The directors present their Strategic Report for the year ended 31 December 2025, prepared in accordance with Section 414 of the Companies Act 2006.

This report provides a comprehensive review of the company’s activities during the financial year, alongside an assessment of its performance and development. It also outlines the principal risks and uncertainties facing the business, as well as key factors that may impact its future operations.

In addition, the report addresses relevant non-financial matters, including environmental considerations and employee-related issues, where these are material to the company’s business.

The company’s principal activities during the year were supply of the following sequencing services to its customers

• Genome Sequencing

• Whole Plasmid Sequencing

• Transcriptome Sequencing

• Epigenome Sequencing

• Metagenome Sequencing

• Pre-made Library Sequencing

• Single Cell RNA Sequencing

• Clinical Diagnostics

• Biopharma Services

During the year, the company announced the launch of its new Whole Plasmid Sequencing service, powered by Oxford Nanopore Technologies (ONT). This service offering represents a major step forward in plasmid verification, providing researchers with a powerful and practical alternative to traditional Sanger sequencing.

Unlike conventional approaches, whole plasmid sequencing delivers a complete, end-to-end view of plasmid constructs, revealing structural variants, rearrangements, and repetitive regions that often remain undetected with first-generation sequencing methods. The service is designed to support scientists working in gene and cell therapy, RNA therapeutics, and synthetic biology, enabling faster, more confident plasmid validation.

Novogene’ s Whole Plasmid Sequencing service provides full coverage for plasmids up to tens of kilobases in length, ensuring complete and accurate characterisation. With a streamlined workflow, researchers can benefit from next-day turnaround and high-quality, long-read data.

The platform offers flexible throughput, from single plasmids to full 96-well plates using barcoding, making it suitable for both small-scale and high-throughput projects. Designed with accessibility and reliability in mind, the service combines competitive pricing with sequencing performed locally in Novogene’ s Cambridge (UK) laboratory, ensuring consistent quality, rapid delivery, and simplified logistics for customers across Europe.

Complementing this new service is Novogene’ s broad sequencing portfolio, which includes microbial sequencing, RNA-seq, whole genome sequencing (WGS), long-amplicon analysis, and single-cell sequencing. This integration enables seamless plasmid validation alongside downstream genomic applications, all under one provider.

“This service was designed around the real needs of our customers: faster turnaround, fewer manual steps, and complete plasmid certainty,” said Tingting Zhou, VP at Novogene Europe. “By introducing ONT long-read sequencing for plasmids, we are enabling researchers to move beyond partial checks and into full validation with ease.”

With the introduction of ONT-based plasmid sequencing, Novogene further strengthens its position as a trusted hub for advanced sequencing solutions, expanding its capabilities in both long- and short-read technologies to meet the evolving needs of Europe’s life sciences research community.

Novogene GmbH, As key players in next generation sequencing and multi omics solutions, Novogene is pleased to introduce the Element AVITI24™ system at its European lab in Munich, expanding our local sequencing capabilities. This state-of-the-art sequencing platform delivers flexible workflows with accurate sequencing, that is capable of supporting projects from pilot to mid-scale studies for diverse genomic applications. In addition, the lab in Munich is equipped with Falcon III, an intelligent NGS delivery platform with an Olink official certificate service provider.

The Element AVITI24 system features dual independent flow cells, enabling researchers to run projects simultaneously or independently. The platform supports multiple sequencing strategies, from PE75 and PE150 to PE300, making it particularly well-suited for specialised applications that require shorter or longer read configurations. AVITI24 supports small to mid-scale projects and provides researchers with greater freedom in tailoring sequencing strategies to their specific needs.

Novogene group remains in the forefronts of the advances in genomic sequencing and strengthens its position in the industry with increased synergies from its high-tech labs in both Cambridge (UK) and Munich (Germany) supported by our sales office in Amsterdam, Netherlands. The group continue to build and harness the potentials of its highly skilled, interdisciplinary teams, with the majority holding advanced degrees from top global institutions. Our high-throughput sequencing and high-performance computing platforms are designed to efficiently handle large-scale genomic data, meeting the evolving demands of life sciences and medical research with secure data storage and powerful bioinformatics analysis.

The Directors have established a comprehensive risk management framework, incorporating robust processes to identify, assess, and monitor emerging and principal risks facing the business. These include risks that could threaten the Company’s business model, strategy, solvency, liquidity, or reputation.

Appropriate mitigation strategies have been implemented to manage these risks and reduce their potential impact to acceptable levels. The principal risks identified are outlined below:

Financial Risks

The risks that the company could face financial difficulties in meeting its obligations contractual or otherwise. The senior management team continue to monitor the cash resources of the business and ensuring regular reviews of its strategic plans. If required support is at hand from the ultimate parent company, Novogene Co, Ltd in China.

Credit risks

Credit risk arises from the potential failure of customers or counterparties to meet their contractual obligations. The Company mitigates this risk by conducting credit assessments on all new and existing customers prior to granting credit terms. Customer credit limits and aged receivables are reviewed regularly.

Competitive risks

The Company operates in a highly competitive and rapidly evolving sector, where technological advancements may impact its market position. To address this, the Group continues to invest significantly in research and development, as well as in the recruitment and expansion of its European sales teams, to maintain and strengthen its competitive advantage. The introduction of new equipment and service lines in both UK and German labs supports and strengthens the resolve to maintain and enhance market position.

Foreign exchange risks

The Company is exposed to foreign exchange risk due to transactions denominated in multiple currencies. This risk is managed centrally by the Group treasury function, based in Beijing, which monitors currency exposures and implements appropriate risk management strategies.

Cash flow risks

The Company is exposed to cash flow and foreign exchange-related risks, some of which are outside its direct control. However, it maintains adequate cash reserves to mitigate the impact of currency volatility. The Company does not engage in speculative use of financial instruments.

Liquidity risks

The Company maintains sufficient cash reserves to support its day-to-day operations and planned investments. Dividend payments to the parent company are determined at the Group level, ensuring alignment with overall financial strategy and liquidity requirements.

During the year ended 31 December 2025, the Company recorded a 5% increase in sales revenue to £38.2 million (2024: decrease of 6% to £36.3 million). This growth was driven by increases in demand and the introduction of a new service offering in single-cell RNA sequencing, alongside continued performance improvements across both the UK and German laboratory operations. Demand across the UK and European markets remained strong throughout the year, and the Company remains confident in its ability to achieve further expansion in these regions. Collectively, these markets accounted for over 90% of total sales revenue.

Profit before taxation increased by 66% to £3.7 million (2024: increase of 95% to £2.2 million). This improvement reflects both the growth in revenue and a 5.5% reduction in administrative expenses compared to the prior year.

As at 31 December 2025, net current assets decreased by 29% to £4.0 million (2024: increase of 95% to £5.6 million), while total net assets declined by 27% to £5.5 million (2024: increase of 32% to £7.7 million).

The Board is satisfied with the Company’s performance during the year and remains confident in its future prospects. The Company will continue to focus strategically on the UK and European markets, supported by ongoing investment in advanced technologies to strengthen and enhance its competitive position. The Cambridge laboratory remains central to the Company’s long-term growth strategy.

Novogene remains at the forefront of innovation, delivering world-class genomic services to support advancements in life sciences, healthcare, and related fields. With state-of-the-art laboratories and operations across the United States, the United Kingdom, Germany, China, Singapore, and Japan, the Group has established a strong global presence to support scientific progress worldwide.

The business continues to invest in advanced laboratory technologies across its global network, including its Cambridge (UK) facility. These investments are further enhanced through collaborations with leading academic institutions and pharmaceutical companies, which are expected to strengthen research capabilities and drive innovation across the UK and European markets.

Other performance indicators

Employee & gender diversity

Our employees remain our most valuable asset, and management deeply recognises the immense contributions our workforce makes every day. The Company's core values — professionalism, innovation, integrity, and partnership — guide everything we do. At every level of the organisation, employees are encouraged to embrace innovation and collaborative partnerships, both of which are central pillars of our long-term growth strategy.

Over the years, we have built highly skilled, interdisciplinary teams, with the majority of our staff holding professional or advanced degrees from leading global institutions. The diverse expertise within these teams is instrumental in driving our customer-focused strategy and delivering sustained value to the clients we serve.

The Company demonstrates a strong commitment to its people through regular training and professional development programmes, as well as annual staff recognition and awards ceremonies held during company-wide kick-off gatherings. Management places great importance on team building and open, transparent communication across the organisation. To this end, business teams organise a variety of events — most notably annual kick-off meetings — that bring the entire workforce together to strengthen collaboration, nurture internal relationships, and reinforce a shared sense of purpose.

Our recruitment practices are firmly grounded in the principles of diversity, gender equality, and equal opportunity. We are committed to providing a fair and inclusive environment for all, irrespective of race, colour, religion, nationality, sex, age, or disability. The Company maintains a zero-tolerance policy toward discrimination in any form.

Business Environment & Trends

The genomics and life sciences sector continues to experience strong growth and achieve significant milestones across the UK and European markets. At a group level, Novogene recognises its position as a leading provider within this dynamic and rapidly evolving industry.

The Company’s capabilities are further strengthened by the addition of a new Whole Plasmid Sequencing service, powered by Oxford Nanopore Technologies (ONT) in our UK hight-tech lab based in Cambridge and the presence of our sister company, Novogene GmbH, and its state-of-the-art laboratory in Munich, Germany, which complements the strategic role of Novogene UK. During the year, the Munich facility was enhanced with the addition of the Element AVITI24™ system, alongside the Falcon III intelligent NGS delivery platform. These investments build upon existing technologies, including the Falcon II and X-Plus systems in the UK laboratory, and further expand the Group’s service capabilities.

The Company’s vision remains to be a global leader in genomic services and the partner of choice for researchers and organisations within the life sciences sector. Its high-throughput sequencing platforms, supported by advanced high-performance computing infrastructure, are designed to process large-scale genomic data efficiently and securely. These capabilities enable the Company to meet the increasingly complex demands of life sciences and medical research, supported by robust data storage and sophisticated bioinformatics analysis.

In addition, the Company offers a highly competitive turnaround time (TAT), underpinned by comprehensive experiment tracking—from sample quality control through to data delivery—via its Customer Service System (CSS). This integrated approach provides reliability and transparency for researchers and partners.

The key performance indicators of the company for year ended 31st December 2025 were as follows:

2025 2024 Change

£’000 £’000    +/-

Turnover 38,211 36,341 +5%

Gross profit 14,249 12,960 +10%

Profit before taxation 3,704 2,225 +66%

Gross Assets 32,929 46,657 -29%

Net Assets 5,452 7,668 -29%

Under s172 of the Companies Act 2006 directors of UK companies have a duty to promote the success of their company for the benefit of the members as a whole and, in doing so, have regard to:

• The likely consequences of any decision in the long term;

• The interests of the company’s employees:

• The need to foster the company’s business relationships with suppliers, customers and others;

• The impact of the company’s operations on the community and the environment;

• The desirability of the company maintaining a reputation for high standards of business conduct; and

• The need to act fairly as between members of the company.

The Directors consider the following areas to be of key importance in his fulfilment of this duty:

• Carrying out detailed planning and forecasting to ensure the ongoing financial safety of the business;

• Monitoring the business plan in order to control deviation and achieve annual sales target;

• Seeking opportunities, by finding new locations to grow the business for the benefit of current and future employees, customers and suppliers as well as the wider UK economy;

• Supervising the overall strategy of the Company and maintaining the highest standards of integrity and honesty in the company’s dealing with employees, suppliers, the general public and local and national government; and

• Implement several measures in order to ensure the continuity of the company and its liquidity (see “Fair Review of the Business”).

On behalf of the board

The directors present their annual report and financial statements for the year ended 31 December 2025.

The results for the year are set out on page 11.

Ordinary dividends were declared amounting to £5,000,000. The directors do not recommend payment of a further dividend.

The directors who held office during the year and up to the date of signature of the financial statements were as follows:

The Directors consider the greenhouse gas emissions, energy consumption and energy efficiency action at a company level and therefore the below disclosure is on the company basis. The company is firmly committed to operating in a green and sustainable manner and takes its responsibilities in there areas extremely seriously.

The company has followed the 2019 HM Government Environmental Reporting Guidelines. The company has also used the GHG Reporting Protocol – Corporate Standard and have used the 2025 UK Government’s Conversion Factors for Company Reporting

The chosen intensity measurement ratio is total gross emissions in metric tonnes CO2e to employees, the recommended ratio for the sector.

The refurbishment of our office updated all heating and air-conditioning units to the latest standards. This included upgrading the lighting to the latest energy LED panels to maximise energy efficiency.

The directors are responsible for preparing the annual report and the financial statements in accordance with applicable law and regulations.

Company law requires the directors to prepare financial statements for each financial year. Under that law the directors have elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting Practice (United Kingdom Accounting Standards and applicable law). Under company law, the directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the company and of the profit or loss of the company for that period.

In preparing these financial statements, the directors are required to:

• select suitable accounting policies and then apply them consistently;

• make judgements and accounting estimates that are reasonable and prudent;

• state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements; and

• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The directors are responsible for keeping adequate accounting records that are sufficient to show and explain the company’s transactions and disclose with reasonable accuracy at any time the financial position of the company and enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

The company has chosen to disclose information regarding the future development opportunities for the company and financial instrument risk management policies in the strategic report rather than the directors' report.

So far as each person who was a director at the date of approving this report is aware, there is no relevant audit information of which the company’s auditor is unaware. Additionally, the directors individually have taken all the necessary steps that they ought to have taken as directors in order to make themselves aware of all relevant audit information and to establish that the company’s auditor is aware of that information.

We have audited the financial statements of Novogene (UK) Company Limited (the 'company') for the year ended 31 December 2025 which comprise the statement of comprehensive income, the statement of financial position, the statement of changes in equity, the statement of cash flows and notes to the financial statements, including significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 102 The Financial Reporting Standard applicable in the UK and Republic of Ireland (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

• give a true and fair view of the state of the company's affairs as at 31 December 2025 and of its profit for the year then ended;

• have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

• have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

In auditing the financial statements, we have concluded that the directors' use of the going concern basis of accounting in the preparation of the financial statements is appropriate.

Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company's ability to continue as a going concern for a period of at least twelve months from when the financial statements are authorised for issue.

Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report.

Other information

The other information comprises the information included in the annual report other than the financial statements and our auditor's report thereon. The directors are responsible for the other information contained within the annual report.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do not express any form of assurance conclusion thereon. Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.

We have nothing to report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of our audit:

• the information given in the strategic report and the directors' report for the financial year for which the financial statements are prepared is consistent with the financial statements; and

• the strategic report and the directors' report have been prepared in accordance with applicable legal requirements.

In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the strategic report or the directors' report.

We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to report to you if, in our opinion:

• adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or

• the financial statements are not in agreement with the accounting records and returns; or

• certain disclosures of directors' remuneration specified by law are not made; or

• we have not received all the information and explanations we require for our audit.

As explained more fully in the directors' responsibilities statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the directors are responsible for assessing the company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the company or to cease operations, or have no realistic alternative but to do so.

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The extent to which our procedures are capable of detecting irregularities, including fraud, is detailed below.

Our approach to identifying and assessing the risks of material misstatement in respect of irregularities, including fraud and non-compliance with laws and regulations, was as follows:

• the engagement partner ensured that the engagement team collectively had the appropriate competence, capabilities and skills to identify or recognise non-compliance with applicable laws and regulations;

• we identified the laws and regulations applicable to the company through discussions with directors and other management, and from our commercial knowledge and experience of the genomic sequencing industry;

• we focused on specific laws and regulations which we considered may have a direct material effect on the financial statements or the operations of the company, including the Companies Act 2006, taxation legislation and data protection, anti-bribery, employment, and health and safety legislation;

• we assessed the extent of compliance with the laws and regulations identified above through making enquiries of management and inspecting legal expenses; and

• identified laws and regulations were communicated within the audit team regularly and the team remained alert to instances of non-compliance throughout the audit.

We assessed the susceptibility of the company’s financial statements to material misstatement, including obtaining an understanding of how fraud might occur, by:

• making enquiries of management as to where they considered there was susceptibility to fraud, their knowledge of actual, suspected and alleged fraud;

• considering the internal controls in place to mitigate risks of fraud and non-compliance with laws and regulations; and

• understanding the design of the company’s remuneration policies.

To address the risk of fraud through management bias and override of controls, we:

• performed analytical procedures to identify any unusual or unexpected relationships;

• tested journal entries to identify unusual transactions;

• assessed whether judgements and assumptions made in determining the accounting estimates were indicative of potential bias; and

• investigated the rationale behind significant or unusual transactions.

In response to the risk of irregularities and non-compliance with laws and regulations, we designed procedures which included, but were not limited to:

• agreeing financial statement disclosures to underlying supporting documentation;

• enquiring of management as to actual and potential litigation and claims; and

• reviewing board minutes.

There are inherent limitations in our audit procedures described above. The more removed that laws and regulations are from financial transactions, the less likely it is that we would become aware of non-compliance. Auditing standards also limit the audit procedures required to identify non-compliance with laws and regulations to enquiry of the directors and other management and the inspection of regulatory and legal correspondence, if any.

Material misstatements that arise due to fraud can be harder to detect than those that arise from error as they may involve deliberate concealment or collusion.

A further description of our responsibilities is available on the Financial Reporting Council’s website at: https://www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor's report.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an auditor's report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed.

The income statement has been prepared on the basis that all operations are continuing operations.

The notes on pages 15 to 27 form part of these financial statements.

The notes on pages 15 to 27 form part of these financial statements.

The notes on pages 15 to 27 form part of these financial statements.

The notes on pages 15 to 27 form part of these financial statements.

Novogene (UK) Company Limited is a private company limited by shares incorporated in England and Wales. The registered office is 2nd Floor, Bio-Innovation Centre, 25 Cambridge Science Park, Milton Road, Cambridge, CB4 0FW.

These financial statements have been prepared in accordance with FRS 102 “The Financial Reporting Standard applicable in the UK and Republic of Ireland” (“FRS 102”) and the requirements of the Companies Act 2006.

The financial statements are prepared in sterling, which is the functional currency of the company. Monetary amounts in these financial statements are rounded to the nearest £.

The financial statements have been prepared under the historical cost convention.The principal accounting policies adopted are set out below.

The company meets its day-to-day working capital requirements through its cash at bank. The company's forecasts and projections show that the company will continue to make profits and have enough cash reserve to meet its liabilities. Atruet the time of approving the financial statements, the directors have a reasonable expectation that the company has adequate resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going concern basis of accounting in preparing the financial statements.

Revenue is measured at the fair value of the consideration received or receivable and represents the amount receivable for services rendered, net of discounts and rebates allowed by the company and value added taxes. The following criteria must also be met before revenue is recognised:

The nature, timing of satisfaction of performance obligations and significant payment terms of the company's major sources of revenue are as follows:

Revenue from the sale of goods is recognised when the significant risks and rewards of ownership of the goods have passed to the buyer (usually on dispatch of the goods), the amount of revenue can be measured reliably, it is probable that the economic benefits associated with the transaction will flow to the entity and the costs incurred or to be incurred in respect of the transaction can be measured reliably.

Rendering of services

Revenue from a contract to provide services is recognised in the period in which the services are provided in accordance with the stage of completion of the contract when all of the following conditions are satisfied:

• the amount of revenue can be measured reliably;

• it is probable that the company will receive the consideration due under the contract;

• the stage of completion of the contract at the end of the reporting period can only be estimated; and

• the costs incurred and the costs to complete the contract can only be estimated.

For performance obligations fulfilled at a certain point in time, the company recognises revenue at the point in time when the customer obtains control over the relevant goods or services. The timing of revenue recognition for major products is as follows:

Testing service: After completing the sequencing of each batch of samples, the company sends the sequencing analysis results, and obtains the customer confirmation, which indicates the number of related income that can be reliably measured, the relevant economic benefits are likely to flow up into the company, and the transaction has occurred and the incurred costs can be reliably measured, then the revenue will be recognised according to the service volume and service price provided in the contract.

Tangible fixed assets are initially measured at cost and subsequently measured at cost or valuation, net of depreciation and any impairment losses. Cost includes the original purchase price, costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by the management.

Depreciation is charged so as to allocate the cost of assets less their residual value over their estimate useful lives, using the straight-line method. All assets are considered to have a residual value of 5% of their original cost.

Depreciation is provided on the following basis:

The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the carrying value of the asset, and is credited or charged to profit or loss.

At each reporting period end date, the company reviews the carrying amounts of its tangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not possible to estimate the recoverable amount of an individual asset, the company estimates the recoverable amount of the cash-generating unit to which the asset belongs.

Recoverable amount is the higher of fair value less costs to sell and value in use. 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 for which the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.

Recognised impairment losses are reversed if, and only if, the reasons for the impairment loss have ceased to apply. Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal of the impairment loss is treated as a revaluation increase.

Inventories are classified into: raw material and work in progress. Inventories are stated at the lower of cost and estimating selling price less costs to complete and sell. Inventories are recognised as an expense in the period in which the related revenue is recognised.

Cost is determined on the Weighted Average Cost (WAC) method. Cost includes the purchase price, taxes and transport, duties, and handling directly attributable to bringing the inventory to its present location and condition. The cost of work in progress includes raw materials, direct labour, other direct costs and related production overheads.

At the end of each reporting period, inventories are assessed for impairment. If an item of inventory is impaired, an impairment charge is recognised in the profit and loss account. Where a reversal of the impairment is recognised, the impairment charge is reversed, up to the original impairment loss, and is recognised as a credit in the profit and loss account.

Cash and cash equivalents are basic financial assets and include cash in hand, deposits held at call with banks, other short-term liquid investments with original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current liabilities.

The company has elected to apply the provisions of Section 11 ‘Basic Financial Instruments’ and Section 12 ‘Other Financial Instruments Issues’ of FRS 102 to all of its financial instruments.

Financial instruments are recognised in the company's statement of financial position when the company becomes party to the contractual provisions of the instrument.

Financial assets and liabilities are offset, with the net amounts presented in the financial statements, when there is a legally enforceable right to set off the recognised amounts and there is an intention to settle on a net basis or to realise the asset and settle the liability simultaneously.

Basic financial assets, which include debtors and cash and bank balances, are initially measured at transaction price including transaction costs and are subsequently carried at amortised cost using the effective interest method unless the arrangement constitutes a financing transaction, where the transaction is measured at the present value of the future receipts discounted at a market rate of interest.

Other financial assets, including investments in equity instruments which are not subsidiaries, associates or joint ventures, are initially measured at fair value, which is normally the transaction price. Such assets are subsequently carried at fair value and the changes in fair value are recognised in profit or loss, except that investments in equity instruments that are not publicly traded and whose fair values cannot be measured reliably are measured at cost less impairment.

Financial assets, other than those held at fair value through profit and loss, are assessed for indicators of impairment at each reporting end date.

Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the initial recognition of the financial asset, the estimated future cash flows have been affected. If an asset is impaired, the impairment loss is the difference between the carrying amount and the present value of the estimated cash flows discounted at the asset’s original effective interest rate. The impairment loss is recognised in profit or loss.

If there is a decrease in the impairment loss arising from an event occurring after the impairment was recognised, the impairment is reversed. The reversal is such that the current carrying amount does not exceed what the carrying amount would have been, had the impairment not previously been recognised. The impairment reversal is recognised in profit or loss.

Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire or are settled, or when the company transfers the financial asset and substantially all the risks and rewards of ownership to another entity, or if some significant risks and rewards of ownership are retained but control of the asset has transferred to another party that is able to sell the asset in its entirety to an unrelated third party.

Financial liabilities and equity instruments are classified according to the substance of the contractual arrangements entered into. An equity instrument is any contract that evidences a residual interest in the assets of the company after deducting all of its liabilities.

Basic financial liabilities, including creditors and amounts owed by fellow group companies, are initially recognised at transaction price unless the arrangement constitutes a financing transaction, where the debt instrument is measured at the present value of the future payments discounted at a market rate of interest.

Debt instruments are subsequently carried at amortised cost, using the effective interest rate method.

Trade creditors are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Amounts payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-current liabilities. Trade creditors are recognised initially at transaction price and subsequently measured at amortised cost using the effective interest method.

Debt instruments that do not meet the conditions in FRS 102 paragraph 11.9 are subsequently measured at fair value through profit or loss. Debt instruments may be designated as being measured at fair value through profit or loss to eliminate or reduce an accounting mismatch or if the instruments are measured and their performance evaluated on a fair value basis in accordance with a documented risk management or investment strategy.

Financial liabilities are derecognised when the company’s contractual obligations expire or are discharged or cancelled.

Equity instruments issued by the company are recorded at the proceeds received, net of transaction costs. Dividends payable on equity instruments are recognised as liabilities once they are no longer at the discretion of the company.

The tax expense represents the sum of the tax currently payable and deferred tax.

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the income statement because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. The company’s liability for current tax is calculated using tax rates that have been enacted or substantively enacted by the reporting end date.

Deferred tax liabilities are generally recognised for all timing differences and deferred tax assets are recognised to the extent that it is probable that they will be recovered against the reversal of deferred tax liabilities or other future taxable profits. Such assets and liabilities are not recognised if the timing difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that affects neither the tax profit nor the accounting profit.

The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity, in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the company has a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes levied by the same tax authority.

The company operates a defined contribution pension scheme. Contributions payable to the company's pension scheme as they are charged to profit or loss in the period to which they relate.

Rentals payable under operating leases, including any lease incentives received, are charged to profit or loss on a straight line basis over the term of the relevant lease except where another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

In the application of the company’s accounting policies, the directors are required to make judgements, estimates and assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised where the revision affects only that period, or in the period of the revision and future periods where the revision affects both current and future periods.

The following judgements (apart from those involving estimates) have had the most significant effect on amounts recognised in the financial statements.

Determine whether there are indicators of impairment of the company's tangible assets. Factors taken into consideration in reaching such a decision include the economic viability and expected future financial performance of the asset, and where it is a component of a larger cash-generating unit, the viability and expected future performance of that unit.

Determine whether there are indicators of impairment of obsolescence of stock. Factors taken into consideration in reaching such a decision include the trading environment, the expected future sales of the product and expiration dates.

The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of assets and liabilities are as follows.

The recoverability of trade debtors is regularly reviewed in the light of available economic information specific to each debtor and specific provisions are recognised for balances considered to be irrecoverable.

The average monthly number of persons (including directors) employed by the company during the year was:

Their aggregate remuneration comprised:

The actual charge for the year can be reconciled to the expected charge for the year based on the profit or loss and the standard rate of tax as follows:

Amounts owed by group undertakings in respect of business transactions are unsecured, interest free and repayable on demand. Group loans are unsecured, interest bearing and repayable in accordance with the terms of the relevant loan agreements.

The company’s investments comprise funds held within an asset management portfolio administered by a third-party asset management company. The funds are placed in the money market on a short-term basis. Related investment income arises primarily from interest received, with no fair value gains/losses applicable.

All amounts owed to group undertakings are unsecured, interest free and payable on demand.

The following are the major deferred tax liabilities and assets recognised by the company and movements thereon:

Short term timing differences set out above are expected to reverse within 12 months. Accelerated capital allowances are expected to reverse within 12 months to 60 months.

The company operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held separately from those of the company in an independently administered fund.

There is a single class of Ordinary shares, all of which have full rights in the company with respect to voting, dividends and capital distributions.

Minimum lease payments under non-cancellable operating leases fall due as follows:

The following amounts were outstanding at the reporting end date:

The company has taken advantage of the exemption under FRS 102, para 33.1A, stating that details need not be given in respect of transactions entered into between two or more members of a group, provided that any subsidiary which is a party to the transaction is wholly-owned by such a member.

The ultimate controlling party is R Li.

The company's immediate parent is Novogene (NL) International Holding B.V, a company incorporated in Netherlands.

The ultimate parent company is Novogene Co. Ltd, a company incorporated in P.R. China. The largest and smallest group into which the result of the company are consolidated is headed by Novogene Co. Ltd, the consolidated financial statements are available from: Building 301, Zone A10 Jiuxianqiao North Road, Chaoyang District, Beijing, P.R, China.