About us
We are a leading digital health company committed to
improving the infrastructu re of care delivery. Our
products facilitate efficient patient and care team
engagement, combining digital with in‑person care
delivery – we call this ‘flexible care’.
Our products power remote consultations, capture patient
reported data and empower patients to self-manage their
care pathway. We are passionate about designing around
the needs of the patient and we sharply focus on the
delivery of cost and efficiency benefits to hospitals,
regional care systems and governments.
l in the British Isles.
Index of contents
Contents
Overview
Business highlights
Strategic report
Chair’s statement
CEO statement
Our Product Market
1
1
2
2
4
6
Financial review 10
Strategic Report
13
S172 Statement 14
Principal risks and uncertainties 17
Governance
23
Directors Biographies 23
Corporate Governance Report
24
Remuneration Committee Report 27
Audit Committee Report
Nomination Committee Report
Directors’ report
Statement of Directors’
responsibilities
Financial Statements
30
32
33
35
36
Independent auditors’ report 36
Consolidated Statement of
Comprehensive Income 43
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
44
45
46
47
92
93
Company Cash Flow Statement 94
Notes to the company
financial statements
95
Additional Information 102
Company Information 102
Glossary
103
Induction Healthcare
Annual Report & Accounts 2023
Business headlines
Revenue from customer contracts
Year ending
Pro-forma Year ending
1
31 March 2023
31 March 2022
£13.6m
£12.1m
2
i
w
e
v
r
e
v
O
• First full year of revenue from
Induction Attend Anywhere
•
EBITD A 3
Y ear ending
EBITD A 3
Ye a r e n d i n g
31 Marc h 2023
£(4.8m)
3 1 Ma rch 2 0 2 2
•
£(5.3m)
Induction Zesty revenues
significantly up with strong
sales pipeline growth into FY24
Induction Attend Anywhere
national contract renewals with
NHS Scotland and NHS Wales
Cash on hand
as at 31 March 2023
£4.3m
(2022: £7.5m)
4
ARR
As at 31 March 2023
£13.5m
(2022: £12.3m)
• Business rightsizing
programme completed by
year-end
• Adjusted EBITDA loss £(3.6m)
(2022 loss £(3.8m)) after adjusting for
non-cash, exceptional items see page 11.
•
Induction Switch product
divested (post-period end)
1 Reported revenue from continuing operations is stated after reclassifying assets held for sale under IFRS5 (Induction Switch and Induction Guidance
£0.7m). These product assets were held for sale at year end 31 March 2023 and classified under discontinued operations (Total recognised revenue from
continuing operations £12.9m plus discontinuing operations £0.7m was £13.6m)..
2 Reported revenue from customer contracts as at 31 March 2022 is stated after the application of IFRS3 being a fair value adjustment (£4.2m) relating
to the deferred revenue acquired as part of the Attend Anywhere Pty Limited acquisition in June 2021. Had this adjustment not been applied, pro-forma
recognised revenue from customer contracts for the year would have been £12.1m compared with the reported figure of £7.9m. See page 10.
3 EBITDA is Operating Loss from continuing operations (£17.4m) before depreciation £0.1m, amortisation £4.8m and non-cash impairment £7.7m.
4 Annual Recurring Revenue (“ARR”) is defined as annualised contracted Software-as-a-Servic e (“SaaS”) fee. ARR is calculated as the annually recurring
licence fees from contracts existing at 31 March 2023 that expire on 1 April 2023 or later. It represents the annualised value of the recurring revenue base that
is expected to be carried into future periods, and its growth is a forward-looking indicator of reported recurring revenue growth. ARR differs from recognised
revenue due to the timing of revenue recognition, which includes amounts for partial years based on contract start dates, whereas ARR is an annualised
amount. Recognised revenue also includes non-recurring non-SaaS fees.
1
Induction Healthcare
Strategic Report
Annual Report & Accounts 2022
Chair’s statement
The year ending March 2023 has been a
particularly challenging period for Induction
Healthcare Group plc (“Induction”). The Group has
faced both market challenges, as the NHS has
struggled to come to terms with the new post
Covid reality, and internal challenges precipitated
by our own managerial failings. As a Board we
recognised and addressed both of these strong
headwinds, putting in place a series of measures
which have been both painful and absolutely
necessary, but which have been vindicated.
Attend Anywhere is a video platform specifically designed for
clinicians and hospitals and their patients and has several unique
features which directly address these needs. However, these
features are costly to support and it is often tempting for hospital
trusts to opt for Microsoft Teams or similar which are perceived as
being ‘free’. Despite these pressures Attend Anywhere has retained
most, if not all, of its share – retaining Wales, Scotland and many of
the English Trusts, demonstrating the benefits of a health-specific
application.
As reported at the time, last year’s financial audit was severely
delayed and this, combined with other key indicators, led the Board
to conclude that significant changes were necessary to the
management and internal processes of the company.
Having reached the middle of the first quarter of financial year
2024, it is apparent that, the strong medicine we have
administered to the business is having a positive impact and,
although it is too early to be definitive, the future looks
distinctly brighter. Market opportunities are also opening up
as Government policy stabilises in the post Johnson/Truss
era.
The lack of healthcare policy consistency immediately post
Covid era as well as the lack of clarity over central funding
characterised most of the financial year. As waiting lists
expanded and as the Department of Health struggled to line
up behind clear, funded policies to address the problem, the
previously announced commitments to invest in digital
platforms were constantly delayed. As a consequence,
expectations of growth, particularly with NHS commissioning
groups for our appointment setting platform Zesty were
seriously delayed.
By early 2023 it was becoming clear that a more consistent
and properly funded digital approach to the challenge of
cutting waiting times was emanating from the Department of
Health. It is from this revised approach that Induction hopes
to benefit from over the coming year and the current
indications are positive.
At the same time as our expected growth in the Zesty
platform has been delayed by policy indecision so also our
video conferencing platform (Attend Anywhere) has come
under pricing and competitive pressure from a combination of
post Covid changes in usage patterns and a more active
challenge to our previously strong market position.
In December 2022 we replaced the senior management with an
interim team - with the Chair stepping into the executive role, Paul
Tambeau moving to interim COO and John McIntosh interim CFO
position. The Board and the executive moved quickly to stem the
cash outflows and to create a sustainable business that would
ensure that we have no requirement to come to the market for more
cash. Our previous CEO (James Balmain) moved to a commercial
sales position focused on Zesty. This move ideally suited his skills
and expertise and his ongoing activity in this role, as well as
providing the link between sales and product definition, is proving
invaluable.
The ‘right sizing’ of Induction necessitated cutting both our
ambitions, our activities, and our headcount. We put on hold our
ambition to grow by acquisition and at the same time we
significantly reduced the breadth of our activities. We cut out non-
core activity (i.e. activity that doesn’t relate exclusively to secondary
healthcare) and set about divesting our non-core assets (the clinical
apps comprising Switch and Guidance). At the same time, we
reduced our headcount and associated cost base by circa 30%.
We also ruthlessly examined our hosting cost base and have seen
that cost fall by over 35%. The resulting rightsizing programme has
eliminated annualised expenditure of c. £6 million, putting the
Group on a sustainable footing for the future. All cash costs relating
to the Group’s restructuring have been fully recognised in the
results to 31 March 2023.
The full year results outcome was an EBITDA loss on continuing
operations which narrowed to £4.8m (2022: £5.3m) with the right-
sizing process completing in March 2023. To this end the full year
results before tax for 31 March 2023 are a watershed, reflecting the
impact of certain material non-cash impairment charges. Inclusive
of a non-cash impairment charge of £7.7m (2022: £ nil), the
Group’s loss for the year reached £17.4m (2022: Loss £8.4m).
2
Induction Healthcare
Annual Report & Accounts 2023
These measures were painful on every level, however we
now have a sustainable business which is smaller, leaner
and significantly more focused. We also have a business
which is better able to meet the digital challenges, as well
as the opportunities, that the fast-changing NHS
presents.
In response to the challenge we faced in the middle of last year
we have also sought to enhance our Board – both in terms of
people and our processes. To this end we appointed Ian
Johnson as our senior non-executive director. Ian has a wealth of
experience in the healthcare environment. Meanwhile we said
farewell to Leslie-Ann Reed who resigned at the end of her term
in October 2023. More recently, and subsequent to the end of the
financial year (May 2023), we announced that Hugo Stephenson,
a director and founder, resigned at the end of his term. We thank
both for their service to Induction. Consistent with our
commitment to hire a permanent leadership team, Paul Tambeau
(CEO) and John McIntosh (CFO) were appointed to the board on
30 June 2023. At the same time, with the outlook more positive,
I stepped back to the non-executive Chair position.
Whilst, as a Board, we know that these changes have been
fundamental to a sustainable future, we also know that they would
not have been made possible without the drive and support of our
leadership teams and all employees – across all the geographies
we operate in. As a result of their action and determination we can
look forward to significantly improved prospects for 2024 and we
genuinely thank them for their part in turning our business around.
Finally, it remains for me to thank our long-suffering shareholders.
You have placed your confidence in the Board, the leadership team
and in me. I believe that in time we will justify that confidence.
Christopher Samler
Non-executive Chair
28 July 2023
3
Induction Healthcare
Strategic Report
Annual Report & Accounts 2023
Chief Executives Officer’s Review
Double Digit Growth
FY23 saw a 12.1% increase in recognized revenue from all
operations and 9.7% increase in ARR. Whilst this partly relates to
the business being able to recognize a full year of Attend
Anywhere revenue, our main growth engine was Zesty, growing
from £1.5m in FY22 to £2.2m in FY23.
In addition to this growth within Zesty, there are a number of
Trusts which have purchased Zesty via our partners Oracle Cerner
and SystemC for deployment in FY24 but are yet to be recognized
as contracted ARR while we finalise flow-through contracting with
our partner. Induction also played a leadership role in partnering
with the NHS Wayfinder Programme in embedding core Zesty
functionality into the NHS App, including single sign-on. This will
position Induction well for growth into the future as the NHS seeks
to move more patient-facing activities into the NHS App.
With our Attend Anywhere business, we were pleased to renew
our national contract with NHS Scotland contract for 3 years, and
our NHS Wales national contract for another 1 year, with the
option to renew for an additional year. We retained a large
proportion of our NHS England contracts despite challenging
market conditions.
Market Conditions Impacting Growth
Renewals in our Attend Anywhere business, especially within NHS
England, were under pressure as the national funding that
supported these contracts during COVID came to an end. This put
downward pressure on pricing as Trusts, many of which are
already under financial constraint, had to find budget to fund the
renewal. We were successful at renewing 81% of these contracts.
With the NHS’s national contract with Microsoft, we also saw
Trusts looking at Teams as an alternative solution. Whilst Teams
doesn’t have some of the health-specific capability of Attend
Anywhere, such as robust waiting room functionality, we’ve had to
work with Trusts in recognizing the administrative burden this
would put on them. Finally, with the health care sector moving to
more in-person appointments following COVID, we have seen a
decline in usage of video consultations. Our Customer Success
team has prioritized getting closer to our customers to help drive
utilization and to help generate continuing value for patients and
clinicians.
Notwithstanding the strong growth in our Zesty business, there
were delays in the NHS Wayfinder program as well as the
provision of national funding for Trusts to procure a portal. NHS
procurement cycles and processes also factored into our
growth in FY23.
Business Rightsizing & Focus
In the last quarter of FY23, we executed a plan to right-
size the business and get our costs in check so that
Induction was on a more sustainable footing. This
involved reducing the Group’s headcount (across a mix of
employees and contractors) across our global team. It
also involved reducing our operating costs, particularly
web hosting and professional fees. The result of this
program was circa 30% being cut from the c.£1.5m
monthly operating costs incurred at the beginning of the
final quarter of the year.
In completing the restructuring, we also reshaped
business processes and provided a much-needed focus
to all areas of the Group’s operation. The result is a
better understanding of the economics of our products
and where and how it should be playing to maximize
margin. In March 2023, we gained approval of our FY24
Operating Plan and Budget which built on our approach
of closely managing costs, focusing on key priorities, and
delivering value to the customer.
In focusing the business on our core strategy, we had to
look at our product suite. With the development of a new
integrated product strategy, our focus going forward will
be on supporting the interactions between care teams
and patients. That meant we have decided to divest
assets that don’t align with this strategy, notably Induction
Switch and Induction Guidance. The Induction Switch
business was subsequently sold for a material
undisclosed sum post year end. We also decided to shut
down our Booking application since much of this
functionality sits within Zesty, and it wasn’t generating
sufficient revenue to justify significant investments
required to upgrade the technology.
Finally, in the short term, we are going to be focused on
the UK market. International growth is an important part
of the Group’s future, but only once we have stabilized
the UK business and matured our business operations to
take on new territories.
4
Induction Healthcare
Strategic Report
Annual Report & Accounts 2023
Chief Executives Officer’s Review (continued)
Looking Ahead with Renewed Focus
Within our FY24 Operating Plan, we’re going to be
focused on executing on 4 Key Goals:
• To b e a profitable and sustainable growing busin e ss to
d e liver our commitments to sha re h o l d e rs. This involves
strengthening our sales capabilities and capitalizing on
near-term growth opportunities. We are working to
industrialise systems and processes within the business to
ensure we continue to closely monitor our cost base.
• To successfully develop our Integrated Product. We are
investing in bringing functionality from Zesty, Attend
Anywhere and FormBuilder together for customers in a
way that enables us to be responsive to customer needs.
With these building blocks in place, we will be looking at
how we expand our capabilities to meet growing customer
needs.
• To b e customer centric and commercial i n e ve ryth i n g
w e d o . We will get closer to our customers to truly
understand their pressures and how we can support them.
Our customers also have valuable insight into how our
integrated product should develop.
Outlook
As we execute on our plan, we believe there are market
factors that can generate new growth for the business.
Underlying demand for digital healthcare services is growing
as the NHS seek to make up for COVID-driven backlogs,
while at the same time treating new patients. This has
resulted in potential new funding streams from the NHS to
tackle these challenges, presenting a strong opportunity for
the business going forward.
The NHS continues to prioritize further developments within
the NHS App, enabling Induction to become more
embedded in the health ecosystem. There is also new
funding available to Trusts to procure or enhance their
patient portals, which Induction is well positioned to
capitalize on.
We’re also seeing increasing demand for integrating the
capabilities of both our Zesty and Attend Anywhere
platforms, creating a better experience for clinicians and
patients.
Given the rightsizing changes we have already
implemented, and the growth opportunities in front of us, we
are confident this puts the Group in a sustainable position.
• To i mplement a n d co n ti n u o u sl y d e ve l o p a n i n cl u si ve ,
p e rformance driven and rewarding employee exp e ri e n ce . We
are investing in the growth and development of our people as
we seek to build a culture where people want to grow their
careers.
Paul Tambeau
CEO
28 July 2023
5
Induction Healthcare
Strategic Report
Annual Report & Accounts 2023
Our Products and Markets
Our Market Challenge
In quarter four of FY23 we took on our greatest challenge as a growing business. Despite the effectiveness of our core
technologies and the resilience of our customer base, we needed to right size our business and refresh our leadership team.
The outcome is a fresh go-to-market approach, and operational focus on building a strong foundation for sustainable growth
in FY24.
How we have changed
Challenge
Sustainable growth Refresh Leadership
Strategy
Execution of cost
containment
. Augmented board skills
. Refresh C-Suite
. Turnaround experience
Sustainable budget
. Achieve cost reduction
. Margin strengthening
Actions
. Christopher Samler became non-exec Chair.
. Ian Johnson as Senior Independent Director
. Interim COO (now CEO)1
. Interim CFO (now CFO) 1
. James Balmain stepped into a commercial role
. Successful Q4 cost containment process.
. Reduced web hosting costs.
. Headcount reduction
Refresh Market
Response
Integrated product
Redefine & validate
integrated product
Created integrated product roadmap.
. Redefined the customer offering
. Goal delivery aligned with staff performance
review and incentives
Divestment of non-
core assets
Core business focus
. Effect separation of
non-core product.
Successful post year end divestment of Induction
Switch, our directory app; Induction Guidance
product asset ready for sale.
1: The Company announced the appointment of Paul Tambeau as CEO and John McIntosh as CFO on 30 June 2023.
Our Market context
There is no doubt that the NHS is going through one of its most challenging times and Induction is responding to this
challenge by providing healthcare customers in the NHS with services that address the goal of delivering digital service
pathways and reduce waiting list pressures on an overstretched NHS.
.
6
Induction Healthcare
Strategic Report
Annual Report & Accounts 2023
Strategic Report (continued)
Induction product capabilities meet our healthcare customers’ needs
Induction is well positioned to help our healthcare customers tackle their strategic priorities. Our integrated product strategy
maps our vision of a highly effective, secure, convenient secondary care patient pathway aligned with our customers’ needs.
Healthcare
system challenges
Healthcare Provider
needs
Induction capabilities that m eet
needs
Shortage of
healthcare workers
Patient self service
Flexible working
Strained
hospital capacity
Cost reduction
Remote risk assessment
Early discharge
Patient self-service
Efficiency in secondary
care patient pathways
Treat based on need
Flexible working
Eliminate waste paper
Reduce administration
Improve utilization of
physical space
Insights on outcomes to
improve decision making
Self-service appointment
management
Patient initiated follow ups (PIFU)
Forms
Remote consultations
Self-service appointment
management
Patient initiated follow ups (PIFU)
Forms
Remote consultations
Digital documents & letters
Analytics
Sustainable
operations & net zero
Eliminate documentation
Reduce travel
Digital documents & letters
Remote consultations
I
N
D
U
C
T
O
N
I
I
N
T
E
G
R
A
T
E
D
P
R
O
D
U
C
T
We see these capabilities as a key opportunity for Induction, not just to support the long-term strategic objectives for NHS
structures, but to deliver early success, through our integrated product.
Our Integrated product solution:
•
•
•
Delivers a secure, convenient, efficient service providing effective healthcare specific video conferencing support and
digital pathways across a trust or nation region which is accessible to all.
Helps tackle health inequity by offering a safe space for people to access their secondary care provider; and
Provides analytical insight to inform healthcare planning by providing a regional and national picture of the changing
needs and issues of accessing secondary care.
7
Induction Healthcare
Strategic Report
Annual Report & Accounts 2023
Product suite – our integrated products
Zesty is a comprehensive solution that delivers tangible
benefits to patients and providers. With Zesty, healthcare
providers can increase efficiency, reduce administrative
burden, and improve patient satisfaction. Patients benefit
from a convenient and secure healthcare experience,
resulting in improved outcomes and better overall health.
At Induction Healthcare, we are committed to
transforming healthcare delivery through innovative
technology solutions like Zesty.
Induction Zesty
Induction Zesty (“Zesty”) is an innovative digital platform that
transforms the healthcare experience for patients and providers
alike. Zesty is a user-friendly, secure, and efficient solution that
streamlines the patient journey from appointment booking to post-
appointment follow-up.
Our value proposition is centred around three key benefits:
• C o n ve n i e n ce : With Zesty, patients can book appointments,
manage their healthcare records, and communicate with their
healthcare providers at any time, from anywhere. No more waiting
on hold or scheduling appointments during office hours. Zesty
makes healthcare accessible and convenient for all.
• Effici e n cy: Zesty's intelligent scheduling system optimizes clinic
schedules, reducing wait times and minimizing patient no-shows.
Our platform also automates appointment reminders and follow-
up communications, allowing providers to focus on delivering
high-quality care rather than administrative tasks.
• Se cu ri ty: Zesty is built with robust security features to
ensure patient data is protected at all times. Our
platform is fully compliant with GDPR, HIPAA, and
NHS Digital security standards, providing patients with
peace of mind knowing their sensitive information is
safe and secure.
8
Induction Healthcare
Strategic Report
Annual Report & Accounts 2023
Our platform is built with industry-leading security and
privacy features to ensure patient information is
protected at all times. Healthcare providers can deliver
personalized care and treatment plans that meet
patients' unique needs, resulting in better outcomes and
improved patient satisfaction.
Attend Anywhere is a comprehensive solution that
delivers tangible benefits to patients, healthcare
providers, and the broader healthcare system. With
Attend Anywhere, healthcare providers can increase
efficiency, reduce wait times, and improve patient
outcomes. Patients benefit from a more convenient and
accessible healthcare experience, resulting in better
health outcomes and improved quality of life. At
Induction Healthcare, we are committed to transforming
healthcare delivery through innovative technology
solutions like Attend Anywhere.
Guidance remains a trusted standard for clinical content
distribution. It has been adopted across the NHS (in 75% of
Acute Trusts), hitting 15 million page views in FY23.
Induction Attend Anywhere
Induction Attend Anywhere (“Attend Anywhere”) - A
powerful platform that connects patients and healthcare
providers in a secure and user-friendly virtual
environment. Our platform is designed to improve access
to care, reduce waiting times, and enhance the overall
patient experience.
Our value proposition is centred around three key benefits:
• Acce ss: Attend Anywhere makes healthcare more
accessible by eliminating geographic and logistical
barriers. Patients can connect with healthcare providers
from the comfort of their own home, eliminating the need
to travel long distances or take time off work for an
appointment. This is particularly beneficial for patients
with mobility issues, chronic conditions, or those who live
in remote areas.
• C o nvenience : Attend Anywhere is easy to use, intuitive,
and available on any device with an internet connection.
Patients can schedule appointments, conduct video
consultations, and receive medical advice and treatment
from their healthcare provider without leaving their home
or office.
• Qu a l i ty: Attend Anywhere provides a high-quality,
secure, and reliable virtual environment that enables
patients and healthcare providers to communicate
effectively.
Induction FormBuilder
FormBuilder enables our customers to digitise clinical and
administrative forms. This means that standard forms can be
safely and efficiently assigned to end users in electronic format
through the Zesty patient portal. Our customers end users are
able to respond using their own portal (on mobile device or PC)
and results are collated and can be viewed electronically.
Induction Guidance
While Induction Guidance is not within our core suite of
products, it continues to provide medical organisations
with the ability to collaboratively create, edit and publish
their own local medical guidelines in a secure and locally
administrated environment.
9
Induction Healthcare
Strategic Report
Annual Report & Accounts 2023
Financial review
Strong renewals – rightsizing programme completed - non-core asset divested
Revenue
The twelve months to 31st March 2023 was the first period the Group
has benefited from a full year of recognised revenue from its Induction
Attend Anywhere acquisition.
Revenue from contracts with customers for the year to 31 March 2023
per table below was £13.6m (pro-forma 2022: £12.1m). Excluding a
non-cash accounting adjustment revenues from all operations grew
12.1% in the year to 31 March 2023.
In our prior year reporting for the twelve months to 31st March 2022 we
applied an adjustment to revenues to account for IFRS 3 requirements.
Consequently, as a more appropriate year on year comparison,
recognised revenue for the year of reporting should be compared with
prior year pro-forma full year revenue. This period end also saw our
non-core products, Switch and Guidance being put up for sale. These
two product assets will be classified as discontinued operations on the
face of the P&L under IFRS5 – as assets held for sale)
Revenue analysis
31
March
2023
£000
31
March
2022
£000
Re-
presented
Revenues from customer contracts 1
Non-cash IFRS3 adjustment 2
13,584
12,116
(74)
(4,209)
Revenue from all operations
13,510
7,907
Revenue - Discontinued operations 3
627
6764
Reported revenue
Revenue - continuing operations
12,884 4
7,231
1 Reported revenue from continuing operations is stated after reclassifying assets held for sale
under IFRS5 (Induction Switch and Induction Guidance £0.6m). These product assets were
held for sale at year end 31 March 2023 and classified under discontinued operations (Total
recognised revenue from continuing operations £12.9m, plus IFRS3 adjustment (£0.1m) and
discontinued operations £0.6m was £13.6m, 2022: £12.1m).
2 Reported revenue from customer contracts as at 31 March 2022 is stated after the application
of IFRS3 being a fair value adjustment (£4.2m) relating to the deferred revenue acquired as
part of the Attend Anywhere Pty Limited acquisition in June 2021. Had this adjustment not been
applied, pro-forma revenues from contracts with customers would have been £12.1m.
3 Revenue from product assets (Induction Switch and Induction Guidance) is disclosed under
IFRS5 as assets held for sale.
4 After excluding discontinued operations revenue (£0.6m).
comparative recognised 2022 revenue was £0.7m.
For reference only the
The majority of the Group’s revenue came from Induction Attend
Anywhere which has grown by 9.9% to £10.8m (2022: £9.8m1), while
revenue from Induction Zesty has leapt to £2.2m (2022: £1.5m).
Induction’s other clinical apps (Switch and Guidance) delivered £0.6m
(2022: £0.7m).
The headwinds which curtailed revenue growth in the second half of
the year predicated a rightsizing programme to bring the Group’s cost
base into line with our sustainable revenue growth. The restructuring
was completed by year end and all associated costs have been
provided for in the year to 31st March 2023.
While focus is on sustainable recognised revenue growth
management also takes note of ARR. ARR differs from
recognised revenue due to the timing of revenue recognition,
which includes amounts for partial years based on contract start
dates, whereas ARR is an annualised amount. Recognised
revenue also includes non-recurring non-SaaS fees.
ARR from all operations as at 1st April 2023 was £13.5m (2022:
£12.3m). This represented the annualised value of the recurring
revenue base that expected to be carried into future periods, and
its growth is a forward-looking indication of recurring revenue
growth.
Gross profit
Reported Gross profit was £8.1 million (2022: £5.0 million) with
gross margin steady at 63.1% versus prior year reported margin
(2022: 63.1%). Direct costs are predominantly made up of web
hosting expenses, sales and delivery staff costs. The year-on-
year increase in gross profit is not directly attributable to
revenue growth due to the prior year FY22 accounts reporting
revenue from customer contracts after IFRS 3 fair value
adjustment. Had the prior year IFRS 3 adjustment not been
applied prior year Group revenues would have been £12.1m on
a pro-forma basis. Given the consistent year-on-year gross
margin percentage, growth of gross profit is more comparable to
recognised revenue growth from customer contracts of 12.1%
as described in the Revenue section above.
Capitalised development costs
Development expenses for the year were £9.3m (2022: £6.0m)
an increase of £3.3m. The reported cost increase for the year to
31 March 2023 is made up of two components: a lower level of
capitalised development cost of £2.2m; and, an increase of
development expenses of £1.1m.
Prior year additions to internally generated intangible assets
were £3.1m reflecting the amount capitalised in the year to 31
March 2022. The comparable figure for the period to 31 March
2023 is £0.8m. This capitalised development expense movement
has been charged directly to the income statement rather than
being capitalised in the year.
In determining the amounts to be capitalised management
makes assumptions regarding the percentage of staff time spent
on development activities. There is a high level of estimation
uncertainty over the estimates, as the ability to reliably track time
is inhibited by the time recording method. The nature of the
features developed during the year do not meet the criteria for
capitalisation under IAS38. This conclusion resulted in costs,
which would otherwise have been taken to the balance sheet,
being charged directly to the operating costs of the business. As
a result of this decision the reported development expenses more
closely represent the development cash outflows experienced by
the business in the year of reporting.
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Impairment charge
Management performed an impairment review as at 31 March
2023 in accordance with IAS 36 ‘Impairment of assets’. The
resulting non-cash impairment charge of £7.7m is explained in
further detail in note 17 – Goodwill, within the financial statements.
Operating expenses
Excluding the adjusting items depreciation, amortisation and share
based payments, operating expenses grew by £2.4m driven by
increased development expenses and restructuring costs.
Core performance measures
Our rightsizing programme resulted in restructuring costs of £0.8m
being charged to the income statement. By the 31st March 2023
the cost containment action had resulted in monthly cost reductions
of the order of £0.5m - the equivalent of an annualised £6.0m
reduction in cash outflow.
The Group’s Operating Plan is focused on sustainable growth.
Management considers that EBITDA is the key operating metric to
towards
the Group’s performance and progress
measure
sustainable growth. In addition, the Group also measures and
presents performance in relation to various other non-GAAP
measures, such as gross margin, and revenue growth. ARR is
considered useful to determine long term revenue growth, viewed
in the context of sustainable growth.
Adjusted EBITDA results are prepared to provide a more
comparable indication of the Group’s core business performance
by removing the impact of certain items including exceptional items
(material and non-operating related costs), and other, non-trading,
items that are reported separately. Adjusted results exclude items
as set out in the consolidated statement of comprehensive income.
Adjusted EBITDA loss was £3.6m (Re-presented 2022: £3.8m).
31/03/2023
£m
31/03/2022
£m
Re-
presented
Loss for the year
Loss from discontinued operations
Loss before tax from continuing operations
Add: Impairment losses
Add: Depreciation and amortisation
Operating loss before depreciation,
amortisation and impairment
Adjusted for exceptional and non-cash costs:
(18.3)
(0.9)
(17.4)
7.7
4.9
9.5
0.4
(9.1)
-
3.8
(4.8)
(5.3)
– Acquisition and fundraise related
transacti on costs1
– Other exceptional items1
– Share based payments (non-cash)
Adjusted Operating profit/(loss) before,
depreciation, amortisation, impairment and
exceptional costs
(“Adjusted EBITDA”)
Adjusted EBITDA from continuing operations
1Restructuring costs. * Reference only
-
0.8
0.4
0.5
0.4
0.6
(3.6)
(3.6)
(3.8)
(3.8)
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Cash
Cash as at 31 March 2023 was £4.3m (2022: £7.5m). As
focused on cost
described above, the Leadership Team
containment and cash conservation during the last quarter of the
year. Processes around cash have been revisited to ensure
projected business needs are sustainable.
We continue to tightly manage our cost base which, as at 31
March 2023, was reduced by over 30% on a monthly basis from
the level at the beginning of 2023.
Going concern
The Group incurred an operating loss on continuing operations
of £4.8m for the year ended 31 March 2023 (2022 £4.8m),
however, it had net assets of £24.3m inclusive of £4.3m of cash
and cash equivalents.
Management has performed a going concern analysis as
described in the Directors report. The liquidity of the group is
judged sufficient to meet the cash needs of the Group as they fall
due.
The directors have considered the applicability of the going
concern basis in the preparation of the financial statements. This
included a review of financial results, internal budgets and cash
flow forecasts to 31 October 2024, including downside scenarios.
Assets and Liabilities
Goodwill as at 31 March 2023 of £10.6m (2022: £19.8m) and
intangibles of £15.3m (2022: £21.0m) are derived from the earlier
acquisitions, Attend Anywhere Pty Limited, Zesty Limited and
Horizon Strategic Partners Limited. Following a review of the
carrying value of the assets a non-cash impairment charge of
£7.7m has been applied. Refer to note 17 of the financial
statements.
Trade Receivables were £2.7m (2022: £3.3m) reflecting
increased collection activity at the period end. Trade payables
were £2.7m (2022: £3.4m) in part reflecting the impact of the
right sizing programme reduced monthly costs.
Taxation
Current tax receivable £1.1m (2022: £1.2m) consists of
Research and Development tax credits due to the Group for
current and prior years. Post year end the Group received
£0.3m of tax R&D reclaim. In spite of the delay to the
repayments we expect further receipts in due course after
appropriate follow-up.
Loss before tax
The Group net loss before tax was £17.4m (2022: loss of £9.1
million (re-presented)) the year-on-year change is driven by a
non-cash impairment charge of £7.7m. See note 17 to the
financial statements.
Discontinued operations
During the year ending 31 March 2023 the Group classified the
Induction Switch and Induction Guidance products as being held
for sale, as a result of a decision to focus on patient facing
Induction Healthcare
Strategic Report
Annual Report & Accounts 2023
products in the secondary care market. This resulted in removal
of discontinued operations losses of £0.8m (for reference: 2022
£0.4m) from the Group profit and loss. Refer to note 13 for further
details.
Principal risks and uncertainties.
As more fully described in the Directors’ Report and notes to the
financial statements in the annual report, the amounts and timing of
future revenues remain uncertain. However, the executive has taken
significant steps, which we believe mitigate the Group’s risks.
John McIntosh
Chief Financial Officer
28 July 2023
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Strategic Report
Our model
Our products are designed for integration with existing
hospital IT systems, a key sales advantage for
healthcare providers looking to leverage legacy
investments and avoid workflow disruption. The ability
to integrate is the reason we have been able to work
with so many NHS trusts.
Revenue is primarily generated from licensed
subscription services, but we also collect fees for initial
implementation. Work continues to onboard
implementation partners, reducing our reliance on a
professional services type model.
Partnerships
Using our advanced integration capability, we have
developed valuable partnerships with large incumbent
health IT suppliers to facilitate and enhance our routes
to market. As part of the value-added reseller
agreements with our partners, such as Cerner
Corporation (NASDAQ: CERN) and System C, clients
can access our products without an extensive
procurement process.
Environmental Social Governance (ESG)
Sustainability is an important value for the Induction
Healthcare Group. Our digital product, by nature,
reduces unnecessary travel to hospitals and eliminates
cumbersome and costly administration providing our
customers and end users with a valuable additional
benefit. We are partnered with Amazon Web Services
(AWS) who host our technology platform, which allows
the Group to benefit from their low emission data centre
strategy.
We have committed to delivering an Environmental,
Social and corporate Governance (ESG) strategy for
2023 as part of our Group business plan, which is
sponsored at Executive level. This includes a Carbon
Reduction Plan in development that details our
organisational carbon footprint and supports UK NHS's
2040 (Carbon Footprint).
Environmental
We have a hybrid working structure which requires a relatively small
office base for meetings with desks used on a rotational basis. In the
UK we utilise office space via The WeWork group which has committed
to 100% renewable energy by 2025.
One of the largest sources of energy usage from the digital healthcare
industry is the transfer and storage of data. Our primary environmental
energy impact comes from data centre usage. AWS, our main data
centre partner providing on-demand cloud computing, is continuously
working to increase the efficiency of its facilities, and its scale allows it
to achieve higher resource utilisation and efficiency than typical on-
premises data centres. AWS is on a path to 100% renewable use. Our
footprint will change as AWS moves to powering its operations with
100% renewable energy by 2025.
Employees
The Group places significant value on the involvement of its employees
and they are not only regularly briefed on the Group’s activities, but
encouraged to express their views at quarterly Town Hall gatherings.
Employee opinion and engagement is sought and measured utilising
anonymous survey and feedback tools within Culture amp online tool.
The Group monitors its turnover rates, which is seeks to mitigate,
aiming to structure staff compensation at competitive rates in order to
attract and retain high calibre personnel. The Group aims to ensure all
individuals - regardless of race, age, gender, disability, sexuality or
socio-economic background have access to opportunities with the
Group.
Our employee assistance programme (EAP) provided by Bupa and
Lifeworks, is an employee benefit that provides staff with support and
practical advice on issues that might be impacting their health and
performance.
To underline our commitment to staff the Group has introduced Thrive,
a leading mental wellbeing digital tool, used and recommended by the
NHS, for use by individuals in the workplace to help prevent mental
health conditions. This initiative has the aim of increasing staff
wellbeing and productivity.
Community and Human Rights
The directors recognise the Group has a duty to be a good corporate
citizen and to respect and comply with the laws and regulations of the
countries of operation and the fundamental rights and freedoms afforded
to individuals.
.
The Group has been working with a third-party
sustainability specialist, Supercritical
(http://gosupercritical.com), to measure our carbon
footprint and prepare a carbon reduction plan.
We have formalised travel policies, with an
objective to minimise travel and benefit from
reduced emissions including:
• A business travel policy to avoid private car
where possible and reduce business travel
flights;
• Optimising our cloud use with the assistance of
Amazon Web Services.
• A hardware policy to, where possible, to extend
the average lifecycle of products.
We are committed to commissioning an
independent footprint report annually and intend
to publish our Net Zero commitments through our
company website.
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Strategic Report
Annual Report & Accounts 2023
S172 Statement
This section serves as our section 172 statement and should be
read in conjunction with other information included in this
Annual Report and Accounts.
Engagement with our members and wider stakeholder groups
plays an essential role throughout our business. (Further
information in contained in this report’s Corporate Governance
Statement and in the Directors’ Report.).
The Directors, in good faith, have taken decisions that they
consider are most likely to promote the success of the Company
for the benefit of its stakeholders, having regard to the matters
set out in s172(1)(a-f) of the Companies Act 2006:
•
The likely long-term consequences of any decision;
The long-term success of the Company is always a key factor
when making strategic decisions. It is important that our
shareholders understand our strategic priorities and ambition,
their views inform our decision-making.
•
The interests of the Company employees;
Our employees are the main asset of the Company and their
wellbeing and development are at the heart of our strategy for
success.
•
relationships with suppliers, customers and others;
The need to foster the Company’s business
The Company regularly meets with key suppliers and customers
to review operations and plans and explores mutually beneficial
future actions.
•
community and the environment;
The impact of the Company’s operations on the
Due to the nature of its commercial activities, the Company
believes that it has no appreciable impact on the environment,
although it does take reasonable measures to ensure that it
procures its office supplies from environmentally friendly and
sustainable sources
.
The desirability of the Company maintaining a reputation for
high standards of business conduct;
Integrity is embedded the Company’s culture. The Directors
believe that it is important to maintain a high standard of ethical
values and seek to ensure that this continues to be shared by all
employees.
The need to act fairly as between shareholders of the
Company
In making decisions, the Directors aim to strike a fair balance
among all stakeholders. The Board regularly reviews our
principal stakeholders and how we engage with them. The
stakeholder voice is brought into the boardroom throughout the
annual cycle through information provided by management and
also by direct engagement with stakeholders themselves.
•
•
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Annual Report & Accounts 2023
S172 Statement (continued)
The Board considered the interests of and the impact on all stakeholders when making a number of key
decisions during the year, as demonstrated by the following examples:
S t ak eholder
Why we engage
How we engage
In ve sto rs
It is important that our shareholders
understand our strategic priorities, and
that their views inform our decision
making. Shareholder views are sought
in connection with significant matters
and taken into account by the Board in
reaching critical decisions. We aim to
provide transparency and clarity about
our results and long-term strategy to
build trust in our future plans.
• Meeting and discussions throughout the
year
• Reports and analysis on shareholdings
• Annual, Half Year Results and AGM
• Company website and investor news section
• Stock exchange announcements
• Analyst research
Emp l o ye e s
R e g u l a to rs
Our people are our most valuable
asset. We rely on their skills,
experience, knowledge and effort to
deliver our vision to provide technology
to the healthcare community. We value
all staff including contractors and
ensure our communications are to all
participants to ensure there is
transparency across the business.
Effective staff engagement leads to
greater wellbeing, promoting a
successful team orientated culture.
Operations are subject to a wide range
of listing requirements, regulatory and
legal frameworks, including regulation
of clinical products, data protection, tax,
employment, and contractual terms.
•
•
•
•
•
•
•
•
Enhanced company-wide Town Hall
sessions incorporating staff Q&A sessions
Use of informal communication channels
Employee benefits (Bupa EAP, Worklife)
Wellbeing tools (Culture-amp, Thrive)
Learning / development budget per person.
Flexible hybrid working
Long term nominal share options
Personal, team and corporate objectives.
• Governance, Risk and Compliance policy
• Audit committee updates at Board meetings
• Regular Risk Register review
•
Informing the board of key drivers of
regulatory requirements requiring attention
Working with underwriters, accreditors on
controls and certification reviews
Work with Clinicians to evaluate our
products
•
•
Su p p l y C h a i n A robust and transparent supply chain
results in greater visibility, leading to lower
exposure to risks and disruptions.
• Trusted supplier partnerships
• Our key suppliers are predominantly software
technology providers requiring strong two-way
working relationship.
• Board review of material changes to supply
chain
• Risk mitigation planning
Pa rtn e rsh i p s
a nd end users
Our partners allow us to develop our
products to meet the needs of hospitals
that we cannot reach directly.
We partner with companies that can
advance our products through
complementary technologies, delivering a
wider distribution channel.
• 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.
• Arrange forums on user experience.
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S t ak eholder
Why we engage
How we engage
C u sto me rs
Communication with our customers is
fundamental to understanding how we
may continue to add value to solve
strategic and operational issues through
our digital solutions.
.
ESG
Our staff value their work developing
high quality digital services which by
their nature deliver a positive outcome
for the NHS and the wider community,
• We and our customer partners understand the
importance of coordinated activities. This ensures
that we achieve our joint objective of providing a high
level of service and successful delivery.
• Regular meetings with customers -these meetings
provide us with valuable feedback regarding market
requirements and competitive issues.
• We generate employment among a diverse
workforce in a number of international communities.
• We are required to demonstrate our environmental
impact as part of our sales process.
• We contribute to a reduction of environmental costs,
through lower carbon usage via reduced webhosting
costs, reduced transport on our roads and elimination
of paperwork and document distribution.
At the end of the annual reporting period, the Board continue to have regard to the interests of the Group’s
stakeholders, including the potential impact of the Group’s future activities on the community, the
environment and the Company’s reputation when making decisions. This was especially impactful during
the right-sizing programme conducted, where the Board balanced the needs of various stakeholder groups
to achieve a successful outcome.
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Principal risks and uncertainties
The Group is exposed to a variety of
risks and actively manages them
through risk management procedures.
As a public company operating in a
highly regulated competitive space, it is
vital that the Group governs and
manages its risks in order to achieve
compliance with legal and regulatory
obligations.
Risk Management
The Board, assisted by the Audit Committee, is
ultimately responsible for oversight of risk
management. The Group’s process for the
identification, assessment and management of
risks in the business, has been augmented by the
implementation of a Governance Risk &
Compliance (GRC) policy which is driven and
monitored by our Leadership Team.
The Audit Committee reviews the systems of internal
control for the Group alongside the Leadership Team’s
process for risk management and periodically reports its
findings to the Board.
Internal systems of control
The Group maintains systems of internal control taking into
account its risk profile and applicable regulatory and legal
requirements. Details of the Group’s financial risk
management objectives and policies, and exposure to
foreign exchange risk, market risk, credit risk and liquidity
risk are given in note XX to the consolidated financial
statements..
Registering and reviewing risks
The Group identifies and assesses each identified 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 scored 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 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 in the table overleaf are the principal risks and
uncertainties that the Directors consider could impact the
business. The Board recognizes 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.
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Principal risks and uncertainties
(continued)
Strategic Risks
Risk
Political
The risk has increased
The risk has decreased
The risk has not changed materially since last year
Description and impact
Key mitigating activities
Trend
The Group has a significant customer
base in public sector health bodies. A
change in either policy or spending
priorities by the current or a future
Government could materially
impact the Group.
Potential impact:
• Delayed spending or change in
National Health Service
commissioning budgets
• Our primary revenue model is Saas based
recurring revenue to deliver a stable base
of contracted visible cashflow.
• Our development priorities are to ensure we
remain at the heart of our customer’s
operations, delivering cost efficiencies and
value for money whatever the political
environment.
• Continuous investment in the development
of the platforms to ensure they remain
relevant, competitive and attractive to
users as well as customers.
Economic
environment
The Group could be affected by
overall economic and political
conditions in the UK and globally
including the risk of a recession,
persistently high inflation and currency
fluctuations.
Potential impact:
• Inflationary and macro-economic
events may have an impact on our
costs and our customers’ funding
sources (NHS funding decisions).
• We continued to monitor our economic
horizon and take pro-active action, both to
reduce risk but also to capitalize on any
opportunities that arise.
• Where possible we contract multi-year
Saas based ARR terms, protecting the
business from cyclical macro events.
The Group is a low energy user, however,
like any other business in this economic
environment we must manage overhead
inflation, which we seek to manage via
indexation clauses in our customer
engagements where we can, and by
maintaining tight budgetary cost control.
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Principal risks and uncertainties
(continued)
Operational Risks
Risk
Description and impact
Key mitigating activities
Trend
Product
development,
technological
change and
competition
Ability to grow
and sell
effectively
• We engage in regular customer
dialogue to define future use cases for our
products to ensure that the product offerings
are validated.
• We focus our development efforts on features
that meet an identified market requirement and
our internal processes review and prioritise
projects most likely to generate sufficient revenue
to fund their development.
• Maintaining market knowledge and
monitoring competitor developments and
technologies.
• The Group has engaged experienced sales
leadership and is providing support to its
customer facing teams to ensure they are
selling effectively and engaging with our
customers on a regular basis.
• Upfront business approval controls have
been implemented to ensure we are
only bidding for work that has a
suitable opportunity for a profitable, cash
return, and review controls to ensure once
we are committed with a customer, the
agreed terms are monitored.
• The implementation of a Group-wide CRM
system in 2023 will provide significant
benefit in terms of broader and deeper
customer insight and data.
The Group operates in a highly
competitive market and also
faces competition from products
developed, marketed and supplied
by companies with significantly
greater resources.
Potential impact:
• Competitor products or
technologies emerge that may
render existing products and
services uncompetitive or impaired,
and may exert downward
pressures on the pricing of existing
products and services, impacting
financial returns.
The Group’s growth strategy has,
until 2022, centred around the
acquisition of businesses which
broaden and enhance existing
operations. While our acquisition
strategy is currently paused the Group
must rely on the effectiveness of its
Sales and Marketing team to grow the
business.
It is imperative we have effective
sales and marketing models,
methodologies and techniques to
effectively realize our investments in
software products and to recover the
direct costs of associated delivery
(and obtain sufficient margin to meet
indirect costs) and that this is done in
a profitable and cash generative way.
Potential impacts:
Investment returns not achieved and
shareholder value eroded.
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Principal risks and uncertainties
(continued)
Operational Risks
Risk
Description and impact
Key mitigating activities
Trend
Information
security
The Group 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. Cyber
security attacks are prevalent and
becoming more sophisticated.
Potential impacts:
• Internal impact due to releasing
software that doesn’t function as
intended; and
• The Group has in place systems and
processes for the classificatio n and control
of access to information within a number of
areas of the business, and the security
around access to information continues to
be strengthened by the enforcemen t of
enhanced security processes and
practices. Changes to our products 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.
• External parties disrupt the platform
or cause failure by a key outsourced
provider.
• Evaluation of all third-party suppliers, ensuring
that they have appropriate recovery
processes.
Business growth
is constrained
by not having
appropriate
people
resources
There is a risk that, in a
highly competitive talent landscape,
the Group cannot attract and retain
sufficient highly skilled and dedicated
staff.
Potential impacts:
• Adverse effect on ability to manage
and grow the business.
• The loss of key individuals could have
an adverse effect on the ability to
grow revenues.
• The Group is accredited to Cyber Essentials
Plus standard and has recently successfully
completed its annual ISO 27001 certification
audit. This security standard specifies the
requirements for establishing, implementing,
maintaining and continually improving an
information security management system.
• The Leadership team has recently been
refreshed and is incentivised towards
achievement of core Goals.
• The Leadership Team regularly reviews
our key budget milestones to ensure
appropriate decisions are made in a
timely manner.
• Retention strategies are in place for
employees including market-level
compensation and incentives, ongoing
training and development and
performance reviews.
• Regular reviews of resource dependency
and succession planning for key roles.
• Focus on developing a strong and cohesive
culture across the organization.
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Governance
Annual Report & Accounts 2023
Principal risks and uncertainties
(continued)
Risk
Description and impact
Key mitigating activities
Trend
• 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 the Group 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.
Customer
concentration
risk
The primary customer of the Group
is the NHS which is a complex
series of connected organisations.
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
regular funding reviews and this
could have a negative impact on
pricing.
Compliance Risks
Risk
Description and impact
Key mitigating activities
Trend
Data protection
and privacy
Compliance with
laws and
regulations
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.
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 risk of insufficient evaluation and
non-compliance with legislation and
regulation in the markets in which
Induction operates.
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 has a dedicated Data Protection
Officer and a separate Head of Information
Security to oversee data protection compliance
and security.
• Regular review of legislation and Group
policies.
• Policies applying to relevant staff on [ list of
GDPR areas]
• Maintenance appropriate expertise and
experience in clinical and information
governance.
• Independent third-party audits and reviews
are conducted.
• The Group maintains an in-house legal
function and uses external legal and tax
counsel to advise on legal, tax and
regulatory requirements.
• The Group’s Governance and Regulatory
Compliance committee is focused on the
regulatory risk for product development and
operational delivery.
• The Data Protection Officer, Medical Director and
Head of Information Security sit on the GRC
committee headed by the Senior Information Risk
Officer.
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Principal risks and uncertainties
(continued)
Financial Risks
Risk
Description and Impact
Key mitigating activities
Trend
Foreign
currency risk
The risk of significant un-favourable
foreign exchange movements.
The Group’s webhosting costs are
denominated in US dollars whereas
the Group’s revenues are GBP
denominated. In addition, due to its
Australian subsidiary Attend Anywhere
Pty Ltd, there is some exposure to the
Australian dollar.
Potential impact:
• Unfavourable FX impact on cash
costs of converting currency and
financial statement reporting of
foreign exchange movement.
• Customer contracts are maintained in GBP.
• Consideration of currency hedging is
regularly reviewed where appropriate.
• Surplus cash balances are transferred to the
UK to minimize any exposure to non-GBP
currencies.
Risk
Description and Impact
Key mitigating activities
Trend
Liquidity risk
The risk of the Group not being able to
meet its financial obligations as they
fall due.
• The Group rigorously manages its cash
resources. Operating expenses are
closely monitored and management will
continue to assess the appropriate level of
expenditure against budgetary
milestones.
• The Board regularly monitors the cash
position of the Group and ongoing cash
requirements. We have systems, controls,
and processes to manage expenditure in
line with budgets, and cash is managed
through rolling cashflow forecasts which
are updated at least monthly.
By order of the Board
John McIntosh
Chief Financial Officer
28 July 2023
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Directors’ Biographies
Christopher Samler – Non-Executive Chair (appointed 8 June 2022)
Appointed to the Chair of Induction Healthcare in June 2022, Christopher has experience as Chief
Executive Officer (CEO) and Chair of quoted companies (both Main Market and AIM) and private
businesses in the education, healthcare, services and technology sectors. He has significant experience
supporting growth for businesses across the U.S., Europe, Asia, Latin America and the Middle East.
Christopher started his career in the British Army before joining The Boston Consulting Group as an analyst,
leading to a variety of senior management positions at Baxter International, the US-based healthcare
multinational. Christopher was CEO of several fast-growing venture capital backed healthcare businesses
including Imutran Ltd, and Weston Medical plc, which he took through three venture capital funding rounds
to an IPO on the Main Market of the London Stock Exchange in 2000. In 2004, Christopher co-founded Iceni
Capital LLP, a private equity / venture capital firm focused on providing capital and operational support to
fast growing UK companies in the services sector. He has Chaired a number of high growth technology,
healthcare and service companies including TQ Education & Training which was sold to Pearson plc,
AirPortr, Sphonic Solutions (recently sold to Signicat AS), Bubble and Tristel plc. Christopher holds an MA
(hons) from the University of Oxford and an MBA from the Harvard Business School
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.
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 was until recently,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.
Andy is Chair of the Audit Committee and, also serves on the Remuneration and Nomination Committees.
Ian Jonhson – Senior Independent Director (appointed 2 December 2022)
Ian has spent his business career in life science and was founder and CEO of Biotrace International
PLC, which was a listed company until its sale to 3M in December 2006. Ian is currently Executive
Chairman of Niox Group plc and was recently Senior Independent Director of Clinigen plc until its sale to
Triton. Previous roles include Executive Chairman of Bioquell PLC, non-executive Chairman of
Redcentric plc, Quantum Pharma PLC, Cyprotex PLC and Celsis Group Ltd. and non-executive Director
of Ergomed PLC. He has also served on the boards of various other public and private companies
including Aim listed companies; Evans Analytical Group and AOI Medical Inc. Ian studied at Cardiff
University obtaining a B.Sc. and M.Sc. in Microbiology. He is a Chartered Biologist, a Fellow of the
Royal Society of Biology and a member of the Institute of Directors.
Paul T ambeau - Chief Executive Officer (appointed 30 J une 2023)
Paul started his career in management consulting, spending 11 years on strategy and transformation
engagements within Canada’s public and private health sectors. This included 3 years in KPMG’s national
health care strategy practice. Over the last 7 years, he has held senior executive roles in digital health
companies in Canada and the UK, Before joining Induction in 2022, Paul was Chief Commercial Officer at
Doctor Care Anywhere, where he helped deliver a 300% increase in revenue growth. He also helped launch
the internet hospital programme with a leading UK health insurer, including the commercial negotiations for
a joint venture. Paul began his career in management consulting in North America, including KPMG
Canada’s national health care strategy practice. Paul holds an MBA with Distinction from the University of
Edinburgh, and a Bachelor of Arts (Honours) from Wilfrid Laurier University in Waterloo, Canada.
J ohn Mc Intos h - Chief Financial Officer (appointed 30 J une 2023)
After qualifying with Deloitte in 1994, John worked with Sony Corporation, global advertising agency
DMB&B and the BBC, before focusing towards online, and multi-media businesses. John has worked as a
consultant CFO, interim Finance Director and Group CFO for public and private entities in the UK, USA, and
Europe. John was Director, CFO of Bidstack Group plc for three years until 2021, where he led the
business through its successful admission to AIM in September 2018, to become a multi-market
international Ad-tech business. Prior to this, he was interim FD then Board member for three years of Anglo-
Australian services group Progility plc leading its reverse takeover onto AIM in 2013. He was also CFO and
Chief Operating Officer for DCD Media plc for six years until 2012. John holds a Bachelor of Commerce
(Hons) from the University of Edinburgh and is a member of the Institute of Chartered Accountants of
Scotland.
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Corporate Governance Report
for Induction Healthcare Group PLC
Chair’s Introduction
I have pleasure in introducing our Corporate Governance
Statement. The Board is committed to supporting high
standards of corporate governance. We consider that a
solid foundation of good governance and best practice
is needed to help the Group profitably and effectively
support our user base, both clinical teams and patients. In
this section of the Annual Report we set out our governance
framework and describe our approach to 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 that, as
a Board, we examine the key operational and financial issues
affecting our strategy.
We have had a number of Board changes during the year
and since our year-end. Throughout the year of audit we had
four independent Non-Executive Directors; Leslie-Ann
Reed, Jane Silber, Ian Johnson and Andy Williams. Ian
Johnson was appointed as our Senior Independent
Director (SID) on 2 December 2022. On 2 December 2022,
Leslie-Ann Reed’s whose term came to an end stepped
down from the board. On 5 May 2023 Hugo Stephenson’s
term also came to an end and he stepped down from the
board.
Our Executive Directors during the year were James Balmain
(resigned 9 January 2023) and Guy Mitchell (resigned 6
December 2022). From 9 December 2023, I was appointed to
the position of Interim Executive Chair. I am pleased to
confirm that on the 30th June 2023 Paul Tambeau, who had
been interim COO since December 2022, was appointed
CEO. At the same time, John McIntosh, interim CFO since
December 2022, was appointed CFO. Both joined the board
on the same date.
We follow the Quoted Companies Alliance (“QCA”)
Corporate Governance Code (the ‘Code’) and we
continue to believe 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 Group has
complied with the ten broad principles of the Code which
all support the Group’s medium to long-term progress.
Christopher Samler
Executive Chair
28 July 2023
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 Report on pages 13. Our Section 172
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statement, which is set out on page 14 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
and monitors progress against the strategic plan. The active
challenge provided by the Non-Executive Directors to the
Executive helps shape our strategy. The CFO maintains a
strategic risk register and reports periodically to the Board
on the how the Group mitigates major perceived risk and
protects the company from unnecessary potential risk.
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, and particularly
the executive team, has maintained an open communication
with investors, and the sell-side research community. This
will be an increasing area of focus for the new Chair in
the future believe that this is the best way to ensure the
company understands what is expected of it in its efforts to
drive enhanced value for our shareholders. 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. 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.
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, 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.
One of our most important stakeholder groups is our
employees. The Company engages regularly with its
employees and monitors closely the views and concerns.
24
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Annual Report & Accounts 2023
Corporate Governance Report
for Induction Healthcare Group PLC (continued)
raised. We communicate thoroughly with all stakeholders
and use the experience we gain from those interactions to
inform our strategy.
experience, skills, and capabilities. The balance, skills and
experience of the Board were evaluated during the year
ended 31 March 2023.
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
supported by its Leadership Team periodically 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 Strategic Review on pages 17 to 21.
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, and three Non-
Executive Directors. The Chair and three Non-
Executive Directors are all considered to be
independent. The current Board has one female and
three male Directors. The balance, skills and experience of
the Board is evaluated throughout the year.
The Board holds between six and eight scheduled
meetings a year and attendance at these meetings is set
out below on page 26. There are also numerous ad hoc
meetings where matters of importance have arisen between
scheduled meetings.
There are three Board Committees: the Audit Committee, the
Remuneration Committee, and the Nomination Committee,
which are chaired by Andy Williams, Jane Silber, and Andy
Williams respectively. Attendance at those meetings is set
out on page 26.
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.
Directors’ Skills and Capabilities
Principle 6 of the Code requires that the Directors ensure
that between them, they have the necessary up-to-date
The biographies of Board members are set out on page 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 is assisted by a range of external advisors,
including the nominated advisor, strategic communication
consultants, legal advisers, and tax consultants.
The Board training and development needs are met with the
support of our Nominated Adviser (NOMAD) and our advisors.
The Board is 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 Board
evaluation will be carried out in 2023 and the Board
evaluation process itself will continue to be refined.
Prior to the proposal for re-election at the AGM, the
performance of the Non-Executive Directors is reconsidered
to ensure they remain effective in their role and, where
appropriate, that they retain their independence.
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.
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
25
Induction Healthcare
Governance
Annual Report & Accounts 2023
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 is 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. The Executive Chair is 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.inductionhealth care.com/. The website contains
details of the Group and its activities, its regulatory
announcements, and sets out the governance of the Group.
Board Committees
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. A summary of the responsibilities of
each Committee and their work during the year follows.
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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.
Christopher Samler1
Christopher Spencer 2
Hugo Stephenson
Andy Williams
Leslie-Ann Reed3
Jane Silber
Ian Johnson 4
James Balmain5
Guy Mitchell 6
Board
Audit
Committee
Remuneration
Committee
Nomination
Committee
9 of 12
3 of 12
12 of 12
12 of 12
4 of 12
12 of 12
5 of 12
10 of 12
7 of 12
No. of meetings
4 of 4
0 of 4
N/a
4 of 4
1 of 4
4 of 4
N/a
N/a
N/a
5 of 6
3 of 6
N/a
6 of 6
1 of 6
6 of 6
N/a
N/a
N/a
0 of 1
0 of 1
N/a
0 of 1
1 of 1
1 of 1
N/a
N/a
N/a
1.Christopher Samler was appointed in June 2022 and therefore did not attend all meetings held during the year.
2. Christopher Spencer resigned as a director in June 2022 and therefore did not attend all meetings held during the year.
3.Leslie Ann Reed resigned as a director in December 2022 and therefore did not attend all meetings held during the year.
4 Ian Johnson was appointed in December 2022 and therefore did not attend all meetings held during the year.
5. James Balmain resigned as a director in January 2023 and therefore did not attend all meetings held during the year.
6 Guy Mitchell resigned as a director in December 2022 and therefore did not attend all meetings held during the year.
26
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Governance
Annual Report & Accounts 2023
Remuneration Committee Report
On behalf of the Remuneration Committee, I am pleased to present the Remuneration Committee report for the year ended
31 March 2023. 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 (resigned 2 December 2022)
Christopher Spencer (resigned 7 June 2022)
Andy Williams Christopher Samler (appointed to Remuneration committee on 7 June 2022)
Committee Responsibilities
The Committee is primarily responsible for:
• Setting the remuneration policy for all executive directors and the Company’s Chair;
• Recommending and monitoring 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 rewarded fairly and responsibly for their individual contributions to the success
of the Company 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.
The Remuneration committee held six formal meetings during the year as set out on page 26 and held a number of informal
meetings and telephone calls between scheduled meetings. The Remuneration committee considered the following items
during the year:
Bonus Plan
LTIP
LTIP
Remuneration
Terms of Reference
Remuneration Policy
Review of the FY24 Bonus Plan
Review of the Scheme Rules
Review of awards to staff
Review of proposed staff pay awards
Review of the terms of reference
Review of the Remuneration Policy
Directors Remuneration Report
The Remuneration that the Company offers to its Executive Directors continues to be based on four principal components:
• 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 under which share options are normally granted
on passing probation or ad-hoc 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 (once fully
vested) 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. The Remuneration Committee is currently reviewing the structure of the share option scheme.
27
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Annual Report & Accounts 2023
Andy Williams was awarded an increase at the time of his appointment as Chair of the Audit Committee. Christopher Samler
was awarded an increase to reflect his interim position as Executive Chair. No other salary increases were awarded to any other
Executive Director or Non-Executive Directors for FY23.
Remuneration received by Directors for the year ended 31 March 2023 (audited)
The following represents remuneration received by directors during the year.
Salary and Fees
Pension
Bonus
Other
Total Remuneration
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
FY22
FY23
Executive
Hugo Stephenson 184,683
James Balmain
Guy Mitchell
Non-Executive
Christopher
Samler
Christopher
Spencer
Ian Johnson
Leslie-Ann Reed
Andy Williams
Jane Silber
55,000
-
40,000
35,000
40,000
49,364
238,769 177,784
67,500 126,750
-
18,244
22,158 17,778
3,375 6,300
–
–
227,050 110,813
20,250 10,125
–
3,086
–
– 202,927
49,364
491,063 308,779
143,494
91,125
2,404
319
- 103,978 -
-
-
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10,208
13,182
26,667
43,353
40,000
2,475
-
–
–
1,800
459
-
–
–
1,800
–
-
–
–
–
–
-
–
–
–
–
-
–
–
–
–
-
–
–
–
57,475
10,668
-
13,182
26,667
40,000
35,000 43,353
41,800
41,800
660,952 591,286
48,052
26,337
247,300 120,938
3,086
2,723 959,390 741,285
Four directors received retirement benefits in the form of defined contribution pension scheme contributions, accruing in
respect of qualifying services. Contributions paid to a pension scheme in respect of directors’ qualifying services for the
highest paid director were £0.02m (2022: £0.02m).
The following represents share-based remuneration received by directors during the prior years.
Director
James Balmain
James Balmain
Date of Grant
8th June 2020
1st April 2021
Exercise
price (£)
0.005
0.005
Number
of shares
745,559
Market value
of award
734,376
Performance
conditions
Exercisable
Exercisable
from
to
no 08/06/2021 08/06/2031
5,803
6,239
no 01/04/2022 01/04/2032
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Remuneration Committee Report (continued)
Directors’ shareholding and share interests
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 2023 and 31 March 2022.
Name
Hugo Stephenson
Christopher Samler
Jane Silber
Andy Williams
Ian Johnson
Beneficially
owned shares
at 31 March
2022
Beneficially
owned shares
at 31 March
2023
8,891,730 8,891,730
- 266,667
8,696
419,495 889,968
20,000
8,696
-
Jane Silber
Remuneration Committee Chair
28 July 2023
Number
of unvested
options at
31 March 2022
(Audited)
–
-
–
–
Number
of vested
options at
31 March 2022
(Audited)
–
-
–
–
Granted
(Audited)
–
-
–
–
Award description
–
-
–
–
Number
of unvested
options at
31 March
2023
(Audited)
–
-
–
–
Number
of vested
options at
31 March
2023
(Audited)
–
-
–
–
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Audit Committee Report
On behalf of the Audit Committee, I am pleased to present the Audit Committee report for the year ended 31 March 2023. 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 until 2 December 2022)
Andy Williams (Chair from 3 December 2022)
Jane Silber
Christopher Spencer (resigned 7 June 2022) Christopher
Samler (appointed on 7 June 2022)
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.
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The Work of the Committee
The Audit Committee continued to review and establish the procedures and systems necessary to ensure robust standards of
financial control. The Chief Financial Officer is invited to attend all meetings, while other senior financial managers will attend as
appropriate. The external auditor attends 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 four formal meetings during the year as set out on page 26 and considered the following items during
the year:
Whistleblowing
Review of arrangements in place
Bribery
Interim Results
Review of arrangements in place
The Committee reviewed and approved the interim results,
Full Year Results
Revenue
recognition
Going Concern
Valuation and
amortization,
impairment
Internal Audit
External Audit
Terms of
Reference
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/intan gib les.
The Audit Committee was satisfied that management’s judgement in the absence of explicit
performance obligations and the consequential recognition of revenue and deferred revenue
in the accounts was reasonable.
The Committee undertook reviews of the Company’s going concern status at the half and full
year period ends. The Audit Committee was satisfied that the basis for adopting the going
concern basis in preparing the Group and Company financial statements.
The Audit Committee reviewed the basis of capitalisation and amortisation and considered
the intangible value attributed to its intangible software development costs. The Audit
Committee was satisfied that the forecast cash flows from the anticipated level of future
revenues, supported by customer interest and the sales pipeline, are sufficient to support the
carrying values.
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 newly appointed external
auditor, Crowe UK LLP; their plan for the full year audit, advisory fees and the effectiveness
of the audit process.
Reviewed terms of reference.
30
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Governance
Annual Report & Accounts 2023
External Auditor
The Audit Committee appointed a new external auditor Crowe UK LLP in December 2022 and monitors the relationship, to ensure
that auditor independence and objectivity are maintained. A summary of remuneration paid to the external auditor is
provided in note 7 of the financial statements. The external auditor does not provide any material non-audit services to the
Company or its subsidiaries. Being satisfied with the external auditor’s work for the year under review and of the
external auditor’s independence, the Audit Committee recommended that the Board reappoint the External Auditor. The
value of the non-audit services provided by the Auditor is zero. Having reviewed the auditor’s independence and
performance, the Audit Committee has concluded that this is effective.
Andy Williams
Audit Committee Chair
28 July 2023
31
Induction Healthcare
Governance
Annual Report & Accounts 2023
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 2023.
Committee Members
Andy Williams (Chair)
Christopher Spencer (resigned 7 June 2022)
Jane Silber
Christopher Samler (appointed 07 June 2022)
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 once during the year and held a number of informal meetings and telephone calls
between the scheduled meeting.
Appointment of Directors The Board asked the Committee to consider the suitability of Ian Johnson for the position of
Senior Independent Director on the Board. The Committee recommended this appointment
and Ian Johnson joined the Board on 2 December 2022.
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 Christopher Samler as Chair, and subsequently as interim Executive Chair
following the resignation of James Balmain as CEO in January 2023. Andy Williams was
appointed as Chair of the Audit Committee. Following the appointment of Paul Tambeau as
Interim COO and John McIntosh as Interim CFO in December 2022, both were confirmed as
CEO and CFO respectively on 30 June 2023.
Change of Company
Secretary
After the resignation by Guy Mitchell as Company Secretary, Louise Torr was appointed to this
role in January 2023.
Induction of new directors
New directors are taken through a comprehensive induction programme which is tailored to their individual needs and
understanding.
Andy Williams
Nomination Committee Chair
28 July 2023
32
Induction Healthcare
Governance
Annual Report & Accounts 2023
Directors’ report
The Directors are pleased to present the Directors’ report to
shareholders and the audited financial statements for the
year ended 31 March 2023.
Corporate governance
The Directors’ statement on Corporate Governance is set out on
pages 23 to 35 and forms part of this report.
Principal activity and business model
Going Concern
The principal activity and business model are set out in the
Strategic Report on page 13.
Results and dividends
The results for the year to 31 March 2023 are set out in the
financial statements on pages 43 to 91.
The Directors do not propose payment of a dividend for 2023
(2022: £Nil).
Review of the year and outlook
A summary of the Group’s progress and development
is set out in the Chair’s review and Chief Executive
Officer’s review, and the Financial Review, which form
part of the Strategic Report on pages 2 to 13. This
analysis includes comments on the position of the
Group at the end of the financial year, an indication of
likely future developments in the business of the
Group and details of the Group’s development
activities. The outlook of the business is set out in the
Strategic Report on page 5.
Significant events after the year‑end
On the 30th June 2023 the Group announced the completion
of the sale of Switch, a directory app, for an undisclosed sum.
This is in line with the previously announced strategy to focus
on sustainable growth and allows additional cost savings to
be applied. The revenues of Switch are disclosed as part of
the discontinued operations. Further details to be found at
note 13.
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 92,380,300
ordinary shares of £0.005 each with voting rights.
Related party transactions
Details of all related party transactions are set out in Note 29
to the Financial Statements.
In assessing the appropriateness of the going concern
assumption, Directors has reviewed the ability to continue
operating over the period to 31 October 2024 to take into
account the operating cycle of the group. The Directors have
also reviewed other relevant information, together with
considering scenarios with adverse impacts across the Group’s
principal risks relating to: revenue reductions from either non-
renewals of major contracts with customers or downward price
pressures; non-materialisation of forecast sales to new
customers and delays in securing new contracts with customers
or delayed cash inflows.
The severe but plausible downside scenario has indicated that
cash balances are their lowest in April 2024 before increasing
again in May 2024 in line with the Group’s operating cycle. At
this low point, cash balances remain positive. The Directors
believe they can timeously respond to decreases in cash inflows
by taking mitigating actions. The Directors have applied
significant judgement regarding renewals of existing contracts
with major customers, in particular NHS customers. The
Directors have made this judgement after considering the UK
budget announcement in November 2022 and funding
confirmation in July 2023. Whilst there remains uncertainty as to
the specifics of the NHS funding plan following the budget
announcement, the Directors note that NHS funding generally
was increased and there was a focus on NHS efficiency, which
the Group’s products / services are designed to assist with.
Therefore, the Directors believe that the judgement they have
made is appropriate based upon information available at that
point.
After due consideration, the Directors have concluded that there
is a reasonable expectation that the Group and Company have
adequate resources to meet their liabilities as they fall due for
the period to 31 October 2024, and therefore these financial
statements are prepared on a going concern basis.
Annual General Meeting
The date of the 2023 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.
Research and development
The assessment of when development expenditure meets the recognition
criteria required for capitalisation requires judgement as to the
technical feasibility and commercial viability of products and
ideas that are under development. The Group capitalised £0.8m
of development costs (2022: £3.1m).
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Induction Healthcare
Governance
Annual Report & Accounts 2023
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 28 of the accounts.
Directors
The Directors who held office during the year were as follows:
• Christopher Samler (appointed 7 June 2022)
• Jane Silber
• Andy Williams
• Ian Johnson (appointed 2 December 2022)
• Christopher Spencer (resigned 7 June 2022)
• Leslie-Ann Reed (resigned 2 December 2022)
• Guy Mitchell (resigned 5 December 2022)
• James Balmain (resigned 9 January 2022)
• Hugo Stephenson (resigned on 5 May 2023)
Political contributions
Neither the Group nor any of its subsidiaries made any
disclosable political donations or incurred any disclosable
political expenditure during the year (2022: £Nil).
Disclosure of information to 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.
Auditor
Crowe U.K. LLP were appointed as the Group external
auditor at the AGM on 11 January 2023.
By order of the board
John McIntosh
Chief Financial Officer
28 July 2023
34
Induction Healthcare
Governance
Annual Report & Accounts 2023
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.
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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 UK-adopted international accounting
standards 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 and reliable;
• state whether they have been prepared in accordance
with UK-adopted international accounting standards;
• 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.
35
Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Independent Auditors’ report to the members of Induction Healthcare Group Plc
Opinion
We have audited the f inancial statements of Induction Healthcare Group Plc (the “Parent Company”) and
its subsidiaries (the “Group”) f or the period ended 31 March 2023, which comprise:
•
•
•
•
•
the Group statement of comprehensive income f or the year ended 31 March 2023;
the Group and parent company statements of f inancial position as at 31 March 2023;
the Group and parent company statements of changes in equity f or the year then ended;
the Group and parent company statements of cash f lows f or the year then ended; and
the notes to the f inancial statements, including a summary of signif icant accounting policies.
The f inancial reporting f ramework that has been applied in the preparation of the f inancial statements is
applicable law and accordance with UK adopted international accounting standardsand, as regards the
parent company f inancial statements, as applied in accordance with the provisions of the Companies Act
2006.
In our opinion:
•
•
•
•
the f inancial statements give a true and f air view of the state of the Group’s and of the Parent
Company's af f airs as at 31 March 2023 and of the Group’s loss f or the year then ended;
the group f inancial statements have been properly prepared in accordance with UK adopted
international accounting standards;
the parent company f inancial statements have been properly prepared in accordance with UK
adopted international accounting standards in conf ormity with the requirements of the Companies
Act 2006; and
the f inancial 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 under those standards are
f urther described in the Auditor’s
responsibilities f or the audit of the f inancial statements section of our report. We are independent of the
Group and the Parent Company in accordance with the ethical requirements that are relevant to our audit
of the f inancial statements in the UK, including the FRC’s Ethical Standard as applied to listed entities, and
we have f ulf illed our other ethical responsibilities in accordance with these requirements. We believe that
the audit evidence we have obtained is suf f icient and appropriate to provide a basis f or our opinion.
Conclusions relating to going concern
In auditing the f inancial statements, we have concluded that the directors’ use of the going concern basis
of accounting in the preparation of the f inancial statements is appropriate. Our evaluation of the directors’
assessment of the Group’s and Parent Company’s ability to continue to adopt the going concern basis of
accounting included
• Understanding the system of internal control over the cash f low management and budgeting
processes;
• Assessing the adequacy of the period covered in management going concern assessment;
• Conf irming the reasonability of the inputs and assumptions in the budgets as well as identif ying
which inputs had been subjected to stress testing and how the results of the stress testing
impacted the conclusions;
• Validating that the cost savings identif ied by management in the last quarter of the year ended 31
March 2023 have been realised in the f irst quarter of the year ended 31 March 2024 and ensuring
that the f orecast savings over the assessment period are consistent with this;
• Ensuring that these f orecasts are consistent with those used f or impairment assessment;
36
Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
• Perf orming a retrospective review on the f igures to mitigate the risk of management bias;
• Challenging other potential mitigating actions to improve liquidity in addition;
• Reviewing and incorporating any post balance sheet events that could impact the conclusions on
going concern; and
• Assessing the completeness and accuracy of the matters described in the going concern disclosure
within the signif icant accounting policies as set out in Note 2.2.
Based on the work we have perf ormed, we have not identif ied any material uncertainties relating to events
or conditions that, individually or collectively, may cast signif icant doubt on the Group’s and Parent
Company's ability to continue as a going concern f or a period of at least twelve months f rom when the
f inancial statements are authorised f or issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in
the relevant sections of this report.
Overview of our audit approach
Materiality
In planning and perf orming our audit we applied the concept of materiality. An item is considered material
if it could reasonably be expected to change the economic decisions of a user of the f inancial statements.
We used the concept of materiality to both f ocus our testing and to evaluate the impact of misstatements
identif ied.
Based on our prof essional judgement, we determined overall materiality f or the Group f inancial statements
as a whole to be £500,000 based on a 5% loss bef ore tax adjusted f or impairment charges. Materiality f or
the Parent Company f inancial statements as a whole was set at £90,000 based on 0.3% of net assets.
We use a dif f erent level of materiality (‘perf ormance materiality’) to determine the extent of our testing f or
the audit of the f inancial statements. Perf ormance materiality is set based on the audit materiality as
adjusted f or the judgements made as to the entity risk and our evaluation of the specif ic risk of each audit
area having regard to the internal control environment. This is set at £350,000 f or the group and £54,000
f or the parent. We reviewed this during the audit but considered that it remained set at an appropriate
amount.
Where considered appropriate perf ormance materiality may be reduced to a lower level, such as, for
related party transactions and directors’ remuneration.
We agreed with the Audit Committee to report to it all identif ied errors in excess of £25,000. Errors below
that threshold would also be reported to it if , in our opinion as auditor, disclosure was required on qualitative
grounds.
Overview of the scope of our audit
Our engagement was in respect of the audit of the Group’s consolidated f inancial statements and those of
the Parent Company. Our audit approach was developed by obtaining a thorough understanding of the
Group’s activities and is risk based.
Based on this understanding we assessed those aspects of the Group and Subsidiary Companies’
transactions and balances which were most likely to give rise to a material misstatement and were most
susceptible to irregularities including f raud or error.
Specif ically, we identif ied what we considered to be key audit matters and planned our audit approach
accordingly. We undertook a combination of analytical procedures and substantive testing on signif icant
transactions, balances and disclosures, the extent of which was based on various f actors such as our
overall assessment of the control environment, the ef f ectiveness of controls over individual systems and
the management of specif ic risks.
We conducted specif ic audit procedures in relation to all entities within the Group without the use of
component auditors. Not all group companies were within the scope of audit testing as some were dormant
with minimal to no transactions during the year under review.
Key Audit Matters
37
Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Key audit matters are those matters that, in our prof essional judgement, were of most signif icance in our
audit of the f inancial statements of the current period and include the most signif icant assessed risks of
material misstatement (whether or not due to f raud) that we identif ied. These matters included those which
had the greatest ef f ect on the overall audit strategy, the allocation of resources in the audit; and directing
the ef f orts of the engagement team. These matters were addressed in the context of our audit of the
f inancial statements as a whole, and in f orming our opinion thereon, and we do not provide a separate
opinion on these matters.
This is not a complete list of all risks identif ied by our audit.
Key audit matter
Revenue Recognition
Refer to page 10 (directors’ report), page 43,
(Consolidated Statement of Comprehensive
Income), pages 50-52 (Notes to the
Consolidated Financial Statements – Note 1.5
Accounting policies), Note 6, pages 72-76,
(financial disclosures).
Revenue is recognised in accordance with the
accounting policy set out
f inancial
the
statements. Revenue
f rom contracts with
customers including discontinued operations for
the year to 31 March 2023 was £13.6m (2022:
£7.9m).
in
The group has a number of dif ferent revenue
streams with dif f erent revenue
recognition
points, including licence revenue recognised
overtime. Errors in the recognition of revenue
could materially misstate
f inancial
statements and key investor metrics.
the
Revenue is a signif icant risk area as judgements
are required in determining the appropriate
revenue recognition point.
Valuation of intangibles including Goodwill
Refer to page 11 (directors’ report), page 44
(Consolidated balance sheet), pages 50,54-
56 (Notes to the Consolidated Financial
Statements – Note 1 and 5 Accounting
and
policies,
judgements), Note 17&18, pages 75-79
(financial disclosures).
Accounting
estimates
The carrying value of goodwill and other
intangible assets at 31 March 2023 were £10.3
million and £15.2 million respectively.
38
How the scope of our audit addressed the key
audit matter
f ocused on assessing
that revenue
Our work
accounting policies were compliant with IFRS and
validating that revenue is recognised in accordance
with the accounting policies and that cut of f was
correctly applied through testing.
We understood and walked through the revenue
recognition process and the related systems of
internal control.
We tested substantively the processing of revenue
across all dif f erent products and service of f erings to
ensure that the processes are in place to recognise
revenue in the appropriate periods.
Substantively tested the contract assets and liabilities
to test the accuracy of the revenue recognised to
contractual terms and supporting evidence.
We ensured that revenue was recognised in the
correct accounting period through review of sample of
contracts to conf irm when perf ormance obligations
were met and also reviewing sampled invoices af ter
the end of the reporting period.
We conf irmed the accuracy of the calculation of any
income balances. This
def erred and accrued
the risk of
additionally gave us comf ort over
management override or
f inancial
reporting.
f raudulent
We reviewed revenue disclosures and segmental
reporting to ensure compliance with the underlying
accounting standards.
The key components of our review covered broadly
the f ollowing:
- Appropriateness of key assumptions and
judgments including the discount rate.
- Adequacy of disclosures, including around the
sensitivities attached to key assumptions.
- Appropriateness of CGUs and accuracy of the
asset allocations to those CGUs.
We perf ormed the f ollowing procedures in order to
address the risks around the impairment:
We evaluated, in comparison to the requirements set
out in IAS 36, management’s assessment (using
Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
The
Management perf ormed an impairment review
as at 31 March 2023 in accordance with IAS 36
‘Impairment of assets’.
resulting
impairment charge of £7.7m is explained in
f urther detail in note 17 within the f inancial
statements.
The Group’s intangible assets comprise of
goodwill arising on acquisition of subsidiaries,
sof tware
customer
developments.
relationships
and
When assessing the carrying value of goodwill
intangible assets, management makes
and
judgements regarding
the appropriate cash
generating unit, strategy, f uture trading and
prof itability and the assumptions underlying
these. We considered the risk that goodwill
and/or other intangible assets were impaired.
The key judgements are in relation to growth
and prof itability. Changes in these f actors could
result in an impairment to the carrying value of
the goodwill and intangible assets.
Capitalisation of intangible assets
(Notes
Refer to page 10-11 (directors’ report), page
44 (Consolidated balance sheet), pages
the Consolidat ed
to
50,54-56
Financial Statements – Note 1 and 5
Accounting policies, Accounting estimates
and
judgements), Note 18, pages 79
(financial disclosures).
The carrying value of other intangible assets
including capitalised development costs as at 31
March 2023 was £15.2 million. Additions to
internally generated intangible assets was for
the year ended 31 March 2023 is £0.8m.
in
The risk on the capitalisation of the intangibles
to appropriateness of
was
management’s judgements concerning whether
the capitalisation criteria have been met.
relation
There was also the risk of errors in the capturing
of relevant costs resulting in misstatements in
the amount being capitalised.
39
discounted cash f low models) as to whether goodwill
and other intangible assets were impaired. We
reviewed, challenged and considered management’s
impairment and f air value models as appropriate and
their key estimates, including the discount rate. We
reviewed the appropriateness and consistency of the
process f or making such estimates. We have also
reviewed the constitution of CGU’s identif ied by the
management.
We obtained management’s discounted cash f low
models supporting the intangible asset valuation. We
challenged the key assumptions into the model,
including the f orecast revenue and EBITDA, discount
rates and growth rates. We compared cash f low
f orecasts used in the impairment review to historical
perf ormance and f orecasts used in the assessment of
going concern and challenged where
f orecasts
indicated perf ormance that deviated signif icantly from
historical perf ormance, in the absence of signif icant
changes in the business or market environment.
Discount rates and growth rates were benchmarked
to our knowledge of sector perf ormance, to evaluate
the reasonableness of these assumptions. We used
an in-house valuations expert to assist with the
assessment of the discount rate. Sensitivity analysis
was perf ormed on the key assumptions such as
growth, margin and discount rates to identif y those
assumptions to which the goodwill or intangible asset
valuation was highly sensitive.
We reviewed the disclosures made in respect of
impairment,
including those made as signif icant
estimates and judgements.
Our audit procedures in this area included:
Obtaining management’s assessment of
the
development projects undertaken and whether they
met, or not, the capitalisation criteria in IAS 38.
Testing, on a sample basis, capitalised costs through
to supporting documentation.
For projects where capitalisation has occurred
obtaining evidence to support the technical f easibility
and commercial viability.
Understanding management’s basis f or determining
qualif ying costs.
Reviewing the sources of these costs by obtaining
third party invoices or receipts, payroll records, etc.
Understanding management’s assessment and
judgement around which percentage or ratio of costs
incurred in respect of sof tware developers should be
capitalised or not by holding discussions with
management’s technical/project heads.
Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Reviewing management’s assessment of each
capitalizable cost against the requirements of IAS 38
f or capitalisation.
assessment
Reviewing management’s
and
determination of the basis f or amortisation and
reviewing the amortisation of each item of capitalised
development costs
f eature
relating
developed and ensuring no errors in determination of
the charge f or the year
to each
Reviewing the adequacy of disclosure.
Our audit procedures in relation to these matters were designed in the context of our audit opinion as a
whole. They were not designed to enable us to express an opinion on these matters individually and we
express no such opinion.
Other information
The directors are responsible f or the other inf ormation. The other inf ormation comprises the inf ormation
included in the annual report, other than the f inancial statements and our auditor’s report thereon. Our
opinion on the f inancial statements does not cover the other inf ormation and, except to the extent otherwise
explicitly stated in our report, we do not express any f orm of assurance conclusion thereon.
In connection with our audit of the f inancial statements, our responsibility is to read the other inf ormation
and, in doing so, consider whether the other inf ormation is materially inconsistent with the f inancial
statements, or our knowledge obtained in the audit or otherwise appears to be materially misstated. If we
identif y such material inconsistencies or apparent material misstatements, we are required to determine
whether there is a material misstatement in the f inancial statements or a material misstatement of the other
inf ormation. If , based on the work we have perf ormed, we conclude that there is a material misstatement
of this other inf ormation, we are required to report that f act.
We have nothing to report in this regard.
Opinion on other matter prescribed by the Companies Act 2006
In our opinion based on the work undertaken in the course of our audit
•
•
the inf ormation given in the strategic report and the directors' report f or the f inancial year f or which
the f inancial statements are prepared is consistent with the f inancial statements; and
the strategic report and the directors’ report have been prepared in accordance with applicable
legal requirements.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the group and the parent company and their environment
obtained in the course of the audit, we have not identif ied material misstatements in the strategic report or
the directors’ report.
We have nothing to report in respect of the f ollowing matters where the Companies Act 2006 requires us
to report to you if , in our opinion:
• adequate accounting records have not been kept by the parent company, or returns adequate f or
our audit have not been received f rom branches not visited by us; or
the parent company f inancial statements are not in agreement with the accounting records and
returns; or
certain disclosures of directors' remuneration specif ied by law are not made; or
•
•
40
Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
• we have not received all the inf ormation and explanations we require f or our audit.
Responsibilities of the directors for the financial statements
As explained more f ully in the directors’ responsibilities statement set out on page 35, the directors are
responsible f or the preparation of the f inancial statements and f or being satisf ied that they give a true and
f air view, and f or such internal control as the directors determine is necessary to enable the preparation of
f inancial statements that are f ree f rom material misstatement, whether due to f raud or error.
In preparing the f inancial statements, the directors are responsible f or assessing the group’s 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 the directors 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 for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the f inancial statements as a whole are
f ree f rom material misstatement, whether due to f raud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise f rom f raud or error and are considered material if , individually or in the aggregate,
they could reasonably be expected to inf luence the economic decisions of users taken on the basis of
these f inancial statements.
Irregularities, including f raud, are instances of non-compliance with laws and regulations. We design
procedures in line with our responsibilities, outlined above, to detect material misstatements in respect of
irregularities, including f raud. The extent to which our procedures are capable of detecting irregularities,
including f raud is detailed below:
We obtained an understanding of the legal and regulatory f rameworks that are applicable to the Group and
the procedures in place f or ensuring compliance. Based on our understanding of the Group and industry,
discussions with management and the Board of Directors we identif ied f inancial reporting standards and
Companies Act 2006 as having a direct ef f ect on the amounts and disclosures in the f inancial statements.
Our work included direct enquiry of management, reviewing Board and relevant committee minutes and
inspection of correspondence.
As part of our audit planning process, we assessed the dif f erent areas of the f inancial statements, including
disclosures, f or the risk of material misstatement. This included considering the risk of f raud where direct
enquiries were made of management and those charged with governance concerning both whether they
had any knowledge of actual or suspected f raud and their assessment of the susceptibility of f raud. We
considered the risk was greater in areas involving signif icant management estimate or judgement. Based
on this assessment we designed audit procedures to f ocus on key areas of estimate or judgement, this
included specif ic testing of journal transactions, both at the year end and throughout the year.
Other laws and regulations where non-compliance may have a material ef f ect on the Group's operations
are Data Protection and GDPR.
Our audit procedures included:
-
-
-
-
-
-
enquiry of management about the Group's policies, procedures and related controls regarding
compliance with laws and regulations and if there are any known instances of non-compliance
including f raud;
examining supporting documents f or all material balances, transactions and disclosures;
review of minutes of meetings of the Board of Directors;
enquiry of management about litigations and claims;
evaluation of the selection and application of accounting policies related
to subjective
measurements and complex transactions, in particular those items included in the Key Audit
Matters;
analytical procedures to identif y any unusual or unexpected relationships;
41
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Financial Statements
Annual Report & Accounts 2023
-
-
testing the appropriateness of journal entries recorded in the general ledger and other adjustments
made in the preparation of the f inancial statements; and
review of accounting estimates f or biases.
Owing to the inherent limitations of an audit, there is an unavoidable risk that some material misstatements
of the f inancial statements may not be detected, even though the audit is properly planned and perf ormed
in accordance with the ISAs (UK). We are not responsible f or preventing non-compliance and cannot be
expected to detect non-compliance with all laws and regulations.
The potential ef f ects of inherent limitations are particularly signif icant in the case of misstatement resulting
f rom f raud because f raud may involve sophisticated and caref ully organized schemes designed to conceal
it, including deliberate f ailure to record transactions, collusion or intentional misrepresentations being
made to us.
A f urther description of our responsibilities f or the audit of the f inancial statements is located on the
Financial Reporting Council’s website at: www.f rc.org.uk/auditorsresponsibilities. This description f orms
part of our auditor’s report.
Use of our report
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 f or no other purpose. To
the f ullest 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, f or our audit work, f or this report, or f or the opinions we
have f ormed.
Matthew Stallabrass (Senior Statutory Auditor)
f or and on behalf of
Crowe U.K. LLP
Statutory Auditor
London
28 July 2023
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Financial Statements
Annual Report & Accounts 2023
Consolidated Statement of Comprehensive
Income
For the year ended 31 March 2023
Note
2023
£000
2022
£000
Re-presented
C o n ti n u i n g o p e ra ti o n s
R e ve n u e fro m co n tra cts w i th cu sto me rs
Cost of sales
Gro ss p ro fi t
Sales and marketing expenses
Administrative expenses
Development expenses
Impairment losses
Loss from operations
Finance income
Finance expense
Loss before tax
Tax credit
Loss for the year from continuing operations
Discontinued operations
Loss from discontinued operations, net of tax
Loss for the year
6
17
7
11
11
12
13
Oth e r co mp re h e n si ve i n co me
Exchange gains/(losses) arising on translation on foreign operations
Exchange gains / (losses) on translation of foreign operations reclassified to
profit and loss during the year
Oth e r co mp re h e n si ve i n co me fo r th e ye a r, n e t o f ta x
To ta l co mp re h e n si ve i n co me
1 2 ,8 8 4
(4 ,7 5 4 )
8 ,1 3 0
(1 ,5 2 3 )
(6 ,9 5 2 )
(9 ,2 8 7 )
(7 ,7 4 8 )
(1 7 ,3 8 0 )
1
(7 )
(1 7 ,3 8 6 )
7 9 8
(1 6 ,5 8 8 )
(7 9 5 )
(1 7 ,3 8 3 )
(1 6 2 )
(8 0 1 )
(9 6 3 )
(1 8 ,3 4 6 )
7,231
(2,751)
4,987
(1,092)
(7,260)
(5,256)
—
(9,129)
1
(30)
(9,158)
1,082
(8,432)
(356)
(8,432)
801
9
810
(7,266)
L o ss p e r sh a re a ttri b u ta b l e to th e o rd i n a ry e q u i ty h o l d e rs o f th e p a re n t
Basic
Diluted
L o ss p e r sh a re fro m co n ti n u i n g o p e ra ti o n s a ttri b u ta b l e to th e o rd i n a ry e q u i ty h o l d e rs o f th e p a re n t
Basic
Diluted
(0 .1 9 )
(0 .1 9 )
(0 .1 8 )
(0 .1 8 )
14
14
14
14
The Notes on pages 47 to 91 form an integral part of these financial statements.
43
(0.10)
(0.10)
(0.10)
(0.10)
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Annual Report & Accounts 2023
Consolidated Statement of Financial Position
As at 31 March 2023
Asse ts
N o n -cu rre n t a sse ts
Property, plant and equipment
Intangible assets
Goodwill
Deferred tax assets
To ta l n o n -cu rre n t a sse ts
C u rre n t a sse ts
Contract assets
Trade and other receivables
Current tax receivable
Cash and cash equivalents
Assets held for sale
To ta l cu rre n t a sse ts
To ta l a sse ts
L i a b i l i ti e s
N o n -cu rre n t l i a b i l i ti e s
Contract liabilities
Deferred tax liability
Other financial liabilities
To ta l n o n -cu rre n t l i a b i l i ti e s
C u rre n t l i a b i l i ti e s
Trade and other payables
Provisions
Contract liabilities
Current tax payable
Liabilities associated with assets held for sale
Other financial liabilities
To ta l cu rre n t l i a b i l i ti e s
To ta l l i a b i l i ti e s
N e t a sse ts
Eq u i ty a ttri b u ta b l e to e q u i ty h o l d e rs o f th e p a re n t
Share capital
Share premium reserve
Merger reserve
Foreign exchange reserve
Other reserves
Retained earnings
To ta l e q u i ty
Note
2023
£000
2022
£000
19
18
17
12
21
20
12
22
24
12
30
23
25
24
12
13
30
26
27
27
27
10
27
9
1 5 ,2 5 1
1 0 ,6 8 5
5 5 6
2 6 ,5 0 1
1 ,2 2 8
2 ,6 7 2
1 ,1 7 5
4 ,2 8 7
2 ,4 7 4
1 1 ,8 3 6
3 8 ,3 3 7
3 ,5 8 8
3 ,8 7 0
5 6
7 ,5 1 4
2 ,7 1 3
5 2 8
2 ,1 9 8
—
1 ,0 1 6
7 2
6 ,5 2 7
1 4 ,0 4 1
2 4 ,2 9 6
244
20,962
19,758
1,540
42,504
786
3,347
1,240
7,496
—
12,869
55,373
326
5,851
128
6,305
3,365
—
2,579
789
—
72
6,805
13,110
42,263
4 6 2
4 1 ,6 6 5
2 0 ,2 0 5
(1 6 2 )
1 ,5 7 8
(3 9 ,4 5 2 )
2 4 ,2 9 6
460
41,665
20,205
801
1,405
(22,273)
42,263
The Notes on pages 47 to 91 form an integral part of these financial statements.
The financial statements on 49 to 93 were approved and authorised for issue by the board of Directors on 28
July 2023 and were signed on its behalf by:
John McIntosh
Director
Company registered number: 11852026
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Financial Statements
Annual Report & Accounts 2023
Consolidated Statement of Changes in Equity
As at 31 March 2023
At 31 March 20 2 1 a n d 1 Ap ri l 2 0 2 1
C o mp re h e n si ve i n co me fo r th e
ye a r
Loss for the year
Other comprehensive gain / (loss)
for the year
To tal comprehensive income for the
ye a r
Transactions with owners,
re co rd e d d i re ctl y i n e q u i ty
Issue of ordinary shares
Issue of shares as consideration for
a business combination
Equity settled share-based
payments
Share-issue costs
Reclassification of equity
To tal contributions by an d
d i stributions to o w n e rs
At 31 March 2022 and 1 April 2022
C o mp re h e n si ve i n co me fo r th e
ye a r
Loss for the year
Other comprehensive income /
(loss) for the year
To tal comprehensive income for the
ye a r
Transactions with owners,
re co rd e d d i re ctl y i n e q u i ty
Issue of shares on exercise of equity
settled share-based payments
Equity settled share-based
payments
To tal contributions by an d
d i stributions to o w n e rs
At 31 March 2023
Note
Share
capital
£000
Share
premium
£000
2 1 0 1 8 ,4 3 2
Merger
reserve
£000
1 0 ,8 7 9
Foreign
exchange
reserve
£000
(9 )
Other
reserves
£000
Retained
earnings
£000
Total
equity
£000
7 9 2
(1 3,839 ) 1 6 ,4 6 5
—
—
—
—
—
—
179
24,821
—
—
—
—
71
—
—
—
—
8,928
—
(1,190)
(398)
—
—
398
250
23,233
9,326
—
810
810
—
—
—
—
—
—
—
—
—
—
—
613
—
—
613
(8,434)
(8,434)
—
810
(8,434)
(7,624)
—
25,000
—
—
—
—
—
8,999
613
(1,190)
—
33,422
4 6 0 4 1 ,6 6 5 2 0 ,2 0 5
8 0 1
1 ,4 0 5 (2 2,273 ) 4 2 ,2 6 3
—
—
—
2
—
—
—
—
—
—
—
—
—
—
—
2
—
4 6 2 4 1 ,6 6 5 2 0 ,2 0 5
—
—
—
(17,383) (17,383)
(963)
—
—
(963)
(963)
—
(17,383)
(18,346)
—
—
—
(1 6 2 )
(204)
204
377
—
173
204
2
377
379
1 ,5 7 8 (3 9,452 ) 2 4 ,2 9 6
15
15
10
15
10
10
The notes on pages 47 to 91 form part of these financial statements.
45
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Annual Report & Accounts 2023
Consolidated Statement of Cash Flows
For the year ended 31 March 2023
C a sh fl o w s fro m o p e ra ti n g a cti vi ti e s
Loss for the year
Ad j u stme n ts fo r
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 charge/(credit)
Mo ve me n ts i n w o rki n g ca p i ta l :
Decrease/(Increase) in trade and other receivables and contract assets
(Decrease)/Increase in trade and other payables and contract liabilities
Interest received
Interest paid
Income taxes received
Income taxes paid
N e t ca sh u se d i n o p e ra ti n g a cti vi ti e s
C a sh fl o w s fro m/(u se d i n ) i n ve sti n g a cti vi ti e s
Acquisition of subsidiary, net of cash acquired
Purchases of property, plant and equipment
Payment of software development costs
N e t ca sh u se d i n i n ve sti n g a cti vi ti e s
C a sh fl o w s fro m/(u se d i n ) fi n a n ci n g a cti vi ti e s
Issue of ordinary shares
Proceeds on other financial liabilities
Share issue costs
Repayment of bank borrowings
Payment of lease liabilities
N e t ca sh fro m/(u se d i n ) fi n a n ci n g a cti vi ti e s
N e t ca sh i n cre a se /(d e cre a se ) i n ca sh a n d ca sh e q u i va l e n ts
Cash and cash equivalents at the beginning of year
Exchange gains/(losses) on cash and cash equivalents
C a sh a n d ca sh e q u i va l e n ts a t th e e n d o f th e ye a r
The notes on pages 47 to 91 form part of these financial statements.
Notes
2023
£000
2022
£000
(1 7 ,3 8 3 )
(8,434)
19
18
17
11
11
2 8
1 0
12
11
11
15
19
7
15
2 8
1 1 9
4 ,7 2 6
7 ,7 4 8
(1 )
7
—
3 7 7
6 3
(7 9 8 )
(5 ,1 4 2 )
1 6 6
2 ,9 7 2
1
(7 )
65
(863)
(2 ,8 0 8 )
28
3,785
—
(1)
30
—
613
—
(1,146)
(5,125)
1,661
1,115
1
(30)
458
(141)
(2,061)
—
(1 7 )
(8 1 0 )
(8 2 7 )
(13,486)
(256)
(3,090)
(16,832)
2
—
—
—
(7 2 )
(7 0 )
(3 ,7 0 5 )
7 ,4 9 6
4 9 6
4 ,2 8 7
25,000
210
(1,190)
—
(12)
24,008
5,115
2,472
(91)
7,496
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Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
1. Ba si s o f p re p a ra ti o n
Both the financial statements of the Group and the financial statements of the Company have been prepared in
accordance with UK-adopted international accounting standards (“UK-Adopted IFRS”). They were authorised for
issue by the Group’s board of directors on 28th July 2023.
Details of the Group’s accounting policies, including changes during the year, are included in note 2.
These financial statements are presented in pound sterling, which is the Group’s presentational 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.
2. Acco u n ti n g p o l i ci e s
2 .1 Ba si s o f co n so l i d a ti o n
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.
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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.
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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.
2 .2 Go i n g co n ce rn
The Group has recognised total revenues during the year of £13.6m (2022: £7.9m) and had cash balances at 31
March 2023 of £4.3m (2022: £7.49m) with cash outflows from operating activities during the year of £2.8m (2022:
£2.06m).
During the year ended 31 March 2023, the Group successfully completed a right-sizing programme, estimated to
deliver c. 30% reduction in costs.
In assessing the appropriateness of the going concern assumption, the Board of Directors (“the Directors”) has
reviewed the ability to continue operating over the period to 30 June 2025 (“the going concern period”). The
Directors have also reviewed other relevant information, together with considering scenarios with adverse impacts
across the Group’s principal risks relating to: revenue reductions from either non-renewals of major contracts with
customers or downward price pressures; non-materialisation of forecast sales to new customers and delays in
securing new contracts with customers resulting in delayed cash inflows. These risks are further connected to
macro-economic conditions and the UK government’s fiscal policy, in particular the funding and support to the
group’s customers which are primarily NHS Trusts and other government bodies. The Directors determined that
the forecast period extends to 30 June 2025 to take into account the operating cycle of the group, which sees
significant contract renewals in March 2025, with cash inflows received in April and May 2025 .
The Directors’ cash inflows under the base case of going concern assessment assumes all existing customer
contracts with major customers will be renewed when they come due within the forecast period at the same
contract terms. It also includes assumptions regarding growth in revenues due to new customer contracts, and
growth in revenues due to sales of new products to existing customers. The base case going concern assessment
cash outflows allows investment in the full range of planned market and product development activities, through
increased employee-related and other spend to achieve revenue targets over this forecast period.
The Directors have considered a severe but plausible downside scenario whereby the Group is impacted by:
reductions in revenue arising from either non-renewals of some major customer contracts or downward price
pressure; non-materialisation of some forecast sales to new customers and three to six-month delays in securing
some contracts with new customers resulting in delays in SaaS revenues and cash inflows, with associated
reductions in incremental costs directly linked to revenue generation. The severe but plausible downside scenario
has indicated that cash balances are their lowest in April 2024 before increasing again in May 2024 in line with the
Group’s operating cycle. At this low point, cash balances remain positive. Under a more severe scenario, the
Directors believe they can timeously respond to decreases in cash inflows by taking mitigating actions to reduce
costs. These include but are not limited to; delays in hiring new employees; delays in hiring new contractors; and
reducing discretionary spend through, for example, reducing professional and consulting expenditure and
contractor costs.
In determining that there is no material uncertainty related to going concern, the Directors have applied significant
judgement regarding renewals of existing contracts with major customers, in particular NHS customers. The
Directors have made this judgement after considering the UK budget announcement in November 2022. Whilst
there remains uncertainty as to the specifics of the NHS funding plan following the budget announcement, the
Directors note that NHS funding generally was increased and there was a focus on NHS efficiency, which the
Group’s products / services are designed to assist with.
Therefore, the Directors believe that the judgement they have made is appropriate based upon information
available at that point.
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Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
2 . Acco u n ti n g p o l i ci e s (co n ti n u e d )
2 .2 Go i n g co n ce rn (co n ti n u e d )
After due consideration, the Directors have concluded that there is a reasonable expectation that the Group and
Company have adequate resources to meet their liabilities as they fall due for the period to 30 June 2025, and
therefore these financial statements are prepared on a going concern basis.
2 .3 Bu si n e ss co mb i n a ti o n s
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:
1
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. When an
operation is classified as a discontinued operation, the comparative statement of profit or loss and OCI is re-
presented as if the operation had been discontinued from the start of the comparative year.
2
3
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
values 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.
49
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Financial Statements
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Notes (forming part of the financial statements)
(continued)
2 . Acco u n ti n g p o l i ci e s (co n ti n u e d )
2 .3 Bu si n e ss co mb i n a ti o n s (co n ti n u e d )
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.
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.
2 .4 Go o d w i l l
Goodwill arising on an acquisition of a business is carried at cost as established at the date of acquisition of the
business (see note 2.3) 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 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.
2 .5 R e ve n u e
Licenced subscription services
The Group is in the business of providing a right-to-access to its proprietary software applications, as software-as-
a- service (“SaaS”). Management have determined that it provides a right-to-access based on the fact that the
customer simultaneously receives and consumes the benefit from the performance of providing access to the
proprietary applications.
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 over time, over the length of the subscription
period on a straight- line basis.
Revenue is recognised at an amount that reflects the consideration to which the Group is entitled to in exchange
for those services. For contracts with value-added reseller customers, revenue is presented net of amounts
payable to these customers.
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 and
resellers where the Group has a value-added reseller agreement, whereby healthcare institutions and resellers
are charged a subscription/ licence fee for making the applications available to users.
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Notes (forming part of the financial statements)
(continued)
2 . Acco u n ti n g p o l i ci e s (co n ti n u e d )
2 .5 R e ve n u e (co n ti n u e d )
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.
With regards to principal versus agent considerations, the Group acts as principal in its contracts with resellers.
As such the Group recognises revenue net of any commissions. The performance obligations of the Group as
applicable to contracts with resellers do not differ from those arising on direct contracts with end customers.
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.
Certain of the group’s services require set-up effort, these are 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 period. Management also assess whether material rights
represent separate performance obligations. For the avoidance of doubt, any references to “subscription period”
or “subscription term” in these financial statements includes extensions of contractual licence or subscription
periods in instances (if any) where management have determined that a material right exists.
Software support and maintenance fees
Unless separately specified, software support and maintenance services are included in licence fees under in the
Group contracts. Support and maintenance fees are recognised as a separate performance obligation as they are
distinct due to the fact that the customer derives a benefit from these services together with the access to the
Group’s applications. For example, the customer receives a distinct benefit from the provision of support services
in dealing with any issues that arise from the use of the applications, whereas the licence fees provide access to
these applications. Support and maintenance fees 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.
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Notes (forming part of the financial statements)
(continued)
2 . Acco u n ti n g p o l i ci e s (co n ti n u e d )
2 .5 R e ve n u e (co n ti n u e d )
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 approved 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.
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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 initial
subscription period and the extended period under anticipated renewals.
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 period from the date of the completion of the set-up services.
2 .6 Fo re i g n cu rre n cy
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.
2 .7 Emp l o ye e b e n e fi ts
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
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up to the reporting date.
Notes (forming part of the financial statements)
(continued)
2 . Acco u n ti n g p o l i ci e s (co n ti n u e d )
2 .8 Sh a re -b a se d p a yme n ts
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.
2 .9 Ta xa ti o n
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.
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Financial Statements
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Notes (forming part of the financial statements)
(continued)
2 . Acco u n ti n g p o l i ci e s (co n ti n u e d )
2 .9 Ta xa ti o n (co n ti n u e d )
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 2022 a credit was recognised in respect of the claim
submitted for the year ended 31 March 2020 in respect of two subsidiary entities. This credit was not recognised
in prior years as there was uncertainty regarding the amount and timing of the credits due to there being no past
experience of claims being received. These credits were therefore only recognised when approved by HMRC. A
credit was also recognised in respect of the claim for the years ended 31 March 2021 and 31 March 2022 for those
subsidiary entities, these claims have not yet been submitted to HM Revenue & Customs.
2 .1 0 Pro p e rty, p l a n t a n d e q u i p me n t
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 Straight line over the expected life of the asset Straight line over the expected life of the asset
Fixtures and fittings
5 years
Computer Equipment
3 years
2 .1 1 In ta n g i b l e a sse ts
Intangible assets acquired separately
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.
Technology
3 – 10 years
Useful life
Amortisation method Straight line over the
expected life of the
asset
Acquired
Internally generated or
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 – 5 years
Straight line over the
expected life of the asset
Internally developed
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Internally-generated intangible assets
Expenditure on research activities is recognised as an expense in the period in which it is incurred.
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Notes (forming part of the financial statements)
(continued)
2 . Acco u n ti n g p o l i ci e s (co n ti n u e d )
2 .1 1 In ta n g i b l e a sse ts (co n ti n u e d )
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; , including through contracts with new
customers, reductions in the cost of delivering the Group’s products, and by enhancing the likelihood of contract
renewals
- the availability of adequate technical, financial and other resources to complete the development and to use or
sell the intangible asset; and
- the ability to measure reliably the expenditure attributable to the intangible asset during its development.
The amount initially recognised for internally-generated intangible assets is the sum of the expenditure incurred
from the date when the intangible asset first meets the recognition criteria listed above. Where no internally-
generated intangible asset can be recognised, development expenditure is recognised in 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.
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.
2 .12 Impairment of non-financial assets (exclud i n g i n ve n to ri e s, i n ve stme n t p ro p e rti e s a n d d e fe rre d ta x a sse ts)
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.
2 .1 3 Imp a i rme n t o f ta n g i b l e a n d i n ta n g i b l e a sse ts o th e r th a n g o o d w i l l
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
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Financial Statements
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Notes (forming part of the financial statements)
(continued)
2 . Acco u n ti n g p o l i ci e s (co n ti n u e d )
2 .1 3 Imp a i rme n t o f ta n g i b l e a n d i n ta n g i b l e a sse ts o th e r th a n g o o d w i l l (co n ti n u e d )
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.
2 .1 4 Fi n a n ci a l i n stru me n ts
Financial assets and financial liabilities are recognised when the Group 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.
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 Group plc’s own equity instruments, it is
either a non-derivative that includes no obligation to deliver a variable number of Induction Healthcare Group plc’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.
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Notes (forming part of the financial statements)
(continued)
2 . Acco u n ti n g p o l i ci e s (co n ti n u e d )
2 .1 4 Fi n a n ci a l i n stru me n ts (co n ti n u e d )
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 Group plc’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.
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.
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.
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.
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.
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.
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Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
2 . Acco u n ti n g p o l i ci e s (co n ti n u e d )
2 .1 4 Fi n a n ci a l i n stru me n ts (co n ti n u e d )
Measurement and recognition of expected credit losses
The Group recognises loss allowances for expected credit losses (“ECLs”) on contract assets and 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.
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.
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.
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.
2 .1 5 D e fi n e d co n tri b u ti o n sch e me s
Contributions to defined contribution pension schemes are charged to the statement of comprehensive income in
the year to which they relate.
2 .1 6 C o st o f sa l e s
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.
2 .1 7 Se g me n ta l re p o rti n g
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
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Notes (forming part of the financial statements)
(continued)
2 . Acco u n ti n g p o l i ci e s (co n ti n u e d )
2 .1 7 Se g me n ta l re p o rti n g (co n ti n u e d )
performance assessment. Therefore, management have determined that the Group has one reportable segment.
2 .1 8 L e a se s
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains,
a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration.
At commencement of a contract that contains a lease component, the Group allocates the consideration in the
contract to each lease component on the basis of its relative stand-alone prices. This includes leases of property.
The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use
asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease
payments made at or before the commencement date, plus any initial direct costs incurred, less any lease
incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date
to the end of the lease term. In addition, the right-of-use asset is periodically reduced by impairment losses, if any,
and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily
determined, the lessee’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as
the discount rate.
The Group determines its incremental borrowing rate by obtaining interest rates from various external financing
sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.
Lease payments included in the measurement of the lease liability comprise the following:
-
fixed payments, including in-substance fixed payments;
The lease liability is measured at amortised cost using the effective interest method.
The Group presents right-of-use assets that do not meet the definition of investment property in ‘property, plant
and equipment’ and lease liabilities in ‘other financial liabilities in the statement of financial position.
2 .1 9 N o n -cu rre n t a sse ts h e l d fo r sa l e
The Group classifies non-current assets and disposal groups as held for sale if their carrying amounts will be
recovered principally through a sale transaction rather than through continuing use. Non-current assets and
disposal groups classified as held for sale are measured at the lower of their carrying amount and fair value less
costs to sell. Costs to sell are the incremental costs directly attributable to the disposal of an asset (disposal group),
excluding finance costs and income tax expense.
The criteria for held for sale classification is regarded as met only when the sale is highly probable, and the asset
or disposal group is available for immediate sale in its present condition. Actions required to complete the sale
should indicate that it is unlikely that significant changes to the sale will be made or that the decision to sell will be
withdrawn. Management must be committed to the plan to sell the asset and the sale expected to be completed
within one year from the date of the classification.
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Notes (forming part of the financial statements)
(continued)
2 . Acco u n ti n g p o l i ci e s (co n ti n u e d )
2 .1 9 N o n -cu rre n t a sse ts h e l d fo r sa l e (co n ti n u e d )
Property, plant and equipment and intangible assets are not depreciated or amortised once classified as held
for sale.
Assets and liabilities classified as held for sale are presented separately as current items in the statement of
financial position.
Discontinued operations are excluded from the results of continuing operations and are presented as a single
amount as profit or loss after tax from discontinued operations in the statement of profit or loss. Additional
disclosures are provided in Note 14. All other notes to the financial statements include amounts for continuing
operations, unless indicated otherwise.
3. R e p o rti n g e n ti ty
Induction Healthcare Group plc is a company incorporated, domiciled and registered in England and Wales 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.
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 17. The Group has only one reportable segment.
4. N e w sta n d a rd s, i n te rp re ta ti o n s a n d a me n d me n ts
No new standards or interpretations have had any impact on the recognition, measurement or disclosures of the
Group. The Group has not early-adopted any standards in issue but yet effective.
5. Acco u n ti n g e sti ma te s a n d j u d g e me n ts
5 .1 Si g n i fi ca n t j u d g e me n ts
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. Significant judgement is
applied by management in determining the point at which technical feasibility is reached, as well as determining
the economic feasibility of the project/feature.
Technological feasibility is achieved at the point at which the product, project or feature is determined to be
technically capable of being built which the Group assess with reference to the functionality of other products in
the market, and the Group has assessed it has the resources available to complete the development.
60
Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
5 Acco u n ti n g e sti ma te s a n d j u d g e me n ts (co n ti n u e d )
5 .1 Si g n i fi ca n t j u d g e me n ts (co n ti n u e d )
Economic feasibility is achieved when a market for the product has been identified and management have
determined that the product will generate future economic benefits, which can be demonstrated by either charging
the customer incremental licence fees for a new feature, generating internal const savings to the Group, or
increased likelihood of customer renewals. The judgement is most significant where the future economic benefit
of a project is determined to be in the form of increased likelihood of customer contract renewals, where evidence
of customer likelihood to renew due to a particular project is uncertain and subjective. Of the additions to internally
generated intangible assets disclosed in Note 5.2, £0.2m of additions capitalised by Zesty Limited (2022: £Nil) and
£0.2m of additions capitalised by Attend Anywhere Limited (2022: £Nil) were deemed to generate probable future
economic benefit via customer renewals.
In concluding on the judgement whether economic feasibility has been met, management have considered
correspondence with customers; past trends in renewal rates; feature differentiation for which there is demand,
and whether the functionality of other similar product features in the market indicates economic feasibility.
Going concern
The directors have applied judgement in assessing that no material uncertainty exists over going concern as part
of their going concern assessment. Refer to note 2.2 for full details.
Non-current assets held for sale
Management have applied significant judgement in determining whether the planned disposal of the Induction
Switch and Induction Guidance disposal groups meet the requirements of IFRS 5 “Non-current Assets Held for
Sale and Discontinued Operations”. Management have concluded that the disposal groups are available for
immediate sale in their present condition subject only to terms that are usual and customary for sales of such
disposal groups, and the sale of these disposal groups are highly probably, based on the actions taken by
management to commence the active marketing of the disposal groups. The Induction Switch disposal group was
sold post-year end, refer Note 32.
5 .2 Si g n i fi ca n t e sti ma te s a n d a ssu mp ti o n s
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 2023 the carrying amount of capitalised development
costs was £4.5m (2022: £5.9m), of which £1.9m relates to Zesty Limited (2022: £2.2m) and £2.5m to Attend
Anywhere Limited (2022 £3.2m). This included additions to internally generated intangible assets of £0.8m (2022:
£3.1m), of which £0.5m relates to Zesty Limited (2022: £1.2m) and £0.3m to Attend Anywhere Limited (2022:
£1.6m). 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 percentage of time
capitalized is determined on an individual employee basis and is reflective of the time spent purely on developing
the products and services of the group for sale to a range of customers. There is a high level of estimation
uncertainty to the estimates used, as there is no time tracking system in place for employees to record time spent
on a certain activity at the point at which that time is incurred. Development costs capitalised are highly sensitive
to the percentages used.
During the year ended 31 March 2023, the average percentage of development costs capitalised, as a percentage
of total staff costs for development related employees was 15% or £0.8m (2022: 60% or £3.1m). A reasonably
possible decrease of 5 percentage points would result in a decrease in the costs capitalised during the year of
£0.3m, resulting in a corresponding decrease in the capitalised development cost balance and an increase in
losses for the year. 5 percentage points is considered a reasonably possible change in the capitalisation
percentage for an individual employee’s time, based on management’s historical experience in the variability of
time spent on development activities.
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Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
5 Acco u n ti n g e sti ma te s a n d j u d g e me n ts (co n ti n u e d )
5 .2 Si g n i fi ca n t e sti ma te s a n d a ssu mp ti o n s (co n ti n u e d )
Impairment of goodwill
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. The impairment assessment
performed for the purposes of goodwill impairment, includes both goodwill and other intangible assets. For the
Induction Zesty and Induction Attend Anywhere CGU’s, management do not calculate the fair value less costs of
disposal, as reliable inputs to fair value are not available for the assets, and therefore the recoverable amount is
the value-in-use. As a result of the planned disposal of the Induction Guidance disposal group (which aligns to the
grouping of assets used for the Induction Guidance CGU), the carrying amount of the Induction Guidance CGU
will be recovered primarily through sale rather than use, and therefore the recoverable amount was determined to
be the fair value less costs of disposal.
The value-in-use (“VIU”) 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 three 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 (including those related to research and development activities
performed to create new feature functionality). The recoverable amount is sensitive to the discount rate used for
the DCF model; the expected future cash-inflows and cash outflows; and the growth rate used for extrapolation
purposes. Management considers EBITDA to be representative of future cash-inflows and outflows. These
estimates are most relevant to goodwill recognised by the Group and apply to the Induction Zesty and Induction
Attend Anywhere CGU’s.
The key assumptions in the VIU assessments are related to the estimation of the discount rate and the cash
inflows and outflows which determine EBITDA. The primary source of estimation uncertainty arises from the
combined impact of reasonably possible changes in two or more of the above assumptions.
Cash inflows are primarily influenced by assumptions about existing customers’ renewal rates; sales of additional
services to existing customers; sales made to new customers; the price of the services and the timing of the
completion of set-up activities for new customers (or “go-lives”). The major sources of estimation uncertainty in
determining cash inflows are the renewal rates of contracts with customers, the number of new customers
contracted in a period, and the timing of the completion of set-up activities for these new customers.
Cash outflows are primarily influenced by employee and non-employee workforce costs, supplier costs such as
cloud hosting costs, and an allocation of corporate overheads.
Based on the sensitivity analysis performed by management, none of the assumptions mentioned above give rise
to significant estimation uncertainty (or an impairment) on an individual basis, but do so in aggregate.
In measuring the fair value of the Induction Guidance CGU, management has adopted an expected value income
approach. Management developed a set of discrete potential outcomes and assigned probabilities to the
estimated consideration derived from these (the “probability weighted outcomes”). The costs of disposal have
been estimated based on historical costs for similar transactions entered into by the group. Refer to Note 13 for
further information.
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. The carrying amount of each CGU is disclosed in Note
17.
62
Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
5 Acco u n ti n g e sti ma te s a n d j u d g e me n ts (co n ti n u e d )
5 .3 Oth e r j u d g e me n ts
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 £26m (2022: £16.9m) of tax losses carried forward. These losses relate to subsidiaries that have
a history of losses and do not expire. Some of these 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.
Two subsidiaries have future taxable profits and deferred tax liabilities, and the Group has recognised deferred
tax assets on the tax losses carried forward to the extent that there are sufficient offsetting deferred tax liabilities.
If the Group was able to recognise all unrecognised deferred tax assets, profit and equity would have increased
by £6.5m (2022: £2.9m). This is not considered to be a reasonably possible outcome. Further details on taxes are
disclosed in Note 12.
5 .4 Oth e r e sti ma te s
Valuation of acquired intangibles
During the year ended 31 March 2022, management made estimates in determining the value of intangible assets
(comprising technology and customer related intangibles) acquired in its business combinations. Due to numerous
assumptions made on variables within the valuation, there is a high level of estimation uncertainty. These
estimations were classified as significant in the financial statements for the year ended 31 March 2022, but are
not considered significant for the year ended 31 March 2023. This is due to the fact that the estimation uncertainty
only affects the amortisation expense recognized during the year ended 31 March 2023.
The assumptions applied in valuing the technology related intangible assets include projections of cash inflows
from contracts with customers, the obsolescence rate, profit margins, corporate tax rates, contributory asset
charges and the discount rate applied to cash flows. Projections of cash inflows from contracts with customers are
influenced by customer attrition rate assumptions and pricing assumptions. The obsolescence rate represents a
rate at which the technology become obsolete, which is a proxy for the number of years over which the Group
updates and replaces the underlying software in order to maintain existing competitiveness. The valuation of
technology assets is most sensitive to cash inflows from contracts with customers and obsolescence rates.
The assumptions applied in valuing the customer related intangible are projections of cash inflows from contracts
with customers, profit margins, corporate tax, working capital requirements, commission rates paid to resellers
under the “without” scenario and the discount rate. Projections of cash inflows from contracts with customers are
influenced by customer attrition rate assumptions and pricing assumptions. The value of the customer related
intangible is most sensitive to the cash inflows from contracts with customers.
The post-tax discount rate used in the valuations was 16%. Management have also determined and disclosed
sensitivities of the valuations to these assumptions. Please refer to Note 15 for more information.
63
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Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
6. R e ve n u e
During the year ended 31 March 2023, the Group classified the Induction Switch and Induction Guidance products
as disposal groups held for sale (refer Note 13). Consequently, revenues from contracts with customers arising
from these products have been presented as part of results from discontinued operations. Revenues as presented
in this note include only revenues from continuing operations, and comparative amounts for the year ended 31
March 2022 have been re-presented to exclude the impact of discontinued operations.
The following is an analysis of the Group’s revenue for the year from continuing operations:
Provision of software (including set-up services of £0.1m (2022: £0.2m))
Post-contract support and maintenance
Text message revenue
Professional services
To ta l re ve n u e fro m co n tra cts w i th cu sto me rs
2023
£000
1 1 ,7 0 3
258
4 3 1
4 9 2
1 2 ,8 8 4
2022
£000
Re-
presented
6,711
217
303
—
7,231
Revenue from the provision of software of £11.7m (2022: £6.7m) is shown after IFRS 3 related adjustments of
£0.07m (2022: £4.2m)). This includes £0.05m related to Induction Zesty (2022: £0.07m) and £0.02m related to
Induction Attend Anywhere (2022: £4.2m). As a result of applying IFRS 3 in accounting for acquisitions, the Group
is required to determine the fair value of all acquired assets and liabilities. This includes determining the fair value
of the contract liabilities (“deferred income”) of the acquiree.
The following is an analysis of revenue from continuing operations by country of destination:
United Kingdom
Europe
United States
Rest of World
To ta l re ve n u e fro m co n tra cts w i th cu sto me rs
2023
£000
1 2 ,8 8 4
—
—
—
1 2 ,8 8 4
2022
£000
Re-
presented
7,231
—
—
—
7,231
Revenue from the United Kingdom of £12.8m (2022: £7.2m) is shown after IFRS 3 related adjustments of £0.07m
(2022: £4.2m).
The following is an analysis of revenue by product line. Attend Anywhere Pty Ltd (Induction Attend Anywhere) was
acquired on 9 June 2021, refer to Note 15 for further information. Revenues for Induction Guidance and Induction
Switch have been included in the results of discontinuing operations, refer Note 13.
2023
£000
1 0 ,7 0 9
2,175
1 2 ,8 8 4
2022
£000
Re-
presented
5,715
1,516
7,231
Induction Attend Anywhere
Induction Zesty
64
Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
6 . R e ve n u e (co n ti n u e d )
The following represents the timing of revenue recognition:
Services transferred over time
Services at point in time
2023
£000
1 1 ,9 6 1
9 2 3
1 2 ,8 8 4
2022
£000
Re-
presented
6,918
313
7,231
The following represents the transaction prices allocated to performance obligations that are unsatisfied or partially
satisfied at 31 March 2023, and the timing of the recognition of revenue from these balances.
Within one year
More than one year
2023
£000
1 ,3 3 0
171
1 ,5 0 1
2022
£000
985
321
1,306
7. Exp e n se s b y n a tu re fo r co n ti n u i n g o p e ra ti o n s
The following represents expenses incurred during the year, by nature. These amounts exclude the results of
discontinued operations, which are presented separately in Note 13.
2023
£000
2022
£000
9 ,6 3 0
1 1 9
4 ,5 1 4
7 ,7 4 8
2 ,7 5 6
—
—
5 1 2
(8 0 5 )
3 7 7
7,859
29
3,785
—
2,366
423
108
459
(3,090)
613
2023
£000
9 3
9 3
—
—
9 3
2022
£000
795
795
8
8
803
Employee costs
Depreciation of property, plant and equipment
Amortisation of intangible assets
Impairment of goodwill and intangible assets
Contractors’ costs
Acquisition related transaction costs
Fundraise related transaction costs recognised in profit and loss
Professional and legal fees
Research and development expense capitalised
Share-based payment charge
8. Au d i to rs re mu n e ra ti o n
Audit of these financial statements
To ta l a u d i t fe e s
Interim financial statement review
To ta l n o n -a u d i t fe e s
To ta l a u d i t a n d n o n -a u d i t fe e s
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Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
9. Emp l o ye e b e n e fi t e xp e n se s fo r co n ti n u i n g o p e ra ti o n s
The following represents employee benefit expenses from continuing operations.
Employee b e n e fi t e xp e n se s (i n cl u d i n g d i re cto rs) co mp ri se :
Wages and salaries
Social security costs
Defined contribution pension cost
Share-based payment expenses
Other employee benefits
To ta l e mp l o ye e b e n e fi t e xp e n se
2023
£000
2022
£000
6 ,9 3 4
8 0 1
3 5 9
3 6 1
1 ,1 7 5
9 ,6 3 0
5,735
551
309
613
651
7,859
The monthly average number of persons, including the directors, employed by the Group during the year was as
follows:
Development
Sales and Marketing
Delivery and Support
General and Administrative
To ta l Ave ra g e FTE
2023
No. of employees
2022
No. of
employees
3 6
1 3
1 1
23
8 3
40
10
8
19
77
The remuneration of the highest paid director was £0.3m (2022: £0.3m). Included in other employee benefits is a
bonus of £0.03m (2022: £0.4m).
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 £0.8m (2022: £0.3m).
10. Sh a re -b a se d p a yme n ts
1 0 .1 D e ta i l s o f th e e mp l o ye e sh a re o p ti o n o f th e Gro u p
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 periods were amended to allow for vesting in tranches,
whereby one-third of the options awarded vest after one year of service, and the remaining two-thirds of the options
vest on a quarterly basis over the remaining two years. No changes were made to the plan in the year ended 31
March 2023.
1 0 .2 Exp e n se re co g n i se d d u ri n g th e ye a r
The expense recognised for employee services received during the year is as follows. This includes £0.01m
related to discontinued operations.
Expense arising from equity settled share-based payment transactions
To ta l e xp e n se a ri si n g fro m sh a re -b a se d p a yme n t tra n sa cti o n s
2023
£000
3 7 7
3 7 7
2022
£000
613
613
66
Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
1 0 Sh a re -b a se d p a yme n ts (co n ti n u e d )
1 0 .3 Fa i r va l u e o f sh a re o p ti o n s g ra n te d i n th e ye a r
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 2023 was 1.16
years (2022: 2.16). Options expire after 10 years.
The weighted average fair value of options granted during the year was £Nil (2022: £1.05).
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 %
1 0 .4 Mo ve me n ts i n sh a re o p ti o n s d u ri n g th e ye a r
The following reconciles the share options outstanding at the beginning and end of the year:
Year to 31 March
2023
0 .9 6
0 .0 0 5
5 0 .0 0
3 .9 8
0 .6 2
—
Year to 31 March
2022
1.05
0.005
50.00
3.98
0.62
—
Balance at the beginning of the year
Granted during the year
Forfeited during the year
Exercised during the year
Ou tsta n d i n g a t 3 1 Ma rch
Exercisable at 31 March 2023
11. Fi n a n ce i n co me a n d e xp e n se
Fi n a n ce i n co me
Interest on:
– Bank deposits
To ta l fi n a n ce i n co me
Fi n a n ce e xp e n se
Finance costs on other financial liabilities
Finance costs on lease liabilities
To ta l fi n a n ce e xp e n se
N e t fi n a n ce (e xp e n se )/i n co me re co g n i se d i n p ro fi t o r l o ss
67
2023
Number of options (‘000)
2022
Number of
options (‘000)
2 ,2 0 0 ,4 8 3 2,589,231
115,180
—
(503,928)
(2 0 3 ,7 2 5 )
(3 8 7 ,8 7 2 )
—
1 ,6 0 8 ,8 8 6 2,200,483
1 ,4 4 2 ,3 3 5 1,388,724
2023
£000
2022
£000
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7
(6 )
1
1
29
1
30
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Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
12. Ta x e xp e n se
1 2 .1 In co me ta x re co g n i se d i n p ro fi t o r l o ss
The below table illustrates income tax related to continuing operations, recognised in profit or loss. Income tax
related to discontinued operations is disclosed in Note 13.
C u rre n t ta x
Corporation tax expense
Prior year adjustment in respect of research & development tax credit
To ta l cu rre n t ta x
D e fe rre d ta x e xp e n se
Origination and reversal of timing differences
Prior year deferred tax movement
To ta l d e fe rre d ta x
Ta x i n co me o n l o ss o n o rd i n a ry a cti vi ti e s
2023
£000
2022
£000
2
-
2
(8 0 0 )
-
(8 0 0 )
(7 9 8 )
361
(764)
(405)
(438)
297
(735)
(1,140)
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% (2022: 20.13%)
Research & development tax relief
Expenses not deductible for tax purposes
Share-based payments
Prior year adjustments – research and development tax relief
Prior year adjustments on deferred tax
Deferred tax not recognised
Other timing differences
Difference in overseas tax rates
Effective rate change
Income not taxable
To ta l ta x i n co me
2023
£000
(1 7 ,3 8 6 )
(3 ,3 0 3 )
-
1 ,6 4 7
-
-
-
2 ,0 7 5
(1 ,0 9 9 )
(1 0 4 )
(8 0 )
6 6
(7 9 8 )
2022
£000
(9,574)
(1,927)
(292)
1,674
123
(722)
(297)
303
109
328
(429)
-
(1,140)
1 2 .1 In co me ta x re co g n i se d i n p ro fi t o r l o ss (co n ti n u e d )
Expenses not deductible for tax purposes primarily relate to the impairment of the investment in Induction
Healthcare Limited in the standalone financial statements of Induction Healthcare Group plc (refer to Note 5 in the
Company financial statements), and also to unrealised foreign exchange differences on foreign currency cash
balances in one subsidiary, which are deductible only once these are realised (ie. on settlement of the balance).
Deferred tax not recognised relates to unused tax losses carried forward, for which deferred tax assets are only
recognised 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. Other timing differences relate to a variety of immaterial
timing differences other than those related to intangible assets or tax losses.
Changes in tax rates and factors affecting the future tax charges
The main rate of corporation tax will increase from 19% to 25% with effect from 1 April 2023. This change was
introduced by Finance Bill 2021 which was substantially enacted on 24 May 2021. Therefore, the timing
differences for the UK companies are recognised at 25% for deferred tax purposes.
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Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
1 2 Ta x e xp e n se (co n ti n u e d )
The rate of corporation tax is 25% in Australia for the 2022-23 income year.
1 2 .2 C u rre n t ta x a sse ts a n d l i a b i l i ti e s
C u rre n t ta x a sse ts
R&D tax credit receivable
C u rre n t ta x l i a b i l i ti e s
Corporation tax liability in Australia
2023
£000
2022
£000
1 ,1 7 5
1,240
-
1 ,1 7 5
(789)
451
Current tax assets relate to research and development tax credits in respect of 2 subsidiaries, for the years ended
31 March 2020, 31 March 2021 and 31 March 2022. A claim of £0.3m for the year ended 31 March 2020 was
settled post-year end for one subsidiary.
1 2 .3 D e fe rre d ta x b a l a n ce s
A deferred tax liability of £2.9m (2022: £3.7m) has been recognised in relation to the fair value of intangible assets
acquired in a business combination. A deferred tax liability of £Nil (2022: £1.05m) has been recognised in relation
to the fair value adjustments to contract liabilities acquired in business combinations. A deferred tax asset of £0.5m
(2022: £0.7m) 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 £6.5m (2022: £4.2m) has not been recognised due to uncertainty over future taxable profits
in the relevant subsidiaries with tax losses. The unrecognised deferred tax asset includes those in relation to tax
losses of £26m (2022: £17m). These amounts exclude amounts related to Horizon Strategic Partners Limited,
which is expected to generate profits and for which a deferred tax asset of £0.2m (2022: £0.05m) has been
recognised. They also exclude those for Zesty Limited, where deferred tax assets have been recognised in relation
to the deferred tax liabilities for the intangible fixed assets acquired through business combinations. A deferred
tax asset of £0.4m (2022:£0.6m) has been recognised for Zesty Limited.
1 2 .3 D e fe rre d ta x b a l a n ce s (co n ti n u e d )
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
Other
To ta l d e fe rre d ta x l i a b i l i ty
69
2023
£000
5 5 6
(3 ,8 7 0 )
(3 ,3 1 4 )
2022
£000
1,540
(5,851)
(4,311)
2023
£000
(3 ,8 1 3 )
4 7 0
2 9
(3 ,3 1 4 )
2022
£000
(5,780)
1,309
160
(4,311)
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Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
1 2 Ta x e xp e n se (co n ti n u e d )
1 2 .4 R e co n ci l i a ti o n o f d e fe rre d ta x l i a b i l i ti e s, n e t
Opening deferred tax balance at tax rate of 2 5 %
Deferred tax acquired in business combinations
Tax expense during the period recognised in profit or loss
Prior year movements
C l o si n g d e fe rre d ta x a t ta x ra te o f 2 5 %
1 2 .5 Mo ve me n t i n d e fe rre d ta x b a l a n ce s
2022
£000
(4 ,2 8 7 )
-
8 0 0
1 7 3
(3 ,3 1 4 )
2022
£000
(168)
(4,878)
438
297
(4,311)
2023
Intangible assets
Tax losses
Other
1 April
2022
(Net)
£000
(5,780)
1,309
160
Recognised
in profit or
loss
£000
1,976
(838)
(131)
Acquired
in business
combination
£000
Other
movements
£000
—
—
—
—
—
—
C losing deferred tax at tax rate o f 2 5 %
(4,311)
798
2022
Intangible assets
Tax losses
Other
1 April
2021
(Net)
£000
(1,047)
880
—
Recognised
in profit or
loss
£000
889
429
1,195
C losing deferred tax at tax rate o f 2 5 %
167
735
Acquired
in business
combination
£000
Other
movements
£000
(3,798)
—
(1,057)
(4,855)
30
—
21
51
31 March
2023
(Net)
£000
(3,813)
470
28
(3,314)
31 March
2022
(Net)
£000
(5,780)
1,309
160
(4,311)
Deferred
Tax
Assets
£000
57
470
28
556
Deferred
Tax
Assets
£000
60
1,309
171
1,540
Deferred Tax
Liabilities
£000
(3,870)
—
—
(3,870)
Deferred Tax
Liabilities
£000
(5,840)
—
(11)
(5,851)
13. D i sco n ti n u e d o p e ra ti o n s a n d d i sp o sa l g ro u p s h e l d fo r sa l e
During the year ended 31 March 2023, management committed to a plan to sell both the Induction Switch and
Induction Guidance product lines and all related assets and liabilities, following a strategic decision to place greater
focus on the Group's key patient-facing applications.
The Induction Switch and Induction Guidance product lines were therefore classified as disposal groups held for
sale for the first time in the year ended 31 March 2023. The grouping of assets aligns to that previously reported
for impairment assessment purposes for the Induction Switch and Induction Guidance CGU’s. The comparative
consolidated statement of profit or loss and OCI has been re-presented to present the results of discontinued
operations separately from continuing operations.
70
Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
1 3 D i sco n ti n u e d o p e ra ti o n s a n d d i sp o sa l g ro u p s h e l d fo r sa l e (co n ti n u e d )
1 3 .1 R e su l ts o f d i sco n ti n u e d o p e ra ti o n s
The following are the results of discontinued operations:
Revenue
Expenses
Pro fi t / (l o ss) fro m o p e ra ti n g a cti vi ti e s
Income tax
Profit / (l o ss) fro m o p e ra ti n g a cti vi ti e s, n e t o f ta x
Loss on remeasurement of discontinued operation
Income tax on gain / (loss) on remeasurement of
discontinued operation
Profit / (loss) from discontinu e d o p e ra ti o n s, n e t o f ta x
Induction Switch
Induction Guidance
Total
2023
£000
4
(4 9 9 )
(4 9 5 )
—
(4 9 5 )
—
—
(4 9 5 )
2022
£000
Re-
presented
34
(524)
(490)
—
(490)
—
—
(490)
2023
£000
622
(9 9 6 )
(3 7 4 )
74
(300)
—
—
(300)
2022
£000
Re-
presented
642
(566)
76
2023
£000
626
(1 ,4 9 5 )
(8 6 9 )
2022
£000
Re-
presented
676
(1,090)
(414)
58
134
—
—
134
74
(795)
—
—
(795)
58
(356)
—
—
(356)
The loss from the discontinued operations is attributable entirely to the owners of the Group.
1 3 .2 C a sh fl o w s fro m / (u se d i n ) d i sco n ti n u e d o p e ra ti o n s
The following are the cash flows from / (used in) discontinued operations:
Net cash flows from / (used in) operating activities
Net cash flows from / (used in) investing activities
Net cash flows from / (used in) financing activities
1 3 .3 In d u cti o n Sw i tch d i sp o sa l g ro u p
Induction Switch
Induction Guidance
Total
2023
£000
(4 9 5 )
—
—
2023
£000
(22)
(4)
(781)
2023
£000
(517)
(4)
(781)
The sale of the Induction Switch disposal group was finalised in June 2023 (refer to Note 32 for further details on
subsequent events).
The Group did not recognise a gain or loss on remeasurement of the disposal group to fair value less costs to sell,
as the fair value less costs to sell exceeds the carrying value of the disposal group. The Group did not recognise
impairment losses or gains on the remeasurement of the disposal group held for sale. There were no income or
expenses included in OCI relating to the disposal group. As the Group presents one operating segment, the
disposal group was not presented separately within any operating segment.
The disposal has a nil impact on the financial position of the Group, as the assets to which the disposal relates
were fully impaired during the year ended 31 March 2021 as part of the impairment of the Induction Switch CGU.
The non-recurring fair value measurement of the disposal group has been recognised as a Level 2 fair value based
on the inputs used to determine fair value. The fair value was determined using inputs that are directly observable
for the disposal group, being the price as per the Asset Purchase Agreement that was concluded in June 2023.
Agreement on price was reached prior to 31 March 2023.
71
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Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
1 3 D i sco n ti n u e d o p e ra ti o n s a n d d i sp o sa l g ro u p s h e l d fo r sa l e (co n ti n u e d )
1 3 .4 In d u cti o n Gu i d a n ce d i sp o sa l g ro u p
The Group did not recognise a loss on remeasurement of the Induction Guidance disposal group to fair value less
costs to sell, as the fair value less costs to sell exceeds the carrying value of the disposal group. The Group did
not recognise impairment losses or gains on the remeasurement of the disposal group held for sale. There were
no income or expenses included in OCI relating to the disposal group. As the Group presents one operating
segment, the Induction Guidance disposal group was not presented separately within any operating segment.
The effect of disposal on the financial position of the Group are as follows:
Assets and liabilities of disposal group held for sale
Deferred tax assets
Goodwill
Intangible assets
Contract assets
Trade and other receivables
Asse ts h e l d fo r sa l e
Deferred tax liabilities
Contract liabilities
Trade and other payables
L i a b i l i ti e s h e l d fo r sa l e
2023
£000
185
857
1,238
40
154
2 ,4 7 4
(270)
(629)
(117)
(1 ,0 1 6 )
The non-recurring fair value measurement of the disposal group has been recognised as a Level 3 fair value based
on the inputs used to determine fair value. The fair value as determined using inputs that are based on valuation
methodologies commonly used in the primary industry that the Induction Guidance disposal group operates in.
14. L o ss p e r sh a re
14.1 Ba si c l o ss p e r sh a re
From continuing operations attributable to the ordinary equity holders of the Group
To tal basic loss p e r sh a re a ttri b u ta b l e to th e o rd i n a ry e q u i ty h o l d e rs o f th e Gro u p
1 4 .2 D i l u te d l o ss p e r sh a re
From continuing operations attributable to the ordinary equity holders of the Group
To tal diluted loss per share attrib u ta b l e to th e o rd i n a ry e q u i ty h o l d e rs o f th e Gro u p
1 4 .3 R e co n ci l i a ti o n o f l o ss u se d i n ca l cu l a ti n g l o ss p e r sh a re
2023
£
(0 .1 8 )
(0 .1 9 )
2023
£
(0 .1 8 )
(0 .1 9 )
2022
£
(0.10)
(0.10)
2022
£
(0.10)
(0.10)
2023
£000
2022
£000
Re-presented
L o ss a ttri b u ta b l e to th e o rd i n a ry e q u i ty h o l d e rs o f th e Gro u p u se d i n ca l cu l a ti n g b a si c l o ss p e r
sh a re a n d d i l u te d l o ss p e r sh a re :
From continuing operations
From discontinued operations
(1 6 ,5 8 8 )
(7 9 5 )
(1 7 ,3 8 3 )
(8,076)
(356)
(8,432)
72
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Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
1 4 L o ss p e r sh a re (co n ti n u e d )
1 4 .4 We i g h te d a ve ra g e n u mb e r o f sh a re s u se d a s th e d e n o mi n a to r
Shares in issue at the beginning of the period
Shares issued
Issue of ordinary shares on exercise of equity settled share-based payments
Shares issued on business combination
Issu e d o rd i n a ry sh a re s a s a t th e e n d o f th e p e ri o d
2023
number
2022
number
9 2 ,0 5 0 ,7 2 7 42,050,728
— 35,714,285
—
— 14,285,714
9 2 ,3 8 0 ,3 0 0 92,050,727
3 2 9 ,5 7 3
Weighted average number of ordinary shares used as the denominator in calculating basic loss
per
share
9 2 ,370,36 7
82,461,686
During the year ended 31 March 2023, the Group issued 329,573 shares to option holders who exercised options
held under the equity settled share-based payments scheme, the NTA Plan. Refer to Note 10 for further details
on the plan.
15. Bu si n e ss co mb i n a ti o n s co mp l e te d i n th e p ri o r ye a r
1 5 .1 Su b si d i a ry Acq u i re d
On 9 June 2021, Induction Healthcare Group plc acquired 83.5% of the share capital of Attend Anywhere Pty
Limited and 100% of the share capital of A.C.N. 167 231 307 PTY Ltd (“A.C.N.”), which owns 16.5% of the share
capital of Attend Anywhere Pty Limited, thereby obtaining 100% control over Attend Anywhere Pty Limited. Attend
Anywhere Pty Limited owns 100% of the share capital of Attend Anywhere Limited, a UK subsidiary.
The consideration included cash consideration of £16.4m, plus the issue of 14,285,714 new ordinary shares which
had a fair value of £9m. This brought the total consideration to £25.4m prior to transaction costs.
Attend Anywhere is a leading provider of video consultations in the UK secondary care market, holding national
contracts with NHS Scotland, NHS Wales and the HSE in Ireland, alongside a number of regional contracts in
England. Attend Anywhere’s proprietary technology, allows users to easily access and use the video service via
a common browser, without the need for plug-ins or downloading a native app.
1 5 .1 Su b si d i a ry Acq u i re d (co n ti n u e d )
The Group’s strategy is to build a leading and future-forward integrated virtual care platform, incorporating patient
onboarding, clinical guidelines, digital communications, online appointment management and, via the acquisition
of Attend Anywhere, video consultations. While the current focus is on secondary care, there is scope to migrate
into allied care settings, such as primary care, mental health and community care.
Attend Anywhere is a clear strategic fit with Induction and the acquisition will provide a number of commercial,
operational and financial benefits, which are expected to create value for shareholders.
Name
Attend Anywhere Pty Limited Provision of video consulting
Principal Activity
Date of Acquisition
09/06/2021
Proportion of voting equity
interest acquired
83.50%
Consideration transferred
£000
21,207
software
A.C.N. 167 231 307 PTY Ltd
Holding Company
09/06/2021
100%
4,191
Attend Anywhere Limited
Provision of support services
to group entities
09/06/2021
100% (indirect)
—
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Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
1 5 . Bu si n e ss co mb i n a ti o n s co mp l e te d i n th e p ri o r ye a r (co n ti n u e d )
1 5 .2 C o n si d e ra ti o n tra n sfe rre d
The following represents the consideration transferred to the owners of Attend Anywhere Pty Limited, A.C.N. 167
231 307 PTY Ltd and Attend Anywhere Limited.
Share consideration
Cash consideration
To ta l co n si d e ra ti o n tra n sfe rre d
2022
£000
9,000
16,398
2 5 ,3 9 8
The fair value of cash consideration equals its carrying value. The fair value of the equity consideration has been
determined with reference 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%. The
lack of marketability discount arises as a result of restrictions on the trading of the shares issued to the former
owners of Attend Anywhere Pty Limited and A.C.N 167 231 307 Pty Ltd as consideration for the acquisition of the
company, for a period after the acquisition. Restrictions on trading of shares extend for 12 months after acquisition
date and share prices may be affected once these restrictions cease.
1 5 .3 Asse ts a cq u i re d a n d l i a b i l i ti e s re co g n i se d a t th e d a te o f a cq u i si ti o n
The following represents assets acquired and liabilities recognised on acquisition. All amounts are final and not
provisional.
Intangible assets
Cash and cash equivalents
Other current assets
Deferred tax liability
Other non-current liabilities
Contract liabilities
Other current liabilities
To ta l i d e n ti fi a b l e n e t a sse ts a t fa i r va l u e
2022
£000
15,193
2,912
4,751
(4,856)
(85)
(1,782)
(746)
1 5 ,3 8 6
The separately identifiable intangible assets and valuation techniques used to measure the fair value of these
material assets acquired were as follows:
As s e t s a c q u i r e d
Valuation technique
C u stomer contracts and rela ti o n sh i p s Income Approach: With and without 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. The
projected revenues, operating expenses, and cash flows are calculated in a
“With” and “Without” scenario, and the differential between the cash flows
from the two scenarios serve as the basis for estimating the fair value of the
customer-related asset.
Excess Earnings Method: a stream of revenue and expenses are identified
with a particular group of assets that are necessary to support the earnings
associated with the subject intangible asset. By identifying and subtracting
contributory assets, the residual earnings are estimated to be attributable to
the subject intangible asset and are discounted to present value at an
appropriate discount rate. An obsolescence rate of 25% is applied to the
forecasts used in the valuation model.
Te ch n o l o g y
74
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Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
1 5 . Bu si n e ss co mb i n a ti o n s co mp l e te d i n th e p ri o r ye a r (co n ti n u e d )
1 5 .3 Asse ts a cq u i re d a n d l i a b i l i ti e s re co g n i se d a t th e d a te o f a cq u i si ti o n (co n ti n u e d )
C o n tra ct l i a b i l i ti e s
The fair value of the of the deferred revenue liability has been determined using
the bottom-up approach. Under this approach the fair value is determined
to be equal to the costs still to be incurred in fulfilling the performance
obligations related to the contract liability, plus an associated profit on these
costs. The costs still to be incurred in satisfying the remaining performance
obligations are hosting fees, staff costs to support the operation of the
platform and provide support and maintenance and other software fees
necessary for the operation of the platform. A mark-up on cost to be incurred
in fulfilling the performance obligation of 28% was applied.
1 5 .4 Go o d w i l l a ri si n g o n a cq u i si ti o n
The following represents goodwill arising on acquisition
Consideration transferred at fair value
Total identifiable net assets at fair value
Go o d w i l l a ri si n g o n a cq u i si ti o n
2022
£000
25,398
(15,386)
1 0 ,0 1 2
Goodwill arising on acquisition relates to the strategic fit with the existing products of the Group and strengthened
market position for the Group. Goodwill includes intangible assets that were not valued separately, such as the
assembled workforce, potential savings for economies of scale, and potential development of further product
offerings using existing know-how in the business acquired.
1 5 .5 An a l ysi s o f ca sh fl o w s o n a cq u i si ti o n
Consideration paid in cash
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
N e t ca sh o u tfl o w s o n a cq u i si ti o n
2022
£000
(16,398)
—
2,912
(1 3 ,4 8 7 )
Acquisition related costs of £423k were recognised in administrative expenses.
1 5 .6 Imp a ct o f a cq u i si ti o n o n th e re su l ts o f th e Gro u p
From the date of acquisition, Attend Anywhere Pty Limited and A.C.N. 167 231 307 PTY Ltd contributed £5.7m to
the revenue of the group and profit before tax of £1.1m. The Group has not disclosed the impact to revenue and
profit before tax for the 12 month period under IFRS3.B64, as it is impracticable to determine the impact of the
IFRS 3 fair value adjustment to contract liabilities (“deferred income”) at 1 April 2021.
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Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
1 5 . Bu si n e ss co mb i n a ti o n s co mp l e te d i n th e p ri o r ye a r (co n ti n u e d )
1 5 .7 Se n si ti vi ty a n a l ysi s
The valuation of acquired technology assets and customer related assets is most sensitive to changes in the
assumptions made regarding cash inflows / revenues. The primary assumptions that influence cash inflows /
revenues for both the technology assets and customer relate assets are the customer attrition rate and growth in
contract prices for forecasted contracts with customers. The reasonable range of outcomes and sensitivity analysis
is presented on an aggregate basis as cash inflows from contracts with customers. A 15 percentage point
difference downwards and 5 percentage point difference upwards in cash inflows from contracts with customers
in each forecast year is considered a reasonable possible range, based on management’s understanding of
potential pricing pressures and renewal probabilities for contracts at the next renewal date. In addition, the
valuation of technology assets is also sensitive to changes in the annual obsolescence rate. A 5 percentage point
variation in the obsolescence rate is considered reasonably possible based on a change of one year in the useful
economic life of the asset.
The following table demonstrates the impact of a reasonably possible range of outcomes on the valuation of
technology assets.
Input
Cash inflows from contracts with customers
Cash inflows from contracts with customers
Obsolescence rate
Obsolescence rate
Sensitivity range
Increase / (decrease) in
value of asset
2022
£000
(1,128)
367
1,424
(979)
-15%
+5%
-5%
+5%
The valuation of acquired customer related assets is most sensitive to changes in the assumptions made regarding
cash inflows / revenues. Cash inflows from contracts with customers represents the cash inflows from contracts
with customers in all forecast years which are primarily influenced by the customer attrition rates of existing
customers and contract pricing. The following table demonstrates the impact of a reasonably possible range of
outcomes on the valuation of customer related intangible assets.
Input
Cash inflows from contracts with customers
Cash inflows from contracts with customers
Sensitivity range
Increase / (decrease) in
value of asset
2022
£000
-15%
+5%
(1,410)
470
76
Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
16. Su b si d i a ri e s
Details of the Group’s subsidiaries at the end of the reporting period are as follows:
oportion of ownership interest in ordinary shares and voting power held by the Group (%)
Name of subsidiary
Induction Healthcare
Limited
Registered
number
11232772 30 Crown Place,
Registered Address
Earl Street, London.
EC2A 4ES
Induction Healthcare (UK)
Limited
11237890 30 Crown Place,
Earl Street, London.
EC2A 4ES
Place of
incorporation
and operation
United
Kingdom
Directly
owned by the
Company
√
United
Kingdom
Principal activity
Investment
holding
company
Provision of
software
to
healthcare
providers
2023
100%
2022
100%
100%
100%
Induction Healthcare Pty
Ltd
625119397 Level 2, Suite 2.03,
574 St. Kilda Road,
Melbourne, Victoria,
3001
Provision of
software
to
healthcare
providers
Australia
100%
100%
Podmedics Limited
06840040 30 Crown Place,
Earl Street, London.
EC2A 4ES
Horizon Strategic Partners
Limited
06285278 30 Crown Place,
Earl Street, London.
EC2A 4ES
Zesty Limited
08294659 30 Crown Place,
Earl Street, London.
EC2A 4ES
United
Kingdom
United
Kingdom
United
Kingdom
Provision of
software
to
healthcare
providers
Provision of
software
to
healthcare
providers
Provision of
software
to
healthcare
providers
√
100%
100%
√
100%
100%
√
100%
100%
Attend Anywhere Pty Ltd 081211707 Level 2, Suite 2.03,
574 St. Kilda Road,
Melbourne, Victoria,
3001
Provision of
software
to
healthcare
providers
Attend Anywhere Limited 11883931 30 Crown Place,
Earl Street, London.
EC2A 4ES
A.C.N. 167 231 307 Pty Ltd 167231307 Level 2, Suite 2.03,
574 St. Kilda Road,
Melbourne, Victoria,
3001
Provision of
software
to
healthcare
providers
Investment
Holding
Company
All subsidiaries have reporting periods that end on 31 March 2023.
Australia
√
100%
100%
United
Kingdom
100%
100%
Australia
√
100%
100%
Induction Healthcare Limited (registered number 11232772), Induction Healthcare (UK) Limited (registered
number 11237890), Podmedics Limited (registered number 06840040), Horizon Strategic Partners Limited
(registered number 06285278) Zesty Limited (registered number 08294659) and Attend Anywhere Limited
(registered number 11883931) have 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.
77
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Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
17. Go o d w i l l
1 7 .1 C a rryi n g a mo u n t o f g o o d w i l l
The following represents the carrying value of goodwill as at 31 March 2023.
Cost
Accumulated impairment
The following reconciles goodwill at the beginning and end of the period.
C o st
At 1 April
Additions as a result of business combinations
Transferred to assets of disposal groups held for sale
Translation differences
At 31 March
Accu mu l a te d i mp a i rme n t
At 1 April
Impairment charge
Transferred to assets of disposal groups held for sale
At 31 March
2023
£000
1 8 ,1 6 4
(7 ,4 7 9 )
1 0 ,6 8 5
2022
£000
20,175
(417)
19,758
2023
£000
2022
£000
2 0 ,1 7 5
—
(1 ,5 5 3 )
(4 5 8 )
1 8 ,1 6 4
4 1 7
7 ,7 5 8
(6 9 6 )
7 ,4 7 9
9,790
10,012
—
373
20,175
—
417
—
417
The net carrying value of goodwill transferred to assets of disposal groups held for sale was £0.8m. During the
year ended 31 March 2023, the Group classified the Induction Switch and Induction Guidance CGU’s as disposal
groups held for sale, refer to Note 13. As a result, goodwill balances relating to these CGU’s have been reclassified
to assets held for sale, after the impairment losses detailed below were recognized.
1 7 .2 Al l o ca ti o n o f g o o d w i l l to ca sh g e n e ra ti n g u n i ts
Goodwill is allocated to the Group’s cash generating unit as follows:
Induction Attend Anywhere
Induction Zesty
Induction Guidance
Induction Switch
2023
£000
9 ,9 2 8
7 5 7
—
—
1 0 ,6 8 5
2022
£000
10,385
8,237
1,136
—
19,758
The Attend Anywhere CGU consists of the assets and cash flows related to the Attend Anywhere video
consultation product. The Zesty CGU consists of the assets and cash flows related to the Zesty patient portal
product. 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 Induction
Switch CGU consists of the assets and cash flows related to the Induction Switch app.
Goodwill in relation to the Induction Guidance and Induction Switch CGU’s have been re-classified to assets of
disposal groups held for sale in accordance with IFRS 5 “Non-current assets held for sale and discontinued
operations. Refer Note 13 for more information.
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Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
1 7 . Go o d w i l l (co n ti n u e d )
1 7 .3 R e co ve ra b l e a mo u n t, ca rryi n g a mo u n t a n d h e a d ro o m / i mp a i rme n t l o sse s
During the year ended 31 March 2023, the Group recognised impairment losses of £7.7m on goodwill. These have
been presented separately in the consolidated statement of comprehensive income as “impairment losses”. There
have been no reversals of previously recognised impairment losses. There have been no impairment losses, or
reversals of impairment losses on revalued assets during the period.
The following table illustrates the recoverable amount, carrying amount and headroom for each of the CGU’s. The
recoverable amounts of the Induction Zesty and Induction Attend Anywhere CGU’s were determined to be the
value-in-use (“VIU”). Due to the decision to dispose of the Induction Guidance CGU (refer Note 13), the carrying
amount will be recovered primarily through sale and therefore the recoverable amount was determined as the fair
value less costs of disposal (“FVLCD").
Induction Attend
Anywhere
Induction Zesty
Induction
Guidance
Induction Switch
Goodwill allocated
2023
£000
Carrying amount of CGU (incl.
goodwill)
2023
£000
2022
£000
2022
£000
Recoverable amount
Headroom / (Impairment)
2023
£000
2022
£000
2023
£000
2022
£000
9 ,9 2 8
10,385
2 1 ,4 6 6
29,302
2 7 ,4 2 8
34,252
5 ,9 6 2
4,950
7 5 7
8,237
3 5 1
8,293
3 5 1
19,111
(7 ,4 7 9 )
10,818
—
—
1 0 ,6 8 5
1,136
—
19,758
2 ,2 4 1
—
2 4 ,0 5 8
4,292
—
41,887
1 ,9 6 2
—
2 9 ,7 4 1
6,243
—
59,606
(2 7 9 )
—
(1 ,7 9 6 )
1,951
—
17,719
The recoverable amount of the Induction Switch CGU continues to be £nil as at 31 March 2023 (2022: £nil). During
the year ended 31 March 2023, the Group classified this CGU as a disposal group held for sale (refer Note 13)
and the sale of this disposal group was finalized in June 2023 (refer Note 32).
The Induction Guidance CGU was impaired during the year ended 31 March 2023 as a result of the intention to
dispose of the CGU and the fact that its fair value less costs of disposal is therefore its recoverable amount. The
non-recurring fair value measurement of the disposal group has been recognised as a Level 3 fair value based on
the inputs used to determine fair value. The fair value was determined using an expected value income approach,
and using inputs such as income multiples that are commonly used in the primary industry that the Induction
Guidance disposal group operates in.
The Induction Zesty CGU was impaired during the year ended 31 March 2023 as a result of challenging
macroeconomic conditions in the primary market in which it operates, which has resulted in slower than expected
growth, and therefore lower net cash flows used in the VIU assessment.
The following table illustrates the key discount and growth rate assumptions applied for each CGU:
Pre-tax discount rate Long term average growth rate
Forecast period length (years)
Induction Attend Anywhere
Induction Zesty*
Induction Guidance*
* Cash flows beyond the five-year period are extrapolated using a declining growth rate, determined using the H-model. The H-model
uses a gradually declining growth rate of between 10% to 2.5 %, with a higher growth component beyond the five-year forecast period as
inputs to estimate the present value of the higher growth component
2022%
13.6%
15.2%
13.7%
2023%
2 .5 %
2.5-1 0 %
n /a
2022%
2.5%
2.5-10%
2.5-10%
2023 %
1 6 .3 %
1 5 .0 %
n /a
2023
5
5
n /a
2022
5
5
5
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Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
1 7 . Go o d w i l l (co n ti n u e d )
1 7 .4 Ke y a ssu mp ti o n s u se d i n va l u e -i n -u se ca l cu l a ti o n s a n d se n si ti vi ty to ch a n g e s i n a ssu mp ti o n s
The calculation of value-in-use for the Induction Zesty and Induction Attend Anywhere CGU’s is most sensitive to
the following assumptions:
-
Earnings before interest, tax, depreciation and amortisation (“EBITDA”). EBITDA is significantly influenced
by cash inflows and cash outflows.
- Discount rates
EBITD A
EBITDA is determined by deducting the budgeted costs to be incurred (cash outflows) from payments received
from customers (cash inflows). Cash in-and-outflows are determined based on detailed budgets for the first two
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 for cash inflows from payments received from customers are determined using assumptions on
existing customer renewal rates; sales of additional services to existing customers; sales made to new customers;
pricing assumptions based on a standard price list as determined by the Group’s pricing policy, and assumptions
regarding the timing of the completion of set-up activities for new customers (or “go-lives”).
Cash outflows primarily consist of employee and non-employee workforce costs, supplier costs such as cloud
hosting costs; and an allocation of the corporate overhead costs.
During the year ended 31 March 2023, a reasonably possible decrease of 5% in EBITDA would not have resulted
in an impairment the Induction Attend Anywhere CGU. A decrease of 19.9% would have resulted in the impairment
of the Attend Anywhere CGU. During the year ended 31 March 2023, a reasonably possible rise in the pre-tax
discount rate of 1% in the Attend Anywhere CGU would not have resulted in an impairment of the Attend Anywhere
CGU. A rise in the pre-tax discount rate of 3.3% to 19.6% in the Induction Attend Anywhere CGU would have
resulted in the elimination of the headroom of the CGU.
During the year ended 31 March 2023, a reasonably possible decrease of 5% in EBITDA would have resulted in
the elimination of the £0.3m headroom of the Induction Zesty CGU. A decrease of 3.5% would have resulted in
the full impairment of the Induction Zesty CGU. During the year ended 31 March 2023, a reasonably possible rise
in the pre-tax discount rate of 0.3% to 15.3% in the Zesty CGU would not have resulted in the elimination of the
headroom of the Induction Zesty CGU.
Management have sensitised the EBITDA assumption below for the Induction Attend Anywhere and Induction
Zesty CGU’s.
Induction Attend Anywhere
Induction Zesty
Reasonably
possible decrease %
2023
Impact of
reasonably
possible
decrease
2023
5%
5%
(1 ,5 0 1 )
(6 6 7 )
% decrease
resulting
in
impairment
2023
1 9 .9 %
3 .5 %
5% is considered to be a reasonably possible decrease for the Induction Attend Anywhere CGU due to the maturity
of the products, high renewal rates, and lower reliance on new customer wins within this CGU.
D i sco u n t ra te s
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”).
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Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
1 7 . Go o d w i l l (co n ti n u e d )
1 7 .4 Key assumptions used in value-i n -u se ca l cu l a ti o n s a n d se n si ti vi ty to ch a n g e s i n a ssu mp ti o n s (co n ti n u e d )
D i sco u n t ra te s (co n ti n u e d )
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. These were £Nil for the year ended 31 March 2023 (2022: £Nil). The beta factors were first
evaluated in the year ended 31 March 2020, based on publicly available market data, and re-evaluated in the year
ended 31 March 2022. These remain relevant for the year ended 31 March 2023.
Adjustments to the discount rate are made to factor in the specific amount and timing of the future cash flows
arising from income tax 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 2022 to reflect the changes in the nature of the
business as a result of the acquisition of Attend Anywhere Pty Ltd, however this did not result in a change in the
post-tax discount rate for the Group.
Discount rates are reviewed each year. Pre-tax discount rates as disclosed above are dependent on the tax rates
in the jurisdiction where the CGU is based and therefore differ from the Group’s WACC. One percentage point is
considered a reasonably possible increase in the discount rate.
Induction Attend Anywhere
Induction Zesty
Impact of reasonably possible percentage point increase in discount
rate
2023
(2 ,0 9 3 )
(9 3 4 )
2022
(2,552)
(1,995)
Percentage point increase
resulting in impairment
2022
2023
2.1%
9.5%
3.3%
0.3%
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Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
18.
In ta n g i b l e a sse ts
C o st
At 31 March 2021
Additions – internally developed
Acquired through business combinations
Translation differences
At 31 March 2022
Additions – internally developed
Transferred to assets of disposal groups held for sale
Translation differences
At 31 March 2023
Accu mu l a te d a mo rti sa ti o n a n d i mp a i rme n t
At 31 March 2021
Charge for the year
Translation differences
At 31 March 2022
Charge for the year
Transferred to assets of disposal groups held for sale
Translation differences
At 31 March 2023
N e t b o o k va l u e
At 31 March 2022
At 31 March 2023
Trade name
£000
Users
£000
Technology
£000
Total
£000
6 3 3
—
—
—
6 3 3
—
(264)
—
3 6 9
8 3
61
—
1 4 4
62
(102)
—
1 0 4
489
2 6 5
1 ,4 2 6
—
7,713
321
9 ,4 6 0
—
(919)
(394)
8 ,1 4 7
2 6 5
1,067
54
1 ,3 8 6
1,620
(355)
(395)
6 ,4 4 6
8 ,5 0 5
3,090
7,480
398
1 7 ,4 1 4
809
(1,024)
(556)
1 6 ,6 4 3
2 ,2 7 3
2,658
83
5 ,0 1 4
3,034
(513)
13
3,090
15,193
719
2 7 ,5 0 7
809
(2,207)
(950)
2 5 ,1 5 9
2 ,6 2 1
3,786
137
6 ,5 4 4
4,716
(970)
(382)
2 ,2 5 6
7 ,5 4 8
9 ,9 0 8
8,074
5 ,8 9 1
12,400
9 ,0 9 5
20,963
1 5 ,2 5 1
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Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
19. Pro p e rty, p l a n t a n d e q u i p me n t
C o st
At 3 1 Ma rch 2 0 2 1
Additions
Acquired through business combinations
At 3 1 Ma rch 2 0 2 2
Additions
Disposals
Translation differences
At 31 March 2023
Accu mu l a te d d e p re ci a ti o n a n d i mp a i rme n t
At 3 1 Ma rch 2 0 2 1
Provided during the year
Acquired through business combinations
Disposals
Translation difference
At 3 1 Ma rch 2 0 2 2
Provided during the year
Disposals
Translation difference
At 31 March 2023
N e t b o o k va l u e
At 31 March 2022
At 31 March 2023
20. Tra d e a n d o th e r re ce i va b l e s
Trade receivables
Tra d e re ce i va b l e s n e t
Fixtures and
fittings
£000
Computer
equipment
£000
Right-of-
use asset –
Buildings
£000
Total
£000
3
—
—
3
—
—
—
3
2
—
—
1
—
3
—
—
—
3
—
—
2 8
46
50
1 2 4
13
(98)
(2)
3 7
14
1
50
13
—
78
50
(98)
(2)
28
46
9
—
211
—
2 1 1
—
(201)
(10)
—
—
12
—
—
1
1 3
70
(78)
(4)
—
3 1
257
50
3 3 8
13
(298)
(12)
4 1
1 6
13
50
14
1
9 4
120
(176)
(6)
3 2
198
—
244
9
2023
£000
2022
£000
2 ,0 6 9
2 ,0 6 9
2 ,0 6 9
1 2 5
1 2 6
3 5 2
2 ,6 7 2
2,900
2,900
2,900
251
80
116
3,347
To tal financial assets other than cash and cash equivalents classifi e d a s l o a n s a n d re ce i va b l e s
Prepayments
Social security and other taxes receivable
Other receivables
To ta l tra d e a n d o th e r re ce i va b l e s
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 (2022: £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.
Other receivables of £0.3m (2022: £0.1m) include deposits held with a financial institution as guarantee for
amounts owing under a lease of £0.1m (2022: £0.1m) and sub-lease receivables of £0.1m (2022: £Nil).
83
Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
21. C o n tra ct a sse ts
2 1 .1 C o n tra ct a sse ts
The below tables reconcile the movement in contract assets during the year.
Ba l a n ce a t 1 Ap ri l
Transfers from contract assets to contract liabilities, on invoice of accrued amounts
Additions for subscriptions commenced, not yet invoiced
Impairment of a contract asset
Changes due to business combinations
Translation differences
Ba l a n ce a t 3 1 Ma rch
2 1 .2 C o n tra ct co sts to o b ta i n a co n tra ct
The below table reconciles the movement in contract costs to obtain a contract.
Ba l a n ce a t 1 Ap ri l
Contracts costs – to obtain a contract
Amortisation of contract costs to obtain a contract
Translation differences
Ba l a n ce a t 3 1 Ma rch
2 1 .3 C o n tra ct co sts to fu l fi l l a co n tra ct
The below table reconciles the movement in contract costs to fulfil a contract.
Ba l a n ce a t 1 Ap ri l
Contract costs – to fulfil a contract
Amortisation of contract costs to fulfil a contract
Ba l a n ce a t 3 1 Ma rch
22. C a sh a n d ca sh e q u i va l e n ts
2023
£000
2 7 6
(2 ,7 9 9 )
3 ,2 0 8
—
—
(1 5 )
6 7 0
2022
£000
35
(1,732)
1,745
(1)
228
1
276
2023
£000
3 4 5
6 0 8
(6 2 3 )
4 8
3 7 8
2022
£000
25
355
(35)
—
345
2023
£000
1 6 5
3 4 8
(3 3 3 )
1 8 0
2022
£000
95
121
(51)
165
Cash at banks and on hand
Short-term deposits
C a sh and cash equivalents per the statement of fi n a n ci a l p o si ti o n a n d ca sh fl o w sta te me n t
4 ,2 8 7
—
4 ,2 8 7
6,996
500
7,496
2023
£000
2022
£000
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.
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Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
23. Tra d e a n d o th e r p a ya b l e s
Trade payables
Other payables
Accruals
To tal financial liabilities, excluding loans and bo rro w i n g s, cl a ssi fi e d a s fi n a n ci a l l i a b i l i ti e s
me a su re d a t a mo rti se d co st
Other payables tax and social security payments
To ta l tra d e a n d o th e r p a ya b l e s
Current taxation payable
8 4 8
6 5
1 ,0 9 6
2 ,0 0 9
7 0 4
2 ,7 1 2
—
901
108
2,120
3,129
238
3,367
789
2023
£000
2022
£000
The carrying value of trade and other payables classified as financial liabilities measured at amortised cost
approximates to fair value.
Included within trade and other payables is £nil expected to be settled in more than 12 months (2022: £nil). All
trade and other payables are non-interest bearing and are normally settled on 30 day terms.
24. C o n tra ct l i a b i l i ti e s
Current
Non-current
To ta l co n tra ct l i a b i l i ti e s
Ba l a n ce a t 1 Ap ri l
Revenue recognised
Increases due to cash received excluding amounts recognized as revenue during the year
Changes due to business combinations
Other changes (including transfers from contract assets on invoice of accrued amounts)
Translation differences
Transfers to liabilities associated with disposal groups held for sale
Ba l a n ce a t 3 1 Ma rch
2023
£000
2023
£000
2022
£000
3 ,5 8 8
2 ,1 9 8
5 ,7 8 6
2,580
326
2,906
2 ,9 0 6
(9 ,6 8 4 )
1 3 ,8 8 5
—
(2 6 7 )
(4 1 9 )
(6 3 5 )
5 ,7 8 6
2022
£000
1,214
(6,215)
7,576
1,782
(1,733)
282
2,906
Other changes (including transfers from contract assets on invoice of accrued amounts) relates to the offsetting of
contract asset (“accrued income”) balances for subscriptions that have renewed but have not yet been invoiced,
against contract liabilities (“deferred income”), when those accrued balances are invoiced (and therefore
derecognised). Since the revenue has been recognised already through accrued income, this offset is required in
order to ensure the contract liabilities balance represents the balance of performance obligations not yet satisfied.
25. Pro vi si o n s
C a rryi n g a mo u n t
Balance at 1 April 2022
Additions
Balance at 31 March 2023
85
Onerous
contracts
£000
Restructuring and
termination
£000
—
104
1 0 4
—
424
4 2 4
Total
£000
—
528
5 2 8
Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
2 5 Pro vi si o n s (co n ti n u e d )
The provision for onerous contracts consists of the unavoidable costs of performance against non-healthcare
contracts.
The provision for restructuring and termination costs relates to costs committed to as a result of the right-sizing of
the Group’s activities during the year ended 31 March 2023.
All provisions are expected to realise within 12 months from 31 March 2023.
26. Sh a re ca p i ta l
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 2023.
Au th o ri se d
Sh a re s tre a te d a s e q u i ty
Ordinary shares of £0.0050 each
Issu e d a n d fu l l y p a i d
2023
Number (‘000)
2023
£000
2022
Number (‘000)
2022
£000
9 2 ,3 8 0
9 2 ,3 8 0
4 6 2
4 6 2
92,051
92,051
460
460
Ord i n a ry sh a re s o f £ 0 .0 0 5 0 e a ch
At 1 April
Issue of ordinary shares
Issue of shares as consideration for a business combination
Issue of shares on exercise of equity settled share-based payments
At 31 March
2023
Number (‘000)
2023
£000
2022
Number (‘000)
2022
£000
9 2 ,0 5 1
—
—
3 2 9
9 2 ,3 8 0
4 6 0
—
—
2
4 6 2
42,052
35,714
14,285
—
92,051
210
179
71
—
460
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.
On 9 June 2021, the Group acquired Attend Anywhere Pty Ltd (“Attend Anywhere”). The consideration included
the issue of 14,285,714 new Ordinary Shares (the “Consideration Shares”). (Refer Note 15 for further details). As
part of the transaction, on 8 June 2021, the Company announced that it had raised £25m through a placing of
35,714,285 new Ordinary Shares at a price of 70p per share.
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The number of share options granted to employees of the Group that are exercisable at 31 March 2023 is
1,442,335 (2022: 1,388,724). An equivalent number of shares will be issued in future on exercise of the options
by employees.
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Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
27. R e se rve s
The following represents the movement in the share premium:
2 7 .1 Sh a re p re mi u m
At 1 April
Issue of ordinary shares
Transaction costs on issue of shares
Reclassification to merger reserve
At 31 March
2022
£000
2023
£000
4 1 ,6 6 5
—
—
—
4 1 ,6 6 5
18,432
24,821
(1,190)
(398)
41,665
During the year ended 31 March 2020, Induction Healthcare Group plc acquired Podmedics Limited in a share-
for-share exchange. £0.4m of the purchase consideration was accounted for as share premium. However, during
the year ended 31 March 2022 management assessed that the conditions set out in section 612 of the Companies
Act 2006 were met at the acquisition date, and therefore the difference between the fair value of the shares issued
and the nominal value have been reclassified from share premium to the merger reserve. This was reclassified in
the year ended 31 March 2022 rather than treated as a prior period adjustment, as it was neither quantitatively nor
qualitatively material.
2 7 .2 Fo re i g n e xch a n g e re se rve
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.
2 7 .3 Me rg e r re se rve
During the year ended 31 March 2022, Induction Healthcare Group plc acquired 83.5% of the share capital of
Attend Anywhere Pty Limited and 100% of the share capital of A.C.N. 167 231 307 PTY Ltd, which owns 16.5%
of the share capital of Attend Anywhere, thereby obtaining 100% control over Attend Anywhere. Attend Anywhere
Pty Limited owns 100% of the share capital of Attend Anywhere Limited, a UK subsidiary. Prior to the acquisition,
a fundraise of £25m was held which led to the issue of 35,714,285 New Ordinary Shares. The consideration
included payments of £0.8m in cash for the purchase of net assets at the completion date, cash consideration of
£15.6m, plus the issue of 14,285,714 New Ordinary Shares which had a fair value of £9m. The acquisition was
effected by way of a share-for-share exchange, whereby the shareholders the above entities 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.
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 Statement of Financial Position, and the difference between the nominal value
and fair value of the shares issued is recognised in the merger reserve.
The following represents the movement in the merger reserve during the year.
At 1 April
Issue of shares as consideration for a business combination
Reclassification from share premium
At 31 March
2023
£000
2 0 ,2 0 5
—
—
2 0 ,2 0 5
2022
£000
10,879
8,928
398
20,205
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Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
2 7 R e se rve s (co n ti n u e d )
2 7 .3 Me rg e r re se rve (co n ti n u e d )
During the year ended 31 March 2020, Induction Healthcare Group plc acquired Podmedics Limited in a share-
for-share exchange. £0.4m of the purchase consideration was accounted for as share premium. However, during
the year ended 31 March 2022 management have assessed that the conditions set out in section 612 of the
Companies Act 2006 were met at the acquisition date, and therefore the difference between the fair value of the
shares issued and the nominal value have been reclassified from share premium to the merger reserve. This has
been reclassified in the year ended 31 March 2022 rather than treated as a prior period adjustment, as it is neither
quantitatively nor qualitatively material.
2 7 .4 Oth e r re se rve s
Other reserves arise from the Group’s equity settled share option scheme. The reserve represents the value of
stock options in issues and still to be exercised. The cumulative value of the reserve is decreased for forfeitures.
Upon exercise of options by option holders, the difference between fair value and exercise price is reclassified
from other reserves to retained earnings/ (losses). Refer to Note 10 for further details.
28. Fi n a n ci a l i n stru me n ts, fa i r va l u e s a n d ri sk ma n a g e me n t
2 8 .1 Fi n a n ci a l a sse ts
The following table shows the carrying amounts and fair values of financial instruments as at 31 March 2023 and
31 March 2022. For financial assets not measured at fair value, the carrying amount is considered to be a
reasonable approximation of fair value.
Fi n a n ci a l a sse ts me a su re d a t a mo rti se d co st
Trade receivables
Other receivables
Prepayments
Social security and other taxes receivable
Cash and cash equivalents
Current tax receivable
2023
£000
2022
£000
2 ,0 6 9
351
1 2 5
1 2 6
4 ,2 8 7
1 3 4
7 ,0 9 2
2,900
116
251
80
7,496
1,322
12,165
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.
2 8 .2 Fi n a n ci a l l i a b i l i ti e s
The following table shows the carrying amounts and fair values of financial liabilities as at 31 March 2023 and 31
March 2022. For financial liabilities not measured at fair value, the carrying amount is considered to be a
reasonable approximation of fair value.
Fi n a n ci a l l i a b i l i ti e s me a su re d a t a mo rti se d co st
Trade and other payables
Lease liabilities (included in “other financial liabilities”)
2023
£000
2022
£000
2 ,7 1 2
1 2 8
2 ,8 4 0
3,367
199
3,566
2 8 .3 Fi n a n ci a l ri sk ma n a g e me n t o b j e cti ve s
The Group’s principal financial liabilities, 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.
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Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
2 8 Fi n a n ci a l i n stru me n ts, fa i r va l u e s a n d ri sk ma n a g e me n t (co n ti n u e d )
2 8 .3 Fi n a n ci a l ri sk ma n a g e me n t o b j e cti ve s (co n ti n u e d )
The Group has exposure to the following principal financial risks in the operation and management of its business:
Market risk
Foreign currency risk;
Credit risk; and
Liquidity risk
2 8 .4 Ma rke t ri sk
Market risk is the risk that the 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.
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2 8 .5 Fo re i g n cu rre n cy ri sk ma n a g e me n t
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. The Group’s exposure to the
US dollar is as a result of web hosting costs, which forms the majority of cost of sales, being denominated in US
dollars. The Group’s exposure to the Australian dollar is as a result of the Group’s operations in Australia related
to Attend Anywhere Pty Limited. The Group’s exposure to foreign currency risk has increased since the year ended
31 March 2022 as a result of the acquisition of Attend Anywhere, which has a functional currency of Australian
dollar. 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 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.
2 0 2 2
Australian dollar
US dollar
Euro
Sterling
2 0 2 3
Australian dollar
US dollar
Euro
Sterling
Liabilities
£000
Assets
£000
(2,049)
—
—
(1,642)
70
44
10
10,270
(3,691)
10,394
(8 7 4 )
—
—
(1 ,8 3 9 )
(2 ,7 1 3 )
1 9 6
—
—
6 ,1 6 0
6 ,3 5 6
2 8 .6 C re d i t ri sk ma n a g e me n t
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.
89
Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
2 8 Fi n a n ci a l i n stru me n ts, fa i r va l u e s a n d ri sk ma n a g e me n t (co n ti n u e d )
2 8 .6 C re d i t ri sk ma n a g e me n t (co n ti n u e d )
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. Contract asset balances below relate only to accrued
income, as contract costs are not subject to credit risk management as these costs are already incurred and
capitalised.
2 0 2 2
Trade receivables
Contract assets
2 0 2 3
Trade receivables
Contract assets
Current
£000
<30 days
£000
30 – 60 days
£000
60 – 90 days
£000
>91 days
£000
2,259
276
1 ,1 9 5
6 6 9
430
—
9 2 8
—
64
—
1 6
—
144
—
—
—
3
—
66
—
2 8 .7 L i q u i d i ty ri sk ma n a g e me n t
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. The following are the remaining
contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and
include contractual interest payments and exclude the impact of netting agreements.
2 0 2 2
Trade payables
Lease liabilities (included in “other
financial liabilities”)
2 0 2 3
Trade payables
Lease liabilities (included in “other
financial liabilities”)
Carrying amount
£000
Total
£000
cash flows
Less than 12
months
£000
1 -5 years
£000
ore than 5
years
£000
4,154
231
4,154
231
4,154
79
—
152
2 ,7 1 3
1 2 7
2 ,7 1 3
1 2 7
2 ,7 1 3
7 2
—
5 5
—
—
—
—
29. R e l a te d p a rty tra n sa cti o n s
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.
2 9 .1 Id e n ti ti e s o f re l a te d p a rti e s w i th w h o m th e Gro u p h a s tra n sa cte d
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.
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Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes (forming part of the financial statements)
(continued)
2 9 R e l a te d Pa rty tra n sa cti o n s (co n ti n u e d )
2 9 .2 C o mp e n sa ti o n o f ke y ma n a g e me n t p e rso n n e l
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
To ta l co mp e n sa ti o n p a i d to ke y ma n a g e me n t p e rso n n e l
2023
£000
1 ,2 0 9
3 7
1 8 7
2 8 6
1 9 3
4
1,916
2022
£000
1,249
76
—
246
342
3
1,916
Key management remuneration comprises short-term benefits only. The remuneration of the highest paid director
was £0.3m (2022: £0.3m).
30. L e a se s
The Group leases office space. The lease was entered into during the year ended 31 March 2022. The lease runs
for a period of 3 years, with an option to renew the lease after that date. Lease payments increase at a rate of 3%
per annum, on the anniversary of the lease commencement date. The group has recognised a right of use asset
and lease liability for this lease. The group does not have any other leases, including those that are short term
and/or leases of low value items.
During the year ended 31 March 2023, the Group entered into a sub-lease agreement for the above lease. This
sub-lease was signed during the year ended 31 March 2023 and is effective on 1 April 2023 for a term of one year
and ten months. Therefore no sub-lease payments have been recognised in the year ended 31 March 2023. The
sub-lease has been accounted for as a finance lease, and a lease receivable of £0.1m has been recognised and
included in trade and other receivables.
Right of use assets that meet the definition of property, plant and equipment have been presented as part of
property, plant and equipment, refer Note 19. During the year ended 31 March 2023, the Group vacated the
premises that are subject to the lease, and entered into a sub-lease for the premises, which is accounted for as a
finance lease. Consequently, the right-of-use-asset has been fully depreciated in the year ended 31 March 2023.
The related lease liability has been presented as part of “Other financial liabilities” and disclosures are included in
Note 28.
31. C o n ti n g e n t l i a b i l i ti e s
As at 31 March 2023 the Group had £nil contingent consideration liabilities (2022: £nil).
32. Eve n ts a fte r th e re p o rti n g d a te
On the 30th June 2023 the Group announced the completion of the sale of Switch, a directory app, for an
undisclosed sum. This is in line with the previously announced strategy to focus on sustainable growth and allows
additional cost savings to be applied. The revenues of Switch are disclosed as part of the discontinued operations.
Further details to be found on page 13.
91
Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Company Statement of Financial Position
as at 31 March 2023
Asse ts
N o n -cu rre n t a sse ts
Investments in subsidiaries
Amounts receivable from group companies
Total non-current assets
C u rre n t a sse ts
Trade and other receivables
To ta l a sse ts
L i a b i l i ti e s
C u rre n t l i a b i l i ti e s
Trade and other payables
Total current liabilities
To ta l l i a b i l i ti e s
N e t a sse ts
Issu e d ca p i ta l a n d re se rve s
Share capital
Share premium
Other reserves
Merger reserve
Retained earnings
TOTAL EQU ITY
Note
2023
£’000
2022
£’000
4
5
2 9 ,2 4 6
4 ,5 8 5
3 3 ,8 3 1
41,009
4,585
45,594
3 5
3 3 ,8 6 6
—
45,594
6
8
9
9
9
9
1 ,0 6 6
1 ,0 6 6
1 ,0 6 6
667
667
667
3 2 ,8 0 0
44,927
4 6 2
4 1 ,6 6 5
1 ,5 7 8
2 0 ,2 0 5
(3 1 ,1 1 0 )
3 2 ,8 0 0
460
41,665
1,405
20,205
(18,808)
44,927
The loss for the year for the Company was £12.5m (2022: £7.2m).
The notes on pages 97 to 103 form an integral part of these Financial Statements.
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The financial statements were approved and authorised for issue by the board of directors on 28 July 2023 and
were signed on its behalf by:
John McIntosh
Director
Company registered number: 11852026
92
Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Company Statement of Changes in Equity
for the year ended 31 March 2023
At 1 April 2021
Total comprehensive loss for the year
Loss for the year
To ta l co mp re h e n si ve l o ss fo r th e ye a r
Transaction s w i th o w n e rs, i n th e i r ca p a ci ty
a s o w n e rs
Issue of ordinary shares
Issue of ordinary shares as consideration for a
business combination
Share-issue costs
Equity-settled share-based payments
Reclassification of equity
To tal contributions by and distributions to o w n e rs
At 31 March 2022
Total comprehensive loss for the year
Loss for the year
To ta l co mp re h e n si ve l o ss fo r th e ye a r
Transaction s w i th o w n e rs, i n th e i r ca p a ci ty
a s o w n e rs
Issue of ordinary shares on exercise of equity
settled share-based payments
Equity-settled share-based payments
To tal contributions by and distributions to o w n e rs
72
—
—
2 5 0
4 6 0
—
—
2
—
2
hare premium
erger reserve
Sh
are capital
S
£’000
M
£’000
ther
reserves
£’000
Retained
earnings
£’000
Total equity
£’000
792
(11,596)
18,717
210
18,432
—
—
—
—
178
24,822
O
£’000
10,879
—
—
—
—
(1,191)
8,928
—
(398)
398
—
—
—
—
—
613
—
(7,212)
(7,212)
(7 ,2 1 2 )
(7 ,2 1 2 )
—
—
—
—
—
25,000
9,000
(1,191)
613
—
3 3 ,4 2 2
2 3 ,2 3 3
9 ,3 2 6
6 1 3
4 1 ,6 6 5
2 0 ,2 0 5
1 ,4 0 5
(1 8 ,8 0 8 )
44,927
—
—
—
—
—
—
—
—
—
—
—
—
(12,506)
(12,506)
(1 2 ,5 0 6 )
(1 2 ,5 0 6 )
(205)
378
205
—
2
378
1 7 3
2 0 5
3 8 0
At 31 March 2023
4 6 2
4 1 ,6 6 5
2 0 ,2 0 5
1 ,5 7 8
(3 1 ,1 1 0 )
3 2 ,8 0 0
The notes on pages 97 to 103 form an integral part of these Financial Statements.
93
Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Company Cash Flow Statement
for the year ended 31 March 2023
C a sh fl o w s fro m o p e ra ti n g a cti vi ti e s
Loss for the year
Ad j u stme n ts fo r
— Other non-cash movements
(Increase) / decrease in amounts due from group companies
N e t ca sh u se d i n o p e ra ti n g a cti vi ti e s
C a sh fl o w s fro m i n ve sti n g a cti vi ti e s
Payments for acquiring businesses, net of cash acquired
Payments for Issue of shares on exercise of equity settled share-based payments
N e t ca sh fro m i n ve sti n g a cti vi ti e s
C a sh fl o w s fro m fi n a n ci n g a cti vi ti e s
Share issue proceeds
Share issue costs
N e t ca sh fro m fi n a n ci n g a cti vi ti e s
N e t mo ve me n t i n ca sh e q u i va l e n ts
C a sh a n d ca sh e q u i va l e n ts a t th e b e g i n n i n g o f th e ye a r
C a sh a n d ca sh e q u i va l e n ts a t th e e n d o f th e ye a r
The notes on pages 97 to 103 form an integral part of these Financial Statements.
2023
£’000
2022
£’000
(1 2 ,8 5 8 )
(7,208)
(3 5 )
12,686
(2 0 7 )
—
2 0 7
2 0 7
—
—
—
—
—
24
(7,184)
—
—
—
—
—
—
—
—
—
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Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes to the company financial statements
1 . Acco u n ti n g p o l i ci e s
1 .1 Go i n g co n ce rn
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 until the end of the going concern forecast period at 30 June 2025. On
this reason, the Directors have adopted the going concern assumption in preparing the financial statements.
Please refer to Note 2.2 in the consolidated financial statements for Induction Healthcare Group plc for going
concern considerations for the Group.
1 .2 Sh a re -b a se d p a yme n ts
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 does not recharge the obligation to settle equity-settled share option awards relating to employees
employed by UK subsidiaries to the subsidiary. 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.
Therefore, the cost of investment increases by the share-based payment expense recognised in the consolidated
financial statements net of 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 Fi n a n ci a l i n stru me n ts
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.
Management calculate the weighted-average loss rate in measuring the expected credit loss allowance for intra-
group receivables. The credit risk exposure of intra-group receivables arises from the loan receivable from
Induction Healthcare Limited, due to its investment in Induction Healthcare (UK) Limited and the fact that the CGU
to which Induction Healthcare (UK) Limited is allocated is the Induction Switch CGU, which remains impaired. The
expected credit loss (“ECL”) provision is calculated as a weighted average expected value of the range of
outcomes with regards to default on repayment of the intra-group receivable. The range of outcomes is binary (ie.
either default or no default) and a range of probabilities of 20% to 80% is allocated to each scenario.
1 .4 In ve stme n ts i n su b si d i a ri e s
Investments in subsidiaries are held at cost less accumulated impairment losses.
1 .5 C a sh fl o w sta te me n t
Induction Healthcare Group plc does not have a bank account. Management have applied judgement and elected
to present a cash flow statement.
2 . R e p o rti n g e n ti ty
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 . Ba si s o f p re p a ra ti o n
The financial statements have been prepared in accordance with UK-adopted international accounting standards
(“UK- adopted IFRS”).
Details of the Company’s accounting policies, including changes during the year, are included in note 1.
95
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Financial Statements
Annual Report & Accounts 2023
Notes to the company financial statements
(continued)
3 . Ba si s o f p re p a ra ti o n (co n ti n u e d )
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.
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 thousand pounds, unless otherwise indicated.
4 . Ju d g e me n ts a n d e sti ma te s
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.
There are no estimates that result in significant estimation uncertainty during the year ended 31 March 2023.
5 . In ve stme n ts i n su b si d i a ri e s
The investments in subsidiaries represent the investments of Induction Healthcare plc in Attend Anywhere Pty
Limited and A.C.N. 167 231 307 PTY Ltd, which were acquired during the year. It also represents investment in
Induction Healthcare Limited, Horizon Strategic Partners Limited and Zesty Limited (acquired in prior year). All of
the entities are wholly owned subsidiaries of the company. A full list of subsidiaries is included in Note 17 of the
consolidated financial statements for the Group.
During the year ended 31 March 2023, management performed an impairment assessment of the investments in
subsidiaries. As a result, management impaired the investment in Zesty Limited by £11.7m (2022: £Nil). The
recoverable amount of the investment in Zesty Limited is the value-in-use as determined for the purposes of the
goodwill impairment assessment of the Induction Zesty CGU in the consolidated financial statements of the Group.
Refer note 17 in the consolidated financial statements. In addition, management impaired the investment in
Horizon Strategic Partners Limited by £0.28m (2022: £Nil). The recoverable amount of the investment in Horizon
Strategic Partners Limited is the fair value less costs-of-disposal as determined for the purposes of the goodwill
impairment assessment of the Induction Guidance CGU in the consolidated financial statements of the Group.
Refer note 17 in the consolidated financial statements. The investments in Attend Anywhere Pty Limited and
A.C.N. 167 231 307 PTY Ltd (“A.C.N.”) are not impaired, as the recoverable amounts exceeds the costs of the
investments.
During the year, the Company advanced £0.08m (2022: £6.8m) to Induction Healthcare Limited, in order to fund
the continued operation of the Group, specifically the Induction Switch CGU and group-wide corporate costs. This
has been accounted for as a capital contribution and therefore an increase in the investment in Induction
Healthcare Limited. The Company has then impaired the investment in Induction Healthcare Limited by £0.08m
(2022: £6.8m), due to the fact that the Induction Switch CGU remains impaired and has been classified as held
for sale in the consolidated financial statements of the Group, and there is no expectation of repayment of these
amounts by Induction Healthcare Limited in the near future. This has been included in the loss for the year for
Induction Healthcare Group plc. The recoverable amount of the investment is £Nil (2022: £Nil).
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Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes to the company financial statements
(continued)
5 . In ve stme n ts i n su b si d i a i re s (co n ti n u e d )
During the year ended 31 March 2022, on 9 June 2021, Induction Healthcare Group plc acquired 83.5% of the
share capital of Attend Anywhere Pty Limited and 100% of the share capital of A.C.N. 167 231 307 PTY Ltd
(“A.C.N.”), which owns 16.5% of the share capital of Attend Anywhere, thereby obtaining 100% control over Attend
Anywhere. Attend Anywhere Pty Limited owns 100% of the share capital of Attend Anywhere Limited, a UK
subsidiary. Prior to the acquisition, a fundraise of £25m was held which led to the issue of 35,714,285 New
Ordinary Shares. The consideration included payments of £0.8m in cash for the purchase of net assets at the
completion date, cash consideration of £15.6m, plus the issue of 14,285,714 New Ordinary Shares which had a
fair value of £9m. This brings the total consideration to £25.4m prior to transaction costs.
Ba l a n ce a t 1 Ap ri l
Acquisitions of new subsidiaries
Share-based payments
Capital contribution
Impairment
Ba l a n ce a t 3 1 Ma rch
2023
£’000
4 1 ,0 0 9
—
4 0 2
8 2
(1 2 ,2 4 7 )
2 9 ,2 4 6
2022
£’000
14,639
25,797
621
6,834
(6,882)
41,009
6 . Amo u n ts re ce i va b l e fro m g ro u p co mp a n i e s
Amounts receivable from group companies comprise loans due from group companies of £4.6m (2022: £4.6m).
The loans are interest free and repayable on demand. Lifetime expected credit losses of £10.5m (2022: £10.5m)
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 2023.
Ba l a n ce a t 1 Ap ri l
Net settlement of amounts owed to group companies
Provision for expected credit losses
Amo u n ts re ce i va b l e fro m g ro u p co mp a n i e s
To ta l n o n -cu rre n t p o rti o n
2023
£’000
4 ,5 8 5
—
—
4 ,5 8 5
4 ,5 8 5
2022
£’000
12,668
(2,333)
(5,750)
4,585
4,585
The carrying value of trade and other receivables classified as loans and receivables approximates fair value. The
gross carrying value of amounts receivable from group companies, prior to the application of the expected credit
loss provision (“ECL”) is £15.1m. This is wholly due from Induction Healthcare Limited.
Amounts receivable from Induction Healthcare Limited are considered to have a high credit risk. Default for
amounts due from group companies is defined as a scenario where the entity will not be able to recover the amount
owing through any means, such as repayments on the loan, distribution of dividends or the sale of the asset. It is
the policy of the entity to not write-off amounts due from group companies.
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Financial Statements
Annual Report & Accounts 2023
Notes to the company financial statements
(continued)
7 . Tra d e a n d o th e r p a ya b l e s
The following table summarises the balance of trade and other payables. The amounts owed to group companies
represent £0.8m (2022: £0.6m). This is an interest free arrangement and is repayable on demand.
Trade payables
Accruals
Amounts due to group companies
To ta l cu rre n t p o rti o n
8 . Sh a re ca p i ta l
2023
£,000
1 7 3
7 5
8 1 8
1 ,0 6 6
2022
£,000
—
42
625
667
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 2023.
Au th o ri se d
Sh a re s tre a te d a s e q u i ty
Ordinary shares of £0.0050 each
Issu e d a n d fu l l y p a i d
Ord i n a ry sh a re s o f £ 0 .0 0 5 0 e a ch
At 1 April
Issue of ordinary shares
Issue of ordinary shares on exercise of equity settled share-based
payments
Issue of shares as consideration for a business combination
At 31 March
2023
Number (‘000)
2023
£000
2022
umber (‘000)
2022
£000
9 2 ,3 8 0
9 2 ,3 8 0
4 6 2
4 6 2
92,051
92,051
460
460
2023
Number (‘000)
2023
£000
2022
umber (‘000)
2022
£000
9 2 ,0 5 1
—
3 2 9
—
9 2 ,3 8 0
4 6 0
—
2
—
4 6 2
42,052
35,714
—
14,286
92,051
210
179
—
71
460
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.
On 9 June 2021, the Group acquired Attend Anywhere Pty Ltd (“Attend Anywhere”). The consideration included
the issue of 14,285,714 new Ordinary Shares (the “Consideration Shares”). (Refer Note 15 for further details).
As part of the transaction, on 8 June 2021, the Company announced that it had raised £25m through a placing of
35,714,285 new Ordinary Shares at a price of 70p per share. Induction Healthcare Group plc does not operate a
bank account, and cash inflows from the fundraise were received by a subsidiary entity, Induction Healthcare
Limited.
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Financial Statements
Annual Report & Accounts 2023
Notes to the company financial statements
(continued)
• R e se rve s
9 .1 Sh a re p re mi u m
Ordinary shares of £0.0050 each
At 1 April
Issue of shares
Transaction costs on issue of shares
Reclassification of equity
At 31 March
2023
£,000
2022
£,000
41,665
—
—
—
41,665
18,432
24,821
(1,190)
(398)
41,665
During the year ended 31 March 2020, Induction Healthcare Group plc acquired Podmedics Limited in a share-
for-share exchange. £0.4m of the purchase consideration was accounted for as share premium. However, during
the year ended 31 March 2022 management have assessed that the conditions set out in section 612 of the
Companies Act 2006 were met at the acquisition date, and therefore the difference between the fair value of the
shares issued and the nominal value have been reclassified from share premium to the merger reserve.
9 .2 Me rg e r re se rve
On 9 June 2021, Induction Healthcare Group plc acquired 83.5% of the share capital of Attend Anywhere Pty
Limited and 100% of the share capital of A.C.N. 167 231 307 PTY Ltd (“A.C.N.”), which owns 16.5% of the share
capital of Attend Anywhere, thereby obtaining 100% control over Attend Anywhere. Attend Anywhere Pty Limited
owns 100% of the share capital of Attend Anywhere Limited, a UK subsidiary. Prior to the acquisition, a fundraise
of £25m was held which led to the issue of 35,714,285 New Ordinary Shares. The consideration included
payments of £0.8m in cash for the purchase of net assets at the completion date, cash consideration of £15.6m,
plus the issue of 14,285,714 New Ordinary Shares which had a fair value of
£9m. This brings the total consideration to £25.4m prior to transaction costs. This acquisition was effected by way
of a share- for-share exchange, whereby the shareholders of Attend Anywhere Pty Limited and A.C.N. 167 231
307 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.
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 Statement of Financial Position, and the difference between the nominal value
and fair value of the shares issued is recognised in the merger reserve.
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Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
Notes to the company financial statements
(continued)
9 . R e se rve s (co n ti n u e d )
9 .2 Me rg e r re se rve (co n ti n u e d )
The following represents the movement in the merger reserve:
At 1 April
Issue of shares as consideration for a business combination
Reclassification of equity
At 31 March
2023
£000
2 0 ,2 0 5
—
—
2 0 ,2 0 5
2022
£000
10,879
8,928
398
20,205
During the year ended 31 March 2020, Induction Healthcare Group plc acquired Podmedics Limited in a share-
for-share exchange. £0.4m of the purchase consideration was accounted for as share premium. However, during
the year ended 31 March 2022 management have assessed that the conditions set out in section 612 of the
Companies Act 2006 were met at the acquisition date, and therefore the difference between the fair value of the
shares issued and the nominal value have been reclassified from share premium to the merger reserve.
9 .3 Oth e r re se rve s
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.
1 0 . R e l a te d p a rty tra n sa cti o n s
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.
1 0 .1 Id e n ti ti e s o f re l a te d p a rti e s w i th w h o m th e Gro u p h a s tra n sa cte d
Note 16 in the consolidated financial statements 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.
1 0 .2 C o mp e n sa ti o n o f ke y ma n a g e me n t p e rso n n e l
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
To ta l co mp e n sa ti o n p a i d to ke y ma n a g e me n t p e rso n n e l
2023
£000
1 ,2 0 9
3 7
1 8 7
2 8 6
1 9 3
4
1 ,9 1 6
2022
£000
1,249
76
—
246
342
3
1,916
Key management remuneration comprises short-term benefits only. The remuneration of the highest paid director
was £0.3m (2022: £0.3m).
Directors’ remuneration has been disclosed in the Directors’ report. Refer to pages 27 and 28, tables “Directors
remuneration”.
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Financial Statements
Annual Report & Accounts 2023
Notes to the company financial statements
(continued)
1 0 . R e l a te d p a rty tra n sa cti o n s (co n ti n u e d )
1 0 .3 Tra n sa cti o n s w i th su b si d i a ri e s
Included in amounts due from group companies is an amount of £4.6m (2022: £4.7m) 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 £0.6m (2022: £0.3m) 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 £0.02m (2022: £0.02m) 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 £0.02m (2022: £0.02m) 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.
1 1 . Eve n ts a fte r th e re p o rti n g d a te
There were no material events after the reporting date that have an impact on these financial statements.
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Induction Healthcare
Financial Statements
Annual Report & Accounts 2023
I n d uction He a l t h c a r e Additional Information
Annual Report & Accounts 2023
Company Information
Non-Executive Chair
Non-Executive Director
Non-Executive Director
Non-Executive Director
Chief Executive Officer
Chief Financial Officer
Solicitors
Pinsent Masons LLP Third Floor
Quay 2
139 Fountainbridge
Edinburgh EH3
9QG
Nominated advisers and brokers
Singer Capital Markets 1 Bartholomew Lane
London
EC2N 2AX
Registered Office
C/O Pinsent Masons
30 Crown Place
London
EC2A 4ES
Registered Number
11852026
Company Website
www.inductionhealthcare.com
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Directors
Christopher Samler
Jane Silber
Andrew Williams
Ian Johnson
Paul Tambeau
John McIntosh
Secretary
Louise Torr
C/O Pinsent Masons
30 Crown Place
London
EC2A 4ES
Auditors
Crowe LLP
55 Ludgate Hill
London
EC4M 7JW
Primary Bankers
HSBC Bank Ltd
172 Upper Richmond Road London SW15 2SH
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I n d u c t i o n H e a l t h c a r e
Glossary
Al te rn a ti ve In ve stme n t Ma rke t (AIM)
An n u a l Ge n e ra l Me e ti n g (AGM)
Attend Anywhere Pty Ltd (Attend Anywhere, Induction Attend An yw h e re )
El e ctro n i c Me d i ca l R e co rd (EMR )
Ea rnings Before Interest, Tax, Depreciation and Amortisa ti o n (EBITD A)
Ge n e ra l D a ta Pro te cti o n R e g u l a ti o n (GD PR )
H o rizon Strategic Partners Limited (Induction Guidance, Horizon and Mi cro g u i d e )
In duction Healthcare Gro u p PL C (Gro u p , In d u cti o n , In d u cti o n H e a l th ca re a n d C o mp a n y)
In i ti a l Pu b l i c Offe ri n g (IPO)
Mo n th l y re cu rri n g re ve n u e (MR R )
N a ti o n a l H e a l th Syste m (N H S)
Podmedi cs L i mi te d (Po d me d i cs,
In d u cti o n Sw i tch )
R e tu rn o n In ve stme n t (R OI)
So ftw a re a s a se rvi ce (Sa a S)
Th e Quoted Companies Al l i a n ce (th e QC A C o d e )
Ze sty L i mi te d (In d u cti o n Ze sty, Ze sty)
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