Annual Report
2022
FINEOS Corporation Holdings plc
ARBN 633 278 430
Contents
Chairman and CEO’s Report
Environmental, Social and Governance Report
Board of Directors
Directors’ Report
Remuneration and Nomination Committee Report
Directors’ Responsibilities Statement
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated Statement of Cash Flows
Company Statement of Cash Flows
Notes to the Consolidated Financial Statements
Additional Security Holder Information
Company Information
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FINEOS Corporation Holdings plc
Chairman and CEO’s Report
Dear Securityholder,
Welcome to the FINEOS Annual Report for
the 12 months ended 30 June 2022 (FY22).
We would like to begin by thanking all
our team, senior executives, co-Directors,
customers and investors for their continued
dedication and support that has enabled
FINEOS
to achieve several significant
strategic milestones over the past year. Our
people continue to be our greatest strength
and we have an enviable customer base
who invest in the FINEOS Platform, as well
as strongly advocate for FINEOS in the
marketplace.
This
loyalty and engagement of our
people and customers has underpinned
the ongoing growth of our business and
cemented its future through an incredibly
challenging operating environment in FY22.
Today FINEOS continues to progress on its
mission to become a global market leader
of core systems for group and individual
life, accident and health insurers.
Over the past six years we have specifically focused on
building out our Platform for Employee Benefits, with
core, digital and data capabilities to support group,
voluntary and absence on our single SaaS Platform.
Recently our partner on this platform investment journey,
New York Life – Group Benefits Service (NYL-GBS),
published a case study about how they have used the
FINEOS Platform to transform their business enabling
them to retire six legacy core systems so that the FINEOS
Platform now supports their entire $4.1 billion policy
portfolio for their nine million clients.
This achievement gives FINEOS a unique and powerful
position in the employee benefits market, with no other
vendor in a position to claim a complete transformation
reference on a full end-to-end modern, purpose built,
platform for employee benefits.The case study is available
to read on both the NYL-GBS website and the FINEOS
website at FINEOS.com.
Growing revenue and earnings, with strong
growth in subscription revenues
Total revenue for FY22 was up 17.5% to €127.2 million
(compared to FY21). Importantly, our higher margin
subscription revenue was up 34.2% to €53.8 million.
Within this, organic growth was 33.0%, with the balance
from the acquisitions we made last fiscal year – Limelight
Health Inc. (Limelight) and DigIn Technologies LLC (Spraoi).
Increasing subscription revenues is our primary focus.
In terms of organic growth achieved, this reflected cross-
selling and up-selling to existing customers, as well as
new customer wins. As our customers further transform
their businesses to generate efficiencies and streamline
their operations, we believe they will continue to invest in
extending their use of the FINEOS Platform to modernise
and enhance their customer service, grow their business
operations and replace outdated unsustainable legacy
systems.
EBITDA – earnings before interest, taxes, depreciation
and amortisation – was up by €1.5 million (28.8%) to
€6.7 million.
Our people headcount (including contractors) remained
relatively flat over FY22, going from 1,065 on 30 June 2021
to 1,075 on 30 June 2022. In line with our growth strategy,
we have continued to invest in product research and
development, sales and marketing, and cloud operations
support. Headcount is expected to remain stable at this
level in FY23, and we believe the greater use of talent in
certain geographies will help contain employment cost
increases in the current inflationary environment.
Annual Report 2022
Annual Report 2022
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Chairman and CEO’s Report (continued)
Continued investment to drive future growth
Research and development investment was up slightly
to €43.2 million, reflecting hiring of additional product
engineers and teams to accelerate product to market.
We continue to generate a strong ROI on our investment,
with subscription revenue growth the key measure, up
34.2% in FY22. We will continue to invest in the ongoing
development of our product suite.
Strong balance sheet supports growth plans
The Company had a cash balance of €44.3 million as at
30 June 2022. This cash balance was bolstered in FY22
through the successful €46.0 million (before costs)
placement and share purchase plan. FINEOS received
strong support from shareholders at the time, as
well as new institutional and sophisticated investors.
Favourable exchange rates during the year also had a
positive impact on the cash balance.
Supporting group and individual life, accident
and health insurers to evolve their businesses
Insurance carriers in our target market have been
shifting to more than just financial protection and case
management. They are looking for ways to provide
expanded service, which includes voluntary benefits,
absence management and partnering with specialist
service providers to improve the health and wellbeing
of their clients.
As the only pureplay end-to-end insurance software
platform provider focussed solely on the group and
individual life, accident and health market, FINEOS is
facilitating the technological and business software
needs of insurers as they deliver this evolving service
to their clients. We partner with them on end-to-end
delivery.
The success of this engagement is demonstrated in the
multiple testimonials and references our customers
provide publicly quoting FINEOS, which continues to
build our proven reputation in the market, including
most recently the joint study with New York Life Group
Benefit Solutions.
Our clear focus and alignment at FINEOS have translated
to the FINEOS Platform becoming the number one
platform for group employee benefits in the North
American market, measured by revenue, number
of clients and end-to-end quote-to-claim product
deployments. This success has contributed to 67.3%
growth in North American cloud subscriptions and
79.4% of total revenue being in North America in FY22,
continuing the trajectory since listing on ASX in August
2019 and reflecting the strong execution of our strategy.
Strategic acquisitions successfully integrated
The Spraoi team has been successfully integrated
into the FINEOS organisation. Spraoi’s ML (Machine
Learning) and AI (Artificial Intelligence) products bolster
our FINEOS Insight and Engage capabilities and have
had further sales success with new customer and cross-
sell wins in FY22 and a growing pipeline for FY23.
Investment in Limelight’s product roadmap continues
within FINEOS and is aligned with current customer
deployments and overall quote-to-claim strategic
product capabilities.
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FINEOS Corporation Holdings plc
FINEOS is committed to creating a world-class Corporate
Social Responsibility (CSR) program that reinforces and
brings to life the company’s vision to create “A world
where protection from illness, injury and loss is accessible
to everyone.” CSR has been incorporated into the FINEOS
DEI “Embrace” program, which includes several employee-
led CSR activities to fundraise for Breast Cancer Ireland,
sports clubs who serve local disadvantaged communities
and the Ukrainian war crisis.
FINEOS is well known for contributing to society and the
environment by supporting pro-bono, philanthropic and
charitable activities in the places where we work and live.
Positive outlook
Looking forward, we see exciting opportunities for
its growth
FINEOS. With the business continuing
trajectory and cash flows strengthening, we remain on
track to achieve a positive free cash flow position in FY24.
We look forward to reporting on our future developments
and progress towards this goal, and delivering growth
for our people, customers and shareholders.
Your sincerely,
Anne O’Driscoll
Chairman
Michael Kelly
Founder and CEO
Our people are our most important asset
One of our principal objectives is to drive organisational
health by creating a great place to work that provides
us with a competitive advantage, measured in part by
successfully achieving high retention levels.
Our health and wellbeing program at FINEOS focuses on
three core dimensions: mental, physical and emotional.
With most of our team continuing to work remotely over
the past two years, the FINEOS health and wellbeing
program really came to the fore.
Our Connecting Culture program has continued with
momentum, with the introduction of our new social
recognition tool ‘Celebrating Success’ and Ways of
Working (WOW), which includes a charter for how each
FINEOS team works in collaboration as one team across
multiple geographies in a hybrid work environment.
FINEOS also recognises the value of inspiring innovation
and collaboration in our people. Employee culture and
engagement strategies are in place that enhance the
Group’s ability to attract and retain talent. FINEOS seeks
feedback from our people to progressively improve on
all areas of our organisational health. We are currently
launching a new ‘Discovery Chat program’ designed
for leaders to continuously engage with employees to
understand the reasons why each employee continues
to work for the Company and gain diverse perspectives
into how we can innovate across all pillars of our strategy.
Achievements in the past year have included HR being
shortlisted for numerous awards and winning ‘Champion
Change Management Program’ at the Irish HR Champion
Awards 2022, the LOMA
‘Educational Achievement’
award in North America and the prestigious CIPD Ireland
‘Inclusion and Diversity’ award for our FINEOS DEI
‘Embrace’ (Diversity, Equity and Inclusion) program.
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Michael Kelly CEO, Letter for ESG
FINEOS’ Purpose – “We help our customers care for the people they serve through the delivery of superior insurance
technology.”
FINEOS has always been focused first on helping improve the lives of people by supporting insurers around the
world in their mission to provide coverage and care to the public. Our Environmental, Social and Governance (ESG)
strategy has been woven into the FINEOS leadership direction and culture for the last 30 years, as seen more recently
in our FINEOS Playbook, which outlines our values and their application toward our employees, our customers, and
the world at large. As we have grown organically and through acquisition, we have updated our FINEOS Playbook to
reflect our expanding and more diverse workforce.
The FINEOS ESG strategy addresses each of the three underlying areas in an integrated fashion, tailored to address
the requirements of an international software company.
Environment
Our environmental impact primarily concerns managing travel and facilities-related impact around energy, utilities
and waste management. The measures FINEOS undertook to address the recent pandemic shutdowns and some of
the resulting changes in general business interaction norms have enabled us to greatly reduce travel and re-evaluate
our approach to office space management in general.
Social
Social impact is an important area for us at FINEOS, since software is a people business, both in the creation of
software, and in the wide range of our global customers, partners and other stakeholders. Professional development,
employee engagement and wellbeing, and fair compensation, are major initiatives that enable us to maintain a fresh
and motivated team at a time where turnover and recruiting are critical industry – and international workforce -- issues.
Our employee-directed Diversity, Equality and Inclusion (DEI) program is also a major element in maintaining a
healthy working culture internally and seeks to ensure we are dealing with our customers, partners and other
stakeholders correctly. We are proud that FINEOS was recently named winner of the Inclusion and Diversity Award
at the CIPD Ireland HR Awards 2022 for our DEI program.
Governance
I have spent a lot of time with our Board and team on governance as we have grown dramatically, made acquisitions
and moved our customers to a SaaS model that requires a higher standard of data security and privacy management
than ever. Our Board members bring a variety of viewpoints and a high degree of independence that positively
challenge me and my leadership to be broad thinkers and bring our best game to the table.
This includes the Board as a whole taking an active interest in ESG matters, encouraging the preparation of this
report and approving the report.
The large amount of customer data necessary to provide life, accident and health insurance requires insurers
to maintain a very high standard for data security and privacy. We have taken the right steps to ensure FINEOS
maintains that standard both in our own people and processes and through having the right partners for cloud
services, consulting services and audit.
Our ESG initiative is in many ways inherent within FINEOS as it aligns with our FINEOS Playbook and overarching
approach to doing business. The past few years have been very difficult for business and for the world in general.
I am very proud of how my team has maintained these high standards and stepped up to the challenge of serving
our customers at a time when insurance protection has been a critical need for people around the globe.
Michael Kelly
Founder and CEO
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FINEOS Corporation Holdings plc
Environmental, Social and Governance Report About this Report
FINEOS is proud to present our inaugural Environmental, Social and Governance (ESG) Report.
This report showcases the work that we have done to date in these areas and provides a new level of transparency
into how we operate and view our role with respect to our stakeholders. As a Software as a Service (SaaS) provider,
our industry places a heavy emphasis on innovation and depends upon human and intellectual capital. FINEOS
has specifically tailored this report to reflect the fact that we operate in a services-led industry. We believe that this
report shows how we are establishing and maintaining a framework for evaluating, creating and maintaining our
ESG-related work. In this inaugural report we reflect our focus on our people, our business and our customers.
FINEOS has a strong people strategy with a focus on Organisational health, running regular Organisational health
surveys and implementing changes to improve the Organisational health; annual benchmarking of salaries across
regions; and performance management.
The data we provide is current through 30 June 2022.
Focus Areas
We have identified nine focus areas within our evolving ESG strategy. We are working to establish quantifiable
measurements across all these areas.
ENVIRONMENT
SOCIAL
GOVERNANCE
Travel, Water and Energy
Management
Materials and Waste
Management
Professional Development
Wellbeing and Engagement
Diversity, Equality, Inclusion (DEI)
Compensation
Board Independence,
Structure and Tenure
Data Security and Privacy
Audit Risk and Oversight
Environment
FINEOS focuses on the environmental areas that are key/relevant to our mission as a global market leader in core
systems for group and individual life, accident and health on a single technology platform. With FINEOS being a SaaS
focused company, it has a relatively low carbon footprint in the context of direct emissions by facility or process (Scope
1), indirect emissions associated with purchased electricity (Scope 2) and supply-chain carbon emissions (Scope 3).
FINEOS has made efforts to address the environmental concerns, regarding:
Travel, Water and Energy Management
FINEOS facilities management focuses on the efficient use of water and energy in all our office spaces. We are
continuously reviewing best practice, cost management and adoption of new technologies.
Commencing in 2007, FINEOS implemented a strategy to virtualise all backend Servers in the FINEOS Data Centre
and completed this in 2010. Since 2017, FINEOS uses Cloud Service Providers to complement this. All third-party
Data Centers used by FINEOS have a goal to reduce their carbon footprint by 2025 and/or be 100% powered by
renewable energy.
In 2020, FINEOS embraced a remote-first Hybrid Working Model for all regions where FINEOS has an office, offering
a choice of being office based or remote based, thus reducing the amount of commuting to/from an office. In 2022,
100% of employees are using the hybrid working model. We encourage our employees to question the value of
carbon intensive activities such as travel by car or plane and to choose an alternative such as video call instead.
Adopting this hybrid working model, which encourages the majority of employees to work from home more so than
in the office, means electricity consumption from office buildings is reduced significantly.
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Materials and Waste Management
FINEOS strives to reduce waste and recycle equipment (office and electrical) where it is safe and practical to do so.
IT hardware (such as ink cartridges, batteries and electronics at end of life) is disposed of in an environment friendly
way once any FINEOS information on the hardware has been destroyed securely so that recovery of the information
is impossible.
FINEOS has driven down the use of paper since 2016 investing in software solutions to reduce paper-based
equivalents, for example:
• 100% of employee contracts, customer contracts and third-party contracts are delivered and signed
electronically, since 2020. FINEOS is reviewing other contractual areas where electronic signatures
are acceptable.
• FINEOS personnel are encouraged to not print documents.
• A robust recycling program for office waste is in place as part of a global reduce, reuse, recycle program.
Social
FINEOS is immensely proud of its employees and as a SaaS company we view our employees as vital to our success.
As such our People strategy has evolved, as the business has, since our Company was founded in 1993. A fair
compensation and performance management program has always existed at FINEOS, while it has evolved over the
years in line with people leadership best practices.
We have also launched many people focused initiatives such as:
• Corporate Playbook and defined values in 2012
•
In 2014 FINEOS transitioned to safe, a scaled agile approach to software development which has people at the
center empowering and trusting them with decisions.
• Organisational Health in 2016
• Learning and Development Program in 2017
• Health and Wellbeing Program in 2018
• Employee share option scheme in 2019 following our successful IPO on the ASX
• Diversity, Equality, and Inclusivity Program in 2021
Our FINEOS Playbook (launched in 2012) is our internal compass providing clarity and underpins everything we do
in FINEOS, demonstrating what our vision, purpose, mission and values are.
It infuses our culture into every team, every workstream and every task. At FINEOS we empower all our people to
lead by example using our leadership principles. It is regularly reviewed, updated and communicated across FINEOS.
Aspirational Values
Striving to be more
Core Values
Who we are
Permission to Play
How we work
Company-wide
Collaboration
Results
Driven
Positive
Challenge
Team Players
High Achievers
Customer Centric
Respectful
Professional
Trustworthy
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FINEOS Corporation Holdings plc
Environmental, Social and Governance Report (continued) Compensation
FINEOS offers a comprehensive total rewards package to all employees encompassing compensation plus employee
benefits. Compensation comprises a combination of base salary and equity. Our benefits package includes health
care coverage, retirement benefits, and wellness and employee assistance programs.
The FINEOS philosophy and basis for our salary criteria in our annual salary review is based on a balance of factors,
namely performance and equity:
• Performance: First and foremost, our goal is to recognise and reward high performance in a fair and consistent
manner. We recognise not only what has been achieved but also how goals were achieved.
• Equity: We ensure individuals receive a fair salary which is aligned with external market and internal relativities.
This is done through internal and external benchmarking. We also carry out internal benchmarking cross
function and region to ensure internal equity. Our gender pay equity gap is sufficiently insignificant that we
are confident our people are paid equally in like-for-like roles. However, we recognise that at an individual
level, pay gaps can still occur and we are working to address any identified gaps through our ongoing salary
review processes.
Professional development
FINEOS is committed to investing in our employees through continuing education programs and professional
memberships. We value the contributions of our employees and want to see them succeed and grow professionally
and we support learning on the job, formal classroom training and on-demand training.
Wellbeing and Engagement
FINEOS recognises the importance of supporting the health and wellness of our employees and has a Health and
wellbeing program to support all employees by creating an environment where our people are encouraged to bring
their best selves to work and are supported in achieving greater wellbeing by fuelling themselves across three core
dimensions: Mind, Body and Life.
FINEOS measures the engagement of our people using the Denison Organisational Health Culture survey,
benchmarking against over 1,000 companies.
CSR (Corporate Social Responsibility)
FINEOS and our employees have a long history of contributing to society and the environment by supporting pro-
bono, philanthropic and charitable activities in the places where we work and live. The FINEOS commitment to
creating a world-class CSR program truly reinforces and brings to life the FINEOS Company vision to create “A world
where protection from illness, injury and loss is accessible to everyone.” Our CSR strategy also supports our purpose
“We help our customers care for the people they serve through the delivery of superior insurance technology.”
Driven by our shared purpose, we are committed to using our expertise and technology to help make the world
a better place. We do this by encouraging and supporting our people to think about how they can contribute to
delivering on this commitment. FINEOS undertakes this work in collaboration with our clients.
FINEOS has chosen to focus its pro-bono and charitable work and contributions in the following key strategic areas
reflecting our commitment to diversity, equality and inclusion within our organisation:
• Community Development: Supporting opportunities to contribute to and make a visible, positive and material
impact in the communities where we work and live.
• Education and Training: Enhancing through training, education, scholarships, internships, participation
in association sponsored events, academic engagements, etc., and delivering education to urban and
underserved communities
• Employee driven activities: Promoting employee led CSR activities. For our employees it helps to create a
greater sense of community within our organisation, employees are empowered to subscribe and fundraise
for local charities and want to promote the FINEOS brand at such events. It means employees can self-actualise
on personal goals, contributing to FINEOS and our greater diverse community to support meaningful lasting
change across the world.
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Diversity, Equality, Inclusion (DEI)
FINEOS set a strategic Company goal of Diversity and Inclusion and in July 2021 we successfully launched our Embrace
DEI program, meeting that business commitment.
One of the measures FINEOS uses is the D&I module in the Denison Organisational Health Survey. FINEOS also
looks for external validation of the DEI program and in April 2022 FINEOS won the top CIPD (Chartered Institute for
Personnel and Development) award for Inclusion and Diversity.
How are we embedding DEI across our strategic pillars?
• People:
– A Company-wide rollout saw employees globally attend the Embrace program launch.
– Our people leaders and individual contributors globally participated in our Leadership Development
program which included a DEI module. This is directly in response to their request for DEI training support
in our Denison Culture survey.
–
–
Formation of globally represented employee DEI committee to drive buy-in and engagement.
FINEOS embraces a multi-cultural and diverse workplace by not tolerating any level of discrimination in the
hiring process or any other day to day business activity.
• Product:
– Our increased focus on diverse ways of thinking/working in the Company has had an impact on the
development of our product, bringing more innovation.
• Customer:
– We have seen we can serve our customers’ needs better with the introduction of our DEI program in
their RFP (Requests for Proposals). For example, we are striving towards the incorporation of accessibility
standards, such as WCAG (web content accessibility guidelines) and language translation configurations.
This is important to FINEOS because we believe holding our customers to the same standards we hold
ourselves to is what creates widespread positive change across industries.
• Market:
– Employer Branding – shortlisted and won Inclusion and Diversity awards.
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FINEOS Corporation Holdings plc
Environmental, Social and Governance Report (continued) Gender Diversity Insights
A recent Deloitte Global report predicts that large global technology firms, on average, will reach nearly 33% overall
female representation in their workforces in 2022. FINEOS is trending at 28% in the global workforce.
Female representation in leadership positions in FINEOS globally is at 25%, coming in just at the industry average of
25.3% in the technology industry.
(Source: Deloitte Insights: https://www2.deloitte.com/us/en/insights/industry/technology/women-tech-leadership.html).
A Total Global Gender Spilt % graph
28.20%
Female
A Total Global Gender Leadership % graph
25%
Female
71.80%
Male
75%
Male
With the successful implementation of our new People system ‘Success Factors’ we are now focused on collating and
reporting on greater DEI measured targets. Note: This data can be limited due to country specific privacy restrictions
on information being requested, recorded and tracked. (Source: Deloitte Insights: https://www2.deloitte.com/us/en/
insights/industry/technology/women-tech-leadership.html).
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Governance
The FINEOS mission is to be the global market leader in core systems for group and individual life, accident and
health on a single technology platform. Aligning our ESG strategy with this mission is more important now than
ever and embedding the ESG strategy within our Company strategy is a core goal for us. This is important to our
employees, our customers and our investors.
As an ASX listed company since 2019, FINEOS has continued to improve and broaden our governance with a strong
focus on our revenue and cost base, by investing in our products and our employees, by building and maintaining
our customer trust in the security of their data. We have reaffirmed that we respect human rights by publishing our
Anti-Slavery and Human Trafficking Policy, https://www.fineos.com/document/anti-slavery-and-human-trafficking-
policy/, and we make ethical decisions that protect our customers and employees.
We are including our ESG strategy within our overall corporate governance program. Our Chief People Officer (CPO)
is the chair and sponsor of the ESG council, and reports to our Chief Executive Officer and the Board on our progress
with the ESG strategy.
Compliance
FINEOS is committed to ensuring that we meet our compliance requirements such as governance, tax, health and
safety, for our employees, for our responsibilities as a publicly listed company and for our duty to our shareholders.
FINEOS has adopted a code of business conduct https://www.fineos.com/document/code-of-conduct/ in addition
to our core values of Respect and Trust. The Company places importance on fostering a workplace culture where
our people are empowered to speak up on issues that concern them and know they will be taken seriously. Our
WhistleBlower Policy, https://www.fineos.com/document/whistleblowers-policy/, is in place to provide clarity on the
support and protection available and outline how concerns are managed.
Our Board has adopted a Corporate Governance Statement, https://www.fineos.com/document/corporate-
governance-statement/, to establish the necessary authority and best practices to review and evaluate FINEOS as
needed and to make decisions that are independent of our management. The standard sets out the practices for
the board including the foundation for management and oversight including the board composition and selection;
board responsibilities; board charter; board performance evaluation; board committees and compensation.
Board Independence, Structure and Tenure
FINEOS has several controls and charters in place which dictate the Board independence, structure and tenure.
Board Members
Independent Directors
Standing Board Committees
6
4
2
Separate CEO and Chair roles
Formal Board Diversity Policy
Renumeration and Nomination Committee (RNC);
Audit and Risk Management Committee (ARC)
Yes
Yes https://www.fineos.com/document/diversity-policy/
ESG formally considered at Board/Committee level
Yes
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FINEOS Corporation Holdings plc
Environmental, Social and Governance Report (continued) Data Security and Privacy
FINEOS is committed to information security, protecting personal data and respecting individual privacy. The
Information Security Program includes administrative, technical and physical safeguards to:
• Ensure the security and confidentiality of information with controls such as encryption at rest and in transit;
and principle of least privilege access control;
• Protect against any anticipated threats or hazards or integrity of such information with continuous monitoring;
vulnerability management program; third party penetration testing; and security incident management;
• Protect against unauthorised access to, or use of, such information that could result in substantial hardship
or inconvenience to FINEOS, business partners, personnel or clients with controls such as user authentication
managed by customers; multi-factor authentication; and attribute-based access control;
•
•
Information Security Policies;
Independent validation of the FINEOS Information Security program;
–
–
In 2018 FINEOS successfully passed the AWS well architected review
In 2019 FINEOS joined the AWS Financial Services competency network
– Ongoing since 2020 when the first SOC 2 Type 2 Attestation report was published
• FINEOS Security Council meets 12 times a year and is comprised of C-suite executives and business information
security leaders;
• FINEOS Security Risk log is reviewed at least annually.
Audit Risk and Oversight
FINEOS is governed by its Board of directors (“Board”) which oversees the overall business affairs of the Company.
The Board sets high standards through its governance and by establishing and enforcing policies designed to
promote and ensure the integrity and ethical values throughout the organisation. The Board has established two
committees which operate according to their charter adopted by the Board.
• Audit and Risk Committee (ARC): Assists the Board in fulfilling corporate governance and oversight
responsibilities in relation to the Company’s financial reports and financial reporting process and internal
control structure, risk management systems and the statutory audit process. The ARC Chair is a non-executive
Board member and the Committee meets at least three times a year.
• Remuneration and Nomination Committee (RNC): Assists the Board by reviewing and making recommendations
in areas such as succession planning; remuneration and performance of the Board, Directors and senior
leaders; and the Company’s performance in respect of the Diversity Policy and learning and development. The
RNC Chair is a non-executive Board member and the Committee meets at least once a year.
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Anne O’Driscoll
Chairman
Non-executive Director
Chair, Remuneration and
Nomination Committee
Michael Kelly
Executive Director
Chief Executive Officer
Gilles Biscay
Non-executive Director
Based in Australia, Anne joined the Board in 2019. Anne has over 35 years of business
experience across a broad spectrum of the insurance industry. Anne is currently on
the boards of ASX-listed companies, Steadfast Group Limited and Infomedia Limited,
as well as non-listed companies, MDA National Pty Limited and Commonwealth
Insurance Limited. Anne chairs the audit committee for each of these boards.
Anne has held various other senior management roles within organisations such
as Insurance Australia Group Limited and NRMA Group, as well as being the CFO of
Genworth Australia between 2009 and 2012. She is also a former director of the NSW
Self-Insurance Corporation and Australasian Investor Relations Association Limited.
Anne qualified as a chartered accountant in Ireland with Haughey Boland (now Deloitte)
before joining Coopers & Lybrand (now PwC) in London. Anne moved to Sydney in
1988 and is a graduate of the Australian Institute of Company Directors and a Fellow
of the Australian and New Zealand Institute of Insurance and Finance, Chartered
Accountants Ireland and Chartered Accountants Australia and New Zealand.
Based in Ireland, Michael is the Chief Executive Officer and founder of FINEOS. Michael
has more than three decades of executive leadership experience in the global life,
accident and health industry.
Michael began his career with FBD Insurance and then moved to Paxus Corporation,
an Australian insurance core systems software vendor entering the European market.
Michael assisted in establishing Paxus’ LIFE400 product as the market leading policy
administration system in continental Europe, which was later acquired by CSC.
Michael is a previous winner of the EY Ireland Technology Entrepreneur of the Year,
and in 2015 was named as one of the top 10 most influential executives in the Irish
international FinTech sector.
Michael attended Dublin City University where he graduated with a BSc in
Computer Science.
Based in France, Gilles joined the Board in 2019, having previously served on the Board
of FINEOS Corporation Limited, the main operating entity of the FINEOS Group from
2014. Gilles spent most of his career at Accenture, where he worked in multiple areas
ranging from large system integration, post-merger implementations, case tools and
enterprise resource planning software development.
In 2005, Gilles was named as the managing director and global lead for Accenture
portfolio in insurance systems. Under his leadership, Accenture’s vertical software
activities grew significantly both organically and with new clients in countries such as
Japan and Turkey, and externally with acquisitions such as NaviSys and Duck Creek,
both insurance software providers.
Gilles is also a founding partner and president of FutureWork SAS, a strategy consulting
firm aimed at helping corporations manage digital transformations.
12
FINEOS Corporation Holdings plc
Board of Directors Based in Australia, Martin joined the Board in 2019. Martin is the Chief Executive
Officer (CEO) of the Association of Superannuation Funds of Australia (ASFA), the peak
policy, research and advocacy body for Australia’s superannuation industry. Prior to
this Martin was a senior partner in the management consulting practice of KPMG,
where he led the firm’s Global Business Services and Business Process Outsourcing
activities.
From 2007 to 2011, Martin was CEO at the Financial Services Institute of Australasia
(FINSIA) where he led the organisation’s transformation post the sale of its education
business. Prior to FINSIA, he led strategy and development for the Chartered Institute
of Management Accountants (CIMA) in Asia Pacific.
Martin holds a Ph.D. from University College Cork, is a former Senior Fulbright Scholar
and has extensive research and policy experience from his time as an academic in
Ireland, France and the United States. Martin is a member of Chartered Accountants
Australia and New Zealand.
Based in the United States, David joined the Board on 14 October 2019. David has over
35 years of experience in the insurance, technology and professional services industries.
David most recently served as Global Insurance Leader for Ernst & Young LLP
(EY), responsible for all service lines and representing a global team of over 14,000
professionals. David currently sits on the Board of Directors at Northwestern Mutual,
Westfield Insurance and Distinguished Programs, all based in the United States.
Previously David served as the CEO of UNIRISX, a SaaS-based policy administration
insurtech solution based in the UK.
David began his career with Accenture (NYSE: ACN), where he served in a variety of
leadership and client service roles including CEO of Accenture’s Financial Services
Solutions Group. He led the creation of a 200-person global insurance software
company within Accenture, driving more than US$1 billion in consulting and outsourcing
pull-through revenues, in addition to leading the acquisition and integration of a major
life and annuity software provider.
Based in Ireland, Tom joined FINEOS in 2003 as Chief Financial Officer and was
appointed to the Board in 2019. Tom has over 30 years of industry experience having
worked in financial management with a number of global corporations across the IT,
financial services, distribution and manufacturing industries.
Prior to joining FINEOS, Tom spent seven years at Oracle where he held various
positions including as a Board Member and Finance Director of Oracle Ireland and
Finance Director for Oracle EMEA Ltd. Tom also gained expertise working across a
number of financial and accounting roles at MFS Communications Ltd, Unisys World
Trade Incorporated and Black & Decker Inc.
Tom is a Fellow of the Chartered Institute of Management Accountants and a Chartered
Global Management Accountant in Ireland.
Dr Martin Fahy
Non-executive Director
Chair, Audit and Risk
Management Committee
David Hollander
Non-executive Director
Tom Wall
Executive Director
Chief Financial Officer
Annual Report 2022
13
The Directors present herewith their report and audited consolidated financial statements for the year ended 30 June
2022. These financial statements reflect the performance of FINEOS Corporation Holdings plc and its subsidiaries
(‘the Group’) for the fiscal year ended 30 June 2022.
1.
Directors and Secretary
The Directors of the Company during, or since the end of, the year are as follows. Directors were in office for the
whole of the year unless otherwise stated.
Chairman
Anne O'Driscoll
Chief Executive Officer
Michael Kelly
Other Directors
Gilles Biscay
Martin Fahy
David Hollander
Tom Wall
Date of appointment
25 July 2019
12 December 2018
25 June 2019
25 July 2019
15 October 2019
25 June 2019
Tom Wall and Vanessa Chidrawi served as Joint Company Secretary for the period of 1 July 2021 to 16 June 2022. On
16 June 2022, Vanessa Chidrawi resigned and Natalie Climo was appointed as Company Secretary.
Particulars of the Directors’ qualifications and experience as well as their directorships of other listed companies are
set out under Board of Directors on pages 12 to 13.
2.
Directors’ Meetings
The number of meetings of the Company’s Board of Directors (the ‘Board’) and of each Board Committee held during
the year ended 30 June 2022, and the number of meetings attended by each Director, were as follows:
Board
Audit and Risk
Management Committee
Remuneration and
Nomination Committee
A
6
6
6
6
6
6
B
6
6
5
6
5
6
A
4
-
4
4
3
–
B
4
-
3
4
2
–
A
3
-
3
3
3
–
B
3
-
2
3
2
–
Anne O’Driscoll
Michael Kelly
Gilles Biscay
Martin Fahy
David Hollander
Tom Wall
A: Meetings eligible to attend
B: Meetings attended as a member
14
FINEOS Corporation Holdings plc
Directors’ Reportfor the year ended 30 June 2022 3.
Audit Committee
The Audit and Risk Management Committee assists the Board in carrying out its accounting, auditing and financial
reporting responsibilities, including those outlined in Section 167 of the Companies Act 2014.
4.
Principal Activities and Review of the Development
and Performance of the Business during the
Financial Year
The principal activity of the Group is the development and sale of software. FINEOS is a global software group
providing modern customer-centric core software to Life, Accident and Health insurers and Employee Benefits
providers.
The Group helps its customers move on from outdated legacy administration systems to the cloud-native FINEOS
AdminSuite for new business, billing, claims, absence and policy administration, enabling improved operational
efficiency, increased effectiveness and excellent customer care.
FINEOS AdminSuite is a purpose built, customer-centric, end-to-end core product suite designed to manage the
modern complex structures and relationships of group and individual insurance processing to optimise plan,
coverage and data management, operational processing and business intelligence. The Group is continuously
developing, both organically and through acquisitions, the entire range of FINEOS Platform offerings, which today
includes machine learning and data insight through artificial intelligence.
Business summary and key performance indicators
The key performance indicators of the financial results are as follows:
• An increase in revenue from €108.3 million for the year ended 30 June 2021 to €127.2 million for the year
ended 30 June 2022 which is a 17.5% improvement.
• Subscriptions revenue is up 34.2% compared to the year ended 30 June 2021.
• Services revenue is up 7.4% compared to the year ended 30 June 2021.
• Employee retention rates are 88% for the year ended 30 June 2022.
• The loss after tax for the year ended 30 June 2022 is €26.0 million compared to a loss after tax of €12.5 million
for the year ended 30 June 2021 and is due to higher cost of sales and product development and delivery costs
as a percentage of sales, higher amortisation charges on capitalised research and development costs and
acquired intangibles, and an impairment charge recognised against goodwill in the amount of €12.6 million.
The higher costs are offset by a tax credit of €4.2 million (2021: €1.0 million).
• Basic loss per share of 8.23 cents (euro) for the year ended 30 June 2022 compared to a basic loss per share of
4.20 cents (euro) for the year ended 30 June 2021.
The 2021 basic loss per share has been restated from a basic loss per share of 4.15 in cents (euro) to 4.20 in cents
(euro), arising from a calculation error. The prior year calculation used total comprehensive loss attributable to
ordinary shareholders rather than loss for the financial year after taxation attributable to ordinary shareholders.
Subscription revenue growth of 34.2% reflects the increased scale and breadth of FINEOS products for the customer
base. Services revenue growth of 7.4% was achieved even though several clients and potential clients faced reduced
funding for systems investment in the context of the social and economic challenges generated by COVID-19. Overall
revenue growth was 17.5%.
During FY22, the FINEOS customer base continued to actively engage in new implementation activity, major product
upgrades, and platform migrations to the cloud. We completed three new implementations and 12 major upgrades,
and we enter FY23 with 19 active cloud customer projects. These include new implementations related to our
acquisitions of Limelight Health and Spraoi, now marketed as part of the FINEOS Platform. Additionally, we are
continuing to engage with our on-premise customers to plan their upgrades to the cloud across multiple countries
including USA, Canada, Australia and New Zealand.
Annual Report 2022
15
4.
Principal Activities and Review of the Development
and Performance of the Business during the Financial
Year (continued)
Anticipating clients’ need to undertake digital transformation drove the Group’s significant R&D investment over the
past seven years. The value of that investment is now being realised with increasing billings on the cloud platforms.
Part of FINEOS’ growth strategy is also to increase its use of strategic implementation partners going forward.
The consolidated financial statements are presented in Euro which is the functional currency of the Group. Euro
based currency volatility continued during fiscal year 2022 in relation to the US Dollar, British Pound, Australian
Dollar, New Zealand Dollar, Polish Zloty and Canadian Dollar, resulting in a foreign exchange gain of €0.8 million
for the Group in the year (2021: foreign exchange loss of €0.3 million). Foreign exchange continues to be a risk for
FINEOS given the export profile of the Group. This is closely managed with part of the risk being covered by the
natural hedge of the non-Euro denominated staff costs and other overheads being paid in local currency.
The consolidated statement of comprehensive income for the year ended 30 June 2022 and the consolidated
statement of financial position as at that date are set out on pages 36 and 37. The consolidated loss on ordinary
activities for the year, before tax, amounted to €30.2 million compared to a loss before tax of €13.5 million in 2021.
After adding back a taxation credit of €4.2 million (2021: €1.0 million), a loss of €26.0 million has been debited to
reserves (2021: €12.5 million).
Non-financial measures are also important to the Group and the Group’s first Environmental, Social and Governance
Report is set out on pages 4 to 11.
5.
Changes in the State of Affairs
The cash reserves closed at €44.3 million as at 30 June 2022 compared to €14.0 million as at 30 June 2021. The Group
had no external debt as at 30 June 2022.
FINEOS undertook an equity raising on 2 September 2021 to provide funding towards FINEOS’ opportunity pipeline
and provide working capital and balance sheet support for planned R&D investments and both organic and
inorganic growth opportunities. FINEOS successfully completed a fully underwritten institutional placement, raising
approximately AU$70 million through the issue of 16,279,069 new fully paid CHESS Depositary Interests over FCL
shares (‘CDIs’). The placement was undertaken at an offer price of AU$4.30 per new CDI. Costs of the capital raise
amounted to €0.7 million.
FINEOS also undertook a non-underwritten Security Purchase Plan (‘SPP’) raising approximately AU$3.7 million
through the issue of 862,261 new fully paid CDIs, at an offer price of AU$4.30 per new CDI, which completed on
7 October 2021.
Equity increased by €33.0 million to €169.3 million from €136.3 million during the year with the significant
movements being:
• Net proceeds of €45.4 million from the new share capital
• Credit of €10.6 million to foreign exchange reserve
•
Increase in share option reserve of €2.8 million
• Loss for the year of €26.0 million.
16
FINEOS Corporation Holdings plc
Directors’ Report (continued)for the year ended 30 June 2022 5.
Changes in the State of Affairs (continued)
Apart from the increase in cash reserves of €30.3 million noted above, other key movements in assets contributing
to a growth in total assets of €38.9 million to €223.4 million were:
• €8.7 million of a positive exchange difference on the retranslation of intangible assets
• €25.8 million of internal development expenditure
• €20.8 million combined amortisation charge
• €12.6 million impairment charge
• An increase of €3.5 million in trade receivables driven by the increase in revenue and lower cash receipts from
customers in quarter 4 of FY22
• An increase in the deferred tax asset recognised of €4.2 million due to the tax restructuring of acquired entities
providing a clear path to tax loss utilisation, favourable regional changes in R&D tax credits and the provision
for offset of tax losses against future taxable profits in Ireland.
Total liabilities increased by €6.0 million to €54.1 million from €48.1 million during the year with the significant
movements being:
• An increase of €8.8 million in deferred revenue due primarily to the increase in subscription revenue in
the year.
• A decrease of €1.6 million in trade payables due to the earlier receipt of invoices from some of our larger
contractors in 2022 allowing for payment in advance of the balance sheet date.
6.
Likely Developments and Outlook
FINEOS completed FY22 with the exciting release of a market-first study in collaboration with New York Life Group
Benefit Solutions. The study reflected the successful implementation of the Group’s strategy, with the Company’s
purpose-built FINEOS platform successfully meeting the business challenges of one of the largest North American
group insurers and delivering a full employee benefits core insurance system. The single FINEOS platform replaced
six legacy back-office systems supporting $4 billion worth of business for 9 million customers.
During FY22, FINEOS successfully raised net cash of €45.2 million from the issue of new CDIs, underpinning the
Company’s strong year end capital position of over €44 million in cash and no debt. This capital position supports
FINEOS’ organic growth plans and ongoing investment in R&D to further enhance the Company’s fully integrated,
industry gold standard quote-to-claim product suite.
The Group’s growth strategy remains focussed on:
• winning new clients
• driving up-sell and cross-sell revenues from existing clients
•
increasing market share in the Group’s chosen segments – life accident and health insurers and employee
benefits providers.
These growth paths are supported by a robust pipeline of significant cross-sell and up-sell opportunities with existing
customers, in addition to new name opportunities.
Despite the uncertainty caused by the COVID-19 pandemic, FINEOS successfully moved its workforce to a ‘remote
first’ hybrid working model. Given the visible opportunities, the Company remains confident that it can continue its
growth trajectory, and is targeting:
• FY23 revenue of between €135 million and €140 million
• Positive free cashflow position in FY24.
7.
Dividends
During the year the Company made no dividend payments to Ordinary shareholders. The Directors do not propose
the payment of a final dividend for the year.
Annual Report 2022
17
8.
Political Donations
There were no political donations made during the year ended 30 June 2022.
9.
Principal Risks and Uncertainties Faced
In the opinion of the Directors, the main risks and uncertainties faced by the Group, along with the nature of their
potential impact, are as follows:
• global economic and political uncertainty and volatility continues in all marketplaces where FINEOS trades,
including potential recessions in key markets. This could potentially lead to further delays and uncertainty on
the allocated budgets of existing and prospective customers;
• FINEOS continues to face competition in its respective markets, and if FINEOS fails to compete successfully,
market share will decline;
• FINEOS subsidiaries and branches operate in currencies other than the Euro, and continued volatility in foreign
exchange rates relative to the Euro could adversely affect the Group’s reported earnings and cash flow;
• competitors’ products may replace existing FINEOS products and as a result, FINEOS may lose market share in
the markets for these products;
• major changes in technology could have an impact on FINEOS and its trading model unless it continues to
nvest in research and development and remains competitive and current;
• FINEOS sells product and services in the USA, Canada, Australia, New Zealand, the UK and Europe, which
increases the complexity of local customer requirements, including addressing local compliance requirements
in the respective countries;
•
the loss of the chief executive officer or other key employees, or the limited availability of qualified personnel,
may disrupt operations or increase the cost structure; and
•
the loss of a significant customer could have a significant negative effect on revenues and profits.
The impact of the above is difficult or impossible to predict accurately and many of the risks and uncertainties faced
are beyond the Group’s control.
In the normal course of business, the Group is also exposed to price risk, credit risk and liquidity risk, which are
discussed in more detail in Note 24.
10.
Events Subsequent to the Year End
There are no events subsequent to the year end that would require disclosure in or adjustment to the consolidated
financial statements.
11. Corporate Governance Statement
The corporate governance statement of FINEOS Corporation Holdings Plc, as approved by the Board, can be found
on the Company’s website at https://www.fineos.com/investors/corporate-governance/.
18
FINEOS Corporation Holdings plc
Directors’ Report (continued)for the year ended 30 June 2022 12.
Transactions with Directors
There were no contracts of any significance in relation to the business of the Group in which the Directors had any
interest, as defined by the Companies Act 2014, at any time during the year ended 30 June 2022, other than as
disclosed in Note 25.
13. Controlling Party
Michael Kelly is the ultimate controlling party of the FINEOS Group.
14. Directors’ and Secretary’s Interests
The Directors’ and Company Secretary’s interests in shares and share options as at 30 June 2022 are set out on
page 26 in the Remuneration and Nomination Committee report.
15. Group Companies
Particulars of the companies within the Group required to be disclosed under Section 314(1) of the Companies
Act 2014 in respect of Group companies are detailed in Note 27.
16. Directors’ Compliance Statement
The Directors have drawn up a compliance policy statement setting out the Company’s policies (that, in the Directors’
opinion, are appropriate to the Company), respecting compliance by the Company with its relevant obligations. The
Directors understand that they are responsible for securing the Company’s compliance with its relevant obligations.
The Company has appropriate arrangements or structures that are, in the Directors’ opinion, designed to secure
material compliance with the Company’s relevant obligations. The Company has conducted a review, during the
financial year of the arrangements or structures that have been put in place.
17. Accounting Records
The Directors are responsible for ensuring that proper books and accounting records, as outlined in Sections 281 to
285 of the Companies Act 2014, are kept by the Company. To achieve this, the Directors have appointed a professionally
qualified Chief Financial Officer who reports to the Board and ensures that the requirements of Sections 281 to 285
of the Companies Act 2014 are complied with. These books and accounting records are maintained at the Company’s
registered office at FINEOS House, East Point Business Park, Dublin 3, Ireland.
18.
Statement on Relevant Audit Information
In the case of all persons who are Directors at the time this report is approved in accordance with Section 332 of the
Companies Act 2014:
(a) so far as the Directors are aware, there is no relevant audit information of which the Company’s statutory
auditors are unaware; and
(b) the Directors have taken all steps that they ought to have taken as Directors to make themselves aware
of any relevant audit information, and to establish that the Company’s statutory auditors are aware of
that information.
Annual Report 2022
19
19. Auditors
Mazars, Chartered Accountants and Statutory Audit Firm, express their willingness to continue in office in accordance
with Section 383(2) of the Companies Act 2014.
20.
Takeover Provisions
FINEOS is not subject to Chapters 6, 6A, 6B and 6C of the Companies Act 2014 dealing with the acquisition of its
shares (including substantial holdings and takeovers).
FINEOS has incorporated into its Articles shareholder protection provisions that are similar to the provisions of the
Australian Corporations Act 2001. These provisions seek to protect the interests of shareholders where a person
seeks to acquire a substantial interest in, or control of, FINEOS. The Articles prohibit a person from acquiring a
relevant interest in issued voting shares in FINEOS if any person’s voting power will increase from 20% or below
to more than 20%, or from a starting point that is above 20% and below 90%. Exceptions to the prohibition apply
(e.g. acquisitions with shareholder approval, 3% creep over six months and rights issues that satisfy prescribed
conditions). Compulsory acquisitions are permitted by persons who hold 90% or more of securities or voting rights
in a company.
21.
Restrictions on the Transfer of Securities under the
Companies Act
The Company is an Irish company formed under the laws of Ireland and therefore subject to the provisions of the
(Uncertificated Securities) Regulations, 1996 (S.I No 68 of 1996) (‘1996 Regulations’) and its Articles of Association
accordingly contain prohibitions on transfers. The provision of uncertificated securities is regulated by the 1996
Regulations, which is administered by the Corporate Enforcement Authority. The Company must comply with the
provisions of the 1996 Regulations. The Company may therefore refuse to register transfers, pursuant to a direction
from the Irish High Court, where the transfer is prohibited under another enactment, where the Company has noted
the transfer is to a deceased person, or where the instruction requires a transfer of units to an entity which is not a
legal person, a minor, or to be held jointly in the names of more persons than permitted under the terms of issue of
the security. Refer to Articles 36.2 and 36.3 of the Company’s Articles of Association.
On behalf of the Board
Michael Kelly
Director
Tom Wall
Director
23 August 2022
20
FINEOS Corporation Holdings plc
Directors’ Report (continued)for the year ended 30 June 2022
As chair of the Remuneration and Nomination Committee (the Committee), I am pleased to present the report for
the Committee for the year ended 30 June 2022.
The objective of this report is to provide shareholders with information to enable them to understand the remuneration
structures in place and how they relate to the Group’s financial performance. The report also provides a summary of
the Committee’s roles and responsibilities and how these were discharged in the year ended 30 June 2022.
Membership and Meetings of the Committee
The members of the Committee during the year ended 30 June 2022 are set out in the table below. The members of
the Committee were in place for the whole of the year unless otherwise stated.
All members of the Committee are independent Non-executive Directors.
Committee Member
Ms Anne O’Driscoll
Mr Gilles Biscay
Dr Martin Fahy
Mr David Hollander
Position
Appointed
Chair
Member
Member
Member
25 July 2019
25 June 2019
25 July 2019
15 October 2019
Attendance details for the three meetings held during the year are outlined on page 14 in the Annual Report. The
Committee members’ biographies are set out on pages 12 to 13.
Role of the Remuneration and Nomination Committee
The purpose of the Committee is to assist the Board by reviewing and making recommendations to the Board in
relation to:
•
the Group’s remuneration policy, including as it applies to Directors, and the process by which any pool of
Directors’ fees approved by shareholders is allocated to Directors;
•
remuneration packages of Executive Directors, Non-executive Directors and senior executives;
• equity-based incentive plans and other employee benefit programs;
•
•
the Group’s pension/superannuation arrangements;
those aspects of the Group’s remuneration policies and packages, including equity-based incentives, which
should be subject to shareholder approval;
• succession plans of the Chief Executive Officer, Executive Directors and senior executives;
• Board succession issues and planning;
•
•
•
•
•
the appointment and re-election of Board and Committee members;
the induction of new Directors and continuing professional development programs for Directors;
the process for recruiting a new Director, including evaluating the balance of skills, knowledge, experience,
independence and diversity on the Board;
the process for the evaluation of the performance of the Board, its Board Committees and individual Directors;
and
the size and composition of the Board and strategies to address Board diversity and the Group’s performance
in respect of the Group’s Diversity Policy, including whether there is any gender or other inappropriate bias in
remuneration for Directors, senior executives or other employees.
The Committee charter can be found at https://www.fineos.com/investors/corporate-governance/.
Annual Report 2022
21
Remuneration and Nomination Committee Reportfor the year ended 30 June 2022 Remuneration Policy
The Group is committed to attracting and retaining the best people to work in the organisation, including Directors
and senior management. Appropriate remuneration designed to reward, retain and motivate people is a key element
in achieving that objective. Part of the Committee’s role is to assist the Board in implementing its Remuneration
Policy. A copy of the policy can be found at https://www.fineos.com/investors/corporate-governance/.
Executive Remuneration Framework
There are two Executive Directors: the Chief Executive, Mr Michael Kelly, and the Chief Financial Officer, Mr Tom Wall.
It should be noted that Mr Wall has announced his intention to retire on 30 September 2022. The Board has
determined that the incoming Chief Financial Officer will not be a Director of the Company.
The elements of the remuneration package which may apply to Executive Directors are base salary, pension
contributions, other benefits and both short-term and long-term incentives.
The tables below summarise the framework which was applied during the year ended 30 June 2022. A similar structure
will apply during the year ended 30 June 2023. The relevant benefits are included in the Directors’ remuneration
table shown below.
Benefit
Nature of Benefit
Annual base salary
Salary levels are reviewed annually by reference to market comparisons and reflect
the individual’s level of expertise and contribution to the organisation, in conjunction
with other benefits being provided. Salary increases are normally in line with the wider
workforce.
Pension contributions
Participation in a defined contribution scheme available to employees in the same
geography. There is a Company contribution of 10% of base salary for the CFO.
The CEO does not utilise this benefit.
Other benefits
Benefits currently provided are healthcare cover, life insurance and permanent health
insurance cover. Premiums payable are included in the remuneration disclosed in this
report.
22
FINEOS Corporation Holdings plc
Remuneration and Nomination Committee Report (continued)for the year ended 30 June 2022 Incentive
Basis of Incentive
Maximum Opportunity
Achieved for FY2022
Short-term Incentives (bonus) The CEO
is entitled to
receive an annual cash
bonus
in recognition of
his contribution towards
growth and
lieu of
pension contributions.
in
CEO: drives the growth of
the Company and leads
key customer relationships
and sales acquisitions.
CEO: Bonus payment of
€100k.
The CFO
is entitled to
receive an annual bonus
based on achievement
of agreed Company and
individual
performance
targets.
CFO: 15% of base salary if
all objectives achieved and
up to 25% where there is
over-achievement beyond
such agreed targets.
CFO: Bonus of 20% of
salary.
Long-term incentives
(equity-based remuneration)
Equity
long-term
A
incentive
plan was established on
admission to the ASX (‘the
Incentive
2019
Plan’) (The Plan). Awards
from this scheme may
be made in the form of
options, restricted shares,
restricted stock units and
performance shares. See
Note 19 for more details.
No more than 5% of the
issued share capital of the
Company may be issued
or reserved under The
Plan at any time.
There were no awards to
the CEO or CFO under The
Plan during FY22.
The terms and conditions
of any awards made
to Executive Directors
under the 2019 Equity
including
Incentive Plan,
those relating to targets,
vesting and/or exercise
(as the case may be),
are determined by the
Committee and
the
extent required, subject to
CDI holder approval.
to
The Committee reviews the performance of the Executive Directors for the purposes of determining short-term
incentives and makes recommendations to the Board as to the pay-out level.
Annual Report 2022
23
Non-executive Directors
The Board aims to recruit high-calibre Non-executive Directors, with broad commercial, international or other
relevant experience.
Non-executive Director remuneration is reviewed by the Board based on recommendations from the Committee.
The aggregate amount paid to all Non-executive Directors in any financial year for their services must not exceed the
amount fixed by the securityholders in general meeting. This amount is currently fixed at AU$800,000 (€514,7341)
per annum.
As Chair of the Board, I am paid a fee of AU$160,000 (€102,947) (2021: AU$160,000) per annum. David Hollander is
paid a fee of US$170,000 (€150,723) (2021: US$170,000) per annum for acting as Non-executive Director. The other
Non-executive Directors, Gilles Biscay and Martin Fahy, are paid fees of €55,000 (2021: €52,167) and AU$90,000
(€57,908) (2021: AU$90,000) per annum, respectively. These Non-executive Director fees include fees payable to
each Non-executive Director for his/her role on the relevant Board committees.
The amounts set out above are exclusive of pension/superannuation contributions where required by law to be made
by FINEOS but such contributions are included in the remuneration set out in the Table of Directors’ Remuneration
for the year ended 30 June 2022 below.
Under their letters of appointment, the Non-executive Directors are not entitled to participate in any share, bonus,
retirement benefit or other scheme operated by the Company or any Group company.
In addition, all reasonable and documented expenses incurred in the performance of the Non-executive Directors’
duties are reimbursed.
Service Contracts/Letters of Appointment
Details of service contracts for the Executive Directors are outlined below.
Name
Michael Kelly
Title
Date of Contract
Notice Period by
Company or Director
Chief Executive Officer
and Founder
12 December 2018
12 months
Tom Wall
Chief Financial Officer
25 June 2019
6 months
Each of the Non-executive Directors has received an appointment letter from FINEOS, confirming their respective
roles and responsibilities as Directors, and FINEOS’ expectations of them as Non-executive Directors.
The appointment letter includes membership of any Board Committees, the fees to be paid and the time commitment
expected. The letter also covers matters such as confidentiality, data protection and securities dealing policy. In
addition, Non-executive Directors are expected to acquire a beneficial interest in CDIs equivalent to their annual fees
within 36 months of the Company’s IPO (which occurred in August 2019).
Dates of appointment for the Non-executive Directors are set out below:
Name
Anne O’Driscoll
Gilles Biscay
Martin Fahy
David Hollander
Date of Appointment
25 July 2019
25 June 2019
25 July 2019
15 October 2019
1 Throughout this Committee report, amounts denominated in Australian or US dollars are translated into Euro at a rate of
AU$/EUR 1.5542 and US$/EUR 1.1279, being the average rates for the year to 30 June 2022.
24
FINEOS Corporation Holdings plc
Remuneration and Nomination Committee Report (continued)for the year ended 30 June 2022 Annual Report on Remuneration 2022
The following table sets out the total remuneration for Directors for the year ended 30 June 2022.
Salary/fees
€
Short-term
incentives
€
Post-
employment
benefits
€
Other
benefits
€
Shares
allotted
€
Share
awards
gain on
exercise
€
LTIP
€
Total
2022
€
Director
Executive Directors
Michael Kelly
390,592
100,000
–
3,411
Tom Wall
287,418
57,484
28,742
12,235
Non-executive Directors
Anne O’Driscoll
102,778
Gilles Biscay
Martin Fahy
55,000
57,812
David Hollander
147,033
–
–
–
–
10,294
–
5,791
–
–
–
–
–
Total
1,040,633
157,484
44,827
15,646
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
494,003
385,879
113,072
55,000
63,603
147,033
– 1,258,590
The equivalent table of total remuneration for Directors for the year ending 30 June 2021 is as follows:
Salary/fees
€
Short-term
incentives
€
Post-
employment
benefits
€
Other
benefits
€
Shares
allotted
€
Director
Executive Directors
Michael Kelly
Tom Wall
380,592
277,418
57,089
55,484
–
3,265
27,742
12,904
Non-executive Directors
Anne O’Driscoll
100,000
Gilles Biscay
Martin Fahy
55,000
56,250
David Hollander
148,106
Peter Le Beau
22,917
–
–
–
–
–
9,507
–
5,348
–
–
–
–
–
–
–
Total
1,040,283
112,573
42,597
16,169
Share
awards
gain on
exercise(a)
€
LTIP
€
Total
2021
€
–
–
440,946
3,319,860
25,752 3,719,160
–
–
–
–
–
–
–
–
–
-
109,507
55,000
61,598
148,106
22,917
3,319,860
25,752 4,557,234
–
–
–
–
–
–
–
–
(a) On 8 October 2020, Tom Wall exercised 1,300,000 options at €0.135 each and resultant CDIs were sold at
AU$4.50 per security resulting in a net gain of €3,319,860.
Annual Report 2022
25
Directors’ and Company Secretary’s Interests in Company Shares
Total CDIs
held at
1 July 2021
Purchases/
Increase
in indirect
holdings
Acquired on
exercise of
options
Sales/
Reductions
Total
shares/
CDIs held
at 30 June
2022(a)
CDIs held
nominally
at 30 June
2022(b)
Anne O’Driscoll
70,399
37,000
Michael Kelly
Gilles Biscay
Natalie Climo
Martin Fahy
David Hollander
Tom Wall
166,418,040
5,064,338
35,883
10,000
–
8,000
41,224
–
–
–
–
–
–
–
–
–
–
–
–
–
107,399
47,399
(2,924,429)
168,557,949
221,589
–
–
–
–
–
45,883
45,883
–
8,000
41,224
–
–
8,000
–
–
(a) Total CDIs at 30 June 2022 represent CDIs held directly by the Director and indirectly by the relevant Director’s
related parties inclusive of domestic partners, dependents and entities jointly controlled or significantly
influenced by the Director. They also represent the relevant interest in the Company’s listed securities as
notified by the Directors to the ASX in accordance with the ASX Listing Rules.
(b) Shares/CDIs held nominally are those CDIs registered in the name of the individual Director.
Directors’ Interests in Options
The only options on issue that are held by Directors are as follows:
Options held at
Options
1 July 2021 Options issued
exercised Options lapsed
Options held at
30 June 2022
Tom Wall
1,150,000
–
–
–
1,150,000
Of the remaining options held by Tom Wall, 1,000,000 options over CDIs are exercisable at €0.135 and expire on
3 February 2026 and 150,000 options over CDIs are exercisable at AU$4.2688 and expire on 6 November 2027.
See Note 19 for further detail on the Company’s equity incentive schemes.
Committee Activities
During FY22 the Committee continued to receive regular reporting from the Chief People Officer and the Chief
Executive Officer on matters pertinent to the Committee’s role. There was a particular focus on succession planning,
diversity and inclusion, and training and retention.
On behalf of the Committee
Anne O’Driscoll
Chair of the Remuneration and Nomination Committee
26
FINEOS Corporation Holdings plc
Remuneration and Nomination Committee Report (continued)for the year ended 30 June 2022
The Directors are responsible for preparing the Annual Report and the Group and Company financial statements in
accordance with applicable law and regulations.
Irish company law requires the Directors to prepare group and company financial statements for each financial year.
Under the law, the Directors have elected to prepare the Group and Company financial statements in accordance
with the Companies Act 2014 and IFRS. Under company law, the Directors must not approve the Group and Company
financial statements unless they are satisfied that they give a true and fair view of the assets, liabilities and financial
position of the Group and Company as at the financial year end date and of the profit or loss of the Group for the
financial year.
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 the financial statements have been prepared in accordance with applicable accounting
standards, identify those standards, and note the effect and reasons for any material departure from those
standards; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume that the
Group will continue in business.
The Directors are responsible for ensuring that the Company keeps or causes to be kept adequate accounting
records, which correctly explain and record the transactions of the Company, enable at any time the assets, liabilities,
financial position and profit or loss of the Group and parent Company to be determined with reasonable accuracy,
enable them to ensure that the parent Company and Group financial statements comply with the Companies Act
2014 and enable the financial statements to be audited. They are also responsible for safeguarding the assets of
the Group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
The Directors are responsible for the maintenance and integrity of the financial information included on the
Company’s website. Legislation in the Republic of Ireland governing the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
On behalf of the Board
Michael Kelly
Director
Tom Wall
Director
23 August 2022
Annual Report 2022
27
Directors’ Responsibilities Statement INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
FINEOS CORPORATION HOLDINGS PLC
Opinion
We have audited the financial statements of FINEOS Corporation Holdings Plc (‘the Company’) and
Subsidiaries (‘the Group’) for the year ended 30 June 2022, which comprise the Consolidated Statement of
Comprehensive Income, the Consolidated and Company Statement of Financial Position, the Consolidated
and Company Statement of Changes in Equity, the Consolidated and Company Statement of Cash Flows and
the notes to the financial statements, including the summary of significant accounting policies set out in Note
2. The financial reporting framework that has been applied in their preparation is Irish Law and International
Financial Reporting Standards (‘IFRS’) as adopted by the European Union.
In our opinion the accompanying financial statements:
•
•
•
give a true and fair view of the assets, liabilities and financial position of the Group and parent
Company as at 30 June 2022 and of the Group’s loss for the year then ended;
have been properly prepared in accordance with International Financial Reporting Standards as
adopted by the European Union; and
have been properly prepared in accordance with the requirements of the Companies Act 2014.
Basis of opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (ISAs (Ireland)) 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 ethical requirements that are relevant to our audit of financial statements in Ireland, including
the Ethical Standard for Auditors (Ireland) issued by the Irish Auditing and Accounting Supervisory Authority
(IAASA), 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.
Our evaluation of the Director’s assessment of the entity’s ability to continue to adopt the going concern basis
of accounting included the following:
•
•
•
•
•
We obtained the cash flow forecasts prepared for the Group;
We tested the clerical accuracy of the cash flow forecasts;
We considered the consistency of the forecasts in line with other areas of our audit;
We tested and challenged management on the key assumptions underlying the forecasts; and
We assessed the adequacy of the disclosures in the financial statements in relation to going
concern.
28
FINEOS Corporation Holdings plc
Independent Auditor’s Report INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
FINEOS CORPORATION HOLDINGS PLC
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 or Group’s ability to
continue as a going concern for a period of at least twelve months from the date 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.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in the
audit of the financial statements of the current year and include the most significant assessed risks of
material misstatement (whether or not due to fraud) identified by the auditor, including those which had the
greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing the efforts
of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
We summarise below the key audit matters in forming our audit opinion above, together with an overview of
the principal audit procedures performed to address each matter and, where relevant, key observations
arising from those procedures.
Key Audit Matter
Revenue recognition
(€127.2 million for the year ended 30 June 2022;
2021: €108.3 million)
How Our Audit Addressed the Key Audit Matter
We performed a number of procedures including
the following:
•
The following are key considerations:
•
The significance of revenue to understanding
the financial results for users of the financial
statements.
The extent of deferred revenue held by the
Group and the assessment of its systematic
release in line with relevant revenue recognition
principles.
The complexity involved in applying IFRS 15.
the varied
The complexity associated with
nature of bespoke contracts in forming new
commercial arrangements.
•
•
•
•
•
•
•
•
•
developed an understanding of and evaluated
the operating effectiveness of relevant key
revenue internal controls, including deferred
revenue calculation and release controls;
use of IT audit to perform data reconciliations;
carried out detailed substantive testing;
on a sample basis, recalculated the deferred
and accrued portions of customer agreements
and compared this to the amount deferred and
accrued on the balance sheet;
assessed associated reconciliations including
accounts receivable and deferred revenue for
unusual reconciling items;
assessed the value of credit notes raised over
the year and for a select period post year end;
and
developed a risk-based approach to perform
journal entry testing on a sample basis to
determine
the appropriateness of manual
postings to revenue.
Annual Report 2022
29
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
FINEOS CORPORATION HOLDINGS PLC
Key Audit Matter
Capitalisation of development expenditure
(€25.8 million capitalised in the year ended 30
June 2022; 2021: €28.3 million)
The Group capitalises costs
the
development of its software. These costs are then
amortised over the estimated useful life of the
software. The costs are mainly comprised of payroll
costs.
incurred
in
The Group’s process for calculating the value of
internally developed software involves judgement
as it includes estimating time which staff spend
the value
developing software, determining
attributable to that time, and determining which
projects being developed meet the criteria to be
capitalised.
•
•
•
•
How Our Audit Addressed the Key Audit Matter
Our work on capitalised development costs focused
on the Group’s process for estimating the time
spent by staff on software development that can be
capitalised under IAS 38, and the nature of the
projects undertaken:
•
the
IAS 38
the procedures applied by
assessing the nature of a sample of projects
against
to
requirements of
determine if they were capital in nature, and
the status of ongoing projects;
the
assessing
Group to review the rates applied to capitalise
payroll costs;
assessing the effectiveness of controls over
the payroll process;
assessing capitalised costs with reference to
actual payroll information for a sample of
employees; and
assessing the adequacy of the disclosures
related to capitalised development costs in the
consolidated financial statements.
How Our Audit Addressed the Key Audit Matter
We assessed the factors that the Group considered
regarding impairment of capitalised development
costs and whether any indicators of impairment
existed
.
This included having regard to:
•
significant changes in the extent or manner in
which the associated software is used;
potential or actual redundancy or disposal of
developed software;
amortisation periods applied by the Group to
develop software relative to its experience of
software lifecycle;
significant changes in the market in which the
assets are used; and
evaluating the Group’s assessment that the
useful lives of intangible assets are appropriate
at year end.
•
•
•
•
Key Audit Matter
Impairment consideration relating to capitalised
development expenditure (€75.0 million at 30
June 2022; 2021: €65.6 million)
Intangible assets make up €136.0 million of the
Group’s non-current assets (2021: €134.6 million).
The most significant of
is
capitalised software development costs of €75.0
million at 30 June 2022 (2021: €65.6 million).
intangibles
these
IAS 36: Impairment of Assets required that finite life
intangible assets be
impairment
whenever there is an indication that the intangible
assets may be impaired and this assessment
requires judgement.
tested
for
The assessment as to whether there are any
indicators of
judgement
including consideration of both internal and external
sources of information.
impairment
requires
30
FINEOS Corporation Holdings plc
Independent Auditor’s Report (continued) INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
FINEOS CORPORATION HOLDINGS PLC
Key Audit Matter
Impairment consideration relating to goodwill
(€33.7 million at 30 June 2022; 2021: €41.3
million)
Goodwill of €33.7 million is recorded in the balance
sheet at 30 June 2022 (2021: €41.3 million), after
booking an impairment charge of €12.6 million in
the year ended 30 June 2022.
Under IAS 36: Impairment of assets, the Group is
required to review goodwill for impairment at least
annually by assessing the recoverable amount of
each cash-generating unit, or group of cash-
generating units, to which the goodwill relates.
This is a key audit matter given
•
•
•
the size of the balance relative to the total
assets of the group;
the judgements involved in allocating goodwill
to each Cash Generating Unit; and
the forward-looking assumptions applied in the
value-in-use model prepared in assessing the
carrying value of goodwill (including forecasted
cashflows, future growth rates and discount
rates applied), which involve estimation and
judgement.
How Our Audit Addressed the Key Audit Matter
We performed a number of procedures including
the following:
• We obtained a third-party report in respect of
impairment
an
impairment
calculations at
the year end date, which
included forecasts for each relevant cash
generating
recommended
and
unit
impairment charge;
review and
a
• We evaluated management’s assessment in
relation to impairment of goodwill, particularly
their methodology for determining value in use;
• We completed a detailed assessment of the
assumptions underlying the impairment review
for
and modelling, and evaluated
reasonableness based on our knowledge of
the business; and
these
• We
assessed management’s
forecast
accuracy based on historical forecasts and
results, and challenged the achievability of
growth rates included in the model.
Our application of materiality
We apply the concept of materiality in planning and performing the audit and in evaluating the impact of
misstatements, if any. Materiality is an expression of the relative significance or importance of a matter in the
context of the financial statements. Misstatements in the financial statements are material if they, individually
or in aggregate, could reasonably be expected to influence the economic decisions of users taken based on
the financial statements.
The scope of our audit was influenced by our application of materiality. We set certain quantitative thresholds
for materiality. These, together with qualitative considerations, helped us to determine the scope of our audit
and the nature, timing and extent of our audit procedures on the individual financial statement line items and
disclosures and in evaluating the effect of misstatements, both individually and on the financial statements as
a whole. Based on our professional judgement, we determined materiality for the consolidated financial
statements as a whole as follows:
Annual Report 2022
31
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
FINEOS CORPORATION HOLDINGS PLC
Overall materiality
€1,908,715
How we determined it
1.5% of Group Revenue
Rationale for benchmark applied
Reporting threshold
This benchmark is considered the most appropriate because
Revenue is a key benchmark used by management and
shareholders in assessing the performance of the business.
We agreed with those charged with governance that we would
report to them misstatements identified during our audit above
€57,261 as well as misstatements below that amount that, in our
view, warranted reporting for qualitative reasons.
We determined materiality for the Company to be €1.76 million which is approximately 1% of the net assets of
the parent company.
Overview of the scope of the audit
As part of designing our audit, we assessed the risk of material misstatement in the financial statements,
whether due to fraud or error, and then designed and performed audit procedures responsive to those risks. In
particular, we looked at where the Directors made subjective judgements such as making assumptions on
significant accounting estimates.
We tailored the scope of our audit to ensure that we performed sufficient work to be able to give an opinion on
the financial statements as a whole. We used the outputs of a risk assessment, our understanding of the
Company, its environment, controls and critical business processes, to consider qualitative factors in order to
ensure that we obtained sufficient coverage across all financial statement line items.
Other information
The Directors are responsible for the other information. The other information comprises the information
included in the annual report other than the financial statements and our auditor’s report thereon. 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 audit, or otherwise
appears to be materially misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material misstatement in the financial
statements or a material misstatement of the other information. 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.
32
FINEOS Corporation Holdings plc
Independent Auditor’s Report (continued) INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
FINEOS CORPORATION HOLDINGS PLC
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2014
In our opinion, based on the work undertaken in the course of the audit, we report that:
•
•
•
•
the information given in the Directors’ Report for the financial year for which the financial statements
are prepared is consistent with the financial statements;
the Directors’ Report has been prepared in accordance with applicable legal requirements;
the accounting records of the Group were sufficient to permit the financial statements to be readily
and properly audited; and
the financial statements are in agreement with the accounting records.
We have obtained all the information and explanations which, to the best of our knowledge and belief, are
necessary for the purposes of our audit.
Matters on which we are required to report by exception
Based on the knowledge and understanding of the Group and its environment obtained in the course of the
audit, we have not identified any material misstatements in the Directors' Report. The Companies Act 2014
requires us to report to you if, in our opinion, the requirements of any of Sections 305 to 312 of the Act, which
relate to disclosures of directors’ remuneration and transactions are not complied with by the Group.
We have nothing to report in this regard.
Respective Responsibilities
Responsibilities of directors for the financial statements
As explained more fully in the Directors’ responsibilities statement set out on page 27, the Directors are
responsible for the preparation of the financial statements in accordance with the applicable financial reporting
framework that they give a true and fair view, and for such internal control as management determines 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 Group’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 management either intends to liquidate the Group or parent Company or
to cease operations, or has no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
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 (Ireland) 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.
Annual Report 2022
33
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
FINEOS CORPORATION HOLDINGS PLC
A further description of our responsibilities for the audit of the financial statements is located on the Irish
Auditing and Accounting Supervisory Authority's website at: http://www.iaasa.ie/getmedia/b2389013-1cf6-
458b-9b8f-a98202dc9c3a/Description_of_auditors_responsibilities_for_audit.pdf. This description forms part
of our auditor's report.
The purpose of our audit work and to whom we owe our responsibilities
Our report is made solely to the Company’s members, as a body, in accordance with Section 391 of the
Companies Act 2014. 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.
Lorcan Colclough
for and on behalf of Mazars
Chartered Accountants and Statutory Audit Firm
Harcourt Centre,
Block 3,
Harcourt Road,
Dublin 2
23 August 2022
34
FINEOS Corporation Holdings plc
Independent Auditor’s Report (continued) Financial Statements
Annual Report 2022
35
Revenue
Cost of sales
Gross profit
Product development and delivery
Sales and marketing
General and administration
Amortisation
Depreciation
Impairment
Other income
Operating loss
Finance income
Finance costs
Loss on ordinary activities before taxation
Income tax
Loss for the financial year
Other comprehensive income for the year:
Foreign exchange differences on translation of operations of
foreign subsidiaries and branches
Total comprehensive loss for the year attributable to the
equity holders of the parent
Note
4
11
12
11
6
7
8
9
2022
€
2021
€
127,247,699
108,338,635
(44,212,991)
(36,292,052)
83,034,708
72,046,583
(54,408,871)
(44,240,937)
(7,013,893)
(6,182,731)
(17,087,981)
(17,788,790)
(20,821,952)
(16,005,834)
(2,294,643)
(2,073,064)
(12,559,945)
–
2,172,577
1,331,818
(28,980,000)
(12,912,955)
282
1,814
(1,209,369)
(633,975)
(30,189,087)
(13,545,116)
4,193,014
1,060,054
(25,996,073)
(12,485,062)
10,606,709
144,972
(15,389,364)
(12,340,090)
Basic and diluted (loss) per share (cents)
10
(8.23)
(4.20)
All results relate to continuing operations.
The notes on pages 45 to 83 are an integral part of these financial statements.
36
FINEOS Corporation Holdings plc
Consolidated Statement of Comprehensive Incomefor the year ended 30 June 2022 ASSETS
Non-current assets
Intangible assets
Property, plant and equipment
Current assets
Trade and other receivables
Cash and cash equivalents
Total Assets
EQUITY AND LIABILITIES
Current liabilities
Trade and other payables
Non-current liabilities
Long-term liabilities
Provisions
Total liabilities
Capital and reserves
Called up share capital presented as equity
Share premium
Foreign exchange reserve
Other undenominated capital
Share option reserve
Reorganisation reserve
Retained earnings
Total equity
TOTAL EQUITY AND LIABILITIES
Note
30 June
2022
€
30 June
2021
€
11
12
14
15
16
16
9
17
17
18
18
18
18
18
136,016,927
134,622,056
5,736,171
6,236,202
141,753,098
140,858,258
37,344,419
29,612,596
44,311,366
13,998,945
81,655,785
43,611,541
223,408,883
184,469,799
42,484,985
34,391,576
11,630,246
13,320,872
–
416,773
54,115,231
48,129,221
319,385
301,677
169,717,173
124,239,947
10,485,419
(121,290)
1
1
6,644,064
3,796,560
11,123,985
11,123,985
(28,996,375)
(3,000,302)
169,293,652
136,340,578
223,408,883
184,469,799
The notes on pages 45 to 83 are an integral part of these financial statements.
On behalf of the Board
Michael Kelly
Director
Tom Wall
Director
23 August 2022
Annual Report 2022
37
Consolidated Statement of Financial Positionas at 30 June 2022 ASSETS
Non-current assets
Financial assets
Current assets
Trade and other receivables
Cash and cash equivalents
TOTAL ASSETS
EQUITY AND LIABILITIES
Current liabilities
Total liabilities
Capital and reserves
Called up share capital presented as equity
Share premium
Other undenominated capital
Reorganisation reserve
Retained earnings
Total equity
TOTAL EQUITY AND LIABILITIES
30 June
2022
€
Restated
30 June
2021
€
Note
13
14
15
16
17
17
18
18
85,507,168
99,404,900
68,873,909
44,489,729
21,657,649
401,664
90,531,558
44,891,393
176,038,726
144,296,293
104,623
104,623
58,324
58,324
319,385
301,677
169,717,173
124,239,947
1
1
22,609,813
22,609,813
(16,712,269)
(2,913,469)
175,934,103
144,237,969
176,038,726
144,296,293
The notes on pages 45 to 83 are an integral part of these financial statements.
On behalf of the Board
Michael Kelly
Director
Tom Wall
Director
23 August 2022
38
FINEOS Corporation Holdings plc
Company Statement of Financial Positionas at 30 June 2022 Called up
share
capital
presented
as equity
€
Share
premium
€
Foreign
exchange
reserves
arising on
translation
€
272,030
59,903,254
(266,262)
–
–
–
–
–
–
–
144,972
144,972
At 30 June 2020
Loss for the year
Other comprehensive
income for the year
Total comprehensive
income for the year
Issue of share capital
29,647
63,336,763
Reserves transfer
from share options
exercised
Share-based payment
charge
Translation
adjustment
–
–
–
999,930
–
–
–
–
–
–
At 30 June 2021
301,677
124,239,947
(121,290)
Other
undenominated
capital
€
Share
option
reserve
€
Reorganisation
reserve
€
Retained
earnings
€
Total
€
1
–
–
–
–
–
–
–
1
2,664,088
11,123,985
9,484,760
83,181,856
–
–
–
–
(999,930)
2,129,018
3,384
–
–
–
–
–
–
–
(12,485,062)
(12,485,062)
–
144,972
(12,485,062)
(12,340,090)
–
–
–
–
63,366,410
–
2,129,018
3,384
3,796,560
11,123,985
(3,000,302) 136,340,578
All amounts are attributable to the equity holders of the Group.
The notes on pages 45 to 83 re an integral part of these financial statements.
Annual Report 2022
39
Consolidated Statement of Changes in Equityfor the year ended 30 June 2022 Consolidated Statement of Changes in Equity (continued)
for the year ended 30 June 2022
Called
up share
capital
presented
as equity
€
Foreign
exchange
reserves
arising on
translation
€
Share
premium
€
At 30 June 2021
301,677
124,239,947
(121,290)
Loss for the year
Other
comprehensive
income for the
year
Total
comprehensive
income for the
year
Issue of share
capital
Reserves
transfer from
share options
exercised
Share-based
payment charge
Translation
adjustment
–
–
–
–
–
–
–
10,606,709
10,606,709
17,708
45,387,851
–
–
–
89,375
–
–
–
–
–
–
At 30 June 2022
319,385
169,717,173
10,485,419
Other
undenominated
capital
€
Share
option
reserve
€
Reorganisation
reserve
€
Retained
earnings
€
Total
€
1
–
–
–
–
–
–
–
1
3,796,560
11,123,985
(3,000,302)
136,340,578
–
–
–
–
(89,375)
2,741,585
195,294
6,644,064
–
(25,996,073)
(25,996,073)
–
–
–
–
–
–
–
10,606,709
(25,996,073)
(15,389,364)
–
–
–
–
45,405,559
–
2,741,585
195,294
11,123,985
(28,996,375)
169,293,652
All amounts are attributable to the equity holders of the Group.
The notes on pages 45 to 83 are an integral part of these financial statements.
40
FINEOS Corporation Holdings plc
Called up
share
capital
presented
as equity
€
Share
premium
€
Other
undenominated
capital
€
At 30 June 2020
Loss for the year
Other comprehensive
income for the year
Total comprehensive
income for the year
272,030
59,903,254
–
–
–
–
–
–
Issue of share capital
29,647
63,336,763
Reserves transfer from
share options exercised
–
999,930
At 30 June 2021
301,677 124,239,947
1
–
–
–
–
–
1
Reorganisation
reserve
€
Retained
earnings
€
Total
€
22,609,813
(240,176)
82,544,922
–
–
–
–
–
(2,673,293)
(2,673,293)
–
–
(2,673,293)
(2,673,293)
–
–
63,366,410
999,930
22,609,813
(2,913,469) 144,237,969
All amounts are attributable to the equity holders of the parent Company.
The notes on pages 45 to 83 are an integral part of these financial statements.
Annual Report 2022
41
Company Statement of Changes in Equityfor the year ended 30 June 2022 Company Statement of Changes in Equity (continued)
for the year ended 30 June 2022
Called up
share
capital
presented
as equity
€
Share
premium
€
Other
undenominated
capital
€
At 30 June 2021
Loss for the year
Other comprehensive income
for the year
Total comprehensive income
for the year
301,677
124,239,947
–
–
–
–
–
Issue of share capital
17,708
45,387,851
Reserves transfer from share
options exercised
–
89,375
At 30 June 2022
319,385
169,717,173
1
–
–
–
–
1
Reorganisation
reserve
€
Retained
earnings
€
Total
€
22,609,813
(2,913,469)
144,237,969
(13,798,800)
(13,798,800)
–
–
–
–
–
–
(13,798,800)
(13,798,800)
–
–
45,405,559
89,375
22,609,813 (16,712,269)
175,934,103
All amounts are attributable to the equity holders of the parent Company.
The notes on pages 45 to 83 are an integral part of these financial statements.
42
FINEOS Corporation Holdings plc
Cash flows from operating activities
Group loss after tax
Adjusted for:
Income tax
Finance costs
Finance income
Other income
Depreciation
Amortisation
Impairment
Loss on disposal of fixed assets
Lease expense
Movement in trade and other receivables
Movement in trade and other payables
Net tax paid
Research and development refund received
Effect of movement in exchange rates
Share-based payment expense
Note
2022
€
2021
€
9
7
6
12
11
11
21
(25,996,073)
(12,485,062)
(4,193,014)
(1,060,054)
1,209,369
633,975
(282)
(1,814)
(2,172,577)
(1,331,818)
2,294,643
2,073,064
20,821,952
16,005,834
12,559,945
–
–
15,214
(2,818,210)
(2,361,939)
(3,792,496)
(2,955,358)
8,294,702
1,881,013
(494,485)
(917,421)
930,623
1,314,105
2,537,886
572,106
19
2,741,585
2,129,018
Net cash flows generated from operating activities
11,923,568
3,510,863
Cash flows from investing activities
Interest received
Grant income
Payment for acquisition of subsidiary (net of cash acquired)
Payment for property, plant and equipment
Payment for intangible assets
Net cash used in investing activities
Cash flows from financing activities
Interest paid
Proceeds from issue of shares
Transaction costs
Net cash generated from financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
12
11
17
17
282
–
–
1,814
108,057
(59,353,544)
(847,236)
(946,292)
(25,972,356)
(25,296,343)
(26,819,310)
(85,486,308)
(197,396)
(73,454)
46,151,132
57,245,894
(745,573)
(1,029,430)
45,208,163
56,143,010
30,312,421
(25,832,435)
13,998,945
39,831,380
Cash and cash equivalents at the end of the year
15
44,311,366
13,998,945
Annual Report 2022
43
Consolidated Statement of Cash Flowsfor the year ended 30 June 2022 Cash flows from operating activities
Company loss after tax
Adjusted for:
Finance costs
Finance income
Impairment
Movement in trade and other receivables
Movement in trade and other payables
Effect of movement in exchange rates
Net cash flows used in operating activities
Cash flows from investing activities
Interest received
Amounts advanced (to)/from Group companies
Payment for acquisition of subsidiary
Net cash used in investing activities
Cash flows from financing activities
Interest paid
Issue of shares
Transaction costs
Net cash generated from financing activities
Net increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Note
2022
€
2021
€
13
14
16
17
17
(13,798,800)
(2,673,293)
124,164
3,311
(48)
13,638,550
(189)
39,405
–
–
(1,846)
58,324
(6,268)
150,201
(3,186)
(2,463,303)
48
–
(24,029,166)
16,216,551
–
(69,570,941)
(24,029,118)
(53,354,390)
(117,270)
(3,311)
46,151,132
57,245,894
(745,573)
(1,029,430)
45,288,289
56,213,153
21,255,985
395,460
401,664
6,204
Cash and cash equivalents at the end of the year
15
21,657,649
401,664
44
FINEOS Corporation Holdings plc
Company Statement of Cash Flowsfor the year ended 30 June 2022 1.
General Information
FINEOS Corporation Holdings plc (‘the Company’) is a public limited company incorporated in the Republic of Ireland.
The registered office is FINEOS House, Eastpoint Business Park, Dublin 3.
The principal activity of the Company and its subsidiaries (‘the Group’) is that of enterprise claims and policy
management software for Life, Accident and Health insurers and Employee Benefits providers. Foreign operations
are included in accordance with the significant accounting policies set out in Note 2.
2.
a)
Summary of Significant Accounting Policies
Basis of financial statements
Compliance with IFRS, new standards and interpretation
The financial statements have been prepared in accordance with International Financial Reporting Standards (‘IFRS’)
and interpretations issued by the IFRS Interpretations Committee (‘IFRS IC’) applicable to companies reporting under
IFRS. The financial statements comply with IFRS as issued by the International Accounting Standards Board and as
adopted by the EU, and the Companies Act 2014.
A number of new amendments and interpretations to accounting standards became effective for the Group during
the financial year including:
•
Interest Rate Benchmark Reform Phase 2 – amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16.
• COVID-19-Related Rent Concessions beyond 30 June 2021 - Amendment to IFRS 16
These amendments and interpretations would not have resulted in the accounting applied by the Group changing
and would not have had a material effect on the Group’s financial statements.
New standards, interpretations and amendments not yet effective
There are a number of standards, amendments to standards and interpretations which have been issued by the
IASB that are effective in future accounting periods that the Group has decided not to adopt early.
The following amendments are effective for the period beginning 1 January 2022:
• Onerous Contracts – Cost of Fulfilling a Contract (Amendments to IAS 37);
• Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16);
• Annual Improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41); and
• References to Conceptual Framework (Amendments to IFRS 3).
The Group does not expect any other standards issued by the IASB, but not yet effective, to have a material impact
on the Group.
Historical cost, presentation currency and going concern
The consolidated financial statements have been prepared on the historical cost basis, except where described
otherwise in the policies below. The consolidated financial statements of the Group and the financial statements of
the Company are presented in Euro (‘€’) which is also the functional currency of the Group and Company.
Management has prepared projections and forecasts for the Group. These include consideration of revenue growth,
funding and finance facilities available, and cash reserves held. On this basis, the Directors consider that it is
appropriate to prepare the consolidated financial statements on the going concern assumption.
Exemption from preparing Company statement of comprehensive income
In accordance with Section 304 of the Companies Act 2014 the Company is availing of the exemption from presenting
its individual statement of comprehensive income to the Annual General Meeting and from filing it with the Registrar
of Companies. The Company’s loss for the year to 30 June 2022 was €13,798,800 (2021: €2,673,293).
Annual Report 2022
45
Notes to the Consolidated Financial Statements b)
Basis of consolidation
The financial statements of the Group incorporate the financial statements of the Company (the parent) and entities
controlled by the Company (its subsidiaries) made up to 30 June each year.
Control is achieved when the Company:
• has the power over the subsidiary entity;
•
is exposed, or has rights, to variable returns from its involvement with the subsidiary entity; and
• has the ability to use its power to affect those returns.
The Group reassesses whether it controls the subsidiaries if facts and circumstance indicate that there are changes
to their control. When the Company has less than a majority of the voting rights of an investee, it considers that it
has power over the investee when the voting rights are sufficient to give it the practical ability to direct the relevant
activities of the investee unilaterally. The Company considers all relevant facts and circumstances in assessing
whether or not the Company’s voting rights in an investee are sufficient to give it power, including:
•
the size of the Company’s holding of voting rights relative to the size and dispersion of holdings of the other
vote holders;
• potential voting rights held by the Company, other vote holders or other parties;
•
rights arising from other contractual arrangements; and
• any additional facts and circumstances that indicate that the Company has, or does not have, the current ability
to direct the relevant activities at the time that decisions need to be made, including voting patterns at previous
shareholders’ meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when the
Company loses control of the subsidiary. Intra-Group assets and liabilities, equity, income, expenses and cash flows
relating to intra-Group transactions are eliminated on consolidation. Where necessary, the accounting policies of
subsidiaries have been changed to ensure consistency with the policies adopted by the Group.
When the Group loses control over a subsidiary, the profit or loss on disposal is calculated as the difference between
(i) the aggregate of the fair value of the consideration received and the fair value of any retained interest and (ii) the
previous carrying amount of the assets (including goodwill) and liabilities of the subsidiary and any non-controlling
interests. Amounts previously recognised in other comprehensive income in relation to the subsidiary are accounted
for (i.e. reclassified to profit or loss or transferred directly to retained earnings) in the same manner as would be
required if the relevant assets or liabilities were disposed of.
The fair value of any investments retained in the former subsidiary at the date when control is lost is regarded as the
fair value on initial recognition for subsequent accounting or, when applicable, the cost on initial recognition of an
investment in an associate or jointly controlled entity.
c)
Revenue recognition
The Group recognises revenue from the following major sources:
•
initial product licence fees;
• annual subscriptions; and
•
rendering of services, including professional services and support contracts.
Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a
customer and excludes amounts collected on behalf of third parties. The Group recognises revenue at a point in
time or over time as contractual performance obligations are fulfilled and control of a product or service transfers
to a customer.
Initial product licence fees
Initial software licence revenue is recognised at a point in time when control is passed to the customer which is upon
delivery of the software to the customer, provided that the Group has no significant related obligations or collection
uncertainties remaining.
46
FINEOS Corporation Holdings plc
Notes to the Consolidated Financial Statements (continued) Licences with related obligations which significantly enhance or modify the IP are considered a single performance
obligation. The performance obligation is satisfied over time as the client avails of consistent access to the services
enhancing and customising the licenced IP. The satisfaction of the performance obligation is reliably measured
primarily on a percentage-of-completion basis. Revenue is recognised over the passage of time using the output
method based on pre-agreed milestones between the parties in accordance with the master licence agreement in
place. Income arising on customised solutions where the provision of the service has not been completed at the
year-end date is deferred and recognised as the service is provided.
Annual subscriptions
Annual subscriptions include all support, maintenance, software updates and cloud services provided by FINEOS
to customers. The promises are considered a single performance obligation which is satisfied over time and the
subscription fees, including the third-party fees, are recognised using the output method on a straight-line basis
which reflects time lapsed, for the continued right to access the licenced IP and to benefit from the support and
maintenance services.
Income arising on subscription where the provision of the service has not been completed at the year-end date is
deferred creating a contract liability which is subsequently recognised as the service is provided.
Rendering of services, including professional services and support contracts
Rendering of services are distinct performance obligations for which revenue is recognised in the accounting period
in which the services are rendered when the outcome of the contract can be estimated reliably.
The performance obligations are satisfied over time and the satisfaction of the promises is measured using the input
method, primarily on a time and materials basis for which revenue is recognised in the period that the services are
provided.
For the services element of fixed price project engagements, the performance obligations are satisfied over time
and the satisfaction of the performance obligations is reliably measured primarily on a percentage-of-completion
basis over the term of the contract. Revenue is recognised using the output method based on pre-agreed milestones
indicating progress to completion. When the outcome of the transaction involving the rendering of services cannot
be estimated reliably, an entity shall recognise revenue only to the extent of the expenses recognised that are
recoverable.
Income arising on rendering of services where the provision of the service has not been completed at the year-end
date is deferred creating a contract liability which is subsequently recognised as the service is provided.
The Group’s policy for contract costs (associated with revenue contracts) is outlined in Note 2(l).
d)
Leases
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs
to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located,
less any lease incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to
the earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful
lives of right-of-use assets are determined on the same basis as those of property and equipment. In addition, the
right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of
the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s
incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate.
Annual Report 2022
47
Lease payments included in the measurement of the lease liability comprise:
•
fixed payments, including in-substance fixed payments;
• variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the
commencement date; and
• amounts expected to be payable under a residual value guarantee.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there
is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s
estimate of the amount expected to be payable under a residual value guarantee.
When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the
right-of-use asset or is recorded in the statement of comprehensive income if the carrying amount of the right-of-use
asset has been reduced to zero.
On the statement of financial position the Group presents the right-of-use asset of office rentals under ‘property,
plant and equipment’ and the right-of-use asset of licences under ‘intangible assets’. The movement on the right-of-
use assets of the Group is disclosed in Notes 11 and 12.
Short-term leases and leases of low-value assets
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of offices and
licences that have a lease term of 12 months or less and leases of low-value assets. The Group recognises the lease
payments associated with these leases as an expense on a straight-line basis over the lease term.
Lease modifications
The Group as lessee accounts for a lease modification as a separate lease if both:
(a) the modification increases the scope of the lease by adding the right to use one or more underlying assets; and
(b) the consideration for the lease increases by an amount commensurate with the stand-alone price for the increase
in scope and any appropriate adjustments to that stand-alone price to reflect the circumstances of the particular
contract.
For a lease modification that is not accounted for as a separate lease, at the effective date of the lease modification
the Group as lessee:
(a) allocates the consideration in the modified contract;
(b) determines the lease term of the modified lease; and
(c) remeasures the lease liability by discounting the revised lease payments using a revised discount rate. The
revised discount rate is determined as the interest rate implicit in the lease for the remainder of the lease term,
if that rate can be readily determined; or the Group’s incremental borrowing rate at the effective date of the
modification, if the interest rate implicit in the lease cannot be readily determined.
For a lease modification that is not accounted for as a separate lease, the Group as lessee accounts for the
remeasurement of the lease liability by:
(a) decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease for
lease modifications that decrease the scope of the lease. The Group recognises in profit or loss any gain or loss
relating to the partial or full termination of the lease; or
(b) making a corresponding adjustment to the right-of-use asset for all other lease modifications.
e)
Foreign currencies
Foreign currency transactions are translated into the individual entities’ respective functional currencies at
the exchange rates prevailing on the date of the transaction. At the end of each financial year, monetary items
denominated in foreign currencies are retranslated at the rates prevailing as of the end of the financial year.
Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates
prevailing on the date when the fair value was determined. Non-monetary items that are measured in terms of
historical cost in a foreign currency are not retranslated.
48
FINEOS Corporation Holdings plc
Notes to the Consolidated Financial Statements (continued) Exchange differences arising on the settlement of monetary items, and on retranslation of monetary items, are
included in the statement of comprehensive income for the year. Exchange differences arising on the retranslation
of non-monetary items carried at fair value are included in the statement of comprehensive income for the year
except for differences arising on the retranslation of non-monetary items in respect of which gains and losses are
recognised directly in equity. For such non-monetary items, any exchange component of that gain or loss is also
recognised directly in other comprehensive income.
For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s foreign
operations (including comparatives) are expressed in Euro using exchange rates prevailing at the end of the financial
year. Income and expense items (including comparatives) are translated at the average exchange rates for the
period, unless exchange rates fluctuated significantly during that period, in which case the exchange rates at the
dates of the transactions are used. Exchange differences arising, if any, are classified as equity and transferred to the
Group’s translation reserve. Such translation differences are recognised in the statement of comprehensive income
in the period in which the foreign operation is disposed of.
On consolidation, exchange differences arising from the translation of the net investment in foreign entities (including
monetary items that, in substance, form part of the net investment in foreign entities), and of borrowings and
other currency instruments designated as hedges of such investments, are taken to the foreign currency translation
reserve.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and
liabilities of the foreign operation and translated accordingly.
f)
Employee benefits
The Group provides a range of benefits to employees, including annual bonus arrangements, paid holiday
arrangements and defined contribution pension plans.
Short-term benefits
Short-term benefits, including holiday pay and other similar non-monetary benefits, are recognised as an expense in
the period in which the service is received. A provision is made for the estimated liability for annual leave as a result
of services rendered by employees up to the end of the financial year.
Defined contribution pension plans
The Group operates a defined contribution plan for its employees. A defined contribution plan is a pension plan
under which the Group pays fixed contributions into a separate entity. Once the contributions have been paid the
Group has no further payment obligations.
The contributions are recognised as an expense when they are due. Amounts not paid are shown in accruals in
the statement of financial position. The assets of the plan are held separately from the Group in independently
administered funds.
Share-based payments
The Group issues equity-settled share-based payments to certain employees. Equity-settled share-based payments
are measured at fair value of the equity instruments (excluding the effect of non-market-based vesting conditions)
at the date of grant. Details regarding the determination of the fair value of equity-settled share-based transactions
are set out in Note 19. The cost of equity-settled transactions with employees is recognised as an expense over the
vesting period, which ends on the date on which the relevant employees become fully entitled to the award. Fair
value is determined by an external valuer using an appropriate pricing model. No expense is recognised for awards
that do not ultimately vest; except for awards where vesting is conditional upon a market condition, which are treated
as vesting irrespective of whether or not the market condition is satisfied, provided that all other performance
conditions are satisfied.
At each year end date before vesting, the cumulative expense is calculated, representing the extent to which the
vesting period has expired and management’s best estimate of the achievement or otherwise of non-market
conditions, the number of equity instruments that will ultimately vest, or in the case of an instrument subject to
a market condition, be treated as vesting as described above. The movement in the cumulative expense since the
previous year end date is recognised in the statement of comprehensive income, with a corresponding entry in
‘Share option reserves’.
Annual Report 2022
49
Where the terms of an equity-settled award are modified or a new award is designated as replacing a cancelled
or settled award, the cost based on the original award terms continues to be recognised over the original vesting
period. In addition, an expense is recognised over the remainder of the new vesting period for the incremental fair
value of any modification, based on the difference between the fair value of the original award and the fair value of
the modified award, both as measured on the date of the modification. No reduction is recognised if this difference
is negative.
g)
Interest income
Interest income comprises income on cash held in interest-bearing bank deposits. Interest income is recognised as
it occurs in the statement of comprehensive income, using the effective interest rate method.
h)
Government grants
Government grants are not recognised until there is reasonable assurance that the Group will comply with the
conditions attaching to them and that the grants will be received.
Government grants are recognised in the statement of comprehensive income on a systematic basis over the periods
in which the Group recognises as expenses the related costs for which the grants are intended to compensate.
Specifically, government grants whose primary condition is that the Group should purchase, construct or otherwise
acquire non-current assets are recognised as deferred income in the consolidated statement of financial position
and transferred to the statement of comprehensive income on a systematic and rational basis over the useful lives
of the related assets.
Government grants that are receivable as compensation for expenses or losses already incurred or for the purpose
of giving immediate financial support to the Group with no future related costs are recognised in the statement of
comprehensive income in the period in which they become receivable.
Government grants towards staff re-training costs are recognised as income over the periods necessary to match
them with the related costs and are deducted in reporting the related expense.
Government grants relating to the acquisition of property, plant and equipment or intangible assets are treated
as deferred income and released to the statement of comprehensive income over the expected useful lives of the
assets concerned.
i)
Income tax
The taxation expense for the period comprises current and deferred tax recognised in the reporting period. Tax is
recognised in the statement of comprehensive income, except to the extent that it relates to items recognised in
other comprehensive income or directly in equity. In this case tax is also recognised in other comprehensive income
or directly in equity respectively.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported
in the statement of comprehensive income 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 Group’s liability for
current tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting
period.
A provision is recognised for those matters for which the tax determination is uncertain but it is considered probable
that there will be a future outflow of funds to a tax authority. The provisions are measured at the best estimate of
the amount expected to become payable. The assessment is based on the judgement of tax professionals within
the Group supported by previous experience in respect of such activities and in certain cases based on specialist
independent tax advice.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets
and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit
and is accounted for using the liability method.
50
FINEOS Corporation Holdings plc
Notes to the Consolidated Financial Statements (continued) Deferred tax liabilities are generally recognised for all taxable temporary differences and deferred tax assets are
recognised to the extent that it is probable that taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if the temporary difference arises from the
initial recognition of goodwill or from the initial recognition (other than in a business combination) of other assets
and liabilities in a transaction that affects neither the taxable profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, except
where the Group is able to control the reversal of the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future. Deferred tax assets arising from deductible temporary
differences associated with such investments are only recognised to the extent that it is probable that there will be
sufficient taxable profits against which to utilise the benefits of the temporary differences and they are expected to
reverse in the foreseeable future.
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 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, based on tax laws and rates that have been enacted or substantively enacted at the reporting date.
The measurement of deferred tax liabilities and assets reflects the tax consequences that would follow from the
manner in which the Group expects, at the end of the reporting period, to recover or settle the carrying amount of
its assets and liabilities.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by the same taxation authority and the
Group intends to settle its current tax assets and liabilities on a net basis.
j)
Research and development tax credits
Research and development tax credits are recognised as a gain, set against the related expenditure in the year
to which they relate. To the extent that the related expenditure is capitalised, the tax credit is deferred on the
statement of financial position.
k)
Business combinations
The Group applies the acquisition method in accounting for business combinations. The cost of an acquisition
is measured as the aggregate of the consideration transferred (excluding amounts relating to the settlement of
pre-existing relationships), the amount of any non-controlling interest in the acquiree and, in a business combination
achieved in stages, the acquisition date fair value of the acquirer’s previously-held equity interest in the acquiree.
Transaction costs that the Group incurs in connection with a business combination are expensed as incurred.
To the extent that settlement of all or any part of consideration for a business combination is deferred, the fair value
of the deferred component is determined through discounting the amounts payable to their present value at the date
of exchange. The discount component is unwound as an interest charge in the Consolidated Income Statement over
the life of the obligation. Any contingent consideration is recognised at fair value at the acquisition date and included
in the cost of the acquisition. The fair value of contingent consideration at acquisition date is arrived at through
discounting the expected payment to present value. In general, in order for contingent consideration to become
payable, pre-defined revenue targets must be exceeded. Subsequent changes to the fair value of the contingent
consideration will be recognised in profit or loss unless the contingent consideration is classified as equity, in which
case it is not remeasured and settlement is accounted for within equity.
The assets and liabilities arising on business combination activity are measured at their acquisition-date fair values.
Contingent liabilities assumed in business combination activity are recognised as of the acquisition date, where such
contingent liabilities are present obligations arising from past events and their fair value can be measured reliably.
In the case of a business combination achieved in stages, the acquisition date fair value of the acquirer’s previously-
held equity interest in the acquiree is remeasured to fair value as at the acquisition date through profit or loss. When
the initial accounting for a business combination is determined provisionally, any adjustments to the provisional
values allocated to the consideration, identifiable assets or liabilities (and contingent liabilities, if relevant) are made
within the measurement period, a period of no more than one year from the acquisition date.
Annual Report 2022
51
l)
Intangible assets
Goodwill arising on business combinations
Goodwill arising on a business combination is initially measured at cost, being the excess of the cost of the acquisition
over the fair value of the net identifiable assets and liabilities assumed at the date of acquisition. It relates to the
future economic benefits arising from assets which are not capable of being individually identified and separately
recognised. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Intangible assets (other than goodwill) arising on business combinations
Intangible assets are capitalised separately from goodwill as part of a business combination at cost (fair value at date
of acquisition). Subsequent to initial recognition these intangible assets are carried at cost less any accumulated
amortisation and any accumulated impairment losses.
Intangible assets are amortised on a straight-line basis over periods ranging from seven to 20 years, depending on
the nature of the intangible asset. The amortisation expense is disclosed separately on the face of the condensed
consolidated statement of comprehensive income.
Intangible assets acquired separately
Computer software
Computer software separately acquired, including computer software which is not an integral part of an item of
computer hardware, is stated at cost less any accumulated amortisation and any accumulated impairment losses.
Cost comprises purchase price and other directly attributable costs.
Computer software is recognised as an asset only if it meets the following criteria:
• an asset can be separately identified;
•
•
•
it is probable that the asset created will generate future economic benefits;
the development cost of the asset can be measured reliably;
it is probable that the expected future economic benefits that are attributable to the asset will flow to the
entity; and
•
the cost of the asset can be measured reliably.
Costs relating to the development of computer software for internal use are capitalised once the recognition criteria
outlined above are met.
Computer software is amortised on a straight-line basis over its useful economic life, which is considered to be
between three to five years. The amortisation expense is disclosed separately on the face of the consolidated
statement of comprehensive income.
Internally-generated intangible assets
Research and development expenditure
Expenditure on research activities is recognised as an expense in the period in which it is incurred. An internally-
generated intangible asset arising from development (or from the development phase of an internal project) is
recognised 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.
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred from
the date when the intangible asset first meets the recognition criteria listed above. Where no internally-generated
intangible asset can be recognised, development expenditure is recognised in the statement of comprehensive
income in the period in which it is incurred.
52
FINEOS Corporation Holdings plc
Notes to the Consolidated Financial Statements (continued) Development expenditure is amortised on a straight-line basis over its useful economic life, which commences when
the asset is brought into use, and is considered to be between three and 10 years. The amortisation expense is
disclosed separately on the face of the consolidated statement of comprehensive income.
Contract costs
The incremental costs of obtaining a contract are recognised as an asset if the Group expects to recover those costs.
However, those incremental costs are limited to the costs that the Group would not have incurred if the contract had
not been successfully obtained.
Costs incurred to fulfil a contract are recognised as an asset if and only if all of the following criteria are met:
•
•
the costs relate directly to a contract (or a specific anticipated contract);
the costs generate or enhance resources of the entity that will be used in satisfying performance obligations in
the future; and
•
the costs are expected to be recovered.
These include costs such as direct labour, direct materials, and the allocation of overheads that relate directly to the
contract.
The asset recognised in respect of the costs to obtain or fulfil a contract is amortised on a systematic basis that is
consistent with the associated revenue contract’s pattern of transfer of the services to which the asset relates. The
amortisation expense is included within administrative expenses in the consolidated statement of comprehensive
income. The incremental costs of obtaining a contract are expensed if the associated amortisation period would be
12 months or less.
Subsequent to initial recognition, internally-generated intangible assets are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.
Derecognition of intangible assets
An intangible asset is derecognised on disposal, or when no future economic benefits are expected from use or
disposal. Gains or losses arising from derecognition of an intangible asset, measured as the difference between
the net disposal proceeds and the carrying amount of the asset, are recognised in the statement of comprehensive
income when the asset is derecognised.
m)
Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses.
Cost includes the original purchase price, costs directly attributable to bringing the asset to its working condition for
its intended use, dismantling and restoration costs, and borrowing costs capitalised.
Depreciation
Depreciation is calculated using the straight-line method to write off the cost of property, plant and equipment over
their expected useful lives as follows:
Office equipment
Computer equipment
Fixtures and fittings
Right-of-use assets
20% to 33.33%
33.33%
20% to 33.33%
Lower of the useful life of the asset or the lease term
The estimated useful lives, residual values and depreciation method are reviewed at the end of each reporting
period, with the effect of any changes in estimate accounted for on a prospective basis.
Subsequent additions
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate,
only when it is probable that economic benefits associated with the item will flow to the Group and the cost can be
measured reliably.
The carrying amount of any replaced component is derecognised. Major components are treated as a separate
asset where they have significantly different patterns of consumption of economic benefits and are depreciated
separately over their useful lives.
Repairs, maintenance and minor inspection costs are expensed as incurred.
Annual Report 2022
53
Derecognition
An item of property, plant and equipment is derecognised upon disposal or when no future economic benefits
are expected to arise from the continued use of the asset. The gain or loss arising on the disposal or retirement of
an asset is determined as the difference between the sales proceeds and the carrying amount of the asset and is
recognised in the statement of comprehensive income.
n)
Financial assets
Investments in subsidiary companies
Investments in subsidiary companies are reflected in the separate financial statements of the parent Company.
Investments in subsidiaries are stated at cost less accumulated impairment losses.
o)
Impairment of goodwill
In the year in which a business combination is effected and where some or all of the goodwill allocated to a particular
cash-generating unit (CGU) arose in respect of that combination, the CGU is tested for impairment prior to the end
of the relevant annual period.
Goodwill is subject to impairment testing on an annual basis and at any time during the year if an indicator of
impairment is considered to exist. Where the carrying value exceeds the estimated recoverable amount (being the
greater of fair value less costs of disposal and value-in-use), an impairment loss is recognised by writing down
goodwill to its recoverable amount.
The recoverable amount of goodwill is determined by reference to the CGU to which the goodwill has been allocated.
Impairment losses arising in respect of goodwill are not reversed once recognised.
p)
Impairment of tangible and intangible assets
The Group reviews the carrying amounts of its tangible and intangible assets as at each reporting date to assess for any
indication of 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 Group estimates the recoverable amount of the cash-generating unit to which the asset belongs.
Irrespective of whether there is any indication of impairment, the Group also tests its intangible assets with indefinite
useful lives and intangible assets not yet available for use for impairment annually by comparing their respective
carrying amounts with their corresponding recoverable amounts.
The recoverable amount of an asset or cash-generating unit is the higher of its fair value less costs to sell and its
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.
An impairment loss for the amount by which the asset’s carrying amount exceeds the recoverable amount is
recognised immediately in the statement of comprehensive income; unless the relevant asset is carried at a revalued
amount, in which case the impairment loss is first treated as a revaluation decrease.
Where an impairment loss subsequently reverses, the carrying amount of the asset (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
(cash-generating unit) in prior years. A reversal of an impairment loss is recognised immediately in the statement of
comprehensive income, 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.
54
FINEOS Corporation Holdings plc
Notes to the Consolidated Financial Statements (continued) q)
Financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the contractual provisions
of the instrument.
Effective interest method
The effective interest method is a method of calculating the amortised cost of a financial instrument and allocating
the interest income or expense over the relevant period. The effective interest rate is the rate that exactly discounts
estimated future cash receipts or payments (including all fees on 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
financial instrument, or where appropriate, a shorter period, to the net carrying amount of the financial instrument.
Income and expense are recognised on an effective interest basis for debt instruments other than those financial
instruments at fair value through profit or loss.
Financial assets
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and
financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately in
the statement of comprehensive income.
All financial assets are recognised on a trade date. This is the date on which the Group commits to purchase or sell
the asset. They are initially measured at fair value plus transaction costs, except for those financial assets classified
as at fair value through profit or loss, which are initially measured at fair value.
Financial assets are classified into the following specified categories: financial assets at fair value through profit or
loss; held-to-maturity investments; loans and receivables; and available-for-sale financial assets. The classification
depends on the nature and purpose for which these financial assets were acquired and is determined at the time of
initial recognition.
Loans and receivables
The Group’s loans and receivables comprise trade and other receivables, amounts due from contract customers,
bank balances and fixed deposits.
Such loans and receivables are non-derivatives with fixed or determinable payments that are not quoted in an
active market. They are measured at amortised cost, using the effective interest method less impairment. Interest is
recognised by applying the effective interest rate, except for short-term receivables when the recognition of interest
would be immaterial.
Impairment of financial assets
The Group always recognises lifetime expected credit losses (‘ECL’) for trade receivables. The ECL on these financial
assets are estimated using a provision matrix based on the Group’s historical credit loss experience, adjusted for
factors that are specific to the receivables, general economic conditions and an assessment of both the current as well
as the forecast direction of conditions at the reporting date, including the time value of money where appropriate.
When there has not been a significant increase in credit risk since initial recognition, the Group measures the loss
allowance for that financial instrument at an amount equal to 12-month ECL which represents the portion of lifetime
ECL that is expected to result from default events on a financial instrument that are possible within 12 months after
the reporting date; except for assets for which a simplified approach was used.
The Group assumes that the credit risk on a financial instrument has not increased significantly since initial
recognition if the financial instrument is determined to have low credit risk at the reporting date.
Annual Report 2022
55
A financial instrument is determined to have low credit risk if:
(a) the financial instrument has a low risk of default;
(b) the debtor has a strong capacity to meet its contractual cash flow obligations in the near term; and
(c) adverse changes in economic and business conditions in the longer term may, but will not necessarily, reduce the
ability of the borrower to fulfil its contractual cash flow obligations.
The Group considers a financial asset to have low credit risk when the asset has an external credit rating of ‘investment
grade’ in accordance with the globally understood definition; or if an external rating is not available, the asset has
an internal rating of ‘performing’. Performing means that the counterparty has a strong financial position and there
are no past due amounts.
Derecognition of financial assets
The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset expire,
or it transfers the financial asset and substantially all the risks and rewards of ownership of the asset to another
entity. If the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial
asset and continues to control the transferred asset, the Group recognises 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 recognise the financial asset and also recognises
a collateralised borrowing for the proceeds receivable.
Financial liabilities and equity
Classification of debt or equity
Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the substance
of the contractual arrangements and the definitions of a financial liability and an equity instrument.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of the Group after deducting all
of its liabilities. Equity instruments are recorded at the proceeds received, net of direct issue costs.
Ordinary share capital
Ordinary share capital is classified as equity. Incremental costs directly attributable to the issue of ordinary shares
and share options are recognised as a deduction from equity.
Financial liabilities
Financial liabilities are classified as either financial liabilities at fair value through profit or loss or other financial
liabilities.
Financial liabilities are classified as at fair value through profit or loss if the financial liability is either held for trading
or it is designated as such upon initial recognition.
Other financial liabilities
Trade and other payables
Trade and other payables are initially measured at fair value, net of transaction costs, and are subsequently measured
at amortised cost, where applicable, using the effective interest method, with interest expense recognised on an
effective yield basis.
Borrowings
Interest-bearing bank loans and overdrafts are initially measured at fair value, and are subsequently measured at
amortised cost, using the effective interest method. Any difference between the proceeds (net of transaction costs)
and the settlement or redemption of borrowings is recognised over the term of the borrowings.
Derecognition of financial liabilities
The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged, cancelled
or they expire.
56
FINEOS Corporation Holdings plc
Notes to the Consolidated Financial Statements (continued) Derivative financial instruments
In order to manage interest rate and foreign currency risks, the Group has from time to time entered into derivative
financial instruments (principally currency swaps and forward foreign exchange contracts). Derivative financial
instruments are recognised initially at fair value on the date on which a derivative contract is entered into and are
subsequently remeasured at fair value. The carrying value of derivatives is fair value based on discounted future cash
flows and adjusted for counterparty risk. Future floating rate cash flows are estimated based on future interest rates
(from observable yield curves at the end of the reporting period). Fixed and floating rate cash flows are discounted
at future interest rates and translated at period-end foreign exchange rates. At the statement of financial position
date, no derivative instruments were recognised on the statement of financial position.
r)
Provisions and contingencies
Provisions
Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event,
it is probable that the Group will be required to settle that obligation and a reliable estimate can be made of the
amount of the obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present
obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.
Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is
the present value of those cash flows (when the effect of the time value of money is material).
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third
party, a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the
amount of the receivable can be measured reliably.
Contingencies
Contingent liabilities, arising as a result of past events, are not recognised when (i) it is not probable that there will
be an outflow of resources or that the amount cannot be reliably measured at the reporting date or (ii) when the
existence will be confirmed by the occurrence or non-occurrence of uncertain future events not wholly within the
Group’s control. Contingent liabilities are disclosed in the financial statements unless the probability of an outflow
of resources is remote.
Contingent assets are not recognised. Contingent assets are disclosed in the financial statements when an inflow of
economic benefits is probable.
s)
Cash and cash equivalents
Cash and cash equivalents comprise cash on hand and demand deposits and other short-term highly liquid
investments which are readily convertible to known amounts of cash and are subject to insignificant risk of changes
in value.
3.
Significant Accounting Judgements, Estimates
and Assumptions
In preparing these financial statements, the Group and Company make judgements, estimates and assumptions
concerning the future that impact the application of policies and reported amounts of assets, liabilities, income and
expenses.
The resulting accounting estimates calculated using these judgements and assumptions are based on historical
experience and expectations of future events and may not equal the actual results.
Estimates and underlying assumptions are reviewed on an ongoing basis, and revisions to estimates are recognised
prospectively.
Annual Report 2022
57
The judgements and key sources of assumptions and estimation uncertainty that have a significant effect on the
amounts recognised in the financial statements are discussed below.
Critical judgements made in applying the Group’s and Company’s accounting policies
Information about judgements made in applying accounting policies that have the most significant effects on the
amounts recognised in these financial statements are set out below:
Group:
(a) Development expenditure
The Group capitalises a proportion of costs related to software development in accordance with its accounting
policy. The Group regularly reviews the carrying value of capitalised development costs, which are amortised over
three to 10 years, to ensure they are not impaired, and the amortisation period is appropriate. Management makes
judgements about the technical feasibility and economic benefit of completed products, as well as the period of time
over which the economic benefit will cease.
(b) Useful life of intangible assets (excluding goodwill)
Intangible assets are amortised over their useful lives. The estimated useful life reflects management’s estimate of
the period that the Group intends to derive future economic benefits from the use of intangible assets. Changes in
the economic usage and developments could affect the economic useful life of the intangible fixed asset which could
then consequently impact future amortisation charges. The carrying amount of the intangible assets of the Group
(excluding goodwill) as at 30 June 2022 was €102,366,571 (2021: €93,290,024) (see Note 11).
(c) Revenue recognition
The Group recognises revenue in line with IFRS 15 Revenue from Contracts with Customers. Management applies
judgement in determining the nature, variable considerations and timing of satisfaction of promises in the context
of the contract that meet the basis of revenue recognition criteria. Significant judgements include identifying
performance obligations, identifying distinct intellectual property licences, and determining the timing of satisfaction
and approach in recognising the revenue of those identified performance obligations; whether a point in time or
a passage of time approach is to be adopted. See applied revenue recognition criteria for each revenue stream
within Note 2(c) for details on the Group’s revenue recognition policies adopted. The amount of the Group’s revenue
recognised as at 30 June 2022 was €127,247,699 (2021: €108,338,635) (see Note 4).
(d) Impairment of goodwill
The impairment testing process requires management to make significant judgements and estimates regarding the
future cash flows expected to be generated by CGUs to which goodwill has been allocated. 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 future cash
flow estimates have not been adjusted. The carrying amount of goodwill as at 30 June 2022 was €33,650,356, net of
an impairment adjustment of €13,638,550 (2021: €41,332,032) (see Note 11).
Company:
(a) Impairment of investment in subsidiaries
Investments in subsidiary companies are reflected in the separate financial statements of the parent Company at
cost less accumulated impairment losses. At the end of each financial year, an assessment is made on whether
there are indicators that the Company’s investments are impaired. The Company’s assessment is based on the
performance of the underlying subsidiary companies. The carrying amount of investments in subsidiaries in the
Company statement of financial position at 30 June 2022 was €85,507,168, net of an impairment adjustment of
€13,638,550 (restated 2021: €99,404,900) (see Note 13).
58
FINEOS Corporation Holdings plc
Notes to the Consolidated Financial Statements (continued) 4.
Revenue
Amount of revenue by class of activity:
Professional services
Annual subscriptions
Initial product licence fees
Amount of revenue by market:
North America
APAC
EMEA
Segment information
2022
€
2021
€
71,369,100
66,443,223
53,832,632
40,128,739
2,045,967
1,766,673
127,247,699
108,338,635
101,023,550
78,845,857
21,231,506
24,131,540
4,992,643
5,361,238
127,247,699
108,338,635
The Group manages its operations as a single business operation and there are no parts of the Group that qualify
as operating segments. The Board assesses the financial performance of the Group on an integrated basis only and
accordingly, the Group is managed on the basis of a single segment.
Major customers
In each of 2022 and 2021 financial years there were three customers that each accounted for 10% or more of the
Group’s revenue, as follows:
Client 1
Percentage of total revenue
Client 2
Percentage of total revenue
Client 3
Percentage of total revenue
Contract assets and contract liabilities
Contract assets
2022
€
2021
€
26,399,568
14,032,231
20.7%
12.9%
17,049,033
13,348,455
13.4%
12.3%
13,266,714
10,822,766
10.4%
9.9%
Contract assets are disclosed separately as unbilled receivables in Trade and other receivables amounting to
€573,242 (2021: €1,247,706) (see Note 14).
Contract liabilities
Contract liabilities are disclosed separately as deferred revenue in Trade and other payables amounting to
€25,809,421 (2021: €17,013,665) (see Note 16). The Group is availing of the practical expedient which exempts the
disclosure of unsatisfied performance obligations to date since both of the following criteria are met:
•
•
the performance obligations are part of contracts which have an original expected duration of one year or less; and
the Group recognises revenue from the satisfaction of the performance obligations which have been completed
to date and to which the Group has a right to invoice.
Annual Report 2022
59
Employees
5.
The average monthly number of persons employed by the Group (including Directors) during the year was as follows:
Product development and delivery
Sales and marketing
Administration
The staff costs comprise:
Wages and salaries
Social welfare costs
Pension costs
Share-based payment expense
Directors’ remuneration
Directors’ remuneration in respect of qualifying
services in respect of FINEOS Corporation Limited:
Emoluments
Pension/superannuation
Share-based payment expense
Gain on exercise of options
2022
Number
2021
Number
755
30
53
838
2022
€
711
30
53
794
2021
€
85,117,132
75,912,624
7,452,505
4,318,471
2,741,585
6,114,359
3,391,835
2,129,018
99,629,693
87,547,836
2022
€
2021
€
1,213,763
1,169,025
44,827
–
–
1,258,590
42,597
25,752
3,319,860
4,557,234
The number of Directors to whom retirement benefits are accruing under defined contribution scheme pension/
superannuation costs noted above is three (2021: three).
Other than as shown above any further disclosures in respect of Sections 305 and 306 of the Companies Act 2014
are €Nil for the financial year presented.
Staff costs as qualifying development expenditure
The qualifying development expenditure generating an asset as shown in Note 11 consists of qualifying staff costs
incurred in relation to the development of the Group’s projects. During the current year, qualifying staff costs
amounted to €25,772,897 (2021: €24,965,485).
60
FINEOS Corporation Holdings plc
Notes to the Consolidated Financial Statements (continued) 6.
Other Income
Research and development tax credit
Gain on re-measurement of contingent consideration
Grant and other income
2022
€
2021
€
1,279,599
1,305,798
892,978
–
–
26,020
2,172,577
1,331,818
The Company avails of research and development tax credits pursuant to Section 33, Finance Act 2004.
7.
Finance Costs
Bank charges and interest
Lease interest
Unwinding of discount applicable to contingent consideration
2022
€
206,594
418,446
584,329
2021
€
74,674
476,627
82,674
1,209,369
633,975
8.
Loss on Ordinary Activities Before Taxation
The loss on ordinary activities before taxation is stated
after charging/(crediting):
Auditor’s remuneration – Audit of Group companies
– Tax advisory services
Amortisation (Note 11)
Depreciation (Note 12)
Impairment (Note 11)
Research and development expense
Research and development tax credit (Note 6)
Share-based payment expense (Note 19)
Acquisition-related costs
Foreign exchange (gain)/loss
2022
€
2021
€
114,350
10,150
122,150
25,000
20,821,952
16,005,834
2,294,643
2,073,064
12,559,945
–
17,471,091
16,341,001
(1,279,599)
(1,305,798)
2,741,585
–
(823,664)
2,129,018
2,101,824
289,265
Annual Report 2022
61
9.
(a)
Tax on Loss on Ordinary Activities
Tax on loss on ordinary activities
The tax charge is made up as follows:
Current tax:
Overseas taxation
Adjustments in respect of previous years
Total current tax
Deferred tax:
2022
€
2021
€
388,946
(45,787)
432,596
(78,557)
343,159
354,039
Origination and reversal of timing differences
(4,536,173)
(1,414,093)
Tax on loss on ordinary activities
(4,193,014)
(1,060,054)
Overseas taxation has been provided on the results of overseas subsidiary companies at the appropriate overseas
rates of tax.
(b)
Factors affecting the tax charge for the year
The current tax charge for the year differs from the amount computed by applying the standard rate of corporation
tax in the Republic of Ireland to the loss on ordinary activities before taxation. The sources and tax effects of the
differences are explained below:
Loss on ordinary activities before tax
2022
€
2021
€
(30,189,087)
(13,545,116)
Loss on ordinary activities multiplied by the standard rate of tax of 12.5%
(3,773,636)
(1,693,139)
Depreciation greater than capital allowances
Short-term timing differences
Non-deductible expenses/non-taxable income
Higher tax charge on passive income
Higher rates of tax on foreign income
Research and development tax credits claimed
Adjustments in respect of previous years
Losses carried forward
Deferred tax
Total tax charge
143,920
(40,445)
1,408,515
–
389,850
(319,203)
(45,787)
73,172
59,092
185,862
28
410,708
(372,431)
(78,557)
2,579,945
1,769,304
(4,536,173)
(1,414,093)
(4,193,014)
(1,060,054)
62
FINEOS Corporation Holdings plc
Notes to the Consolidated Financial Statements (continued) (c)
Deferred tax asset/(liability)
Group
At beginning of year
Released to the statement
of comprehensive income (Note 9(a))
Foreign exchange
Deferred tax on acquisition
At end of year
The deferred tax asset is analysed as follows:
Timing differences between depreciation
and capital allowances
Timing differences on holiday leave
Timing differences for losses
Other timing differences
At end of year
Being:
Deferred tax asset
Provision for deferred tax
Deferred tax asset
10.
Earnings Per Share
Basic earnings per share
Loss attributed to ordinary shareholders
Weighted average number of ordinary shares outstanding
2022
€
546,596
2021
€
10,463
4,536,173
1,414,093
97,570
8,374
–
(886,334)
5,180,339
546,596
204,972
511,693
4,305,442
158,232
173,437
450,946
(249,023)
171,236
5,180,339
546,596
5,180,339
–
963,369
(416,773)
5,180,339
546,596
2022
€
2021
€
(25,996,073)
(12,485,062)
315,974,050
297,122,910
Basic loss per share (cents)
(8.23)
(4.20)
Basic loss per share is calculated by dividing the loss for the year after taxation attributable to ordinary shareholders
by the weighted average number of ordinary shares in issue during the year.
The 2021 basic loss per share has been restated from a basic loss per share of 4.15 in cents to 4.20 in cents,
arising from a calculation error. The prior period calculation used total comprehensive loss attributable to ordinary
shareholders rather than loss for the financial period after taxation attributable to ordinary shareholders.
Annual Report 2022
63
Diluted earnings per share
Loss attributed to ordinary shareholders
Weighted average number of ordinary shares outstanding
2022
€
2021
€
(25,996,073)
(12,485,062)
315,974,050
297,122,910
Diluted loss per share (cents)
(8.23)
(4.20)
The calculation of diluted earnings per share has been based on the loss attributable to ordinary shareholders and
weighted average number of ordinary shares outstanding after adjustments for the effects of all dilutive ordinary
shares. Potential ordinary shares are treated as dilutive when, and only when, their conversion to ordinary shares
would decrease EPS or increase the loss per share from continuing operations.
11.
Intangible Assets
Right-of-
use assets
€
Development
expenditure
€
Contract
costs
€
Computer
Software
€
Technology
€
Customer
relationships
€
Goodwill
€
Total
€
Group 2022
Cost
At 30 June 2021
6,085,458
109,969,639
2,923,068
341,736
7,840,459
17,716,568
41,332,032
186,208,960
Additions
Translation
adjustment
91,578
25,772,897
199,459
7,865
1,326,205
(499)
–
–
–
–
–
26,063,934
1,129,987
2,553,355
5,956,874
10,973,787
At 30 June 2022
6,184,901
137,068,741
3,122,028
341,736
8,970,446
20,269,923
47,288,906 223,246,681
Amortisation
and impairment
At 30 June 2021
3,964,967
44,416,145
1,295,465
341,736
860,248
708,343
Amortisation
charged in the
year
Impairment
charged in the
year
Translation
adjustment
1,242,397
16,892,534
646,814
–
–
–
5,680
775,772
(379)
–
–
–
1,123,230
916,977
–
–
51,586,904
20,821,952
–
-
12,559,945
12,559,945
220,440
180,835
1,078,605
2,260,953
At 30 June 2022
5,213,044
62,084,451
1,941,900
341,736
2,203,918
1,806,155
13,638,550
87,229,754
Net book
amounts
At 30 June 2022
971,857
74,984,290
1,180,128
At 30 June 2021
2,120,491
65,553,494
1,627,603
–
–
6,766,528
18,463,768
33,650,356 136,016,927
6,980,211
17,008,225
41,332,032
134,622,056
64
FINEOS Corporation Holdings plc
Notes to the Consolidated Financial Statements (continued) Right-of-use
assets
€
Development
expenditure
€
Contract
costs
€
Computer
Software
€
Technology
€
Customer
relationships
€
Goodwill
€
Total
€
Group 2021
Cost
At 30 June 2020
4,533,218
81,700,092
2,367,741
341,736
Additions
Arising on
acquisition
Written off
Translation
adjustment
1,552,240
24,965,485
330,858
–
–
–
3,298,150
341,136
–
(111,917)
5,912
(4,750)
–
–
–
–
–
–
–
–
–
–
88,942,787
26,848,583
7,866,144
17,778,516
41,441,051
70,724,997
–
–
–
(111,917)
(25,685)
(61,948)
(109,019)
(195,490)
At 30 June 2021
6,085,458
109,969,639
2,923,068
341,736
7,840,459
17,716,568
41,332,032 186,208,960
Amortisation
At 30 June 2020
3,051,119
31,567,254
655,858
311,647
–
–
Charged in the
year
Translation
adjustment
913,848
12,857,272
641,820
30,089
857,075
705,730
–
(8,381)
(2,213)
–
3,173
2,613
At 30 June 2021
3,964,967
44,416,145
1,295,465
341,736
860,248
708,343
–
–
–
–
35,585,878
16,005,834
(4,808)
51,586,904
Net book
amounts
At 30 June 2021
2,120,491
65,553,494
1,627,603
–
6,980,211
17,008,225
41,332,032 134,622,056
At 30 June 2020
1,482,099
50,132,838
1,711,883
30,089
–
–
–
53,356,909
Development expenditure
In total, research and development costs for the Group amounted to €43,243,988 in 2022 (2021: €41,306,486),
out of which €25,772,897 (2021: €24,965,485) qualifies for capitalisation under IAS 38 Intangible Assets. Qualifying
development expenditure is amortised on a straight-line basis over its useful economic life, which is considered to
be between three and 10 years. The amortisation expense amounts to €16,892,534 in 2022 (2021: €12,857,272), of
which €105,000 (2021: €105,000) relates to the amortisation of previously capitalised borrowing costs.
Cash-generating units
Goodwill acquired through business combination activity has been allocated to CGUs that are expected to benefit
from synergies in that combination. The CGUs represent the lowest level within the Group at which the associated
goodwill is monitored for internal management purposes and are not larger than the operating segments determined
in accordance with IFRS 8 Operating Segments. A total of three CGUs have been identified.
Impairment testing methodology and results
Goodwill is subject to impairment testing on an annual basis. A value-in-use discounted cash flow model has been
used at 30 June 2022 to value each of the three CGUs. The cash flow forecasts are primarily based on a financial
budget for year ending 30 June 2023, formally approved by the Board, and detailed management projections for
years ending 30 June 2024 to 30 June 2025. These include projected revenues and operating margins determined
with reference to historical Company experience, industry data and management’s expectation for the future.
Annual Report 2022
65
These forecasts are projected forward for a further seven years to determine the basis for a terminal value. Projected
cash flows beyond the initial evaluation period have been extrapolated using a long-term growth rate of 2%. This is
based on the long-term inflation for the US, as forecast by the Economics Intelligence Unit.
The value-in-use represents the present value of the future cash flows, including the terminal value, discounted at a
rate appropriate to each CGU. The discount rates (post tax) used range from 10.0% to 10.9%; these rates are in line
with the Group’s estimated weighted average cost of capital, arrived at using the Capital Asset Pricing Model.
The 2022 annual goodwill impairment testing process has resulted in a goodwill adjustment of €13.6 million being
recorded in respect of our Limelight CGU due to an increase in the weighted average cost of capital as a result of
rising global interest rates and revised revenue forecasts due to continued economic uncertainty in the US market
leading to delays and uncertainty on the allocated budgets of existing and prospective customers.
The assumptions underlying the 2022 value-in-use model projections resulted in a present value (using a post-tax
discount rate of 10.35%) of €55.3 million and a related goodwill adjustment being recorded of €13.6 million, of which
included in the operating loss is a goodwill impairment charge of €12.6 million and a further €1.0 million is related
to the retranslation of the goodwill impairment charge to closing rates.
Significant goodwill amounts
The goodwill allocated to the Limelight and Spraoi CGUs accounts for 89.0% and 11.0% of the total carrying amount
of goodwill at 30 June 2022.
The additional disclosures required for these CGUs are as follows:
Goodwill allocated to the CGU as at
balance sheet date (thousands)
Post-tax discount rate per annum
Pre-tax discount rate per annum
Long-term growth rate assumption
Value-in-use (present value of future
cash flows) (thousands)
Carrying value (thousands)
Headroom/(impairment) (thousands)
2022
Limelight
2021
Limelight
2022
Spraoi
2021
Spraoi
€41,884
10.35%
17.0%
2%
€55,296
€68,935
(€13,639)
€36,608
9.4%
15.9%
2%
€192,284
€65,056
€127,228
€5,404
10.35%
16.1%
2%
€59,967
€8,005
€51,962
€4,724
13.3%
15.4%
2%
€8,859
€7,995
€864
The key assumptions and methodology used in respect of the Limelight and Spraoi CGUs are consistent with those
described above. The values applied to each of the key estimates and assumptions are specific to the individual
CGUs and were derived from a combination of internal and external factors and took into account the cash flows
specifically associated with the business.
Sensitivity analysis
Given the magnitude of the excess of value-in-use over carrying amount for the FINEOS and Spraoi CGUs, and
our belief that the key assumptions are reasonable, management believes that it is not reasonably possible that
there would be a change in the key assumptions such that the carrying amount would exceed the value-in-use.
Consequently, no further disclosures relating to sensitivity of the value-in-use computations for the FINEOS or Spraoi
CGUs are considered to be warranted.
66
FINEOS Corporation Holdings plc
Notes to the Consolidated Financial Statements (continued) 12.
Property, Plant and Equipment
Group 2022
Cost
At 30 June 2021
Additions
Translation adjustment
Right-of-use
assets
€
Office
equipment
€
Computer
equipment
€
Fixtures and
fittings
€
Total
€
9,250,962
795,605
4,706,901
1,906,467
16,659,935
878,722
69,286
–
616
635,834
117,985
211,402
9,415
1,725,958
197,302
At 30 June 2022
10,198,970
796,221
5,460,720
2,127,284
18,583,195
Depreciation
At 30 June 2021
Charged in the year
Translation adjustment
4,747,630
1,238,546
49,303
709,645
3,366,642
1,599,816
10,423,733
43,790
(2,985)
882,560
80,949
129,747
1,381
2,294,643
128,648
At 30 June 2022
6,035,479
750,450
4,330,151
1,730,944
12,847,024
Net book amounts
At 30 June 2022
4,163,491
45,771
1,130,569
396,340
5,736,171
At 30 June 2021
4,503,332
85,960
1,340,259
306,651
6,236,202
Annual Report 2022
67
Group 2021
Cost
At 30 June 2020
Additions
Arising on acquisition
Disposals
Translation adjustment
Right-of-use
assets
€
Office
equipment
€
Computer
equipment
€
Fixtures and
fittings
€
Total
€
9,403,441
16,675
–
(210,394)
41,240
790,673
3,986,725
1,889,880
16,070,719
927
208
–
3,797
756,516
151,174
(192,839)
5,325
188,849
4,156
(180,255)
3,837
962,967
155,538
(583,488)
54,199
At 30 June 2021
9,250,962
795,605
4,706,901
1,906,467
16,659,935
Depreciation
At 30 June 2020
Charged in the year
Disposals
Translation adjustment
3,770,503
1,111,831
(160,300)
25,596
656,928
55,777
–
(3,060)
2,740,084
1,668,567
794,352
(181,911)
14,117
111,104
(180,255)
400
8,836,082
2,073,064
(522,466)
37,053
At 30 June 2021
4,747,630
709,645
3,366,642
1,599,816
10,423,733
Net book amounts
At 30 June 2021
4,503,332
85,960
1,340,259
306,651
6,236,202
At 30 June 2020
5,632,938
133,745
1,246,641
221,313
7,234,637
13.
Financial Assets
Company
Shares in Group undertakings – unlisted, at cost:
At beginning of year
Contribution of investment in Limelight to FINEOS Corporation Inc.
Return of capital from FINEOS International
Impairment of investment in FINEOS Corporation Inc.
At end of year
2022
€
Restated
2021
€
99,404,900
–
(259,182)
(13,638,550)
22,834,215
76,570,685
–
–
85,507,168
99,404,900
FINEOS International Ltd and FINEOS Europe Unlimited, a wholly owned subsidiary of FINEOS International Ltd, were
placed into voluntary liquidation on 6 May 2022. Investments of FINEOS International Ltd were effectively distributed
to FINEOS Corporation Holdings plc, and any funds owing to or from FINEOS International Ltd were discharged.
A closing cash position of €259,182 was transferred to FINEOS Corporation Holdings plc in advance of this date and
was accounted for as a return of capital.
DigIn Technologies LLC was officially dissolved with effect from 25 April 2022 and any funds owing to or from DigIn
Technologies LLC were assigned to and assumed by FINEOS Corporation Inc. in advance of this date.
FINEOS Corporation Inc. owns 100% of the share capital of Limelight Health Inc. The Impairment of the Investment in
FINEOS Corporation Inc. is as a result of the impairment of the Limelight Health CGU as detailed in Note 11.
Details of subsidiary undertakings are included in Note 27. Details of the restatement of comparative figures are
included in Note 29.
68
FINEOS Corporation Holdings plc
Notes to the Consolidated Financial Statements (continued) 14.
Trade and Other Receivables
Group
Trade receivables
Unbilled receivables
Other receivables
Prepayments
Research and development tax credits
Value added tax recoverable
Corporation tax recoverable
Deferred tax asset (Note 9)
Company
Prepayments
Amounts owed by subsidiary undertakings
Trade and other receivables
2022
€
2021
€
25,726,450
22,249,112
573,242
141,790
3,063,826
970,267
1,001,832
686,673
5,180,339
1,247,706
148,828
1,984,899
1,492,056
1,084,099
442,527
963,369
37,344,419
29,612,596
2022
€
2,035
Restated
2021
€
1,846
68,871,874
44,487,883
68,873,909
44,489,729
The carrying amounts of trade receivables and other receivables approximate their fair value largely due to the
short-term maturities and nature of these instruments. All trade receivables are due within the Group’s and
Company’s normal terms, which are 30 days. Trade receivables are shown net of a provision for expected credit
losses (see Note 24 (ii)).
Unbilled receivables
Unbilled receivables refers to work performed/revenue earned but not yet invoiced to the customer due to billing
arrangements.
Taxes and tax credits
Taxes and social welfare costs are subject to the terms of the relevant legislation.
15. Cash and Cash Equivalents
Group
Cash and cash equivalents
Company
Cash and cash equivalents
There are no restrictions on the cash held.
2022
€
2021
€
44,311,366
13,998,945
2022
€
2021
€
21,657,649
401,664
Annual Report 2022
69
16.
Trade and Other Payables
Current
Group
Trade payables
Corporation tax
Value added tax
Employee taxes and levies
Accruals
Deferred revenue
Research and development tax credit
Lease liabilities (Note 21)
Contingent consideration
Company
Trade payables
Accruals
Non-current
Group
Lease liability (Note 21)
Research and development tax credit
Contingent consideration
Trade and other payables
2022
€
2021
€
1,735,040
3,289,594
234,902
10,478
176,478
32,996
1,312,422
1,209,036
8,471,960
7,490,130
25,809,421
17,013,665
1,126,376
1,269,063
1,424,662
2,151,497
2,359,724
1,759,117
42,484,985
34,391,576
2022
€
25,706
78,917
104,623
2022
€
2021
€
19,824
38,500
58,324
2021
€
4,559,815
5,262,444
4,452,225
5,180,303
2,618,206
2,878,125
11,630,246
13,320,872
The carrying amounts of trade and other payables approximate their fair value largely due to the short-term
maturities and nature of these instruments. The repayment terms of trade payables vary between on demand and
30 days. No interest is payable on trade payables.
Reservation of title
Certain trade payables purport to claim a reservation of title clause for goods supplied. Since the extent to which
these payables are secured at any time depends on a number of conditions, the validity of some of which is not
readily determinable, it is not possible to indicate how much of the above was effectively secured.
Amounts due to Group companies
The amounts due to Group and related companies are unsecured, interest free and are repayable on demand.
Accruals
The terms of the accruals are based on underlying invoices.
70
FINEOS Corporation Holdings plc
Notes to the Consolidated Financial Statements (continued) Taxes and social welfare costs
Taxes and social welfare costs are subject to the terms of the relevant legislation. Interest accrues on late payments.
No interest was due at the financial year end date.
Deferred revenue
Income arising on support contracts and subscription sales where the provision of the service has not been completed
at the year-end date is deferred and recognised as the service is provided.
Contingent consideration
On an undiscounted basis, the corresponding future payments relating to contingent consideration, for which the
Group may be liable, approximate US$5.9 million (€5.6 million). This is based on the expected payment amounts,
and underlying performance metrics as set out in the updated letter of agreement dated 12 May 2022. The fair value
of contingent consideration is arrived at through discounting the expected payment to present value. The fair value
approximates US$4.6 million (€4.3 million) on a discounted basis.
The movement in contingent consideration during the year was as follows:
At 1 July
Arising on acquisition during the year
Discount unwinding
Translation adjustment
Gain on re-evaluation
At 30 June
2022
€
4,637,242
2021
€
–
–
4,447,533
584,329
649,337
(892,978)
82,674
107,035
–
4,977,930
4,637,242
17. Called up Share Capital
Authorised share capital (Group and Company)
Ordinary shares
€0.001
4,500,000
4,500,000
Nominal value
(per share)
2022
€
2021
€
Issued share capital presented as equity
Ordinary shares
€0.001
319,385
301,677
Annual Report 2022
71
The movement in issued share capital during the financial year was as follows:
Issued share capital
At 30 June 2021
Share issue – equity raise
Share issue – SPP
Share issue – exercise of share options
Transaction costs accounted for as a
deduction from equity
No. of
shares
Nominal
value
(per share)
Share
capital
€
Share
premium
€
Total
€
301,676,608
16,279,069
862,261
566,849
–
319,384,787
€0.001
€0.001
€0.001
€0.001
301,677
124,239,947
124,541,624
16,279
43,660,015
43,676,294
862
567
2,329,134
2,329,996
144,275
144,842
–
(745,573)
(745,573)
319,385
169,627,798
169,947,183
Transfer from share option reserve
–
–
89,375
89,375
At 30 June 2022
319,384,787
€0.001
319,385
169,717,173
170,036,558
The equivalent disclosure for the prior year is as follows:
No. of
shares
Nominal
value (per
share)
Share
capital
€
Share
premium
€
Total
€
Issued share capital
At 1 July 2020
Share issue – equity raise
Share issue – SPP
Share issue – acquisition of Limelight
272,029,851
19,953,052
1,877,520
2,743,315
Share issue – exercise of share options
5,072,870
€0.001
€0.001
€0.001
€0.001
€0.001
272,030
59,903,254
60,175,284
19,953
51,451,527
51,471,480
1,878
2,743
5,073
4,897,982
4,899,860
7,147,203
7,149,946
869,481
874,554
Transaction costs accounted for as a
deduction from equity
–
301,676,608
–
(1,029,430)
(1,029,430)
301,677
123,240,017
123,541,694
Transfer from share option reserve
–
–
999,930
999,930
At 30 June 2021
301,676,608
301,677
124,239,947
124,541,624
FINEOS undertook an equity raising on 2 September 2021 to provide funding towards FINEOS’ opportunity
pipeline and provide working capital and balance sheet support for planned R&D investments and organic and
inorganic growth opportunities. FINEOS successfully completed a fully underwritten institutional placement, raising
approximately AU$70 million through the issue of 16,279,069 new fully paid CHESS Depositary Interests over FCL
shares (‘CDIs’). The placement was undertaken at an offer price of AU$4.30 per new CDI.
FINEOS Corporation Holdings plc also undertook a non-underwritten Security Purchase Plan (‘SPP’) raising
approximately AU$3.7 million through the issue of 862,261 new fully paid CDIs, at an offer price of AU$4.30 per new
CDI, which completed on 7 October 2021.
Reconciliation of shares issued to proceeds
Shares issued at nominal amount
Premium arising on shares issued
Total value of shares issued
Shares issued as consideration for Limelight
Proceeds from issue of shares
72
FINEOS Corporation Holdings plc
2022
€
17,708
2021
€
29,647
46,133,424
46,151,132
64,366,193
64,395,840
–
(7,149,946)
46,151,132
57,245,894
Notes to the Consolidated Financial Statements (continued) 18.
Reserves
Foreign exchange reserve
The foreign exchange reserve represents gains/losses arising on retranslating the net assets of overseas operations
into Euro.
Retained earnings
The retained earnings represent cumulative gains and losses recognised, net of transfers to/from other reserves and
dividends paid.
Other undenominated capital
This reserve records the nominal value of shares repurchased by the Company.
Share option reserve
The share option reserve represents the movement in share-based payments. The movement in the cumulative
expense since the previous year end date is recognised in the statement of comprehensive income, with a
corresponding entry in ‘share option reserve’.
Re-organisation reserve
FINEOS Corporation Holdings plc (‘FINEOS’) was incorporated on 12 December 2018 and the Directors elected at that
date to account for the restructure of the Group as a capital re-organisation rather than a business combination.
The reorganisation reserve represents the difference between the fair value of the shares issued to effect the
reorganisation and the nominal value of the shares acquired. See Note 2(a) on page 35 of the Group’s Annual Report
for the year ended 30 June 2020 for further detail.
19.
Share-Based Payment Expense
The total share-based payment expense for the Group’s equity incentive schemes charged to general and
administration costs in the consolidated statement of comprehensive income is as follows:
Share-based payment expense
Details of the schemes operated by the Group are set out below.
2019 Equity Incentive Plan
2022
€
2021
€
2,741,585
2,129,018
The ‘2019 Equity Incentive Plan’ was adopted by the Board on 24 June 2019 and approved by the shareholders
of the Company on 9 July 2019. It became effective on Listing. The 2019 Equity Incentive Plan, administered by
the Remuneration and Nomination Committee, allows for the grant of the following awards to employees and
contractors: options, restricted share awards, RSU awards and performance awards. Total awards under the 2019
Equity Incentive Plan are subject to a limit of 5% of the ordinary issued share capital of the Company at any time and
subject to annual rationalisation. The exercise of awards may be conditional upon the satisfaction of performance
factors during a performance period as determined by the Remuneration and Nomination Committee and set out
in each award agreement.
Annual Report 2022
73
See the table below for further detail on the terms of options issued under the 2019 Equity Incentive Plan in the year
to 30 June 2022.
Grant Date
No. of Share
Options
Exercise price per
option
Vesting conditions
by shareholders
Contractual life of
Options
Various grant dates
6,809,000 Range of AU$1.49
to AU$4.35
Three-year service
period.
Expire seven years
after date of grant
3 November 2021
180,518 AU$4.12
Expire seven years
after date of grant
Options shall fully
vest in three equal
tranches on the 1st
year, 2nd year and
3rd year anniversary
from the date of
grant of the options.
6,989,518
An expense of €2,741,585 was recognised during the financial year (2021: €2,129,018) relating to the award of options
under the 2019 Equity Incentive Plan in the current year and prior years.
2012 Share Option Plan, 2015 Share Option Plan and 2019 Share Option and Retention Plan
Prior to listing, FINEOS International Limited, the previous ultimate parent undertaking of the Group, operated a
2012 Share Option Plan and a 2015 Share Option Plan. The options awarded were subject to a three-year service
period and the occurrence of a ‘triggering event’, being the acquisition by any person, or group of persons acting in
concert (excluding any persons connected or related to the existing shareholders), of control of the Company as a
result of purchasing and/or subscribing for shares under a trade sale or IPO.
In February 2019, the Group modified the terms and conditions of the share options granted under its 2015 Share
Option Plan and granted new options under a 2019 Share Option and Retention Plan. The options granted under the
2019 Share Option and Retention Plan were issued as replacements for options granted under the Company’s 2012
Share Option Plan, which lapsed on 1 February 2019 without having vested.
On 24 June 2019, as part of the restructure, all options were exchanged for options in the new parent Company,
FINEOS Corporation Holdings Limited, on a one-for-one basis. The awards were to vest six months after listing.
These 2015 and 2019 share option plans have now closed, and no further awards were issued under these plans in
the current or prior financial year. An expense of €Nil was recognised during the financial year (2021: €Nil) relating
to the February 2019 modification of options under the 2015 Share Option Plan and the grant of options under the
2019 Share Option Plan.
Details of movement and options outstanding under the Group’s Equity Incentive Plans
The following table illustrates the number and weighted average exercise prices (WAEP) of, and movements in, share
options granted under the schemes to Group employees during the year.
Outstanding at 1 July at €0.001 per share
Options granted
Options exercised
Options forfeited
2022
Number
16,215,222
6,989,518
(566,849)
(1,207,752)
2022
WAEP
2021
Number
2021
WAEP
1.17
1.68
0.26
2.34
17,217,500
5,292,300
(5,072,870)
(1,221,708)
Outstanding at 30 June at €0.001 per share
21,430,139
1.32
16,215,222
Exercisable at 30 June at €0.001 per share
7,500,212
0.26
7,832,989
74
FINEOS Corporation Holdings plc
0.53
2.48
0.17
2.38
1.17
0.20
Notes to the Consolidated Financial Statements (continued) For the share options not yet exercisable as at 30 June 2022 the weighted average remaining contractual life is
1.7 years (30 June 2021: 1.75 years).
The fair value of equity-settled share options granted is estimated as at the date of grant using a Black-Scholes
model, taking into account the terms and conditions upon which the options were granted. The Black-Scholes
model is internationally recognised as being appropriate to value employee share schemes. The Company has used
expected share price volatilities of comparable listed companies.
The following table lists the inputs to the model used for the year ended 30 June 2022 (weighted average in each case):
Dividend yield
Expected volatility
Risk free interest rate
Average expected life remaining in years
2022
%
0
45.49
1.34
4.7
2021
%
0
45.10
0.60
4.4
20. Commitments and Contingencies
(a)
Capital commitments
At the year end the Group had no capital commitments.
(b)
Contingent liabilities
At the year end the Group had no contingent liabilities.
(c)
Lease commitments
The Group has total future minimum lease payments under non-cancellable lease commitments as follows:
At 30 June 2022
Due within one year
Due within two to five years
Due after five years
At 30 June 2021
Due within one year
Due within two to five years
Due after five years
Land and
buildings
€
1,238,848
3,708,012
1,559,312
6,506,172
Software
licenses
€
526,301
214,987
Total
€
1,765,149
3,922,999
–
1,559,312
741,288
7,247,460
Land and
buildings
€
Software
licenses
€
Total
€
1,204,860
1,330,194
2,535,054
3,390,532
2,338,968
741,288
4,131,820
–
2,338,968
6,934,360
2,071,482
9,005,842
Annual Report 2022
75
21.
Lease Liabilities
Group
Current lease liabilities
Non-current lease liabilities
Total lease liabilities
The Group’s total lease liability over the years is as follows:
Opening liability
Additions for the year
Disposals for the year
Interest for the year
Lease expense for the year
Closing lease liability
2022
€
2021
€
1,424,662
2,151,497
4,559,815
5,262,444
5,984,477
7,413,941
2022
€
2021
€
(7,413,941)
(7,776,146)
(970,300)
(1,568,915)
–
45,808
(418,446)
(476,627)
2,818,210
2,361,939
(5,984,477)
(7,413,941)
Short-term lease expenses in the statement of comprehensive income
–
–
The Group’s leases include rental of office spaces for business use and right-of-use licenses. All leases are on a fixed
repayment basis and no arrangements have been entered into for contingent rental repayments. The lease terms
range from two to 15 years depending on the term set in the contract. The effective interest rate charged during the
financial year ranged from 3.2% to 7% (2021: 3.2% to 7%) per annum. The lower rate of 3.2% reflects the Group’s
overdraft facility rate and the higher rate of 7% reflects the borrowing rate on the loan drawn by the Group in 2017
and repaid in September 2019.
The right-of-use asset of licenses is classified as ‘intangible assets’, while the right-of-use asset of office rentals is
classified as ‘property, plant and equipment’. The movement in the carrying amount of the right-of-use assets of the
Group at the start and end of each reporting period is disclosed in Notes 11 and 12.
22. Controlling Party
Michael Kelly is the ultimate controlling party of the FINEOS Group.
23.
Pension Commitments
The Group operates defined contribution pension schemes. The Group’s contributions are charged to the statement
of comprehensive income in the year to which they relate and amounted to €4,318,471 (2021: €3,391,835). An
amount of €552,674 was payable at the year end (2021: €538,444).
76
FINEOS Corporation Holdings plc
Notes to the Consolidated Financial Statements (continued) 24.
(i)
Financial Instruments
Liquidity risk
Liquidity risk refers to the risk that the Group encounters difficulties in meeting its short-term obligations. Liquidity
risk is managed by matching the payment and receipt cycle. The following table details the Group’s remaining
contractual maturity for its liabilities. The table has been drawn up based on contractual undiscounted cash flows of
financial instruments based on the earlier of the contractual date or when the Group is expected to receive or (pay).
The table includes both interest and principal cash flows.
30 June 2022
Group
Financial liabilities
Finance lease
Total
€
Within
1 year
€
Between
1 – 5 years
€
Over
5 years
€
37,574,223
37,574,223
–
–
5,984,477
1,424,662
3,116,454
1,443,361
Research and development tax credit
5,578,601
1,126,376
3,121,294
1,330,931
Contingent consideration
4,977,930
2,359,724
2,618,206
–
54,115,231
42,484,985
8,855,954
2,774,292
30 June 2021
Group
Financial liabilities
Finance lease
Total
€
Within
1 year
€
Between
1 – 5 years
€
Over
5 years
€
29,211,899
29,211,899
–
–
7,413,941
2,151,497
3,169,144
2,093,300
Research and development tax credit
6,449,366
1,269,063
3,382,583
1,797,720
Contingent consideration
4,637,242
1,759,117
2,878,125
–
47,712,448
34,391,576
9,429,852
3,891,020
Fair values
The fair value of a financial instrument 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.
Financial instruments whose carrying amounts approximate fair value
Management has determined that the carrying amounts of cash and bank balances, trade and other receivables and
trade and other payables reasonably approximate their fair values because these are mostly short-term in nature.
The fair values of other classes of financial assets and liabilities are disclosed in their respective notes to these
financial statements.
Annual Report 2022
77
The analysis of the carrying amounts of the financial instruments of the Group required under IFRS 9
Financial Instruments is as set out below:
Financial assets that are debt instruments measured at amortised cost
Trade receivables
Cash and cash equivalents
Financial liabilities at amortised cost
Trade payables
Lease liabilities
Group
2022
€
Group
2021
€
25,726,450
22,249,112
44,311,366
13,998,945
1,735,040
3,289,594
5,984,477
7,413,941
The main risks arising from the Group’s financial instruments are credit risk, market risk, foreign currency risk,
interest rate risk and liquidity risk. The Board reviews and agrees policies for managing each of these risks and they
are summarised below:
(ii)
Credit risk
Credit risk is the potential financial loss resulting from the failure of a customer or counterparty to settle its financial
and contractual obligations to the Group, as and when they fall due.
The Group’s exposure to credit risk is mainly influenced by the individual characteristics of each customer. The Group
has established credit limits for each customer under which these customers are analysed for credit-worthiness
before the Group’s standard payment and delivery terms are offered. Most of the customers have been with the
Group for many years and losses have occurred infrequently. In most cases, the Group does not require collateral in
respect of trade and other receivables. The Group monitors their balances regularly.
Management has a credit policy in place and the exposure to credit risk is monitored on an ongoing basis. The Group
always recognises lifetime expected credit losses (‘ECL’) for trade receivables. The ECL on these financial assets are
estimated using a provision matrix as shown below, based on the Group’s historical credit loss experience, adjusted
for factors that are specific to the receivables, general economic conditions and an assessment of both the current as
well as the forecast direction of conditions at the reporting date, including time value of money where appropriate.
Expected credit losses analysis:
At 30 June 2022
Current
1 month
2 months
3 months 4+ months
Balance
Trade receivables as at 30 June
2022
Expected credit losses %
Loss allowance
16,105,932
6,883,296
1,524,789
1,292,026
285
25,806,328
0%
–
0%
–
1%
5%
15,248
64,601
10%
29
79,878
At 30 June 2021
Current
1 month
2 months
3 months 4+ months
Balance
Trade receivables as at 30 June
2021
Expected credit losses %
Loss allowance
12,728,346
4,353,461
3,573,807
1,715,669
(722) 22,370,561
0%
–
0%
–
1%
5%
10%
35,738
85,783
(72)
121,449
78
FINEOS Corporation Holdings plc
Notes to the Consolidated Financial Statements (continued) (iii)
Market risk
Market risk is the risk that changes in market prices, such as interest rates and foreign exchange rates, will affect the
Group’s income. The objective of market risk management is to manage and control market risk exposures within
acceptable parameters, while optimising the return on risk.
(a)
Foreign currency risk
The Group’s foreign currency risk arises from sales and purchases denominated in foreign currencies, primarily the
United States dollar, Australian dollar and New Zealand dollar. During the year, the Group used foreign currency
forward exchange contracts to hedge its exposure. However, at the year end the Group had no outstanding contracts
in place.
Sensitivity analysis
At 30 June 2022, if the foreign currencies strengthen or weaken 5% against the functional currencies, with all variables
held constant, the maximum adjustment to the pre-tax profit/loss of the Group, respectively, for the financial years
presented would have been as set out below:
NZ $
AU $
US $
CAN $
GBP £
PLN
INR
2022
€
201,825
(88,187)
2021
€
147,767
97,939
1,602,394
2,166,724
278,579
60,451
(87,836)
(23,963)
266,401
78,380
(88,248)
–
1,943,263
2,668,963
5% is the sensitivity rate used when reporting foreign currency risk internally to key management personnel and
represents management’s assessment of the possible changes in foreign exchange rate.
(b)
Interest rate risk
There are no variable rate instruments on the statement of financial position at 30 June 2022. The Group does not
account for any fixed rate financial liabilities at FVTPL, therefore a change in interest rates at the reporting date
would not affect profit or loss.
Fixed rate instruments – nominal amount
Financial liabilities
2022
€
–
2021
€
–
Annual Report 2022
79
Related Party Transactions
25.
A Group subsidiary, FINEOS Corporation Limited (Ireland), is party to a lease arrangement with a company controlled
by Michael Kelly. Its term extends until 13 June 2029 with no express options for renewal in favour of either party.
The lease provides for a rent review on 13 June 2024 at market rates. Rent payable by FINEOS is currently €779,656
per annum (excluding taxes). The rental expense for the year was €779,656 (2021: €779,656). The total rent due at
30 June 2022 was €Nil (2021: €Nil).
Consulting fees invoiced by Non-executive Directors during the year amounted to €Nil (2021: €Nil).
In common with other companies, which are members of a group of companies, the financial statements reflect the
effect of such membership.
Key management personnel
All Directors of the FINEOS Group are considered key management personnel. The current Directors are set out on
page 14 of the Annual Report. Total remuneration in respect of these individuals is split as follows:
Wages and salaries
Employer’s PRSI
Pension
Share-based payment expense
Share awards gain on exercise
2022
€
2021
€
1,213,763
1,169,025
39,189
44,827
–
–
40,690
42,597
25,752
3,319,860
1,297,779
4,597,924
During the financial year ended 30 June 2022, there were no material changes to, or material transactions between,
the Company and its key management personnel or members of their close family, other than in respect of
remuneration.
26. Capital Management Policies and Objectives
Capital management
The Group’s and Company’s objectives when managing capital are to safeguard the Group’s and Company’s ability
to continue as a going concern in order to provide returns for shareholders and benefits for other stakeholders and
to maintain an optimal capital structure to reduce the cost of capital. The capital structure of the Group consists of
debts, which includes any borrowings, and equity attributable to owners of the Company, comprising issued capital
and reserves.
There were no changes in the Group’s and Company’s approach to capital management during the year. The Group
and Company monitor capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total
equity. Net debt is calculated as total borrowings (including bank borrowings and excluding trade and other payables,
provisions for income tax and deferred tax liabilities as shown in the statement of financial position) less cash.
Given that the Group has no external borrowings, the gearing ratio has been reflected as Nil.
80
FINEOS Corporation Holdings plc
Notes to the Consolidated Financial Statements (continued) The gearing ratio of the Group at 30 June 2022 was as follows:
Total borrowings
Less: cash and cash equivalents
Net funds
Total equity
Total capital
Gearing ratio
Group
2022
€
-
Group
2021
€
-
(44,311,366)
(13,998,945)
(44,311,366)
(13,998,945)
169,293,652
136,340,578
169,293,652
136,340,578
Nil
Nil
27.
Subsidiary Undertakings
The Company has the following subsidiary undertakings. All subsidiaries are wholly owned unless otherwise
indicated:
Subsidiary Undertaking
FINEOS Corporation Limited (previously
FINEOS Corporation U.C.)
FINEOS UK Limited (previously FINEOS
Corporation Limited)
FINEOS Corporation Inc.
Country of
Incorporation
Republic of Ireland
United Kingdom
United States of
America
FINEOS Australia Pty Limited
Australia
FINEOS New Zealand Limited
New Zealand
FINEOS Polska S.p Z.o.o
FINEOS Canada Limited
Poland
Canada
FINEOS Hong Kong Limited
Hong Kong
FINEOS Esp Entity, S.L.U
Spain
Limelight Health Inc.
United States of
America
FINEOS India Private Limited (previously
Spraoi Software Development Services
Private Limited)
India
Principal Activity
Innovator of enterprise claims management
and policy administration software
Provision of professional services to its parent
undertaking
Provision of professional services and
sales and marketing services to its parent
undertaking
Provision of professional services and
sales and marketing services to its parent
undertaking
Provision of professional services to its parent
undertaking
Provision of product engineering services to
its parent undertaking
Provision of professional services to its parent
undertaking
Provision of sales and marketing services to
its parent undertaking
Provision of product engineering services to
its parent undertaking
Provision of professional services and
sales and marketing services to its parent
undertaking
Provision of product engineering services to
its parent undertaking
Annual Report 2022
81
Details of registered offices are listed below:
Incorporated in Ireland
FINEOS Corporation Limited
Registered Address
FINEOS House,
East Point Business Park,
Dublin 3, D03 FT97
Incorporated in the United Kingdom
Registered Address
FINEOS UK Limited
5 Clapham Chase, Bedford,
Bedfordshire, MK41 6FA
Incorporated in the United States of America
Registered Address
FINEOS Corporation Inc.
Limelight Health Inc.
Incorporated in Australia
FINEOS Australia Pty Limited
Incorporated in New Zealand
FINEOS New Zealand Limited
Incorporated in Poland
FINEOS Polska S.p Z.o.o
Incorporated in Canada
FINEOS Canada Limited
Incorporated in Hong Kong
FINEOS Hong Kong Limited
Incorporated in Spain
FINEOS Esp Entity, S.L.U
Incorporated in India
75 State Street, Suite 100,
Boston, MA 02109
26 O’Farrell Street, Suite 410, San Francisco,
CA 94108
Registered Address
North Tower Level 22, 459 Collins Street,
Melbourne, VIC 3000
Registered Address
Offices of DLA Phillips Fox,
Level 22, DLA Phillips Fox Tower,
209 Queen Street, Auckland 1010
Registered Address
ul. Cypriana Kamila Norwida 2, 80-280 Gdansk
Registered Address
900-1959 Upper Water Street,
Halifax, NS, B3J 3N2
Registered Address
16th floor, Wing On Centre,
111 Connaught Road Central
Registered Address
Calle Principe de Vergara 112,
28002 Madrid
Registered Address
FINEOS India Private Limited (previously Spraoi
Software Development Services Private Limited)
23, Siva Archade, 29th Main, BTM Layout 1st Stage,
Bangalore KA 560068
82
FINEOS Corporation Holdings plc
Notes to the Consolidated Financial Statements (continued)
28.
Events Subsequent to the Year End
There are no events subsequent to the year end that would require disclosure in or adjustment to the consolidated
financial statements.
29.
Prior Year Company Financial Statement Comparatives
A capital contribution from FINEOS Corporation Holdings plc of €76.6 million to a Group company was included within
current assets in the 2021 Company statement of final position. This balance is included in financial assets in the 2022
Company statement of financial position and the prior year financial asset and current asset figures have been reclassified
in respect of same. This reclassification has no impact on the Company’s prior year results or total assets.
Company Statement of Financial Position
Financial assets
Trade and other receivables
Cash and cash equivalents
Total assets
30 June 2021
(previously
reported)
€
Restatement
€
30 June 2021
(restated)
€
22,834,215
76,570,685
99,404,900
121,060,414
(76,570,685)
44,489,729
401,664
144,296,293
–
–
401,664
144,296,293
30. Approval of Consolidated Financial Statements
The consolidated financial statements and Company statement of financial position in respect of the year ended
30 June 2022 were approved and authorised for issue by the Directors on 23 August 2022.
Annual Report 2022
83
Information required by ASX Listing Rules and not disclosed elsewhere in this document is set out below.
The information is correct as at 17 August 2022 unless otherwise indicated.
FINEOS is incorporated in Dublin, Ireland. Its securities, in the form of Chess Depositary Interests (CDIs) in FINEOS
shares, are listed on ASX and are not listed on any other securities exchange.
Since Chess Deposit Nominees Pty Limited (CDN) is the legal holder of applicable shares but the holders of CDIs are
not themselves the legal holders of their applicable shares, the holders of CDIs do not have any directly enforceable
right to vote under the FINEOS constitution.
In order to vote at general meetings, CDI holders have the following options:
(a) instructing CDN, as the legal owner of the underlying shares, to vote the shares underlying their CDIs in a
particular manner;
(b) informing FINEOS that they wish to nominate themselves or another person to be appointed as CDN’s proxy
with respect to the shares underlying their CDIs for the purposes of attending and voting at the general
meeting; or
(c) converting their CDIs into a holding of shares and voting these at the meeting (however, if thereafter the former
CDI holder wishes to sell their investment on ASX it would be necessary to convert the shares back to CDIs).
Option holders are not afforded any voting rights by the options held by them.
Securities on issue
There are 319,384,787 CDIs on issue held by 3,525 registered holders.
The number of securities held by substantial security holders are set out below:
JACQUEL INVESTMENTS LIMITED
There are no securities subject to voluntary escrow.
There are 21,542,139 unlisted options issued and held by 839 option holders.
Distribution spread of security holdings
Balance
168,336,360
%
52.7%
Holding Ranges
1-1,000
1,001-5,000
5,001-10,000
10,001-100,000
100,001-9,999,999,999
Totals
Holders
Total Units
1,783
1,089
313
300
40
776,951
2,707,316
2,341,753
7,523,839
306,034,928
3,525
319,384,787
%
0.24
0.85
0.73
2.36
95.82
100.00
84
FINEOS Corporation Holdings plc
Additional Security Holder Information Top 20 Security Holders
JACQUEL INVESTMENTS LIMITED
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED
BNP PARIBAS NOMS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
MIRRABOOKA INVESTMENTS LIMITED
AMCIL LIMITED
BUTTONWOOD NOMINEES PTY LTD
DJERRIWARRH INVESTMENTS LIMITED
NEWECONOMY COM AU NOMINEES PTY LIMITED <900 ACCOUNT>
JASON ANDREW & WENDY ANDREW
POWERWRAP LIMITED
CS FOURTH NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
TRUEBELL CAPITAL PTY LTD
GARRETT VIGGERS
ALAN LEARD
Balance
168,336,360
44,700,554
22,971,645
20,201,104
9,344,692
9,252,729
6,177,226
4,380,049
4,168,501
2,619,232
2,481,973
1,398,891
1,091,610
986,825
826,448
724,590
691,024
659,649
609,509
435,364
%
52.7%
14.0%
7.2%
6.3%
2.9%
2.9%
1.9%
1.4%
1.3%
0.8%
0.8%
0.4%
0.3%
0.3%
0.3%
0.2%
0.2%
0.2%
0.2%
0.1%
Total Securities of Top 20 Holdings
302,057,975
94.4%
Total of Securities
319,384,787
Unmarketable Parcels (UMP) (based on a share price of $1.81)
Total Securities/Issued Capital
UMP Securities
UMP Holders
UMP Percent
319,384,787
117387
729
0.03675
Annual Report 2022
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FINEOS Corporation Holdings plc
Company Information
Directors
Anne O’Driscoll (Chairman)
Michael Kelly
Gilles Biscay
Martin Fahy
David Hollander
Tom Wall
Company Secretary - Joint
Tom Wall
Company Secretary - Joint
Natalie Climo
Registered Office
FINEOS House,
East Point Business Park,
Dublin 3, Ireland
Ph: +353 1 639 9700
Solicitors
William Fry
2 Grand Canal Square,
Dublin 2, Ireland
Bankers
Bank of Ireland
Lower Baggot Street,
Dublin 2, Ireland
HSBC Bank
1 Grand Canal Square,
Dublin 2, Ireland
Auditors
Mazars
Chartered Accountants and Statutory Audit Firm
Harcourt Centre,
Block 3,
Harcourt Road,
Dublin 2, Ireland
North Tower Level 22, 459 Collins Street,
Melbourne, VIC 3000
Australia
Ph: +61 3 9018 3400
Registered Number
639640
Share Registry
Boardroom Pty Ltd
GPO Box 3993,
Sydney, NSW 2001
Australia
Ph: +61 2 9290 9600
Annual Report 2022
87