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i-nexus Global plc
Strategy Execution Software
Annual Report and Accounts 2021
Setting the standard for Strategy Execution
Welcome to our 2021 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
2021 Highlights
Company Overview
Chairman’s Statement
CEO’s Statement
Chief Financial Officer’s Report
Principal Risks and Uncertainties
Stakeholder engagement
CORPORATE GOVERNANCE
Board of Directors
Corporate Governance Statement
Group Directors’ Report
FINANCIAL STATEMENTS
Independent Auditor’s Report
Group Statement of Comprehensive Income
Group Statement of Financial Position
Company Statement of Financial Position
Group Statement of Changes in Equity
Company Statement of Changes in Equity
Group Statement of Cash Flows
Notes to the Statement of Cash Flows
Notes to the Group Financial Statements
Company Information
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02
03
05
08
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22
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74
i-nexus Global plc
2021 Highlights:
01
Continued to respond to the ongoing Covid pandemic
• Despite the ongoing impact on enterprise software budgets, we were successful in closing four new deals
across the year with three being in the last quarter
• Proliferation results at our customers have been disappointing compared to previous years, but there have
been early signs of positivity in this area more recently
• We continued to review our cost base; we are lean, but we continue to deliver great value to our customers,
further develop our world class platform and drive a developing pipe
• Financial position of the company secured for the near term by the £1.975m of Convertible Loan notes
subscribed for during the year by shareholders
Focussed efforts on the Go to Market strategy
• Sales & Product worked in unison to demonstrate our ability to regularly and in a simplified manner deliver
“test drives”, managed trials and pilots during the sales cycle
• After our experiences in FY20 we reviewed our sales strategy and refined it, with laser focussed qualification
being key to reliable delivery of deals
• Marketing initiatives started to bear fruit as we saw the highest historical results in terms of engagement,
reach and therefore leads; confirming our ability to rebuild our prospect pipeline
• We saw our profile on the G2 platform in the category “Strategic Planning Software” increase dramatically;
validating the quality of our product, services and support
• G2 also provides evidence of the development of the Strategy Execution market with hits increasing by
71% to 10,600
Sales momentum emerged in Q4 and is continuing in FY22
• At the time of writing this report we have closed six recurring revenue deals in six months; validating our
ability to win new business
• This is the longest period on record of regular deal delivery
• Our average deal size is increasing to better levels
• We now have clear predictable conversion rates of leads into deals
After another tough year we have emerged in a strong position and ready to deliver double digit net Monthly
Recurring Revenue (MRR) growth in FY22.
Consolidated Financial Statements for the year ended 30 September 2021
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02
STRATEGIC REPORT:
Company Overview
i-nexus helps organisations achieve their goals. Whether executing a strategy, driving
operational excellence and continuous performance improvement, or coordinating portfolios
and programs to transform results, i-nexus strategy execution software underpins success.
Our Vision
How We Solve It
How The Software Works
To transform how organisations
execute plans with software that cuts
complexity, drives delivery, and
empowers everyone’s success.
As a G2 award-winning Strategy
Execution software provider, i-nexus is
the hub of all the plans, work and
reviews critical to delivering success.
Our vision is built on three key
principles:
Our software helps businesses
achieve their goals in two core areas:
• Taking ownership: our industry
• Strategy Execution, covering
reputation, expertise and leading
software keep us at the forefront of
innovation in the Strategy Execution
Management (SEM) and Strategic
Portfolio Management (SPM)
markets.
• Guiding the journey: our G2 award-
winning team guide customers
through the unique challenges of
executing strategy, achieving
operational excellence, and
coordinating portfolios and
programs.
• Enabling real change: our approach
helps customers deliver real-world
business change.
The Problem We Solve
Getting everyone focused and
collaborating on delivering strategy is
daunting. With 61% of organisations
failing to connect strategy to
execution, the size of the problem is
significant. Connecting the dots –
plans, portfolios, processes, and
teams – is the remedy to the obstacles
of change and distractions.
When obstacles grow, so do the
chances of failure. Failure to plan and
communicate clear goals creates
confusion. Failure to turn plans into
action, and execute effectively, slows
delivery. Failure to track delivery
makes it near-impossible to fine-tune
and, ultimately, cause results to fade.
i-nexus Global plc
i-nexus Global plc
methodologies such as Hoshin
Kanri and Balanced Scorecard to
deliver on ESG and M&A goals,
Revenue, Cost, CAPEX, and Digital
Transformation programs, and
support Private Equity companies
manage their portfolio companies.
• Operational Excellence, covering
approaches such as Kaizen, Lean,
Six Sigma, and Project Management
to help with improving processes,
eliminating waste in the pursuit of
continuous improvement, driving
compliance, minimising risks, and
promoting better levels of
governance.
We offer more than software. 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
recognise that digitalising their
approach to delivering goals is the
best way to take their results to the
next level. i-nexus leads that future.
i-nexus transforms how organisations
plan, execute, and track goals.
We inspire the confidence to leave
behind the spreadsheets,
presentations and reports those
organisations rely on, replacing it with
a cloud-based, collaborative solution.
i-nexus contains three core tool
groups:
• Plan, covering tools such as the
X-Matrix, strategic portfolios,
scenario planning, and objective
setting to coherently plan and
deploy goals across the
organisation and roll them back
into strategy.
• Execute, covering tools such as
templates and workflows, project
management, program
management, and idea
management, to execute plans,
while navigating risks, resources,
and roadblocks, according to the
organisation’s processes and
practices.
• Track, covering tools such as
operational scorecards, metric
journals, KPI Bowling Charts,
automated reporting, and benefits
and financial impact visuals to track
delivery and bring i-nexus into
performance reviews, letting data
drive decisions.
With i-nexus providing the tools to
underpin the end to end delivery of
goals, our customers are set to deliver
results like never before – because we
have the solution for their challenges
today, tomorrow, and beyond.
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
03
STRATEGIC REPORT:
Chairman’s Statement
“We remain confident that the market we address is
emerging and that i-nexus is a leading automation
product enabling enterprises to deploy strategy
more efficiently. We are also confident that we are
running as lean a cost base as manageable in
challenging times, that we have the appropriate and
committed management team and that our core
market is undoubtedly growing.”
For many businesses 2020/21
remained challenging due to
economic and commercial uncertainty
coupled with all the ongoing
disruption caused by the global
pandemic. Of course, certain
businesses were in the right markets
to benefit from the unprecedented
demands created by this environment,
whilst others were on the wrong side
of the “must have/like to have”
decision process. However, while in
FY20 we saw many large businesses
retract from longer term decision
making on procuring discretionary
enterprise software purchases, during
FY21 we saw a distinct change in
behaviour from our existing and
potential customers as they returned
to addressing the fundamental
challenge of increasing longer term
productivity.
Critical to addressing this challenge is
how enterprises deploy their strategy.
Having agreed strategic goals, their
attention turns to critical questions
about how they set the goals across
large and complex businesses, how
they measure whether or not they are
on track to achieve those goals and
finally what to do to course correct if
they are not on target. As a Board we
are confident that the challenge which
i-nexus addresses, the automation of
Strategy Execution and Operational
Excellence, is one which all businesses
face, and more and more will seek to
address over the coming years. We
remain confident that we have an
extremely capable solution as
demonstrated by the quality of the
customers which we currently serve
and those with which we are
currently negotiating.
i-nexus Global plc went into the
FY20 downturn in a particularly weak
position, both from a cash and from a
sales perspective, but crucially we
were supported at this critical time by
our major shareholders. We
demonstrated to those shareholders
the inherent value in this business in
terms of the technology we have
developed, the customers who have
deployed it and the new customers
who have signed contracts or are
currently in our pipeline. We all
acknowledge that there was, and
continues to be, considerable
uncertainty about the speed at which
the market for Strategy Execution
software develops but are confident
that there is a significant market to
address and that such deployments
go to the heart of how businesses
operate. We remained ‘hunkered
down’ during FY21, keeping costs to a
minimum, successfully rebuilding our
sales pipeline, continuing to service
our existing customers, signing new
ones and continuing on a more
limited basis to develop our
technology. Preservation of cash until
such time as we can see a clear,
sustainable improvement in sales and
revenues, remained our number one
priority and remains so.
Although we successfully signed a
number of new customers during
FY21 we were hit by higher levels of
churn amongst some of our existing
customers than we were anticipating.
The principal drivers for this churn
were M&A activity and customers who
found themselves in particularly
hard-hit industries. In retrospect, given
the considerable M&A activity
Consolidated Financial Statements for the year ended 30 September 2021
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04
STRATEGIC REPORT:
Chairman’s Statement continued
Finally, I would like, once again, to
thank our management team and
employees for their dedication and
commitment during these challenging
times. I would also like to take this
opportunity to thank all shareholders
who have continued to support the
business and in particular those who
subscribed for additional Loan Notes
during the most challenging of times.
They have given the business the
opportunity to continue to pursue the
growth in new and existing customers
and ultimately the financial results the
management team work unstintingly
to achieve.
Richard Cunningham
Chairman
26 January 2022
amongst our customers, such events
are not entirely unexpected. We have
continued to support such customers
in a totally professional manner and
one in particular, having been
acquired, has already started a new
pilot to deploy i-nexus across the new
merged entity. The result of this higher
than anticipated churn was a tighter
than anticipated cash position which
was once again supported by our
shareholders.
We remain confident that the market
we address is emerging and that
i-nexus is a leading automation
product enabling businesses to deploy
strategy more efficiently. We are also
confident that we are running as lean
a cost base as manageable in
challenging times, that we have the
appropriate and committed
management team and that our core
market is undoubtedly growing.
Although we believe that the stock
market currently undervalues the
business on any comparable metric,
we recognise that the management of
the business must demonstrate to
investors that i-nexus has the exciting
potential we can see and that we as a
team can realise the results we
envisage. Whilst we do so, we will
manage our cash resources as
effectively as possible, continue to
develop one of the best platforms
available to enable the automation of
business improvement and strategy
deployment and continue to drive our
exciting sales pipeline as hard as our
resources permit.
i-nexus Global plc
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
05
STRATEGIC REPORT:
CEO’s Statement
“The changes brought by the pandemic have
highlighted the need for scalable, robust, digital
Strategy Execution tools and the market for our
software is growing. We are confident we are well
positioned, with a differentiated offering, to play a
leadership role in this maturing market and are
focused on delivering a year of growth.”
Overview
We have emerged as a stronger
business as a result of the commercial
and operational challenges of FY21.
After the major milestone in FY20 of
deploying an upgraded version of
i-nexus with a new modern interface
across all our customers, which has
deepened our understanding of
our customers’ needs, we are
generating the highest number of
new sales leads per month, on average
one new demo request is arriving per
working day and the start of a stable
cadence of new contract wins is now
visible. We are now moving into what
I expect to be an exciting phase in
i-nexus’ history.
Our shareholders were an invaluable
support during the challenges of FY21
and have provided the means for us to
get back on a growth trajectory.
I would like to add my thanks for that
to those expressed by our Chairman.
Trading
The substantial challenges posed by
the pandemic continued in the year,
but the ongoing investments made in
our products and the changes to our
Go To Market (“GTM”) strategy started
to deliver an increase in new customer
win rate in Q4, increased industry
recognition and a growing confidence
across the business as we head
into FY22. The efforts we have made
in cash conservation and the uplift in
revenues meant we traded on an
EBITDA positive footing (adjusted for
non-underlying items) for the last
three months of the year, with a visible
cash runway.
The fundraising gave us much needed
working capital. We remain conscious
of the challenges that still lie ahead, but
we are passionate about continuing to
deliver on our growth strategy in the
coming year while carefully managing
our cash resources to ensure the long-
term future of the business.
Market opportunity
All businesses set goals, plan how to
deliver them and track performance.
The challenge is if they can do this at
pace, with insight and high levels of
visibility across their complex
operating environment. In most cases
the answer to this is no and this is
where i-nexus’ software delivers
considerable value. While the last
18 months has been painful for many,
it brought into focus the importance
of strategy being up to date, all in one
place and at the fingertips of those
driving a business forward and most
importantly, remotely and digitally
accessible. This, we believe, will see
the momentum we have seen in
recent months continue and grow in
the coming year.
Sales & Marketing activity
Since the launch of our next generation
platform, i-nexus Workbench last year,
we are encouraged by the exceptionally
positive response from existing
customers and the high level of interest
from new prospects. The flexibility and
usability of the platform has enabled us
to implement live trials and “test drives”
for prospects for the first time,
enabling high levels of engagement
where prospects can see their own
data in the system, providing a
powerful proof of the ROI which can be
delivered.
The success of these trials and test
drives can be seen in the uplift in
customer win rate in Q4 and into the
Consolidated Financial Statements for the year ended 30 September 2021
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06
STRATEGIC REPORT:
CEO’s Statement continued
new financial year, with five trials
converted into annual contracts since
July 2021 – an encouraging run rate of
new business not experienced for
some time.
The four new customers signed in the
year were a major domestic appliance
manufacturer, the first of six portfolio
companies of a US-based Private Equity
business, with further companies in
their portfolio now evaluating the
platform, a European pharmaceutical
organisation and a European
automotive technology company.
Subsequent to the year end, we have
signed one further contract with the
second of the portfolio companies
mentioned above with further deals
progressing through contracting.
We currently have several further live
trial implementations at multiple
enterprises across the US, UK and
Europe and a paid Pilot with a major
technology company. We continue to
see an uplift in new business enquiries
as a result of our targeted marketing
activities but are mindful that the
economic backdrop remains
uncertain.
Existing account activity
Typically, our software is initially
utilised within one division of our
customers, or one geography, with
considerable scope for further
expansion. However, within the year,
we saw lower levels of customer
expansion deals than previously with
only two notable additions, a cross sell
at an existing account to a new
geography, Singapore and the
conclusion of an enterprise deal with a
major technology company whereby
their MRR will ramp across the next
3-5 years. Despite these two increases
success elsewhere was limited with
COVID-19 continuing to impact
enterprise software budgets. We have
seen some improvement post year
end and anticipate a higher level of
customer expansion deals in FY22.
Marketing
We have seen a considerably higher
level of new business enquiries as we
progressed through the year, reflecting
both the improving business landscape
and our inclusion on G2, the world’s
largest online technology marketplace
within the best “Strategic Planning
Software” category. Having not
appeared in this list previously, we now
consistently rank highly, having received
42 reviews and three awards. Year on
year the result is encouraging with new
contacts nearly twice last year’s
average, content download 1.5 times
i-nexus Global plc
those on average a year ago and both
returning contacts and returning web
visits at least five times those a year
ago. All of this activity has seen our rate
of leads and, importantly, demo
requests increase.
Our focus for the year ahead will be to
convert this increase in marketing
reach, maintain this consistency in the
rate of new customer acquisition,
expanding with our existing customers
and delivering net customer growth.
Business structure
The business comprises four core
teams: GTM, (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. A key feature of the
change in the GTM approach has
been to utilise domain experts, with
an in-depth knowledge of i-nexus,
throughout the sales cycle. This has
enabled a far greater level of
interaction with the prospects team as
peers. In addition, we have also
adopted a similar approach in
customer success, whereby our
Solution Consultants are acting as
success managers for our accounts.
Both these changes are delivering
positive results.
As with many software companies, we
are an agile business and well-equipped
to facilitate remote working. Our staff
continue to work successfully from
home, with no disruption to the Group's
continuity of service and indeed some
benefits of the greater ease of
collaboration. We took the decision in
the year not to renew the lease on our
Coventry HQ. We require a more flexible
workspace for the future as lockdown
restrictions lift and resource planning
can become more definitive.
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
07
Innovation
Evolving market
Our software category – Strategy
Execution Management (SEM) –
continues to evolve and gain
momentum as companies accelerate
digitising mission-critical processes in
this post pandemic world. Faced with
market uncertainty, this “new normal”
future requires companies to increase
responsiveness by dynamically
managing their strategic plan;
something that we believe simply
cannot be achieved in spreadsheets
and other conventional productivity
tools.
The growing importance of the
SEM market has been acknowledged
by leading analysts including Gartner
Research, with SEM now considered
an integral part of the new Strategy
Portfolio Management (SPM) software
category.
Competition
Our competitive landscape has shifted
accordingly. Falling under Strategy
Portfolio Management (SPM) from an
analyst perspective, has had two
effects. It has both distanced us from
many previous SEM competitors but
also introduced new SPM competitors.
Against remaining SEM vendors,
i-nexus is differentiated in both its
depth of capabilities and its ability to
support larger deployments where
stringent IT requirements – including
data security – must be met and
flexibility in configuration is needed.
Those capabilities include the X-Matrix
interactive planning tool used by
multiple Strategy Execution
methodologies including Hoshin Kanri.
i-nexus has two clear advantages in
Strategy Execution against SPM
vendors: powerful strategic planning
and performance management
capabilities that complement portfolio
management features. Plus, i-nexus’
customers benefit from experience
gained from over 15 years of market
experience in Strategy Execution.
Customer priorities
The past twelve months have seen the
emergence of two clear trends in
customer priorities. The first is around
the governance of strategic data.
Responding to changing market
conditions requires real-time strategic
insight that depends ultimately on
quality data. Customers increasingly
rely on i-nexus to centralise and
manage this data, and furthermore
present executives with visualisation
and reporting on strategic health.
The second noticeable trend is
growing interest in rethinking the
traditional annual strategic planning
process, applying agile principles to
strategic planning and delivery.
Approaching Strategy Execution in a
more incremental way enables
customers to regularly assess not just
progress toward the strategic plan but
also any internal and external factors
that might warrant strategic course
correction.
In the year ahead we will continue to
evaluate our product market fit and
deliver those enhancements that
respond to the market needs,
especially those resulting from a
greater extent of virtual operations.
Partners
While we secured one new customer
at the start of the year via a partner,
our consulting partners largely
continued to be impacted by
COVID-19, seeing their own pipelines
slow down and facing substantial
uncertainty, we therefore have
reduced our focus on this area for the
time-being.
People
Once again, I would like to thank our
amazing team personally and on
behalf of the Board. We are incredibly
lucky with the talent and commitment
of the team that we have at i-nexus.
This has not been an easy year, but
everyone has worked incredibly hard
to make it a success and I am
delighted for all of us that we are now
starting to see the fruits of those
labours.
Current Trading and Outlook
We exited the year with a Monthly
Recurring Revenue (“MRR”) rate of
£235k and we continue to trade on a
monthly EBITDA positive basis.
Importantly, we have seen levels of
non-renewing customers reduce
considerably over the last five months
and we do not expect to see a repeat
of the rates seen last year.
Our sales pipeline continues to develop
with solid new opportunities being
created monthly and we have seen a
general shortening of sales cycles,
reflecting in our improved conversion
metrics. We therefore enter the next
financial year with a greater level of
optimism.
The changes brought by the pandemic
have highlighted the need for scalable,
robust, digital Strategy Execution tools
and the market for our software is
growing. We are confident we are well
positioned, with a differentiated
offering, to play a leadership role in
this maturing market and are focused
on delivering a year of growth.
Simon Crowther
Chief Executive Officer
26 January 2022
Consolidated Financial Statements for the year ended 30 September 2021
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08
STRATEGIC REPORT:
Chief Financial Officer’s Report
“With the pattern of deal flow we are experiencing
currently we expect to be self-sufficient in working
capital terms in FY22 and can therefore start a
prudent series of investments in resources to help us
accelerate our growth.”
Reported Revenue
Revenue reduced to £3.6m (FY20:
£4.1m) as the COVID-19 pandemic
continued to affect our rate of new
deal conversion and professional
services billing until the last quarter of
the year. The Group signed four new
customers, three in the last quarter
(FY20: two), all under recurring
contracts of more than one year in
length, paid in advance annually.
Upsells and cross sells in our existing
accounts were lower than previous
years, adding £10k Monthly Recurring
Revenue (“MRR”) in the year
(FY20: £40k). At the same time we
experienced exceptional levels of
non-renewing contracts, some of
which were a direct result of COVID-19,
and we exited FY21 with closing MRR
of £235k (FY20 exit MRR: £305k).
Revenue from recurring contracted
software subscriptions was £3.3m
(FY20: £3.7m), this reduction reflecting
the low levels of new MRR generated
from sales and the high level of non-
renewing contracts. Revenue from
associated professional services was
£0.3m (FY20: £0.3m). We had
expected some resurgence in our
services billing closer to levels seen
historically, but this did not materialise
during the earlier part of the year. This
is also showing signs of improvement
in the last three months of the year
with billing in this area reaching an
average of £29k per month from an
average of just £5k per month from
December 2020 to May 2021.
Gross Margin
Gross margin in the year was £3.0m,
or 83% (FY20: £3.0m, or 73%) after
accounting for commission payable to
the Group’s business partners. This
improvement is a demonstration of
how well the team have responded to
the pressures on the business in the
past twelve months.
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
i-nexus Global plc
intangible assets, and share based
payment charges) reduced by 27% in
the year to £3.9m (FY20: £5.31m). This
cost saving was a combination of a full
year of reduced headcount, continuing
to utilise the Government Furlough
scheme, albeit at a much lower rate,
not renewing the Lease on the
Coventry office and other savings
related to software use and other
general overheads savings. Included in
overheads was £0.04m (FY20: £0.2m)
of non-recurring administrative
expenses as a result of the
redundancies. Our monthly run rate of
total costs, both cost of sales and
overheads dropped by approximately
£100k in the year to close at
approximately £270k. Interest expense
at £156k is up on the previous year by
£102k as the recognition of rolled-up
interest expense on the first tranche of
convertible loan notes commenced.
Cash interest paid dropped from £40k
to £22k as the historical venture debt
continues to be paid down.
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
09
Adjusted EBITDA and net loss
for the year
Our focus for the year was to remain
as close to EBITDA breakeven as we
could to conserve cash. These efforts
were rewarded by the final quarter as
we traded profitably at EBITDA level
(adjusted for non-underlying items) for
the last three months and are
continuing to do so in the new
financial year. Adjusted EBITDA
(EBITDA before Depreciation,
amortisation, impairment and loss on
disposal of assets, Share based
payments and non-underlying items)
was a loss of just £0.3m as a result
(FY20: loss £1.8m).
Group loss before taxation reduced to
£1.1m (FY20: £2.4m), a result that
reflects the cost reductions made.
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.
These investments will only be made
as net new MRR increases thus
releasing cash to enable them.
Cash Flow
The Group has cash & cash equivalents
at the period end of £0.58m (FY20:
£0.12m). The Group’s cash position
was enhanced during the year with
successful fund raises to secure
£1.975m as a result of the issue of
Fixed Rate Unsecured Convertible
Redeemable Loan Notes.
Gross debt at 30 September 2021 was
£1.90m (FY20: £0.24m), of which
£0.07m (FY20: £0.18m) was payable
within one year.
£1.0m (FY20: £0.5m). This net outflow
was largely the result of the
repayment of HMRC deferrals and
other accumulated creditor balances
resulting from our pressured cash
position towards the end of last year.
The Group had a cash inflow of £1.8m
(FY20: outflow of £0.2m) from
financing activities.
The funds raised during the year
provide additional working capital to
facilitate the continued
implementation of the Group’s plans
and will be applied entirely towards
meeting the Group’s ongoing working
capital requirements. With the pattern
of deal flow we are experiencing we
expect to be self-sufficient in working
capital terms in FY22 and can
therefore start a prudent series of
investments in resources to help us
accelerate our growth.
Careful cash management will
continue to be a priority focus for the
Board. 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.
The Group prepares budgets,
cashflow forecasts and undertakes
scenario planning to ensure that the
Group can meet its liabilities as they
fall due. As was the case last year 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 may continue to cause sales
cycles to extend and make it difficult
to forecast future sales.
The Group experienced a reduced
outflow of funds from operating
activities of £0.5m (FY20: £2.0m) and a
net outflow from operating activities of
The Board’s assessment in relation to
going concern is included in Note 1.4
of the financial statements. The
Group’s principal risks and
uncertainties are set out in the
Strategic Report.
Capital expenditure
The Group operates an asset light
strategy and has low capital
expenditure requirements, therefore
expenditure on tangible fixed assets is
very low at less than 1% of revenue
(FY20: 3%). The main area of
capitalisation is the development of
the Group’s product software which
amounted to £0.3m in the year
(FY20: £0.6m).
The Group reviews the carrying
amounts of its intangible assets to
determine whether there is any
indication that those assets have
suffered an impairment loss. This is
reflective of the continual evolution of
the market in which the Group
operates and the needs of its
customers, both present and
prospective, and the Group’s agile
approach to continually developing
and improving its offering.
By necessity, this may mean that
expenditure on intangible assets
meeting the recognition criteria may
later become impaired. As a result of
this review we determined an
impairment of £0.29m was necessary
in the year (FY20: £0.11m).
Our development capacity is
contributing to the marketability of the
Group’s products, the product launch
last August is proving to be
strategically important to us as the
success of trials and pilots is
becoming evident.
Alyson Levett
Chief Financial Officer
26 January 2022
Consolidated Financial Statements for the year ended 30 September 2021
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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 issues in November
2020 and more recently in September
2021, will provide the necessary flexibility
to satisfy the Group’s near-term funding
requirements, there can be no guarantee
as to the Group’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 Group’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
Group 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
Group’s long term
working capital.
i-nexus Global plc
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
11
Risk
Description
Mitigation
In addressing the impact of the
COVID-19 Pandemic on its markets and
its customers, the Group has continued
taking action to reduce its operating cost
base in cash terms. 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 £270,000.
The Group have identified further
actions that can be taken to reduce its
cost base further should this prove
necessary.
The Board monitors and manages these
strategies against market conditions,
monthly performance against budget
and cash available.
COVID-19 Pandemic
The ongoing impact of
the Pandemic cannot be
predicted.
Implementation of
Growth Strategy
Failure to successfully
implement its growth
strategies.
The COVID-19 Pandemic has affected
the performance of the business of the
Group. As at the date of this document,
given the nature of the crisis, where new
variants are emerging and infection rates
are increasing, the Group is not aware of
the full extent of the effects of the
COVID-19 Pandemic for the near and
medium term.
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 Group’s strategic and operational
changes introduced to date will be
successful under current or future
market conditions.
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.
Consolidated Financial Statements for the year ended 30 September 2021
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STRATEGIC REPORT:
Principal Risks and Uncertainties continued
Risk
Description
Mitigation
The Group has internal sales and
marketing functions, which are also
supported by an important network of
consulting partners, that work with
potential customers to educate on the
benefits the product can offer an
organisation.
Furthermore the impact of COVID-19 is
making the need to digitise strategy
more widely accepted.
The Group has a number of Success
managers. This team’s efforts at growing
our existing accounts has been assisted
by the recent product enhancements
aimed at improving user experience.
Feedback has been excellent, highlighted
in the number of positive reviews on the
G2 platform discussed elsewhere in this
report. The Board continue to monitor
the efficacy and outcomes of the
Group’s efforts in cross-selling and
upselling.
Renewed efforts in relation to the
evolution of this strategic theme will take
place in 2022 as investment in resource
is unlocked by growth. The Board will
closely monitor progress.
Digitising Strategy
Execution
Failure of the market to
accept the need/urgency
to digitise their Strategy
Execution (SE).
Account Proliferation
Failure of our existing
accounts to grow,
resulting from
dissatisfaction with the
product and/or
deployment issues.
Dependence on
Channel Partners
Failure to develop this
additional route to
market effectively.
i-nexus Global plc
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 digitising 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.
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.
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STRATEGIC REPORT
CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
13
Risk
Description
Mitigation
Dependence on key
Customers
Failure to retain our
larger key customers.
Software Reliability
Undetected defects in
the software provided by
the Group.
Software Applicability
The i-nexus software may
not perform as expected
or meet customers’
changing expectations
quickly enough.
A small group of key customers provide
nearly half of the Group’s MRR. One of
the Group’s key customers represents
approximately 19 per cent of current
MRR. 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.
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.
As previously reported The Group has a
dedicated team of long standing
experienced professionals acting as
Success managers. They have well
established processes and reporting
that allow them to get early warning of
any issues. In addition, a substantial
proportion of our remaining customer
base in value terms have either
renewed, are renewing or are on long
term contracts, giving us comfort over
the security of the bulk of our base.
Whilst this cannot guarantee renewal of
all other customers in the face of
disruptive external factors we can't
foresee or manage, risk is expected to
be lower this year than last.
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.
The Board feels that recent
enhancements along with the Group’s
product strategy and R&D focus has
de-risked this area. The Board monitors
user satisfaction and the extent to which
the software continues to meet
customer expectation through various
channels, including on the G2 platform.
Consolidated Financial Statements for the year ended 30 September 2021
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14
STRATEGIC REPORT:
Principal Risks and Uncertainties continued
Risk
Description
Mitigation
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, activity on
the G2 platform we are part of and
Gartner and Forrester interactions that
the Strategy Execution Management
market is evolving. The Board continues
to monitor market evolution and the
Group's response to this.
The Group invests in R&D and product
development to ensure that the product
remains market leading. The Go to
Market team is responsible for making
substantial improvements in our online
presence in particular our progress on
the G2 platform and this gives the Board
comfort that the marketing strategy will
help maintain our competitive position
in an evolving market.
Market Growth
Failure of Strategy
Execution market to grow
at the rate expected.
Competitors
The Group may face
competition in a rapidly
evolving market.
The Board 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
Group in the future.
i-nexus Global plc
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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 and
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 2021
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16
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. Whilst,
therefore, the Group's customers have
naturally limited discretionary spend
during the pandemic, there has not
been a significant impact on their
creditworthiness. In addition the
majority of the Group’s 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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STRATEGIC REPORT
CORPORATE GOVERNANCE
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 2021
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STRATEGIC REPORT:
Stakeholder 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, services and software.
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 uses Amazon Web Services, as they are committed to running the 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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STRATEGIC REPORT
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
Shareholders,
Employees,
Customers, Suppliers,
Environment
In October 2021, the Board approved the Budget for FY 22
which incorporated a net growth target that is reasonable
and achievable
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 group’s ongoing response to the Covid 19
pandemic. Alongside tactical decisions on not renewing the
Coventry offices lease, redundancies, furlough and cost
cutting, strategic funding options were a theme of every
Board meeting.
Financing and capital
spend
The Board approves the extent of the investment being
made in the i-nexus product.
Shareholders,
Employees
As a result of both the weaker sales experienced in the last
two years, which left the Group with reduced working capital,
strategic options for additional financing have been explored
and have resulted in the successful completion of the
Convertible Bond issue in both November 2020 and
September 2021.
Consolidated Financial Statements for the year ended 30 September 2021
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STRATEGIC REPORT:
Stakeholder 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 Group’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. This process resulted in the issue of 2,668,738
options to Directors and employees (see page 28 and note 29).
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 Group’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
Group announcements) are available to all shareholders,
investors and the public on the Group’s
website www.i-nexus.com/investor-center
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.
By Order of the Board
Alyson Levett
Director
26 January 2022
i-nexus Global plc
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CORPORATE GOVERNANCE
FINANCIAL STATEMENTS
21
CORPORATE GOVERNANCE:
Board of Directors
Richard Cunningham, Non-Executive Chairman
Richard Cunningham is a technology entrepreneur who has built and sold a number of
businesses and who has extensive experience in equity research, financial analysis and
corporate finance, focusing on technology companies. He built one of the UK’s leading
independent corporate telecommunications service providers, Project Telecom Plc, before
listing it on the London Stock Exchange and eventually selling it to Vodafone. Richard also
founded Octium Ltd to “buy and build” a digital connectivity and applications business, which
was exited successfully through a sale to MDNX. He is currently Chairman of two private
technology businesses, CommonTime Ltd and Viewber Ltd. Richard also sits on the investment
committee of Herald Ventures, the venture capital business of Herald Investment Management.
Simon Crowther, Chief Executive Officer
Simon Crowther joined the Group as Software Development Manager in 2006 and has worked
within every key area of the business prior to becoming COO in 2013 and led a process of
change and refocus of the business since becoming CEO in 2016. Simon has a background in
software development, having also spent almost three years at Intascape (a division of See
Tickets) as a senior software architect. He has two masters degrees from Birmingham
University: one in mathematics and the second in computer science.
Alyson Levett, Chief Financial Officer
Alyson Levett joined the Group as Finance Director in 2012, assuming a strategic role and day-to-
day responsibility for planning, implementing, managing and controlling all finance related
activity. Alyson has an extensive background in finance, including as Finance Director of Griffin
Internet prior to its acquisition by MDNX in 2012. She is a Non-Executive Director of AMTE Power
plc and chairs their Audit Committee. She has a masters degree in economics from Cambridge
University and is a qualified Chartered Accountant.
David Firth, Independent Non-Executive Director
David was appointed an independent Non-Executive Director of the Group in February 2021.
He is the non-executive chairman of Best of the Best Plc, an organiser of weekly competitions
to win cars and other luxury prizes. David is also a Non-Executive director of Parity Group Plc,
an IT services and consultancy business, and Summerway Capital PLC, an AIM investing
company focused on investment and acquisition opportunities across the healthcare and
pharmaceutical sectors, and is chairman of the remuneration and audit committees at both
companies. Previously he was the Finance Director of Penna Consulting plc from 1999 to
2016. David is a Chartered Accountant and has held a number of board positions in public
companies over the past 30 years across various sectors including HR consultancy and
recruitment, IT services, financial markets, motor retailing and advertising.
Consolidated Financial Statements for the year ended 30 September 2021
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CORPORATE GOVERNANCE:
Corporate Governance Statement
Chairman’s Introductory Statement on Corporate Governance
As the Chairman of the Board I must 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 Group and for setting and
approving the business strategy and its subsequent execution.
I believe our culture is consistent with the Group’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 ethos and eventual success and we have in place a strong
and effective governance framework and associated practices to ensure that the highest standards are applied throughout
the Group in a consistent manner leading to the right behaviours across it. 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. All AIM companies are
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’s Statement and Stakeholder Engagement section of the Strategic Report.
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 as required, 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 Group engages with its shareholders through its 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 Group focuses on building strong and sustainable relationships with a range of different stakeholders in
order to support the long-term success of the Group. Details on this are included in the section Stakeholder Engagement
in the Strategic report above on pages 18 to 20.
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23
4. Risk Management
The Group 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 17. The Board has overall responsibility for the Group’s system of internal control and for reviewing its
effectiveness. The processes to identify and manage the key risks of the Group 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 21. The Board has determined David Firth 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 Group. 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 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.
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 Group has no pre-defined set of values formally documented, however the Group expects the following behaviours
and attitudes to be representative of its employees; Ego-less, customer centric, high integrity, respectful, supportive, caring,
professional, quality driven, passionate, think for themselves.
Consolidated Financial Statements for the year ended 30 September 2021
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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 Group’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 Group have been assessed by the Board and
are considered appropriate for the size, complexity and risk profile of the Group. This will be reviewed by the Board to
ensure governance arrangements continue to be appropriate as the Group changes over time. There is a formal schedule
of matters reserved for the decision of the Board that covers the key areas of the Group’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.
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 2021, 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 Group 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
Group, 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 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.
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
David Firth 12/12 2/2 3/3
Simon Crowther 12/12
Alyson Levett 12/12
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FINANCIAL STATEMENTS
25
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 Group’s business. The Board believes that a
well-designed system of internal reporting and control is necessary. The Board has overall responsibility to develop and
strengthen internal controls as required. The Audit Committee, on behalf of the Board, has the responsibility for reviewing
internal controls. The system is designed to provide reasonable, but not absolute, assurance that the assets of the Group
are safeguarded, that proper accounting records are maintained, and that reliable financial information is produced.
Audit Committee
The Audit Committee has responsibility for monitoring the integrity of the Group’s financial statements, reviewing significant
financial reporting issues, reviewing the effectiveness of the Group’s internal control and risk management systems,
assessing the need for internal audit and overseeing the relationship with the external auditor, including advising on their
appointment, reviewing the scope of their audit and their fees and ensuring their independence.
The Audit Committee comprises the Non-Executive Directors. David Firth 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 Group’s policies
and procedures and applicable accounting standards and legislation. Topics discussed included the Group’s management
of risks related to COVID-19, compliance with accounting standards on software revenue recognition and capitalisation of
software development costs, management estimates, compound instruments 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.
The Committee reviewed the effectiveness of the Group’s internal controls, including enquiry of the Independent Auditor
and concluded that they were appropriate for a business of the size, scale and complexity of i-nexus. The Committee also
determined that a separate internal audit function was not required during the year, but this decision will be kept under
review.
The independence and objectivity of the Independent Auditor were considered and found to be satisfactory.
Consolidated Financial Statements for the year ended 30 September 2021
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26
CORPORATE GOVERNANCE:
Corporate Governance Statement continued
Independence and objectivity
The Committee has a policy prohibiting 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, and the production of the
Financial Statements, the Board and Committee are satisfied by these safeguards.
The Committee also received confirmation from Saffery Champness LLP that there are no relationships between the Group
and Saffery Champness that may have a bearing on its independence.
Further details of the audit fees paid, to Saffery Champness LLP for the 2021 and 2020 financial years can be found in note
8 to the financial statements. To comply with the FRC Revised Ethical Standards 2019 Saffery Champness LLP did not
undertake any non-audit services in FY21. Those relating to the Group's Tax services, specifically those relating to the 2021
Tax compliance and advisory services were provided by Garbutt & Elliot.
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 David Firth. 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 2021
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 2021.
Directors
The Directors who served on the Board during the year and to the date of this report are as follows:
Richard Cunningham
David Firth (appointed 18 February 2021)
Simon Crowther
Alyson Levett
Nigel Halkes (resigned 31 March 2021)
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 and for the maintenance and
integrity of the corporate and financial information included in the Group’s website.
Matters covered in the Strategic Report
Details of the likely future developments and activities in the field of research and development are not disclosed in the
Directors' Report, as under s414C(11) they are instead considered to be of strategic importance and are covered in the
Strategic Report.
Further details on the Group's policies on financial risk management are disclosed in note 22 to the financial statements.
Consolidated Financial Statements for the year ended 30 September 2021
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CORPORATE GOVERNANCE:
Group Directors’ Report continued
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
Group without paying more than necessary. The remuneration policy bears in mind the Group’s appetite for risk and is
aligned to the Group’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 Group.
Base Salary Review
Having taken external advice the Remuneration Committee developed its 2021 remuneration proposals based on what the
Remuneration Committee believe to be appropriate remuneration levels for the Group 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. 2,668,738 options
were granted under the plans in 2021 including 1,270,578 to Directors as announced in an RNS on this subject on
29 January 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 2021 and 2020 was as follows
2021
2020
Total cash
Total cash
& cash
& cash
Benefits equivalent
equivalent
Salary in Kind Pension remuneration remuneration
£‘000’s
Director £‘000’s £‘000’s £‘000’s £‘000’s
Mr S Crowther 173 – 8 181
Ms A Levett 137 – 7 144
Mr R Cunningham 48 – 1 49
Mr D Firth (appointed 18 February 2021) 18 – – 18
Mr N Halkes (resigned 31 March 2021) 20 – – 20
Total 396 – 16 412
170
131
25
–
35
361
During the year to 30 September 2020 the Directors opted to take a reduced salary as part of the COVID-19 control measures.
In addition to the above remuneration, the directors have been granted share options with fair value as shown the below table for the year ended
30 September 2021. These options are presently out of the money and the associated growth based vesting conditions have not been met. These are
however ascribed a fair value and included as a component of directors’ remuneration in line with the requirements of IFRS 2, in spite of the inherent
uncertainty as to whether they will eventually vest.
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STRATEGIC REPORT
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FINANCIAL STATEMENTS
29
2020
2021
Fair value of Total
Total
share options remuneration remuneration
£‘000’s
Director £‘000’s £‘000’s
Mr S Crowther 5 186
Ms A Levett 3 147
Mr R Cunningham – 49
Mr D Firth (appointed 18 February 2021) – 18
Mr N Halkes (resigned 31 March 2021) – 20
Total 8 420
170
131
25
–
35
361
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
David Firth
30 September 30 September
2021
%
2021
Number
868,475
777,796
1,083,100
180,000
2.94
2.63
3.66
0.6
In addition to the interest in shares directly owned, Richard Cunningham also has an interest resulting from his participation
in the issue of the 2020 and 2021 Fixed Rate Unsecured Convertible Redeemable Loan Notes. His participation represents a
maximum interest of 3,565,000 in new Ordinary Shares that could be issued pursuant to the 2020 and 2021 Convertible
Loan Note Instruments.
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. Simon
Crowther held no external Non-Executive Directorships in the period. Richard Cunningham, David Firth and Alyson Levett
held external Non-Executive Directorships in the period.
Results and Dividends
The results for the year are set out on page 38 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 30.
Consolidated Financial Statements for the year ended 30 September 2021
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CORPORATE GOVERNANCE:
Group Directors’ Report continued
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
30 September 30 September
2021
%
2021
Number
1 Herald Investment Mgt (London)
2 Alto Invest (Paris)
3 Interactive Investor (Glasgow)
4 Hargreaves Lansdown Asset Mgt (Bristol)
5 Antrak Limited (UK)
6 Gresham House (London)
7 Bury Fitzwilliam-Lay and Partners LLP (UK)
8 BPCE (Paris)
9 Richard Cunningham
10 The Capital for Enterprise Fund LP (UK)
There were no notified changes in these holdings in the period after year end to the date of signing the financial
statements.
4,031,490
2,885,410
2,617,641
2,544,987
1,852,210
1,582,279
1,459,460
1,250,000
1,083,100
889,080
13.63%
9.76%
8.85%
8.61%
6.26%
5.35%
4.94%
4.23%
3.66%
3.01%
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 sensitives that address the principal risks and uncertainties to which the Group is
exposed, thus creating a number different scenarios for the board to challenge including a "stress" case scenario of a
worsening of total billing across recurring and services revenue of £900,000 (2020 - £700,000) compared to the base case
budgeted for the current financial year. This stress case was based upon new billing remaining at the same substantially
suppressed rate as FY20. 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 what further
impact Covid-19 could have at this stage. Nevertheless, after making enquiries, and considering the uncertainties described
above, 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
There are no matters or events after the reporting period requiring disclosure.
i-nexus Global plc
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31
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 Group’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 Group 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.
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 Group’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 Group’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 2021 AGM on Monday 28th February 2022. The Notice of the Meeting accompanies the Annual
Report and Accounts.
By Order of the Board
Alyson Levett
Director
26 January 2022
Consolidated Financial Statements for the year ended 30 September 2021
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FINANCIAL STATEMENTS:
Independent Auditor’s Report For the year ended 30 September 2021
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 2021 which comprise the group statement of comprehensive income, the group statement
of financial position, the company statement of financial position, the group statement of changes in equity, the company
statement of changes in equity, the group statement of cash flows and notes to the financial statements, including
significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable
law and international accounting standards (IAS) in conformity with the requirements of the Companies Act 2006. The
financial reporting framework that has been applied in the preparation of the parent company financial statements is
applicable law and United Kingdom Accounting Standards, including Financial Reporting Standard 101 Reduced Disclosure
Framework (United Kingdom Generally Accepted Accounting Practice).
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 2021 and of the group’s loss for the period then ended;
the group financial statements have been properly prepared in accordance with IAS in conformity with the requirements
of the Companies Act 2006;
the parent company financial statements have been properly prepared in accordance with United Kingdom Generally
Accepted Accounting Practice; and
•
the financial statements have been prepared in accordance with the requirements of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities 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 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
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in
the preparation of the financial statements is appropriate. An explanation of how we evaluated the directors’ assessment
of the group and the parent company’s ability to continue to adopt the going concern basis of accounting is set out in the
key audit matters section below.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions
that, individually or collectively, may cast significant doubt on the group or the parent company's ability to continue as a
going concern for a period of at least twelve months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant
sections of this report.
Our approach to the audit
We tailored the scope of our audit to ensure that we obtained sufficient evidence to support our opinion on the financial
statements as a whole, taking into account the structure of the group, the accounting processes and controls and the
industry in which the group and company operates.
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the financial
statements. In particular, we looked at where the directors made subjective judgements, for example in respect of significant
accounting estimates that involved making assumptions and considering future events that are inherently uncertain.
i-nexus Global plc
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33
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 both significant components was performed by the same audit team. In
assessing the risk of material misstatement to the group financial statements, and to ensure adequate quantitative 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.
Key audit matters
Key Audit Matter How our scope addressed this 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 IFRS
15 ‘Revenue from contracts with customers’
and through application of the 5-step model,
the group identifies contracts with its
customers, determines performance
obligations arising under those contracts, sets
an expected transaction price, allocates that
price to the performance obligations and then
recognises revenues as those obligations are
satisfied.
Owing to the presumed risk of fraud in revenue
recognition, the importance of revenue as a key
metric of performance and the judgements
involved in applying the 5-step model this has
been included as a Key Audit Matter.
Going concern
The going concern assumption is a
fundamental and pervasive principle in the
preparation of financial statements. The
requirement to access additional funds,
together with the trading result and cash
utilisation in the year give rise to greater
inherent risk and raises the concern as to
whether the group has sufficient resources to
continue to meet its liabilities as they fall due
for a period of at least 12 months from the
date of approval of the financial statements.
Our audit procedures included the following:
• We assessed the design and effectiveness of internal controls relating
to revenue recognition; and
• We reviewed the revenue recognition policy to ensure compliance
with IFRS 15; and
• For an enhanced sample of contracts, we ensured that the revenue
recognition had been correctly applied against the 5-step model in
IFRS 15 ‘Revenue from contracts with customers’ with reference to the
underlying contract in each instance; and
• We have substantively tested revenue streams on a sample basis by
reference to purchase orders, customer contracts and time records; and
• For an enhanced sample of revenue contracts, we assessed the
accuracy and completeness of the contract liability in each instance.
Based on our procedures we have concluded that, in all material
respects, revenue is valid, complete and has been accurately recognised
in accordance with the financial reporting framework.
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 is a going concern; and
• We reviewed the sensitivities adopted by management, challenging
the feasibility and likelihood of each scenario, including that deemed
to be the ‘worst case’; and
• We obtained audit evidence regarding the modelled impact of
proposed mitigating actions; and
• We obtained and reviewed new contracts secured after the balance
sheet date, ensuring these were correctly incorporated into the
forecasts prepared by management; and
• We assessed the historic accuracy of management’s forecasting process
and reconciled the opening forecast cash and monthly recurring
revenue to the historic information and underlying records; and
• We evaluated management’s plans for future actions and assessed
that management’s assessment included all relevant information,
including that concerning the future; and
• We reviewed the disclosures in the annual report, specifically in note
1.4, to assess that these disclosures are appropriate.
Consolidated Financial Statements for the year ended 30 September 2021
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FINANCIAL STATEMENTS:
Independent Auditor’s Report continued
Key Audit Matter How our audit addressed the key audit matter
The scenarios and sensitivities demonstrated that there are actions
management can implement should the group’s growth plans not be
achieved as anticipated. Based on this and our procedures, we
concluded that there is not a material uncertainty in relation to going
concern and therefore that the continued adoption of the going concern
basis of accounting in these financial statements remains appropriate.
Our audit procedures included the following:
• We reviewed the assertions and assumptions made by management
against the criteria for capitalisation set out under IAS 38; and
• We tested a sample of amounts capitalised during the period to
underlying records and reviewed the assumptions applied for
evidence of management bias; and
• We considered and challenged the appropriateness of the
determination that certain assets were not available for use at the
reporting date; and
• We critically appraised management's assessment of recoverable
amount, comprising incremental trading forecasts for the individual
assets concerned. This included challenging management regarding
critical assumptions, obtaining corroborative evidence and
considering the likelihood of meeting forecasts based upon our
understanding of the business, the trading history of the group and
the current prospects.
Based on our procedures we have concluded that the recognition
criteria have been appropriately applied, that the amortisation charge is
materially complete and that the impairment charge takes account of all
available facts and circumstances, and is based on a series of
assumptions and judgements which are appropriate to these
circumstances.
Our audit procedures included the following:
• We considered the appropriateness of the methodology and
approach applied by management in determining the impairment
charge with reference to the requirements of IFRS 9; and
• We critically appraised management's assessment of recoverable
amount, comprising 5 year trading forecasts for the subsidiary from
which this receivable is due. This included challenging management
regarding critical assumptions, obtaining corroborative evidence and
considering the likelihood of meeting forecasts based upon our
understanding of the business, the trading history of the group and
the current prospects.
The recognition and capitalisation of
development costs, and review of the
carrying value for impairment
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.
The group’s intangible assets include certain
individual assets which are not yet available
for use. IAS 36 requires annual measurement
of recoverable amount for all such assets.
The determination of whether the initial
recognition criteria are met, whether the
underlying asset meets the criteria of being
available for use and the annual
measurement of recoverable amount all
involve judgements. The determination of
recoverable amount is a judgement requiring
assumptions concerning the future which are
subject to estimation uncertainty. The latter
has led to an impairment charge of £293,878
being recorded during the year.
Impairment of intercompany receivables
The assessment of expected credit losses in
relation to intercompany receivables requires
assumptions and judgements concerning the
future and is therefore subject to estimation
uncertainty. The impairment charge recorded
during the year in the parent company’s
financial statements amounts to £2,895,000
and is therefore significant. There are a range
of possible scenarios and outcomes which
must be considered in order to determine the
appropriateness of this impairment charge.
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Key Audit Matter How our audit addressed the key audit matter
Based on our procedures we have concluded that the impairment
charge takes account of all available facts and circumstances, and is
based on a series of assumptions and judgements which are appropriate
to these circumstances.
Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of
misstatements. 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 this
level will not necessarily be evaluated as immaterial as we also take into account of the qualitative 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 £93,000. 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
£4,650. We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative
grounds.
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.
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 course of 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 this gives rise to a material misstatement in the financial statements themselves. 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.
Consolidated Financial Statements for the year ended 30 September 2021
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FINANCIAL STATEMENTS:
Independent Auditor’s Report continued
We have nothing to report in respect of the following matters in relation to which the Companies Act 2006 requires us to
report to you if, in our opinion:
• adequate accounting records have not been kept 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.
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 and the 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 group and parent 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.
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with
our responsibilities, outlined above, to detect material misstatements in respect of irregularities, including fraud. The
specific procedures for this engagement and the extent to which these are capable of detecting irregularities, including
fraud are detailed below.
Identifying and assessing risks related to irregularities:
We assessed the susceptibility of the group and parent company’s financial statements to material misstatement and how
fraud might occur, including through discussions with the directors, discussions within our audit team planning meeting,
updating our record of internal controls and ensuring these controls operated as intended. We evaluated possible
incentives and opportunities for fraudulent manipulation of the financial statements. We identified laws and regulations
that are of significance in the context of the group and parent company by discussions with directors and by updating our
understanding of the sector in which the group and parent company operate.
Laws and regulations of direct significance in the context of the group and parent company include The Companies Act
2006, the AIM Rules for Companies and UK Tax legislation.
Audit response to risks identified:
We considered the extent of compliance with these laws and regulations as part of our audit procedures on the related
financial statement items including a review of group and parent company financial statement disclosures. We reviewed the
parent company’s records of breaches of laws and regulations, minutes of meetings and correspondence with relevant
authorities to identify potential material misstatements arising. We discussed the parent company’s policies and
procedures for compliance with laws and regulations with members of management responsible for compliance
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FINANCIAL STATEMENTS
37
During the planning meeting with the audit team, the engagement partner drew attention to the key areas which might
involve non-compliance with laws and regulations or fraud. We enquired of management whether they were aware of any
instances of non-compliance with laws and regulations or knowledge of any actual, suspected or alleged fraud. We
addressed the risk of fraud through management override of controls by testing the appropriateness of journal entries and
identifying any significant transactions that were unusual or outside the normal course of business. We assessed whether
judgements made in making accounting estimates gave rise to a possible indication of management bias. At the completion
stage of the audit, the engagement partner’s review included ensuring that the team had approached their work with
appropriate professional scepticism and thus the capacity to identify non-compliance with laws and regulations and fraud.
As group auditors, our assessment of matters relating to non-compliance with laws or regulations and fraud differed at
group and component level according to their particular circumstances. Our communications included a request to identify
instances of non-compliance with laws and regulations and fraud that could give rise to a material misstatement of the
group financial statements in addition to our risk assessment.
There are inherent limitations in the audit procedures described above and the further removed non-compliance with laws
and regulations is from the events and transactions reflected in the financial statements, the less likely we would become
aware of it. Also, the risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one
resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional
misrepresentations, or through collusion.
A further description of our responsibilities is available 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 parent 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 parent 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 parent company and the parent
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
26 January 2022
Consolidated Financial Statements for the year ended 30 September 2021
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38
Group Statement of Comprehensive Income
For the year ended 30 September 2021
Revenue
Cost of sales
Gross profit
Other operating income
Administrative expenses
Operating loss
Adjusted EBITDA
Depreciation, amortisation, impairment and profit/loss on disposal
Share based payment expense
Non-underlying items
Investment revenues
Finance costs
Loss before taxation
Income tax income
Loss for the year
Other comprehensive income:
Items that will not be reclassified to profit or loss
Currency translation differences
Loss on net investment hedge
Total items that will not be reclassified to profit or loss
Total other comprehensive income for the year
Total comprehensive income for the year
Earnings per share
Basic
Diluted
Notes
4
4
6
5
11
12
13
Notes
14
2021
£
3,639,111
(635,532)
3,003,579
88,316
(4,062,295)
2020
£
4,080,582
(1,094,342)
2,986,240
244,656
(5,555,327)
(970,400)
(2,324,431)
(256,873)
(551,862)
(17,181)
(144,484)
65
(162,855)
(1,816,412)
(331,924)
–
(176,095)
1,007
(54,299)
(1,133,190)
(2,377,723)
398,258
361,490
(734,932)
(2,016,233)
17,346
–
17,346
8,068
(26,307)
(18,239)
17,346
(18,239)
(717,586)
(2,034,472)
2021
£
2020
£
(0.02) (0.07)
(0.02) (0.07)
Profit and total comprehensive income for the financial year is all attributable to the owners of the parent company.
The notes on pages 45 to 73 form part of these financial statements.
i-nexus Global plc
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FINANCIAL STATEMENTS
39
Group Statement of Financial Position
As at 30 September 2021
Non-current assets
Intangible assets
Property, plant and equipment
Current assets
Trade and other receivables
Current tax recoverable
Cash and cash equivalents
Total assets
Current liabilities
Trade and other payables
Borrowings
Lease liabilities
Deferred revenue
Net current liabilities
Non-current liabilities
Trade and other payables
Borrowings
Convertible loan notes
Provisions
Total liabilities
Net liabilities
Equity
Called up share capital
Share premium account
Foreign exchange reserve
Share option reserve
Equity reserve
Merger reserve
Retained earnings
Total equity
Notes
2021
£
2020
£
15
16
18
23
20
24
27
23
20
21
26
30
31
32
33
1,099,313
67,111
1,166,424
1,136,808
245,963
1,382,771
791,948
275,000
575,203
1,642,151
2,808,575
952,157
71,425
–
1,030,315
2,053,897
(411,746)
88,330
42,094
1,782,458
–
1,912,882
3,966,779
(1,158,204)
832,507
300,000
120,011
1,252,518
2,635,289
1,239,609
179,098
37,467
1,723,661
3,179,835
(1,927,317)
–
64,402
–
80,702
145,104
3,324,939
(689,650)
2,957,161
7,256,188
1,876
12,989
231,851
10,653,881
(22,272,150)
(1,158,204)
2,957,161
7,256,188
(15,470)
–
–
10,653,881
(21,541,410)
(689,650)
The financial statements were approved by the board of directors and authorised for issue on 26 January 2022 and are signed
on its behalf by:
Mr S P Crowther
Director
The notes on pages 45 to 73 form part of these financial statements.
Consolidated Financial Statements for the year ended 30 September 2021
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40
Company Statement of Financial Position
As at 30 September 2021
2021 2020
Notes £ £ £ £
Non-current assets
Investments 37 1,671,951 1,654,770
Current assets
Trade and other receivables 38 6,888,516 7,990,099
Cash and cash equivalents 426,487 226
7,315,003 7,990,325
Current liabilities
Trade and other payables 40 205,883 111,345
Net current assets 7,109,120 7,878,980
Total assets less current liabilities 8,781,071 9,533,750
Non-current liabilities 39 1,870,788 –
Net assets 6,910,283 9,533,750
Equity
Called up share capital 30 2,957,161 2,957,161
Share premium account 31 7,256,188 7,256,188
Equity reserve 39 231,851 –
Share option reserve 12,989 –
Retained earnings (3,547,906) (679,599)
Total equity 6,910,283 9,533,750
As permitted by s408 of Companies Act 2006, the company has not presented its own income statement and related
notes. The company’s loss for the year was £2,872,499 (2020 - £nil).
The financial statements were approved by the board of directors and authorised for issue on 26 January 2022 and are signed
on its behalf by:
Mr S P Crowther
Director
Company Registration No. 11321642
The notes on pages 45 to 73 form part of these financial statements.
i-nexus Global plc
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FINANCIAL STATEMENTS
41
Group Statement of Changes In Equity
For the year ended 30 September 2021
Share Foreign Share
Share premium Equity Merger exchange option Retained
capital account reserve reserve reserve reserve earnings Total
Notes £ £ £ £ £ £ £ £
Balance at
1 October 2019 2,957,161 7,256,188 – 10,653,881 (23,538) – (19,498,870) 1,344,822
Year ended
30 September 2020:
Loss for the year – – – – – – (2,016,233) (2,016,233)
Other comprehensive
income:
Exchange differences
on foreign operations – – – – 8,068 – – 8,068
Loss on net investment
hedge – – – – – – (26,307) (26,307)
Total comprehensive
income for the year – – – – 8,068 – (2,042,540) (2,034,472)
Balance at
30 September 2020 2,957,161 7,256,188 – 10,653,881 (15,470) – (21,541,410) (689,650)
Year ended
30 September 2021:
Loss for the year – – – – – – (734,932) (734,932)
Other comprehensive
income:
Exchange differences
on foreign operations – – – – 17,346 – – 17,346
Total comprehensive
income for the year – – – – 17,346 – (734,932) (717,586)
Issue of convertible loan 21 – – 231,851 – – – – 231,851
Share option expense
in the year 29 – – – – – 17,181 – 17,181
Share options cancelled 29 – – – – – (4,192) 4,192 –
Balance at
30 September 2021 2,957,161 7,256,188 231,851 10,653,881 1,876 12,989 (22,272,150) (1,158,204)
The notes on pages 45 to 73 form part of these financial statements.
Consolidated Financial Statements for the year ended 30 September 2021
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42
Company Statement of Changes in Equity
For the year ended 30 September 2021
Share Share
Share premium Equity option Retained
capital account reserve reserve earnings Total
Notes £ £ £ £ £ £
Balance at 1 October 2019 2,957,161 7,256,188 – – (679,599) 9,533,750
Year ended 30 September 2020:
Loss and total comprehensive
income for the year – – – – – –
Balance at 30 September 2020 2,957,161 7,256,188 – – (679,599) 9,533,750
Year ended 30 September 2021:
Loss and total comprehensive
income for the year – – – – (2,872,499) (2,872,499)
Issue of convertible loan 39 – – 231,851 – – 231,851
Share option expense in the year 41 – – – 17,181 – 17,181
Share options cancelled 41 – – – (4,192) 4,192 –
Balance at 30 September
2021 2,957,161 7,256,188 231,851 12,989 (3,547,906) 6,910,283
The notes on pages 45 to 73 form part of these financial statements.
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FINANCIAL STATEMENTS
43
Group Statement of Cash Flows
For the year ended 30 September 2021
2021 2020
Notes £ £ £ £
Operating activities
Loss after tax (734,932) (2,016,233)
Adjusted for non-cash items:
Taxation credit 13 (398,258) (361,490)
Amortisation, depreciation, and
adjustments on disposal 6 551,862 331,924
Share-based payment expense 29 17,181 –
Finance income 11 (65) (1,007)
Finance charges 12 162,855 54,299
Decrease in provisions 26 (80,702) –
(482,059) (1,992,507)
Decrease in trade and other
receivables 18 78,059 690,536
(Decrease) / increase in trade
and other payables 23 (980,799) 489,077
Cash generated from operations (1,384,799) (812,894)
Income tax refunded 423,258 361,490
Net cash outflow from operating
activities (961,541) (451,404)
Investing activities
Purchase of intangible assets -
internally generated 15 (335,446) (628,210)
Purchase of property, plant and
equipment 16 (1,171) (39,744)
Proceeds on disposal of property,
plant and equipment 1,180 –
Interest received 65 1,007
Net cash used in investing activities (335,372) (666,947)
Financing activities
Issue of convertible loans 21 1,937,500 –
Repayment of borrowings (179,981) (159,730)
Proceeds of new bank loans 20 50,000 –
Payment of lease liabilities 24 (37,467) (89,000)
Interest paid (35,216) (54,299)
Net cash generated from/(used in)
financing activities 1,734,836 (303,029)
Net increase/(decrease) in cash and
cash equivalents 437,923 (1,421,380)
Cash and cash equivalents at
beginning of year 120,011 1,533,323
Effect of foreign exchange rates 17,269 8,068
Cash and cash equivalents at
end of year 575,203 120,011
The notes on pages 45 to 73 form part of these financial statements.
Consolidated Financial Statements for the year ended 30 September 2021
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44
Note to the Statement of Cash Flows
For the year ended 30 September 2021
Changes in liabilities arising from financing activities
The table below details changes in the Group's liabilities arising from financing activities, including both cash and non-cash
changes. Liabilities arising from financing activities are those for which cash flows were, or future cash flows will be,
classified in the Group's Consolidated Statement of Cash Flows as cash flows from financing activities.
At
At 1 October Financing Convertible Other 30 September
2020 cash flows element movements* 2021
£ £ £ £ £
Bank loans – 50,000 – – 50,000
Convertible loan notes – 1,937,500 (231,851) 76,809 1,782,458
Other loans 243,500 (179,981) – – 63,519
Leases 37,467 (37,467) – – –
280,967 1,770,052 (231,851) 76,809 1,895,977
At
At 1 October Financing Convertible Accrued 30 September
2019 cash flows element interest 2020
£ £ £ £ £
Other loans 403,230 (159,730) – – 243,500
Leases 120,552 (89,000) – 5,915 37,467
523,782 (248,730) – 5,915 280,967
*Other movements includes;
(1) Accrued proceeds of £37,500 which was contractually agreed but unpaid at the year end;
(2) Interest charged to the statement of comprehensive income of £127,639; and
(3) Accrued interest payable of £88,330 based on the convertible loan coupon rate of 8%.
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FINANCIAL STATEMENTS
45
Notes to the Group Financial Statements
For the year ended 30 September 2021
1 Accounting policies
Company information
i-nexus Global Plc is a public company limited by shares incorporated in England and Wales. The registered office is
27-28 Eastcastle Street, London, W1W 8DH. The Group’s principal activities and nature of its operations are disclosed in the
Strategic Report.
The Group consists of i-nexus Global Plc and all of its subsidiaries.
1.1 Accounting convention
The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as
adopted for use in the European Union and with those parts of the Companies Act 2006 applicable to companies reporting
under IFRS.
The financial statements are prepared in sterling, which is the functional currency of the Group. Monetary amounts in these
financial statements are rounded to the nearest £1.
The financial statements have been prepared under the historical cost convention, modified to include the revaluation of
certain financial instruments at fair value. The principal accounting policies adopted are set out below.
The individual parent company meets the definition of a qualifying entity under FRS 101 Reduced Disclosure Framework.
These financial statements for the year ended 30 September 2021 are the first financial statements of i-nexus Global Plc
prepared in accordance with FRS 101. The company transitioned from IFRS to FRS 101 for all periods presented and the date
of transition to FRS 101 was 1 October 2019.
As permitted by FRS 101, the company has taken advantage of the following disclosure exemptions from the requirements
of IFRS:
(a) the requirements of IFRS 7 ‘Financial Instruments: Disclosure’;
(b) the requirements within IAS 1 relating to the presentation of certain comparative information;
(c) the requirements of IAS 7 ‘Statement of Cash Flows’ to present a statement of cash flows;
(d) paragraphs 30 and 31 of IAS 8 ‘Accounting policies, changes in accounting estimates and errors’ (requirement for the
disclosure of information when an entity has not applied a new IFRS that has been issued but it not yet effective); and
(e) the requirements of IAS 24 ‘Related Party Disclosures’ to disclose related party transactions and balances between two or
more members of a Group.
As permitted by S408 Companies Act 2006, the Company had not presented its own Statement of Comprehensive Income.
The company’s loss for the year was £2,782,499 (2020 - £nil).
1.2 Business combinations
The cost of a business combination is the fair value at the acquisition date of the assets given, equity instruments issued and
liabilities incurred or assumed, plus costs directly attributable to the business combination. The excess of the cost of a
business combination over the fair value of the identifiable assets, liabilities and contingent liabilities acquired is recognised as
goodwill.
The cost of the combination includes the estimated amount of contingent consideration that is probable and can be
measured reliably, and is adjusted for changes in contingent consideration after the acquisition date.
Provisional fair values recognised for business combinations in previous periods are adjusted retrospectively for final fair
values determined in the 12 months following the acquisition date.
Consolidated Financial Statements for the year ended 30 September 2021
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Notes to the Group Financial Statements continued
For the year ended 30 September 2021
1 Accounting policies (continued)
The accounting treatment in relation to the additions 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 the 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.
1.3 Basis of consolidation
The consolidated Group financial statements consist of the financial statements of the parent company i-nexus Global Plc
together with all entities controlled by the parent company (its subsidiaries) and the Group’s share of its interests in joint
ventures and associates.
All financial statements are made up to 30 September 2021. Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used into line with those used by other members of the Group.
All intra-group transactions, balances and unrealised gains on transactions between Group companies are eliminated on
consolidation. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset
transferred.
Subsidiaries are consolidated in the Group’s financial statements from the date that control commences until the date that
control ceases. The Group’s interest in i-solutions Global Limited has been consolidated as set out in the ‘Business
combinations’ policy above.
1.4 Going concern
The directors have at the time of approving the financial statements, a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future. Thus the directors continue to adopt the going
concern basis of accounting in preparing the financial statements.
The Group prepares regular business forecasts and monitors its projected cash flows, which are reviewed by the Board.
Forecasts are adjusted for reasonable sensitives that address the principal risks and uncertainties to which the Group is
exposed, thus creating a number different scenarios for the board to challenge including a "stress" case scenario of a
worsening of total billing across recurring and services revenue of £900,000 (2020 - £700,000) compared to the base case
budgeted for the current financial year. This stress case was based upon new billing remaining at the same substantially
suppressed rate as FY20. 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.
On the basis of this analysis, the Board has concluded that there is a reasonable expectation that the Group will have
adequate resources to continue in operational existence for the foreseeable future being a period of at lease twelve months
from the balance sheet date.
1.5 Revenue
The Group applies IFRS 15 ‘Revenue from contracts with customers’. Under IFRS 15, the Group applies the 5-step method to
identify contracts with its customers, determine performance obligations arising under those contracts, set an expected
transaction price, allocate that price to the performance obligations, and then recognises revenues as and when those
obligations are satisfied.
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Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on
behalf of third parties. The Group recognises revenue when it transfers control of a product or service to a customer.
When cash inflows are deferred and represent a financing arrangement, the fair value of the consideration is the present
value of the future receipts. The difference between the fair value of the consideration and the nominal amount received is
recognised as interest income.
The nature of revenues is licence fee income on a software-as-a-service (SaaS) basis and professional services.
Licence fee
Revenue for annual licences, support and maintenance is recognised on a straight-line basis over the duration of the contract.
Professional services
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 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.
1.6 Intangible assets other than goodwill
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 benefit. Development expenditure is capitalised if, and only if, an entity within the
Group can demonstrate all of the following:
(a) its ability to measure reliably the expenditure attributable to the asset under development;
(b) the product or process is technically and commercially feasible;
(c) its future economic benefits are probable;
(d) its ability to use or sell the developed asset;
(e) the availability of adequate technical, financial and other resources to complete the asset under development; and
(f) its intention to use of sell the developed asset.
Amortisation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on
the following bases:
Development costs 5 years
1.7 Property, plant and equipment
Property, plant and equipment are initially measured at cost and subsequently measured at cost or valuation, net of
depreciation and any impairment losses.
Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their useful lives on
the following bases:
Leasehold land and buildings 20% straight line or lease term if shorter
Fixtures and fittings 25% reducing balance
Computers 33% straight line
Consolidated Financial Statements for the year ended 30 September 2021
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Notes to the Group Financial Statements continued
For the year ended 30 September 2021
1 Accounting policies (continued)
The gain or loss arising on the disposal of an asset is determined as the difference between the sale proceeds and the
carrying value of the asset, and is recognised in the income statement.
1.8 Non-current investments
Interests in subsidiaries are initially measured at cost and subsequently measured at cost less any accumulated impairment
losses. The investments are assessed for impairment at each reporting date and any impairment losses or reversals of
impairment losses are recognised immediately in profit or loss.
A subsidiary is an entity controlled by the parent company. Control is the power to govern the financial and operating policies
of the entity so as to obtain benefits from its activities.
1.9 Impairment of tangible and intangible assets
At each reporting end date, the Group reviews the carrying amounts of its tangible and intangible assets to determine
whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the
recoverable amount of the asset is estimated in order to determine the extent of the impairment loss (if any). Where it is not
possible to estimate the recoverable amount of an individual asset, the Group estimates the recoverable amount of the cash-
generating unit to which the asset belongs.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are tested for impairment annually,
and whenever there is an indication that the asset may be impaired.
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 not 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 immediately in profit or loss, unless the relevant asset is
carried at a revalued amount, in which case the impairment loss is treated as a revaluation decrease.
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 immediately in profit or loss, unless the relevant asset is carried at a revalued amount, in which case the reversal
of the impairment loss is treated as a revaluation increase.
1.10 Cash and cash equivalents
Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term liquid investments with
original maturities of three months or less, and bank overdrafts. Bank overdrafts are shown within borrowings in current
liabilities.
1.11 Financial assets
Financial assets are recognised in the Group’s statement of financial position when the Group becomes party to the
contractual provisions of the instrument. Financial assets are classified into specified categories, depending on the nature and
purpose of the financial assets.
At initial recognition, financial assets classified as fair value through profit and loss are measured at fair value and any
transaction costs are recognised in profit or loss. Financial assets not classified as fair value through profit and loss are initially
measured at fair value plus transaction costs.
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Financial assets at fair value through profit or loss
Financial assets measured at fair value through profit or loss are recognized initially at fair value and any transaction costs are
recognised in profit or loss when incurred. A gain or loss on a financial asset measured at fair value through profit or loss is
recognised in profit or loss, and is included within finance income or finance costs in the statement of income for the
reporting period in which it arises.
Financial assets held at amortised cost
Financial instruments are classified as financial assets measured at amortised cost where the objective is to hold these assets
in order to collect contractual cash flows, and the contractual cash flows are solely payments of principal and interest. They
arise principally from the provision of goods and services to customers (eg trade receivables). They are initially recognised at
fair value plus transaction costs directly attributable to their acquisition or issue, and are subsequently carried at amortised
cost using the effective interest rate method, less provision for impairment where necessary.
Financial assets at fair value through other comprehensive income
Debt instruments are classified as financial assets measured at fair value through other comprehensive income where the
financial assets are held within the Group’s business model whose objective is achieved by both collecting contractual cash
flows and selling financial assets, and the contractual terms of the financial asset give rise on specified dates to cash flows that
are solely payments of principal and interest on the principal amount outstanding.
A debt instrument measured at fair value through other comprehensive income is recognised initially at fair value plus
transaction costs directly attributable to the asset. After initial recognition, each asset is measured at fair value, with changes
in fair value included in other comprehensive income. Accumulated gains or losses recognised through other comprehensive
income are directly transferred to profit or loss when the debt instrument is derecognised.
Impairment of financial assets
Financial assets, other than those measured at fair value through profit or loss, are assessed for indicators of impairment at
each reporting end date.
Financial assets are impaired where there is objective evidence that, as a result of one or more events that occurred after the
initial recognition of the financial asset, the estimated future cash flows of the investment have been affected.
Derecognition of financial assets
Financial assets are derecognised only when the contractual rights to the cash flows from the asset expire, or when it
transfers the financial asset and substantially all the risks and rewards of ownership to another entity.
1.12 Financial liabilities
The Group recognises financial debt when the Group becomes a party to the contractual provisions of the instruments.
Financial liabilities are classified as either ‘financial liabilities at fair value through profit or loss’ or ‘other financial liabilities’.
Financial liabilities at fair value through profit or loss
Financial liabilities are classified as measured at fair value through profit or loss when the financial liability is held for trading. A
financial liability is classified as held for trading if:
•
it has been incurred principally for the purpose of selling or repurchasing it in the near term, or
• on initial recognition it is part of a portfolio of identified financial instruments that are managed together and has a recent
actual pattern of short-term profit taking, or
•
it is a derivative that is not a financial guarantee contract or a designated and effective hedging instrument.
Consolidated Financial Statements for the year ended 30 September 2021
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Notes to the Group Financial Statements continued
For the year ended 30 September 2021
1 Accounting policies (continued)
Financial liabilities at fair value through profit or loss are stated at fair value with any gains or losses arising on remeasurement
recognised in profit or loss.
Other financial liabilities
Other financial liabilities, including borrowings, trade payables and other short-term monetary liabilities, are initially measured
at fair value net of transaction costs directly attributable to the issuance of the financial liability. They are subsequently
measured at amortised cost using the effective interest method. For the purposes of each financial liability, interest expense
includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the
liability is outstanding.
Convertible loan notes are measured at amortised cost using the effective interest method at initial inception and subsequent
measurement (note 21).
Derecognition of financial liabilities
Financial liabilities are derecognised when, and only when, the Group’s obligations are discharged, cancelled, or they expire.
1.13 Compound instruments
The component parts of compound instruments issued are classified separately as financial liabilities and equity in
accordance with the substance of the contractual arrangement. At the date of issue, the fair value of the liability component is
estimated using the prevailing market interest rate for a similar non-convertible instrument. This amount is recorded as a
liability on an amortised cost basis using the effective interest method until extinguished upon conversion or at the
instrument’s maturity date. The equity component is determined by deducting the amount of the liability component from the
fair value of the compound instrument as a whole. This is recognised and included in equity net of income tax effects and is
not subsequently remeasured.
1.14 Equity instruments
Equity instruments issued by the parent company are recorded at the proceeds received, net of direct issue costs. Dividends
payable on equity instruments are recognised as liabilities once they are no longer payable at the discretion of the company.
Share capital represents the nominal value of shares that have been issued.
Share premium includes all current and prior period premiums on shares allotted.
Equity reserve represents the equity element of the unsecured convertible redeemable loan stock issued.
Merger reserve represents the carrying value of the investment in the subsidiary undertaking at the point of the share for
share exchange.
Foreign exchange reserve relates to the exchange differences arises on the translation of the foreign subsidiary.
Share based payment reserve relates to amounts recognised for the fair value of share options granted in accordance with
IFRS 2.
Retained earnings include all current and prior period retained earnings.
1.15 Derivatives
Derivatives are initially recognised at fair value at the date a derivative contract is entered into and are subsequently
remeasured to fair value at each reporting end date. The resulting gain or loss is recognised in profit or loss immediately
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unless the derivative is designated and effective as a hedging instrument, in which event the timing of the recognition in profit
or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset, whereas a derivative with a negative fair value is
recognised as a financial liability. A derivative is presented as a non-current asset or liability if the remaining maturity of the
instrument is more than 12 months and it is not expected to be realised or settled within 12 months. Other derivatives are
classified as current.
1.16 Taxation
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as reported in the
income statement because it excludes items of income or expense that are taxable or deductible in other years and it further
excludes items that are never taxable or deductible. The Group’s liability for current tax is calculated using tax rates that have
been enacted or substantively enacted by the reporting end date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and
liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit, and is
accounted for using the balance sheet liability method. Deferred tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are recognised to the extent that it is probable that taxable profits will be
available against which deductible temporary differences can be utilised. Such assets and liabilities are not recognised if the
temporary difference arises from goodwill or from the initial recognition of other assets and liabilities in a transaction that
affects neither the tax profit nor the accounting profit.
The carrying amount of deferred tax assets is reviewed at each reporting end date and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered. Deferred tax is
calculated at the tax rates that are expected to apply in the period when the liability is settled or the asset is realised. Deferred
tax is charged or credited in the income statement, except when it relates to items charged or credited directly to equity,
in which case the deferred tax is also dealt with in equity. Deferred tax assets and liabilities are offset when the Group has
a legally enforceable right to offset current tax assets and liabilities and the deferred tax assets and liabilities relate to taxes
levied by the same tax authority.
1.17 Provisions
Provisions are recognised when the Group has a legal or constructive present obligation as a result of a past event and it is
probable that the Group will be required to settle that obligation, and a reliable estimate can be made of the amount of the
obligation.
The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the
reporting end date, taking into account the risks and uncertainties surrounding the obligation. Where a provision is measured
using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows.
When some or all of the economic benefits required to settle a provision are expected to be recovered from a third party,
a receivable is recognised as an asset if it is virtually certain that reimbursement will be received and the amount of the
receivable can be measured reliably.
1.18 Employee benefits
The costs of short-term employee benefits are recognised as a liability and an expense, unless those costs are required to be
recognised as part of the cost of inventories or non-current assets.
Consolidated Financial Statements for the year ended 30 September 2021
Consolidated Financial Statements for the year ended 30 September 2021
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Notes to the Group Financial Statements continued
For the year ended 30 September 2021
1 Accounting policies (continued)
The cost of any unused holiday entitlement is recognised in the period in which the employee’s services are received.
Termination benefits are recognised immediately as an expense when the Group is demonstrably committed to terminate the
employment of an employee or to provide termination benefits.
1.19 Retirement benefits
Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due.
1.20 Share-based payments
Equity-settled share-based payments are measured at fair value at the date of grant by reference to the fair value of the
equity instruments granted using the Black-Scholes model. The fair value determined at the grant date is expensed on a
straight-line basis over the vesting period, based on the estimate of shares that will eventually vest. A corresponding
adjustment is made to equity. Full disclosure of the calculation model is given in note 29.
1.21 Leases
At inception, the Group assesses whether a contract is, or contains, a lease within the scope of IFRS 16. A contract is, or
contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for
consideration. Where a tangible asset is acquired through a lease, the Group recognises a right-of-use asset and a lease
liability at the lease commencement date. Right-of-use assets are included within property, plant and equipment, apart from
those that meet the definition of investment property.
The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any
lease payments made at or before the commencement date plus any initial direct costs and an estimate of the cost of
obligations to dismantle, remove, refurbish or restore the underlying asset and the site on which it is located, less any lease
incentives received.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the
earlier of the end of the useful life of the right-of-use asset or the end of the lease term. The estimated useful lives of right-of-
use assets are determined on the same basis as those of other property, plant and equipment. The right-of-use asset is
periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are unpaid at the commencement date,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental
borrowing rate. Lease payments included in the measurement of the lease liability comprise fixed payments, variable lease
payments that depend on an index or a rate, amounts expected to be payable under a residual value guarantee, and the cost
of any options that the Group is reasonably certain to exercise, such as the exercise price under a purchase option, lease
payments in an optional renewal period, or penalties for early termination of a lease.
The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change
in: future lease payments arising from a change in an index or rate; the Group’s estimate of the amount expected to be
payable under a residual value guarantee; or the Group’s assessment of whether it will exercise a purchase, extension or
termination option. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying
amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been
reduced to zero.
The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases of machinery that have a
lease term of 12 months or less, or for leases of low-value assets including IT equipment. The payments associated with these
leases are recognised in profit or loss on a straight-line basis over the lease term.
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1.22 Grants
Government grants are recognised when there is reasonable assurance that the grant conditions will be met and the grants
will be received. Grant income recognised in the year comprises the Covid-19 job retention scheme grant and is recorded in
other operating income.
1.23 Foreign exchange
Transactions in currencies other than pounds sterling are recorded at the rates of exchange prevailing at the dates of the
transactions. At each reporting end date, monetary assets and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the reporting end date. Gains and losses arising on translation in the period are
included in profit or loss.
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.
2 Adoption of new and revised standards and changes in accounting policies
The current standards, amendments and interpretations have been adopted in the year and have not had a material impact
on the reported results in the company’s financial statements:
• Amendments to the Conceptual Framework for Financial Reporting
• Amendments to IFRS 3 Definition of a Business
• Amendments to IAS 1 and IAS 8 Definition of Material
• Amendments to IFRS 9, IAS 39 and IFRS 7 Interest rate benchmark reform
• Amendments to IFRS 16 Covid-19 related rent concessions
• Adoption of UK - IFRS for the preparation of financial statements
Standards, amendments and interpretations in issue but not yet effective
At the authorisation of these financial statements, the Group has not applied the following new and revised standards that
have been issued but are not effective yet:
IAS 1 ‘Presentation of Financial Statements’: Classification of liabilities as current or non-current
Property, Plant and Equipment: Proceeds before intended use: amendments to IAS 16
Onerous Contracts- Cost of Fulfilling a Contract- amendments to IAS 37
IFRS 17 ‘Insurance Contracts’ and subsequent withdrawal of IFRS 4 ‘Insurance Contracts’
Amendments to IFRS 10 and IAS 28 Sale of contribution of assets between an investor and its
Associate or Joint Venture
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
Definition of an Accounting Estimate (Amendments to IAS 8)
Deferred Tax related to Assets and Liabilities arising from a single transaction (Amendments to
IAS 12 Income Taxes)
Effective date – period
beginning on or after
1 January 2022
1 January 2022
1 January 2022
1 January 2023*
1 January 2023*
1 January 2023*
1 January 2023*
1 January 2023*
* These standards, amendments and interpretations have not yet been endorsed by the UK and the dates shown are the expected dates.
The adoption of all above standards is not expected to have any impact on the Group’s financial statements.
Consolidated Financial Statements for the year ended 30 September 2021
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Notes to the Group Financial Statements continued
For the year ended 30 September 2021
3 Critical accounting estimates and judgements
In the application of the Group’s accounting policies, the directors are required to make judgements, estimates and
assumptions about the carrying amount of assets and liabilities that are not readily apparent from other sources. The
estimates and associated assumptions are based on historical experience and other factors that are considered to be
relevant. Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision
and future periods if the revision affects both current and future periods.
The estimates and assumptions which have a significant risk of causing a material adjustment to the carrying amount of
assets and liabilities are outlined below.
Key sources of estimation uncertainty
Impairment of investments and intercompany debtors
A subsidiary of the parent company has sustained losses and the balance sheet is in deficit. This is a indicator of potential
impairment. The recoverability of the intercompany debtor and the cost of investment is dependent on the future profitability
of the entity, as whilst the debtor is repayable on demand the directors are intending to allow the subsidiary to continue to
trade in order to generate sufficient profits and cash to render this balance recoverable. A provision for impairment of
£2,895,000 (2020 - £nil) has been recognised in the parent company and is a significant judgement (note 36). The impairment
has been eliminated on consolidation in the Group accounts.
Capitalised development costs
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. IAS 36 also requires that
an assessment of recoverable amount is prepared for all intangible assets not available for use at the reporting date, and for
any intangible asset where there is an indicator of impairment.
Useful lives
Amortisation is provided so as to write down the development costs capitalised to their residual values over their estimated
useful lives as set out in the Group’s accounting policy. The selection of estimated life requires the exercise of management
judgement. Useful lives are regularly reviewed and should management’s assessment of useful lives shorten/increase then
amortisation charges in the financial statements would increase/decrease and carrying amounts of intangible assets would
change accordingly.
Impairment
During the year, the directors considered the recoverability of the capitalised development costs, which are included in its
balance sheet at £1,099,313 (2020 - £1,136,808) after impairment. The directors carried out a detailed net present value
assessment of the future expected revenue and net profit stream over a 5 year period. Following the assessment two projects
were held at higher than their recoverable amount and hence an impairment of £293,878 (2020 - £110,011) has been
recognised.
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4 Revenue
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.
Revenue analysed by class of business
Licence
Services
Revenue analysed by geographical market
United Kingdom
Rest of Europe
USA
Rest of the World
Other significant revenue
Grants received
2021
£
2020
£
3,333,407
305,704
3,639,111
2021
£
853,663
806,472
1,211,192
767,784
3,639,111
2021
£
3,737,932
342,650
4,080,582
2020
£
808,412
1,823,246
1,259,360
189,564
4,080,582
2020
£
88,316
244,656
During the year there were two key customers (2020 - one key customer) that accounted for over 10% of revenue each.
Revenue for each of these customers is £629,921 and £451,702 respectively (2020 - £623,091).
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 £1,723,661 (2020 - £1,499,023),
note 27. The total amount of revenue deferred and recognised as a contract liability at the year end is £1,030,315 (2020 -
£1,723,661) as shown in note 27.
Invoices for licence revenue are issued annually in advance and recognised as deferred income as the performance
obligation has not yet been satisfied at that point in time. Services income relates to prepaid, part upfront/part upon
completion and other amounts linked to key milestones as set out in the contract. This is recognised as deferred income
and increase in debtors for performance obligation met but not yet invoiced.
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 satisfied. The service performance obligations vary and the contract
value is recognised over the duration of each project. All warranties are included within the subscription agreements with
each client and are therefore not a separate performance obligation.
Consolidated Financial Statements for the year ended 30 September 2021
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56
Notes to the Group Financial Statements continued
For the year ended 30 September 2021
4 Revenue (continued)
The transaction price is determined by the contractual value agreed with the client. It is deemed that 60% deployment is
attributable to enabling the customer to use the 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 one performance
obligation.
Grants of £88,316 (2020 - £244,656) were received as part of the Government’s initiatives to provide immediate financial
support as a result of the COVID-19 pandemic. There are no future related costs associated with these grants which were
received solely as compensation for costs incurred in the year.
5 Adjusted EBITDA
Operating loss
Add back:
Depreciation, amortisation, impairment and profit/loss on disposal
Share based payment expense
Non-underlying items
Adjusted EBITDA
2021
£
2020
£
(970,400)
(2,324,431)
551,862
17,181
144,484
331,924
–
176,095
(256,873)
(1,816,412)
The calculation of Adjusted Earnings is consistent with the presentation of Adjusted Earnings before Interest, Tax,
Depreciation, and Amortisation, as presented on the face of the Statement of Comprehensive Income. This adjusted
element also removes non-underlying items which comprise Covid-19 related redundancy costs and professional and
consultancy fees relating to the raising of finance during the year ended 30 September 2021. Non-underlying items in the
year ended 30 September 2020 comprise Covid-19 related redundancy costs.
The Directors have presented this Alternative Performance Measure (“APM”) because they feel it most suitably represents
the underlying performance and cash generation of the business, and allows comparability between the current and
comparative period in light of the rapid changes in the business, and will allow an ongoing trend analysis of this
performance based on current plans for the business.
6 Operating loss
Operating loss for the year is stated after charging/(crediting):
Exchange losses
Research and development costs
Government grants
Fees payable to the company’s auditor for the audit of the company’s financial statements
Depreciation of property, plant and equipment
Loss on disposal of property, plant and equipment
Amortisation of intangible assets
Impairment of intangible assets
Share-based payments
2021
£
93,995
523,653
(88,316)
49,550
141,827
37,094
79,063
293,878
17,181
2020
£
75,010
628,210
(244,656)
45,700
221,912
8,750
–
110,011
–
i-nexus Global plc
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FINANCIAL STATEMENTS
57
7 Impairments
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in
profit or loss:
In respect of:
Intangible assets
Recognised in:
Administrative costs
8 Auditor’s remuneration
Fees payable to the company’s auditor and associates:
For audit services
Audit of the financial statements of the company’s subsidiaries
2021
£
293,878
293,878
2021
£
2020
£
–
–
2020
£
49,550
45,700
The audit fee for the parent company, i-nexus Global Plc, is borne by its subsidiary, i-solutions Global Limited.
9 Employees
The average monthly number of persons (including directors) employed by the Group during the year was:
Senior management and directors
Development global services and other
Total
Their aggregate remuneration comprised:
Wages and salaries
Social security costs
Pension costs
2021
Number
2020
Number
12
27
39
9
57
66
2021
£
2,504,068
286,670
84,550
2,875,288
2020
£
3,843,110
424,403
148,981
4,416,494
Included within wages and salaries is £17,181 (2020 - £nil) relating to equity settled share based payment expense,
as explained further in note 29.
Included in the above is aggregate remuneration relating to capitalised development costs (note 15) amounting to
£335,446 (2020 - £628,210).
Consolidated Financial Statements for the year ended 30 September 2021
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58
Notes to the Group Financial Statements continued
For the year ended 30 September 2021
10 Directors’ remuneration
Remuneration for qualifying services
Company pension contributions to defined contribution schemes
2021
£
403,933
16,482
420,415
2020
£
338,125
22,718
360,843
The number of directors for whom retirement benefits are accruing under defined contribution schemes amounted to
3 (2020 - 2).
Remuneration disclosed above includes the following amounts paid to the highest paid director:
Remuneration for qualifying services
Company pension contributions to defined contribution schemes
During the year to 30 September 2021 the Directors received remuneration as follows:
Salary
£000’s
Mr S Crowther 173
Ms A Levett 137
Mr R Cunningham 48
Mr D Firth (appointed 18 February 2021) 18
Mr N Halkes (resigned 31 March 2021) 20
396
No share options were exercised in the year.
Benefits
in Kind
£000’s
–
–
–
–
–
–
2021
£
177,155
8,483
2020
£
157,299
12,580
2021
Total cash &
cash equivalent
Pension remuneration
£000’s
£000’s
8
7
1
–
–
16
181
144
49
18
20
412
In addition to the above remuneration, the directors have been granted share options with fair value as shown the below table
for the year ended 30 September 2021. These options are presently out of the money and the associated growth based vesting
conditions have not been met. These are however ascribed a fair value and included as a component of directors’
remuneration in line with the requirements of IFRS 2, in spite of the inherent uncertainty as to whether they will eventually vest.
Fair value of
2021
Total
share options remuneration
£000’s
£000’s
Mr S Crowther
Ms A Levett
Mr R Cunningham
Mr D Firth (appointed 18 February 2021)
Mr N Halkes (resigned 31 March 2021)
i-nexus Global plc
5
3
–
–
–
8
186
147
49
18
20
420
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STRATEGIC REPORT
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FINANCIAL STATEMENTS
59
During the year to 30 September 2020 the Directors received remuneration as follows:
Share
Salary options
Director £ £
Benefits
in kind
£
Mr S Crowther 157,299 –
Ms A Levett 121,451 –
Mr R Cunningham 24,000 –
Mr N Halkes (resigned 31 March 2021) 35,375 –
Total 338,125 –
–
–
–
–
–
Pension
£
12,580
9,510
628
–
22,718
Total
£
169,879
130,961
24,628
35,375
360,843
During the year to 30 September 2020 the Directors opted to take a reduced salary as part of Covid–19 cost control
measures.
11 Investment income
Interest income
Financial instruments measured at amortised cost:
Bank deposits
12 Finance costs
Interest on lease liabilities
Other interest payable
Interest on convertible loan notes
Total interest expense
13 Taxation
Current tax
UK corporation tax on profits for the current period
Adjustments in respect of prior periods
Total UK current tax
Foreign taxes and reliefs
2021
£
2020
£
65
1,007
2021
£
6,887
28,329
127,639
162,855
2021
£
(275,000)
(122,815)
(397,815)
(443)
(398,258)
2020
£
14,063
40,236
–
54,299
2020
£
(360,000)
–
(360,000)
(1,490)
(361,490)
Consolidated Financial Statements for the year ended 30 September 2021
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60
Notes to the Group Financial Statements continued
For the year ended 30 September 2021
13 Taxation (continued)
The credit for the year can be reconciled to the loss per the income statement as follows:
Loss before taxation
Expected tax credit based on a corporation tax rate of 19% (2020: 19%)
Effect of expenses not deductible in determining taxable profit
Unutilised tax losses carried forward
Adjustment in respect of prior years
Effect of change in UK corporation tax rate
Depreciation on assets not qualifying for tax allowances
Enhanced relief on research and development tax credit
Other
Taxation credit for the year
The UK corporation tax rate was 19% throughout the year.
2021
£
2020
£
(1,133,190)
(2,377,723)
(215,306)
6,277
129,903
(122,815)
–
–
(206,382)
10,065
(398,258)
(451,767)
2,319
554,034
–
(42,514)
3,300
(411,592)
(15,270)
(361,490)
The adjustment in respect of prior periods relates to enhanced relief on the Group’s research and development activity,
where the actual R&D claim exceeded management’s estimate in the prior year.
In the March 2021 Budget, a change to the future UK corporation tax rate was announced, indicating that the rate will
increase to 25% from April 2023. Deferred tax balances at the reporting date are therefore measured at 25% (2020 - 19%).
14 Earnings per share
Number of shares
Weighted average number of ordinary shares for basic earnings per share
2021
2020
29,571,605
29,571,605
Weighted average number of ordinary shares for diluted earnings per share
29,571,605
29,571,605
Earnings (all attributable to equity shareholders of the company)
Loss for the period
Basic earnings per share
From continuing operations
Diluted earnings per share
From continuing operations
2021
£
2020
£
(734,932)
(2,016,233)
(0.02)
(0.07)
(0.02)
(0.07)
The Diluted EPS is the same as the Basic EPS in the current and comparative year as the Group has incurred losses in each
of the periods concerned. The Group has a number of potentially dilutive share options (note 29) and convertible
redeemable loan stock (note 21) that could dilute the earnings per share should the Group become profitable. As at
30 September 2021 both the share options and the convertible loan stock are out of the money.
i-nexus Global plc
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FINANCIAL STATEMENTS
61
15 Intangible assets
Cost
At 1 October 2019
Additions
At 30 September 2020
Additions - internally generated
At 30 September 2021
Amortisation and impairment
Impairment loss
At 30 September 2020
Charge for the year
Impairment loss
At 30 September 2021
Carrying amount
At 30 September 2021
At 30 September 2020
At 30 September 2019
Development
costs
£
618,609
628,210
1,246,819
335,446
1,582,265
110,011
110,011
79,063
293,878
482,952
1,099,313
1,136,808
618,609
The useful economic life of each of the individual assets is deemed to be 5 years. The additions in the year of £335,446
relate to specific products being developed. These products are deemed to provide future economic benefits to the Group.
The impairment of £293,878 was as a result of an impairment review carried out by the directors at the balance sheet date.
Amortisation and impairment charges are recognised within administrative expenses.
Consolidated Financial Statements for the year ended 30 September 2021
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62
Notes to the Group Financial Statements continued
For the year ended 30 September 2021
16 Property, plant and equipment
Leasehold land Fixtures
and buildings and fittings
£ £
Cost
At 1 October 2019 95,328 214,426
Additions 120,552 235
Disposals – –
At 30 September 2020 215,880 214,661
Additions – –
Disposals (215,880) (150,490)
At 30 September 2021 – 64,171
Accumulated depreciation and impairment
At 1 October 2019 50,235 136,956
Charge for the year 97,738 19,098
At 30 September 2020 147,973 156,054
Charge for the year 44,028 12,365
Eliminated on disposal (192,001) (137,099)
Foreign currency adjustments – –
At 30 September 2021 – 31,320
Carrying amount
At 30 September 2021 – 32,851
At 30 September 2020 67,907 58,607
At 30 September 2019 45,093 77,470
Leasehold land and buildings includes right-of-use assets, as follows:
Right-of-use assets
Net values
Property
Cost of additions
Property
Cost of disposals
Property
Depreciation charge for the year
Property
Computers Motor vehicles
£
£
Total
£
546,496
16,707
–
563,203
1,171
(273,356)
291,018
338,678
105,076
443,754
85,434
(272,352)
(78)
256,758
34,260
119,449
207,818
8,750
–
(8,750)
–
–
–
–
–
–
–
–
–
–
–
–
–
8,750
2021
£
–
–
865,000
137,494
(8,750)
993,744
1,171
(639,726)
355,189
525,869
221,912
747,781
141,827
(601,452)
(78)
288,078
67,111
245,963
339,131
2020
£
40,184
120,552
(120,552)
–
40,184
80,368
The Group vacated the office premises in March 2021 when the lease term ended and therefore disposed of the leasehold
land and buildings, including the right-of-use asset, and lease liability as shown in note 24.
i-nexus Global plc
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FINANCIAL STATEMENTS
63
17 Subsidiaries
Details of the company’s subsidiaries at 30 September 2021 are as follows:
Class of % Held
Name of undertaking Registered office Principal activities shares held Direct
Indirect
i-solutions Global Limited England and Wales (1) The development and sale Ordinary 100.00
of Enterprise cloud based
software on a software-as
service (SaaS) basis and
professional consultancy
services
i-nexus (America) Inc USA (2) Sale of computer software Ordinary –
and associated maintenance,
support, software
customisation and services
–
100.00
(1) The registered office address of i-solutions Global Limited is: 27-28 Eastcastle Street, London, W1W 8DH.
(2) The registered office address of i-nexus (America) Inc is: i-nexus, 245 First Street, Suite 1800, Cambridge, MA 02142, USA.
18 Trade and other receivables
Trade receivables
VAT recoverable
Other receivables
Prepayments
19 Trade receivables - credit risk
Fair value of trade receivables
2021
£
557,220
35,486
40,528
158,714
791,948
2020
£
534,464
59,018
52,612
186,413
832,507
The directors consider that the carrying amount of trade and other receivables is approximately equal to their fair value.
Ageing of past due but not impaired receivables
30 days or less
Between 31 and 60 days
Between 61 and 90 days
Over 90 days
2021
£
529,510
8,286
6,037
13,387
557,220
2020
£
312,075
73,688
110,731
37,970
534,464
Consolidated Financial Statements for the year ended 30 September 2021
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Notes to the Group Financial Statements continued
For the year ended 30 September 2021
19 Trade receivables - credit risk (continued)
All opening and closing trade receivables balances arise from contract with customer. All other receivables outside of
general terms of business are immaterial to the Group and are within the company.
No significant receivable balances are impaired at the reporting end date.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses using a lifetime expected credit loss
provision for trade receivables.
The ageing analysis of the trade receivables and expected credit loss provision rates as at 30 September 2021 are as
follows:
Less than 30 days 31 - 60 days
£ £
61 - 90 days Over 90 days
£
£
Expected credit loss percentage 0.10% 0.25%
Gross receivable subject to ECL 529,510 8,286
Expected credit loss 530 21
0.50%
6,037
30
0.75%
13,387
100
Total
£
557,220
681
Based on the above, the directors have not recognised the expected credit loss on grounds of triviality to the Group. The
directors consider the credit quality of trade and other receivables that are neither past due nor impaired to be good.
20 Borrowings
Current Non-current
2021
£
2020
£
2021
£
2020
£
Borrowings held at amortised cost:
Bank loans 7,906
Other loans 63,519
71,425
–
179,098
179,098
42,094
–
42,094
–
64,402
64,402
The Group has the following borrowings at 30 September 2021:
• A Bounce Back Loan Scheme loan within bank loans which has an interest rate of 2.5% payable from November 2021
when the government grant incentive period expires. The loan is carried at £50,000 in the financial statements. This loan
is unsecured.
• Venture debt within other loans which has a fixed interest rate of the higher of 11.5% per annum or LIBOR plus 8% per
annum and is measured at amortised cost. The venture debt is secured by way of fixed and floating charges over the title
of all assets held by i-solutions Global Limited.
The directors consider the value of all financial liabilities to be equivalent to their fair value.
21 Convertible loan notes
Two tranches of convertible loan notes were issued during the year. The first tranche was issued on 4 November 2020 and
total proceeds of £1,325,000 were recognised. The second tranche was issued on 29 September 2021 and total proceeds
of £650,000 were recognised (of which £37,500 is accrued and included with other debtors).
Both tranches have a redemption date 3 years following their date of issue. The loan note holders are entitled, before the
redemption date, to convert all or part of their holding of loan notes into fully paid Ordinary Shares on the basis of 1 Ordinary
Share for every 10p of principal nominal amount of loan notes held, and/or redeem all or part of their holding of loan notes.
i-nexus Global plc
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FINANCIAL STATEMENTS
65
The net proceeds received from the issue of the convertible loan notes have been split between the financial liability
element and an equity component, representing the fair value of the embedded option to convert the financial liability into
equity as follows:
Proceeds of issue of convertible loan note
Equity component
Liability component at date of issue
2021
£
1,975,000
(231,851)
1,743,149
The proceeds of issue of convertible loan notes includes £37,500 which was contractually agreed but unpaid at the year
end and therefore is accrued and included within other debtors.
The liability component is measured at amortised cost, and the difference between the carrying amount of the liability at
the date of issue and the amount reported in the statement of financial position represents the effective interest rate less
interest paid to that date.
The convertible loan notes carry a coupon rate of 8% and are recognised at their net present value using a discount rate of 12%.
Movements and balance at the period end
Liability component at 30 September 2020
Issue of convertible loan notes
Interest charged
Interest accrued
Liability component at 30 September 2021
Liability component due within 12 months
Liability component due after 12 months
Liability
£
–
1,743,149
127,639
(88,330)
1,782,458
–
1,782,458
The equity component of the convertible loan notes has been credited to the equity reserve (note 32).
22 Financial risk management
Market risk management
The Group’s activities expose it to a variety of financial risks: foreign exchange risk, interest rate risk, liquidity risk and credit
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.
Foreign exchange risk
The carrying amounts of the Group’s foreign currency denominated monetary assets and liabilities at the reporting date are
as follows:
Trade and other receivables
Cash and cash equivalents
Trade and other payables
As at 30 September 2021
US Dollars
£
185,662
665
(33,871)
152,456
Euros
£
262,354
–
–
262,354
Total
£
448,016
665
(33,871)
414,810
Consolidated Financial Statements for the year ended 30 September 2021
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Notes to the Group Financial Statements continued
For the year ended 30 September 2021
22 Financial risk management (continued)
Trade and other receivables
Cash and cash equivalents
Trade and other payables
As at 30 September 2020
US Dollars
£
292,833
1,710
(672,565)
(378,022)
Euros
£
250,558
–
–
250,558
Total
£
543,391
1,710
(672,565)
(127,464)
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.
If Sterling had depreciated by 10% against US Dollars and Euros as at 30 September 2021, the Group would have
recognised an increase in its reported profits and net assets of approximately £41,481. If Sterling had appreciated by 10%
against US Dollars and Euros as at 30 September 2021, the Group would have recognised a decrease in its reported profits
and net assets of approximately £41,481.
Interest rate risk
The carrying amounts of financial liabilities which expose the Group to cash flow interest rate risk are as follows:
Venture debt
2021
£
63,519
2020
£
243,500
The weighted average cost of fixed rate borrowing for venture debt is 11.5% (2020 - 11.5%).
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.
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
i-nexus Global plc
2021
£
71,425
40,325
1,769
113,519
2020
£
179,098
64,402
–
243,500
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FINANCIAL STATEMENTS
67
Capital risk management
The Group is both equity and debt funded and these two elements combine to make up the capital structure of the
business. Equity comprises share capital, share premium, convertible loan notes 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 plan;
• 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.
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
bad debt 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.
The carrying amount of financial instruments is shown below:
Financial assets held at amortised cost
Financial liabilities held at amortised cost
23 Trade and other payables
2021
£
597,748
2,609,435
3,207,183
2020
£
587,076
1,031,955
1,619,031
Current Non-current
2021
£
2020
£
2021
£
2020
£
Trade payables 300,797
Accruals 235,631
Social security and other taxation 274,989
Other payables 140,740
378,434
256,848
488,622
115,705
952,157
1,239,609
–
88,330
–
–
88,330
–
–
–
–
–
Consolidated Financial Statements for the year ended 30 September 2021
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Notes to the Group Financial Statements continued
For the year ended 30 September 2021
24 Lease liabilities
Maturity analysis
Within one year
Future finance charges and other adjustments
Lease liabilities in the financial statements
All lease liabilities are expected to be settled within 12 months from the reporting date.
Amounts recognised in profit or loss include the following:
Interest on lease liabilities
25 Deferred taxation
Deferred tax liabilities
Deferred tax assets
2021
£
–
–
–
2021
£
2020
£
44,354
(6,887)
37,467
2020
£
6,887
14,063
2021
£
407,176
(407,176)
–
2020
£
356,610
(356,610)
–
The following are the major deferred tax liabilities and assets recognised by the Group and movements thereon during the
current and prior reporting period.
ACAs Tax losses
£ £
Deferred tax liability/(asset) at
1 October 2019 176,549 (170,934)
Deferred tax movements in prior year
Charge/(credit) to profit or loss 81,603 (178,771)
Deferred tax liability/(asset) at
1 October 2020 258,152 (349,705)
Deferred tax movements in current year
Charge/(credit) to profit or loss (40,025) 549,171
Effect of change in tax rate - profit or loss 68,873 (600,442)
Deferred tax liability/(asset) at
30 September 2021 287,000 (400,976)
Retirement
benefit
obligations
£
(5,615)
Capitalised
R&D
£
–
(1,290)
98,458
(6,905)
98,458
Total
£
–
–
–
2,195
(1,490)
(7,124)
28,842
504,217
(504,217)
(6,200)
120,176
–
The Group has estimated tax losses of £10,000,000 (2020 - £10,000,000) of which approximately £8,900,000 (2020 - £8,700,000)
have not been recognised as a deferred tax asset due to uncertainty over the timing and extent of the company’s ability to utilise
these against future taxable profits. Recognised deferred tax assets have been included only to the extent that these offset other
temporary timing differences which will unwind against the losses. If a deferred tax asset was recognised in full in respect of this,
the Group’s net assets would increase by approximately £2,200,000 (2020 - £1,600,000).
i-nexus Global plc
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26 Provisions for liabilities
Leasehold dilapidations
All provisions are expected to be settled within 12 months from the reporting date.
Movements on provisions:
At 1 October 2020
Reversal of provision
Utilisation of provision
At 30 September 2021
2021
£
–
2020
£
80,702
Leasehold
dilapidations
£
80,702
(59,070)
(21,632)
–
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 provision has been reversed during the year after the company vacated all premises
and disposed of the leasehold properties.
27 Deferred revenue
Arising from contracts with customers
All deferred revenues are expected to be settled within 12 months from the reporting date.
28 Retirement benefit schemes
Defined contribution schemes
Charge to profit or loss in respect of defined contribution schemes
Capitalised as intangible asset
2021
£
2020
£
1,030,315
1,723,661
2021
£
61,669
22,881
84,550
2020
£
123,853
25,128
148,981
The Group operates a defined contribution pension scheme for all qualifying employees. The assets of the scheme are held
separately from those of the Group in an independently administered fund.
The liability at the year end is £25,559 (2020 - £36,340).
Consolidated Financial Statements for the year ended 30 September 2021
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Notes to the Group Financial Statements continued
For the year ended 30 September 2021
29 Share-based payment transactions
Number of share Weighted average
options exercise price
2021
2020
2021
£
2020
£
Outstanding at 1 October 2020 –
Granted in the period 2,668,738
Forfeited in the period (278,678)
Outstanding at 30 September 2021 2,390,060
Exercisable at 30 September 2021 1,334,369
–
–
–
–
–
–
0.10
0.10
0.10
0.10
–
–
–
–
–
The options outstanding at 30 September 2021 had an exercise price of £0.10 and a remaining contractual life of 1 year.
The options can be exercised at certain dates proportionately to the Monthly Recurring Revenues ("MRR") which are
achieved over a fixed period, at fixed amounts and growth rates.
During 2021, options were granted on 13 January 2021. The weighted average fair value of the options on the
measurement date was £37,530. Fair value was measured using Black-Scholes Option-pricing model. Fair value was
measured using Black-Scholes, with the volatility input being based solely on the Group’s average historical volatility over
equivalent recent periods. The risk-free rate is negative, being the rate of comparable government bonds available as at the
grant date.
Inputs were as follows:
Weighted average share price
Weighted average exercise price
Expected volatility
Expected life
Risk free rate
Expected dividends yields
Expenses
Related to equity settled share based payments
2021
0.06
0.10
59.41%
1
(0.01)%
–
17,181
2020
–
–
–
–
–
–
–
During the year a transfer of £4,192 (2020 - £nil) was made from the share option reserve to retained earnings in relation
to share options cancelled.
30 Share capital
2021
Ordinary share capital Number
2020
Number
2021
£
2020
£
Issued and fully paid
Ordinary shares of 10p each 29,571,605
29,571,605
2,957,161
2,957,161
Fully paid shares carry one vote per share and carry rights to a dividend.
i-nexus Global plc
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71
31 Share premium account
At the beginning and end of the year
2021
£
2020
£
7,256,188
7,256,188
The share premium represents the excess of the subscription price over the par value of shares issued.
32 Equity reserve
At the beginning of the year
Arising in the year
At the end of the year
2021
£
–
231,851
231,851
2020
£
–
–
–
During the year i-nexus Global Plc issued two instruments constituting;
• £1,325,000 fixed rate unsecured convertible redeemable loan stock on 4 November 2020; and
• £650,000 fixed rate unsecured convertible redeemable loan stock on 29 September 2021.
The equity reserve solely represents the equity element of the above instruments at their respective issue dates. The fair
value of the liability can be seen in note 21.
33 Other reserves
Merger reserve
2021
£
2020
£
10,653,881
10,653,881
The merger reserve represents the carrying value of the investment in the subsidiary undertaking at the point of the share
for share exchange.
Foreign exchange reserve
2021
£
1,876
2020
£
(15,470)
The foreign exchange reserve relates to the exchange differences arises on the translation of the foreign subsidiary.
34 Related party transactions
Remuneration of key management personnel
The remuneration of key management personnel, including directors, is set out below in aggregate for each of the
categories specified in IAS 24 Related Party Disclosures.
Salary and short-term employee benefits
Post-employment benefits
Share-based payments
2021
£
887,767
34,015
12,672
934,454
2020
£
869,581
52,897
–
922,478
Consolidated Financial Statements for the year ended 30 September 2021
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Notes to the Group Financial Statements continued
For the year ended 30 September 2021
34 Related party transactions (continued)
Other information
During the year directors provided unsecured short term loans to the Group amounting to £35,000 (2020 - £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.
During the year Mr R Cunningham, a director of the company, issued convertible loan notes to the company and proceeds
of £287,500 were received and shown within note 21.
35 Controlling party
There is no ultimate controlling party of i-nexus Global Plc.
36 Impairments
Company
Impairment tests have been carried out where appropriate and the following impairment losses have been recognised in
profit or loss:
In respect of:
Intercompany receivable
Recognised in:
Exceptional items
37 Investments
2021
£
2020
£
2,895,000
2,895,000
–
–
Current Non-current
2021
Company £
2020
£
2021
£
2020
£
Investments in subsidiaries –
Capital contribution –
–
–
–
–
1,654,770
17,181
1,671,951
1,654,770
–
1,654,770
Fair value of financial assets carried at amortised cost
Except as detailed below the directors believe that the carrying amounts of financial assets carried at amortised cost in the
financial statements approximate to their fair values.
Investment in subsidiary undertakings
Details of the company’s principal operating subsidiaries are included in note 17.
i-nexus Global plc
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73
Movements in non-current investments
Cost or valuation
At 1 October 2020
Additions regarding share based payment
At 30 September 2021
Shares in
subsidiaries
£
Capital
contribution
£
Total
£
1,654,770
–
1,654,770
–
17,181
17,181
1,654,770
17,181
1,671,951
Carrying amount
At 30 September 2021
At 30 September 2020
1,654,770
1,654,770
17,181
–
1,671,951
1,654,770
38 Trade and other receivables
Company
VAT recoverable
Amounts owed by subsidiary undertakings
Other receivables
Prepayments
2021
£
–
6,774,358
37,501
76,657
6,888,516
2020
£
59,018
7,697,152
226,931
6,998
7,990,099
Amounts owed by subsidiary undertakings are non-interest bearing and repayable on demand.
39 Convertible loan notes
Company
The company information for convertible loan notes is the same as the group information and is shown in note 21.
Carrying value of convertible loan note
Accrued interest on convertible loan note
40 Trade and other payables
2021
£
1,782,458
88,330
1,870,788
2020
£
–
–
–
Current Non-current
2021
Company £
2021
£
2020
£
2020
£
Trade payables 170,623
Accruals 30,600
Social security and other taxation 3,738
Other payables 922
16,793
86,756
7,796
–
205,883
111,345
–
88,330
–
–
88,330
–
–
–
–
–
41 Share-based payment transactions
Company
The company information for share-based payments is the same as the Group information and is shown in note 29.
Consolidated Financial Statements for the year ended 30 September 2021
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74
Company Information
Directors Ms A M Levett
Mr S P Crowther
Mr R H Cunningham
Mr D S Firth (Appointed 18 February 2021)
Secretary Ms A M Levett
Company number 11321642
Registered Office 27-28 Eastcastle Street
London
W1W 8DH
Auditor Saffery Champness LLP
St Catherine’s Court
Berkeley Place
Clifton
Bristol
BS8 1BQ
i-nexus Global plc
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