholderS

The names of the twenty largest registered shareholders of the Company’s ordinary shares as at 28 August 2012 are:

Rank Name of registered shareholder Number of shares	Percentage held
1 Dr. Mervyn Jacobson Group 127,000,000 2 National Nominees Limited 95,037,517 3 Security& EquityResources Limited 16,584,506 4 Mr. Roger L. Dawkins and Mr. Wayne Cox 16,016,667 5 Ms. Gail J. Bratz 10,000,000 6 Mervyn Jacobson ApS 9,473,684 7 J.P. Morgan Nominees Australia Limited 5,132,686 8 HSBC CustodyNominees (Australia) Limited 4,973,600 9 Jetan Pty. Ltd. 4,421,053 10 Grandor Pty. Ltd. < Mark Scott FamilyP/F account> 4,312,965 11 Mr. Bernard Stangand Mr. Maurie Stang 3,850,000 12 Mr. Maurie Stang 3,446,000 13 PershingAustralia Nominees Pty. Ltd. 3,331,074 14 Mr. Bernard Stang 3,222,000 15 HSBC CustodyNominees (Australia) Limited 3,180,634 16 Mr. Bruce Bartlett 3,000,000 17 Kam Superannuation Fund Pty. Ltd. 2,886,983 18 Mr. PhillipYew 2,700,000 19 Wakko Enterprises Pty. Ltd. 2,640,346 20 EquityTrustees Limited 2,552,631 Totals 323,762,346	27.33%
	20.45%
	3.57%
	3.44%
	2.15%
	2.04%
	1.10%
	1.07%
	0.95%
	0.93%
	0.83%
	0.74%
	0.72%
	0.69%
	0.68%
	0.65%
	0.62%
	0.58%
	0.57%
	0.55%
	69.66%

SuBStantIal ShareholderS

As at 28 August 2012, the name of the only substantial shareholder holding shares representing more than 5% of the Company’s total issued capital, who has notified the Company in accordance with section 671B of the Corporations Act 2001 , is:

Name of substantial shareholder	Number of shares	Percentage held
Dr. Mervyn Jacobson	136,473,684	29.37%

reStrICted SeCurItIeS

As at 28 August 2012, there were no ordinary shares that were subject to escrow agreements with the Company.

VotInG rIGhtS

Article 17 of the Company’s Constitution stipulates the voting rights of Members as follows:

“Subject to any rights or restrictions for the time being attached to any class or classes of shares and to this Constitution:

(a) On a show of hands every person present in the capacity of a Member or a proxy, attorney or representative (or in more than one of these capacities) has one vote; and
(b) On a poll every person present who is a Member or proxy, attorney or Representative has:
(i) For each fully paid share that the person holds or represents: one vote; and
(ii) For each share other than a fully paid share that the person holds or represents: that proportion of one vote that the amount paid (not credited) on the shares bears to the total amount paid and payable on the share (excluding amounts credited).”

GloSSary

ADR (AMERICAN DEPOSITARY RECEIPT) A security listed on NASDAQ comprising 30 ordinary shares in GTG

AMNIOCENTESIS An invasive method for collecting foetal cells from pregnant women

ARC (AUSTRALIAN RESEARCH COUNCIL) The organisation which advises the Government on matters relating to science

ARC–LINKAGE GRANT A source of funding for basic research for commercial organisations

ASX or AUSTRALIAN SECURITIES EXCHANGE Australian Securities Exchange Limited

AUTO IMMUNE DISEASES A group of diseases caused by an immune response being directed toward a normal body cell

BRCA1 and BRCA2 Genes used to assess the risk of developing familial breast and ovarian cancers

BREVAGen™ A genetic based, Laboratory Developed Test used to determine risk of occurrence of breast cancer

CANINE Pertaining to dogs

CEO Chief Executive Officer

CFO Chief Financial Officer

CLIA Clinical Laboratory Improvement Amendments of 1988 (United States)

CMS Centers for Medicare and Medicaid Services

COMPANY or GTG Genetic Technologies Limited (ACN 009 212 328)

CURRENCIES USED

AUD or $ Australian dollars, except where specifically indicated otherwise

CAD Canadian dollars CHF Swiss francs CNY Chinese yuan EUR European euros GBP Great Britain pounds JPY Japanese yen NZD New Zealand dollars USD United States dollars

CVS (CHORIONIC VILLUS SAMPLING) An invasive method for collecting foetal cells from pregnant women

DNA (DEOXYRIBONUCLEIC ACID) The complex chemical in each cell of the body which determines individual differences

FOETAL CELLS The cells of an unborn child

GENDIA An international network consisting of more than 50 laboratories (including GTG) that offers more than 1,300 different genetic tests

GENE A region of DNA that controls an hereditary characteristic

GROUP Genetic Technologies Limited and all of its subsidiaries

IMMUNAID™ A technology aimed at improving the efficiency of treatments in cancer and autoimmune diseases

IMMUNE RESPONSE The body’s mechanism for eliminating infections by bacteria or viruses

ISO (INTERNATIONAL ORGANIZATION FOR STANDARDIZATION) The organisation responsible for developing and maintaining the quality standards for businesses and laboratories

LDT (LABORATORY DEVELOPED TEST) A test that has been developed and offered by a single laboratory

NASDAQ National Association of Securities Dealers Automated Quotation Stock Exchange

NATA (NATIONAL ASSOCIATION OF TESTING AUTHORITIES) An Australian authority for the accreditation of laboratories against the relevant ISO standards that the Company must adhere to for compliance

NON–CODING The segments of DNA which do not contain information on the structure of proteins

NPAAC (NATIONAL PATHOLOGY ACCREDITATION ADVISORY COUNCIL) Responsible for the development and maintenance of standards and guidelines for pathology practices within Australia

PPO (PREFERRED PROVIDER ORGANISATION) An organisation that establishes a network of medical providers with whom they negotiate fees and provide access to insurance companies

PROTEIN A string of amino acids determined by a gene

RARECELLECT™ The Company’s non-invasive process for obtaining foetal cells from pregnant women for genetic testing

RCPA (ROYAL COLLEGE OF PATHOLOGISTS OF AUSTRALIA) Jointly with NATA, is responsible for the accreditation of Australian pathology laboratories in relation to medical testing

SCN1A (SODIUM CHANNEL, NEURONAL 1 ALPHA) A gene responsible for one form of severe (myoclonic) epilepsy in infancy

T–REGULATORY CELLS The cells that limit the strength of an immune response to ensure it does not become too severe

EBITDA Earnings before interest, tax, depreciation and amortisation

Designed and produced by motivo

Genetic Technologies Limited 60-66 Hanover Street Fitzroy, Victoria 3065 Australia

T: +61 3 8412 7000

F: +61 3 8412 7040

E: [email protected]

P.O. Box 115 Fitzroy, Victoria 3065 Australia

AI assistant

GENETIC TECHNOLOGIES LIMITED — AGM Information 2012

65022_rns_2012-10-17_3e7056fa-e8b0-4cbe-b111-3c56e414b3c1.pdf

2012 Notice of Annual General Meeting, Sample Proxy and 2012 Annual Report

FOR FURTHER INFORMATION PLEASE CONTACT

NOTICE OF ANNUAL GENERAL MEETING

BUsINEss

1. CONsIDERATION OF FINANCIAL sTATEMENTs

2. REsOLUTION 1 - ELECTION OF DR. MELVYN JOHN BRIDGEs

3. REsOLUTION 2 - ELECTION OF GREGORY WAYNE BROWN

4. REsOLUTION 3 - RE-ELECTION OF DR. MALCOLM ROY BRANDON

5. REsOLUTION 4 - RE-ELECTION OF HUW DAVID JONEs

6. REsOLUTION 5 - ADOPTION OF THE REMUNERATION REPORT

7. REsOLUTION 6 - APPROVAL OF ADDITIONAL PLACEMENT CAPACITY

VOTING ENTITLEMENT NOTICE

DIRECT VOTE

PROXIEs

APPOINTMENT OF PROXIEs

BODIEs CORPORATE

EXPLANATORY MEMORANDUM

1. CONsIDERATION OF FINANCIAL sTATEMENTs

2. REsOLUTION 1 - ELECTION OF DR. MELVYN JOHN BRIDGEs

3. REsOLUTION 2 - ELECTION OF GREGORY WAYNE BROWN

4. REsOLUTION 3 - RE-ELECTION OF DR. MALCOLM ROY BRANDON

5. REsOLUTION 4 - RE-ELECTION OF HUW DAVID JONEs

6. REsOLUTION 5 - ADOPTION OF THE REMUNERATION REPORT

Voting Prohibition Statement

7. REsOLUTION 6 - APPROVAL OF ADDITIONAL PLACEMENT CAPACITY

7.1 Background

7.2 Description of Listing Rule 7.1A

(a) Equity Securities

(b) Formula for calculating 10% Placement Facility

(A x D) – E

D = 10%

(c) Interaction of Listing Rule 7.1 and Listing Rule 7.1A

(d) Minimum Issue Price

( 10% Placement Period ).

7.3 Listing Rule 7.1A

7.4 Specific information required by Listing Rule 7.1A

(a) Minimum issue price

7. REsOLUTION 6 - APPROVAL OF ADDITIONAL PLACEMENT CAPACITY (cont.)

(b) Risk of dilution

(c) Timing of issue

(d) Purpose of issue

(e) Allocation policy

(f) Prior issues

(g) Voting exclusion

7. REsOLUTION 6 - APPROVAL OF ADDITIONAL PLACEMENT CAPACITY (cont.)

7.5 Post-issue disclosure

Voting exclusion

NOTEs

Lodge your vote:

By Mail:

For all enquiries call:

Voting Form

 For your vote to be effective it must be received by 11.00 am (Melbourne time) Sunday, 25 November 2012

How to Vote on Items of Business

Vote Directly

Appoint a Proxy to Vote on Your Behalf

Signing Instructions

Attending the Meeting

A proxy need not be a securityholder of the Company.

www.investorcentre.com

SRN/HIN: I9999999999

Voting Form

Indicate How your Vote will be Cast

XX

1. Vote Directly

Items of Business 

SIGN

Signature of Securityholder(s) This section must be completed.

Genetic Technologies

conTenTs

ABoUT GTG

chAiRmAn AnD ceo’s messAGe

~~Dr. melvyn J. Bridges~~ ~~Non-Executive Chairman~~

~~Tommaso Bonvino~~ ~~Non-Executive Director~~

~~Dr. malcolm R. Brandon~~ ~~Non-Executive Director~~

~~Gregory W. Brown~~ ~~Non-Executive Director~~

~~Dr. mervyn cass~~ ~~Non-Executive Director~~

GENETIC TECHNOLOGIES LIMITED AGM Information 2012

Dr. melvyn J. Bridges Non-Executive Chairman

Tommaso Bonvino Non-Executive Director

Dr. malcolm R. Brandon Non-Executive Director

Gregory W. Brown Non-Executive Director

Dr. mervyn cass Non-Executive Director

huw D. Jones Non-Executive Director

Thomas G. howitt Chief Financial Offcer and Company Secretary

Alison J. mew Chief Operating Offcer

Gregory J. mcPherson Vice President Sales and Marketing

Dr. David J. sparling Vice President Legal and Corporate Development

mark J. ostrowski Senior Vice President Sales and Marketing – Phenogen Sciences Inc.

ivan Jasenko Quality and Regulatory Manager

3. Other commercial assets

MEDICAL

PATERNITY

FORENSICS

ANIMAL