Making
Healthcare
Better,
Anywhere
Annual Report
& Accounts 2021
Induction Healthcare
Overview
Annual Report & Accounts 2021
Contents
Overview
What we do
Our Products
Operations at a glance
Strategic report
Chair’s statement
Joint CEO statement
Financial review
Structural Growth Drivers
Our business model
Key partnerships
Case studies: Strategy in action
Governance
Directors Biographies
Corporate responsibility
Stakeholder engagement
Principal risks and uncertainties
Corporate Governance Report
Remuneration Committee Report
Audit Committee Report
Nomination Committee Report
Directors’ report
Statement of Directors’ responsibilities
Financial Statements
Independent auditors’ report
Consolidated Statement of Profit or Loss
Consolidated Statement of
Comprehensive Income
Consolidated Statement of
Financial Position
Consolidated Statement of
Changes in Equity
Consolidated Statement of Cash Flows
Notes (forming part of the financial
statements)
Company Statement of
Financial Position
Company Statement of
Changes in Equity
Company Cash Flow Statement
Notes to the company
financial statements
Additional Information
Company Information
Glossary
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What we do
‘Digital transformation’ – it’s a priority of
nearly all healthcare systems worldwide,
and Induction makes popular software tools
that are powering these changes at scale.
We replace outdated modes of interaction between healthcare
providers and their patients with a next generation digital healthcare
toolkit – and we enable a new flexible future for healthcare.
Our mission is to ‘make healthcare better, anywhere’. We alleviate
operational burdens on hospital teams while saving them time,
frustration and money. We allow clinical teams to share information,
collaborate and navigate channels across disciplines. And we put
patients in better control of their own healthcare management. With
Induction tools, providers and patients can choose how and when they
receive care, be it virtually, in-person or even via asynchronous text.
We unchain staff and patients from the limitations of paper-based
and desktop systems.
Our ability to relieve these operational burdens is driven by integrating
our technologies into existing systems. This interoperability is at the
heart of what we do, and it means that we can enhance legacy systems
and existing investments that hospitals have in place while laying the
foundation for their digitally transformed future. While each of our
products addresses specific ‘pain points’ for hospitals and patients,
these stakeholders benefit exponentially when our products are used
comprehensively and collectively.
Zesty Limited
acquisition
8th June 2020
Apple Health
Records
27th October 2020
Cerner partnership
agreement signed
12th October 2020
March
2020
Delivering the flexibility in healthcare
that a post-pandemic world demands
An ambitious growth strategy – and transformational acquisitions
Induction has a focused ‘buy and build’ strategy, and the core of the
business lies with engaging clinical users and the people they see and
serve. We enhance our clinical user platforms by selective acquisitions
in the patient and provider engagement space, creating a business that
encourages user buy-in across all aspects of the healthcare market.
In June 2020, Induction acquired Zesty
Limited (Induction Zesty*). Induction Zesty
has brought two important dimensions to
Induction: patients and data.
It has built a patient portal for hospitals
in the UK and a powerful data integration
platform, allowing third party applications
to read and write data to the majority of
hospital electronic health record (EHR)
systems.
The use of Induction Switch’s* directory
proved incredibly useful for many
healthcare professionals, allowing them
to easily access records and locate
extensions, however the pandemic made
it challenging for NHS providers to spare
bandwidth for monetisation discussions
on moving to paid licences. Despite this,
Induction Guidance* and Induction Switch
have provided hospital staff with workable
solutions, allowing them to access
information with ease during a time where
human interaction and free movement
throughout hospitals and healthcare
centres was advised against.
In June 2021 after the year end, Induction
acquired Attend Anywhere Pty Ltd (Attend
Anywhere), the UK market leader in
secondary care video consultations that
helps hospitals, health systems and other
customers offer video consultations to
patients and service providers as a normal
part of day-to-day operations. With this
recent acquisition, our promise of flexible
care achieves scale across the UK. We
envision a future in which healthcare
providers determine when best to see
patients and work with each other on
a case-by-case basis, whether that be
in-person, via video or on the telephone.
Our products cover not only pre-
treatment patient support, from digital
correspondence, appointment booking
and remote data capture, but also the full
range of in-person, telephone or live-video
consultations. This helps hospitals provide
Half year
results
10th December 2020
Induction
Zesty Royal
Free contract
announcement
13th January 2021
*
Refer to page 3 for description of products
Induction
Switch
multi-year
contract
19th March 2021
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March
2021
maximum flexibility as they shape the
future of healthcare – responding to new
professional and patient demands in the
wake of a pandemic that fundamentally
changed attitudes and behaviours about
accessing care in new ways.
Acquisition
of Attend
Anywhere
9th June 2021
£25m
fundraise
completed
8th June 2021
1
Induction HealthcareAnnual Report & Accounts 2021OverviewOverview & Strategic Report
Induction Healthcare
Overview
Annual Report & Accounts 2021
Our Products
Simple solutions that patients and clinical teams want to use
Induction Zesty
Induction Switch
Induction Guidance
176% growth in registered
patients in FY21
57% growth in registered
users in FY21
27% growth in registered
users in FY21
31 March 2020
76,760
31 March 2020
138,095
31 March 2021
211,947
31 July 2021
305,074
31 March 2021
31 July 2021
216,635
239,901
31 March 2020
31 March 2021
31 July 2021
168,678
214,798
230,267
116,000
Users on the Royal Free
(My RFL Care) portal since
go-live in August 2020
15,459,000
Directory views in FY21
(124% YOY growth)
10,809,000
Guidelines page views in FY21
(22% YOY growth)
623,000
Digital letters delivered in the
6 months to July 2021
3,349,000
Directory calls FY21
(72% YOY growth)
4,000
Guidelines publications in
FY21 (114% YOY growth)
2
Induction Switch
Induction Switch is the number one healthcare collaboration
app in the UK, used by the majority of hospital doctors
within the NHS.
Induction Switch saves healthcare professionals time by
allowing them to bypass the hospital’s switchboard, helping
them locate extensions, return bleeps quickly or send instant
and role-based messages in a secure environment. More than
239,000 clinical staff across multiple territories, including the
UK, Ireland, Australia and South Africa use Induction Switch. It
had 15.5 million directory views in FY21.
Induction Zesty
Induction Zesty is a software-as-a-service (SaaS) platform
that acts as a digital front door for patients visiting hospitals.
Our EPR integrated platform allows patients to book and
access their appointments, read their clinical letters, store a
copy of their clinical record, and provide data to their care
teams remotely. More than 260,000 patients use the patient
portal to manage their hospital care. It is not just a compelling
patient experience, but also delivers significant cost benefits
to hospitals.
Induction Zesty is contracted with several NHS Trusts across
the UK, including The Royal Free London NHS Foundation
Trust and Milton Keynes University Hospital NHS Trust, and its
usage is on an upward trajectory. In March 2020, registered
users of Induction Zesty had more than doubled from 32,000
to 76,000 in one year. In the subsequent 18 months, Induction
Zesty saw further rapid growth to reach more than 305,000
users at the end of July 2021. With more than 700 new
patient registrations daily, this number will continue its climb,
especially as hospital activity returns to pre-pandemic levels.
Induction Guidance
Induction Guidance provides medical
organisations, including most hospital
trusts within the NHS, with the
ability to collaboratively create, edit
and publish their own local medical
guidelines in a secure and locally
administrated environment.
Induction HealthStream
Induction HealthStream is a
proprietary data integration platform
that reads and writes patient
demographic, appointment and
clinical record data between a growing
number of hospital EHR systems and
the Induction platforms.
This increases knowledge of, and
adherence to, guidance. Induction
Guidance has been implemented in
more than 145 healthcare environments
in 14 countries ranging from the United
States to Iceland and New Zealand. In
the UK, Induction Guidance is live in 51%
of NHS Trusts in England and has over
230,000 users. It had 10.8 million page
views in FY21.
This connectivity between stakeholders
and legacy IT systems adds substantial
value to pre-existing health IT
investment and allows large-scale
adoption of Induction app-based
services, making it a key USP for the
Company. Induction HealthStream
currently covers 62% of Electronic
Health Record systems used in
England.
Induction Attend
Anywhere
Acquired post year end in June 2021,
Induction Attend Anywhere helps
hospitals, health systems and other
customers offer video consultations to
patients and service users as a normal
part of day-to-day operations, making
it simple, safe and secure to get the
right care, in the right format and at the
right frequency as determined by the
provider and patient.
This is the promise of flexible care, one
that not only improves lives, but also
helps address social, access, equity and
sustainability challenges in healthcare
and beyond. This promise was made
evident during the pandemic, where
Attend Anywhere delivered more than
one million remote consultations in
Scotland.
With Attend Anywhere, Induction offers
an end-to-end platform; all the points
on the patient pathway are covered
by our platforms, with our SaaS model
allowing us to implement and integrate
our platforms seamlessly.
3
Induction HealthcareAnnual Report & Accounts 2021OverviewOverview & Strategic Report User engagement is critical in
healthcare, and it forms a core part
of our strategy. Platforms for patients
have historically been poorly designed
and tend to ignore the needs of older
users, considering the average age
of a hospital patient in the UK is 65.
Comparatively, lack of engagement and
active non-use is the common downfall
of many platforms with clinical users.
Our platforms are simple
to use and their ability to
integrate into pre-existing
systems means they are
flexible and favoured
by clinical teams, who
hold significant power
within health provider
organisations.
The overall trend towards
super-specialisation in healthcare
is creating exponential degrees of
difficulty in treating patients, and
digital tools are the only viable
solution to operate in this evolving
environment. The NHS spends around
£1bn on technology systems each
year and the existing evidence of
significant usage proves that our
solutions are not only efficient, but
they are also the preferred platforms
of healthcare professionals.
Operations at a glance
Meeting the needs of the marketplace
Our customers
Whilst our principal customers are the
healthcare providers, we have two key
sets of stakeholders (users); clinicians
and patients, supported by access
to data, often held in legacy hospital
systems.
COVID-19 was a significant catalyst to
the digital transformation of healthcare,
a process that had begun long before
the pandemic. As in other industries
before it, change comes in waves. Wave
1 was Electronic Patient Records (EPR),
now used by most hospitals. Wave 2,
which is well under way, involves the
virtualisation of care, extending the
capabilities of legacy systems and
enhancing existing investments to
allocate resources more efficiently.
The system-wide pressure on cost,
waiting lists and overall efficiency,
which has been heightened as a result
of the pandemic, is creating market
urgency. Patients and providers enjoy
digitally enabled flexibility in every
aspect of their lives, especially in
the management of their health, and
our platforms enable secondary care
systems (hospitals) to make healthcare
better and more flexible for patients and
healthcare professionals.
More than 230,000 hospital
clinicians across multiple
territories, including the
UK, Ireland, Australia and
South Africa, have chosen
Induction solutions.
At present, we work with secondary
care systems, but there is significant
scope to extend our platform into
primary (GPs, dentists and opticians)
and community care. The acquisition
of Attend Anywhere will also
introduce private health providers
into our network and we look forward
to continuing to build on these
relationships.
4
In October 2020, we signed a Value-
Added-Reseller agreement with the
Cerner Corporation (NASDAQ: CERN)
for Induction Zesty and Cerner to
develop a joint patient engagement
solution to help NHS trusts deliver
an easier, quicker and more efficient
service for patients. As part of the
value-added reseller agreement, NHS
Trusts that are already Cerner clients
can access Induction Zesty’s market-
leading patient portal without an
extensive procurement process.
Our partnership efforts extend
beyond Cerner, as we’re working with
another large hospital EHR supplier,
System C. With two shared clients
already secured, we are partnering
with System C to integrate Induction
Zesty’s registration and appointment
management functionality into their
Careflow system.
We have seen major new contract
wins in the financial year to 31 March
2021, including a multi-year contract
with The Royal Free London NHS
Foundation Trust (RFL), a Global Digital
Exemplar and one of the largest and
most respected hospitals in the UK.
RFL used Induction Zesty to deliver
their My RFL Care patient portal as the
first phase of an ambitious roadmap to
digitise patient services in the next two
years. My RFL Care launched in August
2020 and has had significant traction
with more than 100,000 patients
registering and using the service in the
first few months and 200,000 patients
expected to adopt the service in the
first year.
Our user base
Our platforms are used regularly by
over 230,000 clinical users and more
than 180 Acute Trusts, as well as a
rapidly growing number of more than
305,000 UK patients.
We are seeing adoption of our products
across multiple territories, including the
UK, Ireland, Australia and South Africa.
As we grow our global footprint, we
also seek to grow our scope beyond
UK secondary care and into new local
markets. We intend to make healthcare
better, anywhere and for everyone.
Induction HealthcareAnnual Report & Accounts 2021Overview Our markets
Our platforms are contracted with more than 180 NHS
secondary care Trusts in England, representing 80% of the
Trusts in England.
Post-acquisition of Attend Anywhere, we now have contracts
in Scotland, Wales and the Republic of Ireland as well as in
North America and Mexico for Induction Guidance. We plan
to grow further internationally, building on the momentum
for digital platforms that has resulted from the pandemic, as
customers and healthcare professionals welcome flexibility in
their healthcare options.
Induction is also expanding its business at a regional
level within the NHS and overseas, as the new Integrated
Care Systems (ICS) gain momentum across England, with
regionalised procurement that makes central budget
available within all care settings. It’s a space in which
Induction solutions are well positioned and can be utilised
beyond secondary care with the intention of creating a
complete ‘whole system’ platform.
Current geographical footprint
London Office
Induction Zesty Live Country List
Induction Guidance Live Country List
Induction Switch Live Country List
Size of dots are representative
of the number of existing users
Melbourne Office
5
Induction HealthcareAnnual Report & Accounts 2021OverviewOverview & Strategic Report Chair’s statement
A year of beginnings and solid progress
Chris
Spencer
Despite the pandemic, Induction has had a
strong year as the Company has continued to
deliver on the objectives set out when it joined
AIM in May 2019. In the financial year to
31 March 2021, Induction has seen its first full year
of revenues of £1.5m and an average increase of
68% in users of Induction platforms.
66
The fiscal year ended with a strong
pipeline and solid order book
as the Group saw an increase in
patients and clinical users.
Induction’s suite of SaaS tools have
been established to combine to deliver
a comprehensive virtual care platform
and, while the Group has a continued
focus on UK secondary care markets, it
has the scope to further grow into new
local markets and internationally.
Key Achievements
Following the acquisition of Zesty
Limited in June 2020, in October 2020
a strategic collaboration agreement
was signed with Cerner Corporation in
the UK and Ireland to jointly develop
patient engagement solutions for NHS
hospitals with Induction Zesty. Cerner
is a leader in health care technology
interoperability and a patient facing
platform that represents the best of
Induction Zesty and the best of Cerner
presents a great solution for both
existing and new Cerner customers.
As part of the Cerner agreement, NHS
Trusts that are already Cerner clients
will also have access to the Company’s
Induction Zesty patient portal under
their existing contractual arrangements.
Following this, Induction Zesty
collaborated with Apple and Cerner to
support the roll out of “Health Records
on iPhone” to patients at Milton Keynes
University Hospital NHS Trust (MKUH),
one of the first two NHS hospital trusts
to launch this feature in the UK. As
at the end of July 2021 over 94,000
patients are registered at Milton Keynes
to be able to access this functionality on
their iPhones and the Group is looking
forward to continuing the partnership
with Apple, Cerner and many more
hospitals in the UK so they can offer
Health Records on iPhone to their
patients.
Induction HealthcareAnnual Report & Accounts 2020OverviewInduction HealthcareAnnual Report & Accounts 2021Strategic Report £25mfundraise completed by
the Group in June 2021
(post year-end)
Outlook
Whilst the impact of COVID-19 has
caused difficulties for the business
in engaging with clients, it has also
been a significant driver for uptake
of Induction’s virtual care platforms
and has brought to the foreground
the momentum to digitally transform
healthcare.
The next financial year is an
opportunity for Induction to
help the NHS to deliver the
benefits of this momentum.
The flexibility and adaptability of
Induction’s SaaS platforms and focus on
evidence-based sales is driving growth
in all areas of the business. Alongside
this, the post year end acquisition of
Attend Anywhere further enhances our
combined product offering, increasing
our attraction to investors and
customers alike.
Chris Spencer
Chair
22 September 2021
£1.5m
in revenue delivered
in FY21
68%increase in user base
across FY21
The Company has seen excellent
commercial momentum with the
NHS over the last twelve months
including new contracts with Royal
Free London, Sussex Community NHS
Foundation Trust, and East & North
Hertfordshire NHS Trust. Broader
public sector contracts include the
University of the West of England and
South Gloucestershire Council, for the
Induction Booking app to enable the
booking of COVID-19 lateral flow tests.
Sales momentum has
accelerated in recent months
for Induction Switch and
in May 2021 we concluded
a three-year contract with
a London-based NHS
Foundation Trust to support
its 10,000 clinicians and
staff.
Post-year end the sales pipeline
has continued to mature with three
prominent hospitals across South
East England, contracting to deploy
Induction Zesty to deliver their digital
patient portals. These contracts are
worth a total of £440k with time periods
that range between 12 to 20 months.
The acquisition of Attend Anywhere in
June 2021 is pivotal for Induction going
forward as it reinforces the Group’s
already strong NHS footprint and brings
£7.7m in annual contract value across
183 NHS England Trusts, £2.1m in
Scotland and £1.6m in Wales.
People
Following our acquisition of Zesty
Limited, on 8 June 2020, our Board
was strengthened with the arrival
of Andy Williams to the Board as a
Non-Executive Director and James
Balmain as joint CEO alongside Hugo
Stephenson.
After the year end, Chris Ryan, Attend
Anywhere’s former CEO, joined the
Company’s executive management
team in June. We are delighted to
welcome him as his expertise and
industry knowledge
will be instrumental to the Group’s
business going forward.
I would especially like to thank the
entire Induction team for their incredible
work over the last twelve months.
The pandemic has been challenging
for all and the Group could not have
reached these significant milestones
without the dedication and resilience
of its employees.
Strategy
The Board has set an ambitious
growth trajectory including international
expansion, and a move beyond
secondary care, to offer a more
complete, ‘whole system’ platform.
Induction’s M&A strategy will act as a
rapid enabler for this.
Induction has continued to execute
its “buy and build”’ strategy
successfully, acquiring four businesses
since its AIM IPO in May 2019 (Attend
Anywhere post year-end), and
considers itself well placed to hold a
strong market position in a significant
area of growth and investment.
77
Induction HealthcareAnnual Report & Accounts 2020OverviewInduction HealthcareAnnual Report & Accounts 2021Strategic ReportOverview & Strategic Report Joint CEO statement
A strong strategic performance in 2021
James
Balmain
Hugo Stephenson
The group has made solid progress in the last
12 months, completing the acquisition of Zesty
amidst the lockdown and laying the foundation
during the latter months of FY21 for acquiring
Attend Anywhere post-close. In the meantime,
Induction’s core products going into the year –
Induction Switch and Induction Guidance – have
been greatly relied upon by clinical users during
the COVID-19 pandemic.
FY21 has been a challenging year for many businesses, particularly technology start-ups
like Induction Healthcare. Throughout the year we have faced significant and unforeseeable
business challenges as a result of the COVID-19 pandemic, including the heavy reliance of
front-line clinical users on our core Induction Switch and Induction Guidance applications,
while at the same time facing healthcare administrations naturally focused on emergent
priorities and unable to spare bandwidth for monetisation discussions around Switch, or deep
system integrations with Zesty – despite their ability to unlock future operational efficiencies.
For many of our clients, hospitals and healthcare systems, FY21 was crisis unfolding in both
slow motion and at warp speed. Despite these challenges, we ended the year having closed
the acquisition of Zesty during a lockdown, as well as a value-added reseller agreement with
Cerner Corporation, the first of its type for Cerner in the UK digital healthcare market. We also
supported Apple in the launch of their Health Records on iPhone service at Milton Keynes
hospital. This is the first time that secondary care health records have been available through
patient Apple devices in the UK.
For an organisation that began FY21 with an almost universally used but unmonetised app
(Induction Switch), and the recent acquisition of MicroGuide (Induction Guidance) still early
in its soon to be successful earn-out journey, Induction Healthcare enters FY22 as one of
88
the leading providers of health IT across the
UK, with a comprehensive toolkit – used
at national scale across the secondary
healthcare systems – enabling digital
collaboration between healthcare providers,
administrators and patients.
Over the last quarter of the year, we
made significant progress towards the
acquisition of Attend Anywhere – a
complex international transaction that was
completed after year end. At the same time,
we managed to roll out major new features
to all our products with software teams
working entirely remotely, and dealt with the
challenges of completing major due diligence
and team integration projects without ever
being able to meet in person.
Even prior to the post-
year acquisition of Attend
Anywhere, Induction
ended FY21 with revenue
growing to £1.5 million
(FY20: £0.1 million), clinical
users growing to 217,000
(57% yoy) and registered
patients growing to
212,000 (176% yoy).
Induction Guidance remains prevalent in
the clinical guidance market in the UK, with
average monthly revenues increasing by 79%
year on year. Our Induction Switch platform
currently has more than 230,000 clinical
users. While we made the decision to keep
much of Induction Switch available free of
charge during the pandemic, we have now
commenced the monetisation journey for this
platform with a three-year deal signed at the
Royal Free London.
Landmark deployments of Induction Zesty
at the Royal Free London and The Royal
Wolverhampton in FY21 act as exemplar
reference cases for the platform to the wider
English NHS secondary care market. In a
first-of-type regional outpatient transformation
platform, Induction Zesty achieved preferred
supplier status with the South West London
integrated care system (ICS) in conjunction
with our partner Cerner – allowing patients
who visit any of the four acute or three
community providers within the ICS to
manage their care directly and access records,
appointments and care pathway information
through a single platform. Our integrated
platform, currently in development, will also
Induction HealthcareAnnual Report & Accounts 2020OverviewInduction HealthcareAnnual Report & Accounts 2021Strategic Report directly onboard patients to telephone or
video consultations via Attend Anywhere.
The post year end acquisition of the video
consultation platform Attend Anywhere is
our most significant to date and establishes
our promise of flexible care at a national
scale across the UK. Our toolkit now enables
providers to engage with other providers
(Induction Switch), healthcare institutions
to engage with their providers (Induction
Guidance), patients to engage with their
healthcare institutions (Induction Zesty), and
– most importantly – patients to engage with
healthcare providers (Attend Anywhere). We
enter FY22 managing some of the most used
tools in each of these domains. We now cover
the complete secondary care patient pathway
by offering pre-treatment patient support via
digital correspondence, appointment booking
and remote data capture, the full range of in-
person, telephone or live-video consultations
and post treatment follow up support.
Attend Anywhere is
a strongly accretive
acquisition, delivering
£10.4 million in revenues
and £4.5 million in EBITDA
in the year to 30 June 2021
(unaudited).
Induction’s platforms are most effective
and exciting when they are synergised as
an end-to-end platform. Going forward, our
‘Induction Anywhere’ solution will retain their
flexibility as standalone tools, and create
a new level of efficiency and value for our
clients when they are used together.
Strategic priorities for
growth
• Upsell in existing channels -
Leveraging our significant UK
contractual position post Attend
Anywhere to sell more
into existing customers
• Geographic expansion -
Winning new customers
in new territories
• Complementary adjacent sectors -
Selling into other public and private
sector organisations
• Accretive M&A - Further
earnings enhancing acquisitions
Upsell in existing channels
Following the acquisition of Attend
Anywhere, Induction is now contracted
with over 80% of NHS Secondary trusts in
England and holds national contracts
in Scotland, Wales and the Republic
of Ireland (ROI), enabling significant scope
to support our customers with further group
products. Whilst Induction Zesty has a key
role to play in enhancing the provider benefit
and patient experience of Attend Anywhere
our Induction Switch and Induction Guidance
products offer further benefits as we move
forward with regional deals in line with the
roll out of ICSs.
Complementary adjacent sectors
As health and social care become more
tightly connected and regional funding is
made available for healthcare providers,
local authorities and national services need
to support a more flexible approach to
citizen engagement, our tried and tested
national capability is a credible proposition
for central payers. We are actively pursuing
complementary sectors, whilst ensuring
our relentless focus on excellent user
experience.
Equally important is the shift towards regional
patient engagement, regardless of care setting.
We remain actively interested in opportunities
to expand more directly into primary and
community care, whilst retaining our market
lead and expertise in secondary care.
We see expansion into new territories
as a vital part of our medium-term
strategy. Following the acquisition of
Attend Anywhere, we now have a team in
Melbourne, Australia and intend to launch
Attend Anywhere in the Australian market
in the coming months, generating revenues
during FY23.
Key partnerships, including our landmark
Value-Added Reseller agreement with the
Cerner Corporation, provide an exciting
route to market.
Accretive M&A
We continue to evaluate our global market
for potential acquisitions. We’re most
focused on targets that will accelerate our
entry into new territories, whilst delivering
EBITDA to the Group.
People
Despite the challenges of remote working,
we’ve made great in-year and post year end
progress in attracting top talent to Induction.
Building a focused and highly skilled team is
critical to our growth. Notable hires include
a Group Chief Revenue Officer, Chief Legal
and Admin Officer (with a core M&A skillset)
and more recently a highly experienced
Chief Technical Officer.
We’re equally focused on developing talent
and supporting our people to grow and
excel in their roles, ensuring that incentives
are aligned with shareholder value and our
people are rewarded via stock options.
Operational execution
We’ve made good progress in building
out our product, development, account
management, customer success and sales
teams. Induction will always be a Group with
product at its core and we’ve taken huge
steps forward in engaging with our customers
and closing the loop on user feedback.
We’ve established our target operating
model, successfully integrating our
acquisitions into a group wide functional
organisational structure, avoiding siloed
teams by product line.
Critically, we’re working at pace to instil P&L
accountability throughout the organisation –
with a clear focus to reach EBITDA neutrality
by the end of FY22, moving towards cash
generation by the end of FY23.
Diversity and inclusion
The global events of the last 12 months
have reinforced our belief that a diverse
and inclusive workforce are not just a social
good, but a commercial advantage. Fair
practices in hiring and talent development,
as well as maintaining safe and supportive
company cultures, are key to the Group’s
success and the encouragement of diverse
voices within it.
Climate and the Environment
Digital tools and transformation are the basis
of our products and we are in a privileged
position to support our clients and champion
positive change on sustainability and our
environment. We will do this in four ways:
• ensure we continue to be the best
corporate citizen we can possibly be;
• ensure sustainability is at the heart of the
workforce and how we operate;
• influence customers to make sustainable
choices whenever we do work for them;
and
• create new products that help our
customers rethink their services for the
challenges and opportunities ahead.
Outlook
The Global Virtual Healthcare Market
is predicted to grow by 23.31% by 2025*
and Induction is well placed to be a major
competitor in this international space. The
Company has strong sales momentum,
recurring revenue, and a pipeline of orders
with multi-year contracts, as well as proven
ability to create value for healthcare systems
at a regional and national level.
In our view our current leading market position
is due to Induction’s ability to work alongside
existing systems. We can operate our
platforms at scale without loss of functionality,
efficiency or margin. The establishment of a
scalable SaaS platform that provides value
to all stakeholders - administrators, providers
and patients - means that we help existing
healthcare systems evolve to become what
they want to be, rather than compete with
these systems and disrupt what they do.
As the COVID-19 pandemic
recedes around the world,
we are excited at the Group’s
enviable position in the
UK market and scope for
significant global growth in
the next 3-5 years.
* Global Virtual Healthcare Market, Cumulative
Impact of COVID-19”, p31
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Induction HealthcareAnnual Report & Accounts 2020OverviewInduction HealthcareAnnual Report & Accounts 2021Strategic ReportOverview & Strategic Report Financial review
A solid financial performance, primed for growth
Revenue
For the year ended 31 March 2021, reported revenue increased to £1,513k (2020: £148k).
Reported revenue from Induction Guidance (Horizon Strategic Partners Limited) grew to £636k (2020: £148k representing
5 months of revenue recognised post acquisition). The principal drivers for this growth have been upselling new product lines and
the sale to the Mexico Better Health Programme in June 2020.
Reported revenue from Induction Zesty of £872k reflects just under 10 months of revenue recognised since the acquisition of Zesty
Limited. Induction Zesty’s revenues were certainly impacted by COVID-19 as many of our existing and potential customers were
understandably focused on initially treating acute patients and subsequently implementing the national vaccine. On the other
hand, COVID-19 has strongly demonstrated the need for our leading technology and, aligned with our Cerner partnership, we are
confident of a stronger year to 31 March 2022.
Whilst Induction Switch has seen a continued increase in its user numbers and some sales traction post year end, reported
revenues of £5k from Induction Switch in the year have not been as expected. Whilst the Board sees great value in the user base
and further monetisation, the Group’s short-term strategy is to focus attention and investment on higher value revenue streams
which in turn are complemented and supported by the Induction Switch user base. The impairment review noted that the carrying
value of Induction Switch significantly exceeded the value in use calculation, which used cash flow projections over a five-year
period. The Board therefore determined that the value of goodwill and intangible assets should be impaired by £1,366k (2020: £nil)
(see note 17).
United Kingdom
Europe
United States
Rest of World
31/03/2021
£’000
31/03/2020
£’000
1,342
13
23
135
1,513
131
2
11
4
148
Operating Costs
Administration costs have increased to £5,052k (2020: £2,330k). This mainly relates to an increase in headcount from the
acquisition of Zesty Limited and a full year of trading post acquisition of Horizon Strategic Partners Limited in the prior year. The
Group capitalises software development and hosting costs which depreciate over three to five years, resulting in capitalisation of
£1,660k (2020: £761k).
Reported loss before tax for the year was £8,117k (2020: £3,527k).
Core performance measures
Core performance measures are alternative performance measures (APM) which are adjusted and non-IFRS measures. These
measures cannot be derived directly from our consolidated financial statements. We believe that the following non-IFRS
performance measures, when provided in combination with reported performance, will provide investors, analysts and other
stakeholders with helpful complementary information to better understand our financial performance and our financial position
from period to period. The measures are not substitutable for IFRS results and should not be considered superior to results
presented in accordance with IFRS.
We considered the adjusting items, including explanations of why they were either not related to the performance of the business
or impacted the comparability of the Group’s results year-on-year. We also reviewed the FRC’s guidance, and considered adjusting
items used by the Group’s peers and have concluded that the appropriate disclosure of those items has been included.
1010
Induction HealthcareAnnual Report & Accounts 2020OverviewInduction HealthcareAnnual Report & Accounts 2021Strategic Report
The Group incurred several exceptional items during the year as per the table below which shows adjusted operating loss before
depreciation, amortisation, impairment and exceptional costs of £4,775k (2020: £2,736k).
Loss before tax
Add / (Less): Net finance expense / (income)
Add: Impairment losses
Add: Depreciation and amortisation
Operating loss before depreciation, amortisation and impairment
Adjusted for exceptional costs:
– IPO costs expensed1
– Acquisition related transaction costs2
– Fair value adjustments on contingent consideration and contract liabilities3
Adjusted Operating loss before, depreciation, amortisation, impairment and exceptional costs
31/03/2021
£’000
31/03/2020
£’000
(8,117)
2
1,366
1,356
(5,393)
–
375
243
(4,775)
(3,527)
(47)
–
324
(3,250)
281
150
83
(2,736)
1.
2.
3.
The prior year saw £281k of IPO costs expensed through the Income Statement. These costs have been excluded as they are non-recurring and do
not relate to the underlying trading of the Group.
These costs are directly attributable to business combinations and are excluded from underlying performance as they would not have been incurred
had the business combination not occurred. They do not relate to the underlying trading of the Group and are added back to aid comparability of the
Group’s profitability year-on-year.
The unwinding of the discount on these liabilities and contingent consideration is also excluded from underlying performance on the basis that it is
non-cash and the balance is driven by the Group’s assessment of the time value of money and this exclusion ensures comparability.
Cash
The Group’s cash position at 31 March 2021 was £2,472k (2020: £10,718). The operating cash outflow was focused on investment
in our developers and products and ongoing AIM regulation costs, as we build the framework and foundations. Investment outlay
of £3,652k (2020: £1,727k) includes a £1,500k earnout payment for Horizon Strategic Partners Limited and £1,660k for capitalised
development costs. Financing cash outflows include the repayment of a third-party loan of £501k, which was repaid following the
acquisition of Zesty Limited.
The Directors regularly monitor cash usage and forecast cashflows to ensure that the projected business needs are supported,
and future acquisitions can be delivered as part of the overall strategy to grow the business.
Operating cash flows
Cash balance
31/03/2021
£’000
31/03/2020
£’000
(4,012)
2,472
(3,346)
10,718
Assets and Liabilities
Goodwill at 31 March 2021 of £9,373k (2020: £1,553k) and Intangibles of £5,884k (2020: £2,349k) are derived from two acquisitions,
Zesty Limited during the year and Horizon Strategic Partners Limited in the prior year.
As previously noted, the carrying value of Induction Switch goodwill and intangible assets has been impaired by £1,366k.
All transactions have been valued for accounting purposes by external consultants resulting in the investment being recognised
between goodwill and intangible assets as per notes 17 and 18.
Goodwill
Intangible assets
31/03/2021
£’000
31/03/2020
£’000
9,373
5,884
1,553
2,349
Post Balance Sheet Events
On 8 June 2021, the Company announced that it had raised £25 million through a placing of 35,714,285 new Ordinary Shares at a
price of 70p per share (refer note 30). On the 9 June 2021, the Company announced the Completion of the acquisition of Attend
Anywhere Pty Ltd for a cash consideration of £16.34 million, which included £0.79 million as payment for Attend Anywhere’s net
assets at completion and the issue of 14,285,714 consideration shares (having a value equivalent to £10 million at the placing price).
The acquisition of Attend Anywhere Pty Ltd adds critical mass, transformational revenues but another profitable and cash
generative business to the Group. Indeed, this acquisition combined with the share placing, has resulted in the Group’s cash
reserves increase by £10 million.
1111
Induction HealthcareAnnual Report & Accounts 2020OverviewInduction HealthcareAnnual Report & Accounts 2021Strategic ReportOverview & Strategic Report
Annual Report & Accounts 2021
Structural Growth Drivers
Structural growth drivers that drive healthier societies
There are several solutions for digital patient
engagement in primary care, including
telehealth platforms that employ providers
to deliver care remotely.
There is greater white space in secondary care,
however, where cost savings are much larger.
Our platforms present a huge opportunity to
address inequalities across care systems, by
making healthcare better and more accessible
for all, as there are very few platforms across
the healthcare system (working in primary,
secondary and community care) that can be
implemented at scale.
87.9%
of clinicians said Attend
Anywhere (Near Me*) will
be a valuable service
We can operate
our platforms at scale
without compromising
on functionality,
efficiency or pricing
1212
*
Attend Anywhere brands its service
offering in Scotland as Near Me
Induction HealthcareAnnual Report & Accounts 2020OverviewInduction HealthcareAnnual Report & Accounts 2021Strategic Report As healthcare advances in terms of treatment protocols, complexity rises.
Just 20 years ago, cancer treatment was relatively uniform – and now,
with personalised care, treatment is increasingly bespoke to the patient. This
change is underway in most clinical specialties, and it demands multidisciplinary
teams, from imaging to diagnostics, and joined up care all along the
patient journey. Systems need to be equipped to give an overview
of the care trajectory to clinical teams, patients and their carers.
Evolution vs revolution
We promise to be a partner in
transformation, but also recognise
that healthcare requires incremental
and evidence-based adjustments
vs an overall revolution that carries
risk. We therefore seek to evolve
and build on the pre-existing systems
into which state and private health
providers have already invested
millions. Our solutions are therefore
inherently empathetic, which is critical
for adoption and user uptake.
It is also a strategic choice for Induction.
The provision of a high-margin SaaS
platform (vs a platform that requires
a clinical workforce) has commercial
benefits that mean we complement
and do not compete with existing
healthcare providers. We can operate
our platforms at a scale without
compromising on functionality,
efficiency or pricing – and that puts
us in a leading position in the market.
Primed for a post-
pandemic world
Induction solutions became increasingly
relevant during the pandemic, with
Induction Switch helping to get the
London Nightingale up and running
and Induction Guidance providing
antimicrobial guidance on COVID-19.
Attend Anywhere helped Scottish
patients see their healthcare providers
when attending appointments was
advised against and presented a risk of
COVID-19 infection. What was originally
a solution for a problem caused by
the pandemic, has now become a fully
integrated platform that has logistically
benefitted patients and clinicians and
will continue to be used going forward.
But most importantly, as an insights-
driven organisation, we listened,
learned and looked at the data.
We refined offerings and strengthened
relationships. Induction is ready
for a post pandemic future, helping
hospitals, and ultimately primary care,
community care and mental health
services move into a new future.
We are rapidly becoming
the solution of choice and
the pandemic has been
a perfect example of how
our platforms are adaptable
and able to make digital
healthcare solutions better
for patients and clinicians
now and going forward in
a post pandemic world.
1313
Induction HealthcareAnnual Report & Accounts 2020OverviewInduction HealthcareAnnual Report & Accounts 2021Strategic ReportOverview & Strategic Report Flexible Healthcare
Flexible healthcare delivered anywhere: The global market for virtual care
The Global Virtual Healthcare Market
is predicted to grow by 23.31%,* from
US $2,785m in 2021 to US $7,944m
in 2025, as the need for better and
more flexible healthcare options have
become a necessity due to behaviour
and lifestyle changes for patient and
provider, technological innovation
and, of course, the impact of the
pandemic.
Video is the fastest growing media
in the virtual healthcare market and
our acquisition of Attend Anywhere
has brought us into this market,
allowing us to offer a full and rounded
platform offering that can be tailored
to our customers’ needs. We’re also
acutely aware that telephone-based
consultations will remain and are
investing in a next generation Voice
over IP platform to complement the
multi-national Attend Anywhere service.
Our acquisition of
Attend Anywhere
allows us to offer
a full and rounded
platform, tailored to
our customers’ needs
Attend Anywhere
14
1414
*Source: Global Virtual Healthcare Market, Cumulative
Impact of COVID-19”, p31
Induction HealthcareAnnual Report & Accounts 2020OverviewInduction HealthcareAnnual Report & Accounts 2021Strategic Report The NHS in England
As the NHS in England moves towards regional
commissioning via new Integrated Care Systems, ICSs will
procure regional digital solutions, using a newly created
centralised budget. However, the needs of each hospital will
be different, and the NHS requires flexible solutions that can
operate in the majority of care settings.
This is where a partnership with Induction comes into its own.
The interoperability of our platforms can be used at a national
scale without the need to implement a national programme,
and we can work cohesively with each NHS trust individually,
based on the needs of those hospitals.
Induction’s first ICS client is South West London Health
and Care Partnership (SWL) and, while signed before the
acquisition, the strong presence of Attend Anywhere in this
region has heightened the appetite for onboarding through
Induction Zesty solutions across our client-base, using both
platforms’ complementary capabilities to strengthen patient
engagement.
Common health markets
Induction Group’s opportunity to expand draws the focus
to markets that see the NHS as an exemplar health system,
broadly including commonwealth markets e.g. Australia and
New Zealand. The healthcare support that is provided
nationally in the UK is unique and the ability to scale
Induction Group’s products is something that the Group is
looking to replicate.
15
1515
Induction HealthcareAnnual Report & Accounts 2020OverviewInduction HealthcareAnnual Report & Accounts 2021Strategic ReportOverview & Strategic Report Our business model
Going for growth
We have an accretive M&A strategy, with four acquisitions completed since
Induction’s IPO in 2019.
We’re actively pursuing valuable partnerships, enabling a stronger go-to-market
strategy, and working alongside large incumbent healthcare IT suppliers.
There is significant value in electronic
patient record integrations, both
financially and for efficiency. We are
able to upsell our platforms individually
from £50k average ARR to £300k+ for
all Induction platforms.
We also have the ability to consolidate
platforms into one integrated
‘anywhere’ platform, providing full
flexibility for our customers on any
side of a consultation.
We are strongly pursuing our buy
and build strategy and expect further
M&A in the near future.
Within the UK market, we are executing
a defined upsell strategy which sets
out to leverage existing contracts
with health providers rather than sell
to new sites which can be consuming
of time and resources. Healthcare
providers are often reluctant to
switch software systems as there is
anxiety about unknown systems and
they are perceived to be expensive
and notoriously difficult to manage
alongside pre-existing systems.
The ability to integrate our platforms
with pre-existing systems is the reason
we have been able to work with so
many NHS trusts, and the upsell
focus of our sales team powers these
additional contracts.
1616
Induction HealthcareAnnual Report & Accounts 2020OverviewInduction HealthcareAnnual Report & Accounts 2021Strategic Report Key partnerships
Creating value in collaboration
In October 2020, we signed a Value-Added Reseller agreement with the
Cerner Corporation, a global healthcare technology company.
It is a landmark moment for Induction
Zesty to be selected by Cerner and
together, our organisations will provide
staff and patients with world class
digital tools to manage their care
and operate more efficiently in the
current environment of rapidly
changing and unfamiliar conditions.
The prospect of a patient facing
platform that represents the best
of Zesty and the best of Cerner is
game-changing for both existing
and new Cerner customers.
Cerner is working with Induction Zesty
to develop a joint patient engagement
solution to help NHS trusts deliver
an easier, quicker and more efficient
service for patients.
In our view, this collaboration
represents the best of Induction Zesty
and the best of Cerner – Induction
Zesty’s market leading front-end and
high patient usage, with Cerner’s back-
end integration into their EHR Cerner
Millennium and their population health
platform, Healthelife. As part of
the value-added reseller agreement,
NHS Trusts that are already Cerner
clients can access Induction Zesty’s
patient portal without
a protracted procurement process.
Also in late 2020, the Induction Zesty
team embarked on a project alongside
Apple and Cerner to provide patient
access to health records on iOS
devices. This helped to create a
direct, encrypted connection between
medical institutions and patient’s
iPhones, empowering patients and
powering efficiency and decision-
making at a clinical level.
1717
Induction HealthcareAnnual Report & Accounts 2020OverviewInduction HealthcareAnnual Report & Accounts 2021Strategic ReportOverview & Strategic Report Case studies:
Strategy in action
Becoming the ubiquitous digital transformation partner at The Royal
Free London
The Royal Free London NHS Foundation Trust (RFL) is a large acute
teaching trust consisting of three main hospitals: Royal Free, Barnet and
Chase Farm. Seeing 1,600,000 patients per year and with a staff base of
around 10,000, it is one of the largest trusts in the UK.
Named as a Global Digital Exemplar
(GDE) by NHS England in 2016, RFL’s
long term vision is to be Europe’s
best healthcare group by bringing the
best of the NHS to every patient. This
is underpinned by a digital strategy
where the ambition is to become
virtual by default.
• Attend Anywhere is ubiquitous for
virtual clinics and telemedicine
These adoption figures have been
impressive, but only represent the tip
of the iceberg for the collaboration
between Induction and Royal Free.
There are product roadmaps formed
around each solution, and they include:
Helping to deliver this digital
strategy, Induction products are in
ever increasing usage across the
organisation with Induction Zesty,
Induction Switch, Induction Guidance
and Attend Anywhere all deployed
and underpinned by Induction
HealthStream.
• Launching in August 2020, the My
RFL Care patient portal, powered by
Induction Zesty, has seen its userbase
grow to over 116,000 registered
patients in the 12 months to 31 July
2021, empowering the patient cohort
with greater control over their health
care management than ever before
• Induction Switch now has over
5,200 monthly active users (of a
total of 6,100 clinical staff) where
the directory has been accessed
over 355,000 times in the financial
year ended 31 March 2021. This
represents a growth of
35% in the user base and a 78%
increase on usage against the
previous 12 months
• Induction Guidance currently
averages over 15,000 page views
a month
• Leveraging the Induction Zesty
adoption rate into a broader
communications platform
• The introduction of Apple Health
records for iPhone users, to give
patients deeper engagement than
ever before
• Using Induction Switch to allow
clinical staff to freely engage and
collaborate with each other without
RFL footing the bill for infrastructure
and device hardware
• Making Induction Guidance
critical within an organisation that
is continuing to grow and has a
requirement to rationalise standard
procedures both clinical and
operational
• And now, with Attend Anywhere
enhanced by HealthStream,
providing seamless integration
with the EPR and simplifying
workflows for clinicians and
access for patients
181818
At Induction we
proudly celebrate
our early successes
alongside the Royal
Free while relishing the
roadmap with a client
whose aspirations
are only matched by
our own.
78%increase on usage of
Induction Switch
35%increase in the user base
of Induction Switch
Induction HealthcareAnnual Report & Accounts 2020OverviewInduction HealthcareAnnual Report & Accounts 2021Strategic Report Making life easier for teams under pressure with Induction Switch
• Before the introduction of Induction
Switch, all respondents had
experienced difficulties with referring
to a Clinical specialty and 96% felt
they were wasting time doing so.
• Most (87.5%) doctors had difficulties
with accessing laboratory results and
all respondents expressed difficulty
accessing clinical guidelines.
• Following proper use of Induction
Switch’s mobile-enabled guidelines,
the survey demonstrated clear
benefits for clinicians:
• Issues accessing information were
eliminated (0% reported) following
mobile intervention.
• After one month of use, problems
finding guidelines dropped to 15.4%
and difficulty locating investigation
request forms fell to 14.3%.
• Significantly, all (100%) respondents
reported that the availability of
resources on their mobile saved time.
The results emphasise the successful
utilisation of mobile technology
for clinical guidelines accessibility,
providing doctors with easy-to-access
resources, support and guidance during
periods of transition.
The University Hospital Wishaw is part
of NHS Lanarkshire and serves a local
population of 250,000. As a small
district general hospital, many specialty
facilities and requests are not available
on site, so staff must outsource them
to neighbouring hospitals. Additionally,
clinical guidelines are difficult to access
as they are not easily located locally.
Such complications become
increasingly challenging at the
beginning of each year, when the
annual, national changeover of doctors
in August combines with the rotation
of junior doctors through specialties,
which happens every four to six
months.
Junior doctors starting in new hospitals
can face particular difficulty as there is
an extensive volume of hospital-specific
information to be learned and retained
quickly. With no set procedures for the
orientation of new doctors, knowledge
acquired in previous rotations is often
lost at changeover.
To tackle these issues, hospital staff
adopted Induction Switch, allowing
them to post newly created tutorial
guidelines for junior doctors and have
better visibility on the general day-to-
day operations of the hospital. They
sought to measure its impact with a pre-
and post-adoption survey, in which 50%
of junior doctors at University Wishaw
Hospital participated.
“Working on the frontline at hospitals, we are able
to see how and where precious time and energy is
being lost. We identified Induction Switch as a tool
that could help solve these issues and were pleased
to see its positive impact for the doctors in our
hospital.”
Co-author, Dr Jennie Cathcart of University Wishaw Hospital:
“Creating more than a directory: improving handover of information by renovating the Induction app for University
Hospital Wishaw” via https://bmjopenquality.bmj.com/content/9/4/e000970.
1919
Induction HealthcareAnnual Report & Accounts 2020OverviewInduction HealthcareAnnual Report & Accounts 2021Strategic ReportOverview & Strategic Report 27,500
Documents migrated on
to the MicroGuide platform
are accessed over 27,500
times each month
Case studies:
Strategy in action
Providing Guidance and more to Salisbury
Salisbury NHS Foundation Trust provides a wide
range of clinical care, including general acute and
emergency services, to approximately 225,000
people across Wiltshire, Dorset and Hampshire.
The Trust also provides specialist
care, such as plastic surgery and
rehabilitation to a wider population of
three million people and the Duke of
Cornwall Spinal Treatment Centre in
Salisbury provides services to most
of Southern England, covering a
population of around 11 million.
Induction was approached by Salisbury
as they had heard that several local
NHS Trust Hospitals were using
Induction Guidance to distribute clinical
guidelines to their doctors and nurses
via a mobile app. The Trust also wanted
to use Induction Guidance to manage
the Trust’s Policies and Procedures as it
would allow them to make a wide range
of content available digitally within a
single system in a consistent manner.
After further discussions, it became
clear Salisbury could use the Induction
Guidance platform to manage and
distribute patient information.
In 2020, we completed the project
plan to migrate existing content
from disparate systems on to
the Induction Guidance Content
Management System.
The Trust has now migrated over
1,000 Patient Information Leaflets
covering over 40 different medical
conditions, such as Diabetes, Surgery,
Ear, Nose & Throat, Plastic Surgery and
Mental Health. All this information is
available to outpatients in real-time via
the Salisbury myInformation Mobile App.
In addition, the Trust has migrated
hundreds of clinical guidelines and non-
clinical policies on to the MicroGuide
platform, all of which can be
accessed by Salisbury staff via the
MicroGuide Mobile App or on the
Trust’s Intranet. These are accessed
over 27,500 times each month.
“ Induction Guidance has quickly
become the one-stop shop for
everything clinical and non-clinical
in my organisation. Its ease of use
and the online training available
means that staff are engaged
and actively keeping their pages
current.”
Katrina Glaister, Head of Patient Experience
at Salisbury NHS Foundation Trust
2020
Induction HealthcareAnnual Report & Accounts 2020OverviewInduction HealthcareAnnual Report & Accounts 2021Strategic Report Case studies:
Strategy in action
Enabling consultations throughout the pandemic in Scotland
Developed and tested in 2018 and 2019, the Attend Anywhere video consulting
service (known as Near Me in Scotland) was initially used mainly in rural and island
communities in the north of Scotland, where distances can be an issue.
1million
Near Me video consultations
grew rapidly to 1 million during
the pandemic
in 2019, it grew rapidly during the
pandemic to its millionth consultation
by May 2021 as it enables patients
to interact with their clinician without
leaving the house, reducing infection
rates. However, in a recent survey of
5,000 patients and clinicians, 75.1%
of patients and 87.9% of clinicians
said Near Me will be a valuable
service even once social distancing
is no longer required*. Patients said
the main benefits are that Near Me
improves access to services, it is more
convenient, saves time and is better for
the environment.
During the pandemic, Near Me has
also become the most viable option
for Scotland’s deaf population, who
are experiencing a communications
crisis because people wearing face
masks prevents lip-reading and social
distancing creates barriers beyond
the effective one-metre range of
hearing aids.
The Scottish Government has been
working to ensure there is sufficient
capacity to meet the growing demand
for Near Me and is assuring patients
and carers that it is an appropriate,
effective and secure means of
conducting remote consultations.
With the rise of COVID-19 in Scotland
in 2020, a severe lockdown resulted
in restricted travel and difficulties
booking in-person doctors’
appointments. Furthermore, travelling
to a doctor or hospital could result
in a COVID-19 infection risk, and
was therefore not advisable.
Near Me mirrors in-person
appointments, whereby patients make
an appointment with the relevant health
service before visiting the service’s
website to commence an appointment.
This takes them to a virtual reception,
then an online waiting area before they
are seen by their clinician. Near Me is
powered by Attend Anywhere which
was procured for national use across
Scotland by the Scottish Government.
From running 7,000 consultations
James Balmain
CEO
22 September 2021
87.9%
75.1%
of clinicians said Near Me
will be a valuable service*
* https://www.gov.scot/publications/public-clinician-views-video-consultation-executive-summary/pages/4/
of patients said Near Me
will be a valuable service*
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Induction HealthcareAnnual Report & Accounts 2020OverviewInduction HealthcareAnnual Report & Accounts 2021Strategic ReportOverview & Strategic Report Directors’ Biographies
Directors’ Biographies
clinical trials. Between 2002 and 2012, Hugo
established and ran Quintiles’ global late phase
clinical trial business and, in that role, oversaw
the development of MediGuard, a technology
enabled community of over 2.4 million patients.
Hugo has been an investor in, and advisor to,
numerous healthcare and technology companies
and in 2012 co-founded DrugDev, a leading
provider of enterprise resource planning systems
for multinational clinical trials (sold to IQVIA in
2017).
Dr Hugo Stephenson - Chief Executive Officer
Hugo joined the Board on 1 April 2019. He
is a medical doctor and technologist who
has founded, grown and generated value
for shareholders from businesses focussed
on healthcare IT and drug development.
Companies include MedSeed PTY Ltd, an early
pioneer of computerized decision support for
antibiotic prescribing and wound management
in hospitals (sold to eHealthcare Asia in 2000)
and Health Research Solutions, a contract
research organization that used technology to
enable multinational electronic data collection
for medical product registries and phase IV
James Balmain - Chief Executive Officer
James joined the Board on 8 June 2020. He has
a wealth of NHS facing commercial experience,
having co-founded Zesty in 2012, a multi-award
winning UK digital health company. Prior to Zesty,
James was ecommerce Director at EE, leading
the digital teams at both Orange and T-Mobile
during the merger and subsequent launch of EE.
As head of ecommerce at the Shop Direct Group,
James led the transition from catalogue to online
shopping, creating one of the largest online retail
organisations in the UK.
Christopher Spencer - Non-Executive Chair
Chris was appointed to the Board as Independent
Chair on 1 April 2019. He has 40 years’
experience in software, healthcare, and legal
matters having initially worked as a nurse in
psycho-geriatrics and terminal care while
studying law at Leeds University. After qualifying
as a Solicitor and becoming managing partner of
the legal practice where he had been an articled
clerk, he simultaneously co-founded a software
house for the professional services sector. In
1999, after forming his own legal practice and
later becoming general manager, legal counsel
and head of IT with a patent and trademark
practice, Chris joined EMIS Group plc. At EMIS
Group senior roles included Chief Administrative
Officer overseeing acquisitions, a management
buyout, and, in 2010, an Initial Public Offering.
He was appointed Chief Executive of EMIS
Group in 2013 and after retiring from that position
has served on several healthcare-related
private company boards. Chris is a Solicitor
(non-practising), formerly an Associate of the
Chartered Institute of Patent Agents and member
of the Law Society of England and Wales and
Fellow of the Chartered Management Institute
and remains a member of the Society for
Computers and Law. He holds an LLB (Hons) and
qualified as a solicitor (with distinction).
Chris is Chair of the Nomination Committee
and also serves on the Remuneration and Audit
Committees.
22
Induction HealthcareAnnual Report & Accounts 2021 Governanceheading 1heading 2(continued)
Jane Silber - Non-Executive Director
Jane joined the Board on 1 April 2019. Jane is
an experienced IT senior executive. She is the
Non-executive Chair of Diffblue Ltd and VONQ
B.V., as well as a non-executive board member
of Weaveworks Ltd and Canonical Ltd. She also
serves as an advisor for numerous tech start-
ups. Previously she was CEO of Canonical for
seven years, which followed a seven-year period
as its Chief Operating Officer. With experience
in the US, Japan and the UK, she has spent her
entire career in software engineering and IT
management, starting as a software developer
and rising through various leadership roles. She
holds a BS from Haverford College, an MS from
Vanderbilt University and an MBA from Oxford
University.
Jane is Chair of the Remuneration Committee
and also serves on the Audit and Nomination
Committees.
Leslie-Ann Reed - Non-Executive Director
Leslie-Ann joined the Board on 19 July 2019.
She is a chartered accountant with a diverse
background and extensive international
experience. Leslie-Ann is currently Non-
Executive Director and Audit Committee
Chair for Learning Technologies Group plc,
Bloomsbury Publishing PLC and Centaur
Media plc. From 2010 she was Chief Financial
Officer of the global, online B2B auctioneer
Go Industry plc. Between 2007 and
2010 Leslie-Ann was an adviser to Marwyn
Investment Management, a private equity
company, overseeing the acquisitions strategy to
acquire professional training, research, data
and information businesses. Prior to this she
served as Chief Financial Officer of global
commodities’ & economic research media group
Metal Bulletin plc helping to lead its transition
from printed products to an online data and news
service. After a career at Arthur Andersen, she
held senior finance leadership roles at Universal
Pictures, Polygram Music, EMI Music and Warner
Communications Inc.
Leslie-Ann is Chair of the Audit Committee and
also serves on the Remuneration and Nomination
Committees.
Andy Williams - Non-Executive Director
Andy was appointed to the board on 8 June
2020 having formerly served as Chair at Zesty
Limited since 26 July 2018. In addition to his role
at Induction, Andy was Chair of Docly AB and is a
non-executive director at Logex Group. His most
recent full-time role was CEO of NHS Digital, the
government body responsible for technology and
data for the NHS. Prior to that, his career was in
the technology industry, holding a wide variety
of senior roles in IBM, Alcatel-Lucent and CSC.
He holds an MA in mathematics and engineering
from Cambridge University.
23
Induction HealthcareAnnual Report & Accounts 2021Governanceheading 1heading 2Governance Corporate responsibility
Corporate responsibility
Our People and Culture
We are committed to building the best and most diverse team at Induction Group. The Group is working hard to create a culture
of inclusion and diversity where all employees are treated and valued equally. Our focus is on:
•
recruiting and retaining high calibre employees;
• developing our team to create a culture which offers opportunities to broaden skill levels and capabilities;
• building a diverse culture;
• providing a safe and stable working environment;
•
recognising performance; and
•
leveraging our capabilities at every opportunity.
Induction is all about our people, and we aim to ensure they have the tools and development to succeed in their role. The
Company is committed to providing our staff with career progression and training to the requirements of roles. A key aspect of
developing the success of the Group is to support an open culture and encourage the mix of cultures and business practices
across the Group.
We create an ethical working environment for our workforce, promoting honesty, transparency and duty of care across the
entire workforce. The Company provides a working environment which meets all legislative requirements and provide all the
necessary training and support for employees to operate safely within it.
Our workforce follows our Anti-bribery and Corruption policy, and Whistleblowing Policy as part of the staff induction and
ongoing training.
We provide appropriate remuneration for responsibilities and equal opportunities for development and career advancements.
The Company ensures opportunities are available to staff to build their breadth and depth of experience.
In a year where Covid-19 had a significant impact on people’s lives, the Group completed the acquisition and integration of
Zesty Limited, the team showed commitment and loyalty to maximise growth, performance and value to our clients.
Our 2021/22 targets continue to be ambitious and will ensure that we continue to provide a safe, inclusive and sustainable
environment where everyone can be at their best.
24
Induction HealthcareAnnual Report & Accounts 2021 Governanceheading 2
Stakeholder engagement
A shared motivation from
all of our stakeholders
involving stakeholders
every step of the way
means we can better
understand their needs.
Having a high level of
engagement allows
us to get to know
our stakeholders and
communicate how the
Group’s plans and actions
will affect their goals.
The following examples demonstrate
how the Directors had regard to the
respective elements of section 172 of
the Companies Act 2006 in discharging
their duties:
Workforce/Colleagues/Our People
Our people are our most valuable
asset. We rely on their skills,
experience, knowledge and diversity
to deliver our vision to provide
technology to the healthcare
community.
Our employees are key to the Group’s
success and we rely on a committed
workforce to help us achieve our
short-term and long-term objectives.
It is right that our employees share in
the success of Induction. Accordingly,
incentive arrangements operate across
the Group to reward colleagues for the
contribution they are making to grow
the business.
The Board recognises that the
interaction between the Board, senior
management, and staff, is crucial to
maintaining the welfare of our people
and ultimately our future success. The
pandemic presented unique challenges
so the executive initiated weekly and
monthly meetings to provide guidance
and support.
The CEOs continue to hold regular
meetings with the senior management,
and each senior executive is
encouraged to engage fully with their
staff. Regular CEO town halls are run
where James Balmain updates the
staff on group initiatives and allows
for questions from the workforce. This
forum also provides an opportunity to
share knowledge across the group and
drive collaboration. During the year we
have worked on updating the employee
handbook which will be re-launched to
all staff across the HR system.
We value all staff including contractors
and ensure our communications
are to everyone to ensure there is
transparency across the business.
While our staff and contractors are
happy at Induction, there is always
room for improvement. Key topics for
further improvement are opportunities
for career progression, development
and succession planning, and working
practices.
The global events of the last 12 months
have reinforced our belief that a
diverse and inclusive workforce are not
just a social good, but a commercial
advantage. Fair practices in hiring
and talent development, as well as
maintaining safe and supportive
company cultures, are key to the Group’s
success and the encouragement of
diverse voices within it.
Shareholders
It is important that our shareholders
understand our strategic priorities
and ambition, their views inform our
decision-making.
The Board recognises the critical
importance of open dialogue and
fair consideration of the Company’s
members. We communicate with our
shareholders through our annual
report and accounts, full-year and half-
year results announcements, trading
updates, AGMs, face-to-face meetings
and investor roadshows.
Users
Our users, whether patients, doctors
or NHS trusts, are the heart of our
business model. So, understanding
them and their challenges is
fundamental to our success. Should
we fail to deliver an excellent user
experience, we will not achieve our
long-term financial and strategic
objectives.
We obtain regular feedback from our
users and clients to ensure that we
are consistently delivering to high
performance standards. Monitoring and
influencing the quality of our customers’
experience is key. It is important that
we do not rely on anecdotal feedback
but conduct customer surveys and
arrange panels on user experience.
We work hard to ensure issues are
resolved quickly through our customer
service team and, if required, we follow
a process that is fair, appropriate and
one that will stand up to scrutiny and
challenge.
We always look at ways to improve
our services to customers and so seek
feedback on all areas of the customer
journey including product design,
implementation, and user experience.
Our aim is to capture these learnings,
and once understood and tested, we
seek to embed any changes into our
policies and procedures, training and
organisation structure.
Community and the Environment
Our vision is to build a Group that
provides technology to deliver
healthcare more efficiently, and drives
our passion to support the community
and environment. Operating with an
ethical purpose to develop apps for
the healthcare community is integral
to everything that we do.
We continue to increase the focus on
our impact on the environment. We aim
to be resilient and responsive to change
and we are committed to working with
our employees, clients, supply chain
and stakeholders to ensure that we are
sustainable for the future.
Like many other businesses, as
Covid-19 took hold our entire workforce
started working remotely and we ended
our office leases. Post pandemic, with
people expected to work from home
more often, and conscious of the
carbon emissions (including electricity,
water usage and travel) that arise
25
Induction HealthcareAnnual Report & Accounts 2021GovernanceGovernance Stakeholder engagement
(continued)
from office space, we will be taking
a much smaller space to support the
further reduction of our environmental
footprint.
Our Customers, Suppliers and Partners
Our business relies on good
relationships with clients, suppliers
and other stakeholders.
The Board is regularly briefed on
key developments across the Group,
including on new and existing client
relationships. Client due diligence is
a key part of our acquisition process
when evaluating potential acquisition
targets and results are made available
to the Board. By their nature our
businesses work in collaboration with
their clients: we work collaboratively
with client organisations, use agile
processes, and build software and
businesses to better serve client needs
based on what they tell us.
The Group’s focus is to leverage and
consolidate the Group’s suppliers. To
obtain better terms, we aim to build on
our customer relationships from the
acquisitions during the last 24 months.
Our effort is to be always professional
and establish a reputation as being a
reliable customer with whom suppliers
and partners want to do business.
When taking on a new supplier, we
conduct a detailed review to ensure
that we understand not only the
quality of their product or services but
also their policies, procedures and
working practices, making sure they
are consistent with our values and
compliance requirements. We keep
our suppliers informed of our business
performance through public disclosures
and communication where appropriate.
The Group ensures that the quality
of the services being supplied meets
the standards expected, through our
engagement and monitoring payment
terms. If there is a reduction in the
standard, we will communicate with the
supplier and if needed we will look to
replace with a comparable alternative.
The Group has a zero-tolerance
approach to practices which are at
odds with our values and culture,
for example corruption, bribery and
modern slavery. We are committed to
acting ethically and with integrity in all
business dealings and relationships and
to implementing and enforcing effective
systems and controls to ensure such
practices are not taking place anywhere
in our businesses or supply chain.
26
Induction HealthcareAnnual Report & Accounts 2021Governance Principal risks and uncertainties
The Board is responsible
for ensuring that the
Group is protected from
unnecessary risk and
regularly reviews the risks
and opportunities of the
business to ensure that
appropriate mitigation
strategies are adopted.
Risk Management
The Board, assisted by the Audit
Committee, is ultimately responsible
for oversight of risk management.
The Directors play the leading role,
monitoring the overall risk profile within
the business and taking into account
internal controls. Through detailed
planning and continuous monitoring,
all identified significant risks are
evaluated, and appropriate mitigating
actions that reduce the likelihood of a
risk event and/or reduce their impact to
an acceptable level are designed and
executed.
The Group’s process for the
identification, assessment and
management of risks in the business,
is driven and monitored by the Senior
Management Team with the support of
the Company Secretary.
The Audit Committee reviews the
systems of internal control for the
Group alongside the Group’s process
for risk management and reports its
findings to the Board. Each year the
Audit Committee consider the need
for an internal audit function. Given
the current size of the group, the Audit
Committee do not judge it appropriate
to maintain a dedicated internal audit
function.
Internal systems of control
The Group maintains systems of
internal control appropriate to a
business of this size and complexity and
which take into account the applicable
regulatory and legal requirements as a
UK AIM listed plc. The internal controls
are designed with the objective of
implementing an action to mitigate the
existing risk, and if impossible to fully
mitigate the risk, managing the risk to
an acceptable level.
Registering and reviewing risks
The Group identifies and assesses
each risk based on the impact and
likelihood, and then applies mitigating
actions appropriately. Each risk is
scaled, based on the likelihood of
occurrence and severity of impact, and
risks categorised as high, medium or
low accordingly, with high-risk areas
receiving the most attention.
The risk register is reviewed and
updated to capture and identify any
new risks and opportunities, and to
improve the mitigating actions. The
Senior Leadership Team review all
identified risks and assign actions on a
quarterly basis. Such risks are reported
to and reviewed by the Board and Audit
Committee.
Set out below are the principal risks
and uncertainties that the Directors
consider could impact the business.
The Board recognises that the nature
and scope of risks can change and that
there may be other risks to which the
Group is exposed and so this list is not
intended to be exhaustive.
t i o n a l
a
n i s
a
O r g
C u l t u re, Policies and Proced
ure
s
n i o r
M anagement Team
e
S
A u d i t Committee
Board
Oversight
27
Induction HealthcareAnnual Report & Accounts 2021GovernanceGovernance Principal risks and uncertainties
The risk has
increased
The risk has
decreased
The risk has not changed
materially since last year
Strategic Risks
Risk
Description and impact
Key mitigating activities
Trend
Competition
and
technological
change
Induction operates in a competitive
market, with new competitors regularly
entering the market. These new entrants
may make it hard for Induction to
generate the anticipated revenues due
to both increased competition for market
share and pricing pressure.
Potential impact:
• Induction Switch, Guidance and Zesty apps are
well-established products in the UK and this,
coupled with a user focussed strategy,
creates a barrier to new competitors.
• Continuous investment in the development
of the platforms to ensure they remain
relevant, competitive and attractive to
users as well as customers.
• New technologies emerge that may
• Hiring and developing the right talented
Identification,
valuation and
pursuit of
acquisitions and
investments
render existing products and services
obsolete, unmarketable or competitively
impaired, and may exert downward
pressures on the pricing of existing
products and services.
people in product development
• Continuous commitment to product
differentiation through innovation
• Analytics used to predict the environment,
market and user engagement
• Maintaining market knowledge and monitoring
competitor developments and technologies.
The Group’s growth strategy has centred
around investing in talent and the
acquisition of businesses which broaden
and enhance existing operations. One of
the inherent risks of acquisitions is that
the Group enters unfamiliar markets/
regions and works with new personnel,
who may not be sufficiently aligned with
Group strategy.
• The Board is very careful when selecting
potential acquisition partners and we spend a
significant amount of time upfront to make sure
the individuals are a good fit for the Group.
• Investment is made in M&A capabilities,
experience and relationships in the market
• Potential targets identified and prioritised to
ensure efficient time is spent on diligence.
The target acquisitions may either not
be readily available or may not generate
the financial or commercial benefit it was
intended to.
• Rigorous due diligence process conducted using
internal and external experts to ensure Induction
fully evaluates the costs and benefits expected
before any business purchase.
Potential impacts:
• Investment returns not achieved and
shareholder value eroded.
• Business case for acquisition is articulated
clearly and key assumptions (financial, technical
and operational) identified for Board approval.
• External communication maintained with
advisors and owners/management of to ensure
Induction has visibility of potential transactions
across the market.
28
Induction HealthcareAnnual Report & Accounts 2021Governance
Operational Risks
Risk
Description and impact
Key mitigating activities
Trend
Key system
failure or
disruption
Business growth
is constrained
by not having
appropriate
people, resources
and processes
Induction is dependent on its IT
infrastructure, whereby loss/corruption
of the application software, infrastructure
failure, damage or denial of service to
the infrastructure could cause serious
business interruption and a decline in
user confidence.
Potential impacts:
• Internal impact due to releasing
software that doesn’t function as
intended; and
• External as third parties can disrupt
the platform or cause failure by a key
outsourced provider.
Induction has a “buy and build” strategy,
therefore operations and processes need
to be robust, efficient and scalable for the
Group to manage growth. There is a risk
that, in a highly competitive technology
talent landscape, Induction cannot attract
and retain sufficient highly skilled and
dedicated staff.
Potential impacts:
• Adverse effect on ability to grow and
scale the business within UK and
internationally.
Inadequate
integration
or leverage
of acquired
businesses
The risk of misjudging key elements of an
acquisition and failing to integrate in an
efficient, timely and successful manner.
Potential impact:
• Integration of new acquisitions can be
challenging and time consuming. There
is a risk that the integration distracts the
acquiring business, or capacity issues
limits the enhancement of synergies
resulting in the growth identified during
due diligence remaining unrealised.
• Use an agile development methodology which
allows small incremental changes to be made to
the platforms.
• Changes are subject to rigorous QA and product
acceptance before they are released to users.
• Maintenance of backups allowing roll back to
previous versions if a new release fails.
• Evaluation of all third-party suppliers, ensuring
that they have appropriate fall-back systems and
disaster recovery processes.
• System penetration tests a performed annually
by a third party.
• Our approach to recruitment is to hire best-in-
class talent and remunerate them accordingly.
• Recruiting employees to attract talent fit for a
dynamic and fast-growth MedTech company.
• Open employee communication including
employee performance reviews to monitor and
identify gaps in leadership and skills levels
• Development program for employees to
continually up-skill, which is supplemented with
key external hires.
• Detailed and continuous review of resource and
succession planning for key roles.
• Focus on developing a strong and consistent
culture across the organisation.
• Detailed integration plan and dedicated
integration teams put in place
• Regular communication on progress highlighting
variations and remedial action taken
• Senior Management with significant experience
to lead the assessment, planning and integration
process
29
Induction HealthcareAnnual Report & Accounts 2021GovernanceGovernance Principal risks and uncertainties
Risk
Description and impact
Key mitigating activities
Trend
Customer
concentration risk
The primary customer of the group is
the NHS which is a complex series of
organisations which brings challenges
to navigate through these organisations
and reach the decision makers. The
procurement process can be onerous
and very lengthy, increasing the risk that
revenues fall short of expectation.
Potential impacts:
• Changes to Government policies can
have a material impact on companies
supplying the NHS, both in terms
of changes in direction as well as
structural changes which can delay
or even negate the Group’s ability to
derive revenues.
• NHS operates against a backdrop of
tight funding and this could have a
negative impact on pricing.
• The Board and management team have
extensive experience working in and
supplying to the NHS and relationships
with key NHS decision makers, and therefore
the Group is well placed to navigate the
myriad NHS organisations.
• While Induction cannot mitigate the political risk
entirely, there is cross party support
for the use of technology in the NHS which
will help reduce both political and pricing risk.
• Induction’s strategy to expand into geographies
outside of the UK, will reduce specific exposure
to the NHS.
Compliance Risks
Risk
Description and impact
Key mitigating activities
Trend
Data protection
and privacy
Regulatory compliance is a key risk
for the Group, not only in terms of the
General Data Protection Regulations
(GDPR) but also specific restrictions
relating potentially to medical devices,
clinical governance including patient
safety and information governance
including confidentiality and security
Brexit has made the regulatory backdrop
even more complicated
as the UK’s regulations
diverge from the European Union’s.
Potential Impacts:
• Failure to comply with regulations could
have a material impact on the Group’s
reputation, fines or late filings penalties,
and financial results.
• Compliance with legislation and code of best
practice.
• Ongoing training on key regulation such as
anti-bribery and corruption and data protection
• Recruitment of appropriate expertise and
experience in clinical and information
governance to improve the regulatory
compliance in data protection, clinical
governance including patient safety,
confidentiality and data ethics has taken place
and will be further enhanced as necessary
• Internal Finance, Legal and Medical departments
monitor changes to law and regulations and
oversee actions to ensure compliance.
• Independent third-party and internal adviser
audits and reviews are conducted regularly
during the year to ensure compliance.
• In terms of Brexit, the Group has very little
presence in any other members of the European
Union outside of the UK and there has been no
initial impact.
30
Induction HealthcareAnnual Report & Accounts 2021Governance Risk
Description and impact
Key mitigating activities
Trend
Compliance
with laws and
regulations
The risk of insufficient evaluation and
non-compliance with legislation and
regulation in the markets and countries in
which Induction operates.
• The Group maintains an in-house legal function
and uses external legal and tax counsel to
advise on local legal, tax and regulatory
requirements.
Potential Impacts:
• Failure to comply with regulations could
have a material impact on the Group’s
reputation, fines or late filings penalties,
and financial results.
The Group notes the ongoing threat
of third parties attempting to exploit
weaknesses in the technological
infrastructure and SaaS services of
different companies.
Potential Impacts:
Inadequate security controls to protect
against these threats could lead to
business disruption, reputational damage
and loss of assets.
System access
and security
Financial Risks
• The ongoing development and maturation of
our Information Security Management System
(ISMS), including the continued investment in
endpoint security, has greatly increased our
ability to monitor and respond to cyber-related
threats.
• Our people are also required to undertake
ongoing training to maintain their awareness and
understanding of information security.
• The Group plans to initiate an independent third-
party review of the existing ISMS.
Risk
Description and impact
Key mitigating activities
Trend
Foreign
currency risk
The risk of significant unfavourable
foreign exchange movements.
The Group has historically had limited
exposure against the US Dollar, Euro
and Australian Dollar due to low levels
of trading with our overseas entity and
the majority of international clients
pay in GBP sterling. However, with the
acquisition of Attend Anywhere Pty Ltd
post year end, the impact on the Group’s
reported profits and asset values could
become increasingly impacted by any
fluctuation of Sterling relative to other
currencies, particularly the AUS Dollar.
Potential impact:
• Currency volatility uncertain in current
COVID-19 climate
• Clear communications on Treasury strategy to
ensure groups currency exposures and policies
are understood.
• Continue international customer contracts in
GBP
• The global and local short-term cash flow
forecasts are used to monitor future large
foreign currency payments, and natural currency
hedging is used where possible across the
Group.
• Surplus cash balances are swept to the UK to
minimise any exposure to particular currencies
or locations.
31
Induction HealthcareAnnual Report & Accounts 2021GovernanceGovernance Principal risks and uncertainties
Financial Risks
Risk
Description and impact
Key mitigating activities
Trend
• The Group has sound virtual working practices
internally and externally with customers
• The product suite offered by the Group is
particularly well positioned to help more efficient
and safe health and social care practices
through its digital offerings
• Home working is well supported technically and
with regular contact visually and verbally.
• The Group will continue to monitor the situation
and is ready to take further action if needed.
Pandemics
(COVID-19)
Covid-19 has created an unprecedented
global emergency, the effects of which
will have a lasting impact on both people
and economies alike.
In particular, it has been a difficult year
for the healthcare sector with many of
our customers being overwhelmed by
COVID-19. On one hand COVID-19 has
strongly demonstrated the need for our
leading technology but it has also made
it very difficult to engage customers who
were understandably focused on initially
treating acute patients and subsequently
implementing the national vaccine
programme.
However, as a technology-centred
business, we have been able to respond
quickly to protect our employees,
customers and the business.
Potential impact:
The main risks of such events relate to:
• Bringing staff together in a physical
environment
• The Group has been impacted by some
customers capacity to take on new
transformation in the health and social
care marketplace due to workload
issues
• Sickness and absence impacts of
personal isolation
Liquidity risk
The risk of the Group not being able to
meet its financial obligations as they fall
due.
• Clear Treasury policies that are designed to
ensure that sufficient cash is available to support
current and future business requirements.
• Cash management through rolling cash flow
forecasts, updated at least on a monthly basis.
• The recent share issue post year end raised
£25m to both fund the acquisition of Attend
Anywhere Pty Ltd and provide £10m in additional
working capital to the Group.
32
Induction HealthcareAnnual Report & Accounts 2021Governance The Company has
maintained operational
capability throughout
COVID-19 and
closely monitors the
COVID-19 situation and
Government guidelines.
Going Concern
The Group’s going concern statement is
detailed in note 1.2 of the consolidated
financial statements on page 58.
Section 172
Each Director is required by the
Companies Act 2006 to act in the way
they consider, in good faith would be
most likely to promote the success
of the Company for the benefit of its
members as a whole and in doing so
are required to have regard for the
following:
• The likely long-term consequences of
any decision;
• The interests of the Company
employees;
• The need to foster the Company’s
business relationships with suppliers,
customers and others;
• The impact of the Company’s
operations on the community and the
environment;
• The desirability of the Company
maintaining a reputation for high
standards of business conduct; and
• The need to act fairly as between
shareholders of the Company.
In 2019, the Company adopted the
Corporate Governance Code for AIM
listed Companies from The Quoted
Companies Alliance (the “QCA Code”).
The QCA Code is an appropriate code
of conduct for the Company’s size and
stage of development. In the Corporate
Governance Report, on pages 34 to 36
are comments regarding the application
of the ten principles of the QCA Code.
Please see the section on Stakeholder
engagement for detail of how the
Group has met its obligations under
Section 172.
33
Induction HealthcareAnnual Report & Accounts 2021GovernanceGovernance Corporate Governance Report
for Induction Healthcare Group PLC
Corporate Governance Report
for Induction Healthcare Group PLC
Chair’s Introduction
I have pleasure in introducing our Corporate Governance
Statement. The Board continues to be committed to supporting
high standards of corporate governance, as we feel that a solid
foundation of good governance and best practice is needed to
help the Group profitably and effectively support both clinical
teams and patients by removing friction from basic but essential
healthcare related tasks and in this section of the Annual Report
we set out our governance framework and describe the work we
have done to ensure good corporate governance throughout
the Company and its subsidiaries (‘the Group’). As Chair, my
primary responsibility is to lead the Board effectively and ensure
that the Group’s corporate governance is appropriate and
adopted across all our business activities. I am also responsible
for ensuring our Board agenda ensures that we examine all the
key operational and financial issues affecting our strategy.
We have had several Board changes during the year and since
our year-end. During the year under review and currently I lead
the Board as the independent Non-Executive Chair. Throughout
the year we had two independent Non-Executive Directors
Leslie-Ann Reed and Jane Silber. Following our acquisition of
Zesty Limited, on 8 June 2020, we were delighted to welcome
Andy Williams to the Board as a Non-Executive Director.
Our Executive Directors during the year were Ibs Mahmood,
Hugo Stephenson, Shelley Fraser and James Balmain. Following
our acquisition of Zesty Limited, on 8 June 2020, we were
delighted to welcome James Balmain as joint CEO with Hugo
Stephenson. Ibs Mahmood stepped down from the Board on the
same date. Sheller Fraser resigned as a director on 22 January
2021 and Oliver Drake was appointed as interim CFO. Oliver is
not a director but has been attending and advising the Board as
interim CFO since 2 February 2021.
At the time of our IPO, we opted to follow the Quoted
Companies Alliance (“QCA”) Corporate Governance Code (the
‘Code’) and we continue to feel that this is the most appropriate
Code for us as an AIM listed company. The report below is
organised under headings which show how the Company has
complied with the ten broad principles of the Code which all
support the Company’s medium to long-term success.
Chris Spencer
Non-Executive Chair
22 September 2021
Statement of Compliance with the QCA
Corporate Governance Code
Strategy and Business Model
Principle 1 of the Code requires that companies establish a
strategy and business model which promote long-term value for
shareholders. The Group is a healthcare technology business
focused on streamlining the delivery of care by healthcare
professionals, and our strategy is articulated in the Strategic
34
Report on pages 12 to 21. Our Section 172 statement, which is
set out on page 33 shows how the Directors have fulfilled their
duties and obligations to ensure the long-term success of the
business. The Executive Directors and senior leadership team
meet throughout the year to discuss strategy and the Group’s
long-term growth. The Board, in turn, debates strategy at every
Board meeting, monitors progress against the strategic plan,
holds strategy days and the active challenges provided by
the Non-Executive Directors help shape the strategy with the
Executive Directors. The interim CFO maintains a strategic risk
register and regularly reports to the Board on the how the Group
mitigates major risk and protects the company from unnecessary
risks.
Shareholder Relations
Under Principle 2 of the Code, the Company must seek to
understand and meet shareholder needs and expectations.
The Company is committed to listening to, and openly
communicating with, its shareholders to ensure that its
business, strategy, and performance are clearly understood
and supported. During the year, the Board has maintained an
open communication with investors, and the sell-side research
community, and believe that this is the best way to ensure we
understand what is expected of the Company in its efforts to
drive the Group’s business forward. The Executive Directors
provide the Board with feedback from all meetings and
communications with shareholders and the Board is provided
with an analysis of investor base changes on a regular basis.
Further information on investor sentiment is provided to the
Board by the Company’s Nominated Advisors and financial PR
advisors. The Board is also mindful of the importance of its retail
shareholders and we aim to provide meaningful information for
all our investors, but particularly our retail shareholders, via our
website www.inductionhealthcare.com. Our website also offers
a facility to sign up for email alert notifications of Company news
and regulatory announcements.
Like many companies, we intend that our AGM will provide a
forum for face-to-face interaction between the Board and the
Company’s shareholders. If the Board views it necessary to keep
shareholders and Directors safe due to restrictions on public
gatherings, we may change our AGM logistics. Further details of
our arrangements this year are set out in our Notice of Meeting.
Our Stakeholders
Principle 3 of the Code requires that the Company takes into
account wider stakeholder and social responsibilities and their
implications for long-term success. The Company’s stakeholders
include shareholders, employees, its registered users, its
customers, and its business suppliers.
The Board values the opinions of the stakeholders in the
business and will regularly seek to ensure that the views of its
shareholders, suppliers, and partners are known and, where
relevant to the success of our business, they are acted upon.
The Board considers investors’ views and feedback following
investor roadshows and individual directors update the Board on
any ad hoc meetings with investors throughout the year.
Induction HealthcareAnnual Report & Accounts 2021 Governanceheading 1heading 2(continued) for Induction Healthcare Group PLC
(continued)
Corporate Governance Report
for Induction Healthcare Group PLC (continued)
One of our most important stakeholder groups is our
employees. The Company engages regularly with its employees
and monitors closely the views and concerns raised. We
communicate thoroughly with all stakeholders and use the
experience we gain from those interactions to inform our
strategy.
Risk Management
Principle 4 of the Code requires that the Company embed
effective risk management, considering both opportunities and
threats, throughout the organisation.
The Board, assisted by the Audit Committee, is ultimately
responsible for overseeing management’s activities in
identifying, evaluating, and managing the risks facing the Group.
The environment in which we operate is constantly evolving
and can be affected by external factors that are outside of our
control and which may impact on us operationally. The Group
implements a risk management policy which defines the Group’s
risk appetite. The Board regularly reviews a matrix of the key
risks which sets out how these are managed and mitigated
through internal and other controls and processes.
The significant risks and related mitigation and control are
disclosed in the Governance section on pages 27 to 33.
The Board
Principle 5 of the Code requires the maintenance of the board as
a well-functioning, balanced team led by the chair.
Our current board consists of the Chair, two Executive Directors,
and three Non-Executive Directors. The Chair and the three
Non-Executive Directors are all considered to be independent.
Aligned to the Group’s diversity strategy, the current Board has
an acceptable gender balance with two female and four male
Directors and a female Company Secretary.
The Board holds eight scheduled meetings a year and
attendance that these meeting is set out below on page 36.
There have also been several ad hoc meetings where matters
of importance have arisen between scheduled meetings. An
example of this would be during an acquisition process, where
the views of the whole Board may be sought by means of a
group conference call facility, telephone, or over email.
Directors’ Skills and Capabilities
Principle 6 of the Code requires that the Directors ensure that
between them, they have the necessary up-to-date experience,
skills, and capabilities.
Our current Board of Directors has an effective and appropriate
balance of skills and experience, and their backgrounds cover
areas such as technology, finance, law, healthcare, sales and
marketing. Their full biographies are set out on pages 22 to 23.
The role of the Non-Executive Directors is to bring valuable
judgement and insight to Board deliberations and decisions.
The Non-Executive Directors are all experienced and influential
individuals whose blend of skills and business experience
contributes to the proper functioning of the Board and its
Committees, ensuring that matters are fully debated, and that
no individual or group dominates the Board’s decision-making
processes.
The Board are assisted by a range of external advisors, including
the interim CFO, the in-house legal counsel, the nominated
advisor, strategic communication consultants, external legal
advisers, and tax consultants.
The Board training and development needs are met with
the support of our NOMAD and our advisors. The Board are
provided with regular updates on governance developments
and the Company Secretary takes minutes at all Board and
Committee meetings.
Board Performance and Evaluations
Principle 7 of the Code requires that the Board and Committees
evaluate their own performance based on clear and relevant
objectives and seek continuous improvement.
The Chair ensures that the Board reflects on its own
performance at the beginning and end of each Board meeting.
This “temperature check” ensures that all board members have
an opportunity to consider whether the Board has worked
effectively or if there are issues that need more discussion.
The Board conducted a formal Board evaluation during the
year under review with actions identified and implemented. A
further formal internal Board evaluation will be carried out on
2021/2022 and the Board evaluation process itself will continue
to be refined.
There are three Board Committees: the Audit Committee, the
Remuneration Committee, and the Nomination Committee,
which are chaired by Leslie-Ann Reed, Jane Silber, and Chris
Spencer respectively. Attendance at those meetings is set out in
their respective reports on pages 37 to 40.
Prior to the proposal for re-election at the AGM, the performance
of the Independent Non-Executive Directors is reconsidered
to ensure they remain effective in their role and, where
appropriate, that they retain their independence.
Directors are expected to attend all meetings of the Board, and
of the Committees on which they sit, and to devote sufficient
time to the Group’s affairs to enable them to fulfil their duties
as Directors. In the event that Directors are unable to attend
a meeting, their comments on papers to be considered at the
meeting will be discussed in advance with the Chair, so that
their contribution can be included as part of the wider Board
discussion.
Succession planning for the Board was considered at the
Nomination Committee and is an ongoing topic of discussion.
Corporate Culture
Principle 8 of the Code requires that the Company promote a
corporate culture that is based on ethical values and behaviours.
35
Induction HealthcareAnnual Report & Accounts 2021Governanceheading 1heading 2(continued)Governance Corporate Governance Report
for Induction Healthcare Group PLC (continued)
The Company has an entrepreneurial and innovative culture
underpinned by sound governance, and policies and processes
that ensure we do business in a fair and ethical way and reflect
the healthcare markets in which we operate. The Board seeks
to lead by example and ensures that all strategic decisions are
taken fairly, with due process and are in the best interests of the
Company and its stakeholders.
Governance Structure
Principle 9 of the Code requires that the Company maintain
governance structures and processes that are fit for purpose
and support good decision making by the board.
The respective responsibilities of the Chair and our joint CEOs
are clearly understood. The Chair is responsible for leading
the Board, facilitating the effective contribution of all members,
and ensuring that it operates effectively in the interests of the
shareholders. Our CEOs are responsible for the leadership of
the business and implementation of the strategy. In turn our
Non-Executive Directors provide effective challenge and help
develop proposals on strategy whilst ensuring that they satisfy
themselves as to the integrity of the financial reporting systems,
internal controls, and the risk management system. The whole
Board ensures that corporate performance is monitored and
adequately reported to shareholders.
Shareholder and Stakeholder Communications
Principle 10 of the Code requires that the Company
communicate how the Group is governed and is performing by
maintaining a dialogue with shareholders and other relevant
stakeholders.
The Board attaches great importance to communication with
both institutional and private shareholders in reporting and
demonstrating good corporate governance practices to create a
sustainable, growing, profitable and successful business.
The Directors regularly communicated with investors
and the Group operates an investor relations website at
www.inductionhealthcare.com. The website contains details of
the Group and its activities, its regulatory announcements, and
sets out the governance of the Group.
Christopher Spencer
Hugo Stephenson
Shelley Fraser*
Andy Williams **
Leslie-Ann Reed
Jane Silber
Ibs Mahmood***
James Balmain ****
Oliver Drake *****
Board
8 of 8
8 of 8
6 of 6
7 of 7
8 of 8
8 of 8
1 of 1
7 of 7
2 of 2
Audit
Committee
Remuneration
Committee
Nomination
Committee
No. of meetings
3 of 3
N/a
N/a
N/a
3 of 3
3 of 3
N/a
N/a
N/a
7 of 7
N/a
N/a
N/a
7 of 7
7 of 7
N/a
N/a
N/a
4 of 4
N/a
N/a
N/a
4 of 4
4 of 4
N/a
N/a
N/a
* Shelley Fraser resigned from the Board on 22 January 2021
** Andy Williams was appointed to the Board on 8 June 2020
*** Ibs Mahmood resigned from the Board on 8 June 2020
**** James Balmain was appointed to the Board on 8 June 2020
***** Oliver Drake is not a director but attends the Board as interim CFO, he has been attending the Board since 2 February 2021
Board Committees
Nominated Adviser and Sole Broker
On 4 March 2021 Induction announced the appointment of
Singer Capital Markets as Nominated Adviser and Sole Broker
with immediate effect.
The Board has delegated and empowered a Remuneration
Committee, Nomination Committee and an Audit Committee,
each of which is accountable to the Board on all matters within
its remit. Each Committee has written terms of reference which
are available on the Company’s website. A summary of the
responsibilities of each Committee and their work during the
year follows on pages 37 to 40.
The Company Secretary acts as secretary to all the Board’s
Committees supported by the Executives to ensure that each
Committee receives information and papers in a timely manner
to enable full and proper consideration to be given to the
relevant items of business.
36
Induction HealthcareAnnual Report & Accounts 2021 Governanceheading 1heading 2(continued)
Remuneration Committee Report
Induction Healthcare
Governance
Annual Report & Accounts 2020
Remuneration Committee Report
On behalf of the Remuneration Committee, I am pleased to present the Remuneration Committee report for the year ended
31 March 2021. In this report, we provide you with an overview of the Committee’s priorities and performance during the year, in
addition to details regarding the Director’s Remuneration Report.
Committee Members
Jane Silber (Chair)
Leslie-Ann Reed
Christopher Spencer
Committee Responsibilities
The Committee is primarily responsible for:
• Setting the remuneration policy for all executive directors and the Company’s Chair;
• Recommend and monitor the levels and structure of remuneration for senior management; and
• Reviewing the ongoing appropriateness and relevance of the remuneration policy.
The Work of the Committee
The objective of the Company’s remuneration policy is to facilitate the recruitment and retention of executives of an appropriate
calibre, to ensure that the Executive Directors of the Company are provided with appropriate incentive to encourage enhanced
performance and are in a fair and responsible manner, rewarded for their individual contributions to the success of the Group in the
year. The remuneration policy has regard to the risk appetite of the Company and alignment to the Company’s long strategic term
goals
Bonus Plan
The outcome of the 2020 annual plan
LTIP
LTIP
Review of the Scheme Rules
Review of awards to staff
Remuneration
Review of proposed staff pay awards
Terms of Reference
The Committee postponed the review of its own terms of reference until 2021 given the
acquisition of Attend Anywhere
Directors Remuneration Report
The objective of the Company’s remuneration policy remains unchanged. It is the intention of the Committee to review the
remuneration policy in the year ended 31 March 2022.
The Remuneration that the Company offers to its Executive Directors continues to be based on four principal components:
1.
2.
3.
4.
Basic Salaries and benefits. Basic salaries are determined by the Remuneration Committee with reference to bench-marked
salaries paid in AIM-quoted and other Technology businesses of similar size and complexity. It is intended that the guaranteed
pay should be at or near the median level. Benefits in kind relate to health insurance.
Pensions. The Group operates a defined contribution pension scheme for all Executive Directors and employees. Only basic
salaries are pensionable.
Short-term incentives. Bonuses are payable to staff according to the achievement by the Group determined by key measurable
objectives and growth targets.
Long-term incentives. The Company operates a share option scheme covering all permanent employees under which share
options are normally granted on passing probation or adhoc on individual performance. Options normally vest over three years,
with a third vesting after twelve months and the remainder quarterly over the subsequent two years and can be exercised until
the tenth anniversary. The number of shares granted is based on a fixed market value of shares on the date of the grant, so
the individual only benefits if there has been a share price growth. The share option scheme is overseen by the Remuneration
Committee which eligible individuals may be invited to participate, including the level of awards.
No salary increases were awarded to the Executive Directors or Non-Executive Directors for FY21.
37
Governance
(continued)
Remuneration Committee Report
(continued)
Directors service contracts
All Executive Directors are employed under service contracts. The services of all Executive Directors may be terminated by the
Company or individual with 6 months’ notice.
Remuneration received by Directors for the year ended 31 March 2021
Salary and Fees
Pension
Bonus
Other
Total Remuneration
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
Executive
Hugo Stephenson
Ibs Mahmood
Shelley Fraser*
James Balmain
Sebastien Jantet
101,848
235,835
14,583
–
124,143
214,153
18,889
150,580
176,723
–
Non-Executive
Christopher Spencer
Leslie-Ann Reed
Andy Williams
Jane Silber
45,984
27,971
–
33,443
55,000
40,000
28,504
40,000
2,334
26,111
1,458
–
11,000
3,578
–
–
2,602
20,697
1,889
18,560
17,672
–
2,475
–
–
1,800
583,807
723,849
47,083
63,093
–
–
–
–
–
–
–
–
–
–
–
–
–
30,000
–
–
41,033
1,142
–
–
–
4,722
84,858
34,726
–
104,182
302,979
17,183
–
135,143
234,850
25,500
253,998
259,121
–
–
–
–
–
–
–
–
–
–
–
–
–
49,562
27,971
–
36,045
57,475
40,000
28,504
41,800
30,000
42,175
124,306
673,065
941,248
Director
James Balmain
Date of Grant
8th June 2020
Exercise
price (£)
0.005
Number
of shares
745,559
Market value
of award
734,376
Performance
conditions
no
Exercisable
from
08/06/2021
Exercisable
to
08/06/2031
* Shelley Fraser resigned from the Board on 22 January 2021. From the initial grant of 450,000 shares in January 2020, 150,000
Share options vested. The remaining 300,000 share options lapsed.
Directors’ shareholding and share interests (audited)
Share ownership plays a key role in the alignment of our executives with the interests of shareholders. The table below sets out
the number of shares held or potentially held by executive and non-executive directors (including their connected persons where
relevant) as at 31 March 2021 and 31 March 2020.
Name
Hugo Stephenson
James Balmain*
Christopher Spencer
Jane Silber
Andy Williams*
Beneficially
owned shares at
31 March 2021
8,891,730
699,391
8,696
8,696
419,495
Award description
–
Share Options 2021
–
–
–
Number
of unvested
options at
31 March 2020
–
–
–
–
–
Number
of vested options
at 31 March 2020
–
–
–
–
Number
of unvested
options at
31 March 2021
–
745,559
–
–
–
Number
of vested options
at 31 March 2021
–
–
–
–
–
Granted
–
745,559
–
–
–
* James Balmain and Andy Williams were appointed to the Board on 8 June 2020
Jane Silber
Remuneration Committee Chair
22 September 2021
38
Induction HealthcareAnnual Report & Accounts 2021 Governanceheading 1(continued) Audit Committee Report
(continued)
Induction Healthcare
Governance
Annual Report & Accounts 2020
Audit Committee Report
On behalf of the Audit Committee, I am pleased to present the Audit Committee report for the year ended 31 March 2021. In this
report, we provide you with an overview of the Committee’s priorities and performance during the year, in addition to details
regarding the audit and risk management policies approved by the Committee for implementation throughout the Group.
Committee Members
Leslie-Ann Reed (Chair)
Jane Silber
Christopher Spencer
Committee Responsibilities
The Committee is primarily responsible for:
— Oversight of the Group’s risk management framework and mitigating actions
— Monitoring the effectiveness of internal controls;
— Ensuring that the Group’s financial performance is properly measured and reported, through review of the annual and half-year
financial statements, accounting policies and significant reporting judgements;
— Identification of adjusting items and the presentation of Alternative Performance Measures (“APMs”) and the judgement
used in terms of which costs or credits are not associated with the underlying trading of the Group or otherwise impact the
comparability of the Group’s results year on year; and
— Oversight of the annual audit and its effectiveness, including the objectivity and independence of the external auditor.
The Work of the Committee
In the year following the Company’s public listing, the Audit Committee continued to review and establish the procedures and
systems necessary to ensure robust standards of financial control. The CEO and Chief Financial Officer are invited to attend all
meetings, while other senior financial managers will attend as appropriate. The external auditors attend the meetings to discuss
the planning and conclusions of their work. The Audit Committee is able to call for information from management and external
consultants with the external auditors directly if required. The objectivity and independence of the external auditors is safeguarded
by reviewing the auditors’ formal planning proposal and monitoring relationships between key audit staff and the Company.
The Audit Committee held three formal meetings during the year as set out on page 36 and considered the following items during
the year:
Whistleblowing
Bribery
Interim Results
Full Year Results
Going Concern
Internal Audit
External Audit
Terms of Reference
Review of arrangements in place
Review of arrangements in place
The Committee reviewed and approved the interim results taking into account a limited scope agreed upon
procedures provided by KPMG.
The Committee also reviewed and approved the full year results through review of the annual report with a
focus on revenue recognition, valuation and impairment of goodwill/intangibles.
The Committee undertook reviews of the Company’s going concern status at the half and full year period
ends.
The Committee reviewed the need for an internal auditor and agreed that the Company was of not yet of
sufficient size or complexity to merit a separate internal audit function.
The Committee reviewed the independence and objectivity of the external auditor, KPMG; their plan for the
full year audit, advisory fees and the effectiveness of the audit process.
The Committee postponed the review of its own terms of reference until 2021 given the acquisition of
Attend Anywhere
External Auditor
The Audit Committee monitors the relationship with the external auditor, KPMG LLP, to ensure that auditor independence and
objectivity are maintained. KPMG have been the Group’s auditor since IPO in 2019 and the Committee will keep under review the
need for external tender, including any contractual restrictions on the choice of auditor. A summary of remuneration paid to the
external auditor is provided in note 7 of the financial statements. The value of the non-audit services provided by the Auditor is £8k.
Having reviewed the auditor’s independence and performance, the Audit Committee has concluded that these are effective and
recommends that KPMG LLP be re-appointed as the Group’s auditor at the next AGM.
Leslie-Ann Reed
Audit Committee Chair
22 September 2021
39
Governance
Nomination Committee Report
(continued)
Induction Healthcare
Governance
Annual Report & Accounts 2020
Nomination Committee Report
On behalf of the Board, I am pleased to present the Nomination Committee report of the Company for the year ended 31 March
2021.
Committee Members
Christopher Spencer (Chair)
Leslie-Ann Reed
Jane Silber
Committee Responsibilities
The Nomination Committee is responsible for reviewing the structure, size, and composition (including the skills, knowledge,
experience, and diversity) of the board and making recommendations to the board with regard to any changes.
The Work of the Committee
The Nomination Committee met formally four times during the year and held a number of informal meetings and telephone calls
between scheduled meetings.
Appointment of Directors
Following the acquisition of Zesty Limited, the Board asked the Committee to consider the suitability
of James Balmain and Andrew Williams for, respectively, Executive and Non-Executive positions on
the Board. The Committee recommended their appointments, and they joined the Board on 8 June
2020.
Succession Planning
During the year, the Committee considered the positions of the Executive Directors and short
term and long term succession planning for the Executive Directors and the Chairs of the various
Committees. Their discussions took into account the needs of the business and the preferences of
the individuals under discussion. The recommendations of the Committee were communicated to the
full Board and resulted in the appointment of Hugo Stephenson and James Balmain as joint CEOs
and Ibs Mahmood’s voluntary departure from the Board to take up a new role as Chief Business
Officer. Shelley Fraser stood down as an Executive Director and Chief Financial Officer and Oliver
Drake assumed the role of Interim Chief Financial Officer. Oliver Drake was not appointed as an
Executive Director but attends the Board and the various Committees.
Change of Company
Secretary
The Committee reviewed the provision of Company Secretarial Services considering the needs of the
business. The recommendations of the Committee were communicated to the full Board and resulted
in the services being brought in-house with the appointment of Alison Talbot as Company Secretary
and the resignation of Prism Company Secretarial Services.
Induction of new directors
New directors are taken through a comprehensive induction programme which is tailored to their individual needs and
understanding.
Chris Spencer
Nomination Committee Chair
22 September 2021
40
Directors’ report
Directors’ report
The Directors are pleased to present the Directors’ report to
shareholders and the audited financial statements for the year
ended 31 March 2021.
Corporate governance
The Directors’ statement on Corporate Governance is set out on
pages 34 to 40 and forms part of this report.
Principal activity and business model
The principal activity and business model are set out in the
Business Model and Strategy section on pages 12 to 21.
Future outlook
The strategy of the business is set out in the Group Strategy on
pages 12 to 16.
Results and dividends
The results for the year to 31 March 2021 are set out in the
financial statements on pages 54 to 90.
The Directors do not propose payment of a dividend for 2021
(2020: £Nil).
Annual General Meeting
The date of the 2021 Annual General Meeting of the Company
can be found in the Notice of Meeting which is available
in the Investor Section of the Company’s website at www.
inductionhealthcare.com.
Review of the year
Research and development
A comprehensive analysis of the Group’s progress and
development is set out in the Strategic Report on pages 6 to 11.
This analysis includes comments on the position
of the Group at the end of the financial year.
Significant events after the year-end
The Group capitalised £1,660k on development (2020: £761k).
Financial instruments
The financial risk management objectives and policies of the
Group, including credit risk, interest rate risk and currency risk
are provided in Note 27 of the accounts.
On 8 June 2021, the Company announced that it had raised
£25 million through a placing of 35,714,285 new Ordinary Shares
at a price of 70p per share (refer note 30).
Directors
The Directors who held office during the year were as follows:
— Shelley Fraser, resigned 22 January 2021
— Ibs Mahmood, resigned 8 June 2020
— James Balmain, appointed 8 June 2020
— Leslie-Ann Reed
— Jane Silber
— Christopher Spencer
— Hugo Stephenson
— Andy Williams, appointed 8 June 2020
Political contributions
Neither the Group nor any of its subsidiaries made any
disclosable political donations or incurred any disclosable
political expenditure during the year (2020: £Nil).
On 10 June 2020, the Company acquired Attend Anywhere
Pty Ltd (Attend Anywhere) an Australian-based video
consultation provider in the UK, for a consideration comprising
(1) £16,348k, which included approximately £788k as payment
for Attend Anywhere’s net assets at completion and (2) the issue
of 14,285,714 New Ordinary Shares (having a value equivalent to
£10 million at the Placing Price).
Directors’ insurance
An insurance policy is maintained by the Group which insures
the Directors of the Group against certain liabilities arising in the
conduct of their duties.
Capital structure
The Company’s share capital is divided into 92,050,727 ordinary
shares of £0.005 each with voting rights. Note 30 explains the
changes to the capital structure after the balance sheet date.
Related party transactions
Details of all related party transactions are set out in Note 28 to
the Financial Statements.
41
Induction HealthcareAnnual Report & Accounts 2021Governanceheading 1(continued)Governance
(continued)
Directors’ report
(continued)
Disclosure of information to auditor
Auditor
The Directors who held office at the date of approval of this
Directors’ report confirm that, so far as they are each aware,
there is no relevant audit information of which the company’s
auditor is unaware; and each Director has taken all the steps
that he ought to have taken as a Director to make himself
aware of any relevant audit information and to establish that the
company’s auditors is aware of that information.
In accordance with Section 489 of the Companies Act 2006, a
resolution for the re-appointment of KPMG LLP as auditor of the
company is to be proposed at the forthcoming Annual General
Meeting.
By order of the board
James Balmain
Director
22 September 2021
42
Induction HealthcareAnnual Report & Accounts 2021 Governanceheading 1heading 2(continued) Statement of Directors’
responsibilities in respect of
the annual report and the financial
statements
Statement of Directors’ responsibilities in respect of
the annual report and the financial statements
The directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent
Company’s transactions and disclose with reasonable accuracy
at any time the financial position of the parent company and
enable them to ensure that its financial statements comply with
the Companies Act 2006. They are responsible for such internal
control as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error, and have general responsibility for
taking such steps as are reasonably open to them to safeguard
the assets of the Group and to prevent and detect fraud and
other irregularities.
Under applicable law and regulations, the directors are also
responsible for preparing a Strategic Report and a Directors’
Report that complies with that law and those regulations.
The directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Group’s website. Legislation in the UK governing the preparation
and dissemination of financial statements may differ from
legislation in other jurisdictions.
The directors are responsible for preparing the Annual Report
and the group and parent company financial statements in
accordance with applicable law and regulations.
Company law requires the directors to prepare group and parent
company financial statements for each financial year. Under
the AIM Rules of the London Stock Exchange they are required
to prepare the Group financial statements in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006 and applicable law
and they have elected to prepare the parent Company financial
statements on the same basis.
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 parent Company
and of the Group’s profit or loss for that period. In preparing
each of the Group and parent Company financial statements, the
directors are required to:
— select suitable accounting policies and then apply them
consistently;
— make judgements and estimates that are reasonable,
relevant, reliable and prudent;
— state whether they have been prepared in accordance with
international accounting standards in conformity with the
requirements of the Companies Act 2006;
— assess the Group and parent Company’s ability to continue
as a going concern, disclosing, as applicable, matters
related to going concern; and
— use the going concern basis of accounting unless they
either intend to liquidate the Group or the parent Company
or to cease operations, or have no realistic alternative but to
do so.
43
Induction HealthcareAnnual Report & Accounts 2021GovernanceGovernance Independent auditor’s report to the
Induction Healthcare Group plc
members of
Independent auditor’s report to the members of
Induction Healthcare Group plc
Overview
Materiality: group financial
statements as a whole
Coverage
Key audit matters
vs 2020
£66.0k (2020 : £30.4k)
0.80% (2020: 0.83%) of
Total expenses
99% (2020 : 100%) of
Total expenses
Recurring risks
Event driven
Intangible assets - capitalised
development costs
Revenue recognition
Investment impairment
New: Valuation of acquired
intangibles of Zesty Limited
New: Goodwill impairment
1. Our opinion is unmodified
We have audited the financial statements of Induction
Healthcare Group plc (“the Company”) for the year ended
31 March 2021 which comprise the Consolidated Statement
of Profit or Loss, Consolidated Statement of Comprehensive
Income, Consolidated Statement and Company Statement
of Financial Position, Consolidated Statement and Company
Statement of Changes in Equity, Consolidated Statement and
Company Statement of Cash Flows, and the related notes,
including the accounting policies in note 1.
In our opinion:
— the financial statements give a true and fair view of the
state of the Group’s and of the parent Company’s affairs as
at 31 March 2021 and of the Group’s loss for the year then
ended;
— the Group financial statements have been properly
prepared in accordance with international accounting
standards in conformity with the requirements of the
Companies Act 2006;
— the parent Company financial statements have been
properly prepared in accordance with international
accounting standards in conformity with the requirements
of, and as applied in accordance with the provisions of, the
Companies Act 2006; and
— the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.
Our responsibilities are described below. We have fulfilled our
ethical responsibilities under, and are independent of the Group
in accordance with, UK ethical requirements including the FRC
Ethical Standard as applied to listed entities. We believe that the
audit evidence we have obtained is a sufficient and appropriate
basis for our opinion.
44
Induction HealthcareAnnual Report & Accounts 2021 Financial Statementsheading 1heading 2(continued) Independent auditor’s report to the
(continued)
members of
Induction Healthcare Group plc
Independent auditor’s report to the members of
Induction Healthcare Group plc (continued)
2. Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgement, were of most significance in the audit of the financial
statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by us,
including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing
the efforts of the engagement team. These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. In arriving at our audit
opinion above, the key audit matters, in decreasing order of audit significance, were as follows:
The risk
Our Response
Goodwill impairment (£9,373k;
2020: £1,553k)
Refer to page 39 (Audit
Committee Report), page 64
(accounting policy) and page 80
(financial disclosures).
Forecast-based assessment:
In accordance with IAS 36, the
company is required to assess the
carrying value of intangible assets
with indefinite useful lives for
impairment.
We performed the detailed tests below rather
than seeking to rely on any of the company’s
controls because the nature of the balance
is such that we would expect to obtain audit
evidence primarily through the detailed
procedures described:
— Assessing judgements and estimates:
We critically assessed the method used in the
value in use estimates.
We challenged the assumptions on revenue
growth (including renewals, upsells and new
business), discount rate, EBITDA margin and
terminal rate used to determine the value in use
for the CGUs by corroborating the assumptions
against the Company’s internal data and relevant
market data.
— Sensitivity analysis:
Performing breakeven analysis on the
assumptions noted above;
— Comparing valuations:
Comparing the sum of the discounted cash flows
to the group’s market capitalisation to assess the
reasonableness of those cashflows; and
— Assessing transparency:
We evaluated whether the disclosure within the
financial statements (see note 17) are in line with
IAS 36 and IAS 1.
During FY20, the Group recognised
goodwill relating to the acquisition
of Horizon (£417k and £1,136k
respectively) and in FY21, the group
acquired Zesty Limited recognising
goodwill of £8,237k.
The goodwill was allocated to the
Microguide (Induction Guidance) and
Induction Zesty cash generating
units for which the Company is
required to estimate their value in
use.
The estimated recoverable amount
is subjective due to the start-up
nature of the Company and the
inherent uncertainty involved in
forecasting and discounting future
cash flows.
The effect of these matters is that,
as part of our risk assessment,
we determined that the value in
use of goodwill has a high degree
of estimation uncertainty, with
a potential range of reasonable
outcomes greater than our
materiality for the financial
statements as a whole and
possibly many times that amount.
The financial statements (note 17)
disclose the sensitivity estimated by
the Company
45
Induction HealthcareAnnual Report & Accounts 2021Financial Statementsheading 1heading 2(continued)Financial Statements Independent auditor’s report to the members of
Induction Healthcare Group plc (continued)
The risk
Our Response
Valuation of acquired
intangibles of Zesty Limited
(£3,277k; 2020: £nil)
Forecast-based estimate
One business was acquired in the
year; Zesty Limited.
Refer to page 39 (Audit
Committee Report), page 63
(accounting policy) and page 75
(financial disclosures).
We identified the valuation of
the identified intangible assets
and goodwill as a significant
risk due to the judgements and
assumptions required to be applied
by management in determining
valuation of the acquired
intangibles.
In performing the valuations of
the identified intangible assets,
various assumptions were applied
in deriving the fair value of the
identified intangible assets.
The effect of any changes to the
assumptions is that, as part of our
risk assessment, we determined
that the calculation of fair value
and accordingly Goodwill has
a high degree of estimation
uncertainty, with a potential range
of reasonable outcomes greater
than our materiality for the financial
statements as a whole, and possibly
many times that amount.
The financial statements (Note
14) disclose the sensitivity of the
Goodwill estimated by the Group.
We performed the detailed tests below rather
than seeking to rely on any of the company’s
controls because the nature of the balance
is such that we would expect to obtain audit
evidence primarily through the detailed
procedures described:
— Our valuation expertise:
We used our own valuation specialists to assist
us in critically assessing discount rate, discount
for lack of marketability (‘DLOM’) and royalty
rate utilised within the valuation of the identified
intangible assets by comparing against the
specialists’ own developed assumptions.
— Assessed accuracy:
The Company utilised internal data such as the
strategic plans, forecast and actual data. We
performed procedures to assess the accuracy
of the internal data. This included comparing
and corroborating the assumptions made by the
company when preparing forecasts against the
internal data.
— Assessing transparency:
We critically assessed whether the Company’s
disclosures on the assumptions used were
consistent with the valuations performed and
whether the Group’s disclosures adequately
highlighted the uncertainties inherent in the
valuations due to the assumptions used.
46
Induction HealthcareAnnual Report & Accounts 2021 Financial Statementsheading 1heading 2(continued) Independent auditor’s report to the members of
Induction Healthcare Group plc (continued)
Intangible assets – capitalised
development costs (£1,939k;
2020: £963k)
Refer to page 39 (Audit
Committee Report), page 63
(accounting policy) and page 82
(financial disclosures).
The risk
Our Response
Estimate-based assessment
We identified the capitalisation
of development costs as a risk
due to the inherent judgement
and assumptions that need to
be applied in estimating the
capitalised development costs.
There is estimation uncertainty
in determining which of the costs
incurred in the development of the
applications should be capitalised
and at what rate as a percentage of
total expense in the period.
The effect of these matters is that,
as part of our risk assessment,
we determined that the estimate
has a high degree of estimation
uncertainty, with a potential range
of reasonable outcomes greater
than our materiality for the financial
statements as a whole.
We performed the detailed tests below rather
than seeking to rely on any of the company’s
controls because the nature of the balance
is such that we would expect to obtain audit
evidence primarily through the detailed
procedures described:
— Assessed assumptions:
We challenged the assumptions on the rate (as a
percentage of employee time) used to capitalise
the development costs by having meetings
with developers and other employees in the
company to agree the time spent on the projects
on a sample basis. We considered the different
employees involved in the development of the
applications and the time spent on developing
the applications. We critically assessed the
different rates used for each of the employee
categories by agreeing the rates used in
calculation against the applicable rates.
— Assessed accuracy:
We inspected the invoices and other supporting
documentation for the contractor expenses
incurred and we inspected employees’ contracts
to corroborate that these were directly linked to
the development of the applications.
We recalculated the capitalised costs using the
applicable rate for the employees identified.
47
Induction HealthcareAnnual Report & Accounts 2021Financial Statementsheading 1heading 2(continued)Financial Statements Independent auditor’s report to the members of
Induction Healthcare Group plc (continued)
The risk
Our Response
Revenue recognition (£1,513k;
2020: £148k)
Refer to page 39 (Audit
Committee Report), page 60
(accounting policy) and page 69
(financial disclosures).
Accounting treatment
As required by the auditing
standards, we identified a fraud risk
related to the Company’s revenue
recognition at the year-end date
for Horizon Strategic Partners and
existence of revenue throughout the
year in relation to Zesty revenue.
There is a risk in ascertaining the
correct revenue to be recognised
for the period with reference to
the requirements of IFRS 15. Whilst
there is limited judgement in
identifying the point in which the
obligations have been fulfilled, the
external focus on the revenue value
increases the risk of fraudulent
premature revenue recognition.
For customer contracts in Zesty
Limited, the application of IFRS
15 involves significant judgement
due to the bespoke nature of
the contracts. The inappropriate
determination of when revenue
recognition commences and the
identification of performance
obligations may result in a material
misstatement.
Investment impairment – parent
company (£14,639k: 2020:
£2,514k)
Refer to page 39 (Audit
Committee Report), page 95
(accounting policy) and page 95
(financial disclosures).
Moderate risk, high value
The carrying amount of the parent
company’s investments in the
subsidiary companies represent
76% of the Company’s total assets.
Its recoverability is not at a high
risk of significant misstatement or
subject to significant judgement.
However, due to its materiality in
the context of the parent company
financial statements, this is
considered to be the area that had
the greatest effect on our overall
parent company audit.
48
We performed the detailed tests below rather
than seeking to rely on any of the company’s
controls because knowledge of the design of
these controls indicated that we would not be
able to obtain the required evidence to support
reliance on controls.
— Accounting analysis:
We assessed and challenged the key terms
in purchase orders and contracts to consider
the Company’s assessment of the revenue
contract, the Company’s determination of
distinct performance obligations, the Company’s
methodology in recognising revenue in line with
IFRS 15 for over time or point in time recognition.
We assessed whether the revenue has been
recorded in the correct period, the performance
obligation has been satisfied in the correct
period and the correct transaction price has
been used in the revenue recognition calculation
by agreeing contract term and price to source
documentation.
For Provision of Software revenue, we
recalculated the accrued and deferred income
calculation as at the balance sheet date to
confirm that revenue has been recognised at the
correct accounting period.
We have tested the manual journal entries in
relation to Provision of Software revenue by
agreeing to source data.
— Assessed Transparency:
We critically assessed the adequacy of the
Company’s disclosures in relation the revenue
recognition and assessed that the accounting
policies are in line with the requirements of
IFRS 15. (see note 6).
We performed the detailed tests below rather
than seeking to rely on any of the company’s
controls because the nature of the balance
is such that we would expect to obtain audit
evidence primarily through the detailed
procedures described:
We compared the net assets of the Group to the
market capitalisation of the Company.
We considered if the subsidiaries have sufficient
net assets to support the value of the investment
held by the company.
We obtained and analysed the recoverable
amount of the CGUs prepared and considered
the impact of these valuations on the carrying
value of the investment recorded.
Induction HealthcareAnnual Report & Accounts 2021 Financial Statementsheading 1heading 2(continued) Independent auditor’s report to the members of
Induction Healthcare Group plc (continued)
3. Our application of materiality and an
overview of the scope of our audit
Materiality for the group financial statements as a whole was
set at £66.0k (2020: £30.4k), determined with reference to
a benchmark of Total Expenses, of which it represents 0.8%
(2020: 0.83%). We consider the group expenses to be the
appropriate benchmark as the group is still in its start-up phase.
Materiality for the parent company financial statements as a
whole was set at £155k (2020: £90k), determined with reference
to a benchmark of company total assets, of which it represents
0.8% (2020: 2.5%).
In line with our audit methodology, our procedures on
individual account balances and disclosures were performed
to a lower threshold, performance materiality, so as to reduce
to an acceptable level the risk that individually immaterial
misstatements in individual account balances add up to a
material amount across the financial statements as a whole.
Performance materiality was set at 75% (2020: 75%) of
materiality for the financial statements as a whole, which
equates to £50.0k (2020: £22.8k) for the group and £194k
(2020: £67.5k) for the parent company. We applied this
percentage in our determination of performance materiality
because we did not identify any factors indicating an elevated
level of risk.
We agreed to report to the Audit Committee any corrected
or uncorrected identified misstatements exceeding £3.3k
(2020: £1.5k), in addition to other identified misstatements that
warranted reporting on qualitative grounds.
Of the group’s 6 (2020: 5) reporting components, we subjected
4 (2020: 4) to full scope audits for group purposes and nil (2020:
nil) to specified risk-focused audit procedures. The components
within the scope of our work accounted for the percentages
illustrated opposite.
The remaining 0.01% (2020: 1%) of total group expenses, 0.01%
(2020: 1%) of group loss before tax and 8.5% (2020: 8%) of
total group assets is represented by 3 (2020: 2) of reporting
components, none of which individually represented more than
8.5% (2020: 8%) of any of total group expenses, group profit
before tax or total group assets. For these components, we
performed analysis at an aggregated group level to re-examine
our assessment that there were no significant risks of material
misstatement within these.
The work of all reporting components including the audit of
the parent company, was performed by the Group team
(2020: all reporting components including the audit of the
parent company performed by the Group team)
Total expenses
£8,267k (2020: £3,675k)
Group materiality
£66.0k (2020: £30.4k)
£66.0k
Whole financial
statements materiality (2020:
£30.4k)
£55.0k
Whole financial
statements performance
materiality (2020: £22.8k)
£40.0k
Range of materiality at 4
components (£11k - £40k)
(2020: £1k to £18k)
£3.3k
Misstatements reported to the
audit committee (2020: £1.5k)
Total expenses
Group materiality
Group revenue
Group loss before tax
99%
(2020 99%)
99
99
100%
(2020: 100%)
100
100
Group total assets
92%
(2020 92%)
92
92
Full scope for group audit purposes 2021
Full scope for group audit purposes 2020
Residual components
49
Induction HealthcareAnnual Report & Accounts 2021Financial Statementsheading 1heading 2(continued)Financial Statements Independent auditor’s report to the members of
Induction Healthcare Group plc (continued)
4. Going concern
The directors have prepared the financial statements on the
going concern basis as they do not intend to liquidate the
Group or the Company or to cease their operations, and as they
have concluded that the Group’s and the Company’s financial
position means that this is realistic. They have also concluded
that there are no material uncertainties that could have cast
significant doubt over their ability to continue as a going
concern for at least a year from the date of approval of the
financial statements (“the going concern period”).
We used our knowledge of the Group, its industry, and the
general economic environment to identify the inherent risks to
its business model and analysed how those risks might affect
the Group’s and Company’s financial resources or ability to
continue operations over the going concern period. The risks
that we considered most likely to adversely affect the Group’s
and Company’s available financial resources over this period
were:
• delays in launch of the products and the retention of
customers for existing product.
We considered whether these risks could plausibly affect the
liquidity in the going concern period by assessing the degree of
downside assumption that, individually and collectively, could
result in a liquidity issue, taking into account the Group’s and
Company’s current and projected cash (a reverse stress test).
Our procedures also included:
• Critically assessing assumptions in base case and downside
scenarios, in particular in relation to customer renewals, new
business and upsells by comparing to historical renewal
and upsell rates of customers and historical trends in severe
economic situations and overlaying knowledge of the entity’
plans based on approved budgets and our knowledge of
the entity and the sector in which it operates;
• Assessing whether downside scenarios applied mutually
consistent and severe assumptions in aggregate, using our
assessment of the possible range of each key assumption
and our knowledge of inter-dependencies;
• Assessing the working capital assumptions inherent in the
forecasts to actual recent experience and existing supplier/
customer arrangements; and
• Comparing past budgets to actual results to assess the
directors’ track record of budgeting accurately.
We considered whether the going concern disclosure in note 1
to the financial statements gives a full and accurate description
of the Directors’ assessment of going concern, including the
identified risks, dependencies, and related sensitivities. We
assessed the completeness of the going concern disclosure.
Our conclusions based on this work:
• we consider that the Directors’ use of the going concern
basis of accounting in the preparation of the financial
statements is appropriate;
• we have not identified, and concur with the Directors’
assessment that there is not, a material uncertainty related
to events or conditions that, individually or collectively, may
cast significant doubt on the Group’s or Company’s ability to
continue as a going concern for the going concern period;
However, as we cannot predict all future events or conditions
and as subsequent events may result in outcomes that are
inconsistent with judgements that were reasonable at the time
they were made, the above conclusions are not a guarantee
that the Group or the Company will continue in operation.
5. Fraud and breaches of laws and regulations
– ability to detect
Identifying and responding to risks of material misstatement
due to fraud
To identify risks of material misstatement due to fraud (“fraud
risks”) we assessed events or conditions that could indicate an
incentive or pressure to commit fraud or provide an opportunity
to commit fraud. Our risk assessment procedures included:
• Enquiring of directors, the audit committee and inspection
of policy documentation as to the Company’s high-level
policies and procedures to prevent and detect fraud and the
Group’s channel for “whistleblowing”, as well as whether
they have knowledge of any actual, suspected or alleged
fraud.
• Reading Board meeting minutes.
• Using analytical procedures to identify any unusual or
unexpected relationships.
We communicated identified fraud risks throughout the audit
team and remained alert to any indications of fraud throughout
the audit.
As required by auditing standards, and taking into account
possible pressures to meet profit targets, and our overall
knowledge of the control environment, we perform procedures
to address the risk of management override of controls and
the risk of fraudulent revenue recognition, in particular the
risk that license revenue is recorded in the wrong period
and the risk that Group management may be in a position to
make inappropriate accounting entries, and the risk of bias
in accounting estimates and judgements such as capitalised
development costs, impairment of intangible assets and
recoverable amount of CGUs.
50
Induction HealthcareAnnual Report & Accounts 2021 Financial Statementsheading 1heading 2(continued) Independent auditor’s report to the members of
Induction Healthcare Group plc (continued)
5. Fraud and breaches of laws and regulations
– ability to detect (continued)
correspondence, if any. Therefore, if a breach of operational
regulations is not disclosed to us or evident from relevant
correspondence, an audit will not detect that breach.
We did not identify any additional fraud risks.
Further detail in respect of fraud in revenue recognition is set
out in the key audit matter disclosures in section 2 of this report.
We performed procedures including:
•
Identifying journal entries to test for all full scope
components based on risk criteria and comparing the
identified entries to supporting documentation. These
included those posted to unusual accounts.
• Assessing significant accounting estimates for bias.
Identifying and responding to risks of material misstatement
due to non-compliance with laws and regulations
We identified areas of laws and regulations that could
reasonably be expected to have a material effect on the
financial statements from our general commercial and sector
experience, through discussion with the directors and other
management (as required by auditing standards) and discussed
with the directors and other management the policies and
procedures regarding compliance with laws and regulations.
We communicated identified laws and regulations throughout
our team and remained alert to any indications of non-
compliance throughout the audit.
The potential effect of these laws and regulations on the
financial statements varies considerably.
Firstly, the Group is subject to laws and regulations that
directly affect the financial statements including financial
reporting legislation (including related companies legislation),
distributable profits legislation and taxation legislation and
we assessed the extent of compliance with these laws and
regulations as part of our procedures on the related financial
statement items.
Secondly, the Group is subject to many other laws and
regulations where the consequences of non-compliance
could have a material effect on amounts or disclosures in the
financial statements, for instance through the imposition of
fines or litigation or the loss of the Group’s ability to comply
with the regulations of being a vendor within the NHS. We
identified the following areas as those most likely to have such
an effect: General Data Protection Regulations and the specific
restrictions relating to medical devices, clinical governance
including patient safety and information governance including
confidentiality and security. Auditing standards limit the
required audit procedures to identify non-compliance with
these laws and regulations to enquiry of the directors and
other management and inspection of regulatory and legal
Context of the ability of the audit to detect fraud or breaches
of law or regulation
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we
have properly planned and performed our audit in accordance
with auditing standards. For example, the further removed
non-compliance with laws and regulations is from the events
and transactions reflected in the financial statements, the less
likely the inherently limited procedures required by auditing
standards would identify it.
In addition, as with any audit, there remained a higher risk of
non-detection of fraud, as these may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of
internal controls. Our audit procedures are designed to detect
material misstatement. We are not responsible for preventing
non-compliance or fraud and cannot be expected to detect
non-compliance with all laws and regulations.
6. We have nothing to report on the other
information in the Annual Report
The directors are responsible for the other information
presented in the Annual Report together with the financial
statements. Our opinion on the financial statements does not
cover the other information and, accordingly, we do not express
an audit opinion or, except as explicitly stated below, any form
of assurance conclusion thereon.
Our responsibility is to read the other information and, in
doing so, consider whether, based on our financial statements
audit work, the information therein is materially misstated
or inconsistent with the financial statements or our audit
knowledge. Based solely on that work we have not identified
material misstatements in the other information.
Strategic report and directors’ report
Based solely on our work on the other information:
• we have not identified material misstatements in the
strategic report and the directors’ report;
•
•
in our opinion the information given in those reports for the
financial year is consistent with the financial statements; and
in our opinion those reports have been prepared in
accordance with the Companies Act 2006
51
Induction HealthcareAnnual Report & Accounts 2021Financial Statementsheading 1heading 2(continued)Financial Statements Independent auditor’s report to the members of
Induction Healthcare Group plc (continued)
9. The purpose of our audit work and to whom
we owe our responsibilities
This report is made solely to the Company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we
might state to the Company’s members those matters we
are required to state to them in an auditor’s report and for no
other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the
Company and the Company’s members, as a body, for our audit
work, for this report, or for the opinions we have formed.
Karen Tasker
(Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
KPMG LLP
Challenge House
Sherwood Drive
Milton Keynes
MK3 6DP
22 September 2021
7. We have nothing to report on the other
matters on which we are required to report by
exception
Under the Companies Act 2006, we are required to report to
you if, in our opinion:
— adequate accounting records have not been kept by the
parent Company, or returns adequate for our audit have not
been received from branches not visited by us; or
— the parent Company financial statements are not in
agreement with the accounting records and returns; or
— certain disclosures of directors’ remuneration specified by
law are not made; or
— we have not received all the information and explanations
we require for our audit.
We have nothing to report in these respects.
8. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 43,
the directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and
fair view; such internal control as they determine is necessary
to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error;
assessing the Group and parent Company’s ability to continue
as a going concern, disclosing, as applicable, matters related to
going concern; and using the going concern basis of accounting
unless they either intend to liquidate the Group or the parent
Company or to cease operations, or have no realistic alternative
but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue our opinion in an auditor’s report. Reasonable assurance
is a high level of assurance, but does not guarantee that an
audit conducted in accordance with ISAs (UK) will always detect
a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or
in aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of the
financial statements.
A fuller description of our responsibilities is provided on the
FRC’s website at www.frc.org.uk/auditorsresponsibilities.
52
Induction HealthcareAnnual Report & Accounts 2021 Financial Statementsheading 1heading 2(continued) Consolidated Statement of Profit
For the year ended 31 March 2021
or Loss
Consolidated Statement of Profit or Loss
For the year ended 31 March 2021
Revenue
Cost of sales
Gross profit
Sales and marketing expenses
Administrative expenses
Development expenses
Impairment losses
Loss from operations
Finance income
Finance expense
Fair value losses on contingent consideration
Loss before tax
Tax credit
Loss for the year
The Notes on pages 58 to 90 form an integral part of these financial statements.
Note
6
7
11
11
7
12
2021
£000
1,513
(636)
877
(590)
(5,052)
(1,893)
(1,366)
(8,024)
3
(5)
(91)
(8,117)
503
(7,614)
2020
£000
148
(73)
75
(274)
(2,330)
(962)
–
(3,574)
47
–
(83)
(3,527)
–
(3,527)
53
Induction HealthcareAnnual Report & Accounts 2021Financial StatementsFinancial Statements
Consolidated Statement of
Comprehensive Income
For the year ended 31 March 2021
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2021
Loss for the year
Exchange (losses)/gains arising on translation on foreign operations
Reclassified to profit and loss during the year
Other comprehensive income for the year, net of tax
Total comprehensive income
Loss per share attributable to the ordinary equity holders of the parent
Profit or loss
Basic
Diluted
The Notes on pages 58 to 90 form an integral part of these financial statements.
2021
£000
(7,614)
(9)
(7)
(16)
(16)
(7,630)
2020
£000
(3,527)
8
(1)
7
7
(3,520)
13
13
(0.19)
(0.19)
(0.13)
(0.13)
54
heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial Statements
Consolidated Statement of
Financial Position
As at 31 March 2021
Consolidated Statement of Financial Position
As at 31 March 2021
Assets
Non-current assets
Property, plant and equipment
Intangible assets
Goodwill
Deferred tax assets
Total non-current assets
Current assets
Contract assets
Trade and other receivables
Cash and cash equivalents
Other current financial assets
Total current assets
Total assets
Liabilities
Non-current liabilities
Contract liabilities
Deferred tax liability
Total non-current liabilities
Current liabilities
Trade and other payables
Contract liabilities
Other financial liabilities
Total current liabilities
Total liabilities
Net assets
Equity attributable to equity holders of the parent
Share capital
Share premium reserve
Merger reserve
Foreign exchange reserve
Other reserves
Retained earnings
Total equity
Note
19
18
17
12
21
20
22
12
24
12
23
24
27
25
26
26
26
10
26
2021
£000
2020
£000
15
5,884
9,373
880
16,152
155
896
2,472
447
3,970
20,122
187
1,048
1,235
1,396
1,027
–
2,421
3,656
16,466
210
18,432
10,879
(9)
792
(13,838)
16,466
–
2,349
1,553
97
3,999
23
140
10,718
–
10,881
14,880
38
321
359
402
263
1,409
2,074
2,433
12,447
148
18,432
(10)
7
94
(6,224)
12,447
The Notes on pages 58 to 90 form an integral part of these financial statements.
The financial statements on pages 53 to 90 were approved and authorised for issue by the board of Directors on 22 September
2021 and were signed on its behalf by:
James Balmain
Director
Company registered number: 11852026
55
heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial StatementsFinancial Statements
Consolidated Statement of
Changes in Equity
As at 31 March 2021
Consolidated Statement of Changes in Equity
As at 31 March 2021
At 1 April 2019
Comprehensive income for the year
Loss for the year
Other comprehensive loss for the year
Total comprehensive loss for the year
Transactions with owners, recorded directly in
equity
Reserves arising on acquisition of subsidiaries
Issue of shares pre-Initial Public Offering
Issue of shares to settle loans and borrowings
Issue of shares as consideration for a business
combination
Issue of shares on Initial Public Offering
Share issue costs
Equity settled share-based payments
Total contributions by and distributions to
owners
At 31 March 2020 and 1 April 2020
Comprehensive income for the year
Loss for the year
Other comprehensive loss for the year
Total comprehensive income for the year
Transactions with owners, recorded directly in
equity
Issue of shares as consideration for a business
combination
Share issue costs
Equity settled share-based payments
Total contributions by and distributions to
owners
At 31 March 2021
Notes
Share
capital
£000
66
Share
premium
£000
–
Merger
reserve
£000
–
Foreign
exchange
reserve
£000
(1)
Other
reserves
£000
–
Retained
earnings
£000
(2,707)
Total
equity
£000
(2,642)
–
–
–
–
9
9
2
62
–
–
–
–
–
–
1,991
1,991
398
14,521
(469)
–
–
–
–
(10)
–
–
–
–
–
–
82
148
18,432
18,432
(10)
(10)
–
8
7
–
–
–
–
–
–
–
–
7
–
–
–
–
(16)
(16)
–
–
–
–
–
–
–
–
–
94
94
94
–
–
–
(3,527)
–
(3,527)
(3,527)
8
(3,520)
10
–
–
–
–
–
–
–
2,000
2,000
400
14,583
(469)
94
10
18,608
(6,224)
12,447
(7,614)
–
(7,614)
(7,614)
(16)
(7,630)
10,953
(64)
–
10,889
–
–
–
–
–
–
698
698
–
–
–
–
11,015
(64)
698
11,649
18,432
10,879
(9)
792 (13,838)
16,466
–
–
–
62
–
–
62
210
14
14
10
–
–
–
–
–
–
–
The notes on pages 58 to 90 form part of these financial statements.
56
heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial Statements Consolidated Statement of Cash
For the year ended 31 March 2021
Flows
Consolidated Statement of Cash Flows
For the year ended 31 March 2021
Cash flows from operating activities
Loss for the year
Adjustments for
Depreciation of property, plant and equipment
Amortisation of intangible fixed assets
Impairment losses on intangible assets
Finance income
Finance expense
Fair value adjustments on financial liabilities
Share-based payment expense
Net foreign exchange loss/(gain)
Income tax credit
Movements in working capital:
(Increase) / decrease in trade and other receivables and contract assets
Increase / (decrease) in trade and other payables and contract liabilities
Interest received
Interest paid
Net cash used in operating activities
Cash flows from investing activities
Acquisition of subsidiary, net of cash acquired
Purchases of property, plant and equipment
Repayments by related parties
Payment of software development costs
Net cash used in investing activities
Cash flows from financing activities
Issue of ordinary shares
Share issue costs
Proceeds from related party borrowings
Repayment of bank borrowings
Repayment of related party borrowings
Net cash (used in) /from financing activities
Net cash (decrease) /increase in cash and cash equivalents
Cash and cash equivalents at the beginning of year
Exchange (loss) /gains on cash and cash equivalents
Cash and cash equivalents at the end of the year
The notes on pages 58 to 90 form part of these financial statements.
Notes
2021
£000
2020
£000
(7,614)
(3,527)
19
18
17 & 18
11
11
27
10
12
11
11
14
19
7
14
27
7
1,340
1,366
(3)
5
91
698
3
(503)
3,004
(485)
1,085
3
(5)
(4,012)
(1,987)
(5)
–
(1,660)
(3,652)
–
(64)
–
(501)
–
(565)
(8,230)
10,718
(16)
2,472
–
323
–
(47)
–
83
94
(7)
–
446
29
(342)
47
–
(3,346)
(976)
–
10
(761)
(1,727)
16,584
(469)
500
–
(1,000)
15,615
10,542
169
7
10,718
57
heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial StatementsFinancial Statements Notes (forming part of the financial
statements)
Notes (forming part of the financial statements)
1. Accounting policies
1.1 Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Group and entities (including structured entities)
controlled by the Group and its subsidiaries. Control is achieved when the Group:
— has power over the investee;
— is exposed, or has rights, to variable returns from its involvement with the investee; and
— has the ability to use its power to affect its returns.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or
more of the three elements of control listed above.
When the Group has less than a majority of the voting rights of an investee, it has power over the investee when the voting rights
are sufficient to give it the practical ability to direct the relevant activities of the investee unilaterally. The Group considers all
relevant facts and circumstances in assessing whether or not the Group’s voting rights in an investee are sufficient to give it power,
including:
— the size of the Group’s holding of voting rights relative to the size and dispersion of holdings of the other vote holders;
— potential voting rights held by the Group, other vote holders or other parties;
— rights arising from other contractual arrangements; and
— any additional facts and circumstances that indicate that the Group has, or does not have, the current ability to direct the
relevant activities at this time that decisions need to be made, including voting patterns at previous shareholders’ meetings.
Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control
of the subsidiary. Specifically, income and expenses of a subsidiary acquired or disposed of during the year are included in the
consolidated statement of profit or loss and other comprehensive income from the date the Group gains control until the date when
the Group ceases to control the subsidiary.
Profit or loss and each component of other comprehensive income are attributed to the owners of the Group and to the non-
controlling interests. Total comprehensive income of subsidiaries is attributed to the owners of the Group and to the non-controlling
interests even if this results in the non-controlling interests having a deficit balance.
When necessary, adjustments are made to the financial statements of subsidiaries to bring their accounting policies into line with
the Group’s accounting policies.
All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions between members of the
Group are eliminated in full on consolidation.
There are no restrictions on the ability of the parent and subsidiaries to transfer cash or other assets to or from other entities
within the group. There are no restrictions that may restrict dividends and other capital distributions within the group. There are no
restrictions on the ability of the group to access or use the assets and settle the liabilities of the group.
1.2 Going concern
The Group has recognised revenues from commercial deals during the year of £1,513k (2020: £148k), however it is still largely reliant
on cash from financing activities to fund on-going operations.
The Group made adjusted operating losses before interest, tax, depreciation, amortisation, impairment and exceptional costs for
the year ended 31 March 2021 of £4,775k (2020: £2,736k) and had cash balances at 31 March 2021 of £2,472k (2020: £10,718k) with
cash outflows from operating activities during the year of £4,012k (2020: £3,346k).
On 8 June 2021, the Company announced that it had raised £25 million through a placing of 35,714,285 new Ordinary Shares at a
price of 70p per share (refer note 30).
On the 9 June 2021, the Company announced the completion of the acquisition of Attend Anywhere Pty Ltd for a cash
consideration of approximately £16,348k, which included approximately £788k as payment for Attend Anywhere’s net assets at
completion; and the issue of 14,285,714 Consideration Shares (having a value equivalent to £10 million at the Placing Price).
Following the share placing and acquisition the Group has seen an incremental increase in cash reserves of £10 million, which will be
used to support product development and international expansion.
58
heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial Statements
(continued)
Notes (forming part of the financial statements)
(continued)
1. Accounting policies (continued)
1.2 Going concern (continued)
In assessing the appropriateness of the going concern assumption, the Board of Directors has reviewed the projected cash flow
forecasts to 31 March 2023 of the enlarged Group and other relevant information, together with considering scenarios with adverse
impacts across the Group’s principal risks relating to COVID-19 and macro-economic conditions.
Management’s base case going concern assessment allows investment in the full range of planned market and product
development activities, to achieve revenue targets over this forecast period.
Management has considered a severe but plausible downside scenario whereby the Group sees six-month delays in signing new
revenues and a 33% reduction in renewals of Attend Anywhere Pty Limited’s existing contracts, together with a series of mitigating
actions, which resulted in the Group remaining viable over the going concern period.
After due consideration, the Board has concluded that there is a reasonable expectation that the Group and Company have
adequate resources to meet its liabilities as they fall due for at least 12 months from the date of this report, and therefore these
financial statements are prepared on a going concern basis.
1.3 Business combinations
Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in a business
combination is measured at fair value, which is calculated as the sum of the acquisition date fair values of the assets transferred
by the Group, liabilities incurred by the Group to the former owners of the acquiree and the equity interests issued by the Group in
exchange for control of the acquiree. Acquisition-related costs are generally recognised in profit or loss as incurred.
At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognised at their fair value, except that:
— deferred tax assets or liabilities, and assets or liabilities related to employee benefit arrangements are recognised and
measured in accordance with IAS 12 Income Taxes and IAS 19 respectively;
— liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-based payment
arrangements of the Group entered into to replace share-based payment arrangements of the acquiree are measured in
accordance with IFRS 2 at the acquisition date (see note 1.8); and
— assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5 Noncurrent Assets Held for Sale and
Discontinued Operations are measured in accordance with that Standard.
Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-controlling interests in the
acquiree, and the fair value of the acquirer’s previously held equity interest in the acquiree (if any) over the net of the acquisition
date amounts of the identifiable assets acquired and the liabilities assumed. If, after reassessment, the net of the acquisition date
amounts of the identifiable assets acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of
any non-controlling interests in the acquiree and the fair value of the acquirer’s previously held interest in the acquiree (if any), the
excess is recognised immediately in profit or loss as a bargain purchase gain.
When the consideration transferred by the Group in a business combination includes assets or liabilities resulting from a contingent
consideration arrangement, the contingent consideration is measured at its acquisition date fair value and included as part of
the consideration transferred in a business combination. Changes in the fair value of the contingent consideration that qualify as
measurement period adjustments are adjusted retrospectively, with corresponding adjustments against goodwill. Measurement
period adjustments are adjustments that arise from additional information obtained during the ‘measurement period’ (which cannot
exceed one year from the acquisition date) about facts and circumstances that existed at the acquisition date.
The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify as measurement period
adjustments depends on how the contingent consideration is classified. Contingent consideration that is classified as equity is not
remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration
that is classified as an asset or a liability is remeasured at subsequent reporting dates, with the corresponding gain or loss being
recognised in profit or loss.
When a business combination is achieved in stages, the Group’s previously held equity interest in the acquiree is remeasured to
its acquisition date fair value and the resulting gain or loss, if any, is recognised in profit or loss. Amounts arising from interests in
the acquiree prior to the acquisition date that have previously been recognised in other comprehensive income are reclassified to
profit or loss where such treatment would be appropriate if that interest were disposed of.
59
heading 1heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial StatementsFinancial Statements Notes (forming part of the financial statements)
(continued)
1. Accounting policies (continued)
1.3 Business combinations (continued)
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination
occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are
adjusted during the measurement period (see above), or additional assets or liabilities are recognised, to reflect new information
obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts
recognised at that date.
1.4 Goodwill
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the business (see note
1.3) less accumulated impairment losses, if any.
For the purposes of impairment testing, goodwill is allocated to each of the Group’s cash-generating units (or groups of cash-
generating units) that is expected to benefit from the synergies of the combination.
A cash-generating unit to which goodwill has been allocated is tested for impairment annually, or more frequently when there is an
indication that the unit may be impaired. If the recoverable amount of the cash-generating unit is less than its carrying amount, the
impairment loss is allocated first to reduce the carrying amount of any goodwill allocated to the unit and then to the other assets of
the unit pro rata based on the carrying amount of each asset in the unit. Any impairment loss for goodwill is recognised directly in
profit or loss. An impairment loss recognised for goodwill is not reversed in subsequent periods.
On disposal of the relevant cash-generating unit, the attributable amount of goodwill is included in the determination of the profit
or loss on disposal.
1.5 Revenue
Licenced subscription services
The Group is in the business of providing access to its proprietary software applications, as software-as-a-service. Revenue from
the sale of licenced software is recognised when control of the goods or services are transferred to the customer, either after user
acceptance testing or Go-Live and at the point where there are no further outstanding significant commitments relating to the sale.
Revenue is recognised at an amount that reflects the consideration to which the Group expects to be entitled in exchange for
those services.
The transaction price is determined based on the standard list price in line with the Group’s pricing policy. Revenue is therefore
shown net of value added tax and trade discounts and is reported for healthcare institutions, whereby healthcare institutions are
charged a subscription/licence fee for making the applications available to users.
Control is transferred, and performance obligations are satisfied over time over the subscription period and therefore this revenue
is recognised rateably over the period of the subscription. For arrangements which contain set-up services, the period of the
subscription commences once set-up services have been fully provided.
Payment is due within 30 days of date of invoice.
The Group did not enter into any transactions with variable consideration, rights of return, volume rebates or significant financing
components during the year. The Group does not have any warranty obligations. The Group has elected to use the practical
expedient to disregard the significant financing component for contracts with a subscription period of 12 months or less.
Set-up services
Set-up services vary depending on the scope and complexity of the engagement and type of software service provided. Examples
of such services include system configuration, project management, testing assistance and database consulting. Where software
requires installation effort, set-up services are deemed to be essential to the functionality of the licence and therefore impacts
the timing of the software licence recognition, as control does not transfer until such set-up services have been fully provided.
Set-up services are considered fully provided on either the go-live date or date of completion of user acceptance testing, as
specified in each contract. Such set-up services are not considered a separate performance obligation and are combined with the
corresponding licence subscription fee and recognised rateably over the subscription period.
60
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial Statements Notes (forming part of the financial statements)
(continued)
1. Accounting policies (continued)
1.5 Revenue (continued)
Set-up services (continued)
Certain of the group’s services require set-up effort, these are not considered to be essential to the functionality of the software
and are not considered to be separate performance obligations and do not affect the timing of revenue recognition for licensed
subscriptions.
Contract terms
Management considers termination clauses and renewal clauses on a contract-by-contract basis to determine if such clauses grant
a material right to the customer. Where management have determined that such material rights exist, these impact the contractual
licenced subscription term. Management also assess whether material rights represent separate performance obligations.
Software support and maintenance fees
Unless separately specified, software support and maintenance services are included in licence fees under in the Group contracts.
These are recognised as revenue in line with the licensed subscription revenues, from the date at which any set-up services have
been fully provided (ie. go-live date or user acceptance date). The transaction price is determined with reference to the standalone
selling price of the services based on historical contracted amounts agreed. Management have assessed whether any contracts
contain specified upgrade rights and have concluded that no contracts contain material upgrade rights and therefore these are not
accounted for as separate performance obligations.
Text and SMS revenues
Text and SMS revenues are recognised at a point in time and in line with usage.
Other revenues
Where ad-hoc development or consulting activities are undertaken for customers, the revenue from these is recognised at a point
in time, when control of the service passes to the customer and there are no further outstanding significant commitments in relation
to the sale.
Contract assets and liabilities
A contract asset is initially recognised for renewals of subscriptions, where the customer continues to have access to the
applications but has not been invoiced for the subscription renewal. Upon receipt of a purchase order from the customer and
invoicing by the Group, the balance is reclassified to trade receivables.
A contract liability is recognised if a payment is received from a customer in advance of the subscription period to which that
payment relates.
The Group has incurred sales commission costs to obtain contracts with customers during the year. Management have elected
to apply the exemption from capitalisation of these costs for contracts with a term of 12 months or less. For contracts with terms
longer than 12 months, costs are capitalised and amortised over the subscription term.
The Group has incurred costs to fulfil contracts with customers during the year, specifically related to the provision of set-up
services. Such costs are capitalised as contract costs and amortised through cost of sales over the licenced subscription term from
the date of the completion of the set-up services.
1.6 Foreign currency
In preparing the financial statements of each individual group entity, transactions in currencies other than the entity’s functional
currency (foreign currencies) are recognised at the rates of exchange prevailing at the dates of the transactions. At the end of
each reporting period, monetary items denominated in foreign currencies are retranslated at the rates prevailing at that date.
Non-monetary items carried at fair value that are denominated in foreign currencies are retranslated at the rates prevailing at the
date when the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are
not retranslated.
For the purposes of presenting these financial statements, the assets and liabilities of the Group’s foreign operations are translated
into pounds using exchange rates prevailing at the end of each reporting period. Income and expense items are translated at the
average exchange rates for the period, unless exchange rates fluctuate significantly during that period, in which case the exchange
rates at the dates of the transactions are used. Exchange differences arising, if any, are recognised in other comprehensive income
and accumulated in equity (and attributed to non-controlling interests as appropriate).
61
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial StatementsFinancial Statements Notes (forming part of the financial statements)
(continued)
1. Accounting policies (continued)
1.7 Employee benefits
Short-term and other long-term employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave and sick leave in the
period the related service is rendered at the undiscounted amount of the benefits expected to be paid in exchange for that service.
Liabilities recognised in respect of short-term employee benefits are measured at the undiscounted amount of the benefits
expected to be paid in exchange for the related service.
Liabilities recognised in respect of other long-term employee benefits are measured at the present value of the estimated future
cash outflows expected to be made by the Group in respect of services provided by employees up to the reporting date.
1.8 Share-based payments
Share-based payment transactions of the Group
Equity settled share-based payments to employees and others providing similar services are measured at the fair value of
the equity instruments at the grant date. Details regarding the determination of the fair value of equity-settled share-based
transactions are set out in note 10.
The fair value determined at the grant date of the equity-settled share-based payments is expensed on a straight-line basis over
the vesting period, based on the Group’s estimate of equity instruments that will eventually vest, with a corresponding increase in
equity. At the end of each reporting period, the Group revises its estimate of the number of equity instruments expected to vest.
The impact of the revision of the original estimates, if any, is recognised in profit or loss such that the cumulative expense reflects
the revised estimate, with a corresponding adjustment to the equity-settled employee benefits reserve.
1.9 Taxation
Tax on the profit or loss for the period comprises current and deferred tax. Tax is recognised in the consolidated income statement
except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity.
Current tax is the expected tax payable or receivable on the taxable income or loss for the period, using tax rates enacted or
substantively enacted at the statement of financial position date, and any adjustment to tax payable in respect of previous periods.
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 or liabilities that affect neither accounting nor taxable profit other than in
a business combination, and 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 manner of realisation or settlement of the
carrying amount of assets and liabilities, using tax rates enacted or substantively enacted at the statement of financial position
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 difference can be utilised. Deferred tax assets are reviewed at each reporting date and recognised to the extent that it
has become probable that future taxable profits will be available against which they can be used.
Expenses and assets are recognised net of the amount of sales tax, except:
— When the sales tax incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case,
the sales tax is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable
— When receivables and payables are stated with the amount of sales tax included
The net amount of sales tax recoverable from, or payable to, the taxation authority is included as part of receivables or payables in
the statement of financial position.
62
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial Statements Notes (forming part of the financial statements)
(continued)
1. Accounting policies (continued)
1.9 Taxation (continued)
Research and development tax credits claimed from HM Revenue & Customs are taken as a credit in the period in which the
qualifying research and development costs are incurred unless there is uncertainty over the amount and timing of the credits.
During the year ended 31 March 2021 a credit was recognised in respect of the claim submitted for the year ended 31 March 2019.
A credit was also recognised in respect of the claim for the year ended 31 March 2020, this claim has not yet been submitted to
HM Revenue & Customs. Refer Note 5.1 for the judgement applied by management in recognising this claim. No credits have
been recognised for the years ended 31 March 2021 as the assessment of qualifying expenditure for the claim has not yet been
performed and therefore there is uncertainty over the amount and timing of the credits.
1.10 Property, plant and equipment
Items of property, plant and equipment are measured at cost less accumulated depreciation and any accumulated impairment
losses.
If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate
items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and
equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic
benefits associated with the expenditure will flow to the Group.
Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their
expected useful economic lives. It is provided at the following range:
Useful life
Amortisation method
Fixtures and fittings
5 years
Straight line over the expected life of the
asset
Computer Equipment
3 years
Straight line over the expected life of the
asset
Intangible assets acquired separately
1.11 Intangible assets
(i)
Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated amortisation and
accumulated impairment losses. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated
useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate
being accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired separately are carried at
cost less accumulated impairment losses.
Useful life
Amortisation method
Internally generated or
acquired
Technology
3 - 10 years
Straight line over the
expected life of the asset
Acquired
Users
3 - 10 years
Straight line over the
expected life of the asset
Acquired
Trade Name
3 - 10 years
Straight line over the
expected life of the asset
Acquired
Capitalised development costs
3 years
Straight line over the
expected life of the asset
Internally developed
Internally-generated intangible assets
(ii)
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
An Internally-generated intangible asset arising from development (or from the development phase of an internal project) is
recognised if, and only if, all of the following have been demonstrated:
— the technical feasibility of completing the intangible asset so that it will be available for use or sale;
— the intention to complete the intangible asset and use or sell it;
— the ability to use or sell the intangible asset;
— how the intangible asset will generate probable future economic benefits;
— the availability of adequate technical, financial and other resources to complete the development and to use or sell the
intangible asset; and
— the ability to measure reliably the expenditure attributable to the intangible asset during its development.
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(continued)
1. Accounting policies (continued)
Internally-generated intangible assets (continued)
1.11 Intangible assets (continued)
(ii)
The amount initially recognised for Internally-generated intangible assets is the sum of the expenditure incurred from the date
when the intangible asset first meets the recognition criteria listed above. Where no Internally-generated intangible asset can be
recognised, development expenditure is recognised in profit or loss in the period in which it is incurred.
Subsequent to initial recognition, Internally-generated intangible assets are reported at cost less accumulated amortisation and
accumulated impairment losses, on the same basis as intangible assets that are acquired separately.
(iii) Intangible assets acquired in a business combination
Intangible assets acquired in a business combination and recognised separately from goodwill are initially recognised at their fair
value at the acquisition date (which is regarded as their cost).
Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost less accumulated
amortisation and accumulated impairment losses, on the same basis as intangible assets that are acquired separately.
1.12 Impairment of non-financial assets (excluding inventories, investment properties and deferred tax assets)
Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the
financial year end. Other non-financial assets are subject to impairment tests whenever events or changes in circumstances
indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount
(i.e. the higher of value-in-use and fair value less costs to sell), the asset is written down accordingly.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the smallest
group of assets to which it belongs for which there are separately identifiable cash flows; its cash generating units (‘CGUs’).
Goodwill is allocated on initial recognition to each of the Group’s CGUs that are expected to benefit from a business combination
that gives rise to the goodwill.
Impairment charges are included in profit or loss, except to the extent they reverse gains previously recognised in other
comprehensive income. An impairment loss recognised for goodwill is not reversed.
1.13 Impairment of tangible and intangible assets other than goodwill
At the end of each reporting period, the Group reviews the carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable
amount of the asset is estimated in order to determine the extent of the impairment loss (if any). When it is not possible to estimate
the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-generating unit to which
the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated
to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a
reasonable and consistent allocation basis can be identified.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment at least
annually, and whenever there is an indication that the asset may be impaired.
Recoverable amount is the higher of fair value less costs of disposal and value-in-use. In assessing value-in-use, the estimated
future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the
time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount
of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised immediately in profit
or loss, unless the relevant asset is carried at a revalued amount, in which case the impairment loss is treated as a revaluation
decrease.
When an impairment loss subsequently reverses, the carrying amount of the asset (or a cash generating unit) is increased to the
revised estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that
would have been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior years. A
reversal of an impairment loss is recognised immediately in profit or loss, unless the relevant asset is carried at a revalued amount,
in which case the reversal of the impairment loss is treated as a revaluation increase.
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(continued)
1. Accounting policies (continued)
1.14 Financial instruments
Financial assets and financial liabilities are recognised when an entity becomes a party to the contractual provisions of the
instruments.
Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly attributable to the
acquisition or issue of financial assets and financial liabilities (other than financial assets and financial liabilities at fair value through
profit or loss) are added to or deducted from the fair value of the financial assets or financial liabilities, as appropriate, on initial
recognition. Transaction costs directly attributable to the acquisition of financial assets or financial liabilities at fair value through
profit or loss are recognised immediately in profit or loss.
(i) Classification of financial instruments
Financial instruments issued by the Group are treated as equity only to the extent that they meet the following two conditions:
— they include no contractual obligations upon the Group to deliver cash or other financial assets or to exchange financial assets
or financial liabilities with another party under conditions that are potentially unfavourable to the Group; and
— where the instrument will or may be settled in Induction Healthcare Limited’s own equity instruments, it is either a non-
derivative that includes no obligation to deliver a variable number of Induction Healthcare Limited’s own equity instruments
or is a derivative that will be settled by the company exchanging a fixed amount of cash or other financial assets for a fixed
number of its own equity instruments.
To the extent that this definition is not met, the proceeds of issue are classified as a financial liability. Where the instrument so
classified takes the legal form of Induction Healthcare Limited’s own shares, the amounts presented in the financial statements for
called up share capital and share premium account exclude amounts in relation to those shares.
(ii) Recognition and initial measurement
Non-derivative financial instruments comprise other receivables, cash and cash equivalents, loans and borrowings, and trade
and other payables. All financial assets and liabilities are initially recognised when the Group becomes a party to the contractual
provisions of the instrument. Financial assets and liabilities are initially measured at fair value plus, for items measured at amortised
cost, transaction costs directly attributable to its acquisition or issue. A trade receivable without a significant financing component
is initially measured at the transaction price.
(iii) Financial assets – classification and subsequent measurement
On initial recognition, a financial asset is classified as measured at amortised cost or fair value through profit or loss (“FVTPL”). The
Group has no financial assets measured at fair value through other comprehensive income (“FVOCI”). A financial asset is measured
at amortised cost if it is both: held within a business model whose objective is to hold assets to collect contractual cash flows; and
its contractual terms give rise to cash flows that are solely payments of principal and interest on the amount outstanding.
(iii) Financial assets – classification and subsequent measurement
For the purposes of this assessment, “principal” is defined as the fair value of the financial asset on initial recognition, and “interest”
is defined as consideration for the time value of money and for the credit risk associated with the principal amount outstanding. In
assessing whether the contractual cash flows are solely payments of principal and interest, the Group considers the contractual
terms of the instrument, including any terms which may affect the timing or amount of contractual cash flows. All financial assets
not measured at amortised cost are measured at FVTPL.
Financial assets at FVTPL are subsequently measured at fair value with net gains and losses, including any interest or dividend
income, recognised in profit or loss.
Financial assets measured at amortised cost are subsequently measured at amortised cost using the effective interest method.
The amortised cost is reduced by impairment losses.
Interest income, foreign exchange gains and losses, and impairment are recognised in profit or loss. Any gain or loss on
derecognition is recognised in profit or loss.
(iv) Financial liabilities – classification and subsequent measurement
Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is
classified as held-for-trading, it is a derivative or it is designated as such on initial recognition.
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(continued)
1. Accounting policies (continued)
1.14 Financial instruments (continued)
(iv) Financial liabilities – classification and subsequent measurement (continued)
Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in
profit or loss.
All other financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and
foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or
loss.
(v) Measurement and recognition of expected credit losses
The Group recognises loss allowances for expected credit losses (“ECLs”) on financial assets measured at amortised cost. The
Group measures loss allowances at an amount equal to lifetime ECLs, except for cash and cash equivalents which is measured
using 12-month ECLs. ECLs are a probability-weighted estimate of credit losses and are measured as the present value of all cash
shortfalls expected on financial assets, using the effective interest rate of the financial asset. Lifetime ECLs are the ECLs which
result from all possible default events over the expected life of a financial instrument. When determining ECLs, the Group considers
reasonable and supportable qualitative and quantitative information that is relevant and available without undue cost or effort. The
Group considers a financial asset to be in default when the borrower is unlikely to pay its obligations to the Group in full without
recourse by the Group to actions such as realising security (if any held) or when the financial asset is more than 90 days overdue.
Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets. The
carrying amount of a financial asset is written off when the Group has no reasonable expectation of recovering a financial asset in
its entirety or a portion thereof.
(vi) Derecognition
The Group derecognises a financial asset when the contractual rights to receive cash flows from the asset expire, or when it
transfers the rights to receive the contractual cash flows in a transaction in which substantially all of the risks and rewards of
ownership are transferred.
The Group derecognises a financial liability when its contractual obligations are discharged, cancelled, or expire.
(vii) Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an
integral part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose only of
the consolidated cash flow statement.
(viii) Derivative financial instruments and other financial assets
Other financial assets comprise call options. Options are initially classified as FVTPL and recognised at fair value based on the
consideration paid for the option. Subsequently, the options are measured at fair value and the gain or loss on remeasurement to
fair value is recognised immediately in profit or loss.
(ix) Business model assessment
The Group makes an assessment of the objective of the business model in which a financial asset is held at a portfolio level as this
best reflects the way the business is managed, and information provided to management. The assessment includes consideration
of the stated objectives of the portfolio, the performance of the portfolio, the risks that affect the performance of the business
model, and the frequency, volume and timing of sales of financial assets.
1.15 Defined contribution schemes
Contributions to defined contribution pension schemes are charged to the statement of comprehensive income in the year to
which they relate.
1.16 Cost of sales
Cost of sales consists of the direct costs associated with the Group’s proprietary application. These include costs incurred for
server hosting, costs incurred to obtain a contract such as sales commission, and costs incurred to deliver on a contract. Costs
incurred to deliver on a contract are staff costs, which are allocated to cost of sales based on an estimation of the proportion of
time spent on each contract.
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(continued)
1. Accounting policies (continued)
1.17 Segmental reporting
For management purposes, the Group is organised into business units based on its products and services, with separate revenue
streams being generated by different business units. These business units operate on a shared cost base. The Board is the Chief
Operating Decision Maker (CODM) and monitors the operating results of the consolidated Group for the purposes of making
decisions about resource allocation and performance assessment. Therefore, management have determined that the Group has
one reportable segment.
2. Reporting entity
Induction Healthcare Group plc is a company incorporated, domiciled and registered in England in the United Kingdom. Its
principal activity is the provision of software to healthcare professionals. The registered number is 11852026 and the registered
address is 20 St. Dunstan’s Hill, London, United Kingdom, EC3R 8HL.
Induction Healthcare Group plc was formed on 28 February 2019 with an initial shareholding of 1 share at a nominal value of £1.
On 1 April 2019 acquired 100% of the share capital of Induction Healthcare Limited, the previous parent company of the Group, in
a share for share exchange transaction. This has been accounted for as a common control transaction under IFRS 3 B1 during the
year ended 31 March 2020.
These financial statements include the consolidated financial information of Induction Healthcare Group plc (the “Company”)
and its subsidiaries (together referred to as the “Group”). Details of Induction Healthcare Group plc’s subsidiaries are included in
Note 14. The Group has only one reportable segment.
3. Basis of preparation
Both the financial statements of the Group and the financial statements of the Company have been prepared in accordance with
international accounting standards in conformity with the requirements of the Companies Act 2006 (“Adopted IFRS”). They were
authorised for issue by the Group’s board of directors on 22 September 2021.
Details of the Group’s accounting policies, including changes during the year, are included in note 1.
These financial statements are presented in pound sterling, which is the Group’s functional currency. All amounts have been
rounded to the nearest thousand, unless otherwise indicated.
In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application
of the Group accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ
from these estimates.
Estimates and underlying assumptions are reviewed on an on-going basis. Revisions to estimates are recognised prospectively.
The areas where judgements and estimates have been made in preparing the financial statements and their effects are disclosed
in note 5.
The financial statements have been prepared on the historical cost basis.
4 New standards, interpretations and amendments
The following new and amended IFRSs have been issued and been applied by the Group in these financial statements.
— Amendments of IFRS 3, “Business Combinations” (effective 1 January 2020). This amends the definition of a “business”.
Management have applied the amended definition of a business in assessing all business combinations completed during the
year.
— Amendments to IAS 1 “Presentation of Financial Statements”, and IAS 8 “Accounting policies, changes in accounting estimates
and errors” (effective from 1 January 2020), which clarified the definition of the word “material”. This standard has had no impact
on the financial statements.
— Amendments to References to Conceptual Framework in IFRS Standards (effective 1 January 2020). The impact of this has not
been material to the financial statements.
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(continued)
4 New standards, interpretations and amendments (continued)
— Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7), (effective 1 January 2020). The impact of this has
not been material to the financial statements.
The Group has not yet early adopted any standards, interpretations or amendments that have been issued but are not yet effective.
5. Accounting estimates and judgements
5.1 Judgement
Determination of material rights and contractual terms
The Group recognises licenced subscription revenue from the date that all set-up services have been completed, based on either
the user acceptance testing completion date or the “go-live” date. The contracts of the Group contain both termination clauses
and renewal options, and management makes a judgement on a contract-by-contract basis as to whether these clauses grant a
material right to the customer. Where management concludes that a material right exists, this material right affects the term over
which implementation revenue is recognised and whether it represents a separate performance obligation.
Development costs
The Group capitalises costs for product development projects. Initial capitalisation of costs is based on management’s judgement
that technological and economic feasibility is confirmed. Technological feasibility is achieved when a product development project
has reached a defined milestone according to an established project management model. Economic feasibility is achieved when a
market for the product has been identified.
Recognition of deferred tax assets
Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against
which the losses can be utilised. Management judgement is required to determine the amount of deferred tax assets that can be
recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies.
The Group has £15,549k (2020: £6,144k) of tax losses carried forward. These losses relate to subsidiaries that have a history of
losses, do not expire, and may not be used to offset taxable income elsewhere in the Group. The subsidiaries neither have any
taxable temporary difference nor any tax planning opportunities available that could partly support the recognition of these losses
as deferred tax assets.
On this basis, the Group has determined that it can only recognise deferred tax assets on the tax losses carried forward to the
extent that there are sufficient offsetting deferred tax liabilities and therefore future profits.
If the Group was able to recognise all unrecognised deferred tax assets, profit and equity would have increased by £2,961k (2020:
£1,058k). Further details on taxes are disclosed in Note 12.
Research and development tax credit
Management have recognised research and development tax credits for claims submitted for the year ended 31 March 2019
and 31 March 2020. The claim for the year ended 31 March 2019 has been submitted to HM Revenue & Customs and has been
successfully settled post year-end. Management have recognised the research and development tax credit for claims for the year
ended 31 March 2020 which have not yet been submitted to HM Revenue & Customs, based on the historical evidence that the
claim is likely to be successful. These claims are in relation to one subsidiary and management have not recognised research and
development tax credits for two subsidiaries where there is no past history of claims.
5.2 Estimates and assumptions
Development costs
In determining the amounts to be capitalised, management makes assumptions regarding the percentage of employee time spent
on development activities. At 31 March 2021, the carrying amount of capitalised development costs was £1,939k (2020: £963k).
In determining the estimated percentage of time, management considers: the role of the employee; whether the activity is of a
research nature (which is not capitalised); whether the standard activities the employee performs are project or customer specific
(not capitalised) or related to the development of the products of the entity; and an estimate of other time spent on administrative
activities such as training. The eventual percentage arrived at is reflective of the time spent purely on developing the services
of the group for sale to a range of customers. As a result, there is high level of estimation uncertainty to the estimates used.
Development costs capitalised are highly sensitive to the percentages used.
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(continued)
5. Accounting estimates and judgements (continued)
5.2 Estimates and assumptions (continued)
Impairment of goodwill and intangible assets
Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher
of its fair value less costs of disposal and its value-in-use. Management do not calculate the fair value less costs of disposal, as
reliable inputs to fair value are not available for the assets, therefore the recoverable amount is the value-in-use.
The value-in-use calculation is based on a Discounted Cash Flow (“DCF”) model. The cash flows are derived from the budget
for the next two years and projections for another 3 years and do not include restructuring activities that the Group is not yet
committed to or significant future investments that will enhance the performance of the assets of the CGU being tested. The
recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows and the
growth rate used for extrapolation purposes. These estimates are most relevant to goodwill recognised by the Group. The key
assumptions used to determine the recoverable amount for the different CGUs, including a sensitivity analysis, are disclosed and
further explained in Note 17.
Valuation of acquired intangibles
Management has made estimates in determining the value of intangible assets acquired in its business combinations. Due to the
variety of methods used to value intangible assets, as well as the numerous assumptions made on variables within the valuation,
there is a high level of estimation uncertainty. The values of intangible assets recognised are highly sensitive to changes in the
estimates and assumptions, as management have performed corroborating valuation analyses for each class of intangible assets
using alternative valuation methodologies. Please refer to Note 14 for more information.
6. Revenue
The following is an analysis of the Group’s revenue for the year from continuing operations:
Provision of software
Post-contract support and maintenance
Text message revenue
The following is an analysis of revenue by country of destination:
United Kingdom
Europe
United States
Rest of World
2021
£000
1,340
73
100
1,513
2021
£000
1,342
13
23
135
1,513
2020
£000
148
–
–
148
2020
£000
131
2
11
4
148
The following is an analysis of revenue by product line. Zesty Limited (Induction Zesty) was acquired on 8 June 2020, see Note 14
for further information.
Induction Zesty
Induction Guidance
Induction Switch
Timing of revenue recognition:
Services transferred over time
Services at point in time
2021
£000
872
636
5
1,513
2021
£000
1,347
165
1,513
2020
£000
–
148
–
148
2020
£000
148
–
148
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7. Expenses by nature
Employee costs
Depreciation of property, plant and equipment
Amortisation of intangible assets
Impairment of goodwill and intangible assets
Contractors’ costs
Acquisition related transaction costs
Professional and legal fees
Research and development expense capitalised
Share-based payment charge
Fair value adjustments on financial liabilities
Fair value adjustments on contract liabilities
2021
£000
5,123
7
1,340
1,366
1,103
375
359
(1,660)
698
91
152
2020
£000
2,106
–
323
–
538
150
583
(761)
94
83
–
Fair value adjustments on contract liabilities relate to the unwinding of adjustments made to the contract liabilities of acquirees at
acquisition. These adjustments unwind as the revenue to which the contract liability balance relates is recognised.
8. Auditors remuneration
Audit of these financial statements
Total audit fees
Interim financial statement review
Non-audit fees in relation to initial public offering
Total non-audit fees
Total audit and non-audit fees
The Group has not entered into any limitation of liability agreements with its auditors.
9. Employee benefit expenses
Employee benefit expenses (including directors) comprise:
Wages and salaries
Social security costs
Defined contribution pension cost
Share-based payment expenses
Other employee benefits
Total employee benefit expense
2021
£000
241
241
8
–
8
249
2021
£000
3,583
414
140
698
288
5,123
2020
£000
80
80
15
79
94
174
2020
£000
1,717
191
96
94
8
2,106
The monthly average number of persons, including the directors, employed by the Group during the year was as follows:
Development
Sales and Marketing
General and Administrative
Total Average FTE
2021
No. of employees
23
12
6
41
2020
No. of employees
11
2
3
16
The remuneration of the highest paid director was £259k (2020: £303k). Included in other employee benefits is £30k (2020: £Nil)
compensation for loss of office paid to a former director of the group.
The Group operates a defined contribution pension plan which was put in place in October 2018. The total expense relating to the
plan in the year was £140k (2020: £94k).
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(continued)
10. Share-based payments
Details of the employee share option of the Group
On the admission to the AIM market on 22 May 2019, the Group established the Non-tax Advantaged Share Option Plan (“the NTA
Plan” which awards executive directors, management and other employees share options. The awards are granted in the form of
share options over ordinary shares of £0.005 each with the intent of normal vesting after a minimum period of three years from the
date of grant, and an exercise price of £0.005 per option. Vesting is subject to continued services of the participant. No options
issued during the year had any vesting conditions other than service conditions attached. The Group accounts for the plan as an
equity settled plan. During the year ended 31 March 2021, the Group amended the vesting periods in the NTA Plan. The vesting
period were amended to allow for vesting in tranches, whereby one-third of the options awarded vest after 1 year of service, and
the remaining two-thirds of the options vest on a quarterly basis over the remaining 2 years.
Expense recognised during the year
The expense recognised for employee services received during the year is:
Expense arising from equity settled share-based payment transactions
Total expense arising from share-based payment transactions
2021
£000
698
698
2020
£000
94
94
Fair value of share options granted in the year
The fair value of share options is estimated at the grant date using a Black-Scholes-Merton model, taking into account the terms
and conditions on which the options were granted.
The expected life of share options is based on current expectations and is not necessarily indicative of exercise patterns that may
occur. Due to the fact that the Induction Healthcare Group plc does not have listed share data for the same period as the expected
life of the share options, the expected volatility is based on an average of the volatilities of comparable companies in comparative
industries and of the same market capitalisation as the Group. This volatility reflects an assumption that the volatility is indicative of
future trends, which may not necessarily be the actual outcome.
The weighted average remaining contractual life for the share options outstanding as at 31 March 2021 was 3.09 years (2020: 3.43).
Options expire after 10 years.
The weighted average fair value of options granted during the year was £0.93 (2020: £2.17).
The following share-based payment arrangements were in existence during the current and prior years:
Weighted average grant date fair value £
Exercise price £
Expected volatility %
Option life years
Risk Free interest rate %
Dividend rate %
Movements in share options during the year
The following reconciles the share options outstanding at the beginning and end of the year:
Balance at the beginning of the year
Granted during the year
Forfeited during the year
Outstanding at 31 March
Exercisable at 31 March 2020
Year to 31 March
2021
0.93
0.005
50.00
3.94
0.62
–
Year to 31 March
2020
1.03
0.005
50.00
3.94
0.62
–
2021
Number of
options (‘000)
288,153
2,765,185
(464,107)
2,589,231
303,071
2020
Number of
options (‘000)
–
431,351
(143,198)
288,153
–
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(continued)
11. Finance income and expense
Finance income
Interest on:
– Bank deposits
Total finance income
Finance expense
Other loan interest payable
Total finance expense
Net finance (expense) /income recognised in profit or loss
12. Tax expense
12.1 Income tax recognised in profit or loss
Current tax
Research & development tax credit
Total current tax
Deferred tax expense
Origination and reversal of timing differences
Prior year deferred tax movement
Total deferred tax
Tax income on loss on ordinary activities
2021
£000
2020
£000
3
3
5
5
(2)
2021
£000
(446)
(446)
(116)
59
(57)
(503)
47
47
–
–
47
2020
£000
–
–
–
–
–
–
The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax in the United
Kingdom applied to losses for the year are as follows:
Loss for the year
Tax at the standard rate of corporation tax of 19% (2020: 19.11%)
Non-tax deductible amortisation of goodwill and impairment
Expenses not deductible for tax purposes, other than goodwill, amortisation and impairment
Depreciation on tangible assets
Share-based payments
Prior year adjustments
Deferred tax not recognised
Other
Total tax income
2021
£000
(8,117)
(1,561 )
9
301
–
124
(386)
961
(50)
(503)
2020
£000
(3,527)
(674)
(1)
108
–
18
–
550
–
–
Changes in tax rates and factors affecting the future tax charges
Deferred tax balances have been recognised at the rate expected to apply when the deferred tax balance is forecast to be utilised
based on tax rates substantively enacted at 31 March 2021. A reduction in the UK corporate tax rate from 21% to 20% (effective
from 1 April 2015) was substantively enacted on 2 July 2013. Further reductions to 19% (effective from 1 April 2017) and to 18%
(effective 1 April 2020) were substantively enacted on 26 October 2015, and an additional reduction to 17% (effective 1 April 2020)
was enacted on 15 September 2016. This reduction was then reversed and a rate of 19% maintained from 1 April 2020, this was
substantively enacted on 17 March 2020. An increase in the UK corporate tax rate to 25% (effective 1 April 2023) was substantively
enacted on 11 March 2021.
This does not result in any significant change to these figures. The deferred taxes at 31 March 2021 have been calculated based on
the 19% tax rate.
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heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial Statements Notes (forming part of the financial statements)
(continued)
12. Tax expense (continued)
12.2 Current tax assets and liabilities
Current tax assets
R&D tax credit receivable
2021
£000
446
446
2020
£000
–
–
Current tax assets relate to research and development tax credits in respect of a subsidiary, for the years ended 31 March 2019 and
31 March 2020. The claim for the year ended 31 March 2019 was submitted to HMRC and settled post-year end. Other subsidiaries
do not have a recent history of claims and therefore an estimate for these has not been made, due to the uncertainty regarding
timing and amount of such claims.
12.3 Deferred tax balances
A deferred tax liability of £791k (2020: £321k) has been recognised in relation to fair value adjustments of intangible assets acquired
in business combinations. A deferred tax asset of £791k (2020: £97k) was recognised in relation to unused tax losses acquired in
business combinations. This deferred tax asset was recognised only to the extent that there are deferred tax liabilities available
with the same tax authority and which will be unwound in the same period as the deferred tax asset.
A deferred tax asset of £2,787k (2020: £1,058k) has not been recognised due to uncertainty that the asset will be utilised in the
foreseeable future as the Group has yet to obtain significant sources of income. The unrecognised deferred tax asset includes
those in relation to tax losses of £14,605k (2020: £6,144k) . These amounts exclude amounts related to Horizon Strategic Partners
Limited, which is expected to generate profits and for which a deferred tax asset of £89k (2020: £97k) has been recognised.
The following is the analysis of deferred tax assets/(liabilities) presented in the statement of financial position:
Deferred tax assets
Deferred tax liabilities
Deferred tax liabilities in relation to:
Intangible assets
Tax losses carried forward
Total deferred tax liability
Reconciliation of deferred tax liabilities, net
Opening deferred tax balance at tax rate of 19%
Deferred tax acquired in business combinations
Tax expense during the period recognised in profit or loss
Prior year movements
Closing deferred tax at tax rate of 19%
2021
£000
880
(1,048)
(168)
2021
£000
(1,048)
880
(168)
2021
£000
(224)
–
116
(59)
(168)
2020
£000
97
(321)
(224)
2020
£000
(321)
97
(224)
2020
£000
–
(224)
–
–
(224)
73
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial StatementsFinancial Statements Notes (forming part of the financial statements)
(continued)
13. Loss per share
(i) Basic loss per share
From continuing operations attributable to the ordinary equity holders of the Group
Total basic loss per share attributable to the ordinary equity holders of the Group
(ii) Diluted loss per share
From continuing operations attributable to the ordinary equity holders of the Group
Total diluted loss per share attributable to the ordinary equity holders of the Group
(iii) Reconciliation of loss used in calculating loss per share
Profit attributable to the ordinary equity holders of the Group used in calculating basic loss per share
and diluted loss per share:
From continuing operations
2021
£
(0.19)
(0.19)
2021
£
(0.19)
(0.19)
2020
£
(0.13)
(0.13)
2020
£
(0.13)
(0.13)
2021
£000
2020
£000
(7,614)
(7,614)
(3,527)
(3,527)
(iv) Weighted average number of shares used as the denominator
Shares in issue at the beginning of the period
Shares issued on share split
Shares issued
Shares issued on IPO
Shares issued on business combination
2021
number
29,626,201
–
–
–
12,424,527
Issued ordinary shares as at the end of the period
42,050,728
Weighted average number of ordinary shares used as the denominator in calculating basic loss per share 39,701,981
2020
number
65,591
13,052,609
3,826,086
12,681,915
–
29,626,201
26,189,458
On 9 June 2021, the Group acquired Attend Anywhere Pty Ltd (“Attend Anywhere”). The consideration for the acquisition included
the issue of 14,285,714 new Ordinary Shares.
As part of the transaction, the Group also completed a fundraise by issuing 35,714,285 new Ordinary Shares.
Both the above transactions would have significantly changed the number of shares outstanding used to calculate the loss per
share, if they had occurred prior to 31 March 2021.
74
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial Statements Notes (forming part of the financial statements)
(continued)
14. Business combinations during the year
14.1 Subsidiaries acquired
On 8 June 2020, Induction Healthcare Group plc acquired 100% of the share capital of Zesty Limited for a consideration comprising
£500k in cash, plus the issue of 12,424,527 New Ordinary Shares.
Zesty Limited is a digital healthcare patient engagement platform company. Zesty’s platform provides an integration layer with a
hospital’s electronic patient record (“EPR”) or patient administration system (“PAS”) and a portal that allows patients to manage
their hospital outpatient appointments, read their administrative and clinical correspondence, attend a video based consultation
and store a personal copy of their clinical record, through this integration layer.
Zesty was acquired due to the fact that integrating Zesty and Induction’s technologies, the enlarged group will, in the Directors’
view, be one of the first technology platforms to interconnect patients, clinicians and healthcare information across both multiple
hospital sites and EPR platforms. The Directors expect the acquisition to provide many synergistic benefits, including sales to the
same sales channel, pooling software engineering resources, and bringing extensive experience to management and the Board of
Directors.
Name
Zesty Limited
Principal activity
Provision of software to healthcare organisations
14.2 Consideration transferred
The following represents the consideration transferred to the owners of Zesty Limited.
Cash
Equity consideration
Total consideration
Proportion of
voting equity
interests
acquired
%
100
Consideration
transferred
£000
11,514
Date of
acquisition
08/06/20
Zesty Limited
£000
500
11,014
11,514
The fair value of cash consideration equals its carrying value. The fair value of the equity consideration has been determined with
references to the market value of the shares of Induction Healthcare Group plc immediately prior to the issue of the consideration
shares, adjusted for the impact of a lack of marketability discount of 10%.
14.3 Assets acquired and liabilities recognised at the date of acquisition
The following represents assets acquired and liabilities recognised on acquisition.
Non-current assets
Property, plant and equipment
Intangible assets
Other non-current assets
Current assets
Cash and cash equivalents
Other current assets
Non-current liabilities
Loans and borrowings
Deferred tax liabilities
Current liabilities
Other current liabilities
Loans and borrowings
Total identifiable net assets at fair value
Zesty Limited
£000
18
4,163
884
13
313
(417)
(791)
(821)
(85)
3,277
75
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial StatementsFinancial Statements
Notes (forming part of the financial statements)
(continued)
14. Business combinations during the year (continued)
14.3 Assets acquired and liabilities recognised at the date of acquisition (continued)
The separately identifiable intangible assets and valuation techniques used to measure the fair value of these material assets
acquired were as follows:
Valuation technique
Relief-from-royalty savings method. This method considers the discounted
estimated royalty payments that are expected to be avoided as a result of the
patents being owned.
Premium profits method. This method estimates the value of customer-related
assets by quantifying the impact on cash flows under a scenario in which the
customer related assets must be replaced, assuming all of the assets required
to operate the business are in place except the customer-related assets.
Replacement cost method. This method establishes value based on the
cost of reproducing or replacing the asset, less depreciation from functional
or economic obsolescence. A corroborating analysis was performed using
the multi-period excess earnings method. The multi-period excess earnings
method considers the present value of net cash flows expected to be
generated by the customer relationships, by excluding any cash flows related
to contributory assets.
Assets acquired
Trade Name
Users
Technology
14.4 Goodwill arising on acquisition
Consideration transferred
Total identifiable net assets at fair value
Goodwill arising on acquisition
14.5 Net cash outflow on acquisition
Zesty Limited
£000
11,514
3,277
8,237
2021
£000
(500)
(269)
(64)
13
(820)
Consideration paid in cash
Transaction costs of the acquisition (included in cash flows from operating activities)
Transaction costs attributable to the issuance of shares (included in cash flows from financing activities, net of tax)
Less: cash and cash equivalent balances acquired
Net cash flow on acquisition
Acquisition related costs of £269k were recognised in administrative expenses. Acquisition related costs of £64k relate to the
issuance of shares and were capitalised to share premium. All issue costs were recognised.
14.6 Impact of acquisition on the results of the Group
From the date of acquisition, Zesty Limited contributed £872k to the revenue of the group and net losses of £1,921k to the loss
before tax from continuing operations of the Group. If the acquisition had taken place at the beginning of the year, contribution to
revenue from continuing operations would have been £954k and contribution to loss before tax from continuing operations for the
Group would have been £2,306k.
76
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial Statements Notes (forming part of the financial statements)
(continued)
15. Business combinations completed in prior periods
15.1 Podmedics Limited
Subsidiary acquired
On 7 May 2019, Induction Healthcare Limited exercised the option to acquire the share capital of Podmedics Limited which was
acquired in September 2018 for £100k. Consequently, Dr Edward Wallitt, Induction Healthcare Limited and Podmedics Limited
entered into a share purchase agreement pursuant to which Induction Healthcare Limited acquired the entire issued share capital
of Podmedics Limited (06840040) from Dr Edward Wallitt. The consideration payable under the share purchase agreement was
£400k which was satisfied following Admission by the issue by the Company to Dr Edward Wallitt of 347,826 Ordinary Shares in the
capital of the Induction Healthcare Group PLC. Pursuant to the share purchase agreement, Dr Edward Wallitt granted customary
warranties and a tax deed to Induction Healthcare Limited. The primary reason for the acquisition was to bring under the Group’s
control all of the assets and intellectual property relating to Induction Switch.
The valuation technique used for measuring the fair value of material assets acquired was based on the replacement cost
approach.
The goodwill of £417k reflects the value of the anticipated long term revenue generating capabilities of the business. None of the
goodwill recognised is expected to be deductible for income tax purposes.
The operations of Podmedics Limited became dormant shortly after acquisition by the Group, and it has contributed £Nil to the loss
before tax of the Group. The operations and intellectual property of Podmedics have been included within the Induction CGU, and
continued to be developed by the Group as part of the operations of this CGU.
Consideration transferred
Exercise of option classified as other financial assets
Equity instruments (347,826 ordinary shares)
Total consideration transferred
Assets acquired and liabilities assumed at the date of acquisition
Intangible assets
Cash and cash equivalents
Trade and other receivables
Deferred tax liabilities
Other current liabilities
2020
£000
100
400
500
2020
£000
91
1
12
(17)
(4)
83
The valuation technique used for measuring the fair value of material assets acquired was based on the replacement cost
approach.
The goodwill of £417k reflects the value of the anticipated long term revenue generating capabilities of the business. None of the
goodwill recognised is expected to be deductible for income tax purposes.
If the combination had taken place at the beginning of the year, contribution to loss before tax from continuing operations for the
Group would have been £Nil.
Goodwill arising on acquisition
Consideration paid
Goodwill
2020
£000
(500)
(417)
77
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial StatementsFinancial Statements Notes (forming part of the financial statements)
(continued)
15. Business combinations completed in prior periods (continued)
15.1 Podmedics Limited (continued)
Analysis of cash flows on acquisition
Transaction costs of the acquisition (included in cash flows from operating activities)
Net cash acquired with the subsidiary (included in cash flows from investing activities)
Transaction costs attributable to the issuance of shares (included in cash flows from financing activities, net of tax)
Net cash flow on acquisition
2020
£000
(2)
1
–
(1)
Induction Healthcare Group plc issued 347,826 ordinary shares as consideration for the 100% interest in Podmedics Limited.
The fair value of £1.15 per share was calculated with reference to recent transactions with shareholders. This is also the price at
which the shares of the Company were placed at the Initial Public Offering on 22 May 2020.
The attributable costs of the issuance of the shares of £2k have been charged directly to equity as a reduction in the share
premium.
15.2 Horizon Strategic Partners Limited
Subsidiary acquired
On 5 November 2019, the Group acquired 100% of the share capital of Horizon Strategic Partners Limited, a non-listed company
based in the United Kingdom, in exchange for £507k initial cash consideration, contingent consideration of £1,325k and
assumed liabilities of £523k. Horizon owns Induction Guidance - a revenue-generating app providing medical organisations with
functionality to create, edit, and publish their own local medical guidelines (“Guidelines”) in a secure and locally administrated
environment. These guidelines can be accessed by clinicians, at the point of care, either on a mobile device or an intranet. The
Group acquired Horizon due to the fact that Induction Guidance brings to the Group a further substantial NHS user base.
Consideration transferred
Cash
Contingent consideration
Liabilities assumed
Total consideration transferred
2020
£000
507
1,325
523
2,355
Contingent consideration transferred
As part of the purchase agreement with the previous owners of Horizon Strategic Partners Limited, contingent consideration had
been agreed, in the form of an earn-out agreement. The contingent consideration was based on a multiple of 4.29 times the cash
collected from customers for subscription fees which were invoiced and paid from 1 October 2019 to 30 September 2020 (the earn-
out period). The cash collected from customers excluded a baseline cash amount of £225k plus VAT. Contract liabilities as at the
date of acquisition were deducted in arriving at the contingent consideration. The maximum amount to be paid out as contingent
consideration was £1,500k, based on a maximum cash target of £622k. The previous owners of Horizon Strategic Partners Limited
had the right to choose whether payment of the contingent consideration is settled in cash, or in shares of the Induction Healthcare
Group plc.
As at 31 March 2020, the key performance indicators of Horizon Strategic Partners Limited showed that it was highly probable that
the target would be achieved, and a remeasurement charge of £83,434 was recognised through profit or loss. The fair value was
determined using a probability-weighted expected value approach.
At the end of the earn-out period on 30 September 2020, Horizon Strategic Partners Limited reached the maximum cash target,
and therefore the maximum amount of £1,500k was paid out to the previous owners. This resulted in the increase in the fair value of
the contingent consideration liability to £1,500k prior to settlement, and remeasurement charge of £91k was recognised in profit or
loss.
78
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial Statements Notes (forming part of the financial statements)
(continued)
15. Business combinations completed in prior periods (continued)
15.2 Horizon Strategic Partners Limited (continued)
Assets acquired and liabilities recognised at the date of acquisition
Intangible assets
Cash and cash equivalents
Other current assets
Deferred tax assets
Non-current liabilities
Current liabilities
Total identifiable net assets at fair value
2020
£000
1,598
53
61
97
(304)
(285)
1,220
The deferred tax liability mainly comprises the tax effect of the accelerated depreciation for tax purposes of intangible assets
acquired in the business combination.
Contract liabilities were remeasured to fair value at the acquisition date to take into account the costs that market participants
would incur to acquire such contract liabilities.
The goodwill of £1,136k comprises the value of the established, long term revenue generating capabilities of the business. None of
the goodwill recognised is expected to be deductible for income tax purposes.
Assets acquired and liabilities recognised at the date of acquisition (continued)
The valuation techniques used for measuring the fair value of material assets acquired were as follows:
Valuation technique
Relief-from-royalty method
Multi-period excess earnings method
Replacement cost approach, corroborated with the relief-from-royalty method
Assets acquired
Trade Name
Users
Technology
Goodwill arising on acquisition
Consideration paid
Goodwill
Analysis of cash flows on acquisition
Transaction costs of the acquisition (included in cash flows from operating activities)
Net cash acquired with the subsidiary (included in cash flows from investing activities)
Transaction costs attributable to the issuance of shares (included in cash flows from financing activities, net of tax)
Net cash flow on acquisition
Impact of acquisition on the results of the Group
From the date of acquisition, Horizon Strategic Partners Limited contributed £148k of revenue and £73k in net profits to Group’s
loss before tax from continuing operations in the year ended 31 March 2021. If the acquisition had taken place at the beginning
of the year, contribution to revenue from continuing operations would have been £383k and contribution to loss before tax from
continuing operations for the Group would have been £43k for the year ended 31 March 2020.
79
2020
£000
(2,355)
(1,135)
2020
£000
(60)
53
–
(7)
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial StatementsFinancial Statements Notes (forming part of the financial statements)
(continued)
16. Subsidiaries
Details of the Group’s material subsidiaries at the end of the reporting period are as follows:
Proportion of
ownership interest in
ordinary shares and
voting power held by
the Group (%)
Name of subsidiary
Induction Healthcare
Limited
Induction Healthcare
(UK) Limited
Induction Healthcare
Pty Ltd
Podmedics Limited
Registered
number
11232772
11237890
Registered Address
20 St. Dunstan’s Hill,
London, EC3R 8HL
20 St. Dunstan’s Hill,
London, EC3R 8HL
625119397 23 Regent St, Prahran,
Victoria, Australia, 3181
06840040 20 St. Dunstan’s Hill,
London, EC3R 8HL
Horizon Strategic
Partners Limited
Zesty Limited
06285278 20 St. Dunstan’s Hill,
London, EC3R 8HL
08294659 20 St. Dunstan’s Hill,
London, EC3R 8HL
Principal activity
Investment holding
company
Provision of software to
healthcare providers
Provision of software to
healthcare providers
Provision of software to
healthcare providers
Provision of software to
healthcare providers
Provision of software to
healthcare providers
Place of incorporation
and operation
United Kingdom
Directly
owned by the
Company
√
2021
100
2020
100
United Kingdom
100
100
Australia
United Kingdom
United Kingdom
United Kingdom
100
100
100
100
100
100
100
–
√
√
√
There are no dormant subsidiaries not preparing and filing individual accounts by virtue of S394A and S448A of the Companies Act
2006.
Podmedics Limited (registered number 06840040) has taken advantage of the exemption from audit under Section 479A of the
Companies Act 2006, and Induction Healthcare Group plc has provided a parental guarantee in accordance with section 479C of
the Companies Act 2006.
All subsidiaries have reporting periods that end on 31 March 2021.
17. Goodwill
The following represents the carrying value of goodwill as at 31 March 2021.
Cost
Accumulated impairment
Cost
At 1 April
Additions as a result of business combinations
At 31 March
Accumulated impairment
Impairment charge
At 31 March
80
2021
£000
9,790
(417)
9,373
2021
£000
1,553
8,237
9,790
417
417
2020
£000
1,553
–
1,553
2020
£000
–
1,553
1,553
–
–
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial Statements Notes (forming part of the financial statements)
(continued)
17. Goodwill (continued)
17.1 Allocation of goodwill to cash generating units
Goodwill is allocated to the Group’s cash generating unit as follows:
Induction Zesty
Induction Guidance
Induction Switch
2021
£000
8,237
1,136
–
9,373
2020
£000
–
1,136
417
1,553
Induction Zesty
The Zesty CGU consists of the assets and cash flows related to the Zesty patient portal product. The recoverable amount of the
Zesty CGU of £10,902k as at 31 March 2021 has been determined based on a value-in-use calculation using cash flow projections
for a five-year period. The pre-tax discount rate applied to cash flow projections is 17.4% and cash flows beyond the five-year period
are extrapolated using a declining growth rate, determined using the H-model. The recoverable amount of this CGU exceeded its
carrying amount by £1,334k. No impairment charge resulted from this analysis. Refer to sensitivity disclosures below.
Induction Guidance
The Induction Guidance CGU consists of the assets and cash flows related to the Induction Guidance product line (formerly
MicroGuide, acquired as part of the acquisition of Horizon Strategic Partners). The recoverable amount of the Induction Guidance
CGU of £3,385k as at 31 March 2021 (2020: £3,830k) has been determined based on a value-in-use calculation using cash flow
projections for a five-year period. The pre-tax discount rate applied to cash flow projections is 17.7% (2020: 10.6%) and cash flows
beyond the five-year period are extrapolated using a 2% growth rate (2020: 2.7%). The recoverable amount of this CGU exceeded
its carrying amount by £1,231k. No impairment charge resulted from this analysis. Refer to sensitivity disclosures below.
Induction Switch
The Induction Switch CGU consists of the assets and cash flows related to the Induction Switch app. During the year ended 31
March 2021, the performance of the Induction Switch app did not align to management’s previous expectations and forecasts.
This was due to challenges in monetising the app, due to the COVID-19 pandemic changing priorities for the customers of the
Group. As a result of this, management’s forecasts of future cash inflows were updated to reflect these delays in monetisation.
The recoverable amount of the Induction Switch CGU of £Nil as at 31 March 2021 (2020: £11,441k) has been determined based
on a value-in-use calculation using cash flow projections for a five-year period. The pre-tax discount rate applied to cash flow
projections is 16.7% (2020: 17.9%) and cash flows beyond the five-year period are extrapolated using a 2% growth rate (2020: 2%).
An impairment charge of £1,366k was recognised on the Induction Switch CGU, and would have been included in administrative
expenses if presented by function on the statement of profit and loss. This impairment charge was allocated to all identifiable
individual assets within the CGU as follows: £417k to goodwill; £33k to intangible assets acquired in a business combination; and
£915k to capitalised development costs (refer Note 18). Management does not expect any further impairment of the assets related
to the Induction Switch CGU. Refer to sensitivity disclosures below.
Key assumptions used in value-in-use calculations and sensitivity to changes in assumptions
The calculation of value-in-use for all 3 CGU’s is most sensitive to the following assumptions:
— Earnings before interest, tax, depreciation and amortisation (“EBITDA”) margins
— Discount rates
— Growth rates used to extrapolate cash flows beyond the forecast period.
81
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial StatementsFinancial Statements Notes (forming part of the financial statements)
(continued)
17. Goodwill (continued)
17.1 Allocation of goodwill to cash generating units (continued)
Key assumptions used in value-in-use calculations and sensitivity to changes in assumptions (continued)
EBITDA – EBITDA is determined by deducting the budgeted costs to be incurred (cash outflows) from payments received
from customers. Cash inflows are determined based on detailed budgets for the first 2 years of the forecast period, and then
extrapolated for the remaining forecast period using an appropriately declining growth rate to reach the terminal growth rate.
Detailed budgets are determined using assumptions on existing customer renewal rates; sales of additional services to existing
customers; sales made to new customers; and pricing assumptions based on a standard price list as determined by the Group’s
pricing policy. Cash outflows are based on values achieved in the year to 31 March 2021, adjusted for an appropriate growth rate
depending on the nature of the cash outflow. Decreased demand can lead to a decline in EBITDA. A reasonable possible decrease
of 1% in EBITDA would not result in an impairment of either the Zesty or Induction Guidance CGU. A decrease of 7.4% would result
in the impairment of the Zesty CGU. A decrease of 32.6% would result in the impairment of the Induction Guidance CGU.
Discount rates – Discount rates represent the current market assessment of the risks specific to each CGU, taking into account
the time value of money and individual risks of the underlying assets that have been incorporated in the cash flow estimates. The
discount rate calculation is based on the specific circumstances of the Group and is derived from the weighted average cost of
capital (WACC). The WACC takes into account both debt and equity. The cost of equity is derived from the expected return on
investment by the Group’s investors. The cost of debt is based on the interest-bearing borrowings the Group is obliged to service.
CGU specific risk is incorporated by applying individual beta factors. The beta factors were evaluated for the first time in the year
ended 31 March 2020, based on publicly available market data. Adjustments to the discount rate are made to factor in the specific
amount and timing of the future tax flows in order to reflect a pre-tax discount rate. The assumptions made in determining the
discount rate were updated during the year ended 31 March 2021 to reflect the changes in the nature of the business as a result of
the acquisition of Zesty Limited.
A reasonable possible rise in the pre-tax discount rate to of 1% 18.4% in the Zesty CGU would result in the elimination of the
headroom of the CGU. A rise in the pre-tax discount rate of 5.5% to 23.2% in the Induction Guidance CGU would result in the
elimination of the headroom of the CGU.
Terminal growth rate The terminal growth rate is the growth rate used to forecast cash inflows and outflows into perpetuity. As
the terminal growth rate for the Induction Guidance and Induction Zesty CGU’s is 2%, there would be no material impact to the
recoverable amount of any decreases in the terminal growth rate.
18. Intangible assets
Cost
At 1 April 2019
Additions internal
Acquired through business combinations
At 31 March 2020
Additions – internally developed
Acquired through business combinations
At 31 March 2021
Capitalised
development
costs
£000
197
761
229
1,187
1,660
1,081
3,928
Trade name
£000
Users
£000
Technology
£000
–
–
264
264
–
369
633
–
–
919
919
–
507
1,426
36
–
277
313
–
2,205
2,518
Total
£000
233
761
1,689
2,683
1,660
4,162
8,505
82
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial Statements Notes (forming part of the financial statements)
(continued)
18. Intangible assets (continued)
Accumulated amortisation and impairment
At 1 April 2019
Charge for the year
At 31 March 2020
Charge for the year
Impairment charge
At 31 March 2021
Net book value
At 1 April 2019
At 31 March 2020
At 31 March 2021
Capitalised
development
costs
£000
Trade name
£000
–
224
224
851
915
1,990
197
963
1,939
–
15
15
61
7
83
–
249
550
Users
£000
–
53
53
189
23
265
–
866
1,161
Technology
£000
10
31
41
239
3
283
26
271
2,234
Total
£000
10
323
333
1,340
948
2,621
223
2,349
5,884
The impairment charge of £948k recognised on capitalised development costs and acquired intangible assets relates to the
allocation of the impairment loss recognised in the Induction CGU to individual assets within the CGU. Refer Note 17 for further
information.
19. Property, plant and equipment
Cost
Additions
Acquired through business combinations
Disposals
At 31 March 2021
Accumulated depreciation and impairment
Charge owned for the year
Acquired through business combinations
Disposals
At 31 March 2021
Net book value
At 31 March 2020
At 31 March 2021
Fixtures and
fittings
£000
Computer
equipment
£000
–
3
–
3
6
40
(18)
28
Fixtures and
fittings
£000
Computer
equipment
£000
–
2
–
2
–
1
7
23
(16)
14
–
14
Total
£000
6
43
(18)
31
Total
£000
7
25
(16)
16
–
15
83
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial StatementsFinancial Statements Notes (forming part of the financial statements)
(continued)
20. Trade and other receivables
Trade receivables
Trade receivables net
Total financial assets other than cash and cash equivalents classified as loans and receivables
Prepayments and accrued income
Other receivables
Total trade and other receivables
2021
£000
723
723
723
151
22
896
2020
£000
80
80
80
34
26
140
The carrying value of trade and other receivables classified as loans and receivables approximates fair value.
Trade receivables are non-interest bearing and are generally on terms of 30 days. Included within trade and other receivables is
£nil expected to be recovered in more than 12 months (2020: £nil).
An allowance for expected credit losses is not material to the Group, due to the nature of the customers of the Group (primarily
NHS), for which the risk of default has been assessed to be negligible.
21. Contract assets
Balance at 1 April
Transfers from contract assets recognised at the beginning of the year, on invoice
Transfers from contract assets not recognised at the beginning of the year, on invoice
Additions for subscriptions commenced, not yet invoiced
Impairment of a contract asset
Changes due to business combinations
Contracts costs – to obtain a contract
Amortisation of contract costs to obtain a contract
Contract costs – to fulfil a contract
Amortisation of contract costs to fulfil a contract
Balance at 31 March
22. Cash and cash equivalents
Cash at banks and on hand
Short-term deposits
Cash and cash equivalents per the statement of financial position and cash flow statement
2021
£000
23
(23)
(371)
400
(5)
11
35
(10)
330
(235)
155
2020
£000
–
–
–
3
–
20
–
–
–
–
23
2021
£000
872
1,600
2,472
2020
£000
671
10,047
10,718
Cash at banks earn interest at floating rates based on daily bank deposit rates. Short-term deposits are made on weekly basis,
depending on the immediate cash requirements of the Group, and earn interest at the respective short-term deposit rates.
84
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial Statements Notes (forming part of the financial statements)
(continued)
23. Trade and other payables
Trade payables
Other payables
Accruals
Total financial liabilities, excluding loans and borrowings, classified as financial liabilities measured at
amortised cost
Other payables tax and social security payments
Total trade and other payables
2021
£000
289
70
760
1,119
277
1,396
2020
£000
39
15
299
353
49
402
The carrying value of trade and other payables classified as financial liabilities measured at amortised cost approximates fair value.
Included within trade and other payables is £nil expected to be settled in more than 12 months (2020: £nil).
All trade and other payables are non-interest bearing and are normally settled on 30 day terms.
24. Contract liabilities
Current
Non-current
Balance at 1 April
Revenue recognised that was included in the contract liability balance at the beginning of the year
Revenue recognised, not included in contract liability balance at the beginning of the year
Increases due to cash received, excluding amounts recognised as revenue during the year
Changes due to business combinations
Other changes
Balance at 31 March
25. Share capital
2021
£000
1,027
187
1,214
2021
£000
302
(222)
(1,261)
2,074
159
162
1,214
2020
£000
263
38
302
2020
£000
–
–
(148)
229
221
–
302
For the purposes of the Group’s capital management, capital includes issued share capital, share premium and all other equity
reserves attributable to the equity holders of the parent. The primary objective of the Group’s capital management is to maximise
shareholder value. The Group manages its capital structure and makes adjustments in light of changes in economic conditions and
the requirements of the financial covenants. The Group does not have any interest-bearing loans and borrowings. There have been
no changes to the Group’s capital management policies and processes during the year ended 31 March 2021.
Authorised
Shares treated as equity
Ordinary shares of £0.0050 each
2021
Number (‘000)
2021
£000
2020
Number (‘000)
42,052
42,052
210
210
29,627
29,627
2020
£000
148
148
85
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial StatementsFinancial Statements
Notes (forming part of the financial statements)
(continued)
25. Share capital (continued)
Issued and fully paid
Ordinary shares of £0.0050 each
At 1 April
Share split
Issue of shares pre-IPO
Issue of shares to settle loans and borrowings
Issue of shares as consideration for a business combination
Issue of shares on IPO
At 31 March
2021
Number (‘000)
2021
£000
2020
Number (‘000)
29,627
–
–
–
12,425
–
42,052
148
–
–
–
62
–
210
66
13,053
1,739
1,739
348
12,682
29,627
2020
£000
66
–
9
9
2
62
148
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 Induction Healthcare Group plc.
The number of share options granted to employees of the Group that are exercisable at 31 March 2021 is 303,071. An equivalent
number of shares are reserved for issue.
26. Reserves
The following represents the movement in the share premium:
Share premium
Ordinary shares of £0.0050 each
At 1 April
Share split
Issue of shares pre-IPO
Issue of shares to settle loans and borrowings
Issue of shares as consideration for a business combination
Issue of shares on IPO
Share issue costs capitalised
At 31 March
2021
£000
2020
£000
18,432
–
–
–
–
–
–
18,432
–
–
1,991
1,991
398
14,521
(469)
18,432
Foreign exchange reserve
The translation reserve comprises all foreign exchange differences arising since 5 March 2018 (date of incorporation) from the
translation of the financial information of foreign operations.
Merger reserve
On 1 April 2019, Induction Healthcare Group plc and Induction Healthcare Limited executed a share for share exchange, whereby
Induction Healthcare Group plc acquired 100% of the share capital in Induction Healthcare Limited, in consideration for the
issuance of shares in Induction Healthcare Group plc to the shareholders of Induction Healthcare Limited. This was done on the
basis of one ordinary share in Induction Healthcare Group plc for each ordinary share in Induction Healthcare Limited.
Induction Healthcare Group plc issued 65,590 shares with a nominal value of £1 to the holders of equivalent shares in Induction
Healthcare Limited. This has been treated as a common control transaction and the comparative historical financial statements
have been presented as if the transaction had already taken place. At the point of acquisition, Induction Healthcare Limited had
retained losses of £10,388k, and therefore a merger reserve has been recognised for this amount. The transaction has been
accounted for at book value.
Where the conditions set out in section 612 of the Companies Act 2006 or equivalent sections of previous Companies Acts are
met, shares issued as part of the consideration in a business combination are measured at their fair value in the Consolidated
Balance Sheet, and the difference between the nominal value and fair value of the shares issued is recognised in the merger
reserve.
86
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial Statements Notes (forming part of the financial statements)
(continued)
26. Reserves (continued)
Merger reserve (continued)
On 8 June 2020, Induction Healthcare Group plc acquired 100% of the share capital of Zesty Limited for a consideration comprising
£500k in cash, plus the issue of 12,424,527 New Ordinary Shares. This acquisition was effected by way of a share-for-share
exchange, whereby the shareholders of Zesty Limited exchanged their shares for an equivalent number of shares in Induction
Healthcare Group plc. The difference between the nominal amount of the shares and the fair value of the shares has been
recognised in the merger reserve. The following represents the movement in the merger reserve:
At 1 April
Issue of shares as consideration for a business combination
Share issue costs capitalised
At 31 March
2021
£000
(10)
10,953
(64)
10,879
2020
£000
–
(10)
–
(10)
Other reserves
Other reserves arise from the Group’s equity settled share option scheme. Refer to Note 10 for further details.
27. Financial instruments fair values and risk management
27.1 Financial assets
The following table shows the carrying amounts and fair values of financial instruments as at 31 March 2021 and 31 March 2020. For
financial assets not measured at fair value, the carrying amount is considered to be a reasonable approximation of fair value.
Financial assets measured at amortised cost
Trade receivables
Other receivables
Prepayments
Cash and cash equivalents
Other financial assets
2020
£000
723
22
151
2,471
447
3,814
2020
£000
80
53
7
10,718
–
10,858
The business does not hold any other form of financial assets
Management have assessed that the fair values of cash and short-term deposits and other receivables approximate their carrying
amounts largely due to the short-term maturities of these instruments.
27.2 Financial liabilities
The following table shows the carrying amounts and fair values of financial liabilities as at 31 March 2021 and 31 March 2020. For
financial liabilities not measured at fair value, the carrying amount is considered to be a reasonable approximation of fair value.
Financial liabilities measured at amortised cost
Trade and other payables
Financial liabilities at fair value through profit or loss
Contingent consideration
2020
£000
1,391
–
1,391
2020
£000
402
1,409
1,811
87
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial StatementsFinancial Statements
Notes (forming part of the financial statements)
(continued)
27. Financial instruments fair values and risk management (continued)
27.2 Financial liabilities (continued)
As part of the purchase agreement with the previous owners of Horizon Strategic Partners Limited concluded during the year
ended 31 March 2020, contingent consideration was agreed, in the form of an earn-out agreement. The contingent consideration
was based on a multiple of 4.29 times the cash collected from customers for customer subscriptions (over and above the baseline
cash amount of £225k), which were invoiced and paid from 1 October 2019 to 30 September 2020 (the earn-out period). Contract
liabilities as at the date of acquisition were deducted in arriving at the contingent consideration. The maximum amount to be paid
out as contingent consideration was £1,500k. The previous owners of Horizon Strategic Partners Limited had the right to choose
whether payment of the contingent consideration was effected in cash, or in shares of the Induction Healthcare Group plc.
Included in the net identifiable assets acquired and liabilities assumed of Zesty Limited was a loan of £501k. This loan was repaid in
full during the year. The following represents the movements in the loans and borrowings of the group for the year ended 31 March
2021:
Balance on 1 April
Incurred on acquisition through a business combination
Proceeds from loans and borrowings
Repaid during the year
Balance on 31 March
27.3 Fair value measurements
The following table reconciles the balance of the contingent consideration:
Balance on 1 April
Incurred on acquisition through a business combination
Loss on remeasurement to fair value recognised in other operating expenses
Settlement
Balance on 31 March
2020
£000
–
501
–
(501)
–
2020
£000
2,500
–
500
(3,000)
–
2020
£000
1,409
–
91
(1,500)
–
2020
£000
–
1,325
83
–
1,409
At the end of the earn-out period on 30 September 2020, Horizon Strategic Partners Limited reached the maximum cash target,
and therefore the maximum amount of £1,500k was paid out to the previous owners. This resulted in the increase in the fair value of
the contingent consideration liability to £1,500k prior to settlement, and remeasurement charge of £91k was recognised in profit or
loss. The previous owners of Horizon Strategic Partners Limited elected full settlement in cash.
27.4 Financial risk management objectives
The Group’s principal financial liabilities, other than contingent consideration, comprise loans and borrowings, and trade and other
payables. The main purpose of these financial liabilities is to finance the Group’s operations. The Group’s principal financial assets
include trade receivables, and cash and short-term deposits that derive directly from its operations.
The Group has exposure to the following principal financial risks in the operation and management of its business:
(i) Market risk
(ii) Foreign currency risk;
(ii) Credit risk; and
(iii) Liquidity risk
27.5 Market risk
Market risk is the risk that he fair value or future cash flows of a financial instrument will fluctuate because of changes in market
prices, such as foreign exchange rates, interest rates and equity prices. Market risk comprises three types of risk: interest rate risk,
currency risk and other price risk. Interest rate risk is not considered to be material to the Group. The Group is not exposed to any
other market risks aside from foreign currency risk
88
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial Statements Notes (forming part of the financial statements)
(continued)
27. Financial instruments fair values and risk management (continued)
27.6 Foreign currency risk management
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign
exchange rates. The Group’s exposure to the risk of changes in foreign exchange rates relates primarily to the Group’s operating
activities (when revenue or expense is denominated in a foreign currency) and the Group’s net investments in foreign subsidiaries.
The Group’s main exposure is to the United States dollar and the Australian dollar. However, the Group’s exposure is limited as
the sums involved are relatively small. The Group has a bank account denominated in Australian dollars and the Group’s exposure
to foreign exchange risk is limited by ensuring the Group has enough cash in this account to cover approximately six months
of expenditure. The Group’s exposure to foreign currency risk is as follows. This is based on the carrying amount for monetary
financial instruments other financial assets and liabilities based on notional amounts. Sensitivity analysis has not been presented as
the effects of reasonably possible strengthening or weakening of the foreign currencies below would not have a material impact on
the Group’s financial information.
Australian dollar
US dollar
Euro
Sterling
Liabilities
2021
£000
(6)
–
–
(1,390)
(1,396)
Assets
2021
£000
7
16
–
3,331
3,354
27.7 Credit risk management
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations and arises principally from the Group’s receivables from customers and investment securities. The Group’s principal
financial assets are cash and cash equivalents, trade receivables, other financial assets, and other receivables, the carrying values
of which represent the Group’s maximum exposure to credit risk in relation to financial assets, as shown in this note. The Group’s
credit risk is primarily attributable to its cash and cash equivalents. The credit risk arising from cash and cash equivalents is limited
because the counterparties are banks with Triple-A credit-ratings assigned by international credit rating agencies.
The credit risk arising from trade receivables and contract assets is assessed as limited, due to the nature of the counterparties,
which consist of primarily NHS customers. Therefore, no provision for expected credit losses has been recognised on trade
receivables or contract assets
2020
Trade receivables
Contract assets
2021
Trade receivables
Contract assets
Current
£000
<30 days
£000
30 – 60 days
£000
60 – 90 days
£000
>91 days
£000
44
23
460
60
29
–
112
–
6
–
–
–
–
–
121
–
–
–
30
–
27.8 Liquidity risk management
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s treasury policies
are designed to ensure that sufficient cash is available to support current and future business requirements. Cash management is
a core feature of the Group’s business model and rolling cash flow forecasts, updated on at least a monthly basis, are reviewed to
manage these requirements. At 31 March 2021 (and 31 March 2020), the contractual maturity of all financial liabilities was less than
12 months.
89
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial StatementsFinancial Statements Notes (forming part of the financial statements)
(continued)
28. Related party transactions
Balances and transactions between the Group and its subsidiaries, which are related parties of the Group, have been eliminated on
consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties are disclosed
below.
28.1 Identities of related parties with whom the Group has transacted
Note 16 provides information about the Group’s structure, including subsidiaries and the holding company. The related parties with
whom the Group has transacted are i) the subsidiaries within the group and ii) key management personnel.
28.2 Compensation of key management personnel
The remuneration of the directors and other members of key management personnel during the year was as follows:
Short-term employee benefits
Post-employment pension and other benefits
Termination benefits
Share-based payment transactions
Bonus
Other benefits
Total compensation paid to key management personnel
Key management remuneration comprises short-term benefits only.
29. Contingent liabilities
2021
£000
791
44
74
322
30
–
1,261
2020
£000
584
92
–
13
–
–
689
As at 31 March 2020 the Group had £nil contingent consideration liabilities (2020: £1,409k). The contingent consideration liability
was settled during the year. Refer Note 27 for more information.
30. Events after the reporting date
On 9 June 2021, the Group acquired Attend Anywhere Pty Ltd (“Attend Anywhere”), a private Australian-based video consultation
provider in the UK. The Acquisition (which comprised the acquisition of 818 shares in Attend Anywhere together with the
acquisition of 1 share in A.C.N. 167 231 307 Pty Ltd, a company which owns the remaining shares in Attend Anywhere) resulted in
Induction owning the whole issued share capital (100%) and voting rights of Attend Anywhere.
The acquisition of Attend Anywhere is an opportunity for the Induction Healthcare Group to provide a comprehensive virtual
care platform for hospitals, doctors and patients. Attend Anywhere extends the Group’s existing product set with a mature video
consultation platform already being widely used by NHS hospitals across the UK. It will also deliver Attend Anywhere customers an
even higher standard of user support, technical resilience and customer service, via the Group’s existing UK based infrastructure.
The consideration for the Acquisition comprised £16,348k in cash including an amount equal to Attend Anywhere’s net assets at
completion of the Acquisition as calculated in accordance with the SPA (estimated to be £788k) and the issue of 14,285,714 new
Ordinary Shares (the “Consideration Shares”).
As part of the transaction, on 8 June 2021, the Company announced that it had raised £25 million through a placing of 35,714,285
new Ordinary Shares at a price of 70p per share. Part of the proceeds of the Placing was used to fund the Cash Consideration and
fees in respect of the Acquisition and the remainder will be used to provide the Group with additional working capital.
Following completion of the Acquisition, Chris Ryan, Attend Anywhere’s CEO, joined the Company’s executive management team
and holds 11,002,445 Ordinary Shares.
The Group is in the process of determining the accounting impacts of the acquisition and completing the purchase price allocation
in accordance with IFRS 3, however this is not yet complete. Therefore, the Group has determined that providing the disclosures
required by IFRS 3 for business combinations effected after the reporting date is not practicable.
90
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial Statements Company Statement of Financial
Position
as at 31 March 2021
Company Statement of Financial Position
as at 31 March 2021
Assets
Non-current assets
Other non-current investments
Amounts receivable from group companies
Total non-current assets
Total assets
Liabilities
Current liabilities
Trade and other payables
Other financial liabilities
Total current liabilities
Total liabilities
Net assets
Issued capital and reserves
Share capital
Share premium
Merger reserve
Other reserves
Retained earnings
TOTAL EQUITY
Note
2021
£’000
2020
£’000
4
5
6
7
8
9
9
9
9
14,639
4,585
19,224
19,224
507
–
507
507
18,717
210
18,432
10,879
792
(11,596)
18,717
2,514
12,668
15,182
15,182
52
1,409
1,461
1,461
13,721
148
18,432
(10)
94
(4,943)
13,721
The loss for the year for the Company was £6,653k (2020: £4,943k).
The notes on pages 94 to 99 form an integral part of these Financial Statements.
The financial statements were approved and authorised for issue by the board of directors on 22 September 2021 and were signed
on its behalf by:
James Balmain
CEO
Company registered number: 11852026
91
Induction HealthcareAnnual Report & Accounts 2021Financial StatementsFinancial Statements
Company Statement of Changes in
for the year ended 31 March 2021
Equity
Company Statement of Changes in Equity
for the year ended 31 March 2021
At 1 April 2019
Total comprehensive loss for the year
Loss for the year
Total comprehensive loss for the year
Transactions with owners, in their capacity as owners
Shares issued in share-for-share exchange
Pre-IPO shares issued
Shares issued to settle loan notes
Issue of ordinary shares as consideration for a business
combination
IPO shares issued
Share-issue costs
Equity-settled share-based payments
Total contributions by and distributions to owners
At 31 March 2020
At 1 April 2020
Total comprehensive loss for the year
Loss for the year
Total comprehensive loss for the year
Transactions with owners, in their capacity as owners
Issue of ordinary shares as consideration for a business
combination
Share-issue costs
Equity-settled share-based payments
Total contributions by and distributions to owners
At 31 March 2021
Share capital
£’000
1
Share
premium
£’000
–
Merger
reserve
£’000
–
Other
reserves
£’000
–
Retained
earnings
£’000
–
Total equity
£’000
1
–
–
66
9
9
2
62
–
–
148
148
148
–
–
62
–
–
62
–
–
–
1,991
1,991
398
14,521
(469)
–
18,432
18,432
18,432
–
–
–
–
–
–
–
–
(10)
–
–
–
–
–
–
(10)
(10)
(10)
–
–
10,953
(64)
–
10,889
210
18,432
10,879
–
–
–
–
–
–
–
–
94
94
94
94
–
–
–
–
698
698
792
(4,943)
(4,943)
(4,943)
(4,943)
–
–
–
–
–
–
–
–
(4,943)
(4,943)
56
2,000
2,000
400
14,583
(469)
94
18,664
13,721
13,721
(6,653)
(6,653)
(6,653)
(6,653)
–
–
–
–
11,015
(64)
698
11,648
(11,596 )
18,717
The notes on pages 94 to 99 form an integral part of these Financial Statements.
92
Induction HealthcareAnnual Report & Accounts 2021Financial Statements Company Cash Flow Statement
Company Cash Flow Statement
for the year ended 31 March 2021
Cash flows from operating activities
Loss for the year
Adjustments for
Fair value adjustment of contingent consideration
Other non-cash movements
Movements in working capital:
Decrease/(increase) in amounts due from group companies
Increase in trade and other payables
Net cash from/(used in) operating activities
Cash flows from financing activities
Issue of ordinary shares
Share issue costs
Net cash (used in) /from financing activities
Net cash increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the end of the year
The notes on pages 94 to 99 form an integral part of these Financial Statements.
2021
£’000
2020
£’000
(6,653)
(4,943)
91
32
123
6,138
456
64
–
(64)
(64)
–
–
83
92
175
(13,399)
52
(18,114)
18,583
(469)
18,114
–
–
93
heading 2Induction HealthcareAnnual Report & Accounts 2021Financial StatementsFinancial Statements Notes to the company financial
statements
Notes to the company financial statements
1. Accounting policies
1.1 Going concern
The Company operates as an investment company for the Induction Healthcare Group plc, holding investments in subsidiaries
financed by Group companies. As the Company is an intrinsic part of the Group’s structure, the Directors have a reasonable
expectation that Group companies will continue to support the Company through trading and cash generated from trading for
the foreseeable future. On this reason, the Directors have adopted the going concern assumption in preparing the financial
statements. Please refer to Note 1.2 in the consolidated financial statements for Induction Healthcare Group plc for going concern
considerations for the Group.
1.2 Share-based payments
Share-based payment transactions of the Company
Where the Company grants share-based awards over its own shares in exchange for employee services rendered to its
subsidiaries, it recognises an increase to the cost of investment equivalent to the share-based payment expense recognised in the
consolidated financial statements and a corresponding credit in other reserves in equity.
The Company recharges the expenses for share-based awards relating to employees employed UK subsidiaries to the subsidiary
which employs the respective employee at an amount equivalent to the respective share-based payment expense recognised in
the consolidated financial statements relating to those subsidiary employees. The Company recognises in its individual financial
statements an allocated percentage of the share-based payment charge for employees performing some duties for the Company,
as well as an increase to amounts due from related parties and a corresponding decrease in the cost of investment. Therefore, the
cost of investment increases by the share-based payment expense recognised in the consolidated financial statements net of any
recharges and amounts relating to services supplied to the company. Refer to Note 2 of the consolidated financial statements for
the accounting policy in respect of share-based payments.
1.3 Financial instruments
Financial assets and liabilities are recognised on the Company statement of financial position when the Company becomes a
contractual party to the instrument. When financial instruments are recognised initially, they are measured at fair value, which is
the transaction price plus, in the case of financial assets and financial liabilities not measured at fair value through profit and loss,
directly attributable transaction costs.
2. Reporting entity
Induction Healthcare Group Plc (the ‘Company’) is a public company incorporated, domiciled and registered in England in the
United Kingdom. The Company’s registered office is at 20 St Dunstan’s Hill, London, EC3R 8HL. The Company’s principal activity is
the provision of software to healthcare professionals.
3. Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards, International
Accounting Standards and Interpretations (collectively IFRSs) .
Details of the Company’s accounting policies, including changes during the year, are included in note 1.
The Company has taken advantage of the exemption available under section 408 of the Companies Act 2006 and elected not to
present its own Income statement or Statement of comprehensive income in these financial statements.
In preparing these financial statements, management has made judgements, estimates and assumptions that affect the application
of the Company accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ
from these estimates.
Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.
The areas where judgements and estimates have been made in preparing the financial statements and their effects are disclosed
in note 5 in the Group financial statements.
The financial statements have been prepared on the historical cost basis.
These financial statements are presented in pound sterling, which is the Company’s functional currency. All amounts have been
rounded to the nearest pound, unless otherwise indicated.
94
heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial Statements
(continued)
Notes to the company financial statements
(continued)
4.
Investments in subsidiaries
The investments in subsidiaries represent the investments of Induction Healthcare Group plc in Induction Healthcare Limited,
Horizon Strategic Partners Limited and Zesty Limited (acquired during the year) . All three entities are wholly owned subsidiaries of
the Company. A full list of subsidiaries is included in Note 16 of the Consolidated financial statements for the Group.
On 1 April 2019, Induction Healthcare Group plc and Induction Healthcare Limited executed a share for share exchange, whereby
Induction Healthcare Group plc acquired 100% of the share capital in Induction Healthcare Limited, in consideration for the
issuance of shares in Induction Healthcare Group plc to the shareholders of Induction Healthcare Limited. This was done on the
basis of one ordinary share in Induction Healthcare Group plc for each ordinary share in Induction Healthcare Limited. Induction
Healthcare Group plc issued 65,590 shares with a nominal value of £1 to the holders of equivalent shares in Induction Healthcare
Limited. This was treated as a common control transaction in the prior year.
On 5 November 2019, the Group acquired 100% of the share capital of Horizon Strategic Partners Limited, in exchange for £507k
initial cash consideration, contingent consideration of £1,325k and assumed liabilities of £523k.
On 8 June 2020, Induction Healthcare Group plc acquired 100% of the share capital of Zesty Limited for a consideration comprising
£500k in cash, plus the issue of 12,424,527 new ordinary shares.
During the year, the group impaired the investment in Induction Healthcare Limited by £55k, its full carrying value, due to the
impairment of the Induction Switch CGU, of which it is a part. Refer to Note 17 in the consolidated financial statements for further
information.
Balance at 1 April
Acquisitions of new subsidiaries
Share-based payments
Impairment
Balance at 31 March
5. Amounts receivable from group companies
2021
£’000
2,514
11,514
666
(55)
14,639
2020
£’000
–
2,420
94
–
2,514
Amounts receivable from group companies comprise loans due from group companies of £4,585k (2020: £12,668k) . The loans
are interest free and repayable on demand. Lifetime expected credit losses of £5,750k (2020: £4,678k) have been recognised on
amounts due from group companies. These amounts have been classified as non-current, as there is no intention to demand
repayment of these amounts within 12 months from 31 March 2021.
Balance at 1 April
Loans to group companies
Provision for expected credit losses
Amounts receivable from group companies
Total non-current portion
The carrying value of trade and other receivables classified as loans and receivables approximates fair value.
2021
£’000
12,668
(2,333)
(5,750)
4,585
4,585
2020
£’000
–
17,436
(4,768)
12,668
12,668
95
heading 1heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial StatementsFinancial Statements (continued)
Notes to the company financial statements
(continued)
6. Trade and other payables
The following table summarises the balance of trade and other payables. The amounts owed to group companies represent £288k.
This is an interest free arrangement and is repayable on demand.
Accruals
Amounts due to group companies
Total current portion
7. Other financial liabilities
2021
£,000
219
288
507
2020
£,000
27
25
52
Other financial liabilities relate to the contingent consideration paid on the acquisition of Horizon Strategic Partners Limited. At
the end of the earn-out period on 30 September 2020, Horizon Strategic Partners Limited reached the maximum cash target, and
therefore the maximum amount of £1,500k was paid out to the previous owners. This resulted in the increase in the fair value of
the contingent consideration liability to £1,500k prior to settlement, and remeasurement charge of £91k was recognised in profit or
loss. The previous owners of Horizon Strategic Partners Limited elected full settlement in cash.
Balance at 1 April
Incurred on acquisition through a business combination
Loss on remeasurement to fair value recognised in other operating expenses
Settlement
Balance on 31 March
8. Share capital
2021
£’000
1,409
–
91
(1,500)
–
2020
£’000
–
1,325
83
–
1,409
For the purposes of the Group’s capital management, capital includes issued share capital, share premium and all other equity
reserves attributable to the equity holders of the parent. The primary objective of the Group’s capital management is to maximise
shareholder value. The Group manages its capital structure and makes adjustments in light of changes in economic conditions and
the requirements of the financial covenants. The Group does not have any interest bearing loans and borrowings. There have been
no changes to the Group’s capital management policies and processes during the year ended 31 March 2021.
Authorised
Shares treated as equity
Ordinary shares of £0.0050 each
Issued and fully paid
Ordinary shares of £0.0050 each
At 1 April
Share split
Issue of shares pre-IPO
Issue of shares to settle loans and borrowings
Issue of shares as consideration for a business combination
Issue of shares on IPO
At 31 March
2021
Number (‘000)
2021
£000
2020
Number (‘000)
42,052
42,051
210
210
29,627
29,627
2021
Number (‘000)
2021
£000
2020
Number (‘000)
29,627
–
–
–
12,425
–
42,052
148
–
–
–
62
–
210
66
13,053
1,739
1,739
348
12,682
29,627
2020
£000
148
148
2020
£000
66
–
9
9
2
62
148
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 Induction Healthcare Group plc.
96
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial Statements Notes to the company financial statements
(continued)
9. Reserves
Share premium
Ordinary shares of £0.0050 each
At 1 April
Share split
Issue of shares pre-IPO
Issue of shares to settle loans and borrowings
Issue of shares as consideration for a business combination
Issue of shares on IPO
Share issue costs capitalised
At 31 March
2021
£000
2020
£000
18,432
–
–
–
–
–
–
18,432
–
–
1,991
1,991
398
14,521
(469)
18,432
Foreign exchange reserve
The translation reserve comprises all foreign exchange differences arising since 5 March 2018 (date of incorporation) from the
translation of the financial information of foreign operations.
Merger reserve
On 1 April 2019, Induction Healthcare Group plc and Induction Healthcare Limited executed a share for share exchange, whereby
Induction Healthcare Group plc acquired 100% of the share capital in Induction Healthcare Limited, in consideration for the
issuance of shares in Induction Healthcare Group plc to the shareholders of Induction Healthcare Limited. This was done on the
basis of one ordinary share in Induction Healthcare Group plc for each ordinary share in Induction Healthcare Limited.
Induction Healthcare Group plc issued 65,590 shares with a nominal value of £1 to the holders of equivalent shares in Induction
Healthcare Limited. This has been treated as a common control transaction and the comparative historical financial statements
have been presented as if the transaction had already taken place. At the point of acquisition, Induction Healthcare Limited had
retained losses of £10k, and therefore a merger reserve has been recognised for this amount. The transaction has been accounted
for at book value.
Where the conditions set out in section 612 of the Companies Act 2006 or equivalent sections of previous Companies Acts are met,
shares issued as part of the consideration in a business combination are measured at their fair value in the Consolidated Balance
Sheet, and the difference between the nominal value and fair value of the shares issued is recognised in the merger reserve.
On 8 June 2020, Induction Healthcare Group plc acquired 100% of the share capital of Zesty Limited for a consideration comprising
£500k in cash, plus the issue of 12,424,527 New Ordinary Shares. This acquisition was effected by way of a share-for-share
exchange, whereby the shareholders of Zesty Limited exchanged their shares for an equivalent number of shares in Induction
Healthcare Group plc. The difference between the nominal amount of the shares and the fair value of the shares has been
recognised in the merger reserve. The following represents the movement in the merger reserve:
At 1 April
Issue of shares as consideration for a business combination
Share issue costs capitalised
At 31 March
2021
£000
(10)
10,953
(64)
10,879
2020
£000
–
(10)
–
(10)
Other reserves
Other reserves arise from the Group’s equity settled share option scheme. Refer to Note 10 in the consolidated group financial
statements for further details.
97
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial StatementsFinancial Statements Notes to the company financial statements
(continued)
10. Related party transactions
Balances and transactions between the Company and its subsidiaries, which are related parties of the Company, have been
eliminated on consolidation and are not disclosed in this note. Details of transactions between the Group and other related parties
are disclosed below.
10.1 Identities of related parties with whom the Group has transacted
Note 16 provides information about the Group’s structure, including subsidiaries and the holding company. The related parties with
whom the Group has transacted are i) the subsidiaries within the group and ii) key management personnel.
10.2 Compensation of key management personnel
The remuneration of the directors and other members of key management personnel during the year was as follows:
Short-term employee benefits
Post-employment pension and other benefits
Termination benefits
Share-based payment transactions
Bonus
Other benefits
Total compensation paid to key management personnel
Key management remuneration comprises short-term benefits only.
2021
£000
791
44
74
322
30
–
1,261
2020
£000
584
92
–
13
–
–
689
Directors’ remuneration has been disclosed in the Directors’ report. Refer to page 37 and 38, tables “Directors remuneration ” and
“Directors’ shareholding and share interests ”.
10.3 Transactions with subsidiaries
Included in amounts due from group companies is an amount of £4,722k due from Induction Healthcare Limited. This arose as a
result of loans made to Induction Healthcare Limited as intermediate holding company to fund the operations of the group. The
loan carries interest at 0% and is repayable on demand.
Included in trade and other payables is an amount of £269k due to Induction Healthcare (UK) Limited. This arose as a result of
payments made by Induction Healthcare (UK) Limited on behalf of Induction Healthcare Group plc. The loan carries interest at 0%
and is repayable on demand.
Included in trade and other payables is an amount of £19k due to Induction Healthcare Pty Ltd. This arose as a result of payments
made by Induction Healthcare Pty Ltd on behalf of Induction Healthcare Group plc. The loan carries interest at 0% and is repayable
on demand.
Included in trade and other payables is an amount of £4k due to Zesty Limited. This arose as a result of payments made by Zesty
Limited on behalf of Induction Healthcare Group plc. The loan carries interest at 0% and is repayable on demand.
11. Events after the reporting date
On 9 June 2021, the Group acquired Attend Anywhere Pty Ltd (“Attend Anywhere”) , a private Australian-based video consultation
provider in the UK. The Acquisition (which comprises the acquisition of 818 shares in Attend Anywhere together with the
acquisition of 1 share in A.C.N. 167 231 307 Pty Ltd, a company which owns the remaining shares in Attend Anywhere) resulted in
Induction owning the whole issued share capital (100%) and voting rights of Attend Anywhere.
The acquisition of Attend Anywhere is an opportunity for the Induction Healthcare Group to provide a comprehensive virtual
care platform for hospitals, doctors and patients. Attend Anywhere extends the Group’s existing product set with a mature video
consultation platform already being widely used by NHS hospitals across the UK. It will also deliver Attend Anywhere customers an
even higher standard of user support, technical resilience and customer service, via the Group’s existing UK based infrastructure.
98
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial Statements Notes to the company financial statements
(continued)
11. Events after the reporting date (continued)
The consideration for the Acquisition comprised £15,560k in cash plus an amount equal to Attend Anywhere’s net assets at
completion of the Acquisition as calculated in accordance with the SPA (estimated to be £787k) and the issue of 14,285,714 new
Ordinary Shares (the “Consideration Shares”) .
As part of the transaction, on 8 June 2021, the Company announced that it had raised £25 million through a placing of 35,714,285
new Ordinary Shares at a price of 70p per share. Part of the proceeds of the Placing was used to fund the Cash Consideration and
fees in respect of the Acquisition and the remainder will be used to provide the Group with additional working capital.
Following completion of the Acquisition, Chris Ryan, Attend Anywhere’s CEO, joined the Company’s executive management team
and holds 11,002,445 Ordinary Shares.
The Group is in the process of determining the accounting impacts of the acquisition and completing the purchase price allocation
in accordance with IFRS 3, however this is not yet complete. Therefore, the Group has determined that providing the disclosures
required by IFRS 3 for business combinations effected after the reporting date is not practicable.
99
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Financial StatementsFinancial Statements Company Information
Additional Information
Company Information
Non-Executive Chair
Chief Executive Officer1
Group Executive Director1
Non-Executive Director
Non-Executive Director
Non-Executive Director
Solicitors
Pinsent Masons LLP
Third Floor
Quay 2
139 Fountainbridge Edinburgh
EH3 9QG
Nominated advisers and brokers
Singer Capital Markets2
1 Bartholomew Lane
London
EC2N 2AX
Registered Office
20 St Dunstan’s Hill
London
EC3R 8HL
Registered Number
11232772
Company Website
www.inductionhealthcare.com
Directors
Chris Spencer
James Balmain
Hugo Stephenson
Jane Silber
Leslie-Ann Reed
Andrew Williams
Secretary
Alison Talbot
20 St Dunstan’s Hill
London
EC3R 8HL
Auditors
KPMG LLP
The Pinnacle
170 Midsummer Blvd
Milton Keynes
MK9 1FD
Primary Bankers
HSBC Bank Ltd
172 Upper Richmond Road London
SW15 2SH
Public Relations
Walbrook Public Relations
75 King William Street
London
EC4N 7BE
induction@walbrookpr.com
1
James Balmain and Hugo Stephenson were joint CEO’s during the year
ended 31 March 2021. On the 6th September 2021, Hugo Stephenson
took a new role as Group Executive Director and James Balmain
became sole CEO
2
Numis Securities Ltd were the Company’s nominated adviser and
broker during the year until 4 March 2021, at which point the Company
appointed Singer Capital Markets.
100
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021
Glossary
Additional Information
Glossary
Alternative Investment Market (AIM)
Annual General Meeting (AGM)
Attend Anywhere Pty Ltd (Attend Anywhere, Induction Anywhere)
Electronic Health Record (EHR)
Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA)
General Data Protection Regulation (GDPR)
Horizon Strategic Partners Limited (Induction Guidance, Horizon and Microguide)
Induction Healthcare Group PLC (Group, Induction, Induction Healthcare and Company)
Initial Public Offering (IPO)
Milton Keynes University Hospital Foundation Trust (MKUH)
Monthly recurring revenue (MRR)
National Health System (NHS)
Patient administration system (PAS)
Podmedics Limited (Podmedics, Induction Switch)
Return on Investment (ROI)
Software as a service (SaaS)
The Quoted Companies Alliance (the QCA Code)
Zesty Limited (Induction Zesty, Zesty)
101
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Additional InformationAdditional Information
Reader’s Notes
Reader’s Notes
102
heading 1heading 2heading 1heading 2Induction HealthcareAnnual Report & Accounts 2021Additional Information
This document is printed on Galerie Satin, a paper sourced
from well managed, responsible, FSC® certified forests and
other controlled sources. The pulp used in this product is
bleached using an elemental chlorine free (ECF) process.
20 St. Dunstanʼs Hill
London
EC3R 8HL
Tel: 03339398091
Email: support@inductionhealthcare.com