i-nexus Global plc
Annual Report 2018
Turn your strategy into reality.
Our strategy execution software helps large
organisations achieve more of their goals,
faster, and with less eff ort.
i-nexus Global plc
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Contents
STRATEGIC REPORT
Chairman Statement 2
CEO Statement & Operational Review 5
CFO Report & Risks and Uncertainties 8
CORPORATE GOVERNANCE
Board of Directors 10
Corporate Governance Statement 11
Group Directors Report 14
FINANCIAL STATEMENTS
Independent Auditors Report 20
Consolidated Statement of Comprehensive Income 25
Consolidated Statement of Financial Position 26
Consolidated & Company Statement of Cash Flows 27
Consolidated Statement of Changes in Equity 28
Company Statement of Financial Position 29
Company Statement of Changes in Equity 30
Notes to the Financial Statements 31
Company Information 56
Notice of Annual General Meeting 57
Consolidated Financial Statements for the year ended 30 September 2018
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STRATEGIC REPORT:
Chairman’s Statement
I am delighted to present i-nexus
Global plc’s first full year results as a
public company.
On 21 June 2018 the Company’s
shares were admitted to trading on
AIM, raising £10m before expenses.
We are a small, nimble and fast-
growing UK software business,
supporting large companies’
Operational Excellence and Strategy
Execution programmes globally. The
financial support that our new
investors have provided has created a
solid platform from which to grow our
resources and our ability to sell to and
support our large global customers.
The board remains confident and
excited about the Company’s ability to
grow within its chosen niche verticals.
Since the IPO management has
wasted no time in deploying capital
and addressing the crucial areas of
business development as laid out to
investors, being to:
– Enhance the Company’s go-to
market capabilities
– Develop product capabilities
– Scale the Company’s partner
programme
Since admission the Company has
made good progress in these areas,
whilst also developing our plans for
ongoing thought leadership initiatives
and longer-term market and product
initiatives. We believe our ability to
grow with existing customers and
create new opportunities will underpin
our targeted growth strategy in the
years to come.
In FY19 the focus has shifted to
successfully executing on our growth
strategy. We have implemented a
larger, more proactive marketing plan
and a significantly strengthened sales
resource, led and driven by
experienced industry professionals. In
addition, we are complementing our
direct sales capabilities with our
developing indirect partner
programme. We have a clearly defined
Customer Success plan and now have
sufficient resources to ensure we can
build and strengthen increasingly
deep strategic relationships with our
customers, driving increased use of
our software and facilitating their full
adoption of Hoshin. We continue to
invest in broadening our product
range and during 2019 will focus on
developing our Hoshin and user
experience capabilities and
strengthening our architecture and
infrastructure.
The executive team has ensured we
have skilled people in place across the
business to deepen our customer
relationships and successfully execute
our strategic growth plan. The Board is
comfortable with the quick but
considered manner in which
management has deployed capital
and will continue to monitor both the
Company’s growth plans but also its
consumption of cash.
FY18 was a seminal year in the
development of i-nexus Global plc and
none of it would have been possible
without the commitment and
capabilities of all our staff. Two long
standing Board members stepped
down at the IPO and I would like to
take this opportunity to thank Kevin
Douglas and Frank Bury for the
support and advice they provided
during their time on the Board. Nigel
Halkes joined the Board before the
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STRATEGIC REPORT
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FINANCIAL STATEMENTS
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“When it comes to execution, low performing organisations spend 83% more time
fire fighting at a tactical level rather than a strategic level.”
Harvard Business Review
Finally, I would like to thank my other
fellow directors and our longstanding
and new staff for their unremitting
commitment to the ongoing success
of i-nexus Global plc.
The Board is confident about the
future of the Company. i-nexus has
the resources now to appropriately
address the large growing market for
its software. Much remains to be
done, but our progress so far and the
momentum we are generating allows
me to look forward with confidence.
Richard Cunningham
Chairman
IPO and I would like to thank him for
his steady and considered advice.
Since the IPO there have been
two changes to the Board. Paul
Docherty has decided to leave the
Company with effect from 13 February
2019 to pursue new challenges. Since
founding the business 18 years ago
the transformation of i-nexus into an
AIM listed company is something he
can be very proud of.
I’d like to take this opportunity to
thank Paul for everything he has done
for the Company and for the valued
contribution that he has made over
the years.
In addition, James Davies has resigned
from the Board on 1 January 2019 to
become the Company’s EVP Product.
He brings with him a wealth of
expertise and is already proving to be
an invaluable member of the
executive team.
Consolidated Financial Statements for the year ended 30 September 2018
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i-nexus Global plc
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
05
STRATEGIC REPORT:
CEO’s Statement
The investments made since our
IPO to grow our high calibre team
and suite of products has laid the
foundation for continued growth.
This is the first Annual Report issued
by the Group i-nexus Global plc.
The Company was incorporated and
registered in England and Wales on
20 April 2018 as a private company
limited by shares. On 25 May 2018,
the Company became the holding
company of i-solutions Global Limited
by means of a Share Capital
Reorganisation. On 4 June 2018, the
Company changed its name to i-nexus
Global Limited, and on 18 June 2018
the Company was re-registered as a
public limited company with the name
i-nexus Global plc. The Group trades
under the name ‘i-nexus’.
i-nexus is a provider of Continuous
Improvement and Strategy Execution
software, delivering an enterprise
ready, scalable solution to Global 5000
customers. Our SaaS software
simplifies the management of
operational and strategic complexity,
providing actionable insights and
ensuring that all levels of business are
aligned behind the same objectives.
Following a strong operational
performance in the first half of FY18,
the key highlight of the year was our
successful admission to AIM in June
and the platform this has provided the
business for future growth. With the
support of our expanding investor
base, i-nexus now has the funding to
accelerate growth and take it into the
next stage of its development, building
on our market leading position in the
emerging market for enterprise grade
Hoshin-based Strategy Execution
software. Targeted investment has
commenced across our operations
and we are excited about the
prospects for the year ahead and
beyond.
Recognised revenues for the year
increased 15% to £4.7 million (FY17:
£4.1 million). Loss before tax
increased to £1.0m (FY17: £0.5m) as
we started to deploy funds and period
end net cash increased to £6.9 million
(FY17: £0.2m). Despite some weaker
than expected pipeline conversion in
Q3 of FY18, target Monthly Recurring
Revenue (“MRR”) returned towards
more normalised levels in Q4 and we
closed FY18 at an MRR run rate of
£335k. We saw some excellent
customer successes during the year,
with 10 new customers added in the
year. This growth included our entry
into the UK public sector, securing
four new public sector customers
across the year including University
Hospitals Coventry and Warwickshire,
Highway England and Birmingham and
Solihull Mental Health NHS
Foundation Trust. We have
subsequently allocated a dedicated
salesperson focused on increasing our
penetration into this market.
Our Growth Strategy
In order to take advantage of our
significant market opportunity, we
have developed our own Hoshin
Strategic plan, resulting in a Group
strategy with the following themes:
• Scalable Sales & Marketing Cycle:
We are building an extensive
calendar of marketing events and
other initiatives to drive our
pipeline of new opportunities. The
recent investment in this and in our
sales team has resulted in
Consolidated Financial Statements for the year ended 30 September 2018
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“Organisations are realising that executing strategy effectively in the digital age requires a new set of tools and
practices. Transformation leaders and EPMO leaders should consider investing in strategy execution software to help
close the ever-persistent ‘execution gap’.”
Market Guide to Strategy Execution Software, Gartner
promising growth within the
pipeline of opportunities.
• Cross and Upsell to existing
customers:
All customers are at different levels
of maturity in their journey to
successful Strategy Execution, we
characterise this journey as crawl,
walk, run. As we guide our
customers from crawl to run, we
have many upsell opportunities to
expand the implementation of our
software. We also see cross-sell
opportunities for those customers
who have adopted the Hoshin
Strategy Planning solution to the
i-nexus Continuous Improvement
solution, and vice versa.
• Working with Channel Partners:
Our channel strategy is in its early
stages of development with a small
number of established resellers
and referral consulting partners.
Interest from potential partners,
however, is growing and we have
begun to explore ways to capitalise
on this opportunity as a key driver
for the next stage in the Group’s
development.
• Product Innovation:
Our primary focus in the initial
planning horizon is the
simplification and standardisation
of our software, making
engagements easier and helping to
accelerate growth. In addition, we
see a long-term opportunity to
build predictive analytics into the
platform, utilising the vast
quantities of data available to us.
• Strong Thought Leadership:
We have established our leading
market position by promoting the
development of industry best
practices through the i-nexus
StratEx Hub community – a best-
practice resource tool with
thousands of subscribers. We run
and organise well attended
consortium events hosted by both
our customers and other
companies to discuss strategy
execution issues & experiences.
These initiatives, in addition to
more traditional sales channels,
provide distinct additional routes to
market, supporting traditional
pipeline development.
Investment into our people,
processes and scalability to
drive growth
The Placing which accompanied our
IPO was significantly oversubscribed,
with strong support from institutional
investors, raising £10m pre-expenses
and providing us with the funds to
execute on our growth strategy.
The investment programme
commenced immediately following the
IPO and has progressed to plan, with
hires across many areas of the
business, including client relationship
managers, Domain experts, sales and
marketing personnel and additional
members of the development teams.
We have also begun the planned
development work on our software
and opened our first International
office in New York, to support our
growing US customer base.
Building the team
Everything starts with getting the right
team in place. i-nexus will only fulfil its
potential if we can attract and retain
high quality personnel in all areas of
the business. We have made a
number of senior hires since the IPO,
including an EVP of Sales, EVP of
Product and a Head of Marketing.
Other key scaling hires include:
• Additional people into marketing,
providing content and to support
the sales team
• Scaling the sales team. They can
now cover our key regions,
customers and begin to generate
their own leads to not be so
dependent on marketing as the
only source of leads
• The success team, responsible for
customer adoption, retention and
expansion, has increased by three
to five, meaning we now have the
capacity to embed a team member
across all customer accounts,
ensuring customer renewal and the
unlocking of further opportunities
• We are investing in the
organisation’s processes and
operations to support our ongoing
expansion, particularly in the areas
of Finance and HR
We have been delighted by the calibre
of these new recruits, holding our first
Company launch in early October, in
order to ensure all the expanded team
is aligned behind the new objectives
for i-nexus.
Scaling marketing
We have two unique resources in
terms of developing thought
leadership and setting the agenda for
Strategy Execution as outlined above.
We are mobilising many initiatives to
multiply activity in these areas.
Utilising our funds, we are also
exploring and launching new
marketing initiatives such as breakfast
briefings and other market focussed
events, with three having taken place
since July, in New Jersey, San Diego
and Rotterdam. This activity will
continue to ramp up through 2019.
i-nexus Global plc
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
07
financial year, we are already seeing
the benefit of our targeted investment
with clear evidence of steady pipeline
growth.
With an outstanding customer base,
strong competitive position, large
addressable market and strengthened
operational teams, we look to the
future with confidence.
Simon Crowther
Chief Executive Officer
Product Development
Another major area of focus has been
our Development teams, where we
have added two additional teams,
enabling a potential tripling of our
productivity which is critical to our
ability to:
• work increasingly closely with our
customers which will de-risk our
product development strategy
• enhance our products to ensure
that not only can they manage what
are large and complex corporate
processes
• ensure the solution is simple to
deploy for both internal staff and
partners
•
facilitate cross-sell and up-sell
opportunities
Development in the year focused on
increasing the ease of use and
competitive strength of our software,
including:
•
•
the introduction of the My World
Dashboard
to present key information simply
and graphically
• work on the wider user interface to
improve consistency and reduce
duplication
October we opened a small office in
New York. This is a key step for both
scaling efficiently and being closer to
one of our largest market
opportunities.
Key performance indicators
A qualitative review of the
performance during the year is
provided in my Statement above and
in the CFO’s statement below and the
results for the year are presented in
the Consolidated Financial
Statements.
The company operates a rigorous
approach to KPI monitoring as you
would expect given the business we
are in.
We have a full suite of weekly and
monthly pipeline and other
operational metrics reviewing all
aspects of the company in six themes,
Pipeline, Profit & Loss, Cash, Product,
Deployment and Customers. We also
track ourselves against the principle
SaaS metrics including MRR which this
year had a closing value of £335k.
Events since the period end
With the exception of the changes to
the Board and executive team covered
in the Chairman’s Statement there
have been no other announceable
events since the period end (see also
note 26).
•
incremental Hoshin functionality
Outlook
• architectural development,
primarily to increase the speed,
efficiency and output of the
product development process.
US Presence
The Group’s target market is primarily
the Global 5000 and, more specifically,
the 2,800 companies in this list that
are based in the USA and Europe. In
In taking our first steps as a public
company, we have identified a clear
path to enhance the size, scale and
relevance of our business. The
investment in growing our high calibre
team and suite of products has laid
the foundation for continued growth,
which gives us grounds for optimism.
Despite some higher than expected
churn at the beginning of the current
Consolidated Financial Statements for the year ended 30 September 2018
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STRATEGIC REPORT:
Chief Financial Officer’s Report
We are deploying our capital in line
with our plans whilst maintaining
effective management of our
financial resources
Reported revenue
Revenue increased by nearly 15% to
£4.7m from £4.1m in the prior year.
The Group signed 10 new customers
(2017: 8) all under recurring contracts
of at least one year in length, typically
paid annually in advance.
Revenue from recurring contracted
software subscriptions was £3.84m
(2017 £3.37m) and from associated
professional services was £0.87m
(2017: £0.75m).
Gross Margin
Gross margin in the year was £3.23m
68.4% (2017: £2.85m 69.4%) after
considering commission payable to
the Group’s business partners. There
was a slight narrowing of margin as
expected as the Group deploys the
capital raised at IPO, but this is
expected to improve as the
operational benefits of these
investments begin to feed through.
Reported gross margin is the
combined gross margin over both
recurring software subscriptions and
professional services.
Overheads
Overhead (defined as the aggregate of
staff costs, other operating expenses
but excluding those costs included in
cost of sale, depreciation of tangible
assets and amortisation of intangible
assets, share based payment charges
and non-recurring administrative
expenses related to the IPO) increased
in the year from £3.2m to £4.1m. We
have added ~£100k of monthly run
rate cost to the Group since IPO, as
planned.
Included in these overheads was
£0.2m of non-recurring administrative
expenses related to the IPO. The total
of these costs was £1.4m, the balance
being charged to reserves.
Interest expense rose by £37k on the
previous year as we took on additional
long-term debt ahead of the IPO to
allow us to start our strategic plans.
Capitalised development costs
amounted to £55k in the year. We
expect a scaling of this next year as
the additional development capacity
contributes to the Groups’ products
marketability.
The Groups Loss before taxation rose
from £0.46m in 2017 to £1.04m.
Cash flow
The Group is in a strong financial
position, with cash balances of £6.9m
at 30 September 2018 (2017: £0.2m).
Gross debt at 30 September was
£0.7m of which £0.3m was payable
within one year.
The Group experienced a net outflow
of funds from operating activities of
£1.7m (2017 inflow £0.4m). The Group
had a cash outflow of £0.3m (2017
£0.2m) from the servicing of its debt
finance and a net inflow of funds
associated with the AIM IPO of £8.8m.
The Group will continue to apply
treasury and foreign currency
exposure management policies to
minimise both the cost of finance and
our exposure to foreign currency
exchange rate fluctuations.
Capital expenditure
The Group operates an asset light
strategy and has low capital
requirements, therefore expenditure
on fixed assets is low at 3.4% of
revenue (2017 0.9%). Capital
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FINANCIAL STATEMENTS
09
international risks and challenges to
protect operating results.
Liquidity risk: The Group seeks to
manage financial risk by ensuring
sufficient liquidity is available to meet
foreseeable needs and to invest cash
assets safely and profitably.
Alyson Levett
Chief Financial Officer
expenditure this year has increased
due to an essential refresh of critical IT
related assets to support our
Infrastructure and as a result of new
starters in the year.
Principal risks & uncertainties
Although the directors seek to
minimise the impact of risk factors,
the Group is subject to a number of
risks which are as follows:
Loss of key personnel: loss of key
personnel could have an adverse
effect on the Group. The Group has
entered into service agreements with
its Executive Directors and both they
and other key personnel will benefit
from long term incentive plans in the
near future, however this does not
guarantee the retention of their
services.
Competitor risk: competitors may be
able to develop software that is more
attractive to our customers and
prospects. To minimise this risk the
Group is investing in research and
development activities and is
responding appropriately to
technological change.
International Operations: a substantial
proportion of the Groups customers
and prospects operate overseas and
as a result we are exposed to a
number of risks and challenges;
operational challenges around
distance, language and culture,
human resource issues in different
geographies, foreign currency
exchange movements, different legal
and taxation environments.
The Board actively review and put in
place management controls to
minimise the impact of these
Consolidated Financial Statements for the year ended 30 September 2018
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CORPORATE GOVERNANCE:
Board of Directors
Richard Cunningham, Independent Non-Executive Chairman
Richard Cunningham is a technology entrepreneur who has built and sold a number of
businesses and who has extensive experience in equity research, financial analysis and
corporate finance, focusing on technology companies. He built one of the UK’s leading
independent corporate telecommunications service providers, Project Telecom Plc, before
listing it on the London Stock Exchange and eventually selling it to Vodafone. Richard also
founded Octium Ltd to “buy and build” a digital connectivity and applications business, which
was exited successfully through a sale to MDNX. He is currently Chairman of two private
technology businesses, CommonTime Ltd and Viewber Ltd. Richard also sits on the investment
committee of Herald Ventures, the venture capital business of Herald Investment Management.
Simon Crowther, Chief Executive Officer
Simon Crowther joined the Group as Software Development Manager in 2006 and has worked
within every key area of the business prior to becoming COO in 2013 and having led a process
of change and refocus of the business since becoming CEO in 2016. Simon has a background
in software development, having also spent almost three years at Intascape (a division of See
Tickets) as a senior software architect. He has two masters degrees from Birmingham
University: one in mathematics and the second in computer science.
Alyson Levett, Chief Financial Officer
Alyson Levett joined the Group as Finance Director in 2012, assuming a strategic role and day-
to-day responsibility for planning, implementing, managing and controlling all finance-related
activity. Alyson has an extensive background in finance, including as finance director of Griffin
Internet prior to its acquisition by MDNX in 2012. Alyson was also a director of AML Financial
Consultancy Limited, through which she provided consultancy services to businesses on a
range of finance related matters. She has a masters degree in economics from Cambridge
University and is a qualified chartered accountant.
Nigel Halkes, Independent Non-Executive Director
Nigel Halkes is an experienced Non-Executive Director and a former Managing Partner of Ernst
& Young, UK & Ireland (“EY”). He is a Non-Executive Director of Hargreaves Services plc, an AIM
listed company, where he chairs the audit committee. Nigel was also a Non-Executive Director
of FreeAgent Holdings plc, a provider of cloud-based SaaS accounting software, which was
admitted to AIM in November 2016 and was subsequently sold to Royal Bank of Scotland for
£53 million on 1 June 2018. Nigel was a partner at EY for 25 years, during which time he led
their Technology, Media & Telecommunications business through a period of sustained growth.
In his leadership role at EY, Nigel was responsible for the UK firm’s growth strategy, key account
programme and the business development function.
i-nexus Global plc
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
11
CORPORATE GOVERNANCE:
Corporate Governance Statement
Chairman’s introductory statement on Corporate Governance
As Chairman, my role is to lead the Board, ensure it operates effectively and contains the right balance of skills, diversity
and experience. The Board is collectively responsible for the long-term success of the Company and for setting and
executing the business strategy. I believe our culture is consistent with the company’s objectives, strategy and business
model and is supportive in minimising our principal risks and uncertainties.
Good corporate governance is a key element of our business success and we have in place a strong and effective
governance framework and practices to ensure that high standards of governance, values and behaviours are consistently
applied throughout the Group. These elements are critical to business integrity and maintaining the trust of all
stakeholders in i-nexus.
The following Corporate Governance Report contains a summary of the Company's governance arrangements and the
regulatory assurances required under the UK Corporate Governance Code.
Richard Cunningham
Chairman
Overview
The Directors recognise the value and the importance of high standards of corporate governance. From 28 September
2018 AIM companies have been required to apply a recognised corporate governance code. The Company has adopted
and complies with all 10 principles of the Corporate Governance Code published by the Quoted Companies Alliance (the
QCA Code). The ways in which the Company complies with the QCA Code are available to view via a link on the website.
Board Constitution and Procedures
As at 30 September 2018, the Board comprised the Non-Executive Chairman, the Chief Executive Officer, the Chief
Financial Officer, Chief Innovation Officer and two Non-Executive Directors.
The Directors, together, act in the best interests of the Company via the Board and its Committees, devoting sufficient time
and consideration as necessary to fulfil their duties. Each Director brings different skills, experience and knowledge to the
Company, with the Non-Executive Directors additionally bringing independent thought and judgement.
The Non-Executive Directors are considered by the Board to be independent of management and freely able to exercise
their independent judgement in all matters related to the Board. Any conflicts of interest are declared at the start of each
Board meeting.
The Board recognises that it continually needs to monitor and improve its performance. This is achieved through annual
performance evaluation, full induction of new Board members and ongoing Board development activities. The Chairman is
responsible for ensuring that all Non-Executive Directors receive ongoing training and development. Our Non-Executive
Directors are conscious of the need to keep themselves properly briefed and informed about current issues.
Board meetings are convened monthly where all Directors are provided with comprehensive information to digest and
discuss. Any specific actions arising during meetings agreed by the Board are followed up and reviewed at subsequent
Board meetings to ensure their completion.
Attendance at meetings
During the period from IPO there were three Board meetings. The details of attendees are shown below:
BOARD REMUNERATION AUDIT
MEETINGS COMMITTEE COMMITTEE
Richard Cunningham 3/3 1/1 2/2
Nigel Halkes 3/3 1/1 2/2
James Davies 3/3 1/1 2/2
Simon Crowther 3/3 N/A N/A
Alyson Levett 3/3 N/A 2/2
Paul Docherty 3/3 N/A N/A
Consolidated Financial Statements for the year ended 30 September 2018
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12
CORPORATE GOVERNANCE:
Corporate Governance Statement continued
Roles and Responsibilities
The roles of the Chairman and Chief Executive Officer are separated and clearly defined.
The Chairman provides leadership to the Board by ensuring that the Board has sufficient time to discuss issues on the
agenda and facilitating constructive discussion on these items.
The Chief Executive provides day to day management of the company employees and is responsible for the leadership of
the i-nexus senior management team. He is responsible, along with the senior management team, for the execution of
strategy approved by the Board and the implementation of Board decisions.
Internal Control
Management has considerable autonomy to run and develop the business of the Group. The Board believes that a well-
designed system of internal reporting and control is necessary. The Board has overall responsibility to develop and
strengthen internal controls as required. The Audit Committee, on behalf of the Board, has the responsibility for reviewing
internal controls. The system is designed to provide reasonable, but not absolute, assurance that the assets of the Group
are safeguarded, that proper accounting records are maintained, and that reliable financial information is produced.
Audit Committee
The Audit Committee has responsibility for monitoring the integrity of the Group’s financial statements, reviewing significant
financial reporting issues, reviewing the effectiveness of the Group’s internal control and risk management systems,
assessing the need for internal audit and overseeing the relationship with the external auditor, including advising on their
appointment, reviewing the scope of their audit and their fees and ensuring their independence.
The Audit Committee comprises the Non-Executive Directors. Nigel Halkes chairs the Committee. He is a Chartered
Accountant, who brings a high level of financial and corporate governance experience to the Committee. The Board is
satisfied that he has recent and relevant financial experience. The Chief Financial Officer and External Auditor are invited to
attend the meetings. The External Auditor throughout the financial year was Saffery Champness LLP, who conducted the
external audit. The Committee meets at least three times a year.
The Committee reviewed the annual financial statements before submission to the Board, including reviewing the reports
from Saffery Champness LLP on their work and findings from the external audit and compliance with the Group’s policies
and procedures and applicable accounting standards and legislation. Topics discussed included observations and
recommendations from the IPO Long Form report, the decision to use merger Accounting as the most appropriate method
for the Group reconstruction that took place in 2018, the Group’s compliance with accounting standards on software
revenue recognition and capitalisation of software development costs. These significant issues were discussed by the
Committee taking guidance from the Independent Auditor and discussions with the CFO. Complying fully with IFRS in
relation to revenue recognition will need careful review when IFRS 15 is adopted next year.
The FRC’s ethical standard for auditors requires key audit partners of public interest entities or other listed entities to cease
their participation in the statutory audit not later than 5 years from the date of their appointment. When an entity becomes
a public interest entity or an other listed entity, the time already served is considered and where the engagement partner
has acted for 4 or more years, that individual may continue to serve for not more than 2 years after the entity becomes
listed. The Board has decided to extend Alistair Hunt of Saffery Champness LLP’s tenure as audit partner by a further two
years beyond the one remaining year before rotation is required. The audit firm, Saffery Champness LLP has also agreed to
this extension to safeguard the quality of the audit engagement.
The Committee reviewed the effectiveness of the Group’s internal controls, including enquiry of the Independent Auditor and
concluded that they were appropriate for a business of the size, scale and complexity of i-nexus. The Committee also
determined that a separate internal audit function was not required during the year, but this decision will be kept under review.
The independence and objectivity of the Independent Auditor were considered and found to be satisfactory.
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FINANCIAL STATEMENTS
13
Independence and objectivity
The Committee has a policy governing the engagement of the external auditor to provide non-audit services. The following
safeguards are in place to preserve Auditor independence; use of separate teams for tax compliance, Corporate Finance
and preparation of the financial statements, the Board and Committee are satisfied by these safeguards. As such the
Committee has pre-approved that permitted non-audit services can be provided up to a maximum of 50% of the Audit
fees. For certain specific permitted services, the Committee has preapproved that Saffery Champness can be engaged by
management, subject to the policies referred to above.
The Committee also received confirmation from Saffery Champness that there are no relationships between the Company
and Saffery Champness that may have a bearing on its independence.
Further details of the fees paid, for audit and non-audit services, to Saffery Champness for the 2018 and 2017 financial
years can be found in note 8 to the financial statements. Given the safeguards in place and to allow for continuity post IPO
the Committee decided not to use another independent firm for the non-audit services.
The Independent Auditor also met with the Chairman of the Committee without management present. The effectiveness of
the annual audit process was also reviewed and the quality of delivery and service levels provided were assessed.
Remuneration Committee
The Remuneration Committee was comprised of Richard Cunningham (Chairman), Nigel Halkes and James Davies until his
resignation from the Board on 1 January 2019. Since then it is comprised of the remaining two members. The Committee
meets regularly and reviews the performance of the Executive Directors and makes recommendations to the Board on
matters relating to the remuneration of the Executive Directors and Senior Management, including bonus awards, share
incentive plans and objectives. The Committee also reviews and makes recommendations to the Board on the overall
remuneration policy of the Group, including the design of any performance related pay schemes, share incentive schemes
and employee benefit structures.
Nomination Committee
In the event of any new director appointments being proposed, the Board will meet as a whole to discuss and as such no
nomination committee has been constituted.
Relations with Shareholders
The company endeavours to maintain communication with Shareholders through regulatory announcements, via the
company’s website and by direct contact with its major shareholders. The Board values the views of its shareholders and
fosters continuing dialogue with investment and fund managers, other investors and equity analysts to ensure that the
investing community receives an informed view of the Group’s prospects, plans and progress.
Alyson Levett
Chief Financial Officer and Company Secretary
26th February 2019
Consolidated Financial Statements for the year ended 30 September 2018
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14
CORPORATE GOVERNANCE:
Group Directors Report For the year ended 30 September 2018
The Directors of i-nexus Global plc (the “Company”) present their report and the Financial Statements of the Company and
its subsidiary undertakings (together the “Group” or “i-nexus”) for the year to 30 September 2018.
Change of Name and Strategy
The Company was incorporated and registered in England and Wales on 20 April 2018 as a private company limited by
shares. On 25 May 2018, the Company became the holding company of i-Solutions Global Limited by means of a Share
Capital Reorganisation. On 4 June 2018, the Company changed its name to i-nexus Global Limited, and on 18 June 2018 the
Company was re-registered as a public limited company with the name i-nexus Global plc. The Group trades under the
name ‘i-nexus’.
i-nexus is a provider of Strategy Execution Software, delivering an enterprise ready, scalable solution to Global 5000
customers. Our SaaS software simplifies the management of vast operational and strategic complexity, providing actionable
insights and ensuring that all levels of the business are aligned behind the same objectives.
Directors
The Directors who served on the Board during the year and to the date of this report are as follows:
Richard Cunningham (Appointed 20 April 2018)
Simon Crowther (Appointed 25 May 2018)
Paul Docherty (Appointed 25 May 2018, resigned 13 February 2019)
Alyson Levett (Appointed 25 May 2018)
James Davies (Appointed 25 May 2018, resigned 1 January 2019)
Nigel Halkes (Appointed 25 May 2018)
Policy on Executive Directors and Senior Management Remuneration
When determining the Board policy for remuneration, the Remuneration Committee considers all factors which it deems
necessary including relevant legal and regulatory requirements and the provisions and recommendations of relevant
guidance. The objective of this policy is to help attract, retain and motivate the Executive and Senior Management of the
Company without paying more than necessary. The remuneration policy bears in mind the Company’s appetite for risk and
is aligned to the Company’s long term strategic goals. A significant proportion of remuneration is structured to link rewards
to corporate and individual performance and be designed to promote the long-term success of the Company.
Base Salaries Review
The Remuneration Committee developed its 2018 remuneration proposals based on what the Remuneration Committee
believe to be appropriate remuneration levels for the Company at its current stage of development. The Company has yet
to set target remuneration for both Executive Management and Non-Executive Directors, it plans to do so in the next
period.
Bonus Payments
All Executive Directors and Senior Management are eligible for a discretionary annual bonus. Annual cash bonuses are paid
on the achievement of pre-set financial objectives. The Committee in conjunction with the Board reviews and sets these
objectives at the start of each financial year.
In the current year, the Executive Management team did not achieve the pre-set objectives and have received 0% of their
target cash bonus. However, as a result of the successful IPO, both Simon Crowther and Alyson Levett were awarded a
bonus payment of £20,000 each.
i-nexus Global plc
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
15
Long Term Incentives
The Company has adopted both a Long Term Incentive Plan and an Employee Share Option Plan (the “Plans”) with all
Directors, Senior Management and employees of the Company eligible to receive awards on the Plans. No options were
granted under the plans in 2018. In accordance with UK best practice on corporate governance, it is the Company’s current
policy not to award share options to Non-Executive Directors.
Directors’ Remuneration – Current Year
The remuneration of Directors for the year ended 30 September 2018 was as follows:
Pension
Base Salary Contri- 2018
and Fees Bonuses butions Total
£‘000 £‘000 £‘000 £‘000
2017
Total
£‘000
Simon Crowther 138 27 1 166
Alyson Levett 132 17 1 150
Paul Docherty 127 28 1 155
Richard Cunningham 21 – – 21
Nigel Halkes 13 – – 13
James Davies 33 – – 33
Kevin Douglas 17 – – 17
Frank Bury 18 – – 18
2018 TOTAL 499 72 3 573
Period to 30 September 2018 –
Share based payments 28
Period to 30 September 2018 – Total 601
•
•
•
•
•
•
•
•
•
•
•
A Companies controlled by the Directors, also received payments in respect of consultancy and other services performed outside of their Directors contract.
These are disclosed as consulting fees, office facilities and administration and other fees in Note 25 Related party transactions.
Consolidated Financial Statements for the year ended 30 September 2018
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16
CORPORATE GOVERNANCE:
Group Directors Report For the year ended 30 September 2018
Directors and their Interests
Interest in ordinary shares of 10p
The Directors of the Company held the following interest in the ordinary shares of I-nexus Global plc:
Director
Simon Crowther
Alyson Levett
Paul Docherty
Richard Cunningham
Nigel Halkes
James Davies
30 September 30 September
2018
%
2018
Number
854,475
763,796
848,929
1,029,360
6,331
0
2.89
2.58
2.87
3.48
0.02
0.00
Fees retained for external non-executive directorships
Executive Directors may hold positions in other companies as non-executive directors and retain the fees. Non-executive
Directors may hold positions in other companies as either Executive or non-executive directors and retain the fees. Alyson
Levett, Simon Crowther and Paul Docherty held no external non-executive directorships in the period. James Davies held
an Executive directorship in the period. Both Richard Cunningham and Nigel Halkes held external non-executive
directorships in the period.
Results and Dividends
The results for the year are set out on page 25 and are also discussed in the Strategic Report. The Directors do not
recommend payment of a dividend.
Share Capital Structure
The company was incorporated on 20 April 2018 issuing 1 ordinary share of £1.
On 20 May 2018 1,417,216 £1 ordinary shares were issued in a share for share exchange at par value.
On 18 June 2018 the company subdivided its shares from £1 ordinary to £0.10 ordinary shares.
On 18 June 2018, the subsidiary company i-Solutions Global Limited issued a further 237,554 ordinary £1 shares in closing
its share options scheme and conversion of shareholder debt. These shares were immediately exchanged for 2,375,540
£0.10 ordinary shares in i-nexus Global plc at par value.
On 21 June 2018 the company issued a further 13,023,895 £0.10 ordinary shares as a result of the IPO.
The Company’s ordinary shares of 10p are listed on the Alternative Investment Market (“AIM”) market of the London Stock
Exchange (ticker: INX). At the date of this report, 29,571,605 ordinary shares of 10p each were in issue. Details of share
issues and changes to the capital structure during the year are set out in note 22.
i-nexus Global plc
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STRATEGIC REPORT
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FINANCIAL STATEMENTS
17
Substantial Shareholdings
The Company is aware that the following had an interest of 3% or more in the issued ordinary share capital of the
Company:
Rank Investor
1 Herald Investment Management
2 Alto Invest
3 Amati Global Investors
4 Canaccord Genuity Group Inc.
5 Antrak Limited
6 Gresham House plc
7 Bury Fitzwilliam-Lay and Partners LLP
8 Chelverton Asset Management
9 Richard Cunningham
10 The Capital for Enterprise Fund LP
30 September 30 September
2018
%
2018
Number
4,031,490
3,164,557
3,164,557
2,658,228
1,852,210
1,582,279
1,459,460
1,325,000
1,029,360
889,080
13.63
10.70
10.70
8.99
6.26
5.35
4.94
4.48
3.48
3.01
There were no notified changes in these holdings in the period after year end to the date of signing the financial
statements.
Qualifying Indemnity Provision
The Group has in place insurance protection, including a Directors and Officers liability policy, to cover the risk of loss when
management deems it appropriate and cost effective; however in some cases risks cannot be effectively covered by
insurance and the cover in place may not be sufficient to cover the extent of potential liabilities.
Going Concern
After making appropriate enquires, the Directors consider that the Company and the Group has adequate resources to
continue in business for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing
the Financial Statements. As part of their enquires the Directors reviewed budgets, projected cash flows, and other relevant
information for 12 months from the date of approval of the Consolidated Financial Statements for the year ended 30
September 2018.
The Group’s forecasts, taking into account reasonably possible changes, show that the Group will be able to operate and
have significant financial headroom for the 12 months from the date of approval of the Consolidated Financial Statements
for the year ended 30 September 2018.
Consolidated Financial Statements for the year ended 30 September 2018
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18
CORPORATE GOVERNANCE:
Group Directors Report For the year ended 30 September 2018
Events after the Reporting Period
Events after the reporting period are set out in note 26 to the Financial Statements. Likely future developments in the
business are discussed in the Strategic Report.
Auditors
The Board are recommending Saffery Champness LLP for re-appointment as auditor of the Company, Saffery Champness
LLP have expressed their willingness to accept this appointment and a resolution re-appointing them will be submitted to
the forthcoming Annual General Meeting.
Disclosure of Information to the Auditors
All of the current Directors have taken all the steps that they ought to have taken to make themselves aware of any
information needed by the Company’s auditors for the purposes of their audit and to establish that the auditors are aware
of that information. The Directors are not aware of any relevant audit information of which the auditors are unaware.
Directors’ Responsibilities
The Directors are responsible for preparing the Strategic Report, the Corporate Governance Report and the Financial
Statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare Financial Statements for each financial year. Under that law the Directors
have elected to prepare the Group and Company Financial Statements in accordance with International Financial Reporting
Standards (IFRSs) as adopted by the European Union. Under company law the Directors must not approve the Financial
Statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and
of the profit or loss of the Group for that period. The Directors are also required to prepare Financial Statements in
accordance with the Rules of the London Stock Exchange for companies trading securities on the Alternative Investment
Market and the ESM exchange of the Irish Stock Exchange.
In preparing these Financial Statements, the Directors are required to:
• select suitable accounting policies and then apply them consistently;
• make judgements and accounting estimates that are reasonable and prudent;
• state whether they have been prepared in accordance with IFRSs as adopted by the European Union, subject to any
material departures disclosed and explained in the Financial Statements;
• prepare the Financial Statements on the going concern basis unless it is inappropriate to presume that the company will
continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the
Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Group and
Company and enable them to ensure that the Financial Statements comply with the requirements of the Companies Act
2006. They are also responsible for safeguarding the assets of the Group and Company and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.
Equality and diversity
The Company operates an equal opportunities policy which endeavours to treat individuals fairly and not to discriminate
on the basis of gender, disability, race, national or ethnic origin, sexual orientation or marital status. Applications for
employment are fully considered on their merits, and employees are given appropriate training and equal opportunities for
career development and promotion.
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FINANCIAL STATEMENTS
19
Website Publication
The Directors are responsible for ensuring the Annual Report and the Financial Statements are made available on a
website. Financial Statements are published on the Company’s website in accordance with legislation in the United
Kingdom governing the preparation and dissemination of Financial Statements, which may vary from legislation in other
jurisdictions. The maintenance and integrity of the Company’s website is the responsibility of the Directors. The Directors’
responsibility also extends to the on-going integrity of the Financial Statements contained therein.
This report was approved by the board on 26 February 2019 and signed on its behalf by:
Alyson Levett
Chief Financial Officer and Company Secretary
Consolidated Financial Statements for the year ended 30 September 2018
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20
FINANCIAL STATEMENTS:
Independent Auditor’s Report For the year ended 30 September 2018
Opinion
We have audited the financial statements of i-nexus Global plc (‘the parent company’) and its subsidiaries (the ‘group’) for
the year ended 30 September 2018 which comprise the Consolidated Statement of Comprehensive Income, the
Consolidated Statement of Financial Position, the Company Statement of Financial Position, the Consolidated Statement of
Changes in Equity, the Company Statement of Changes in Equity, the Consolidated and Company Statement of Cash Flows
and notes to the financial statements, including a summary of significant accounting policies. The financial reporting
framework that has been applied in their preparation is applicable law and International Financial Reporting Standards
(IFRSs) as adopted by the European Union.
In our opinion, the financial statements:
• give a true and fair view of the state of the group’s affairs as at 30 September 2018 and its loss for the period then
ended;
• have been properly prepared in accordance with IFRSs as adopted by the European Union; and
• 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 further described in the Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the group in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including the FRC’s Ethical Standard as applied to SME listed
entities, and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to you
where:
•
•
the directors’ use of the going concern basis of accounting in the preparation of the financial statements is not
appropriate; or
the directors have not disclosed in the financial statements any identified material uncertainties that may cast significant
doubt about the group’s ability to continue to adopt the going concern basis of accounting for a period of at least twelve
months from the date when the financial statements are authorised for issue.
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FINANCIAL STATEMENTS
21
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the
financial statements of the current period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the greatest effect on: the overall audit strategy, the
allocation of resources in the audit; and directing the efforts of the engagement team. These matters were addressed in
the context of our audit of the financial statement as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Key Audit Matter How our audit addressed the key audit matter
Reporting under the AIM listed company
regime including first year reporting
under IFRS
The company completed an IPO on the AIM
market in June 2018. i-Solutions Global
Limited transitioned from reporting under
FRS 102 to IFRS. There are a number of areas
that require different accounting treatments
and disclosure between the two financial
reporting frameworks. Management must
ensure transactions are recorded and
disclosed correctly.
Our audit procedures included the following:
• We have obtained and reviewed management’s transition workings
and satisfied ourselves that they materially comply with IFRS;
• We have completed a disclosure checklist on the financial statements;
• We have enquired with management to determine if a change in the
group’s circumstances requires an announcement to be made to the
market; and
• We have reviewed the announcements made to the market to ensure
these are consistent with our understanding of the group.
Companies listed on the AIM market must
comply with the AIM rules and make the
appropriate disclosures to the market.
Based on our procedures we consider that the adjustments on transition
to IFRS have been recorded correctly and appropriate disclosures have
been made to the market.
Revenue recognition and compliance
with IFRS 15
As detailed in the notes to the financial
statements, the group’s revenue is generated
from the development and licencing of cloud-
based software and associated maintenance,
support, software customisation and
professional consultancy services.
Revenue is recognised in accordance with the
terms of the contracts with customers which
can span a period of over twelve months in
compliance with IFRS. The group has not
adopted IFRS 15 on the basis that the group
is reporting on a period beginning before
1 January 2018.
Our audit procedures included the following:
• We have tested a sample of contracts and corroborated the
accounting treatment including the amount of deferred income
recognised at the period end;
• We have tested a sample of project income to time records and
ensured this income is recorded in line with the group’s revenue
recognition policy; and
• We have confirmed with management that IFRS 15 is not to be early
adopted. We have also considered the technical argument that IFRS
15 must be applied to this set of financial statements, on the basis
that the company incorporated after 1 January 2018.
Based on our procedures we have considered that revenue has been
recognised in accordance with the financial reporting framework.
Consolidated Financial Statements for the year ended 30 September 2018
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FINANCIAL STATEMENTS:
Independent Auditor’s Report continued
Key Audit Matter How our audit addressed the key audit matter
The accounting treatment in relation to
the new parent company in the
consolidated financial statements
During the period the company acquired the
issued share capital of i-Solutions Global
Limited by way of a share-for-share
exchange. Merger accounting principles have
been applied to account for the
reconstructed group as if it had always been
in existence. Due to the material and
complex nature of the transactions
associated with it, the treatment,
presentation and disclosure of this is
considered a key audit matter.
The recognition and capitalisation of
development costs
As detailed in the notes to the financial
statements, the group carries out research
and development of its internally generated
software. The expenditure that does not
meet the recognition criteria of IAS 38 should
be expensed to the consolidated statement
of comprehensive income. The expenditure
that meets the recognition criteria of IAS 38
should be capitalised as an intangible asset
and amortised over the period in which the
group expects to benefit from it.
This capitalised development expenditure
must adhere to the specific recognition
criteria and disclosure requirements under
IAS 38.
Our audit procedures included the following:
• We have reviewed management’s assessment of the group
reconstruction and confirmed that the application of merger
accounting is appropriate;
• We have obtained and reviewed management’s consolidation
workings to ensure the accounting entries have been recorded
correctly;
• We have obtained the share-for-share exchange documentation and
verified the amount of issued share capital in i-nexus Global plc; and
• We have confirmed the level of income raised as part of the IPO to
bank information.
Based on our procedures we have considered that the group
reconstruction has been accounted for correctly. We consider the
approach taken by management to be true and fair and to reflect the
substance and reality of the group numbers, in that they are reflecting a
continuation of i-solutions Global Limited.
Our audit procedures included the following:
• We have documented the process of determining if development
expenditure should be capitalised including the process of
management challenging their assessment;
• We have tested a sample of R&D expenditure and corroborated the
accounting treatment; and
• We have considered the appropriateness of the claim for R&D tax
credits and the recognition of a tax debtor.
Based on our procedures we have considered that the expenditure on
R&D has been appropriately accounted for including the capitalisation of
certain development costs.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
misstatements. For planning we consider materiality to be the magnitude by which misstatements, including omissions,
could influence the economic decisions of reasonable users that are taken on the basis of the financial statements.
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23
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower
materiality level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below
these levels will not necessarily be evaluated as immaterial as we also take into account the nature of identified
misstatements, and the particular circumstances of their occurrence, when evaluating their effect on the financial
statements as a whole.
The materiality for the group financial statements as a whole was set at £100,000. This was determined with reference to a
benchmark of revenue which we consider to be the principal consideration in assessing the financial performance of the
group. The group considers monthly recurring revenue growth to be one of its key performance indicators.
Performance materiality was set at 80 percent of the above materiality level.
We agreed with the Audit Committee that we would report to the Committee all individual audit differences in excess of £5,000.
We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
An overview of the scope of our audit
The group manages its operations from a single location in the UK and has common financial systems, processes and
controls covering all significant components. The audit of all significant components was performed by the same audit team.
In assessing the risk of material misstatement to the group financial statements, and to ensure we had adequate
quantitate coverage of significant accounts in the financial statements, we determined that two components, i-nexus
Global plc and i-Solutions Global Limited, represented the principal business units within the group. A full scope audit was
undertaken on each component.
Other information
The directors are responsible for the other information. The other information comprises the information included in the
annual report, other than the financial statements and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained
in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent
material misstatements, we are required to determine whether there is a material misstatement in the financial statements
or a material misstatement of the other information. If, based on the work we have performed, we conclude that there is a
material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, based on the work undertaken in the course of the audit:
•
the information given in the Strategic Report and the Directors’ Report for the financial year for which the financial
statements are prepared is consistent with the financial 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 the light of the knowledge and understanding of the group and its environment obtained in the course of the audit, we
have not identified material misstatements in the Strategic Report or the Directors’ Report.
Consolidated Financial Statements for the year ended 30 September 2018
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24
FINANCIAL STATEMENTS:
Independent Auditor’s Report continued
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not been kept, or returns adequate for our audit have not been received from
branches not visited by us; or
•
the financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Responsibilities of directors
As explained more fully in the Directors’ Responsibilities Statement set out on page 12, the directors are responsible for the
preparation of the financial statements and for being satisfied that they give a true and fair view, and for such internal
control as the directors determine is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the group’s ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless
the directors either intend to liquidate the group 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 financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our auditor’s report.
Use of our report
This report is made solely to the group’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 group’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the group and the group’s members as a body, for our audit work,
for this report, or for the opinions we have formed.
Alistair Hunt (Senior Statutory Auditor)
for and on behalf of Saffery Champness LLP
Chartered Accountants
Statutory Auditors
Suite C, Unex House
Bourges Boulevard
Peterborough
PE1 1NG
26 February 2019
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Consolidated Statement of Comprehensive Income
For the year ended 30 September 2018
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating loss
Adjusted EBITDA
Depreciation and profit/loss on disposal
Share based payment expense
Non-underlying items
Finance income
Finance costs
Loss before taxation
Tax expense
Loss for the year
Other comprehensive income:
Exchange differences arising on translation of foreign operations
Loss on net investment hedge
Total comprehensive loss for the year
Attributable to equity holders of company
Basic and diluted loss per share
Note
5
6
10
7
11
Year ended
30 September
2018
£
Year ended
30 September
2017
£
4,713,430
(1,488,028)
3,225,402
(4,139,628)
4,113,180
(1,259,262)
2,853,918
(3,229,795)
(914,226)
(375,877)
(655,401)
(53,737)
(30,000)
(175,088)
1,847
(124,384)
(1,036,763)
186,957
(849,806)
(54)
(28,529)
(878,389)
(878,389)
£
(0.05)
(275,688)
(38,173)
(11,789)
(50,277)
145
(86,562)
(462,294)
290,879
(171,415)
(14,036)
–
(185,451)
(185,451)
£
(0.12)
Consolidated Financial Statements for the year ended 30 September 2018
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26
Consolidated Statement of Financial Position
For the year ended 30 September 2018
30 September
2018
£
30 September
2017
£
Note
13
14
17
17
18
20
19
19
20
21
22
55,011
199,222
254,233
–
96,252
96,252
1,751,956
183,162
6,940,573
8,875,691
1,501,011
278,876
245,674
2,025,561
9,129,924
2,121,813
298,998
904,668
1,716,746
2,920,412
403,230
80,702
483,932
3,404,344
5,725,580
310,831
987,802
2,554,995
3,853,628
549,228
40,702
589,930
4,443,558
(2,321,745)
2,957,161
7,256,188
–
–
(9,508)
10,653,881
(15,132,142)
1,417,216
4,086,013
6,468,287
23,578
(9,454)
–
(14,307,385)
5,725,580
(2,321,745)
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Total non-current assets
Current assets
Trade and other receivables
Current tax receivable
Cash and cash equivalents
Total current assets
Total assets
Liabilities
Current liabilities
Borrowings
Trade and other payables
Deferred income
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Share premium
Capital redemption reserve
Share based payment reserve
Foreign exchange reserve
Merger reserve
Accumulated losses
Total equity
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27
Consolidated Statement of Cash Flows
For the year ended 30 September 2018
Group Group Company
Year ended Year ended Year ended
30 September 30 September 30 September
2018 2017 2018
Note £ £ £
Cash flows from operating activities
Loss before taxation (1,036,763) (462,294) (336,639)
Adjustments for non-cash/non-operating items:
Depreciation and profit on disposals 53,737 38,173 –
IPO Costs (175,088) – –
Share based payments 30,000 11,789 –
Finance income (1,847) (145) –
Finance charges 124,384 86,562 441
(655,401) (325,915) (336,198)
Changes in working capital:
(Increase) in trade and other receivables (250,945) (731,237) (8,379,633)
(Decrease)/increase in trade and other payables (948,478) 1,128,892 157,693
Taxation 282,671 317,350 –
Net cash from operating activities (1,572,156) 389,091 (8,558,138)
Cash flows from investing activities
Purchase of property, plant and equipment 14 (118,141) (34,636) –
Purchase of development costs 13 (55,011) – –
Interest received 1,847 145 –
Net cash flow from investing activities (171,305) (34,491) –
Cash flows from financing activities
Proceeds from shares 9,982,508 – 9,763,817
Less issue costs (1,381,090) – (1,205,238)
Proceeds from borrowings 1,299,863 375,000 –
Repayment of borrowings (1,338,486) (484,661) –
Interest paid (124,384) (86,562) (441)
Net cash flow from financing activities 8,438,411 (196,223) 8,558,138
Net increase in cash and cash equivalents 6,694,953 158,377 –
Cash and cash equivalents beginning of period 245,674 101,333 –
Effect of foreign exchange rate changes (54) (14,036) –
Cash and cash equivalents at the end of the period 6,940,573 245,674 –
Consolidated Financial Statements for the year ended 30 September 2018
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Consolidated Statement of Changes in Equity
For the year ended 30 September 2018
Share
Capital based Foreign Accum-
Issued Share redemption payment exchange Merger ulated Total
capital premium reserve reserve reserve reserve losses equity
£ £ £ £ £ £ £ £
At 1 October 2016 1,417,216 4,086,013 6,468,287 11,789 4,582 – (14,135,970) (2,148,083)
Loss for the year – – – – – – (171,415) (171,415)
Other comprehensive income – – – – (14,036) – – (14,036)
Share based payment expense – – – 11,789 – – – 11,789
At 30 September 2017 1,417,216 4,086,013 6,468,287 23,578 (9,454) – (14,307,385) (2,321,745)
Loss for the year – ~– – – – – (849,806) (849,806)
Transfer to merger reserve – (4,085,249) (6,468,287) – – 10,553,536 – –
Transfer to losses – – – (53,578) – – 53,578 –
Other comprehensive income – – – – (54) – (28,529) (28,583)
Issue of share capital 1,539,945 8,461,426 – – – 100,345 – 10,101,716
Issue costs – (1,206,002) – – – – – (1,206,002)
Share based payment expense – – – 30,000 – – – 30,000
At 30 September 2018 2,957,161 7,256,188 – – (9,508) 10,653,881 (15,132,142) 5,725,580
i-nexus Global plc
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Company Statement of Financial Position
Assets
Non-current assets
Investments
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Liabilities
Current liabilities
Trade and other payables
Total liabilities
Net assets
Equity
Issued capital
Share premium
Accumulated losses
Total equity
30 September
2018
Note £
15 1,654,770
1,654,770
17 8,379,633
18 –
8,379,633
10,034,403
19 157,693
157,693
157,693
9,876,710
22 2,957,161
7,256,188
(336,639)
9,876,710
Consolidated Financial Statements for the year ended 30 September 2018
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Company Statement of Changes in Equity
Issued
capital
£
Incorporated on 20 April 2018 –
Loss for the period –
Issue of share capital 2,957,161
Issue costs –
Share
premium
£
–
–
8,461,426
(1,205,238)
Accumulated Total
losses equity
£ £
– –
(336,639) (336,639)
– 11,418,587
– (1,205,238)
At 30 September 2018 2,957,161
7,256,188
(336,639) 9,876,710
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Notes to the Financial Statements
For the year ended 30 September 2018
1 General information
i-nexus Global PLC is a public company limited by shares incorporated in England and Wales (registration number
11321642). The registered office and principal place of business is i-nexus, i-nexus Suite, George House, Herald Avenue,
Coventry Business Park, Coventry, CV5 6UB.
The principal activity of i-nexus Global plc and its subsidiaries (the Group) is that of development and sale of Enterprise
cloud-based software on a software-as-a-service (SaaS) basis and associated maintenance, support, software customisation
and professional consultancy services.
2 Significant accounting policies
The following principal accounting policies have been used consistently in the preparation of consolidated financial
statements.
Basis of preparation
The financial statements have been prepared in accordance with International Financial Reporting Standards (“IFRS”) as
adopted by the European Union, in accordance with the IFRS Interpretations Committee (“IFRIC”) interpretations, and with
those parts of the Companies Act 2006 as applicable to companies reporting under IFRS. The financial statements comply
with IFRS as issued by the International Accounting Standards Board (IASB).
The financial statements are prepared in sterling, which is the presentational currency of the company. Monetary amounts
in these financial statements are rounded to the nearest £1.
Historical cost convention
The financial statements have been prepared under the historical cost convention except for the following:
• The business combination of i-Solutions Global Limited by i-nexus Global plc is accounted for under the merger method
• The use of fair value for financial instruments measured at fair value
Basis of consolidation
The financial statements incorporate the results of i-nexus Global plc and all of its subsidiary undertakings as at
30 September 2018.
i-nexus Global plc was incorporated on 20 April 2018 and on 20 May 2018 it acquired the entire issued share capital of
i-Solutions Global Limited by way of a share-for-share exchange. i-Solutions Global Limited has one wholly owned
subsidiary, i-nexus (America) Inc.
The accounting treatment in relation to the addition of i-nexus Global plc as a new UK holding company of the Group falls
outside the scope of IFRS 3 ‘Business Combinations’. The share scheme arrangement constituted a common control
combination of the entities. This was as a result of all the shareholders of i-nexus Global plc being issued shares in the
same proportion, and the continuity of ultimate controlling parties. The Directors believe that this approach presents fairly
the financial performance, financial position and cash flows of the Group.
The reconstructed group was consolidated using merger accounting principles, as outlined in Financial Reporting Standard
FRS 102 (“FRS”), and the reconstructed Group treated as if it had always been in existence. There was no difference
between the nominal value of the shares issued in the share exchange and the book value of the shares obtained.
Going concern
This historical financial information relating to i-nexus Global plc has been prepared on the going concern basis.
Consolidated Financial Statements for the year ended 30 September 2018
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Notes to the Financial Statements continued
For the year ended 30 September 2018
2 Significant accounting policies (continued)
After making appropriate enquires, the directors of i-nexus Global plc (the “Directors”) have a reasonable expectation that
i-nexus Global plc has adequate resources to continue in operational existence for the foreseeable future and for at least
one year from the date of this historical financial information. For these reasons, they continue to adopt the going concern
basis in preparing i-nexus Global plc’s historical financial information.
On 21 June 2018, the Group completed a successful IPO on the AIM market of the London Stock Exchange, raising
£9,982,508 less deal costs of £1,206,002. At the balance sheet date the group had cash of £6,940,573.
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity
when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power to direct the activities of the entity.
The financial statements of trading subsidiaries are included in the consolidated financial statements under the merger
accounting method until the date that control ceases. The accounting policies of the subsidiaries have been changed when
necessary to align them with the policies adopted by the Group.
Transactions eliminated on consolidation
Intra-group balances, and any gains and losses or income and expenses arising from intra-group transactions, are
eliminated in preparing the historical financial information. Losses are eliminated in the same way as gains, but only to the
extent that there is no evidence of impairment.
The Group has been consolidated under merger accounting principles as described in ‘basis of consolidation’ above.
Foreign currencies
Transactions in foreign currencies are converted into the respective functional currencies on initial recognition, using the
exchange rates approximating to those ruling at the transaction dates. Monetary assets and liabilities at the end of the
reporting period are translated at the rates ruling as of that date. Non-monetary assets and liabilities are translated using
exchange rates that existed when the values were determined.
Overseas operations which have a functional currency different from the group presentation currency have been
translated using the monthly average exchange rate for consolidation in to the statement of comprehensive income. The
amounts included in the group statement of financial position, have been translated at the exchange rate ruling at the
statement date. All resulting exchange differences are reported in other comprehensive income.
Pensions
i-nexus Global plc operates a defined contribution plan. A defined contribution plan is a pension plan under which the
Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further
contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in
the current and prior periods. The Group has no further payment obligations once the contributions have been paid. The
contributions are recognised as employee benefit expense when they are due. Prepaid contributions are recognised as an
asset to the extent that a cash refund or a reduction in the future payments is available.
Short term employee benefits
A liability is recognised for benefits accruing to employees in respect of wages and salaries, annual leave 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.
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Revenue recognition
Revenue comprises of fair value of consideration received or receivable, net of sales taxes and discounts. Revenues are
recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be
reliably measured. The following criteria must also be met before revenue is recognised:
•
•
•
•
the amount of revenue can be measured reliably;
is it probable that the Group will receive the consideration due under the contract;
the stage of completion of the contract at the end of the reporting period can be measured reliably; and
the costs incurred and the costs to complete the contract can be measured reliably.
The nature of revenues is license fee income (on a SaaS basis) and professional services.
License fee income
Revenue for annual licenses, support and maintenance is recognised on a straight-line basis over the duration of the
contract.
Professional services income
Configuration and software customisation revenue is recognised on a percentage completion basis over the period during
which the configuration or software customisation is completed, in line with IAS 18. Setup, deployment, migration and
report development revenue are recognised at the point of setup, deployment, migration or report development is
completed. In the circumstances where an event spans two or more accounting periods, the entire revenue is recognised
in the period when the event is completed, and the software has been accepted by the customer. Revenue for training
events is recognised at the point the training event is completed.
Internally generated intangible assets – Research and development costs
Research expenditure is recognised as an expense when it is incurred. Development expenditure is recognised as an
expense except that costs incurred on development projects are capitalised as intangible assets to the extent that such
expenditure is expected to generate future economic benefits. Development expenditure is capitalised if, and only if an
entity within the Group can demonstrate all of the following:
i.
its ability to measure reliably the expenditure attributable to the asset under development;
ii. the product or process is technically and commercially feasible;
iii. its future economic benefits are probable;
iv. its ability to use or sell the developed asset;
v. the availability of adequate technical, financial and other resources to complete the asset under development; and
vi. its intention to use or sell the developed asset.
Amortisation
Historically, no development expenditure has been capitalised, as the amount of total research and development
expenditure deemed to meet all the criteria above has been immaterial and has therefore been recognised as an expense
when it is incurred.
Consolidated Financial Statements for the year ended 30 September 2018
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Notes to the Financial Statements continued
For the year ended 30 September 2018
2 Significant accounting policies (continued)
Amortisation is charged to profit or loss on a straight-line basis to administrative costs over the estimated useful lives of
each part of an item of property, plant and equipment. The estimated useful lives are as follows:
Development costs 5 years
Property, plant and equipment
Items of property, plant and equipment are stated at cost or deemed cost less accumulated depreciation and impairment
losses. Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working
condition for its intended use. When parts of an item of property, plant and equipment have different useful lives, those
components are accounted for as separate items of property, plant and equipment. Subsequent costs are included in the
asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic
benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Gains and losses
on disposals are determined by comparing the proceeds with the carrying amount and are recognised in the income
statement.
Depreciation
Depreciation is charged to profit or loss on a straight-line basis over the estimated useful lives of each part of an item of
property, plant and equipment. The estimated useful lives are as follows:
Land and buildings leasehold 20% straight line or lease life if shorter
Fixtures, fittings and equipment 25% reducing balance
Computer equipment 33% straight line
The residual values, useful lives and depreciation methods are reviewed, and adjusted if appropriate, or if there is an
indication of a significant change since the last reporting date. Gains and losses on disposals are determined by comparing
the proceeds with the carrying amount and are recognised within ‘other operating income’ in the consolidated statement
of comprehensive income.
Impairment of non-financial assets
At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment 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.
Where the asset does not generate cash flows that are independent from other assets, the Group estimates the
recoverable amount of the cash generating unit to which the asset belongs. An intangible asset with an indefinite useful life
is tested for impairment annually and whenever there is an indication that the asset may be impaired.
The recoverable amount is the higher of fair value less costs to sell 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 been adjusted.
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If the recoverable amount of an asset is estimated to be less than its carrying amount, the carrying amount of the asset is
reduced to its recoverable amount. An impairment loss is recognised as an expense immediately, unless the relevant asset
is carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease. Where an
impairment loss subsequently reverses, the carrying amount of the asset 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 in prior years. A reversal of an impairment loss is
recognised as income immediately, unless the relevant asset is carried at a revalued amount, in which case the reversal of
the impairment loss is treated as a revaluation increase.
Financial assets
Classification
The Group classifies all of its financial assets as loans and receivables. Management determines the classification of its
financial assets at initial recognition.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments. They are initially recognised
at fair value and are subsequently stated at amortised cost using the effective interest method.
Impairment of financial assets
Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part
of the counterparty or default or significant delay in payment) that the Group will be unable to collect all of the amounts
due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and
the present value of the future expected cash flows associated with the impaired asset.
Fixed asset investments
Equity investments are measured at fair value through profit or loss, except for those equity investments that are not
publicly traded and whose fair value cannot otherwise be measured reliably, which are recognised at cost less impairment
until a reliable measure of fair value becomes available.
In the parent company financial statements, investments in subsidiaries, associates and jointly controlled entities are
initially measured at cost and subsequently measured at cost less any accumulated impairment losses.
Trade receivables
Trade receivables, defined as loans and receivables in accordance with IAS 39 ‘Financial Instruments: Recognition and
Measurement’, are recorded initially at fair value and are subsequently measured at amortised cost. A provision for
impairment of trade receivables is established when there is evidence that the Group will not be able to collect all amounts
due according to the original terms of the receivables. The amount of the provision is the difference between the assets’
carrying amount and the present value of future cash flows discounted at the effective interest rate. The movement in the
provision is recognised in the consolidated statement of comprehensive income.
Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments
with original maturities of three months or less, and bank overdrafts.
Financial liabilities – Trade and other payables
Trade and other payables are initially recognised at fair value and subsequently measured at amortised cost. Accounts
payable are classified as current liabilities if payment is due within one year or less. If not, they are presented as non-
current liabilities.
Consolidated Financial Statements for the year ended 30 September 2018
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Notes to the Financial Statements continued
For the year ended 30 September 2018
2 Significant accounting policies (continued)
Financial liabilities – Borrowings
Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently carried at
amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in
the income statement over the period of the borrowings using the effective interest method.
Borrowings are derecognised from the balance sheet when the obligation specified in the contract is discharged, is
cancelled or expires. The difference between the carrying amount of a financial liability that has been extinguished or
transferred to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed,
recognised in profit or loss as other operating income or finance costs.
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability
for at least 12 months after the reporting period.
Net finance costs
Finance costs
Finance costs comprise interest payable on borrowings, direct issue costs and foreign exchange losses, and are expensed
in the period in which they are incurred.
Finance income
Finance income comprises interest receivable on funds invested, and foreign exchange gains. Interest income is recognised
in profit or loss as it accrues using the effective interest method.
Share capital/equity instruments
Ordinary shares are classified as equity. Equity instruments issued by the Company are recorded at the proceeds received,
net of direct issue costs.
Share based payments
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 23.
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 the number 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 the income
statement such that the cumulative expense reflects the revised estimate, with a corresponding adjustment to other
reserves.
Current and deferred income tax
Income tax comprises current and deferred tax. Income tax is recognised in profit or loss except to the extent that it
relates to items recognised directly in equity, in which case it is recognised in equity.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts.
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37
The following temporary differences are not recognised if they arise from a) the initial recognition of goodwill, and b) for the
initial recognition of other assets or liabilities in a transaction other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss. 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 balance sheet date.
A deferred income tax asset is recognised only to the extent that it is probable that future taxable profits will be available
against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the
related tax benefit will be realised.
Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets
against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the
same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the
balances on a net basis.
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation and a reliable estimate of the amount can be
made. If the effect is material, provisions are determined by discounting the expected future cash flows at an appropriate
pre-tax discount rate.
The provision for liabilities comprises the dilapidation provision for the lease, which is included in land and buildings in
property, plant and equipment.
Compound Financial Instruments
Compound financial instruments issued by the Group comprise venture debt which entitles the lender to warrant shares in
i-nexus Global plc at the drawdown of the loan. The liability component of compound financial instruments is initially
recognised at the fair value by discounting the cash flows to net present value. The equity component would be initially
recognised as the difference between the fair value of the compound financial instrument as a whole and the fair value of
the liability component, however the i-nexus Directors have concluded that the equity component is immaterial and
therefore not recorded separately. Any directly attributable transaction costs are allocated to the liability and equity
components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of a
compound financial instrument is measured at amortised cost using the effective interest method. The equity component
of a compound financial instrument is not remeasured. Interest related to the financial liability is recognised in profit or
loss. On conversion at maturity, the financial liability is reclassified to equity and no gain or loss is recognised.
Leases
Leases are classified as finance leases whenever the terms of the lease transfer substantially all the risks and rewards of
ownership to the lessee. All other leases are classified as operating leases. Assets held under finance leases are recognised
as assets of the Group at their fair value or, if lower, at the present value of the minimum lease payments, each determined
at the inception of the lease. The corresponding liability to the lessor is included in the balance sheet as a finance lease
obligation. Lease payments are apportioned between finance expenses and reduction of the lease obligation so as to
achieve a constant rate of interest on the remaining balance of the liability. Finance expenses are recognised immediately
in profit or loss, unless they are directly attributable to qualifying assets, in which case they are capitalised in accordance
with the Group’s general policy on borrowing costs (see below). Contingent rentals are recognised as expenses in the
periods in which they are incurred. Leases in which a significant portion of the risks and rewards of ownership are retained
by the lessor are classified as operating leases. The costs associated with operating leases are taken to the income
statement on an accruals basis over the period of the lease.
Consolidated Financial Statements for the year ended 30 September 2018
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38
Notes to the Financial Statements continued
For the year ended 30 September 2018
2 Significant accounting policies (continued)
Standards, amendments and interpretations to existing standards that are not yet effective and have
not been early adopted by the Group
The following relevant standards, interpretations and amendments to existing standards have been published by the IASB
but are yet to be endorsed by the EU or are not effective for the period presented in the financial statements and the
Group has decided not to early adopt them.
Standard Effective date, annual period
beginning on or after
IFRS 9 Financial instruments 1 January 2018
IFRS 15 Revenue from contracts with Customers 1 January 2018
IFRIC 23 Uncertainty over Income Tax Treatments 1 January 2019
IFRS 16 Leases 1 January 2019
Management have considered the effect of the future changes in accounting standards and have surmised the impacts to
be as follows:
IFRS 9
The Group is currently assessing the impact of IFRS 9 Financial Instruments (“IFRS 9”) to ensure compliance with the new
standard. IFRS 9 includes a logical model for classification and measurement, a single forward looking expected loss
impairment model, and a substantially reformed approach to hedge accounting. There may be potential additional
impairment provisions for long term receivables in the future from the transition to an “expected loss model” however, as
the Group currently has no history of material aged receivables or bad debts, there is no material impact of transitioning to
IFRS 9 expected.
IFRS 15
IFRS 15 introduces a five step approach to revenue recognition based on the delivery of performance obligations and an
assessment of when control is transferred. This differs from existing IAS 11 and IAS 18 which focus on the transfer of “risk
and reward” as the point of recognition. the Group is currently in the process of assessing the impact of implementation of
the standard and therefore the full effect of the standard has not yet been determined. In order to determine the impact,
the Group is currently in the process of reviewing all of its customer contracts to ascertain how the new requirement will
impact the identification of distinct goods and services and the allocation of consideration to them.
IFRS 16
IFRS 16 Leases requires lessees to recognise a lease liability reflecting future lease payments and a “right of use asset” for
virtually all lease contracts. The Group is currently in the process of assessing the impact of implementation of the standard
and therefore the full effect of the standard has not yet been determined.
IFRIC 23
This interpretation covers how the Group accounts for taxation, where there is some uncertainty over whether treatments
in the tax return will be accepted by HMRC or the relevant overseas jurisdictions. Each uncertain treatment (or combination
of treatments) is considered for whether it will be accepted, and if probable taxable profits/losses, tax bases, unused tax
losses, unused tax credits and tax rates are accounted for consistently with the tax return. Otherwise the Group accounts
for each treatment using whichever of the two allowed measurement methods is expected to best predict the final
i-nexus Global plc
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39
outcome – the single most likely outcome or a probability weighted average value of a range of possible outcomes. The
new standard allows for two different transition approaches, fully retrospective and modified retrospective. The Group has
not yet concluded on a transition method and as such it is not possible to fully quantify the impact of IFRIC 23 at this stage,
though it is not expected to be material.
Adjusted EBITDA
Adjusted EBITDA is earnings before interest, tax, depreciation, amortisation, share based payment expense and non-
underlying items and is set out in note 6.
Adjusted EBITDA is not a measure recognised under IFRS. The Directors consider that this measure may be helpful to
potential investors and so it is shown.
3 Critical accounting judgements and estimates
The preparation of the Group’s historical financial information under IFRS as endorsed by the EU requires the directors to
make estimates and assumptions that affect the reported amounts of assets and liabilities at the statement of financial
position date, amounts reported for revenues and expenses during the year, and the disclosure of contingent liabilities, at
the reporting date. However, uncertainty about these assumptions and estimates could result in outcomes that could
require a material adjustment to the carrying amount of the assets or liabilities affected in the future.
Estimates and judgements are continually evaluated and are based on historical experience and other factors, including
expectations of future events that are believed to be reasonable under the circumstances.
In preparing the financial statements the Group has selected and applied various accounting policies which are described
in the notes to the financial statements. In order to apply these accounting policies the Group has made estimates and
judgements concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual
results.
Key areas of judgement and estimation uncertainty are disclosed below:
Share based payment charges
The charge related to equity settled transactions with employees is measured by reference to the fair value of the equity
instruments at the date they are granted, using an appropriate valuation model selected according to the terms and
conditions of the grant. Judgement is applied in determining the most appropriate valuation model and in determining the
inputs to the model. Third-party experts are engaged to advise in this area where necessary. Judgements are also applied
in relation to estimations of the number of options which are expected to vest, by reference to historic leaver rates and
expected outcomes under relevant performance conditions.
Research and Development expenditure
Development expenditure is recognised as an expense except that costs incurred on development projects are capitalised
as intangible assets to the extent that such expenditure is expected to generate future economic benefits. Significant
judgement is applied in determining if development costs meet the criteria to be capitalised as intangible assets.
Historically, no development expenditure has been capitalised, as the amount of total research and development
expenditure deemed to meet all the criteria has been immaterial and has therefore been recognised as an expense when
it is incurred.
Consolidated Financial Statements for the year ended 30 September 2018
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40
Notes to the Financial Statements continued
For the year ended 30 September 2018
4 Financial risk management
The Group’s activities expose it to a variety of financial risks: market risk (including cash flow interest rate risk), liquidity risk,
credit risk and foreign exchange risk. Risk management is carried out by the board of directors. The Group uses financial
instruments to provide flexibility regarding its working capital requirements and to enable it to manage specific financial
risks to which it is exposed.
(a) Market risk
i. Interest rate risk
Interest rate risk is the risk that the value of a financial instrument or cash flows associated with the instrument will
fluctuate due to changes in market interest rates. Interest bearing assets including cash and cash equivalents are
considered to be short term liquid assets. It is the Group’s policy to settle trade payables within the credit terms allowed
and the Group does therefore not incur interest on overdue balances. As the interest rates on both venture debt and
shareholder loans are fixed, interest rate risk is considered to be very low and no sensitivity analysis has been prepared as
the impact on the historical financial information would not be significant.
The interest rate profile of the Group’s borrowings is shown below:
Interest rate profile of interest bearing borrowings
30 September
2018
Interest rate
££
Debt
£
Fixed rate borrowings
Venture debt 702,228
Shareholder loans –
Weighted average cost of fixed rate borrowing
11.5%
–
11.5%
Debt
£
478,059
382,000
30 September
2017
Interest rate
11.5%
12.0%
11.7%
(b) Liquidity risk
The Group seeks to maintain sufficient cash balances. Management reviews cash flow forecasts on a regular basis to
determine whether the Group has sufficient cash reserves to meet future working capital requirements and to take
advantage of business opportunities.
A maturity analysis of the Group’s borrowings is shown below:
30 September
2018
30 September
2017
298,998
159,730
243,500
702,228
310,831
188,821
360,407
860,059
Less than one year
One to two years
Two to five years
i-nexus Global plc
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41
Capital risk management
The Group is both equity and debt funded and these two elements combine to make up the capital structure of the
business. Equity comprises share capital, share premium and retained losses and is equal to the amount shown as ‘Equity’
in the balance sheet. Debt comprises various items which are set out in further detail above.
The Group’s current objectives when maintaining capital are to:
• Safeguard the Group’s ability as a going concern so that it can continue to pursue its growth plans;
• Provide a reasonable expectation of future returns to shareholders; and
• Maintain adequate financial flexibility to preserve its ability to meet financial obligations, both current and long term.
The Group sets the amount of capital it requires in proportion to risk. The Group manages its capital structure and makes
adjustments to it in the light of changes in economic conditions and the risk characteristics of underlying assets. In order to
maintain or adjust the capital structure, the Group may issue new shares or sell assets to reduce debt.
(c) Credit risk
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the
Group. In order to minimise the risk, i-nexus Global endeavours only to deal with companies which are demonstrably
creditworthy and this, together with the aggregate financial exposure, is continuously monitored. The maximum exposure
to credit risk is the carrying value of its financial receivables, trade and other receivables and cash and cash equivalents as
disclosed in the notes.
i-nexus Global plc does not consider that there is any concentration of risk within either trade or other receivables and any
debt bad provisions in the years presented are not for significant amounts. The Group holds no collateral or other credit
enhancements. The receivables’ age analysis is also evaluated on a regular basis for potential doubtful debts. It is the i-
nexus Directors’ opinion that no further provision for doubtful debts is required. Credit risk on cash and cash equivalents is
considered to be very low as the counterparties are all substantial banks with high credit ratings.
(d) Foreign currency risk
Foreign currency risk refers to the risk that the value of a financial commitment or recognised asset or liability will fluctuate
due to changes in foreign exchange rates. The Group is also exposed to foreign exchange risk as a result of transactions
denominated in US Dollars and Euros. The Group maintains bank accounts in US Dollars and Euros in order to mitigate
this risk.
Consolidated Financial Statements for the year ended 30 September 2018
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42
Notes to the Financial Statements continued
For the year ended 30 September 2018
5 Revenue and segmental reporting
The Group has one single business segment and therefore all revenue is derived from the rendering of services as stated in
the principal activity. The group operates four geographical segments, as set out below. This is consistent with the internal
reporting provided to the chief operating decision maker. The chief operating decision maker, who is responsible for
allocating resources and assessing performance, has been identified as the management team comprising the executive
directors who make strategic decisions.
United Kingdom
Rest of Europe
United States
Rest of the World
Year ended
30 September
2018
£
Year ended
30 September
2017
£
773,694
1,963,760
1,885,539
90,437
4,713,430
591,180
1,860,000
1,288,000
374,000
4,113,180
The Group has one customer that represented more than 10 percent of revenue in either 2018 or 2017 as detailed below:
Customer 1
Year ended
30 September
2018
£
Year ended
30 September
2017
£
604,906
636,000
The Group has two main revenue streams in each of the years presented, as detailed below:
Licence Fees
Professional Services
6 Adjusted EBITDA
Operating loss
Add back:
Depreciation and profit/loss on disposal
Share based payment expense
Non-underlying items (see note 7)
Adjusted EBITDA
i-nexus Global plc
Year ended
30 September
2018
£
Year ended
30 September
2017
£
3,844,551
868,879
4,713,430
3,365,180
748,000
4,113,180
Year ended
30 September
2018
£
Year ended
30 September
2017
£
(914,226)
(375,877)
53,737
30,000
175,088
38,173
11,789
50,227
(655,401)
(275,688)
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43
7 Loss on ordinary activities before taxation
Profit or loss before taxation is arrived at after:
Depreciation of property, plant and equipment
Profit on disposal of fixed assets
Operating minimum lease rentals
Auditor’s remuneration (note 8)
Loss on foreign exchange transactions
Research and development expenditure
AIM IPO costs expensed
Ex-gratia payments
8 Auditor’s remuneration
Fee payable to the company’s auditors and its associates for the audit of
consolidated financial statements
Fee payable to the company’s auditors and its associates for other services:
Corporate finance (As Reporting Accountant at IPO)
Taxation services
Other services
9 Directors and employees
Wages and salaries
Social security costs
Other pension costs
Share based payment expense
Year ended
30 September
2018
£
Year ended
30 September
2017
£
54,511
(774)
86,004
202,437
12,726
549,212
175,088
–
38,173
–
93,070
27,183
43,724
688,353
–
50,227
Year ended
30 September
2018
£
Year ended
30 September
2017
£
30,000
18,600
129,500
19,927
23,010
202,437
–
4,583
4,000
27,183
Year ended
30 September
2018
Year ended
30 September
2017
3,571,080
370,092
28,844
30,000
4,000,016
2,869,161
307,087
37,380
11,789
3,225,417
Consolidated Financial Statements for the year ended 30 September 2018
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44
Notes to the Financial Statements continued
For the year ended 30 September 2018
9 Directors and employees (continued)
The average number of employees during the year was:
Senior Management
Development global services and other
2018
Number
2017
Number
8
52
60
7
41
48
Details of emoluments (including pension) paid to the key management personnel are as follows:
Total emoluments paid to:
Directors
Salaries and fees
Post-employment benefits
Share based payment expense
Key management personnel including directors
Salaries and fees
Post-employment benefits
Share based payment expense
Year ended
30 September
2018
£
Year ended
30 September
2017
£
571,009
2,931
27,860
601,800
725,771
3,463
27,860
757,094
524,600
3,644
10,713
538,957
524,600
3,644
10,713
538,957
Remuneration disclosed above include the following amounts paid to the highest paid directors:
Remuneration for qualifying services
179,796
161,904
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 3
(2017: 3).
10 Finance costs
On loans and overdrafts
On loans repayable after five years
i-nexus Global plc
Year ended
30 September
2018
£
Year ended
30 September
2017
£
124,384
–
124,384
86,562
–
86,562
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FINANCIAL STATEMENTS
45
11 Taxation
Domestic current period tax
UK Corporation tax
Adjustment for prior years
Foreign corporation tax
Foreign corporation tax
Adjustments for prior years
Total current tax credit
Factors affecting the tax charge for the period
Loss before tax
Year ended
30 September
2018
£
Year ended
30 September
2017
£
(183,162)
(264)
(183,426)
(3,531)
–
(3,531)
(278,876)
(16,650)
(295,526)
4,647
–
4,647
(186,957)
(290,879)
(1,036,763)
(462,294)
Loss before tax multiplied by standard rate of UK Corporation tax of 19.0% (2017: 19.5%)
(196,985)
(90,147)
Effects of:
Non-deductible expenses
Adjustments to tax credit in respect of prior years
R&D enhancement
Surrender R&D for tax credit
Deferred tax asset not recognised
Other tax adjustments
Current tax credit
1,094
(264)
135,655
(240,006)
90,553
22,996
(186,957)
687
(16,650)
296,592
(375,395)
–
(105,966)
(290,879)
Changes in the applicable tax rate arose due to the April 2016 Budget which amended the corporation tax charge to 19%.
The corporation tax rate will reduce to 17% from 1 April 2020.
12 Loss per share
The loss per share has been calculated using the loss for the year and the weighted average number of ordinary shares
outstanding during the year, as follows:
Loss for the period attributable to equity holders of the company
Weighted average number of ordinary shares
Loss per share
Year ended
30 September
2018
£
Year ended
30 September
2017
£
(849,806)
18,495,089
(0.05)
(171,415)
1,417,216
(0.12)
Note that at 30 September 2018 the share capital of the company are Ordinary Shares of £0.10 each and at 30 September
2017 the share capital is made up of Ordinary shares of £1 each, see Note 22.
Consolidated Financial Statements for the year ended 30 September 2018
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46
Notes to the Financial Statements continued
For the year ended 30 September 2018
13 Intangible assets
Group
Cost
At 1 October 2017
Additions
At 30 September 2018
Amortisation/impairment
At 1 October 2017
Charge for the year
At 30 September 2018
Net book value
At 30 September 2018
At 30 September 2017
Development
costs
£
–
55,011
55,011
–
–
–
Total
£
–
55,011
55,011
–
–
–
55,011
–
55,011
–
14 Property, plant and equipment
Group
Short
Leasehold
£
At 1 October 2017 68,328
Additions 40,000
Disposals (13,000)
At 30 September 2018 95,328
At 1 October 2017 36,494
Charge for the year 9,371
On disposals (13,000)
At 30 September 2018 32,865
Carrying value
At 30 September 2018 62,463
At 30 September 2017 31,834
Fixtures,
fittings &
equipment
£
144,335
5,158
–
149,493
123,086
5,812
–
128,898
Computer
equipment
£
262,306
112,983
(1,188)
374,101
219,137
39,328
(528)
257,937
Total
£
474,969
158,141
(14,188)
618,922
378,717
54,511
(13,528)
419,700
20,595
21,249
116,164
43,169
199,222
96,252
i-nexus Global plc
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FINANCIAL STATEMENTS
47
The figures for the previous period are as follows:
Group
Short
Leasehold
£
At 1 October 2016 68,328
Additions –
At 30 September 2017 68,328
At 1 October 2016 27,124
Charge for the year 9,370
At 30 September 2017 36,494
Carrying value
At 30 September 2017 31,834
At 30 September 2016 41,204
Fixtures,
fittings &
equipment
£
Computer
equipment
£
143,926
409
144,335
116,130
6,956
123,086
21,249
27,796
228,079
34,227
262,306
197,290
21,847
219,137
43,169
30,789
Total
£
440,333
34,636
474,969
340,544
38,173
378,717
96,252
99,789
The company had no property, plant or equipment during the current or comparative period.
15 Non-current asset investments
Cost
At 30 September 2018
At 30 September 2017
Net book value
At 30 September 2018
At 30 September 2017
Group
£
Company
£
–
–
–
–
1,654,770
n/a
1,654,770
n/a
Non-current asset investments consist of investments in subsidiaries, measured at cost.
Details of non-current asset investments in equity
Country of
Name of entity Principal activity Incorporation
i-Solutions Global Limited The development and sale of England and Wales
Enterprise cloud-based software
on a software-as-a service (SaaS)
basis and professional
consultancy services.
i-nexus (America) Inc Sale of computer software and USA
associated maintenance, support,
software customisation and
services
% of Ordinary
Shares held by
parent company
% of Ordinary
Shares held
by group
100
–
–
100
Consolidated Financial Statements for the year ended 30 September 2018
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48
Notes to the Financial Statements continued
For the year ended 30 September 2018
15 Non-current asset investments (continued)
i-nexus (America) Inc is owned by i-Solutions Global Limited. The company is included in the list above according to the
control exercised over it by i-nexus Global plc. All subsidiaries have prepared their financial statements to 30 September
2018.
There are no restrictions on i-nexus Global plc’s ability to access or use the assets and settle the liabilities of subsidiary
companies.
The aggregate amount of capital and reserves and the results of these undertakings for the last relevant financial year were
as follows:
i-Solutions Global Limited
i-nexus (America) Inc
16 Financial instruments
Financial assets held at amortised cost
Financial liabilities held at amortised cost
Financial liabilities held at fair value
Capital and Loss
reserves for the year
2018 2018
£ £
439,904 (623,645)
(3,019,873) (1,668)
At
30 September
2018
£
At
30 September
2017
£
1,478,754
1,457,108
28,529
1,481,083
1,588,787
–
The Group’s exposure to various risks associated with the financial instruments is discussed in note 4. The maximum
exposure to credit risk at the end of the reporting period is the carrying amount of each class of financial assets mentioned
above.
17 Trade and other receivables
Group
At
30 September
2018
£
At
30 September
2017
£
1,000,144
183,162
751,812
1,935,118
1,102,659
278,876
398,352
1,779,887
Trade receivables
Corporation tax receivable
Other receivables and prepayments
i-nexus Global plc
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FINANCIAL STATEMENTS
49
Other debtors and prepayments
Amounts owed by group undertakings
An analysis of trade receivables is shown below:
Company
At
30 September
2018
£
28,139
8,351,494
8,379,633
Between
30 days Between 31 61 and Over Bad debt
or less and 60 days 90 days 90 days provision
£ £ £ £ £
Total
£
2018 554,290 267,053 46,926 164,953 (33,078)
2017 852,626 86,516 102,032 61,485 –
1,000,144
1,102,659
All other receivables outside of general terms of business are immaterial to the Group and within the Company.
18 Cash and cash equivalents
Group
Cash at bank and in hand
Cash at bank and in hand
At
30 September
2018
£
At
30 September
2017
£
6,940,573
6,940,573
245,674
245,674
Company
At
30 September
2018
£
–
–
Consolidated Financial Statements for the year ended 30 September 2018
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Notes to the Financial Statements continued
For the year ended 30 September 2018
19 Trade and other payables (current)
Group
Trade payables
Taxes and social security costs
Accruals
Deferred income
Trade payables
Taxes and social security costs
Accruals and other creditors
At
30 September
2018
£
At
30 September
2017
£
443,316
121,258
340,094
904,668
386,794
259,074
341,934
987,802
At
30 September
2018
£
At
30 September
2017
£
1,716,746
1,716,746
2,554,995
2,554,995
Company
At
30 September 2018
£
64,682
16,229
76,782
157,693
Trade payables are non-interest bearing and are normally settled on 60 day terms. The Group has a financial risk
management policy in place to ensure that all payables are paid within the pre-agreed credit terms.
i-nexus Global plc
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51
20 Borrowings
Group
Current
Venture debt
Shareholder loans
Non-current
Venture debt
Shareholder loans
Total borrowings
Venture debt
At
30 September
2018
£
At
30 September
2017
£
298,998
–
298,998
403,230
–
403,230
202,228
108,603
310,831
275,831
273,397
549,228
702,228
860,059
The venture debt is secured by way of a fixed and floating charges over the title of all assets held by i-Solutions Global
Limited.
All prior year shareholder loans were repaid at IPO.
The Group borrowings are repayable as follows:
Within 1 year
Between 1 year and 2 years
Between 2 years and 5 years
At
30 September
2018
£
At
30 September
2017
£
298,998
403,230
–
702,228
310,831
549,228
–
860,059
The directors consider the value of all financial liabilities to be equivalent to their fair value.
Venture debt
The venture debt has a fixed interest rate of the higher of 11.5 per cent per annum or LIBOR plus 8 per cent per annum.
Shareholder loans
The shareholder loans had fixed interest rates of between 11 per cent and 12 per cent per annum.
Consolidated Financial Statements for the year ended 30 September 2018
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Notes to the Financial Statements continued
For the year ended 30 September 2018
21 Provisions
At 1 October 2017
Capitalised in Short Leasehold assets (Note 14)
Release of provision
At 30 September 2018
Due within one year
Due after more than one year
Group
Leasehold dilapidations
£
40,702
40,000
–
80,702
–
80,702
80,702
The provision relates to the estimated cost of returning leasehold properties to their original state at the end of the lease in
accordance with the lease terms. The cost is recognised as depreciation of leasehold improvements over the remaining
term of the lease. There are no provisions in the company balance sheet at 30 September 2018.
22 Share capital
Group
Authorised, allotted, called up and fully paid
29,571,605 Ordinary shares of £0.10 each
1,417,216 Ordinary shares of £1 each
At
30 September
2018
£
At
30 September
2017
£
2,957,161
–
2,957,161
–
1,417,216
1,417,216
Fully paid shares, which have a par value of £0.10, carry one vote per share and carry rights to a dividend.
Reconciliation of movement in shares during the year
Group
Ordinary
number
£1 shares
1,417,216
(1,417,216)
–
–
–
Ordinary
number
£0.10 shares
10
14,172,160
2,186,920
188,620
13,023,895
–
29,571,605
At 1 October 2017
Subdivision of shares
Exercise of options
Conversion of loan notes
IPO share issue
At 30 September 2018
i-nexus Global plc
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53
Authorised, allotted, called up and fully paid
29,571,605 Ordinary shares of £0.10 each
Company
At
30 September 2018
£
2,957,161
2,957,161
Fully paid shares, which have a par value of £0.10, carry one vote per share and carry rights to a dividend.
Reconciliation of movement in shares during the year
Company
At 1 October 2017
Issued on incorporation
(1 Ordinary share of £1 each, subsequently sub divided)
Share for share exchange
Subdivision of shares
Share for share exchange
IPO share issue
At 30 September 2018
Ordinary
number
£1 shares
–
Ordinary
number
£0.10 shares
–
–
1,417,216
(1,417,216)
–
–
10
–
14,172,160
2,375,540
13,023,895
–
29,571,605
The company was incorporated on 20 April 2018 issuing 1 ordinary share of £1.
On 20 May 2018 1,417,216 £1 ordinary shares were issued in a share for share exchange at par value.
On 18 June 2018 the company subdivided its shares from £1 ordinary to £0.10 ordinary shares.
On 18 June 2018, the subsidiary company i-Solutions Global Limited issued a further 237,554 ordinary £1 shares in closing
its share options scheme and conversion of shareholder debt. These shares were immediately exchanged for 2,375,540
£0.10 ordinary shares in i-nexus Global plc at par value.
On 21 June 2018 the company issued a further 13,023,895 £0.10 ordinary shares as a result of the IPO. Total share
premium on this issue was £8,461,426, and incurred issue costs of £1,205,238.
Consolidated Financial Statements for the year ended 30 September 2018
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Notes to the Financial Statements continued
For the year ended 30 September 2018
23 Share based payments
Share options
i-Solutions Global Limited has granted share options at its discretion to directors and employees. These are accounted for
as equity settled options. Details for the share options granted, exercised, lapsed and outstanding at the end of each year
are as follows:
Number of
share options
2018
Outstanding at the beginning of the year 262,184
Granted during the year 27,337
Forfeited /lapsed during the year (2,730)
Exercised during the year (286,791)
Outstanding at the end of the year –
Exercisable at the end of the year –
Weighted
average
exercise
price £
2018
1.45
1.00
3.36
1.39
–
–
Number of
share options
2017
264,284
–
(2,100)
–
262,184
99,408
Weighted
average
exercise
price £
2017
1.47
–
3.36
–
1.45
2.20
Options arrangements that exist over i-Solutions Global Limited’s shares at the end of each year are detailed below.
Date of grant 2018
6 March 2012 –
30 November 2013 –
30 November 2013 –
30 November 2014 –
1 September 2016 –
1 September 2016 –
21 December 2017 –
2017
1,255
16,227
18,799
15,370
191,355
19,178
–
Exercise
price (£)
1.00
3.36
3.36
3.36
1.00
1.00
–
Vesting
30/01/2015
01/11/2015
31/12/2013
01/02/2016
Note 1
Note 2
Note 3
Note 1 – 25 per cent. vested on 1 September 2016, 25 per cent. vested on 1 September 2017, 25 per cent to vest on
1 September 2018 and 25 per cent to vest on 1 September 2019, however the Directors agreed to accelerate the vesting
ahead of the share for share exchange with i-nexus Global plc.
Note 2 – These options to vest on 1 October 2019, however the Directors agreed to accelerate vesting ahead of the share
for share exchange with i-nexus Global plc.
Note 3 – 27,337 options were granted on 21 December 2017 with an exercise price of £1 per share. The Directors agreed
to accelerate the vesting ahead of the share for share exchange with i-nexus Global plc.
The Group uses a Black Scholes model to estimate the cost of share options. The following information is relevant in the
determination of the fair value of the above options. The assumptions inherent in the use of this model, at the time of
issue, are as follows:
• The option life is the estimated period over which the options will be exercised. The options have no expiry date to
discount so 5 years has been considered a reasonable expected life.
• No variables change during the life of the option (such as the dividend yield remaining zero).
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55
• Volatility has been considered low for the unlisted company with limited data available. The volatility rate used was 25%.
• The risk-free interest rates of 1.16% (2012), 1.544% (2013), 1.265% (2014), 0.211% (2016) and 0.766% (2017) have been
used.
The total recognised share based payment expense during the year by the Group was £30,000 (2017: £11,789). All options
have been exercised or forfeited by the end of the year. The vesting conditions attached to the share options are
considered to have been met in the year so the share based payment charge has been accelerated in the Statement of
Comprehensive Income.
24 Financial commitments
The operating lease expenditure charged to the statement of comprehensive income during the year is disclosed in note 7.
The future aggregate minimum lease payments under non-cancellable operating leases are as follows:
Group
Land and buildings
Within 1 year
Within 2 - 5 years
After 5 years
At
30 September
2018
£
At
30 September
2017
£
89,000
133,500
–
222,500
89,000
222,500
–
311,500
On 7 March 2016 the group entered into a 5-year lease for the premises at Herald Avenue. The break date of this lease is 1
April 2019.
There were no capital commitments at 30 September 2018 or 30 September 2017.
25 Related parties
At 30 September 2017, i-Solutions Global Limited owed loans amounting to £382,000 to shareholders and directors. By 30
September 2018 all of the loans had either been repaid or converted into shares (£119,208).
During the year the company was charged marketing support costs of £18,107 by Napkin Jack Limited, a company in which
James Davies, a director of i-nexus Global plc, is a director. At the year end, £10,270 of this cost was unpaid.
At 30 September 2018, the group owed the directors £26,640 (2017: £130,749) of remuneration.
26 Events after the reporting period
Post IPO the following Directors have resigned their positions on the Board:
Paul Docherty – 11 February 2019
James Davies – 1 January 2019
27 Control
There is no ultimate controlling party of i-nexus Global plc.
Consolidated Financial Statements for the year ended 30 September 2018
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Company Information
Registered Office
i-nexus
i-nexus Suite
George House
Herald Avenue
Coventry Business Park
Coventry
CV5 6UB
Company number
11321642
Directors
Richard Cunningham
Simon Crowther
Nigel Halkes
Alyson Levett
Company Secretary
Alyson Levett
Company Website
www.i-nexus.com
i-nexus Global plc
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57
Notice of Annual General Meeting
Notice is given that the first annual general meeting of i-nexus Global Plc (“Company”) will be held at 11.00 am (GMT
time) on Tuesday 26 March 2019 at N+1 Singer, 1 Bartholomew Lane London EC2N 2AX for the following purposes:
To consider and, if thought fit, to pass the following resolutions as ordinary resolutions:
1. To receive the Company’s annual accounts and the strategic, directors’ and auditor’s reports for the year ended
30 September 2018.
2. To reappoint Simon Crowther, who retires by rotation, as a director of the Company.
3. To reappoint Alyson Levett, who retires by rotation, as a director of the Company.
4. To reappoint Richard Cunningham, who retires by rotation, as a director of the Company.
5. To reappoint Nigel Halkes, who retires by rotation, as a director of the Company.
6. To reappoint Saffery Champness LLP as auditors of the Company.
7. To authorise the Audit Committee to determine the remuneration of the auditors.
8. That, pursuant to section 551 of the Companies Act 2006 (“Act”), the directors be generally and unconditionally
authorised to allot Relevant Securities:
8.1 up to an aggregate nominal amount of £985,720; and
8.2 comprising equity securities (as defined in section 560(1) of the Act) up to a further aggregate nominal amount
of £985,720 in connection with an offer by way of a rights issue:
8.2.1 to holders of ordinary shares in the capital of the Company in proportion (as nearly as practicable) to the
respective numbers of ordinary shares held by them; and
8.2.2 to holders of other equity securities in the capital of the Company, as required by the rights of those
securities or, subject to such rights, as the directors otherwise consider necessary,
but subject to such exclusions or other arrangements as the directors may deem necessary or expedient in relation
to treasury shares, fractional entitlements, record dates or any legal or practical problems under the laws of any
territory or the requirements of any regulatory body or stock exchange,
provided that these authorities shall expire at the conclusion of the next annual general meeting of the Company
after the passing of this resolution or on 26th June 2020 (whichever is the earlier), save that, in each case, the
Company may make an offer or agreement before the authority expires which would or might require Relevant
Securities to be allotted after the authority expires and the directors may allot Relevant Securities pursuant to any
such offer or agreement as if the authority had not expired.
In this resolution, “Relevant Securities” means shares in the Company or rights to subscribe for or to convert any
security into shares in the Company; a reference to the allotment of Relevant Securities includes the grant of such a right;
and a reference to the nominal amount of a Relevant Security which is a right to subscribe for or to convert any security
into shares in the Company is to the nominal amount of the shares which may be allotted pursuant to that right.
These authorities are in addition to all existing authorities under section 551 of the Act.
To consider and, if thought fit, to pass the following resolutions as special resolutions:
9. That, subject to the passing of resolution 9 and pursuant to section 570 of the Act, the directors be and are generally
empowered to allot equity securities (within the meaning of section 560 of the Act) for cash pursuant to the
authorities granted by resolution 9 as if section 561(1) of the Act did not apply to any such allotment, provided that
this power shall be limited to the allotment of equity securities:
Consolidated Financial Statements for the year ended 30 September 2018
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Notice of Annual General Meeting continued
9.1 in connection with an offer of equity securities (whether by way of a rights issue, open offer or otherwise, but, in
the case of an allotment pursuant to the authority granted by paragraph 8.2 of resolution 9, such power shall be
limited to the allotment of equity securities in connection with an offer by way of a rights issue):
9.1.1 to holders of ordinary shares in the capital of the Company in proportion (as nearly as practicable) to the
respective numbers of ordinary shares held by them; and
9.1.2 to holders of other equity securities in the capital of the Company, as required by the rights of those
securities or, subject to such rights, as the directors otherwise consider necessary,
but subject to such exclusions or other arrangements as the directors may deem necessary or expedient in
relation to treasury shares, fractional entitlements, record dates or any legal or practical problems under the
laws of any territory or the requirements of any regulatory body or stock exchange; and
9.2 otherwise than pursuant to paragraph 9.1 of this resolution, up to an aggregate nominal amount of £295,716,
and this power shall expire at the conclusion of the next annual general meeting of the Company after the passing of
this resolution or on 26 June 2020 (whichever is the earlier), save that the Company may make an offer or agreement
before this power expires which would or might require equity securities to be allotted for cash after this power
expires and the directors may allot equity securities for cash pursuant to any such offer or agreement as if this power
had not expired.
This power is in addition to all existing powers under section 570 of the Act.
10. That, pursuant to section 701 of the Act, the Company be and is generally and unconditionally authorised to make
market purchases (within the meaning of section 693(4) of the Act) of ordinary shares of £0.10 each in the capital of
the Company (“Shares”), provided that:
10.1 the maximum aggregate number of Shares which may be purchased is 2,957,161;
10.2 the minimum price (excluding expenses) which may be paid for a Share is £0.10;
10.3 the maximum price (excluding expenses) which may be paid for a Share is an amount equal to 105 per cent. of
the average of the middle market quotations for a Share as derived from the Daily Official List of the London
Stock Exchange plc for the five business days immediately preceding the day on which the purchase is made,
and (unless previously revoked, varied or renewed) this authority shall expire at the conclusion of the next annual general
meeting of the Company after the passing of this resolution or on 26 June 2020 (whichever is the earlier), save that the
Company may enter into a contract to purchase Shares before this authority expires under which such purchase will or
may be completed or executed wholly or partly after this authority expires and may make a purchase of Shares pursuant to
any such contract as if this authority had not expired.
By order of the board
...……..................................
Secretary
26 March 2019
Registered office
George House
Herald Avenue
Coventry Business Park
Coventry
CV5 6UB
Registered in England and Wales No. 11321642
i-nexus Global plc
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59
Notes
Entitlement to attend and vote
1. The right to vote at the meeting is determined by reference to the register of members. Only those shareholders registered in the register of members of
the Company as at close of business on 22 March 2019 (or, if the meeting is adjourned, close of business on the date which is two working days before the
date of the adjourned meeting) shall be entitled to attend and vote at the meeting in respect of the number of shares registered in their name at that time.
Changes to entries in the register of members after that time shall be disregarded in determining the rights of any person to attend or vote (and the
number of votes they may cast) at the meeting.
Proxies
2. A shareholder is entitled to appoint another person as his or her proxy to exercise all or any of his or her rights to attend and to speak and vote at the
meeting. A proxy need not be a shareholder of the Company.
A shareholder may appoint more than one proxy in relation to the meeting, provided that each proxy is appointed to exercise the rights attached to a
different share or shares held by that shareholder. Failure to specify the number of shares each proxy appointment relates to or specifying a number
which when taken together with the numbers of shares set out in the other proxy appointments is in excess of the number of shares held by the
shareholder may result in the proxy appointment being invalid.
A proxy may only be appointed in accordance with the procedures set out in note 3 and the notes to the proxy form.
The appointment of a proxy will not preclude a shareholder from attending and voting in person at the meeting.
3. A form of proxy is enclosed. When appointing more than one proxy, complete a separate proxy form in relation to each appointment. Additional proxy
forms may be obtained by contacting the Company’s registrar on [•] or the proxy form may be photocopied. State clearly on each proxy form the number
of shares in relation to which the proxy is appointed.
To be valid, a proxy form must be received by post or (during normal business hours only) by hand at the offices of the Company’s registrar, Share
Registrars Limited, The Courtyard, 17 West Street, Farnham, Surrey, GU9 7DR, no later than 11.00 am on 22 March 2019 (or, if the meeting is adjourned, no
later than 48 hours (excluding any part of a day that is not a working day) before the time of any adjourned meeting).
Corporate representatives
4. A shareholder which is a corporation may authorise one or more persons to act as its representative(s) at the meeting. Each such representative may
exercise (on behalf of the corporation) the same powers as the corporation could exercise if it were an individual shareholder, provided that (where there is
more than one representative and the vote is otherwise than on a show of hands) they do not do so in relation to the same shares.
Documents available for inspection
5. The following documents will be available for inspection during normal business hours at the registered office of the Company from the date of this notice
until the time of the meeting. They will also be available for inspection at the place of the meeting from at least 15 minutes before the meeting until it ends.
5.1 Copies of the service contracts of the executive directors.
5.2 Copies of the letters of appointment of the non executive directors.
6. Biographical details of all those directors who are offering themselves for reappointment at the meeting are set out in the accompanying letter from the
Company’s chairman.
Consolidated Financial Statements for the year ended 30 September 2018
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i-nexus Global plc
i-nexus Suite
George House
Herald Avenue
Coventry Business Park
Coventry CV5 6UB
www.i-nexus.com