Inspiration Healthcare Group plc
(previously Inditherm plc)
Annual Report &
Financial Statements 2016
a breath of fresh air…
Our expertise is in bringing a broad range of life changing products to our customers, largely health authorities in the UK and increasingly, internationally. Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
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Contents
At a Glance
Our Business
Our Highlights
Welcome
Chairman’s Welcome
Directors
Corporate Governance
Strategic Report
Operating and Financial Review
Statement of Corporate Governance
Remuneration Report
Consolidated Financial Statements
Statement of Directors’ Responsibilities in respect of the Annual Report and Financial Statements
Report of the Directors
Independent Auditors’ Report to the Members of Inspiration Healthcare Group plc
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Shareholders’ Equity
Consolidated Cash Flow Statement
Notes forming part of the Financial Statements
Company Financial Statements
Independent Auditors’ Report to the Members of Inspiration Healthcare Group plc (Company)
Company Balance Sheet
Company Statement of Changes in Shareholders’ Equity
Company Cash Flow Statement
Notes to the Company’s Financial Statements
Shareholder Information
Other Shareholder Information
Advisers
Notice of Annual General Meeting
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At a Glance
At a Glance
Incidence of perinatal
asphyxia ranges from
1/1000 live births in
resource rich countries to
5-10/1000 in resource
poor countries.
McGuire, Clinical Evidence 2007
Tecotherm Neo can be
used to treat the effects
of perinatal asphyxia by
regulating the baby’s core
temperature in the first
few hours of life.
ecotherm Neo
Tecotherm Neo
TTecotherm Neo
eco
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Our Business
Inspiration Healthcare Group plc (the
Group) is a supplier of medical devices
mainly in areas of critical care. It was
formed by the reverse acquisition of
Inditherm plc by Inspiration Healthcare
Ltd in June 2015.
The new management team’s expertise is in
bringing a broad range of life changing
products to our customers, largely health
authorities in the UK and increasingly,
internationally. We use our technical expertise
in niche areas and excellence in customer
service as a differentiator. We have a major
focus on bringing real changes to the quality of
life of babies in their early stages of
development.
management
team’s expertise is
in bringing a broad
range of life changing
products to our
“The new
customers”
Our key products fall into 3 segments:
Critical Care, Operating Theatre and Home
Healthcare product sales.
• Critical Care:- our main business area.
Revenue of £8.8 million (2015: £7.3
million) (representing 72% (2015: 76%) of
revenue), this segment also includes subsets
that provide an exciting portfolio of products.
The main source of revenue comes from the
Neonatal Intensive Care Units (NICU).
Products for premature and sick babies
include our LifeStart (for deferred cord
clamping), Tecotherm Neo (for thermo-
regulation), Inspire nCPAP (non-invasive
respiratory support) which are all key
products in this area. Additionally in the UK
we complement these with a range of
distributed products including ventilators,
incubators and a range of consumable
products. We also sell products for adult and
paediatric intensive care in the UK and Ireland.
• Operating Theatre:- Revenue of £1.3
million (2015: £0.7 million) (representing
11% (2015: 8%) of revenue), this is a
growing area of our business where we sell
the Inditherm Alpha system, our own range
of warming products for maintaining patient
temperature during surgery. We complement
these products in the UK and Ireland with
jet ventilators, cardiac surgery perfusion
products and pain management systems.
• Home Healthcare:- Revenue of £2.1 million
(2015: £1.5 million) (representing 17%
(2015: 16%) of revenue), this segment
represents a broad range of products mainly
for parenteral feeding and products that are
not used in intensive care and the operating
theatre. The Inditherm industrial products
are also included. They use related
technology in different markets but add a
useful contribution. We add products in this
segment because of our extensive
relationship with suppliers and customers.
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At a Glance
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Sales represent a mix of capital and revenue
items for our customers. It is, therefore,
important to note that our business is not
reliant on capital budgets in health systems
around the world which come under increasing
pressure during economic downturns. Our
business model benefits from strong recurring
revenue from consumable products and
technical service. Our growth is underpinned
by introducing new and innovative capital
items in addition to the spares and after-market
support. In particular our range includes:
• Capital:- our capital range includes our own
brand of the Tecotherm, Alpha patient
warming, Unique CFM and LifeStart, again
complemented in the UK and Ireland by a
range of distributed products including
incubators, ventilators, and infusion pumps.
• Consumables:- our own range of
consumables is headlined by the Inspire
nCPAP range. We distribute a range of other
neonatal consumables as well as disposables
that link directly to our capital range.
• Technical service:- a range of service
options from planned preventative
maintenance, to ad hoc repairs along with
selling spare parts and training courses.
All of our products benefit from our renowned
customer service and emergency hire service
where we will deliver any equipment to a
hospital in the UK and Ireland within hours
complete with our clinical support team.
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
2016 Highlights
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wise stated)
Financial (statutory unless otherwise stated)
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F
y unless other
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UK up 17%,
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21%, UK up
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International up
International up 28%
International up 28%
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£0.3 million (£0.8 million
exceptional items up £0.3 million
exceptional items up
exceptional items up £0.3 million (£0.8 million
on a proforma basis)
on a proforma basis)
on a proforma basis)
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ter
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£0.1 million
£0.1 million
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£1.2 million
£1.2 million
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£2.3 million
£2.3 million
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Operational
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shipped to Saudi Arabia
shipped to Saudi Arabia
shipped to Saudi Arabia
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UK and Ireland) up 34%
UK and Ireland) up
UK and Ireland) up 34%
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ear End
Post Year End
P
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ear
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tant new product and
impor
tant new product and
important new product and
clinical trial star
ted
clinical trial star
clinical trial started
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K
Key facts
ey facts
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(cid:81)(cid:86)
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(cid:86)(cid:70)(cid:86)(cid:79)(cid:70)(cid:87)(cid:70)(cid:51)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:81)(cid:86)
(cid:1)
(cid:70)(cid:86)(cid:79)(cid:70)(cid:87)(cid:70)(cid:51)
(cid:86)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
29%
29%
29%
(cid:48)(cid:81)(cid:70)(cid:83)(cid:66)(cid:85)(cid:74)(cid:79)(cid:72)(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:72)
(cid:79)(cid:74)(cid:85)(cid:66)(cid:83)(cid:70)(cid:81)(cid:48)
(cid:72)
(cid:74)(cid:85)(cid:66)(cid:83)(cid:70)(cid:81)(cid:48)
(cid:79)
(cid:49)(cid:83)(cid:80)(cid:109)(cid:85)(cid:1)(cid:86)(cid:81)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:81)
(cid:1)
(cid:81)(cid:86)(cid:85)(cid:109)(cid:80)(cid:83)(cid:49)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
£0.3million
£0.3million
million
(cid:1)
(cid:36)(cid:83)(cid:74)(cid:85)(cid:74)(cid:68)(cid:66)(cid:77)(cid:1)(cid:36)(cid:66)(cid:83)(cid:70)(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:83)(cid:66)
(cid:70)
(cid:1)
(cid:1)
(cid:36)(cid:77)(cid:66)(cid:68)(cid:74)(cid:85)(cid:74)(cid:83)(cid:36)
(cid:66)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:83)(cid:66)
(cid:70)
(cid:1)
(cid:1)
(cid:36)(cid:77)(cid:66)(cid:68)(cid:74)(cid:85)(cid:74)(cid:83)(cid:36)
(cid:66)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
Sales up
Sales up
Sales up
%
21%
%12
(cid:66)
(cid:36)(cid:66)(cid:84)(cid:73)(cid:1)(cid:66)(cid:85)(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:85)
(cid:84)(cid:66)(cid:36)
(cid:73)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
(cid:1)
year end
year end
year end
£2.3million
£2.3million
million
7
elcome
Chairman's Welcome
Chairman's W
elcome
There are over
400,000
operating theatres
in the world.
Funk et al, The Lancet,
2010
Inditherm Alpha patient
warming system uses
patented technology to help
reduce patients becoming
hypothermic before,
during and after surgery.
Inditherm Alpha
Inditherm Alpha
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Chairman’s Welcome
It gives me great pleasure to report
the first annual results of the newly
formed Inspiration Healthcare Group
plc which came about following the
reverse acquisition of Inditherm plc
by Inspiration Healthcare Limited.
Transactions of this type are complex but I am
pleased say that the teams from both sides did
an excellent job and the transaction was
completed in a professional and enjoyable way.
I look forward to the merged business providing
real value for shareholders in the future.
On 24 June 2015, when the transaction became
unconditional, Inditherm plc acquired 100% of
the share capital of Inspiration Healthcare Limited
in a transaction which under IFRS 3 was deemed
to be a reverse acquisition. The enlarged group
has been renamed Inspiration Healthcare Group
plc. The transaction has brought a strong
management team with a proven track record of
growth and profitability. The Group has a much
broader range of innovative products which
predominantly serve the medical markets
specialising in Critical Care and the Operating
Theatre.
The re-structured business will provide a strong
platform for growth in important areas of the
medical technology market with scale and
additional resources.
Under the provisions of IFRS 3 the results are
reported as a continuation of Inspiration
Healthcare Limited with the results of the
former Inditherm plc consolidated from the
point that the transaction was completed and
the shares of the enlarged entity admitted to
AIM. Accordingly, the trading for the year to
31 January 2016 reflects twelve months of
Inspiration Healthcare Limited and
approximately thirty-two weeks from Inditherm
plc as previously constituted.
The statutory results for the year ended
31 January 2016 show revenue of £12.3
million, operating profit of £1.3 million before
impairment charges and exceptional items
arising on the reverse acquisition of £1.2
million and an operating profit of £0.1 million.
Reported revenue growth was 29% of which
15% was organic and the balance due to
incorporating the Inditherm business.
Board Members L-R
Robert Beveridge
Mark Abrahams
Toby Foster
Neil Campbell
Ian Smith
Brook Nolson
9
Chairman’s Welcome
To help shareholders to assess the Group, an
unaudited Proforma Consolidated Income
Statement has been produced, which reflects
twelve months of trading from both
entities (see below). The Board believes that
this statement represents the most appropriate
basis for future comparison of operating
performance.
Proforma Consolidated Income Statement (unaudited)
12 months
12 months
Revenue
Cost of sales
Gross profit
Operating expenses
Other income
Operating (loss)/profit
Analysed as:
Operating profit before impairment of goodwill and
intangible assets and exceptional items
Impairment of goodwill and intangible assets
Exceptional items
Operating (loss)/profit
Net finance income
(Loss)/profit on ordinary activities before taxation
Income tax expense
(Loss)/profit for the period attributable to owners of the parent company
Earnings per share, before impairment of goodwill and
intangible assets and exceptional items, attributable to owners
2016
£’000
13,096
(7,118)
5,978
(6,553)
295
(280)
1,109
(517)
(872)
(280)
3
(277)
(136)
(413)
2015
£’000
11,409
(6,344)
5,065
(4,806)
–
259
302
–
(43)
259
6
265
(229)
36
of the parent company during the period - basic and diluted
3.4p
2.9p
Adjusted earnings per share has been included as, in the opinion of the Directors, this will allow shareholders to
gain a clearer understanding of the trading performance of the Group for the period.
Compared to the statutory results, the unaudited
proforma consolidated income statement basis
includes an additional 20 weeks of Inditherm
plc’s results prior to the reverse acquisition which
has the impact of increasing revenue by £0.8
million and reducing the operating profit before
impairment charges and exceptional items by
£0.2 million. On the proforma basis revenue
increased by 15% and operating profit before
goodwill and impairment charges and
exceptional items increased by £0.8 million from
£0.3 million to £1.1 million compared to the
previous 12 months.
There is a great deal of synergy between the
two group’s product ranges. The majority of the
Inspiration product range focuses on the
newborn in the Neonatal Intensive Care Units
(NICU) as does the Inditherm infant warming
range. Additionally in the UK, Inspiration sell a
range of products into the Operating Theatre, to
which adding the Inditherm patient warming
mattresses gives scale to the sales team and
will unlock more value from this sector.
Interest in the Inditherm products has also
grown especially in the LifeStart range. We
10
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
We believe that our own branded products are
well placed in our key export markets to drive
growth in our business, whilst we will continue
to look for products to distribute in the United
Kingdom that would add value to our existing
portfolio.
The new financial year has started well and on
plan and we expect to continue our progress
across the business this year.
MARK ABRAHAMS
Chairman
28 April 2016
believe that this product has significant
potential and it is gaining interest in both
regular usage and also in the academic world
where clinicians are looking at the benefits of
deferred cord clamping. The interest in this
topic is gaining momentum with ongoing
clinical trials and we look forward to realising
the full potential of the product in the
forthcoming years.
Some of our R & D developed products were
slower to gain regulatory clearance than we
had hoped but our market research shows
substantial interest in these products and we
remain confident in the potential of our new
product pipeline.
I would like to offer my sincere thanks to our
staff who have worked diligently and tirelessly
throughout the year to maintain the
momentum required to grow our Group during
the merger and integration process. Their
endeavour is appreciated by the entire Board.
Forward looking statement
The Group is well positioned to realise its
potential with a newly restructured sales team
and a pipeline of products through a prioritised
R & D programme. We believe the market is
right for the products we have developed
especially with our comprehensive neonatal
offering where we can help affect the outcome
of babies from before the first breath of life.
The market in the UK continues to
unpredictable for capital purchases by the NHS.
However our managed service offering helps to
remove such barriers for the NHS to acquire our
patient warming system for surgery. We also
have strong recurring revenue through our
disposable product and Technical Support
contracts that reduce reliance on capital
budgets.
11
Chairman’s Welcome
Directors
Executive Directors
Neil Campbell
Chief Executive Officer
Toby Foster
Group Sales Director
Ian Smith
Group Finance Director
After beginning his career in medical
devices at Smiths Medical, Neil
held several sales and marketing
positions including regional
International Sales Manager at
Eschmann. He subsequently joined
Electro Medical Equipment Limited
(“EME”) as marketing manager for
the global neonatal company. In
2003, Neil became CEO and
founding partner of Inspiration
Healthcare Limited. In total Neil has
spent 23 years in the Medical Device
sector. Neil’s commitment to
perinatology has been recognised by
him being invited to be an industry
and scientific board member at the
Infant Centre in Ireland. Neil is also a
Non-executive Director of
Neuroprotexeon Limited, a drug-
discovery and biotechnology
company, in which the Group is a
shareholder.
Toby joined EME in 1992 having
previously run his own small
business in the construction/property
industry. During his time at EME, he
was instrumental in launching new
products including neonatal
ventilators, neonatal nCPAP, adult
high frequency oscillation and
developmental care. He then moved
to international sales management
before heading up the UK sales team.
In 2003 he was a founding director
of Inspiration Healthcare Limited;
responsible for all sales and sales
recruitment, the 24/7 clinical support
service and patient first philosophy,
launching several new technologies
including the Novalung
extracorporeal lung assist into the UK
critical care market.
Ian joined Inspiration Healthcare
Group plc (previously Inditherm plc)
as Group Finance Director upon
completion of the reverse acquisition
of Inditherm plc (which he joined in
January 2004 as Finance Director)
by Inspiration Healthcare Limited. He
is a Chartered Accountant having
trained with Ernst & Young. After
moving into industry he qualified as a
Corporate Treasurer and has over 25
years’ board level experience gained
at both group and operating company
level in a wide range of industries.
Amongst previous roles, Ian has been
Finance Director for Portakabin
Limited, Divisional Finance Director
of the turbocharging division of
Cummins Engine Co Inc. and
Divisional Finance Director and Group
Treasurer at Hickson International.
12
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Non-executive Directors
Mark Abrahams
Non-executive Chairman
Mark is currently Non-executive
Chairman of Fenner Plc, having been
Chief Executive for 18 years. There
he led a strategy of converting the
group from a power transmissions
manufacturer to a world leader in
reinforced polymers. Mark was Vice
Chair of Leeds Teaching Hospitals
Trust and was Non-executive
Chairman of the Darby Group Plc. He
is a Chartered Accountant and a
Companion of the Institute of
Management. He is a member of the
Economics Growth Board of the CBI.
Robert Beveridge
Non-executive Director and Senior
Independent Director
Bob Beveridge FCA was appointed as
a Non-executive Director on 3 August
2015 and is Chairman the Group’s
Audit Committee. Bob has wide
ranging non-executive director and
public company experience. He is
Non-executive Director and Chairman
of the Audit Committee of Brady plc,
Volex plc and InternetQ plc.
Previously he was Group Finance
Director of McBride plc, Marlborough
Stirling plc and Cable and Wireless
Communications plc and Non-
executive Director of Hampshire
Hospitals NHS Trust.
Brook Nolson
Non-executive Director
Brook joined the Group as Non-
executive Director on 23 June 2015.
Having established and managed a
regional electronics retail chain,
Brook moved into a marketing role
with Balfour Beatty plc in 1986. He
assumed the role of Regional
Marketing Director in 1989 for the
North East. Following a period as
Business Development Director of
Birse Group plc, Brook was
appointed Strategic Key Accounts
Director of Willmott Dixon Group. His
roles included development of
marketing strategy, establishing a
customer care process and managing
innovation, research and
development. In 2001, he was
appointed Group Strategic Director of
Morgan Sindall plc, with
responsibility to consolidate
individual operating companies into
one brand. Brook remains an adviser
to a number of businesses across
various sectors, which include
turnaround and start up situations.
13
Corporate Governance
For preterm infants in good
condition at delivery, delaying
cord clamping by 3 min
results in increased blood
pressure during stabilisation,
a lower incidence of IVH and
fewer blood transfusions. For
infants requiring resuscitation,
resuscitative intervention
remains the immediate priority.
J Wylie, S Ainsworth, R Tinnion –
Resuscitation Council Guidelines 2015;
Cochrane Review
LifeStart TM enables the
umbilical cord to be cut
at the most optimal time
for the baby by allowing
it to be positioned close
to mother even if needing
resuscitation.
LifeStart TM
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Strategic Report
Principle Activities
Inspiration Healthcare Group plc is a supplier
of medical devices mainly in areas of critical
care. It was formed by the reverse acquisition
of Inditherm plc by Inspiration Healthcare
Limited which became unconditional on
24 June 2015. Inditherm plc was renamed
Inspiration Healthcare Group plc on 23 June
2015.
Inspiration Healthcare Limited was founded in
2003 as a patient-focused distributor of critical
care equipment in the UK and the Republic of
Ireland. Each of the founders is still active in
the business. Using cash generated from
operations to invest in sales and marketing
activities and to add further products to the
portfolio under distribution agreements,
Inspiration has experienced unbroken year-on-
year sales growth since 2003 through a
combination of:
• adding more innovative products to
complement the range available to our
medical customers;
• increasing our international presence as we
gain market share in each of our targeted
countries;
• increasingly developing our own technology
principally through innovative products
designed to improve outcomes for babies;
and
• targeted acquisitions of niche businesses in
related product areas.
Inspiration has also licensed technology for
sale under its own brand worldwide with
products manufactured by third parties. In
addition, Inspiration has invested in an R&D
team based in Albourne, West Sussex, to
develop its own products.
Inditherm plc was formed in 1998 having
developed a heating product using new
technology, also called Inditherm, which is
capable of generating a uniform heat with no
hot or cold spots when a low voltage is
applied. The product is material-based and
flexible, robust, energy efficient and
controllable. In addition, use of the product can
deliver cost-efficient warming in medical
applications.
Review of Business and Future
Developments
The Consolidated Statement of Comprehensive
Income is set out on page 43 reflecting the
Group’s profit before taxation for the financial
year of £0.1 million (2015: £1.0 million) and
profit before taxation, impairment of goodwill
and intangible assets and exceptional items for
the financial year of £1.3 million (2015: £1.0
million).
The Operating and Financial Review prepared
on a Group basis is contained on pages 23 to
25.
Products
Each of our three segments can be futher
divided into key two areas. These are Own
Brand, which accounts for 45% of revenue
and Distributed, which encompasses products
distributed on behalf of other manufacturers
and accounts for 55% of revenue.
Own Brand
Products that we manufacture or sub-contract
manufacture to our own specification and
design. These products typically have a higher
margin but have higher costs to bring to market
(such as R&D, manufacturing, regulatory and
marketing costs). We sell these products in
international markets as well as the UK.
15
Corporate Governance
Review of Business and Future
Developments (continued)
Products (continued)
Distributed
Products we sell in the UK and Ireland through
our direct selling channels. These products add
value to our portfolio and typically generate
positive cash. They are usually secured by
distribution contracts.
There are distinct advantages of having a blend
of products. The own brand products
demonstrate our sector expertise and are
protected by either patents or other specialist
knowledge. Distributed products earn lower
margins but need less capital, typically
generating cash more quickly. However, these
benefits are offset against the risk of losing the
distributorship due to changes in strategy of the
principal and could therefore be seen as
relatively short term. Our strategy therefore is to
increase the proportion of sales from own
branded products.
Distributed products add value to our sales
team and the call point as we can offer a more
comprehensive product range. We will
continue to look at opportunities to add more
distributed products into the product portfolio
where they can add value and
complement/supplement the rest of the product
range. Products that we will actively look for
will be therapeutic with an element of capital
where we can offer technical service and
planned preventative maintenance, along with
bespoke consumables.
Our strategy over the next few years will be to
invest further in R&D to further enhance the
range of own brand products sold
internationally. International sales are
strategically important to increase our diversity
and resilience as well as offering improved
margins. Priorities will be given to areas where
we have an existing sales channel. They will
revolve around our Neonatal Product range,
and especially thermo-regulation of the new-
born and respiratory support, and
peri-operative patient warming.
16
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
During the last six months of the financial year,
the current product portfolio of own brand
products has been reviewed comprehensively.
The overall proposition of the products has
been assessed and we have looked strategically
at the market dynamics. We have now defined
product requirements, market requirements
and expect to launch the first of several
products in the new financial year.
Sales and Marketing
The market for medical equipment is growing
in all our market segments albeit at different
levels around the world. The birth rate in many
countries remains relatively consistent but
there is an increasing demand for improving
the outcome and survival rates of babies that
are born with complications. In low to middle
income countries, investment is being made in
child health to reduce childhood mortality as
part of the World Health Organisation’s
Millennium Development Goal which is aimed
at reducing mortality in children under five.
Currently there is considerable interest in
optimising the timing of clamping of the
umbilical cord of the new born. This ideally
places the LifeStart product in the forefront as
clinicians look to determine how to offer the
best treatment to their patients.
We are starting to see particular growth in our
managed service offering and growth in interest
in our rental programmes in the UK. Our aim is
to ensure that the products are right for the
market and to offer a range of capital purchase
and revenue based offerings to give maximum
flexibility to our customers who want to use our
technology but may not have the capital
budgets to make an outright purchase.
In international markets we have seen strong
growth in our Tecotherm range with a large
order from Saudi Arabia. Clinical trials have
started in India to see if babies suffering from
perinatal asphyxia can be treated in a low
income setting using the Tecotherm and we
look forward to the findings of this study.
Our international dealer network has been
reviewed in light of the merger to ensure we have
best in class distributors. We believe that we now
have in place a strong route to market in most of
the key markets and this, supported by the
internal regulatory strategy, will allow for further
growth internationally in the next few years.
In the UK we have re-aligned our sales team to
be able to handle a greater range of products
and also to focus more clearly on the products
in the current range. This allows greater growth
potential as we develop new products or
distribute more products from our overseas
partners as well as leveraging its position in
key accounts with better customer service and
product support.
The Home Healthcare parenteral products are
achieving excellent distribution. We expect to
see continued growth in this niche but
important market as the extra focus from the
restructured sales team starts to realise the
potential.
Our marketing strategy continues to focus on
how to improve the interaction with customers
by defining innovative products, improving the
online interface, the corporate image and how
we can drive interest in the product we sell. We
will continue to invest in the Inspiration brand
to position it as a world leader in the key niche
markets it serves.
17
Corporate Governance
Sales and Marketing (continued)
Competition
Our technical service offering has been stable
this financial year. Market conditions have
proved difficult with NHS Trusts looking closely
at the costs of service through third parties. We
are looking for opportunities to increase the
portfolio of products that we can service and
ways to grow training revenues.
IT and Infrastructure
In 2014 we embarked on implementing a full
ERP system into Inspiration Healthcare Limited
and we are now in the final stages of planning to
migrate the former Inditherm business onto the
same platform.
Additionally, this will include a CRM function
which will help our sales and marketing teams
develop better understanding of customer needs
and help plan targeted campaigns to ensure that
our customers are fully engaged without being
overly exposed to products that they may not be
interested in.
Principal Risks and Uncertainties
The Group has a formal process for identifying
principal risks and has a programme for
reviewing these risks as part of its monthly
Board meeting business. The principal risks
faced by the Group are:
Strategic Risks
Loss of Key Distribution or Licence Agreements
The loss of any of the Group’s largest
agreements to sell medical devices on behalf of
third parties may have a material impact on the
Group’s business, prospects, financial condition
or results of operations. Major account reviews
take place regularly and plans are mutually
agreed. Our strategy is based upon the added
value of our supply chain and if necessary
alternative product suppliers can be sourced. It
is the Group’s intention to increase the
proportion of sales from products where we own
the intellectual property to minimise this risk.
The Group operates in a highly competitive
market with potential competitors including
companies which may have substantially greater
resources than those of the Group. The Group’s
products may face competition from products
designed, manufactured, marketed and supplied
by companies that have greater research,
development, marketing, financial and
personnel resources. Exceptional customer
service and delivery times are essential in order
to maintain competitive advantage and our
strategy is based upon this competitive
advantage.
Research & Development
The Group invests in R&D projects in order to
develop innovative new products. It works with
a professional advisory panel in order to
prioritise opportunity areas. Continued growth
within existing customers depends upon the
successful introduction of these new products.
Projects are reviewed regularly by the Board
and total R&D investment is planned to
increase in the forthcoming year, in line with
our strategic objectives.
Integration of Acquisitions
The stated strategy of the Group is to grow by a
mixture of organic sales growth and
acquisitions. A new end to end business
system and processes are being implemented
across all our sites and will comprise the basis
for the integration of future acquisitions. Until
the first acquisition is fully integrated the Group
might not deliver all the logistics, service and
sales synergies identified in the business case.
Operational Risks
Dependence on Supply by Third Parties
The Group’s business depends on products
and services provided by third parties. If there
is any interruption to the supply of products or
services by third parties or those products or
services are not as scalable as anticipated or at
all, or there are problems maintaining quality
standards and delivering product to
18
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Principal Risks and Uncertainties
(continued)
Operational Risks (continued)
specification, or there are problems in
upgrading such products or services, the
Group’s business will be adversely affected.
The Group maintains appropriate stock levels
of the most critical items to maintain customer
service levels and mitigate this risk.
Reliance on Key Individuals
The success of the Group will depend largely
upon the expertise and relationships of the
Board and other senior employees. The loss of
any of the key individuals could have an adverse
effect on the Group. Rewards are competitive
and all employees are paid at least the living
wage. A culture of engagement and recognition
exists and it is the Group’s policy to maintain a
safe and pleasant work environment.
Supply Chain Business Interruption
The success of the Group depends critically
upon the efficiency and speed of its supply
chain. A new experienced supply chain
manager has been appointed and an ERP
system has been implemented to underpin the
supply chain processes. A disaster recovery
plan exists and is tested each year.
Health & Safety
The Health & Safety of all our associates is a
priority item for the Board and the Health &
Safety report is presented at each Board
meeting. The Group’s Health & Safety officer
holds a national accreditation. An annual
Health & Safety assessment is presented
annually to the Board and follow up actions
agreed if necessary.
19
Corporate Governance
Principal Risks and Uncertainties
(continued)
Financial & Compliance Risks
Foreign Exchange Risk
As the Group operates globally, it is exposed to
foreign exchange gains and losses which may
have an adverse effect on the Group’s profits.
However, the balance of imports and exports
provides a high degree of natural hedge so the
risk is minimised.
Retention of the Group’s Certificates and
Other Licences
The medical industry is highly regulated and
each territory in which the Group operates is
subject to its own stringent legal and regulatory
regime. Regulatory approvals are required to
market and sell medical devices into both the
UK and export markets. The Group has
stringent internal controls in order to comply
with the relevant legal and regulatory conditions
in the UK and in its export markets and has a
Regulatory Affairs and Quality Department
dedicated to liaising with the regulatory
authorities to monitor any changes in conditions
and ensure continuing compliance with existing
and new conditions.
Litigation
Legal proceedings may arise from time to time
in the course of the Group’s business,
including through potential product failure
which may lead to claims and reputational
damage. The Board maintains product and
public liability insurance to comply with the
requirements of the NHS in the UK. In
addition, the Company seeks protection of IP
and does not intentionally infringe the IP of
others.
Risk Appetite
Risk appetite can be defined as ‘the amount
and type of risk’ that the Group is willing to
take in order to meet their strategic objectives.
The Board have applied a differentiated risk
appetite to each major category of risk, i.e.
Strategic, Operational, Financial & Compliance.
Levels of risk were considered against the
following categories:
0 – Avoid risk – zero tolerance
1 – Minimal risk – as little as reasonably
possible
2 – Cautious – prepared to accept some limited
loss
3 – Open – prepared to consider balance
between risk and reward, invest for future
return
4 – Seek – prepare to be innovative in pursuit
of higher returns
5 – Mature – confident of setting high levels of
risk appetite underpinned by rigorous
processes and controls.
Our Strategic risks appetite is assessed as level
4 (Seek) as we aim to be innovative in our
specialist areas. For Operational risks we adopt
level 2 (Cautious) as our customer service is
integral to our business model. Our risk
appetite for Financial & Compliance is minimal
as we work in a highly regulated industry.
Employees
Pre-merger, Inspiration Healthcare Limited had
been awarded recognition from the Living
Wage Foundation. Post-merger management
decided to implement this initiative across the
entire Group. We are pleased to say that all
employees now benefit from this initiative. We
will continue to invest in our staff in terms of
20
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
decided to implement this initiative across the
entire Group. We are pleased to say that all
employees now benefit from this initiative. We
will continue to invest in our staff in terms of
training and opportunities to progress their
careers within the Group in order to create a
stimulating work environment for all our staff
and develop appropriate skills to grow the
business.
The Group is committed to employment
policies, which follow best practice, based on
equal opportunities for all employees,
irrespective of sex, race, colour, disability or
marital status. Applications for employment by
disabled persons are always fully considered,
bearing in mind the respective aptitudes and
abilities of the applicant concerned. In the
event of members of staff becoming disabled,
every effort is made to ensure that their
employment with the Group continues and that
appropriate training is arranged. It is the policy
of the Group that the training, career
development and promotion of a disabled
person should, as far as possible, be identical
to that of a person who does not suffer from a
disability.
We have continued our policy of retaining our
loyal staff through the short term peaks and
troughs of demand. On behalf of the Board, we
thank our staff most sincerely for their
continued support.
Dividends
At the time of the Group’s re-admission to AIM
in June 2015, the Board proposed to reinvest
earnings in financing the growth of the Group’s
business. Neil Campbell and Toby Foster
received dividends (from Inspiration Healthcare
Limited) during the year’s prior to the reverse
acquisition and becoming directors of
Inspiration Healthcare Group plc (see note 10).
21
Corporate Governance
Key Performance Indicators
The Directors have monitored the performance of the Group with particular reference to the relevant
key performance indicators (KPI’s) which are set out below:
Sales growth %
Proportion of sales from international markets %
Gross margin %
R & D % of Sales (Gross)
Operating profit (before impairment of goodwill and
intangible assets and exceptional items) %
Sales from own brand %
Asset turnover ratio (times)
Proforma
results
12 months
ended
31 January
2016
Statutory
12 months
ended
31 January
2016
Statutory
12 months
ended
31 January
2015
14.8%
32.3%
45.6%
3.3%
8.5%
45.0%
3.4%
28.7%
31.7%
44.9%
3.3%
10.6%
42.4%
3.7%
7.9%
30.2%
42.3%
2.6%
10.3%
39.9%
3.3%
These Key Performance Indicators have been chosen by the Directors as those that measure the key
elements of the Group’s performance towards the achievement of the Group’s strategy.
Sales of own brand products in international markets continue to show encouraging growth in line
with our strategic goals. R&D has been stable in recent years but is expected to increase in the future.
Asset turnover is an important measure of our operating efficiency.
MARK ABRAHAMS
NEIL CAMPBELL
Chairman
Chief Executive Officer
28 April 2016
28 April 2016
22
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Operating and Financial Review
Our underlying revenue grew during
the year, embracing the challenges of
merging the Inspiration and Inditherm
businesses. The biggest thank you
I can say is to all our staff who have
helped complete the merger smoothly
and have driven the Group forward.
I am delighted with the response we
have had from all our staff who have
brought about the successful
integration.
On a statutory basis reported operating profit
was £0.1 million (2015: £1.0 million) with
operating profit before impairment charges and
exceptional items of £1.3 million (2015: £1.0
million). On a proforma basis, operating profit
before impairment charges and exceptional
items improved to £1.1 million (2015: £0.3
million). Profit after tax and earnings per share
(EPS) were minimal, reflecting the impact of
non-recurring impairment charges of £0.5
million and £0.7 million of exceptional costs.
Underlying profit margin was 8.5% and
adjusted EPS increased from 2.9p to 3.4p per
share on a proforma basis (2.9p to 4.1p on a
statutory basis).
Sales of the Inspiration Healthcare Limited
business increased to £11.2 million from £9.5
million with the balance of revenue generated
by the former Inditherm business. Sales grew
21% in Critical Care to £8.8 million (2015:
£7.3 million) and 39% in Home Healthcare to
£2.1 million (2015: £1.5 million).
The overall performance of the Group was in
line with our plans at £12.3 million of revenue
(2015: £9.5 million). As expected, this
represented a flat period for the Inditherm
range, which was achieved with a lower cost
base as the product range was integrated into
the Inspiration offering. Looking forward, in the
short to medium term, we expect to achieve
growth as we develop more appropriate
channels and products.
Critical Care (£8.8 million, +21% growth
year on year)
Our Critical Care business grew strongly with
UK sales up 17% and international sales up
28%. Whereas the UK market is particularly
important to us in our distribution model, the
real growth from our own products in the
longer term will be attained internationally.
During the financial year we have made made
reasonable progress in North America and we
had our largest ever order shipped to Saudi
Arabia (£0.7 million).
Our sales team has now been re-organised in
the UK to give a focus on the different aspects
of our business. We now have a dedicated
Critical Care sales team, including a full time
National Sales Manager. This approach will
give more focus to the team and better
reporting and visibility of opportunities.
Our service department has contracts with
NHS Trusts for planned preventative
maintenance. Additionally we also carry out ad
hoc repairs chargeable by the hour and supply
spare parts. Technical service is a core part of
our business, which adds value to distribution
and helps differentiate us from competitors.
Our service offering includes 24/7 emergency
hire of life support equipment.
Operating Theatre (£1.3 million, +82% year
on year)
Our Operating Theatre business includes the
original Inditherm surgical warming products
as well as some distributed products in the UK
that can add value to customers in this area.
Again, as with the Critical Care sales team, we
have re-organised the sales team to deliver a
more focused service to the customer when it
comes to discussing surgical needs and patient
requirements led by a National Sales Manager.
23
Corporate Governance
The sales growth reflects the impact of the
acquisition, the Inditherm Alpha mattress
system for warming patients during surgery
had a challenging financial year, although we
managed to win a substantial managed service
contract in the UK. Further development of the
managed service business is being undertaken
to see how far we can progress with this
offering as we believe it demonstrates savings
to our customers more clearly.
Home Healthcare (£2.1 million, + 39% year
on year)
We have seen significant growth in our
parenteral feeding product lines sharing
experience with other infusion based products
in the portfolio.
The industrial business of Inditherm is making
a small but valuable contribution and following
the transaction the focused resource is starting
to show benefits with increased interest in this
area.
Review of Business and Future Developments
On a Group basis the business review, future
prospects and key performance indicators are
set out in the Strategic Report on pages 15 to
22. Due to the change in the structure of the
business following the reverse acquisition the
Directors have included a 12 month Proforma
Consolidated Income Statement (unaudited)
within the Chairman’s Welcome on pages 9
to 11. The Directors believe that this year on
year comparison represents the most
appropriate basis for future comparisons of
financial performance and that overall the
Annual Accounts and Consolidated Financial
Statements are fair, balanced and
understandable.
Taxation
The Group has recorded an income tax
expense of £136,000 (2015: £229,000).
Within this amount the Group has benefitted
from a deferred tax credit on recognition of the
future benefit of capital allowance (not
previously claimed by Inditherm plc) as a
deferred tax asset of £45,000 (2015: £nil).
Further benefit is gained from Research and
Development tax credits resulting in £115,000
(2015: £nil) of UK corporation tax recoverable
at the year end. £80,000 of the amount
recoverable relates to previous financial years.
Cashflow
The year end cash and cash equivalents
improved to £2.3 million from £0.3 million in
2015 due to cash generated from trading of
£1.1 million (2015: decrease of £0.2 million)
and £0.9 million assumed from Inditherm plc
when the reverse acquisition was completed.
24
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Impairment of Goodwill and Intangible Assets
The impairment of goodwill and intangible
assets arising on reverse acquisition of £0.5
million comprise the impairment of intellectual
property of £0.1 million and impairment of
goodwill of £0.4 million both recognised
following a review of the carrying values of the
assets at year end (see note 11 for further
details).
NEIL CAMPBELL
Chief Executive Officer
28 April 2016
The Group has no borrowings (other than
£33,000 (2015: £nil) of finance leases). The
Directors believe that in the short to medium
term, the planned growth in the business can
be funded from ongoing operations.
Exceptional Items
The Group presents certain items as
exceptional items that are non-recurring and
significant. These relate to items which, in
management’s judgement, need to be
disclosed by virtue of their size and incidence
in order to obtain a more meaningful
understanding of the financial information.
The exceptional items reported relate to reverse
acquisition transaction and re-organisation
costs of £0.7 million. The amount comprised
two main categories of non-recurring items.
Firstly, professional fees of £0.5 million
including brokerage, legal fees, accounting and
taxation advice, stamp duty and public
relations fees in relation to the reverse
acquisition. Secondly, non-recurring severance
costs of £0.2 million including payments for
loss of office and redundancy.
25
Corporate Governance
Statement of Corporate Governance
As a company whose shares are traded on
AIM, we are not required to comply with all the
requirements of the UK Corporate Governance
Code published by the Financial Reporting
Council in September 2014 (the Code).
However, the Board is committed to the highest
standards of corporate governance in relation to
its size and sets out below details of how it has
applied certain provisions of the Code.
The Board of Directors of Inspiration
Healthcare Group plc is made of up three
executive directors and three independent non-
executive directors. Details of the Board
members are on pages 12 to 13. The Board is
chaired by Mark Abrahams who has held this
post for 15 years, including time served as
Chairman of Inditherm plc. There is a clear
distinction between the role of the Chairman of
the Board and the Chief Executive Officer of the
Group.
The Board is responsible for ensuring that good
corporate governance is applied across the
Group. Board meetings are typically held
monthly, with an agenda focussing on aspects
of the business that need attention to reduce
risk and improve growth. A fundamental part of
every Board meeting is the consideration of
Health and Safety matters.
The balance between executives and non-
executive directors is seen as essential. The
non-executive directors are considered by the
Board to be independent of management and
free from any relationship which could
materially affect their independent judgement,
save as disclosed later in this section. The non-
executive directors of the Group bring a wealth
of experience from different industries which is
seen as a positive way of ensuring that best
business practices are adopted within the
organisation. The non-executives also
recognise the need for the Group to be
dynamic and entrepreneurial at its current size.
If required, the directors are entitled to take
independent legal advice and if the Board is
informed in advance, the cost of the advice will
be reimbursed by the Group.
Due to the current size of the Group the roles of
Group Finance Director and Company
Secretary are carried out by one person.
Board Committees
There are three committees that meet
independently of Board meetings.
Audit Committee:
The Audit Committee has two members,
Robert Beveridge (Chairman) and Brook
Nolson. Executive Directors and external
auditors can attend audit committee meetings
by invitation. The Committee meets as required
but at least twice a year. The Committee
reviews the content of financial reports as well
as examining internal controls, risks and
independence of auditors including monitoring
the level of non-audit fees.
Remuneration Committee:
The report of the Remuneration Committee is
set out on pages 29 to 35. The Remuneration
Committee has two members, Brook Nolson
(Chairman) and Robert Beveridge. The
Committee is responsible for setting the
remuneration packages for Executive Directors
as well as approving, where appropriate, the
remuneration of senior staff. The Committee
sets incentive schemes for the Directors to
align their interests with those of the
shareholders and to encourage the strategic
development of the business.
26
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Board Committees (continued)
Consulting Agreement – John Markham
Nominations committee
The Nominations Committee has four
members, Mark Abrahams (Chairman), Robert
Beveridge, Brook Nolson and Neil Campbell.
The Nominations Committee considers
succession planning, reviews the structure, size
and composition of the Board and nominates
candidates to fill Board vacancies. Where it is
deemed necessary, new members of the Board
are provided with appropriate training in
respect of their roles and duties as a public
company director.
Consulting Agreement – Brook Nolson
On 26 September 2013 Inspiration Healthcare
Limited entered into an agreement with
Deciduous Limited, a company of which Brook
Nolson is a director, for the provision of
business consultancy services and strategic
advice. The amount paid in the year to
31 January 2016 was £65,000 (2015:
£48,000). The agreement terminated on
Admission, when Brook Nolson became a
Non-executive Director of the Company.
In order to effect an orderly handover of
services provided in relation to the installation
of new business systems, a number of
additional days support were considered by the
other directors as necessary for which
Deciduous Limited was paid an additional
£8,000 in total during July and August 2015.
This now completes the assignment and the
obligations under the agreement.
John Markham served as a Non-executive
Director of Inditherm plc up to the completion
of the reverse acquisition on 24 June 2015.
The annual remuneration under this agreement
was £8,000 paid in 12 equal monthly
instalments. In accordance with the terms of
this agreement three months written notice to
terminate this agreement was served on 9
November 2015 and the last monthly payment
was made in January 2016.
Shareholder Relations
Relationships with our shareholders are
important to us and we seek to have good
relations. Communication, in our early stage of
development, is through our Interim and Annual
Reports along with Regulatory News Service
announcements where appropriate. Additionally
we use the RNS Reach service for important
news and our website for more general news.
The Chief Executive Officer supported by the
other Executives meet shareholders and other
investors/potential investors from time to time
including at the AGM.
As the Group grows a more proactive
shareholder engagement programme will be
developed. Robert Beveridge has been
identified as the Company’s Senior
Independent Director. He is available to
shareholders who wish to raise any concerns
that they have been unable to resolve through
other channels and to attend meetings between
management and major investors.
27
Due to the size of the Group there are inherent
control limitations. The Group does not
currently operate an internal audit function. At
the Audit Committee meetings, the Group
Finance Director presents a formal report on
internal controls and, where appropriate, a
programme of work to ensure systems and
processes are maintained in an appropriate
manner for the operations.
Going Concern
After making enquiries, the Directors have a
reasonable expectation that the Group has
adequate resources to continue to trade as a
going concern.
MARK ABRAHAMS
Chairman
28 April 2016
Corporate Governance
The notice of the AGM will be sent to
shareholders at least 21 days before the
Meeting. At the forthcoming AGM, the
Company will indicate the level of proxy voting
and members of the Board will be available to
answer questions.
Internal Control
The system of internal control is structured
around an assessment of prioritisation of the
various risks to the business. The control
environment is designed to address particularly
those risks that the Board considers to be
material to the business, in safeguarding the
assets against unauthorised use or disposition
and maintaining proper accounting records
which produce reliable financial and
management information.
The Board has reviewed the effectiveness of
the system of internal control for the
accounting year and the year to the date of
approval of the financial statements.
The key features of the Group’s systems of
internal control are as follows:
• An ongoing process of risk assessment to
identify, evaluate and manage business
risks
• Management structure with clearly defined
responsibilities and authority limits
• A comprehensive system of reporting
financial results to the Board
• Quality control systems certified under ISO
9001 and ISO 13485
• Appraisal and authorisation of capital
expenditure
• Clearly defined authority levels for the
commitment of expenditure
• Dual signatories on all bank accounts
28
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Remuneration Report
This report covers the year from 1 February 2015 to 31 January 2016 for Inspiration Healthcare Group
plc which, in accordance with the provisions of IFRS 3, represents 12 months of remuneration paid to
Directors of Inspiration Healthcare Limited for the period from 1 February 2015 to 23 June 2015 and
Inspiration Healthcare Group plc from 24 June 2015 to 31 January 2016.
Responsibilities
The Remuneration Committee was formed on 24 June 2015 and has 2 members, Brook Nolson
(Chairman) and Robert Beveridge. The Committee is responsible for setting the remuneration packages
for Executive Directors as well as approving, where appropriate, the remuneration of senior staff. The
Committee sets incentive schemes for the Executive Directors to align their interests with those of the
shareholders and to encourage the strategic development of the business.
Directors’ Service Contracts
The details of the service contracts in relation to the Executive Directors and letters of appointment in
relation to the Chairman and Non-executive directors are:
Mark Abrahams
Neil Campbell
Toby Foster
Ian D Smith
Robert Beveridge
Brook Nolson
Chairman
Chief Executive Officer
Group Sales Director
Group Finance Director
Non-executive
Non-executive
Unexpired term at
28 April 2016
35 months
6 months
6 months
6 months
27 months
25 months
Notice period
6 months
6 months
6 months
6 months
6 months
6 months
The Non-executive Directors, including the Chairman, each have a letter of appointment for a three year
term. Under the terms of these letters either party can serve 6 months written notice to terminate the
arrangement and the maximum compensation payable in the event that appropriate notice is not given
will be the equivalent of 6 months of the director’s fees.
The Executive Directors, including the Chief Executive Officer, each have a rolling 6 month contract.
There are no provisions in these contracts for compensation if there is a change of control. The service
contracts do not contain any provision for compensation on early termination other than the notice
period. In the event of any early termination, the Committee would seek to mitigate cost to the Group
whilst dealing fairly with each individual case.
Executive Remuneration Policy
The Committee endeavours to offer competitive remuneration packages which are designed to attract,
retain and incentivise Executive Directors and senior executives with the experience and necessary skills
to operate and develop the Group’s business to their maximum potential, thereby delivering the highest
level of return for the shareholders.
29
Corporate Governance
Executive Remuneration Policy (continued)
Consistent with this policy, benefits packages awarded to executives are intended to be competitive and
comprise a mix of contractual and performance related remuneration designed to incentivise them, but
not to detract from the goals of corporate governance.
The remuneration packages for the Executive Directors were entered into on 24 June 2015. The
composition of each director’s remuneration based on a maximum payment under the terms of an
annual performance related bonus is as follows:
Neil Campbell
Toby Foster
Ian D Smith
Contractual entitlement
Performance related
50%
50%
50%
50%
50%
50%
Remuneration packages are reviewed each year to ensure that they are in line with the Group’s business
objectives. No director participates in decisions about their own remuneration package.
The main components in determining pay are as follows:
Basic salary/fees and benefits
The basic annual salary is subject to an annual review, which takes into account the performance of
the Group and the individual. Benefits comprise the provision of a vehicle allowance, private healthcare
insurance and a death in service insurance scheme.
The annual basic salaries of the Executive Directors is as follows:
Neil Campbell
Toby Foster
Ian D Smith
£120,000
£100,000
£100,000
Annual performance related bonus
Demanding annual performance targets, which are consistent with both the short and long term objectives
for the Group, are set for Executive Directors which must be achieved before the bonus is payable. The
maximum potential payment for the annual bonus is capped at 100% of basic annual salary, the
breakdown of which is two tiered, the first tier of 40%, recognises the performance of the executive team
in delivering Group forecasts and objectives as set out in the business plan, the second, a further 60%,
recognises an ‘exceptional performance’. Revenue, EPS, Cash generated, Health & Safety, Staff Turnover,
and new Market Development are considered within the performance measures. Additionally, an ‘under
performance clawback’ has been introduced, this identifies areas where performance has under achieved
irrespective of the results and deductions can equal as much as 100% of the earned bonus. All bonus
calculations are excluding benefits in kind and pension contributions.
The Remuneration Committee have awarded bonuses to executives for the period which are accrued at
the period end date and included on page 31 of the Remuneration Report. No bonuses were accrued
or paid to executives in the prior year.
30
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Executive Remuneration Policy (continued)
Pensions
Executive Directors receive pension contributions of 5% of basic salary to a stakeholder or money
purchase scheme on a matched contribution basis.
Executive share options schemes
Share options are granted to Executive Directors to encourage them to deliver sustained, long term
growth. Except in exceptional circumstances, the value of options granted in any year will not exceed
one times basic salary and the total value of options outstanding will not exceed five times salary.
Directors’ Detailed Emoluments
The emoluments of the directors of the parent company for the twelve month period in accordance
with the basis of preparation were as follows:
Mark Abrahams1
Neil Campbell2
Toby Foster2
Ian D Smith1
Robert Beveridge3
Brook Nolson1 and 4
Graham Walls5
Simon Motley5
Malcolm Oxley5
Salary
£’000
21
105
88
65
12
14
305
41
14
14
374
Pension
Bonus contributiion
£’000
£’000
Benefits
in kind
£’000
2016
Total
£’000
2015
Total
£’000
–
15
25
10
–
–
50
–
–
–
50
–
6
5
3
–
–
14
2
3
2
21
–
1
2
1
–
–
4
–
–
–
4
21
127
120
79
12
14
373
43
17
16
449
–
14
18
–
–
–
32
42
13
13
100
Note 1
Note 2
Note 3
Note 4
Note 5
Directors of the newly formed Group from 24 June 2015. The remuneration included above is for the period from
24 June 2015 to 31 January 2016.
Directors of Inspiration Healthcare Limited for the year and Directors of Inspiration Healthcare Group plc since 24 June
2015. The remuneration included above is for the year ended 31 January 2016.
Director of Inspiration Healthcare Group plc from 3 August 2015. The remuneration included above is for the period
from 3 August 2015 to 31 January 2016.
In addition to emoluments as a director, Brook Nolson received payments under the terms of a consulting agreement,
details of which are included on page 32.
Directors and key management of Inspiration Healthcare Limited who ceased to be Directors of the Group on 23 June
2015. The remuneration included above is for the period from 1 February 2015 to 23 June 2015.
In addition to emoluments as a director, Graham Walls received payments of a further £42,000 under
the terms of a consulting agreement in the previous year.
Contributions to a defined contribution pension scheme were paid on behalf of 5 directors to 23 June
2015 (2015: 4) and 3 directors in the period since the new Group was formed on 24 June 2015. No
directors exercised share options during the current or previous financial period.
31
Corporate Governance
Consulting Agreement – Brook Nolson
On 26 September 2013 Inspiration Healthcare Limited entered into an agreement with Deciduous
Limited, a company of which Brook Nolson is a director, for the provision of business consultancy
services and strategic advice, the details of which are explained in the Statement of Corporate
Governance. The company paid fees of £8,000 during the period which he served as a Director.
Chief Executive’s Remuneration for past 5 years
The total remuneration of the persons holding the position of Chief Executive over the past 5 years was
as follows:
24 June 1 February 1 January
2015 to
2015 to
2015 to
23 June 31 January
31 January
2015
2016
£’000
£’000
2015
£’000
Salary
Bonus
Pension contribution
Benefits in kind
Total Remuneration
77
15
4
–
96
46
–
2
6
54
9
–
–
1
10
2014
£’000
2013
£’000
2012
£’000
2011
£’000
110
–
5
16
131
110
–
5
13
128
106
–
5
13
124
99
6
5
12
122
On 22 May 2015, Nick Bettles, Chief Executive Officer of Inditherm plc prior to the reverse acquisition
entered into a settlement agreement with the Company with the effect of terminating his Directorship
upon Admission on 24 June 2015 and his employment with the Group on 24 September 2015.
Payments on termination (made after 24 June 2015) amounted to £113,000 including £30,000 for
loss of office. His remuneration is shown above for the period from 1 February 2015 to 23 June 2015
and the preceding periods.
A new Chief Executive Officer (Neil Campbell) was appointed on 24 June 2015 and his remuneration
is shown for the period 24 June 2015 to 31 January 2016.
32
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
2016 Annual Review
All of the executive directors entered in new service agreements with the Group on 24 June 2015. Full
details were disclosed in the Admission document which is available on the Group’s website.
Interests in Share Options
Details of options held by directors at 31 January 2016 are set out below:
Share Incentive Plan
Ian D Smith
Ian D Smith
Nick D Bettles
Nick D Bettles
Date
of grant
Option*
price
2016
Number
2015*
Number
18/01/2012
27/05/2008
18/01/2012
27/05/2008
50p
100p
50p
100p
35,000
20,000
–
–
35,000
20,000
90,000
40,000
*Upon completion of the reverse acquisition on 24 June 2015 the shares of Inspiration Healthcare
Group plc (previously Inditherm plc) were consolidated in the ratio of 10 old ordinary shares for 1 new
ordinary share. See note 21 for further details.
At the time of the reverse acquisition existing option holders were able to carry forward options granted
until the expiry date. The original scheme was closed to new members on 23 June 2015 and the Board
do not intend to grant further options under the existing scheme.
All share options satisfy the conditions and have been registered with Her Majesty’s Revenue and
Customs (HMRC) for Enterprise Management Incentive relief.
Options issued to Nick D Bettles lapsed when he left employment on 24 September 2015.
The comparative number of share options in issue at 31 January 2015 relates to Inditherm plc.
33
Corporate Governance
Share Price during the Year
Adjusted for the impact of the share consolidation on 24 June 2015, where ten old ordinary shares
were replaced with 1 new ordinary share, the range of market prices during the period 1 February 2015
to 31 January 2016 was 25p to 50p and the market price of the Company’s shares at 31 January
2016 was 36.5p.
Share Scheme 2015
As part of its strategy for executive and key employee remuneration, the Company established on re-
admission to AIM, a new Share Option Scheme under which share options may be granted to officers
and employees or members of the Group. Under the rules of the new Share Option Scheme, the
Company may grant both options that qualify as enterprise management incentives under schedule 5
of the Income Tax (Earnings and Pensions) Act 2003 and unapproved options over Ordinary Shares to
any employee of the Group and any of its subsidiaries (including Executive Directors), subject to various
scheme and individual limits.
No option may be granted under the Share Option Scheme if, as a result, the aggregate nominal value
of ordinary shares in the capital of the Company issued or issuable pursuant to options granted during
the previous ten years under the Share Option Scheme or any other discretionary employees’ share
scheme adopted by the Company would exceed 5 per cent of the ordinary share capital of the Company
in issue on that date. The Remuneration Committee has the discretion to exceed this five per cent, in
exceptional circumstances up to a maximum of ten per cent.
After an initial three-year qualification period options are exercisable at any time up to the tenth
anniversary of the date of grant subject to a performance criterion that requires the company to have
made an Operating Profit (before exceptional items) in the audited financial statements for the preceding
12 month period prior to the exercise of the options. There are also provisions, which may allow exercise
of the Options in the event of a change of control, subject to the agreement of the Remuneration
Committee.
No options have been granted under the new Share Option Scheme as at the date of signing these
financial statements and there are no immediate plans to do so.
34
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Directors’ interests in shares
The director’s interests in the 10p Ordinary Shares of the Company at the end of the period were:
Mark Abrahams
Neil Campbell
Toby Foster
Ian D Smith
28 April
2016
Number
155,154
5,718,089
5,718,089
5,444
31 January
2016
Number
155,154
5,718,089
5,718,089
5,444
2015
Number*
30,154
–
–
5,444
*The effect of the share consolidation was to consolidate every 10 Ordinary Shares into 1 Ordinary
share. See note 21 for further details. The comparative number of shares at 31 January 2015 relates
to Inditherm plc.
BROOK NOLSON
Chairman, Remuneration Committee
28 April 2016
35
Consolidated Financial Statements
Amplitude integrated
EEG (aEEG) to monitor
brain activity is the most
commonly used digital
trend for newborns and
has been shown to reduce
the total seizure duration
in neonates.
American Clinical Neurophysiology
Society’s Guideline on Continuous
EEG Monitoring
Unique CFM enables real-
time bedside monitoring
and interpretation of an
infant’s brain activity
allowing clinicians to
determine the best course
of treatment.
Unique CFM
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Statement of Directors’ Responsibilities in respect of the
Annual Report and Financial Statements
The directors are responsible for preparing the Annual Report and the Financial Statements in accordance
with applicable law and regulations.
Company law requires the directors to prepare financial statements for each financial year. Under that
law the directors have prepared the Group and parent Company financial statements in accordance
with International Financial Reporting Standards (IFRSs) as adopted by the European Union. Under
company law the directors must not approve the financial statements unless they are satisfied that they
give a true and fair view of the state of affairs of the Group and the Company and of the profit or loss of
the Group for that period. In preparing these financial statements, the directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether applicable IFRSs as adopted by the European Union have been followed, subject to
any material departures disclosed and explained in the financial statements; and
• prepare the financial statements on the going concern basis unless it is inappropriate to presume
that the Company will continue in business.
The directors are responsible for keeping adequate accounting records that are sufficient to show and
explain the Company’s transactions and disclose with reasonable accuracy at any time the financial
position of the Company and the Group and enable them to ensure that the financial statements comply
with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company
and 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 Company’s website. Legislation
in the United Kingdom governing the preparation and dissemination of financial statements may differ
from legislation in other jurisdictions.
In accordance with Section 418, directors’ reports shall include a statement, in the case of each director
in office at the date the Report of the Directors is approved, that:
(a) so far as the director is aware, there is no relevant audit information of which the Company’s auditors
are unaware; and
(b) he/she has taken all the steps that he/she ought to have taken as a director in order to make
themselves aware of any relevant audit information and to establish that the Company’s auditors are
aware of that information.
By order of the Board
IAN D SMITH
Group Finance Director and Company Secretary
28 April 2016
37
Consolidated Financial Statements
Report of the Directors
for the period ended 31 January 2016
The Directors present their report on the Group and Company, together with the audited Consolidated
Financial Statements of the Group for the year ended 31 January 2016 and the audited Financial
Statements of the Company for the thirteen month period ended 31 January 2016.
Inspiration Healthcare Group plc is incorporated under the laws of England and Wales as a public limited
company and its registered office and principal place of business is Houndhill Park, Bolton Road, Wath
upon Dearne, Rotherham, S63 7LG. The Company’s Ordinary Shares are admitted to and traded on
AIM, a market operated by the London Stock Exchange.
Cautionary statement
The review of the business and its future development in the Strategic Report has been prepared solely
to provide additional information to shareholders to assess the Company and Group’s strategies and the
potential for these strategies to succeed. It should not be relied on by any other party for any other
purpose. The review contains forward-looking statements which are made by the Directors in good faith
based on information available to them up to the time of the approval of the reports and should be
treated with caution due to the inherent uncertainties associated with these statements.
Results and dividends
The results of the Group are set out in detail on page 43. The results of the Company are not required
to be presented separately under section 408 of the Companies Act 2006.
At the time of the Group’s re-admission to AIM in June 2015, the Board proposed to reinvest earnings
in financing the growth of the Group’s business. Neil Campbell and Toby Foster received dividends from
Inspiration Healthcare Limited during the periods prior to the reverse acquisition and becoming directors
of Inspiration Healthcare Group plc. For information relating to dividends prior to the reverse acquisition
(refer to note 10).
Business review and future developments
Details of the business activities and acquisitions made during the period can be found in the Strategic
Report on pages 15 to 22 and in note 2 to the Consolidated Financial Statements respectively.
Political donations
The Group made no political donations during the period (2015: £nil).
Financial instruments and risk management
Disclosures regarding financial instruments are provided within the Strategic Report and note 20 to the
Consolidated Financial Statements.
38
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Capital structure
Details of the Company’s share capital, together with details of the movements therein, are set out in
note 21 to the Consolidated Financial Statements. The Company has one class of Ordinary Share which
carry no right to fixed income.
Research and development
The Group continues to invest in research and development, in order to extend its product offerings and
improve the effectiveness of its technology. During the year the Group incurred costs totalling £394,000
(2015: £246,000) gross and received grant income of £295,000 (2015: £nil) leaving net costs of
£99,000 (2015: £246,000).
Internal costs and external costs are expensed in the Consolidated Statement of Comprehensive Income.
External costs incurred on specific development projects that are expected to result in commercially and
economically viable products are capitalised and expensed over a period of up to three years.
The Directors of the Company who served during the period were:
Director
M S Abrahams
N J Campbell
T Foster
I D Smith
B Nolson
R J Beveridge
N D Bettles
J H Markham
Position
Non-executive Chairman
Chief Executive Officer (appointed 23 June 2015)
Group Sales Director (appointed 23 June 2015)
Group Finance Director
Non-executive (appointed 23 June 2015)
Non-executive (appointed 3 August 2015)
Chief Executive Officer (resigned 23 June 2015)
Non-executive (resigned 23 June 2015)
Further information relating to the Board is detailed on pages 12 to 13.
Directors interests in shares and contracts
Directors’ interests in shares of the Company at 31 January 2016 and 31 January 2015 and any
changes subsequent to 31 January 2016 are disclosed in the Remuneration Report on page 35.
Directors’ interests in contracts of significance to which the Group was a party during the financial period
are disclosed in note 26.
Indemnification of directors
The Directors’ Contracts of Employment and Letters of Appointment do not indemnify Directors. The
Group provides Directors and Officers Insurance cover for £5,000,000 and is contractually committed
to provide cover for the period of service and six years thereafter.
39
Consolidated Financial Statements
Report of the Directors
for the period ended 31 January 2016 (continued)
Substantial interests
At 28 April 2016 the Company had been notified of the following interests which amounted to 3% or
more of the issued capital of the Company.
Shareholder
N J Campbell
T Foster
S G Motley
M J Oxley
W G Walls
D G Steward
Number of shares
Percentage holding
5,718,089
5,718,089
5,718,089
5,718,089
1,558,934
1,505,000
18.6%
18.6%
18.6%
18.6%
5.1%
4.9%
Annual General Meeting
The Annual General Meeting (‘AGM’) will be held the offices of Gordons LLP, Riverside West, Whitehall
Road, Leeds, LS1 4AW, United Kingdom on Wednesday 22 June 2016 at 12.00 pm. The notice of the
AGM on pages 95 to 97 contains the full details of the business to be conducted and the resolutions to
be proposed.
Re-appointment of independent auditors
PricewaterhouseCoopers LLP have expressed their willingness to continue in office and a resolution to
re-appoint them is proposed for consideration at the Annual General Meeting.
By order of the Board
IAN D SMITH
Company Secretary
28 April 2016
40
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Independent Auditors’ Report to the Members of
Inspiration Healthcare Group plc
Report on the Group financial statements
Our opinion
In our opinion, Inspiration Healthcare Group plc’s Group financial statements (the ‘financial statements’):
• give a true and fair view of the state of the Group’s affairs as at 31 January 2016 and of its profit
and cash flows for the year then ended;
• have been properly prepared in accordance with International Financial Reporting Standards (‘IFRSs’)
as adopted by the European Union; and
• have been prepared in accordance with the requirements of the Companies Act 2006.
What we have audited
The financial statements, included within the Annual Report and Financial Statements (the ‘Annual
Report’), comprise:
• the consolidated statement of financial position as at 31 January 2016;
• the consolidated statement of comprehensive income for the year then ended;
• the consolidated cash flow statement for the year then ended;
• the consolidated statement of changes in shareholders’ equity for the year then ended; and
• the notes to the financial statements, which include a summary of significant accounting policies
and other explanatory information.
The financial reporting framework that has been applied in the preparation of the financial statements
is IFRSs as adopted by the European Union, and applicable law.
In applying the financial reporting framework, the directors have made a number of subjective
judgements, for example in respect of significant accounting estimates. In making such estimates, they
have made assumptions and considered future events.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, the information given in the Strategic Report and the Report of the Directors for the
financial year for which the financial statements are prepared is consistent with the financial statements.
Other matters on which we are required to report by exception
Adequacy of information and explanations received
Under the Companies Act 2006 we are required to report to you if, in our opinion, we have not received
all the information and explanations we require for our audit. We have no exceptions to report arising
from this responsibility.
Directors’ remuneration
Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures
of directors’ remuneration specified by law are not made. We have no exceptions to report arising from
this responsibility.
41
Consolidated Financial Statements
Independent Auditors’ Report to the Members of
Inspiration Healthcare Group plc (continued)
Responsibilities for the financial statements and the audit
Our responsibilities and those of the directors
As explained more fully in the Statement of Directors’ Responsibilities set out on page 37, the directors
are responsible for the preparation of the financial statements and for being satisfied that they give a
true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with
applicable law and International Standards on Auditing (UK and Ireland) (‘ISAs (UK & Ireland)’). Those
standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the company’s members as a
body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose.
We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any
other person to whom this report is shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.
What an audit of financial statements involves
We conducted our audit in accordance with ISAs (UK & Ireland). An audit involves obtaining evidence
about the amounts and disclosures in the financial statements sufficient to give reasonable assurance
that the financial statements are free from material misstatement, whether caused by fraud or error.
This includes an assessment of:
• whether the accounting policies are appropriate to the group’s circumstances and have been
consistently applied and adequately disclosed;
• the reasonableness of significant accounting estimates made by the directors; and
• the overall presentation of the financial statements.
We primarily focus our work in these areas by assessing the directors’ judgements against available
evidence, forming our own judgements, and evaluating the disclosures in the financial statements.
We test and examine information, using sampling and other auditing techniques, to the extent we
consider necessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence
through testing the effectiveness of controls, substantive procedures or a combination of both.
In addition, we read all the financial and non-financial information in the Annual Report to identify
material inconsistencies with the audited financial statements and to identify any information that is
apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us
in the course of performing the audit. If we become aware of any apparent material misstatements or
inconsistencies we consider the implications for our report.
Other matter
We have reported separately on the Company financial statements of Inspiration Healthcare Group plc
for the period ended 31 January 2016.
ARIF AHMAD (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Leeds
28 April 2016
42
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Consolidated Statement of Comprehensive Income
for the year ended 31 January 2016
Revenue
Cost of sales
Gross profit
Operating expenses
Other operating income
Operating profit
Analysed as:
Operating profit before impairment of goodwill and intangible
assets and exceptional items
Impairment of goodwill and intangible assets
Exceptional items
Net finance income
Profit before tax
Income tax expense
Total comprehensive income for the year attributable to
owners of the parent company
Earnings per share, attributable to owners of the
parent company– basic and diluted
Notes
3
5
11
6
7
8
9
2016
£’000
12,279
(6,764)
5,515
(5,664)
295
2015
£’000
9,538
(5,507)
4,031
(3,053)
–
146
978
1,305
(517)
(642)
2
148
(136)
978
–
–
2
980
(229)
12
751
0.04p
2.94p
All recognised gains and losses are included in the Consolidated Statement of Comprehensive Income, as such
there is no other comprehensive income.
The notes on pages 47 to 76 are an integral part of these consolidated financial statements.
Neil Campbell
Director
Ian D Smith
Director
43
Consolidated Financial Statements
Consolidated Statement of Financial Position
as at 31 January 2016
31 January
2016
£’000
31 January
2015
£’000
Notes
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Deferred tax asset
Investments
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Liabilities
Current liabilities
Trade and other payables
Obligations under finance leases
Deferred income
Non-current liabilities
Deferred income
Obligations under finance leases
Deferred tax liability
Total liabilities
Net assets
Shareholders’ equity
Called up share capital
Share premium account
Merger reserve
Reverse acquisition reserve
Retained earnings
11
12
19
13
14
15
17
22
18
18
22
19
21
21
21
2
242
166
45
100
553
780
2,147
2,319
5,246
5,799
136
90
–
–
226
664
2,143
342
3,149
3,375
(2,502)
(17)
(276)
(1,559)
–
(251)
(2,795)
(1,810)
(136)
(16)
(39)
(191)
–
–
(25)
(25)
(2,986)
(1,835)
2,813
1,540
3,067
9,929
4,600
(16,164)
1,381
511
9,929
–
(10,440)
1,540
Total equity attributable to owners of the parent company
2,813
1,540
The notes on pages 47 to 76 are an integral part of these consolidated financial statements.
The Group financial statements on pages 43 to 76 were approved by the Board of Directors on 28 April 2016
and signed on its behalf by:
Neil Campbell
Director
Ian D Smith
Director
44
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Consolidated Statement of Changes in
Shareholders’ Equity
Issued
share
capital
£’000
Share
premium
account
£’000
511
9,929
–
–
–
–
511
9,929
Reverse
Merger Acquisition
reserve
reserve
£’000
£’000
Retained
earnings
£’000
(10,440)
1,197
Total
£’000
1,197
–
–
–
–
–
–
751
(408)
751
(408)
(10,440)
1,540
1,540
–
–
–
2,556
–
–
–
–
–
–
–
4,600
–
–
(5,724)
–
12
(171)
–
–
12
(171)
(5,724)
7,156
At 31 January 2014
Profit for the year and total
comprehensive income
Dividends paid
At 31 January 2015
Profit for the year and total
comprehensive income
Dividends paid
Arising on reverse acquisition
Shares issued as consideration
At 31 January 2016
3,067
9,929
4,600
(16,164)
1,381
2,813
The notes on pages 47 to 76 are an integral part of these consolidated financial statements.
45
Consolidated Financial Statements
Consolidated Cash Flow Statement
for the year ended 31 January 2016
Operating profit for the financial year
Impairment of goodwill
Impairment of intangible assets
Depreciation and amortisation
Loss on disposal of intangible asset
Net finance income
Decrease/(increase) in inventories
Decrease/(increase) in trade and other receivables
Increase in trade and other payables
(Decrease)/increase in deferred income
Taxation paid
Net cash inflow from operating activities
Cash flows from investing activities
Interest paid
Purchase of property, plant and equipment
Purchase of intangible assets
Cash and cash equivalents acquired under reverse acquisition (see note 2)
Acquisition of investment (see note 13)
Net cash generated from/(used in) investing activities
Cash flows from financing activities
Finance leases
Dividends paid prior to reverse acquisition
Net cash used in financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
12 months
2016
£’000
12 months
2015
£’000
146
378
139
178
6
2
14
379
579
(26)
(172)
1,623
(1)
(132)
(169)
894
(100)
492
33
(171)
(138)
1,977
342
2,319
978
–
–
67
–
2
(185)
(979)
456
98
(123)
314
–
(120)
–
–
–
(120)
–
(408)
(408)
(214)
556
342
46
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Notes forming part of the Financial Statements
for the year ended 31 January 2016
1
Accounting Policies
Reporting entity
Inspiration Healthcare Group plc (previously Inditherm plc) (the Company) is a public limited company
incorporated in England and Wales (registration number 3587944) and domiciled in England. The
Company’s registered address is Houndhill Park, Bolton Road, Wath-upon-Dearne, Rotherham S63 7LG.
The Company’s ordinary shares are traded on the AIM Market of the London Stock Exchange plc.
Basis of preparation
The principal accounting policies adopted in the preparation of these financial statements are set out
below. These policies have been consistently applied unless otherwise stated.
The consolidated financial statements have been prepared and approved by the Directors in accordance
with International Financial Reporting Standards as adopted by the European Union (‘Adopted IFRSs’),
issued by the International Accounting Standards Board (IASB), including interpretations by the
International Financial Reporting Interpretations Committee (IFRIC), and the Companies Act 2006
applicable to companies reporting under IFRS. The consolidated financial statements are prepared under
the historical cost convention, as modified for any financial assets which are stated at fair value through
operating profit or loss and for share based payments which are measured at fair value.
On 24 June 2015 Inspiration Healthcare Group plc (the Company) (previously Inditherm plc), acquired
the entire issued ordinary share capital of Inspiration Healthcare Limited and became the legal parent of
Inspiration Healthcare Limited.
The accounting policy adopted by the Directors applies the principles of IFRS 3 (Revised) ‘Business
Combinations’ in identifying the accounting parent as Inspiration Healthcare Limited and the presentation
of the Group consolidated statements of the Company (the legal parent) as a continuation of financial
statements of the accounting parent or legal subsidiary (Inspiration Healthcare Limited). This policy reflects
the commercial substance of this transaction as follows:
•
•
•
•
•
The original shareholders of the legal subsidiary undertaking were the most significant shareholders
post initial public offering, owning 83.3% of the issued share capital; and the deemed consideration
paid as part of the initial public offering returned equity to the original shareholders of the legal
subsidiary undertaking and as a consequence diluted their shareholding.
The assets and liabilities of the legal subsidiary Inspiration Healthcare Limited are recognised and
measured in the Group financial statements at the pre-combination carrying amounts without
restatement to fair value.
The retained earnings and other equity balances recognised in the Group financial statements reflect
the retained earnings and other equity balances of Inspiration Healthcare Limited immediately before
the business combination.
The results of the year from 1 February 2015 to the date of the business combination are those of
Inspiration Healthcare Limited.
The equity structure appearing in the Group financial statements reflects the equity structure of the
legal parent, including the equity instruments issued under the share for share exchange to effect the
business combination and adjusted in accordance with IFRS 3.
The consolidated financial statements cover the twelve months ended 31 January 2016. The financial
statements for the comparative twelve months ended 31 January 2015 represent the substance of the
reverse acquisition and are those of Inspiration Healthcare Limited.
47
Consolidated Financial Statements
Notes forming part of the Financial Statements
for the year ended 31 January 2016 (continued)
1
Accounting Policies (continued)
Basis of consolidation
The financial statements of the Group consolidate the financial statements of Inspiration Healthcare Group
plc (previously Inditherm plc) and its subsidiary undertakings (together referred to as the ‘Group’) up to
31 January 2016. This encompasses Inspiration Healthcare Group plc (previously Inditherm plc) for the
period from 24 June 2015 to 31 January 2016 and Inspiration Healthcare Limited and its subsidiaries for
the twelve months from 1 February 2015 to 31 January 2016.
Subsidiaries are entities controlled by the Group. Control exists when the Group has the power, directly or
indirectly, to govern the financial and operating policies of an entity so as to obtain benefits from its
activities. In assessing control, potential voting rights that are currently exercisable or convertible are taken
into account.
The financial statements of subsidiaries are included in the consolidated financial statements from the date
that control commences until the date that control ceases. Intra group transactions and balances are
eliminated in preparing the consolidated financial statements. The accounting policies of new subsidiaries
are changed when necessary to align them with the policies adopted by the Group.
Business combinations
The acquisition method of accounting is used in accounting for the acquisition of businesses. In
accordance with IFRS 3 ‘Business Combinations’ the assets and liabilities of the acquired entity are
measured at fair value. When the initial accounting for a business combination is determined provisionally,
any adjustments to the provisional values allocated are made within twelve months of the acquisition date
and are effected from the acquisition date.
Under the acquisition method, the results of the subsidiaries acquired or disposed of are included from the
date of acquisition or up to the date of disposal. At the date of acquisition, the fair value of the subsidiaries’
net assets are determined and these values are reflected in the consolidated financial statements. The cost
of acquisition is measured at the aggregate of the fair values, at the date of exchange, of assets given,
liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the
acquiree, plus any costs directly attributable to the business combination. Any excess of the purchase
consideration of the business combination over the fair value of the identifiable assets and liabilities
acquired is recognised as goodwill. If the consideration is less than the fair value of assets and liabilities
acquired, the difference is recognised directly in the Consolidated Statement of Comprehensive Income.
Acquisition related costs are expensed as incurred.
As a result of IFRS 10 ‘Consolidated Financial Statements’ the Group changed its accounting policy for
determining whether it has control over and consequently whether it consolidates its investees. IFRS 10
introduces a new control model that focuses on whether the Group has power over an investee, exposure
or rights to variable returns from its involvement with the investee and ability to use its power to affect
those returns. In accordance with the transitional provisions of IFRS 10, the Group reassessed the control
conclusion for its investees at 1 January 2014. No modifications of previous conclusions about control
regarding the Group’s investees were required.
As a result of IFRS 12 ‘Disclosure of interests in other entities’, the Group has expanded disclosures about
its interests in subsidiaries (see note 6 of the Company Financial Statements).
Going concern basis
On the basis of current financial projections and available funds and facilities, the Directors are satisfied
that the Group has adequate resources to continue in operation for the foreseeable future and, therefore,
consider it appropriate to prepare the financial statements on the going concern basis.
48
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
1
Accounting Policies (continued)
Critical accounting estimates and judgements
The Group is required to make estimates and assumptions concerning the future. These estimates and
judgements are based on historical experience and other factors, including expectations of future events
that are believed to be reasonable under the circumstances. The resulting accounting estimates will, by
definition, seldom equal the related actual results. Estimates and underlying assumptions are reviewed on
an ongoing basis. Revisions to accounting estimates are recognised in the year in which the estimate is
revised and in any future periods affected. Accounting estimates and judgements have been required for
the production of these financial statements.
The following are those that are deemed to require the most complex judgements about matters that have
the most significant effect on the amounts recognised in the financial statements.
•
Warranty provisions
The performance of products is warranted against clearly defined performance specifications
established by reference to the technical and development testing carried out at the manufacturing
facility. The estimated cost of the work to be performed under warranty on items sold by the Group
would be provided for if management were aware of any field issues that needed rectification. At
31 January 2016 no provision is required (2015: £nil) and management are not aware of any field
issues that would require a provision to be made for products supplied for distribution outside of the
manufacturers warranties.
•
Allowances against the valuation of inventories
Where inventory has become obsolete or is slow moving a provision is made to write the value of
stock down to management’s estimate of net realisable value. Slow moving stock is identified by
reference to historic usage and sales projections. When products are made obsolete, the appropriate
components and sub-components are identified at the time and are fully provided against.
•
Deferred taxation
Management must judge whether future profitability is likely in making the decision whether or not
to recognise a deferred tax asset. Note 19 explains the potential deferred tax assets which have not
been recognised due to the uncertainty of the timing of utilising tax losses.
•
Intangible assets
The determination of the fair value of assets and liabilities including goodwill arising on the acquisition
of businesses, the acquisition of industry-specific knowledge, software technology, branding and
customer relationships whether arising from separate purchases or from the acquisition as part of
business combinations, and development expenditure which is expected to generate future economic
benefits, are based to a considerable extent, on management’s judgement.
The fair value of these assets is determined by discounting estimated future net cash flows
generated by the asset where no active market for the asset exists. The use of different
assumptions for the expectations of future cash flows and the discount rate would change the
valuation of the intangible asset.
The discount rate takes account of the current market conditions and this has been applied as a pre-
tax discount factor to obtain current value. Refer to note 11 for further details.
The estimated useful life principally reflects management’s view of the average economic life of each
asset and is assessed by reference to historical data and future expectations, any reduction in the
estimated useful life would lead to an increase in the annual amortisation charge.
Capitalisation of development costs requires detailed analysis of the technical feasibility and
commercial viability of the project. The Board regularly reviews this judgement in respect of relevant
development projects. Estimates are required as to development cost carrying values and impairment
charges. Amortisation rates are based on estimates of useful lives and residual values of the assets
involved.
49
Consolidated Financial Statements
Notes forming part of the Financial Statements
for the year ended 31 January 2016 (continued)
1
Accounting Policies (continued)
Critical accounting estimates and judgements (continued)
•
Impairment reviews
Impairment testing is an area involving management’s judgement, requiring assessment as to
whether the carrying value of assets can be supported by the net present value of future cash flows
derived from such assets using cash flow projections which have been discounted at an appropriate
rate. In calculating the net present value of the future cash flows, certain assumptions are required
to be made in respect of highly uncertain matters including management’s expectations of:
•
•
•
•
the selection of discount rates to reflect the risks involved;
growth in operating profit;
depreciation and amortisation; and
long term growth rates.
The Group prepares and approves a detailed annual budget and three year business plans which are
used in the value of these calculations.
See note 11 for details of how these estimates and judgements have been applied.
Changing the assumptions selected by management, in particular the discount rate and growth rate
assumptions used in the cash flow projections, could significantly affect the Group’s impairment
evaluation and hence results.
Property, plant and equipment
Items of property, plant and equipment are measured at cost or the fair value at the date of acquisition less
accumulated depreciation and any impairment. Costs include expenditure that is directly attributable to the
acquisition of the asset. Depreciation is provided to write off the cost, less estimated residual value of
property, plant and equipment by equal instalments over their estimated useful economic lives. The assets
residual values and useful economic lives are reviewed, and adjusted as appropriate, at each year end
date. When parts of an item of property, plant and equipment have different useful lives, they are
accounted for as separate items (major components) of property, plant and equipment.
The following rates are applied:
Leasehold improvements
Fixtures and fittings
Motor vehicles
Plant, machinery and office equipment
Over the term of the lease
10% - 25% per annum
25% per annum
15% - 33% per annum
Leased assets
Leases or hire purchase agreements under the terms of which the Group assumes substantially all the risks
and rewards of ownership are classified as finance leases. Upon initial recognition the leased asset is
measured at an amount equal to the lower of its fair value and the present value of the minimum lease
payments. Subsequent to initial recognition, the asset is accounted for in accordance with the accounting
policy applicable to that asset.
Obligations under finance leases are included in liabilities net of the finance charge allocated to future
years. The finance element of the rental payment is charged to the Consolidated Statement of
Comprehensive Income as a finance expense so as to produce a constant periodic rate of charge on the
net obligations outstanding at each year end. Other leases are operating leases and the leased asset is not
recognised on the Consolidated Statement of Financial Position.
Assets acquired by finance lease are depreciated over the lease term or their useful lives.
Payments made under operating leases, net of any incentives received from the lessor, are recognised in
the Consolidated Statement of Comprehensive Income on a straight line basis over the term of the lease.
50
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
1
Accounting Policies (continued)
Intangible assets and goodwill
Intangible assets are recognised if it is possible to demonstrate that there will be future economic benefits
attributable to the asset, the cost of the asset can be measured reliably, the asset is separately identifiable
and there is control over the use of the asset. All intangible assets recognised are considered to have finite
lives (unless otherwise stated) and are amortised on a straight line basis over the period over which the
Group expects to benefit from these assets, and included with administrative expenses. Provision is made
for any impairment in the carrying amount of the intangible asset if applicable.
Intellectual property
Purchased intellectual property rights are capitalised and amortised over management’s estimate of their
useful economic life or term of the relevant contract up to a maximum of 10 years.
Goodwill
Goodwill arises when the fair value of the consideration for the business exceeds the fair value of the net
assets acquired. Intangible assets are capitalised separately from goodwill as part of a business
combination, only if the value can be measured reliably on initial recognition and if the future economic
benefits are expected to flow to the Group. Goodwill is not amortised but is tested annually for impairment.
Goodwill is stated at fair value less any accumulated impairment losses.
Acquisition related intangible assets
Net assets acquired as part of a business combination includes an assessment of the fair value of
separately identifiable acquisition-related intangible assets. In addition to other assets, liabilities and
contingent liabilities purchased. These are amortised over their useful lives which are individually
assessed.
Product development costs
Where the criteria for capitalisation in IAS 38 ‘Intangible assets’ are met, costs incurred are capitalised and
amortised over their useful economic lives which is initially considered to be 3 years from the point the
products are launched to market. The capitalised values are reviewed against the discounted future
economic value, and adjusted as appropriate, at each year end date.
All internal costs of product development are written off in the year in which they are incurred.
Research and development costs
Research expenditure is written off to the Consolidated Statement of Comprehensive Income in the year in
which it is incurred. Development expenditure on an individual project is recognised as an intangible asset
when the Group can demonstrate:
•
•
•
•
•
the technical and commercial feasibility of completing the intangible asset so that the asset will be
available for use or sale;
its intention to complete and its ability and intention to use or sell the developed asset;
its future economic benefits are probable;
the availability of adequate technical, financial and other resources to complete the asset; and
the ability to measure reliably the expenditure attributable to the asset during development.
51
Consolidated Financial Statements
Notes forming part of the Financial Statements
for the year ended 31 January 2016 (continued)
1
Accounting Policies (continued)
Intangible assets and goodwill (continued)
Following initial recognition of the development expenditure as an asset, the asset is carried at cost less
any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when
development is complete and the asset is available for use. It is amortised over the period of expected
future benefit. Amortisation is recorded in operating expenses. During the period of development, the asset
is tested for impairment annually.
Impairment
Intangible assets and goodwill are considered to be impaired if objective evidence suggests that one or
more events have had a negative effect on the estimated future cash flows of that asset. If any such
indication exists, the asset’s recoverable amount is estimated. For goodwill and intangible assets that have
an indefinite useful life, the recoverable amount is estimated at each year end date. Impairment losses are
recognised in the Consolidated Statement of Comprehensive Income.
Calculation of recoverable amount
Assets that are subject to amortisation or depreciation are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss
would be recognised whenever the carrying amount of an intangible asset or its cash generating unit
exceeds its recoverable amount.
The recoverable amount is the greater of the asset’s fair value less costs to sell and its value in use. In
assessing an asset’s 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.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises direct material and,
where applicable, direct labour costs and those overheads that have been incurred in bringing inventories
to their present location and condition on a first in first out basis.
Net realisable value is based on estimated selling price less additional costs to completion or disposal.
Allowance is made for obsolete, defective and slow moving items based on estimated future usage.
Recognition and valuation of financial assets and liabilities
Cash and cash equivalents
Cash and cash equivalents include cash at bank and in hand, deposits held on call with banks, other short
term highly liquid investments with original maturities of three months or less, and bank overdrafts which
are repayable on demand.
Investments
Investments held as non-current and current assets are stated at cost less provision for any impairment in
value.
Trade and other receivables
Trade and other receivables are recognised and carried at the lower of their original invoiced value and
recoverable amount. An impairment is made when it is likely that the balance will not be recovered in full.
The recoverable amount is calculated as the present value of estimated future cash flows. Estimated future
cash flows are not discounted due to the relatively short period of time between recognition of trade
receivables and receipt of cash.
52
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
1
Accounting Policies (continued)
Recognition and valuation of financial assets and liabilities (continued)
Trade and other payables
The value of trade payables is the value that would be payable to settle the liability at the year end date.
Provisions
Provisions for liabilities are made where the timing or amount of settlement is uncertain. A provision is
recognised when: the Group has a present legal or constructive obligation as a result of past events; it is
probable that an outflow of resources will be required to settle the obligation; and the amount can be
reliably estimated. Provisions are not discounted on the grounds of materiality as permitted under IAS 37
‘Provisions, Contingent Liabilities and Contingent Assets’.
Share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares
are shown in equity as a deduction, net of tax, from the proceeds.
Foreign currency transactions and balances
Transactions in foreign currencies are translated to Sterling at the foreign exchange rate ruling at the date
of the transaction. Monetary assets and liabilities denominated in foreign currencies at the year end date
are retranslated to Sterling at the foreign exchange rate ruling at that date. Any exchange differences arising
on the settlement of monetary items or on translating monetary items at rates different from those at which
they were initially recorded are recognised in the Consolidated Statement of Comprehensive Income in the
year in which they arise.
Employee benefits
Defined contribution pension plans
The costs of contributing to defined contribution stakeholder pension scheme and employees’ personal
pension schemes are charged to the Consolidated Statement of Comprehensive Income in the year in
which they relate. The Group has no further payment obligations once the contributions have been paid.
Share-based incentives
The fair value as at the grant date, of options granted to employees is recognised as an employee expense,
with a corresponding increase in equity, over the period in which the employees become unconditionally
entitled to the options. The fair value of the options granted is measured by using the Black-Scholes
options pricing model taking into account the terms and conditions upon which the options were granted.
Grants
Revenue based grants are credited as other operating income to the Consolidated Statement of
Comprehensive Income against related expenditure while grants of a capital nature are treated as deferred
income and are transferred to the Consolidated Statement of Comprehensive Income over the expected useful
lives of the relevant assets.
53
Consolidated Financial Statements
Notes forming part of the Financial Statements
for the year ended 31 January 2016 (continued)
1
Accounting Policies (continued)
Revenue recognition
Revenue comprises the fair value of the consideration received or receivable from the sale of goods and
services in the ordinary course of the Group’s activities. Revenue is shown net of value added tax, returns,
rebates and discounts.
Revenue is recognised when title of the goods passes to the customer or when the services have been
provided. The revenue on rental, service and maintenance contracts and licence fees is assessed at the
commencement of the contract, and provided the outcome of the contract can be assessed with reasonable
certainty, the income is recognised over the life of the contract on a straight-line apportioned basis.
Provisions for costs are charged to the Consolidated Statement of Comprehensive Income when incurred.
Due to uncertainty, no provision is made for future costs on these contracts. Provision is made in full for
any losses as soon as they can be foreseen. Any provisions for foreseeable losses in excess of contract
balances are included in current liabilities.
Segment reporting
An operating segment is a component of the Group that engages in business activities from which it may
earn revenues and incur expenses, including revenue and expenses that relate to transactions with any of
the Group’s other components. All segments’ operating results are reviewed regularly by the Group’s Board
of Directors. The Group’s Chief Operating Decision Maker is considered to be the Board.
Exceptional items
Items that are considered significant by virtue of their size or their nature, or that are non-recurring, are
disclosed on the face of the Consolidated Statement of Comprehensive Income as exceptional items to
enable a full understanding of the underlying performance of the Group.
Taxation
Tax on the profit or loss for the year comprises the current and deferred tax. Tax is recognised in the
Consolidated Statement of Comprehensive Income except to the extent that it relates to items directly
recognised in equity, in which case it is recognised in equity.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted at the year end date and any adjustment in respect of previous years.
Deferred tax is provided on temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. The following temporary
differences are not provided for:
•
•
•
the initial recognition of goodwill
the initial recognition of assets and liabilities that affect neither accounting nor taxable profit other
than in a business combination; and
the differences relating to investments in subsidiaries to the extent that they will probably not
reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected amount of realisation or settlement of the
carrying amount of assets and liabilities using tax rates enacted or substantively enacted at the year end
date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will
be available against which the temporary differences can be utilised within a reasonable future timescales.
54
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
1
Accounting Policies (continued)New standard and interpretations not yet endorsed and not yet
effective
New standards, amendments and interpretations
There are no accounting standards and interpretations, issued by the International Accounting Standards
Board (‘IASB’) or IFRIC (as endorsed by the EU), that are effective or endorsed but not yet effective for the
first time in the current financial year.
New standards and interpretations not yet endorsed and not yet effective
The IASB and IFRIC have also issued the following standards and interpretations that are yet to be
endorsed with an effective date after the date of these financial statements.
•
•
•
•
•
•
•
IFRS 10 (Amendment) Consolidated Financial Statements – effective 1 January 2016
IFRS 12 (Amendment) Disclosure of Interests in Other Entities – effective 1 January 2016
IAS 28 (Amendment) Investments in Associates and Joint Ventures – effective 1 January 2016
IAS 12 (Amendment) Recognition of Deferred Tax Assets for Unrealised Losses – effective 1
January 2017
IFRS 9 Financial Instruments – effective 1 January 2018
IFRS 15 Revenue from Contracts with Customers – effective 1 January 2018
IFRS 16 Leases – effective 1 January 2019
These standards will be adopted by the Group in future accounting periods. The directors do not anticipate
that the adoption of any of these standards and interpretations will have a material impact on the Group’s
financial statements, except for IFRS 15 and IFRS 16 where the impact has not yet been assessed.
2
Reverse acquisition accounting
On 24 June 2015, the Company, by way of a share exchange, acquired the entire issued ordinary share
capital of Inspiration Healthcare Limited through issuing 25,556,290 ordinary shares of 10p to the
shareholders of Inspiration Healthcare Limited.
The acquisition of Inspiration Healthcare Limited by Inspiration Healthcare Group plc (previously Inditherm
plc) is deemed to be a reverse acquisition under the provisions of IFRS 3 (Revised) ‘Business
Combinations’.
In accounting for a reverse acquisition (rather than an acquisition) the combined financial statements are
deemed to be a continuation of the books of the legal acquiree (Inspiration Healthcare Limited) rather than
a continuation of those of the legal acquirer (Inspiration Healthcare Group plc, previously Inditherm plc).
The assets and liabilities of Inspiration Healthcare Limited are recognised and measured in the Group
financial statements at the pre-combination carrying amounts, without restatement to fair value and no
goodwill arises in relation to them.
Conversely, the assets of Inspiration Healthcare Group plc (previously Inditherm plc) are consolidated at
their fair values.
The overall effect is that the consolidated financial statements are prepared from an Inspiration Healthcare
Limited perspective rather than Inspiration Healthcare Group plc, in summary this means:
•
•
The comparative consolidated financial information is that of Inspiration Healthcare Limited rather
than that of Inspiration Healthcare Group plc (previously Inditherm plc).
The results for the year and consolidated cumulative profit and loss reserves are those of Inspiration
Healthcare Limited plus the post-acquisition results of Inspiration Healthcare Group plc (previously
Inditherm plc).
•
A reverse acquisition reserve of £16,164,000 has been created.
55
Consolidated Financial Statements
Notes forming part of the Financial Statements
for the year ended 31 January 2016 (continued)
2
Reverse acquisition accounting (continued)
•
•
The share capital, share premium account and merger reserve are that of Inspiration Healthcare
Group plc (previously Inditherm plc).
The cost of the combination has been determined from the perspective of Inspiration Healthcare
Limited.
Goodwill arises on the reverse acquisition when comparing the deemed fair value consideration of
Inspiration Healthcare Limited acquiring the shares of Inspiration Healthcare Group plc (previously
Inditherm plc). The fair value of the consideration is the market capitalisation of Inspiration Healthcare
Group plc (previously Inditherm plc) at acquisition based on the average share price over the five days
preceding the date of the transaction being proposed.
Fair value of consideration
Net assets acquired:
Intangible assets
Tangible assets
Inventories
Trade and other receivables
Current tax asset
Trade and other payables
Deferred income
Cash and bank balances
Goodwill arising on reverse acquisition
Book
value
£’000
Adjustment
£’000
Fair Recognised
amount
£’000
Value
£’000
1,431
3
33
157
267
18
(270)
(188)
894
914
139
–
–
–
–
–
–
–
139
142
33
157
267
18
(270)
(188)
894
1,053
1,053
378
The acquisition consideration, net assets and goodwill are based upon the reverse acquisition of Inspiration
Healthcare Group plc (previously Inditherm plc) by Inspiration Healthcare Limited. The fair value of the
consideration is the market capitalisation of Inspiration Healthcare Group plc (previously Inditherm plc) at
acquisition. The value of the consideration shares was £7,156,000 based upon the market price of shares
on re-admission to trading on AIM for 28p per share.
Transaction costs of equity transactions relating to the issue and re-admission of the Company’s shares are
accounted for as a deduction from equity where they relate to the issue of new shares and listing costs are
charged to the Consolidated Statement of Comprehensive Income.
The fair value of the net assets acquired and shown in the table above was £1,053,000. The fair value
of the consideration was £1,431,000 resulting in goodwill on reverse acquisition of £378,000. In
addition, the fair value of intellectual property arising on reverse acquisition was £139,000. Refer to note
11 for further details on the recognition of the fair value adjustments.
56
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
3
Segmental analysis
Inspiration Healthcare Group plc’s activities are organised into four segments: three trading segments,
being Critical Care, Operating Theatre and Home Healthcare; and Central and Unallocated costs which are
not allocated to trading segments.
There is no inter-segmental trading.
The Group’s operations are based in the United Kingdom and it operates in a worldwide market.
The Group’s Chief Operating Decision Maker is the Board of Directors.
The revenue segments are defined in the Operating and Financial Review on pages 23 to 25.
Central and Unallocated costs
This segment includes the costs of the Board of Directors, costs attributable to the business’ status as a
public limited company on the AIM market, together with shared support functions such as accounting
and sales administration. An allocation of these costs to the three trading segments has not been done
because it is the Board’s opinion that it would be too subjective and could lead to distorted decision
making.
Segmental information for the year’s ended 31 January 2016 and 31 January 2015 is as follows:
2016
Revenue
Depreciation and amortisation
Operating profit
Critical
Care
£’000
8,792
(48)
2,372
Operating
Theatre
£’000
Home
Healthcare
£’000
Central and
unallocated
costs
£’000
1,342
(5)
380
2,145
(1)
694
–
(124)
(3,300)
Total
£’000
12,279
(178)
146
Analysed as:
Before impairment of goodwill and
intangible assets and exceptional items 2,372
Impairment of goodwill and
intangible assets
Exceptional items
–
–
380
694
(2,141)
1,305
–
–
–
–
(517)
(642)
(517)
(642)
Trade receivables
1,225
201
297
–
1,723
2015
Revenue
Depreciation and amortisation
Operating profit
Critical
Care
£’000
7,253
(33)
2,092
Operating
Theatre
£’000
Home
Healthcare
£’000
Central and
unallocated
costs
£’000
737
–
116
1,548
–
386
–
(34)
(1,616)
Total
£’000
9,538
(67)
978
Analysed as:
Before impairment of goodwill and
intangible assets and exceptional items 2,092
Impairment of goodwill and
intangible assets
Exceptional items
–
–
Trade receivables
1,697
116
386
(1,616)
978
–
–
28
–
–
299
–
–
–
–
–
2,024
57
Consolidated Financial Statements
Notes forming part of the Financial Statements
for the year ended 31 January 2016 (continued)
3
Segmental analysis (continued)
Geographical analysis of revenue for the years ended 31 January 2016 and 31 January 2015 is as
follows:
2016
UK
Europe
Asia Pacific
Middle East & Africa
Americas
Total
2015
UK
Europe
Asia Pacific
Middle East & Africa
Americas
Total
Significant categories of revenue
Goods sold
Services
Critical
Care
£’000
5,107
2,229
316
816
324
8,792
Critical
Care
£’000
4,378
1,785
323
534
233
7,253
Operating
Theatre
£’000
Home
Healthcare
£’000
1,157
87
62
25
11
1,342
2,121
11
8
3
2
2,145
Operating
Theatre
£’000
Home
Healthcare
£’000
736
1
–
–
–
737
1,548
–
–
–
–
1,548
Total
£’000
8,385
2,327
386
844
337
12,279
Total
£’000
6,662
1,786
323
534
233
9,538
12 months
2016
£’000
12 months
2015
£’000
10,586
1,693
12,279
7,886
1,652
9,538
No single customer accounted for more than 10% of revenue.
No analysis of the Consolidated Statement of Financial Position has been included as this information is
not reported on internally.
Reconciliation of segmental operating profit and profit for the year attributable to the owners of the parent
company:
Operating profit
Net finance income
Taxation charge
Profit for the year attributable to the owners of the parent company
12 months
2016
£’000
12 months
2015
£’000
146
2
(136)
12
978
2
(229)
751
58
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
3
Segmental analysis (continued)
Reconciliation of segmental trade receivables to total net assets:
Trade receivables (see note 15)
Prepayments and accrued income
Other receivables
UK corporation tax recoverable
Intangible assets
Property, plant and equipment
Deferred tax asset
Investments
Inventories
Cash and cash equivalents
Trade and other payables
Obligations under finance leases
Deferred income
UK corporation tax payable
Deferred tax liability
Net assets
4
Employees
Aggregate employee costs are as follows:
Wages and salaries
Social security costs
Pension costs – defined contribution schemes
Total
31 January
2016
£’000
31 January
2015
£’000
1,723
185
123
116
242
166
45
100
780
2,319
(2,218)
(33)
(412)
(284)
(39)
2,024
108
11
–
136
90
–
–
664
342
(1,368)
–
(251)
(191)
(25)
2,813
1,540
12 months
2016
£’000
12 months
2015
£’000
2,245
250
53
2,548
1,330
153
36
1,519
Employee costs include the costs of the executive directors but not the non-executive directors.
Monthly average number of persons employed (including executive directors and excluding agency staff)
analysed by category:
Management and Administration
Sales
Development and Quality
Production
Total
12 months
2016
£’000
12 months
2015
£’000
14
27
8
11
60
9
22
7
2
40
59
Consolidated Financial Statements
Notes forming part of the Financial Statements
for the year ended 31 January 2016 (continued)
4
Employees (continued)
Key management emoluments (including executive Directors) emoluments
Aggregate emoluments paid to:
Emoluments of the directors and key management personnel
Contributions to defined contribution pension scheme on their behalf
Emoluments of highest paid director
Contributions to defined contribution pension scheme
Dividends paid to directors
12 months
2016
£’000
12 months
2015
£’000
556
31
587
126
6
132
171
122
24
146
92
–
92
408
Number of directors for whom retirement benefits are accruing under defined contribution pension
schemes during the year 4 (2015: 4).
No directors exercised share options during the year (2015: none).
Refer to note 10 for further details of dividends paid to Directors during the year but prior to their
appointment as Directors on completion of the reverse acquisition.
In addition to the above emoluments Brook Nolson received £65,000 (2015: £48,000) under the terms of a
consulting agreement. Details of the agreement are disclosed in the Remuneration Report on page 32.
5
Operating profit
Operating profit has been arrived at after charging/(crediting:
Depreciation of property, plant and equipment
– owned assets
– leased assets
Amortisation of intangible fixed assets
Impairment of goodwill
Impairment of intellectual property
Loss on disposal of intangible assets
Foreign exchange losses
Impairment of trade receivables
Inventories recognised as an expense
Operating lease rentals for land and buildings
Other operating lease rentals
Auditors’ remuneration
For audit services – statutory
For non-audit services – taxation compliance services
12 months
2016
£’000
12 months
2015
£’000
101
17
60
378
139
6
8
13
6,355
90
76
34
–
32
–
–
–
21
(16)
5,289
47
67
55
–
21
4
60
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
6
Exceptional items
Professional fees in relation to the reverse acquisition
Severance costs on re-organisation
Total exceptional items
12 months
2016
£’000
12 months
2015
£’000
472
170
642
–
–
–
The Group presents certain items as non-recurring and significant. These relate to items which, in
management’s judgement, need to be disclosed by virtue of their size and incidence in order to obtain a
more meaningful understanding of the financial information.
The exceptional items reported relate to the reverse acquisition transaction and re-organisation costs of
£642,000. The Group incurred a total cost during the process of reverse acquisition and subsequent
restructuring of £873,000. The amounts in the consolidated results of the Group reflect that £231,000 of
these were incurred by Inspiration Healthcare Group plc prior to the date when the transaction became
unconditional on 24 June 2015.
Professional fees of £472,000 include brokerage, legal fees, accounting and taxation advice, stamp duty
and public relations fees. Severance costs of £170,000 include payments for loss of office and
redundancy. All amounts were paid before the end of the financial year.
7
Finance income
Bank interest receivable
Finance lease interest payable
Net finance income
8
Taxation
(a) Analysis of tax charge for the year
Domestic current year tax
UK corporation tax –
current year
prior year adjustment
UK corporation tax credit –
current year
prior year adjustment
Total current tax
Deferred tax (see note 19)
origination and reversal of temporary timing differences
prior year adjustment
Total deferred tax
Tax on profit on ordinary activities
12 months
2016
£’000
12 months
2015
£’000
3
(1)
2
2
–
2
12 months
2016
£’000
12 months
2015
£’000
268
–
(20)
(81)
167
(29)
(2)
(31)
136
191
20
–
–
211
18
–
18
229
61
Consolidated Financial Statements
Notes forming part of the Financial Statements
for the year ended 31 January 2016 (continued)
8
Taxation (continued)
(b) Factors affecting tax charge for the year
The tax assessed for the year is higher (2015: higher) than the standard rate of corporation tax in the UK
20.16% (2015: 21%) as explained below:
Profit on ordinary activities before taxation
Tax using the UK corporation tax rate of 20.16% (2015: 21%)
Effects of:
Non-deductible expenses
Chargeable losses
Loss utilised on research and development claim
Additional deduction for research and development
Adjustment to restate opening deferred tax and difference in rates
Trading losses for which no deferred tax has been recognised
Adjustments to tax charge from pre reverse acquisition earnings
Adjustments to tax charge in respect of prior years
Research and development tax credit -
current year
prior year
Total tax charge/(credit)
12 months
2016
£’000
12 months
2015
£’000
148
30
282
(57)
28
(19)
153
(107)
(73)
–
237
(20)
(81)
136
980
206
3
–
–
–
–
20
229
–
–
229
The research and development tax credit is effectively at an enhanced rate to the expenditure at the
expected rate of corporation tax of 130% on expenditure incurred after 1 April 2015. The previous
enhanced rate was 125%.
Changes to the UK corporation tax rates were substantively enacted as part of the Finance Bill 2015 on
26 October 2015. These include reductions to the main rate to reduce the rate to 19% from 1 April 2017
and to 18% from 1 April 2020. Deferred taxes at the balance sheet date have been measured using these
enacted tax rates and reflected in these financial statements.
A further change to the UK corporation tax was announced in the Chancellor’s Budget on 16 March 2016.
The change announced is to reduce the main rate to 17% from 1 April 2020. Changes to reduce the UK
corporation tax rate to 19% from 1 April 2017 had already been substantively enacted on 26 October
2015.
As the change to 17% had not been substantively enacted at the balance sheet date its effects are not
included in these financial statements. The overall effect of that change, if it had been applied to the
deferred tax balance at the balance sheet date, would be to reduce the deferred tax asset by £2,000 and
reduce the deferred tax liability by £2,000 and there would be no effect on the income tax expense.
(c) Factors that may affect future tax charges
The group has gross unused losses estimated at £7,596,000. Brought forward losses transferred to the
Group due to the reverse acquisition amount to £7,373,000 available for relief against future trading
profits.
62
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
9
Earnings per ordinary share
Basic earnings per share for the year is calculated by dividing the profit attributable to ordinary
shareholders for the year after tax by the weighted average number of shares in issue. Basic diluted
earnings per share is calculated by adjusting the weighted average number of ordinary shares in issue to
assume conversion of all potential dilutive ordinary shares.
Profit
Profit attributable to equity holders of the company
Impairment of goodwill and intangible assets
Exceptional items
Numerator for adjusted earnings per share calculation
12 months
2016
£’000
12 months
2015
£’000
12
517
642
1,171
751
–
–
751
The weighted average number of shares in issue and the diluted weighted average number of shares in
issue were as follows:
Shares
Weighted average number of ordinary shares in issue during the year
for the purposes of basic earnings per share
Dilutive effect of potential Ordinary share:
share options
Diluted weighted number of shares in issue during the year
for the purposes of diluted earnings per share
12 months
2016
£’000
12 months
2015
£’000
28,665,055 25,556,290
55,000
–
28,720,055 25,556,290
The basic and diluted earnings per share and adjusted basic and diluted earnings per share for the year
are as follows:
Earnings per share
Adjusted earnings per share
12 months
Basic
12 months
Diluted
2016
pence
0.04
4.09
2016
pence
0.04
4.08
12 months
Basic and
Diluted
2015
pence
2.94
2.94
An adjusted earnings per share and an adjusted diluted earnings per share have also been calculated as
in the opinion of the Directors this will allow shareholders to gain a clearer understanding of the trading
performance of the Group. These adjusted earnings per share exclude:
• Re-organisation and other significant non-recurring costs
• Impairment of goodwill and intangible assets
• The taxation effect at the appropriate rate on adjustments
10 Dividends
At the time of the Group’s admission to AIM in June 2015, the Board proposed to reinvest earnings in
financing the growth of the Group’s business. Neil Campbell and Toby Foster received dividends from
Inspiration Healthcare Limited during the years prior to the reverse acquisition and becoming directors of
Inspiration Healthcare Group plc. There are no immediate plans to pay dividends for Inspiration Healthcare
Group plc.
63
Consolidated Financial Statements
Notes forming part of the Financial Statements
for the year ended 31 January 2016 (continued)
11
Intangible assets
Development
costs
£’000
Intellectual
property
£’000
Software
costs
£’000
Goodwill
£’000
Total
£’000
Cost
At 1 February 2014
Capitalised in the year
At 1 February 2015
Arising on reverse acquisition
Additions on reverse acquisition
Capitalised in the year
Disposals in year
At 31 January 2016
Amortisation
At 1 February 2014
Charge in the year
At 1 February 2015
Additions on reverse acquisition
Impairment of intangible assets
Charge in the year
Disposals in year
At 31 January 2016
Net book value
At 31 January 2016
At 31 January 2015
At 31 January 2014
–
–
–
–
129
–
–
129
–
–
–
126
–
1
–
127
2
–
–
395
–
395
139
136
1
(10)
661
286
32
318
136
139
33
(4)
622
39
77
109
–
59
59
–
–
168
–
227
–
–
–
–
–
26
–
26
201
59
–
–
–
–
378
–
–
–
378
–
–
–
–
378
–
–
378
–
–
–
395
59
454
517
265
169
(10)
1,395
286
32
318
262
517
60
(4)
1,153
242
136
109
Intangible assets are amortised on a straight line basis and the amortisation is included within operating
expenses in the Consolidated Statement of Comprehensive Income.
The development costs and intellectual property additions on reverse acquisition were purchased as part
of the reverse acquisition of Inspiration Healthcare Limited in June 2015. They are considered to have
finite useful lives and are amortised on a straight line basis over their estimated useful lives of 3 years for
development costs and 10 years for intellectual property. The acquisition value approximated the fair value
of the intangible assets acquired.
Goodwill and acquisition related intellectual property recognised have arisen from the reverse acquisition
of Inspiration Healthcare Limited in June 2015. The intangible assets and liabilities of the Group have
been measured at their reverse acquisition date fair values as required by IFRS 13 “Fair Value
Measurement”.
Intellectual property of £139,000 was separately identified and recognised on reverse acquisition following
an independent valuation using the relief from royalty approach. The royalty rate was determined at 2.5%
by comparing similar market transactions. The discount factor applied in the calculation of the net present
value of future cash flows was 16.0%, comprising the weighted average cost of capital of 14% with a
margin of 2%.
64
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
11
Intangible fixed assets (continued)
Goodwill reflects the future economic benefits arising from assets that are not capable of being identified
individually and recognised as separate assets. The goodwill reflects the anticipated profitability and
synergistic benefits arising from the Group structure. The goodwill is the balance of the total consideration
less fair value of assets acquired and identified. In accordance with IFRS 3 the Group considers that, on
reverse acquisition, there are future economic benefits arising from other assets that are not individually
identified and recognised. The deemed consideration payable on reverse acquisition was £1,431,000 (see
note 2). The Group has recognised goodwill of £378,000 as an intangible asset.
Goodwill acquired in a business combination is allocated, at acquisition, to the cash generating units
(CGU’s) that are expected to benefit from that business combination.
The recoverable amounts are determined from value in use calculations. The key assumptions for the value
in use calculations are the discount rate used for future cash flows and the anticipated future changes in
revenue, direct costs and indirect costs of the Group. The assumptions used reflect the past experience of
management and future expectations.
The carrying value of the intellectual property and goodwill arising on reverse acquisition have been
reviewed for impairment and fully impaired in the year.
12
Property, plant and equipment
Improvements
to property
£’000
Plant,
Fixtures machinery,
office
equipment
£’000
and
fittings
£’000
Motor
vehicles
£’000
Cost
At 1 February 2014
Additions in the year
Transfer in the year
At 1 February 2015
Additions on reverse acquisition
Reclassification
Additions in the year
Disposals in year
At 31 January 2016
Depreciation
At 1 February 2014
Charge in the year
At 1 February 2015
Additions on reverse acquisition
Reclassification
Charge in the year
Disposals in year
At 31 January 2016
Net book value
At 31 January 2016
At 31 January 2015
At 31 January 2014
5
–
–
5
–
–
–
–
5
3
–
3
–
–
1
–
4
1
2
2
32
–
–
32
237
–
–
–
269
18
5
23
234
–
3
–
260
9
9
14
99
119
(59)
159
198
503
132
(14)
978
69
23
92
168
474
108
(14)
828
150
67
30
23
–
–
23
10
–
–
–
33
5
6
11
10
–
6
–
27
6
12
18
Total
£’000
159
119
(59)
219
445
503
132
(14)
1,285
95
34
129
412
474
118
(14)
1,119
166
90
64
65
Consolidated Financial Statements
Notes forming part of the Financial Statements
for the year ended 31 January 2016 (continued)
12
Property, plant and equipment (continued)
Depreciation charged for the financial year is included within cost of sales and operating expenses in the
Consolidated Statement of Comprehensive Income.
The reclassification in the year comprises a transfer of demonstration inventory at an opening balance cost
of £503,000 and accumulated depreciation of £474,000.
Plant, machinery and office equipment includes leased assets of £50,000 (2015: £nil) with a net book
value of £33,000 (2015: £nil). The related depreciation charge for the year was £17,000 (2015: £nil).
The obligations under finance leases are secured on lease equipment (see note 22).
13
Investments
Cost at 1 February 2015
Additions
Cost at 31 January 2016
Net Book Value
At 31 January 2016
At 31 January 2015
£’000
–
100
100
100
–
The Group is an investor in Neuroprotexeon Limited, a drug device technology company which is
pioneering the use of the inert gas, Xenon, as a neuro-protectant.
During the year the Group has invested £100,000 in aggregate in return for a holding of 12.8% (11.3%
on a fully diluted basis taking into account share options and loan conversion rights of other investors) at
31 January 2016. The Group also holds 50,000 options to purchase ordinary shares at an exercise price
of £1.05 per share.
The Group has the right, amongst other conditions, to appoint a director. Neil Campbell is currently
appointed as a Non-executive Director of Neuroprotexeon Limited as the Group’s representative. All non-
executive director fees to be paid by Neuroprotexeon Limited will be invoiced by the Group in due course.
The Group will also provide intellectual property and technology to aid research.
The cost of the investment is deemed to be the fair value.
An impairment review was carried out by the directors at 31 January 2016 and no impairment is
considered necessary.
14
Inventories
Raw materials
Work in progress
Finished goods
31 January
2016
£’000
31 January
2015
£’000
151
4
625
780
–
–
664
664
Inventories are presented net of provisions to write down the values to management’s estimate of net
realisable value.
The amount charged to the Consolidated Statement of Comprehensive Income in respect of the writing
down of inventories was £83,000 (2015: £nil). The amount credited to the Statement of Comprehensive
Income in respect of reversals of write-downs was £55,000 (2015: £35,000).
66
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
14
Inventories (continued)
Inventories recognised as an expense:
Opening inventories
Acquired on reverse acquisition
Purchases
Increase in stock provisions
Closing inventories
Expensed during the year
15
Trade and other receivables
Gross trade receivables
Provision for doubtful debts
Net trade receivables
UK corporation tax receivable (see note 16)
Other taxes and social security
Other debtors
Prepayments and accrued income
31 January
2016
£’000
31 January
2015
£’000
664
157
6,258
56
(780)
6,355
479
–
5,443
31
(664)
5,289
31 January
2016
£’000
31 January
2015
£’000
1,781
(58)
1,723
116
61
62
185
2,147
2,031
(7)
2,024
–
–
11
108
2,143
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary
course of business and are generally due for settlement within 30 days. Other receivables are generally due
for settlement within three to twelve months. Trade and other receivables are therefore all classified as
current. Trade and other receivables are non-interest bearing and receivable under normal commercial
terms. The directors consider that the carrying value of trade and other receivables approximates their fair
value. Specific provisions are made against doubtful debts taking the value based on the most likely
outcome. Trade receivables includes specific provisions at 31 January 2016 of £58,000 (2015: £7,000).
At 31 January 2016 the trade receivables which were past due but not impaired were £610,000
(2015: £898,000). These receivable balances have not been impaired because the balances have been
acknowledged as payable by the customers or have been paid since the year end. The ageing of these
receivables is as follows:
Up to three months
Between four and twelve months
31 January
2016
£’000
31 January
2015
£’000
587
23
610
775
123
898
67
Consolidated Financial Statements
Notes forming part of the Financial Statements
for the year ended 31 January 2016 (continued)
15
Trade and other receivables (continued)
The carrying value of receivables that would have been past due or impaired, but whose terms have been
renegotiated is £nil (2015: £nil).
Receivables that are neither past due or impaired are within credit limits for the respective customer and
having made reasonable enquiries the directors are not aware of any reasons that indicate the amounts
due are disputed or not collectable.
The maximum exposure to credit risk at the reporting date is the fair value of each class of receivable
shown above. The Group does not insure receivables or hold any collateral as security.
The carrying amounts of the Group’s receivables are denominated in the following currencies:
Pounds sterling
Euro
US Dollars
16
Current tax liability
31 January
2016
£’000
31 January
2015
£’000
1,752
329
66
2,147
1,761
318
64
2,143
The following are the major current tax assets and liabilities recognised by the Group and movements
thereon during the current and prior reporting year.
UK corporation tax receivable (see note 15)
UK corporation tax payable (see note 17)
UK current tax net liability
31 January
2016
£’000
31 January
2015
£’000
116
(284)
(168)
–
(191)
(191)
At the year end date the Group has recognised a receivable in respect of potential research and
development tax claims of £116,000 (2015: £nil). During the current year the Group received £18,000
in respect of research and development tax claims, that were acquired as part of the reverse acquisition.
68
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
17
Trade and other payables
Trade payables
Directors current accounts
UK corporation tax payable (see note 16)
Other taxes and social security
Other payables
Accruals
31 January
2016
£’000
31 January
2015
£’000
1,405
–
284
261
7
545
2,502
922
76
191
211
1
158
1,559
The fair value of trade and other payables approximates to book value at 31 January 2016. Trade payables
are non-interest bearing and the average credit period taken for trade purchases is 53 days (2015:
49 days). Accruals are normally settled monthly throughout the financial year.
Security has been provided over the Group’s banking facilities by way of a fixed and floating charge over
all of the Group assets.
18 Deferred income
Deferred income arises on medical rental, managed service, service or maintenance contracts and the
accounting policy is explained in note 1.
The profile of when this income will be recognised in the Consolidated Statement of Comprehensive
Income is as follows:
Within 1
year
£’000
31 January 2016
31 January 2015
276
251
1 to 2
years
£’000
69
–
2 to 3
years
£’000
50
–
3 to 4
years
£’000
15
–
4 to 5
years
£’000
2
–
Total
£’000
412
251
69
Consolidated Financial Statements
Notes forming part of the Financial Statements
for the year ended 31 January 2016 (continued)
19 Deferred tax
The following are the major deferred tax liabilities and assets recognised by the Group and movements
thereon during the current and prior reporting year.
Note that the effective future tax rate is 18% (2015: 20%).
Deferred tax assets
Liability at beginning of year
Credit/(charge) to the profit and loss for the year
Net asset/(liability) at end of year
The elements of deferred taxation provided for are as follows:
Difference between accumulated depreciation and amortisation
and capital allowances
Short term timing differences
Deferred tax asset
Accelerated capital allowances
Deferred tax liability
31 January
2016
£’000
31 January
2015
£’000
(25)
31
6
(7)
(18)
(25)
31 January
2016
£’000
31 January
2015
£’000
44
1
45
–
–
–
31 January
2016
£’000
31 January
2015
£’000
(39)
(39)
(25)
(25)
At the year end date the Group had gross unused losses of £7,596,000 (2015: £nil) potentially available
to offset against future profits. Brought forward losses transferred to the Group due to the reverse
acquisition amount to £7,373,000. No deferred tax has been recognised in respect of these losses due to
the unpredictability of future profit streams.
The amounts not provided for are as follows:
Unused tax losses
31 January
2016
£’000
31 January
2015
£’000
1,367,000
–
The Group may also benefit from a taxable deduction when the outstanding share options are exercised.
Such a benefit would create an additional tax deductible expense. The Directors have not provided for the
potential deferred tax credit that might arise as its realisation is considered too uncertain to be recognised
in the Consolidated Statement of Financial Position.
70
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
20
Financial risk management and financial instruments
The Group’s principal financial instruments comprise trade and other receivables, cash and cash
equivalents and trade and other payables. The main purpose of these financial instruments is to finance
the Group’s operations.
The policies to address the risks associated with the Group’s financial instruments are reviewed and
approved by the Board. The main risks arising from the Group’s financial instruments are liquidity risk and
credit risk. A summary of the risks is set out below and also referred to in the Strategic Report on pages
15 to 22.
Classes of financial assets and liabilities
Assets
Cash and cash equivalents
Trade and other receivables
Liabilities
Trade and other payables
At
31 January
2016
£’000
At
31 January
2015
£’000
2,319
2,147
342
2,143
2,502
1,559
All the above are due or mature in under three months.
The Group has not disclosed the fair values for financial instruments such as short-term trade receivables
and payables, because their carrying amounts are a reasonable approximation of fair values.
Credit risk
Credit risk principally arises on cash deposits and trade receivables.
The Group monitors defaults of customers and other counterparties and incorporates this information into
credit risk controls. Ongoing credit evaluation is performed on the financial condition of accounts receivable
taking into account independent ratings (where available), its financial position, past experience and other
factors. Any single counterparty or any group of counterparties having similar characteristics, with the
exception of the NHS, which could be viewed as one organisation but is financially organised through a
number of trusts and the credit risk may be viewed as ultimately the UK Government.
Management considers that all the above financial assets that are not impaired for each of the reporting
dates under review are of good credit quality, including those that are past due.
The carrying value of financial assets recorded in the financial statements, which is net of impairment
losses, represents the Group’s maximum exposure to credit risk as no collateral or other credit
enhancements are held.
The credit risk for liquid funds and other short term financial assets relates to the banking institutions
holding such funds and assets on behalf of the Group and may therefore be higher in conditions of general
banking uncertainty. The counterparties are considered to be reputable banks with high quality external
risk ratings.
Liquidity risk
In the normal course of business the Group is exposed to liquidity risk. The Group’s objective is to ensure
that sufficient resources are available to fund short term working capital and longer term strategic
requirements. This is achieved through the use of an appropriate mix of short, medium and long term
deposits and investments.
71
Consolidated Financial Statements
Notes forming part of the Financial Statements
for the year ended 31 January 2016 (continued)
20
Financial risk management and financial instruments (continued)
Liquidity risk (continued)
The Group manages its liquidity needs by monitoring cash outflows due in day-to-day business. Liquidity
needs are monitored in various time bands, on a day-to-day and week-to-week basis. Long term liquidity
needs are monitored monthly.
The Group maintains cash and cash equivalents to meet its liquidity requirements for up to a 90 days
period.
At 31 January 2016 and 31 January 2015, the Group’s liabilities had contractual maturities which are
summarised as follows:
2016
Obligations under finance leases
Trade payables
Cash and cash equivalents
2015
Carrying
amount
£’000
(33)
(1,405)
2,319
Total
£’000
(33)
(1,405)
2,319
1 year
or less
£’000
(17)
(1,405)
2,319
1 to 2
years
£’000
(16)
–
–
Obligations under finance leases
Trade payables
Cash and cash equivalents
–
(922)
342
–
(922)
342
–
(922)
342
–
–
–
2 to 5
years
£’000
–
–
–
–
–
–
The above contractual maturity of the Group’s financial liabilities reflects the gross cash flows, which may
differ from the carrying values of the liabilities at the year end date.
Interest rate risk
The Group does not believe that its financial stability is threatened because of an exposure to interest rate
risk and consequently does not hedge against it. The Board keeps this risk under regular review.
Foreign currency risk
It is recognised that the Group has exposure to foreign currency risks, however, the Board consider this to
be an acceptable level of risk which does not threaten the financial stability of the Group. The Board keeps
this risk under regular review.
Capital risk
The Group establishes credit limits for all financial instruments taking into account independent ratings,
past experience and other factors. The Group’s investment policy is to invest in fixed rate/low risk
investments where the capital element is not at risk to market changes. The capital risk of cash deposits
is further reduced by spreading investment across a number of banks.
72
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
21
Share capital
Number of
shares
At 1 February 2015
Effect of share consolidation
51,112,581
(46,001,323)
At 23 June 2015
Issue of consideration shares
5,111,258
25,556,290
At 31 January 2016
30,667,548
Share
capital
£’000
511
–
511
2,556
3,067
Share
premium
£’000
9,929
–
9,929
–
9,929
Merger
reserve
£’000
–
–
–
4,600
4,600
Total
£’000
10,440
–
10,440
7,156
17,596
The effect of the share consolidation was to consolidate every 10 Ordinary Shares into 1 Ordinary share
and increase the par value of each Ordinary Share from 1 pence to 10 pence. On 24 June 2015, the
Company announced that all the conditions to acquire the entire issued share capital of Inspiration
Healthcare Limited had been satisfied and 25,556,290 Ordinary Shares were issued as consideration.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are
entitled to one vote per share at meetings of the Company.
For the purpose of preparing the consolidated financial statements of the Group, the Share Capital
represents the nominal value of the issued share capital of 10p per share. Share Premium represents the
excess over nominal value of the fair value consideration received for equity shares net of expenses of
share issues. The Merger reserve relates to the reverse acquisition between Inspiration Healthcare Group
plc and Inspiration Healthcare Limited on 24 June 2015.
22
Commitments
(a) Capital commitments
There were no capital commitments at the end of the financial year (2015: £nil).
(b) Finance lease
The Group has a finance lease for the purchase of 2 Novalung iLA Active Consoles. Commitments under
finance leases are as follows:
Minimum payments within one year
Minimum payments after one year but not more than five years
Present value of minimum lease payments
31 January
2016
£’000
31 January
2015
£’000
17
16
33
33
–
–
–
–
73
Consolidated Financial Statements
Notes forming part of the Financial Statements
for the year ended 31 January 2016 (continued)
22
Commitments (continued)
(c) Operating leases
The Group has annual commitments under non-cancellable operating leases relating primarily to land and
buildings, motor vehicles and office equipment. Land and buildings have been considered separately for
lease classification. Land and buildings amounts relate to leasehold properties at the Earl Shilton site,
Wath-upon-Dearne, Albourne and Newtownards. During the year £166,000 was recognised as an
expense in the Consolidated Statement of Comprehensive Income in respect of operating leases
(2015: £114,000).
Future aggregate minimum lease payments under non-cancellable operating leases at the end of the year
are as follows:
Within 1 year
In the second to fifth years inclusive
After five years
Land and buildings
Other
31 January
2016
£’000
31 January
2015
£’000
31 January
2016
£’000
31 January
2015
£’000
112
47
–
159
40
53
–
93
53
31
3
87
50
40
–
90
23
Share based payments
The Group operates approved share option schemes.
The Group previously operated a Share Incentive Plan. Options previously granted under this scheme are
exercisable subject to certain performance criteria being met until the expiry date. This scheme is closed
to new members and no further options will be granted under the scheme. The Group established, on Re-
Admission to AIM, a new Share Option Scheme, details of all existing schemes are included below.
The fair value is calculated at the grant date and ultimately expensed in the Consolidated Statement of
Comprehensive Income over the vesting period of three years, based on the best available estimate of the
number of share options expected to vest, with a corresponding credit to reserves. Upon exercise of the
share options the proceeds received net of attributable transaction costs are credited to share capital and
where appropriate share premium.
There have been no options granted during the course of the financial year under review.
Details of the share options outstanding at 31 January 2016 and movements during the year by exercise
price is shown below:
Exercise
price*
First
exercise
date
Last
exercised
date
Restated*at
31 January
2015
Granted
Exercised
Lapsed
At
31 January
2016
50p
Jan 2015
100p May 2011
Jan 2022
May 2018
125,000
60,000
185,000
–
–
–
–
–
–
(90,000)
(40,000)
35,000
20,000
(130,000)
55,000
*The effect of the share consolidation was to consolidate every 10 Ordinary Shares into 1 Ordinary share.
See note 21 for further details.
74
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
23
Share based payments (continued)
There were 55,000 (2015: 185,000 (restated)) options exercisable at the year end date subject to a
performance criterion being met.
The options outstanding at the year end have a weighted average exercise price of 68p (2015: 66p
(restated)) and a weighted average contractual life of 7.8 years (2015: 5.9 years).
The fair value of the share options granted was determined by the Black-Scholes pricing model. The key
assumptions used were the share price at the date of issue, the strike price of the options, life of the
options, historic volatility and benchmarking other AIM listed companies.
The expense recognised in the year from equity settled share based payments was £nil (2015: £nil). There
were no cash settled share based payment transactions.
24
Contingent liabilities
Included within cash and cash equivalents is a deposit for £250,000 that is used as collateral for bank
facilities provided by HSBC Bank plc.
Bank facilities provided by HSBC Bank plc include a bank guarantee issued to Highbridge (Houndhill)
Industries Limited for £143,000, being a rolling two year rent on the manufacturing facility at Rotherham.
The Group entered into the lease on 11 March 2002 for an initial period of fifteen years, which ends on
10 March 2017.
Inspiration Healthcare Limited has provided a fixed and floating charge over its assets as collateral for bank
facilities provided by The Royal Bank of Scotland plc. Throughout all years reported there have been no
borrowings on this facility. In addition The Royal Bank of Scotland plc provide a bank guarantee to HM
Revenue and Customs as security for its Duty Deferment Scheme.
During the normal course of business, the Group offers warranties against clearly defined performance
specifications.
25
Pension schemes
The Group made contributions in respect of defined contribution pension arrangements of £53,000
(2015: £36,000). At the year end £7,000 (2015: £1,000) of contributions were payable to the schemes.
26 Related party transactions
Neuroprotexeon Limited
At the year end date the Group held 12.8% (2015: 17.5%) of the issued ordinary share capital of
Neuroprotexeon Limited. The Group also holds 50,000 options to purchase ordinary shares at an exercise
price of £1.05 per share. Further information relating to the investment is disclosed in note 13.
The investment agreement provides the Group with the right to appoint a director. Neil Campbell is
currently appointed as a Non-executive Director of Neuroprotexeon Limited as the Group’s representative.
Key management
Directors control 37.4% of the voting shares of the legal parent company. Directors interests in shares are
disclosed in the Remuneration Report on page 35.
Key management comprise the group’s executive and non-executive directors. Remuneration of executive
and non-executive directors is set out in note 4 and the Remuneration Report on page 31.
For the period from 1 February 2014 to 23 June 2015 the Directors of Inspiration Healthcare Limited
operated Directors current and loan accounts. The accounts were settled and closed prior to the reverse
acquisition. The amount outstanding at 31 January 2015 was £76,000.
75
Consolidated Financial Statements
Notes forming part of the Financial Statements
for the year ended 31 January 2016 (continued)
26 Related party transactions (continued)
Brook Nolson
On 26 September 2013 Inspiration Healthcare Limited entered into an agreement with Deciduous Limited,
a company of which Brook Nolson is a director, for the provision of business consultancy services and
strategic advice. The amount paid in the year to 31 January 2016 was £65,000 (2015: £48,000). The
agreement was terminated on Admission, when Brook Nolson became a Non-executive Director of the
Company.
In order to effect an orderly handover of services provided in relation to the installation of new business
systems a number of additional days support were considered by the other directors as necessary for
which Deciduous Limited was paid an additional £8,000 during July and August 2015. This now
completes the assignment and the obligations under the agreement.
Lease of Leicestershire facility
Inspiration Healthcare Limited entered into a lease in respect of Gildor House in Earl Shilton, Leicestershire
for an annual rent of £19,250 on 8 April 2008. The lease term is for ten years from April 2008. The last
rent review date in the term has already passed. The landlord of the property is a self-invested pension
plan (‘SIPP’) controlled by Neil Campbell, Toby Foster, Simon Motley, Malcolm Oxley and Graham Walls.
The annual charge was deemed to be at a market rate by Standard Life Trustee Limited on 18 April 2008.
This was reviewed on 6 August 2013, with the market rate remaining unchanged.
27 Ultimate parent undertaking
Inspiration Healthcare Group plc is the ultimate parent undertaking.
76
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Independent Auditors’ Report to the Members of
Inspiration Healthcare Group plc (Company)
Report on the Company financial statements
Our opinion
In our opinion, Inspiration Healthcare Group plc’s Company financial statements (the ‘financial
statements’):
•
•
give a true and fair view of the state of the Company’s affairs as at 31 January 2016 and of its
cash flows for the 13 month period (the ‘period’) then ended;
have been properly prepared in accordance with International Financial Reporting Standards
(‘IFRSs’) as adopted by the European Union and as applied in accordance with the provisions of
the Companies Act 2006; and
•
have been prepared in accordance with the requirements of the Companies Act 2006.
What we have audited
The financial statements, included within the Annual Report and Financial Statements (the ‘Annual
Report’), comprise:
•
•
•
•
the Company balance sheet as at 31 January 2016;
the Company cash flow statement for the period then ended;
the Company statement of changes in shareholders’ equity for the period then ended; and
the notes to the financial statements, which include a summary of significant accounting policies
and other explanatory information.
The financial reporting framework that has been applied in the preparation of the financial statements
is IFRSs as adopted by the European Union, and applicable law, and as applied in accordance with the
provisions of the Companies Act 2006.
In applying the financial reporting framework, the directors have made a number of subjective
judgements, for example in respect of significant accounting estimates. In making such estimates, they
have made assumptions and considered future events.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion, the information given in the Strategic Report and the Report of the Directors for the financial
period for which the financial statements are prepared is consistent with the financial statements.
Other matters on which we are required to report by exception
Adequacy of accounting records and information and explanations received
Under the Companies Act 2006 we are required to report to you if, in our opinion:
•
•
•
we have not received all the information and explanations we require for our audit; or
adequate accounting records have not been kept by the company, or returns adequate for our audit
have not been received from branches not visited by us; or
the financial statements are not in agreement with the accounting records and returns.
We have no exceptions to report arising from this responsibility.
Directors’ remuneration
Under the Companies Act 2006 we are required to report to you if, in our opinion, certain disclosures
of directors’ remuneration specified by law are not made. We have no exceptions to report arising from
this responsibility.
77
Company Financial Statements
Independent Auditors’ Report to the Members of
Inspiration Healthcare Group plc (Company)
Responsibilities for the financial statements and the audit
Our responsibilities and those of the directors
As explained more fully in the Statement of Directors’ Responsibilities set out on page 37, the directors
are responsible for the preparation of the financial statements and for being satisfied that they give a
true and fair view.
Our responsibility is to audit and express an opinion on the financial statements in accordance with
applicable law and International Standards on Auditing (UK and Ireland) (‘ISAs (UK & Ireland)’). Those
standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors.
This report, including the opinions, has been prepared for and only for the company’s members as a
body in accordance with Chapter 3 of Part 16 of the Companies Act 2006 and for no other purpose.
We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any
other person to whom this report is shown or into whose hands it may come save where expressly
agreed by our prior consent in writing.
What an audit of financial statements involves
We conducted our audit in accordance with ISAs (UK & Ireland). An audit involves obtaining evidence
about the amounts and disclosures in the financial statements sufficient to give reasonable assurance
that the financial statements are free from material misstatement, whether caused by fraud or error.
This includes an assessment of:
•
•
•
whether the accounting policies are appropriate to the company’s circumstances and have been
consistently applied and adequately disclosed;
the reasonableness of significant accounting estimates made by the directors; and
the overall presentation of the financial statements.
We primarily focus our work in these areas by assessing the directors’ judgements against available
evidence, forming our own judgements, and evaluating the disclosures in the financial statements.
We test and examine information, using sampling and other auditing techniques, to the extent we consider
necessary to provide a reasonable basis for us to draw conclusions. We obtain audit evidence through
testing the effectiveness of controls, substantive procedures or a combination of both.
In addition, we read all the financial and non-financial information in the Annual Report to identify
material inconsistencies with the audited financial statements and to identify any information that is
apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us
in the course of performing the audit. If we become aware of any apparent material misstatements or
inconsistencies we consider the implications for our report.
Other matter
We have reported separately on the Group financial statements of Inspiration Healthcare Group plc for
the year ended 31 January 2016.
Arif Ahmad (Senior Statutory Auditor)
for and on behalf of PricewaterhouseCoopers LLP
Chartered Accountants and Statutory Auditors
Leeds
28 April 2016
78
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Company Balance Sheet
as at 31 January 2016
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Investments
Deferred tax asset
Current assets
Inventories
Trade and other receivables
Cash and cash equivalents
Total assets
Liabilities
Current liabilities
Trade and other payables
Deferred income
Non-current liabilities
Deferred income
Total liabilities
Net assets
Capital and reserves
Called up share capital
Share premium account
Share based payment reserve
Retained earnings
Shareholders’ funds
31 January 31 December
2014
£’000
2016
£’000
Notes
4
5
6
11
7
8
9
10
10
12
12
28
46
7,156
45
7,275
195
306
760
1,261
8,536
(1,069)
(48)
(1,117)
(131)
(1,248)
3
36
–
–
39
189
320
1,165
1,674
1,713
(220)
(87)
(307)
(124)
(431)
7,288
1,282
3,067
14,529
155
(10,463)
511
9,929
155
(9,313)
7,288
1,282
The notes on pages 82 to 91 are an integral part of these financial statements.
The financial statements on pages 79 to 91 were approved by the Board of Directors on 28 April 2016 and
signed on its behalf by:
Neil Campbell
Director
Ian D Smith
Director
79
Company Financial Statements
Company Statement of Changes in Shareholders’
Equity
At 31 December 2013
Credit for share based payments
Loss for the period
At 31 December 2014
Loss for the period
Shares issued as consideration
At 23 June 2015
Loss for the period
Issued
share
capital
£’000
511
–
–
511
–
2,556
3,067
–
Share
premium
account
£’000
9,929
–
–
9,929
–
4,600
14,529
–
At 31 January 2016
3,067
14,529
Share
based
payment
reserve
£’000
148
7
–
155
–
–
155
–
155
Retained
earnings
£’000
(8,938)
–
(375)
(9,313)
(368)
–
(9,681)
(782)
Total
£’000
1,650
7
(375)
1,282
(368)
7,156
8,070
(782)
(10,463)
7,288
The notes on pages 82 to 91 are an integral part of these financial statements.
80
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Company Cash Flow Statement
for the period ended 31 January 2016
13 months
to
12 months
to
31 January 31 December
2014
£’000
2016
£’000
Operating loss
Share based payments
Depreciation and amortisation
(Increase)/decrease in inventories
(Increase)decrease in trade and other receivables
Increase/(decrease) in trade and other payables
Decrease in deferred income
Taxation received
Net cash outflow from operating activities
Cash flow from investing activities
Interest received
Purchase of property, plant and equipment
Purchase of intangible assets
Capitalised development costs
Net cash used in investing activities
(1,218)
–
22
(6)
(2)
850
(32)
36
(350)
2
(31)
(26)
–
(55)
(399)
7
22
30
65
(148)
(50)
12
(461)
4
(10)
–
(3)
(9)
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
(405)
(470)
1,165
760
1,635
1,165
81
Company Financial Statements
Notes to the Company’s Financial Statements
for the period ended 31 January 2016
1
Accounting Policies
The following accounting policies have been applied consistently in dealing with items which are
considered material in relation to the financial statements of the Company.
Basis of preparation
The Company financial statements cover the period of 13 months from 1 January 2015 to 31 January
2016.
The Company financial statements have been prepared and approved by the Directors in accordance with
International Financial Reporting Standards as adopted by the European Union (‘Adopted IFRSs’), issued
by the International Accounting Standards Board (IASB), including interpretations by the International
Financial Reporting Interpretations Committee (IFRIC), and the Companies Act 2006 applicable to
companies reporting under IFRS. The Company financial statements are prepared under the historical cost
convention, as modified for any financial assets which are stated at fair value through operating profit or
loss and for share based payments which are measured at fair value.
Under Section 408 of the Companies Act 2006 the Company is exempt from the requirement to present
a separate Profit and Loss account in these separate financial statements. The loss for the period is
included in the Company Statement of Changes in Shareholders’ Equity.
The accounting policies of the Company are the same as for the Group.
Going concern
The Directors have assessed the Company’s ability to continue in operational existence for the foreseeable
future in accordance with FRC Going Concern and Liquidity Risk guidance (October 2009). It is considered
appropriate to continue to prepare the financial statements on a going concern basis.
2
Exceptional items
13 months
to
12 months
to
31 January 31 December
2014
£’000
2016
£’000
Professional fees in relation to the reverse acquisition
Severance costs on re-organisation
Total exceptional items
548
172
720
–
–
–
The Company presents certain items as non-recurring and significant. These relate to items which, in
management’s judgement, need to be disclosed by virtue of their size and incidence in order to obtain a
more meaningful understanding of the financial information.
The exceptional items included in the Company’s loss for the period relate to the reverse acquisition
transaction and re-organisation costs of £720,000. The amounts in the results of the Company include
£231,000 of costs incurred by the Company prior to the date when the transaction became unconditional
on 24 June 2015.
Professional fees of £548,000 include brokerage, legal fees, accounting and taxation advice, stamp duty
and public relations fees. Severance costs of £172,000 include payments for loss of office and
redundancy. All amounts were paid before the end of the financial year.
82
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
3
Staff numbers and costs
Monthly average number of persons employed (including Executive Directors and excluding agency staff)
analysed by category:
13 months
to
12 months
to
31 January 31 December
2014
£’000
2016
£’000
Management and Administration
Sales
Development and Quality
Production
Total
6
5
2
9
22
4
11
2
9
26
Employee costs include the costs of the executive directors but not the non-executive directors.
The aggregate payroll costs of these persons were as follows:
13 months
to
12 months
to
31 January 31 December
2014
£’000
2016
£’000
Wages and salaries
Social security costs
Pension costs – defined contribution scheme
Share based payments
Total
Key management (including Executive Directors) emoluments
965
90
24
–
1,079
814
81
17
7
919
13 months
to
12 months
to
31 January 31 December
2014
£’000
2016
£’000
Aggregate emoluments paid to:
Emoluments of the directors and key management personnel
Contributions to defined contribution pension scheme on their behalf
Emoluments of highest paid director
Contributions to defined contribution pension scheme
448
16
464
139
5
144
288
10
298
126
5
131
Payments for loss of office of £113,000 (2014: £nil) are included in severance pay within exceptional
items (see note 2).
Number of directors for whom retirement benefits are accruing under defined contribution pension
schemes during the year 4 (2014: 2).
No directors exercised share options during the year (2014: none).
In addition to the above emoluments John Markham received £9,000 (2014: £8,000) under the terms of
a consulting agreement.
83
Company Financial Statements
Notes to the Company’s Financial Statements
for the period ended 31 January 2016 (continued)
4
Intangible assets
Cost
At 1 January 2014
Capitalised in period
At 1 January 2015
Capitalised in period
At 31 January 2016
Amortisation
At 1 January 2014
Charge in the period
At 1 January 2015
Charge in the period
At 31 January 2016
Net book value
At 31 January 2016
At 31 December 2014
At 31 December 2013
Development
costs
£’000
Intellectual
property
£’000
Software
costs
£’000
Total
£’000
126
3
129
–
129
122
4
126
1
127
2
3
4
136
–
136
–
136
136
–
136
–
136
–
–
–
–
–
–
26
26
–
–
–
–
–
26
–
–
262
3
265
26
291
258
4
262
1
263
28
3
4
Intangible assets are amortised on a straight line basis and the amortisation is included within operating
expenses within the Group’s Consolidated Statement of Comprehensive Income on page 43.
5
Property, plant and equipment
Cost
At 1 January 2014
Additions in the year
At 1 January 2015
Additions in the year
At 31 January 2016
Depreciation
At 1 January 2014
Charge in the period
At 1 January 2015
Charge in the period
At 31 January 2016
Net book value
At 31 January 2016
At 31 December 2014
At 31 December 2013
Plant,
Fixtures machinery,
office
equipment
£’000
and
fittings
£’000
Motor
vehicles
£’000
Total
£’000
234
3
237
–
237
232
1
233
1
234
3
4
2
186
7
193
31
224
144
17
161
20
181
43
32
42
10
–
10
–
10
10
–
10
–
10
–
–
–
430
10
440
31
471
386
18
404
21
425
46
36
44
Depreciation charged for the financial period is included within cost of sales and operating expenses within
the Group’s Consolidated Statement of Comprehensive Income on page 43.
84
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
6
Investments
Cost
At 1 January 2015
Additions
At 31 January 2016
Net Book Value
At 31 January 2016
At 31 December 2014
£’000
–
7,156
7,156
7,156
–
The additions relate to the shares issued as consideration for the reverse acquisition of Inspiration
Healthcare Limited (see note 2 of the Group’s financial statements).
Inspiration Healthcare Group plc has the following interests in wholly owned subsidiaries, joint ventures or
associates registered and operating in England and Wales.
Name
Inspiration Healthcare Limited
Anaesthetic Services Systems
Limited
Inspiration Homecare Limited
Inditherm Limited
Inditherm (Medical) Limited
Nature of business
Sale of medical and
orthopaedic goods
Dormant
Dormant
Dormant
Holding company for
intellectual property rights
Inditherm (UK) Limited
Inditherm Construction Limited
Dormant
Dormant
7
Inventories
Raw materials
Work in progress
Finished goods
Direct/
indirect
ownership
% of total
issued
share
capital
Class of
share
Direct
100
Ordinary
Indirect
Indirect
Indirect
Direct
Direct
Direct
100
100
100
100
100
100
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
31 January 31 December
2014
£’000
2016
£’000
151
4
40
195
134
3
52
189
Inventories are presented net of provisions to write down the values to management’s estimate of net
realisable value.
85
Company Financial Statements
Notes forming part of the Financial Statements
for the period ended 31 January 2016 (continued)
8
Trade and other receivables
Gross trade receivable
Provision for bad debts
Net trade receivables
Other taxes and social security
UK corporation tax recoverable
Other debtors
Prepayments and accrued income
31 January 31 December
2014
£’000
2016
£’000
226
(37)
189
61
20
–
36
306
229
–
229
–
36
7
48
320
At 31 January 2016 the trade receivables which were past due but not impaired were £47,000 (2014:
£85,000). These receivable balances have not been impaired because the balances have been
acknowledged as payable by the customers or have been paid since the year end. The ageing of these
receivables is as follows:
Up to three months
Between four and twelve months
9
Trade and other payables
Trade payables
Amounts due to subsidiary undertakings
Other taxes and social security
Other payables
Accruals
31 January 31 December
2014
£’000
2016
£’000
43
4
47
80
5
85
31 January 31 December
2014
£’000
2016
£’000
219
501
35
6
308
1,069
109
–
25
4
82
220
The amounts due to subsidiaries of £501,000 (2014: £nil) are repayable on demand.
10 Deferred income
Deferred income arises on service or maintenance contracts and the accounting policy is explained in note
1 of the Group’s financial statements.
The profile of when this income will be recognised in the Group’s Consolidated Statement of
Comprehensive Income on page 43 is as follows:
Within 1
year
£’000
48
87
1 to 2
years
£’000
64
53
2 to 3
years
£’000
50
50
3 to 4
years
£’000
15
18
4 to 5
years
£’000
2
3
Total
£’000
179
211
2016
2014
86
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
11 Deferred tax
At the balance sheet date the Company had gross unused losses of £7,596,000 (2014: £7,373,000)
available to offset against future profits. No deferred tax has been recognised in respect of these losses due
to the unpredictability of future profit streams.
Note that the effective future tax rate is 18% (2014: 20%).
Deferred tax assets
At beginning of year
Credit to the profit and loss for the year
At end of year
The elements of deferred taxation provided for are as follows:
Difference between accumulated depreciation and amortisation
and capital allowances
Short term timing differences
Deferred tax asset
The amounts not provided for are as follows:
Unused tax losses
Depreciation in excess of capital allowances
Unrecognised deferred tax asset
31 January 31 December
2014
£’000
2016
£’000
–
45
45
–
–
–
31 January 31 December
2014
£’000
2016
£’000
44
1
45
–
–
–
31 January 31 December
2014
£’000
2016
£’000
1,367
–
1,367
1,472
68
1,540
The Company may also benefit from a taxable deduction when the outstanding share options are
exercised. Such a benefit would create an additional tax deductible expense. The Directors have not
provided for the potential deferred tax credit that might arise as its realisation is considered too uncertain
to be recognised in the Company’s balance sheet.
87
Company Financial Statements
Notes forming part of the Financial Statements
for the period ended 31 January 2016 (continued)
12
Share capital
At 1 January 2015
Effect of share consolidation
At 23 June 2015
Issue of consideration shares
At 31 January 2016
Number of
shares
51,112,581
(46,001,323)
5,111,258
25,556,290
30,667,548
Share
capital
£’000
511
–
511
2,556
3,067
Share
premium
£’000
9,929
–
9,929
4,600
Total
£’000
10,440
–
10,440
7,156
14,529
17,596
The effect of the share consolidation was to consolidate every 10 Ordinary Shares into 1 Ordinary share
and increase the par value of each Ordinary Share from 1 pence to 10 pence. On 24 June 2015, the
Company announced that all the conditions to acquire the entire issued share capital of Inspiration
Healthcare Limited had been satisfied and 25,556,290 Ordinary Shares were issued as consideration.
The holders of ordinary shares are entitled to receive dividends as declared from time to time and are
entitled to one vote per share at meetings of the Company.
For the purpose of preparing the financial statements of the Company, the Share Capital represents the
nominal value of the issued share capital of 10p per share. Share Premium represents the excess over
nominal value of the consideration received for equity shares net of expenses of the share issue.
88
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
13
Commitments under operating leases
The Company has annual commitments under non-cancellable operating leases relating primarily to land
and buildings, motor vehicles and office equipment. Land and buildings have been considered separately
for lease classification. Land and buildings amounts relate to a leasehold property at Wath-Upon-Dearne.
Future aggregate minimum lease payments under non-cancellable operating leases at the end of the period
are as follows:
Within 1 year
In the second to fifth years inclusive
After five years
Land and buildings
Other
31 January 31 December
2014
£’000
2016
£’000
31 January 31 December
2014
£’000
2016
£’000
72
–
–
72
71
72
–
143
14
18
3
35
23
35
–
58
14
Capital commitments
At the financial period ended 31 January 2016, the Company had no capital expenditure commitments
(2014: £nil).
15
Contingent liabilities
Included within cash and cash equivalents is a deposit for £250,000 that is used as collateral for bank
facilities provided by HSBC Bank plc.
Bank facilities provided by HSBC Bank plc include a bank guarantee issued to Highbridge (Houndhill)
Industries Limited for £143,000, being a rolling two year rent on the manufacturing facility at Rotherham.
The Company entered into the lease on 11 March 2002 for an initial period of fifteen years, which ends
on 10 March 2017.
During the normal course of business, the Company offers warranties against clearly defined performance
specifications.
16
Pension schemes
The Company made contributions in respect of defined contribution pension arrangements of £24,000
(2014: £17,000). At the period end £6,000 (2014: £3,000) of contributions were payable by the
Company.
89
Company Financial Statements
Notes forming part of the Financial Statements
for the period ended 31 January 2016 (continued)
17
Share based payments
The Company operates approved share option schemes.
The Company previously operated a Share Incentive Plan. Options previously granted under this scheme
are exercisable subject to certain performance criteria being met until the expiry date. This scheme is
closed to new members and no further options will be granted under the scheme. The Company
established, on Re-Admission to AIM, a new Share Option Scheme, details of all existing schemes are
included below.
The fair value is calculated at the grant date and ultimately expensed in the profit and loss account over
the vesting period of three years, based on the best available estimate of the number of share options
expected to vest, with a corresponding credit to reserves. Upon exercise of the share options the proceeds
received net of attributable transaction costs are credited to share capital and where appropriate share
premium.
There have been no options granted during the course of the financial period under review.
Details of the share options outstanding at 31 January 2016 and movements during the 13 month period
by exercise price are shown below:
Exercise
price*
First
exercise
date
Last
Restated*
at
exercised 31 December
2014
date
Granted
Exercised
Lapsed
At
31 January
2016
50p
Jan 2015
100p May 2011
Jan 2022
May 2018
125,000
60,000
185,000
–
–
–
–
–
–
(90,000)
(40,000)
35,000
20,000
(130,000)
55,000
*The effect of the share consolidation was to consolidate every 10 Ordinary Shares into 1 Ordinary share.
See note 12 for further details.
There were 55,000 (2014: 185,000 restated) options exercisable at the balance sheet date subject to a
performance criterion being met.
The options outstanding at the period end have a weighted average exercise price of 68p (2014: 6.6p)
and a weighted average contractual life of 7.8 years (2014: 5.9 years).
The fair value of the share options granted was determined by the Black-Scholes pricing model. The key
assumptions used were the share price at the date of issue, the strike price of the options, life of the
options, historic volatility and benchmarking other AIM listed companies.
The expense recognised in the period from equity settled share based payments was £nil (2014: £7,000).
There were no cash settled share based payment transactions.
90
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
18 Related party transactions
Key management
Directors control 37.4% of the voting shares of the Company. Directors interests in shares at the end of
the period are disclosed in the Remuneration Report of the Group consolidated financial statements on
page 35.
Key management comprise the Group’s executive and non-executive directors. Remuneration of Executive
and Non-executive Directors for the period since the reverse acquisition is set out in note 4 of the Group’s
financial statements and the Remuneration Report on page 31. Remuneration of Executive and Non-
executive Directors for the period from 1 January 2015 to 23 June 2015 representing the previous Group
structure is set out below:
Pension
contribution
£’000
Bonus
£’000
Benefits
in kind
£’000
Period to
23 June
2015
Total
£’000
12 months
2014
Total
£’000
–
–
–
–
–
–
2
2
–
4
–
7
1
–
8
17
64
52
11
144
35
131
109
23
298
Salary
£’000
17
55
49
11
132
Mark S Abrahams
Nick Bettles
Ian D Smith
John Markham*
* Emoluments as a director, in addition John Markham received £9,000 (2014: £8,000) in his capacity
as a consultant to the Company during the 13 months to 31 January 2016.
Contributions to a defined contribution pension scheme were paid on behalf of 2 directors during the
period to 23 June 2015 (2014: 2). No directors exercised share options during the current or previous
financial periods.
Transactions with subsidiaries
Amounts due from Inditherm (Medical) Limited at 31 January 2016 of £903,000 (2014: £903,000)
have been provided for in full.
There were no other transactions with related parties.
19
Financial risk management
The Company’s policies on the management of liquidity and credit rate risks are managed at Group level
and are set out in note 20 in the Group’s Financial Statements and also referred to in the Strategic Report
on pages 15 to 22.
91
Shareholder Information
Shareholder Information
Shareholder Information
5.13m Live births
ths
5.13m Live bir
ths
in the EU in 2014.
in the EU in 2014.
in the EU in 2014.
in the EU in 2014.
in the EU in 2014.
Eurostat
Eurostat
Approximately 10% of
Approximately 10% of
Approximately 10% of
newborns require some
newborns require some
newborns require some
assistance to begin
assistance to begin
assistance to begin
breathing at birth. Less
th. Less
breathing at bir
th. Less
than 1% require extensive
than 1% require extensive
than 1% require extensive
resuscitative measures.
resuscitative measures.
resuscitative measures.
2010 American Heart Association
t Association
2010 American Hear
t Association
Guidelines for Cardiopulmonary
Guidelines for Cardiopulmonar
y
Guidelines for Cardiopulmonar
esuscitation and Emergency
R
esuscitation and Emergency
esuscitation and Emergency
R
esuscitation and Emergency
Resuscitation and Emergency
Cardiovascular Care Science
Cardiovascular Care Science
Cardiovascular Care Science
Inspired
Inspired
Inspire nCPAP gives
respiratory support to
babies who need help
breathing during the
first few weeks of life.
Inspire nCP PAP
AP
Inspire nCP PAP
AP
Inspire nCPAP
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Other Shareholder Information
CAPITA ASSET SERVICES
The Company’s registrars, Capita Asset Services, provide a number of services that, as a shareholder,
might be useful to you:
Registrar’s On-Line Service
By logging onto www.capitashareportal.com and following the prompts, shareholders can view and
amend various details on their account. You will need to register to use this service for which purpose
you will require your unique investor code, which can be found on your share certificate.
Share Dealing Services
Capita offers an on-line and telephone share dealing service which is available by logging on to
www.capitadeal.com or telephoning 0371 664 0045 (calls are charged at the standard geographic rate
and will vary by provider). Calls outside the United Kingdom are charged at the applicable international
rate. Office hours are between 8 am – 4.30 pm, Monday to Friday (excluding public holidays in England
and Wales). If you are an Irish shareholder, please dial lo-call 1890 946 375. For the on-line service,
Capita’s commission rates are 1.25% of the value of the deal (minimum charge £34.50) and for the
telephone service, Capita’s commission rates are 1.50% of the value of the deal (minimum charge
£44.50).
Duplicate Share Register Accounts
If you are receiving more than one copy of our report, it could be your shares are registered in two or
more accounts on our register of members. If that was not your intention, please contact Capita who
will be pleased to merge your accounts.
93
Shareholder Information
Advisers
Company Secretary and Registered Office
Ian D Smith, Houndhill Park, Bolton Road, Wath-Upon-
Dearne, S63 7LG
Company number
3587944
Independent Auditors
Bankers
PricewaterhouseCoopers LLP, Chartered Accountants
and Statutory Auditors, Benson House, 33 Wellington
Street, Leeds, LS1 4JP
HSBC, Montgomery Road, Wath Upon Dearne,
Rotherham, S63 7QW
Royal Bank of Scotland Group plc, 896 Woodborough
Road, Mapperley, Nottingham, NG3 5QR
Nominated adviser and broker
WH Ireland Limited, Royal House, 28 Sovereign Street,
Leeds, LS1 4BJ
Legal advisers
Registrars
Gordons LLP, Riverside West, Whitehall Road,
Leeds, LS1 4AW
Capita Asset Services, 34 Beckenham Road,
Beckenham, Kent, BR3 4TU
94
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
Notice of Annual General Meeting
Notice is given that the annual general meeting of Inspiration Healthcare Group plc ("the Company")
will be held at the offices of Gordons LLP, Riverside West, Whitehall Road, Leeds, LS1 4AW at
12:00 p.m. on 22 June 2016 for the following purposes:
Ordinary Business
To consider and, if thought fit, to pass the following resolutions which will be proposed as ordinary
resolutions:
1.
2.
3.
4.
5.
To receive and adopt the financial statements of the Company for the financial year ended
31 January 2016 together with the directors’ and auditors’ reports on those financial statements.
To approve the Remuneration Report for the year ended 31 January 2016.
To reappoint Mark Simon Abrahams who retires by rotation as a director of the Company.
To reappoint Robert James Beveridge, who was appointed by the Board since the last annual
general meeting of the Company, as director of the Company.
To reappoint PricewaterhouseCoopers LLP as auditors of the Company to hold office from the
conclusion of the meeting to the conclusion of the next meeting at which the accounts are laid
before the Company at a remuneration to be determined by the directors.
Special Business
To consider and, if thought fit, pass the following resolutions, of which resolution 6 will be proposed as
an ordinary resolution and resolutions 7 and 8 will be proposed as special resolutions:
6.
7.
That the directors be generally and unconditionally authorised in accordance with Section 551 of
the Companies Act 2006 (the "Act"), in substitution for all existing authorities to the extent unused,
to exercise all powers of the Company to allot shares in the Company and to grant rights to
subscribe for, or to convert any security into, shares in the Company up to an aggregate nominal
amount of £1,012,028, provided that this authority shall, unless renewed, varied or revoked by
the Company, expire at the conclusion of the next annual general meeting or, if earlier, 22 June
2017, save that the Company may, before such expiry, make an offer or agreement which would
or might require shares to be allotted or rights to be granted after such expiry and the directors
may allot shares or grant rights in pursuance of such offer or agreement as if the authority conferred
by this resolution had not expired.
That, subject to the passing of Resolution 6 above, the board of directors of the Company be
empowered pursuant to section 570 of the Act to allot equity securities (as defined in section 560
of the Act) for cash pursuant to the general authority conferred by Resolution 6 as set out in this
Notice of Annual General Meeting as if section 561(1) of the Act did not apply to such allotment,
provided that this power shall be limited to the allotment of equity securities up to an aggregate
nominal amount of £153,337. Such power shall expire on the conclusion of the next annual
general meeting of the Company after the passing of this Resolution save that the Company may
95
Shareholder Information
Notice of Annual General Meeting
(continued)
before such expiry make an offer or agreement which would or might require equity securities to
be allotted after such expiry, and the board may allot equity securities in pursuance of such an
offer or agreement as if the power conferred by this resolution had not expired.
8.
That the Company be generally and unconditionally authorised pursuant to Article 8(A) of the
Articles of Association of the Company and section 701 of the Act to make market purchases
(within the meaning of section 693(4) of the Act) of ordinary shares provided that:
8.1.1
8.1.2
8.1.3
8.1.4
8.1.5
the maximum aggregate number of ordinary shares hereby authorised to be purchased
is 4,600,130, representing 15% of the Company’s issued ordinary share capital at
the date of this notice;
the minimum price, exclusive of any expenses, which may be paid for an ordinary
share is £0.10;
the maximum price, exclusive of any expenses, which may be paid for any such share
is an amount equal to 105% of the average of the middle market quotations for an
ordinary share taken from the London Stock Exchange AIM All-Share List for the five
business days immediately preceding the date on which such share is contracted to
be purchased;
the authority hereby conferred shall expire on the earlier of 22 June 2017 or the close
of the next annual general meeting of the Company; and
the Company may make a contract for the purchase of ordinary shares under this
authority before the expiry of this authority which would or might be executed wholly
or partly after the expiry of such authority, and may make purchases of ordinary shares
in pursuance of such a contract as if such authority had not expired.
By order of the Board
Ian D Smith
Company Secretary
28 April 2016
Registered Office:
Houndhill Park
Bolton Road
Wath-upon-Dearne
Rotherham
S63 7LG
96
Inspiration Healthcare Group plc (previously Inditherm plc) Annual Report and Financial Statements 2016
NOTES:
1.
2.
3.
4.
5.
A form of proxy is enclosed for use by shareholders and, if appropriate, must be deposited with the Company’s
registrars at Capita Asset Services, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU by 12:00pm on
20 June 2016. Appointment of a proxy does not preclude a shareholder from attending the Annual General
Meeting (AGM) and voting in person.
A member entitled to attend and vote at the AGM may appoint one or more proxies (who need not be a
member of the Company) to attend and to speak and to vote on his or her behalf whether by show of hands
or on a poll. A member can appoint more than one proxy in relation to the meeting, provided that each proxy
is appointed to exercise the rights attaching to different shares held by him. In order to be valid an appointment
of proxy (together with any authority under which it is executed or a copy of the authority certified notarially)
must be returned by one of the following methods:
–
–
in hard copy form by post, by (during normal business hours only) courier or by hand to the Company’s
registrars, Capita Asset Services, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU;
in the case of CREST members, by utilising the CREST electronic proxy appointment service in
accordance with the procedures set out below
and in each case must be received by the Company not less than 48 hours before the time of the meeting.
CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment
service may do so for the AGM and any adjournment thereof by using the procedures described in the CREST
Manual. CREST personal members or other CREST sponsored members, and those CREST members who
have appointed a voting service provider(s) should refer to their CREST sponsor or voting service provider(s),
who will be able to take that appropriate action on their behalf.
In order for a proxy appointment, or instruction, made by means of CREST to be valid, the appropriate CREST
message (a CREST Proxy Instruction) must be properly authenticated in accordance with Euroclear UK &
Ireland Limited’s (EUI) specifications and must contain the information required for such instructions, as
described in the CREST Manual. The message regardless of whether it relates to the appointment of a proxy
or to an amendment to the instruction given to a previously appointed proxy must, in order to be valid, be
transmitted so as to be received by the issuer’s agent (ID RA 10) by the latest time(s) for receipt of proxy
appointments specified in the Notice of Meeting. For this purpose, the time of receipt will be taken to be the
time (as determined by the timestamp applied to the message by the CREST Applications Host) from which
the issuer’s agent is able to retrieve the message by enquiry to CREST in the manner prescribed by CREST.
CREST members and where applicable, their CREST sponsors or voting service providers should note that
EUI does not make available special procedures in CREST for any particular messages. Normal system timings
and limitations will therefore apply in relation to the input of CREST Proxy instructions. It is therefore the
responsibility of the CREST member concerned to take (or, if the CREST member is a CREST personal member
or sponsored member or has appointed voting service provider(s)), to procure that his or her CREST sponsor
or voting service provider(s) take(s)) such action as shall be necessary to ensure that a message is transmitted
by means of the CREST system by any particular time. In this connection, CREST members and, where
applicable, their CREST Sponsors or voting service providers are referred, in particular, to those sections of
the CREST Manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation
35(5) of the Uncertified Securities Regulations 2001.
To be entitled to attend and vote at the AGM (and for the purpose of the determination by the Company of
the votes they may cast) Shareholders must be registered in the Register of Members of the Company at close
of business on 20 June 2016 or, in the event of any adjournment, at close of business on the date which is
two days (not including non-working days) before the time of the adjourned meeting. Changes to the Register
of Members after the relevant deadline shall be disregarded in determining the rights of any person to attend
and vote at the meeting.
97
Notes
98
Headquarters and Registered Office:
Inspiration Healthcare Group plc
Houndhill Park, Bolton Road, Rotherham, S63 7LG, United Kingdom
T +44 (0)1709 761000 F +44 (0)1709 761066 E info@inspiration-healthcare.com W inspiration-healthcare.com
inspiration-healthcare.com