PART 4/

Financial report

1. Consolidated Annual Accounts

1.1. / CONSOLIDATED FINANCIAL STATEMENTS AS OF AND FOR THE YEARS ENDED 31 DECEMBER 2020 AND 2019

1.1.1. / CONSOLIDATED INCOME STATEMENT

1.1.2. / CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

1.1.3. / CONSOLIDATED STATEMENT OF FINANCIAL POSITION

*Cash and cash equivalents for 31 December 2020 include EUR 1.2 million restricted cash related to KBC Lease financing

1.1.4. / CONSOLIDATED CASH FLOW STATEMENT

1.1.5. / Consolidated statement of changes in equity

1.2. / NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

1.2.1. / GENERAL INFORMATION

Biocartis Group NV, a company incorporated in Belgium with registered address at Generaal de Wittelaan 11 B, 2800 Mechelen, Belgium (the ‘Company’) and its subsidiaries (together, the ‘Group’) commercialize an innovative and proprietary molecular diagnostics (‘MDx’) platform that offers accurate, highly-reliable molecular information from virtually any biological sample, enabling fast and effective diagnostics treatment selection and treatment progress monitoring.

The Group’s mission is to become a global, fully integrated provider of novel molecular diagnostics solutions with industry-leading, high clinical value tests within the field of oncology. The Company has established subsidiaries in Mechelen (Belgium), New Jersey (US), Milan (Italy) and a joint venture in Hong Kong (China).

The consolidated financial statements have been authorized for issue on 23 February 2021 by the board of directors of the Company (the ‘board of directors’).

1.2.2. / SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.2.2.1. / STATEMENT OF COMPLIANCE

The consolidated financial statements of the Group for the year ended 31 December 2020 have been prepared in accordance with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and as adopted by the European Union.

1.2.2.2. / BASIS OF PREPARATION

The consolidated financial statements have been prepared on the historical cost basis except for financial instruments at fair value and non-cash distribution (e.g. issuance of equity) that are measured at fair value at the end of each reporting period as further explained in the accounting policies. The acquired assets and assumed liabilities in a business combination are also measured initially at fair value at the date of acquisition.

Historical cost is generally based on the fair value of the consideration given in exchange for assets.

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:

•  Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities
•  Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable
•  Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

The consolidated financial statements are presented in Euro (EUR) and all values are rounded to the nearest thousand (EUR000), except when otherwise indicated.

The Group has adopted the following new and revised standards and interpretations issued by the IASB that are relevant to its operations and effective for accounting periods beginning on 1 January 2020:

•  Amendments to IAS 1 and IAS 8 Definition of Material
•  Amendments to IFRS 3 Business Combinations: Definition of a Business
•  Amendments to IFRS 9, IAS 39 and IFRS 7 Interest Rate Benchmark Reform – Phase 1
•  Amendments to references to the Conceptual Framework in IFRS standards

The above application of new standards did not have a significant impact on the financial position and the results of the Group. Standards and interpretations published, but not yet applicable for the annual period beginning on 1 January 2020, are listed in note 1.2.35.

1.2.2.3. / CONSOLIDATION PRINCIPLES

The consolidated financial statements comprise the financial statements of the Company and entities controlled by the Company as at 31 December 2020.

Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee.

Specifically, the Group controls an investee if, and only if, the Company has:

•  Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee)
•  Exposure, or rights, to variable returns from its involvement with the investee
•  The ability to use its power over the investee to affect its returns

The results of subsidiaries acquired or disposed of during the year are included in the consolidated income statement from the effective date of acquisition and up to the effective date of disposal.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it derecognizes the related assets (including goodwill), liabilities, non-controlling interest and other components of equity while any resulting gain or loss is recognized in profit or loss. Any investment retained is recognized at fair value.

All transactions between Group companies have been eliminated upon consolidation.

1.2.2.4. / FOREIGN CURRENCY TRANSLATION

The items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which each entity operates (‘Functional Currency’). The consolidated financial statements are presented in Euro, which is the Company’s functional and presentation currency.

Transactions in foreign currencies are recorded at the foreign exchange rate prevailing at the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated at the foreign exchange rate prevailing at that date. Exchange differences arising on the settlement of monetary items or on reporting monetary items at rates different from those at which they were initially recorded during the period or in previous financial statements, are recognized in the consolidated income statement.

1.2.2.5. / JOINT VENTURES

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement (i.e. joint ventures) have rights to the net assets of the arrangement. Joint control is the contractually agreed sharing of control of an arrangement, which exists only when decisions about relevant activities require the unanimous consent of the parties sharing control.

The results, assets and liabilities of joint ventures are incorporated in the Group’s consolidated financial statements using the equity method of accounting, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 – Non-current Assets Held for Sale and Discontinued Operations. Under the equity method, an investment in a joint venture is initially recognized in the consolidated statement of financial position at cost and adjusted thereafter to recognize the Group's share of the profit or loss and other comprehensive income of the joint venture. When the Group's share of losses of a joint venture exceeds the Group's interest in that joint venture (which includes any long-term interests that, in substance, form part of the Group's net investment in the joint venture), the Group discontinues recognizing its share of further losses. Additional losses are recognized only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the joint venture.

Any excess of the Group's share of the net fair value of the identifiable assets, liabilities and contingent liabilities over the cost of acquisition, after reassessment, is recognized immediately in profit or loss. Unrealized gains and losses resulting from transactions between the Group and the joint venture are eliminated to the extent of the interest in the joint venture.

Where a Group entity transacts with a joint venture of the Group, gains and losses are eliminated to the extent of the Group’s interest in the relevant associate or joint venture.

1.2.2.6. / INTANGIBLE ASSETS

RESEARCH AND DEVELOPMENT COSTS

Research and development costs are currently expensed as incurred. Development costs incurred are recognized as intangible assets if, and only if, all of the following conditions have been demonstrated:

•  The technical feasibility of completing the intangible asset so that it will be available for use or sale;
•  The intention to complete the intangible asset and use or sell it;
•  The ability to use or sell the intangible asset;
•  How the intangible asset will generate probable future economic benefits;
•  The availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and
•  The ability to measure reliably the expenditure attributable to the intangible asset during its development.

Due to uncertainties inherent to the development and registration with authorities of the Group’s Idylla™ platform and its tests, the Group considers that the conditions for capitalization are not met until the regulatory procedures required by authorities have been completed. Development costs incurred after the recognition criteria are met are in general not material. As such, development expenditure not satisfying the above criteria and expenditure in the research phase of internal projects are recognized in the consolidated income statement as incurred.

SEPARATELY ACQUIRED INTANGIBLE ASSETS

Separately acquired intangible assets include patents and licenses, and purchased IT and software licenses. These intangible assets are capitalized based on the costs incurred to acquire and bring to use the specific asset.

Intangible assets are amortized in accordance with the expected pattern of consumption of future economic benefits derived from each asset. Practically, intangible assets are amortized on a straight-line basis over their estimated useful lives as per the table below:

Intangible assets are carried in the consolidated balance sheet at their initial cost less accumulated amortization and impairment losses, if applicable.

1.2.2.7. / PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are initially recognized in the consolidated balance sheet at their acquisition cost, including the costs directly attributable to the acquisition and the installation of the asset.

Each item of property, plant and equipment is recorded at historical cost less accumulated depreciation and impairment losses, if applicable. A pro rata straight-line depreciation method is used to reflect the pattern in which the asset’s future economic benefits are expected to be consumed. Practically the term over which items of property, plant and equipment is depreciated depends on the estimated useful life of each asset category, as per the table below.

The Group records as manufacturing and other equipment under construction all the physical equipment, including custom-designed equipment and generic pieces of equipment, and related costs, such as borrowing costs, certain specific engineering expenses, incurred for their design, build-up and installation and validation costs, until it is ready for its intended use. Manufacturing and other equipment under construction is carried at cost and is not depreciated until it is ready for its intended use.

Normal maintenance and repair costs of property, plant and equipment are expensed as incurred. Other subsequent expenses are capitalized, only when it is probable that future economic benefits associated with the items will flow to the Group and the cost of the item can be measured reliably, such as the replacement of an identified component of an asset.

An item of property, plant and equipment and any significant part initially recognized is derecognized upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on de-recognition of the asset (calculated as the difference between the net proceeds from disposal and the carrying amount of the asset) is included in the income statement when the asset is derecognized.

The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year-end and adjusted prospectively, if appropriate.

1.2.2.8. / IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS, OTHER THAN GOODWILL

The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or cash-generating unit’s (CGU) fair value less costs of disposal and its value in use.

The recoverable amount 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. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset 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.

A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the asset’s (CGU’s) recoverable amount since the last impairment loss was recognized. The reversal is limited so that the carrying amount of the asset (CGU) does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset in prior years. Such reversal is recognized in the consolidated income statement.

1.2.2.9. / INVENTORY

Inventories are valued at the lower of cost and net realizable value. The cost of inventories is determined on a first in, first out (FIFO) basis.

Net realizable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

1.2.2.10. / FINANCIAL INSTRUMENTS

FINANCIAL ASSETS

The Group has financial assets classified in the following categories: financial assets at fair value (through OCI or through P&L) and financial assets at amortized cost. The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows. Management determines the classification of its financial assets at the time of initial recognition.

Purchases or sales of financial assets that require delivery of assets within a time frame established by regulation or convention in the market place are recognized on the settlement date, i.e., the date that an asset is delivered by or to an entity.

Financial assets are initially measured at fair value. Transactions costs that are directly attributable to the acquisition of financial assets (other than financial assets at fair value through profit or loss) are added to the fair value of the financial assets, as appropriate, on initial recognition. Transactions costs directly attributable to the acquisition of financial assets at fair value through profit or loss are recognized immediately in profit or loss.

At amortized cost

Financial assets (such as loans, trade and other receivables, cash and cash equivalents) are subsequently measured at amortized cost using the effective interest method, less any impairment if they are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest.

The effective interest method is a method of calculating the amortized cost of a debt instrument and of allocating interest income over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash receipts (including all fees and points paid or received that form an integral part of the effective interest rate, transaction costs and other premiums or discounts) through the expected life of the debt instrument, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Trade and other receivables after and within one year are recognized initially at fair value and subsequently measured at amortized cost, i.e. at the net present value of the receivable amount, using the effective interest rate method, less allowances for impairment.

At fair value

For assets measured at fair value, gains and losses will either be recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading, the Group has made an irrevocable election at the time of initial recognition of its participation in MyCartis to account for the equity investment at fair value through other comprehensive income (FVOCI).

After initial measurement, the investment in equity instruments is subsequently measured at fair value with unrealized gains or losses recognized in other comprehensive income and accumulated in reserves. As the Group’s management has elected to present fair value gains and losses on equity investments in OCI, there is no subsequent reclassification of fair value gains and losses to profit or loss following the derecognition of the investment. Dividends from such investments continue to be recognized in profit or loss as other income when the Group’s right to receive payments is established.

Derecognition

A financial asset is primarily derecognized when the contractual rights to receive cash flows from the asset have expired or when the owner of the asset transferred its rights to receive cash flows and substantially all the risk and rewards of ownership of the financial asset to another party. If the Group neither transfers nor retains substantially all the risks and rewards of ownership and continues to control the transferred asset, the Group recognizes its retained interest in the asset and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and rewards of ownership of a transferred financial asset, the Group continues to recognize the financial asset and also recognizes a collateralized borrowing for the proceeds received.

Impairment of financial assets

The Group assesses on a forward looking basis the expected credit losses associated with its financial assets carried at amortized cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. For trade receivables, the group applies the simplified approach permitted by IFRS 9 – Financial Instruments, which requires expected lifetime losses to be recognized from initial recognition of the receivables. The amount of the allowance is deducted from the carrying amount of the asset and is recognized in the income statement.

FINANCIAL LIABILITIES

All financial liabilities are recognized initially at fair value net of directly attributable transaction costs. The Group’s financial liabilities include trade and other payables, borrowings, leases and a convertible bond.

The Group has financial liabilities classified as financial liabilities measured at amortized cost. The Group’s outstanding convertible bond is included on the balance sheet, based on the fair value at issuance.

After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortized cost using the effective interest rate method.

The effective interest method is a method of calculating the amortized cost of a financial liability and of allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash payments through the expected life of the financial liability, or, where appropriate, a shorter period, to the net carrying amount on initial recognition.

Derecognition

The Group derecognizes financial liabilities when, and only when, the Group’s obligations are discharged, cancelled or they expire. The difference between the carrying amount of

the financial liability derecognized and the consideration paid and payable is recognized in profit or loss.

Convertible debt

The liability component of the convertible bond is measured at its fair value (i.e. discounting its contractual cash flows using market benchmark rate and market credit spread for a similar debt) minus transaction costs that are allocated to the host debt component and is accounted for at amortized costs.

EQUITY INSTRUMENTS

Equity instruments (e.g. share capital and employee warrant plans) issued by the Group are recorded at the fair value of the proceeds received, net of transactions costs.

The equity component of the convertible bond is the embedded share conversion option. This component is initially measured as the difference between the nominal amount of the convertible bond minus the initial fair value of the liability component and the allocated transaction costs.

1.2.2.11. / CASH AND CASH EQUIVALENTS

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term bank deposits with a maturity of or less than three months, and which are subject to an insignificant risk of changes in value.

1.2.2.12. / INCOME TAXES

Income taxes include all taxes based upon the taxable profits of the Group including withholding taxes payable on transfer of income from group companies and tax adjustments from prior years and deferred income taxes.

Current tax

Current tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to calculate the amount are those that are enacted or substantively enacted, at the reporting date in the countries where the Group operates and generates taxable income.

Deferred tax

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax liabilities are recognized for all taxable temporary differences, except when the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

Deferred tax assets are recognized for all deductible temporary differences, the carry-forward of unused tax credits and any unused tax losses. Deferred tax assets are recognized to the extent that it is probable that taxable profits will be available against which the deductible temporary differences, and the carry-forward of unused tax credits and unused tax losses can be utilized, except when the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss.

The carrying amount of deferred tax assets is reviewed at each reporting 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 deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reporting date and are recognized to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred taxes relate to the same taxable entity and the same taxation authority.

R&D Investment Tax Credits

Current IFRSs have no specific accounting principles with respect to the treatment of investment tax credits as these are scoped out of IAS 20 Accounting for Government Grants and Disclosure of Government Assistance and IAS 12 Income Taxes. As a result, the Group developed an accounting policy in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors, whereby it opted to follow the analogy to IAS 12. In following that analogy, there will be immediate recognition of an income tax credit and deferred tax asset when the Group satisfies the criteria to receive the credits. The recognition of the income tax credit is accounted for in the income statement under the line ‘Income taxes’.

Recognized research and development tax credits in Belgium can be effectively repaid if a company has not been able to offset the tax credit against the corporation tax for the last five consecutive tax years. Therefore in 2020, EUR 0.3m of the Group’s tax credit on research and development has become a short term receivable.

1.2.2.13. / EMPLOYEE BENEFITS

SHORT-TERM EMPLOYEE BENEFITS

Short-term employee benefits include salaries and social security contributions, social taxes, paid vacation and bonuses. They are recognized as expenses for the period in which employees perform the corresponding services. Outstanding payments at the end of the period are shown as other current liabilities.

POST-EMPLOYMENT BENEFITS

Due to the fact that the Belgian law prescribes that the employer would guarantee a minimum rate of return on the contributions, such plans are classified as defined benefit plans under IFRS.

The cost of providing benefits is determined using the Projected Unit Credit (PUC) method, with actuarial valuations being carried out at the end of each reporting period.

Re-measurement, comprising actuarial gains and losses, the effect of changes to the asset ceiling (if applicable) and the return on plan assets (including interest), is reflected immediately in the statement of financial position with a charge or credit recognized in other comprehensive income in the period in which they occur. Re-measurement recognized in OCI (Other Comprehensive Income) is reflected immediately in retained earnings and will not be reclassified to P&L in subsequent periods. Past service costs are recognized in profit or loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset.

Defined benefit costs are categorized as follows:

•  Service costs (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
•  Net interest expense or income; and
•  Re-measurement gains and losses.

The Group presents the first two components of defined benefit costs in P&L. Curtailment gains and losses are accounted for as past service costs.

The retirement benefit obligation recognized in the consolidated balance sheet represents the actual deficit in the Group's defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of returns from the plans or reductions in future contributions to the plans.

SHARE-BASED PAYMENT ARRANGEMENTS

The Group operates equity-settled share-based payment plans. The fair value of the employee services received in exchange for the grant of stock options is determined at the grant date using an appropriate valuation model (Black-Scholes Merton model).

The total amount to be expensed over the vesting period, with a corresponding increase in the ‘share-based payment reserve’ within equity, is determined by reference to the fair value of the stock options granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets). Non-market based vesting conditions are included in assumptions about the number of stock options that are expected to become exercisable. At each reporting date, the entity revises its estimates of the number of stock options that are expected to become exercisable. It recognizes the impact of the revision of original estimates, if any, in the income statement, and a corresponding adjustment to equity over the remaining vesting period.

The proceeds received net of any directly attributable transaction costs are credited to share capital (par value) and share premium when the stock options are exercised.

1.2.2.14. / PROVISIONS

The Group recognizes provisions when it has a present obligation, legal or constructive, as a result of past events, when it is probable, defined as more likely than not, that an outflow of resources will be required to settle the obligation and when a reliable estimate of the amount can be made.

Where the effect of the time value of money is material, the amount is the present value of expenditures required to settle the obligation. Impacts of changes in discount rates are generally recognized in the financial result.

1.2.2.15. / REVENUE RECOGNITION

The Group recognizes revenues from the sale of the Idylla™ platform, related cartridges and services as well as revenues generated from collaboration arrangements in accordance with IFRS 15 Revenue from contracts with customers.

IFRS 15 specifies how and when a company should recognize revenue and requires entities to provide users of financial statements with more informative, relevant disclosures. The standard provides a single principles-based five-step model to be applied to all contracts with customers as follows:

•  Identify the contract(s) with a customer
•  Identify the performance obligations in the contract
•  Determine the transaction price
•  Allocate the transaction price to the performance obligations in the contract
•  Recognize revenue when (or as) the entity satisfies a performance obligation

Transactions with customers and collaboration partners may include multiple deliverables (performance obligations). The Group evaluates whether the obligations towards its customers or collaboration partners are distinct on a stand-alone basis or in the context of the contract. If the Group determines that multiple performance obligations exist, the transaction price is allocated to each performance obligation based upon the best estimate of the stand-alone selling prices of each obligation.

The Group recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration the Group expects to be entitled to in exchange for those goods or services.

If the services rendered exceed the payment, accrued income is recognized. If the payments exceed the services rendered, deferred income is recognized. The Group decided to keep old terminology; accrued income instead of contract asset and deferred income instead of contract liability.

COLLABORATION REVENUE

The Group provides multiple products or services to its customers as part of a single collaboration arrangement, such as research, development, manufacturing, commercialization and licensing. Each component of such arrangement is reviewed to assess if the component should be considered as a distinct performance obligation within the context of the contract. If a performance obligation is considered to be distinct, then the revenue related to it is accounted for separately from the other performance obligations; otherwise, it is combined with other performance obligations until the Group identifies a bundle of obligations that is distinct.

The amount of revenue recognized is the amount allocated to the satisfied performance obligation taking into account variable consideration. The transaction price may include upfront (license) payments, milestone payments and/or compensation for research and development services. Variable consideration that is considered in the transaction price typically relates to milestone and royalty payments The estimated amount of variable consideration is included in the transaction price only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. As soon as the uncertainty is resolved, the variable component of the transaction price (mainly milestone payments and success fees) is included in the transaction price based on the appropriated timing of revenue recognition of the related performance obligation. In certain situations, the Group may receive contingent payments after the end of its period of continued involvement. In such circumstances, the Group would recognize 100% of the contingent revenues when the contingency is resolved and collection is reasonably certain. Royalty-based revenues are recognized when the royalty is earned, or when the underlying goods or services are sold. Payment schedules differ from arrangement to arrangement but no element of financing is deemed present. Therefore the transaction price is not adjusted for the effects of a significant financing component.

Revenue linked to performance obligations relating to development work and e.g. clinical validation are recognized over time as the services are rendered to the customer based on the progress over the activities, i.e. a rato the services performed.

In case of performance obligations relating to licensing intellectual property (IP), the Group assesses if it grants a right to access the IP as it exists throughout the license period or a right to use the IP as it exists at the point in time at which the license is granted. If the performance obligation is to grant a right to access, then the related revenue is recognized over the license period; otherwise, it is recognized at a point in time, i.e. when the license period starts or when the customer starts using the IP. The Group assesses if the license provided can be considered as being distinct in the context of the contract. If not, the license will have to be bundled with the research and development services. Currently all milestone payments are development milestones and are considered to be distinct, hence recognized at a point in time. If one would conclude that the license is not a distinct performance obligation, the receipt of a development milestone will have to be recognized pro rata the completion of the research and development services to be provided under the agreement.

Unless up-front fees are paid in exchange for products delivered or services performed and, therefore, control over the related services has been transferred to the buyer in a separate transaction, such fees are not recognized as revenue at a point in time but rather over time (even if they are non-refundable) pro rata over the expected performance period under each respective arrangement.

The Group makes its best estimate of the period over which it expects to fulfil its performance obligations, which may include technology transfer assistance, research and development activities, clinical, medical and regulatory activities, manufacturing and commercialization activities.

Cost reimbursements resulting from collaboration agreements, or a similar type of compensation received for costs incurred under R&D collaborations are recorded as R&D services as the related costs are incurred and upon agreement by the parties involved. The corresponding expenses are generally recorded under research and development expenses. Revenues from R&D Services are in general recognized over the duration of the collaboration agreement, if relevant subject to when the required services are provided or costs are incurred.

License fees include technology access fees to the Idylla platform technology. A distinction is made between right to use and right to access fees. Right to use fees are fees paid to use the IP as it exists when the license is granted, which means that the revenue recognition will happen at a point in time. Right to access fees are fees paid to access IP throughout a certain license period, which means that the revenue recognition will happen over time. A contingent consideration received by the Group upon the achievement of a substantive milestone is recognized in its entirety in the period in which the milestone is achieved. A milestone is defined as an event (i) that can only be achieved based in whole or in part either on the entity’s performance or on the occurrence of a specific outcome resulting from the entity’s performance, (ii) for which there is substantive uncertainty at the date the arrangement is entered into that the event will be achieved, and (iii) that would result in additional payments being due to the entity.

A milestone is substantive if the consideration earned from the achievement of the milestone is consistent with the Group's performance required to achieve the milestone or the increase in value to the collaboration resulting from the Group's performance, related solely to the Group's past performance, and is reasonable relative to all of the other deliverables and payments within the overall collaboration arrangement.

PRODUCT RELATED REVENUE

Product sales

Revenues from the sale of goods are recognized when the Group has transferred control over the goods to the buyer according to the incoterms agreed with such customers, i.e. performance obligation is satisfied at a point in time.

The transaction price (revenue) from the sale of goods is the amount of the amount of the consideration to which the Group expects to be entitled in exchange for transferring the goods to the customer. This includes fixed amounts and variable amounts, such as returns and allowances, trade discounts and volume discounts. The variable consideration is only recognized as part of revenue to the extent it is highly probable that a significant reversal of revenue will not occur when the associated uncertainty is subsequently resolved.

Reagent rental contracts

The Group also puts its products available to customers under the form of an Idylla™ Reagent Rental Agreement whereby the Group delivers the console and instruments, together the Idylla™ system, and the customer commits to purchase a minimum required volume (consumption) of cartridges over a defined period. The price of the Idylla™ system is included as a mark-up premium in the price of the cartridges and is as such received over the period when the cartridges are purchased. Under these contracts the Group bundles the following multiple elements together: the use of the Idylla™ system, the servicing of the system and the consumption of Idylla™ cartridges. The use of the Idylla™ system is considered to be a lease and therefore the consideration under the reagent rental agreement will have to be allocated between the lease component and the other components (servicing and consumption of Idylla™ cartridges) using a relative fair value approach.

There is no binding cartridge volume commitment from the customer that will result in a full reimbursement of the Idylla™ systems price over the term of the agreement. However, there is a minimum annual consumption of cartridges indicated by the customer on the basis of which the mark-up premium for the Idylla™ system usage is determined, ensuring a proper compensation for the usage of the Idylla™ system. The minimum annual consumption of cartridges is evaluated at each reporting date. If the minimum indicated consumption is not met, the Group has the right to increase the sales prices and/or the volume commitments for the cartridges. The Group also has the right to terminate the agreement with a notice period if the minimum annual cartridge consumption is not met, without any additional indemnity. The customer has the option to terminate the agreement at any given time before the agreed contractual term with a notice period during which the customer will be required to purchase or pay a part of the agreed minimum annual cartridge commitment, in proportion to the notice period. No additional indemnity will be required. Since the minimum purchase requirements are not contractually enforceable, the lease component present in these contracts are generally to be considered as contingent payments. The price invoiced to customers for an Idylla™ cartridge includes a cost for the use and servicing of the Idylla™ system by the customer. Customers are invoiced based on received sales orders for Idylla™ cartridges. Revenue allocated the Idylla™ cartridges will only be recognized when the Idylla™ system is delivered to the customer and the customer obtained control over the cartridges.

The significant risks and rewards for the Idylla™ systems are not transferred to the customer at signing of the agreement. The revenue of the cartridges, the Idylla™ systems and servicing thereof is consequently recognized gradually when cartridges are delivered to the customer.

Regular rental contracts

The Group also rents out Idylla™ systems, whereby the customer pays a regular rental fee for the temporary use of the Idylla™ system since there is no transfer of ownership. Under this type of rental contracts, the Idylla™ system revenue is considered as pure rental income and is recognized linearly over the term of the rental contract. Upon expiry of the rental contract, the rented out Idylla™ systems return to the Group.

SERVICE REVENUE

Under service revenue, Biocartis classifies the revenue generated by service contracts as well as the revenue generated by one-off repairs. Service revenue is recognized over time, linearly for capital sales and in line with the service contract term, which includes regular annual preventive maintenance. For reagent rental contracts the service revenue is also recognized over time but in line with the cartridge consumption which equals the usage of the system.

1.2.2.16. / GRANTS

Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attaching to them and that the grants will be received. Any outstanding receivables related to these grants are recorded as grants receivable.

R&D GRANTS

On certain specific research and development projects, the costs incurred are partially reimbursed by IWT (Institute for the Promotion of Innovation by Science and Technology in Flanders), the Flemish Agency for Innovation & Entrepreneurship under its Strategic Transformation Support (‘STS’) program, the European Commission or other institutional funds. These grants are recognized in profit or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs which the grants are intended to compensate. They are presented as other operating income.

INVESTMENT GRANTS

Grants from the STS program relating to investments in property, plant and equipment and intangible assets are deducted from the cost of the related asset. The grant is recognized in profit or loss over the life of a depreciable asset as a reduced amortization expense.

1.2.2.17. / LEASES

Lease contracts as defined by IFRS 16 Leases, are recorded in the balance sheet, which leads to the recognition of an asset representing a right-of-use of the asset leased during the lease term of the contract and a liability related to the payment obligation.

The Group applies a single recognition and measurement approach for all lease, expect for short-term leases and leases of low-value assets. The Group recognizes lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.

RIGHT-OF-USE ASSETS

The Group recognizes right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any re-measurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. If there is no reasonable certainty that the Group will obtain ownership by the end of the lease term, the right-of-use asset shall be fully depreciated over the shorter of the lease term and its useful life. The right-of-use assets are also subject to impairment, refer to the accounting policies in note 1.2.2.8.

LEASE LIABILITIES

The corresponding liability to the lessor is included in the consolidated balance sheet as a financial liability. At the commencement date of the lease, the Group recognizes lease liabilities measured at the present value of the lease payments to be made over the lease term. The lease payments include fixed payments less any lease incentives receivable, variable lease payments that depend on an index or a rate and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognized as expenses in the period in which the event or condition that triggers the payment occurs.

In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is re-measured if there is a modification, a change in lease term, a change in the lease payments (e.g. changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset.

SHORT-TERM LEASES AND LEASES OF LOW-VALUE ASSETS

The Group applies the short-term lease recognition exemption for leases that have a lease term of 12 months or less from the commencement date. It also applies the lease of low-value assets recognition exemption for assets that have a value in new of below EUR 5,000. Lease payments on short-term and low-value leases are recognized as expense.

1.2.2.18. / BORROWING COSTS

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalized as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

1.2.3. / CRITICAL ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGMENTS

1.2.3.1. / CRITICAL ACCOUNTING ESTIMATES, ASSUMPTIONS AND JUDGMENTS

When preparing the consolidated financial statements, judgments, estimates and assumptions are made that affect the carrying amount of certain assets, liabilities, revenues and expenses. These include the going concern assessment, the valuation of the share-based payment transactions, the valuation of employee benefits and actuarial assumptions underlying such calculations and the revenue recognition for multiple element arrangements, upfront fees and reagent rental contracts. These estimates and assumptions have been reviewed for each year and are reviewed on a regular basis, taking into consideration past experience and other factors deemed relevant under the then prevailing economic conditions. Changes in such conditions might accordingly result in different estimates in the Group’s future consolidated financial statements.

CRITICAL JUDGMENTS

Revenue recognition relating to collaboration arrangements

Assessing the indicators for revenue recognition under collaboration arrangements requires judgement to determine (i) the nature of the contractual performance obligations and whether they are distinct or should be combined with other performance obligations, and (ii) the pattern of transfer of each promised component identified in the contract, using methods based on key assumptions such as forecasted costs and development timelines of the collaboration arrangements for the assessment of satisfaction of the performance obligation.

For all performance obligations linked to licensing agreements, the Group makes an assessment about whether or not the license is to be considered as a distinct performance obligation or not. The Group determines whether a promise to grant a license of intellectual property is distinct from other promised goods or services in the contract. As such, the Group assesses whether the customer can benefit from a license of intellectual property on its own or together with readily available resources (i.e., whether it is capable of being distinct) and whether the Group’s promise to transfer a license of intellectual property is separately identifiable from other promises in the contract (i.e., whether it is distinct in the context of the contract). The assessment of whether a license of intellectual property is distinct is based on the facts and circumstances of each contract, e.g. interdependencies between the license and other services in the contract, the continuing involvement of the Group after the license has been granted.

If the transfer of the license is considered to be a separate performance obligation, revenue relating to the transfer of the license is recognized at a point in time or over time depending on the nature of the license, i.e. granting a right to use the intellectual property or the right to access the IP. Basically, the Group assesses whether the customer has the right to use the intellectual property as it exists at a certain period in time or whether it has access to the intellectual property as it exists at any time during the license period, where the latter requires more on-going activities from the Group.

CRITICAL ACCOUNTING ESTIMATES AND ASSUMPTIONS

Idylla™ systems presented on the balance sheet

Idylla™ systems are both presented on the balance sheet under inventory and under property, plant and equipment (PPE). Idylla™ systems that are recorded as property, plant and equipment are used for amongst other assay research and development, platform engineering, production process optimization, quality testing purposes and marketing purposes. Furthermore, Idylla™ systems recorded as PPE include also systems that are rented by clients under the operating lease reagent rental agreements, presented as capitalized systems for rent. These systems are recorded at their acquisition cost and are depreciated over 5 years and have the same accounting treatment as other property, plant and equipment, we also refer to 1.2.2.7.

Idylla™ systems kept as inventory are held for expected commercialization, including systems placed at clients for demo purposes or at customer sites under the Group’s Early Adaptor Program. On a regular basis a review of the aging of the systems is performed in order to mitigate the obsolescence risk of the systems and to guarantee that the net realizable value remains higher than the carrying amount.

COVID-19

For more information related to the current and expected impact of the COVID-19 situation on the financial position and performance of the Group, we refer to Part 2 ‘Performance 2020’, ‘Impact of COVID-19’.

1.2.3.2. / OPERATING SEGMENTS

The segment information is represented in a consistent manner with the internal reporting to the executive management, enabling decision making of allocating resources to the segment and evaluating financial performances of the segment.

At this moment, all of the Group’s activities relate to Idylla™ and as such there is only one operating segment. The reporting to the key decision makers is currently done at the global level.

In addition, substantially all non-current assets of the Group are located in the country of domicile (Belgium) per 31 December 2020.

1.2.4. / REVENUE

The Group’s revenue recognized under IFRS 15 can be aggregated as follows:

For details related to the movements in accrued and deferred income related to collaboration agreements, we respectively refer to notes 1.2.20 and 1.2.27.

R&D service revenue is recognized over time as the services are rendered to the customer based on the progress over the activities i.e. a rato the services performed. Over the reporting period, the majority of the collaborations for which revenues were recognized, included a quarterly or monthly payment structure. Consequently, the Group recognized either an accrued income or deferred income on the balance sheet over the course of the reporting period.

In general, customers do not have a right-of return and/or are entitled to refunds in the context of product related sales.

The below table corresponds to the revenue expected to be recognized in the future relating to (partially) unsatisfied performance obligations. This table excludes potential future R&D service revenue of pending collaborations for which the associated services are performed on an hourly invoicing basis (IFRS 15.121).

The aggregate amount of the transaction price allocated to collaboration arrangements that are partially or fully unsatisfied as at 31 December 2020 is EUR 0.6m.

1.2.4.1. / SUMMARY OF COLLABORATION REVENUES

Below is a description of the main collaboration arrangements from which the Group generates revenue, for more details on the accounting policy of collaboration revenue we refer to note 1.2.2.15.

AMGEN

Biocartis and Amgen have several collaborations that aim at amongst others the evaluation of Idylla™ RAS testing as a tool for rapid decentralized testing and/or to accelerate access to RAS biomarker information using Biocartis’ Idylla™ platform and RAS tests. Product revenue recognized under this agreement is shown under product related revenue as it relates to the placement of Idylla™ systems and cartridges.

Biocartis and Amgen also collaborate on companion diagnostics (CDx) such as the development agreement with Amgen for the Idylla™ RAS biomarker tests aimed at the registration of these test with the US Food and Drug Administration (FDA) as a CDx test for Amgen’s drug Vectibix® (panitumumab). The elements included in the CDx collaboration consist of milestone payments and R&D services.

Based on the contractual dispositions, we assessed the following:

•  The first stage (i.e. the clinical trial development) of the arrangement consists of one initial performance obligation and the renewal options are considered to be separate performance obligations as Amgen can terminate the contract without significant penalty and these options are treated as material rights for Amgen.
•  The transaction price is currently composed of a fixed part, being an upfront fee and cost reimbursements for R&D activities delivered and a variable part, being milestone payments. Milestone payments are included in the transaction price of the arrangement only when achieved.

The transaction price has been allocated to the single performance obligation and revenues have been recognized over the estimated service period based on a pattern that reflects the transfer of the development activities a rato of the services performed (i.e. percentage of completion method). The milestone payments will be treated as a change in transaction price as soon as the revenue constraint assessment is resolved. The milestone payment will be allocated to the performance obligation (based on the percentage of completion of the development work).

In relation to the collaboration agreements with Amgen, the Group recognized R&D service revenue over time a rato to the services performed in 2020.

BRISTOL-MYERS SQUIBB

Biocartis and Bristol-Meyers Squibb (BMS) have a collaboration under which one or more projects can be initiated in the area of MSI testing. In Q1 2019, a first project agreement under the master collaboration agreement was signed with the objective to register the Idylla™ MSI test as a companion diagnostic with the US FDA. In Q1 2020, another project agreement under the master collaboration agreement was signed with the objective to register the Idylla™ MSI test in the People’s Republic of China. The elements included in these CDx agreements consists of milestone payments and R&D services.

Based on the contractual dispositions, we assessed the following:

•  The arrangement consists of the following performance obligations: development activities and services and the supply of Idylla™ assays and Idylla™ systems.
•  The transaction price is currently composed of a fixed part, being quarterly installments and a variable part being milestone payments. The variable component of the transaction price will only be included as revenue when the related uncertainty is resolved.
•  The transaction price has been allocated to the different performance obligations based on the stand-alone selling prices. The performance obligation related to development activities and services are recognized over the estimated service period based on a pattern that reflect the transfer of the development activities. The milestone payment will be treated as a change in transaction price as soon as the revenue constraint assessment is resolved. The milestone payments will be allocated to the performance obligation. Performance obligations relating to the supply of Idylla™ components are satisfied at a point in time, when the control over development components are transferred.

In relation to the collaboration agreement with BMS, the Group recognized R&D service revenues over time a rato to the services performed.

Geneprodx

Biocartis and GeneproDx have signed a collaboration in Q4 2020, aimed at the development and commercialization of GeneproDx’s novel genomic test ThyroidPrint on Biocartis’ rapid and easy to use molecular diagnostics platform Idylla™. Upon commercialization of GeneproDx’s novel genomic test ThyroidPrint, GeneproDx will make royalty payments to Biocartis based on net sales. Consequently, the elements included in this agreement consist of upfront license revenue, R&D services and product related revenue.

Product revenue recognized under this agreement is shown under product related revenue as it relates to the placement of Idylla™ systems and cartridges.

Based on the contractual dispositions, we assessed the following:

•  The arrangement consists of the following performance obligations: license to use IP, development services and the supply of Idylla™ assays and Idylla™ systems
•  The transaction price is currently composed of a fixed part, being the license fee and a variable part being the royalty revenue and product related revenue.
•  The transaction price has been allocated to the different performance obligations based on the stand-alone selling prices. The performance obligation relating to granting the right to use the IP is satisfied at a point in time, i.e. at the start of the license period. Performance obligations relating to development activities and services are satisfied over the estimated service period based on a pattern that reflects the transfer of the development activities. The royalty-based revenues are recognized when the royalty is earned, or when the underlying goods are sold. Performance obligations relating to the supply of Idylla™ components are satisfied at a point in time, when the control is transferred.

In 2020, the Group recognized a license fee and R&D service revenue. The recognized R&D service revenue mainly related to the billing of fixed amounts for each hour of service.

1.2.4.2. / REVENUES BY MAJOR COUNTRIES AND CUSTOMERS

Revenue in the above table are assigned according to the location of the Group or parent company of the customer.

In 2020 there are no costumers representing at least 10% of the total recognized revenues, however the 5 largest clients together represent 24% of the revenue.

1.2.5. / OTHER OPERATING INCOME

The collaboration with Genomic Health, a subsidiary of Exact Sciences Corporation, for the development of the Oncotype DX Breast Recurrence Score® test on Idylla™ was initially delayed and ultimately terminated because of the pandemic and a decision by Exact Sciences Corporation to shift priorities to other initiatives. Genomic Health, Inc. (a subsidiary of Exact Sciences Corporation) paid a settlement fee of EUR 10.3m, which is recorded as other income.

The other operating income also consist out of grants that were awarded to support R&D activities. In 2020, the Group was awarded two new grants from VLAOI, for the development of the Idylla™ SARS-CoV-2 Test and the Idylla™ Genefusion assay.

1.2.6. / COST OF SALES

The cost of goods sold in relation to the product sales is as follows:

For the explanation on the increase of the cost of sales we refer to Part 3, ‘Performance 2020’.

1.2.7. / RESEARCH & DEVELOPMENT EXPENSES

Subcontracting includes expenses in relation to services provided by research and development providers such as services related to the development of assay cartridges, instrument and console of the various diagnostic platforms, manufacturing equipment design and engineering services.

Laboratory and cartridge costs include consumables and prototype costs related to the development of diagnostic platform prototypes and assays.

The remaining expenses relate to quality, regulatory, patenting, building facilities, ICT, office, maintenance of equipment, logistics, travel, training and conferences.

For the explanation on the increase of the research and development expenses we refer to Part 3, ‘Performance 2020’.

1.2.8. / SALES & MARKETING EXPENSES

Sales and promotional expenses relate to costs of external market research, advertisement, and promotional activities related to the Group’s products.

For the explanation on the increase of the sales and marketing expense we refer to Part 3, ‘Performance 2020’.

1.2.9. / GENERAL & ADMINISTRATIVE EXPENSES

External advice expenses include fees, service and consulting expenses related to legal, human resources, investor relations, accounting, audit and tax services. Facilities, office & other include office, insurance and other miscellaneous expenses used in general and administrative activities.

For the explanation on the increase of the general and administrative expense we refer to Part 3, ‘Performance 2020’.

1.2.10. / EMPLOYEE BENEFIT EXPENSES

Employee benefit expenses include payroll expenses of fixed employees, interim staff and consultants in a permanent position. The employee benefit expenses amounted to EUR 52.2m in 2020 compared to EUR 47.7m in 2019, a year-over-year increase of 9%. This increase is predominantly a consequence of the increase in headcount, as can be seen in the table below.

The headcount can be presented as follows:

The average FTE equals sum of the day-to-day FTE divided by the number of days. The average FTE’s in the table above is calculated including fixed employees, interim staff and consultants. The average FTE’s of fixed employees only is 366 for 2020.

1.2.11. / FINANCIAL INCOME AND EXPENSE

Net financial expenses amounted to EUR 15.8m in 2020 compared to EUR 7.9m in 2019 and included financial expenses in relation to the Company’s convertible bond of EUR 9.0m (consisting of EUR 6.0m coupon payment and EUR 3.0m of debt appreciation) in 2020, compared to EUR 5.7m in 2019. The bond was issued in May 2019 and therefore only included one coupon in 2019. The other financial expenses include in 2020 a cash payment of EUR 4.3m in connection with the exercise of conversion rights.

The other financial result mainly consists of non-realized foreign exchange gains and losses of EUR 1.0m in 2020 compared to EUR 0.1m in 2019, due to a higher amount of dollars on our bank account.

1.2.12. / LOSS PER SHARE

The Group has stock option plans that may be settled in common shares of the Group and which are considered anti-dilutive given that the Group’s operations were loss making over the reporting period. As such, the basic and diluted earnings per share are equal.

The basis for the basic and diluted earnings per share is the net loss for the year attributable to the owners of the Group.

1.2.13. / INTANGIBLE ASSETS

The Group’s intangible assets comprise acquired patents, licenses and software. The carrying amounts for the periods presented can be analyzed as follows:

Patents and licenses primarily include a number of technology licenses acquired by the Group from Philips in 2010 relating to the Group’s flagship diagnostic platform Idylla™. The carrying amount per 31 December 2020 is EUR 4.5 (2019: EUR 5.0m). The remaining useful life is 8 years.

Amortization expense on intangible assets is shown in the income statement under research and development expenses.

1.2.14. / PROPERTY, PLANT AND EQUIPMENT

The Group’s property, plant and equipment comprise ICT equipment, laboratory equipment, manufacturing equipment, Idylla™ systems for internal use, furniture and fixtures, leasehold improvements, other property and equipment, equipment under construction, right-of-use assets and Idylla™ systems for rent. The carrying amounts can be analyzed as follows: