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i-nexus Global plc
Strategy Execution Software
Annual Report and Accounts 2020
Setting the standard for Strategy Execution
Strategy Execution Solutions
i-nexus Global plc
i-nexus Suite
George House
Herald Avenue
Coventry Business Park
Coventry CV5 6UB
www.i-nexus.com
Welcome to our 2020 Annual Report
At i-nexus, we believe that by digitally transforming Strategy
Execution, our customers take control and ensure that every
action, measurement and decision contributes to achieving
organisational goals
Contents
STRATEGIC REPORT
2020 Highlights
Company Overview
Chairman’s Statement
CEO’s Statement
Chief Financial Officer’s Report
Principal Risks and Uncertainties
Shareholder engagement
CORPORATE GOVERNANCE
Board of Directors
Corporate Governance Statement
Group Directors Report
FINANCIAL STATEMENTS
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated and Company Statement of Cash Flows
Notes to the Financial Statements
Company Information
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i-nexus Global plc
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2020 Highlights:
Restructured go-to-market organisation
• Revised the go-to-market strategy
• Made key personnel changes
01
• Early positive results from changes made prior to start of Covid-19 pandemic
Protected the business through Covid-19
• Continued expansion within existing customer accounts, adding £40k of MRR (FY19: £35k)
• Secured a new customer during lock-down, a US based global food corporation
• However, new business generation severely impacted by the Covid-19 pandemic
• Significant cost reduction measures implemented through the year, reducing the monthly cost base by £400k by the year end to ~£370k
Major release of a new generation enterprise Strategy Execution platform
•
Launch of a major platform upgrade in September following extensive customer testing, i-nexus Summer 2020, including enhanced
analytics, reporting and a mobile application
• 95% of customers have transitioned onto the new platform, providing a pathway for future growth
Shareholder support provides strengthened financial position
• Cash at year end of £0.12m, supplemented post year end by a fundraise of £1.235m, net of expenses
•
Financial position of the business secure for the near-term
Consolidated Financial Statements for the year ended 30 September 2020
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02
STRATEGIC REPORT:
Company Overview
The i-nexus platform enables organisations to excel in Strategy Execution, empowering them
to execute their strategies successfully, drive business transformation and deliver continuous
performance improvement.
Our Vision
To make world-class Strategy
Execution accessible to all
organisations by delivering a
technology platform that removes
complexity, accelerates delivery,
provides leaders with visibility and
puts them in control of delivering their
strategic goals.
people pursue the wrong objectives.
Failure to gain buy-in prevents
initiatives from achieving the expected
results. Failure to track performance,
alignment and results make it
impossible to tell whether an initiative
is working or not or potentially identify
the root cause of a significant problem
in the business operation.
Our vision is built on three key
principles:
• Taking ownership: our industry
reputation, expertise and leading
technology keep us at the forefront
of innovation in the Strategy
Execution Management (SEM) and
Strategic Portfolio Management
(SPM) markets.
• Guiding the journey: our solutions
provide customers of all sizes with
the support they need to achieve
their strategic, transformational
and operational goals.
• Enabling transformation: our
rigorous, systematic approach
helps customers convert high-level
strategies into actionable goals and
deliver real-world business change.
The problem we solve
When business leaders set out a new
strategy, they expect the rest of the
organisation to follow—yet most
businesses find putting strategy into
practice a significant challenge. If there’s
a disconnect between the decisions
made in the boardroom and the day-to-
day work of employees, strategic
initiatives can easily be derailed.
If organisations fail to focus on
Strategy Execution, things can start
going wrong quickly. Failure to set and
communicate clear goals means that
i-nexus Global plc
i-nexus Global plc
How we solve it
As a leader in today’s Strategy
Execution market, we provide a
technology platform that helps
organisations drive, monitor and
control the day-to-day execution of
strategy.
Our platform provides a rigorous,
standardised approach to managing
strategic initiatives, cascading goals
down through the organisation and
measuring progress against the
strategic plan. This approach
empowers our customers to answer
the key questions:
• How are we performing?
• Are our plans on track?
• Will we achieve our strategic goals?
We offer more than just technology.
With over 15 years’ experience in the
space, our expert guidance helps
organisations at all levels of maturity
raise the profile of Strategy Execution
within their business. Today, we
support organisations in managing
over 200,000 strategic programmes
around the world.
As a thought leader, our mission is to
grow and educate the emerging
market for Strategy Execution
solutions. We are working towards a
future where all organisations will
recognize that digitalising their
approach to Strategy Execution is the
best way to control the outcome.
Strategy Execution software is critical
to their success. i-nexus leads that
future.
How the platform works
Our platform fundamentally
transforms the way organisations
define, communicate, manage and
monitor the execution of their
strategies.
Instead of taking a manual approach
of managing Strategy Execution with a
mixture of documents, spreadsheets,
project management tools and
business analytics solutions, we
provide a central, secure, cloud-based
environment that acts as a single
source of truth for all strategic,
transformational and operational
activities, and enables seamless end-
to-end management.
Building on proven continuous
improvement and transformation
methodologies, our platform helps
our customers to:
• Set, cascade and negotiate strategic
goals throughout their organisation
• Manage, coordinate and track
strategic programmes and projects
• Measure results and adjust
initiatives in real time to drive
improved performance
By enabling a relentless focus on
Strategy Execution, supported by real-
time visibility, full accountability and a
closed loop for feedback and
improvement, our platform connects
stakeholders from the boardroom to
the rest of the organisation, helping to
create a single team that works
cohesively towards clear, shared goals.
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
03
STRATEGIC REPORT:
Chairman’s Statement
“The practical challenges posed by the impact of the
Covid-19 pandemic and the subsequent economic
turmoil that unfolded asked many questions of the
i-nexus business, its management team and the
Board and I must express my gratitude and
admiration for those employees, customers and
shareholders who have continued to back the
business during these tumultuous times.”
Without doubt 2019/20 has been an
unprecedented year for everyone. No
one predicted that by March 2020 the
entire country would be locked down,
businesses where possible all working
from home and economies
throughout the world experiencing
the most turbulent environment since
the second world war. The practical
challenges posed by the impact of the
Covid-19 pandemic and the
subsequent economic turmoil that
unfolded asked many questions of the
i-nexus business, its management
team and the Board and I must
express my gratitude and admiration
for those employees, customers and
shareholders who have continued to
back the business during these
tumultuous times.
We started the year acknowledging
that our previous attempt to build a
first class sales machine had failed
and that we would regroup and focus
on ensuring we had a leading product
for our customers, while preserving
our cash resources to ensure that we
would not require additional capital
until such time as we could
demonstrate repeatable commercial
success. We reduced our costs but
maintained our product development
momentum and retained sufficient
commercial capacity to achieve our
more modest ambitions.
The arrival of Covid-19 and the
lockdown in March 2020 had a severe
impact on our business. Following a
fantastic effort from many in the
business we moved quickly to a fully
distributed, work-from-home model.
As many of our existing and
prospective customers did the same,
our pipeline of prospects ground to a
halt and many customer finance
departments found it increasingly
difficult to process payments. We
experienced a significant cash
squeeze. The UK Government’s
furlough scheme allowed us to reduce
our costs by some 40% and HMRC
provided additional short-term cash
support. Unfortunately, we found
ourselves ineligible for the broader
Government support packages for
public or private companies. The
Board, as identified in previous
Company announcements, sought
alternative funding options, but we
reached the end of the financial year
having failed to secure new
investment.
Despite the challenges the business
faced, we managed to win a new US
customer, bring to market a
considerably enhanced release of our
platform, and demonstrate the ability
to implement our new product,
Workbench, remotely. However, we
still faced an ongoing working capital
challenge, exacerbated by the late
payment of invoices. Having
exhausted discussions with potential
new and existing investors, it was
decided in October to raise in excess
of £1m in the form of a Convertible
Note, issued to Herald Investment
Management Ltd, the Company’s long-
standing core investor, myself and a
number of other long-standing
investors, raising £1.235m in total, net
of expenses. The note was issued with
a conversion price approximately
twice the share price at the time,
underlining the confidence which
investors have in the business. We
expect to continue to generate
Consolidated Financial Statements for the year ended 30 September 2020
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STRATEGIC REPORT:
Chairman’s Statement continued
We end the year with a radically
updated product, new customers, a
reduced but workable cost base and
funding to secure the business in the
near term. While there will still be
challenges ahead, we can now face
2021 with determination and cautious
optimism.
Richard Cunningham
Chairman
19 February 2021
modest monthly losses in the short
term, but the purpose of the funds
raised is primarily to help manage
working capital, not to fund ongoing
losses.
Without extraordinary efforts and
sacrifices from all our staff, the
business would have faced a very
uncertain future. Sadly, we have seen
a number of valued colleagues leave
the business and I wish them well in
their future endeavours. At the
beginning of lock-down, all staff
agreed to take a 15% cut in
remuneration for 6 months. It is vital
that we retain and appropriately
remunerate our remaining talent. As
such the recent funding has allowed
us to return staff pay to its correct
level and to agree option grants, which
will vest on the achievement of
performance targets, ensuring staff
and shareholders are aligned in
sharing in the future success of the
business. I would like to thank all our
remaining staff for all that they have
done over the last 12 months, as well
as those investors who supported the
recent fundraising.
Nigel Halkes has informed the Board
of his intention not to seek re-election
as a Director at the forthcoming AGM.
Accordingly we have appointed on
February 18th David Firth as our new
independent non Executive Director.
David comes with a wealth of senior
Executive and non Executive
experience. He is a qualified
Chartered accountant and he will take
up the position of Chair of Audit
Committee after Nigel resigns in
March. I would like to express my
gratitude for Nigel’s valuable
contribution over the last 3 years.
i-nexus Global plc
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
05
STRATEGIC REPORT:
CEO’s Statement
“Our strategic focus for 2021 is to achieve repeatable,
incremental sales, while operating within our financial
means. All departments are focussed on projects to
deliver this goal.
The investments we have made in our Strategy
Execution platform have considerably enhanced the
usability of our platform, its stickiness, our ability to
convert new business and generate upsells with our
existing accounts. We believe our platform is capable
of meeting the stringent requirements of the world’s
largest organisations and, while conscious of the
continuing challenges ahead, we have entered the new
year in a strengthened financial position and with
cautious optimism.”
As outlined by the Chairman, this was
a challenging year, in which much has
been asked of our teams and, while
revenue has declined, much has been
done to improve our product and our
operations. In the face of the
escalation of financial pressure on the
business caused by Covid-19, we
reduced our cost base, conserving our
cash resources, and post period end
secured £1.235m (net of expenses) in
additional funding by way of a
Convertible Note, securing the near-
term financial future of the business.
We are grateful for the support of our
investors, our teams and our
customers, and while conscious of the
challenges that still lie ahead, are
passionate about delivering on our
growth strategy in the coming year.
Covid-19
We were swift to respond to the
pressures of Covid-19, moving to a
remote working basis ahead of UK
lockdown, reducing our headcount
and stabilising our core teams.
However, new business discussions
simply fell away, as the blue-chip
enterprises with whom we were
engaged themselves adjusted to the
new environment. While we have seen
some organisations seek to accelerate
their adoption of digital strategy
execution solutions, many put those
plans on hold; cash conservation took
precedence over investing in new
technology for many prospects.
Within our existing customer base we
have limited exposure to the worst
impacted sectors, such as aerospace
and automotive and while we
anticipate some shrinkage to our
renewal base, we believe it to be
largely stable.
Despite the challenges Covid-19 threw
at us, we managed to win a major new
US customer during lockdown and a
major European one since year end,
via our partner channel. These
customers were won despite not
having ever met the customers face to
face. More positively, we are having a
growing number of positive
discussions with businesses for whom
the pandemic demonstrated their lack
of visibility on their strategy execution,
highlighting the risk this posed to their
businesses and this has allowed us to
rebuild our sales pipeline. The issue
now is consistently being able to close
new deals on a timely basis.
Business structure
The business now comprises a
workforce of 37 people in four core
teams: Go to Market, (Sales &
Marketing), Product (Development,
Product & Cloud Ops), Success, (all the
customer facing & delivery teams) and
Business Support (Finance, HR &
Admin). Each team has clearly laid out
performance metrics and KPIs, to be
delivered against quarterly.
Innovation
Launch of i-nexus Summer 2020
One of the notable successes of the
year was the launch of i-nexus
Summer 2020, the significant upgrade
to our existing cloud-based Strategy
Execution Management platform. This
was the culmination of a two year
program of activity incorporating our
internal expertise, client base, user
experience experts and other
specialist consultancies. The suite
incorporates several new offerings
Consolidated Financial Statements for the year ended 30 September 2020
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06
STRATEGIC REPORT:
CEO’s Statement continued
and now encompasses i-nexus
Workbench, Pulse, Advisor and i-nexus
Data Warehouse (“IDW”). The software
will enable customers to execute and
sustain greater process
improvements, and track and optimise
their project mix. Importantly, the
inclusion of remote working solutions
will enable customers to log on and
see all of the projects and programs in
one place, linked to their key
measurements. Customers can
remain fully informed and ready to act
immediately, on a remote basis.
Hosted on Amazon Web Services, the
platform is an enterprise-ready
Strategy Execution Management
solution, scalable to thousands of
users, and meeting the stringent
demands of corporate IT
organisations.
By the date of this report, 95% of
customers are live on the new
platform, providing a streamlined
ability to execute on our Land &
Expand strategy, facilitating easier roll-
out of the service across multiple
divisions and subsidiaries.
i-nexus Data Warehouse
The platform processes significant
strategic and operational customer
data. FY20 saw the release of IDW, a
new service giving customers direct
access to their data ready for analysis.
Our investment in data will make it
easier for customers to analyse and
visualise their data through new
dashboards, views and reports within
our Workbench and Advisor products.
IDW will be further enhanced in FY21
and, together with our broader data
roadmap, will unlock new customer
insight into strategic planning and
strategy execution performance.
Partners
We continue to develop relationships
with potential channel partners, to
extend our market reach. Our
consulting partners have also been
badly affected by Covid-19, seeing
their own pipelines slow down and
facing substantial uncertainty. They
also recognise that innovation and
new approaches will be key to
emerging from the lockdown
successfully and we are working with
them on various initiatives accordingly.
In one encouraging development,
subsequent to the year end, we
signed our first new customer through
a consulting partner introduction, a
European based white goods
manufacturer.
i-nexus Global plc
People
It is hard to put into words how
grateful we are for the fortitude and
commitment shown by our team. Not
only have they had to deal with the
emotional and practical impacts of
colleagues departing the business, but
this has been done against the
personal challenges Covid-19 has
brought to all of us. And yet
throughout this period, service levels
to our customers never dropped, our
pace of innovation remained high and
sales opportunities were sought with
continued vigour. I, and the Board, are
immensely grateful and we were
pleased to be able to return all staff to
full pay as a result of the fundraise.
Market opportunity
While Covid-19 is likely to continue to
have a negative impact on corporate
decision-making for some time to
come, we are confident the long-term
opportunity has not diminished. We
continue to believe that the market
opportunity for enterprise level
Strategy Execution software is
significant, and for the growing area of
Hoshin Kanri based tools in particular.
The breadth of our platform and its
proven ability to run complex strategy
programmes at depth and scale,
across thousands of employees in
multiple geographies, puts us in a
strong position to benefit from this
evolving market once the initial
impacts of Covid-19 have reduced.
The cloud and mobile abilities of our
products mean they can be used
remotely and our platform has
increased relevance at a time when
organisations are having to make
significant strategy adjustments, to
course correct for the impacts of
Covid-19 on their businesses.
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
07
Current Trading and Outlook
We exited the year with a monthly cost
base more than 50% lower than at the
start, at approximately £370k, against
a Monthly Recurring Revenue exit rate
of £305k. Our sales pipeline continues
to develop with solid new
opportunities being created monthly,
however conversion on a timely basis
is an ongoing challenge with Covid-19
still a factor. We have seen some initial
success in recent months; closing a
deal via a channel partner and a major
contract extension with an existing
customer. Our strategic focus for
2021 is to achieve repeatable,
incremental sales and operate within
our financial means. All departments
are focussed on projects to deliver
this goal.
Simon Crowther
Chief Executive Officer
19 February 2021
Consolidated Financial Statements for the year ended 30 September 2020
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08
STRATEGIC REPORT:
Chief Financial Officer’s Report
“As reported above the Group successfully secured
funding after the Balance Sheet date in the form of
Fixed Rate Unsecured Convertible Redeemable Loan
Notes to the value of £1.235m net of expenses.
These funds provide much needed additional
working capital to facilitate the continued
implementation of the Company’s growth plan and
will be applied entirely towards meeting the
Company’s ongoing working capital requirements.”
Reported revenue
Gross Margin
Revenue reduced to £4.1m (FY19:
£4.8m) as the Covid-19 pandemic and
other internal factors adversely
affected our rate of new deal
conversion and services change order
billing. The Group signed two new
customers (FY19: eight), both under
recurring contracts of more than one
year in length, paid in advance. Upsells
and cross sells in our existing
accounts showed an improvement on
last year, adding £40k Monthly
Recurring Revenue in the year (FY19:
£35k). This growth was, however,
offset by some high customer churn,
some of which was a direct result of
Covid 19, and we exited FY20 with
closing MRR of £305k (FY19 exit MRR:
£340k).
Revenue from recurring contracted
software subscriptions was £3.74m
(FY19: £4.03m) and from associated
professional services was £0.34m
(FY19: £0.73m). We had a strong end
to the year with respect to services
billing, but this could not be converted
into recognised revenue until after the
year end.
Gross margin in the year was £2.99m,
or 73% (FY19: £3.55m, or 74%) after
accounting for commission payable to
the Group’s business partners.
Reported gross margin is the
combined gross margin over both
recurring software subscriptions and
professional services.
Overheads
Overheads (defined as the aggregate
of staff costs and other operating
expenses, but excluding those costs
included in cost of sales, depreciation
of tangible assets and amortisation of
intangible assets, and share based
payment charges) reduced in the year
from £7.82m to £5.31m. This
reduction was the result of a program
of rightsizing all costs including
redundancies, a temporary 15% salary
reduction scheme for all employees
including Executive and Non-Executive
Directors to help secure the business
in the short-term. At the same time,
we took advantage of the Government
Furlough scheme, with 25 employees
involved in the scheme. Included in
overheads was £0.2m of
non-recurring administrative expenses
as a result of the redundancies. As
reported elsewhere our monthly run
rate of total costs, both cost of sales
and overheads dropped by
approximately £400k in the year to
end at approximately £370k. Interest
expense at £54k is down on the
previous year as debt continues to be
paid down.
Capitalised development costs
amounted to £0.6m in the year (FY19:
£0.6m). Our development capacity is
contributing to the marketability of the
Group’s products and the product
launch in August is strategically
important to us and our current
customers and prospects.
Group loss before taxation reduced
from £4.33m in FY19 to £2.38m, a
result that reflects the cost reductions
made, with most of the impact on our
second half year. There are minimal
plans to increase the cost base in the
coming year, restricted to well
targeted investments in lead
generation, projects designed to
improve conversion rates and in
marketing initiatives with our partners.
i-nexus Global plc
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
09
The Group prepares budgets,
cashflow forecasts and undertakes
scenario planning to ensure that the
Group can meet its liabilities as they
fall due. The uncertainty as to the
ongoing impact on the Group of
Covid-19 has been considered as part
of the Group’s adoption of the going
concern basis. In particular, the
ongoing impact of Covid-19 continues
to cause sales cycles to extend and
make it difficult to forecast future
sales.
The Board’s assessment in relation to
going concern is included in Note 2 of
the financial information. The
Group’s principal risks and
uncertainties are set out in Note 9 of
the financial information.
Capital expenditure
The Group operates an asset light
strategy and has low capital
expenditure requirements, therefore
expenditure on tangible fixed assets is
low at 1% of revenue (FY19: 5%). The
main area of capitalisation is the
development of the Group’s product
software.
Alyson Levett
Chief Financial Officer
19 February 2021
Cash Flow
The Group has cash & cash
equivalents at the period end of
£0.12m (FY19: £1.53m). The Group’s
cash position was significantly
enhanced shortly after year end with
the successful conclusion of a fund
raise to secure £1.235m net of
expenses as a result of the issue of
Fixed Rate Unsecured Convertible
Redeemable Loan Notes.
Gross debt at 30 September 2020 was
£0.24m, of which £0.18m was payable
within one year.
The Group experienced a net outflow
of funds from operating activities of
£2.2m (FY19 £4.2m). The Group had a
cash outflow of £0.3m (FY19 £0.4m)
from the servicing of its debt finance.
As reported above the Group
successfully secured funding after the
Balance Sheet date in the form of
Fixed Rate Unsecured Convertible
Redeemable Loan Notes to the value
of £1.235m net of expenses. These
funds provide much needed
additional working capital to facilitate
the continued implementation of the
Company’s growth plan and will be
applied entirely towards meeting the
Company’s ongoing working capital
requirements.
Careful cash management will
continue to be a priority focus for
management and the Board for the
foreseeable future. The Group
continues 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.
Consolidated Financial Statements for the year ended 30 September 2020
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STRATEGIC REPORT:
Principal Risks and Uncertainties
Although the Directors seek to minimise the impact of risk factors, the Group is subject to a number of risks which may
have a material effect on its reputation, financial or operational performance. Key areas for on-going risk management are
as follows:
Risk
Description
Mitigation
The Group prepares regular business
forecasts and monitors its projected
cash flows, which are reviewed by the
Board.
The scenarios and sensitivities
demonstrate that there are actions
management can implement should the
plans not deliver the growth hoped.
Whilst the Directors believe that the
recent injection of funds, as a result of
the convertible bond issue on 4th
November 2020, will provide the
necessary flexibility to satisfy the
Company’s near-term funding
requirements, there can be no
guarantee as to the Company’s medium
to longer term working capital
requirements and, therefore, the Group
may need to seek additional capital over
and above that raised from the issue of
the Convertible Loan Notes. No
assurance can be given as to the
availability of such additional capital at
any future time or, the terms upon
which such additional capital would be
available.
The proceeds of the Convertible Bond
issue will provide the necessary flexibility
in the event that the expected growth in
revenues does not materialise in the
near term, the Company’s continuing
viability in the longer term remains
critically dependent on its ability to
secure new sales to existing and
potential customers. Given the nature of
the COVID-19 Pandemic, it is not
possible to know the potential impact of
the ongoing crisis on the activities of the
Group for the current financial year and
beyond and, in particular, it is possible
that as a direct or indirect result the
Company will continue to experience a
slower and/or lower sales conversion
rate than the Directors have modelled
within their central case financial
projections. This could in turn have a
material adverse effect on the Group’s
business, results of operations, financial
condition and prospects.
Working capital
Vulnerability of the
Groups long term
working capital
i-nexus Global plc
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STRATEGIC REPORT
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FINANCIAL STATEMENTS
11
Risk
Description
Mitigation
In addressing the impact of the COVID-
19 Pandemic on its markets and its
customers, the Group has taken swift
and decisive action to reduce its
operating cost base in cash terms since
the start of the crisis. Staffing expense
reductions have been implemented and
this has been combined with reduced
discretionary spending. This has reduced
the Group’s monthly operating cost
significantly to approximately £370,000.
The Group have identified further
actions that can be taken to reduce its
cost base further should this prove
necessary.
COVID 19 Pandemic
The ongoing impact of
the Covid 19 Pandemic
cannot be predicted
The COVID-19 Pandemic has affected
the performance of the business of the
Group. The restrictions being imposed in
the UK, as well as similar lockdown
measures introduced internationally
(particularly in the US which is the
Group’s largest market) have created
uncertainty around when normal
business will resume. As at the date of
this document, given the nature of the
crisis, the Group is not aware of the full
extent of the effects of the COVID-19
Pandemic for the current financial year
or beyond.
The global economic slowdown resulting
from the COVID-19 Pandemic requires a
number of businesses worldwide to
make adjustments to their operating
models. Whilst the Group continues to
monitor the situation on a regular basis
and may be able to introduce further
cost saving measures if needed, it is
possible that in the longer term the
COVID-19 Pandemic will have a material
adverse effect on the Group’s business,
results of operations, financial condition
and prospects. Also, there is no
assurance that the implementation of
the Company’s strategic and operational
changes introduced to date will be
successful under current or future
market conditions. Furthermore, if there
were to be further outbreaks of the
COVID-19 Pandemic either globally or in
the Group’s markets this could materially
adversely affect the Group’s business,
results, financial condition and
prospects.
Consolidated Financial Statements for the year ended 30 September 2020
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12
STRATEGIC REPORT:
Principal Risks and Uncertainties continued
Risk
Description
Mitigation
The Board monitors and manages these
strategies against market conditions,
monthly performance against budget
and cash available.
The Group has internal sales and
marketing functions, which are also
supported by a growing network of
consulting partners, that work with
potential customers to educate on the
benefits the product can offer an
organisation.
One of the key strategies followed by the
Group is investment in its Success teams
aimed at broadening and deepening our
reach within accounts. In addition the
Summer 2020 release targeted to
enhance user experience should help to
reduce risk in this area.
The Board recognises that executing the
Group’s strategy may be difficult to
implement/achieve and may not be as
successful as planned. Pressure on
management, limitations on operational
and financial resources, the potential
insufficiency of demand for the Group’s
products and a slower than anticipated
market acceptance of the Group’s
products could lead to failure to
successfully implement its strategies and
so adversely affect the Group’s
reputation, prospects, results of
operations, and its financial condition.
A large proportion of the Group’s target
market continues to use traditional
methods and in-house developed
systems to assist in their SE. The Board
believes the market needs further
education in the benefits of digitalising
SE. Potential customers may prefer to
"do nothing" and be unnecessarily
cautious about investing in the Group’s
software. Failure by the Group to
adequately explain the value proposition
to increase the market’s readiness to
accept the technology will lead to slower
than projected growth.
An important aspect of the Group’s
growth strategy is to proliferate sales of
its i-nexus software with existing
customers as a result of the natural
evolution of the software use over time.
Although the Group has a number of
examples where this has occurred in the
past, this is no guarantee that it will
continue to happen at the increasing
rate predicted. Any failure of this
anticipated account proliferation to
happen will affect the Group’s future
success and adversely affect its
business, prospects and results of
operations and financial position.
Implementation of
Growth Strategy
Failure to successfully
implement its growth
strategies.
Digitalising Strategy
Execution
Failure of the market to
accept the need/urgency
to digitalise their Strategy
Execution
Account Proliferation
Failure of our existing
accounts to grow,
resulting from
dissatisfaction with the
product and/or
deployment issues.
i-nexus Global plc
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
13
Risk
Description
Mitigation
Dependence on
Channel Partners
Failure to develop this
additional route to
market effectively.
Dependence on key
Customers
Failure to retain our
larger key customers.
Software Reliability
Undetected defects in
the software provided by
the Group.
Part of the Group’s strategy is to
increasingly sell its software through
channel partners. There are no
guarantees that sufficient channel
partners will be found to sell the Group’s
software at the rates planned. The
Directors are confident that engagements
to date by existing and prospective
channel partners provide strong evidence
of the opportunity in this regard. However,
there is a risk that the loss of any one or
more existing channel partners and/or
failure to secure enough productive
channel partners in the future could affect
the Group’s future success and adversely
affect its business, prospects and results
of operations and financial position.
A small group of key customers provide
nearly half of the Group’s MRR. One of
the Group’s key customers represents
approximately 18 per cent of current
MRR. The Group’s top five customers
generated 45 per cent of annual revenue
in FY2020. The Group’s financial
performance is therefore partly
dependent on the continued business
relationship with these key customers.
Failure to manage the ongoing renewal
of the contracts with these key
customers on a commercially acceptable
basis could materially affect the Group’s
operations and/or its financial condition.
If the software provided to our
customers contains undetected defects
when first introduced or when upgraded
then the group may fail to meet its
customers performance requirements
or otherwise satisfy contract
specifications. As a result it may lose
customers and/or become liable to its
customers for damages and this may
among other things damage the Group’s
reputation, business, prospects, results
of operation and financial condition.
Substantial focus has been maintained
on this area this year. The CEO is
personally heavily involved in the
evolution of this strategic theme and the
Board is closely monitoring progress.
As previously reported the Group has
invested heavily in Success activities.
Utilising the tools available to us gives us
the visibility we need across our key
accounts and forms the basis of a clear
strategy of interaction with them. Whilst
this cannot guarantee renewal in the
face of disruptive external factors we
can't foresee or manage, risk is generally
no higher than a year ago.
The Group targets significant investment
in product R&D. This includes
performance enhancements, bug fixes
and integration of new technologies, all
of which undergo substantial testing
before releasing to customers. In
addition the Group endeavours to
negotiate limitations of liability clauses in
its customers’ contracts.
Consolidated Financial Statements for the year ended 30 September 2020
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STRATEGIC REPORT:
Principal Risks and Uncertainties continued
Risk
Description
Mitigation
The Board feels that the Summer 2020
release along with the Group’s product
strategy and R&D focus has de-risked
this area as a result.
The Board do not consider this year’s
new deal performance to be indicative of
an underlying weakness in the market
for the Group’s product. The impact of
Covid 19 has been highlighted elsewhere
in this report. However it is clear from
competitor activity and Gartner and
Forrester interactions that the Strategy
Execution Management market is
evolving and we expect a Magic
Quadrant to be created in due course.
The Group invests in R&D and product
development to ensure that the product
remains market leading. Our highly
experienced Head of Marketing is
responsible for making substantial
improvements in our on line presence
gives the Board comfort that the
marketing strategy will help maintain our
competitive position in an evolving
market.
Software Applicability
The i-nexus software may
not perform as expected
or meet customers’
changing expectations
quickly enough.
Market Growth
Failure of Strategy
Execution market to grow
at the rate expected.
Competitors
The Group may face
competition in a rapidly
evolving market.
i-nexus Global plc
There is no guarantee that the i-nexus
software will perform as intended or
meet customer expectations either in
terms of functionality, performance or
usability. Costs spent on developing the
i-nexus software may therefore not be
recouped at the rate anticipated or at all,
and this may result in reduced
profitability for the Group.
The Directors believe that there is strong
evidence supporting the growth in the
adoption of Strategy Execution software.
However, there can be no assurance that
this growth will happen at the rate
envisaged by the Directors. If the market
fails to adopt Strategy Execution software
at the rate envisaged then this will affect
the Group’s future success and adversely
affect its business, prospects and results
of operations and financial position.
The Group may face an increasing amount
of competition in the future as the market
expands, making entry to it more
attractive. Whilst the Group has achieved
its market position through a deep
understanding of the market, and the 10
years of development of its i-nexus
software which places the Group in a
strong position, there is no guarantee that
the Group’s competitors and potential
competitors (who may have significantly
greater financial, marketing, service,
support, technical and other resources
than the Group) may be able to develop
competing products, respond more
quickly to changes in customer
requirements and devote greater
resources to the enhancement, promotion
and sale of their products, which could
have a negative impact and disadvantage
the Group’s business. The entry into the
market of strong, well funded competitors,
could have a negative impact on sales
volumes or profit margins achieved by the
Company in the future.
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
15
Risk
Description
Mitigation
The group takes its Information Security
very seriously as demonstrated by its
ISO27001 accreditation. Employees are
trained in this area including the risks of
phishing and the best practice for
Information Security. The Group has
cyber security insurance in place and the
Group endeavors to secure limitations of
liability clauses in its customer contracts.
All geographies addressed by the Group
can be readily serviced from the UK. The
Group applies Treasury and foreign
currency exposure management policies
to minimise both the cost of finance and
our exposure to foreign currency
exchange rate fluctuations.
Security Breaches &
Cyber Attacks
Vulnerability of the
Group’s systems to
security breaches or
cyber attacks.
International
Operations
Failure of the Group to
adequately manage risks
of operating
internationally.
The Group is a Data Processor for its
customers’ confidential data. Although
the Group is ISO27001 accredited and
therefore employs security and testing
measures for the software it deploys and
the broader security environment is well
documented, these measures may not
protect it from all possible security
breaches that could harm the groups or
its customers’ business. Given the
reliance of the Group on its information
technology systems then its software is
at risk from cyber attacks. Either of these
security events may result in significant
costs being incurred and other negative
consequences including reputational
damage and a loss of investor
confidence.
A substantial proportion of the Group’s
customers and prospects operate
overseas and as a result the Group is
exposed to various risks; operational
challenges around distance, language
and culture, human resource issues and
different legal and taxation
environments.
In addition a significant proportion of the
Group’s revenues are denominated in
foreign currency, principally US dollars.
Since the Group reports its financial
results in sterling, fluctuations in rates of
exchange between sterling and non-
sterling currencies, particularly US
dollars, may have a material adverse
impact on the Group’s financial results.
Consolidated Financial Statements for the year ended 30 September 2020
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STRATEGIC REPORT:
Principal Risks and Uncertainties continued
Risk
Description
Mitigation
Reliance on
counterparties
Risk that trading partners
may be unable to pay in
a timely manner or may
seek to renegotiate
terms with the Group
Dependence on key
executives and
personnel
Risk that key personnel
could leave the Group
There is a risk that parties with whom the
Group trades or has other business
relationships may be unable to pay the
Group in a timely manner, or at all. Some
of the Group’s customers may seek to
renegotiate their pricing and/or payment
terms with the Group. Furthermore, as a
result of the COVID-19 Pandemic and
global economic slowdown some of the
Group’s customers may enter into
bankruptcy or insolvency proceedings
and be in a position whereby they are
unable to pay the Group all or some of
the payments to which the Group is
owed. If any of these risks arise, this
could have an adverse impact on the
Group’s business, revenue, financial
condition, profitability, prospects and
results of operations
The Group is managed by a limited
number of key personnel, including the
Directors and senior management, who
have significant experience within the
Group and the sectors it operates within.
If members of the Group’s key senior
team depart, the Group may not be able
to find effective replacements in a timely
manner, or at all and its business may be
disrupted or damaged.
The Group has very little exposure in its
customer base to those sectors most
adversely affected by Covid 19. In
addition the majority of the Groups
customer base are Global Enterprises
with secure working capital.
Executive and staff remuneration plans,
incorporating long-term incentives, have
been implemented to mitigate this risk.
i-nexus Global plc
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FINANCIAL STATEMENTS
17
Risk
Description
Mitigation
The Group evaluates its business
partners very carefully and regularly
undertakes risk assessments of these
partners to evaluate surety of supply.
Reliance on third
parties
The Group is at risk as to
the availability, price and
quality offered by such
third party suppliers.
The Group contracts with third parties to
perform functions or operations that are
integral to the Group’s products and
services, including third party suppliers
for integration software, and cloud
hosting. Any significant changes in the
availability, price and quality offered by
third party suppliers could adversely
affect profit margins and have a material
adverse effect on the Group’s business,
results of operations and financial
condition. The Group’s reliance on third
party suppliers increases the risk of
disruption to its operations if such third
party service providers are unable to
provide business services as anticipated.
The Group may not be able to provide its
services and may need to seek
alternative service providers or resume
providing these business processes
internally, which could be costly and
time-consuming and have a material
adverse effect on the Group’s business,
results of operations and financial
condition.
Consolidated Financial Statements for the year ended 30 September 2020
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18
STRATEGIC REPORT:
Shareholder Engagement
During the year, the Board and its directors confirm they have acted in a way that promotes the success of i-nexus Global
plc for the benefit of its members as a whole, and in doing so have had regard to the stakeholders and key matters set out
in Section 172 of the Companies Act 2006.
The Board considers that the Group’s key stakeholders are its shareholders, employees, customers, suppliers and key
partners and the environment. The directors recognise that they are expected to take into account the interests of those
stakeholders whilst prioritising the long term success of the Group. This can mean that the interests of certain stakeholder
groups in the short-term may need to be balanced against such long term success.
The Board view the key stakeholders and principal methods of engagement as shown in the table below. In all cases, the
level of engagement informs the Board, both in relation to stakeholder concerns and the likely impact on decision-making.
Stakeholder Group
Principal Methods of Engagement
Shareholders
The Board engages with shareholders throughout the year through the annual and half
year results and trading updates, the Annual General Meeting, the investor roadshows
and the investor pages on the i-nexus Global plc website. Throughout the year the
Board engages with major shareholders and investors as required and receives detailed
feedback reports via our various advisors, on views of shareholders and covering
analysts.
Employees
Our culture defines the behaviours we expect from all our employees and helps drive
our strategy of building a high performance team.
The Board engages with employees by maintaining a rotational schedule which sees
department heads present at Board meetings, weekly Management Updates with the
CEO and fortnightly alternate All Hands briefing email and meetings, currently being run
virtually. We also hold an annual “Launch Event” whereby we review the year just gone
and consider the targets and aspirations for the year ahead.
The Group places customers at the heart of our business and strategy. All our teams
are focussed on regular communication with customers to ensure we fulfil our
customers’ product and service requirements and to deliver excellent customer service.
We ensure that our customers have the opportunity to speak to their support team,
account manager or a member of senior management throughout each stage of their
customer journey with i-nexus.
Open and honest engagement and relationships with our suppliers and subcontractors
is critical to the delivery of our business. The Group has a number of key strategic
partners that we engage with to support delivery of our business in a number of key
areas including IT infrastructure and communication products and services, software,
and our landlords on leased property. Our teams and employees interact with our
strategic partners and all other suppliers on a regular basis to strengthen trading
relationships and to ensure that the supply chain function continues to operate well to
support the business.
The Group recognises the environmental impacts arising from our business activities
and is committed to reducing these through effective environmental management. The
Group switched hosting to Amazon Web Services this year, because they are committed
to running their business in the most environmentally friendly way possible and
achieving 100% renewable energy usage for their global infrastructure.
Customers
Suppliers and key
partners
Environment
i-nexus Global plc
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
19
The Board held twelve board meetings in the year to address and meet its obligations under Section 172 of the Companies
Act 2006. The following table covers the key decisions made during the year and the stakeholder group(s) impacted by
these decisions.
Key Impact
Key Decisions Made Key Stakeholder
Group’s impacted
Long Term Strategy
Each year, the Board approves the annual budget of the
Group and reviews the Group’s strategy and growth plans for
the budget year and the following year.
Shareholders,
Employees,
Customers, Suppliers
Performance of the
Group
Financing and capital
spend
In September 2020, the Board approved the Budget for FY
21 which incorporated a net growth target that reflects the
current Covid 19 impacted environment
On a monthly basis, the Board reviews the trading
performance of the Group with detailed Board reports,
including management accounts, provided by the Executive
team covering trading in the month and year to date, with
operational and financial performance monitored against
budget and the previous financial year. These reports cover
sales and forecast pipeline, customers and suppliers, data
centre activity and various aspects of operational
performance and compliance with ISO requirements as
applicable.
In the year, the Board spent significant time reviewing and
agreeing the company’s response to the Covid 19 pandemic.
Alongside tactical decisions on redundancies, furlough and
cost cutting including salary cuts, strategic options were a
theme of every Board meeting.
The Board approves the extent of the investment being
made in the i-nexus product. In an environment of a
weakened financial position it was agreed that we maintain
capacity to allow the completion of the latest release of
i-nexus – the Summer 2020 release. The risks around this
release were monitored by the Board.
As a result of both the weaker sales experienced in 2019 and
the Covid 19 impact which left the Group with reduced
working capital, strategic options for additional financing
were explored from 28th May 2020 through to the
successful completion of the Convertible Bond issue in
November 2020.
Shareholders,
Employees,
Customers, Suppliers,
Environment
Shareholders,
Employees
Consolidated Financial Statements for the year ended 30 September 2020
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STRATEGIC REPORT:
Shareholder Engagement continued
Key Impact
Key Decisions Made Key Stakeholder
Group’s impacted
Employees and Culture
The Board seeks to ensure that the Group’s staff policies and
processes are aligned with the Company’s core values and
promote the long term strategy of the Group.
Shareholders,
Employees
The Board continues to make decisions that encourage
improvements in systems, processes and benefits which
impact the wellbeing of our employees.
The Remuneration Committee makes recommendations to
the Board on the remuneration packages for the Executive
Directors, including annual salary increase, performance
related bonuses and options under our long term incentive
plans.
Governance,
Regulatory
requirements and Risk
The Board reviews and approves the results announcements
and trading updates, the half year report and annual report
and the AGM statement. The Board receives regular briefings
from the Chief Executive Officer and Chief Financial Officer
and the Company’s brokers and public relations advisers.
Shareholders,
Employees,
Customers, Suppliers,
Environment
Through the half year and annual year end results process
and the investor roadshows, the Board are in
communication with analysts and advisors to help
understand shareholder views which contributes to the
Group’s strategy and decision making. The executive team
presents investor feedback results from the roadshows to
the Board. A range of corporate information (including
Company announcements) are available to all shareholders,
investors and the public on the Company
website www.i-nexus.com/investors.
The Board takes regulatory responsibilities seriously and is
committed to ensuring that it is open and transparent with
regulators. In the current year, the Board received advice
from our nominated adviser to obtain an update on changes
to AIM rules and market abuse regulations to ensure
i-nexus’s compliance with requirements.
As noted in the Chief Financial Officer’s report on page 9,
Principal Risks and Uncertainties on page 11 and the
Corporate Governance report on page 30, the Board has
formally considered the risks and our response to the risks
posed by Covid-19 on the business.
i-nexus Global plc
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
21
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 Company as Software Development Manager in 2006 and has
worked within every key area of the business prior to becoming COO in 2013 and 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 Company 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 is a Non Executive Director of AMTE Power Limited
and chairs the Audit Committee. 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 and
Tribal Group Plc, both AIM listed companies, where he chairs the audit committees. 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 2019. 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.
Consolidated Financial Statements for the year ended 30 September 2020
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CORPORATE GOVERNANCE:
Corporate Governance Statement
Chairman’s Introductory Statement on Corporate Governance
As Chairman, my role is to lead the Board, ensure it’s effectiveness and that it has Directors with 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 approving the business strategy and its subsequent execution.
I believe our culture is consistent with the Company’s objectives, strategy and business model and supports the
requirement to minimise our principal risks and uncertainties.
Good corporate governance forms a key part of our business success and we have in place a strong and effective
governance framework and associated practices to ensure that these high standards of governance, values and behaviours
are applied throughout the Company in a consistent manner. All of these 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.
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 identified below and can also be found on
our website.
1. Long-term Value and Strategy
The Company’s business model is designed to promote long-term value for all stakeholders. It is explained more in the
CEO Statement above.
2. Shareholder Engagement
The Company actively engages in dialogue with shareholders. The Chief Executive Officer and Chief Financial Officer
regularly meet with institutional shareholders and analysts, including after the announcement of full year and half-year
results, and are responsible for ensuring that their expectations are understood by the Board. In addition the Chairman is
available should shareholders need his input. The AGM also provides an opportunity for all shareholders to engage and to
ask questions of the Board. In addition, the Company engages with its shareholders through regular RNS communications
to provide updates on financial and commercial matters.
3. Stakeholders
The Board considers the interests of shareholders and all relevant stakeholders in line with section 172 of the Companies
Act 2006. The Company focuses on building strong and sustainable relationships with a range of different stakeholders in
order to support the long-term success of the Company. Details on this are included in the section Stakeholder
Engagement in the Strategic report above on pages 18 to 20.
i-nexus Global plc
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
23
4. Risk Management
The Company is exposed to a number of potential risks which may have a material effect on its reputation, financial or
operational performance. The Board has overall responsibility for risk management and internal controls and is fully
supported by the Audit Committee. More detail about the identified principal risks and uncertainties can be found on
pages 10 to 14. The Board has overall responsibility for the Company’s system of internal control and for reviewing its
effectiveness. The processes to identify and manage the key risks of the Company are an integral part of the internal
control environment. Such processes, which are regularly reviewed and improved as necessary, include strategic planning,
approval of annual budgets, regular monitoring of performance against budget (including full investigation of significant
variances), control of capital expenditure, ensuring proper accounting records are maintained, the appointment of senior
management and the setting of high standards for health, safety and environmental performance.
5. Board Practice
The Board consists of the Chairman, two Executive Directors and one Non-Executive Director. The biographical details of
the Board members can be found on page 15. The Board has determined Nigel Halkes is independent in character and
judgement. The Chairman, Richard Cunningham, is not considered to be independent, however the Board considers that
his long experience as Chairman of the Board of i-solutions Global Limited (which is the Operating entity of i-nexus Global
plc) is of benefit to the Board in providing continuity of knowledge and additional industry expertise to the Company. The
Board meets sufficiently regularly, at least ten times throughout the year. Meetings of the Non-Executive Directors without
the Executive Directors being present are held at regularly. Further information on the Board, its constitution and
procedures can be found below.
6. Board Composition and Performance
The Board considers its overall size and current composition to be suitable and have an appropriate balance of sector,
financial and public markets skills and experience as well as an appropriate balance of personal qualities and capabilities.
Further details on our compliance in this area can be found on page 18. As noted in the Chairman’s Statement, Nigel
Halkes has informed the Board of his intention not to seek re-election as a Director at the forthcoming AGM. He will be
replaced on the Board by newly appointed Independent Non-executive Director, David Firth, who brings a wealth of senior
Executive and non-Executive experience.
7. Board Evaluation
The Board recognises that it continually needs to monitor and improve its performance. This is achieved through an
informal 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.
8. Company Culture
The Company has no pre-defined set of values formally documented, however the following graphic identifies behaviours
and attitudes the Company expects employees to reflect.
Consolidated Financial Statements for the year ended 30 September 2020
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CORPORATE GOVERNANCE:
Corporate Governance Statement continued
These values are reflected in everything that we do, beginning with the selection criteria used in the employee recruitment
process and continuing throughout all elements of the Company’s business. The Board ensures that ethical behaviours are
expected and followed by approving a set of internal policies on matters such as anti-bribery and whistleblowing, and by
ensuring that appropriate systems and controls are in place to ensure compliance with those policies.
9. Governance
Whilst the Board is collectively responsible for defining corporate governance arrangements, the Chairman is ultimately
responsible for corporate governance. The governance structures within the Company have been assessed by the Board
and are considered appropriate for the size, complexity and risk profile of the Company. This will be reviewed by the Board
to ensure governance arrangements continue to be appropriate as the Company changes over time. There is a formal
schedule of matters reserved for the decision of the Board that covers the key areas of the Company’s affairs. The schedule
includes approval of the Annual Report and any other financial statements, the adoption of the budgets and business
plans, material financial commitments, and the release of inside information. The Chairman and Chief Executive Officer
have clearly defined roles and responsibilities. The role of the Chairman is to lead the Board and ensure it is operating
effectively in approving and monitoring the strategic direction of the Company. The role of the Chief Executive is to propose
strategic direction to the Board and to execute the approved strategy by leading the executive team in managing the
Company’s business. The Board is supported by an Audit Committee and a Remuneration Committee.
10. Communication
The Company is committed to open communications with all its shareholders. Communication is primarily through the
Company’s website and the Annual General Meeting. All shareholders will receive a copy of the Annual Report. Copies of
historical Annual Reports and notices of general meetings covering the period since the shares of the Company were
admitted to trading on AIM are also available on the Company’s website. The Company reports on the responsibilities and
activities of each of the Committees in the Annual Report.
Board Constitution and Procedures
As at 30 September 2020, the Board comprised the Non-Executive Chairman, the Chief Executive Officer, the Chief
Financial Officer, and one Non-Executive Director.
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.
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.
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25
Attendance at Meetings
Since the issue of the last Annual Report there were 12 Board Meetings. The details of attendees are shown below:
BOARD REMUNERATION AUDIT
MEETINGS COMMITTEE COMMITTEE
Richard Cunningham 12/12 2/2 3/3
Nigel Halkes 12/12 2/2 3/3
Simon Crowther 12/12
Alyson Levett 12/12
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 Group’s 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’s. 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
Company 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 to review the interim results, the external audit plan and
the full year results and external audit report.
The Committee reviewed the annual report and accounts 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 Company’s
policies and procedures and applicable accounting standards and legislation. Topics discussed included the Company’s
management of risks related to Brexit and Covid-19, compliance with accounting standards on software revenue
recognition and capitalisation of software development costs and the Group’s going concern assumption and related
disclosures. These significant issues were discussed by the Committee taking guidance from the Independent Auditor and
discussions with the CFO.
Consolidated Financial Statements for the year ended 30 September 2020
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CORPORATE GOVERNANCE:
Corporate Governance Statement continued
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. This year, our key audit
partner was required to rotate off the audit, so the Chair of the Audit Committee interviewed the candidate proposed by
Saffery Champness LLP for suitability and agreed the appointment of Michael Strong to fill the role of key audit partner.
The Committee reviewed the effectiveness of the Company’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.
Independence and objectivity
The Committee has a policy governing the engagement of the external auditor to provide non-audit services. Safeguards
are in place to preserve Auditor independence; use of separate teams for tax compliance, 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 pre-approved 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 2020 and 2019 financial
years can be found in note 8 to the financial statements. To comply with the FRC Revised Ethical Standards 2019 Saffery
Champness did not undertake any non-audit services in FY 2020. Those relating to the Group's Tax services, specifically
those relating to the 2020 Tax computation were provided by Scrutton Bland.
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) and Nigel Halkes. The Committee meets
at least annually 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.
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27
CORPORATE GOVERNANCE:
Group Directors Report For the year ended 30 September 2020
Group Directors Report
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 2020.
Directors
The Directors who served on the Board during the year and to the date of this report are as follows:
Richard Cunningham
Nigel Halkes
Simon Crowther
Alyson Levett
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 (IFRS) 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 IFRS 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.
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.
Consolidated Financial Statements for the year ended 30 September 2020
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CORPORATE GOVERNANCE:
Group Directors Report For the year ended 30 September 2020
Base Salary Review
Having taken external advice the Remuneration Committee developed its 2020 remuneration proposals based on what the
Remuneration Committee believe to be appropriate remuneration levels for the Company at its current stage of
development.
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. The primary objective is achieving the annual budget which is approved 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.
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 2020. As disclosed in the circular to Shareholders concerning the Convertible Bond issue in
November 2021, and subsequently confirmed in the RNS of January 29th the Board’s has issued options under the plans in
2021. 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 2020 was as follows:
Pension
Base Salary Contri- 2020
and Fees Bonuses butions Total
£‘000 £‘000 £‘000 £‘000
Simon Crowther 157 – 13 170
Alyson Levett 122 – 10 132
Richard Cunningham 24 – 1 25
Nigel Halkes 35 – – 35
Paul Docherty – – – –
James Davies – – – –
2020 TOTAL 338 – 24 362
Period to 30 September 2020
Share based payments – – – –
Period to 30 September 2020 – Total 338 – 24 362
2019
Total
£‘000
181
154
49
35
165
9
593
–
593
During the year all of the Directors voluntarily agreed to reduce their remuneration for the period from April to September 2020, because of the adverse
impact of Covid-19 on the business.
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29
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
Richard Cunningham
Nigel Halkes
30 September 30 September
2020
%
2020
Number
868,475
777,796
1,083,100
20,331
2.94
2.63
3.66
0.07
In addition to the interest in shares directly owned, Richard Cunningham also has an interest resulting from his participation
in the issue of the Fixed Rate Unsecured Convertible Redeemable Loan Note. His participation represents a maximum
interest of 3,100,000 in new Ordinary Shares that could be issued pursuant to the Convertible Loan Note Instrument.
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 and Simon Crowther held no external Non-Executive Directorships 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 31 and are also discussed in the Strategic Report. The Directors do not
recommend payment of a dividend.
Share Capital Structure
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 23.
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 Limited
2 Alto Invest
3 Interactive Investor
4 Hargreaves Lansdown PLC
5 Antrak Limited
6 Gresham House plc
7 Bury Fitzwilliam-Lay and Partners
8 BPCE
9 Richard Cunningham
10 The Capital for Enterprise Fund LLP
30 September 30 September
2020
%
2020
Number
4,040,846
2,885,410
2,403,954
2,332,096
1,852,210
1,582,279
1,459,460
1,250,000
1,083,100
889,080
13.66
9.76
8.13
7.89
6.26
5.35
4.94
4.23
3.66
3.01
Consolidated Financial Statements for the year ended 30 September 2020
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CORPORATE GOVERNANCE:
Group Directors Report For the year ended 30 September 2020
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
This historical financial information relating to i-nexus Global plc has been prepared on the going concern basis.
The Group prepares regular business forecasts and monitors its projected cash flows, which are reviewed by the Board.
Forecasts are adjusted for reasonable sensitivities that address the principal risks and uncertainties to which the Group is
exposed, thus creating a number of different scenarios for the Board to challenge including a “stress” case scenario of a
worsening of total billing across recurring and services revenue of £700k, nearly a 50% reduction in new billing compared
to the base case budgeted for the current financial year. In those cases, where scenarios deplete the Group’s cash
resources too rapidly, consideration is given to the potential actions available to management to mitigate the impact of one
or more of these sensitivities, in particular the discretionary nature of costs incurred by the Group, in order to ensure the
continued availability of funds. The Board have also taken into account that the Group does not have access to bank debt.
Based on current trading, the stress test scenario is considered very unlikely. However, it is difficult to predict the overall
impact and outcome of Covid-19 at this stage, as the second wave hits different geographies and sectors in different ways.
Nevertheless, after making enquiries, and considering the uncertainties described above and after receiving the convertible
debt funds of £1.235m net, the directors have a reasonable expectation that the company has adequate resources to
continue in operational existence for the foreseeable future, being a period of at least twelve months from the balance
sheet date. For these reasons, they continue to adopt the going concern basis in preparing the annual report and
accounts.
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.
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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31
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.
Annual General Meeting
The Company will hold the 2020 AGM on Thursday 25th March 2021. The Notice of the Meeting accompanies the Annual
Report and Accounts. Due to COVID-19 restrictions the 2020 AGM will be held virtually. In line with Government guidelines
shareholders will not be allowed to attend in person and all voting will be via a poll vote.
By Order of the Board
Alyson Levett
Company Secretary
19 February 2021
Consolidated Financial Statements for the year ended 30 September 2020
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FINANCIAL STATEMENTS:
Independent Auditor’s Report For the year ended 30 September 2020
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 2020 which comprise the consolidated statement of comprehensive income, consolidated
statement of financial position, company statement of financial position, consolidated statement of changes in equity,
company statement of changes in equity, consolidated 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 affairs of the group and of the parent company as at 30 September 2020 and of
the group’s 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 and the parent company 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 or parent company’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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33
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 statements 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
Revenue recognition
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.
Our audit procedures included the following:
• We tested a sample of contracts and corroborated the accounting
treatment including the amount of deferred income recognised at the
period end;
• We tested a sample of project income to time records and ensured
this income was recorded in line with the group’s revenue recognition
policy; and
Based on our procedures we have concluded that revenue has been
recognised in accordance with the financial reporting framework.
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 reviewed the development criteria alongside managements
workings and justifications, ensuring these comply with the accounting
standards for capitalisation or not;
• We validated the costs to underlying records; and
• We discussed with management the stage of completion and carrying
value of the unamortised costs.
Based on our procedures we have concluded that the expenditure has
been appropriately accounted for including the capitalisation of certain
development costs.
Consolidated Financial Statements for the year ended 30 September 2020
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FINANCIAL STATEMENTS:
Independent Auditor’s Report continued
Key Audit Matter How our audit addressed the key audit matter
Going concern
The going concern assumption is
fundamental in the preparation of financial
statements. The Group utilised cash of £1.4m
in the year and cash reserves were at
£0.1m at year end. This raises the concern
that the business may have insufficient cash
to trade for the coming year without further
placing of shares. The group has no banking
facilities to utilise.
Our audit procedures included the following:
• We reviewed the working capital presentation, financial models and
forecast scenarios prepared by the management team to support
their conclusion that the business was a going concern;
• We reviewed the sensitivities prepared by management and
corroborated the modelled impact of proposed mitigating actions to
supporting information;
• We reviewed new contracts secured after the balance sheet date,
ensuring these were correctly incorporated into the forecasts
prepared by management;
• We vouched inflows from the post year and fundraise to supporting
documentation;
• We reconciled the monthly recurring revenue to the historic
information and underlying records; and
• We spoke to management and challenged the assumptions used.
Based on our procedures we concluded that the going concern
assumption adopted by the directors appears reasonable. The scenarios
and sensitivities demonstrated that there are actions management can
implement should the plans not deliver the growth hoped.
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.
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 of 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 £87,000. 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 the key performance indicator.
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 £4,350. We also agreed to report differences below this threshold that, in our view, warranted reporting on
qualitative grounds.
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35
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 the parent company and their environment obtained in
the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors’ Report.
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 by the parent company, or returns adequate for our audit have not
been received from branches not visited by us; or
•
the parent company financial statements are not in agreement with the accounting records and returns; or
• certain disclosures of directors’ remuneration specified by law are not made; or
• we have not received all the information and explanations we require for our audit.
Consolidated Financial Statements for the year ended 30 September 2020
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36
FINANCIAL STATEMENTS:
Independent Auditor’s Report continued
Responsibilities of directors
As explained more fully in the Directors’ Responsibilities Statement set out on page 27, the directors are responsible for the
preparation of the financial statements 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 and parent company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting unless the directors either intend to liquidate the group or the parent company or to cease operations,
or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the 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 company’s members, as a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might state to the company’s members those matters we are
required to state to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not
accept or assume responsibility to anyone other than the company and the company’s members as a body, for our audit
work, for this report, or for the opinions we have formed.
Michael Strong (Senior Statutory Auditor)
for and on behalf of Saffery Champness LLP
Chartered Accountants
Statutory Auditors
St Catherine’s Court
Berkeley Place
Clifton
Bristol
BS8 1BQ
19 February 2021
i-nexus Global plc
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
37
Consolidated Statement of Comprehensive Income
For the year ended 30 September 2020
Revenue
Cost of sales
Gross profit
Administrative expenses
Operating loss
Adjusted EBITDA
Depreciation, impairment and profit/loss on disposal
Non-underlying items
Finance income
Finance costs
Loss before taxation
Tax on loss
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
Note
5
6
10
11
Year ended
30 September
2020
£
Year ended
30 September
2019
£
4,080,582
(1,094,342)
2,986,240
(5,310,671)
4,759,072
(1,212,175)
3,546,897
(7,817,865)
(2,324,431)
(4,270,968)
(1,816,412)
(331,924)
(176,095)
1,007
(54,299)
(2,377,723)
361,490
(4,050,691)
(105,977)
(114,300)
6,904
(66,838)
(4,330,902)
401,164
(2,016,233)
(3,929,738)
8,068
(26,307)
(14,030)
(92,158)
(2,034,472)
(4,035,926)
Attributable to equity holders of company
(2,034,472)
(4,035,926)
Basic and diluted loss per share
23
£
(0.07)
£
(0.14)
The notes on pages 43 to 67 form part of these financial statements
Consolidated Financial Statements for the year ended 30 September 2020
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38
Consolidated Statement of Financial Position
As at 30 September 2020
30 September
2020
£
30 September
2019
£
Note
13
14
17
18
20
19
20
21
23
1,136,808
245,963
1,382,771
832,507
300,000
120,011
1,252,518
2,635,289
179,098
37,467
1,239,609
1,723,661
3,179,835
64,402
80,702
145,104
3,324,939
(689,650)
618,609
339,131
957,740
1,418,293
400,000
1,533,323
3,351,616
4,309,356
159,730
-
942,210
1,541,109
2,643,049
243,500
80,702
324,202
2,967,251
1,342,105
2,957,161
7,256,188
(15,470)
10,653,881
(21,541,410)
2,957,161
7,256,188
(23,538)
10,653,881
(19,501,587)
(689,650)
1,342,105
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
Lease liability
Trade and other payables
Deferred income
Total current liabilities
Non-current liabilities
Borrowings
Provisions
Total non-current liabilities
Total liabilities
Net (liabilities)/assets
Equity
Share capital
Share premium
Foreign exchange reserve
Merger reserve
Accumulated losses
Total equity
Approved by the Board and authorised for issue on 19 February 2021.
Simon Crowther
Director
Company Registration No. 11321642
i-nexus Global plc
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STRATEGIC REPORT
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FINANCIAL STATEMENTS
39
Company Statement of Financial Position
As at 30 September 2020
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
2020
£
30 September
2019
£
Note
15
17
18
19
23
1,654,770
1,654,770
1,654,770
1,654,770
7,990,099
226
7,799,325
9,645,095
7,902,272
66,831
7,969,103
9,623,873
(111,345)
(111,345)
(111,345)
(90,123)
(90,123)
(90,123)
9,533,750
9,533,750
2,957,161
7,256,188
(679,599)
9,533,750
2,957,161
7,256,188
(679,599)
9,533,750
As permitted by section 408 Companies Act 2006, The Company has not presented its own profit and loss account and
related notes. The parent company’s loss for the year was £0.
Approved by the Board and authorised for issue on 19 February 2021.
Simon Crowther
Director
Company Registration No. 11321642
Consolidated Financial Statements for the year ended 30 September 2020
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40
Consolidated Statement of Changes in Equity
For the year ended 30 September 2020
Foreign Accum-
Issued Share exchange Merger ulated Total
capital premium reserve reserve losses equity
£ £ £ £ £ £
At 1 October 2018 2,957,161 7,256,188 (9,508) 10,653,881 (15,479,691) 5,378,031
Loss for period – – – – (3,929,738) (3,929,738)
Exchange differences on
foreign operations – – (14,030) – – (14,030)
Loss on net investment hedge – – – – (92,158) (92,158)
At 30 September 2019 2,957,161 7,256,188 (23,538) 10,653,881 (19,501,587) 1,342,105
Loss for the year – – – – (2,016,233) (2,016,233)
Transition to IFRS 16 – – – – 2,717 2,717
Exchange differences on
foreign operations – – 8,068 – – 8,068
Loss on net investment hedge – – – – (26,307) (26,307)
At 30 September 2020 2,957,161 7,256,188 (15,470) 10,653,881 (21,541,410) (689,650)
i-nexus Global plc
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FINANCIAL STATEMENTS
41
Company Statement of Changes in Equity
For the year ended 30 September 2020
Issued
capital
£
At 1 October 2018 2,957,161
Loss for the period –
At 30 September 2019 2,957,161
Loss for the year –
Share
premium
£
7,256,188
–
7,256,188
–
Accumulated
losses
£
(336,639)
(342,960)
(679,599)
–
Total
equity
£
9,876,710
(342,960)
9,533,750
–
At 30 September 2020 2,957,161
7,256,188
(679,599)
9,533,750
Reserve Description
Issued capital Nominal value of issued shares
Share premium Includes all current and prior period premiums on shares allotted.
Share based payment reserve This reserve relates to amounts recognised for the fair value of share options granted
in accordance with IFRS 2.
Foreign exchange reserve This reserve relates to exchange differences arising on the translation of foreign
subsidiary operations.
Merger reserve This represents the carrying value of the investment in the subsidiary undertaking at
Accumulated losses All other net gains and losses not recognised elsewhere
the point of the share for share exchange.
Consolidated Financial Statements for the year ended 30 September 2020
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42
Consolidated and Company Statement of Cash Flows
For the year ended 30 September 2020
Group Group Company Company
Year ended Year ended Year ended Year ended
30 September 30 September 30 September 30 September
2020 2019 2020 2019
Notes £ £ £ £
Cash flows from operating activities
Loss before taxation (2,377,723) (4,330,902) – (342,960)
Adjustments for non-cash/non-operating
items:
Depreciation and profit on disposals 331,924 105,977 – –
Share based payments – – – –
Finance income (1,007) (6,904) – –
Finance charges 54,299 66,838 – 26
(1,992,507) (4,164,991) – (342,934)
Changes in working capital:
Decrease in trade and other receivables 690,536 333,663 (87,827) 477,360
Increase/(decrease) in trade and
other payables 489,077 (577,802) 21,222 (67,570)
Taxation 361,490 184,326 – –
Net cash from operating activities (451,404) (4,224,804) (66,605) (409,790)
Cash flows from investing activities
Purchase of property, plant
and equipment 14 (39,744) (247,040) – –
Proceeds from sale of property,
plant and equipment 14 – 1,154 – –
Purchase of development costs 13 (628,210) (563,598) – –
Interest received 1,007 6,904 – –
Net cash flow from investing activities (666,947) (802,580) – –
Cash flows from financing activities
Principle elements of lease payments (89,000) – – –
Proceeds from borrowings – – – –
Repayment of borrowings (159,730) (298,998) – –
Interest paid (54,299) (66,838) – (25)
Net cash flow from financing activities (303,029) (365,836) – (25)
Net increase/(decrease) in cash
and cash equivalents (1,426,131) (5,393,220) (66,605) 66,831
Cash and cash equivalents beginning
of period 1,533,323 6,940,573 66,831 –
Effect of foreign exchange rate changes 8,068 (14,030) – –
Cash and cash equivalents at the
end of the period 120,011 1,533,323 226 66,831
i-nexus Global plc
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FINANCIAL STATEMENTS
43
Notes to the Financial Statements
For the year ended 30 September 2020
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 and Group.
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 has been 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 2020.
The accounting treatment in relation to the addition of i-nexus Global plc as a new UK holding company of the Group fell
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 believed 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.
Consolidated Financial Statements for the year ended 30 September 2020
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44
Notes to the Financial Statements continued
For the year ended 30 September 2020
Going concern
This historical financial information relating to i-nexus Global plc has been prepared on the going concern basis.
The Group prepares regular business forecasts and monitors its projected cash flows, which are reviewed by the Board.
Forecasts are adjusted for reasonable sensitivities that address the principal risks and uncertainties to which the Group is
exposed, thus creating a number of different scenarios for the Board to challenge including a "stress" case scenario of a
worsening of total billing across recurring and services revenue of £700k, nearly a 50% reduction in new billing compared
to the base case budgeted for the current financial year. In those cases, where scenarios deplete the Group's cash
resources too rapidly, consideration is given to the potential actions available to management to mitigate the impact of one
or more of these sensitivities, in particular the discretionary nature of costs incurred by the Group, in order to ensure the
continued availability of funds. The Board have also taken into account that the Group does not have access to bank debt.
Based on current trading, the stress test scenario is considered very unlikely. However, it is difficult to predict the overall
impact and outcome of Covid-19 at this stage, as further waves hit different geographies and sectors in different ways.
Nevertheless, after making enquiries, and considering the uncertainties described above and after receiving the
convertible debt funds of £1.235m net, the directors have a reasonable expectation that the company has adequate
resources to continue in operational existence for the foreseeable future, being a period of at least twelve months from
the balance sheet date. For these reasons, they continue to adopt the going concern basis in preparing the annual report
and accounts.
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 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 to the group presentation currency have been translated
using the monthly average exchange rate for consolidation into 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.
i-nexus Global plc
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FINANCIAL STATEMENTS
45
2 Significant accounting policies (continued)
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 plus annual 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.
Revenue recognition
Revenue represents amounts receivable for services net of VAT and trade discounts.
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 IFRS 15. 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.
Consolidated Financial Statements for the year ended 30 September 2020
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Notes to the Financial Statements continued
For the year ended 30 September 2020
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
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
Motor vehicles
25% reducing balance
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.
i-nexus Global plc
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47
2 Significant accounting policies (continued)
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.
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.
Consolidated Financial Statements for the year ended 30 September 2020
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48
Notes to the Financial Statements continued
For the year ended 30 September 2020
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.
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, is
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, dividends on preference shares 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.
Warrants
Warrants are considered to be share based payments and are accounted for in accordance with IFRS 2. The fair value of
issued warrants is credited to the share based payment reserve at the time of issue of the warrants. Upon the exercise of
warrants, the fair value held in the share based payment reserve is transferred to the share premium reserve.
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2 Significant accounting policies (continued)
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.
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 outcome – the single most likely outcome or a
probability weighted average value of a range of possible outcomes.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts.
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 at 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.
Consolidated Financial Statements for the year ended 30 September 2020
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Notes to the Financial Statements continued
For the year ended 30 September 2020
Leases
The Group assesses whether a contract is or contains a lease, at inception of a contract. The Group recognises a right-of-
use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for
short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these
leases, the Group recognises the lease payments as an operating expense on a straight-line basis over the term of the
lease unless another systematic basis is more representative of the time pattern in which economic benefits from the
leased asset are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its
incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise the fixed lease
payments (including in-substance fixed payments), less any lease incentives.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using
the effective interest method) and by reducing the carrying amount to reflect the lease payments made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
i.
the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the
lease liability is remeasured by discounting the revised discount rate;
ii. the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed
residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial
discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised
discount rate is used); or
iii. a lease contract is modified, and the lease modification is not accounted for as a separate lease, in which case the lease
liability is remeasured by discounting the revised lease payments using a revised discount rate.
The Group did not make any such adjustments during the periods presented.
The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or
before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated
depreciation and impairment losses.
Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease
transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that the Group expects to exercise
a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The
depreciation starts at the commencement date of the lease.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any identified
impairment loss.
As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any
lease and associated non-lease components as a single arrangement. The Group has not used this practical expedient.
i-nexus Global plc
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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
Amendments to references to Conceptual Framework in IFRS Standards
Definition of a Business (Amendments to IFRS 3)
Definition of Material (Amendments to IAS 1 and IAS 8)
Interest Rate Benchmark Reform (Amendments to IFRS 9, IAS 39 and IFRS 7)
COVID-19-Related Rent Concessions (Amendment to IFRS 16)
Effective date, annual
period beginning
on or after
1 January 2020
1 January 2020
1 January 2020
1 January 2020
1 January 2020
Management have considered the effect of the future changes in accounting standards and do not consider that they will
have a significant impact.
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.
Valuation of investments
Investments in subsidiaries are measured at cost less accumulated impairment.
Exceptional administrative expenses
Exceptional items are transactions that fall within the ordinary activities of the company but are presented separately due
to their size or incidence.
Government Grants
Grants are accounted for under the accruals mode. Grants of a revenue nature are recognised in the same period as the
related expenditure.
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.
Consolidated Financial Statements for the year ended 30 September 2020
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Notes to the Financial Statements continued
For the year ended 30 September 2020
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:
Impairment of investments and intercompany debtors
The subsidiary has sustained losses and the balance sheet is in deficit. This is a potential indicator of impairment. The
recoverability of intercompany debtor and the cost of investment is dependent on the future profitability of the entity. No
provision for impairment has been made in these accounts and this is a significant judgement.
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.
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
shareholders 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
2020
Interest rate
££
Debt
£
Fixed rate borrowings
Venture debt 243,500
Weighted average cost of fixed rate borrowing
11.5%
11.5%
Debt
£
403,230
30 September
2019
Interest rate
11.5%
11.5%
i-nexus Global plc
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53
4 Financial risk management (continued)
(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:
Less than one year
One to two years
Two to five years
Capital risk management
30 September
2020
30 September
2019
179,098
64,402
–
243,500
159,730
179,098
64,402
403,230
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 plc 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 2020
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54
Notes to the Financial Statements continued
For the year ended 30 September 2020
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
2020
£
808,412
1,823,246
1,259,360
189,564
4,080,582
As restated
Year ended
30 September
2019
£
928,733
1,624,195
2,029,839
176,305
4,759,072
The Group has one customer that represented more than 10 percent of revenue in either 2020 or 2019 as detailed below:
Customer 1
Year ended
30 September
2020
£
Year ended
30 September
2019
£
623,091
603,755
The Group has two main revenue streams in each of the years presented, as detailed below:
Licence
Services
Year ended
30 September
2020
£
3,737,932
342,650
4,080,582
As restated
Year ended
30 September
2019
£
4,027,129
731,943
4,759,072
All revenue is recognised is in relation to contracts held with customers. Amounts of revenue recognised in the period that
was included as a contract liability balance at the beginning of the previous period was £1,499,023.
Invoices for licence income are issued annually in advance arising to deferred income as the performance obligation has
not yet been satisfied. Services income relates to prepaid, part upfront/part upon completion & others linked to key
milestones set out in contracts. This arises to deferred income and increase in debtors for performance obligation met but
not yet invoiced.
i-nexus Global plc
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55
5 Revenue and segmental reporting (continued)
The performance obligations of the licence revenue are satisfied on a monthly basis and as such revenue for this stream is
recognised monthly as and when the licence period is consumed. The services performance obligations vary and contract
value is recognised over the duration of each project. All warranties are included within the subscription agreements with
each client.
The transaction price is determined by the contractual value agreed with our clients. It is deemed that 60% of a
deployment is attributable to enabling the customer to use our software. This was determined by reviewing live examples
and attaching a percentage of each deployment which is required to enable the customer to use the software thus being
the one performance obligation.
6 Adjusted EBITDA
Operating loss
Add back:
Depreciation, impairment and profit/loss on disposal
Share based payment expense
Non-underlying items
Adjusted EBITDA
7 Loss on ordinary activities before taxation
Profit or loss before taxation is arrived at after:
Depreciation of property, plant and equipment
(Loss)/Profit on disposal of fixed assets
Auditor’s remuneration (note 8)
Loss/(profit) on foreign exchange transactions
Research and development expenditure
Impairment of intangible
Bad debt expense
Year ended
30 September
2020
£
As restated
Year ended
30 September
2019
£
(2,324,431)
(4,270,968)
331,924
–
176,095
105,977
–
114,300
(1,816,412)
(4,050,691)
Year ended
30 September
2020
£
Year ended
30 September
2019
£
221,912
8,750
45,700
75,010
628,210
110,011
68,338
106,233
(256)
73,332
(175,857)
917,455
–
14,431
Government grants amounting to £244,656 were received during the period under the Coronavirus Job Retention Scheme.
The bad debt expense is recognised as part of administrative expenses.
Consolidated Financial Statements for the year ended 30 September 2020
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56
Notes to the Financial Statements continued
For the year ended 30 September 2020
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
Taxation services
Other services
9 Directors and employees
Wages and salaries
Social security costs
Other pension costs
Share based payment expense
The average number of employees during the year was:
Senior Management
Development global services and other
At 30 September 2020 the group had 46 FTE’s (FY19: 90).
Year ended
30 September
2020
£
As restated
Year ended
30 September
2019
£
45,700
46,700
–
–
45,700
–
7,250
19,382
73,332
Year ended
30 September
2020
£
Year ended
30 September
2019
£
3,843,110
424,403
148,981
–
4,416,493
4,745,415
545,039
134,368
–
5,424,822
2020
Number
2019
Number
9
57
66
9
76
85
i-nexus Global plc
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FINANCIAL STATEMENTS
57
9 Directors and employees (continued)
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
2020
£
Year ended
30 September
2019
£
338,125
22,718
–
360,843
869,581
52,897
–
922,478
569,914
23,196
–
593,110
1,153,030
39,424
–
1,192,454
Remuneration disclosed above include the following amounts paid to the highest paid directors:
Remuneration for qualifying services
169,879
181,250
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to 2
(2019: 2).
10 Finance costs
Finance lease interest expense
On loans and overdrafts
Year ended
30 September
2020
£
Year ended
30 September
2019
£
14,063
40,236
54,299
–
66,838
66,838
Consolidated Financial Statements for the year ended 30 September 2020
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Notes to the Financial Statements continued
For the year ended 30 September 2020
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
Factors affecting the tax charge for the period
Loss before tax
Year ended
30 September
2020
£
As restated
Year ended
30 September
2019
£
(360,000)
(360,000)
(400,000)
–
(400,000)
(1,490)
(1,490)
(1,164)
–
(1,164)
(361,490)
(401,164)
(2,377,723)
(4,330,902)
Profit before tax multiplied by standard rate of UK Corporation tax of 19.0% (2019: 19.0%)
(451,767)
(822,871)
Effects of:
Non-deductible expenses
Adjustments to tax credit in respect of prior years
Surrender R&D for tax credit
Deferred tax asset not recognised
Restriction of R&D tax credit
Depreciation on assets not qualifying for tax allowance
Effect of change in UK corporation tax rate
Other
Finance lease assets
Utilisation of tax losses
Current tax credit
There are no factors to consider in respect of future tax changes.
2,319
–
(411,592)
–
–
3,300
(42,514)
–
(15,270)
554,034
(361,490)
1,648
–
(205,182)
489,784
76,854
3,327
55,086
190
–
–
(401,164)
i-nexus Global plc
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FINANCIAL STATEMENTS
59
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
13 Intangible assets
Group
Cost
At 1 October 2019
Additions
At 30 September 2019
Amortisation/impairment
At 1 October 2019
Charge for the year
At 30 September 2020
Net book value
At 30 September 2020
At 30 September 2019
Year ended
30 September
2020
£
Year ended
30 September
2019
£
(2,034,472)
29,571,605
(4,035,926)
29,571,605
(0.07)
(0.14)
Development
costs
£
Total
£
618,609
628,211
618,609
628,211
1,246,820
1,246,820
–
(110,011)
(110,011)
–
(110,011)
(110,011)
1,136,808
1,136,808
618,609
618,609
The useful economic life of each of the individual assets is deemed to be 5 years. The additions in the year of £628,211
relate to specific products being developed. These products are deemed to provide future economical benefits to i-nexus
global plc.
Consolidated Financial Statements for the year ended 30 September 2020
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Notes to the Financial Statements continued
For the year ended 30 September 2020
14 Property, plant and equipment
Group
Fixtures,
Short fittings &
Leasehold equipment
£ £
At 1 October 2019 95,328 214,426
Additions 120,552 235
Disposals – –
At 30 September 2020 215,880 214,661
At 1 October 2019 50,235 136,956
Charge for the year 97,738 19,098
On disposals – –
At 30 September 2020 147,973 156,054
Carrying value
At 30 September 2020 67,907 58,607
At 30 September 2019 45,093 77,470
The figures for the previous period are as follows:
Group
Fixtures,
Short fittings &
Leasehold equipment
£ £
At 1 October 2018 95,328 149,493
Additions – 64,933
Disposals – –
At 30 September 2019 95,328 214,426
At 1 October 2018 32,865 128,898
Charge for the year 17,370 8,058
On disposals – –
At 30 September 2019 50,235 136,956
Carrying value
At 30 September 2019 45,093 77,470
At 30 September 2018 62,463 20,595
Computer
equipment
£
546,496
16,707
–
563,203
338,678
105,076
–
443,754
119,449
207,818
Computer
equipment
£
374,101
173,357
(962)
546,496
257,937
80,805
(64)
338,678
207,818
116,164
The company had no property, plant or equipment during the current or comparative period.
Motor
Vehicle
£
8,750
–
(8,750)
–
–
–
–
–
–
8,750
Motor
Vehicle
£
–
8,750
–
8,750
–
–
–
–
Total
£
865,000
137,494
(8,750)
993,744
525,869
221,912
–
747,781
245,963
339,131
Total
£
618,922
247,040
(962)
865,000
419,700
106,233
(64)
525,869
8,750
–
339,131
199,222
i-nexus Global plc
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FINANCIAL STATEMENTS
61
15 Non-current asset investments
Cost
At 30 September 2020
At 30 September 2019
Net book value
At 30 September 2020
At 30 September 2019
Group
£
Company
£
–
–
–
–
1,654,770
1,654,770
1,654,770
1,654,770
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
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 2020.
There are no restrictions on i-nexus Global plc’s ability to access or use the assets and settle the liabilities of subsidiary companies.
Impairment of investments in subsidiaries
The subsidiaries have sustained losses and the balance sheets are in deficit. This is a potential indicator of impairment. The
recoverability of intercompany debtors and the cost of investment is dependent on the future profitability of those entities.
No provision for impairment has been made in these accounts and this is a significant judgement but one that only affects
the parent company and its distributable reserves. It does not affect the group results as the losses of the subsidiaries
have been consolidated.
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
Capital and Profit/(loss)
reserves for the year
2020 2020
£ £
(7,676,823) (4,290,968)
(2,319,647) –
Consolidated Financial Statements for the year ended 30 September 2020
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62
Notes to the Financial Statements continued
For the year ended 30 September 2020
16 Financial instruments
Financial assets held at amortised cost
Financial liabilities held at amortised cost
Financial liabilities held at fair value
At
30 September
2020
£
At
30 September
2019
£
946,095 1,405,318
962,370 1,461,944
– 56,627
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
Trade receivables
Corporation tax receivable
Other receivables
At
30 September
2020
£
At
30 September
2019
£
534,464
300,000
298,043
689,710
400,000
728,583
1,132,507
1,818,293
Company
Other debtors and prepayments
Prepayments
Amounts owed by group undertakings
An analysis of trade receivables is shown below:
At
30 September
2020
£
At
30 September
2019
£
59,019
6,998
7,697,152
7,763,169
46,478
–
7,855,794
7,902,272
Between
30 days Between 31 61 and Over Bad debt
or less and 60 days 90 days 90 days provision
£ £ £ £ £
2020 312,075 73,688 110,731 54,209 (16,239)
2019 635,752 6,373 13,143 48,873 (14,431)
Total
£
534,464
689,710
All opening and close trade debtor balances arise from contracts with customers. All other receivables outside of general
terms of business are immaterial to the Group and within the Company.
i-nexus Global plc
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FINANCIAL STATEMENTS
63
18 Cash and cash equivalents
Group
Cash at bank and in hand
At
30 September
2020
£
At
30 September
2019
£
120,011
120,011
1,533,323
1,533,323
Company
Cash at bank and in hand
At
30 September
2020
£
At
30 September
2019
£
226
226
66,831
66,831
19 Trade and other payables (current)
Group
Trade payables
Taxes and social security costs
Other creditors and accruals
Deferred income
At
30 September
2020
£
At
30 September
2019
£
378,434
488,622
372,553
1,239,609
444,660
155,239
342,311
942,210
At
30 September
2020
£
At
30 September
2019
£
1,723,661
1,723,661
1,541,109
1,541,109
All opening and closing deferred income relate to contracts with customers. The increase in deferred income in the period
relates to multiple year contracts being recognised on an equal basis opposed to the billing. The closing deferred income
balance will be recognised in full during the next 12 months.
Consolidated Financial Statements for the year ended 30 September 2020
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64
Notes to the Financial Statements continued
For the year ended 30 September 2020
Company
Trade payables
Taxes and social security costs
Accruals and other creditors
At
30 September
2020
£
At
30 September
2019
£
16,793
7,796
86,756
111,345
42,930
3,386
43,807
90,123
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. Included within Other
creditors and accruals are outstanding pension contributions payable of £53,192.
20 Borrowings
Group
Current
Venture debt
Non-current
Venture debt
Total borrowings
Venture debt
At
30 September
2020
£
At
30 September
2019
£
179,098
179,098
64,402
64,402
243,500
159,730
159,730
243,500
243,500
403,230
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.
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
2020
£
179,098
64,402
–
243,500
As restated
At
30 September
2019
£
159,730
179,098
64,402
403,230
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.
i-nexus Global plc
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FINANCIAL STATEMENTS
65
21 Provisions
At 1 October 2019
Release of provision
At 30 September 2020
Due within one year
Due after more than one year
Group
Leasehold
dilapidations
£
80,702
–
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 2020.
22 Leases
Depreciation charged on right-of-use is disclosed below.
Interest charges relating to lease liabilities are disclosed in note 10.
The weighted average incremental borrowing rate applied to lease liabilities recognised in the consolidated statement of
financial position at the date of initial application was 3%.
The carrying value of right-of-use assets on 30 September 2020 is broken down as follows:
At 1 October 2019
Additions
Disposals
At 30 September 2020
Accumulated depreciation and impairment
At 1 October 2019
Charge for the year
Eliminated on disposal
At 30 September 2020
At 30 September 2020
At 30 September 2019
Right of use
Short leasehold
£
–
120,552
–
120,552
–
80,368
–
80,368
40,184
–
Total
£
–
120,552
–
120,552
–
80,368
–
80,368
40,184
–
Consolidated Financial Statements for the year ended 30 September 2020
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Notes to the Financial Statements continued
For the year ended 30 September 2020
Lease liabilities in relation to right-of-use assets are included within trade and other payables and fall due as follows:
Due within 1 year
Reconciliation of new standards adopted in the financial year
Reconciliation of loss for the financial period
Loss as previously reported
Effect of new standards adopted in the financial year
Adoption of IFRS 16
Loss as restated
Notes to reconciliations
a) Adoption of IFRS 16
2020
£
37,467
2019
Notes £
(3,929,738)
a
2,717
(3,927,021)
In the current financial year, the Group has adopted IFRS 16 Leases. The Group has elected to apply the modified
retrospective method.
On application of IFRS 16, some changes in accounting policy resulted principally in the recognition of a right-to-use asset
in tangible fixed assets for a carrying value of £40,184 and a lease liability measured at the present value of minimum
future lease payments.
Furthermore, a depreciation charge of £80,368 and an interest expense relating to the lease liability of £14,037 have
been recognised.
The total cash outflow during the period in respect to the lease liability recognised is £89,000.
Reconciliation from operating lease to IFRS16
£
Operating lease commitments at 30 September 2019 122,861
Less: Short-term leases not recognised as a liability –
Less: Low-value leases not recognised as a liability (2,309)
Lease liability recognised as at 1 October 2019 120,552
i-nexus Global plc
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FINANCIAL STATEMENTS
67
23 Share capital
Group and Company
Authorised, allotted, called up and fully paid
29,571,605 Ordinary shares of £0.10 each
At
30 September
2020
£
At
30 September
2019
£
2,957,161
2,957,161
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.
24 Financial commitments
There were no capital commitments at 30 September 2020 or 30 September 2019.
25 Related parties
At 30 September 2020 loans amounting to £0 were due to shareholders and directors of the group (30 September 2019:
£243,500).
During the year the directors provided unsecured short term loans to the group amounting to £144,500, these were fully
repaid at the balance sheet date. Interest was charged at a rate of 0%.
No guarantees have been given or received.
26 Events after the reporting period
On October 19th the company announced that it was proposing to raise in aggregate £1.325 million (before expenses) by
way of the issue of Fixed Rate Unsecured Convertible Redeemable Loan Notes with a Conversion price of 10p and a
Coupon of 8%. Subsequently £1.325m was received from participating Shareholders.
27 Control
There is no ultimate controlling party of i-nexus Global plc.
Consolidated Financial Statements for the year ended 30 September 2020
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Company Information
Registered Office
i-nexus
i-nexus suite
George House
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
Welcome to our 2020 Annual Report
At i-nexus, we believe that by digitally transforming Strategy
Execution, our customers take control and ensure that every
action, measurement and decision contributes to achieving
organisational goals
Contents
STRATEGIC REPORT
2020 Highlights
Company Overview
Chairman’s Statement
CEO’s Statement
Chief Financial Officer’s Report
Principal Risks and Uncertainties
Shareholder engagement
CORPORATE GOVERNANCE
Board of Directors
Corporate Governance Statement
Group Directors Report
FINANCIAL STATEMENTS
Independent Auditor’s Report
Consolidated Statement of Comprehensive Income
Consolidated Statement of Financial Position
Company Statement of Financial Position
Consolidated Statement of Changes in Equity
Company Statement of Changes in Equity
Consolidated and Company Statement of Cash Flows
Notes to the Financial Statements
Company Information
01
02
03
05
08
10
18
21
22
27
32
37
38
39
40
41
42
43
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i-nexus Global plc
Strategy Execution Software
Annual Report and Accounts 2020
Setting the standard for Strategy Execution
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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