GENETIC TECHNOLOGIES LIMITED

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ASX ANNOUNCEMENT 25 October 2013

Notice of 2013 Annual General Meeting, Sample Proxy, Adjournment of Extraordinary General Meeting and 2013 Annual Report

Genetic Technologies Limited (ASX: GTG; NASDAQ: GENE) is pleased to release its Notice of the 2013 Annual General Meeting of shareholders (the “Notice”), a Sample Proxy for the AGM, a letter regarding the adjournment of the recent Extraordinary General Meeting (with respect to Resolution 2 only) (the “Letter”) and its 2013 Annual Report.

It is anticipated that a copy of the Notice and a personalised proxy will be mailed to all shareholders, together with a copy of the Letter, by no later than Tuesday, 29 October 2013. The Company’s 2013 Annual Report is available for download from its website: www.gtglabs.com

As detailed in the Notice and the Letter, the adjourned Extraordinary General Meeting and the 2013 Annual General Meeting will both be held on Friday, 29 November 2013 at the following address:

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

The Extraordinary General Meeting will re-open at 10.30 am, with the Annual General Meeting to follow immediately thereafter.

FOR FURTHER INFORMATION PLEASE CONTACT

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

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:

10.45 am on Friday, 29 November 2013 at

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

The meeting will commence immediately after the adjourned Extraordinary General Meeting that is scheduled to reopen at 10.30 am on Friday, 29 November 2013 at the same venue as above.

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 2013.

2. REsOLUTION 1 - 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 2013 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.

3. REsOLUTION 2 - RE-ELECTION OF MR. TOMMAsO BONVINO

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

“ To elect Mr. Tommaso Bonvino 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.”

4. REsOLUTION 3 - ELECTION OF MR. BENJAMIN sILLUZIO

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

“ To elect Mr. Benjamin Silluzio who was appointed to the Board as an additional Director on 10 December 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.”

5. REsOLUTION 4 - APPROVAL OR RATIFICATION OF THE IssUE OF sHAREs TO CYGNET CAPITAL PTY. LTD.

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

“ That for the purposes of Listing Rule 7.1, or in the alternative Listing Rule 7.4, and for all other purposes, Shareholders approve the issue of up to 6,944,444 Shares to Cygnet Capital Pty. Ltd. at an issue price of $0.072 (as announced by the Company to the ASX on 3 October 2013) on the terms and conditions set out in the Explanatory Memorandum.”

Dated this 25th day of October 2013

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 7.00 pm on Wednesday, 27 November 2013. 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 completing Step 2 on the attached Proxy Form, complete 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 1) 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 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 Step 1, and not “tick” the first panel.

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 1, 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 1 by directing their proxy how to vote with respect to Resolution 1. 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 1.

An “Excluded Voter” for these purposes means collectively one of the Key Management Personnel (as set out on page 36 of the Company’s 2013 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 10.45 am on Wednesday, 27 November 2013.

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 Friday, 29 November 2013. 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 2013 Annual Report.

2. REsOLUTION 1 - 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 36 to 44 of the Company’s 2013 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 2013 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 2012 Annual General Meeting. Where a “first strike” occurs at the 2013 Annual General Meeting:
(a) the Company’s subsequent Remuneration Report (in other words, the Company’s Remuneration Report to be included in the 2014 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
(b) if the Company’s subsequent Remuneration Report also receives a “no vote” at the 2014 Annual General Meeting of at least 25% of the votes cast, then Shareholders at the 2014 Annual General Meeting will be asked (at that 2014 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 1.

The Chairman intends to exercise all undirected proxies in favour of Resolution 1.

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 1.

Voting Exclusion Statement

A vote on Resolution 1 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 1 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 1 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.

3. REsOLUTION 2 - RE-ELECTION OF MR. TOMMAsO BONVINO

Mr. Bonvino, 52, retires by rotation in accordance with the Company’s Constitution and being eligible offers himself for re-election.

Mr. Bonvino 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 27 years experience in consumer marketing and product development and also a NonExecutive Director of the Melbourne Recital Centre and Fellow of the Australian Institute of Company Directors.

4. REsOLUTION 3 - ELECTION OF MR. BENJAMIN sILLUZIO

Mr. Silluzio, 37, 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. Silluzio was appointed to the Board on 10 December 2012. He has held several senior positions including: Director of UBS Wealth Management Australia, Senior Vice President of Credit Suisse First Boston Melbourne, Smith Barney Century Council, Colonial Institutional Stock broking in Melbourne and Sydney and was the President/Chairman of the Italian Chamber of Commerce. He is currently the managing partner and desk head of RBS Morgans Family Office and a Director of Private Branded Beverages Limited, a public unlisted company.

5. REsOLUTION 4 - APPROVAL OR RATIFICATION OF THE IssUE OF sHAREs TO CYGNET CAPITAL PTY. LTD.

5.1 Short explanation - Resolution 4

On 1 August 2013, the Company announced its intention to offer Shareholders the opportunity to acquire up to $7,500 worth of Shares each, at an issue price of $0.072 per Share, under a share purchase plan to raise up to $3,000,000 ( SPP ).

The SPP was underwritten by the Lodge Corporate Pty. Ltd. and Cygnet Capital Pty. Ltd. ( Cygnet ) (together the Underwriters ) within the Company’s then remaining capacity under Listing Rule 7.1. As such, the underwriting of the SPP was limited to $1,800,000, or 25,000,000 Shares.

Shareholders approved the issue of Shares to Underwriters of the Company’s SPP at the Company’s Extraordinary General Meeting which was held on 23 October 2013 ( EGM ).

As announced by the Company to the ASX on 3 October 2013, Cygnet also committed to subscribe for further Shares at the same issue price of $0.072 per Share (under the SPP) to raise an additional $1,000,000. Of this amount, Shares representing a total of $500,000 (equivalent to 6,944,444 Shares) will be issued at the same issue price as the other Shares under the SPP.

In the event that Shares are issued under this Resolution 4 after the date of the Annual General Meeting, this Resolution 4 seeks approval of the issue of Shares (under Listing Rule 7.1) representing the remaining $500,000 (equivalent to 6,944,444 Shares) which will be issued at $0.072 per Share.

In the alternative, if Shares are issued under this Resolution 4 before the date of the Annual General Meeting, this Resolution 4 seeks approval (under Listing Rule 7.4) of the ratification of the issue of Shares representing the remaining $500,000 (equivalent to 6,944,444 Shares) which will be issued at $0.072 per Share.

This issue of Shares the subject of this Resolution 4 was subject to Shareholders refreshing the Company’s 15% share issue capacity under Listing Rule 7.1 – this condition was satisfied on 23 October 2013 as Shareholders approved the refreshment of the Company’s share issue capacity at the EGM.

5.2 Regulatory requirements under ASX Listing Rules 7.1 and 7.4 for the issue of Shares to Cygnet

ASX Listing Rule 7.1 sets out the regulatory requirements that must be satisfied in relation to the issue of securities under Resolution 4. Listing Rule 7.1 prohibits the Company issuing equity securities in excess of 15% of the existing share capital in a 12 consecutive month period without prior shareholder approval.

Alternatively, Listing Rule 7.4 permits a company to obtain ratification from its shareholders in relation to a prior share issue (and thereby refresh the Company’s ability in the future to issue up to 15% of its share capital without obtaining prior shareholder approval).

Listing Rules 7.3 and 7.5 (whichever is applicable) requires that a notice of meeting pursuant to which Shareholders are requested to consider approving an issue of equity securities pursuant to Listing Rule 7.1, or alternatively a ratification of an issue of equity securities pursuant to Listing Rule 7.4, must include certain specified information in relation to the securities to be issued, as follows:

Cygnet Capital Pty. Ltd. (Underwriter).

Shares issued to or proposed Cygnet Capital Pty. Ltd. (Underwriter). to be issued to, as applicable Maximum number of Up to 6,944,444 Shares. securities to be issued Issue price of the securities The Shares will be issued at a price of $0.072 per Share. Issue date The Shares are to be issued as soon as practical after the Company obtains shareholder approval but in any event within 3 months of the date of shareholder approval (or such later date to the extent permitted by any waiver that may be granted by ASX). Terms of the securities The Shares will rank equally in all respects with the Company’s existing ordinary shares on issue.

The use of the funds raised

Funds raised under the share purchase plan are to be used for:

Expanding US distribution for the Company’s lead breast cancer test BREVAGen™;
Completing additional studies to add ethnicities (initially African American and Hispanics) to expand the addressable market for BREVAGen™;
Increasing market awareness for BREVAGen™ through broader and more active key opinion leader and speaker programs;
investing to further improve reimbursement performance; and
general working capital purposes.

5.3 Effect of passing of Resolution 4

Resolution 4, if passed, will enable the Company to retain the flexibility to issue equity securities within the next 12 months up to the 15% threshold without the requirement to obtain prior Shareholder approval.

5.4 Board recommendation

The Board unanimously recommends that Shareholders vote in favour of Resolution 4.

Voting Exclusion Statement

Pursuant to Listing Rules 7.3.8 and 7.5.6 (as applicable), the Company will disregard any votes cast on Resolution 4 by:

(a) Cygnet Capital Pty. Ltd.;
(b) a person who may participate in the proposed issue and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of Shares, if the resolution is passed; and
(c) any Associate of those persons.

However, the Company need not disregard a vote if:

it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a 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 Attention: Company Secretary P.O. Box 115 Fitzroy Vic. 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 10.45 am (Melbourne time) Wednesday, 27 November 2013

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.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole Company Secretary, this form must be signed by that person. If the company (pursuant to section 204A of the Corporations Act 2001) does not have a Company Secretary, a Sole Director can also sign alone. Otherwise this form must be signed by a Director jointly with either another Director or a Company Secretary. Please sign in the appropriate place to indicate the office held. Delete titles as applicable.

Attending the Meeting

Bring this form to assist registration. If a representative of a corporate securityholder or proxy is to attend the meeting you will need to provide the appropriate “Certificate of Appointment of Corporate Representative” prior to admission. A form of the certificate may be obtained from Computershare or online at www.investorcentre.com under the information tab, "Downloadable Forms".

Comments & Questions: If you have any comments or questions for the company, please write them on a separate sheet of paper and return with this form.

 Turn over to complete the form

A proxy need not be a securityholder of the Company.

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View the Annual Report:

Update your securityholding, 24 hours a day, 7 days a week:

www.investorcentre.com

Your secure access information is:

www.gtglabs.com

SRN/HIN: I9999999999

 PLEASE NOTE: For security reasons it is important that you keep your SRN/HIN confidential.

Samples/000001/000001/i

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

I ND

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Change of address. If incorrect, mark this box and make the correction in the space to the left. Securityholders sponsored by a  broker (reference number commences with ’ X ’) should advise their broker of any changes. I 9999999999 I ND

Voting Form

Please mark to indicate your directions

Indicate How your Vote will be Cast

Select one option only

XX

At the Annual General Meeting of Genetic Technologies Limited to be held at "Treetops", Melbourne Museum, 11 Nicholson Street, Carlton, Victoria, Australia on Friday, 29 November 2013, The meeting will commence immediately after the adjourned Extraordinary General Meeting that is scheduled to reopen at 10.30 am (AEDT) and at any adjournment or postponement of that meeting, I/We being member/s of Genetic Technologies Limited direct the following:

 PLEASE NOTE: Leave this box blank if you have selected the Chairman of the Meeting. Do not insert your own name(s).

2. Appoint a Proxy to Vote on Your Behalf: I/We hereby appoint

1. Vote Directly

Record my/our votes strictly in accordance with directions in Step 2.

Chairman of OR the Meeting

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PLEASE NOTE: A Direct Vote will take OR priority over the appointment of a Proxy. For a valid Direct Vote to be recorded you must mark FOR, AGAINST, or ABSTAIN on each item.

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, and to the extent permitted by law, as the proxy sees fit).

Chairman authorised to exercise undirected proxies on remuneration related resolutions : Where I/we have appointed the Chairman of the Meeting as my/our proxy (or the Chairman becomes my/our proxy by default), I/we expressly authorise the Chairman to exercise my/our proxy on Resolution 1 (except where I/we have indicated a different voting intention below) even though Resolution 1 is connected directly or indirectly with the remuneration of a member of key management personnel, which includes the Chairman.

Important Note: If the Chairman of the Meeting is (or becomes) your proxy you can direct the Chairman to vote for or against or abstain from voting on Resolution 1 by marking the appropriate box in step 2 below.

Items of Business 

PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on your behalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

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Resolution 1 - Adoption of the Remuneration Report Resolution 2 - Re-election of Mr Tommaso Bonvino

Resolution 3 - Election of Mr Benjamin Silluzio Resolution 4 - Approval or ratification of the issue of shares to Cygnet Capital Pty Ltd

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The Chairman of the Meeting intends to vote all available proxies in favour of each Resolution

SIGN Signature of Securityholder(s) This section must be completed.

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Individual or Securityholder 1 Securityholder 2 Securityholder 3
Sole Director and Sole Company Secretary Director Director/Company Secretary
Contact
Contact Daytime
Name Telephone Date / /
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G T G

9 9 9 9 9 9 A

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25 October 2013

Dear Shareholder,

NOTICE OF ADJOURNMENT OF EXTRAORDINARY GENERAL MEETING

Please note that, in accordance with the Company’s Constitution, the Extraordinary General Meeting of shareholders held on Wednesday, 23 October 2013 ( EGM ) was adjourned until 10.30 am (EDT) on Friday, 29 November 2013 for the consideration and shareholder vote of Resolution 2 of the Notice of Meeting dated 19 September 2013 ( EGM Notice of Meeting ).

The Directors maintain their unanimous recommendation that shareholders approve Resolution 2, as described in the EGM Notice of Meeting. A copy of the EGM Notice of Meeting remains available at www.gtglabs.com or can be obtained from the Company by contacting Tom Howitt, Company Secretary, on +61 3 8412 7000.

The resumed EGM will only consider Resolution 2 and will take place immediately before the Company’s Annual General Meeting to be held on Friday, 29 November 2013 ( AGM ) at the same venue as the AGM, namely “Treetops”, Melbourne Museum, 11 Nicholson Street, Carlton, Victoria, 3053.

All valid proxies for the EGM that were received by the Company prior to 21 October 2013 remain current for the adjourned EGM. Shareholders who have not yet lodged a proxy for the EGM may still do so (in respect of Resolution 2 only). The completed proxy must be received by the Company, as detailed on the original Proxy Form that was sent to all shareholders, by no later than 10.30 am on Wednesday, 27 November 2013.

We also advise that the Notice for the Company’s 2013 Annual General Meeting accompanies this letter. The Annual General Meeting will commence immediately after the conclusion of the EGM.

Yours sincerely,

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THOMAS G. HOWITT Company Secretary

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

Genetic Technologies

Personalizing health

Annual Report 2013

01 ABOUT GTG
02 ChAirmAn AnD CEO’s mEssAGE
04 BOArD Of DirECTOrs AnD sEniOr mAnAGEmEnT
06 fivE-yEAr sUmmAry
08 OUr BUsinEss
09 DOmEsTiC GEnETiC TEsTinG
10 CAnCEr DiAGnOsTiCs
25 DirECTOrs’ rEPOrT
46 COrPOrATE GOvErnAnCE sTATEmEnT
54 COnsOLiDATED sTATEmEnT Of COmPrEhEnsivE inCOmE
55 COnsOLiDATED BALAnCE shEET
56 COnsOLiDATED sTATEmEnT Of CAsh fLOWs
57 COnsOLiDATED sTATEmEnT Of ChAnGEs in EQUiTy
11 BrEvAGen™
58 nOTEs TO ThE finAnCiAL sTATEmEnTs
17 LiCEnsinG
93 DirECTOrs’ DECLArATiOn
18 nOn-COrE AssETs
94 AUDiTOr’s rEPOrT
20 PATEnT EsTATE
96 AUDiTOr’s inDEPEnDEnCE DECLArATiOn
97 COrPOrATE infOrmATiOn
98 AsX ADDiTiOnAL infOrmATiOn
100 GLOssAry

Genetic Technologies

Positioned for growth

ABOUT GTG

Founded in 1989, Genetic Technologies is an established Australian-based global genetic testing business specialising in cancer diagnostics, with a focus on women’s health.

Listed on the ASX (GTG) in 2000 and NASDAQ (GENE) in 2005, the Company has established a successful multifaceted fee-for-service genetic testing business and is the dominant player in Australia and New Zealand.

From its headquarters in Melbourne, Victoria, the Company’s laboratory is accredited to all appropriate CLIA, NATA, RCPA and ISO standards, enabling it to accept samples from anywhere in the world.

Following its acquisition in 2010 of a proprietary breast cancer risk assessment test named BREVAGen™, the Company has established a permanent office in North Carolina from which its current and future USA sales activities are based.

The Company also owns an impressive patent estate comprising more than 200 patents, including foundational patents covering the use of “non-coding” DNA that form the basis of a successful out-licensing program that has to date generated in excess of $73 million in revenue from the granting of licenses to approximately 70 licensees.

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Having successfully
launched the
BREVAGen™ test in the
USA, we are building
the necessary sales and
marketing infrastructure
to engage with
healthcare professionals
as they adopt this test
as an important part
of their management
of breast cancer risk
for their patients.
02
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CHAIRMAN AND CEO’S MESSAGE

The 2013 year will be characterized as one in which we re-focused the Company’s resources around the commercialization of the Company’s breast cancer risk predictive test BREVAGen™ in the US, while maintaining our domestic businesses with a more streamlined structure. The domestic genetic testing business is an important part of the Company’s core capability and provides a solid infrastructure, revenue and skill set to allow the Company to pursue aggressive growth plans.

having successfully launched the BrEvAGen™ test in the UsA, we are building the necessary sales and marketing infrastructure to engage with healthcare professionals as they adopt this test as an important part of their management of breast cancer risk for their patients. This success will underpin long term growth for the Company across a number of possible tests and services focused around women’s health and oncology.

Establishing and expanding the market for a new test such as BrEvAGen™, particularly in a huge market like the Us, requires significant investment and coordinated activities on a number of fronts and progress needs to be planned and deliberate. By benchmarking ourselves against other successful companies in our sector such as myriad Genetics and Genomic health we can determine that the number of tests performed by Genetic Technologies in year two from launch is broadly on track in the adoption phase of market acceptance as compared to other, now highly successful products offered by these large Us companies.

The 2013 financial year saw Phenogen sciences inc. (Genetic Technologies’ Us subsidiary) further refine its messaging and focus the roll-out of BrEvAGen™ to key physicians and breast clinics. BrEvAGen™ is the first clinically validated breast cancer risk predictive assessment tool that combines a woman’s genetic information with clinical data to assist physicians in developing personalised risk management plans. During the year, we continued the roll-out of BrEvAGen™ to breast surgeons, obstetricians and gynaecologists in twelve territories, receiving samples from more than 27 states across the Us. Phenogen sciences currently has twenty physician Key Opinion Leaders in its speakers Program who assist in the education of their peers with respect to breast cancer risk assessment and the use of BrEvAGen™. We have also added resource to the Us team with the appointment of key personnel in medical Affairs and marketing roles which will ensure our messaging fits with accepted clinical practice.

During the first half of the 2013 financial year, the Company announced that it had received licensure to sell BrEvAGen™ into the states of California and florida, bringing the total number of states in which the BrEvAGen™ test can be sold in 49 of the 50 Us states. in July 2013, the Company was inspected by a representative of the new york state Department of health, Clinical Laboratory Evaluation Program (“CLEP”). The Company’s laboratory received an inspection result with no deficiencies reported and, on 30 August 2013, the Company received the formal certificate of qualification from CLEP. This approval allows the Company to test BrEvAGen™ samples from residents of new york state (a densely populated state of nearly 20 million people) and completes the out of state licensures enabling the Company to provide testing services to all 50 Us states. Phenogen sciences has now commenced appointing representatives to cover this important state, with a particular emphasis on new york City. having now achieved certification in all 50 Us states for high complexity molecular testing, new products can be added to the Company’s portfolio of tests and taken to market in the Us using our existing sales force, with no further material regulatory steps being necessary.

in order to broaden the market for BrEvAGen™, we are actively progressing a research program with leading international academic collaborators to expand the utility of BrEvAGen™ into hispanic and African American populations. further, we will look to expand the snP panel, incorporating the full portfolio of known common breast cancer susceptibility variants into the test.

in August 2012, the Company received the 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 expansion into Europe, will be commenced at a time appropriate to the Company’s resources and when the Us market has reached a critical mass.

The Company continues to look for synergistic assets that can be deployed through our existing sales and marketing infrastructure. several potential projects were assessed through the course of the year with two progressing to detailed due diligence. none of these projects, however, met our criteria for acquisition.

The Company’s intellectual property out-licensing program based on its portfolio of foundational non-coding DnA patents continued during the year, with seven new licenses being executed, taking the total number of licensees to approximately 70 and the total fees generated to AUD 73 million. During the year, a suit in the Western District of Texas was successfully settled, whilst a Colorado suit is ongoing with five settlements secured so far, being: navigenics inc., hologic inc., Eurofins sTA Laboratories inc., Geneseek inc. and 454 Life sciences Corporation (and its affiliates). Changes to Us law this year resulted in a 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 its Us attorneys to also 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.

A number of advances were made during the year with respect to commercialising the Company’s three major non-core assets. in a positive move for both GTG and its former subsidiary immunAid Limited, the commencement of a successful second round of fundraising recently by immunAid resulted in a significant revaluation of the Company’s 45% investment in that company. The funds raised will enable immunAid to fund and advance the development of its exciting technology, hopefully resulting in further gains for GTG and its shareholders. Discussions regarding the Company’s rareCellect™ project continue with a high profile partner, supported by additional testing work that the parties have agreed to as a precursor to a possible transaction. finally, the Company announced that its Canadian-listed subsidiary, Gtech international resources Limited, had executed a scheme merger Agreement pursuant to which it would, subject to shareholder approval, acquire all of the outstanding shares of sydney-based company simavita holdings Limited. Once complete, GTG should have a valuable asset that can be monetized over time.

strategically, the Company’s goal to become a global cancer diagnostics company continues, with further expansion of its Us business now well under way, entry into Europe with BrEvAGen™ planned and an active search for new products. Obtaining certification to provide testing services to residents of new york state is an important milestone to complete access to the large Us 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 a challenging but productive year that continues to build capacity for growth. We expect the coming 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. MALCOLM R. BRANDON non-Executive Chairman Genetic Technologies Limited

MS. ALISON J. MEW Chief Executive Officer Genetic Technologies Limited

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Strategically, the
Company’s goal to
become a global
cancer diagnostics
company continues,
with further expansion
of its US business
now well under way,
entry into Europe with
BREVAGen™ planned
and an active search
for new products.
03
ANNUAL REPORT 2013
GENETIC TECHNOLOGIES
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BOARD OF DIRECTORS AND SENIOR MANAGEMENT

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Dr. Malcolm R. Brandon Non-Executive Chairman

Tommaso Bonvino Non-Executive Director

Dr. Mervyn Cass Non-Executive Director

Benjamin Silluzio Non-Executive Director

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~~Alison J. Mew~~ ~~Chief Executive Offcer~~

~~Thomas G. Howitt~~ ~~Chief Financial Offcer and Company Secretary~~

Mark J. Ostrowski Senior Vice President Sales and Marketing – Phenogen Sciences Inc.

Dr. Richard Allman Scientifc Director

Diana Newport Quality and Business Operations Director

M. Luisa Ashdown Director of Global Licensing and Intellectual Property

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

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TESTING REVENUE

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EXPENSES

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XJO A 2009 2	SX 200 010 2011	Genetic Technologies 2012	XJO ASX 200 5,373.10 2013 GTG ASX $0.075

KEY FINANCIAL DATA 2009-2013

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OUR BUSINESS

Successfully implementing the five-year strategy

A global cancer diagnostics business focused on building a sustainable stable of branded tests and services

1. Genetic testing, focusing on cancer diagnosis and management

With a well-established genetic testing business, Genetic Technologies is building global infrastructure and a suite of tests to position itself as an international cancer diagnostics and management business.
Following the launch of the Company’s innovative breast cancer risk assessment test in 2011, BREVAGen™, Genetic Technologies has established operations in the huge US market.
Utilising its US sales force, the Company will expand its cancer diagnostics test offering in the USA through the addition of new tests, with a continuing focus on women’s health/oncology, delivering potentially significant sales at minimal additional cost.
Alongside the growing range of cancer-related products, Genetic Technologies continues to successfully service its mature markets in the areas of other medical, paternity, forensic and animal testing.

2. Out-licensing of intellectual property

Genetic Technologies holds a significant global patent estate that includes the socalled “179” and “762” patent families, both of which relate to “non-coding” DNA.
Using this valuable technology, the Company conducts a successful global out-licensing program which, to date, has resulted in the granting of licenses to more than 70 commercial licensees and the generation of $73 million in revenue.
In recent years, this program has been expanded by the establishment of a formal assertion program that has so far involved the filing of patent infringement suits in the USA against more than 25 parties.
During 2012, this formal assertion program was expanded to bolster the Company’s licensing activities in Europe.
In addition to the US licensing business, the Company is independently pursuing licenses from parties in Europe and elsewhere who utilise the GTG non-coding technology.

3. Other commercial assets

RareCellect™ is a prenatal testing platform technology that is poised to make significant advances in the identification of genetic disorders prior to birth. The Company is working with parties to advance the commercialisation of this wholly-owned technology.
ImmunAid™ is a proprietary technology aimed at improving treatment outcomes in chronic diseases such as cancer and autoimmune diseases. The company that owns the technology, in which GTG has a 45% equity interest, has since raised independent funds and is now expanding its intellectual property portfolio and pursuing collaborative arrangements.
The Company’s 75.8% owned Canadian-listed subsidiary, Gtech International Resources Limited, is in the advanced stages of acquiring an exciting operating business.

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DOMESTIC GENETIC TESTING

For 22 years, Genetic Technologies has been the largest non-government genetic testing operation in the Asia Pacific region. With the launch of BREVAGen™ 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 all parts of the world, including the USA and Europe. The Company is well positioned to bring to the world what our local customers have experienced for many years; the ability to translate innovative science into tests that truly make a clinical difference.

MEDICAL

The Company views 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™, 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 companies. 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.

FORENSICS

As the only accredited private forensics laboratory operating in the Asia Pacific region, Genetic Technologies has the capability to conduct work for government organisations, defence lawyers and private investigators. 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 a wide range of genetic tests to breed clubs, breeders, animal welfare organisations and veterinarians.

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.

Figure 1: Global molecular-based diagnostics (MDx)[2]

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Revenue Market penetration
US$billions %
160 90
128 72
96 54
64 36
2010 revenue:
32 US$4.4 billion 18
0 0
2001 2007 2013E 2019E 2025E 2031E 2037E 2040E
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Figure 2: Forecast potential MDx revenue under different adoption scenarios[2]

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US$billions
8
Fast
6
4 Medium
2
Slow
0
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

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2 Raskin A, et. al. The Dawn of Molecular
Medicine, Alliance Bernstein 2011
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BREVAGen™ A clearer picture of breast cancer risk

IDENTIFIES SPORADIC BREAST CANCER RISK, INTEGRATING CLINICAL AND GENETIC FACTORS

WHAT IS BREVAGen™?

BrEvAGen™ is a first-in-class, clinically validated predictive risk test for sporadic breast cancer which examines a woman’s clinical risk factors, combined with seven scientifically validated genetic markers to allow for more personalized breast cancer risk assessment and risk management.

more than 80% of women who develop breast cancer have little or no family history of the disease, but physicians worldwide look largely to family history of breast cancer as an indication of risk. BrEvAGen™ is designed to help elucidate risk in women who have little or no family history of the disease, and especially, those individuals who also have had increased endogenous estrogen exposure during their lifetimes.

Unlike familial or hereditary breast cancer, where the majority of patients develop estrogenreceptor negative breast cancer (Er-), sporadic or non-familial 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’s™ role in the earlier detection of breast cancer has the potential to positively impact patient survival rates. Earlier detection of the disease improves treatment outcomes and saves lives.

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GENETIC CLINICAL BREVAGen™
X =
MARKERS RISK INTEGRATED RISK
Average Risk Above Average Risk High Risk
Integrated Lifetime Risk: Integrated Lifetime Risk: Integrated Lifetime Risk: > 20%
< 15% 15% to 20% Integrated 5-year Risk: ≥ 1.66%
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WHO SHOULD CONSIDER BREVAGen™?

The core groups of patients who are likely to benefit most from BrEvAGen™ are periand post-menopausal Caucasian women over 35 years of age who harbor additional clinical risk factors, such as: a history of atypical or benign breast biopsies, early menstruation, late menopause, and being designated as having “dense” breast tissue upon mammographic evaluation (dense breast tissue makes mammographic identification of early breast cancer tumors difficult and inconclusive).

Currently, several Us states have enacted legislation which mandates that breast density be documented on mammogram reports, recognizing there is a relationship between dense breast tissue and higher breast cancer risk. it is expected that more and more jurisdictions in the Us will adopt similar legislation in the coming years, increasing awareness of the correlation between dense breast tissue and breast cancer risk amongst healthcare providers, patients and health insurance payers.

BREVAGen™ (cont.)

PEER-REVIEWED RESEARCH DATA FURTHER SUPPORTS THE CLINICAL UTILITY OF BREVAGen™

in June 2013, an independent study authored by Dr. Gillian Dite and Prof. John hopper from the Centre for molecular Epidemiology at the University of melbourne, investigated the impact of seven single nucleotide polymorphisms (snPs) on the predictive accuracy of the national Cancer institute’s Breast Cancer risk Assessment Tool (Gail model) (“BCrAT”), currently the empirical standard for assessing statistical breast cancer risk in women in the Us.

The study, entitled “Using snP genotypes to improve the discrimination of a simple breast cancer risk prediction model” looked at 962 breast cancer cases derived from the Australian Breast Cancer family registry and the seven snPs which are currently utilized in the BrEvAGen™ breast cancer risk assessment test. These seven snPs had previously been studied by mealiffe et al. (J natl Cancer inst 102 (21):1618-1627) via an independent cohort of cases and controls from the Women’s health initiative clinical trial in the UsA. This new Australian study supports the previous observation of mealiffe et al. that including information on seven snPs associated with breast cancer risk improves the discriminatory accuracy of BCrAT, and extends that observation in pre-menopausal women aged 35 to 49 years.

Genetic Technologies continues to advance its research programs with other leading international academic collaborators to confirm these observations in other ethnic populations, including hispanic and African American, while also incorporating the full portfolio of currently known common breast cancer susceptibility variants into the BrEvAGen™ test.

BREAST CANCER RISK MANAGEMENT AND THE PERSONALIZED BREAST HEALTH PLAN

for the physician, BrEvAGen™ 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 an ongoing personalized breast health plan.

Physicians can take into account recommendations from the American Cancer society (ACs) and the American society for Clinical Oncology (AsCO) that are based on individualized risk scores. They can also review 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 enable the early detection of breast cancer? The options can include more/earlier mammography, the addition of 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.

The breast health plan component of the BrEvAGen™ 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.

One woman’s experience with BREVAGen™: “It saved my life”

For one woman in the United States, BREVAGen™ had a fortuitous and dramatic impact on her life

Cyndi Pierre is a 45-year old former ballet dancer and dance instructor from Arkansas. She is married and the mother of a 16 year old daughter. She is an exercise enthusiast, with a low BMI and weight of 53 kilograms, standing a diminutive 163 centimetres tall. Cyndi has a long history of taking care of herself, being proactive with her health, and reporting to her local breast centre for annual mammograms since the age of 30. Given her family history of breast cancer – Cyndi’s mother had breast cancer at the age of 60, and her sister also had breast cancer at the age of 40 – all three family members were tested for BRCA1/2 mutations, and all three family members tested negative for deleterious mutations in the BRCA1 and BRCA2 genes.

So, at the age of 44, Cyndi asked her health care provider in Arkansas what more could be done beyond annual mammography and clinical breast exams to assess and manage her risk. Her healthcare provider suggested a BREVAGen™ test, which ultimately determined that Cyndi was at increased risk of developing sporadic breast cancer. Her high BREVAGen™ score was used to lobby her health insurer to cover the cost of a more sensitive breast MRI, and the MRI scan revealed a 9 millimetre wide suspicious nodule in her left breast, which was previously undetected by mammography. A subsequent ultrasound-guided needle biopsy of the suspicious lesion confirmed an ER-positive breast cancer. Cyndi unequivocally proclaims: “I’m here today, because BREVAGen™ saved my life.” Indeed, Cyndi’s cancer was detected at an early, more treatable stage and, as of this writing, she is cancer-free, and enjoying a vibrant, healthful life.

BREVAGen™ (cont.)

PROFESSIONAL MEDICAL SOCIETIES AND DISEASE PREVENTION EXPERTS ENCOURAGE FORMAL BREAST CANCER RISK ASSESSMENT AND RISK-REDUCTION INTERVENTIONS

in July 2013, the American society of Clinical Oncology (“AsCO”) published an updated statement in the Journal of Clinical Oncology which more strongly supported the use of selective estrogen receptor modulators and one aromatase inhibitor in postmenopausal women who are at increased risk for breast cancer. The new update – the third since AsCO’s initial guideline entitled, “Use of Pharmacologic interventions for Breast Cancer risk reduction,” was first published in 1999 and then updated in 2009 (J. Clin. Onco. 2009; 27:3235-58) – includes stronger wording regarding discussing chemoprevention via tamoxifen and raloxifene with at-risk women, compared with the 2009 version, which stated that tamoxifen and raloxifene “may be offered” to women at increased risk.

following the AsCO statement, in september 2013, the United states Preventive services Task force (UsPsTf) issued its final recommendation statement on medications for risk reduction of primary breast cancer in women. The UsPsTf is an independent, volunteer panel of national experts in prevention and evidence-based medicine who work to improve the health of all Americans by making evidence-based recommendations about clinical preventive services such as screenings, counselling services, and preventive medications. The Task force’s recommendation stated that for women older than age 35 who have not been diagnosed with breast cancer, “after a formal breast cancer risk assessment, women at increased risk should talk with their health care professional about the potential benefits and harms of taking a risk-reducing medication such as tamoxifen or raloxifene.” These recent, evidence-based clinical practice recommendations underscore the need for health care providers in the Us to perform a formal, individualized risk assessment for breast cancer in women older than 35 years of age, since the aforementioned medications have been shown in randomized controlled trials to reduce the risk of hormone-receptor-positive breast cancer.

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US SALES TERRITORIES
New England
North West New York State
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 South West
Central East South Central
Mid Atlantic South East Central
Mid West South East
New England New York State
North West Northern California
North East Southern California
Ohio Valley
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BROADER MARKET ACCEPTANCE AND REIMBURSEMENT COVERAGE CONTINUES

since the initial commercial launch of BrEvAGen™ in 2011, and after two years of focused marketing and sales activities, BrEvAGen™ is now being utilized by nearly 500 women’s health, primary care, surgical, oncology, and genetics healthcare providers and breast centres throughout the United states. As awareness and public demand for more personalized, cost-effective predictive and diagnostic tools to assess and manage sporadic breast cancer increases, the Company is focused on helping to drive more prudent, cost-effective allocation of resources in the breast cancer risk assessment and management arena, amid an era of increasing scrutiny over healthcare utilization and costs.

As of August 2013, upon receiving certification of the Company’s CLiA laboratory by the state of new york, the Company’s sales and marketing organization has achieved the milestone of being cleared to operate in all 50 Us states. Additional experienced women’s health and oncology sales and marketing staff continue to join the Company’s growing ranks, expanding the breadth and efficacy of the Company’s commercial efforts, with a target of increasing the size of its commercial organization by over 50% by the end of the 2014 financial year.

On the reimbursement and payer contracting front, as of september 2013, the Company’s wholly-owned Us subsidiary Phenogen sciences inc., had executed its eighth credentialing agreement with yet another large Us Preferred Provider Organization, bringing the cumulative total number of covered lives for which its BrEvAGen™ risk assessment test could be adjudicated as “in-network” to over 102 million.

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BREVAGen™ Test Sample Numbers
1,000
800
600
400
200
0
Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013
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BREVAGen™ IS A PHYSICIANORDERED CLINICAL LABORATORY TEST

The BrEvAGen™ test is a simple two-step DnA test that 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 risk factors”, and having the results on hand, use the “find a Doctor” locator in order to complete the second cheek-swab DnA-collection step and be counselled on their own risk and corresponding “breast health plan”.

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BREVAGen™ IS A SIMPLE IN OFFICE CHEEK
SWAB TEST, NO BLOOD IS REQUIRED.
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LICENSING

The out-licensing of the Company’s foundational “non-coding” DNA patent portfolio 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 approximately 70 commercial licensees, including multi-nationals, biotechnology companies, genetic testing service providers and equipment manufacturers. These licenses have collectively generated $73 million in total revenues for the Company since the licensing program began. Colorado-based lawyer, sheridan ross, continues to assist GTG with its licensing and intellectual property activities.

As previously reported, following the success of the Company’s first and the second assertion law suits in 2010 and 2011, a third assertion suit was initiated on 26 may 2011. Of the initial ten counterparties to this suit five have since entered into settlement Agreements with GTG, and therefore five are still pending, being Agilent Technologies inc., Bristol-myers squibb Company, GlaxosmithKline LLC, merial LLC and Pfizer inc. in addition to these, a number of new parties have also been sued, in several Us districts. Law suits are now being pursued against, medical Diagnostics Laboratories LLC, reprogenetics LLC, natera inc., histogenetics LLC and Laboratory Corporation of America (LabCorp). since releasing the 2012 Annual report, settlement and License Agreements have been executed with the following seven Us entities: One Lambda inc., 454 Life science Corporation, Prevention Genetics LLC, Genetics and ivf institute inc., LabCorp, reproductive Genetics institute and Genelex Corporation.

in addition to the formal Us patent assertion program, the Company continues to independently pursue additional licenses external to these lawsuits, principally in Europe. During 2013, the Company executed licenses with a number of sonic healthcare entities, namely sonic healthcare Germany, sonic healthcare Europe, sonic healthcare holding Company (UK), sonic healthcare (ireland) Ltd. and Bioscientia institute for medical Diagnostics under which these companies were granted non-exclusive rights to several of the Company’s non-coding patents.

On 19 April 2013, the Company announced that merial LLC of Duluth, Georgia, had filed a request for ExParte re-Examination of claims 1-18 and 26-32 of the Company’s Us Patent no. 5,612,179 (the ‘179 patent), and subsequently, on 30 september 2013, GTG announced it had received an ExParte re-Examination Certificate from the UsPTO, which confirmed the patentability of claims 1-18 and 26-32 and that no amendments had been made to the ‘179 patent. however, the Company noted that on 5 september 2013, merial filed yet another request with the UsPTO for re-examination of the ‘179 patent. This request for re-examination is now under review by the UsPTO.

The 2013 financial year has presented some challenges for the Company’s licensing program, including the abovementioned re-examination proceedings for the `179 patent, and also certain changes to Us legislation and new interpretations of Us case law, all of which have contributed to some delay in reaching various settlements.

As previously stated, Genetic Technologies will actively defend such re-examinations and will also continue to vigorously pursue entities infringing the Company’s proprietary non-coding DnA technology. The Company intends to maintain the momentum of its Us assertion program and also its activities in Europe, to continue generating licensing revenues during the 2014 financial year.

NON-CORE ASSETS

IMMUNAID™

A New Paradigm in Treating Cancer and Auto-Immune Disease

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. That financing then provided immunAid with resources to enable the company to advance its proprietary technology to improve treatment outcomes in chronic diseases, such as cancer and auto-immune diseases. in return for their $1 million investment, the incoming investors secured a 10% interest in immunAid.

As a result of that share issue, the equity interest held by Genetic Technologies in immunAid fell below 50% and, due to the resulting loss of control, immunAid was deconsolidated from the Group during the 2012 financial year. in addition, immunAid was then converted from a private company into an unlisted public company and changed its name to immunAid Limited. 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 to commercialise its cutting edge technology were then approved by its reconstituted Board of Directors. GTG currently holds a 45% interest in immunAid.

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 or hiv. immunAid™ researchers believe that chemotherapy may actually be having a greater effect on the background immune system than on the disease itself. 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 complete paradigm shift in relation to the relevance of the immune system in the treatment of cancer. in current chemotherapy regimens, where therapy is not timed, a “complete response” (where the treatment is completely effective and the cancer is eliminated) is relatively rare, accounting for perhaps just 7% of cases. however, immunAid™ believes that by utilising the immune cycle to personalise cancer treatment – and by specifically targeting the patient’s “off” T-regulatory cells – such optimal timing of administration of traditional or new therapeutic agents may significantly improve a cancer patient’s response – and survival.

This exciting project has delivered highly encouraging results in early clinical studies. immunAid is now actively pursuing a second round of fundraising, to raise between $5 million and $10 million at a significantly higher issue price, to pursue additional collaborations with academic institutions, hospitals and commercial entities, all leading towards the further development and commercialisation of this exciting new proprietary immunAid™ technology.

RARECELLECT™

Safe and reliable pre-natal testing

Genetic Technologies is continuing to advance its wholly-owned, 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 (“Cvs”) 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.

several commercial diagnostic tests based upon circulating foetal DnA derived from maternal plasma are beginning to appear in this space. however, cervical mucus samples provide a better alternative to foetal DnA recovered from maternal circulation, as they have the potential to yield higher quantities of higher quality foetal genetic material.

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 pre-natal 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 this market to lower risk pregnancies.

The Company continues to pursue collaboration / out-licensing discussions with international parties central to the field of foetal sampling and testing.

GTECH INTERNATIONAL RESOURCES LIMITED

Acquiring an exciting business

On 29 July 2013, the Company announced that its Canadian-listed subsidiary, Gtech international resources Limited (“Gtech”), had executed a scheme merger Agreement (“smA”) with sydneybased company simavita holdings Limited (“simavita”). Pursuant to the scheme that is covered by the smA (which is subject to the approval of the shareholders of both Gtech and simavita), Gtech will convene a meeting of its shareholders to approve Gtech issuing new shares to the simavita shareholders to acquire 100% of the issued capital of simavita (the “merger”).

The merger, which will involve the raising of at least $10 million in new equity by simavita, is to be implemented by way of a scheme of arrangement under the Corporations Act. Genetic Technologies understands that the parties anticipate that the transaction will be completed before the end of the 2013 calendar year.

simavita is an Australian unlisted public company based in sydney, new south Wales which is a global leader in the area of incontinence management. simavita has developed and commercialized the world’s first instrumented and integrated system of incontinence assessment and management known as sim™. sim™ replaces the unreliable and inaccurate process of manual and subjective incontinence assessment which is currently being used all over the world. There are no known competitors providing integrated and instrumented incontinence assessment.

The proprietary sim™ technology arose from a concept created by the company’s founder, Australian medical doctor Dr. fred Bergman, while working with residential aged care facilities (“rACfs”) in melbourne, victoria. his observations of the inadequacy of incontinence management in rACfs led him to devote most of his remaining life to the conceptualization and innovation of the system which is the predecessor of simavita’s current technology. in 1996, Dr. Bergman filed the first patent application in respect of the technology for the development of sim™ to effectively assess and manage incontinence.

The current sim™ technology is in its fourth generation and it has taken many years of continuous improvement through innovation and extensive customer interface. more than $28 million has been spent developing and commercializing the sim™ technology, which is protected by a substantial portfolio of intellectual property, including eight patent families and associated know-how. sales of sim™ have commenced in Australia and simavita is poised to expand its operations internationally, initially into the United states and then into Canada and selected European countries. it is expected that the core sim™ technology platform can be extended into a variety of other health care settings and applications in the future. further information regarding simavita and its activities can be found at www.simavita.com

Genetic Technologies Limited currently holds a 75.8% direct equity interest in Gtech and further details of the proposed transaction can be found at www.gtechinternational.com

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 Australia AU647806
haplotyping 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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PERLEGEN

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

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 United states Us7135286
business 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 Japan JP2007502088
Methods for genetic analysis Australia AU2008304485
Earliest priority 27 september 2007 Canada CA2704152
Europe 08833114.5
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
12112875.1
12112368.5
12112874.2
12112873.3
israel iL191566
227562
227563
227564
Japan JP2008543446
2013-112566
south Korea Kr1020087015808
10-2013-7020281
United states Us12/890272
Us12/370972
Methods for breast cancer risk assessment Australia 2010/000675
Earliest priority 1 June 2009 Canada 2763500
China 201080033130.5
Europe 10782820.4
hong Kong 12109000.5
israel 216627
Japan 2012-513409
mexico mX/a/2011/012913
United states Us12/920815
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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 separations Austria AT159589
Earliest priority 11 July 1990 Europe EP466479
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 using United states Us6383747
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
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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 2010306072
Earliest priority 14 October 2009 Europe 10822895.8
israel 219172
United states 13/501799
Maternal antibodies as fetal cell markers to new Zealand nZ537328
identify 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 Us13/757527
Methods of enriching fetal cells Europe EP06721493
Earliest priority 11 may 2005 Japan JP2008510361
Canada CA2651367
United states 13/385775
Biological sampling device Australia 2010207877
Earliest priority 27 January 2009 Canada 2787405
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 2010239131
Earliest priority 21 April 2009 Canada 2795268
Europe 10766487.2
israel 215808
singapore 201107673.4
United states 13/265485
Methods of enriching and detecting fetal nucleic acids Australia 2010336017
Earliest priority 23 December 2009 Canada 2817990
Europe 10838414.0
hong Kong 13103054.2
israel 220560
United states 13/518454
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STATUTORY REPORTS FOR THE YEAR ENDED 30 JUNE 2013

DIRECTORS’ REPORT

The Directors submit their Report for the year ended 30 June 2013.

DIRECTORS

The names and details of the Directors of Genetic Technologies Limited who held office during the 2013 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. Malcolm R. Brandon BScAgr, PhD (Non-Executive Chairman)

In office from 1 July 2012 up to the date of this Report

Dr. Brandon, 66, was appointed to the Board on 5 October 2009 and as its Chairman on 28 November 2012. He also serves as Chairman 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 cattle, sheep and horses and to preserve the genetics of elite animals. Dr. Brandon also serves as Chairman of the Company’s Canadian-listed subsidiary, Gtech International Resources Limited.

Tommaso Bonvino FAICD (Non-Executive)

In office from 1 July 2012 up to the date of this Report

Mr. Bonvino, 52, was appointed to the Board on 25 November 2009 and also serves as Chairman of the Company’s Corporate Governance Committee. He has over 29 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. Most recently, Mr. Bonvino served as CEO of Private Branded Beverages Limited, and is a non-executive Director of the Melbourne Recital Centre and a Fellow of the Australian Institute of Company Directors.

Dr. Mervyn Cass MBBS (Non-Executive)

In office from 1 July 2012 up to the date of this Report

Dr. Cass, 72, was appointed to the Board on 30 September 2011 and also serves as a member of the Company’s Audit and Corporate Governance Committees. 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.

Benjamin Silluzio DipFM, GradDipAppFin, MAICD (Non-Executive)

In office from 10 December 2012 up to the date of this Report

Mr. Silluzio, 37, was appointed to the Board on 10 December 2012 and also serves as a member of the Company’s Audit and Corporate Governance Committees. He specialises in the provision of advice for sophisticated investors, institutional clients and high net worth families in Melbourne, nationally and abroad. Currently, he serves as the managing partner and desk head of RBS Morgans Family Office, and is also a director of Private Branded Beverages Ltd., a public unlisted company, and is a former President and Chairman of the Italian Chamber of Commerce. Previously, Mr. Silluzio has held several senior positions in the stockbroking and funds management industries, including: Director of UBS Wealth Management Australia, Senior Vice President of Credit Suisse First Boston in Melbourne, Vice President and member of the “Smith Barney Century Council” at Citigroup Smith Barney in Melbourne and as an institutional client advisor at Colonial Institutional Stockbroking in Sydney and Melbourne.

Also during the financial year, Dr. Melvyn J. Bridges served as a Director of the Company and Chairman of the Board from the beginning of the year until he was not re-elected on 27 November 2012. Mr. Huw D. Jones served as a Director of the Company from the beginning of the year until he was not re-elected 27 November 2012. Mr. Gregory W. Brown served as a Director of the Company from 24 July 2012 until his resignation on 27 November 2012.

DIRECTORS’ REPORT (cont.)

DIRECTORS (cont.)

Company Secretary

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

In office from 1 July 2012 up to the date of this Report

Mr. Howitt, 49, 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 Director holds an indirect beneficial interest in the shares of the Company:

Dr. Mervyn Cass 473,667 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.

OPERATING AND FINANCIAL REVIEW

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 -----

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. Following the acquisition of GeneType AG, the Company changed the nature of its business from mining to biotechnology and changed its name to Genetic Technologies Limited.

OPERATING AND FINANCIAL REVIEW (cont.)

Group overview (cont.)

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™ 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 late-stage research project.

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™ breast cancer risk test was launched into the US marketplace.

There were no significant changes in the nature of the Group’s activities during the financial year.

Result

During the 2013 financial year, Genetic Technologies Limited and its subsidiaries generated consolidated gross revenues from continuing operations and other revenues, of $8.4 million, representing a 24% increase over the corresponding figure for the 2012 financial year of $6.8 million. The increased loss for the year of $9.3 million was principally attributable to a one-off gain on deconsolidation of subsidiary that occurred in the 2012 financial year (but not in 2013) of $5.1 million, as well as an increased investment in the US sales and marketing of the Company’s lead product, BREVAGen™.

Going concern and fundraising

In the Auditor’s Report for the year ended 30 June 2013, PricewaterhouseCoopers has included an Emphasis of Matter regarding continuity as a Going Concern. In this section of their Report, the Auditors note certain disclosures made by the Company in Note 2(a) under the heading Going Concern. In relation to these disclosures, the Company advises that:

In August 2013, the Company completed a successful private placement of 41,666,667 ordinary shares to sophisticated and institutional investors at an issue price of $0.072 per share which raised a total of $3,000,000, before the payment of associated costs.
Also in August 2013, the Company announced a Share Purchase Plan (“SPP”) to raise up to a further $3,000,000 by offering eligible shareholders the right to purchase up to $7,500 worth of shares at an issue price of $0.072 per share. The offer was underwritten to a level of $1,800,000, representing 60% of the total amount being sought. As at the date of this Report, a total of $1,350,500 had been received by the Company. This amount, when added to the amount that is likely to be contributed by the Underwriters or their nominees, should result in the Company receiving at least $3,000,000, before the payment of associated costs. At the issue price of $0.072 per share, this amount will result in the issue of 41,666,667 further ordinary shares in the Company.
Finally, the Company has executed a Term Sheet and Securities Purchase Agreement in relation to the issue of a convertible note to an institutional investor, to raise at least US$5,000,000, before the payment of associated costs. The issue of the Note is subject to shareholder approval which the Company will seek at a General Meeting to be held on 23 October 2013. Subject to shareholder approval being received and the completion of certain US regulatory requirements which the Company anticipates will be completed before the end of October 2013 (including the filing of the Company’s 2013 US Annual Report on Form 20-F), the proceeds from the issuance of the Note should be received by the Company soon thereafter.

Dividends and distributions

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.)

OPERATING AND FINANCIAL REVIEW (cont.)

Review of operations

BREVAGen™ breast cancer predictive risk test

The 2013 financial year saw the Company refine its messaging and focus the roll-out of its breast cancer predictive risk test, BREVAGen™ to key physicians and breast clinics. 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 personalised risk management plans. During the year, the Company continued its roll-out of BREVAGen™ to breast surgeons, obstetricians and gynaecologists in twelve territories accessing more than 60 metropolitan areas across the United States. The Company has nine physician Key Opinion Leaders in its Speakers Program who assist in the education of their peers with respect to breast cancer risk assessment and the use of BREVAGen™.

During the first half of the 2013 financial year, the Company announced that it had received licensure to sell BREVAGen™ into the states of California and Florida, bringing the total number of US states in which the BREVAGen™ test can be sold to 49 of the 50 US states. In July 2013, the Company was inspected by a representative of the New York State Department of Health, Clinical Laboratory Evaluation Program (“CLEP”). The Company’s laboratory received an inspection result with no deficiencies reported and, on 30 August 2013, the Company announced that it had received the formal certificate of qualification from CLEP. This approval allows the Company to test BREVAGen™ samples from residents of New York State (a densely populated state of nearly 20 million people) and completes the out of state licensures allowing the Company to provide testing services to all 50 US states. Genetic Technologies’ wholly-owned US subsidiary, Phenogen Sciences Inc., (“Phenogen”) has commenced appointing representatives to cover this state, with a particular emphasis on New York City.

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.

Reimbursement

Prior to the end of the 2012 calendar year, insurance claims for BREVAGen™ were submitted using the so-called “code stack” of CPT methodology codes. Reimbursement under this regime was positive, with a low percentage of denials and appeals. However, effective 1 January 2013, the AMA removed the code stack claim process, requiring tests without a specific CPT code to be claimed via an “Unlisted” or “Miscellaneous Code”.

As a result of these changes, the Company now uses a Miscellaneous Code when submitting claims for reimbursement from insurers. As part of this transition, the list price for a BREVAGen™ test was increased to enable the Company to receive payment for aspects of the test that were not previously available under the code stack. Importantly, notwithstanding this increase, the Company has not sought to increase the maximum out-of-pocket amount that a given patient is required to pay for a BREVAGen™ test under its “Patient Protection Program”.

While not all insurance claims have yet been fully adjudicated since the transition to a Miscellaneous Code, early signs are encouraging. The average total payment received from closed cases during the past six months, including all write-offs and denials for non-coverage, has increased significantly, despite an increase in the number of denials.

Credentialing with Preferred Provider Organisations (“PPOs”) allows for expedited claim adjudication as “in-network”. A PPO is a managed care organisation of medical doctors, hospitals and other health care providers which has covenanted with insurers or third-party administrators to provide health care, at reduced rates, to the clients of the respective insurer or administrator. Credentialing is a process whereby provider organisations such as physicians, care facilities and ancillary providers (including testing service providers such as Phenogen) contract directly with the PPO. Contracts with PPOs are fundamental to having claims for the BREVAGen™ test adjudicated as “in-network”.

During the reporting period, the Company announced that, through Phenogen, it had executed agreements with four new PPOs: being FedMed Inc., MultiPlan Network, Three Rivers Provider Network and InterWest. The execution of these agreements takes to eight the number of such PPO agreements that the Company has now entered into which, collectively, increases the cumulative number of covered lives for which its BREVAGen™ risk assessment test could be adjudicated as “in-network” to more than 102 million.

As described above, the positive impact of this increased credentialing activity has been clearly demonstrated in reviewing reimbursement payments received in respect of the BREVAGen™ test since launch. The average reimbursement received in respect of claims that were adjudicated as “in-network” was significantly higher than the amounts received in respect of claims that were adjudicated as “out of network”, with the time taken to collect the funds also being materially shorter.

OPERATING AND FINANCIAL REVIEW (cont.)

Review of operations (cont.)

Once BREVAGen™ sample volumes reach a significant level and Genetic Technologies has gathered the necessary clinical utility data, the Company will approach insurers directly to contract.

Credentialing contracts have now been executed between the Company and InterWest, FedMed Inc., MultiPlan Network, Three Rivers Provider Network, Prime Health Services, National Preferred Provider Network / PlanCare America / Ohio Preferred Provider Network LLC (NPPN / OPPN), Galaxy Health Network and Fortified Provider Network.

During the year, the number of full time Regional Business Managers employed in the Phenogen sales team was expanded to eleven, several of whom were appointed to service the two new US states for which the Company has now received clearance to sell the BREVAGen™ test. Appointments of a Medical Director and a Marketing Director have also been made during 2013 which have already proven instrumental in reaching physicians and key decision makers in clinics.

Now in its second year of launch, the total number of BREVAGen™ test samples received by the Company during the 2013 financial year was 1,547, representing an increase of more than 272% over the previous year. 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 $329,511 during the 2013 financial year, representing an increase of more than 690% over the previous financial year. Month-on-month test sample figures continue to trend upwards, with record months of activity having been recorded in July 2013 and then again in August 2013.

Publication of further validation study supporting BREVAGen™

On 24 June 2013, the Company noted with interest the online publication of a study entitled “Using SNP genotypes to improve the discrimination of a simple breast cancer risk prediction model” in Breast Cancer Research & Treatment (Dite GS, Mahmoodie M, Bickerstaffe A et al.; Vol. 139; June 2013).

This independent study investigated the impact of the seven single nucleotide polymorphisms (SNPs) used in the Company’s BREVAGen™ test on the predictive accuracy of the Breast Cancer Risk Assessment Tool (Gail Model) (“BCRAT”). The seven SNPs had previously been studied by Mealiffe et al. (J Natl Cancer Inst 102 (21):1618-1627), in an older cohort of cases and controls from the Women’s Health Initiative clinical trial in the USA. The new Australian study supports the previous observation of Mealiffe et al. that including information on seven SNPs associated with breast cancer risk improves the discriminatory accuracy of BCRAT, and extends that observation to pre-menopausal women aged between 35 and 49 years.

Genetic Technologies is now actively progressing a research program with leading international academic collaborators to confirm these observations in other ethnic populations and to incorporate the full portfolio of currently known common breast cancer susceptibility variants into the BREVAGen™ test.

Australian heritage businesses

The 2013 financial results for the Company’s Australian genetic testing businesses exceeded 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 competitors.

Licensing

On 26 May 2011, the Company announced that it had filed a third patent infringement law suit in the US, in the US District Court for the District of Colorado, asserting infringement of its primary non-coding patent against various parties. Since then, Settlement and License Agreements have been executed with Navigenics Inc., Hologic Inc., Eurofins STA Laboratories Inc., GeneSeek Inc. and 454 Life Sciences Corporation (and its affiliates). Settlement discussions with other parties to the suit are progressing.

During the 2013 financial year, the Company announced that it had also executed agreements with the following parties:

Conexio Genomics Pty. Ltd. Genetics & IVF Institute Inc. One Lambda Inc. Laboratory Corporation of America Holdings (“LabCorp”) PreventionGenetics LLC Reproductive Genetics Institute Inc.

The execution of these agreements demonstrates the ongoing activity of the Company’s out-licensing program and its recent successes.

DIRECTORS’ REPORT (cont.)

OPERATING AND FINANCIAL REVIEW (cont.)

Review of operations (cont.)

During the year, the Company also filed further law suits against Natera Inc., HistoGenetics LLC, and General Genetics Corporation, and discussions with these entities are now being pursued. The Company’s US attorneys, Sheridan Ross PC, are also preparing additional suits, to be filed when appropriate.

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. On 24 June 2013, the Company reported that it had settled its dispute with Bioscientia Institute for Medical Diagnostics, based in Ingelheim, Germany, and accordingly, the law suit filed by GTG against Bioscientia was withdrawn. Additionally, the Company’s Dutch attorneys, AKD, based in Breda, The Netherlands, have initiated a first action under Dutch Law, a so-called “Preliminary Witness Examination”, against Hendrix Genetics BV, based in Boxmeer, The Netherlands.

On 15 March 2013, the Company announced that the United States Patent and Trademark Office (“USPTO”) had issued an action reaffirming the validity of certain claims contained in the Company’s U.S. Patent No. 5,612,179 (the ‘179 patent) directed to non-coding deoxyribonucleic acid (DNA). This re-examination arose from a request for ex parte re-examination of claims 1-18 and 26-32 of the ‘179 patent based upon a submission by Merial L.L.C. of Duluth, Georgia (“Merial”). Merial is a defendant in an action originally brought by the Company in Colorado, USA for infringement of the ‘179 patent. That action currently is pending in Delaware Federal District Court. In its formal notification to the Company, the USPTO stated that “claims 1-18 and 26-32 of the ‘179 patent are confirmed and claims 19-25 and 33-36 are not reexamined”.

On 19 April 2013, the Company advised that the USPTO had received a further request from Merial for a second ex parte re-examination of the ‘179 patent and that the request had been granted. As was the case in all previous challenges, GTG will actively defend this matter in order to have the patent upheld.

Other assets

As part of the Company’s strategy to focus on the expansion of its cancer diagnostic franchise, work continues to out-license, co-develop or partner other technologies in which the Group has an interest.

ImmunAid™

Following its “Round One” fundraising program in April 2012, the Company’s former subsidiary ImmunAid Limited (“ImmunAid”), in which Genetic Technologies owns 4,500,000 shares (being a 45% equity interest) and is the largest shareholder, continues to advance collaborations for the development of its unique “on/off” technology based around a novel approach to cancer therapy by the timely reversal of immune system suppression. Further work is also being undertaken to expand ImmunAid’s patent portfolio. Subsequent to balance date, ImmunAid issued the first shares under its “Round Two” fundraising program, with new shares having been issued to an arm’s-length investor at an issue price of $5.00 per share.

RareCellect™

Discussions with companies who may be interested in pursuing potential commercial collaborations are continuing.

Gtech International Resources Limited

On 29 July 2013, the Company announced that its Canadian-listed subsidiary, Gtech International Resources Limited (“Gtech”), had executed a Scheme Merger Agreement (“SMA”) with Sydney-based company Simavita Holdings Limited (“Simavita”). Pursuant to the scheme that is covered by the SMA (which is subject to the approval of the shareholders of both Gtech and Simavita), Gtech will convene a meeting of its shareholders to approve Gtech issuing new shares to the Simavita shareholders to acquire 100% of the issued capital of Simavita (the “Merger”). The Merger is to be implemented by way of a scheme of arrangement under the Corporations Act.

Genetic Technologies Limited currently holds a 75.8% direct equity interest in Gtech and further details of the proposed transaction can be found at www.gtechinternational.com

OPERATING AND FINANCIAL REVIEW (cont.)

Review of operations (cont.)

Corporate matters

On 19 October 2012, a total of 10,200,000 options that had been granted to certain Executives of the Company were exercised. As a result, a total of 10,200,000 ordinary shares were issued on that date at an issue price of $0.045 each, raising $459,000 in new equity for the Company. On 24 January 2013, a total of 500,000 options that had previously been granted to a former Executive of the Company were exercised. As a result, a total of 500,000 ordinary shares were issued on that date at an issue price of $0.045 each, raising $22,500 in new equity for the Company.

On 24 October 2012, documents were executed by the five parties to the Limited Recourse Loan Agreements referred to in Note 33 of the Company’s 2012 Financial Report pursuant to which the Loans were immediately terminated. No funds were ever advanced under the respective Loans.

Review of financial condition

Capital structure

As at the date of this Report, the Company had a total of 517,138,486 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 ADRs (American Depositary Receipts). Also at that date, there were 10,775,000 unissued ordinary shares in the Company under option. 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 $7.52 million. This result compared to the net cash outflows from operations from the prior financial year of $7.67 million. Overall, the Group’s consolidated cash assets decreased by approximately $7.18 million during the 2013 financial year.

Liquidity and funding

As at 30 June 2013, the Company also had corporate credit card facilities with National Australia Bank Limited and Bank of America, which had total credit limits of $150,000 and $65,603, respectively. As at that date, a total liability outstanding in respect of these credit card facilities was $60,918. Cash and cash equivalents as at 30 June 2013 was $1,721,293. As detailed previously, a total of $3,000,000 was raised subsequent to the end of the financial year from the placement of 41,666,667 ordinary shares at an issue price of $0.072 per share by way of private placement. Further ordinary shares will be issued at the same price in early October 2013 under the Company’s Share Purchase Plan.

Significant changes in the state of affairs

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

On 18 October 2012, the Company released its Notice for the 2012 Annual General Meeting of shareholders which was held at 11.00 am on 27 November 2012 in the “Treetops” Room at Melbourne Museum. Resolution 1 (the election of Dr. Melvyn J. Bridges) and Resolution 4 (the election of Mr. Huw D. Jones) were put to a poll and were not passed. As a result, they ceased to be Directors of the Company on that date. Resolutions 2, 3 and 5 were all passed on a show of hands. Shortly after the AGM, Mr. Gregory W. Brown resigned as a Director of the Company and Dr. Paul D.R. MacLeman resigned as Chief Executive Officer of the Company.

On 28 November 2012, Dr. Malcolm R. Brandon was appointed as Chairman of the Company’s Board of Directors.

On 10 December 2012, Ms. Alison J. Mew was appointed as Chief Executive Officer of the Company. Also on that date, Mr. Ben Silluzio was appointed as a Director of the Company.

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

DIRECTORS’ REPORT (cont.)

OPERATING AND FINANCIAL REVIEW (cont.)

Significant events after balance date

On 30 July 2013, the Company announced that its Canadian-listed subsidiary, Gtech International Resources Limited, had executed a Scheme Merger Agreement pursuant to which it would, subject to shareholder approval, acquire all of the outstanding shares of Sydney-based company Simavita Holdings Limited.

On 1 August 2013, the Company announced a three-stage fund raising program involving a placement, a Share Purchase Plan (“SPP”) and, subject to shareholder approval, the issue of a convertible note to an institutional investor.

On 14 August 2013, the Company completed the placement of 30,555,556 ordinary shares at an issue price of $0.072 per share which raised a total of $2,200,000, prior to the payment of associated costs. On 30 August 2013, the Company completed the placement of a further 11,111,111 ordinary shares at the same issue price which raised a total of $800,000, prior to the payment of associated costs.

On 11 September 2013, the Company granted a total of 1,250,000 options over ordinary shares in the Company. The options, which were granted at no cost, entitle the holders to acquire one ordinary share at a price of $0.105 at any time up to, and including 18 July 2018, subject to certain vesting conditions.

As at the date of this Report, a total of $1,350,500 had been received by the Company under its Share Purchase Plan. This amount, when added to the amount that is likely to be contributed by the Underwriters or their nominees, should result in the Company receiving at least $3,000,000, before the payment of associated costs. At the issue price of $0.072 per share, this amount will result in the issue of 41,666,667 further ordinary shares in the Company.

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

Business strategy, future developments and prospects

During the 2014 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™ breast cancer risk test in the US through its wholly-owned US subsidiary, Phenogen Sciences Inc. Further development of the Key Opinion Leader speaker program will be conducted alongside focused public relations and promotional activities in target market areas including comprehensive breast centres.

In respect of future product development, the Company will coordinate the collaboration between several US and Australian academic institutions to conduct further studies which will expand the clinical application of its BREVAGen™ test to additional ethnicities, beyond Caucasian – specifically, Hispanic and African American. Simultaneously, the Company will incorporate recent scientific developments and conduct studies that expand the SNP panel to include all relevant SNPs shown to be associated with breast cancer.

Further clinical utility studies will be developed to demonstrate the value of BREVAGen™ in the management of patients in the clinical setting. These studies will be important to engage with the private insurers for coverage decisions that assist in reimbursement.

The Australian medical business will further consolidate its position in the domestic market through targeted investment – particularly in association with its partner Myriad Genetics Inc. – to bring new tests to the Australian medical community.

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

Legal matters

Other than those described elsewhere in this Report with respect to the Company’s ongoing licensing assertion program, there are no legal matters affecting the Company as at the date of this Report.

OPERATING AND FINANCIAL REVIEW (cont.)

Financial analysis

Income statement

During the 2013 financial year, the Company’s reported loss after income tax increased from $5,296,828 in the prior year to $9,349,483. Information relating to this movement is provided below.

Revenues from continuing operations (which include fees from the sale of genetic testing services) decreased by 9%, or $314,032, as compared to the 2012 financial year. This decline, due largely to increased competition in the local Medical and Canine Testing areas of the business, was partially offset by an increase in sales of the Company’s new BREVAGen™ breast cancer risk assessment test in the USA, which increased by 690%.

During the 2012 financial year, following the deconsolidation of former subsidiary ImmunAid Limited, a one-off gain on deconsolidation of $5,113,175 was recorded in the Company’s income statement. During the financial year ended 30 June 2013, there were no such comparative transactions.

Other revenue includes the fees generated from the granting of licensing to the Company’s proprietary non-coding technologies. During the 2013 financial year, the Company’s licensing revenues were $4,784,913 which represented an increase of 89% as compared to the result from the previous year of $2,526,599. The associated commissions payable increased accordingly from $210,478 to $1,209,865. Other revenue also included interest received which decreased by 65% from $609,807 to $217,441 due to the decrease in cash on hand. The Company also received its first research and tax credit of $181,036 in cash which was reported under the heading other income and expense.

Employee benefits expenses decreased by 15%, or $1,255,909, during the 2013 financial year. Despite restructuring and termination expenses that were incurred during the year, the decrease was partially due to a significant one-off share-based payments expense of $1,759,980 that was associated with transactions concerning shares in ImmunAid Limited during the prior year.

Other one-off items which contributed to the increase in the Company’s loss from the prior year included:

$292,081 in capital raising expenses that were expensed, rather than capitalised as equity in the balance sheet;
$191,090 in fees that were paid to US Physicians as part of the Group’s expanding speaker program to promote its BREVAGen™ breast cancer risk test;
$175,341 in transaction costs relating to the Scheme Merger Agreement between the company’s Canadian listed subsidiary pursuant to which it would, subject to shareholder approval, acquire all of the outstanding shares of Sydney-based company Simavita Holdings Limited;
$151,220 in costs associated with a pharmacoeconomic study for the BREVAGen™ breast cancer risk test; and
$149,262 in additional reimbursement costs relating to the change of coding stack for the BREVAGen™ breast cancer risk test.

Balance sheet

As at 30 June 2013, the Company’s balance of cash and cash equivalents was $1,721,293 (2012: $8,900,235). Performance bonds and other deposits of $209,296 at that date (2012: $17,460) included a bond with a German Court of $206,259 which was returned to the Company after balance date.

Statement of cash flows

The total net operating and investing cash outflows for the year were $7,695,431 (2012: $7,181,997) and included costs associated with the Company’s US subsidiary Phenogen Sciences Inc. of $4,658,000 and an advance to an associate of $173,193. Net cash inflows from financing activities of $437,955 included $481,500 from the issue of ordinary shares arising from the exercise of options.

Earnings / (loss) per share

2013	2012
Basic earnings / (loss)per share (centsper share) (1.97) Diluted earnings / (loss)per share (centsper share) (1.97)	(1.15)
	(1.15)

DIRECTORS’ REPORT (cont.)

OPERATING AND FINANCIAL REVIEW (cont.)

Material business risks

The Group operates in the biotechnology sector. Any investment in this sector is considered to be high risk in nature. The Group is subject to normal business risks including, but not limited to, exchange rate fluctuations; the condition, liquidity and volatility of global securities markets; changes in government policy and legislation (particularly in Australia and the USA); and potential litigation, all of which are largely outside the control of the Company’s Board and Management. Other risks that are more specific to the Company, the sector in which it operates and its underlying business activities include:

Financial risk – the business now called Genetic Technologies Limited was established in 1989. With the exception of the year ended 30 June 2011, the Company has incurred operating losses in every year of its existence. As at 30 June 2013, the Company had accumulated losses of $82,049,916 and the extent of any future losses and whether or not the Company can generate profits in future years remains uncertain. The Company currently does not generate sufficient revenue to cover its operating expenses. There is also no certainty that the Company will be able to raise additional funds by issuing further shares and/or the raising of debt and, if such funds are available, on what terms the Company would be able to secure them.

Length of sales cycle – the sales cycle for the Company’s testing products and license generation is typically lengthy. As a result, the Company may expend substantial funds and management effort with no assurance of successfully selling its products or services or granting new licenses. The sales effort requires the effective demonstration of the benefits of its products and services to, and significant training of, many different departments within a potential customer. In addition, the Company is sometimes required to negotiate agreements containing terms which are unique to each customer. With respect to license generation, it is common for negotiations with licensees to take many months before a license is granted.

Competition – with respect to BREVAGen™, the Company’s lead breast cancer risk test, the Company is currently subject to limited competition from biotechnology and diagnostic companies, academic and research institutions and government or other publicly-funded agencies. However, many potential competitors, which include private and public sector enterprises in Australia, the US and elsewhere, have greater experience in the areas of finance, research and development, marketing, sales, distribution, technical and regulatory matters than the Company does. However, the Company maintains an extensive patent portfolio which does provide some protection for BREVAGen™ and for the Company’s licensing assertion program.

Intellectual property (“IP”) risks – the Company relies on its portfolio of patents, patent applications and exclusive licenses to patents relating to genetic technologies. While the Company patents and protects its IP, it cannot be certain that additional patents will be issued to it or that its patents will withstand challenges by others. Patents issued to, or licensed by, the Company may be infringed or third parties may develop similar technologies. Further, patents may not provide meaningful protection from competitors. The Company may also need to sue, or be sued, by third parties regarding its patents and other IP rights. These suits may be costly and would divert funds and resources from the Company and cause distraction to Management. Historically, the Company has commenced litigation against a number of parties to protect its IP rights. If these proceedings are unsuccessful, the Company may be required to pay significant monetary damages.

Professional liability risks – by the very nature of its operations, the Company’s business exposes it to potential liability risks that are inherent in the testing, manufacturing, marketing and sale of genetic tests. In the event of a mistake occurring, including an incorrect result of analysis of genetic variations or other screening tests performed, the commercial sale of a genetic test by the Company may expose it to professional liability claims and possible adverse publicity. Litigation of such claims could be costly. Further, if a court were to require the Company to pay damages to a plaintiff, the amount of such damages could harm its financial condition, despite the Company having significant levels of public and product liability insurance coverage to protect it from such risks.

Government regulation – apart from accreditation requirements, the Company is generally not subject to significant regulation. However, from time to time, federal, state and/or local governments adopt regulations relating to the conduct of genetic research and genetic testing. In future, such regulations could limit or restrict the Company’s genetic research activities as well as genetic testing for research or clinical purposes. Regulations restricting genetic testing could adversely affect the Company’s ability to market and sell its products and services. Accordingly, any regulations of this nature could increase the costs of operations or restrict its ability to conduct its testing business and might adversely affect its operations and financial condition.

OPERATING AND FINANCIAL REVIEW (cont.)

Material business risks (cont.)

Ethical issues – public opinion regarding ethical issues related to the confidentiality and appropriate use of genetic testing results may influence government authorities to call for limits on, or regulation of the use of, genetic testing. In addition, such authorities could prohibit testing for genetic predisposition to certain conditions, particularly for those that have no known cure. Adverse publicity or public opinion relating to genetic research and testing could reduce the potential markets for the Company’s services, which could adversely affect its revenues. Further, the patents it holds over uses of “non-coding” DNA have broad scope and have also been the subject of much debate and some criticism in the media. Potential licensees could take legal action to seek the amendment, re-examination, revocation or invalidation of these patents, something which has happened previously on several occasions, though the Company has prevailed in all such cases.

Launch of BREVAGen™ – with the launch of the Company’s BREVAGen™ test in June 2011, a number of potential commercial risks have been identified. The test exists in a new area of genetic testing, being a predictive test, and it may take time to establish credibility and educate potential customers which may delay establishing reasonable rates of sales. Despite already having various studies and review publications, clinician adoption of the test requires substantial resources and effort. The establishment of a new US company, such as the Company’s subsidiary Phenogen Sciences Inc., requires staffing with qualified and experienced salespeople who require time to establish customer contacts and convert sales. Invariably, some new employees are not able to adapt to the new sales environment and may need to be replaced, potentially hampering growth. Even though the Company’s laboratory has now been CLIA certified, US government health care programs could potentially restrict its ability to offer the test in the US, thereby restricting the available market. The US healthcare reimbursement system with which the Company interacts is complex, involving a series of independent insurers and other third parties involved to assist with credentialing and the administration of the payment processes. Establishing benchmarks with insurers is a time consuming process which could delay the receipt of initial payments until such time as “rules” with each provider can be established.

Risk management

In respect of the above risks, 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 those risks and opportunities. 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.

SHARE OPTIONS

Unissued shares under option

As at the date of this Report, there were 10,775,000 unissued ordinary shares in the Company under option. During the year ended 30 June 2013, a total of 3,650,000 options to acquire ordinary shares in the Company were granted. All options were granted at nil cost. Refer Note 26 to the attached financial statements for details regarding the outstanding options.

Shares issued as a result of the exercise of options

During the 2013 financial year, a total of 10,700,000 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 2013 financial year, a total of 3,550,000 options that had been issued to employees lapsed. Of this number, a total of 1,550,000 options were forfeited, while the remaining 2,000,000 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.

DIRECTORS’ REPORT (cont.)

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 not) of the parent company, and includes the six executives in 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, US Senior Vice President Sales and Marketing, VP Sales and Marketing, Scientific Director and Operations Director. For details regarding changes to Key Management Personnel during the period from 1 July 2012 to the date of this Report, please refer to the notes at the foot of the Remuneration Table on page 42.

Details of Directors and Key Management Personnel as at balance date

Directors	Executives
Dr. Malcolm R. Brandon_(Non-Executive Chairman)_	Alison J. Mew_(Chief Executive Offcer)_
Tommaso Bonvino_(Non-Executive)_	Thomas G. Howitt_(Chief Financial Offcer and Company Secretary)_
Dr. Mervyn Cass_(Non-Executive)_	Mark J. Ostrowski_(US Senior Vice President, Sales and Marketing)_
Benjamin Silluzio_(Non-Executive)_	GregoryJ. McPherson_(VP Sales and Marketing)_
	Dr. Richard Allman_(Scientifc Director)_
	Ivan Jasenko_(Operations Director)_

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 Mr. Tommaso Bonvino and has as its members Dr. Mervyn Cass and Mr. Benjamin Silluzio, both of whom are independent directors.

The Corporate Governance Committee was 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 2013 financial year, the Company’s remuneration practices were further 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.

REMUNERATION REPORT (cont.)

Remuneration structure (cont.)

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.

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.

DIRECTORS’ REPORT (cont.)

REMUNERATION REPORT (cont.)

Fixed remuneration (cont.)

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.

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. An assessment of existing base salaries is made annually using comparisons against independent market data which 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 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 that is based on the performance of both the Company and the individual 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 the position and responsibility of the respective individual, but in respect of the year ended 30 June 2013 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, if any, are paid in August or September of each year subject to the completion of the performance review process and the receipt of a satisfactory rating. The Board conducts this process in the case of the CEO. Any such STI payments which may be made are delivered as a cash bonus during the following reporting period.

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 certain 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, in most cases, generally vest in three equal tranches after 12, 24 and 36 months from the date on which they are granted.

During the year ended 30 June 2013, a net share-based payments expense of $223,005 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.

The following table shows the key performance indicators for the Group over the past five financial years ended 30 June.

	2013	2012	2011	2010	2009
	$	$	$	$	$
Proft/(loss) for the year attributable to owners of Genetic Technologies Limited	(9,298,367) (1.97)	(5,287,523) (1.15)	910,002 0.22	(9,343,766) (2.46)	(7,841,073)
Basic earningsper share (cents)					(2.10)

	2013	2012	2011	2010	2009
	%	%	%	%	%
Increase/(decrease) in shareprice	(20.8) (1.36)	(42.9) (2.16)	500.0 41.98	(22.2) (0.91)	(50.0)
Total KMP incentives (being STI and LTI) as apercentage ofproft/(loss) for theyear					(0.29)

DIRECTORS’ REPORT (cont.)

REMUNERATION REPORT (cont.)

Variable remuneration (cont.)

STI and LTI payments made

In respect of the years ended 30 June 2013 and 30 June 2012, the following STI and LTI payments, and the percentages that each such payment represents relative to their respective salary/fees, were made to Executives:

Name and title Year	Fixed remuneration At risk
	Salary/fees Proportion of total STI Proportion of total LTI Proportion of total
	$ % $ % $ %
Executives
Alison J. Mew Chief Executive Offcer 2013 2012	223,133 176,335 96.9% 89.4% - 10,000 - 5.1% 7,201 10,906 3.1% 5.5%
Thomas G. Howitt Chief Financial Offcer and Company Secretary 2013 2012	222,624 220,204 90.1% 92.4% 20,000 5,000 8.1% 2.0% 4,598 13,174 1.8% 5.6%
Mark J. Ostrowski US Senior Vice President Sales and Marketing 2013 2012	221,953 - 74.9% - 10,778 - 3.6% - 63,549 - 21.5% -
Dr. Richard Allman Scientifc Director 2013 2012	114,076 - 95.4% - - - - - 5,553 - 4.6% -
Dr. Paul D.R. MacLeman Ex-Chief Executive Offcer 2013 2012	122,949 300,000 100% 92.3% - - - - - 25,009 - 7.7%
Lewis J. Stuart Ex-General Manager US ops. 2013 2012	52,843 267,894 100% 95.4% - - - - - 12,900 - 4.6%
Gregory J. McPherson Ex-VP Sales and Marketing 2013 2012	182,157 177,646 100% 91.7% - 5,000 - 2.6% - 11,047 - 5.7%
Dr. David J. Sparling Ex-VP Legal / Corp. Develop. 2013 2012	79,781 194,670 100% 90.2% - 10,000 - 4.6% - 11,141 - 5.2%
Ivan Jasenko Ex-Operations Director 2013 2012	148,607 - 90.9% - - - - - 14,900 - 9.1% -
Totals 2013 2012	1,368,123 1,336,749 91.5% 92.1% 30,778 30,000 2.1% 2.1% 95,801 84,177 6.4% 5.8%

Employment contracts

The Chief Executive Officer, Ms. Alison Mew, is employed under an employment contract dated 5 August 2009 which was subsequently amended on 13 December 2012. The key terms and conditions of Ms. Mew’s employment arrangements are:

During the 2013 financial year, Ms. Mew’s base salary was increased to $260,000. In addition, she received statutory superannuation contributions as prescribed under the Superannuation Guarantee legislation;
Ms. Mew is entitled to receive an STI payment equivalent to a maximum of 30% of base salary based on achievement of Key Performance Indicators, as agreed with the Board from time to time. During the 2012 financial year, she received an STI payment of $10,000 in respect of that financial year;
Ms. Mew may resign from her position, and thus terminate the contract, by giving up to five months written notice and the Company may terminate Ms. Mew’s contract by providing similar written notice or providing payment in lieu of the notice period; and
the Company may terminate Ms. Mew’s contract at any time without notice if serious misconduct has occurred. Where termination with cause occurs, she 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.

REMUNERATION REPORT (cont.)

Employment contracts (cont.)

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, Mr. Mark Ostrowski, Dr. Richard Allman, Ms. Diana Newport and Ms. Luisa Ashdown, 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.

Remuneration of Key Management Personnel (“KMP”)

Name and title Year	Short-term Post- employment Long-term Share-based
	Salary/fees Other Superannuation Long service leave Options Totals
	$ $ $ $ $ $
Directors
Dr. Malcolm R. Brandon1 Non-Executive Chairman 2013 2012	51,759 31,800 - - 26,458 24,662 - - - - 78,217 56,462
Tommaso Bonvino Non-Executive Director 2013 2012	52,318 51,800 - - 4,708 4,662 - - - - 57,026 56,462
Dr. Mervyn Cass Non-Executive Director 2013 2012	52,318 38,850 - - 4,708 3,496 - - - - 57,026 42,346
Benjamin Silluzio2 Non-Executive Director 2013 2012	29,344 - - - 2,641 - - - - - 31,985 -
Dr. Melvyn J. Bridges3 Ex-Non-Executive Chairman 2013 2012	32,683 43,333 - - 9,754 12,756 - - - - 42,437 56,089
Gregory W. Brown4 Ex-Non-Executive Director 2013 2012	18,016 - - - 1,621 - - - - - 19,637 -
Huw D. Jones5 Ex-Non-Executive Director 2013 2012	21,229 51,800 - - 1,910 4,662 - - - - 23,139 56,462
Sidney C. Hack6 Ex-Non-Executive Chairman 2013 2012	- 12,384 - - - 23,845 - - - - - 36,229
Sub-totals for Directors 2013 2012	257,667 229,967 - - 51,800 74,083 - - - - 309,467 304,050

DIRECTORS’ REPORT (cont.)

REMUNERATION REPORT (cont.)

Remuneration of Key Management Personnel (“KMP”) (cont.)

Name and title Year	Short-term Post- employment Long-term Share-based
	Salary/fees Other Superannuation Long service leave Options Totals
	$ $ $ $ $ $
Executives
Alison J. Mew7 Chief Executive Offcer 2013 2012	223,133 176,335 - 10,000 24,999 18,951 7,201 2,843 - 8,063 255,333 216,192
Thomas G. Howitt Chief Financial Offcer and Company Secretary 2013 2012	222,624 220,204 20,000 5,000 22,286 22,726 4,598 5,111 - 8,063 269,508 261,104
Mark J. Ostrowski8 US Senior Vice President Sales and Marketing 2013 2012	221,953 - 10,778 - - - - - 63,549 - 296,280 -
Dr. Richard Allman9 Scientifc Director 2013 2012	114,076 - - - 13,782 - 5,553 - - - 133,411 -
Dr. Paul D.R. MacLeman10 Ex-Chief Executive Offcer 2013 2012	122,949 300,000 161,297 - 11,064 29,160 - 5,659 - 19,350 295,310 354,169
Lewis J. Stuart11 Ex-General Manager US ops. 2013 2012	52,843 267,894 107,752 - - - - - - 12,900 160,595 280,794
Gregory J. McPherson12 Ex-VP Sales and Marketing 2013 2012	182,157 177,646 77,775 5,000 16,844 19,385 - 2,984 - 8,063 276,776 213,078
Dr. David J. Sparling13 Ex-VP Legal / Corp. Develop. 2013 2012	79,781 194,670 102,248 10,000 8,080 21,691 - 3,078 - 8,063 190,109 237,502
Ivan Jasenko14 Ex-Operations Director 2013 2012	148,607 - - - 13,374 - 2,276 - 12,624 - 176,881 -
Sub-totals for Executives 2013 2012	1,368,123 1,336,749 479,850 30,000 110,429 111,913 19,628 19,675 76,173 64,502 2,054,203 1,562,839
Total remuneration of KeyManagement Personnel 2013 2012	1,625,790 1,566,716 479,850 30,000 162,229 185,996 19,628 19,675 76,173 64,502 2,363,670 1,866,889

The following changes to KMP occurred during the period from 1 July 2012 to the date of this Report:

1. Dr. Malcolm Brandon was appointed as the Non-Executive Chairman of the Board on 28 November 2012.

2. Mr. Benjamin Silluzio was appointed as a Non-Executive Director of the Company on 6 December 2012.

3. Dr. Melvyn Bridges ceased to be a Director of the Company and Chairman of its Board on 27 November 2012.

4. Mr. Gregory Brown resigned as a Director of the Company on 27 November 2012.

5. Mr. Huw Jones ceased to be a Director of the Company on 27 November 2012.

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

7. Ms. Alison Mew was appointed as acting Chief Executive Officer of the Company on 28 November 2012 and as permanent Chief Executive Officer of the Company on 10 December 2012.

8. Mr. Mark Ostrowski was appointed US Senior Vice President, Sales and Marketing on 7 September 2012.

9. Dr. Richard Allman was appointed as Scientific Director of the Company on 10 December 2012.

10. Dr. Paul MacLeman resigned as Chief Executive Officer of the Company on 27 November 2012. Included in his payments under the heading “other” is a termination payment of $161,297 (2012: $nil).

11. Mr. Lewis Stuart ceased to be an employee of the Company on 24 August 2012. Included in his payments under the heading “other” is a termination payment of $107,752 (2012: $nil).

12. Mr. Greg McPherson ceased to be an employee of the Company on 12 July 2013. Included in his payments under the heading “other” is a termination payment of $77,775 (2012: $nil) that was accrued as at 30 June 2013.

13. Dr. David Sparling resigned as VP Legal and Corporate Development on 27 November 2012. Included in his payments under the heading “other” is a termination payment of $102,248 (2012: $nil).

14. Mr. Ivan Jasenko was appointed as Operations Director of the Company on 10 December 2012. He subsequently resigned as Operations Director of the Company on 16 August 2013, i.e. after balance date.

15. Ms. Luisa Ashdown and Ms. Diana Newport became members of KMP on 23 August 2013 and 26 September 2013, respectively.

16. The column above entitled “other” of $479,850 (2012: $30,000) comprised termination payments of $449,072 (2102: $nil) and STI payments of $30,778 (2012: $30,000).

REMUNERATION REPORT (cont.)

Remuneration of Key Management Personnel (“KMP”) (cont.)

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 .

Options exercised, granted and lapsed as part of remuneration during the year ended 30 June 2013

During the 2013 financial year, 2,400,000 options were granted as equity compensation benefits to Executives, as disclosed below. Details of the options held by the Executives nominated as Key Management Personnel during the year ended 30 June 2013 are set out below.

Name of Executive	Number of options	Exerciseprice Number lapsed Fair value per option Final vestingdate
	Exercised Granted
Alison J. Mew	1,500,000 -	$0.045 - $0.021 Not applicable
Thomas G. Howitt	1,000,000 -	$0.045 - $0.021 Not applicable
Mark J. Ostrowski	- 2,400,000	$0.140 - $0.065 29 October 2015
Dr. Richard Allman	- -	- - - Not applicable
Dr. Paul D.R. MacLeman	3,600,000 -	$0.045 - $0.021 Not applicable
Lewis J. Stuart1	1,600,000 -	$0.045 800,000 $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
Ivan Jasenko	- -	- - - Not applicable
Totals	10,700,000 2,400,000	800,000

1. The value of the options granted to Mr. Stuart as part of remuneration that lapsed during the year because a vesting condition was not satisfied was $52,000, assuming that the condition had been satisfied.

Options exercised, granted and lapsed as part of remuneration during the year ended 30 June 2012

During the 2012 financial year, there were no options granted as equity compensation benefits to Executives, nor were any such options exercised or lapsed.

Fair values of options

During the year ended 30 June 2013, a total of 3,550,000 options that had previously been issued to employees lapsed. Of this number, a total of 1,550,000 options were forfeited, whilst the remaining 2,000,000 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 2013, a total of 10,700,000 options were exercised (refer Note 26 for details).

During October 2012, a total of 2,650,000 options over ordinary shares in the Company were granted, at no cost, to two employees of its US subsidiary, Phenogen Sciences Inc. Each option, which entitles the holder to acquire one ordinary share at a cost of $0.14, will expire on 29 August 2017, unless exercised before that date.

During February 2013, a total of 250,000 options over ordinary shares in the Company were granted, at no cost, to another employee of Phenogen Sciences Inc. Each option, which entitles the holder to acquire one ordinary share at a cost of $0.10, will expire on 1 December 2017, unless exercised before that date.

DIRECTORS’ REPORT (cont.)

REMUNERATION REPORT (cont.)

Fair values of options (cont.)

During March 2013, a total of 750,000 options over ordinary shares in the Company were granted, at no cost, to further employees of Phenogen Sciences Inc. Each option, which entitles the holder to acquire one ordinary share at a cost of $0.10, will expire on 25 January 2018, unless exercised before that date.

The above options granted during the 2013 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 2013, there were 3 executives and 18 employees who held options that had previously been granted under the Company’s respective option plans.

End of Remuneration Report

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 69 of the Financial 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
	2013	2012
	$	$
Audit services	275,167 16,425 291,592 5,676 5,676 297,268
PricewaterhouseCoopers in respect of:
Audit of the Company’s Financial Report under the_Corporations Act 2001_		267,880
Other audit frms in respect of:
Audit of the Financial Reports of subsidiaries		16,360
Total remuneration in respect of audit services		284,240
Non-audit services
Other audit frms in respect of:
Tax advice and compliance, accountingand other services		18,390
Total remuneration in respect of non-audit services		18,390
Total auditors’ remuneration		302,630

ENVIRONMENTAL REGULATION

The Company is not aware of any breaches of any environmental regulation during the 2013 financial year.

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.

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 .

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. Malcolm R. Brandon1	11 11	2 2 - -
Tommaso Bonvino2	11 11	- - - -
Dr. Mervyn Cass	11 10	1 1 - -
Benjamin Silluzio	6 6	1 1 - -
Dr. Melvyn J. Bridges3	3 3	1 1 - -
GregoryW. Brown	3 3	- - - -
Huw D. Jones	3 3	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 two Sub-Committees during the 2013 financial year were:

	Audit Committee	Corporate Governance Committee
Name of Member	Period served	Period served
Dr. Malcolm R. Brandon	1 July2012 to 30 June 2013	Not applicable
Tommaso Bonvino	Not applicable	1 July2012 to 30 June 2013
Dr. Mervyn Cass	30 January2013 to 30 June 2013	30 January2013 to 30 June 2013
Benjamin Silluzio	30 January2013 to 30 June 2013	30 January2013 to 30 June 2013
Dr. Melvyn J. Bridges	1 July2012 to 27 November 2012	1 July2012 to 27 November 2012
Huw D. Jones	1 July2012 to 27 November 2012	1 July2012 to 27 November 2012

Notes:

1. Dr. Brandon served as the Chairman of the Audit Sub-Committee from 28 November 2012 to 30 June 2013.

2. Mr. Bonvino served as the Chairman of the Corporate Governance Sub-Committee from 28 November 2012 to 30 June 2013.

3. Dr. Bridges served as the Chairman of both Sub-Committees from 1 July 2012 to 27 November 2012.

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

Signed in accordance with a resolution of the Directors.

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TOMMASO BONVINO

Non-Executive Director

Melbourne, 27 September 2013

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 2013 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.

Performance appraisals for all members of the Senior Leadership Team last took place in May and June 2013. The process for these assessments is described in the Remuneration Report on pages 36 to 44 of this Financial 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 four 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 eleven Board meetings during the 2013 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 2013, and the number of such meetings attended by each Director, are disclosed on page 45.

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 Tommaso Bonvino (Chairman), Dr. Mervyn Cass and Benjamin Silluzio, all of whom are independent. Details of their attendance at meetings of the Committee are set out in the Directors’ Report on page 45. 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	32 50% 41 64%
Number of women in senior executivepositions	2 29% 4 57%
Number of women on the Board	1 25% 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. Malcolm Brandon (Chairman), Dr. Mervyn Cass and Benjamin Silluzio, all of whom are independent. Details of their attendance at meetings of the Committee are set out in the Directors’ Report on page 45. 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;
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.

ASX PRINCIPLES AND RECOMMENDATIONS (cont.)

Principle 7: Recognise and manage risk (cont.)

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
	2013	2012
	$	$
Revenue from continuing operations –genetic testing services	3,377,183 (1,945,467) 1,431,716 5,002,354 - (5,266,818) (4,413,782) (2,399,824) (3,462,466) (38,968) (437,185) 235,490 (9,349,483) - (9,349,483) 9,347 17,073 26,420 (9,323,063) (9,298,367) (51,116) (9,349,483) (9,289,020) (34,043) (9,323,063) (1.97) (1.97)	3,691,215
Less: cost of sales 4		(1,948,625)
Grossproft from continuing operations –genetic testing services		1,742,590
Other revenue 5		3,136,406
Gain on deconsolidation of subsidiary 6		5,113,175
Sellingand marketingexpenses		(4,384,184)
General and administrative expenses		(5,608,038)
Licensing,patent and legal costs		(1,267,838)
Laboratoryand research and development costs		(4,029,369)
Finance costs		(45,217)
Share of net loss of associate accounted for usingthe equitymethod 34		(132,037)
Other income and expenses 8		177,684
Loss from continuing operations before income tax expense		(5,296,828)
Income tax expense 10		-
Loss for theyear		(5,296,828)
Other comprehensiveproft / (loss)
Items that maybe reclassifed toproft or loss
Exchangegains / (losses) on translation of controlled foreign operations 23		(6,818)
Exchangegains / (losses) on translation of non-controlled foreign operations 25		(296)
Other comprehensiveproft / (loss) for theyear, net of tax		(7,114)
Total comprehensive loss for theyear		(5,303,942)
Loss for theyear is attributable to:
Owners of Genetic Technologies Limited		(5,287,523)
Non-controllinginterests 25		(9,305)
Total loss for theyear		(5,296,828)
Total comprehensive loss for theyear is attributable to:
Owners of Genetic Technologies Limited		(5,294,341)
Non-controllinginterests 25		(9,601)
Total comprehensive loss for theyear		(5,303,942)
Loss per share attributable to owners of the Company and from continuing operations:
Basic lossper share (centsper share) 9		(1.15)
Diluted lossper share (centsper share) 9		(1.15)

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
	2013	2012
	$	$
ASSETS	1,721,293 328,642 398,185 209,296 2,657,416 3,932,384 423,168 1,306,559 5,662,111 8,319,527 1,375,536 - 320,781 768,699 2,465,016 96,224 96,224 2,561,240 5,758,287 83,735,845 3,951,771 (82,049,916) 5,637,700 120,587 5,758,287
Current assets
Cash and cash equivalents 11		8,900,235
Trade and other receivables 12		495,975
Prepayments and other assets 13		536,125
Performance bond and deposits 14		17,460
Total current assets		9,949,795
Non-current assets
Investments accounted for usingthe equitymethod 15		4,414,914
Property,plant and equipment 16		642,918
Intangible assets andgoodwill 17		1,434,124
Total non-current assets		6,491,956
Total assets		16,441,751
LIABILITIES
Current liabilities
Trade and otherpayables 18		905,772
Interest-bearingliabilities 19		17,748
Deferred revenue 20		266,646
Provisions 21		740,402
Total current liabilities		1,930,568
Non-current liabilities
Provisions 21		108,541
Total non-current liabilities		108,541
Total liabilities		2,039,109
Net assets		14,402,642
EQUITY
Contributed equity 22		83,280,142
Reserves 23		3,719,419
Accumulated losses 24		(72,751,549)
Parent entityinterest		14,248,012
Non-controllinginterests 25		154,630
Total equity		14,402,642

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
	2013	2012
	$	$
Cash fows from / (used in) operating activities	8,460,774 (16,213,984) 275,399 (38,968) (7,516,779) 1,201 (53,611) 46,951 - (173,193) - (178,652) 481,500 (25,797) - - (17,748) 437,955 (7,257,476) 8,900,235 78,534 1,721,293
Receipts from customers		6,300,410
Payments to suppliers and employees		(14,481,226)
Interest received		551,859
Interest and fnance chargespaid		(45,217)
Net cash fows from / (used in) operating activities 11		(7,674,174)
Cash fows from / (used in) investing activities
Proceeds from the sale ofplant and equipment		31,455
Purchases ofplant and equipment		(76,314)
Proceeds from the sale of shares in associate		20
Purchase of shares in subsidiary		(10)
Advance to associate		-
Loans repaid byassociate		537,026
Net cash fows from / (used in) investing activities		492,177
Cash fows from / (used in) fnancing activities
Netproceeds from the issue of shares		10,902,037
Equitytransaction costs		-
Proceeds from borrowings		1,000,000
Repayment of borrowings		(1,000,837)
Repayment of hirepurchaseprincipal		(50,130)
Net cash fows from / (used in) fnancing activities		10,851,070
Net increase / (decrease) in cash and cash equivalents		3,669,073
Cash and cash equivalents at beginningofyear		5,104,667
Net foreign exchange difference		126,495
Cash and cash equivalents at end ofyear 11		8,900,235

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 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(net)	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
Loss for theyear	- - (9,298,367) (9,298,367) (51,116) (9,349,483)
Other comprehensive loss	- 9,347 - 9,347 17,073 26,420
Total comprehensive income / (loss)	- 9,347 (9,298,367) (9,289,020) (34,043) (9,323,063)
Transactions with owners in their capacity as owners
Contributions of equity(net)	455,703 - - 455,703 - 455,703
Share-basedpayments	- 223,005 - 223,005 - 223,005
	455,703 223,005 - 678,708 - 678,708
Balance at 30 June 2013	83,735,845 3,951,771 (82,049,916) 5,637,700 120,587 5,758,287

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 2013

1. CORPORATE INFORMATION

The Financial Report of Genetic Technologies Limited (the “Company”) for the year ended 30 June 2013 was authorised for issue in accordance with a resolution of the Directors dated 27 September 2013. 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.

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 ended 30 June 2012, 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 that first year of launch, the income generated from these sales was recorded on a cash basis. Effective 1 January 2013, significant changes in the US reimbursement system have impacted (positively) on the amounts the Company has since received for the BREVAGen™ tests it performs. However, given the relatively short period of time since this change, a reliable estimate of the amount of revenue expected to be received in respect of each BREVAGen™ test cannot yet be made in accordance with AASB 118 Revenue (IAS 18) . Accordingly, the sales received during the financial year ended 30 June 2013 were also recorded on a cash basis.

Going concern

During the 2013 financial year, the Company incurred a total comprehensive loss after income tax of $9,323,063 (2012: $5,303,942) and net cash outflows from operations of $7,516,779 (2012: $7,674,714). As at 30 June 2013, the Company held cash reserves of $1,721,293 and had net current assets of $192,400.

Subsequent to balance date, the Company raised a total of $3,000,000 via the placement of 41,666,667 ordinary shares at an issue price of $0.072 per share. As at the date of this Report, the Company held cash reserves of approximately $2,350,000.

As at the date of this Report, a further $1,350,500 had been received by the Company under a Share Purchase Plan (“Plan”) to eligible shareholders which is scheduled to close on 26 September 2013. This amount, when added to the amount that is likely to be contributed by the Underwriters of the Plan or their nominees, should result in the Company receiving at least $3,000,000, before the payment of associated costs. At the issue price of $0.072 per share, this amount will result in the issue of a further 41,666,667 ordinary shares in the Company.

The Company proposes to raise additional funds via the issue of a US$5,000,000 convertible note (subject to shareholder approval which will be sought at an Extraordinary General Meeting on 23 October 2013).

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(a) Basis of preparation (cont.)

Going concern (cont.)

The continuing viability of the Company and its ability to continue as a going concern and meet its debts and commitments as they fall due are dependent upon the consolidated entity being successful in one or more of the following events:

Fundraising from the issue of further new shares in the Company and/or the sale of non-core or surplus assets;
Obtaining shareholder approval for, and successfully completing the proposed raising of, debt funds via the issue of the US$5,000,000 convertible note;
Increasing sales of genetic tests, including the BREVAGen™ test in the USA and potentially Europe;
Generating additional funds from the granting of further “non-coding” licenses as part of the Company’s out-licensing and assertion programs, and;
Cost containment strategies which are currently in progress.

As a result of these matters, there is a material uncertainty that may cast significant doubt on the Company’s ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business. However, the Directors believe that the Company will be successful in the above matters and, accordingly, have prepared the financial report on a going concern basis.

(b) New accounting standards and interpretations

In respect of the year ended 30 June 2013, 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 effect 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 2013 reporting periods.

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

IFRS 9 / (AASB 9) Financial Instruments, AASB 2009-11 Amendments to Australian Accounting Standards arising from AASB 9, AASB 2010-7 Amendments to Australian Accounting Standards arising from AASB 9 (December 2010) and AASB 2012-6 Amendments to Australian Accounting Standards – Mandatory Effective Date of AASB 9 and Transition Disclosures (effective for annual reporting periods beginning on or after 1 January 2015)

IFRS 9 / (AASB 9) Financial Instruments addresses the classification, measurement and derecognition of financial assets and financial liabilities. The standard is not applicable until 1 January 2015 but is available for early adoption. When adopted, the standard will affect in particular the Group’s accounting for its available-for-sale financial assets, since IFRS 9 / (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 as at fair value through profit or loss and the Group does not have any such liabilities. The derecognition rules have been transferred from IAS 39 / (AASB 139) Financial Instruments: Recognition and Measurement and have not been changed. The Group has not yet decided when to adopt IFRS 9 / (AASB 9).

IFRS 10 / (AASB 10) Consolidated Financial Statements, IFRS 11 / (AASB 11) Joint Arrangements, IFRS 12 / (AASB 12) Disclosure of Interests in Other Entities, revised IAS 27 / (AASB) 127 Separate Financial Statements and IAS 28 / (AASB 128) Investments in Associates and Joint Ventures, AASB 2011-7 Amendments to Australian Accounting Standards arising from the Consolidation and Joint Arrangements Standards and AASB 2012-10 Amendments to Australian Accounting Standards – Transition guidance and other Amendments (effective 1 January 2013)

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

AASB 10 replaces all of the guidance on control and consolidation in IAS7 / 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. The Group is still evaluating the effect the new standard will have on its composition.

NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2013 (cont.)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(b) New accounting standards and interpretations (cont.)

IFRS 12 / (AASB 12) sets out the required disclosures for entities reporting under the two new standards, IFRS 10 / (AASB 10) and IFRS 11 / (AASB 11), and replaces the disclosure requirements currently found in IAS 28 / (AASB 128). Application of this standard by the Group will not affect any of the amounts recognised in the financial statements, but will impact the type of information disclosed in relation to the Group’s investments.

Amendments to IAS 28 / (AASB 128) provide clarification that an entity continues to apply the equity method and does not remeasure its retained interest as part of ownership changes where a joint venture becomes an associate, and vice versa. The amendments also introduce a “partial disposal” concept. As the Group is not party to any joint arrangements, this standard will not have any impact on its financial statements. The Group will adopt the new standards before their operative date and would therefore be applied in the financial statements for the reporting period ending 30 June 2014.

IFRS 13 / (AASB 13) Fair Value Measurement and AASB 2011-8 Amendments to Australian Accounting Standards arising from AASB 13(effective 1 January 2013)

IFRS 13 / (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 will 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 2011-4 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.

Improvements to IFRS (2009-2011 project cycle) / (AASB 2012-5 Amendments to Australian Accounting Standard arising from Annual Improvements 2009-2011 cycle) (effective for annual periods beginning on or after 1 January 2013)

In June 2012, the AASB approved a number of amendments to Australian Accounting Standards as a result of the 2009-2011 annual improvements project. The Group will apply the amendments from 1 July 2013. The Group does not expect that any adjustments will be necessary as the result of applying the revised rules.

Revised IAS 19 / (AASB 119) Employee Benefits, AASB 2011-10 Amendments to Australian Accounting Standards arising from AASB 119 (September 2011) and AASB 2011-11 Amendments to AASB 119 (September 2011) arising from Reduced Disclosure Requirements (effective 1 January 2013)

In June 2011 (AASB: September 2011), the IAS / (AASB) released a revised standard on accounting for employee benefits. It requires the recognition of all remeasurements of defined benefit liabilities/assets immediately in other comprehensive income (removal of the so-called “corridor” method) and the calculation of a net interest expense or income by applying the discount rate to the net defined benefit liability or asset. This replaces the expected return on plan assets that is currently included in profit or loss. The standard also introduces a number of additional disclosures for defined benefit liabilities/assets and could affect the timing of the recognition of termination benefits. The amendments will have to be implemented retrospectively. The Group is still evaluating the impact of the new standard on its financial statements. The Group will adopt the new standard when it becomes operative, being from 1 July 2013.

AASB 2012-3 Amendments to AASB 136 Recoverable Amount Disclosures for Non-Financial Assets (effective 1 January 2014)

The AASB has made small changes to some of the disclosures that are required under AASB 136 Impairment of Assets. These may result in additional disclosures if the Group recognises an impairment loss or the reversal of an impairment loss during the period. They will not affect any of the amounts recognised in the financial statements. The Group intends to apply the amendment from 1 July 2014.

There are no other standards that are not yet effective and that are expected to have a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(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 2013 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. Non-controlling 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.

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 34.

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.

NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2013 (cont.)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(d) Foreign currency translation (cont.)

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.

(e) 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.

(f) 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.

(g) Parent entity financial information

The financial information for the parent entity, Genetic Technologies Limited, as disclosed in Note 35, 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.

(h) 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, royalties and annuities 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(x). 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.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(i) 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 Report. In valuing equitysettled 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 cumulative 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.

(j) 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 10. 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 2013 (cont.)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(k) 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.

(l) 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. In such cases, revenues are recorded net of any withholding tax deducted.

(m) Finance costs

Finance costs are recognised using the effective interest rate method.

(n) 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 six 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, depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.

(o) 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 36.

(p) 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.

(q) Performance bonds and deposits

Performance bonds and deposits include cash deposits held as security for the performance of certain contractual obligations.

(r) 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, with the replacement parts being subsequently written off.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(s) 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.

(t) 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 .

(u) 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 2013 (cont.)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(v) 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.

(w) 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.

(x) 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 license 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.

(y) 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.

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (cont.)

(z) 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.

(aa) Contributed equity

Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Transaction costs arising on the issue of ordinary shares are recognised directly in equity as a deduction, net of tax, of the 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 29).

(ab) 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 non-controlling 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, including goodwill, are impaired on at least a bi-annual basis, in accordance with the accounting policies stated in Notes 2(s) and 2(t). 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 2013 (cont.)

3. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (cont.)

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

Carrying value of investment in ImmunAid Limited

As at 30 June 2013, the Company’s investment in its associate ImmunAid Limited (“ImmunAid”) had a carrying value in its balance sheet of $3,932,384. This investment is carried at the lower of its carrying amount and its recoverable amount, which is the higher of value in use and fair value less costs to sell. As at 30 June 2013, the Company considered the net trading loss of the investment to be indicative of an impairment trigger and has tested its carrying value for impairment.

The Company has not recognised any impairment in the investment based of its assessment that, as at 30 June 2013, its fair value less costs to sell exceeds its carrying value. In April 2012, ImmunAid issued shares to new investors at a price in excess of the current per share carrying value of the investment. In addition, the Company noted that ImmunAid was recently allowed an exclusive US patent, which was positively received by the Market. Taking these events in aggregate, the Company has concluded that there is no impairment in the investment for the year ended 30 June 2013.

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(j), 2(k) and 2(l)). 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 10).

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
	2013	2012
	$	$
4. COST OF SALES	823,139 785,722 173,300 163,306 1,945,467
Inventories used		859,206
Direct labour costs		864,286
Depreciation expense		230,349
Inventories written off / (back)		(5,216)
Total cost of sales		1,948,625

	Consolidated	Consolidated
	2013	2012
	$	$
5. OTHER REVENUE	3,579,677 1,205,236 217,441 5,002,354 - - - - -
License fees received		1,189,170
Royalties and annuities received		1,337,429
Interest revenue		609,807
Total other revenue		3,136,406
6. GAIN ON DECONSOLIDATION OF SUBSIDIARY
Recognition of investment in associate (Note 34)		4,546,951
Removal of net assets of associate on loss of control of a subsidiary		528,433
Removal of non-controllinginterests (Note 25)		37,771
Proft received from sale of shares in associate		20
Totalgain on deconsolidation of subsidiary		5,113,175

Note: During the year ended 30 June 2012, the Group deconsolidated its former subsidiary, ImmunAid Limited (refer Note 27). 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 in accordance with Note 2(c) at its fair value, as described in Note 3(a).

7. EXPENSES

Amortisation of intangible assets 127,565 Depreciation of fxed assets 97,444 Employee benefts expenses 6,938,342 Operatinglease expenses 369,254 Research and development expenses 573,377 Net impairment of intangible assets - 8. OTHER INCOME AND EXPENSES Net foreign exchangegains 46,264 Netproft / (loss) on disposal ofplant and equipment (1,416) Management fees received 8,000 Research and development tax credit 181,036 Netproft on disposal of investments accounted for usingthe equitymethod 1,606 Loss on disposal of shares in subsidiary(Notes 27 and 32) - Total other income and expenses 235,490	181,048
	150,547
	8,194,251
	354,958
	892,274
	104,338

	141,364
	31,455
	4,875
	-
	-
	(10)
	177,684

9. LOSS PER SHARE

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

	2013	2012
	$	$
Loss for theyear attributable to the owners of Genetic Technologies Limited	(9,298,367) 472,084,970	(5,287,523)
Weighted average number of ordinaryshares used in calculatinglossper share		460,402,869

Note: None of the 9,525,000 (2012: 20,125,000) 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 2013 (cont.)

	Consolidated	Consolidated
	2013	2012
	$	$
10. INCOME TAX	(9,349,483) (2,804,845) 54,883 66,902 131,156 (48,328) - (54,311) 20,330 6,869 (2,627,344) 46,701 4,794 (134,757) 1,159,185 1,551,421 - 96,234 350,002 2,404,695 64,286 259,477 52,553 3,227,247 (3,227,247) - 41,135,676 12,340,703
Reconciliation of income tax expense toprima facie taxpayable
Loss before income tax expense		(5,296,828)
Tax at the Australian tax rate of 30% (2012: 30%)		(1,589,048)
Tax effect amounts which are not deductible / (taxable) in calculating taxable income
Net impairment losses and other write-downs		31,301
Share-basedpayments expense		608,497
Share of net loss of associate accounted for usingthe equitymethod		39,611
Capital raisingexpenses		(48,328)
Gain on deconsolidation of subsidiary		(1,533,953)
Research and development tax incentive		-
Withholdingtax expense		19,753
Other non-deductible items		4,980
		(2,467,187)
Tax effect of adjustments relating to temporary differences
Amortisation and depreciation expenses		25,557
Net movements inprovisions		26,111
Settlementproceeds from Applera Corporation		(131,134)
Adjustment for amended tax returns ofpriorperiods		1,264,668
Tax losses not recognised		1,281,985
Income tax expense		-
Deferred tax assets
Deferred revenue		79,994
Applera settlement		484,759
Intangible assets		2,099,763
Doubtful debts		26,635
Provisions		254,683
Other		-
Total deferred tax assets		2,945,834
Deferred tax assets on temporarydifferences not brought to account		(2,945,834)
Total net deferred tax assets		-
Tax losses
Unused tax losses for which no deferred tax asset has been recognised		35,964,273
Potential tax beneft @ 30%		10,789,282

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 $12,340,703 (2012: $10,789,282) 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

10. 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(j). 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 2013, 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 (2012: $nil).

	Consolidated	Consolidated
	2013	2012
	$	$
11. CASH AND CASH EQUIVALENTS	1,721,293 - 1,721,293 (9,349,483) 398,309 223,005 - 437,185 - - 173,193 1,416 (52,114) (1,606) 167,333 137,940 (191,836) 469,764 54,135 15,980 (7,516,779)
Reconciliation of cash and cash equivalents
Cash at bank and on hand		2,380,114
Short-term deposits		6,520,121
Total cash and cash equivalents		8,900,235
Reconciliation of loss for theyear
Reconciliation of loss for the year after income tax to net cash fows used in operatingactivities is as follows:
Loss for theyear after income tax		(5,296,828)
Adjust for non-cash items
Amortisation and depreciation expenses		561,944
Share-basedpayments expense		2,028,323
Net impairment losses and other write-downs		104,338
Share of loss of associate		132,037
Loss on disposal of shares in subsidiary		10
Fair valuegain on deconsolidation of subsidiary		(5,113,175)
Provision for advance to associate		-
Net (proft) / loss on disposal ofplant and equipment		(31,455)
Net foreign exchange (gains) / losses		(141,365)
Net (proft) / loss on disposal of shares in associate		-
Adjust for changes in assets and liabilities
(Increase) / decrease in trade and other receivables		178,394
(Increase) / decrease inprepayments and other assets		(62,466)
(Increase) / decrease inperformance bonds and deposits		(14,811)
Increase / (decrease) in trade and otherpayables		(209,256)
Increase / (decrease) in deferred revenue		103,100
Increase / (decrease) inprovisions		87,036
Net cash fows from / (used in) operatingactivities		(7,674,174)

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2013 (cont.)

	Consolidated	Consolidated
	2013	2012
	$	$
11. CASH AND CASH EQUIVALENTS(cont.) Non-cash activities There were no non-cash activities during the 2013 fnancial year.	- 215,603 - (60,918) - 154,685 513,633 (214,285) 299,348 - 29,294 328,642
Financing facilities available
As at 30 June 2013, the following fnancing facilities had been negotiated and were available:
Total facilities
Hirepurchase facility		2,500,000
Credit cards		199,208
Facilities used as at reporting date
Hirepurchase facility		(17,748)
Credit cards		(15,861)
Facilities unused as at reporting date
Hirepurchase facility		2,482,252
Credit cards		183,347
12. TRADE AND OTHER RECEIVABLES (CURRENT)
Trade receivables		474,843
Less:provision for doubtful debts		(88,783)
Net trade receivables		386,060
Accrued interest		57,948
Other receivables		51,967
Total net current trade and other receivables		495,975

Note: Trade and other receivables for the Group include amounts due in US dollars of USD 42,140 (2012: USD 61,336) and European euros of EUR 90,000 (2012: EUR 90,000).

Refer Note 36 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.

13. PREPAYMENTS AND OTHER ASSETS (CURRENT)

Prepayments 184,394 Inventories at the lower of cost and net realisable value 213,791 Total currentprepayments and other assets 398,185 14. PERFORMANCE BONDS AND DEPOSITS (CURRENT) Performance bonds 206,259 Deposits 3,037 Total currentperformance bonds and deposits 209,296 15. INVESTMENTS ACCOUNTED FOR USING THE EQUITY METHOD (NON-CURRENT) Shares in associate (Note 34) 3,932,384 Total non-current investments accounted for usingthe equitymethod 3,932,384	219,409
	316,716
	536,125

	15,260
	2,200
	17,460

	4,414,914
	4,414,914

	Consolidated	Consolidated
	2013	2012
	$	$
16. PROPERTY, PLANT AND EQUIPMENT	3,880,330 (2,824,044) (751,325) 304,961 695,288 (617,439) 77,849 224,949 (190,301) 34,648 1,282,389 (1,272,389) (10,000) - 111,873 (106,163) 5,710 423,168 6,222,730 53,611 (81,512) 6,194,829 (5,579,812) 78,895 (270,744) (5,771,661) 423,168
Laboratoryequipment, at cost		3,953,756
Less: accumulated depreciation		(2,706,111)
Less: impairment loss		(751,325)
Net laboratoryequipment		496,320
Computer equipment, at cost		657,337
Less: accumulated depreciation		(571,706)
Net computer equipment		85,631
Offce equipment, at cost		219,500
Less: accumulated depreciation		(168,116)
Net offce equipment		51,384
Equipment under hirepurchase, at cost		1,282,389
Less: accumulated depreciation		(1,271,014)
Less: impairment loss		(10,000)
Net equipment under hirepurchase		1,375
Leasehold improvements, at cost		109,748
Less: accumulated depreciation		(101,540)
Net leasehold improvements		8,208
Total netproperty,plant and equipment		642,918
Reconciliation ofproperty, plant and equipment
Opening gross carryingamount		6,518,757
Add: additionspurchased duringtheyear		76,314
Less: disposals made duringtheyear		(372,341)
Closing gross carryingamount		6,222,730
Openingaccumulated depreciation and impairment losses		(5,571,257)
Add: disposals made duringtheyear		372,341
Less: depreciation expense charged		(380,896)
Closingaccumulated depreciation and impairment losses		(5,579,812)
Total netproperty,plant and equipment		642,918

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	496,320 609 - (191,968) 304,961
Computer equipment	85,631 45,428 (2,617) (50,593) 77,849
Offce equipment	51,384 5,449 - (22,185) 34,648
Equipment under hirepurchase	1,375 - - (1,375) -
Leasehold improvements	8,208 2,125 - (4,623) 5,710
Totals	642,918 53,611 (2,617) (270,744) 423,168

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2013 (cont.)

	Consolidated	Consolidated
	2013	2012
	$	$
17. INTANGIBLE ASSETS AND GOODWILL	36,594,310 (32,797,420) (3,632,338) 164,552 1,033,273 (206,654) 826,619 358,012 (42,624) 315,388 1,306,559 36,322,585 271,725 36,594,310 (36,133,795) (24,238) - (271,725) (36,429,758) 164,552 929,946 (103,327) 826,619 358,012 - 358,012 (42,624) - (42,624) 315,388
Patents
Patents, at cost		36,322,585
Less: accumulated amortisation		(32,501,457)
Less: impairment losses		(3,632,338)
Total netpatents		188,790
Other intangible assets
Assets associated with BREVAGen™ breast cancer risk test, at cost		1,033,273
Less: accumulated amortisation		(103,327)
Total net other intangible assets		929,946
Goodwill
Goodwill, at cost		358,012
Less: accumulated impairment		(42,624)
Total netgoodwill		315,388
Total net intangible assets andgoodwill		1,434,124
Reconciliation ofpatents
Opening gross carryingamount		36,538,523
Adjust for exchange rate movements		(215,938)
Closing gross carryingamount		36,322,585
Openingaccumulated amortisation and impairment losses		(36,167,674)
Add: amortisation expense charged (refer below)		(77,721)
Add: impairment losses (refer below)		(104,338)
Adjust for exchange rate movements		215,938
Closingaccumulated amortisation and impairment losses		(36,133,795)
Total netpatents		188,790
Reconciliation of other intangible assets
Openingnet carryingamount		1,033,273
Add: amortisation expense charged (refer below)		(103,327)
Total net other intangible assets		929,946
Reconciliation ofgoodwill
Opening gross carryingamount		358,012
Less:goodwill written off		-
Closing gross carryingamount		358,012
Openingaccumulated impairment losses		(42,624)
Add:goodwill written off		-
Closingaccumulated impairment losses		(42,624)
Total netgoodwill		315,388

17. INTANGIBLE ASSETS AND GOODWILL (cont.)

Remaining useful lives

The assets associated with the BREVAGen™ breast cancer risk test have a remaining useful life of 8 years as at 30 June 2013.

Disclosure of expenses

The total amortisation expense charged during the year in respect of intangible assets of $127,565 is disclosed in the consolidated statement of comprehensive income under the headings of laboratory and research and development costs ($103,327) and licensing, patent and legal costs ($24,238).

	Consolidated
2013		2012
$		$

18. TRADE AND OTHER PAYABLES (CURRENT)

Tradepayables 622,216 Otherpayables 377,829 Accrued expenses 375,491 Total current trade and otherpayables 1,375,536	332,636
	342,539
	230,597
	905,772

Note: Trade payables and other payables for the Group include amounts due in US dollars of USD 307,332 (2012: USD 210,304), Chinese yuan of CNY 41,291 (2012: CNY 49,128), Canadian dollars of CAD 171,900 (2012: CAD 7,886), European euros of EUR 20,804 (2012: EUR 1,652), Swiss francs of CHF 3,090 (2012: CHF 3,090), New Zealand dollars of NZD 839 (2012: NZD 1,817) and Japanese yen of JPY 62,928 (2012: JPY 69,677).

Refer Note 36 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.

19. INTEREST-BEARING LIABILITIES (CURRENT)

19. INTEREST-BEARING LIABILITIES (CURRENT)
Hirepurchase liability(Notes 30 and 36) - Total current interest-bearingliabilities -	17,748
	17,748

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

20. DEFERRED REVENUE (CURRENT)

Genetic testingfees received in advance 320,781 Total current deferred revenue 320,781 21. PROVISIONS (CURRENT AND NON-CURRENT) Currentprovisions Annual leave 415,511 Longservice leave 353,188 Total currentprovisions 768,699 Non-currentprovisions Longservice leave 96,224 Total non-currentprovisions 96,224 Totalprovisions 864,923	266,646
	266,646


	439,186
	301,216
	740,402

	108,541
	108,541
	848,943

NOTES TO THE FINANCIAL STATEMENTS

For the year ended 30 June 2013 (cont.)

	Consolidated	Consolidated
	2013	2012
	$	$
21. PROVISIONS (CURRENT AND NON-CURRENT)	439,186 382,655 (406,330) 415,511 409,757 50,995 (11,340) 449,412
Reconciliation of annual leaveprovision
Balance at the beginningof the fnancialyear		417,603
Add: obligation accrued duringtheyear		452,638
Less: utilised duringtheyear		(431,055)
Balance at the end of the fnancialyear (note)		439,186
Reconciliation of long service leaveprovision
Balance at the beginningof the fnancialyear		344,304
Add: obligation accrued duringtheyear		65,453
Less: utilised duringtheyear		-
Balance at the end of the fnancialyear (note)		409,757

Note: The current provisions for annual leave and long service leave include a total amount of $353,188 (2012: $439,186) in respect of obligations which, based on historical evidence, the Company estimates will be settled more than 12 months from balance date.

22. CONTRIBUTED EQUITY	83,735,845 83,735,845 Shares 464,771,819 10,700,000 - 475,471,819 404,605,152 60,000,000 166,667 464,771,819
Issued andpaid-up capital
Fully paid ordinaryshares		83,280,142
Total contributed equity		83,280,142

Movements in shares on issue		$

Year ended 30 June 2013
Balance at the beginningof the fnancialyear		83,280,142
Add: shares issued duringtheyear from the exercise of options		481,500
Less: other share transaction costs		(25,797)
Balance at the end of the fnancialyear
		83,735,845
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

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
	2013	2012
	$	$
23. RESERVES	(152,511) 4,104,282 3,951,771 (161,858) 9,347 (152,511) 3,881,277 223,005 4,104,282
Foreign currencytranslation		(161,858)
Share-basedpayments		3,881,277
Total reserves		3,719,419
Reconciliation of foreign currency translation reserve
Balance at the beginningof the fnancialyear		(155,040)
Add: net currencytranslationgain / (loss)		(6,818)
Balance at the end of the fnancialyear		(161,858)
Reconciliation of share-basedpayments reserve
Balance at the beginningof the fnancialyear		1,852,954
Add: share-basedpayments expense		2,028,323
Balance at the end of the fnancialyear		3,881,277

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
	2013	2012
	$	$
24. ACCUMULATED LOSSES	(72,751,549) (9,298,367) (82,049,916) 154,630 (51,116) 17,073 (34,043) - 120,587
Balance at the beginningof the fnancialyear		(67,464,026)
Add: net loss attributable to owners of Genetic Technologies Limited		(5,287,523)
Balance at the end of the fnancialyear		(72,751,549)
25. NON-CONTROLLING INTERESTS
Reconciliation of non-controlling interests in subsidiaries
Balance at the beginningof the fnancialyear		202,002
Add: movements duringtheyear
Less: share of operatinglosses		(9,305)
Less: share of movement in reserves		(296)
Net loss attributable to non-controllinginterests		(9,601)
Add / (less): share / (reversal) of issued capital		(37,771)
Balance at the end of the fnancialyear		154,630

NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2013 (cont.)

26. OPTIONS

As at 30 June 2013, the following options over ordinary shares in the Company were outstanding.

2013	Weighted average exerciseprice	2012	Weighted average exerciseprice
Unlisted employee options (refer below) 9,525,000	$0.147	20,125,000	$0.099

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 2013, there were 3 executives and 18 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:

2013	Weighted average exerciseprice	2012	Weighted average exerciseprice
Balance at the beginningof the fnancialyear 20,125,000 Add: optionsgranted duringtheyear 3,650,000 Less: options exercised duringtheyear (10,700,000) Less: options forfeited duringtheyear (1,550,000) Less: options expired duringtheyear (2,000,000) Balance at the end of the fnancialyear 9,525,000 Exercisable at the end of the fnancialyear 3,166,667	$0.099 $0.129 $0.045 $0.093 $0.216 $0.147 $0.155	19,650,000 3,250,000 (166,667) (1,958,333) (650,000) 20,125,000 14,958,333	$0.109
			$0.145
			$0.045
			$0.165
			$0.462
			$0.099
			$0.077

A total of $481,500 was raised from the exercise of 10,700,000 options granted under the Employee Option Plan during the year ended 30 June 2013 (2012: $7,500). The weighted average share price at the dates on which the options were exercised during the year ended 30 June 2013 was $0.106 (2012: $0.128).

The numbers of options outstanding as at 30 June 2013 by ASX code, including the respective dates of expiry and exercise prices, are tabled below (refer Note 29 for further information). The options tabled below are not listed on ASX.

Option description 2013	Weighted average exerciseprice	2012	Weighted average exerciseprice
GTGAI (expiring8 May2015) 500,000 GTGAK (expiring20 February2017) 1,750,000 GTGAM (expiring31 July2016) 1,000,000 GTGAO (expiring29 August 2017) 2,650,000 GTGAQ (expiring1 December 2017) 250,000 GTGAS (expiring25 January2018) 750,000 GTGAW (expiring31 March 2016) 2,625,000 GTGAW (expiring31 May2013) - GTGAY (expiring23 October 2012) - Balance at the end of the fnancialyear 9,525,000	$0.045 $0.120 $0.200 $0.140 $0.100 $0.100 $0.190 - - $0.147	12,000,000 2,250,000 1,000,000 - - - 2,875,000 300,000 1,700,000 20,125,000	$0.045
			$0.120
			$0.200
			-
			-
			-
			$0.190
			$0.190
			$0.220
			$0.099

The weighted average remaining contractual life of options outstanding as at 30 June 2013 was 3.48 years (2012: 3.00 years).

27. CHANGES IN THE COMPOSITION OF THE ENTITY

Sale of shares in ImmunAid Limited

On 7 August 2012, the Company sold a total of 46,951 ordinary shares in former subsidiary ImmunAid Limited for a total consideration of $46,951, prior to the payment of associated costs. As a result, the Company’s equity interest in the shares of ImmunAid Limited was reduced from 45.5% to 45.0%.

28. 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 $ $ $ $ 3,377,183 3,691,215 (1,419) 31,455 3,375,764 3,722,670 (6,725,608) (5,747,234) - - 4,784,913 2,526,599 4,784,913 2,526,599 2,385,088 1,258,761 - - 181,036 - 181,036 - (392,341) (892,274) 3,377,183 3,691,215 4,964,530 2,558,054 8,341,713 6,249,269 (4,732,861) (5,380,747) - - 273,314 5,869,211 273,314 5,869,211 (4,616,622) 83,919 3,377,183 3,691,215 5,237,844 8,427,265 8,615,027 12,118,480 (9,349,483) (5,296,828)
Operations 2013 2012
Licensing 2013 2012
Research 2013 2012
Sub-total 2013 2012
Corporate 2013 2012
Totals 2013 2012

Segment	Assets Liabilities Amortisation/ depreciation Impairment losses/ write downs Purchases of equipment
	$ $ $ $ $
Operations 2013 2012	1,960,237 2,578,637 (1,477,080) (1,210,360) (333,058) (433,124) - - 42,469 66,162
Licensing 2013 2012	551,293 184,103 (168,593) (100,458) (26,894) (28,195) - - 712 1,050
Research 2013 2012	35,224 62,403 (119,767) (48,865) (19,192) (79,707) - (104,338) 990 2,443
Sub-total 2013 2012	2,546,754 2,825,143 (1,765,440) (1,359,683) (379,144) (541,026) - (104,338) 44,171 69,655
Corporate 2013 2012	5,772,773 13,616,608 (795,800) (679,426) (19,165) (20,918) - - 9,440 6,659
Totals 2013 2012	8,319,527 16,441,751 (2,561,240) (2,039,109) (398,309) (561,944) - (104,338) 53,611 76,314

NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2013 (cont.)

28. 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

Geographic segments
Segment	Revenues and income Loss Sales Other Totals $ $ $ $ 3,047,672 3,649,522 6,144,771 8,536,940 9,192,443 12,186,462 (4,782,247) (2,055,144) 329,511 41,693 (906,929) (109,678) (577,418) (67,985) (4,330,769) (3,161,898) - - - 1 - 1 (10,258) (29,384) - - - - - - (211,397) (38,484) - - 2 3 2 3 (14,812) (11,918) 3,377,183 3,691,215 5,237,844 8,427,265 8,615,027 12,118,480 (9,349,483) (5,296,828)
Australia 2013 2012
USA 2013 2012
China 2013 2012
Canada 2013 2012
Switzerland 2013 2012
Totals 2013 2012

Segment	Assets Liabilities Amortisation/ depreciation Impairment losses/ write downs Purchases of equipment
	$ $ $ $ $
Australia 2013 2012	7,809,210 15,768,900 7,698,493 3,842,342 (376,424) (540,381) - (104,338) 45,164 68,950
USA 2013 2012	279,137 413,203 (9,584,715) (5,398,129) (21,885) (21,563) - - 8,447 7,364
China 2013 2012	- 3 (364,005) (352,357) - - - - - -
Canada 2013 2012	219,380 249,056 (172,219) (7,571) - - - - - -
Switzerland 2013 2012	11,800 10,589 (138,794) (123,394) - - - - - -
Totals 2013 2012	8,319,527 16,441,751 (2,561,240) (2,039,109) (398,309) (561,944) - (104,338) 53,611 76,314

Additional segment disclosures

Other revenues and income – corporate includes interest received of $217,441 (2012: $609,807).
Expenses – corporate includes employee benefits expenses of $1,756,159 (2012: $3,495,637) and a share of loss in associate of $437,185 (2012: $132,037).
Assets – corporate includes cash of $1,721,293 (2012: $8,900,235).
Liabilities – corporate includes trade and other payables of $579,570 (2012: $449,034) and provisions of $216,231 (2012: $228,990).

The Corporate business and the Australian geographic segments include a share of loss in associate of $437,185 (2012: $132,037).

There were no intersegment sales.

28. SEGMENT INFORMATION (cont.)

Additional segment disclosures (cont.)

Included in the above figures are the following intersegment balances and transactions:

	Consolidated	Consolidated
	2013	2012
	$	$
Loanpayable (USA) and loan receivable (Australia)	9,313,022 633 135,210 351,712 905,700 49,136	5,223,612
Loanpayable (China) and loan receivable (Australia)		633
Loanpayable (Switzerland) and loan receivable (Australia)		120,210
Accountspayable (China) and accounts receivable (Australia)		344,074
Foreign exchangegain (USA) and foreign exchange loss (Australia)		109,678
Cost of sales (USA) and sales (Australia)		11,572

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 2013, there were no customers from whom the Group generated revenues representing more than 10% of the total consolidated revenue from operations. During the year ended 30 June 2012, there was one such customer.

29. EMPLOYEE BENEFITS

Employee options

During the period from October 2012 to March 2013, a total of 3,650,000 options over ordinary shares (expiring 29 August 2017 to 25 January 2018) were granted, at no cost, to a number of employees of the Company’s US subsidiary, Phenogen Sciences Inc. Each option entitles the holders to acquire one ordinary share at a cost of between $0.10 and $0.14 (refer Note 26), settled in cash.

The fair value of each option granted under the Employee Option Plan is estimated by an external valuer using a Black-Scholes option-pricing model with the following assumptions used for grants made during the years ended 30 June 2013 and 2012:

2013	2012
Dividendyield - Historic volatilityand expected volatility 95% Option exercisesprices $0.10 to $0.14 Weighted average exerciseprice $0.129 Risk-free interest rate 3.24% to 3.66% Expected life of an option 4years to 5years	-
	83%
	$0.12 to $0.20
	$0.145
	3.23% to 3.65%
	4years to 5years

NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2013 (cont.)

29. EMPLOYEE BENEFITS (cont.)

Superannuation commitments

The Group does not have any defined benefit funds. In respect of the year ended 30 June 2013, the Group made 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. In respect of the period commencing 1 July 2013, the rate increased to 9.25%. 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 ended 30 June 2012, the Company disposed of shares in former subsidiary ImmunAid Limited 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.

	Consolidated	Consolidated
	2013	2012
	$	$
30. COMMITMENTS AND CONTINGENCIES	- - - - - - 359,497 376,450 - 735,947
Hirepurchase expenditure commitments
Minimum hirepurchasepayments
- not later than oneyear		17,981
- later than oneyear but not later than fveyears		-
- later than fveyears		-
Total minimum hirepurchasepayments		17,981
Less: future fnance charges		(233)
Present value of hirepurchasepayments (Note 19)		17,748
Operating lease expenditure commitments
Minimum operatingleasepayments
- not later than oneyear		370,837
- later than oneyear but not later than fveyears		790,087
- later than fveyears		-
Total minimum operatingleasepayments		1,160,924

As at 30 June 2013, 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 Fitzroy, Victoria 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	723,942
	12,005
	735,947

Apart from the above, there were no other commitments or contingencies as at 30 June 2013.

	Consolidated	Consolidated
	2013	2012
	$	$
31. AUDITORS’ REMUNERATION	275,167 16,425 291,592 5,676 5,676 297,268
Audit services
PricewaterhouseCoopers in respect of:
Audit of the Company’s Financial Report under the_Corporations Act 2001_		267,880
Other audit frms in respect of:
Audit of the Financial Reports of subsidiaries		16,360
Total remuneration in respect of audit services		284,240
Non-audit services
Other audit frms in respect of:
Tax advice and compliance, accountingand other services		18,390
Total remuneration in respect of non-audit services		18,390
Total auditors’ remuneration		302,630

32. 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 2013, 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 Limited

ImmunAid Limited (“ImmunAid”) is a former subsidiary of Genetic Technologies Limited (the “Company”) in which the Company holds a total of 4,500,000 ordinary shares, representing a 45% direct equity interest in ImmunAid. Transactions between the Company and ImmunAid, and those involving shares in ImmunAid, that were undertaken during the year have been summarised as follows:

On 7 August 2012, the Company sold a total of 46,951 ordinary shares in ImmunAid at a price of $1.00 per share, generating total consideration of $46,951. In respect of this sale, the Company paid commissions of $2,817 to Dr. Mervyn Jacobson, a former Director and current substantial shareholder of the Company.
During the 2013 financial year, the Company rendered twelve invoices to ImmunAid totalling $52,800 (inclusive of GST) in respect management services provided to ImmunAid by the Company. As at balance date, a total of $8,800 had been paid whilst the remaining $44,000 was recorded in the Company’s balance sheet as a receivable, against which a full provision was raised. The remaining balance of $44,000 was recorded in the ImmunAid’s balance sheet as a payable. During the 2012 financial year, ImmunAid paid management fees to the Company amounting to $22,500.
During the 2013 financial year, the Company paid various expenses to third parties on behalf of ImmunAid totalling $173,300. This amount was recorded in the Company’s balance sheet as a receivable, against which a full provision was raised.
Dr. Jacobson served as Chief Executive Officer of ImmunAid throughout the entire 2013 financial year. He rendered twelve invoices to ImmunAid totalling $200,004 (2012 $nil) in respect of services performed by him. As at balance date he had received $33,334 from ImmunAid. The remaining balance of $166,670 was recorded in the ImmunAid’s balance sheet as a payable.

Licensing services

During the year ended 30 June 2013, the Company paid a total of $50,000 (2012: $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 $293,981 (2012: $59,813) 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 $34,518 (2012: $115,084).

NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2013 (cont.)

32. RELATED PARTY DISCLOSURES (cont.)

Phenogen Sciences Inc.

During the year ended 30 June 2013, Phenogen Sciences Inc, a subsidiary, purchased testing services from Genetic Technologies Corporation Pty. Ltd., another subsidiary at a cost of $49,136 (2012: $11,572).

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 as at balance date

Directors	Executives
Dr. Malcolm R. Brandon_(Non-Executive Chairman)_	Alison J. Mew_(Chief Executive Offcer)_
Tommaso Bonvino_(Non-Executive)_	Thomas G. Howitt_(Chief Financial Offcer and Company Secretary)_
Dr. Mervyn Cass_(Non-Executive)_	Mark J. Ostrowski_(US Senior Vice President, Sales and Marketing)_
Benjamin Silluzio_(Non-Executive)_	GregoryJ. McPherson_(VP Sales and Marketing)_
	Dr. Richard Allman_(Scientifc Director)_
	Ivan Jasenko_(Operations Director)_

The following changes to Key Management Personnel occurred during the period from 1 July 2012 to the date of this Report:

1. Dr. Malcolm Brandon was appointed as the Non-Executive Chairman of the Board on 28 November 2012.

2. Mr. Benjamin Silluzio was appointed as a Non-Executive Director of the Company on 6 December 2012.

3. Dr. Melvyn Bridges ceased to be a Director of the Company and Chairman of its Board on 27 November 2012.

4. Mr. Greg Brown resigned as a Director of the Company on 27 November 2012.

5. Mr. Huw Jones ceased to be a Director of the Company on 27 November 2012.

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

7. Ms. Alison Mew was appointed as acting Chief Executive Officer of the Company on 28 November 2012 and as permanent Chief Executive Officer of the Company on 10 December 2012.

8. Mr. Mark Ostrowski was appointed US Senior Vice President, Sales and Marketing on 7 September 2012.

9. Dr. Richard Allman was appointed as Scientific Director of the Company on 10 December 2012.

10. Dr. Paul MacLeman resigned as Chief Executive Officer of the Company on 27 November 2012.

11. Mr. Lewis Stuart ceased to be an employee of the Company on 24 August 2012.

12. Mr. Greg McPherson ceased to be an employee of the Company on 12 July 2013, i.e. after balance date.

13. Dr. David Sparling resigned as VP Legal and Corporate Development on 27 November 2012.

15. Ms. Luisa Ashdown and Ms. Diana Newport became members of Key Management Personnel on 23 August 2013 and 26 September 2013, respectively.

	Consolidated	Consolidated
	2013	2012
	$	$
Remuneration of Key Management Personnel	2,105,640 162,229 76,173 19,628 2,363,670
Short-term employee benefts		1,596,716
Post-employment benefts		185,996
Share-basedpayments		64,502
Long-term benefts		19,675
Total remuneration of KeyManagement Personnel		1,866,889

32. RELATED PARTY DISCLOSURES (cont.)

Optionholdings of Key Management Personnel 30 June 2013

30 June 2013
Name of optionholder Opening balance	Number of options Closing balance Granted Exercised Lapsed	Vestingas atyear end
		Exercisable Not exercisable
Executive
Dr. Paul D.R. MacLeman 3,600,000	- (3,600,000) - -	- -
Thomas G. Howitt 2,500,000	- (1,000,000) (1,000,000) 500,000	500,000 -
Alison J. Mew 1,500,000	- (1,500,000) - -	- -
Lewis J. Stuart 2,400,000	- (1,600,000) (800,000) -	- -
GregoryJ. McPherson 1,500,000	- (1,500,000) - -	- -
Dr. David J. Sparling 1,500,000	- (1,500,000) - -	- -
Mark J. Ostrowski -	2,400,000 - - 2,400,000	- 2,400,000
Ivan Jasenko 500,000	- - - 500,000	333,333 166,667
Totals 13,500,000	2,400,000 (10,700,000) (1,800,000) 3,400,000	833,333 2,566,667
30 June 2012

30 June 2012
Name of optionholder Opening balance	Number of options Closing balance Granted Exercised Lapsed	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 -
Ivan Jasenko 500,000	- - - 500,000	166,667 333,333
Totals 13,750,000	- - (250,000) 13,500,000	11,566,667 1,933,333

Shareholdings of Key Management Personnel

30 June 2013

30 June 2013
Shares held in Genetic Technologies Limited Opening balance	Number of shares Acquired on exercise of options Closing balance Bought Sold
Director
Dr. Malcolm R. Brandon -	- - - -
Tommaso Bonvino -	- - - -
Dr. Mervyn Cass 473,667	- - - 473,667
Benjamin Silluzio -	- - - -
Executive
Dr. Paul D.R. MacLeman -	- (3,600,000) 3,600,000 -
Thomas G. Howitt -	- (1,000,000) 1,000,000 -
Alison J. Mew -	- (1,500,000) 1,500,000 -
Lewis J. Stuart -	- (1,600,000) 1,600,000 -
GregoryJ. McPherson -	- (1,500,000) 1,500,000 -
Dr. David J. Sparling -	- (1,500,000) 1,500,000 -
Totals 473,667	- (10,700,000) 10,700,000 473,667

Note: Mr. Silluzio, Mr. Ostrowski, Dr. Allman and Mr. Jasenko became members of Key Management Personnel during the year ended 30 June 2013. Mr. Bridges, Mr. Jones, Dr. MacLeman, Mr. Stuart and Dr. Sparling all ceased to be members of Key Management Personnel during the year ended 30 June 2013. Mr. McPherson and Mr. Jasenko ceased to be members of Key Management Personnel after the year ended 30 June 2013, i.e. after balance date.

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 2013 (cont.)

33. SUBSIDIARIES

The following diagram is a depiction of the Group structure as at 30 June 2013.

==> picture [407 x 204] intentionally omitted <==

Name of Groupcompany Incorporation details	Groupinterest (%) Net carryingvalue ($)
	2013 2012 2013 2012
Entities held directly by parent
GeneType Pty. Ltd. 5 September 1990 Victoria, Australia	100% 100% - -
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% 8,217 7,405
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 28 May 1968 Yukon Territory, Canada	75.8% 75.8% 47,161 241,485
ImmunAid Limited (refer note below) 21 March 2001 Victoria, Australia	45.0% 45.5% - -
Total carryingvalue	66,396 259,908
Entities held by other subsidiaries
Genetic Technologies (Beijing) Limited	100% 100% - -

Note: On 12 April 2012, the Company’s equity interest in former subsidiary ImmunAid Limited (“ImmunAid”) fell below 50%. Due to the resulting loss of control, ImmunAid was deconsolidated from the Genetic Technologies Group on that date. On 7 August 2012, 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. As at 30 June 2013, the Company held a total of 4,500,000 shares in ImmunAid representing 45.0% of that Company’s total issued capital.

	Consolidated	Consolidated
	2013	2012
	$	$
34. INVESTMENTS IN ASSOCIATES	4,414,914 - (45,345) (437,185) 3,932,384 45.00% 29,906 (324,621) - (437,185)
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 27)		4,546,951
Less: book value of 46,951 ordinaryshares sold in associate		-
Less: share of net loss of associate accounted for usingthe equitymethod		(132,037)
Closing gross carryingamount		4,414,914
Summarised fnancial information of associates
The Group’s share of the results of its associate, ImmunAid Limited, and its share of the aggregate assets and liabilities as at 30 June 2013 are as follows:
Ownershipinterest (Note 27)		45.47%
Assets		161,429
Liabilities		(17,717)
Revenues		-
Proft / (loss)		(132,037)

35. PARENT ENTITY FINANCIAL INFORMATION

Summary financial information

The individual financial statements for the parent entity, Genetic Technologies Limited, disclose the aggregate amounts set out in the following table.

	Consolidated	Consolidated
	2013	2012
	$	$
Balance sheet	1,865,349 7,892,261 1,564,682 13,109,489 83,735,845 2,289,605 (91,242,678) (5,217,228) (11,274,372)
Current assets		8,479,614
Total assets		16,408,747
Current liabilities		1,411,194
Total liabilities		11,030,310
Equity
Contributed equity		83,280,142
Reserves (share-basedpayments)		2,066,600
Accumulated losses		(79,968,305)
		5,378,437
Total comprehensive loss		(5,395,618)

NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2013 (cont.)

35. PARENT ENTITY FINANCIAL INFORMATION (cont.)

Related party information

As at 30 June 2013, an amount of $41,331,482 (2012: $36,604,690) was receivable by the Company from its various subsidiaries and associates. As at the same date, an amount of $11,448,582 (2012: $9,510,575) was payable by the Company to its whollyowned 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, the parent entity had no contingent liabilities or other commitments.

36. 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 and cash equivalents. The Group also 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
	2013	2012
	$	$
Financial assets	1,721,293 - 328,642 209,296 2,259,231 1,375,536 - 1,375,536
Cash at bank / on hand		2,380,114
Short-term deposits		6,520,121
Trade and other receivables		495,975
Performance bond and deposits		17,460
Total fnancial assets		9,413,670
Financial liabilities
Trade and otherpayables		905,772
Hirepurchase liabilities		17,748
Total fnancial liabilities		923,520

36. FINANCIAL RISK MANAGEMENT (cont.)

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 2013 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.

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 2013, the balance of the Group’s provision for doubtful debts was $214,285 (2012: $88,783), out of a total net receivables balance as at that date of $328,642 (2012: $495,975) (refer Note 12). 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
	2013	2012
	$	$
Net trade and other receivables	265,578 35,638 1,788 25,638 328,642 1,364,891 1,007 6,091 3,547 1,375,536
Current (less than 30 days)		489,893
31 days to 60 days		2,152
61 days to 90 days (note)		3,435
Greater than 90 days (note)		495
Total net trade and other receivables (Note 12)		495,975
Net trade and otherpayables
Current (less than 30 days)		894,817
31 days to 60 days		703
61 days to 90 days		9,397
Greater than 90 days		855
Total net trade and otherpayables (Note 18)		905,772

Note: A total of $27,426 in net trade and other receivables greater than 60 days is past due, of which a total of $27,426 had been received prior to the date of this Report.

NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2013 (cont.)

36. FINANCIAL RISK MANAGEMENT (cont.)

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.

As at 30 June 2013, the Group held the following financial assets and liabilities that were denominated in foreign currencies:

Consolidated	Year	USD	CAD	EUR	CNY	NZD	CHF	JPY
Financial assets
Cash at bank / on hand	2013	326,255	210,432	71,631	-	86	6,718	87,046
	2012	396,454	259,451	4,670	19	154	7,776	123,175
Trade and other receivables	2013	42,140	-	90,000	-	-	-	-
	2012	61,336	-	90,000	-	-	-	-
Total fnancial assets	2013	368,395	210,432	161,631	-	86	6,718	87,046
	2012	457,790	259,451	94,670	19	154	7,776	123,175
Financial liabilities
Trade and other payables	2013	307,332	171,900	20,804	41,291	839	3,090	62,928
	2012	210,304	7,886	1,652	49,128	1,817	3,090	69,677
Total fnancial liabilities	2013	307,332	171,900	20,804	41,291	839	3,090	62,928
	2012	210,304	7,886	1,652	49,128	1,817	3,090	69,677
Note:*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 2013, the Australian dollar / US dollar exchange rate fell by 10.0%, from 1.0161 at the beginning of the year to 0.9146 at the end of the year. During the same period, Australian dollar / Canadian dollar exchange rate fell by 7.6%, from 1.0416 at the beginning of the year to 0.9627 at the end of the year.

Based on the financial instruments held at 30 June 2013, 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 $45,000 lower / $37,000 higher (2012: loss $50,000 lower / loss $41,000 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 2013, 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 $24,000 lower / $20,000 higher (2012: loss $28,000 lower / loss $23,000 higher), due to changes in the values of cash and cash equivalents which are denominated in Canadian dollars, as detailed in the above tables.

36. FINANCIAL RISK MANAGEMENT (cont.)

Market risk (cont.)

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 2013, 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 $6,000 lower / higher (2012: loss $42,000 lower / higher), as a result of higher / lower interest income from cash and cash equivalents. Consolidated equity for the Group would have been $6,000 higher / lower (2012: $42,000 higher / lower) mainly as a result of an increase / decrease in the fair value of cash and cash equivalents.

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 Carryingamount	Weighted average effective rate Average maturity period
	$ $ $	% days
Financial assets	1,721,293 2,380,114 - - 1,721,293 2,380,114 - - - 6,520,121 - 6,520,121 - - 209,296 17,460 209,296 17,460 1,721,293 2,380,114 209,296 6,537,581 1,930,589 8,917,695 - - - 17,981 - 17,748 - - - 17,981 - 17,748
Cash at bank / on hand 2013 2012		1.50% 2.31% At call At call
Short-term deposits 2013 2012		- 5.23% - 61
Performance bond / deposits 2013 2012		- - At call At call
Totals 2013 2012
Financial liabilities
Hire purchase liabilities (Note 30) 2013 2012		- 6.84% - 79
Totals 2013 2012

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

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.

NOTES TO THE FINANCIAL STATEMENTS For the year ended 30 June 2013 (cont.)

36. FINANCIAL RISK MANAGEMENT (cont.)

Liquidity risk (cont.)

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	1,721,293 2,380,114 - 6,520,121 328,642 495,975 209,296 17,460 2,259,231 9,413,670 1,375,536 905,772 - 17,981 1,375,536 923,753 883,695 8,489,917	- - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - -	- - - - - - - - - - - - - - - - - -
Cash at bank / on hand 2013 2012					1,721,293 2,380,114
Short-term deposits 2013 2012					- 6,520,121
Trade and other receivables 2013 2012					328,642 495,975
Performance bond and deposits 2013 2012					209,296 17,460
Total fnancial assets 2013 2012					2,259,231 9,413,670
Financial liabilities
Trade and other payables 2013 2012					1,375,536 905,772
Hire purchase liabilities 2013 2012					- 17,981
Total fnancial liabilities 2013 2012					1,375,536 923,753
Net maturity 2013 2012					883,695 8,489,917

The Group had access to the following undrawn borrowing facility as at 30 June 2013:

Nature of facility	Facilitylimit Amount used Amount available
	$ $ $
Credit card facility	215,603 (60,918) 154,685

37. SUBSEQUENT EVENTS

On 14 August 2013, the Company completed the placement of 30,555,556 shares at an issue price of $0.072 per share which raised a total of $2,200,000, prior to the payment of associated costs. On 30 August 2013, the Company completed the placement of a further 11,111,111 shares at the same issue price which raised a total of $800,000, prior to the payment of associated costs.

On 11 September 2013, the Company granted a total of 1,250,000 options over ordinary shares in the Company. The options, which were granted at no cost, entitle the holder to acquire one ordinary share at a price of $0.105 at any time up to, and including 18 July 2018, subject to certain vesting conditions.

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 54 to 92 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 2013 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.

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TOMMASO BONVINO

Non-Executive Director

Melbourne, 27 September 2013

AUDITOR’S REPORT

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AUDITOR’S INDEPENDENCE DECLARATION

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CORPORATE INFORMATION

DIRECTORS

Dr. Malcolm R. Brandon (Non-Executive Chairman)

BANKERS

Australia

National Australia Bank Limited

Tommaso Bonvino (Non-Executive)

Dr. Mervyn Cass (Non-Executive)

Benjamin Silluzio (Non-Executive)

COMPANY SECRETARY

Level 2, 151 Rathdowne Street Carlton Victoria 3053 Australia

USA

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

Thomas G. Howitt

Canada

REGISTERED OFFICE

60-66 Hanover Street Fitzroy Victoria 3065 Australia

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

POSTAL ADDRESS

P.O. Box 115 Fitzroy Victoria 3065 Australia

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

AUSTRALIAN BUSINESS NUMBER

17 009 212 328

COMPANY WEBSITE

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

www.gtglabs.com

Code: GTG

SHARE REGISTER

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

T: +61 3 9415 5000 F: +61 3 9473 2500 W: www.computershare.com

NASDAQ Capital Market

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

Ticker: GENE

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 3 October 2013.

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 listing of Level II 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 3 October 2013, ranked by size of holding, in each class of shares are as follows:

Range of shares Number of holders	Number of shares
1 – 1,000 275 1,001 – 5,000 828 5,001 – 10,000 489 10,001 – 100,000 1,006 100,001 and over 254 Totals 2,852	175,665
	2,507,072
	4,100,627
	36,559,851
	473,795,271
	517,138,486

The number of shareholders holding less than a “marketable parcel” of shares (being 6,330 shares) is 1,204. The total number of shares held by these shareholders on 3 October 2013 was 3,266,334.

TWENTY LARGEST SHAREHOLDERS

The names of the twenty largest registered shareholders of the Company’s ordinary shares as at 3 October 2013 are:

Rank Name of registered shareholder Number of shares	Percentage held
1 National Nominees Limited 137,356,395 2 Dr. Mervyn Jacobson Group 136,473,684 3 Mr. Roger L. Dawkins and Mr. Wayne Cox 16,016,667 4 Security& EquityResources Limited 15,923,506 5 Ms. Gail J. Bratz 9,000,000 6 Jetan Pty. Ltd. 8,521,053 7 Overachieve Pty. Ltd. 8,333,334 8 J.P. Morgan Nominees Australia Limited 5,157,508 9 J.P. Morgan Nominees Australia Limited 5,132,686 10 Moore FamilyNominee Pty. Ltd. 4,647,388 11 UBS Wealth Management Australia Nominees Pty. Ltd. 4,574,250 12 Tass Investments Pty. Ltd. 4,429,325 13 Grandor Pty. Ltd. < Mark Scott FamilyP/F account> 4,312,965 14 Wakko Enterprises Pty. Ltd. 3,654,449 15 PershingAustralia Nominees Pty. Ltd. 3,549,109 16 Mr. Maurie Stang 3,446,000 17 Mr. Bernard Stang 3,122,000 18 Mr. Bruce Bartlett 3,100,000 19 Kam Superannuation Fund Pty. Ltd. 2,886,983 20 EquityTrustees Limited 2,552,631 Totals 382,189,933	26.56%
	26.39%
	3.10%
	3.08%
	1.74%
	1.65%
	1.61%
	1.00%
	0.99%
	0.90%
	0.88%
	0.86%
	0.83%
	0.71%
	0.69%
	0.65%
	0.60%
	0.60%
	0.56%
	0.49%
	73.89%

SUBSTANTIAL SHAREHOLDERS

As at 3 October 2013, the names of the only substantial shareholder holding shares representing more than 5% of the Company’s total issued capital, who have 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	26.39%

RESTRICTED SECURITIES

As at 3 October 2013, 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

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

EBITDA Earnings before interest, tax, depreciation and amortisation

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

100

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 — Proxy Solicitation & Information Statement 2013

65022_rns_2013-10-24_2f0a65bb-3228-4191-9178-0220ab0a07e0.pdf

ASX ANNOUNCEMENT 25 October 2013

Notice of 2013 Annual General Meeting, Sample Proxy, Adjournment of Extraordinary General Meeting and 2013 Annual Report

NOTICE OF ANNUAL GENERAL MEETING

BUsINEss

1. CONsIDERATION OF FINANCIAL sTATEMENTs

2. REsOLUTION 1 - ADOPTION OF THE REMUNERATION REPORT

3. REsOLUTION 2 - RE-ELECTION OF MR. TOMMAsO BONVINO

4. REsOLUTION 3 - ELECTION OF MR. BENJAMIN sILLUZIO

5. REsOLUTION 4 - APPROVAL OR RATIFICATION OF THE IssUE OF sHAREs TO CYGNET CAPITAL PTY. LTD.

VOTING ENTITLEMENT NOTICE

DIRECT VOTE

PROXIEs

APPOINTMENT OF PROXIEs

BODIEs CORPORATE

EXPLANATORY MEMORANDUM

1. CONsIDERATION OF FINANCIAL sTATEMENTs

2. REsOLUTION 1 - ADOPTION OF THE REMUNERATION REPORT

Voting Exclusion Statement

3. REsOLUTION 2 - RE-ELECTION OF MR. TOMMAsO BONVINO

4. REsOLUTION 3 - ELECTION OF MR. BENJAMIN sILLUZIO

5. REsOLUTION 4 - APPROVAL OR RATIFICATION OF THE IssUE OF sHAREs TO CYGNET CAPITAL PTY. LTD.

5.1 Short explanation - Resolution 4

5.2 Regulatory requirements under ASX Listing Rules 7.1 and 7.4 for the issue of Shares to Cygnet

5.3 Effect of passing of Resolution 4

5.4 Board recommendation

Voting Exclusion Statement

NOTEs

Lodge your vote:

By Mail:

For all enquiries call:

Voting Form

 For your vote to be effective it must be received by 10.45 am (Melbourne time) Wednesday, 27 November 2013

How to Vote on Items of Business

Vote Directly

Appoint a Proxy to Vote on Your Behalf

Signing Instructions

Attending the Meeting

www.investorcentre.com

www.gtglabs.com

SRN/HIN: I9999999999

Voting Form

Please mark to indicate your directions

Indicate How your Vote will be Cast

Select one option only

XX

2. Appoint a Proxy to Vote on Your Behalf: I/We hereby appoint

1. Vote Directly

Items of Business 

SIGN Signature of Securityholder(s) This section must be completed.

25 October 2013

Dear Shareholder,

NOTICE OF ADJOURNMENT OF EXTRAORDINARY GENERAL MEETING