Combine the butter, sugar, egg, almond extract and vanilla extract in a mixing bowl. Beat together with an electric mixer; gradually add the flour, baking powder and salt while continually beating. Knead the dough until it is smooth, cover with cling wrap and chill for 20 to 30 minutes.
Preheat oven to 160 degrees C. Lightly grease baking trays.
Remove dough from fridge in small amounts. Scoop about 1 heaping teaspoon at a time onto a piece of greaseproof paper. Use the paper to roll the dough into a thin finger-shaped biscuit. Press one almond into one end of each biscuit to give the appearance of a long fingernail. Squeeze biscuit near the tip and again near the centre of each to give the impression of knuckles. You can also cut into the dough with a sharp knife at the same points to help give a more finger-like appearance. Arrange the shaped biscuits on the baking trays.
Bake in the preheated oven until the biscuits are slightly golden in colour, 20 to 25 minutes.
Remove the almond from the end of each biscuit; squeeze a small amount of red icing into the cavity; replace the almond to cause the icing to ooze out around the tip of the biscuit.